Q1 2021 Jamf Holding Corp Earnings Call
Thank you for standing by and welcome to the jams first quarter 2021 earnings conference call. At this time, all participants are in a listen only mode.
After the speaker presentation, there will be a question and answer session to ask a question. During the session you will need to press star one on your telephone. Please be advised that today's conference is being recorded sales.
If you require any further assistance please press star zero.
Now I'd like to hand, the conference over to your host the <unk>.
V P of Investor Relations Jennifer Gaumond. Please go ahead.
Good afternoon, and thank you for joining us on today's conference call to discuss <unk> first quarter 2021 financial results.
With me on today's call are being Hager, Chief Executive Officer and Jim.
Putman Chief Financial Officer.
For we begin I'd like to remind you that shortly after the market closed today, we issued a press release announcing our first quarter 2021 financial results.
We also published an updated investor presentation, and an excel file containing quarterly financial statements.
The <unk> 2019, 2020 in 2021 year to date to assist with modeling.
Additionally, this afternoon, we also issued a press release and accompanying presentation announcing the acquisition of warm Dara you may access all of this information on the Investor Relations section of <unk> Dot com.
Today's discussion May include forward looking statements. Please refer to our most recent SEC filings, including our most recent annual report on form 10-K, where you will see a discussion of factors that could cause actual results to differ materially from these statements.
I would also like to remind you that during the call. We will discuss some non-GAAP financial measures related to Jim's performance.
You can find the reconciliation of those measures to the nearest comparable GAAP measures in our quarterly financial statements of.
Additionally to ensure we can address as many analyst questions as possible during the call. We ask that you. Please limit your questions to one initial question and one follow up now I'd like to turn the call over to Dean Hager D.
Thank you Jennifer and thank you to everyone for joining us on.
On today's call I will share highlights from our first quarter and discuss our recent announcement regarding our intent to acquire one Darryl a leader in zero Trust cloud security and access for mobile devices. Gino will then review our first quarter financial results and provide our outlook for the second quarter and fiscal 2021.
Last quarter, we talked about our remarkable balance and momentum across our business in 2020, and we continue to see this in the first quarter driving our overall <unk> growth of 37%.
Once again, our first quarter are our year over year of growth for every one of our price products was at least 25%.
Additionally, our <unk> growth in all three major geographic regions Americas, EMEA and APAC was also at least 25% in each geography.
And when examining the top industries, Jim serves <unk> growth year over year was also at least 25 per cent for both SMB and enterprise organizations.
Additionally, current trends in mobile work education technology, and digital health continued to strengthen our value to customers as well as our business results. We again saw evidence of these trends and the momentum of Apple in the enterprise in the first quarter.
According to a recent IDC reported first quarter 2021, PC sales increased 55% year over year. While this is impressive growth Apple Mac sales led the way with the even more impressive 111, 5% growth year over year.
The power efficiency and speed of the M. One map combined with increasing individual map profit preference is helping drive this growth.
We believe math will increasingly become the device of choice for many of the workplace and Janssen is best positioned to help organizations easily adopt and get the most out of this new technology over time.
The depth and breadth of our Apple Enterprise management platform and our commitment to innovating at the pace of Apple are key Differentiators for Jan.
Last month, we announced same day support of all new operating systems on heartburn.
Many other providers both cross platform on Apple focused are not same day ready to support Apple hardware and software releases.
This can cause some organizations to adopt the Max lower than their users want as well as create potential security issues for organizations that have already adopted Mac.
However, with Jim Enterprises can adopt map choice programs that meet both the security and device management needs of their organizations.
In Q1 jumped played a significant role in organizations of drawing their Max fleet and fat chance 10 largest annual subscriptions signed in the first quarter were all driven by map growth and commercial businesses. In total. These 10 customers grew their Geoff pro licenses for map by over.
93000 seats.
Furthermore, six of the 10 customers also contracted for either Jam connect our jam protect or both to enhance their security profile, while also providing the best possible user experience.
In the healthcare market, we continue to see strong demand for our innovative solutions that enhance patient care.
Many hospitals are expanding their use of jam for additional new workflows, resulting in our healthcare segment, achieving the second highest growth of the top industries we serve.
For example, during our third quarter earnings call last year, we highlight or do you see health in Colorado, a large healthcare system. The benefits from a number of jams innovations in 2018, you see health began using <unk> to streamline their technology management and improved patient experience by offering them.
IPad at each patient's bedside.
They use jump healthcare listener jumped setup and jam preset to digitally sterilize the device between each patient and easily set it up for the next patients without the need for ITE assistance.
As virtual health care need spiked last year, you see health was an early adopter of our virtual visits workflow for inpatient isolation telehealth, which helped greatly increased the virtual visit the sessions each day.
UC health has now expanded its use of jump with iphones at many of its vaccination sites, including of mass vaccination of band at quartz field in February were approximately 10000, Colorado residents, we see COVID-19 vaccinations.
Compared to their initial vaccination site pilot debt leverage PC terminals and required complex network infrastructure. The iPhone base delivery model leverage the latest mobile technology simplify the process. This reduced per patient vaccination time from three minutes to only 30 seconds.
UC health is a great example of how organizations continued to leverage jump to solve new problems of testament to the flexibility of our architecture and breadth of our solutions.
In the education increased global buying patterns have continued through Q1, driven by several government funding programs, including the cares Act in the United States. The most recent rounds of the cares funding also include provisions for higher education, and we see many colleges and universities utilize these.
Bonds to accelerate their technology initiatives.
Laura A&M University or family <unk> for short is the Prime example of setting students up for success today and well into the future with technology.
Their school of journalism in graphic communications, primarily uses Apple to ensure students have the tools that there'll be leveraging their professional careers with hundreds of on campus Mac already managed through channel. Then you purchased additional map hardware to empower students to learn remotely.
Their school of journalism and graphic communication provides a zero touch Mac deployment of experience to give students access to the same learning resources at home is in the classroom.
Bam used program is indicative of the technology of awakening, that's occurring in education with the education technology programs growing in importance whether students on learning in the classroom remotely or a combination of both.
Programs like families demonstrates the significant impact of well thought out education technology program can bring to student learning and career preparation.
With the backdrop of our outstanding Q1 performance and these examples of how we will continue to deliver innovative solutions to help organizations succeed with Apple I'd like to discuss our one Dara acquisition announcement.
First some context.
There has been of mass proliferation of Apple devices, and the enterprise. According to Idc's Twenty-twenty Enterprise survey the average penetration of macos devices is around 23% compared with 17% in 2019 six point movement in just one year.
And iphones account for 49% of the smartphone installed base the amongst enterprises.
Ipads makeup the majority of tablets used in business.
As a result of its growth in the enterprise Apple devices are now a bigger target for security threats.
This coupled with greater mobility at work and dependent on sensitive cloud resources is accelerating the demand for zero Trust solutions.
In 2020, we recognize the changing requirements of the security solutions and launched channel protests, which was purchased by approximately 400 customers in its very first year in.
In 2021, the momentum for Jeff protect continues to grow as we added over 300, new jam protect customers in the first quarter alone.
One Dara and Apple first provider of unified Cloud Security brings zero Trust network access content filtering data policies and mobile threat defense to jams platform rounding out our security solution from access through endpoint protection and solidifying <unk> security offering for the enterprise.
One Dara strengthened Champs overall position in Apple Enterprise management and offers a number of expansion opportunities.
Our first opportunity is with the iphones and ipads and commercial markets.
Since 2002 jump has been the leader with the best whole product solution for mass, helping any organization manage protect and connect their macos devices with their enterprise resources the strength and Mac has led more organizations to also use <unk> for iOS device management consolidate.
<unk>, all Apple management into one tailored solution for the Apple ecosystem.
In fact in Q1 jumps iOS commercial business was our fastest.
Growth segment year over year yeah.
Yet to day Champ has not expanded our iOS solution into the access and security space. The way we have with map.
<unk> mobile access and threat defense products, coupled with jams industry best iOS device management capabilities, we will complete the whole solution our customers require.
Both jump in one Darrow sales are driven by the same market forces and life channel one <unk> product team takes the Apple first approach leading to iOS, representing approximately 80% of the devices. One Dara securities yet there is no overlap between our solutions. The addition of <unk>.
One there of products to the <unk> portfolio will increase Champs iOS competitiveness, which is the largest segment of our total addressable market.
Even more exciting one Dara solutions will grow janse Tam by $5 billion across all global commercial markets.
And that market expansion doesn't include non Apple devices, which is the one Dara solution also supports and will continue to be of valuable part of <unk> product portfolio.
For second opportunities in the education market educators are coming off of year that provided the greatest education technology awakening in the history. The very technology that was required for distance learning can now transform classrooms and provide student centered personal learning plans that are engaging and equitable.
But as exciting as this is technology also presents potential danger to students and greater concern for parents.
<unk> is already the clear leader in deploying Apple Education technology, one Dara solution offers a valuable follow on that can be used to secure school resources protect student privacy and restrict student access to inappropriate threatening are prohibited content. This opportunity is the also.
<unk> additive to jam solution and we're debt represents an additional $1 billion in the total addressable market and our education sector.
James third opportunity with wonder is leveraging our complimentary teams and go to market channels.
Headquartered in London, the majority of <unk> customers are based in Europe, while jump has a strong presence in EMEA and increased European customer base will accelerate our international growth.
Additionally, one of the key channels for one Dara has been mobile carriers in fact more than half of <unk> historical sales have come through carriers, while less than 1% of <unk> sales have come through that channel with one Darryl we believe <unk> can now offer carriers of better whole product.
True.
Finally, we are also very upset at the most of one day or as employees are on the product side of the company.
Historically, one Dara has invested little of direct go to market channels.
But channel go to market direct and indirect channels have proven extremely efficient and effective we believe with the additional scale of <unk> sales and marketing teams. We can help many more organizations globally experienced success with the wonder of solution.
Together jump on one Dara can help mitigate barriers to apple adoption in the enterprise.
<unk> is the leading provider of Apple enterprise management with significant market share on differentiation, one darrow's Apple first solution complements Champs leadership and end user focus with unique mobile and security capabilities.
Now from a single provider customers could benefit from an Apple first enterprise solution that connects manages and protects all apple devices data and users while preserving the legendary Apple user experience with same day Apple technology support.
Many of one day or as largest customers are also jam customers utilizing jam for Mac and one Darryl for mobile to connect manage and protect devices with no overlap in the solutions provider customers.
Customers like these will provide compelling use cases for both the jampa only in one day or only customers, helping drive significant cross sell opportunities.
And with <unk> capability to install new apps to the existing 21 8 million Apple devices on our platform one of <unk> cloud based solutions can be easily deployed to our existing customer base.
Champs heritage and focus on Apple paired with one Dara Zero Trust and advanced security solutions greatly extends the gem platform to uniquely position us to help it.
And security teams continues to succeed with Apple or.
So excited to welcome the <unk> team into the <unk> family.
In closing 2021 is off to a great start with continued momentum in our business. The strategic acquisition of one Dara extends our leadership position in Apple Enterprise management solidifying jump as an enterprise security provider and helping accelerate apples continued growth in the enterprise now.
Now Joe will walk through our financial results and guidance Jill.
Thanks, Dean and thanks, again to everyone for joining us today.
As Dean mentioned, we had a strong start to the year continued momentum across all aspects of our business.
Total revenue for the first quarter was 34% year over year to $81 2 million.
Revenue growth exceeded our expectations, primarily due to outperformance in subscription revenue and the timing of license revenue from one large customer the significantly through the map point that we were initially anticipating closing in the second quarter.
Recurring revenue grew 37% representing 92% of our total revenue.
Total AAR on it as of March 31 was $308 million, an increase of 37% year over year.
Similar to the prior quarter. This was driven by greater than 25% growth across every product geography, and each of our top industries with particular strength in our international business, but they are again growing over 50% year over year.
The remainder.
<unk> represents the annualized value of all subscription and support and maintenance contracts as of the end of the period.
Or mitigate fluctuations the seasonality contract churn in the sales mix of subscription for 10 day cycle.
Yes.
The three primary drivers of our <unk>.
Our our consistently high device expansion rate.
Our strong new logo acquisition and the Upselling and cross the line of products into our installed base.
We expect to continue benefiting from these trends going forward.
We ended the quarter with $21 8 million despite the downturn.
Platform, representing 34% year over year growth as we continue to realize the strength in both the education and commercial verticals and all geographies.
In devices to our platform and expanding our customers' adoption of add on products off the drugs are high dollar based net retention rate, which remained strong at 117% for the true.
Mailing 12 months ended March 31.
For the remainder of my remarks on margin expense items and profitability will be on a GAAP basis.
Our GAAP financial results along with the reconciliation between GAAP and non-GAAP are found in our earnings release.
Gross profit margin of 83% compared to 80% in the prior year quarter.
We expect our gross margin to remain at approximately of these levels going forward, given the reach scale and customer support and hosting on.
Additionally, the invested to create the flexibility to deliver our services remotely a priority which was accelerated due to COVID-19.
With respect to operating expenses, we remain focused on improving the leverage in our book, while balancing investments for growth.
Increases in operating expenses over the prior year for primarily due to these investments for growth as well of public company car parts.
Partially offset by lower volume.
Net expenses.
Operating margin was 11%.
Representing a four percentage point increase compared to the same period last year.
During the first quarter, our annual effective tax rate was negative, 5%, which is impacted by the establishment of the valuation of allowance as previously disclosed as well as the exercise of stock options.
Unlevered free cash flow was $800000 from Q1 compared to negative $2 1 million in the prior year period.
The one is seasonally low in the multiple factors, including the payout of our annual bonus and large annual software contract renewal.
Additionally, we made significant investments to retrofit our offices to meet our needs post COVID-19.
This year's first quarter represents the first cash flow positive Q1 in recent years.
Our operating model growth and improving efficiency continues to yield strong cash flow generation and the.
Allows us to continue to make investments in innovation on topline growth.
The ended the first quarter with $196 million on cash and cash equivalents.
Now I'll provide the guidance for the second quarter and full year 2021.
Since you anticipate the wonder of acquisition completed in the third quarter I'll also provide some insight into the anticipated impact of the acquisition on our full year results.
We expect a strong part of 16.
Given our results for the first quarter and continued momentum in our business.
We expect the second quarter to benefit from continued strength in education, followed by increasing strength in our commercial business in the second half of the year as the economy improves and enterprise hiring rebounds.
We began to see some early signs of the improvement in the U S. In late Q1. However.
However, uncertainty related to the pandemic recovery and its impact on the spending environment remain key considerations.
As we discussed during our Q4 call beginning in the third quarter and update to how we deliver our connect product will result in a change in revenue recognition of <unk>.
Revenue recognized upfront and on premise.
Subscription revenue as it will now be recognized ratably over the total of the subscription.
In line with the majority of the revenue.
Well there is no impact to <unk>, we anticipate this change what the FERC approximately $9 million of revenue second half of the year into future quarters, which impacts our full year revenue growth rate by approximately three percentage points.
Given these considerations for.
The second quarter of 2021, we expect total revenue in the range of $82 million to $84 million representing growth of 32% to 35% year over year.
Non-GAAP operating income in the range of five five to $6 $5 million.
For the full year 2021, we expect total revenue in the range of $3 $35 million to $341 million.
Representing growth of 24% to 27% year over year.
Non-GAAP operating income in the range of 27, five to $31 $5 million.
Provided that the one day or acquisition closes as expected early in the third quarter of 2021.
We expect one Derek to contribute an additional $9 million to $11 million of revenue in 2021.
This amount reflects the impact of our initial purchase accounting adjustments analysis, but it's subject to change for the analysis is completed as well as if there are any changes in expected timing of the closing.
Additionally for modeling purposes, we are providing the following information.
Note that these amounts exclude the impact of the one day of acquisition.
For the second quarter and full year 2021 amortization is expected to be approximately $8 5 million and 33 $9 million respectively.
For the second quarter and full year 2021 stock based compensation and payroll related taxes is expected to be approximately $5 6 million and $55 million.
First of late.
We expect an annual effective tax rate to be less the 5%, which should also be used in calculating tax effects of non-GAAP adjustment.
This annual effective tax rate is impacted by the establishment of the valuation allowance during 2021.
In addition, we do not pay cash taxes on the U S federal basis.
For calculating EPS, we expect basic and diluted weighted average shares outstanding to the approximately $117 7 million and $126.
Secondly for the second quarter of 2021.
For the full year ex.
Basic and diluted weighted average share outstanding to be approximately $117 8 million and $121 6 million respectively.
In closing we had a great start to the year. We're excited about the strategic acquisition of one day is expand our platform to bring innovative value added products for customers to help them succeed with Apple.
That Dean and I will take your questions.
Operator.
Thank you as a reminder to ask a question you will need to press star one on your Touchtone telephone again Thats Star one on your Touchtone telephone to ask a question to withdraw your question press the pound key.
To remind you to restrict yourself to one question and one follow up please standby, while we compile the Q&A roster.
Our first question comes from the line of bovine Suri of William Blair. Your question. Please.
First question comes from Brooklyn on Sir Your line is open.
Hello.
Yeah, you're good.
Hello.
Thank you.
Yes can you guys hear me on US yes, yes, I can hear you great now okay. Thanks goodness sorry.
Right.
Okay.
Backup congrats.
Good quarter.
And congrats on one Dara.
Although all of that right Ed I was going to talk about Jam business plan, you announced the late last year. It was a great way to make sort of of the adoption of the full stack easier for customers I guess, what kind of traction of machine with the bundling approach and how is that impacting the attach rates of protecting connect with new customers and is one day or a kind of the idea to become part of the bundled sort of drive ASP lift truck.
Do we think about that so just kind of how is business on doing how does that impact protecting connected and the wonder of integration for that.
Yeah. Thanks for the question Pavan and.
We are very pleased with the uptick that we're seeing in <unk> business plan.
The intended.
Use case that we had for it was simply to make it easier for our customers to purchase multiple products from us and indeed it has done that we continue to move in the neighborhood of hundreds of <unk> business plan licenses within a given quarter and youre right in that it's pretty common.
Net of if a customer is thinking about multiple products. It just starts to make a lot of sense to lean over to jam business plans. So we're seeing a lot of that product being purchased if theyre interested in either jumped connect or jammed protect to accompany jumped pro.
And then what ends up happening is the customer contracts for it and ends up using both products, which is which is great for them.
Oh and the Dodge your question on one Dara.
It will sell all day of when we do come together, obviously as a standalone product just like Jeff connecting jump protect for all of the Standalone product regarding any bundling plans is way too premature to determine what we might do there. We're just happy with the value of the value of value add.
On a solution that will have for our customer base.
Gotcha Gotcha Gotcha.
I think the other piece I want to touch on a little bit was the Apple relationship and it comes up when we talk to investors a lot just can you speak a little bit about the continued co development of the Apple and then any update on conversations with that partner obviously since they bought the some of it feels like the.
The first of all around the risk there is the idea, but love to get your take as you talk to Apple obviously much more directly than we do.
Yeah. So our partnership is still on multi dimensional of obviously were each other's customer.
Apple Resells us in the education and awful through retail.
And then of course, we have.
Several joint projects that will work on and we developed the Apple technology working with their worldwide development organization as anybody else would are there has been no change to that relationship over the past year of us being public.
We consider our relationship with Apple to be at the strongest point that we've ever had.
And I had mentioned a year ago that the fleet Smith acquisition would have little to no impact on our business.
And now a year later I would suggest that it spend even less than what I implied a year ago.
Great I appreciate the candor there Dana on the clarity I think you guys had a really nice job.
Thank you I appreciate it.
Thank you. Our next question comes from the line.
Oh, Brian Hall your line is open.
Hi, My first question I guess is this $9 million accounting impact I Wonder if you guys could dig into that a little bit more I think I heard you say, it's a change to the way you are recognizing ratable revenue, but maybe Joe could you explain a little bit more on that are deemed for whoever wants to take it in the name of follow up.
Hey, Rod did here for me is Joe Yeah. So we started this at the at our last quarterly update so mid year here, we're going to have a change in the feature updates to our GAAP connect products when that when those go into the effect of that product is now going to be deployed more like eight a cloud product versus an on prem cloud product.
As it is currently just going to trigger of different accounting revenue revenue recognition treatment, whereas prior are currently right now because it's the treated on Prem about 80% net of the revenue is recognized upfront from the first month that is deployed with the 20% ratable going forward about cash.
The mid year here on the change kicks in all of it will be treated as if the cloud deployment. So it'll be all recognized radically the impact is about $9 million of estimating will be the impact for the second half of this year, that's essentially just going to get deferred into next year. It's just the timing difference of the Rev. Rec has zero impact on the IRR the.
<unk> is going to remain hall.
And you're right.
The.
Just kind of add on a quick comment for clarity the reason why.
Connect was treated at Rev. Rec from an on premises perspective is because at the played as an app on the Mac itself and now is changing technically to be more of the cloud delivery.
Oh, great. Okay. That's great and then my follow up is just on visibility into each too.
Youre kind of guiding.
But below consensus here I guess are implying below consensus of little bit, but then there are $9 million of ex that so it's a little better if you account for that but I'm just curious what your visibility looks like into the second half of the year or do you feel like people are ordering on out into the end of the year, you're kind of having to guess what the bag.
End of the year is going to look like.
Joe for that.
Alright, Thank you all for Orion.
So consistent with the.
Our full year guidance, we gave at the beginning of the year, we're just updating that impact and raise debt here off of our guidance from a quarter ago really based on the strength that we're seeing on the commercial pipeline as we as Dean and I were anticipating as we got into 2021 education is going to continue to have some tailwind for our commercial business on pipeline is really starting.
Of the comeback predominantly we're seeing that in the SMB market right now and.
And we're starting to see that as the exited March strong pipeline going into Q2, continuing to build them.
Particularly in the U S.
The bit slower outside of the U S. So that would be upside for our model should that should that come back faster again, we're just trying to layer on just a little bit of.
It's not absolutely certain how the pandemic is going to play out here for the next couple of months and the economy, but based on what we're seeing in our pipeline.
That's the number that we've used the up their guidance.
Okay, alright, thanks, a lot of Joe.
Okay.
Okay.
Thank you. Our next question comes from the line.
Raimo <unk> of Barclays. Your line is open.
Hey, Thank you congrats on the accuracy of the physician as well.
The Dean can I stay on that one like if I think about on there a little bit like so you guys for more like endpoint. This is the seems more like on the networking side like how do I think about that cross sell upsell like how natural as debt.
It jumped protect and when the euro kind of potential of sales motion on kind of give us a little bit more color since we're not so deep in there. Thank you.
Sure. Thanks for the question Raimo and yes, you're right all of that one Darryl would have a more network focused but frankly.
Being able to block of tax from the network at the point that they are hitting the device is an important part of also protecting the user and the device 80% of the Activations on the one day or a platform or for iOS. Specifically so they are on Apple first developer in their solution is also Apple best.
If you think about it maybe I'll simplify it this way with jump we have as you know management connection and protection products management, we have for all of iOS and all map for everything Apple, but our connection and our protection products have really been only for Mac, what one Dara brings.
His connection and protection solutions also for I O S. So combined the now we provide the entire Apple Enterprise management solution of management connection and protection for every type of Apple device.
Does that makes sense, yeah, that's super helpful. Okay perfect.
And then.
In terms of how.
How did the sell in terms of revenue treatment for them.
Deferred revenue write downs et cetera that we need to kind of consider.
Yeah, So for one day on.
Then from high level estimates at this point, we haven't gone through a complete analysis. So we've layered in what it is.
Kind of a range of where we expect that to land of course that $9 million to $11 million that we put out the second half of two completing that analysis.
First of its too early really press the nail that down right now.
Okay perfect. Thanks congratulations.
Thanks.
Thank you. Our next question comes from Rob Owens of Piper Sandler Your line is open.
Great. Thanks for taking my question can you drill down into two Vice Council.
It was a little bit of acceleration, we're seeing enterprise and then secondarily, how should we discount any potential supply chain issues. The apples, having right now relative to your outlook for Q2 of them.
Thanks.
I'll grab that.
Regarding the supply chain.
Occasionally just anecdotally, what we may hear of a supply problem every once in a while but theres been no material impact on on our business at all regarding the industries that are driving those device count of course as Joe mentioned.
We continue to see great strength in the education market, but as predicted towards the end of Q1.
We did see of a.
A surge of <unk>.
The enterprise interest as well so it really was a nice mix if you take a look at.
Are both sides of our business the education of the commercial side.
As we mentioned our growth was extremely a balance between the two.
Great. Thank you very much.
And that was the fourth consecutive quarter of momentum Inoculates growth.
Accelerating growth.
Yes.
Thank you. Our next question comes from Matt Hedberg of RBC capital markets. Your line is open.
Oh, Hey, guys. Thanks for taking my question congrats on the quarter.
On a lot of strength here to talk about obviously the education was strong too and I think that was the question that a lot of as head of the durability and Dean I think you mentioned you expect strong education results. This year I'm just wondering when you sort of think about the path.
For the education spend this year, obviously, it's different versus last year, but now you've got cares Act and the number of other international drivers how do you sort of anticipate this the trajectory of this year from an AD spend perspective relative to last year. When you were obviously on the take of COVID-19.
Thanks, Matt I appreciate the question.
First of all just the level set everybody as we've mentioned before over 60% of our IRR is on the commercial side in our commercial <unk> still year over year grows faster than the.
Patient <unk> does we just seen of those growth rates closer in the last year than what they typically are because of the tremendous strength, we've seen on an education.
And one of the things I would say as we thought through continued strength through Q1 with education and it's largely because it is such a global initiative. We mentioned on the call that there are several government of funding programs like what we mentioned with the cares Act of what we didn't mention is the cash.
Almost every European country has some similar type of funding act, even though students are starting to come back into the classroom. It's why we call. It an education of awakening when it comes to the technology because even if they did not have technology deployed in time for the pandemic or in the middle of the pandemic even as.
As we start to come out of it as we are in various regions. There is an awareness of how important technology is an education right now. So some funding programs are just getting started so.
We see of buying continued to be strong there.
And in the coming months, we are anticipating it to remain strong.
Got it that's great and then Jill maybe I missed it you noted that there was the one large early renewal.
I don't think you quantified it but any way to kind of get a sense for I don't know if it's the device count or air or the just sort of shifted from Q2 Q2 to Q1, just trying to get a sense for how we rightsize that when we think about the sequential growth this quarter.
Yes, it was actually a large license of existing customers, who had a large license.
The expansion as well as of course, the maintenance contract that goes along with that we anticipated. We originally anticipated closing in early Q2 actually swapped into Q1, and so that was part of our.
The equity in the quarter.
Got it thanks, a lot guys.
Thanks, Matt.
Thank you. Our next question comes from the line of Greg Moscowitz of Mizuho. Your line is open.
Okay. Thank you very much hi, guys.
A bit of a follow up to start just from a wood raimo with asking about and I realize youre going to be selling one dara and JF protect discretely, but is there an opportunity to integrate and optimize some of the IP, where perhaps you can enhance what there is the <unk> technology with protects anti malware.
Thanks for the question Greg on Yeah, you threw me a softball there.
Yes is the answer on we see tremendous opportunity of one of the things that we love about this acquisition is that one dara of sales have been driven by the same market forces that have been driving our sales the desire to connect manage and protect devices with a mobile work force and on.
Apple first way are yet we don't have any overlap in our solutions. There are incredibly complementary in in other words, one customer it makes sense and there are a few customers out there that have already done this literally own everything that <unk> offers and everything.
That one Dara offers but then they've integrated themselves together.
By us providing that integration will take two valuable solutions and make them even more valuable together for our customers. So yes, many integration opportunities and it won't simply be for iOS, either the TNA is a great cross platform solution integrated with identity and there are going.
B potentially millions of Mac users out there that we're going to bring a better work connection experience too and what they've had using historical virtual private networks.
Alright, that's very helpful. Thanks team and are you guys able to say roughly how many customers. One dara has in and just how much customer overlap that exists between the two companies at any level.
They have over 2000 customers, we're not prepared at this time to talk about our.
Customer overlap, we're still doing that analysis.
But what a terrific is even when we have a customer that has both solutions.
Frequently what we have already found its because of their using jump for the Mac and they're using one dara for the mobile devices and we still have more solution from jam that can go in and provide even greater value by bringing an ROI on our iOS device management as well.
So on wall.
We might be running within the same customer base, we're not necessarily running on the same devices today.
All right terrific, thanks, very much strength.
Thank you on our next question comes from David Hynes of Canaccord. Your line is open.
Hey, Thanks, guys congrats on the strong results.
Dean I wanted to ask you about the stat you shared around penetration for for Mac OS I think you said 17 to 20.
3%, which is.
For the exceptional growth I think we typically talk about two to three point annual gains can you just talk about your view of what drove that acceleration whether it was COVID-19 driven how youre thinking about the pace of Mac share gains in 'twenty, one any color along those lines would be helpful.
Sure for just for clarity that was an IDC enterprise study in the U S of organizations of greater than 1000 people a day.
The published that study I believe in.
In December or January I can't remember the exact date of it now but their.
The data showed that in 2019 that was 17% penetration in 2020. It was 23 saw a six percentage point movement for organizations of 1000 and more and then that was reinforced by the mat growth on units.
Court that they did in December which was about 50% growth for Mac. On then of course in Q1. It was over 111% growth for Matt. So we have seen that growth and we are seeing definitely an increase of Mac useful agent within the enterprise and we believe that the overall driver of that is the consumer is Asian of.
The people no longer want to use at home with their issued at work, but rather use at work what they already love in their homes and that is Matt. So as that movement continues we believe that map growth will continue provided that the organization has a solution to secure and manage the Mac that allows it to still.
Work consumer simple that Apple the so known for it that's exactly what <unk> does.
Yeah, perfect and Joe I, just wanted to make sure I'm understanding the guidance correctly. So you raised the range for the full year on revenue by 5 million Bucks.
The two questions. There did the prior guidance range already exclude that $9 million of connect from the second half of that pushes out.
So that's question one and then question two the.
For the nine to 11 that you talk about expected from one day or a that would be incremental to this $3 35 to $3 41 correct.
Yeah, Hey gauge of good question, yes. The previous guidance are already did exclude the $9 million you talked about that and explain that and he did back that out on our original guidance for the year. So that we're holding consistent to that and then the 9% to 11 with absolutely be incremental to the guidance, we're giving we have not layered on dara in to any of the information on that.
The other than just that $99 million to $11 million range that would be on top.
Perfect makes sense, okay. Thank you guys congrats.
Yes.
Thank you on next question comes from Sterling Auty of Jpmorgan. Your line is open.
Yeah. Thanks, Hi, guys. Most of my questions been asked the one from my side would be Deane, when we think about the innovation, especially when M. One chip devices were made available you're really the only platform that could support day, one how does that stand today, whereas your competitive differentiation from a tech.
<unk> side say relative to the other options on the market, especially with the new iOS <unk> enabled devices.
Yes. Thank you for the question Sterling.
Without a doubt on the am one chip and the emergence of big serve the operating system for the Mac.
Shine a light on jumps differentiation because both the operating system and the chip were supported by all jumped solutions of the very day that they were available there are several other providers out there that still today, even though that was released late last fall still today do not support that.
Chip or the operating system and I think that is one of the reasons on.
Why Jeff has seen some good fortune here and in our ability to be able to help customers succeed with Apple.
As you look at our iOS. The same is true our same day readiness on with all Apple operating systems as we showcased in Q1 with our all of our products as well as a key part of the differentiation, but overall I believe that that is it just a small.
Part of the overall, Jeff differentiation, which is allowing things are empowering users with consumer simple Apple technology in other words, giving them the privacy the performance and the user experience that they want but yet doing it on in a way that still delivers.
For the security and the control and the efficiency that the organization requires and one of the things that we loved about one Dara is they built solutions in the same way, we did focusing on that end user empowerment and still delivering the organization what was required.
Excellent. Thank you.
Thank you.
Thank you. Our next question comes from Joshua Reilly of Needham Your line is open.
I think guys congrats on the strong quarter.
I had a question on Kinect, so obviously that product has done quite well over the last year, how should we think about demand correlation for that product relative to growth for the cloud identity providers like okta or azure that the product integrates with like you get some more color.
On what's driving adoption there on that I had a quick follow up.
Sure.
Clearly as more and more organizations are adopting cloud identity providers from the south being able to use that one of the single cloud identity for your authentication whatever you happen to be authenticating too is a really useful security tool and also of user experience tool so you've seen great.
Adoption of jump connect as the organizations have been adopting cloud identity, because essentially we can use the cloud identity to authenticate to the Mac. So we don't we're not on identity provider ourselves, but we leverage and partner with the identity providers to create a better all overall experience on the map with one.
Dara or actually going to take that to a next level because once you authenticate to the device itself using your cloud identity. You will also have private access connection into all of your work resources of both in the network at work on all flow through the cloud using one day or a private access.
And that's once again going to be a solution that creates a great user experience and actually improve security at the same time.
Okay, Great and then just the follow up on that how much of the outperformance in the on premise subscription.
Revenue was related to connect product revenue versus actual on premise subscriptions.
Any color there would be helpful.
Yeah, I'll take that one it was really a combination of the kill both Kroll and connect nothing unusual on unusually large meters on either side of that.
Great. Thanks, guys.
Thanks.
Thank you. Our next question comes from Koji Ikeda of Bank of America. Your line is open.
Great. Thanks, guys, Hey, doing Hey, Joe just a couple of questions here on one Dara Dean I think you said in your prepared remarks that iOS of about 80% of the business.
What's the other 20 per cent of the business is that is that macro or is there anything else on there.
Thanks, Great question on the remaining 20% would be a mix of pretty much all of the other endpoints that you'd be familiar with windows Android Mac.
Would make up that remainder 20 per ton.
Okay got it and then.
I guess a lot of questions on one day, but I wanted to switch gears, a little bit and talk about CMV security.
We saw that you guys completed that acquisition, it's still new but does that fully integrated within the tech stack I mean, I guess any sort of color from initial reaction from customers partners anything on early adoption would be helpful. Thank you.
Yeah. Thanks for the question on.
Just for everybody's information, we acquired the assets of CMT security on a closed that acquisition in the first quarter of the product called the CMT reporter essentially grabs telemetry for.
Security telemetry from the Mac and is able to hand that off to whatever the security logging system. Our Sim is for the organization and that is something that was very well received by our customers. When we call. It there was a small tuck in acquisition.
On the word that we got from our customers is of the exact type of combination of jammed with them delivered again, where the integration delivers greater value to the customers. So nothing quantifiable ought to give you just yet but overall.
Just the.
Anecdotal we've received terrific response from our customers on that.
Got it thanks for taking my questions Congrats on a great quarter and the one day of acquisition.
Shall I appreciate it.
Okay.
Thank you. Our next question comes from Pant Wall Ravens of JMP Securities. Your line is open.
Thank you. So much guys. This is Joe I'm ready to take on for Pat.
This too from our end so first on the dig in on net retention, which continues to be strong.
What is driving that and then second secondly can you just give us the left them on data.
That's right.
Thank you.
Absolutely. Thanks for the question first of all on retention I'm, assuming you mean, the net revenue retention.
I'll I'll just speak first to overall just without.
Our retention of customers what drives that is just great customer support and of product that does what you say it does so by providing those products on that support to our customers. That's the number one thing we do for net revenue retention beyond that I'll, let Jeff handle the rest of that question and then I'll take up on Mandato.
Yeah.
Our drivers are really device gross at the primary driver of net retention as well as on the add on products that we sell but then kind.
Kind of mix of the top of that is the mix of commercial and our education business with our commercial business, a growing faster and at the higher price points that tend to kind of pull it forward and going through the COVID-19 here at the start of a little bit of softness anywhere. It was really offset by some of those growth factors and then when we think about our commercial presence of education.
There's really nothing significantly different about the retention rates across the two verticals as well the just absolute consistency of the last several quarters from from from both verticals.
Super Helpful. And then just on Manada. If you can just give us an update on that.
Oh, yes, I'm sorry.
We've already integrated the solution and provide more value to our customers where today supporting over 500 application titles for the Mac and its just.
Been tremendous reception from our customers and appreciation.
For so quickly taking again, a small tuck in acquisition and delivering customer value and we're not done yet we actually have ideas for a greater improvement.
For the installation and updating on the Mac itself. So.
The initial integration done customer value delivered and we're not done innovating on that front.
Great Super helpful. Thank you guys.
Okay.
Thank you ladies and gentlemen. This concludes today's conference call. Thank you for participating you may now disconnect.
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