Q1 2022 Jamf Holding Corp Earnings Call
[music].
Thank you for standing by and welcome to the first quarter 2022 chance, earning conference call. At this time all participants are in listen only mode. Later, we will conduct a question and answer session and instructions will be given at that time, if anyone should require assistance. During the program. Please press Star then zero on your Touchtone telephone as a reminder, today's program is being recorded.
And now I'd like to introduce your host for today's program, Jennifer Gaumond, Vice President Investor Relations. Please go ahead.
Good afternoon, and thank you for joining us on today's conference call to discuss <unk> first quarter financial results.
Which guarantee collared team Hager, Chief Executive Officer, Joe <unk>, Chief Financial Officer, and John <unk>, Our President and Chief operating Officer.
Before we begin I'd like to remind you that shortly after the market closed today.
Press release announcing our first quarter financial results. We also published Q1 earnings presentation.
And the updated investor presentation.
An excel file containing quarterly financial statements to assist with models.
You may access this information on the Investor Relations section.
Com.
Any 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 the events.
I would also like to remind you that during the call. We will discuss some non-GAAP measures related to Jim's performance you can find the reconciliation of those measures to the nearest comparable GAAP measures.
You see filings and press release.
Additionally to ensure we can address as many analyst questions as possible during the call.
Please limit your questions to one initial question and one follow up.
I'd like to turn the call over to team hanger.
Thank you Jan and thank you everyone for joining us on today's call I will share some highlights from <unk> first quarter and exciting updates from our recent jam virtual customer of that where we announced several key product enhancements.
John will then walk you through recent customer successes and how we are enabling our go to market teams. Then Jill will review the first quarter financial results and provide <unk> financial outlook for the second quarter and fiscal 2022.
Q1 marks the eighth quarter of Jam reporting business results as a publicly traded company over those two years James company market and product have transformed significantly we have exceeded expectations every quarter, despite facing a pandemic recession a challenging environment.
For recruiting and retaining talent and most recently the war in Europe .
In Q1 of 2022, we continue to exceed expectations growing IRR to $436 5 million up 42% increase over the same period last year.
Since James IPO, we have added over $200 million of approximately.
Approximately 23000 customers over 10 million devices and on boarded over 1000, new GMP members.
We are especially proud of <unk> growth in Q1 since we have now completely lap the surgeon education buying that occurred in Q3, and Q4 of 2020 and in Q1 of 2021 or programs like the Giga project in Japan drove device growth in the education market never be.
<unk> seen in our history.
To better understand how <unk> business evolved throughout different stages of the pandemic I would like to compare <unk> Q1 growth rates in education and commercial markets versus the past two years to assist you. We haven't included a quarter by quarter representation of these metrics over the past two years in James.
Earnings presentation, which is available via the webcast and Gm's IR web site.
At the start of the pandemic in Q2, 2020 jumps first quarter as a public company and prior to the surge in education by Champ reported year over year.
Both up 36%, which was comprised of 50% growth in commercial markets and 18% growth in education markets over the course of the next three quarters, we reported that market dynamics had pushed our commercial and education growth rates closer together, culminating in Q1 of 2000.
'twenty, one where jumps year over year commercial <unk> growth was 39% and education growth was 33%.
From that point on education growth rate started to return to normal levels as expected and James commercial growth rates accelerated also as expected. This has continued each quarter and is reflected in our Q1 2022 results for <unk>.
Year over year, <unk> growth and education with 15% despite lapping an incredibly strong prior year and <unk> growth in commercial markets was 57% in Q1 now for the first time, representing over 70% of total IRR.
We're very pleased with the balance between healthy education market and higher growth commercial markets with the larger portion of our business growing at significantly faster rates going forward, we believe that buying cycles and year over year comparisons will no longer have significant pandemic anomalies we.
Celebrate the return to a healthier balance across markets, but we are also proud that our business was flexible enough to adapt during the pandemic in order to help organizations work care and learn remotely while continuing to succeed as a public company maintaining consistent strong growth throughout this period.
Perhaps most impressive has been the transformation of <unk> product platform over the past two years at the time of <unk> IPO. Our business was primarily driven by Apple device management solutions and we have just recently entered the security market with products like Jam connect and protect.
Two years ago in Q1 of 2020 chance total IRR from security solutions was approximately $5 million.
We are very pleased to report that <unk> from Janssen expanding line of endpoint security solutions has grown well over 10 fold to $75 million in Q1 of 2022 with the vast majority of our security IRR coming from commercial markets.
We have accomplished this impressive growth with <unk> security portfolio, while continuing high growth far Apple management products for commercial markets Chimps Q1, <unk> growth for our <unk> Pro and <unk> now Apple management solutions was over 30% year over year and every G.
Okay.
Today <unk> is a leading provider in both Apple device management and cross platform Mobile security that includes identity based account management and authentication next generation Zero Trust VPN prevention of malware phishing and malicious download content filtering data capping.
Compliance and reporting solutions.
<unk> is one of the very few companies in the world that offer both endpoint management and securities, giving GMT unique ability to identify and prevent and remediate security threats automatically.
Of the few companies in the market that offer both endpoint management and security <unk> as the only provider that manages and secures and Apple first enterprise, which is a critical differentiator since the iPhone is the number one smartphone used in the enterprise.
Pat is the number one enterprise tablet and the Mac is the fastest growing computer in the enterprise. According to IDC data apples growth has continued in 2022 with near record Max shipments in Q1 still growing despite a very strong Q1 2021, when Max shipments grew.
<unk>, an amazing 111%.
Not only supports this apple growth, we helped drive it by delivering a consumer simple experience that employees love and in <unk>.
Enterprise secure solution that organizations.
Fulfilling our purpose to simplify work.
Jeff will continue to win the trust of organizations by developing innovative solutions that are Apple <unk> and Apple best further solidifying Jeff as the provider best suited to power the Apple run enterprise of the future are.
A great example of this is the recently launched <unk> fundamentals plan.
<unk> fundamentals is a simple yet powerful solution that provides a super set of mobile device management capabilities, along with the ability to simply turn on malware prevention.
And password same with the most popular cloud identity providers.
Deal for growing small and medium sized businesses. This plan helped provide the management and security functionality businesses need to thwart modern threats all within one simple platform.
New customer can deploy fundamentals with no training required and without speaking to a sales representative.
All current jump now management customers can upgrade to fundamentals with one simple plex.
We launched <unk> fundamentals in late March and have seen an impressive number of devices enrolled into the plan. We showcased this new solution along with several other platform capabilities a few weeks ago at the <unk> spring event.
During this event, which was attended by thousands we took the opportunity to update customers on the progress we've made on what we announced at <unk> last October along with some new features including B Y O D App installers and new security solutions.
Leveraging Apple's latest native technology Jam has now delivered a new <unk> solution that strikes the right balance between organizational security and user privacy offer a compelling price point, 85% less than the cost of Corporately owned iphones and ipads.
This new capability transforms jams competitiveness in the large and underserved <unk> market.
With the delivery of new App installers as part of jams App catalog. We are now providing a workflow for software delivered directly by third parties that mirrors. The simplicity of the Mac App store, we believe <unk> solution is significantly differentiated volume velocity and valid.
<unk> of the third party software, we support and we anticipate customers will save an average of five to 15 hours per week using this new capability.
Continuing our strategy to expand our security portfolio, we also announced significant enhancements to Jeff protect form map with the goal of providing the entire solution needed to maintain good Mac security hygiene, if passed the tax and stop malware compromising endpoints with this.
New announcements, Jim also prevents incoming network threats like fishing and malicious downloads.
Or are they put users or devices at risk.
These enhancements combined with Champs mobile security suite make jam, the only comprehensive endpoint and network security platform built first for Apple yet also available for Android and Windows.
Innovations like the built for the purpose of simplifying work helped jump extend its lead in Apple Enterprise management, and ultimately help drive Apple adoption enterprises of all sizes for more on Gm's recent customer successes and how we're enabling go to market teams to deliver James comprehensive platform.
Tears John .
Thanks, Steve with the enhancements we've outlined at the <unk> event. The GM security platform now provides a one stop shop for organizations looking to secure devices across Mac OS.
IPad OS Android and Windows and when combined with a robust management capabilities <unk> is the only vendor at scale, who can fully support the apple growth within large organizations, especially for the bank.
Nowhere is this more evident than in our technology industry as enterprises are growing their fleet with Mac, serving as a key device of choice for software engineers in Q1, we signed over 26 figure deals many of which were in the technology industry. We're excited to continue working with industry leaders like salesforce as well as Amazon.
And web services with proud to offer employee technology choice and now has one of the largest and fastest growing apple specifically Mac deployments in the world.
We believe this strong that trend in the technology industry will play a significant role in macro across all industries.
As our expanding line of products continues its impressive growth. We've enabled our go to market teams to identify customer needs holistically across both management and security.
And with the help of security overlay sales expertise to provide insights related to complex security requirements. Our teams can demonstrate the power and the value of utilizing GM for all of their device management and security needs.
Success stories, and delivering a comprehensive solution to customers in various industries across both management and security and across device types have helped guide our go to market strategy.
Like for example in health care first the University Medical center growth rates, it's one of the largest academic health care centers in the Netherlands with over a 100 beds and more than 11000 employees UMC has been a <unk> customer for nine years, starting with Mac management in the research Department now over time they began.
Managing back not only for the researchers, but also for doctors and nurses doing patient care as well as for the medical students.
Onset of the pandemic caused a new challenge of supporting a dispersed network and workforce, while meeting the medical center security and privacy requirements.
During this time UMC was able to quickly scale as deployment from 400 to over 800, Max while not having to increase the size of the site team.
Over the past two years, the ITT has both improve their security posture and simplified their user experience with channel by adding Champs connect protect and most recently James private access in January UMC renewed all of its licenses while also growing its Max fleet.
Also with healthcare <unk> health is an innovative national provider of complex specialty pharmacy services administered in the home or an alternative sites of care.
A team of experienced pharmacists nurses and clinicians throughout the United States.
<unk> has leveraged pro Cam threat defense and generous data policy since 2020 to deploy their fleet of iPad and smartphones and ensure these devices are protected and in compliance while in the field and.
In Q1, <unk> renewed bolt, it's Tim threat defense and data policy for a three year term with license growth built in annually.
<unk> health grows jam thats, helping simplify <unk> device management, while addressing their mobile security need.
We are excited to extend this partnership to continue our efforts to bring value to the edmunds as well as our leadership team.
The benefits of this strategy across a number of industries in Q1 over half of our top 20 largest deals included one or more of our security products.
Another element of our security go to market strategy is expanding our relationships with mobile carriers, if you'll recall one of the key opportunities related to last year's one Dara acquisition was the ability to expand in the mobile carrier channel given wonder a strong carrier relationships.
Since then we've expanded in landed carrier relationships internationally with carriers like Docker, Moe BT, Telstra and others with the ability to deliver our full GMP platform. So far we're incredibly pleased with the results of these efforts and in one expanded carrier relationship yielding a new deal for the first day of launch.
We're excited about the opportunity to help organizations simplify their device management, while also addressing their security needs. We look forward to sharing more of our progress in future quarters now I'll turn it over to Jill for our financial results and guidance.
Thanks, John .
Q1 results again reflect continued strong growth.
So proud of how consistently we've delivered such strong results over the last two years.
Our nation of these consistent strong results.
Our high quality recurring revenue.
Our solid net revenue retention.
<unk> investment approach.
These factors combined with our loyal customer base and award winning culture make Jack unique amongst many of our peers and position us well as we navigate the ever changing macro environment.
We ended Q1, several more than 62000 customer with more than $27 3 million devices on our platform.
As Dean mentioned.
Now last tough comparables related to the education buying <unk> in late 2020, and early 2021 now.
Now with a healthier balance between commercial and education market.
With more normalized customer end device going forward.
Q1 revenue growth of 34% and total IRR growth, 42% year over year.
Primarily.
Pension new logo acquisition, and upsell and cross sell effort.
This growth represents at least 25% growth across every channel product.
All major geographies and I'll, let Jim top commercial industry experiencing growth of at least 30%.
And it's worth noting.
Our security offering is now contributing over 15% of our IRR.
Dollar based net retention remained steady at 120% for the trailing 12 months ended March 31.
Well besides expansion is the primary driver of our net retention.
Adding security products are increasingly contributing to our expansion.
As a reminder, our net retention disclosures will not include one there until they have 12 months of training data.
Historical net retention was lower than GAAP. However, we believe that after one year as part of camp one Darrin that retention will have minimal impact to our overall dollar based net retention once its added to our third quarter reporting.
Now the remainder of my remarks on margin expense items and profitability will be on a non-GAAP basis.
Our GAAP financial results, along with a reconciliation between GAAP and non-GAAP are found in our earnings release.
Q1, non-GAAP gross profit margin was 81% a decrease of two percentage points from prior year due to the impact of the one Dara acquisition and the impact of the connect revenue recognition changes both of which occurred in early Q3 2021.
We saw increases in non-GAAP operating expenses in Q1 over the prior year, primarily due to added headcount in sales and R&D and support of topline growth as.
As well as absorbing one their operating costs.
As such Q1, non-GAAP operating margin of 5% to 10% in the prior year quarter.
non-GAAP operating income exceeded our expectations in Q1, partially due to the timing of certain license revenue that you.
Our recognized upfront have minimal associated costs.
Depending defense or some new higher expenses related to recruiting and hardware with Jim.
Anticipate will be recognized over the remainder of the fiscal year.
Our trailing 12 month Unlevered free cash flow margin was 16% compared to 24% in the prior year period.
The prior year period.
Expense savings related to the pandemic and the timing of cash collections and multiyear education contract.
The current period now includes the operating costs associated with one of their operation.
Our trailing 12 month Unlevered free cash flow margin when combined with our trailing 12 months revenue growth of 36% again exceeding our goal of 50.
We anticipate 2022, unlevered free cash flow margins to be at or slightly above 18% margin we achieved in 2021.
We believe our strong consistent cash flow generation differentiate camp. Many other high growth Tech companies and provides us with financial flexibility and stability.
Capex from any rapidly changing market or economic condition.
This cash flow generation also allows us to continue to make investments in innovation and sustainable top line growth.
Our annual effective tax rate of one 3%.
Ah patients.
Going forward for non-GAAP metrics really at the statutory rate for calculating tax impact which is currently 24%.
We have included calculation given the updated methodology for current and prior periods in the excel file containing a quarterly financial statements that have been posted to our IR website.
Please note that we do not pay cash taxes on the U S.
Thanks.
Now I'll provide thoughts on our financial outlook for the second quarter and full year 2022.
As Dan mentioned earlier, we are very pleased with the balanced between our healthy education market and a higher growth commercial market, but the larger commercial question of our business is growing significantly faster rate.
This momentum along with continued investment in our go to market activities and new product offerings, many of what's Dan and John highlighted earlier.
We will drive strong revenue growth in 2022.
From a perspective of investing for continued growth.
Can you remain focused on investment and strategic innovation increased capacity and infrastructure as we scale.
Geographic expansion and strategic market and investment in our people.
And as we have done historically, we will continue to reinvest the performance against our planned back into the business in support of these initiatives.
Given these considerations for the second quarter of 2022.
Total revenue in the range of $112 million to $114 million, representing growth of 30% to 32% year over year.
non-GAAP operating income in the range of $2 million to $3 million.
For the full year 2022.
Total revenue in the range of $472 million to $477 million.
Representing growth of 29% to 30% year over year, and a $5 $5 million raised the midpoint from our prior outlook.
non-GAAP operating income in the range of 19% to $22 million.
As a reminder, our non-GAAP operating income is impacted by the full year impact of the one theyre acquisition, which occurred in July 2021.
Additionally for modeling purposes, we provided estimates for amortization stock based compensation and related payroll taxes.
Annual effective tax rate and basic and diluted weighted average shares outstanding and the earnings presentation as part of the webcast.
Also posted on our Investor Relations website.
And now Jim John and I will take your questions.
Operator.
Certainly ladies and gentlemen, if you have a question at this time. Please press Star then one on your touch tone telephone. If your question has been answered and you'd like to remove yourself from the queue. Please press the pound key our first question comes from the line of Brian Essex from Goldman Sachs. Your question. Please.
Hi, good afternoon, and thank you for taking the question and congratulations on the results for the quarter.
Dana I wanted to start with a quick question for you, particularly as you highlighted the increasing contribution from security.
On your platform.
Wanted to ask are you starting to see a change in the buying patterns, particularly on the enterprise side, and who you're selling to and the appetite for greater endpoint security given the.
Elevated threat environment or are you starting to see <unk> enter the conversation a little bit more frequently or are you still selling through to the traditional type of <unk>.
Enterprise contact person.
Great question, Brian and thank you for it.
Yes, you make a.
Interesting observation because we.
One of the very few as I mentioned that has a full management suite of products and security and as a result.
<unk>.
Story that we're able to tell them the value that we're able to deliver not only of detection.
Security vulnerabilities, but also accident against that now the answer to your question, specifically is a little bit different depending on whether it's in SMB commercial customer or whether it's an enterprise in the SMB space very frequently it's the same economic buyer and so when we originally launched.
For instance, <unk> connect.
A couple of years ago.
First area of traction, we got was actually within SMB and there the bundle of Jam business plan, where we combined pro connect and protect together became very popular very fast enterprise level, a little bit different youre likely going to bring in the team that C. So into that by as well.
And so I would say that our rhythm.
Is really get traction with SMB load up on the references showed the use cases of what we can deliver and then move to the enterprise in which case you do.
Then have contacts with additional economic buyers does that answer your question.
Yes, yes, perfect Super helpful and maybe maybe one quick one just a follow up now that we're kind of entering into a period of more normal buying patterns.
Of lapping that accelerated buying pattern of the pandemic, how should we think about seasonality for <unk> revenue kind of as we fine tune our models for the remainder of the year.
Joe do you want to grab that.
Yeah, Hey, Brian It's Joe.
Thank you.
We have to remember that.
One day of the acquisition that occurred in July of last year. So as they come up on the second half of the year, we will see a slightly slower growth rate compared to what we posted in the first half of the year, just because we're lapping that acquisition, but all things held equal neutralize for that similar growth rate.
Very helpful. Perfect. Thank you very much.
Thank you. Our next question comes from line of Rob Owens from Piper Sandler Your question. Please.
Yes. Thanks for taking my question wanted to build on what Brian was asking around the security front.
Especially as we look at the your Edr solution or are you, replacing brand name endpoint players like.
The crusher et cetera wondering Microsoft are you sitting next to them just just curious how that's logistically playing out within your enterprise space and then just to add to that we love. Some of the early response to Jeremy Internet from some of your customers. Thanks.
Sure. Thanks, Rob So first of all on the are we replacing or.
Cuddling up alongside other security providers that are out there, we're very clearly since gimp connect and protect and Thats really was our are on ramp up getting into the security space. Since those are Max only and almost no enterprise out there is math only we always coexist with somebody else.
Within the enterprise. The question is do we actually co exist on the Mac itself and frequently.
What customers will do because we have such a low impact from a performance and experience on the user when we load those solutions on the map that we will find that customers will actually just go ahead and install is of course using jump pro because theyre all using gen probe for the Mac anyway.
Bill install is right alongside.
<unk> see that we typically will find exports that other solution providers that arent built specifically for Apple.
And then as we bring on new security solutions like threat defense and.
And data policy in such.
Once again.
<unk> of our focused predominantly on Mac and now mobile we really don't focus because it is adequately served the windows ecosystem.
Protection perspective that will always coexist with where most of the security industry is focused which is on the windows windows platform. So.
We'll let them continue to focus on that area will focus on the back of multiple area and then we typically partner with those security providers to make sure that our feeds are going into their data logging. So that there is a simple one source of truth for C zone, and then regarding safe to enter that very quickly we actually are have announced that.
But haven't launched it we announced that it would be coming to market. This.
This summer and we are seeing a lot of anticipation for it but no numbers to report yet.
Great. Thanks for the color.
Thanks Robert.
Thank you. Our next question comes from the line of Matt Stover from William Blair. Your question. Please.
Hey, Deane and Jill Hey, Jennifer Thanks for taking the questions.
Just a couple from me I guess, one maybe you want to take it all the way back to the Apple relationship right. I think we got the really interesting piece of news that Apple is shutting down a fleet Smith, which I think is a pretty strong validation of the way you guys are in.
You are saying about kind of that move and thoughts around that.
That development over the past couple of years, obviously, they still have Apple business essentials, but.
As we've spoken about before.
There has been more of a new channel rather than anything thats really competitive. So any update you can give any any color you can provide in terms of the relationship with Apple as a partner as a customer and then what youre seeing in terms of using that.
Apple business Essentials as a channel.
For kind of Upselling, Jeff.
Will.
Right. Thank you Matt.
First of all the partnership with Apple and the relationship as it continues to be a strong as ever from a customer perspective from a reseller perspective from a development perspective and of course from an influence in the market, which is our primary.
Existing out there together within the enterprise.
So nothing has changed there it is as I mentioned is strong as ever Youre absolutely right.
That pretty much everything that we were providing predictions for what would happen with fleet Smith was indeed, what ended up happening.
<unk> wasn't surprised at all by that announcement.
On the Apple business Essentials again, we consider that at the very very low end of the market to be a great. I mean, frankly, our security solutions as you can see are growing so fast they require.
They are best served if there is some MDM and the picture of that can actually help deploy those solutions. So the more devices out there that actually have an MDM running on it of the better for Jim and so therefore.
Again, we applaud Apple attempting to provide a service to a segment of the market that largely goes on managed typically so.
I have yet and I can say that.
Actually completely.
Since the announcement even of the beta last fall.
Have not talked to a single customer that was.
Views on whether they should run.
<unk> or bring Apple business essentials in Tibet implementation. It really is designed to meet a segment of the market that nobody is really reaching so it is exactly what we thought it was.
And the results are what we expected as well as it pertains to actually expanding the channel for us to give us more to sell to its so early on with Apple business Essentials, we haven't really seen any impact there either.
Understood understood.
And then just maybe one follow up you mentioned the kind of the carrier carrier relationships that Youre building out that's something you had talked about previously as a potential.
Benefit from bringing bringing wander into the picture I would love to just get kind of obviously its relatively early it seems that some of these relationships, though the traction seems to you already.
Pretty encouraging.
But just to get some updated thoughts on kind of timeline for ramping up those relationships and thoughts on how that.
I guess it expands your effective sham from her serviceable addressable market.
Yeah, I would tell you what I'm going to bring John into this discussion a bit just to talk about some of the work that we're doing with carriers, but before I do I'll just remind everybody that you are right. We typically had not gone to market through.
Carriers.
<unk> has an incredibly.
Productive and effective sales force that is led by John and we believe that the primary points of synergy with the <unk> acquisition was actually bringing their products to our customers through our channel, but a secondary benefit was going out there and furthering our.
<unk> chips with one <unk> channel, which is predominantly through either other security companies or carriers, but just I just wanted to remind you that it was kind of a secondary factor from a channel perspective, but John do you want to comment just to touch on some of the work that we're doing with carriers.
Yeah sure. Thanks, Steve.
As you said.
We had those original channels with <unk> channels in that were taken at the wonder of products and putting them in through those channels, but we already had them. The expansion for us is really leveraging the carrier relationships that <unk> had previous to that and I've personally been in discussions with with several carriers and they are very very.
They're very open and eager to add some of the functionality that we have in our legacy gem products to the carrier relationships today. In fact, we've been listed several on several of those carriers in their price list and when Theyre enterprise reps go out to their enterprise customers. They can now quote not just the wonder of products, but also and also the legacy products and put those in and as I mentioned in my in my.
<unk> that we actually had a deal closed immediately once we did that because that's just that's just multiplies our reach into until the enterprises to those carriers.
Great to hear thanks again.
Thank you. Our next question comes from the line of Joshua Reilly from Needham Your question. Please.
Hey, guys. Thanks for taking my questions.
If you look at your international business, how should we think about your exposure to Europe versus APAC or Latam.
And have you seen any divergence in demand between the U S market in these international Geos as the macro has become more challenging in the last couple of months.
Okay. So real quick I think I'll kick it over to Joe in a second.
First of all when talking about the overall impact Theres a couple of factors one would be of course the unrest that's over there.
And specifically some sanction customers and also.
Some FX impact, but Joe do you want to comment or try to quantify.
That impact.
Yes, it's really those couple of factors.
We had to.
Stirring business typically is sanctioned organizations, we had to stop selling into Russia. We had a few deals in our pipeline and then as Dean mentioned the FX could you kind of bundle that all together with the international economic impact for the quarter was about $1 million.
Locks to our IRR that we have.
Protecting for the quarter.
No one.
Significantly individual.
Significant customer just a handful of smaller ones that existed.
Got it that's helpful and then.
You now have a b Y O D U b yod's skew on the website at I believe it's $6 per year.
Curious given some of the changes that apples made the privacy are your salespeople are going to be pitching this offering more aggressively now.
And how is that resonating with customers. After your I know you've done some initial marketing around this.
Yeah. Thanks for the question I'll tell you the what we could do in the <unk> space.
Balancing privacy for the individual and security for the organization.
I will say is.
It's still not well known out there I think most organizations don't even know that what we and Apple do together on BYOB devices is even possible, which is a native way of segmenting and iPhone into a personal partition and work.
Titian and actually giving the management software the ability to natively put apps in the.
Worth partition and set up with <unk>, new private access solution a.
Her app VPN to make sure that all communications from those apps are secure and the same thing with E Mail.
We are just conditioning the market what that story I don't think that there was going to be a huge surge of a move towards this solution for <unk> in the short term because so little of the market is even aware of really how special what we can do.
So we'll be getting and we've seen some interest early on as we've talked to customers and explained what's possible. But this is something that I think is going to deliver for the long haul because as you well know the BYOB market is absolutely enormous and I almost think of it very similarly to when jam first entered into.
These zero trust deployment market back in 2014 to 15 using native Apple technology.
Was slow at first because frankly organizations didn't even know what was possible, but eventually it just became the standard way to deploy I think thats going to happen and B Y O D as well.
Got it thanks guys.
Thank you. Our next question comes from the line of Koji Aikido from Bank of America. Your question. Please.
Hi, This is Barry onboard Koji thanks for taking our question.
So it seems like the <unk> device.
Increase.
I was wondering what's the driver for that.
And under the current inflationary environment.
How do you think about the price increase and the bundling bundling strategy.
Why don't Joe why don't you take both of those.
Yes.
Hey, good afternoon. So when it comes to the increase that Youre seeing in our <unk> per device a couple of different things going on there.
One of them is we're starting to sell more products per device with our add on product offerings, particularly the security suite and then there's also a mix shift that's occurring between our commercial and education business as you recall, our commercial device carries about a five point, a blended compared to education and with Q1 being.
Our largest commercial bookings quarter that we've had really starting to see the weight of that especially when you consider the fact that congressional now represents over 70% of the business that we're doing so with the mix shift we're seeing between commercial and education as well as the benefit of the add on products that we are seeing great traction with impact.
Over 20% of our commercial customers have more than one product on their devices.
I wanted to pick us drivers as well.
Great. Thanks for the color and then just on.
That international expansion just wanted to drill down.
Would you call out the China impact given their COVID-19 lockdown situation. So Apple have commented on their earnings I was wondering how that kind of intense impact you guys.
Thank you for that question not in a material way today.
R.
Our largest business in APAC.
In Japan, but John do you want to just.
Chime in just a little bit as to whether you've been seeing anything from a.
Something that would be material impactful in China.
No in fact, the China has not been.
A big target market selling into we have some opportunities there, but really our focus in fact, Taiwan.
It's growing quite a bit as far as the demand and then we've also seen demand in South Korea, South Korea increased but primarily as he mentioned is Japan, and we still we still see tremendous growth opportunity and actual growth in Japan, we've gone outside the U S. At a faster clip than we've grown inside the U S. So we'll continue that investment internationally because it's over half.
Total addressable market.
Great. Thanks.
Thank you. Our next question comes from line of Matthew <unk> from Craig Hallum. Your question. Please.
Hi, This is Nick on for Chad Bennett, Thanks for taking our question so.
So just a question on the education segment, where we are today in terms of attaching security products in the education customers and then as we as.
As we begin to gear up for the next school year and can you speak to the cross sell opportunities you see in the education base.
Yes, thanks for the question, Matt and thanks for joining us as well.
I would say the products that we have the security products that we have.
After World Baseball game, it's in the first inning of actually starting to penetrate.
The education market, we originally by design focused on the commercial market.
With our new security offered although we're starting to see pickup demand as we position of more within the education space and as there is continued.
Even our regulations out there in legislation of the importance of protecting students not only from.
Say use but also ensuring that students don't accidentally exposed the organization to security threats, we're seeing an increase in demand, but when we really expect to see it is when we launched the safe Internet solution.
We just talked about earlier, that's coming this summer.
See a lot of interest in it and I think not only will that drive our volumes of the safe Internet solution itself, but it will open the door to conversation for the remainder of our security portfolio that can come in and benefit them.
Got it thank you.
Thank you. Our next question comes from the line of.
The <unk> Srinivasan often from Barclays. Your question. Please.
Thanks for taking my question just to follow up on <unk> given that it's early is it fair to say that that potential uplift from BYD BYOB is not built into guidance yet.
I don't expect that an uplift thank you.
I don't expect that <unk>.
Materially change any guidance that we've provided at this time and as I mentioned I'm not expecting a lot of near term uplift there.
More of a long term uplift that I believe will exist.
Again, if you look historically at jam.
We've just never really been focused now we could run always on <unk> devices.
And bring value to them, but just the way the market is structured for BYOB, it's a low price market, where no provider out there really provides a lot of differentiation on <unk> devices and if they do they more than likely wrap the potential for those users.
To be able to upgrade to the latest operating system Windows operating systems come out.
With apples, what's called user enrollment and device partitioning technology that exists and embracing it really being alone in doing so we're providing the best of both worlds of being able to connect that device per work, but yet have to be completely personal and be able to upgrade on the users.
<unk>.
Timetable.
<unk> that opens up we're focusing on it for the first time and we just announced this.
Reising for B y or the we didn't even have special pricing for B why would be before because we just.
Just wasn't that attractive market for us now with a differentiated solution. It is and in the out years to 2022, I think it will have a more meaningful impact it will have some penetration this year, but it's more of a long term play.
Got it that makes sense and then one more for me.
You talk about some of the early adoption patterns for.
<unk> security solutions, various initial adoption patterns brand that connect and protect are there any similarities differences and what have you learned from rolling out connect and protect that you're kind of using now to drive adoption here.
Yes, well one of the things we've learned was what I mentioned to Brian earlier that.
It's very popular.
That there is a single economic buyer in F&B and so it becomes an area, where we can ignite our sales force very rapidly and youre asking the right question about.
The early days of sales of the.
The products that we acquired our threat defense, Jeff data policy.
Jeff private accesses is how are those products selling comparative to say Jeff protect.
When we launch that product now coincidentally.
The one <unk> products launched on <unk> paper in Q4 of 2021, and Jeff protect launched to our customers in Q4 of 2019, So we actually contract the first two quarters of sales.
And you know pretty equally and if you look at just those couple of quarters of sales. We're very pleased with how the <unk> products are sold.
We're tracking ahead of the first two quarters of selling Jeff protests. So given more Jeff protect ended up two years later contributing to that $75 million security number that we have for IRR right. Now we're pleased that the one day our products are tracking ahead of that pace and again, that's by the way.
Just selling those products through the jump direct sales channel.
Not including the one Dara sales that come through the already established one day or a carrier and security company sales. So it is really a pretty good apples to apples comparison and we're ahead of the pace that we had set on jet project a couple of years ago.
That's helpful. Thank you again.
Yes.
Thank you. Our next question comes from the line of Pat Walraven from JMP Securities. Your question. Please.
ATM is generates a golfer Pat. Thank you so much for the question I was hoping you could touch on your relationship with Google and give us an update on the Google Cloud partnership.
Is that playing out so far thank you so much.
Oh, yes, absolutely. Thank you for your question.
We have tremendous partnerships with a lot of the major.
Platform providers out there and especially on the identity front.
<unk>.
Jump connect for instance, integrates with all of the identity providers in order to provide the most seamless on ramp of <unk>.
Any apple device within a network that has the identity secured.
By either a Microsoft or an offshore for instance, at Google and Google.
A great partner on that front and then most recently.
We expanded that partnership too.
Somewhat similar capability as we've had with Microsoft for some time.
It's part of their <unk> or Zero Trust network access strategy, it's called Google Beyond Corp.
And it's where Google can actually look to jail.
See if a user and device is compliant and as a result.
We can signal and we have a flag actually within Google that could be said that we can tell Google to block a device from their network based on them checking with us so.
It's one of the reasons why we provide both management and security is because we're getting so much security data now.
And in a dynamic way, we can take that security data.
Instantly set a flag within either Microsoft or within Google using Google Beyond Corp to say block. This device from your network. So it's being able to do that with Google was one of the reasons why it was so attractive to our customers for us to enter into the security space given the management partnership that we had with the <unk>.
Google and Microsoft of the World.
That's really helpful. Thank you so much for the color.
Absolutely.
Thank you. This does conclude the question and answer session of today's program I'd like to hand, the program back to Dean Hager for any further remarks.
Well hey, Thank you again, everybody for joining the call just in closing this quarter like the past two years now.
<unk> continued to deliver innovative solutions to the market that now comprise a broad multi platform product portfolio and once again, we have exceeded financial expectations with consistent balanced and financially healthy growth and going forward.
Whereas the optimistic as we've ever been Jeff is well positioned to continue delivering for our customers employees and shareholders given the demand that we see in the market our high quality recurring revenue loyal customer base strong net revenue retention and balanced approach to revenue growth and margins.
You and have a great evening.
Thank you, ladies and gentlemen for your participation in today's conference. This does conclude the program you may now disconnect good day.
Okay.
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