Q1 2024 Jamf Holding Corp Earnings Call

May 8, 2024

Rochelle: Thank you for standing by. My name is Rochelle, and I will be your conference operator today. At this time, I would like to welcome everyone to the Jamf First Quarter 2024 Earnings Call. All lines have been placed on mute to prevent any background noise.

Thank you for standing by my name is Rochelle, and I will be your conference operator today at this time I would like to welcome everyone to the Johns first quarter 'twenty 'twenty four earnings call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer.

Rochelle: After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during this time, simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question, press star one again. Thank you. I would now like to turn the call over to Jennifer. Please do so.

Jennifer: Session. If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question Press Star one again, thank you.

Rochelle: I would now like to turn the call over to Jennifer. Please go ahead.

Jennifer: Good afternoon, and thank you for joining us on today's conference call to discuss Jamf's first quarter 2024 financial results. With me on today's call are John Strosahl, Chief Executive Officer, and Ian Goodkind, Chief Financial Officer. Before we begin, I'd like to remind you that shortly after the market closed today, we issued a press release announcing our first quarter financial results. We also published a Q1 earnings presentation, investor presentation, and an Excel file containing quarterly financial statements to assist with modeling. You may access this information in the investor relations section of Jamf.com.

Jennifer: Good afternoon, and thank you for joining us on today's conference call to discuss <unk> first quarter 2020 for our financial results with me on today's call are John Russell, Chief Executive Officer, and Ian Good kind Chief Financial Officer before we begin I'd like to remind you that shortly after the market close.

Jennifer: Today, we issued a press release announcing our first quarter financial results. We also published a Q1s earnings presentation Investor presentation, an excel file containing quarterly financial statements to assist with modeling you may access this information on the Investor Relations section of <unk> Dot com.

Jennifer: Today's discussion may include forward-looking statements. Please refer to our most recent SEC reports, 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 non-GAAP measures related to Jamf's performance. You can find the reconciliation of those measures to the nearest comparable GAAP measures in our earnings release.

Jennifer: Today's discussion May include forward looking statements. Please refer to our most recent SEC reports, 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.

Jennifer: I would also like to remind you that during the call. We will discuss some non-GAAP measures related to Jeff's performance you can find a reconciliation of those measures to the nearest comparable GAAP measures in our earnings release.

Jennifer: 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 John Strosahl. John?

Jennifer: 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 John struggle John.

John Strosahl: Thanks, Jim. Jamf started off the year strong, reaching a milestone of $600 million in total ARR. At the end of Q1, ARR grew 14% year-over-year to reach $602.4 million. We're delivering on the expectations we set for 2024. Both Q1 revenue and non-GAAP operating income exceeded the high end of our outlook. Q1 year-over-year revenue growth was 15%, and non-GAAP operating income was $22.1 million, with a non-GAAP operating income margin of 15%.

John Strosahl: Ken <unk>.

John Strosahl: <unk> started off the year strong, reaching the milestone of $600 million of total IRR at the end of Q1, <unk> grew 14% year over year to $602 $4 million, we're delivering on the expectations. We set for 2020 for both Q1 revenue and non-GAAP operating income exceeded the high end of our <unk>.

John Strosahl: Outlook Q1 year over year revenue growth was 15% and non-GAAP operating income was $22 1 million with non-GAAP operating income margin of 15%. This margin represents a 1000 basis points improvement from Q1 of 2023.

John Strosahl: This margin represents a 1,000 basis points improvement from Q1 of 2023. We ended Q1 with 75,900 customers and 32.8 million devices on our platform. Of these customers, 41% run a Jamf management and security product. We continue to drive cross-sell with 31% year-over-year growth in security ARR to $138 million, or 23% of Jamf's total ARR. Our largest industries, tech and K-12, remain muted, impacting device expansion.

John Strosahl: We ended Q1 with 75900 customers and $32 8 million devices on our platform.

John Strosahl: These customers, 41% <unk> management and security product, we continue to drive cross sell with 31% year over year growth in security <unk> to a $138 million or 23% of jams total IRR.

John Strosahl: Our largest industries Tac and K through 12 remained muted goodbye. This expansion the remaining industries in our top five continue to see positive trends. We're also encouraged by growth in the PC market in Q1. After two years of decline. According to IDC Q1 year over year worldwide PC shipments grew one 5% to nil.

John Strosahl: The remaining industries in our top five continue to see positive trends. We're also encouraged by growth in the PC market in Q1 after two years of decline. According to IDC, Q1 year-over-year worldwide PC shipments grew 1.5% to nearly 60 million units, representing a similar level of shipments to pre-pandemic levels. Apple saw the highest year-over-year growth in shipments of any company in Q1 at 14.6% and also increased its market share.

John Strosahl: Early 60 million units, representing a similar level of shipments to pre pandemic Apple saw the highest year over year growth in shipments of any company in Q1 at 14, 6% and also increased its market share.

John Strosahl: IDC remains optimistic regarding PC sales in 2024, as companies begin refreshing PCs that were purchased during the pandemic. However, while we are encouraged by this Q1 data, our outlook for 2024 does not rely on a significant uplift in device expansion. We continue to innovate and deliver solutions to help organizations succeed with Apple. In April, we held a special Jamf event to showcase a number of new offerings with a focus on compliance. IT and security teams are being asked to get more involved beyond traditional device management functions to help meet these various compliance standards across their Apple devices.

John Strosahl: <unk> remain optimistic regarding PC sales in 2024 as companies begin refreshing Pcs that were purchased during the pandemic.

John Strosahl: While we are encouraged by this Q1 data our outlook for 2024 does not rely on a significant uplift in device expansion.

John Strosahl: We continue to innovate and deliver solutions to help organizations succeed with Apple.

John Strosahl: In April we held a special event to showcase a number of new offerings with a focus on compliance.

John Strosahl: And security teams are being asked to get more involved beyond traditional device management functions to help meet these various compliance standards across their Apple devices, Jeff is proud to deliver tools that help customers navigate the vast and varied compliance landscape.

John Strosahl: Jamf is proud to deliver tools that help customers navigate the vast and varied compliance landscape. Product updates highlighted at the event include a customizable compliance dashboard in Jamf Protect, allowing admins to view an aggregate baseline score and detailed information to understand and remediate compliance issues. Compliance Editor Tool for Jamf Pro for iOS that generates deployable configurations to make endpoints compliant with a chosen compliance benchmark. Jamf Routines Tool for Jamf Bundled Solutions, which offers customers new no-code automations and integrations to streamline management and security workflows, while also providing seamless integration with Slack and Microsoft Teams to alert IT teams when devices fall out of compliance. Privilege Elevation feature that utilizes an organization's cloud identity provider and Jamf Connect to temporarily allow admin privileges for local macOS accounts based on valid user authentication and authorization

John Strosahl: Updates highlighted at the event include a customizable compliance dashboards and James protect allowing admins to view, an aggregate baseline score and detailed information to understand and remediate compliance issues compliance editor tool for GMP pro for iOS that generates deployable configurations to make endpoints comply.

John Strosahl: With a chosen compliance benchmark.

John Strosahl: Kemper teams tool for bundled solutions, which offers customers new no code automation and integrations to streamline management and security workflows, while also providing seamless integration with slack and Microsoft teams to alert teams when devices fall out of compliance.

John Strosahl: Privilege elevation feature that utilizes it organizations cloud identity provider and just connect to temporarily allow admin privileges for local Mac OS accounts based on valid user authentication and authorization.

John Strosahl: We also recapped our recent announcement that support for Apple Vision Pro is now available across the entire Jamf platform. With Jamf Pro, organizations can enroll and streamline the deployment of enterprise apps and settings for Apple Vision. Jamf Connect allows Apple Vision Pro to securely access enterprise resources for any of the web and native apps that require secure identity-based access controls. Jamf Protect extends the same mobile threat defense, network protection, and content filtering use cases to Apple Vision Pro.

John Strosahl: We also recapped our recent announcement that support for Apple Vision Pro is now available across the entire platform with.

John Strosahl: With <unk> pro organizations can enroll and streamline deployment of enterprise apps and settings for Apple vision Pro <unk>.

John Strosahl: <unk> connect allows Apple vision pro to securely access enterprise resources for any of the web and native apps that require secure identity based access controls can't protect extends the same mobile threat defense network protection and content filtering use cases to the Appalachian Pro.

John Strosahl: We also announced that support for watchOS management is coming later this year, including enrollment and inventory display. We're excited about the opportunities that watchOS management provides, especially as it relates to deskless workflows across a number of industries. Enabling these new device types is a testament to Jamf's commitment to simplifying Apple at work and giving users the ability to be productive however they work best. In addition to the spring event, we hosted another important event, our first Investor Day, in mid-March. We outline the next phase of Jamf evolution, which is all about efficient scalability. If you haven't had a chance to review the event yet, I encourage you to do so.

John Strosahl: We also announced that support for watch OS management is coming later, this year, including enrollment and inventory display.

John Strosahl: We're excited about the opportunities that <unk> management provides especially as it relates to desktop workflows across a number of industries.

John Strosahl: Enabling these new device types is a testament to <unk> commitment to simplify apple at work and giving users the ability to be productive. However, they work best.

John Strosahl: In addition to the spring event, we hosted another important event, our first Investor day in mid March.

John Strosahl: We outlined the next phase of <unk> evolution, which is all about efficient scalability.

John Strosahl: If you hadn't had a chance to review the events yet I encourage you to do so the replay and presentation can be found on our Investor Relations website.

John Strosahl: The replay and presentation can be found on our investor relations website. During the event, we highlighted our differentiated position in the competitive moat, our large and growing addressable market, our strategic growth drivers, and our financial expectations through 2026. I'd like to use the strategic growth drivers we discussed during this event as the framework for the remainder of my remarks, highlighting some of the specific successes we saw in Q1. First, and Mac Leadership, we continue to demonstrate how Jamf's Apple First, Apple Best solutions deliver the best outcomes for our customers. And in Q1, a leading online travel company renewed with Jamf for three years.

John Strosahl: During the event, we highlighted our differentiated position in competitive moat, our large and growing addressable market, our strategic growth drivers and our financial expectations through 2026.

John Strosahl: I would like to use the strategic growth drivers we discussed during this event as the framework for the remainder of my remarks, highlighting some of the specific successes we saw in Q1.

John Strosahl: First and Mac leadership, we continue to demonstrate high chance Apple first Apple best solutions deliver the best outcomes for our customers and.

John Strosahl: In Q1, a leading online travel company renewed with GM for three years key to this win was our ability to demonstrate how <unk> solutions can help with the customer's current strategic initiative around process automation. We also delivered a long term roadmap for expanding with GM, including <unk> pro for iOS and protect our ability to.

John Strosahl: Key to this win was our ability to demonstrate how Jamf's solution can help with the customer's current strategic initiative around process automation. We also delivered a long-term roadmap for expanding with Jamf, including Jamf Pro for iOS and Jamf Protect. Our ability to build strong relationships with customers at the management level was also beneficial, helping streamline the approval process, and our suggestion to utilize AWS Marketplace to leverage their committed spend was a win-win, simplifying procurement for the customer and resulting in a timely renewal for Jamf.

John Strosahl: Build multiple strong relationships with the customers at the management level was also beneficial helping streamline the approval process and our suggestions who utilize AWS marketplace to leverage their committed spend was a win win simplifying procurement for the customer and resulting at a timely renewal for Gms were.

John Strosahl: We're excited about continued growth through the AWS Marketplace as customers can use committed spend towards their Jamf contract, like Netlify, a cloud platform for front-end teams to build, deploy, and scale modern web applications. Netlify is now using Jamf with committed spend for AWS to manage its Apple devices and connect its end users to the resources they need.

John Strosahl: We're excited about continued growth through the AWS marketplace as customers can use committed spend towards their GMP contract like <unk>, a cloud platform for front end teams to build deploy and scale modern web applications.

John Strosahl: <unk> is now using Champ with committed spend through AWS to manage as Apple devices and connect their end users to the resources they need.

John Strosahl: Second, with respect to expanding with mobile, we continue to see customers utilizing Jamf across their mobile fleets, especially for deskless workflows. In Q1, one leading specialty retailer expanded with Jamf beyond Mac by adding Jamf Pro for 15,000 iOS devices used across nearly 1,500 retail locations. This was a great win for Jamf against a legacy UEM provider, a testament to Jamf's continued commitment to innovating at the pace of Apple to securely manage multiple device types across multiple use cases.

John Strosahl: Second with respect to expanding with mobile we continue to see customers utilizing jump across their mobile fleece, especially for desktop workflows in Q1, one leading specialty retailer expanded with Champs beyond Mac by adding Gen probe for 15000 iOS devices used across nearly 500 retail locations.

John Strosahl: This was a great win for Champ against the legacy OEM provider, a testament to GFS continued commitment to innovating at the pace of Apple to securely manage multiple device types across multiple use cases.

John Strosahl: We're strongly encouraged by our progress in the retail space, which represents one of our top five largest. Retail, along with financial services and professional services, continues to see strong growth, helping balance the softness we are seeing in tech and K-12 education. Tech is seeing muted hiring and lower IT investments, while K-12 is experiencing a bit of a COVID overhang with record device deployments in 2020 and 2021.

John Strosahl: We're strongly encouraged by our progress in the retail space, which represents one of our top five largest industries retail along with financial services and professional services continue to see strong growth, helping balance the softness we're seeing in tech and K through 12 education Tech is seeing muted hiring and lower it investments while K through 12.

John Strosahl: <unk> experienced a bit of a COVID-19 overhang with record device deployments in 2020 and 2021.

John Strosahl: The third growth driver, management and security, is what we refer to as delivering our trusted access vision in an area of opportunity we expect to become a larger part of our total ARR over time. Our ability to deliver both management and security on one platform is a key differentiator for Jamf. Both legacy UEM providers and Apple-specific management providers lack a complete platform, requiring customers to utilize a number of third-party vendors to deliver management, connection, and protection capabilities.

John Strosahl: The third growth driver management, and security or what we referred to as delivering our trusted access vision and an area of opportunity we expect to become a larger part of our total IRR over time.

John Strosahl: Our ability to deliver both management and security on one platform is a key differentiator for Champs.

John Strosahl: Both legacy OEM providers, and Apple specific management providers lack the complete platform requiring customers to utilize a number of third party vendors to deliver management connection and protection capabilities smaller organizations, often don't have the bandwidth budget or the desire to engage multiple third parties.

John Strosahl: Smaller organizations often don't have the bandwidth, budget, or the desire to engage multiple third parties, making Jamf's Trusted Access Platform an appealing solution. We continue to see an increasing number of deals with both a management and a security component. We see this in the continued strong growth of Jamf's bundled commercial solutions, which grew 63% year over year in Q1. And currently, 45% of Jamf's new customer commercial pipeline is made up of security opportunities.

John Strosahl: Making gm's trusted access platform and appealing solution.

John Strosahl: We continue to see an increased number of deals with both the management and the security component. We see this by continued strong growth of Gm's bundled commercial solutions, which grew 63% year over year in Q1, and currently 45% of <unk> new customer commercial pipeline is made up of security opportunities. Additionally, when it.

John Strosahl: Additionally, when a customer consolidates management and security with Jamf, we see reduced churn compared to customers with just a management solution or just a security solution. In Q1, a precision medicine company became a Jamf business plan customer for its 1,200 devices. This company chose to move away from the legacy UEM provider and chose Jamf due to the value trusted access brings to their organization and the strength of our capabilities for a mixed device environment. The customer's device environment includes Macs, PCs, Chromebooks, and Android.

John Strosahl: Consolidated management, and security, which amp, we see reduced churn compared to customers with just a management solution or just a security solution.

John Strosahl: In Q1, a precision medicine company became a jam business planned customer for their 200 devices. This company chose to move away from the legacy OEM provider and chose <unk> due to the value of trusted access brings to the organization and the strength of our capabilities for a mixed device environment the customers device.

John Strosahl: <unk> includes Mac, Pcs and Chromebooks and Android.

John Strosahl: Also in Q1, one of our largest airline customers, a mainline American carrier, expanded beyond management, adding Jamf Connect and Jamf Protect to 15,000 of their iOS devices, which are utilized globally. We were able to demonstrate our industry leadership in managing and securing mission-critical mobile use cases and remote work situations, which were key to this win. Our solutions allowed the customer to have a defined practice for continuously securing mobile devices, something the customer only had previously for PCs.

John Strosahl: Also in Q1, one of our largest airline customers our mainline American carrier expanded beyond management, adding Jeff connect and protect to 15000 of their iOS devices, which are utilized globally.

John Strosahl: We're able to demonstrate our industry leadership in managing and securing mission critical mobile use cases, and remote work situations, which were key to this win our solutions allowed the customer to have a defined practice for continuously securing mobile devices something the customer only had previously for Pcs. This successful service the blue.

John Strosahl: This success will serve as the blueprint for further expansion with customers in other areas of their business, and Clarion Housing Group, the largest housing association in the United Kingdom with 125,000 properties across more than 170 local authorities, recently became a Jamf customer using Jamf Pro and Jamf Connect for their Mac and iOS fleets.

John Strosahl: Print for further expansion with customers in other areas of their business and.

John Strosahl: And clearing housing group the largest housing association in the United Kingdom with 125000 properties across more than 170 local authorities recently became a <unk> customer using genome pro and Champs connect for their Mac and iOS fleets.

John Strosahl: These three wins showcase the strength and leadership of Jamf's management and security platform, which is able to deliver the right solution for each organization, whether that is purchasing both management and security at the onset or expanding beyond management at the right time. And lastly, with respect to international expansion, Jamf continues to invest in strategic geographies where we're seeing growing adoption for Apple. Revenues outside of the U.S. continue to grow at a faster rate than U.S. revenues.

John Strosahl: These three wins showcase the strength and leadership of Champs management, and security platform, which is able to deliver the right solution for each organization, whether that is purchasing both management and security of the onset or expanding beyond management at the right time.

John Strosahl: And lastly, with respect to international expansion GM continues to invest in strategic geographies, where we're seeing growing adoption for Apple.

John Strosahl: Revenues outside of the U S continue to grow at a faster rate than U S. Revenues in Q1, we saw a number of international wins for our camp executive threat protection product with government agencies in the Middle East and India.

John Strosahl: In Q1, we saw a number of international wins for our Jamf Executive Threat Protection product with government agencies in the Middle East and India. The win in India represented our first government agency win in the country.

John Strosahl: The win in India represented our first government agency win in the country.

John Strosahl: The agency has embarked on a journey to curb cybercrime, and Jamf Executive Threat Protection, along with other products, will be used by forensic teams to investigate and, for instance, respond. Jamf's Executive Threat Protection was chosen due to its ability to identify sophisticated digital threats and extend visibility into attacks that target high-value users. Wins like these help our footprint in these regions and offer a blueprint for similar organizations in the area to utilize Jamf. We've seen success with this strategy in the past in countries like Japan.

John Strosahl: The agency has embarked on a journey to curb cyber crime and Gm's executive threat protection, along with other products will be used by forensic teams to investigate and for incident response.

John Strosahl: Janssen executive threat protection was chosen due to its ability to identify a sophisticated digital threats and extend visibility into attacks that target high value users.

John Strosahl: Wins like these help our footprint in these regions and offer a blueprint for similar organizations in the area to utilize chance. We've seen success with this strategy in the past in countries like Japan will continue to leverage the success and select geographies, where we're seeing the most potential.

Ian Goodkind: We'll continue to leverage this success in select geographies where we're seeing the most potential. I'll now turn it over to Ian to review our results and provide our Q2 and 2024 outlook. Thanks, John.

Ian Goodkind: I'll now turn it over to Ian to review, our results and provide our Q2 and 2020 for outlook.

Ian Goodkind: We ended Q1 with year-over-year revenue growth of 15%, exceeding the high end of our revenue outlook by $2.1 million. Total ARR reached 602.4 million, representing year-over-year growth of 14%, exceeding expectations. We continue to believe that Jamf's commercial business, and specifically commercial security, will be a key growth driver both now and in the future. A strategic core of Jamf's business, SAS recurring revenue remains strong, and Q1 grew 18%. Less strategic revenue sources, like licenses, services, and on-premise revenues, continue to experience year-over-year declines but came in slightly better than expected.

Ian Goodkind: Thanks, John we ended Q1 with year over year revenue growth of 15% exceeding the high end of our revenue outlook by $2 1 million.

Ian Goodkind: Total <unk> reached $602 4 million representing year over year growth of 14% exceeding expectation.

Ian Goodkind: Continue to believe that Champ commercial business and specifically commercial security will be a key growth driver both now and in the future.

Ian Goodkind: The strategic core of Champs business SaaS recurring revenue remained strong in Q1 growing 18% less strategic revenue sources like licenses services non premise revenues continued to experience year over year declines, but came in slightly better than expected.

Ian Goodkind: Our net retention rate decreased slightly, as expected, to 107% in Q1 when compared to Q4 2022. The remainder of my remarks on margins, expense items, and profitability will be on a non-GAAP basis. Our GAAP financial results, along with the reconciliation between GAAP and non-GAAP, are found in our earnings release.

Ian Goodkind: Our net retention rate decreased slightly as expected to 107% in Q1, when compared to Q4 and 2023.

Ian Goodkind: The remainder of my remarks, some 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 Q.

Ian Goodkind: Q1's non-GAAP growth profit margin was 81% and within our expectations. We continued to anticipate growth margins in the low 80% range and expect slight fluctuations each quarter. Non-GAAP operating income exceeds the high end of our Q4 outlook at $22.1 million, or 15% margin, due to cost-saving initiatives and increased revenues, representing an approximate 1,000 basis point improvement over Q1 2023. Our trailing 12 months on lever-free cash flow margin was 13% compared to 14% in the prior year. Our effective tax rate for Q1 was negative 5.4%, consistent with our expectations.

Ian Goodkind: Q1, non-GAAP gross profit margin was 81% and within our expectations. We continue to anticipate gross margin in the low 80% range and expect slight fluctuation each quarter.

Ian Goodkind: non-GAAP operating income exceeded the high end of our Q4 outlook at $22 1 million or 15% margin due to cost saving initiatives and increased revenues, representing an approximate 1000 basis point improvement over Q1 2023.

Ian Goodkind: Our trailing 12 month Unlevered free cash flow margin was 13% compared to 14% in the prior year.

Ian Goodkind: Our effective tax rate for Q1 was negative five 4% consistent with our expectation.

Ian Goodkind: As a reminder, for our non-GAAP metrics, we use a domestic statutory rate for calculating tax impacts, which is currently 24%. Please note that we pay a negligible amount of cash taxes on a U.S. federal basis and pay an immaterial amount of cash taxes outside the U.S. At our Investor Day, we outlined some key milestones that will help you track our progress against our goals. One, meet our quarterly financial outlook. In Q1, we exceeded the high end of both our revenue and non-GAAP operating income guidance. Two, achieve at least 25% growth in security ARR. Q1 year-over-year growth of security ARR was 31%. 3.

Ian Goodkind: As a reminder, for our non-GAAP metrics, we use a domestic statutory rate for calculating tax impact which is currently 24%. Please note that we pay a negligible amount of cash taxes on our U S federal basis, and pay an immaterial amount of cash taxes outside the U S.

Ian Goodkind: During our Investor day, we outlined some key milestones that will help you track our progress against our goal.

Ian Goodkind: One meet our quarterly financial outlook in Q1, we exceeded the high end of both revenue and non-GAAP operating income guidance ranges.

Ian Goodkind: To achieve at least 25% growth in security.

Ian Goodkind: Q1 year over year growth of security.

Ian Goodkind: <unk> was 31%.

Ian Goodkind: Decrease General and Administrative Expense as a Percentage of Total Revenue. Q1 non-GAAP GNA margin was 14%, an approximate 100 basis point reduction from Q4 2022. 4.

Ian Goodkind: Three decreased general and administrative expense as a percentage of total revenue Q1, non-GAAP G&A margin was 14% an approximate 100 basis point reduction from Q4 2023.

Ian Goodkind: DECREASING SALES AND MARKETING EXPENSE AS A PERCENTAGE OF TOTAL REVENUE. Q1 non-GAAP sales and marketing margin was 34%, an approximate 200 basis point reduction from Q4 2020. With respect to sales and marketing expense, given that we anticipate the largest portion of cost savings coming from this area, we are providing additional details on current efficiency and scalability initiatives. First, earlier this year, we adjusted our workforce with a focus on higher productivity. Second, we're adjusting our sales incentive structure to further drive cross-sell security in mobile and price caps.

Ian Goodkind: For decreased sales and marketing expense as a percentage of total revenue Q1, non-GAAP sales and marketing margin was 34% an approximate 200 basis point reduction from Q4 2023.

Ian Goodkind: With respect to sales and marketing expense given that we anticipate the largest portion of cost savings coming from this area. We are providing additional detail on <unk>.

Ian Goodkind: Efficiency and scalability initiatives.

Ian Goodkind: First earlier this year, we adjusted our workforce with a focus on higher productivity.

Ian Goodkind: We are adjusting our sales incentive structure to further drive cross sell security and mobile and price capture.

Ian Goodkind: Third, we are implementing programs to drive enhanced value from our channel partners. Fourth, we continue to focus on educating customers on the value we provide with our Trusted Access Outlook. And fifth, we are aligning resources to geographies with the highest growth potential, like the Asia Pacific region.

Ian Goodkind: Third we are enacting program to drive enhanced value from our channel partners.

Ian Goodkind: Fourth we continue to focus on educating customers on the value, we provide with our trusted access outcome.

Ian Goodkind: And fifth we are aligning our resources to geographies with the highest growth potential like the Asia Pacific region.

Ian Goodkind: Now, turning to our outlook for Q2 and full year 2024. With respect to revenue growth, we expect continued pressure on device upsells through 2024. We will continue to focus on the strategic growth drivers John outlined, building on the successes we achieved in Q1. We will invest in growth and scalability with a focus on scalable go-to-market organization, platform optimization, and back-office automation. Our scalability initiatives will set Jamf up for profitable growth in the future and return Jamf to Rule 40, as outlined at our Investor Day.

Ian Goodkind: Now turning to our outlook for Q2 and full year 2024.

Ian Goodkind: With respect to revenue growth, we expect continued pressure on device upsell through 2020 four we will continue to focus on the strategic growth drivers John outline building on the successes we achieved in Q1.

Ian Goodkind: We will invest in growth and scalability with focus on scalable go to market organization platform optimization and back office automation.

Ian Goodkind: Our scalability initiatives will set you up for profitable growth in the future and returned your app to the rule of 40 as outlined at our Investor Day.

Ian Goodkind: Many of these initiatives are in process, with some themed benefits in 2024 and others with benefits expected throughout the next few years. Based on these factors, for the second quarter of 2024, we expect total revenue of $150.5 to $152.5 million, representing year-over-year growth of 11 to 13 percent. Non-GAAP operating income of $21.5 to $22.5 million, representing a non-GAAP operating income margin of 15% at the midpoint. Given our strong performance in Q1, we are increasing our expectations for the full year 2024. Total revenue of $618.5 to $622.5 million, representing year-over-year growth of 11% at the midpoint. This reflects an increase of $3.5 million at the midpoint.

Ian Goodkind: Many of these initiatives are in process with some <unk> benefits in 2024 and others with benefits expected throughout the next few years.

Ian Goodkind: Based on these factors for the second quarter of 2024, we expect total revenue of 155 to 152 $5 million.

Ian Goodkind: <unk> year over year growth of 11% to 13%.

Ian Goodkind: non-GAAP operating income of 21, 5% to $22 5 million, representing a non-GAAP operating income margin of 15% at the midpoint.

Ian Goodkind: Given our strong performance in Q1, we are increasing our expectation for the full year 2024 total revenue of $618 five to $622 5 million.

Ian Goodkind: <unk> year over year growth of 11% at the midpoint. This reflects an increase of $3 $5 million at the midpoint.

Ian Goodkind: Non-GAAP Operating Income of $92.5 to $95.5 million, representing a Non-GAAP Operating Income margin of 15% at the midpoint and an approximate 700 basis point improvement over fiscal year 2022. This reflects an increase of $3 million at the. While we don't provide an outlook for ARR, we would expect to end fiscal year 2024 with ARR growth similar to full year revenue. With respect to unlevered free cash flows, for full year 2024, we expect the unlevered free cash flow margin to be similar to the non-GAAP operating income margin.

Ian Goodkind: non-GAAP operating income of 92, 5% to $95 5 million, representing a non-GAAP operating income margin of 15% at the midpoint and an approximate 700 basis point improvement over fiscal year 2023.

Ian Goodkind: This reflects an increase of $3 million at the midpoint.

Ian Goodkind: While we don't provide an outlook for <unk>, we would expect to end fiscal year 2024 with a growth.

Ian Goodkind: <unk> full year revenue growth.

Ian Goodkind: With respect to Unlevered free cash flows for full year 2024, we expect unlevered free cash flow margin to be similar to non-GAAP operating income margin.

Operator: We also provide estimates for amortization, stock-based compensation-related payroll taxes, and other metrics to assist with modeling in the earnings presentation as part of the webcast and also posted on our Investor Relations website. With respect to the longer-term financial outlook we present as part of our Investor Day, we remain committed to the goals we outlined during the event. Now, John and I will take your questions. Operator.

Ian Goodkind: We also provide estimates for amortization stock based compensation related payroll taxes, and other metrics to assist with modeling and the earnings presentation as part of the webcast and also posted on our Investor Relations website.

Speaker Change: With respect to the longer term financial outlook, we presented as part of our Investor Day, we remain committed to the goals we outlined during the event and now Jon and I will take your questions operator.

Operator: Thank you. We will now begin the question and answer session. If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad. If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask your question and are listening via the loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.

Speaker Change: Thank you.

Speaker Change: We will now begin the question and answer session.

Operator: If you have dialed in and would like to ask a question. Please press star one on your telephone keypad. If you would like to withdraw your question simply press Star one again.

Operator: You are called upon to ask your question and our listening via loud speaker on your device. Please pick up your handset and ensure that your phone is not on mute when asking your question again press star one to join the queue and your first question comes from the line of Joshua Reilly of Needham and company. Your line is open.

Joshua Christopher Reilly: Again, press star one to join the queue, and your first question comes from the line of Joshua Reilly of Needham and Company. Your line is open. All right, nice job on the quarter here. And thanks for taking my questions. I guess the starting point probably people are interested in here is the ARR growth was a bit better than what we expected and kind of what you laid out at analyst day.

Joshua Christopher Reilly: Can you just give us a sense of what are some of the puts and takes for the rest of the year in terms of how much is the pricing benefit of ARR growth here in Q1 relative to your expectations? And has there really been any change in the macro with a little bit of a pick-up in the ARR growth? It sounds like it's going to be closer to 11% for exiting the year. Yeah, so hey, Josh, good to hear from you at the end. I'll jump in there. So you're right.

Joshua Christopher Reilly: Alright, nice job on the quarter here and thanks for taking my questions I guess, the starting point, probably if people are interested in here is the air growth was a bit better than what we expected and kind of what you laid out at the analyst day can you just give us a sense of what are some of the puts and takes for the rest of the year in terms of how much is.

Speaker Change: Pricing benefited our growth here in Q1 relative to your expectations and has there really been any change in the macro with a little bit of a talk up.

Speaker Change: In the air growth it sounds like it can be closer to 11%.

Speaker Change: <unk> exiting the year.

John Strosahl: And I appreciate the way you asked your question. AR came out generally as we expected and as we outlined at our investor day. We did come off a strong Q4. And there we did pull forward some deals from Q1. Q1 is our seasonally low, but we did, in the first quarter, have our first reduction in workforce, and we didn't assign quotas until after that.

Speaker Change: Yeah, a J.

Josh: Good to hear from me and I'll jump in there. So you are right and I. Appreciate the way you asked your question.

John Strosahl: I came out of generally how we expected and what we outlined at our Investor day.

John Strosahl: Did come off a strong Q4 and there we did pull forward some deals from Q1.

John Strosahl: Q1 is our seasonally low but we did.

John Strosahl: In the first quarter to have our first a reduction in workforce and we didn't assign quotas until after that and that continues.

John Strosahl: And, you know, tech continues to be muted, you know, from the macro, and education continues to have the COVID overhang. We did see a little bit more churn in January from a specific competitor, but that's normalized within February and March.

John Strosahl: Continues to be muted.

John Strosahl: From the macro and education continues to have the Covid overhang, we did see a little bit more churn in January from a specific competitor, but though that's normalized within February and March so as we March forward throughout the year, we do see some additional bright spots we have seen some strength in professional services financial services.

John Strosahl: Wholesale and retail and those non leading tech industries have been leaning more into it in.

John Strosahl: In Q1, we actually saw higher rep productivity.

John Strosahl: They call it double digit.

John Strosahl: The improvement from the prior year, we also saw a little bit more upsell on some of the deals not to the levels. We've seen historically, but we saw that as well we started bundles continue to be strong it was a 63% year over year.

John Strosahl: And then what we're continuing forward with we've been continuing to tweak our incentive plans, which is boding well that we've seen our pipeline starting to build within the.

John Strosahl: The Securities base, we see our new logo commercial pipeline represents 45%, which is good and we are also just seeing a few green shoots in EU, So and as a reminder, our 2024 outlook was based on the on the same economics, we saw in 2023 savings bode well and could help us over achieve on 2024.

John Strosahl: And we feel good about what we said it again.

John Strosahl: In Q1, we actually saw a pipeline start to build within the security space. We see our new global commercial pipeline represent 45%, which is good. And we've also just seen a few green shoots in EDU.

Speaker Change: Got it that's Super helpful. And then just following up on the SMB segment of the market.

John Strosahl: Some of the other peers in <unk>.

John Strosahl: Yes.

John Strosahl: <unk> World had been seeing some challenges from SMB customers I know, that's a smaller mix of your business relative to some of these other areas, but are you seeing higher for longer interest rate dynamics beginning to impact these customers as well. Thank you.

John Strosahl: So as a reminder, our 2024 outlook was based on the same economics we saw in 2023. So many things are both going well and could help us overachieve in 2024. We feel good about what we've said as, Okay. That's super helpful.

John Strosahl: And then just following up on the SMB segment of the market, some of the other peers and staff world have been seeing some challenges from SMB customers. I know that's a smaller mix of your business relative to some of these other areas, but are you seeing the hire for longer interest rate dynamics beginning to impact these customers as well? Thank you. Josh. I can, this is John. I can answer that question.

Speaker Change: Hey, Jonathan this.

John Strosahl: This is John I can answer that question, yes. Its interesting I was just talking to some of the sales guys about this particularly and we still are a volume business.

John Strosahl: And.

John Strosahl: And we have seen.

John Strosahl: We've seen the longer.

John Strosahl: Interest rates being higher effect some of these businesses, we typically see.

John Strosahl: Bit of a Canary in the coal mine with our SMB business and that's when we see them start to start to purchase more than enterprise generally follows.

John Strosahl: Yeah, it's interesting; I was just talking to some of the sales guys about this particular thing, and, you know, we still are a volume business. And, you know, we've seen the longer interest rates being higher affect some of these businesses; we typically see a bit of a canary in the coal mine with our SMB business, and when we see them start to start to purchase more than enterprise, it generally follows.

John Strosahl: And we've had some very consistent new logo growth, but we've also seen some of those smaller companies fallout as a result of the longer than expected interest rates, but we do feel pretty good about our year over year bundled sales, which typically goes to the SMB market and Ian mentioned over 60% year over year.

John Strosahl: And we continue to see more interest although sales cycles have remained elongated, but we're starting to get more interest for both the SMB and the enterprise.

John Strosahl: And, you know, we've had some very consistent new logo growth, but we've also seen some of those smaller companies fall out as a result of the longer than expected interest rates. But we do feel pretty good about our year over year bundled sales, which typically go to the SMB market, and Ian mentions over 60% year over year, and we continue to see more interest, although sales cycles have remained elongated, but we're starting to get more interest from both the SMB and the enterprise. Your next question comes from the line of Koji Ikeda of Bank of America. Your line is open. Yeah, no, thanks, guys.

John Strosahl: Your next question comes from the line of Koji Ikeda of Bank of America. Your line is open.

Koji Ikeda: Yeah, no. Thanks, guys. Thanks for taking the questions.

Koji Ikeda: Lots of good commentary in the prepared remarks, thank you for that.

Koji Ikeda: Thanks for taking the questions. Lots of good commentary in the prepared remarks. Thank you for that. I just wanted to ask you a question about the three-year model and, very specifically, the revenue growth and AR growth that you guys laid out at the investor day, which is accelerating, and the growth is accelerating in 2025 and 2026. You know, of course, that setup is very, very attractive.

Koji Ikeda: I just wanted to ask you a question on how you're feeling about the three year model and very specifically about the revenue grew up in a growth that you guys laid out at the Investor day, which is accelerating the growth is accelerating in 2025 and 2026.

Koji Ikeda: Of course that setup is very very attractive.

Koji Ikeda: But when I look at some of the growth metrics, I was wondering, you know, maybe what you're seeing from your end that is giving you that increased confidence. Maybe there was something this quarter that's increasing your confidence to be so committed to the three-year growth. Yeah, I'll jump in on that one.

Speaker Change: Look at some of the growth metrics in one SKU a lot of them diesel. So I was wondering maybe what youre seeing from your end that is giving you that increased cost maybe there was something this quarter, that's increasing your conference to be.

Speaker Change: <unk> committed to a three year growth targets.

Ian Goodkind: And thanks for the question, Koji. I think the first short answer, and I'll expand on it, is yes, we still have conviction over our three-year model. We laid it out in a manner where this year, you know, we laid out 10%, now it's 10.7%, growth rate on revenues. And we've overachieved that.

Speaker Change: Yeah, I'll jump in on that one and thanks for the question Koji I think the first short answer and I'll expand on the answer is yes, we still have conviction over a three year model.

Ian Goodkind: We laid it out in a manner, where this year, we laid out 10% now at 10, 7% growth rate on revenues and we've over achieved that and we knew again it would be.

Ian Goodkind: A little bit of a slower start from the standpoint of the items I just talked about from the fact, we knew we were taking some steps with workforces that Jonathan we knew we were making some adjustments to compound we knew a lot of that and we've also what we focus on Investor day. If you remember we showed your NRI on kind of historically and what it looks like going forward and that it does.

Ian Goodkind: And we knew, again, it would be a little bit of a slower start from the standpoint of the items I just talked about, from the fact that we knew we were taking some steps with workforce adjustment, we knew we were making some adjustments to comp plans, we knew a lot about it. And we also focused on investor day, if you remember, we showed you NRR kind of historically and what it looks like going forward, and that it doesn't have a huge macro return.

Ian Goodkind: Didn't have a huge macro return and Thats still what we are factoring in we do believe that's going to come at some point. So there's that and then I talked about just a little bit ago.

Ian Goodkind: About the security pipeline and we're starting to see that build and customers are having interest and when I look at our.

Ian Goodkind: And that's still what we're factoring in; we do believe that's going to come at some point. So there's that. And then I talked about just a little bit ago, about the security pipeline. And we're starting to see that build.

Ian Goodkind: <unk> bundles again that continues to have a lot of interest with customers and one thing on our bundles. As you know we continue to added value. There. We just released Jan for teens and jam routines and something you only find within our bundle and it it automates certain workflows and integrates with certain collaboration tools.

Ian Goodkind: Does help with a lot of customer issues. So those are the types of things you can expect when we also last comment I'd make them as we just saw in my prepared remarks, I talked about the five areas that we were focused on from a sales and marketing perspective.

Ian Goodkind: We have a clear plan of how we're going to check through those things.

Ian Goodkind: We have met the things we've outlined on checklists from Investor day. So far this year. So when you take all those things together, yes, we have conviction around that plan.

Speaker Change: Got it. Thank you so much and maybe a follow up for you Sir.

Ian Goodkind: I noticed the queue just came out and I punched into are a little spreadsheet here the remaining performance obligations.

Ian Goodkind: I did notice that on the IPO front it declined sequentially just just a tick.

Ian Goodkind: Did notice that it happened last year in the first quarter to just <unk>.

Speaker Change: Wanted to understand anything particular about the dynamics of the first quarter and our peer that we need to understand thank you.

Ian Goodkind: Yeah. Good question, so on <unk> and actually every first quarter. If you go back historically on all our first quarters, it's actually seasonality. It is always our slowest quarter.

Ian Goodkind: And so just as a reminder, Q1 their slowest quarter Q2, and Q3 are supported by our education business, and then Q3 and Q4 heavier commercial business as I talked about we had a pretty good Q4, which pulled some deals forward.

Ian Goodkind: I wouldn't read into that any further than that it is along is what we generally expected.

Speaker Change: Got it thank you very much.

Ian Goodkind: Your next question comes from the line of Raimo <unk>, Chile of Barclays. Your line is open.

Ian Goodkind: Hey, this is Isaac on for Raimo, Thanks for taking the question.

Ian Goodkind: Security IRR came in pretty strong again this quarter.

Ian Goodkind: As guided to 25% at the analyst day.

Ian Goodkind: How much upside do you see to that number versus what you initially guided and how should we think about the shape of net new way or are there as we go through the remainder of the year.

Speaker Change: I I can jump in there so a couple of things.

Ian Goodkind: Yeah, I mean, we said we were going to achieve at least 25%. So we're above that what we showed on our analyst days.

Ian Goodkind: <unk> that they're saying here's the things you should monitor throughout the year does show our ethics SaaS, we had 33% growth in Q4, 31% now so it continues to bode well for us.

Ian Goodkind: As we talked about at Investor day.

Ian Goodkind: We are very focused on cross sell and that comes in three farms that comes in the form of commercial security Education Security and then Theres mobile and mobile has been good.

Ian Goodkind: It is talking about security I mean, some of our the way we're thinking about our incentive plan focuses on the cross sell focus is on the security and we are seeing customers asking more and more about that.

Ian Goodkind: It's just become a really good opportunity when customers see that you can consolidate on one platform. Both your management and security that had been boding well for us and in the SMB side. Since there is one economic buyer that's been boding well.

Ian Goodkind: We've been working with enterprises, and we get a couple though we get one of those once in a while here and those are things that I think could accelerate if we see more of those come through and I think just again buyers are sitting a little bit on the sidelines as nervous to make changes, but we are seeing this be successful in this economy. When you can consolidate so those.

Ian Goodkind: One of the things I think could bode well for us and can help us continue along with that John I'll, just add that on the enterprise side, we have seen the security to be successful and particularly on the iOS side.

Ian Goodkind: When you look at the retail and wholesale markets as the desktops workflows.

Ian Goodkind: Become more and more prevalent in those industries, we're seeing a lot more mobile security on that side as well. So we're getting we're seeing some really good traction traction there and we're continuing to double down on it as Ian said really incentivizing our sales teams to promote that cross sell and really lead with our trusted access.

Ian Goodkind: <unk>.

Ian Goodkind: Opportunity, which our customers have really taken kindly to yeah. One other thing I've thought about it was education too we in the first quarter, we did actually see.

Ian Goodkind: A few extra deals in the education security piece. So we have seen some success in some green shoots there as well.

Speaker Change: Great. That's super helpful. Thanks, and then maybe one more for you if I think about the margin guidance Q1 came in ahead of expectations and it seems like Q2 is also slightly ahead.

Ian Goodkind: But the full year guide on margins stayed consistent is there anything when you just think about in Q3 and Q4 that maybe.

Ian Goodkind: The reasons for that margin guide not moving incrementally up through the remainder of the year.

Speaker Change: Yeah, I think youre talking about the margin percentage versus the dollars right and so the dollars did go up with consistent and actually slightly more than what our over achievement in the first quarter was so we did pass that through and we actually brought it up I think what you're asking and payables are getting close to 15% you guided 15%.

Ian Goodkind: The year.

Ian Goodkind: And what I would think about there is a couple of things what we talked about at Investor Day is two things, we're going to still continue to invest in growth and scalability and those are continuing throughout the year I listed in my prepared remarks say around the initiatives that we're spending on on the go to market side. We also still have the <unk>.

Ian Goodkind: Platform capabilities, where we're continuing to optimize our platform and we are focused on back office automation. So I wouldnt adjust this spending for those long term initiatives that make us more scalable.

Speaker Change: Great that's super helpful. Thank you.

Ian Goodkind: Your next question comes from the line of Dan Bergstrom of RBC capital markets. Your line is now open.

Ian Goodkind: Hey, it's tampered for Matt Hedberg, Thanks for taking our questions.

Ian Goodkind: So it's nice to see the PC shipments returned to growth. Following a couple of years of declines in the gains for Apple I guess are there any additional observations you have from conversations with customers around refresher anything otherwise here.

Ian Goodkind: Yes.

Ian Goodkind: I guess, they would remain prudent around hiring and expense though.

Ian Goodkind: Yes, Dan This is John I can I can take the question.

Ian Goodkind: Just ancillary discussions with our customer and the sales team as well.

Ian Goodkind: We have seen a bit of elongated refresh cycle I mean, the uncertainty in the market.

Ian Goodkind: Cause some of that.

Ian Goodkind: Said before we have seen some more interest in some more engagement all of those sales cycles are still remained elongated. We also noted that.

Ian Goodkind: It was the Wall Street Journal article that came out of IDC in both Gartner had had identified that apples growth had been over 14 about 14, 5% year over year and shipments as well.

Ian Goodkind: That bodes well for us, we don't track that on a quarter by quarter basis, but several quarters in a row certainly have an impact on the on the installed base and so.

Ian Goodkind: Your assumption is right, we have seen a bit of elongated refresh cycles, both in the enterprise as well as.

Ian Goodkind: As well as an education, but we are seeing seeing some of that loosen a bit.

Speaker Change: Thanks, and then I appreciate the additional color so far around security and the Q&A here I guess on security in the go to market, whereas the sales force here around security versus say a year ago. It sounds like there have been some adjustments on incentives more focus on cross sell maybe any more color here or anything youre leaning into.

Ian Goodkind: Security perspective to start the year.

Ian Goodkind: Yeah.

Ian Goodkind: The sales teams to become much better versed in our security opportunity or as a security offering you remember we had the management first and then our customers asked us to extend into security and we did that.

Ian Goodkind: And we have a pretty pretty decent salesforce pretty sizable sales force and they don't necessarily turn on a dime, but we're really seeing the traction that they're getting especially when they lead with trusted access and that being that management and security together really being able to identify those things and then actually go ahead and remediate them through the device management product and so those have.

Ian Goodkind: The sales team better well burst and leading with trusted access is gaining traction that we've also taken.

Ian Goodkind: More recent sales hires from the security space. So they bring a wealth of knowledge into the company that help has helped cross pollinate that to our other sales teams, we did adjust the compensation.

Ian Goodkind: Plan early in the year and really to focus on <unk> to make sure that those customers that were.

Ian Goodkind: But we're making sure that we're retaining the customers that we have in an environment that we don't know when the when the.

Ian Goodkind: The PC shipments and all that will return and in the process of that we really what we needed to do more of it is focus on the cross selling we saw that in Q1 towards the end of Q1, we adjusted compensation will continue that through Q2, and the rest of the year and so Thats had also some green shoots and when Ian talked about our security pipeline.

Ian Goodkind: A lot of that is also a direct result of some of those changes that we made.

Speaker Change: That's great. Thanks.

Ian Goodkind: The next question comes from the line of Jake Roberge of William Blair. Your line is open.

Speaker Change: Hey, Thanks for taking the questions and congrats on the great results.

Ian Goodkind: I'm curious now that you've had a quarter or two following the acquisition and then subsequent divestiture of workspace. One have you started to see any incremental opportunities that presented from customers that that might be frustrated from that change of control. Just curious if there's any incremental opportunities in our pipeline that is building from that those deals this year.

Ian Goodkind: Oh, absolutely Jay This is John again I'll take this question, we certainly have and.

Ian Goodkind: The issue with that is.

Ian Goodkind: Because of the.

Ian Goodkind: The acquisition went through of that competitor to a financial sponsor.

Ian Goodkind: We're not expecting and we've said this before we don't expect all of those deals to come in one quarter. They all have they all have renewal cycles and so we're engaged with a lot of those.

Ian Goodkind: Pretty much all of those customers are when that renewal cycle is coming up in promoting our products. We've replaced tens of thousands of devices every quarter.

Ian Goodkind: In that with that with that competitor and we have a pretty healthy pipeline directed at that and our advantage here is that we innovate at the pace of Apple and our competitors have had some difficulty with that especially when they are cross platform and then you kind of dilute the user experience down to the lowest common denominator and so thats, where we really excel.

Ian Goodkind: And then you top that you put that on top of.

Ian Goodkind: Having the.

Ian Goodkind: The perception of not innovating at the pace of Apple.

Ian Goodkind: Given the ownership structure that is something that we've really taken advantage of and our salespeople have leaned into heavily.

Speaker Change: Okay very helpful. And then and then obviously great to see that the 31% security are our growth.

Ian Goodkind: Some some really solid comments on the call about pipeline and then they go to market tweaks youre, making there, but given the RSA is that's why I'm curious if there are any areas on the product side that youre looking to dig deeper into throughout the year and maybe opportunities that could be more upsell throughout 2025, and 2026 timeframe that you're really digging into.

Ian Goodkind: This year.

Ian Goodkind: But we certainly are.

Ian Goodkind: And also aspect we've got we've got a lot of.

Ian Goodkind: Opportunity in front of us with the security products that we have but we also know there's other areas of security that we're leading into as well and we continue to be very acquisitive in looking at companies, particularly in the tech and talent side that are Apple <unk> and Apple best and that's something that we'll continue to do.

Ian Goodkind: Enhance the feature set of our security products, but we're seeing that from our customers that we're listening to our customers. The reason we went to the security of the first places because that's what our customers ask us to do and we're following their lead and adding functionality to those security products. The other one I might mentioned and I mentioned in the prepared remarks is the jump executive threat protection that is done.

Ian Goodkind: Really really well.

Ian Goodkind: In that it becomes.

Ian Goodkind: A halo effect in that when you are speaking to a CSO.

Ian Goodkind: High level in the organization about securing high value targets you were talking to the same person that can make decisions on protect and NGF connect so the connectivity other parts of the organization and so once they have they see the value of Jeff Executive threat protection, we have an opportunity to discuss other security products and we've done that over and over.

Ian Goodkind: We're again so those are again, we're seeing some nice green shoots.

Speaker Change: Great. Thanks for taking my questions and congrats again on the results.

Ian Goodkind: Thanks.

Ian Goodkind: Your next question comes from the line of V nod Srinivasan Ragavan from Mizuho. Your line is open.

Speaker Change: Hey, guys. Thanks for taking my question just wanted to dig into a little bit can you give us a sense of what the mix of up sells for stem cells first churn was this quarter and is this much different than what you saw in Q1 last year.

Speaker Change: Yeah. Thanks for the question.

Ian Goodkind: So it did decline from one wait until one of seven and so when I look at Q4 to Q1 about 75% of that decline related to off so it can do that the same macro customer spending effects continue to Ambac then.

Ian Goodkind: In this quarter we saw.

Ian Goodkind: In the trailing 12 month metric or sorry lift from Q large Q1, the other 25% did relates to lost logos that did relate to that.

Ian Goodkind: January extra churn that we saw but again February or March came back and it actually was better than what we expected and just a comparison point because you asked Q1 of last year when I look at that and the declined 81% of that related to upsell, 14% related to downtown and then 5% related to lost logos. So inner.

Ian Goodkind: Trailing 12 months off logo isn't really that big of an impact and our R.

Ian Goodkind: Our competitors come and go but we've seen them go for the time being and we're excited about the things we're seeing in our pipeline and in our second quarter.

Speaker Change: Okay, Great that's helpful and then.

Ian Goodkind: Just in general how did your business plan do this quarter and are you seeing more momentum now as you know that's been out for a while now.

Ian Goodkind: Yes, it was at 63% year over year was the growth in our business plans, which includes enterprise plan.

Ian Goodkind: It continues to be successful at it.

Ian Goodkind: It's been something our customers have been asking bar they see the benefits when you combine management and security together not just from a cost perspective, but they know that things just work together.

Ian Goodkind: I'd mentioned.

Ian Goodkind: Routines, a little bit earlier, and that's just something we had our spring release, when we announced.

Ian Goodkind: All of the different things related to compliance and then we also announced routines and refuses are really interesting piece, that's just available and business plan and it is something that is going to earn helps automate workflows and helps lift kit and collaborative.

Ian Goodkind: Tools. So for example, if you see a device that you need a read that this actually has an automated workflow for that and it actually tells you it through whatever tool you're using from a collaboration standpoint. So we see a lot of success there and we're really excited about that.

Ian Goodkind: And again when customers have both management and security, we see our churn improve on those customers because of its customer health health is stronger.

Speaker Change: Thanks, guys appreciate it.

Ian Goodkind: There are no further questions from the line at this time I will now turn the conference back over to Jennifer for the closing remarks.

Speaker Change: Thank you all for joining US today. This is the end of the call have a good rest of your day. Thank you.

Speaker Change: Thank you that concludes today's conference call. Thank you all for joining you may now disconnect.

Speaker Change: Please wait the conference will begin shortly.

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Ian Goodkind: And customers are having interest. And when I look at our bundles, again, that continues to have a lot of interest from customers. And one thing about our bundles that I should know, we continue to add value there. We just released Jamf Routines, and Jamf Routines is something you only find within our bundle.

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Michelle: Thank you for standing by my name is Michelle and I will be your conference operator today at this time I would like to welcome everyone to <unk> first quarter 2024 earnings call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question and answer.

Ian Goodkind: And it automates certain workflows and integrates with certain collaboration tools, and it does help with a lot of customer issues. So those are the types of things you can expect. And also, the last comment I'd make on this, we just saw in my prepared remarks. I talked about the five areas that we were focused on from a sales and marketing perspective. And you see, we have a clear plan of how we're going to check on those things.

Ian Goodkind: We've met the things we've outlined on our checklist from investor day so far this year. So when you take all those things together, yes, we have conviction around that point. Got it, Ian. Thank you so much.

Ian Goodkind: Session. If you would like to ask a question. During this time simply press star followed by the number one on your telephone keypad. If you would like to withdraw your question Press Star one again, thank you.

Koji Ikeda: And maybe a follow up for you, sir. I noticed the cue just came out, and I punched the remaining performance obligations into our little spreadsheet here. And I did notice that on the RPO front, it declined sequentially, just by a tick. And I did notice that it happened last year in the first quarter. I just wanted to understand anything in particular about the dynamics of the first quarter and RPO that we need to understand. Thank you. Yeah, a good question.

Ian Goodkind: I'd now like to turn the call over to Jennifer. Please go ahead.

Ian Goodkind: So on RPO, and actually, every first quarter, if you go back historically, on all our first quarters, it's actually seasonality; it's always our slowest quarter. And so just as a reminder, Q1 is our slowest quarter; Q2 and Q3 are supported by our education business. And then Q3 and Q4 are heavier commercial businesses. As I talked about, we had a pretty good Q4, which pulled some deals forward. So I wouldn't read into that any farther than that. It is a, I got it.

Speaker Change: Good afternoon, and thank you for joining us on today's conference call to discuss <unk> first quarter 2020 for our financial results with EMEA unchanged caller, Josh Russell, Chief Executive Officer, and Ian <unk>, Chief Financial Officer before we begin I would like to remind you that shortly after that.

Ian Goodkind: Thank you very much. Your next question comes from the line of Raimo Lenschow of Barclays. Your line is open. Hey, this is Isaac on behalf of Raimo.

Raimo Lenschow: Thanks for taking the question. Security ARR came in pretty strong again this quarter. And I know you guys guided to 25% at analyst day. How much upside do you see to that number versus what you initially guided? And how should we think about the shape of net new ARR there as we go through the remainder of the year? I can jump in there.

Raimo Lenschow: <unk> closed today, we issued a press release announcing our first quarter financial results. We also published a Q1 earnings presentation Investor presentation, an excel file containing quarterly financial statements to assist with modeling you may access this information on the Investor Relations section of <unk> Dot com.

Ian Goodkind: So a couple things. Yeah, I mean, we said we were going to achieve at least 25%. So we're above that what we showed on our analysis slide that was, you know, saying here are the things you should monitor throughout the year to show our success. We had 33% growth in Q4, and 31% now. So it continues to bode well for us, and as we talked about it at Investor Day, you know, we are very focused on cross-selling. And that comes in three. Continue along this path.

Raimo Lenschow: Today's discussion May include forward looking statements. Please refer to our most recent SEC reports, 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.

Ian Goodkind: I'd also like to remind you that during the call. We will discuss some non-GAAP measures related to <unk> performance you can find the reconciliation of those measures to the nearest comparable GAAP measures in our earnings release.

Ian Goodkind: Surely to ensure we can address as many analyst questions as possible during the call.

Ian Goodkind: Please limit your questions to one initial question and one follow up now I'd like to turn the call over to John struggle John Thanks.

John Strosahl: John, I'll just add that, you know, on the enterprise side, we have seen security be successful, particularly on the iOS side. And when you look at the retail and wholesale markets, as deskless workflows become more and more prevalent in those industries, we're seeing a lot more mobile security on that side as well. So we're getting, we're seeing some really good traction there, and we're continuing to double down on it, as Ian said, really incentivizing our sales teams to promote that cross-sell and really lead with our trusted access opportunity, which our customers have really taken kindly to. Yeah. One other thing I thought about was education, too.

Ian Goodkind: In the first quarter, we did actually see a few extra deals in the education security piece, so we have seen some success with Green Shelf there as well. Great, that's super helpful. Thanks. And then, Ian, maybe one more for you.

Speaker Change: Thanks, Jen <unk>.

Raimo Lenschow: If I think about the margin guidance, Q1 came in ahead of expectations and seems like Q2 is also slightly ahead. But the full-year guidance on margin stayed consistent. Is there anything we need to think about in Q3 and Q4 that, you know, maybe are reasons for that margin guide not moving incrementally up through the remainder of the year? Yeah, I think you're talking about the margin percentage versus the dollars, right? And so the dollars did go up consistently and actually slightly more than what our overachievement in the first quarter was.

Raimo Lenschow: So we did pass that through, and we actually brought it up. I think what you're asking is, hey, both are getting close to 15%, you're at 15% for the year. And what I would think about there are a couple things.

Speaker Change: Outlook Q1 year over year revenue growth was 15% and non-GAAP operating income was $22 $1 million with non-GAAP operating income margin of 15%. This margin represents a 1000 basis points improvement from Q1 of 2023.

Raimo Lenschow: We ended Q1 with 75900 customers and $32 8 million devices on our platform.

Raimo Lenschow: These customers, 41% run a chance management and security product, we continue to drive cross sell with 31% year over year growth in security <unk> to a $138 million or 23% of jams total IRR.

Raimo Lenschow: Our largest industries Tac and K through 12 remained muted goodbye its expansion the remaining industries in our top five continue to see positive trends. We're also encouraged by growth in the PC market in Q1. After two years of decline. According to IDC Q1 year over year worldwide PC shipments grew one 5% to nil.

Raimo Lenschow: Early 60 million units, representing a similar level of shipments to pre pandemic Apple saw the highest year over year growth in shipments of any company in Q1 at 14, 6% and also increased its market share.

Raimo Lenschow: <unk> remain optimistic regarding PC sales in 2024 as companies begin refreshing Pcs that were purchased during the pandemic.

Raimo Lenschow: While we are encouraged by this Q1 data our outlook for 2024 does not rely on a significant uplift in device expansion.

Raimo Lenschow: We continue to innovate and deliver solutions to help organizations succeed with Apple in April we held a special event to showcase a number of new offerings with a focus on compliance.

Raimo Lenschow: And security teams are being asked to get more involved beyond traditional device management functions to help meet these various compliance standards across their apple devices campus proud to deliver tools that help customers navigate the vast and varied compliance landscape.

Raimo Lenschow: Alex updates highlighted at the event include a customizable compliance dashboard and JF protect allowing admins to view, an aggregate baseline score and detailed information to understand and remediate compliance issues compliance editor tool for <unk> pro for iOS that generate deployable configurations to make endpoints comply.

Raimo Lenschow: With a chosen compliance benchmark.

Raimo Lenschow: Kemper teams tool for bundled solutions, which offers customers new no code automation and integrations to streamline management and security workflows, while also providing seamless integration with slack and Microsoft teams to alert it teams when devices fall out of compliance.

Raimo Lenschow: Privilege elevation feature that utilizes an organizations cloud identity provider andreev connect to temporarily allow admin privileges for local Mac OS accounts based on valid user authentication and authorization.

Raimo Lenschow: We also recapped our recent announcement that support for Apple Vision Pro is now available across the entire platform with <unk> pro organizations can enroll and streamline deployment of enterprise apps and settings for Apple vision Pro.

Raimo Lenschow: Jeff connect allows Apple vision pro to securely access enterprise resources for any of the web and native apps that require a secure identity based access controls.

Raimo Lenschow: Protect extends the same mobile threat defense network protection and content filtering use cases to the Appalachian Pro.

Raimo Lenschow: We also announced that support for watch OS management is coming later this year, including enrollment and inventory display. We're excited about the opportunities that <unk> management provides especially as it relates to desktop workflows across the number of industries.

Raimo Lenschow: Enabling these new device types is a testament to <unk> commitment to simplifying Apple at work and giving users the ability to be productive. However, they work best.

Ian Goodkind: What we talked about on investor day are two things. We're going to still continue to invest in growth and scalability, and those will continue throughout the year.

Raimo Lenschow: In addition to the spring event, we hosted another important event, our first Investor day in mid March.

Ian Goodkind: We outlined the next phase of evolution, which is all about efficient scalability.

Ian Goodkind: If you hadn't had a chance to review the events yet I encourage you to do so the replay and presentation can be found on our Investor Relations website.

Ian Goodkind: During the event, we highlighted our differentiated positioning and competitive moat, our large and growing addressable market, our strategic growth drivers and our financial expectations through 2026, I would like to use the strategic growth drivers. We discussed during this event as the framework for the remainder of my remarks, highlighting some of the specific successes we saw in <unk>.

Ian Goodkind: I listed in my prepared remarks today the initiatives that we're spending on on the go-to-market side. We also still have the platform capabilities where we're continuing to optimize our platform, and we are focused on back office automation. So I wouldn't adjust the spending for those long-term initiatives that make us more scaled.

Ian Goodkind: Great, that's super helpful. Thank you. Your next question comes from the line of Dan Bergstrom of RBC Capital Markets. Your line is now open. Hey, it's Dan Bergstrom on behalf of Matt Hedberg.

Ian Goodkind: Q1.

Dan Bergstrom: Thanks for taking our question. It's nice to see the PC shipments return to growth following a couple of years of declines in the gains for Apple. I guess, are there any additional observations you have from conversations with customers around refresh or anything else here? I guess they'd, you know, I guess they'd remain prudent around hiring and expense though. Yeah, Dan, this is John.

Ian Goodkind: First and Mac leadership, we continue to demonstrate high chance Apple first Apple best solutions deliver the best outcomes for our customers and.

John Strosahl: I can take the question. You know, just ancillary discussions with our customer and the sales team as well, we have seen a bit of an elongated refresh cycle. I mean, the uncertainty in the market, you know, has caused some of that. As I said before, we have seen some more interest and some more engagement, although sales cycles have still remained elongated. You know, we also noted that it was a Wall Street Journal article that came out.

John Strosahl: IDC and Gardner both identified that Apple's growth had been over 14, about 14.5% year-over-year in shipments. And, you know, while that bodes well for us, we don't track that on a quarter-by-quarter basis, but several quarters in a row certainly have an impact on the install base. And so your assumption is right.

Dan Bergstrom: We have seen a bit of elongated refresh cycles, both in the enterprise as well as in education, but we are seeing some of that loosen up a bit. Thanks, and then appreciate the additional color so far around security in the q&A here. I guess on security and the go-to-market, you know, where's the Salesforce here around security versus a year ago? It sounds like there have been some adjustments on incentives, more focused on cross sell. Maybe any more color here or anything you're leaning into from a security perspective to start the year.

Dan Bergstrom: In Q1, a leading online travel company renewed with GM for three years key to this win was our ability to demonstrate how <unk> solutions can help with the customer's current strategic initiative around process automation. We also delivered a long term roadmap for expanding with GM, including <unk> pro for iOS and protect our ability to.

Dan Bergstrom: Build multiple strong relationships with the customers at the management level was also beneficial helping streamline the approval process and our suggestions who utilize AWS marketplace to leverage their committed spend was a win win simplifying procurement for the customer and resulting at a timely renewal for Gms were.

Dan Bergstrom: We're excited about continued growth through the AWS marketplace as customers can use committed spend towards their GMP contract like net lo-fi a cloud platform for front end teams to build deploy and scale modern web applications.

Dan Bergstrom: <unk> is now using Champ with committed spend for AWS to manage as Apple devices and connect their end users to the resources they need.

Dan Bergstrom: Second with respect to expanding with mobile we continue to see customers utilizing champ across their mobile fleets, especially for desktop workflows in Q1, one leading specialty retailer expanded with beyond Mac by adding <unk> probe for 15000 iOS devices used across nearly 500 retail locations.

Dan Bergstrom: This was a great win for Champ against the legacy OEM provider, a testament to <unk> continued commitment to innovating at the pace of Apple to securely manage multiple device types across multiple use cases.

Dan Bergstrom: We're strongly encouraged by our progress in the retail space, which represents one of our top five largest industries retail along with financial services and professional services continue to see strong growth, helping balance the softness we're seeing in tech and K through 12 education Tech is seeing muted hiring and lower it investments while K through 12.

Dan Bergstrom: <unk> experienced a bit of a COVID-19 overhang with record device deployments in 2020 and 2021.

Dan Bergstrom: Yeah, well, the sales teams have become much better versed in our security opportunity or security offering. You remember, we had the management first, and then our customers asked us to extend into security, and we did that.

Dan Bergstrom: The third growth driver management, and security or what we referred to as delivering our trusted access vision and an area of opportunity we expect to become a larger part of our total IRR over time.

John Strosahl: And, you know, we have a pretty decent sales force, a pretty sizable sales force, and they don't necessarily turn on a dime, but we're really seeing the traction that they're getting, especially when they lead with trusted access and that being that management and security together, really being able to identify those things and then actually go ahead and remediate them through the device management product. And so those, you know, having the sales team better well-versed and leading with trusted access is gaining traction, and we've also taken on more recent sales hires from the security space, so they bring a wealth of knowledge into the company and have helped cross-pollinate that to our other sales teams.

John Strosahl: That we're making sure that we're retaining the customers that we have in an environment where we don't know when the PC shipments and all that will return. And in the process of that, we really need to focus more on cross-selling.

Dan Bergstrom: Our ability to deliver both management and security on one platform is a key differentiator for Champs bulk.

John Strosahl: Making gm's trusted access platform and appealing solution.

John Strosahl: Consolidated management and security with Champ, we see reduced churn compared to customers with just a management solution or just a security solution.

John Strosahl: <unk> includes Mac Pcs Chromebooks and Android.

John Strosahl: We're able to demonstrate our industry leadership in managing and securing mission critical mobile use cases, and remote work situations, which were key to this win our solutions allow the customer to have a defined practice for continuously securing mobile devices something the customer only had previously for Pcs. This successful service the blue.

John Strosahl: Print for further expansion with customers in other areas of their business.

John Strosahl: These three wins showcase the strength and leadership of Champs management, and security platform, which is able to deliver the right solution for each organization, whether that is purchasing both management and security is the onset or expanding beyond management at the right time.

John Strosahl: And lastly, with respect to international expansion DRAM continues to invest in strategic geographies, where we're seeing growing adoption for Apple.

John Strosahl: The win in India represented our first government agency win in the country.

John Strosahl: Janssen executive threat protection was chosen due to its ability to identify a sophisticated digital threats and extend visibility into attacks that target high value users.

John Strosahl: Wins like these help our footprint in these regions and offer a blueprint for similar organizations in the area to utilize channels. We've seen success with this strategy in the past in countries like Japan will continue to leverage the success and select geographies, where we're seeing the most potential.

John Strosahl: And we saw that in Q1, toward the end of Q1, we adjusted compensation. We're continuing that through Q2 and the rest of the year. And so that's also had some green shoots. And when Ian talked about our security pipeline, I think a lot of that is also a direct result of some of those changes that we made. That's great. Thanks. The next question comes from the line of Jake Roberge of William Blair. Your line is open.

John Strosahl: I'll now turn it over to Ian to review, our results and provide our Q2 and 2020 for outlook.

Jacob Roberge: Hey, thanks for taking the questions and congrats on the great results. Now, I'm curious, now that you've had a quarter or two following the acquisition and then subsequent divestiture of Workspace ONE, have you started to see any incremental opportunities get presented from customers that might be frustrated from the changes in control? Just curious if there are any incremental opportunities or pipeline that's building from those deals this year. Oh, absolutely, Jake.

Jacob Roberge: Thanks, John we ended Q1 with year over year revenue growth of 15% exceeding the high end of our revenue outlook by $2 1 million.

John Strosahl: This is John again. I'll take this question. We certainly have. And, you know, the issue with that is because the acquisition went through of that competitor by a financial sponsor, we're not expecting, and we've said this before, we don't expect all of those deals to come in one quarter. You know, they all have renewal cycles, and so we're engaged with a lot of them, pretty much all of those customers. And when that renewal cycle is coming up and promoting our products, we replace tens of thousands of devices every quarter with that, with that competitor.

John Strosahl: And we have a pretty healthy pipeline directed at that. And, you know, our advantage here is that we innovate at the pace of Apple. And our competitors have had some difficulty with that, especially when they're cross-platform. And then you kind of dilute the user experience down to the lowest common denominator.

Jacob Roberge: Total <unk> reached $602 4 million representing year over year growth of 14% exceeding expectation.

Jacob Roberge: And so that's where we've really excelled. And then you top that on, you put that on top of, you know, having the perception of not innovating at the pace of Apple, given the ownership structure, that is something that we've really taken advantage of and our salespeople have leaned into heavily. Okay, very helpful.

Jacob Roberge: And then, obviously, great to see the 31% security ARR growth. You've had some really solid comments on the call about pipeline and then the go-to-market tweaks you're making there. But given RSAs this week, I'm curious if there are any areas on the product side that you're looking to dig deeper into throughout the year and maybe opportunities that could be more upsell throughout the 2025 and 2026 timeframe that you're really digging into this year. We certainly are.

John Strosahl: You know, in all aspects, we've got a lot of opportunity in front of us with the security products that we have. But we also know there's other areas of security that we're leading into, as well. And we continue to be very acquisitive in looking at companies, particularly on the tech and talent side that are Apple first and Apple best. And that's something that we'll continue to do to enhance the feature set of our security products. But we're seeing that from our customers, and we're listening to our customers. The reason we went into security in the first place is because that's what our customers asked us to do.

John Strosahl: And we're following their lead and adding functionality to those security products. The other one I might mention, and I mentioned in my prepared remarks, is Jamf Executive Threat Protection. That is done really, really well in that it's kind of a halo effect in that when you're speaking to a CISO, or a very high level in the organization about securing high-value targets, you're talking to the same person that can make decisions on Jamf Protect and Jamf Connect, so the connectivity between parts of the organization. And so once they see the value of Jamf Executive Threat Protection, we have an opportunity And We've done that over and over again.

Jacob Roberge: Continue to believe that Champ commercial business and specifically commercial security will be a key growth driver both now and in the future.

Jacob Roberge: So there again, we're seeing some nice green shoots. Great, thanks for taking my questions and congratulations again on the results. Your next question comes from the line of Vinod Srinivas Saragavan from Missouho. Your line is open.

John Strosahl: The strategic core of Champs business SaaS recurring revenue remained strong in Q1 growing 18% less strategic revenue sources like licenses services non premise revenues continued to experience year over year declines, but came in slightly better than expected.

Unknown Attendee: Hey guys, thanks for taking my question. I just wanted to dig into NRR a little bit. Can you give us a sense of what the mix of upsells versus downsells versus churn was this quarter? And was this much different than what you saw in Q1 last year? Yeah, thanks for the question. So it did decline from 108 to 107.

Speaker Change: Our net retention rate decreased slightly as expected to 107% in Q1, when compared to Q4 of 2023.

Ian Goodkind: And so when I look at Q4 to Q1, about 75% of that decline related to upsell. It continues that the same macro customer spending effects continue to impact that. In this quarter, we saw in the trailing 12 month metric, or sorry, when we looked from Q4 to Q1, the other 25% did relate to lost logos. That did relate to that January extra churn that we saw. But again, February and March came back and were actually better than we expected.

Ian Goodkind: And just a comparison point, because you asked Q1 of last year, when I look at that decline, 81% of that was related to upsell, 14% related to downsell, and then 5% related to lost logo. So in our trailing 12 month lost logo, it doesn't really have that big of an impact. Our competitors come and go, but we've seen them go for the time being, and we're excited about the things we're seeing in our pipeline and in our second quarter. Okay, great.

Ian Goodkind: Q1, non-GAAP gross profit margin was 81% and within our expectations. We continue to anticipate gross margin in the low 80% range and expect slight fluctuation each quarter.

Ian Goodkind: Our trailing 12 month Unlevered free cash flow margin was 13% compared to 14% in the prior year.

Ian Goodkind: Our effective tax rate for Q1 was negative five 4% consistent with our expectation.

Ian Goodkind: During our Investor day, we outlined some key milestones that will help you track our progress against our goal.

Ian Goodkind: One meet our quarterly financial outlook in Q1, we exceeded the high end of both our revenue and non-GAAP operating income guidance ranges.

Ian Goodkind: To achieve at least 25% growth in security.

Ian Goodkind: Q1 year over year growth of security.

Ian Goodkind: <unk> was 31%.

Ian Goodkind: Three decreased general and administrative expense as a percentage of total revenue Q1, non-GAAP G&A margin was 14% an approximate 100 basis point reduction from Q4 2023.

Ian Goodkind: For decreased sales and marketing expense as a percentage of total revenue Q1, non-GAAP sales and marketing margin was 34% an approximate 200 basis point reduction from Q4 2023.

Ian Goodkind: With respect to sales and marketing expense given that we anticipate the largest portion of cost savings coming from this area. We are providing additional details on our current efficiency and scalability initiatives.

Ian Goodkind: First earlier this year, we adjusted our workforce with a focus on higher productivity.

Ian Goodkind: We are adjusting our sales incentive structure to further drive cross sell security and mobile and price capture.

Ian Goodkind: Third we are enacting program to drive enhanced value from our channel partners.

Ian Goodkind: We continue to focus on educating customers on the value, we provide with our trusted access outcome.

Ian Goodkind: Fifth we are aligning our resources to geographies with the highest growth potential like the Asia Pacific region.

Unknown Attendee: That's helpful. And then, just in general, how did Jamf Business Plan do this quarter? And are you seeing, you know, just more momentum now, as you know, that's been out for a while now? Yeah, it was 63% year over year growth in our business plans, which includes enterprise plans. But it continues to be successful.

Ian Goodkind: It has been something our customers have been asking for. They see the benefits when you combine management and security together, not just from a cost perspective, but they know that things just work together. And I did mention routines a little bit earlier.

Ian Goodkind: Now turning to our outlook for Q2 and full year 2024.

Ian Goodkind: You know, that's just something we did for our spring release, and we announced, you know, all the different things related to compliance. And then we also announced routines. Routines is a really interesting piece that's just available in business plan, and it is something that is going to help automate workflows and help with collaborative tools. So, for example, if you see a device that you need to reset, well, this actually has an automated workflow for that.

Ian Goodkind: With respect to revenue growth, we expect continued pressure on device sell through 'twenty 'twenty four we will continue to focus on the strategic growth drivers John outline building on the successes we achieved in Q1.

Ian Goodkind: We will invest in growth and scalability with focus on scalable go to market organization platform optimization and back office automation, our scalability initiatives will set you up for profitable growth in the future and returned your app to the rule of 40 as outlined at our Investor Day.

Ian Goodkind: Many of these initiatives are in process with some theme benefits in 2020, four and others with benefits expected throughout the next few years.

Ian Goodkind: Based on these factors for the second quarter of 2024, we expect total revenue of 155 to 152 $5 million representing year over year growth of 11% to 13%.

Ian Goodkind: non-GAAP operating income of 21, 5% to $22 $5 million, representing a non-GAAP operating income margin of 15% at the midpoint.

Ian Goodkind: Given our strong performance in Q1, we are increasing our expectation for the full year 2024 total revenue of $618 five to $622 5 million representing year over year growth of 11% at the midpoint. This reflects an increase.

Ian Goodkind: $3 5 million at the midpoint.

Ian Goodkind: non-GAAP operating income of 92, 5% to $95 $5 million, representing a non-GAAP operating income margin of 15% at the midpoint and an approximate 700 basis point improvement over fiscal year 2023.

Ian Goodkind: This reflects an increase of $3 million at the midpoint.

Ian Goodkind: We don't provide an outlook for <unk>, we would expect to end fiscal year 2024 with AAR growth.

Ian Goodkind: Similar to full year revenue growth.

Ian Goodkind: With respect to Unlevered free cash flows for full year 2024, we expect unlevered free cash flow margin to be similar to non-GAAP operating income margin.

Ian Goodkind: With respect to the longer term financial outlook, we presented as part of our Investor Day, we remain committed to the goals we outlined during the event and now Jon and I will take your questions operator.

Ian Goodkind: And it actually tells you through whatever tool you're using from a collaboration standpoint. So we see a lot of success there. And we're really excited about that. And again, when customers have both management and security, we see our churn improve on those customers because customer health is strong. Thanks, guys. There are no further questions from the line at this time.

Jennifer: I will now turn the conference back over to Jennifer for the closing remarks. Thank you all for joining us today. This is the end of the call. Have a good rest of your day.

Operator: Thank you. Thank you. That concludes today's conference call. Thank you all for joining. You may now disconnect. Please wait. The conference will begin shortly. Please wait. The conference will begin shortly. ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? ?? Thank you for standing by.

Jennifer: Thank you.

Jennifer: We will now begin the question and answer session.

Rochelle: My name is Rochelle, and I will be your conference operator today. At this time, I would like to welcome everyone to the Jamf First Quarter 2024 Earnings Call. All lines have been placed on mute to prevent any background noise.

Operator: If you have dialed in and I would like to ask a question. Please press star one on your telephone keypad. If you would like to withdraw your question simply press Star one again.

Rochelle: You are called upon to ask your question and our listening via loud speaker on your device. Please pick up your handset and ensure that your phone is not on mute when asking your question again press star one to join the queue and your first question comes from the line of Joshua Reilly of Needham and company. Your line is open.

Jennifer: Alright, nice job on the quarter here and thanks for taking my questions I guess, the starting point, probably if people are interested in here is the <unk> growth was a bit better than what we expected and kind of what you laid out at the analyst day can you just give us a sense of what are some of the puts and takes for the rest of the year in terms of how much is.

Jennifer: Pricing benefited our growth here in Q1 relative to your expectation and has there really been any change in the macro with a little bit of a talk up.

Jennifer: In the air growth it sounds like it can be closer to 11%.

Jennifer: <unk> exited nir.

Jennifer: Today's discussion may include forward-looking statements. Please refer to our most recent SEC reports, including our most recent annual report on Form 10-K, where you will see a discussion of factors that can cause actual results to differ materially from these statements. I would also like to remind you that during the call, we will discuss non-GAAP measures related to Jamf's performance. You can find the reconciliation of those measures to the nearest comparable GAAP measures in our earnings release.

Jennifer: Yes.

John Strosahl: Josh good to hear from me and I'll jump in there. So you are right and I. Appreciate the way you asked your question.

Jennifer: Ah chemo generally how we expected and what we outlined at our Investor day.

Jennifer: Did come off a strong Q4 and there we did pull forward some deals from Q1.

Jennifer: Q1 is our seasonally low but we did.

Jennifer: In the first quarter have are first a reduction in workforce and we didn't assign quotas until after that and tech continues to be muted.

Jennifer: From the macro and education continues to have the Covid overhang, we did see a little bit more churn in January from a specific competitor but.

Jennifer: That normalized within February and March so as we March forward throughout the year, we do see some additional bright spots, we have seen some strength in professional services financial services, and our wholesale and retail and those non leading tech industries have been leaning more into it in.

Jennifer: In Q1, we actually saw higher rep productivity.

Jennifer: And because of the double digit.

Jennifer: The improvement from the prior year, we also saw a little bit about upsell on some of the deals not to the levels. We've seen historically, but we saw that as well we saw our bundles continue to be strong it was a 63% year over year.

Jennifer: And then what we're continuing forward with we've been continuing to tweak our incentive plans, which is boding well that we've seen our pipeline starting to build within the.

Jennifer: The Securities base, we see our new logo commercial pipeline represents 45%, which is good and we are also just seeing a few green shoots in EU, So and as a reminder, our 2024 outlook was based on the on the same economics, we saw in 2023 savings bode well and good outlets over achieve on 2024.

Jennifer: And we feel good about what we said it again.

Jennifer: Got it that's Super helpful. And then just following up on the SMB segment of the market.

Jennifer: Some of the other peers.

Jennifer: Yes.

Jennifer: <unk> World had been seeing some challenges from SMB customers I know, that's a smaller mix of your business relative to some of these other areas, but are you seeing the higher for longer interest rate dynamics beginning to impact these customers as well. Thank you.

Jennifer: Hey, Jonathan this.

Jennifer: This is John I can answer that question, yes. Its interesting I was just talking to some of the sales guys about this particularly and we still are a volume business.

Jennifer: And.

Jennifer: And we have seen.

Jennifer: We've seen the longer.

Jennifer: The interest rates being higher effect some of these businesses, we typically see.

Jennifer: Bit of a Canary in the coal mine with our SMB business and that's when we see them start to start to purchase more than enterprise generally follows.

Jennifer: And we've had some very consistent new logo growth, but we've also seen some of those smaller companies fallout as a result of the longer than expected interest rates, but we do feel pretty good about our year over year bundled sales, which typically goes to the SMB market and Ian mentioned over 60% year over year.

Jennifer: And we continue to see more interest although sales cycles have remained elongated, but we're starting to get more interest for both the SMB and the enterprise.

Jennifer: Your next question comes from the line of Koji Ikeda of Bank of America. Your line is open.

John Strosahl: This margin represents a 1,000 basis points improvement from Q1 of 2023. We ended Q1 with 75,900 customers and 32.8 million devices on our platform. Of these customers, 41% run a Jamf management and security product. We continue to drive cross-sell with 31% year-over-year growth in security ARR to $138 million, or 23% of Jamf total ARR. Our largest industries, tech and K-12, remain muted, impacting device expansion.

John Strosahl: Yeah, no. Thanks, guys. Thanks for taking the questions.

Speaker Change: Lots of good commentary in the prepared remarks, thank you for that.

Speaker Change: I just wanted to ask you a question on how you are feeling about the three year model and very specifically about the revenue grew up in a growth that you guys laid out at the Investor day, which is accelerating the growth is accelerating in 2025 and 2026.

John Strosahl: Of course that setup is very very attractive.

John Strosahl: Look at some of the growth metrics in one SKU a lot of them diesel. So I was wondering maybe what youre seeing from your end that is giving you that increased cost maybe there was something this quarter, that's increasing your conference to be.

John Strosahl: <unk> committed to a three year growth targets.

Speaker Change: Yeah, I'll jump in on that one and thanks for the question question Koji I think the first short answer and I'll expand on the answer is yes, we still have conviction over a three year model.

John Strosahl: We laid it out in a manner, where this year, we laid out 10% now at 10, 7% growth rate on revenues and we've over achieved that and we knew again it would be.

John Strosahl: A little bit of a slower start from the standpoint of the items I just talked about from the fact, we knew we were taking some steps with workforces that Jonathan we knew we were making some adjustments to compound we knew a lot of that and we've also what we focused on Investor day. If you remember we showed your NRI on kind of historically and what it looks like going forward and that it does.

John Strosahl: Didn't have a huge macro return and Thats still what we are factoring in we do believe that's going to come at some point. So there's that and then I talked about just a little bit ago.

John Strosahl: About the security pipeline and we're starting to see that build and customers are having interest and when I look at.

John Strosahl: Our bundles again that continues to have a lot of entrants with customers and one thing on our bundles. As you know we continue to added value. There. We just released Jan for teens and jam routines as something you only find within our bundle and is it automates certain workflows and integrates with certain collaboration tools.

John Strosahl: Does help with a lot of customer issues. So those are the types of things you can expect when we also last comment I'd make them as we just saw in my prepared remarks, I talked about the five areas that we were focused on from a sales and marketing perspective.

John Strosahl: We have a clear plan of how we're going to check through those things.

John Strosahl: We have met the things we've outlined on our checklist from Investor day. So far this year. So when you take all those things together, yes, we have conviction around that plan.

Speaker Change: Got it. Thank you so much and maybe a follow up for you Sir.

John Strosahl: I noticed the Hugest came out and I punched into are a little spreadsheet here the remaining performance obligations.

John Strosahl: I did notice that on the IPO front it declined sequentially just just a tick.

John Strosahl: Did notice that it happened last year in the first quarter to just <unk>.

Speaker Change: Wanted to understand anything particular about the dynamics of the first quarter and our peer that we need to understand thank you.

Speaker Change: Yeah. Good question, so on <unk> and actually every first quarter. If you go back historically on all our first quarters, it's actually seasonality. It is always our slowest quarter.

John Strosahl: And so just as a reminder, Q1 their slowest quarter Q2, and Q3 are supported by our education business, and then Q3 and Q4 heavier commercial business is that.

John Strosahl: While we had a pretty good Q4, which pulled them forward.

Speaker Change: I wouldn't read into that any further than that it is along is what we generally expected.

Speaker Change: Got it thank you very much.

John Strosahl: Your next question comes from the line of Raimo <unk> Chao of Barclays. Your line is open.

John Strosahl: Hey, this is Isaac on for Raimo, Thanks for taking the question.

John Strosahl: Security IRR came in pretty strong again, this quarter and I know you.

John Strosahl: Guys guided to 25% at the analyst day, how much upside do you see to that number versus what you initially guided and how should we think about the shape of net new IRR there as we go through the remainder of the year.

Speaker Change: I can jump in there so a couple of things.

John Strosahl: I mean, we said we were going to achieve at least 25%. So we're above that what we showed on this slide that they're saying here's the things you should monitor throughout the year does show our ethics SaaS, we had 33% growth in Q4, 31% now so it continues to bode well for us and as we.

John Strosahl: We talked about at Investor Day, we are very focused on cross sell and that comes in three farms that comes in the form of commercial security education security.

John Strosahl: And then there is mobile and mobile has been good but just talking about security I mean, some of our the way we're thinking about our incentive plan focuses on the cross sell focus is on the security and we are seeing customers ask more and more about that.

John Strosahl: It's just become a really good opportunity when customers see that you can consolidate on one platform. Both your management and security that had been boding well for us and in the SMB side. Since there is one economic buyer, that's been boding, well and we've been working with enterprises and we get a couple, though we get one of those ones.

Speaker Change: And a while here and those are things that I think could accelerate if we see more of those come through and I think just again buyers are sitting a little bit on the sidelines as nervous to make changes, but we are seeing this be successful in this economy. When you consolidate so those are the things that I think could bode well for us and can help US continue along this path John.

John Strosahl: Yes.

John Strosahl: I'll just add that on the enterprise side, we have seen the security to be successful and particularly on the iOS side and when you look at the retail and wholesale markets as the desktops workflows.

John Strosahl: Become more and more prevalent in those industries, we're seeing a lot more.

John Strosahl: <unk> security on that side as well so we're getting we're seeing some really good traction traction there and we're continuing to double down on it as Ian said really incentivizing our sales teams to <unk>.

John Strosahl: Promote that cross sell and really lead with our trusted access.

John Strosahl: Opportunity, which our customers have really taken kindly to yeah. One other thing I've thought about it was education to.

John Strosahl: In the first quarter, we did actually see.

John Strosahl: A few extra deals in the education security piece. So we have seen some success in some green shoots there as well.

John Strosahl: But the full year guide on margins stayed consistent is there anything when you think about in Q3 and Q4 that maybe.

John Strosahl: The reasons for that margin guide not moving incrementally up through the remainder of the year.

Speaker Change: Yes, I think youre talking about the margin percentage versus the dollars right and so the dollars did go up with consistent and actually slightly more than what our over achievement in the first quarter was so we did pass that through and we actually brought it up I think what youre asking and payables are getting close to 15% you guided 15%.

John Strosahl: The year and what I would think about there is a couple of things what we talked about at Investor Day is two things, we're going to still continue to invest in growth and scalability and those are continuing throughout the year I listed in my prepared remarks say around the initiatives that we're spending on on the go to market side. We also see.

John Strosahl: They'll have the platform capabilities, where we're continuing to optimize our platform and we are focused on back office automation. So I wouldnt adjust this spending for those long term initiatives that make us more scalable.

Speaker Change: Great that's super helpful. Thank you.

John Strosahl: Your next question comes from the line of Dan Bergstrom of RBC capital markets. Your line is now open.

John Strosahl: Hey, it's tampered for Matt Hedberg, Thanks for taking our questions.

John Strosahl: So it's nice to see the PC shipments returned to growth. Following a couple of years of declines in the gains for Apple I guess are there any additional observations you have from conversations with customers around refresher anything otherwise here.

John Strosahl: Yes.

John Strosahl: I guess, they would remain prudent around hiring and expense though.

John Strosahl: Yes, Dan This is John I can I can take the question.

John Strosahl: Just ancillary discussions with our customer and the sales team as well.

John Strosahl: We have seen a bit of elongated refresh cycle I mean, the uncertainty in the market.

John Strosahl: Cause some of that.

John Strosahl: Said before we have seen some more interest in some more engagement all of those sales cycles are still remained elongated. We also noted that.

John Strosahl: It was the Wall Street Journal article that came out of IDC in both Gartner had had identified that apples growth had been over 14 about 14, 5% year over year and shipments as well.

John Strosahl: We also recapped our recent announcement that support for Apple Vision Pro is now available across the entire Jamf platform. With Jamf Pro, organizations can enroll in streamlined deployment of enterprise apps and settings for Apple Vision. Jamf Connect allows Apple Vision Pro to securely access enterprise resources for any of the web and native apps that require secure identity-based access controls. Jamf Protect extends the same mobile threat defense, network protection, and content filtering use cases to Apple Vision Pro.

John Strosahl: The replay and presentation can be found on our investor relations website. During the event, we highlighted our differentiated position and competitive moat, our large and growing addressable market, our strategic growth drivers, and our financial expectations through 2026. I'd like to use the strategic growth drivers we discussed during this event as the framework for the remainder of my remarks, highlighting some of the specific successes we saw in Q1. First, in Mac leadership, we continue to demonstrate how Jamf's Apple First, Apple Best solutions deliver the best outcomes for our customers. In Q1, a leading online travel company renewed with Jamf for three years.

John Strosahl: Key to this win was our ability to demonstrate how Jamf's solution can help with the customer's current strategic initiative around process automation. We also delivered a long-term roadmap for expanding with Jamf, including Jamf Pro for iOS and Jamf Protect. Our ability to build multiple strong relationships with the customers at the management level was also beneficial, helping streamline the approval process.

John Strosahl: And our suggestion to utilize AWS Marketplace to leverage their committed spend was a win-win, simplifying procurement for the customer and resulting in a timely renewal for Jamf. We're excited about continued growth through the AWS Marketplace as customers can use committed spend towards their Jamf contract, like Netlify, a cloud platform for front-end teams to build, deploy, and scale modern web applications. Netlify is now using Jamf with committed spend for AWS to manage its Apple devices and connect its end users to the resources they need.

John Strosahl: We're strongly encouraged by our progress in the retail space, which represents one of our top five largest. Retail, along with financial services and professional services, continues to see strong growth, helping balance this gap we are seeing in tech and K-12 education. Tech is seeing muted hiring and lower IT investments, while K-12 is experiencing a bit of a COVID overhang with record device deployments in 2020 and 2021.

John Strosahl: That bodes well for us, we don't track that on a quarter by quarter basis, but several quarters in a row certainly have an impact on the on the install base and so.

John Strosahl: Your assumption is right, we have seen a bit of elongated refresh cycles, both in the enterprise as well as.

John Strosahl: As well as an education, but we are seeing seeing some of that loosen a bit.

John Strosahl: Thanks, and then I appreciate the additional color so far around security and the Q&A here I guess on security in the go to market, whereas the sales force here around security versus say a year ago. It sounds like there have been some adjustments on incentives more focus on cross sell maybe any more color here or anything youre leaning into.

John Strosahl: Security perspective to start the year.

John Strosahl: Yeah.

John Strosahl: The sales teams to become much better versed in our security opportunity or as a security offering you remember we had the management first and then our customers asked us to extend into security and we did that.

John Strosahl: And we have a pretty pretty decent salesforce pretty sizable sales force and they don't necessarily turn on a dime, but we're really seeing the traction that they're getting especially when they lead with trusted access and that being that management and security together really being able to identify those things and then actually go ahead and remediate them through the device management product and so those have.

John Strosahl: Smaller organizations often don't have the bandwidth, budget, or the desire to engage multiple third parties, making Jamf's trusted access platform an appealing solution. We continue to see an increasing number of deals with both a management and a security component. We see this in the continued strong growth of Jamf's bundled commercial solutions, which grew 63% year over year in Q1. And currently, 45% of Jamf's new customer commercial pipeline is made up of security opportunities.

John Strosahl: Additionally, when a customer consolidates management and security with Jamf, we see reduced churn compared to customers with just a management solution or just a security solution. In Q1, a precision medicine company became a Jamf Business Plan customer for its 1,200 devices. This company chose to move away from the legacy UEM provider and chose Jamf due to the value trusted access brings to their organization and the strength of our capabilities for a mixed device environment. The customer's device environment includes Macs, PCs, Chromebooks, and Android.

John Strosahl: The sales team better well burst and leading with trusted access is gaining traction that we've also taken.

John Strosahl: More recent sales hires from the security space. So they bring a wealth of knowledge into the company that help has helped cross pollinate that to our other sales teams, we did adjust the compensation.

John Strosahl: Plan early in the year and really to focus on <unk> to make sure that those customers that were.

John Strosahl: But we're making sure that we're retaining the customers that we have in an environment that we don't know when the when the.

John Strosahl: The PC shipments and all that will return and in the process of that we really what we needed to do more of it is focus on the cross selling we saw that in Q1 towards the end of Q1, we adjusted compensation will continue that through Q2, and the rest of the year and so Thats had also some green shoots and when Ian talked about our security pipeline.

John Strosahl: A lot of that is also a direct result of some of those changes that we made.

Speaker Change: That's great. Thanks.

John Strosahl: The next question comes from the line of Jake Roberge of William Blair. Your line is open.

Speaker Change: Hey, Thanks for taking the questions and congrats on the great results.

Speaker Change: I'm curious now that you've had a quarter or two following the acquisition and then subsequent divestiture of workspace. One have you started to see any incremental opportunities that presented from customers that that might be frustrated from that change of control. Just curious if there's any incremental opportunities in our pipeline that is building from that those deals this year.

John Strosahl: Oh, absolutely Jay This is John again I'll take this question, we certainly have and.

Speaker Change: The issue with that is.

John Strosahl: Because the.

John Strosahl: The acquisition went through of that competitor to a financial sponsor.

John Strosahl: We're not expecting and we've said this before we don't expect all of those deals to come in one quarter. They all have they all have renewal cycles and so we're engaged with a lot of those.

John Strosahl: Pretty much all of those customers are when that renewal cycle is coming up in promoting our products. We've replaced tens of thousands of devices every quarter.

John Strosahl: In that with that with that competitor and we have a pretty healthy pipeline directed at that and our advantage here is that we innovate at the pace of Apple and our competitors have had some difficulty with that especially when they are cross platform and then you kind of dilute the user experience down to the lowest common denominator and so thats, where we really excel.

John Strosahl: And then you top that you put that on top of.

John Strosahl: Having the.

John Strosahl: The perception of not innovating at the pace of Apple.

John Strosahl: Given the ownership structure that is something that we've really taken advantage of and our salespeople have leaned into heavily.

Speaker Change: Okay very helpful. And then and then obviously great to see that the 31% security are our growth you've had some some really solid comments on the call about pipeline and then they go to market tweaks youre, making there, but given the RSA. This week I am curious if there are any areas on the product side that youre looking to dig deeper into throughout the year and maybe opportunities that.

John Strosahl: It could be more upsell throughout 2025, and 2026 timeframe that youre really digging into this year.

Speaker Change: But we certainly are.

John Strosahl: And also aspect we've got we've got a lot of.

John Strosahl: Opportunity in front of us with the security products that we have but we also know there is other areas of security that we're leading into as well and we continue to be very acquisitive in looking at companies, particularly in the tech and talent side that are Apple <unk> and Apple best and that's something that we'll continue to do.

John Strosahl: Enhance the feature set of our security products, but we're seeing that from our customers that we're listening to our customers. The reason, we went and the security of the first places because that's what our customers ask us to do and we're following their lead and adding functionality to those security products. The other one I mentioned and I mentioned in the prepared remarks is the jump executive threat protection that is done.

John Strosahl: Really really well.

John Strosahl: In that it becomes.

John Strosahl: A halo effect in that when you are speaking to a CSO.

John Strosahl: High level in the organization about securing high value targets you are talking to the same person that can make decisions on protect and NGF connect so the connectivity other parts of the organization and so once they have they see the value of Jeff Executive threat protection, we have an opportunity to discuss other security products and we've done that over and over.

John Strosahl: We've seen success with this strategy in the past in countries like Japan. We'll continue to leverage this success in select geographies where we're seeing the most potential. I'll now turn it over to Ian to review our results and provide our Q2 and 2024 outlook. Thanks, John.

Ian Goodkind: We ended Q1 with year-over-year revenue growth of 15%, exceeding the high end of our revenue outlook by $2.1 million. Total ARR reached 602.4 million, representing year-over-year growth of 14%, exceeding expectations. We continue to believe that Jamf's commercial business, and specifically commercial security, will be a key growth driver both now and in the future. Of Jamf's business, SAS recurring revenue remains strong, and Q1 growing 18%. Less strategic revenue sources like licenses, services, and on-premise revenues continue to experience year-over-year declines but came in slightly better than expected.

Ian Goodkind: We're again so those are again, we're seeing some nice green shoots.

Speaker Change: Great. Thanks for taking my questions and congrats again on the results.

Ian Goodkind: Thanks.

Ian Goodkind: Your next question comes from the line of the nod Srinivasan Ragavan from Mizuho. Your line is open.

Ian Goodkind: Our net retention rate decreased slightly, as expected, to 107% in Q1 when compared to Q4 2020. The remainder of my remarks on margins, expense items, and profitability will be on a non-GAAP basis. Our GAAP financial results, along with the reconciliation between GAAP and non-GAAP, are found in our earnings release.

Ian Goodkind: Q1's non-GAAP growth profit margin was 81% and within our expectations. We continue to anticipate growth margins in the low 80% range and expect slight fluctuations each quarter. Non-GAAP operating income exceeded the high end of our Q4 outlook at $22.1 million, or 15% margin, due to cost-saving initiatives and increased revenues, representing an approximate 1,000 basis point improvement over Q1 2023. Our trailing 12 months on levered free cash flow margin was 13% compared to 14% in the prior year. Our effective tax rate for Q1 was negative 5.4%, consistent with our expectations.

Speaker Change: Yeah. Thanks for the question.

Ian Goodkind: So it did decline from one wait until one of seven and so when I look at Q4 to Q1 about 75% of that.

Ian Goodkind: Client related to up sell it can do the same macro customer spending effects continue to ambac that.

Ian Goodkind: In this quarter, we saw in the trailing 12 month metric or sorry lift from Q large Q1, the other 25% did related to lost logos that did relate to that.

Ian Goodkind: Decrease General Unadministrative Expense as a Percentage of Total Revenue. Q1 non-GAAP G&A margin was 14%, an approximate 100 basis point reduction from Q4 2022. 4.

Ian Goodkind: January extra churn that we saw but again February or March came back and actually was better than what we expected and just a comparison point because you asked Q1 of last year when I look at that and the declined 81% of that related to upsell, 14% related to downtime and then 5% related to lost logos. So in our trail.

Ian Goodkind: 12 months half logo isn't really that big of an impact and our R. R.

Ian Goodkind: Our competitors come and go but we've seen them go for the time being and we're excited about the things we're seeing in our pipeline and in our second quarter.

Ian Goodkind: Now, turning to our outlook for Q2 and full year 2024. With respect to revenue growth, we expect continued pressure on device upsells through 2024. We will continue to focus on the strategic growth drivers John outlined, building on the successes we achieved in Q1. We will invest in growth and scalability with a focus on scalable go-to-market organization, platform optimization, and back-office automation. Our Scalability Initiatives will set Jamf up for profitable growth in the future and return Jamf to Rule 40, as outlined at our Investor Day.

Speaker Change: Okay, Great that's helpful and then.

Ian Goodkind: This reflects an increase of $3.5 million at the midpoint. Non-GAAP Operating Income of $92.5 to $95.5 million, representing a Non-GAAP Operating Income margin of 15% at the midpoint and an approximate 700 basis point improvement over fiscal year 2022. This reflects an increase of $3 million at the. While we don't provide an outlook for ARR, we would expect to end fiscal year 2024 with ARR growth similar to full-year revenue. With respect to unlevered free cash flows, for full year 2024, we expect unlevered free cash flow margin to be similar to non-GAAP operating income margin.

Speaker Change: Just in general how does GM business plan do this quarter and are you seeing more momentum now is that's been out for a while now.

Ian Goodkind: Yes.

Ian Goodkind: 63% year over year was the growth in our business plan, which includes enterprise plan.

Ian Goodkind: It continues to be successful.

Ian Goodkind: It's been something our customers have been asking bar they see the benefit when you combine management and security together not just from a cost perspective, but they know that they can just work together and I did mentioned.

Ian Goodkind: Routines, a little bit earlier, and that's just something we had our spring release, when we announced.

Ian Goodkind: All of the different things related to compliance and then we also announced routines and routines is a really interesting piece. That's just available in business plan and it is something that is going to earn helps automate workflows and helps lift kit and collaborative.

Ian Goodkind: Tools. So for example, if you see a device that you need a reset of this actually has an automated workflow for that and it actually tells you through whatever tool youre using from a collaboration standpoint. So we see a lot of success there and we're really excited about that.

Ian Goodkind: And again when customers have both management and security, we see our churn improve on those customers because of its customer health health is stronger.

Speaker Change: Thanks, guys appreciate it.

Ian Goodkind: There are no further questions from the line at this time I will now turn the conference back over to Jennifer for the closing remarks.

Ian Goodkind: We also provide estimates for amortization, stock-based compensation, related payroll taxes, and other metrics to assist with modeling in the earnings presentation as part of the webcast and also posted on our investor relations website. With respect to the longer-term financial outlook we present as part of our Investor Day, we remain committed to the goals we outlined during the event. And now John and I will take your questions, operator. Thank you. We will now begin the question and answer session.

Ian Goodkind: If you have dialed in and would like to ask a question, please press star 1 on your telephone keypad. If you would like to withdraw your question, simply press star 1 again. If you are called upon to ask your question and are listening via loudspeaker on your device, please pick up your handset and ensure that your phone is not on mute when asking your question.

Operator: Again, press star one to join the queue, and your first question comes from the line of Joshua Reilly of Needham and Company. Your line is open. All right, nice job on the quarter here. And thanks for taking my questions. I guess the starting point probably people are interested in here is the ARR growth was a bit better than what we expected and kind of what you laid out at analyst day.

Unknown Attendee: Thanks, guys. I appreciate it. There are no further questions from the line at this time. I will now turn the conference back over to Jennifer for the closing remarks. Thank you all for joining us today. This is the end of the call. Have a good rest of your day. Thank you. Thank you. That concludes today's conference call. Thank you all for joining me. You may now disconnect.

Operator: Can you just give us a sense of what are some of the puts and takes for the rest of the year in terms of how much is the pricing benefit of ARR growth here in Q1 relative to your expectations? And has there really been any change in the macro with a little bit of a pick-up in the ARR growth? It sounds like it's going to be closer to 11% for exiting the year. Yeah, so hey, Josh, good to hear from you at the end. I'll jump in there. So you're right.

Joshua Christopher Reilly: And I appreciate the way you asked your question. AR came out generally as we expected and as we outlined at our investor day. We did come off a strong Q4. And there we did pull forward some deals from Q1. Q1 is our seasonally low, but we did, in the first quarter, have our first reduction in workforce, and we didn't assign quotas until after that.

John Strosahl: So as we march forward throughout the year, we do see some additional bright spots. We've seen some strengths in professional services, financial services, and wholesale and retail. And those non-leaning tech industries have been leaning more into it. In Q1, we actually saw higher rep productivity, and they call it a double-digit improvement from the prior year. We also saw a little bit of an upsell on some of the deals, not to the levels we've seen historically, but we saw that as well. We saw our bundles continue to be strong. It was up 63% year-over-year.

John Strosahl: And then what we're continuing forward with, we've been continuing to tweak our incentive plans, which are voting well, that we've seen our pipeline start to build. And we've seen that build within the security space. We see our new global commercial pipeline represent 45%, which is good. And we've also just seen a few green shoots in EDU.

Speaker Change: Thank you all for joining US today. This is the end of the call have a good rest of your day. Thank you.

John Strosahl: So, as a reminder, our 2024 outlook was based on the same economics we saw in 2023. So, many things bode well and could help us overachieve in 2024. We feel good about what we said.

Joshua Christopher Reilly: And then just following up on the SMB segment of the market, some of the other peers and, you know, Staff World have been seeing some challenges from SMB customers. I know that's a smaller mix of your business relative to some of these other areas, but are you seeing the hire for longer interest rate dynamics beginning to impact these customers as well? Thank you. Josh, I can, this is John. I can answer that question.

Koji Ikeda: Thanks for taking the questions. Lots of good commentary in the prepared remarks. Thank you for that. I just wanted to ask you a question about the three-year model, and very specifically about the revenue growth and AR growth that you guys laid out at Investor Day, which is accelerating, and the growth is accelerating in 2025 and 2026. You know, of course, that setup is very, very attractive.

Koji Ikeda: But when I look at some of the growth metrics in one view, a lot of them decelerate. So I was wondering, you know, maybe what you're seeing from your end that is giving you that increased cost, maybe there was something this quarter that's increasing your confidence to be so committed to the three-year growth. Yeah, I'll jump in on that one. And thanks for the question, Koji.

Ian Goodkind: I think the first short answer, and I'll expand on it, is yes, we still have conviction over our three-year model. We laid it out in a manner where this year, you know, we laid out 10%, and now it's 10.7% growth rate on revenues. And we've overachieved that. And we knew, again, it would be a little bit of a slower start from the standpoint of the items I just talked about, from the fact that we knew we were taking some steps with workforce adjustment, we knew we were making some adjustments to comp plans, we knew a lot of it.

Speaker Change: Thank you that concludes today's conference call. Thank you all for joining you may now disconnect.

Ian Goodkind: And we've also focused on yesterday, if you remember, we showed you NRR kind of historically and what it looks like going forward, and that it doesn't have a huge macro return. And that's still what we're factoring in; we do believe that's going to come at some point. So there's that. And then I talked about just a little bit ago the security pipeline. And we're starting to see that build.

Ian Goodkind: We've met the things we've outlined on our checklist from Investor Day so far this year. So when you take all those things together, yes, we have conviction around that plan.

Koji Ikeda: And maybe a follow-up for you, sir. I noticed the cue just came out, and I punched the remaining performance obligations into our little spreadsheet here. And I did notice that on the RPO front, it declined sequentially, just by a tick. And I did notice that it happened last year in the first quarter, too.

Ian Goodkind: Just, you know, wanted to understand anything in particular about the dynamics of the first quarter and RPO that we need to understand. Thank you. Yeah, good question.

Ian Goodkind: So on RPO, and actually, every first quarter, if you go back historically, on all our first quarters, it's actually seasonality; it's always our slowest quarter. And so just as a reminder, Q1 is our slowest quarter, Q2 and Q3 are supported by our education business, and then Q3 and Q4 are heavier commercial businesses. As I talked about, we had a pretty good Q4, which pulled some deals forward. But I wouldn't read into that any farther than that. It is a Got it.

Ian Goodkind: Thank you very much. Your next question comes from the line of Raimo Lenschow of Barclays. Your line is open. Hey, this is Isaac on behalf of Raimo.

Ian Goodkind: So a couple things. Yeah, I mean, we said we were going to achieve at least 25%. So we're above that what we showed on our analysis slide that was, you know, saying here are the things you should monitor throughout the year to show our success. We had 33% growth in Q4, and 31% now. So it continues to bode well for us. And as we talked about it at Investor Day, you know, we are very focused on cross-selling.

Ian Goodkind: And that comes in three Yeah, I'll just add that, you know, on the enterprise side, we have seen security be successful, and particularly on the iOS side. And when you look at the retail and wholesale markets, as the Desmos workflows, you know, it has become more and more prevalent in those industries.

John Strosahl: We're seeing a lot more mobile security on that side as well. So we're getting, we're seeing some really good traction there. And we're continuing to double down on it, as Ian said, really incentivizing our sales teams to promote that cross-sell and really lead with our trusted access opportunity, which our customers have really taken kindly to. Yeah, one other thing I thought about was education, too.

Ian Goodkind: We, in the first quarter, we did actually see a few extra deals in the education security piece, so we have seen some success there as well. Great, that's super helpful. Thanks. And then, Ian, maybe one more question. If I think about the margin guidance, Q1 came in ahead of expectations, and it seems like Q2 is also slightly ahead, but the full year guidance on margin stayed consistent.

Raimo Lenschow: Is there anything we need to think about in Q3 and Q4 that, you know, maybe are reasons for that margin guide not moving incrementally up through the remainder of the year? Yeah, I think you're talking about the margin percentage versus the dollars, right? And so the dollars did go up consistently and actually slightly more than what our overachievement in the first quarter was. So we did pass that through, and we actually brought it up. I think what you're asking is, hey, both are getting close to 15%; you're at 15% for the year.

Ian Goodkind: And what I would think about there are a couple things. What we talked about on investor day are two things. We're going to still continue to invest in growth and scalability, and those will continue throughout the year.

Dan Bergstrom: Great, that's super helpful. Thank you. Your next question comes from the line of Dan Bergstrom of RBC Capital Markets. Your line is now open. Hey, it's Dan Bergstrom on behalf of Matt Hedberg.

John Strosahl: Thanks for taking our question. It's nice to see the PC shipments return to growth following a couple of years of declines in the gains for Apple. I guess, are there any additional observations you have from conversations with customers around refresh or anything else here? I guess they'd, you know, I guess they'd remain prudent around hiring and expense still. Yeah, Dan, this is John.

Dan Bergstrom: I can take the question. You know, just ancillary discussions with our customer and the sales team as well, we have seen a bit of an elongated refresh cycle. I mean, the uncertainty in the market, you know, has caused some of that. As I said before, we have seen some more interest and some more engagement, although sales cycles have still remained elongated. You know, we also noted that it was a Wall Street Journal article that came out.

Dan Bergstrom: IDC and Gardner both identified that Apple's growth had been over 14, about 14.5% year-over-year in shipments. And, you know, while that bodes well for us, we don't track that on a quarter-by-quarter basis, but several quarters in a row certainly have an impact on the install base. And so your assumption is right.

John Strosahl: We have seen a bit of elongated refresh cycles, both in the enterprise as well as in education, but we are seeing some of that loosen up a bit. Thanks, and then appreciate the additional color so far around security in the q&A here. I guess on security and the go-to-market, you know, where's the Salesforce here around security versus say a year ago. It sounds like there have been some adjustments on incentives more focused on cross sell. Maybe any more color here or anything you're leaning into from a security perspective to start the year.

John Strosahl: Yeah, well, the sales teams have become much better versed in our security opportunity or security offering. You remember, we had the management first, and then our customers asked us to extend into security, and we did that. And you know, we have a pretty, pretty decent sales force, a pretty sizable sales force, and they don't necessarily turn on a dime, but we're really seeing the traction that they're getting, especially when they lead with trusted access. And that being that management and security together, really being able to identify those things and then actually go ahead and remediate them through the device management product.

John Strosahl: And so those, you know, having the sales team better well-versed and leading with trusted access is gaining traction. And we've also taken on more recent sales hires from the security space. So they bring a wealth of knowledge into the company, and it has helped cross-pollinate that to our other sales teams.

John Strosahl: You know, we did adjust the compensation plan early in the year and really focus on ARR, to make sure that those customers that were, We're making sure that we're retaining the customers that we have in an environment where we don't know when the PC shipments and all that will return. And in the process of that, we really need to focus more on cross-selling.

Jacob Roberge: Hey, thanks for taking the questions and congrats on the great results. And now, I'm curious, now that you've had a quarter or two following the acquisition and then subsequent divestiture of Workspace ONE, have you started to see any incremental opportunities get presented from customers that might be frustrated from the changes in control? Just curious if there's any incremental opportunities or pipeline that's building from those deals this year? Oh, absolutely, Jake. This is John again. I'll take this question.

John Strosahl: We certainly have. And, you know, the issue with that is because the acquisition went through of that competitor by a financial sponsor, we're not expecting, and we've said this before, we don't expect all of those deals to come in one quarter. You know, they all have renewal cycles, and so we're engaged with a lot of them, pretty much all of those customers. And when that renewal cycle is coming up and promoting our products, we replace tens of thousands of devices every quarter in that with that competitor.

John Strosahl: And so that's where we've really excelled. And then you top that on, you put that on top of, you know, having the perception of not innovating at the pace of Apple, given the ownership structure, that is something that we've really taken advantage of and our salespeople have leaned into heavily. Okay, very helpful.

John Strosahl: And that's something that we'll continue to do to enhance the feature set of our security products. But we're seeing that from our customers, and we're listening to our customers. The reason we went into security in the first place is because that's what our customers asked us to do, and we're following their lead and adding functionality to those security products. The other one I might mention, and I mentioned in the prepared remarks, is Jamf Executive Threat Protection.

John Strosahl: That has done really, really well. It's kind of a halo effect in that when you're speaking to a CISO, a very high level in the organization about securing high-value targets, you're talking to the same person that can make decisions on Jamf Protect and Jamf Connect, so the connectivity between other parts of the organization. And once they see the value of Jamf Executive Threat Protection, we have an opportunity to discuss other security products with them.

John Strosahl: And we've done that over and over again. So, there again, we're seeing some nice green shoots. Great, thanks for taking my questions and congratulations again on the results. Your next question comes from the line of Vinod Srinivas Saragavan from Mizuho.

Unknown Attendee: Your line is open. Hey guys, thanks for taking my question. I just wanted to dig into NRR a little bit. Can you give us a sense of what the mix of upsells versus downsells versus churn was this quarter? And is this much different than what you saw in Q1 last? Yeah, thanks for the question. So it did decline from 108 to 107. And so when I look at Q4 to Q1, about 75% of that decline related to upsell. It continues that the same macro customer spending effects continue to impact that.

Ian Goodkind: In this quarter, we saw in the trailing 12 month metric, or sorry, when we looked from Q4 to Q1, the other 25% did relate to the lost logos. That did relate to that January extra churn that we saw. But again, February and March came back and were actually better than we expected. And just a comparison point, because you asked about Q1 of last year, when I look at that and the decline, 81% of that was related to upsell, 14% related to downsell, and then 5% related to lost logo. So in our trailing 12 month lost logo, it isn't really that big of an impact.

Ian Goodkind: Our competitors come and go, but we've seen them go for the time being, and we're excited about the things we're seeing in our pipeline and in our second quarter. Okay, great. That's helpful. And then, just in general, how did Jamf Business Plan do this quarter? And are you seeing, you know, just more momentum now, as you know, that's been out for a while now? Yeah, it was at 63% year over year growth in our business plans, which includes enterprise plans, but it continues to be successful.

Ian Goodkind: So we see a lot of success there, and we're really excited about that. And again, when customers have both management and security, we see our churn improve on those customers because customer health is strong.

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