Jamf Holding Corp.

Ladies and gentlemen, thank you for standing by, and welcome to the GEMP Fourth Quarter 2020 Earnings Call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your touchtone telephone. Please be advised that today's conference may be recorded. Should you require any further assistance, please press star 0. I would now like to hand the conference over to your host, VP, Investor Relations, Jennifer Gamond. Madam, you may begin.

Good afternoon, and thank you for joining us on today's conference call to discuss JAMS' fourth quarter and full year 2020 financial results. With me on today's call are Dean Hager, Chief Executive Officer, and Jill Putman, 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 fourth quarter and full year 2020 financial results. Additionally, we published an updated investor presentation and an Excel file containing quarterly financial statements for fiscal years 2019 and 2020 to assist with modeling. You may access this information on the investor relations section of Jamf.com. Today's discussion may include forward-looking statements. Please refer to our most recent SEC filings, where you will see a discussion of factors that could cause actual results to differ materially from these statements. I would also like to remind you that during the call, we will discuss some non-GAAP measures related to JANF's performance. You can find the reconciliation of those measures to the nearest comparable GAAP measures in our quarterly financial statements. Additionally, To ensure we can address as many analyst questions as possible during the call, we ask that you please limit your questions to one initial question and one follow-up. Now, I'd like to turn the call over to Dean Hager. Dean?

Thank you, Jennifer, and thank you to everyone for joining us. On today's call, I will share highlights from the fourth quarter and fiscal year, as well as provide an update on the exciting momentum in our business for 2021. Jill will then review our fourth quarter and fiscal 2020 financial results and provide our initial outlook for fiscal 2021. For the fourth quarter and full fiscal year, we again showed excellent growth with strong performance across all aspects of our business, driven by continued benefits from trends in remote work, education technology, and telehealth, despite macroeconomic challenges as a result of the pandemic. Total revenue in the fourth quarter grew 34% year over year to $76.4 million driven by recurring revenue growth of 40% year over year to $70 million or 92% of total revenues. Full year revenue grew 32% to $269.5 million with recurring revenue also representing 92% of total revenue. We ended 2020 with annual recurring revenue or ARR of $285.3 million representing year over year growth of 37%. Non-GAAP operating income was $3 million in the quarter or 4% of revenue. This was a five point increase over the fourth quarter of 2019. For the fiscal year, non-GAAP operating income was $30.4 million representing a margin of 11%. Unlevered free cash flow totaled $19.1 million in the fourth quarter, representing an unlevered free cash flow margin of 25%. This compares with a margin of 18% for fourth quarter 2019. And full year unlevered free cash flow was $66.2 million. Our exceptional performance was capped off by reaching our five-year goal of powering 20 million Apple devices by the end of 2020. Coming into the year 2015, Jamf was 13 years old and managing less than 4 million devices for approximately 5,000 customers. That year, as the enterprise saw a growing number of professionals demanding to use Apple at work, we set this aggressive goal to empower the new workforce. Through our mission to help organizations succeed with Apple, we are proud to have achieved this milestone by running on 20.4 million Apple devices across more than 47,000 customers at the end of 2020. Part of the reason we were able to achieve this goal was our ability to maintain the pace of customer wins throughout 2020, despite the uncertainty created by the pandemic. 2020 was a year like no other. where digital transformations that were once visionary are now necessary and will continue even after the pandemic ends. Like zero touch deployment for at-home employees, teachers embracing education technology, and remote patient care. Specifically, we believe, and many third-party research firms would agree, that the remote work trend, which was ignited in 2020, is here to stay and is spurring growth of Apple at work across the Apple ecosystem, but in particular with the Mac. During 2020, and especially in the fourth quarter, we saw much evidence of this. In addition to Apple reporting strong growth for the Mac over the past several quarters, IDC reported PC sales growth in Q4, with the largest growth for Apple Mac at an incredible 49.2%. The momentum of Apple at work also led IDC to publish their first ever MarketScape report for unified endpoint management for Apple devices, in which Jamf was included as the clear leader in both capabilities and strategies. Also in this report, IDC cites that Apple map penetration in U.S. enterprises of greater than 1,000 employees grew from 17% in 2019 to 23% in 2020. an increase of six points in just one year. This data is further validated by StatCounter, an organization that tracks internet usage by operating system and device type. At the end of December, the StatCounter data shows that the map accounts for approximately 30% of internet page views in the U.S. from desktop and laptop computers, compared to 61% for Windows. This represents a six point increase for the Mac over 2019 and a dramatic change over the past decade. Across these data sets, the story remains the same. Mac penetration in the enterprise is growing exceptionally fast. We believe this momentum will continue as working from home accelerates the consumerization of IT. The need for zero touch device deployments and support and decisions by companies to invest more in improving the IT environment for employees versus expanding their facilities. After all, when working from home, the IT experience is the employee experience. One example of this trend is HSBC, one of the world's largest banking and financial services organizations. Working closely with Apple and Jam, HSBC launched a new program in the fourth quarter that empowers employees to choose Mac globally as their primary work computer. This was accomplished by developing a zero touch procurement configuration and deployment experience such that employees could order and receive a corporate laptop at home. This process allowed HSBC to efficiently upgrade devices for employees working from home and reduce deployment costs. Additionally, This project was completed during a very busy period for HSBC's IT department since COVID forced 98% of their employees to shift to remote working, including the employees supporting this project. The zero-touch process can also be used on Macs with the new M1 chip for improved performance and an even lower price. This is expected to drive demand from employees even further, which has already exceeded expectations. At Jamf, we feel projects like HSBC are indicative of a growing movement to supply employees with technology choice. Further, we believe the power, efficiency, and speed of the M1 Mac will make it a popular choice for the current and next generation of employees. Its availability also showcases the importance of deploying Mac with Jamf's Apple Enterprise Management Platform as we were same-day ready for all of the new Apple operating systems including macOS Big Sur and the M1 chip that were released in Q4, something many cross-platform solution providers were unable to do. Another example of an organization responding to at-home needs is Shift, a company founded on the mission to simplify lives through delivery of groceries and everyday essentials. In 2020, COVID fueled an increase in demand for Shift services, resulting in the need to build their team rapidly. Shift turned to Jamf to help implement their remote workforce efficiently and better meet their security needs with tools built for Mac OS. In the fourth quarter, Shift licensed over 1,000 users of Jamf Business Plan, which was launched to new customers in October to increase Jamf product adoption and simplify the customer purchasing process. The bundle includes Jamf Pro, Jamf Protect, and Jamf Connect across all Apple devices. In addition to Shift, approximately 100 other new customers chose Jamf Business Plan during the fourth quarter, its first quarter of availability. This success has led Jamf to expand the offering to include all existing customers globally in February of this year. Shifting from remote work requirements to unique organization challenges, Few industries have been impacted more by COVID than the airline industry. Still, in Q4, Cafe Pacific Airways, headquartered in Hong Kong, selected Jamf's Apple Enterprise Management Platform to replace their legacy MDM solution for 5,000 iPads to be used for several airline-specific workflows, including electronic flight bags and cockpits, in-flight services in the cabins, and aircraft maintenance on the ground. Our solutions, Jamf Setup and Jamf Reset, for which we were granted a U.S. patent in the fourth quarter, were integral components in order to provide shared yet personalized deployment of these iPads. This unique workflow led to Cafe Pacific switching to Jamf in the middle of a global pandemic that was significantly impacting their business. Jamf was also granted a US patent in Q4 for our new healthcare solution, Virtual Visits, which we launched shortly after the pandemic began last spring. Jamf's Virtual Visit solution allows patients to seamlessly and securely connect with doctors and their families through third-party video meeting platforms like Zoom and Microsoft Teams without IT assistance. Starting in November, this solution, along with Jamf Setup and Jamf Reset, was used to roll out 11,000 iPads to 9,000 care homes across England by the National Health Service, the UK's public health system. Care homes can now utilize shared iPads between care home staff and residents, allowing care staff to easily communicate with each other and to support residents with virtual visits to seamlessly and securely connect with their doctors and hold long overdue calls with family members during the holiday season who many residents had not seen for nearly a year. Additionally, a number of NHS hospitals in central London are utilizing our virtual visit solution in neonatal intensive care units to securely connect newborns to parents who are unable to be at hospitals, allowing the parent-child bonding process to continue despite COVID restrictions. One of NHS's key reasons for choosing us was our unique solution that can be utilized across multiple workflows throughout NHS. JAMF's ability to deliver technology in new and innovative ways continues to lead hospitals and other care facilities to look to JAMF over legacy MDM solutions as they navigate their ever-evolving healthcare technology landscape. Jamf's unique ability to enhance industry-specific workflows also has positively impacted business in our education market, where Jamf solutions foster teacher monitoring and control, student engagement, and parental guidance to help focus students on their studies both at home and in the classroom. In Q4, growth in the education market continued well beyond the traditional buying season for schools, in part driven by government-funded programs across the globe like Japan's GIGA project and Germany's DigitalPAC project, and CARES Act funding in the United States. The GIGA school project in Japan is a government-funded initiative to provide at least one device to every one of the 9 million elementary and junior high school students in Japan. Originally planned to be implemented over a five-year period, the project was accelerated due to the pandemic. Jamf partnered with the Apple education team and Apple reseller in Japan, Docomo, to build a robust sales effort for iPad. By the end of 2020, over 100 boards of education in Japan implemented iPads with Jamf, including the Oklahoma City, Japan's largest board of education. In 2021, we plan to continue empowering teachers and students with iPads, and Jamf in schools throughout Japan as the Giga project shifts its focus to nearly 3 million high school students. In Germany, historically, many schools haven't used technology in the classroom, and as such, some German schools struggled to continue lessons for their students at the beginning of the lockdown. The German government stepped in last April and dedicated nearly 500 million Euro to help support students, teachers, and education institutions. This funding's priority was to ensure underprivileged students and communities throughout Germany could purchase the technology they needed to succeed in a distance learning environment. This funding was in addition to a longer-term €7 billion Digital Path Fund aimed to improve digital infrastructure for schools. One beneficiary of this funding was the city of Bremen, who, in Q4, ordered approximately 100,000 iPads, all managed by Jamf, for each student to have their very own. Thanks to the success students and teachers had in 2020 with their new iPads and adapting to a distance learning environment, the German government will continue the funding into 2021 to ensure these schools remain successful. Here in America, the education market was also supported with the initial CARES Act funding last spring. Thousands of schools were able to use this funding to establish or grow their Apple footprint for students. In Q4, the Mississippi Department of Education was able to use CARES Act funding to further an initiative to create digital equity for students. With a large number of students across the state residing in underserved or impoverished areas, the state took the opportunity to use these funds to bring more Mississippi districts and students to technology parity with other schools across the country. Nearly 9,000 iPads were rolled out to students along with hotspots for those without regular Internet access, bringing the total devices managed by Jamf to approximately 55,000. Momentum in U.S. education is continuing into 2021, fueled further by a new education emergency relief fund announced in December, which also includes funding for higher education to help serve students and ensure learning continues. In total, in 2020, Jamf helped empower millions of students globally with new iPads and Mac to help them complete their studies despite an incredibly challenging environment. We believe one positive that has come out of 2020 and continues in 2021 is the incredible supply of education technology provided to teachers and students that enhance student engagement with mass personalized and active learning curriculum. whether the students are at home or in the classroom. For all these industries and organizations, Jamf accelerates the Apple at Work and Apple in School movements. We continue to invest in innovation that extends our leadership position and fulfills our mission to help organizations succeed with Apple. We are pleased with the momentum of our newer add-on products, specifically Jamf Connect and Jamf Protect, are meeting the growing needs of companies to remotely and securely connect employees from their homes. In 2020, we added over 900 Jamf Connect customers with over 350 in Q4 alone. And in the first full year of availability, Jamf Protect was selected by over 400 organizations in 2020, 200 in Q4 alone. The momentum of both products is accelerating as we enter 2021. As we look across our business in 2020, Jamf shows remarkable balance and momentum in every category. For example, our 2020 ARR year-over-year growth for every one of our price products was at least 25%. Additionally, our ARR growth in all three major geographic regions, Americas, EMEA and APAC, was also at least 25% in each geography. And when examining the top 10 industries Jamf serves, ARR growth year over year was again at least 25% in all 10. With any strategy, some initiatives are more successful than others. We are very proud at Jamf to finish 2020 with tremendous consistent high growth across every product, geography, and the top industries we serve. As we look to 2021, we believe these trends in remote work education technology, and telehealth will continue to strengthen our value to customers as well as our business results. Additionally, we're energized by recent industry reports which validate the momentum of Apple and the enterprise. We believe we are best positioned to help organizations succeed with Apple through leveraging technology in new and innovative ways. We remain a customer-first organization dedicated to our customer success by continued investment in new features and enhancements that fulfill our mission to help organizations succeed with Apple. We continue to innovate at the pace of Apple, supporting new operating systems and hardware on the same day it's released. We continue to bring new innovations to market in order to further enhance the depth and breadth of our Apple Enterprise Management Platform, as evidenced by recent announcements to Jamf School and Jamf Protect, as well as the recent acquisition of the technical assets of CMD security and Apple Mac-specific security and compliance solution. We built the largest Apple IT management community in the world, Jamf Nation, providing greater access to Apple enterprise experts, which serve as a crowdsource support community. We continue to remove friction for our customers in sales, implementation, and support, We have a remarkably well-balanced portfolio with no one industry product or geography driving our overall financial performance. And we're committed to maintaining our outstanding culture and providing an environment where employees enjoy the freedom to be their authentic selves. This is evidenced by our certification as a great place to work, as well as 96% of our employees indicating they are proud to work at Jamf. In closing, I could not be more proud of our team and what we've accomplished. We've built a fantastic group of passionate, committed, and bright people who continue to deliver despite numerous challenges this year. We're excited for what's to come in 2021, and we continue to live our values and fulfill our mission to help organizations succeed with Apple. Now, Jill will walk you through our financial results and guidance. Jill?