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spk15: Thank you for standing by and welcome to JAMPS first quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1 on your telephone. Please be advised that today's conference is being recorded. Should you require any further assistance, please press star 0. I would now like to hand the conference over to your host, VP of Investor Relations, Jennifer Gaumont. Please go ahead.
spk13: Good afternoon, and thank you for joining us on today's conference call to discuss Jamf's first quarter 2021 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 first quarter 2021 financial results. We also published an updated investor presentation and an Excel file containing quarterly financial statements for fiscal years 2019, 2020, and 2021 year to date to assist with modeling. Additionally, this afternoon we also issued a press release and accompanying presentation announcing the acquisition of WANDERA, You may access all 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, including our most recent annual report on Form 10-K, where you will see a discussion of factors that could cause actual results to differ materially from these statements. I would also like to remind you that during the call, we will discuss some non-GAAP financial measures related to Jamf's performance. You can find the reconciliation of those measures to the nearest comparable gap 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?
spk16: Thank you, Jennifer, and thank you to everyone for joining us. On today's call, I will share highlights from our first quarter and discuss our recent announcement regarding our intent to acquire Wandera, a leader in zero trust cloud security and access for mobile devices. Jill will then review our first quarter financial results and provide our outlook for the second quarter and fiscal 2021. Last quarter, we talked about our remarkable balance and momentum across our business in 2020. And we continue to see this in the first quarter, driving our overall ARR growth of 37%. Once again, our first quarter 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 industries Jamf serves, ARR growth year over year was also at least 25% for both SMB and enterprise organizations. Additionally, current trends in mobile work, education technology, and digital health continue to strengthen our value to customers as well as our business results. We again saw evidence of these trends and the momentum of Apple in the enterprise in the first quarter. According to a recent IDC report, first quarter 2021 PC sales increased 55% year over year. While this is impressive growth, Apple Mac sales led the way with an even more impressive 111.5% growth year over year. The power, efficiency, and speed of the M1 Mac, combined with increasing individual Mac preference, is helping drive this growth. We believe math will increasingly become the device of choice for many in the workplace, and Jamf is best positioned to help organizations easily adopt and get the most out of this new technology over time. The depth and breadth of our Apple Enterprise Management Platform and our commitment to innovating at the pace of Apple are key differentiators for Jamf. Last month, we announced same-day support of all new operating systems and hardware. Many other providers, both cross-platform and Apple focused, are not same day ready to support Apple hardware and software releases. This can cause some organizations to adopt the Mac slower than their users want, as well as create potential security issues for organizations that have already adopted Mac. However, with Jamf, enterprises can adopt Mac choice programs that meet both the security and device management needs of their organizations. In Q1, Jamf played a significant role in organizations growing their map fleet. In fact, Jamf's 10 largest annual subscriptions signed in the first quarter were all driven by map growth in commercial businesses. In total, these 10 customers grew their Jamf Pro licenses for map by over 93,000 seats. Furthermore, six of the 10 customers also contracted for either Jamf Connect or Jamf Protect or both to enhance their security profile while also providing the best possible user experience. In the healthcare market, we continue to see strong demand for our innovative solutions that enhance patient care. Many hospitals are expanding their use of Jamf for additional new workflows, resulting in our healthcare segment achieving the second highest growth of the top industries we serve. For example, During our third quarter earnings call last year, we highlighted UC Health in Colorado, a large healthcare system that benefits from a number of Jamf innovations. In 2018, UC Health began using Jamf to streamline their technology management and improve patient experience by offering an iPad at each patient's bedside. They used Jamf Healthcare Listener, Jamf Setup, and Jamf Reset to digitally sterilize the device between each patient and easily set it up for the next patient without the need for IT assistance. As virtual healthcare needs spiked last year, UCHealth was an early adopter of our virtual visits workflow for inpatient isolation telehealth, which helped greatly increase the virtual visit sessions each day. UCHealth has now expanded its use of Jamf with iPhones at many of its vaccination sites, including a mass vaccination event at Coors Field in February, where approximately 10,000 Colorado residents received COVID-19 vaccinations. Compared to their initial vaccination site pilot that leveraged PC terminals and required complex network infrastructure, their iPhone-based delivery model leveraged the latest mobile technology to simplify the process. This reduced per-patient vaccination time from three minutes to only 30 seconds. UC Health is a great example of how organizations continue to leverage Jamf to solve new problems, a testament to the flexibility of our architecture and breadth of our solutions. In education, increased global buying patterns have continued through Q1, driven by several government funding programs, including the CARES Act in the United States. The most recent rounds of CARES funding also include provisions for higher education, and we see many colleges and universities utilize these funds to accelerate their technology initiatives. Florida A&M University, or FAMU for short, is a prime example of setting students up for success today and well into the future with technology. Their school of journalism and graphic communication primarily uses Apple to ensure students have the tools that they'll be leveraging in their professional careers. With hundreds of on-campus Mac already managed through Jamf, FAMU purchased additional Mac hardware to empower students to learn remotely. Their school of journalism and graphic communication provides a zero-touch Mac deployment experience. to give students access to the same learning resources at home as in the classroom. FAMU's program is indicative of the technology awakening that's occurring in education, with education technology programs growing in importance whether students are learning in the classroom, remotely, or a combination of both. Programs like FAMU's demonstrate the significant impact a well-thought-out education technology program can bring to student learning and career preparation. With the backdrop of our outstanding Q1 performance and these examples of how we will continue to deliver innovative solutions to help organizations succeed with Apple, I'd like to discuss our Wandera acquisition announcement. First, some context. There has been a mass proliferation of Apple devices in the enterprise. According to IDC's 2020 Enterprise Survey, The average penetration of Mac OS devices is around 23%, compared with 17% in 2019, a six-point movement in just one year. And iPhones account for 49% of the smartphone installed based amongst enterprises, while iPads make up the majority of tablets used in business. As a result of its growth in the enterprise, Apple devices are now a bigger target for security threats. coupled with greater mobility at work and dependence on sensitive cloud resources is accelerating the demand for zero trust solutions. In 2020, we recognized the changing requirements for security solutions and launched Jamf Protect, which was purchased by approximately 400 customers in its very first year. In 2021, the momentum for Jamf Protect continues to grow. as we added over 300 new Jamf Protect customers in the first quarter alone. Wandera, an Apple-first provider of unified cloud security, brings zero-trust network access, content-filtering data policies, and mobile threat defense to Jamf's platform, rounding out our security solution from access through endpoint protection and solidifying Jamf's security offering for the enterprise. Wandera strengthens Jamf's overall position in Apple Enterprise Management and offers a number of expansion opportunities. Our first opportunity is with iPhones and iPads in commercial markets. Since 2002, Jamf has been a leader with the best whole product solution for Mac, helping any organization manage, protect, and connect their macOS devices with their enterprise resources. This strength in Mac has led more organizations to also use Jamf for iOS device management, consolidating all Apple management into one tailored solution for the Apple ecosystem. In fact, in Q1, Jamf's iOS commercial business was our fastest ARR growth segment year over year. Yet, today, Jamf has not expanded our iOS solution into the access and security space the way we have with Mac. Wanderer's mobile access and threat defense products, coupled with Jamf's industry-best iOS device management capabilities, will complete the whole solution our customers require. Both Jamf and Wanderer sales are driven by the same market forces, and like Jamf, Wandera's product team takes an Apple-first approach, leading to iOS representing approximately 80% of the devices Wandera secures. Yet there is no overlap between our solutions. The addition of Wandera products to the Jamf portfolio will increase Jamf's iOS competitiveness, which is the largest segment of our total addressable market. Even more exciting, Wandera's solutions will grow Jamf's TAM by $5 billion across all global commercial markets. And that market expansion doesn't include non-Apple devices, which the Wandera solution also supports and will continue to be a valuable part of Jamf's product portfolio. Our second opportunity is in the education market. Educators are coming off a year that provided the greatest education technology awakening in history. The very technology that was required for distance learning can now transform classrooms and provide student-centered personal learning plans that are engaging and equitable. But as exciting as this is, technology also presents potential danger to students and greater concern for parents. Jamf is already the clear leader in deploying Apple education technology. Wandera's solution offers a valuable follow-on that can be used to secure school resources, protect student privacy, and restrict student access to inappropriate, threatening, or prohibited content. This opportunity is also additive to Jamf's solution and represents an additional $1 billion in the total addressable market in our education sector. Jamf's third opportunity with Wanderer is leveraging our complementary teams and go-to-market channels. Headquartered in London, the majority of Wanderer's customers are based in Europe. While Jamf has a strong presence in EMEA, an increased European customer base will accelerate our international growth. Additionally, one of the key channels for Wanderer has been mobile carriers. In fact, more than half of Wanderer's historical sales have come through carriers. while less than 1% of Jamf sales have come through that channel. With Wandera, we believe Jamf can now offer carriers a better whole product solution. Finally, we are also very excited that most of Wandera's employees are on the product side of the company. Historically, Wandera has invested little in direct go-to-market channels, but Jamf's go-to-market direct and indirect channels have proven extremely efficient and effective. We believe with the additional scale of Jamf sales and marketing teams, we can help many more organizations globally experience success with the Wandera solution. Together, Jamf and Wandera can help mitigate barriers to Apple adoption in the enterprise. Jamf is the leading provider of Apple enterprise management with significant market share and differentiation. Wandero's Apple-first solution complements Jamf's leadership and end-user focus with unique mobile and security capabilities. Now, from a single provider, customers can benefit from an Apple-first enterprise solution that connects, manages, and protects all Apple devices, data, and users while preserving the legendary Apple user experience with same-day Apple technology support. Many of Wondera's largest customers are also Jamf customers, utilizing Jamf for Mac and Wondera for mobile to connect, manage, and protect devices with no overlap in the solutions provided. Customers like these will provide compelling use cases for both Jamf-only and Wondera-only customers, helping drive significant cross-sell opportunities. And with Jamf's capability to install new apps to the existing 21.8 million Apple devices on our platform, Wondera's cloud-based solutions can be easily deployed to our existing customer base. Jamf's heritage and focus on Apple paired with Wondera's zero-trust and advanced security solutions greatly extends the Jamf platform to uniquely position us to help IT and security teams continue to succeed with Apple We're so excited to welcome the Wandera team into the Jamf family. In closing, 2021 is off to a great start with continued momentum in our business. The strategic acquisition of Wandera extends our leadership position in Apple Enterprise Management, solidifying Jamf as an enterprise security provider and helping accelerate Apple's continued growth in the enterprise. Now, Jill will walk through our financial results and guidance. Jill?
spk14: Thanks, Dean, and thanks again to everyone for joining us today. As Dean mentioned, we had a strong start to the year with continued momentum across all aspects of our business. Total revenue for the first quarter grew 34% year-over-year to $81.2 million. Revenue growth exceeded our expectations primarily due to outperformance in subscription revenue and the timing of license revenue from one large customer who significantly grew their max that we were initially anticipating closing in the second quarter. Recurring revenue grew 37%, representing 92% of our total revenue. Total ARR as of March 31st was $308 million, an increase of 37% year over year. Similar to the prior quarter, this was driven by greater than 25% growth across every product, geography, and each of our top industries. with particular strength in our international business, with ARR again growing over 50% year over year. As a reminder, ARR represents the annualized value of all subscription, support, and maintenance contracts as of the end of the period. ARR mitigates fluctuations due to seasonality, contract term, and the sales mix of subscriptions for term-based licenses versus staff. The three primary drivers of our ARR growth are our consistently high device expansion rates, our strong new logo acquisition, and the upselling and cross-selling of products into our install base. We expect to continue benefiting from these trends going forward. We ended the quarter with 21.8 million devices on our platform, representing 34% year-over-year growth, as we continue to realize strength in both the education and commercial verticals in all geographies. Adding devices to our platform and expanding our customers' adoption of add-on products also drives our high dollar-based net retention rate, which remains strong at 117% for the trailing 12 months ended March 31st. 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. Gross profit margin was 83% compared to 80% in the prior year quarter. We expect our gross margins to remain at approximately these levels going forward, given we've reached scale in customer support and hosting costs. Additionally, we've invested to create the flexibility to deliver our services remotely, a priority which has accelerated due to COVID. With respect to operating expenses, We remain focused on improving the leverage in our business while balancing investments for growth. Increases in operating expenses over the prior year were primarily due to these investments for growth, as well as public company costs, partially offset by lower related expenses. Operating margin was 11 percent, representing a four percentage point increase compared to the same period last year. During the first quarter, our annual effective tax rate was negative 0.5%, which was impacted by the establishment of a valuation allowance, as previously disclosed, as well as the exercise of staff options. Unlevered free cash flow was $800,000 in Q1, compared to negative $2.1 million in the prior year period. Q1 is seasonally low due to multiple factors, including the payout of our annual bonus and large annual software contract renewals. Additionally, we made significant investments to retrofit our offices to meet our needs post-COVID. This year's first quarter represents the first cash flow positive Q1 in recent years. Our operating model of high growth and improving efficiency continues to yield strong cash flow generation and allows us to continue to make investments in innovation and top line growth. We ended the first quarter with $196 million in cash and cash equivalents. Now I'll provide thoughts and guidance for the second quarter and full year 2021. Since we anticipate the Wondera acquisition to be completed in the third quarter, I'll also provide some insights into the anticipated impact of the acquisition on our full year results. We expect our strong performance to continue, given our results in the first quarter and continued momentum in our business. We expect the second quarter to benefit from continued strength in education, followed by increasing strength in our commercial business in the second half of the year as the economy improves and enterprise hiring rebounds. We began to see some early signs of this improvement in the U.S. in late Q1. However, uncertainty related to the pandemic recovery and its impact on the IT spending environment remain key considerations. As we discussed during our Q4 call, Beginning in the third quarter, planned updates to how we deliver our Connect products will result in a change in revenue recognition, with less revenue recognized upfront as on-premise subscription revenue, as it will now be recognized radically over the term of the subscription, in line with the majority of our revenue. While there is no impact to ARR, we anticipate this change will defer approximately $9 million of revenue in the second half of the year into future quarters. which impacts our full-year revenue growth rate by approximately three percentage points. Given these considerations, for the second quarter of 2021, we expect total revenue in the range of $82 to $84 million, representing growth of 32 to 35 percent year-over-year, non-GAAP operating income in the range of $5.5 to $6.5 million. For the full year 2021, we expect total revenue in the range of $335 to $341 million, representing growth of 24% to 27% year-over-year, non-GAAP operating income in the range of $27.5 to $31.5 million. Provided that the OneDara acquisition closes as expected early in the third quarter of 2021, we expect OneDara to contribute an additional $9 to $11 million of revenue in 2021. This amount reflects the impact of our initial purchase accounting adjustment analysis, but is subject to change when the analysis is completed, as well as if there are any changes in expected timing of the closing. Additionally, for modeling purposes, we are providing the following information. Please note that these amounts exclude the impact of the Wondera acquisition. For the second quarter and full year 2021, amortization is expected to be approximately 8.5 million and $33.9 million, respectively. For the second quarter and full year 2021, stock-based compensation and payroll-related taxes is expected to be approximately $5.6 million and $55.7 million, respectively. We expect an annual effective tax rate to be less than 5%, which should also be used when calculating tax effects of non-GAAP adjustments. This annual effective tax rate is impacted by the establishment of a valuation allowance during 2021. In addition, we do not pay cash taxes on a U.S. federal basis. For calculating APS, we expect basic and diluted weighted average shares outstanding to be approximately 117.7 million and 120.6 million respectively for the second quarter of 2021. For the full year, We expect basic and diluted weighted average share outstanding to be approximately 117.8 million and 121.6 million, respectively. In closing, we had a great start to the year. We're excited about the strategic acquisition of Wondera as we expand our platform to bring innovative, value-added products to our customers to help them succeed with Apple. With that, Dean and I will take your questions. Operator?
spk15: Thank you. As a reminder, to ask a question, you will need to press star 1 on your touchtone telephone. Again, that's star 1 on your touchtone telephone to ask a question. To withdraw your question, press the pound key. We'd like to remind you to restrict yourself to one question and one follow-up. Please stand by while we compile the Q&A roster. Our first question comes from the line of Bhavan Suri of William Blair. Your question, please. First question comes from Bhavan Suri. Your line's open.
spk04: Hello? Bhavan, is that you? Yeah, can you guys hear me or not?
spk16: Yes, I can hear you great now. Thank goodness. Sorry.
spk04: Okay. I'll back up. Congrats. That was a good quarter. Thank you. And congrats on Wandera. I'll dive right in. I was going to talk about Jamf Business Plan. You announced it late last year. And it was a great way to make sort of the adoption of full-stack easy for customers. I guess what kind of traction have you seen with the bundling approach? And how is that impacting the attach rates of Protect and Connect with new customers? And is Wondera kind of the idea to become part of the bundled sort of drive ASP lift? How should we think about that? So it's kind of how is business plan doing? How does that impact Protect and Connect and the Wondera integration into that?
spk16: Yeah, thanks for the question, Bhavan. And We are very pleased with the uptick that we're seeing in Jamf Business Plan. The intended use case that we had for it was simply to make it easier for our customers to purchase multiple products from us, and indeed it has done that. We continue to move in the neighborhood of hundreds of Jamf Business Plan licenses within a given quarter, and you're right in that it's pretty common that if If a customer is thinking about multiple products, it just starts to make a lot of sense to lean over to Jamf Business Plan. So we're seeing a lot of that product being purchased if they're interested in either Jamf Connect or Jamf Protect to accompany Jamf Pro. And then what ends up happening is the customer contracts for it and ends up using both products, which is great for them. Oh, and then your question on Wondera specifically. It will sell when we do come together, obviously, as a standalone product, just like Jamf Connect and Jamf Protect sell as a standalone product. Regarding any bundling plans, it's premature to determine what we might do there. We're just happy with the value-added solution that it will have for our customer base.
spk04: Gotcha, gotcha, gotcha. You know, I think the other piece I want to touch on a little bit was the Apple relationship, and this comes up when we talk to investors a lot. Can you speak a little bit about the continued co-development with Apple and then any update in conversations with that partner, obviously, since they bought Seesmith? It feels like the fervor around the risk there has died down, but I'd love to get your take as you talk to Apple, obviously, much more directly than we do.
spk16: Yeah, so our partnership is still multidimensional. Obviously, we're each other's customer. Apple resells us in education and also through retail. And then, of course, we have several joint projects that we'll work on. And we developed Apple technology working with their worldwide development organization as anybody else would. There has been no change to that relationship over the past year of us being public. We consider our relationship with Apple to be at the strongest point that we've ever had. And I had mentioned a year ago that the FleetSmith acquisition would have little to no impact on our business. And now a year later, I would suggest that it's been even less than what I implied a year ago.
spk05: Great. I appreciate the candor there, Dean, and the clarity. Thank you, guys, and really nice job.
spk16: Thank you. Appreciate it.
spk15: Thank you. Our next question comes from the line of Rod Hall. Your line is open.
spk10: My first question, I guess, is this $9 million accounting impact. I wonder if you guys could dig into that a little bit more. I think I heard you say it's a change to the way you're recognizing rateable revenue, but maybe, Jill, could you explain a little bit more on that, or Dean, whoever wants to take it, and then I have a follow-up.
spk14: Hey, Rod. Good to hear from you. It's Jill. Yeah, so we shared this at our last quarterly update. So mid-year here we're going to have a change in some feature updates to our Jamf Connect product. When those go into effect, that product is now going to be deployed more like a cloud product versus an on-prem product as it is currently. So it's going to trigger a different accounting revenue recognition treatment. Whereas prior or currently, right now, because it's treated on-prem, about 80% of the revenue is recognized up front in the first month that it's deployed with a 20% rateable. Going forward, about approximately mid-year here when the change kicks in, all of it will be treated as a cloud deployment, so it'll be all recognized radically. The impact is about $9 million we're estimating will be the impact for the second half of this year. That's essentially just going to get deferred into next year. It's just the timing difference of the RevRec. It has zero impact on the ARR. The ARR is going to remain whole.
spk16: And just for clarity, I'm just going to add on a quick comment for clarity. The reason why Jamf Connect was treated at RevRec from an on-premises perspective is because it deployed as an app on the Mac itself and now is changing technically to be more of a cloud delivery.
spk10: Oh, great. Okay. That's great. And then my follow-up is just on visibility into H2. You're kind of guiding a little bit below consensus here, I guess, or implying below consensus a little bit. But then there are 9 million effects of that, so it's a little better if you account for that. But I'm just curious what your visibility looks like into the second half of the year. Do you feel like people are ordering on out into the end of the year, or are you kind of having to guess – you know, what the back end of the year is going to look like.
spk14: Yeah, I'll take that.
spk02: Go ahead.
spk14: You take that, Jill. All right. So consistent with the full year guidance we gave at the beginning of the year, we're just updating that. In fact, it raised it here off of our guidance from a quarter ago, really based on the strength that we're seeing in the commercial pipeline. As Dean and I were anticipating as we got into 2021, education is going to continue to have some tailwinds, but our commercial business and pipeline is really starting to come back Predominantly, we're seeing that in the SMB market right now, and we're starting to see that as we exited March, strong pipeline going into Q2, continuing to build then, particularly in the U.S. It's a tiny bit slower outside of the U.S., so that would be upside to our model should that come back faster. Again, you know, let's try to layer in just a little bit of, you know, it's not absolutely certain how the pandemic is going to play out here for the next couple months and the economy. But based on what we're seeing in our pipeline, that's the number that was used to update our guidance.
spk10: Okay. All right. Thanks a lot, Joe.
spk15: Thank you. Our next question comes from the line of Ramo Linschel of Barclays. Your line is open.
spk07: Hey, thank you. Congrats on the acquisition as well. Dean, can I stay on that one? If I think about Vandera a little bit, so you guys were more like endpoint. This seems more like on the networking side. How do I think about that cross-sell, up-sell? How natural is that jump, protect, and Vandera kind of potential sales motion? Give us a little bit more color since we're not so deep in there. Thank you.
spk16: Sure. Thanks for the question, Remo. And yes, you're right. that Wandero would have a more network-focused, but frankly, being able to block attacks from the network at the point that they're hitting the device is an important part of also protecting the user and the device. Eighty percent of the activations on the Wandero platform are for iOS specifically, so they are an Apple-first developer, and their solution is also Apple-best. If you think about it, maybe I'll simplify it this way. With Jamf, We have, as you know, management, connection, and protection products. Management we have for all iOS and all Mac for everything Apple. But our connection and our protection products have really been only for Mac. What Wandera brings is connection and protection solutions also for iOS. So combined now, we provide the entire Apple enterprise management solution of management connection and protection for every type of Apple device. Does that make sense?
spk07: Yeah, that's super helpful. Okay, perfect. And then, Jill, in terms of how did they sell in terms of revenue treatment and deferred revenue write-downs, et cetera, that we need to kind of consider?
spk14: Yeah, so for one, Dara, we've done some high-level estimates at this point. We haven't gone through a complete analysis. So, We've layered in kind of a range of where we expect that to land. Of course, that $9 million to $11 million that we've put out there for the second half will be subject to completing that analysis. We just have two early roads for us to nail that down right now.
spk07: Okay, perfect. Hey, thanks. Congratulations.
spk15: Thank you. Our next question comes from Rob Owens of Piper Sandler. Your line is open.
spk09: Great. Thanks for taking my question. Let me drill down into device counts a little bit. Is a lot of that acceleration we're seeing enterprise? And then secondarily, how should we discount any potential supply chain issues that Apple's having right now relative to your outlook for Q2 in the back? Thanks.
spk16: I'll grab that. Regarding the supply chain, occasionally, just anecdotally, We may hear of a supply problem every once in a while, but there's been no material impact on our business at all. Regarding the industries that are driving those device counts, of course, as Jill mentioned, we continue to see great strength in the education market. But as predicted, towards the end of Q1, we did see a surge of enterprise interest as well. So it really was a nice mix. If you take a look at both sides of our business, the education and commercial side, as we mentioned, our growth was extremely balanced between the two.
spk15: Great. Thank you very much.
spk14: And that was our fourth consecutive quarter of momentum in our device growth, accelerating growth.
spk15: Thank you. Our next question comes from Matt Hedberg of RBC Capital Markets. Your line is open.
spk06: Oh, hey, guys. Thanks for taking my question. Congrats on the quarter. You know, a lot of strength here to talk about. Obviously, education was strong, too, and I think that was a question mark that a lot of us had is the durability. And, Dean, I think you mentioned, you know, you expect strong education results this year. I'm just wondering, when you sort of think about the path of education spend this year, obviously it's different versus last year. but now you've got CARES Act and a number of other international drivers. How do you sort of anticipate this, you know, the trajectory of this year from an ad spend perspective relative to last year when we were obviously in the thick of COVID?
spk16: Yeah, thanks, Matt. Appreciate the question. First of all, just to level set everybody, as we've mentioned before, you know, over 60% of our ARR is on the commercial side and our commercial ARR still year over year grows faster than than the education ARR does. We've just seen those growth rates closer in the last year than what they typically are because of the tremendous strength we've seen in education. And one of the things I would say is we saw it through continued strength through Q1 with education, and it's largely because it is such a global initiative. We mentioned on the call that there are several government funding programs, like what we mentioned with the CARES Act. What we didn't mention is, gosh, almost every European country has some similar type of funding act. Even though students are starting to come back into the classroom, it's why we call it an education awakening when it comes to technology, because even if they did not have technology deployed in time for the pandemic or in the middle of the pandemic, even as we start to come out of it, as we are in various regions, there is an awareness of how important technology is in education right now. So some funding programs are just getting started. So we see buying continue to be strong there, and in the coming months we are anticipating it to remain strong.
spk06: Got it. That's great. And then, Jill, you noticed that there was one large early renewal program I don't think you quantified it, but any way to kind of get a sense for, I don't know, if it's a device count or ARR that just sort of shifted from Q2 to Q1, just trying to get a sense for, you know, how we would right-size that when we think about the sequential growth of this quarter?
spk14: Yeah, it was actually a large license, existing customer who had a large license license. expansion as well as, of course, the maintenance contract that goes along with that. We anticipated, we originally anticipated it closing in early Q2. It actually swapped into Q1, so that was part of our exceed in the quarter.
spk11: Got it. Thanks a lot, guys.
spk15: Thanks, Matt. Thank you. Our next question comes from the line of Greg Moskowitz of Missoula. Your line is open.
spk01: Okay, thank you very much. Hi, guys. So a bit of a follow-up to start just from what Raymond was asking about, and I realize you're going to be selling Wondera and Jamf Protect discreetly, but, you know, Dean, is there an opportunity to, you know, integrate and optimize some of the IP where perhaps you can enhance Wondera's vTNA technology with Protect's anti-malware?
spk16: Thanks for the question, Greg, and, yeah, you threw me a softball there in that Yes, is the answer. We see tremendous opportunity. One of the things that we love about this acquisition is that Wandera's sales have been driven by the same market forces that have been driving our sales. The desire to connect, manage, and protect devices with a mobile workforce in an Apple-first way. Yet, we don't have any overlap in our solutions. They're incredibly complementary to In other words, one customer, it makes sense, and there are a few customers out there that have already done this, literally own everything that Jamf offers and everything that Wandera offers, but then they've integrated themselves together. By us providing that integration, we'll take two valuable solutions and make them even more valuable together for our customers. So, yes, many integration opportunities. And it won't simply be for iOS either. ZTNA is a great cross-platform solution integrated with identity, and there are going to be potentially millions of Mac users out there that we're going to bring a better work connection experience to than what they've had using historical virtual private networks.
spk01: All right, that's very helpful. Thanks, Dean. And are you guys able to say roughly how many customers Wondera has and and just how much customer overlap does exist between the two companies at any level?
spk16: They have over 2,000 customers. We're not prepared at this time to talk about customer overlap. We're still doing that analysis. But what's terrific is even when we have a customer that has both solutions, very frequently what we have already found, it's because they're using Jamf for the Mac, and they're using Wondera for the mobile devices, and we still have more solution from Jamf that can go in and provide even greater value by bringing in our iOS device management as well. So while we might be running within the same customer base, we're not necessarily running on the same devices today.
spk01: All right, terrific. Thanks very much, Dean.
spk15: Thank you. Our next question comes from David Hines of Canaccord. Your line is open.
spk03: Hey, thanks, guys. Congrats on the strong results. Dean, I wanted to ask you about the stat you shared around penetration for macOS. I think you said 17% to 23%, which is pretty exceptional growth. I think we typically talk about two- to three-point annual gains. Can you just talk about your view of what drove that acceleration, whether it was COVID-driven, how you're thinking about the pace of max share gains in 21, any color along those lines would be helpful.
spk16: Sure. Just for clarity, that was an IDC enterprise study in the U.S. of organizations of greater than 1,000 people. They published that study, I believe, in December or January. I can't remember the exact date of it now, but Their data showed that in 2019, that was 17% penetration. In 2020, it was 23, so a 6 percentage point movement for organizations, 1,000 and more. And then that was reinforced by the MAC growth on units report that they did in December, which was about 50% growth for MAC. And then, of course, in Q1, it was over 111% growth for MAC. We have seen that growth, and we are seeing definitely an increase of Mac use within the enterprise, and we believe that the overall driver of that is the consumerization of IT, that people no longer want to use at home what they're issued at work, but rather use at work what they already love in their homes, and that is Mac. So as that movement continues, we believe that Mac growth will continue, provided that the organization has a solution to secure and manage the Mac that allows it to still work consumer simple that Apple is so known for. That's exactly what Jamf does.
spk03: Yeah, perfect. And, Jill, I just want to make sure I'm understanding the guidance correctly. So you raised the range for the full year on revenue by $5 million. Two questions there. Did the prior guidance range already exclude that $9 million of Connect from the second half that pushes out So that's question one. And then question two, the 9 to 11 that you talk about expected from WANDERA, that would be incremental to this 335 to 341, correct?
spk14: Yeah. Hey, DJ, good question. Yes, the previous guidance already did exclude the 9 million. We talked about that and explained it, and we did back that out on our original guidance for the year. So we're holding consistent to that. And then the 9 to 11 would absolutely be incremental to the guidance we're giving. We have not layered WANDERA in to any of the information we've given other than just that 9 to 11 million range that would be on top.
spk03: Perfect. Makes sense. Okay. Thank you, guys. Congrats.
spk14: Thanks.
spk15: Thank you. Our next question comes from Sterling Odie of J.P. Morgan. Your line is open. Yeah. Thanks. Hi, guys.
spk02: Most of my questions have been asked, but one from my side would be, Dean, when we think about the innovation, especially when M1 chip devices were made available, you're really the only platform that could support day one. How does that stand today? Where's your competitive differentiation from a technology side sit relative to the other options on the market, especially with the new iOS 5G enabled devices?
spk16: Yeah, thank you for the question, Sterling. Without a doubt, the M1 chip and the emergence of Big Sur, the operating system for the Mac, shined a light on Jamf differentiation because both the operating system and the chip were supported by all Jamf solutions the very day that they were available. There are several other providers out there that still today, even though that was released late last fall still today do not support that chip or the operating system. And, you know, I think that is one of the reasons why Jamf has seen some good fortune here in our ability to be able to help customers succeed with Apple. As you look at iOS, the same is true. Our same-day readiness with all Apple operating systems, as we showcased in Q1, with all of our products as well is a key part of the differentiation. But overall, I believe that that is just a small part of the overall Jamf differentiation, which is allowing things or empowering users with consumer simple Apple technology. In other words, giving them the privacy, the performance, and the user experience that they want, but yet doing it in a way that that still delivers the security and the control and the efficiency that the organization requires. And one of the things that we loved about Wandera is they built solutions in the same way we did, focusing on that end user empowerment and still delivering the organization what was required.
spk02: Excellent. Thank you.
spk16: Thank you.
spk15: Thank you. Our next question comes from Joshua Riley of Needham. Your line is open.
spk12: Thanks, guys. Congrats on the strong quarter. So I had a question on Connect. So obviously that product's done quite well over the last year. How should we think about demand correlation for that product relative to growth for the cloud identity providers like Okta or Azure that the product integrates with? I'd like to get some more color on what's driving adoption there, and then I had a quick follow-up. Sure.
spk16: Clearly, as more and more organizations are adopting cloud identity providers themselves, being able to use that one single cloud identity for your authentication or whatever you happen to be authenticating to is a really useful security tool and also a user experience tool. So you've seen great adoption of Jamf Connect as organizations have been adopting cloud identity because essentially we can use that cloud identity to authenticate to the Mac. So we're not an identity provider ourselves, but we leverage and partner with the identity providers to create a better overall experience on the Mac. With Wandera, we're actually going to take that to a next level because once you authenticate to the device itself using your cloud identity, you will also have private access connection into all of your work resources, both in the network at work and also through the cloud using Wondera private access. And that's, once again, going to be a solution that creates a great user experience and actually improves security at the same time.
spk12: Okay, great. And then... Just to follow up on that, how much of the outperformance in the on-premise subscription revenue was related to Connect product revenue versus actual on-premise subscriptions? Any color there would be helpful.
spk14: Yeah, I'll take that one. It was really a combination of the two, both Pro and Connect. Nothing unusually large on either side of that.
spk12: Great. Thanks, guys.
spk14: Thanks.
spk15: Thank you. Our next question comes from Koji Aikida of Bank of America. Your line is open. Great.
spk08: Thanks, guys. Hey, Dean. Hey, Joe. Just a couple questions here. On Wondera, Dean, I think you said in your prepared remarks that iOS is about 80% of the business. What's the other 20% of the business? Is that Mac or is there anything else in there?
spk16: Thanks. Great question. The remaining 20% would be a mix of pretty much all the other endpoints that you'd be familiar with. Windows, Android, Mac would make up that remainder 20%.
spk08: Okay. Got it. And then... I guess a lot of questions on one, Dara, but I wanted to switch gears a little bit and talk about CMD security. Saw that you guys completed that acquisition. It's still new, but is that fully integrated within the tech stack? I mean, I guess any sort of color from initial reaction, from customers, partners, anything on early adoption would be helpful. Thank you.
spk16: Yeah, thanks for the question. Just for everybody's information, we acquired the assets of CMD security and closed that acquisition in the first quarter. The product called CMD Reporter essentially grabs telemetry from security telemetry from the MAC and is able to hand that off to whatever the security logging system or SIM is for the organization. And that is something that was just very well received by our customers when we closed. It was a small tuck-in acquisition. And the word that we got from our customers is the exact type of combination of And, you know, Jamf with them delivers, again, where the integration delivers greater value to the customer. So nothing quantifiable to give you just yet, but overall just, you know, anecdotal. We've received terrific response from our customers on that.
spk08: Got it. Thanks for taking my questions. Congrats on a great quarter and the one-day acquisition.
spk16: Thanks a lot. Appreciate it.
spk15: Thank you. Our next question comes from Pat Walravens of JMP Security. Your line is open.
spk11: Thank you so much, guys. This is Joey Marincic. I'm for Pat. Just two from our end. So first, I want to dig in on net retention, you know, which continues to be strong. What is driving that? And then secondly, can you just give us an update on Mandata and how that's playing out? Thank you.
spk16: Absolutely. Thanks for the question. First of all, on retention, I'm assuming you mean the net revenue retention. I'll just speak first to overall just without our retention of customers, what drives that is just great customer support and a product that does what you say it does. So by providing those products and that support to our customers, that's the number one thing we do for net revenue retention. Beyond that, I'll let Jill handle the rest of that question, and then I'll take up on Mandata.
spk14: Yeah. So, you know, our drivers are really, you know, device growth. That's our primary driver of net retention as well as the add-on products that we sell. But then kind of mixed over top of that is the mix of commercial and our education business with our commercial business, A, growing faster and at a higher price point. So that tends to kind of pull it forward faster. And going through COVID here, if we saw a little bit of softness anywhere, it was really offset by some of those growth factors. And then when we think about our commercial versus education, there's really nothing significantly different about the retention rates across those two verticals as well. So just absolute consistency over the last several quarters from both verticals.
spk11: And then just on Monada, if you can just give us an update on that.
spk16: Oh, yes. I'm sorry. Okay. We've already integrated the solution and provided more value to our customers. We're today supporting over 500 application titles for the Mac, and it's just been tremendous reception from our customers and appreciation for so quickly taking, again, a small token acquisition and delivering customer value. And we're not done yet. We actually have ideas for greater improvement for the installation and updating on the Mac itself. So, you know, the initial integration done, customer value delivered, and we're not done innovating on that front.
spk11: Okay, super helpful. Thank you, guys.
spk15: Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now.
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