Jamf Holding Corp.

Thank you for standing by, and welcome to the Jamf Second Quarter 2023 Earnings Conference Call. At this time, all participants are in a listen-only mode. After this speaker's presentation, there will be a question and answer session. To ask a question during this session, you'll need to press star 1-1 on your telephone. To remove yourself from the queue, simply press star 1-1 again. As a reminder, today's program is being recorded. Now I'd like to introduce your host for today's program, Jennifer Gaumont, Vice President, Investor Relations. Please go ahead.

Good afternoon, and thank you for joining us on today's conference call to discuss CHAMP's second quarter financial results. With me on today's call are Dean Hager, Chief Executive Officer, Ian Goodkind, Chief Financial Officer, and John Strosaw, President and Chief Operating Officer. Before we begin, I'd like to remind you that shortly after the market closed today, we issued a press release announcing our second quarter financial results. We also published a Q2 earnings presentation, along with an updated investor presentation and Excel file containing quarterly financial statements 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 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 some non-GAAP measures related to JANPS performance. You can find the reconciliation of those measures to the nearest comparable GAAP measures in our earnings release. 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, Jen, and thank you, everyone, for joining us. Jamf delivered strong results again in Q2 with year-over-year revenue growth of 17% and non-GAAP operating margin of 4%. ARR grew 18% year-over-year in Q2 to $547.8 million. We continue to see strong new bookings and customer retention as demand for Jamf's management and security solutions grow, even during this current period of muted hiring and device expansions. Our vision of delivering organizations trusted access, which combines management connection and protection into a single powerful, easy to use platform is resonating with our customers. In Q2, we saw this manifest in our largest commercial bookings quarter ever, our strongest quarter yet for organic security ARR added, 40% of new ARR added came from our security solutions, representing 21% of Jamf's total ARR, as well as 22% of Jamf's total customer base, utilizing both a security and management solution. We ended Q2 adding 1,000 customers and 500,000 devices on our platform since Q1, resulting in more than 73,500 active customers running Jamf on 31.3 million devices. We're pleased with the rate at which we continue to add both net customers and devices to our substantial base, thus gaining market share over alternative providers, even in a challenging selling environment. During the last few quarters, the technology industry has faced macroeconomic challenges. Jamf has not been immune to these challenges, especially considering that the information and communication market, which includes tech, represents Jamf's largest industry measured by ARR, now larger and faster growing than Jamf's K-12 education market. This is in large part driven by the popularity of Apple Mac in the tech sector. Jamf serves seven of the top 10 technology companies in the world, including several companies who run over 100,000 Macs, more than any other solution provider. Despite what we believe is a temporary slowdown of device expansion in the tech sector, Jamf continues to see strong industry growth, largely driven by the adoption of our security solution. As an example, Jamf's largest Q2 win in the tech sector did not include any additional devices, but rather over 10,000 Jamf Protect seeds purchased for their map fleet to replace a less specialized cross-platform security solution. In other industries, with lower penetration of map, we are seeing positive trends. Jamf's second largest commercial industry, professional services, is also one of its fastest growing. Jamf manages MAP for nine of the top ten consulting companies in the world. In Q2, we renewed two of the largest five consulting companies, adding a combined 6,000 MAP seats, growing their total to 30,000 MAP. Seven years ago, these two organizations combined deployed fewer than 1,000 MAP representing nearly a 50 times MAP expansion over that period. Jamf's third largest commercial market is financial services where we manage MAP for 14 of the 15 largest banks in the United States. Although Jamf's market penetration is substantial, the MAC penetration in financial services organizations is lower than in most other industries. But we are also witnessing trends that make this industry one of Jamf's fastest growing. In Q2, Jamf renewed two of the top five banks in the United States, growing their map fleet by 5,000 devices to a combined total of 13,500, representing a 58% map expansion in just one year. We believe momentum in the professional services and financial services markets reflect the growing popularity of map, but also the impact of Jamf's map security solutions. Jamf's largest Q2 win in the global consulting market included 20,000 Jamf Protect seats for one customer. And Jamf's largest Q2 win in the financial services market included 10,000 Jamf Protect seats. Building on Mac's inherent excellent built-in security with a specialized enterprise security solution from Jamf, in addition to efficiently managing Mac, has opened the door for organizations to expand Mac faster, reaching more employees who have expressed their preference to use Mac at work. We believe user preference, coupled with Jamf's management and security solutions, have been the key drivers for Mac market share growth. According to IDC, the overall PC market declined over 13% year-over-year in Q2, representing the sixth consecutive quarter of contraction. Mac, however, was the only PC to show growth in Q2, growing 10% year over year. When looking at the data over the trailing four quarters, although muted in this economic environment, Mac's shipment still grew 1% compared to a PC industry that declined 22%. For the past three years, Mac has shown consistent growth much faster than the rest of the PC industry. IDC is forecasting a return to growth for industry PC shipments towards the end of this year and continuing into 2024, as much of the install base, which was purchased at the beginning of the pandemic, is reaching time for refresh. We believe both Mac and iPad, which have grown in market share over the past four years, will play a significant role in the replacement cycle, driven by employee choice, continued consumerization of IT, hybrid work, and hardware innovation from Apple, like the new 15-inch MacBook Air with Apple Silicon, making the price-performance ratio for the Mac much more attractive versus alternative PCs. While demand for Apple is a key tailwind for Jamf, there are other dynamics that give us confidence in Jamf's ability to continue to perform, not only in the current environment, but over the long term. We've talked about consolidation of legacy unified management vendors, which open up opportunities for Jamf. John will provide you more details on the traction we're seeing in a little bit. We are also seeing a growing number of organizations consolidating their Apple Mac and mobile teams together as Apple continues to differentiate their management and security frameworks versus other platforms. And we are seeing a growing number of organizations consolidating their InfoSec and IT departments, thereby bringing together the key decision makers for both Jamf's management and security solutions. Jamf is well positioned to benefit from all this consolidation with strong relationships in IT departments and developing relationships and references at the CISO level. The only way to ensure trusted access within an enterprise is to combine threat identification and prevention, access policies and governance, and device automation and remediation into a single integrated solution. In most cases, these products are provided by different vendors and must be integrated by the customer. Jamf's vertical approach of building the entire solution designed for a fast-growing enterprise ecosystem is proving to achieve our customers' desired outcome. Jamf's management and security solutions, delivered as an integrated platform, reduces exposure and risk for organization, and increases automation to achieve the goals of both IT and InfoSec teams. We've seen this come to life over the last two quarters, which John will soon highlight. When it comes to innovation, Jamf is busy adopting and expanding upon the Apple innovations showcased at this year's Worldwide Developer Conference, or WWDC, in June. We believe many of the advancements highlighted represent not only the future of work, but the future of computing. And Jamf will take these advancements the final mile to ensure enterprise and education customers can use them to better achieve their mission. The three primary innovation categories I'd like to highlight from WWDC are, one, expansion of Apple's enterprise platform. Two, the convergence of management, security, and identity. And three, a unique, differentiated approach to the enterprise. First, the expansion of Apple's enterprise platform. One of the reasons we believe Apple will be the endpoint leader in the enterprise is because the iPhone is already the leading enterprise mobile phone. iPad is the leading tablet. And the Mac, as we've already highlighted, is the fastest growing computer. But it doesn't stop there. More enterprise features are arriving for tvOS, specifically video conferencing and secure VPN access. While not often highlighted, Jamf manages over 300,000 Apple TVs today and growing rapidly. Also at WWDC, Apple introduced for the first time Apple Watch management and security capabilities, opening the door for secure, mobile, hands-free workflows in the future. And of course, we can't leave out Vision Pro, although not yet available, has tremendous potential once capable of adopting Apple's management and security framework. Apple is the only provider offering a competitive enterprise device to put in front of every use case. And Jamf keeps pace with Apple to ensure secure workflows are ready at the same time as new device capabilities. But devices are only part of the overall platform. With advances in managed Apple IDs, federated with more cloud identity providers, the introduction of account-driven device enrollment, and advancing pass keys for work, Apple continues their focus on the individual while empowering organizations like Jamf to build differentiated enterprise solutions. The convergence of Apple's management, security, and identity frameworks is consistent with JAN's approach to provide a single platform designed to achieve a trusted access outcome for customers, reducing costs in three ways. One, on the original software purchase versus buying from three different vendors. Two, on integrating solutions together to achieve the desired outcome. And three, on recovering from potential failure when the desired outcome is not achieved. Finally, at WWDC, we saw Apple continuing to take a specialized and differentiated approach to the enterprise versus other ecosystems. Major strategic shifts like declarative management and device attestation turned previous processes upside down. Instead of a server-centric approach to device management and security, Apple processes start natively on the device by self-identifying status in inventory. Likewise, instead of management providers creating their own enrollment portals, Apple enrollment starts automatically on the device at startup or is initiated from general settings. All of these capabilities reduce the potential for security vulnerabilities and attacks while simplifying the user experience. And these features also necessitate a specific focus on the entire Apple ecosystem as these capabilities are Apple only and require same-day availability from management and security providers, most notably Apple. We're excited by all the great innovations that Apple has lined up and look forward to bringing value to our customers as we help them succeed with Apple. I'll now hand things over to John to highlight additional areas of Jamf's momentum and Q2 wins. John?