
☐
	OR

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from to


Delaware ~~Delaware~~ (State or ~~Other Jurisdiction~~other jurisdiction of ~~Incorporation~~ incorporation or ~~Organization)~~ organization)		82-3031543 ~~82-3031543~~ (I.R.S. Employer Identification No.)
	~~100 Washington Ave S~~, ~~Suite 1100~~ ~~Minneapolis~~, MN~~55401~~ ~~(Address of principal executive offices)~~

100 Washington Ave S, Suite 1100

(Address of principal executive offices)

(~~612~~) (612) 605-6625

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading symbol	Name of each exchange on which registered
Common Stock, $0.001 par value per share	JAMF	The NASDAQ Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ~~Yes☐~~ Yes ☒No ☒

☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer ☐ ☒	Accelerated ~~filer☐~~ filer ☐	Non-accelerated filer ☒ ☐
Smaller reporting company ☐		Emerging growth company ☒ ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

On ~~August~~July 26, ~~2020,~~2023, the ~~Registrant~~registrant had ~~116,448,284~~125,409,404 shares of common stock, $0.001 par value, outstanding.

~~Jamf Holding Corp.~~

~~INDEX~~

JAMF HOLDING CORP.

We use acronyms, abbreviations, and other defined terms throughout this quarterly report on Form 10-Q. These terms are defined below. Jamf Holding Corp. and its wholly owned subsidiaries, collectively, are referred to as the “Company,” “we,” “us,” or “our.”


Term						Definition
2017 Option Plan						2017 Stock Option Plan
2020 Credit Agreement						Credit agreement dated July 27, 2020, as amended, supplemented, or modified
2020 Plan						Jamf Holding Corp. Omnibus Incentive Plan
2020 Revolving Credit Facility						Revolving credit facility available under the 2020 Credit Agreement
2021 ESPP						Jamf Holding Corp. 2021 Employee Stock Purchase Plan
2026 Notes						Convertible Senior Notes due 2026
ARR						Annual Recurring Revenue
AWS						Amazon Web Services
ASC 606						ASC Topic 606, Revenue from Contracts with Customers
ASC 805						ASC Topic 805, Business Combinations
ASC 850						ASC Topic 850, Related Party Disclosures
BYOD						Bring your own device
Cash Plan						Jamf Holding Corp. Annual Cash Incentive Plan
CEO						Chief executive officer
CODM						Chief operating decision maker
Credit Agreement Amendment						Amendment No. 2 to the 2020 Credit Agreement, effective April 7, 2023
Current Period ARR						ARR from the same cohort of customers used to calculate Prior Period ARR as of the current period end
dataJAR						Data Jar Ltd.
dataJAR Purchase Agreement						Share Purchase Agreement, dated as of July 13, 2023, entered into in connection with the acquisition of dataJAR
Digita						Digita Security LLC
EUR						Euro
Exchange Act						The Securities Exchange Act of 1934, as amended
GAAP						U.S. generally accepted accounting principles
GBP						British pound sterling
IPO						Initial public offering
IT						Information technology
JNGF						Jamf Nation Global Foundation
LIBO Rate						London interbank offered rate
MSP						Managed services provider
Prior Period ARR						ARR from the cohort of all customers as of 12 months prior to period end
R&E						Research and experimental
RSU						Restricted stock unit
SaaS						Software-as-a-service
SAFE						Simple agreement for future equity
SEC						Securities and Exchange Commission
SMBs						Small-to-medium-sized businesses
SwiftConnect, Inc.						SwiftConnect
Term SOFR						Forward-looking secured overnight financing rate
UK						United Kingdom
U.S.						United States
Vista						Vista Equity Partners, LLC and its affiliates
Wandera						Wandera, Inc.
ZecOps						ZecOps, Inc.
ZecOps Merger Agreement						Agreement and Plan of Merger, dated as of September 23, 2022 in connection with the acquisition of ZecOps

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

JAMF HOLDING CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Inin thousands, except share and per share amounts)

June 30, 2020

December 31, 2019

(unaudited)

Assets




Current assets:




Cash and cash equivalents

$
38,424

$
32,433
Trade accounts receivable, net

53,275

46,513
Income taxes receivable

554

14
Deferred contract costs

7,270

5,553
Prepaid expenses

10,880

10,935
Other current assets

6,314

3,133
Total current assets

116,717

98,581
Equipment and leasehold improvements, net

11,494

12,477
Goodwill

539,818

539,818
Other intangible assets, net

218,430

235,099
Deferred contract costs

20,334

16,234
Other assets

2,557

2,599
Total assets

$
909,350

$
904,808
Liabilities and stockholders’ equity




Current liabilities:




Accounts payable

$
3,909

$
3,684
Accrued liabilities

26,099

26,927
Income taxes payable

1,081

819
Deferred revenues

130,309

120,089
Total current liabilities

161,398

151,519
Deferred revenues, noncurrent

27,429

20,621
Deferred tax liability

14,913

18,133
Debt

201,891

201,319
Other liabilities

6,876

9,338
Total liabilities

412,507

400,930
Commitments and contingencies




Stockholders’ equity:




Common stock, $0.001 par value, 132,000,000 shares authorized, 102,862,404 and 102,843,612 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively

103

103
Additional paid‑in capital

570,434

568,756
Accumulated deficit

(73,694)

(64,981)
Total stockholders’ equity

496,843

503,878
Total liabilities and stockholders’ equity

$
909,350

$
904,808


	June 30, 2023		December 31, 2022
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	211,471	$	224,338
Trade accounts receivable, net of allowances of $508 and $445 at June 30, 2023 and December 31, 2022, respectively	100,184		88,163
Income taxes receivable	782		465
Deferred contract costs	20,386		17,652
Prepaid expenses	18,092		14,331
Other current assets	8,078		6,097
Total current assets	358,993		351,046
Equipment and leasehold improvements, net	17,514		19,421
Goodwill	867,909		856,925
Other intangible assets, net	200,128		218,744
Deferred contract costs, non-current	46,145		39,643
Other assets	42,340		43,763
Total assets	$	1,533,029	$	1,529,542
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	15,168	$	15,393
Accrued liabilities	56,902		67,051
Income taxes payable	866		486
Deferred revenues	290,663		278,038
Total current liabilities	363,599		360,968
Deferred revenues, non-current	64,388		68,112
Deferred tax liability, net	5,146		5,505
Convertible senior notes, net	365,750		364,505
Other liabilities	25,783		29,114
Total liabilities	824,666		828,204
Commitments and contingencies (Note 7)
Stockholders’ equity:
Preferred stock, $0.001 par value, 50,000,000 shares authorized at June 30, 2023 and December 31, 2022; no shares issued and outstanding at June 30, 2023 and December 31, 2022	—		—
Common stock, $0.001 par value, 500,000,000 shares authorized at June 30, 2023 and December 31, 2022; 124,890,541 and 123,170,172 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively	125		123
Additional paid‑in capital	1,105,703		1,049,875
Accumulated other comprehensive loss	(28,357)		(39,951)
Accumulated deficit	(369,108)		(308,709)
Total stockholders’ equity	708,363		701,338
Total liabilities and stockholders’ equity	$	1,533,029	$	1,529,542

The accompanying notes are an integral part of these condensed consolidated financial statements.

JAMF HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Inin thousands, except share and per share amounts)

(unaudited)

Three Months Ended

Six Months Ended

June 30,

June 30,


2020

2019

2020

2019

Revenue:









Subscription

$
52,978

$
37,216

$
103,056

$
70,956

Services

2,451

4,794

6,461

9,295

License

6,802

6,300

13,104

12,187

Total revenue

62,231

48,310

122,621

92,438

Cost of revenue:









Cost of subscription (exclusive of amortization shown below)

8,762

7,423

18,010

14,380

Cost of services (exclusive of amortization shown below)

2,207

3,549

5,293

7,192

Amortization expense

2,678

2,513

5,355

4,954

Total cost of revenue

13,647

13,485

28,658

26,526

Gross profit

48,584

34,825

93,963

65,912

Operating expenses:









Sales and marketing

20,202

16,612

42,484

31,888

Research and development

11,929

9,491

24,546

18,534

General and administrative

6,603

7,534

17,892

14,797

Amortization expense

5,634

5,626

11,308

11,259

Total operating expenses

44,368

39,263

96,230

76,478

Income (loss) from operations

4,216

(4,438)

(2,267)

(10,566)

Interest expense, net

(4,690)

(5,481)

(9,468)

(10,952)

Foreign currency transaction loss

(13)

(197)

(317)

(450)

Other income, net

36

55

91

110

Loss before income tax benefit

(451)

(10,061)

(11,961)

(21,858)

Income tax benefit

28

2,390

3,248

5,177

Net loss

$
(423)

$
(7,671)

$
(8,713)

$
(16,681)

Net loss per share, basic and diluted

$
(0.00)

$
(0.07)

$
(0.08)

$
(0.16)

Weighted‑average shares used to compute net loss per share, basic and diluted

102,862,404

102,709,405

102,861,475

102,694,756


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Revenue:
Subscription	$	130,591	$	109,407	$	257,821	$	211,608
Services	4,254		5,027		8,638		8,971
License	244		1,204		842		3,317
Total revenue	135,089		115,638		267,301		223,896
Cost of revenue:
Cost of subscription (exclusive of amortization expense shown below)	24,186		20,634		47,345		40,536
Cost of services (exclusive of amortization expense shown below)	3,385		3,493		6,677		6,600
Amortization expense	3,312		5,265		6,608		10,483
Total cost of revenue	30,883		29,392		60,630		57,619
Gross profit	104,206		86,246		206,671		166,277
Operating expenses:
Sales and marketing	63,890		58,750		124,098		105,075
Research and development	34,725		33,983		66,797		58,785
General and administrative	35,966		48,321		64,402		73,933
Amortization expense	7,247		7,034		14,488		14,063
Total operating expenses	141,828		148,088		269,785		251,856
Loss from operations	(37,622)		(61,842)		(63,114)		(85,579)
Interest income (expense), net	1,481		(641)		2,766		(1,500)
Foreign currency transaction gain (loss)	1,048		(676)		1,652		(1,457)
Loss before income tax (provision) benefit	(35,093)		(63,159)		(58,696)		(88,536)
Income tax (provision) benefit	(1,106)		20		(1,703)		(232)
Net loss	$	(36,199)	$	(63,139)	$	(60,399)	$	(88,768)
Net loss per share, basic and diluted	$	(0.29)	$	(0.53)	$	(0.49)	$	(0.74)
Weighted‑average shares used to compute net loss per share, basic and diluted	124,382,767		119,941,482		123,905,072		119,768,871

The accompanying notes are an integral part of these condensed consolidated financial statements.

JAMF HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF ~~STOCKHOLDERS’ EQUITY~~

COMPREHENSIVE LOSS

(~~In thousands, except share amounts)~~

in thousands)

(unaudited)

Stock Class

Additional

Common

Paid‑In

Accumulated

Stockholders’


Shares

Amount

Capital

Deficit

Equity

Three Months Ended June 30, 2020:

Balance, March 31, 2020

102,862,404

$
103

$
569,670

$
(73,271)

$
496,502

Issuance of common stock

—

—

—

—

—

Share‑based compensation

—

—

764

—

764

Net loss

—

—

—

(423)

(423)

Balance, June 30, 2020

102,862,404

$
103

$
570,434

$
(73,694)

$
496,843

~~Three Months Ended June 30, 2019:~~

Balance, March 31, 2019

102,692,784

$
103

$
566,177

$
(41,391)

$
524,889

Issuance of common stock

76,540

—

422

—

422

Share‑based compensation

—

—

649

—

649

Net loss

—

—

—

(7,671)

(7,671)

Balance, June 30, 2019

102,769,324

$
103

$
567,248

$
(49,062)

$
518,289

~~Six Months Ended June 30, 2020:~~

Balance, December 31, 2019

102,843,612

$
103

$
568,756

$
(64,981)

$
503,878

Issuance of common stock

18,792

—

103

—

103

Share‑based compensation

—

—

1,575

—

1,575

Net loss

—

—

—

(8,713)

(8,713)

Balance, June 30, 2020

102,862,404

$
103

$
570,434

$
(73,694)

$
496,843

~~Six Months Ended June 30, 2019:~~

Balance, December 31, 2018

102,649,701

$
103

$
565,372

$
(32,381)

$
533,094

Issuance of common stock

119,623

—

658

—

658

Share‑based compensation

—

—

1,218

—

1,218

Net loss

—

—

—

(16,681)

(16,681)

Balance, June 30, 2019

102,769,324

$
103

$
567,248

$
(49,062)

$
518,289


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Net loss	$	(36,199)	$	(63,139)	$	(60,399)	$	(88,768)
Other comprehensive income (loss):
Foreign currency translation adjustments	5,547		(21,625)		11,594		(29,708)
Total other comprehensive income (loss)	5,547		(21,625)		11,594		(29,708)
Comprehensive loss	$	(30,652)	$	(84,764)	$	(48,805)	$	(118,476)

The accompanying notes are an integral part of these condensed consolidated financial statements.

JAMF HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF ~~CASH FLOWS~~

STOCKHOLDERS’ EQUITY

(~~In thousands)~~

in thousands, except share amounts)

(unaudited)

Six Months Ended

June 30,


2020

2019

Cash flows from operating activities

Net loss

$
(8,713)

$
(16,681)

Adjustments to reconcile net loss to cash provided by (used in) operating activities:





Depreciation and amortization expense

19,002

18,085

Amortization of deferred contract costs

4,218

2,795

Amortization of debt issuance costs

571

571

Provision for bad debt expense and returns

812

—

Loss (gain) on disposal of equipment and leasehold improvements

12

(7)

Share‑based compensation

1,575

1,218

Deferred taxes

(3,217)

(5,407)

Adjustment to contingent consideration

(3,700)

—

Changes in operating assets and liabilities:

Trade accounts receivable

(7,374)

(10,637)

Income tax receivable/payable

(278)

(226)

Prepaid expenses and other assets

429

(2,663)

Deferred contract costs

(10,035)

(8,701)

Accounts payable

258

(1,437)

Accrued liabilities

(2,371)

(828)

Deferred revenue

17,028

14,207

Other liabilities

1,240

(8)

Net cash provided by (used in) operating activities

9,457

(9,719)

Cash flows from investing activities





Acquisition, net of cash acquired

—

(35,306)

Purchases of equipment and leasehold improvements

(1,366)

(3,319)

Net cash used in investing activities

(1,366)

(38,625)

Cash flows from financing activities





Proceeds from credit agreements

—

40,000

Debt issuance costs

—

(1,550)

Cash paid for offering costs

(2,203)

—

Proceeds from the exercise of stock options

103

656

Net cash provided by (used in) financing activities

(2,100)

39,106

Net increase (decrease) in cash

5,991

(9,238)

Cash, beginning of period

32,433

39,240

Cash, end of period

$
38,424

$
30,002

Supplemental disclosures of cash flow information:





Cash paid for interest

$
9,262

$
10,568

Cash paid for income taxes, net of refunds

411

451

Offering costs, accrued but not yet paid

2,865

—


	Stock Class			Additional Paid‑In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Stockholders’ Equity
	Common
	Shares	Amount

Three Months Ended June 30, 2023:

Balance, March 31, 2023	123,907,489	$	124	$	1,072,148	$	(33,904)	$	(332,909)	$	705,459
Exercise of stock options	40,854	1		241		—		—		242
Vesting of restricted stock units	737,236	—		—		—		—		—
Issuance of common stock under the employee stock purchase plan	204,962	—		3,131		—		—		3,131
Share‑based compensation	—	—		30,183		—		—		30,183
Foreign currency translation adjustments	—	—		—		5,547		—		5,547
Net loss	—	—		—		—		(36,199)		(36,199)
Balance, June 30, 2023	124,890,541	$	125	$	1,105,703	$	(28,357)	$	(369,108)	$	708,363

Three Months Ended June 30, 2022:

Balance, March 31, 2022	119,659,455	$	119	$	930,788	$	(15,949)	$	(193,037)	$	721,921
Exercise of stock options	59,573	1		345		—		—		346
Vesting of restricted stock units	460,569	—		—		—		—		—
Issuance of common stock under the employee stock purchase plan	130,450	—		3,419		—		—		3,419
Share‑based compensation	—	—		53,024		—		—		53,024
Foreign currency translation adjustments	—	—		—		(21,625)		—		(21,625)
Net loss	—	—		—		—		(63,139)		(63,139)
Balance, June 30, 2022	120,310,047	$	120	$	987,576	$	(37,574)	$	(256,176)	$	693,946

The accompanying notes are an integral part of these condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (continued)

(in thousands, except share amounts)


	Stock Class			Additional Paid‑In Capital		Accumulated Other Comprehensive Loss		Accumulated Deficit		Stockholders’ Equity
	Common
	Shares	Amount

Six Months Ended June 30, 2023:

Balance, December 31, 2022	123,170,172	$	123	$	1,049,875	$	(39,951)	$	(308,709)	$	701,338
Exercise of stock options	408,025	1		2,964		—		—		2,965
Vesting of restricted stock units	1,107,382	1		—		—		—		1
Issuance of common stock under the employee stock purchase plan	204,962	—		3,131		—		—		3,131
Share‑based compensation	—	—		49,733		—		—		49,733
Foreign currency translation adjustments	—	—		—		11,594		—		11,594
Net loss	—	—		—		—		(60,399)		(60,399)
Balance, June 30, 2023	124,890,541	$	125	$	1,105,703	$	(28,357)	$	(369,108)	$	708,363

Six Months Ended June 30, 2022:

Balance, December 31, 2021	119,426,064	$	119	$	913,581	$	(7,866)	$	(167,408)	$	738,426
Exercise of stock options	270,773	1		1,542		—		—		1,543
Vesting of restricted stock units	482,760	—		—		—		—		—
Issuance of common stock under the employee stock purchase plan	130,450	—		3,419		—		—		3,419
Share‑based compensation	—	—		69,034		—		—		69,034
Foreign currency translation adjustments	—	—		—		(29,708)		—		(29,708)
Net loss	—	—		—		—		(88,768)		(88,768)
Balance, June 30, 2022	120,310,047	$	120	$	987,576	$	(37,574)	$	(256,176)	$	693,946

The accompanying notes are an integral part of these condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	Six Months Ended June 30,
	2023		2022
Operating activities
Net loss	$	(60,399)	$	(88,768)
Adjustments to reconcile net loss to cash (used in) provided by operating activities:
Depreciation and amortization expense	24,838		27,784
Amortization of deferred contract costs	9,987		7,859
Amortization of debt issuance costs	1,368		1,358
Non-cash lease expense	2,955		2,943
Provision for credit losses and returns	217		274
Share‑based compensation	49,733		69,034
Deferred tax benefit	(355)		(1,199)
Adjustment to contingent consideration	—		188
Other	(1,856)		1,438
Changes in operating assets and liabilities:
Trade accounts receivable	(12,047)		(17,870)
Income tax receivable/payable	81		165
Prepaid expenses and other assets	(6,694)		(3,851)
Deferred contract costs	(19,124)		(15,438)
Accounts payable	(483)		292
Accrued liabilities	(10,205)		(3,100)
Deferred revenue	8,753		35,233
Net cash (used in) provided by operating activities	(13,231)		16,342
Investing activities
Acquisitions, net of cash acquired	—		(4,023)
Purchases of equipment and leasehold improvements	(1,786)		(2,876)
Purchase of investments	(750)		—
Other	(25)		(79)
Net cash used in investing activities	(2,561)		(6,978)
Financing activities
Debt issuance costs	—		(50)
Cash paid for offering costs	—		(80)
Cash paid for contingent consideration	(206)		(4,588)
Payment of acquisition-related holdback	(277)		(200)
Proceeds from the exercise of stock options	2,965		1,543
Net cash provided by (used in) financing activities	2,482		(3,375)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	92		(790)
Net (decrease) increase in cash, cash equivalents, and restricted cash	(13,218)		5,199
Cash, cash equivalents, and restricted cash, beginning of period	231,921		177,150
Cash, cash equivalents, and restricted cash, end of period	$	218,703	$	182,349

The accompanying notes are an integral part of these condensed consolidated financial statements.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)


	Six Months Ended June 30,
	2023		2022
Supplemental disclosures of cash flow information:
Cash paid for:
Interest	$	391	$	371
Income taxes, net of refunds	1,981		751
Non-cash activities:
Employee stock purchase plan	3,131		3,419
Offering costs accrued but not paid	—		44
Operating lease assets obtained in exchange for operating lease liabilities	522		8,497
Purchases of equipment and leasehold improvements accrued but not paid	170		—

Reconciliation of cash, cash equivalents, and restricted cash within the condensed consolidated balance sheets to the amounts shown in the condensed consolidated statements of cash flows above:
Cash and cash equivalents	$	211,471	$	182,349
Restricted cash included in other current assets	32		—
Restricted cash included in other assets	7,200		—
Total cash, cash equivalents, and restricted cash	$	218,703	$	182,349

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

~~(unaudited)~~

(unaudited)

Note 1. Basis of presentation and description of business

Description of business

~~Jamf Holding Corp. and its wholly owned subsidiaries, collectively, are referred to as the “Company”, “we”, “us” or “our.”~~

We are the standard in managing and securing Apple ~~Enterprise Management,~~at work, and ~~our cloud software platform is~~we are the only ~~vertically-focused Apple infrastructure~~company in the world that provides a complete management and security ~~platform~~solution for an Apple-first environment that is designed to be enterprise secure, consumer simple, and protective of ~~scale in the world.~~personal privacy. We help ~~organizations connect, manage~~IT and security teams confidently protect ~~Apple products, apps~~the devices, data, and ~~corporate resources in the cloud without ever having to touch the devices.~~applications used by their workforce, while providing employees with consumer-simple, privacy-protecting technology. With ~~our products, Apple~~Jamf’s software, devices can be deployed to employees brand new in the shrink-wrapped box, ~~automatically~~ set up automatically and personalized at first power-on and administered continuously ~~administered~~ throughout the ~~life~~lifecycle of the device. Our customers are located throughout the world.

~~Emerging growth company status~~

~~We are an emerging growth company, as defined in the Jumpstart Our Business Startups Act~~

Basis of ~~2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment~~presentation and principles of ~~the JOBS Act, until such time as those standards apply to private companies.~~

We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it is (i) no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, ourconsolidation

The accompanying condensed consolidated financial statements, ~~may not be comparable to companies that comply with~~which include the ~~new or revised accounting pronouncements as of public company effective dates.~~

~~We will remain an emerging growth company until the earliest of (i) the last day~~accounts of the first fiscal year (a) following the fifth anniversary of the completion of our offering, (b) in which our total annual gross revenue is at least $1.07 billion or (c) when we are deemed to be a large accelerated filer, which means the market value of our common stock that is held by non-affiliates exceeds $700.0 million as of the prior June 30,Company and ~~(ii) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.~~

~~Basis of presentation~~

~~The accompanying consolidated financial statements~~its wholly owned subsidiaries, have been prepared in accordance with ~~U.S. generally accepted accounting principles (“GAAP”)~~GAAP and ~~include all adjustments necessary for the fair presentation~~applicable rules and regulations of the SEC regarding interim financial reporting. All intercompany accounts and transactions have been eliminated.

Unaudited interim condensed consolidated financial ~~position, results of operations, and cash flows of the Company.~~

~~Vista Equity Partners acquisition~~

On November 13, 2017, Vista Equity Partners ("Vista") acquired a majority share of all the issued and outstanding shares of the Company at the purchase price of $733.8 million (the "Vista Acquisition"). As of June 30, 2020, funds controlled by Vista owned approximately 89.5% of our outstanding common stock.

~~Unaudited Interim Consolidated Financial Information~~

information

The ~~accompanying~~ interim condensed consolidated balance sheet as of June 30, ~~2020,~~2023, the condensed consolidated statements of operations, of comprehensive loss, and of stockholders’ equity for the three and six months ended June 30, ~~2020~~2023 and ~~2019 and~~2022, the condensed consolidated statements of cash flows for the six months ended June 30, ~~2020~~2023 and ~~2019~~2022, and the related ~~footnote disclosures~~notes are unaudited. The condensed consolidated balance sheet as of December 31, 2022 was derived from our audited consolidated financial statements that were included in our Annual Report on Form 10-K for the year ended December 31, 2022, which was filed with the SEC on March 1, 2023. The accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2022.

These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in management’s opinion, include all adjustments necessary for the fair presentation of the consolidated financial position, results of operations, and cash flows of the Company. All adjustments made were of a normal recurring nature. The results for

~~Table of Contents~~

~~JAMF HOLDING CORP.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(unaudited)~~

the three and six months ended June 30, ~~2020~~2023 are not necessarily indicative of the results to be expected for the year ending December 31, ~~2020~~2023 or for any future period.

Use of estimates

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the reporting date, and the reported amounts of ~~revenues~~revenue and expenses during the reporting period. These estimates are based on management’s best knowledge of current events and actions that the Company may undertake in the future and include, but are not limited to, revenue recognition, stock-based compensation, ~~commissions, goodwill~~the expected period of benefit for deferred contract costs, the fair values of assets acquired and liabilities assumed in business combinations, useful lives for finite-lived assets, recoverability of long-lived assets, the value of right-of-use assets and lease liabilities, allowance for expected credit losses, commitments and contingencies, and accounting for income ~~taxes.~~taxes and related valuation allowances against deferred tax assets. Actual results could differ from those estimates.

Table of Contents

JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

Segment and ~~Geographic Information~~

geographic information

Our ~~chief operating decision maker (“CODM”)~~CODM is our ~~Chief Executive Officer,~~CEO, who reviews financial information presented on a consolidated basis for purposes of making operating decisions, assessing financial performance, and allocating resources. We operate our business as 1one operating segment and therefore we have 1one reportable segment.

Revenue by geographic region as determined based on the ~~end user customer address was~~location where the sale originated were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
The Americas (1)	$	91,440	$	79,980	$	181,251	$	155,129
Europe, the Middle East, India, and Africa	33,375		27,517		65,726		53,514
Asia Pacific	10,274		8,141		20,324		15,253
	$	135,089	$	115,638	$	267,301	$	223,896

(1)

Three Months Ended

Six Months Ended

June 30,

June 30,


2020

2019

2020

2019

(in thousands)
Revenue:

The Americas

$
49,558

$
36,537

$
97,879

$
70,521
Europe, the Middle East, India, and Africa

9,199

9,068

18,025

16,659
Asia Pacific

3,474

2,705

6,717

5,258

$
62,231

$
48,310

$
122,621

$
92,438

The vast majority of our Americas revenue comes from the United States.

Note 2. Summary of significant accounting policies

The Company’s significant accounting policies are discussed in Note 2 to the consolidated financial statements included in ~~our final prospectus (the “IPO Prospectus”)~~the Company’s Annual Report on Form 10-K for ~~our initial public offering (“IPO”) dated as of July 21, 2020 and filed with~~ the ~~Securities and Exchange Commission (the “SEC”) pursuant to Rule 424(b)(4) under the Securities Act of 1933, as amended (the “Securities Act”).~~year ended December 31, 2022. There have been no significant changes to these policies ~~that have had a material impact on the Company’s consolidated financial statements and related notes for~~during the three and six months ended June 30, ~~2020.~~2023. The following describes the impact of certain policies.

~~Deferred offering costs~~

~~Offering costs are capitalized~~

Trade accounts receivable, net

The allowance for credit losses is based on an expected loss model that estimates losses over the expected life of the trade accounts receivable. The Company estimates expected credit losses based on the Company’s historical loss information, current and ~~consist~~future economic and market conditions, and ongoing review of ~~fees incurred in connection with the sale of common stock in~~customers’ account balances.

Activity related to our ~~IPO and include legal, accounting, printing, and other IPO-related costs. The balance of deferred offering costs included within other current assets at June 30, 2020 and December 31, 2019~~allowance for credit losses for trade accounts receivable was $5.8 million and $2.3 million, respectively. Upon completion of our IPO, these deferred costs were reclassified to stockholders’ equity and recorded against the proceeds from the offering. During the three and six months ended June 30, 2020, we paid offering costs of $0.7 million and $2.2 million, respectively.

as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Balance, beginning of period	$	427	$	492	$	445	$	391
Provision	153		140		167		262
Write-offs	(124)		(155)		(179)		(182)
Recoveries of amounts previously written off	52		2		75		8
Balance, end of period	$	508	$	479	$	508	$	479

Table of Contents

JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~(Continued)~~

~~(unaudited)~~

(continued)

~~Share-based compensation~~

The Company applies the provisions of ASC Topic 718, Compensation — Stock Compensation (“ASC 718”), in its accounting and reporting for stock-based compensation. ASC 718 requires all stock-based payments to employees, including grants of employee stock options, to be recognized in the income statement based on their fair values. All service-based options outstanding under the Company’s option plans have exercise prices equal to the fair value of the Company’s stock on the grant date. The fair value of these service options is determined using the Black-Scholes option pricing model. The estimated fair value of service-based awards is recognized as compensation expense over the applicable vesting period. All awards expire after 10 years. The fair value of each grant of service options was determined by the Company using the methods and assumptions discussed below. Each of these inputs is subjective and generally requires judgment to determine.

Compensation cost for restricted stock units is determined based on the fair market value of the Company’s stock at the date of the grant. Stock-based compensation expense is generally recognized over the required service period. Forfeitures are accounted for when they occur.

The Company also grants performance-based awards to certain executives that vest and become exercisable when Vista Equity Partners’, our equity sponsor (“Vista”) realized cash return on its investment in the Company equals or exceeds $1.515 billion upon a change in control of the Company (“Termination Event”). The terms of the agreement do not specify a performance period for the occurrence of the Termination Event. The contractual term of the awards is 10 years. These options are also referred to as return target options. The Company uses a Modified Black-Scholes option pricing model which uses Level 3 inputs for fair value measurement.

In conjunction with the IPO, the vesting conditions of the performance-based awards were modified to also vest following an IPO and registration and sale of shares by Vista whereby Vista still must achieve a cash return on its equity investment in the Company equaling or exceeding $1.515 billion. In accordance with ASC 718, we calculated the fair value of these options on the modification date. The value of these options increased from $13.8 million prior to modification to $33.0 million on the date of modification as of June 30, 2020. As the awards are not currently considered probable of meeting vesting requirements no expense has been recognized, and the timing of any future expense recognition is unknown.

(unaudited)

The Company applies ASC ~~Topic~~ 606~~Revenue from Contracts with Customers~~ ~~(“ASC 606”)~~ and follows a five-step model to determine the appropriate amount of revenue to be recognized in accordance with ASC 606.

~~Table of Contents~~

~~JAMF HOLDING CORP.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(unaudited)~~

Disaggregation of Revenue

The Company separates revenue into ~~recurring~~subscription and ~~non-recurring~~non-subscription categories to disaggregate ~~those revenues~~the revenue that ~~are~~is term-based and renewable from the revenue that is one-time in ~~nature from those that are term-based and renewable.~~nature. Revenue from ~~recurring~~subscription and ~~non-recurring~~non-subscription contractual arrangements ~~are~~were as follows:

Three Months Ended

Six Months Ended

June 30,

June 30,


2020

2019

2020

2019

(in thousands)
SaaS subscription and support and maintenance

$
52,978

$
37,216

$
103,056

$
70,956
On‑premise subscription

5,770

4,048

10,310

7,089
Recurring revenue

58,748

41,264

113,366

78,045
Perpetual licenses

1,032

2,252

2,794

5,098
Professional services

2,451

4,794

6,461

9,295
Non‑recurring revenue

3,483

7,046

9,255

14,393
Total revenue

$
62,231

$
48,310

$
122,621

$
92,438


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
SaaS subscription and support and maintenance	$	126,566	$	104,291	$	247,328	$	200,641
On‑premise subscription	4,025		5,116		10,493		10,967
Subscription revenue	130,591		109,407		257,821		211,608
Professional services	4,254		5,027		8,638		8,971
Perpetual licenses	244		1,204		842		3,317
Non‑subscription revenue	4,498		6,231		9,480		12,288
Total revenue	$	135,089	$	115,638	$	267,301	$	223,896

Contract Balances

If revenue is recognized in advance of the right to invoice, a contract asset is recorded in other current assets on the condensed consolidated balance sheets. The opening and closing balances of contract assets were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Balance, beginning of the period	$	636	$	1,885	$	817	$	1,792
Balance, end of the period	757		1,840		757		1,840
Change	$	121	$	(45)	$	(60)	$	48

For the three and six months ended June 30, 2023 and 2022, the allowance for expected credit losses associated with contract assets was not material.

Contract liabilities consist of customer billings in advance of revenue being recognized. The Company invoices its customers for subscription, support and maintenance, and services in advance.

Changes in contract liabilities, including revenue earned during the period from the beginning contract liability balance and new deferrals of revenue during the period, were as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Balance, beginning of the period	$	340,842	$	292,499	$	346,150	$	282,128
Revenue earned	(112,723)		(93,199)		(193,872)		(154,473)
Deferral of revenue	127,917		117,652		203,758		189,297
Other (1)	(985)		—		(985)		—
Balance, end of the period	$	355,051	$	316,952	$	355,051	$	316,952

(1)

Three Months Ended

Six Months Ended

June 30,

June 30,


2020

2019

2020

2019

(in thousands)
Balance, beginning of the period

$
145,735

$
111,255

$
140,710

$
100,662
Revenue earned

(49,562)

(42,277)

(97,285)

(76,884)
Deferral of revenue

61,565

48,941

114,313

94,141
Balance, end of the period

$
157,738

$
117,919

$
157,738

$
117,919

Includes contract assets netted against contract liabilities on a contract-by-contract basis.

Table of Contents

JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

There were no significant changes to our contract assets and liabilities during the three and six months ended June 30, ~~2020~~2023 and ~~2019~~2022 outside of our sales activities.

Remaining Performance Obligations

Revenue allocated to remaining performance obligations represents contracted revenue that has not yet been recognized, which includes deferred revenue and ~~noncancelable~~noncancellable amounts to be invoiced. As of June 30, ~~2020 and December 31, 2019,~~2023, the Company had ~~$170.2~~$454.5 million ~~and $149.5 million, respectively,~~ of remaining performance obligations, with ~~84% and 86%, respectively,~~71% expected to be recognized as revenue over the succeeding 12 months, and the remainder generally expected to be recognized over the three years thereafter.

Deferred Contract Costs

Sales commissions, as well as associated payroll taxes and retirement plan contributions (together, contract costs), that are incremental to the acquisition of customer contracts are capitalized using a portfolio approach as deferred contract costs onin the condensed consolidated balance ~~sheet~~sheets when the period of benefit is determined to be greater than one year.

~~Table of Contents~~

~~JAMF HOLDING CORP.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(unaudited)~~

Total amortization of contract costs was $5.2 million and $4.1 million for the three months ended June 30, ~~2020~~2023 and ~~2019 was $2.2~~2022, respectively, and $10.0 million and ~~$1.5~~$7.9 million ~~respectively. Total amortization of contract costs~~ for the six months ended June 30, ~~2020~~2023 and ~~2019 was $4.2 million and $2.8 million,~~2022, respectively.

The Company periodically reviews these deferred contract costs to determine whether events or changes in circumstances have occurred that could affect the period of benefit of these deferred contract costs. There were 0no impairment losses recorded during the three and six months ended June 30, ~~2020~~2023 and ~~2019.~~

For the three and six months ended June 30, 2020, the Company had 2 distributors that accounted for more than 10% of total net revenues. Total receivables related to these distributors were $19.3 million at June 30, 2020. For the three and six months ended June 30, 2019, the Company had 1 distributor that accounted for more than 10% of total net revenues. Total receivables related to this distributor were $6.0 million at December 31, 2019.

~~Recently issued accounting pronouncements not yet adopted~~

From time to time, new accounting pronouncements are issued by the FASB, or other standard setting bodies and adopted by us as of the specified effective date. Unless otherwise discussed, the impact of recently issued standards that are not yet effective will not have a material impact on our financial position or results of operations upon adoption.

~~Financial Instruments — Credit Losses~~

~~In June 2016, the FASB issued Accounting Standards Update (“ASU”) No. 2016-13,~~ ~~Financial Instruments — Credit Losses (Topic 326): Measurement of Credit Losses on Financial Instruments~~ (“ASU 2016-13”), which introduces a model based on expected losses to estimate credit losses for most financial assets and certain other instruments. In November 2019, the FASB issued ASU No. 2019-10 ~~Financial Instruments — Credit Losses (Topic 326), Derivatives and Hedging (Topic 815), and Leases (Topic 842): Effective Dates~~ ~~(“ASU 2019-10”). The update allows the extension of the initial effective date for entities which have not yet adopted ASU No. 2016-02,~~ ~~Leases (Topic 842)~~ (“ASU 2016-02”). The standard is effective for annual reporting periods beginning after December 15, 2022, with early adoption permitted for annual reporting periods beginning after December 15, 2018. Entities will apply the standard’s provisions by recording a cumulative-effect adjustment to retained earnings. The Company has not yet adopted ASU 2016-13 and is currently evaluating the effect the standard will have on its consolidated financial statements.

~~Fair Value Measurement — Disclosure Framework~~

~~In August 2018, the FASB issued ASU No. 2018-13,~~ ~~Fair Value Measurement (Topic 820): Disclosure Framework — Changes to the Disclosure Requirements for Fair Value Measurement~~ ~~(“ASU 2018-13”), which amends ASC Topic 820,~~ ~~Fair Value Measurements~~. ASU 2018-13 modifies the disclosure requirements for fair value measurements by removing, modifying, or adding certain disclosures. The effective date is the first quarter of fiscal year 2021, with early adoption permitted for the removed disclosures and delayed adoption permitted until fiscal year 2021 for the new disclosures. The removed and modified disclosures will be adopted on a retrospective basis and the new disclosures will be adopted on a prospective basis. The Company has not yet adopted ASU 2018-13 and is currently evaluating the effect the standard will have on its consolidated financial statements.

~~Leases~~

In February 2016, the FASB issued ASU 2016-02. The update requires lessees to put most leases on their balance sheets while recognizing expenses on their income statements in a manner similar to current GAAP. The guidance also eliminates current real estate-specific provisions for all entities. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. In June 2020, the FASB issued ASU No. 2020-05, ~~Revenue from Contracts with Customers (Topic 606) and Leases (Topic 842): Effective Dates for Certain~~

2022.

~~Table of Contents~~

~~JAMF HOLDING CORP.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(unaudited)~~

~~Entities~~.The update defers the initial effective date of ASU 2016-02 by one year for private companies and private not-for-profits. For these entities the effective date is for fiscal years beginning after December 15, 2021, and interim periods within fiscal years beginning after December 15, 2022. Early adoption is permitted, and the modified retrospective method is to be applied. The Company is currently assessing the timing and impact of adopting the updated provisions.

~~Income Taxes~~

In December 2019, the FASB issued ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU 2019-12”), which simplifies the accounting for income taxes, eliminates certain exceptions to the general principles in Topic 740 and clarifies certain aspects of the current guidance to improve consistent application among reporting entities. ASU 2019-12 is effective for fiscal years beginning after December 15, 2021 and interim periods within annual periods beginning after December 15, 2022. Early adoption is permitted. The method of adoption varies for the provisions in the update. The Company is currently evaluating the effect the standard will have on its consolidated financial statements.

~~Reference Rate Reform~~

In March 2020, the FASB issued ASU No. 2020-04, Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting (“ASU 2020-04”), which provides entities with temporary optional financial reporting alternatives to ease the potential burden in accounting for reference rate reform and includes a provision that allows entities to account for a modified contract as a continuation of an existing contract. ASU 2020-04 is effective upon issuance and can be applied through December 31, 2022. The Company is currently evaluating the effect the standard will have on its consolidated financial statements.

~~Adoption of new accounting pronouncements~~

~~Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract~~

~~In March 2018, the FASB issued ASU No. 2018-15,~~ ~~Intangibles — Goodwill and Others — Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract~~ (“ASU 2018-15”), which aligns the accounting for implementation costs incurred in a hosting arrangement that is a service contract with the accounting for implementation costs incurred to develop or obtain internal-use software under ASC Subtopic 350-40, in order to determine which costs to capitalize and recognize as an asset. ASU 2018-15 is effective for annual reporting periods, and interim periods within those years, beginning after December 15, 2019, and can be applied either prospectively to implementation costs incurred after the date of adoption or retrospectively to all arrangements. The Company adopted the new standard in the first quarter of fiscal year 2020. The adoption of the standard did not have an impact on the Company’s consolidated financial statements as the Company does not have any of these arrangements.

~~Improvements to Nonemployee Share-Based Payment Accounting~~

~~In June 2018, the FASB issued ASU No. 2018-07,~~ ~~Compensation — Stock Compensation (Topic 718): Improvements to Nonemployee Share-Based Payment Accounting~~ (“ASU 2018-07”), with an intent to reduce cost and complexity and to improve financial reporting for share-based payments issued to nonemployees. The amendments in ASU 2018-07 provide for the simplification of the measurement of share-based payment transactions for acquiring goods and services from nonemployees. Currently, the accounting requirements for nonemployee and employee share-based payment transactions are significantly different. This standard expands the scope of ASC Topic 718 to include share-based payments issued to nonemployees for goods or services, aligning the accounting for share-based payments to nonemployees and employees. ASU 2018-07 is effective for annual reporting periods beginning after

~~Table of Contents~~

~~JAMF HOLDING CORP.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(unaudited)~~

December 15, 2019, including interim periods within those periods, and early adoption is permitted. The Company adopted the new standard in the first quarter of fiscal year 2020. The adoption did not have an impact on the Company’s consolidated financial statements as the Company does not have any nonemployee share-based payment awards.

Note 3. Financial instruments fair value

~~We report financial assets~~

Assets and liabilities ~~and nonfinancial assets and liabilities that are recognized or disclosed~~measured at fair value ~~in the consolidated financial statements~~ on a recurring basis

The Company invests in ~~accordance~~money market funds with ~~ASC Topic 820. ASC 820 defines fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants~~original maturities at the ~~measurement date. When determining the fair value measurements for assets and liabilities,~~time of purchase of three months or less, which are ~~required to be~~measured and recorded at fair value ~~we consider the principal or most advantageous~~on a recurring basis. Money market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions and credit risk.

ASC 820 also establishes a fair value hierarchy, which prioritizes the inputs to valuation techniques used to measure fair value into three levels. Fair value represents the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. GAAP established a hierarchy framework to classify the fair valuefunds are valued based on ~~the observability of significant inputs to the measurement. The levels~~quoted market prices in active markets and classified within Level 1 of the fair value ~~hierarchy are as follows:~~

~~Level~~ ~~1: Fair~~hierarchy.

In addition, the contingent consideration associated with the Digita acquisition was measured and recorded at fair value ~~is determined using an unadjusted quoted price in an active market for identical assets or liabilities.~~

~~Level~~ ~~2: Fair value is~~on a recurring basis. The estimated ~~using inputs other than quoted prices included within Level 1 that are observable, either directly or indirectly.~~

~~Level~~ ~~3: Fair value is estimated using unobservable inputs that are significant to the~~ fair value of the ~~assets or liabilities.~~contingent payments associated with the Digita acquisition was determined using a Monte Carlo simulation model, which used Level 3 inputs, including assumptions about the probability of growth of subscription services and the related pricing of the services offered. Significant increases (decreases) in the probability of growth of subscription services as well as the related pricing of the services offered would have resulted in a higher (lower) fair value measurement. The Company made the final payment related to the contingent consideration in the first quarter of 2023. See Note 4 for more information.

Table of Contents

JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

The fair value of these financial instruments were as follows:


	June 30, 2023
	Level 1		Level 2		Level 3		Total
	(in thousands)
Assets
Cash equivalents:
Money market funds	$	128,762	$	—	$	—	$	128,762
Total cash equivalents	$	128,762	$	—	$	—	$	128,762


	December 31, 2022
	Level 1		Level 2		Level 3		Total
	(in thousands)
Assets
Cash equivalents:
Money market funds	$	132,306	$	—	$	—	$	132,306
Total cash equivalents	$	132,306	$	—	$	—	$	132,306

Liabilities
Contingent consideration:
Accrued liabilities	$	—	$	—	$	6,206	$	6,206
Total contingent consideration	$	—	$	—	$	6,206	$	6,206

The carrying value of ~~cash and cash equivalents,~~ accounts receivable and accounts payable approximate their fair ~~value.~~ value due to their short maturities and are excluded from the tables above.

The following table provides a summary of the changes in contingent consideration, which is classified as Level 3:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Balance, beginning of period	$	—	$	5,600	$	6,206	$	10,100
Total (gains) losses included in:
Net loss	—		100		—		188
Payments	—		—		(6,206)		(4,588)
Balance, end of period	$	—	$	5,700	$	—	$	5,700

The change in the fair value of ~~our debt at~~the contingent consideration is included in general and administrative expenses in the condensed consolidated statements of operations. The adjustment for the three and six months ended June 30, ~~2020~~2022 primarily reflected updated assumptions about the probability of growth of subscription services.

Fair value measurements of other financial instruments

The following table presents the net carrying value and estimated fair value of the 2026 Notes, which are not recorded at fair value in the condensed consolidated balance sheets:


	June 30, 2023				December 31, 2022
	Net Carrying Value		Estimated Fair Value		Net Carrying Value		Estimated Fair Value
	(in thousands)
2026 Notes	$	365,750	$	319,743	$	364,505	$	308,504

Table of Contents

JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

As of June 30, 2023 and December 31, ~~2019 was $203.4 million and $203.1 million, respectively (Level 2). The~~2022, the difference between the net carrying value of ~~our~~the 2026 Notes and the principal amount of $373.8 million represents the unamortized debt asissuance costs of ~~both June 30, 2020~~$8.0 million and ~~December 31, 2019 was $205.0 million.~~$9.2 million, respectively. See Note 8 for more information. The estimated fair value of ~~our debt~~the 2026 Notes, which is classified as Level 2, was determined ~~using discounted cash flow analysis~~ based on quoted bid prices of the 2026 Notes in an over-the-counter market ~~rates for similar types~~on the last trading day of ~~borrowings.~~

the reporting period.

Note 4. Acquisitions

~~ZuluDesk B.V.~~

ZecOps

On ~~February 1, 2019,~~November 16, 2022, the Company ~~purchased all~~completed its acquisition of ZecOps, a leader in mobile detection and response, pursuant to the terms of the ~~outstanding membership units~~ZecOps Merger Agreement. This acquisition uniquely positioned Jamf to help IT and security teams strengthen their organization’s mobile security posture.

Under the terms of ~~ZuluDesk B.V. whose products are designed to offer a cost-effective mobile device management system~~the ZecOps Merger Agreement, the Company acquired 100% of the equity interest in ZecOps for ~~today’s modern digital classroom. ZuluDesk B.V’s software complement~~total purchase consideration of $44.5 million. The total purchase consideration included cash consideration of $28.4 million, equity consideration of $15.1 million (based on the closing price of the Company’s common stock on November 16, 2022), and repayment of the $1.0 million SAFE investment in ZecOps the Company entered into in the third quarter of 2022. The cash consideration included (i) $0.3 million in cash held back in an escrow fund as partial security for post-closing true-up adjustments and (ii) $7.2 million in cash held back in an escrow fund as partial security for post-closing indemnification claims with (A) 50% of the then existing ~~product offerings.~~ escrowed amount to be released 18 months following the closing date and (B) the remaining escrowed amount to be released on March 1, 2025. The cash consideration was funded by the Company’s cash on hand. The equity consideration consisted of up to 711,111 shares of the Company’s common stock, based on (i) the deemed total equity consideration value under the ZecOps Merger Agreement of $19.2 million divided by (ii) the agreed upon floor of the Company’s stock price of $27.00 per share. On the closing date, 710,691 shares of the equity consideration were issued to applicable ZecOps equityholders, and 420 shares were issued into a reserve account, subject to the completion of customary shareholder certifications. The reserved shares were subsequently released in January 2023. In the first quarter of 2023, the Company recorded an immaterial measurement period adjustment.

The final purchase accounting allocations for the ZecOps acquisition will be determined within one year from the acquisition date and depend on a number of factors, including the finalization of income tax effects of the opening balance sheet. The following table summarizes the preliminary allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed (in thousands):


Assets acquired:
Cash and cash equivalents	$	820
Trade accounts receivable, net	448
Prepaid expenses	39
Other current assets	2,104
Intangible assets acquired	9,500
Operating lease assets	104
Liabilities assumed:
Accounts payable	(73)
Accrued liabilities	(2,260)
Income taxes payable	(48)
Deferred revenue	(1,014)
Operating lease liabilities	(85)
Deferred tax liability	(529)
Goodwill	35,458
Total purchase consideration	$	44,464

Table of Contents

JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

The Company accounted for the acquisition by applying the acquisition method of accounting for business combinations in accordance with ASC ~~Topic~~ 805. The ~~final aggregate~~allocation of the purchase price ~~was approximately $38.6 million. This acquisition was funded by term debt,~~required management to make significant estimates in determining the fair value of assets acquired and ~~borrowings under a revolving line~~liabilities assumed, especially with respect to intangible assets. These estimates included, but were not limited to:

•future expected cash flows from subscription contracts and acquired developed technologies;

•time to recreate customer relationships and anticipated growth in revenue;

•research and development costs;

•obsolescence curves and other useful life assumptions, such as the period of ~~credit.~~ time and intended use of acquired intangible assets in the Company’s product offerings;

•discount rates; and

•tax-related valuation allowances.

The goodwill represents the excess of the purchase consideration over the fair value of the underlying net identifiable assets. The goodwill recognized in this acquisition is primarily attributable to ~~the offerings~~expected synergies in ~~mobile device management of ZuluDesk B.V.~~sales opportunities across complementary products, customers, and ~~its assembled workforce.~~geographies and cross-selling opportunities. The goodwill is not deductible for income tax purposes.

~~Table of Contents~~

~~JAMF HOLDING CORP.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(unaudited)~~

The estimated useful lives and fair ~~value~~values of the ~~separately~~ identifiable intangible assets acquired consisting of trademarks, customer relationships and developed technology, was estimated by applying an income approach. Under the income approach, an intangible asset’s fair value is equal to the present value of future economic benefits to be derived from ownership of the asset. Indications of value are developed by discounting future net cash flows to their present value at market-based rates of return. were as follows:


	Useful Life	Gross Value
		(in thousands)
Developed technology	5.0 years	$	5,900
Customer relationships	5.0 years	2,300
Non-competes	3.0 years	1,300
Total identifiable intangible assets		$	9,500

The weighted-average ~~economic~~useful life of the intangible assets acquired ~~is 7.0~~was 4.7 years. ~~For more details on~~

Developed technology represents the ~~intangible assets, see Note 5.~~

Acquisition-related expenses were expensed as incurred and totaled $0.9 million for the three and six months ended June 30, 2019. These expenses were recognized as acquisition costs in general and administrative expenses. ZuluDesk B.V. contributed revenue and net loss of $1.0 million and $0.3 million, respectively, during the three months ended June 30, 2019, excluding the effects of the acquisition and integration costs. ZuluDesk B.V. contributed revenue and net loss of $1.5 million and $0.5 million, respectively, during the six months ended June 30, 2019, excluding the effects of the acquisition and integration costs. The Company used its then-existing term loan facility (the “Term Loan Facility”) of $175.0 million with a maturity date of November 13, 2022 under its secured credit agreement entered into November 13, 2017 (the “Prior Credit Agreement”), which was increased to $205.0 million on January 30, 2019 when the Company entered into that certain Amendment Agreement No. 1 to such Prior Credit Agreement, to complete the acquisition and approximately $0.5 million of debt issuances costs were capitalized as a reduction in Debt on the balance sheet. These costs are amortized over the course of the debt agreements.

The Company allocated the net purchase consideration to the net assets acquired, including finite-lived intangible assets, based on their respective fair values at the time of the acquisition as follows (in thousands):

Assets acquired:


Cash

$
3,325
Other current assets

1,306
Long‑term assets

154
Liabilities assumed:


Accounts payable and accrued liabilities

(419)
Deferred revenue

(3,050)
Deferred tax liability

(2,996)
Intangible assets acquired

12,310
Goodwill

28,000
Total purchase consideration

$
38,630

~~Digita Security LLC~~

On July 26, 2019, the Company purchased all of the outstanding membership interests of Digita Security LLC (“Digita”). With this acquisition, Digita’s acquired technology will complement the Company’s existing Apple management, authentication and account management solutions with a security offering to provide a more robust suite of capabilities and service offerings in the Apple enterprise market. The Company accounted for the acquisition by applying the acquisition method of accounting for business combinations in accordance with ASC Topic 805. The acquisition aggregate purchase consideration totaled $14.4 million which included contingent purchase consideration with an estimated fair value of ~~$9.0 million~~the features underlying the ZecOps products as well as the platform supporting ZecOps customers and ~~the remainder provided for with cash. Acquisition-related expenses were expensed as incurred. Goodwill in the amount of $1.7 million is deductible for~~was valued using an excess earnings income ~~tax purposes.~~

~~The maximum contingent consideration is $15.0 million if~~approach. Customer relationships represent the ~~acquired business achieves certain revenue milestones by December 31, 2022. The~~ estimated fair value of ~~these contingent payments was determined~~the underlying relationships with ZecOps customers and were valued using a ~~Monte Carlo simulation model,~~replacement cost method, which ~~uses Level 3 inputs for fair value measurements, including assumptions about probability of growth of subscription services and~~estimates the ~~related pricing of~~cost to recreate the ~~services offered. During~~asset. Non-competes represent the ~~three and six months ended~~

~~Table of Contents~~

~~JAMF HOLDING CORP.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(unaudited)~~

~~June 30, 2020, the~~estimated fair value of ~~the contingent consideration was decreased by $3.7 million, which was included in general~~non-compete agreements acquired from ZecOps and administrative expenses in the consolidated statement of operations. This adjustment reflects updated assumptions about the probability of change in control in light of our initial public offering. At June 30, 2020 and December 31, 2019, the contingent consideration was $5.5 million and $9.2 million, respectively, which was included in other liabilities in the consolidated balance sheet.

In addition, the terms of the purchase agreement provide for additional future payments to the Digita shareholders in the amount of up to $5.0 million if certain key employees continue their employment with the Company through December 31, 2020, which will be recognized aswere valued using a ~~compensation expense in our consolidated statement of operations. The Company paid and recognized as expense $1.6 million and $3.2 million during the three and six months ended June 30, 2020.~~

The fair value of the acquired developed technology was estimated by discounting future net cash flows to their present value at market-based rates of return (income approach). The estimated useful life of the acquired developed technology is estimated to be 5 years. For more details on the Company’s intangible assets, see Note 5, Goodwill and other intangible assets. with-and-without income approach.

Pro forma results of operations for this acquisition were not presented as the effects were not material to our financial results.

Table of Contents

JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

Other

During the first quarter of 2022, the Company completed two acquisitions to expand our products and services offerings. These acquisitions were not significant individually or in the aggregate to our condensed consolidated financial statements. The ~~following table summarizes~~combined purchase price for these acquisitions was $4.0 million, which was paid with cash on hand. The purchase price was allocated to the assets acquired based on their estimated fair values as of the date of each acquisition. The allocation included $0.9 million to developed technology with an estimated useful life of 5.0 years and $0.1 million to other assets, with the remaining $3.0 million allocated to goodwill. The goodwill is not deductible for income tax purposes. Acquisition-related expenses of $0.4 million were expensed as incurred. These expenses were recognized as acquisition costs in general and administrative expenses in the condensed consolidated statement of operations.

Digita

In 2019, the Company recorded contingent consideration in connection with its purchase of the outstanding membership interests of Digita. The maximum contingent consideration was $15.0 million if the acquired business achieved certain revenue milestones by December 31, 2022. The acquired business achieved the minimum revenue milestones, which resulted in the Company making cash payments of $6.2 million, $4.6 million, and $4.2 million in the first quarter of 2023, the first quarter of 2022, and the second quarter of 2021, respectively, to the former owners of the acquired business. See Note 3 for more information on the fair value of ~~consideration transferred and~~ the ~~estimated fair values of the assets acquired and liabilities assumed at the date of acquisition (in thousands):~~

Assets acquired:


Cash

$
512
Other current assets

1
Long‑term assets

12
Liabilities assumed:


Accounts payable and accrued liabilities

(119)
Intangible assets acquired

3,300
Goodwill

10,673
Total purchase consideration

$
14,379

contingent consideration.

Note 5. Goodwill and other intangible assets

The change in the carrying amount of goodwill iswas as follows:

Three Months Ended

Six Months Ended

June 30,

June 30,


2020

2019

2020

2019

(in thousands)
Goodwill, beginning of period

$
539,818

$
529,145

$
539,818

$
501,145
Goodwill acquired

—

—

—

28,000
Goodwill, end of period

$
539,818

$
529,145

$
539,818

$
529,145


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Goodwill, beginning of period	$	862,747	$	841,984	$	856,925	$	845,734
Goodwill acquired	—		—		—		3,014
Measurement period adjustments	—		—		339		—
Foreign currency translation adjustment	5,162		(18,313)		10,645		(25,077)
Goodwill, end of period	$	867,909	$	823,671	$	867,909	$	823,671

Table of Contents

JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~(Continued)~~

~~(unaudited)~~

(continued)

(unaudited)

The gross carrying amount and accumulated amortization of intangible assets other than goodwill ~~are~~were as follows:

Weighted‑

Average

Accumulated

Net Carrying

Remaining

Useful Life

Gross Value

Amortization

Value

Useful Life

(in thousands)

Trademarks

1‑8 years

34,320

9,167

25,153

5.8 years
Customer relationships

2‑12 years

214,320

37,564

176,756

9.7 years
Developed technology

5 years

53,560

20,419

33,141

3.2 years
Non‑competes

2 years

90

41

49

1.1 years
Balance, December 31, 2019

$
302,290

$
67,191

$
235,099


Trademarks

8 years

34,320

11,310

23,010

5.3 years
Customer relationships

2‑12 years

214,320

46,711

167,609

9.2 years
Developed technology

5 years

53,560

25,775

27,785

2.7 years
Non‑competes

2 years

90

64

26

0.6 years
Balance, June 30, 2020

$
302,290

$
83,860

$
218,430


	June 30, 2023
	Useful Life	Gross Value		Accumulated Amortization		Net Carrying Value		Weighted‑ Average Remaining Useful Life
	(in thousands)
Trademarks	3 - 8 years	$	34,665	$	24,420	$	10,245	2.3 years
Customer relationships	2 ‑ 12 years	250,503		108,068		142,435		6.7 years
Developed technology	5 - 6.5 years	119,359		73,716		45,643		4.3 years
Non‑competes	2 - 3 years	2,936		1,696		1,240		2.0 years
Order backlog	2.5 years	3,607		3,042		565		0.5 years
Total intangible assets		$	411,070	$	210,942	$	200,128


	December 31, 2022
	Useful Life	Gross Value		Accumulated Amortization		Net Carrying Value		Weighted‑ Average Remaining Useful Life
	(in thousands)
Trademarks	3 - 8 years	$	34,649	$	22,200	$	12,449	2.8 years
Customer relationships	2 ‑ 12 years	249,659		96,973		152,686		7.2 years
Developed technology	5 - 6.5 years	116,881		66,373		50,508		4.7 years
Non‑competes	2 - 3 years	2,864		1,066		1,798		2.3 years
Order backlog	2.5 years	3,518		2,215		1,303		1.0 year
Total intangible assets		$	407,571	$	188,827	$	218,744

The gross value in the tables above includes a cumulative foreign currency translation adjustment of $(7.5) million and $(11.0) million as of June 30, 2023 and December 31, 2022, respectively. The cumulative foreign currency translation adjustment for accumulated amortization was not material as of June 30, 2023. The accumulated amortization as of December 31, 2022 in the table above includes a cumulative foreign currency translation adjustment of $(1.0) million.

Amortization expense was ~~$8.3~~$10.6 million and ~~$8.1~~$12.3 million for the three months ended June 30, ~~2020~~2023 and ~~2019, respectively. Amortization expense was $16.7~~2022, respectively, and $21.1 million and ~~$16.2~~$24.5 million for the six months ended June 30, ~~2020~~2023 and ~~2019,~~2022, respectively.

Therewere 0no impairments to goodwill or intangible assets ~~recorded for~~during the three and six months ended June 30, ~~2020~~2023 and ~~2019.~~

2022.

Note 6. Leases

Supplemental balance sheet information related to the Company’s operating leases is as follows:


Leases	Balance Sheet Classification	June 30, 2023		December 31, 2022
		(in thousands)
Assets
Operating lease assets	Other assets	$	21,411	$	23,828

Liabilities
Operating lease liabilities - current	Accrued liabilities	$	6,465	$	6,539
Operating lease liabilities - non-current	Other liabilities	18,573		21,895
Total operating lease liabilities		$	25,038	$	28,434

Table of Contents

JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

Maturities of the Company’s operating lease liabilities as of June 30, 2023 were as follows:


	Operating Leases
	(in thousands)
Years ending December 31:
2023 (remaining six months)	$	3,740
2024	6,440
2025	4,794
2026	4,668
2027	2,711
Thereafter	5,342
Total lease payments	27,695
Less: imputed interest	2,657
Total present value of lease liabilities	$	25,038

Note 6.7. Commitments and ~~Contingencies~~

~~Operating Leases~~

The Company leases office facilities and office equipment under operating leases that expire at various dates through February 2030. The office facility leases require annual base rent, plus real estate taxes, utilities, insurance and maintenance costs. Total rent expense, including the Company’s share of the lessors’ operating expenses, was $1.3 million and $1.1 million for the three months ended June 30, 2020 and 2019, respectively, and $2.7 million and $2.0 million for the six months ended June 30, 2020 and 2019, respectively. Certain of these leases are with a related party. Rent expense with related parties, including the Company’s share of the lessors’ operating expenses, was $0.3 million and $0.2 million for the three months ended June 30, 2020 and 2019, respectively, and $0.5 million and $0.4 million for the six months ended June 30, 2020 and 2019, respectively.

contingencies

Hosting Services and Other Support Software Agreements

The Company has various contractual agreements for hosting services and other support software. ~~In March 2020,~~The below table reflects the ~~Company entered into a new contractual agreement with an unrelated party for hosting services.~~ minimum payments under these agreements as of June 30, 2023:


	Unrelated
	(in thousands)
Years ending December 31:
2023 (remaining six months)	$	3,165
2024	39,192
2025	20,609
2026	1,126
2027	1,126
Thereafter	—
	$	65,218

As of June 30, ~~2020, future payments related to~~2023, the Company also has a variable obligation of $17.5 million over the term of a three-year contract for third-party hosting services. The Company entered into this contract ~~are $4.3 million for~~in May 2022. The variable obligation is not reflected in the ~~remainder of 2020, $9.3 million in 2021, $12.0 million in 2022 and $3.2 million in 2023.~~

table above.

Contingencies

From time to time, the Company may be subject to various claims, charges, and litigation. The Company records a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably

~~Table of Contents~~

~~JAMF HOLDING CORP.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(unaudited)~~

estimated. The Company maintains insurance to cover certain actions and believes that resolution of such claims, charges, or litigation will not have a material impact on the Company’s financial position, results of operations, or liquidity. The Company ~~has recorded 0~~had no liabilities for contingencies ~~recorded~~ as of June 30, 2023 or December 31, 2022.

Table of Contents

JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

Note 8. Debt

The following table summarizes the balances and availability of our 2026 Notes and 2020 Revolving Credit Facility:


	Outstanding (1)				Unutilized Amount				Interest Rate				Maturity Date
	June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022		June 30, 2023		December 31, 2022
	(in thousands)
2026 Notes	$	365,750	$	364,505	N/A		N/A		0.125%		0.125%		Sept. 1, 2026
2020 Revolving Credit Facility	1,037		1,037		$	148,963	$	148,963	1.25%	(2)	1.25%	(2)	July 27, 2025

(1) Represents the net carrying amount of our 2026 Notes and outstanding letters of credit under the 2020 Revolving Credit Facility.

(2) Represents the rate on the outstanding letters of credit under the 2020 Revolving Credit Facility. See further discussion on the interest rate applicable to borrowings under the 2020 Revolving Credit Facility below.

Convertible Senior Notes

On September 17, 2021, the Company issued $373.8 millionaggregate principal amount of 0.125% 2026 Notes in a private offering. The initial conversion rate for the 2026 Notes is 20.0024 shares of the Company’s common stock per $1,000 principal amount of 2026 Notes, which is equivalent to an initial conversion price of approximately $49.99 per share of common stock. As of June 30, 2023, the conditions allowing holders of the 2026 Notes to convert were not met.

The following table sets forth the interest expense related to the 2026 Notes for the periods presented:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Contractual interest expense	$	117	$	117	$	234	$	234
Amortization of issuance costs	623		617		1,245		1,234

The effective interest rate on the 2026 Notes was 0.81% for both the three and six months ended June 30, 2023 and 2022. See Note 3 for additional information on the Company’s 2026 Notes.

Credit Agreement

The 2020 Credit Agreement provides for the 2020 Revolving Credit Facility of $150.0 million, which may be increased or decreased under specific circumstances, with a $25.0 million letter of credit sublimit and a $50.0 million alternative currency sublimit. In addition, the 2020 Credit Agreement provides for the ability of the Company to request incremental term loan facilities, in a minimum amount of $5.0 million for each facility. The 2020 Credit Agreement contains customary representations and warranties, affirmative covenants, reporting obligations, negative covenants, and events of default. We were in compliance with such covenants as of both June 30, 2023 and December 31, ~~2019.~~

2022.

Effective April 7, 2023, we entered into the Credit Agreement Amendment, which amends certain provisions of the 2020 Credit Agreement. The Credit Agreement Amendment updated the benchmark interest rate provisions to replace the LIBO Rate with the Adjusted Term SOFR for purposes of calculating interest for U.S. dollar-denominated borrowings under the terms of the 2020 Credit Agreement. Except as amended by the Credit Agreement Amendment, the remaining terms of the 2020 Credit Agreement remain in full force and effect. The interest rates applicable to revolving borrowings under the 2020 Credit Agreement are, at the Company’s option, either (i) a base rate, which is equal to the greater of (a) the Prime Rate, (b) the Federal Funds Effective Rate plus 0.50%, and (c) the Adjusted Term SOFR Rate (subject to a floor) for a one month interest period (each term as defined in the 2020 Credit Agreement) plus 1.00%, (ii) the Adjusted Term SOFR Rate (subject to a floor) equal to the Term SOFR Rate for the applicable interest period plus 0.10%, or (iii) the Adjusted LIBO Rate (subject to a floor) equal to the LIBO Rate for the applicable interest period multiplied by the Statutory Reserve Rate, plus in the case of each of clauses (i), (ii), and (iii), the Applicable Rate (each term as defined in the 2020 Credit Agreement). The Applicable Rate (i) for

Table of Contents

JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

base rate loans range from 0.25% to 1.00% per annum and (ii) for LIBO Rate and Term SOFR Rate loans range from 1.25% to 2.00% per annum, in each case, based on the Senior Secured Net Leverage Ratio (each term as defined in the 2020 Credit Agreement). Base rate borrowings may only be made in dollars. The Company pays a commitment fee during the term of the 2020 Credit Agreement ranging from 0.20% to 0.35% per annum of the average daily undrawn portion of the revolving commitments based on the Senior Secured Net Leverage Ratio.

As of June 30, 2023 and December 31, 2022, debt issuance costs related to the 2020 Credit Agreement of $0.5 million and $0.7 million, respectively, are included in other assets in the condensed consolidated balance sheets.

~~Note 7. Net Loss per Share~~

~~The following table sets forth the computation of basic and diluted net loss per share:~~

Three Months Ended

Six Months Ended

June 30,

June 30,


2020

2019

2020

2019

(in thousands, except share and per share data)
Numerator:







Net loss

$
(423)

$
(7,671)

$
(8,713)

$
(16,681)
Denominator:







Weighted‑average shares used to compute net loss per share, basic and diluted

102,862,404

102,709,405

102,861,475

102,694,756
Basic and diluted net loss per share

$
(0.00)

$
(0.07)

$
(0.08)

$
(0.16)

Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding for the period. Because we have reported a net loss for the three and six months ended June 30, 2020 and 2019, the number of shares used to calculate diluted net loss per common share is the same as the number of shares used to calculate basic net loss per common share because the potentially dilutive shares would have been antidilutive if included in the calculation.

The following potentially dilutive securities outstanding have been excluded from the computation of diluted weighted-average shares outstanding because such securities have an antidilutive impact due to losses reported:

Three Months Ended

Six Months Ended

June 30,

June 30,


2020

2019

2020

2019
Stock options outstanding

7,742,158

6,038,890

7,742,158

6,038,890
Unvested restricted stock units

36,520

25,520

36,520

25,520
Total potentially dilutive securities

7,778,678

6,064,410

7,778,678

6,064,410

~~Note 8. Long-term incentive plan~~

In 2018, the Company established a long-term incentive plan for certain employees. Under the plan, the employees will receive cash payments upon achievement of the same conditions of the Company’s return target options discussed previously. In conjunction with the IPO, the conditions of the long-term incentive plan were modified to also vest following an IPO and registration and sale of shares by Vista whereby Vista still must achieve a cash return on its equity investment in the Company equaling or exceeding $1.515 billion. The Company has established a pool of $7.0 million to provide these cash payments to employees. As of June 30, 2020, the Company had executed individual agreements with employees to pay $7.0 million upon achievement of the plan conditions. As of December 31, 2019, the Company had executed individual agreements with employees to pay $5.9 million upon achievement of the plan conditions. Consistent with the return target options, as of June 30, 2020 and December 31, 2019, 0 expense or liability has been recognized as the conditions for payment have not occurred.

~~Table of Contents~~

~~JAMF HOLDING CORP.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(unaudited)~~

Note 9. Share-based compensation

The ~~2017 Stock Option Plan (“2017 Option Plan”) became effective November 13, 2017, upon the approval~~Company’s equity incentive plans provide for granting various share-based awards to eligible employees, non-employee directors, and consultants of the ~~board of directors and serves~~Company. In addition, the Company offers an employee stock purchase plan to eligible employees.

The Company recognized stock-based compensation expense for all equity arrangements as ~~the umbrella plan for the Company’s stock-based and cash-based incentive compensation program for its officers and other eligible employees.~~ follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Cost of revenue:
Subscription	$	2,715	$	2,061	$	4,982	$	4,016
Services	323		313		632		617
Sales and marketing	9,076		13,811		16,575		19,670
Research and development	6,401		10,631		11,434		14,490
General and administrative	11,668		26,208		16,110		30,241
	$	30,183	$	53,024	$	49,733	$	69,034

Equity Incentive Plans

The ~~aggregate~~maximum number of shares of common stock ~~that may be issued~~available for issuance under the ~~2017 Option~~2020 Plan ~~may not exceed 8,470,000 shares. At~~was 29,183,546 shares as of January 1, 2023. As of June 30, ~~2020, 128,928~~2023, 14,158,509 shares of common stock ~~are~~were reserved for additional grants under the 2020 Plan and 128,928 shares of common stock were reserved for additional grants under the 2017 Option Plan. All stock options previously granted by the Company were at an exercise price at or above the estimated fair market value of the Company’s common stock as of the grant date. ~~NaN options were granted during the six months ended June 30, 2020.~~

Return Target Options

The table below summarizes return target ~~options activity for the six months ended June 30, 2020:~~

Weighted‑

Weighted‑

Average

Aggregate

Average

Remaining

Intrinsic

Exercise

Contractual

Value


Options

Price

Term (Years)

(in thousands)
Outstanding, December 31, 2019

3,687,664

$
6.75

8.8

$
29,908
Granted

—

—

Exercised

—

—

—
Forfeitures

—

—

Outstanding, June 30, 2020

3,687,664

$
6.75

8.3

$
39,644
Options exercisable at June 30, 2020

—

$
—

—

$
—
Vested or expected to vest at June 30, 2020

—

$
—

—

$
—

~~There was approximately $33.0 million of unrecognized compensation expense related to these return target options at June 30, 2020.~~

~~Restricted stock unit (“RSU”) activity for the six months ended June 30, 2020 is as follows:~~

Per Unit

Units

Fair Value
Outstanding, December 31, 2019

36,520

$
12.60
Granted

—

—
Restrictions lapsed

—

—
Forfeited

—

—
Outstanding, June 30, 2020

36,520

$
12.60

RSUs vest 100% on the one-year anniversary of the date of the grant. The estimated compensation cost of each RSU, which is equal to the fair value of the award on the date of grant, is recognized on a straight-line basis over the vesting period. At June 30, 2020, there was $0.2 million of total unrecognized compensation cost related to unvested restricted stock and that cost is expected to be recognized in the year.

~~Table of Contents~~

~~JAMF HOLDING CORP.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(unaudited)~~

~~The table below summarizes the service-based~~ option activity for the six months ended June 30, ~~2020:~~2023:


	Options	Weighted‑ Average Exercise Price		Weighted‑ Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in thousands)
Outstanding, December 31, 2022	3,272,920	$	6.75	5.8	$	47,623
Granted	—	—
Exercised	(347,234)	7.37			4,689
Forfeitures	—	—
Outstanding, June 30, 2023	2,925,686	$	6.68	4.9	$	37,579
Options exercisable at June 30, 2023	2,925,686	$	6.68	4.9	$	37,579
Vested or expected to vest at June 30, 2023	2,925,686	$	6.68	4.9	$	37,579

Table of Contents

Weighted‑

Weighted‑

Average

Aggregate

Average

Remaining

Intrinsic

Exercise

Contractual

Value


Options

Price

Term (Years)

(in thousands)
Outstanding, December 31, 2019

4,073,286

$
5.65

8.1

$
37,520
Granted

—

—

Exercised

(18,792)

5.49

60
Forfeitures

—

—

Outstanding, June 30, 2020

4,054,494

$
5.65

7.6

$
48,044
Options exercisable at June 30, 2020

2,150,893

$
5.50

7.5

$
25,806
Vested or expected to vest at June 30, 2020

4,054,494

$
5.65

7.6

$
48,044

JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

The aggregate intrinsic value in the table above represents the total intrinsic value that would have been received by the optionholders had all optionholders exercised their options on the last ~~date~~day of the period. The return target options outstanding on June 27, 2022 were modified such that these options were deemed fully vested as of June 30, 2022. During the three months ended June 30, 2022, with the filing of a Form S-3 “shelf” registration statement, the market condition and the implied performance obligation were deemed to be satisfied and the Company recognized $33.0 million of stock-based compensation expense. There is no remaining unrecognized compensation expense related to these return target options as of June 30, 2023. The Company issues new shares when return target options are exercised.

Service-Based Options

The table below summarizes the service-based option activity for the six months ended June 30, 2023:


	Options	Weighted‑ Average Exercise Price		Weighted‑ Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in thousands)
Outstanding, December 31, 2022	1,215,822	$	5.70	5.1	$	18,968
Granted	—	—
Exercised	(60,791)	6.68			782
Forfeitures	—	—
Outstanding, June 30, 2023	1,155,031	$	5.65	3.7	$	16,023
Options exercisable at June 30, 2023	1,128,447	$	5.59	3.7	$	15,723
Vested or expected to vest at June 30, 2023	1,155,031	$	5.65	3.7	$	16,023

The aggregate intrinsic value in the table above represents the total intrinsic value that would have been received by the optionholders had all optionholders exercised their options on the last day of the period. Service-based options vest over four years with 25% vesting one year after grant and the remainder vesting ratably on a quarterly basis thereafter. The Company issues new shares when service-based options are exercised. All service-based options outstanding under the Company’s option plans have exercise prices equal to the fair value of the Company’s stock on the grant date. All awards expire after 10 years.

The total fair value of service-based options vested during the six months ended June 30, ~~2020~~2023 was ~~$0.6~~$0.2 million.

~~The Company recognized stock-based compensation expense for service-based stock options as follows:~~

Three Months Ended

Six Months Ended

June 30,

June 30,


2020

2019

2020

2019

(in thousands)
Cost of revenues:







Subscription

$
38

$
55

$
76

$
118
Services

—

—

—

—
Sales and marketing

111

143

222

236
Research and development

141

95

298

185
General and administrative

474

356

979

679

$
764

$
649

$
1,575

$
1,218

There was ~~$4.6~~$0.1 million of unrecognized compensation expense related to service-based ~~stock~~ options that is expected to be recognized over a weighted-average period of ~~2.1~~0.4 years atas of June 30, ~~2020.~~

~~Note 10. Income taxes~~

The Company’s effective tax rates for the three months ended June 30, 2020 and 2019 were 6.2% and 23.8%, respectively. The effective tax rate for the three months ended June 30, 2020 was impacted by $108 thousand of discrete income tax expense primarily due to the finalization of the net operating loss carryback changes related to the Coronavirus Aid, Relief, and Economic Security Act ("CARES Act"). The Company’s effective tax rates2023.

Restricted Stock Units

RSU activity for the six months ended June 30, 2023 was as follows:


	Units	Weighted-Average Grant Date Fair Value (per share)
Outstanding, December 31, 2022	8,417,357	$	29.61
Granted	4,697,169	19.98
Vested	(1,107,382)	30.93
Forfeited	(515,141)	28.56
Outstanding, June 30, 2023	11,492,003	$	25.63

RSUs under the 2020 ~~and 2019 were 27.2% and 23.7%, respectively.~~Plan generally vest ratably on an annual basis over four years. There was $249.1 million of unrecognized compensation expense related to unvested RSUs that is expected to be recognized over a weighted-average period of 2.8 years as of June 30, 2023. The ~~effective tax rate for~~total fair value of RSUs vested during the six months ended June 30, ~~2020~~2023 was ~~higher than~~$34.3 million.

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JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

In connection with the ~~prior year period due to~~CEO’s Transition and Retirement Agreement, dated May 2, 2023, and his retirement effective September 1, 2023, during the ~~impact~~three months ended June 30, 2023, the Company recognized $5.7 million of ~~the net operating loss carryback and interest limitation changes~~incremental stock-based compensation expense related to the ~~CARES Act,~~modification of vested stock options and ~~a change~~acceleration of expense of unvested RSUs through the retirement date.

Employee Stock Purchase Plan

As of both June 30, 2023 and December 31, 2022, the Company withheld, at the employees’ request, $1.1 million of eligible employee compensation, which is included in ~~valuation allowance on foreign deferred tax assets related to a merger~~accrued liabilities in the condensed consolidated balance sheets, for purchases of ~~subsidiaries. The effective tax rate~~common stock under the 2021 ESPP.

As of June 30, 2023, 4,925,810 shares of common stock were reserved for future issuance under the 2021 ESPP. During the six months ended June 30, ~~2020 was impacted by $210 thousand~~2023, 204,962 shares of ~~discrete income tax benefit primarily due~~common stock were issued under the 2021 ESPP at a weighted-average purchase price of $15.76 per share. Total proceeds to the ~~impact of~~Company were $3.1 million during the ~~net operating loss carryback and interest limitation changes related to the CARES Act.~~

On March 27, 2020, the CARES Act was signed into law. The CARES Act provides numerous tax provisions and other stimulus measures, including temporary changes regarding the prior and future utilization of net operating

~~Table of Contents~~

~~JAMF HOLDING CORP.~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)~~

~~(unaudited)~~

losses, temporary changes to the prior and future limitations on interest deductions, temporary suspension of certain payment requirements for the employer portion of social security taxes, the creation of certain refundable employee retention credits, and technical corrections from prior tax legislation for tax depreciation of certain qualified improvement property. The Company anticipates it will benefit from the prior and future utilization of net operating losses and interest deductions. Beginning with pay dates on and after April 17, 2020, the Company has elected to defer the employer-paid portion of social security taxes.

~~Note 11. Related-party transactions~~

~~The Company made pledges to the JAMF Nation Global Foundation (“JNGF”) of $0.1 million for both the three and~~ six months ended June 30, ~~2019.~~2023.

The average grant date fair value for the offering period under the 2021 ESPP that commenced on May 1, 2023 was $5.22 per share. The Company ~~did not make any pledges~~used the following assumptions in the Black-Scholes option pricing model to ~~JNGF~~estimate the fair value:


			Three and Six Months Ended June 30, 2023
Expected term			0.5 years
Expected volatility			51.25%
Risk-free interest rate			5.14%
Expected dividend yield			—%

There was $0.8 million of unrecognized compensation expense related to the 2021 ESPP that is expected to be recognized over a period of four months as of June 30, 2023.

Note 10. Net loss per share

The following table sets forth the computation of basic and diluted net loss per share:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands, except share and per share amounts)
Numerator:
Net loss	$	(36,199)	$	(63,139)	$	(60,399)	$	(88,768)
Denominator:
Weighted-average shares used to compute net loss per share, basic and diluted	124,382,767		119,941,482		123,905,072		119,768,871
Basic and diluted net loss per share	$	(0.29)	$	(0.53)	$	(0.49)	$	(0.74)

Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding for the period. Because we have reported a net loss for the three and six months ended June 30, ~~2020. As~~2023 and 2022, the number of ~~June 30, 2020 and December 31, 2019,~~shares used to calculate diluted net loss per common share is the ~~Company’s accrued liabilities related~~same as the number of shares used to ~~JNGF pledges were $0.6 million and $1.0 million, respectively, which are~~calculate basic net loss per common share given that the potentially dilutive shares would have been antidilutive if included in ~~accrued expenses on the consolidated balance sheet.~~

~~The Company has an ongoing lease agreement for office space in Eau Claire, Wisconsin, with an entity in which a related party is a minority owner. See Note 6 for further discussion of~~ this ~~lease agreement.~~

Vista is a U.S.-based investment firm that controls the funds which own a majority of the Company. The Company has paid for consulting services and other expenses related to services provided by Vista and Vista affiliates. The total expenses incurred by the Company for these services with Vista were $0.1 million and $0.3 million for the three months ended June 30, 2020 and 2019, respectively, and $0.3 million and $0.6 million for the six months ended June 30, 2020 and 2019, respectively. The Company had less than $0.1 million in accounts payable related to these expenses at June 30, 2020. The Company had no ~~amounts in accounts payable related to these expenses at December 31, 2019.~~

The Company also has revenue arrangements with Vista affiliates. The Company recognized revenue related to these arrangements of $0.3 million and $0.2 million for the three months ended June 30, 2020 and 2019, respectively, and $0.6 million and $0.4 million for the six months ended June 30, 2020 and 2019, respectively. The Company had $0.2 million in accounts receivable related to these agreements at June 30, 2020. The Company had no ~~amounts in accounts receivable related to these agreements at December 31, 2019.~~

In addition, the Company pays for services with Vista affiliates in the normal course of business. The total expenses incurred by the Company for services with Vista affiliates were $0.1 million for both the three months ended June 30, 2020 and 2019 and $0.3 million for both the six months ended June 30, 2020 and 2019. The Company had less than $0.1 million in accounts payable related to these expenses at June 30, 2020. The Company had no ~~amounts in accounts payable related to these expenses at December 31, 2019.~~

Prior to its termination and repayment in full on July 27, 2020, the Company had the Term Loan Facility and, pursuant to the Company’s Prior Credit Agreement, a $15 million revolving credit facility with a maturity date of November 13, 2022 (the “Prior Revolving Credit Facility”) with a consortium of lenders for a principal amount of $205.0 million and principal committed amount of $15.0 million, respectively. At both June 30, 2020 and December 31, 2019, affiliates of Vista held $34.9 million of the Term Loan Facility and there were no amounts drawn on the Prior Revolving Credit Facility. During the three months ended June 30, 2020 and 2019, affiliates of Vista were paid $0.8 million and $1.0 million, respectively, in interest on the portion of the Term Loan Facility held by them. During the six months ended June 30, 2020 and 2019, affiliates of Vista were paid $1.6 million and $2.0 million, respectively, in interest on the portion of the Term Loan Facility held by them.

calculation.

Table of Contents

JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS ~~(Continued)~~

~~(unaudited)~~

(continued)

(unaudited)


	As of June 30,
	2023	2022
Stock options outstanding	4,080,717	5,060,157
Unvested restricted stock units	11,492,003	9,100,043
Shares related to the 2026 Notes	7,475,897	7,475,897
Shares committed under the 2021 ESPP	223,947	188,533
Total potentially dilutive securities	23,272,564	21,824,630

Note 11. Income taxes

The Company calculated the year-to-date income tax provision by applying the estimated annual effective tax rate to the year-to-date pre-tax income for each applicable jurisdiction and adjusted for discrete tax items in the period. The following table presents benefit (provision) for income taxes:


	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
	(in thousands, except percentages)
Loss before income tax (provision) benefit	$	(35,093)		$	(63,159)		$	(58,696)		$	(88,536)
Income tax (provision) benefit	(1,106)			20			(1,703)			(232)
Effective tax rate	(3.2)		%	—		%	(2.9)		%	(0.3)		%

For the periods presented, the difference between the statutory rate and the Company’s effective tax rate was primarily due to the valuation allowances on its U.S. and UK tax assets. The effective tax rate is also impacted by state taxes and earnings realized in foreign jurisdictions.

The Tax Cuts and Jobs Act enacted on December 22, 2017 amended Internal Revenue Code Section 174 to require that specific R&E expenditures be capitalized and amortized over five years (U.S. R&E) or fifteen years (non-U.S. R&E) beginning in 2022. Although Congress has considered legislation that would defer, modify, or repeal the capitalization and amortization requirement, there is no assurance that the provision will be deferred, repealed, or otherwise modified. If the requirement is not modified, the Company may be required to utilize some of its federal and state tax attributes.

Note 12. ~~Subsequent events~~

~~On July 10, 2020,~~Related party transactions

As of June 30, 2023 and December 31, 2022, the Company ~~effected a 110-for-1 stock split of its common stock. The par value of the common stock was not adjusted as a result of the stock split. Accordingly, all share~~accrued $1.4 million and ~~per share amounts for all periods presented~~$1.3 million, respectively, related to JNGF pledges, which are included in accrued liabilities in the ~~accompanying~~condensed consolidated ~~financial statements and notes thereto have been adjusted retrospectively, where applicable, to reflect this stock split.~~

~~On July 21, 2020,~~balance sheets. The Company may engage in transactions in the ordinary course of business with significant shareholders or other companies whose directors or officers may also serve as directors or officers for the Company. The Company ~~adopted~~carries out these transactions on customary terms.

Vista is a U.S.-based investment firm that controls the Jamf Holding Corp. Omnibus Incentive Plan (the “2020 Plan”). The 2020 Plan provides for grants of (i) stock options, (ii) stock appreciation rights, (iii) restricted shares, (iv) performance awards, (v) other share-based awards and (vi) other cash-based awards to eligible employees, non-employee directors and consultantsfunds which previously owned a majority of the Company. ~~The maximum number~~In 2021, Vista sold a portion of ~~shares of common stock available for issuance under the 2020 Plan is 14,800,000 shares~~.

~~On July 24, 2020,~~its investment in the Company ~~closed~~such that its ~~IPO through which it issued and sold 13,500,000 shares of common stock at~~funds no longer owned a price per share of $26.00. The Company received aggregate proceeds of approximately $319.0 million from the IPO, after deducting the underwriting discount and offering expenses payable by us. Upon completion of the IPO, authorized capital stock consists of 500,000,000 shares of common stock, par value $0.001 per share, and 50,000,000 shares of undesignated preferred stock, par value $0.001 per share. Immediately after our IPO, funds controlled by our equity sponsor Vista own approximately 72.9% of our outstanding common stock. As a result, we are a "controlled company" under NASDAQ corporate governance rules. Upon closing of the IPO, the Company repaid $205.0 million of the principal amount of the Term Loan Facility and paid $3.4 million of accrued interest and $2.0 million of prepayment penalty. The Company also wrote off $3.2 million of remaining debt issuance costs upon repayment of the debt. The Company recorded a loss on debt extinguishment of $5.2 million for the prepayment penalty and write off of debt issuance costs in the third quarter of 2020.

~~In addition, in conjunction with the closing of the IPO, our Board granted awards under the 2020 Plan to certain of our employees, representing an aggregate of 1,256,538 shares of common stock.~~

On July 27, 2020, the Company entered into a new secured credit agreement (the “New Credit Agreement”) for an initial revolving credit facility of $150 million (the “New Revolving Credit Facility”), which may be increased or decreased under specific circumstances, with a $25 million letter of credit sublimit and a $50 million alternative currency sublimit. In addition, the New Credit Agreement provides for the abilitymajority of the Company as of June 30, 2023. However, Vista is deemed a related party in accordance with ASC 850 as it continues to ~~request incremental term loan facilities, in~~be a minimum amount of $5 million for each facility. Borrowings under the New Credit Agreement mature on July 27, 2025. The New Credit Agreement contains customary representations and warranties, affirmative covenants, reporting obligations, negative covenants and events of default. In the third quarter of 2020, the Company recorded debt issuance costs of $1.2 million related to the New Credit Agreement. There have been no borrowings against the New Credit Agreement.

~~Table of Contents~~

~~Forward-Looking Statements~~

This Quarterly Report on Form 10-Q contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q are forward-looking statements. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as "anticipate", "estimate", "expect", "project", "plan", "intend", "believe", "may", "will", "should", "can have", "likely" and other words and terms of similar meaning in connection with any discussionprincipal owner of the ~~timing~~Company. There were no material transactions with Vista or ~~nature of future operating or financial performance or other events. For example, all statements we make relating to our estimated~~its affiliates during the three and ~~projected costs, expenditures, cash flows, growth rates~~six months ended June 30, 2023 and financial results or our plans and objectives for future operations, growth initiatives, or strategies are forward-looking statements. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected, including:

●

~~the impact on our operations and financial condition from the effects of the current COVID-19 pandemic;~~

●

~~the potential impact of customer dissatisfaction with Apple or other negative events affecting Apple services and devices, and failure of enterprises to adopt Apple products;~~

●

~~the potentially adverse impact of changes in features and functionality by Apple on our engineering focus or product development efforts;~~

●

~~changes in our continued relationship with Apple;~~

●

~~the fact that we are not party to any exclusive agreements or arrangements with Apple;~~

●

~~our reliance, in part, on channel partners for the sale and distribution of our products;~~

●

~~risks associated with cyber-security events;~~

●

~~the impact of reputational harm if users perceive our products as the cause of device failure;~~

●

~~our ability to successfully develop new products or materially enhance current products through our research and development efforts;~~

●

~~our ability to continue to attract new customers;~~

●

~~our ability to retain our current customers;~~

●

~~our ability to sell additional functionality to our current customers;~~

●

~~our ability to meet service-level commitments under our subscription agreements;~~

●

~~our ability to correctly estimate market opportunity and forecast market growth;~~

●

~~risks associated with failing to continue our recent growth rates;~~

●

~~our dependence on one of our products for a substantial portion of our revenue;~~

●

~~our ability to scale our business and manage our expenses;~~

2022.

~~Table of Contents~~

●

~~our ability to change our pricing models, if necessary to compete successfully;~~

●

the impact of delays or outages of our cloud services from any disruptions, capacity limitations or interferences of third-party data centers that host our cloud services, including Amazon Web Services, or AWS;

●

~~our ability to maintain, enhance and protect our brand;~~

●

~~our ability to maintain our corporate culture;~~

●

~~the ability of Jamf Nation to thrive and grow as we expand our business;~~

●

~~the potential impact of inaccurate, incomplete or misleading content that is posted on Jamf Nation;~~

●

~~our ability to offer high-quality support;~~

●

risks and uncertainties associated with potential acquisitions and divestitures, including, but not limited to, disruptions to ongoing operations; diversions of management from day-to-day responsibilities; adverse impacts on our financial condition; failure of an acquired business to further our strategy; uncertainty of synergies; personnel issues; resulting lawsuits and issues unidentified in diligence processes;

●

~~our ability to predict and respond to rapidly evolving technological trends and our customers' changing needs;~~

●

~~our ability to compete with existing and new companies;~~

●

~~the impact of adverse general and industry-specific economic and market conditions;~~

●

~~the impact of reductions in IT spending;~~

●

~~the impact of real or perceived errors, failures or bugs in our products;~~

●

~~the impact of interruptions or performance problems associated with our technology or infrastructure;~~

●

~~our ability to attract and retain highly qualified personnel;~~

●

~~risks associated with competitive challenges faced by our customers;~~

●

~~the impact of statutory and regulatory determinations on our offerings to governmental entities;~~

●

~~risks associated with stringent and changing privacy laws, regulations and standards, and information security policies and contractual obligations related to data privacy and security;~~

●

~~the impact of any catastrophic events;~~

●

~~risks associated with our financial results or difficulty in predicting our financial results due to our revenue recognition; and~~

●

~~other factors disclosed in the section entitled "Risk Factors" and elsewhere in our IPO prospectus and this Quarterly Report on Form 10-Q.~~

~~Table of Contents~~

results. Important factors that could cause actual results to differ materially from our expectations, or cautionary statements, are disclosed under "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations" in this prospectus. All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements as well as other cautionary statements that are made from time to time in our other SEC filings and public communications. You should evaluate all forward-looking statements made in this prospectus in the context of these risks and uncertainties.

We caution you that the important factors referenced above may not contain all of the factors that are important to you. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way we expect. The forward-looking statements included in this Quarterly Report on Form 10-Q are made only as of the date hereof. We undertake no obligation to update or revise any forward-looking statement as a result of new information, future events or otherwise, except as otherwise required by law.

~~Table of Contents~~

Note 13. Subsequent events

On July 13, 2023, the Company announced its acquisition of dataJAR, a UK-based leading MSP focused on providing powerful Apple and Jamf services for businesses and educational organizations. dataJAR’s proprietary software provides a single pane of glass for Jamf MSP partners who assist in managing multiple organizations’ deployments, reducing support

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JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

tickets, and allowing partners to more seamlessly manage devices. We believe this acquisition will help Jamf partner more closely with its MSP partners and expand the reach of its leading Apple-first and Apple-best management and security platform.

Under the terms of the dataJAR Purchase Agreement, the Company acquired 100% of the equity interest in dataJAR for total purchase consideration of £18.9 million (or approximately $24.6 million using the exchange rate on July 13, 2023), which included (i) £16.2 million (or approximately $21.1 million using the exchange rate on July 13, 2023) paid upon closing, (ii) £0.2 million (or approximately $0.3 million using the exchange rate on July 13, 2023) in cash as partial security for post-closing true-up adjustments, and (iii) £2.5 million (or approximately $3.2 million using the exchange rate on July 13, 2023) in cash as partial security for post-closing indemnification claims to be released 12 months from the closing date. In addition, the terms of the dataJAR Purchase Agreement provide for additional future payments to the sellers in the amount of £6.5 million (or approximately $8.4 million using the exchange rate on July 13, 2023) if certain key employees continue their employment with the Company through July 13, 2024. The cash consideration paid upon closing was funded by the Company’s cash on hand.

The initial accounting for the business combination is incomplete at the time of this filing due to the limited amount of time between the acquisition date and the date these financial statements are issued.

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Forward-Looking Statements

This Quarterly Report on Form 10-Q contains forward-looking statements that are subject to risks and uncertainties. All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q are forward-looking statements. Forward-looking statements give our current expectations and projections relating to our financial condition, results of operations, plans, objectives, future performance, and business. You can identify forward-looking statements by the fact that they do not relate strictly to historical or current facts. These statements may include words such as “anticipate,” “estimate,” “expect,” “project,” “plan,” “intend,” “believe,” “may,” “will,” “should,” “can have,” “likely,” and other words and terms of similar meaning in connection with any discussion of the timing or nature of future operating or financial performance or other events. For example, all statements we make relating to our estimated and projected costs, expenditures, cash flows, growth rates, and financial results or our plans and objectives for future operations, growth initiatives, or strategies are forward-looking statements. All forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those that we expected, including:

•the impact of adverse general and industry-specific economic and market conditions and reductions in IT spending;

•the potential impact of customer dissatisfaction with Apple or other negative events affecting Apple services and devices, and failure of enterprises to adopt Apple products;

•the potentially adverse impact of changes in features and functionality by Apple and other third parties on our engineering focus or product development efforts;

•changes in our continued relationship with Apple;

•the fact that we are not party to any exclusive agreements or arrangements with Apple;

•our reliance, in part, on channel partners for the sale and distribution of our products;

•our ability to successfully develop new products or materially enhance current products through our research and development efforts;

•our ability to continue to attract new customers and maintain and expand our relationships with our current customers;

•our ability to correctly estimate market opportunity and forecast market growth;

•our ability to effectively manage our future growth;

•our dependence on one of our products for a substantial portion of our revenue;

•our ability to change our pricing models, if necessary, to compete successfully;

•the impact of delays or outages of our cloud services from any disruptions, capacity limitations, or interferences of third-party data centers that host our cloud services, including AWS;

•our ability to meet service-level commitments under our subscription agreements;

•our ability to maintain, enhance, and protect our brand;

•our ability to maintain our corporate culture;

•the ability of Jamf Nation to thrive and grow as we expand our business;

•the potential impact of inaccurate, incomplete, or misleading content that is posted on Jamf Nation;

•our ability to offer high-quality support;

•risks and uncertainties associated with acquisitions, divestitures, and strategic investments, including our recent acquisition of dataJAR;

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•our ability to predict and respond to rapidly evolving technological trends and our customers’ changing needs;

•our ability to compete with existing and new companies;

•our ability to attract and retain highly qualified personnel;

•risks associated with competitive challenges faced by our customers;

•the impact of our often long and unpredictable sales cycle;

•our ability to effectively expand and develop our sales and marketing capabilities;

•the risks associated with free trials and other inbound, lead-generation sales strategies;

•the risks associated with indemnity provisions in our contracts;

•risks associated with cybersecurity events;

•the impact of real or perceived errors, failures, or bugs in our products;

•the impact of general disruptions to data transmission;

•risks associated with stringent and changing privacy laws, regulations, and standards, and information security policies and contractual obligations related to data privacy and security;

•the risks associated with intellectual property infringement, misappropriation, or other claims;

•our reliance on third-party software and intellectual property licenses;

•our ability to obtain, protect, enforce, and maintain our intellectual property and proprietary rights;

•the risks associated with our use of open source software in our products;

•risks related to our indebtedness, including our ability to raise the funds necessary to settle conversions of our convertible senior notes, repurchase our convertible senior notes upon a fundamental change, or repay our convertible senior notes in cash at their maturity; and

•other factors disclosed in the section entitled “Risk Factors” and elsewhere in our Annual Report on Form 10-K for the year ended December 31, 2022, as supplemented by our subsequent Quarterly Reports on Form 10-Q.

We derive many of our forward-looking statements from our operating budgets and forecasts, which are based on many detailed assumptions. While we believe that our assumptions are reasonable, we caution that it is very difficult to predict the impact of known factors, and it is impossible for us to anticipate all factors that could affect our actual results. Important factors that could cause actual results to differ materially from our expectations, or cautionary statements, are disclosed under “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K and “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” of our subsequent Quarterly Reports on Form 10-Q. All written and oral forward-looking statements attributable to us, or persons acting on our behalf, are expressly qualified in their entirety by these cautionary statements as well as other cautionary statements that are made from time to time in our other SEC filings and public communications. You should evaluate all forward-looking statements in the context of these risks and uncertainties.

We caution you that the important factors referenced above may not contain all of the factors that are important to you. In addition, we cannot assure you that we will realize the results or developments we expect or anticipate or, even if substantially realized, that they will result in the consequences or affect us or our operations in the way we expect. The forward-looking statements included in this Quarterly Report on Form 10-Q are made only as of the date hereof. We undertake no obligation to update or revise any forward-looking statement as a result of new information, future events, or otherwise, except as otherwise required by law.

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Item 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis summarizes the significant factors affecting the consolidated operating results, financial condition, liquidity, and cash flows of our company as of and for the periods presented below. The following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q and our consolidated financial statements and the related notes in our Annual Report on Form 10-K for the ~~IPO Prospectus.~~year ended December 31, 2022. The discussion contains forward-looking statements that are based on the beliefs of management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed below, elsewhere in this Quarterly Report on Form 10-Q, in our Annual Report on Form 10-K for the year ended December 31, 2022, and in ~~the IPO Prospectus,~~our subsequent Quarterly Reports on Form 10-Q, particularly in the sections entitled “Risk Factors” and “Forward-Looking ~~Statements”.~~

Statements.”

Overview

We are the standard in managing and securing Apple ~~Enterprise Management,~~at work, and ~~our cloud software platform is~~we are the only ~~vertically-focused Apple infrastructure~~company in the world that provides a complete management and security ~~platform~~solution for an Apple-first environment that is designed to be enterprise secure, consumer simple, and protective of ~~scale in the world.~~personal privacy. We help ~~organizations, including businesses, hospitals, schools~~IT and ~~government agencies, connect, manage~~security teams confidently protect the devices, data, and ~~protect Apple products, apps and corporate resources in the cloud without ever having to touch the devices.~~applications used by their workforce, while providing employees with consumer-simple, privacy-protecting technology. With Jamf’s software, ~~Apple~~ devices can be deployed to employees brand new in the shrink-wrapped box, set up automatically and personalized at first power-on and administered continuously throughout the ~~life~~lifecycle of the device.

Jamf was founded in 2002, around the same time that Apple was leading an industry transformation. Apple transformed the way people access and utilize technology through its focus on creating a superior consumer experience. With the release of revolutionary products like the Mac, iPod, iPhone, and iPad, Apple built the world’s most valuable brand and became ubiquitous in everyday life.

We have built our company through a ~~singular~~primary focus on being the ~~primary~~leading solution for Apple in the ~~enterprise.~~enterprise because we believe that due to Apple’s broad range of devices, combined with the changing demographics of today’s workforce and their strong preference for Apple, that Apple will become the number one device ecosystem in the enterprise by the end of this decade. We believe that the enterprise management provider that is best at Apple will one day be the enterprise leader, and that Jamf is best positioned for that leadership. Through our long-standing relationship with Apple, we have accumulated significant Apple technical experience and expertise that give us the ability to fully and quickly leverage and extend the capabilities of Apple products, ~~OSs~~operating systems, and services. This expertise enables us to fully support new innovations and OSoperating system releases the moment they are made available by Apple. This focus has allowed us to create a best-in-class user experience ~~for Apple~~ in the enterprise.

We sell our SaaS solutions via a subscription model, through a direct sales force, online, and indirectly via our channel partners, including Apple. Our multi-dimensional go-to-market model and cloud-deployed offering enable us to reach all organizations around the world, large and small, with our software solutions. As a result, we continue to see rapid growth and expansion of our customer base as Apple continues to gain momentum in the enterprise.

~~Response to COVID-19~~

With social distancing measures having been implemented to curtail the spread of COVID-19, we enacted a robust business continuity plan, including a global work-from-home policy for all of our employees. We believe our internal cloud-first technology platforms have allowed for a seamless transition to a remote working environment without any material impacts to our business, highlighting the resilience of our business model. Our product portfolio and platform has enabled our commercial customers to continue with their efforts to work remotely, our K-12 and higher-education customers to deliver distance learning and our health-care customers to provide quality care via a telehealth model, a solution that was conceptualized and released ~~during~~ the current pandemic. We believe that a business like ours is well-suited to navigate the current environment in which customers are focused on effectively conducting business remotely, while the underlying demand for our core products remains relatively unchanged.

The extent to which the COVID-19 pandemic affects our business will depend on future developments in the United States and around the world, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the coronavirus and the actions required to contain and treat it, among others. Although the ultimate impact of the COVID-19 pandemic on our business and financial results remains

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uncertain, a continued and prolonged public health crisis such as the COVID-19 pandemic could have a material negative impact on our business, operating results and financial condition. See "Risk Factors — Risks Relating to Our Business — The COVID-19 pandemic could materially adversely affect our business, operating results, financial condition and prospects" in our IPO Prospectus for additional information.

Key Factors Affecting Our Performance

~~Our historical financial performance has been, and we expect our financial performance in the future to be, driven by our ability to:~~

~~Attract new customers.~~New customer growth. Our ability to attract new customers is dependent upon a number of factors, including the effectiveness of our pricing and solutions, the features and pricing of our ~~competitors'~~competitors’ offerings, the effectiveness of our marketing efforts, the effectiveness of our channel partners in selling, marketing, and deploying our software solutions, and the growth of the market for ~~Apple~~ devices and services for SMBs and enterprises. Sustaining our growth requires continued adoption of our platform by new customers. We intend to continue to invest in building brand awareness as we further penetrate our addressable markets. We intend to expand our customer base by continuing to make significant and targeted investments in our direct sales and marketing to attract new customers and to drive broader awareness of our software solutions.

~~Expand within our~~Existing customer ~~base.~~retention and expansion. Our ability to increase revenue ~~within~~depends in large part on our ability to retain our existing customers and increase revenue from our existing customer ~~base~~base. Customer retention and expansion is dependent upon a number of factors, including their satisfaction with our software solutions and support, the features and pricing of our competitors’ offerings, and our ability to effectively enhance our platform by developing new products and features and addressing additional use cases. Often our customers will begin with a small deployment and then later expand

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their usage more broadly within the enterprise as they realize the benefits of our platform. We believe that our ~~"land~~“land and ~~expand"~~expand” business model allows us to efficiently increase revenue from our existing customer base. We intend to continue to invest in enhancing awareness of our software solutions, creating additional use cases, and developing more products, features, and functionality, which we believe are important factors to expand usage of our software solutions by our existing customer base. We believe our ability to retain and expand usage of our software solutions by our existing customer base is evidenced by our dollar-based net retention rate.

~~Sustain product~~Product innovation and technology leadership. Our success is dependent on our ability to sustain product innovation and technology leadership in order to maintain our competitive advantage. We believe that we have built a highly differentiated platform, and we intend to further extend the adoption of our platform through additional innovation. While sales of subscriptions to our Jamf Pro product account for most of our revenue, we intend to continue to invest in building additional products, features, and functionality that expand our capabilities and facilitate the extension of our platform to new use cases. Our future success is dependent on our ability to successfully develop, market, and sell additional products to both new and existing customers. For example, we announced our BYOD solution in ~~2018, we introduced~~March 2022 to help organizations manage and secure personally owned devices that employees bring to work, while upholding employee personal privacy. We also announced Jamf ~~Connect to provide users with a seamless connection to corporate resources using a single identity and~~Executive Threat Protection in ~~2019 we introduced Jamf Protect to extend Apple's security and privacy model to enterprise teams by creating unprecedented visibility into MacOS fleets through customized remote monitoring and threat~~April 2023, as an advanced detection and ~~prevention.~~

response tool designed for mobile devices that provides organizations with an efficient, remote method to monitor devices and respond to advanced attacks.

~~Continue investment~~Investment in growth. Our ability to effectively invest for growth is dependent upon a number of factors, including our ability to offset anticipated increases in operating expenses with revenue growth, our ability to spend our research and development budget efficiently or effectively on compelling innovation and technologies, our ability to accurately predict costs, and our ability to maintain our corporate culture as our headcount expands. We plan to continue investing in our business so we can capitalize on our market opportunity. We intend to grow our sales team to target expansion within our midmarket and enterprise customers and to attract new customers. We expect to continue to make focused investments in marketing to drive brand awareness and enhance the effectiveness of our customer acquisition model. We also intend to continue to ~~add headcount to~~invest in our research and development team to develop new and improved products, features, and functionality. Although these investments may increase our operating expenses and, as a result, adversely affect our operating results in the near term, we believe they will contribute to our long-term growth.

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~~Continue international~~International expansion. Our international growth in any region will depend on our ability to effectively implement our business processes and go-to-market strategy, our ability to adapt to market or cultural differences, the general competitive landscape, our ability to invest in our sales and marketing channels, the maturity and growth trajectory of ~~Apple~~ devices and services by region, and our brand awareness and perception. We plan to continue making investments in our international sales and marketing channels to take advantage of this market opportunity while refining our go-to-market approach based on local market dynamics. While we believe global demand for our platform will increase as international market awareness of Jamf grows, our ability to conduct our operations internationally will require considerable management attention and resources and is subject to the particular challenges of supporting a growing business in an environment of multiple languages, cultures, customs, legal and regulatory systems (including with respect to data transfer and privacy), alternative dispute systems, commercial markets, and ~~commercial markets.~~geopolitical challenges. In addition, global demand for our platform and the growth of our international operations is dependent upon the rate of market adoption of Apple products in international markets.

~~Enhance our offerings via our partner network.~~Partner network development. Our success is dependent not only on our independent efforts to innovate, scale, and reach more customers directly but also on the success of our partners to continue to gain share in the enterprise. With a focus on the user and being the bridge between critical technologies — with Apple, Microsoft, AWS, Google, and ~~Microsoft~~Okta as ~~two~~ examples — we feel we can help other market participants deliver more to enterprise users with the power of Jamf. We will continue to invest in the relationships with our existing, critical partners, nurture and develop new relationships and do so globally. We will continue to invest in developing ~~"plus one"~~“plus one” solutions and workflows that help tie our software solutions together with those delivered by others.

General and industry-specific economic and market conditions and reductions in IT spending.Our revenue, results of operations, and cash flows depend on the overall demand for our products. Currently, the U.S. and other key international economies are impacted by record levels of inflation, elevated interest rates, supply chain challenges, financial instability and concerns about banking liquidity, volatility in credit, equity, and foreign exchange markets, and overall uncertainty with respect to the economy, including the possibility of a recession. These factors could result in reductions in IT spending by our existing and prospective customers or in requests to renegotiate existing contracts, defaults on payments due on existing contracts, or non-renewals. As result of macroeconomic uncertainty, some of our customers have taken a more moderate outlook when planning their future hiring and device growth needs. We expect these conditions to continue throughout 2023.

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Key Business Metrics

In addition to our GAAP financial information, we review several operating and financial metrics, including the following key metrics, to evaluate our business, measure our performance, identify trends affecting our business, formulate business plans, and make strategic decisions.

Number of Devices

We believe our ability to grow the number of devices on our software platform provides a key indicator of the growth of our business and our future business opportunities. We define a device at the end of any particular period as a device owned by a customer, ~~owning~~which device has at least one Jamf product pursuant to an active subscription or support and maintenance agreement or that has a reasonable probability of renewal. We define a customer at the end of any particular period as an entity with at least one active subscription or support and maintenance agreement as of the measurement date or that has a reasonable probability of renewal. A single organization with separate subsidiaries, segments, or divisions that use our platform may represent multiple customers as we treat each entity, subsidiary, segment, or division that is invoiced separately as a single customer. In cases where customers subscribe to our platform through our channel partners, each end customer is counted separately. A single customer may have multiple Jamf products on a single device, but we still would only count that as one device.

The number of devices on our software platform was ~~17.2~~31.3 million and ~~14.5~~28.4 million as of June 30, ~~2020~~2023 and ~~2019,~~2022, respectively, representing a ~~19%~~10% year-over-year growth rate. ~~In the second quarter of 2020, we saw particular strength~~The increase in ~~the growth rate~~number of devices ~~in the healthcare~~reflects our growth across industries, products, and ~~education verticals, as COVID-19 has accelerated the demand for organizations to connect remotely, manage, and protect their Apple devices.~~

geographies.

Annual Recurring Revenue

ARR represents the annualized value of all subscription and 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 and SaaS. ARR is calculated on a constant currency basis using a rate that estimates the exchange rate at the beginning of the year. ARR does not have any standardized meaning and is therefore unlikely to be comparable to similarly titled measures presented by other companies. ARR should be viewed independently of revenue and deferred revenue and is not intended to be combined with or to replace either of those items. ARR is not a forecast and the active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by our customers.

Our ARR was ~~$241.0~~$547.8 million and ~~$177.1~~$466.0 million as of June 30, ~~2020~~2023 and ~~2019,~~2022, respectively, which is an increase of ~~36%~~18% year-over-year. The growth in our ARR is primarily driven by ~~our high~~ device expansion, ~~rates, our~~the addition of new ~~logo acquisition~~customers, and ~~the upselling and cross selling opportunities for products into~~cross-selling additional solutions to our installed customer base.

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Dollar-Based Net Retention Rate

To further illustrate the “land and expand” economics of our customer relationships, we examine the rate at which our customers increase their subscriptions for our software solutions. Our dollar-based net retention rate measures our ability to increase revenue across our existing customer base through expanded use of our software solutions, offset by customers whose subscription contracts with us are not renewed or renew at a lower amount.

We calculate dollar-based net retention rate as of a period end by starting with ~~the ARR from the cohort of all customers as of 12 months prior to such period end, or~~ Prior Period ARR. We then calculate the ~~ARR from these same customers as of the current period end, or~~ Current Period ARR. Current Period ARR includes any expansion and is net of contraction or attrition over the last 12 months but excludes ARR from new customers in the current period. We then divide the total Current Period ARR by the total Prior Period ARR to arrive at the dollar-based net retention rate.

Our dollar-based net retention rates were ~~117%~~109% and ~~120%~~117% for the trailing twelve months ended June 30, ~~2020~~2023 and ~~2019,~~2022, respectively. Our high dollar-based net retention rates are primarily attributable to an expansion of ~~devices. We believe~~devices and our ability to cross-sell our new solutions to our installed ~~base, particularly Jamf Connect and Jamf Protect, will continue to support our high dollar-based net retention rates.~~

~~Non-GAAP Financial Measures~~

In addition to our results determined in accordance with GAAP, we believe the non-GAAP measures of Non-GAAP Gross Profit, Non-GAAP Operating Income, Non-GAAP Net Income and Adjusted EBITDA are useful in evaluating our operating performance. We believe that non-GAAP financial information, when taken collectively, may be helpful to investors because it provides consistency and comparability with past financial performance and assists in comparisons with other companies, some of which use similar non-GAAP information to supplement their GAAP results. The non-GAAP financial information is presented for supplemental informational purposes only, and should not be considered a substitute for financial information presented in accordance with GAAP, and may be different from similarly-titled non-GAAP measures used by other companies. A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures.

~~Non-GAAP Gross Profit~~

Non-GAAP Gross Profit is a supplemental measure of operating performance that is not prepared in accordance with GAAP and that does not represent, and should not be considered as, an alternative to gross profit, as determined in accordance with GAAP. We define Non-GAAP Gross Profit as gross profit, adjusted for stock-based compensation expense and amortization expense.

We use Non-GAAP Gross Profit to understand and evaluate our core operating performance and trends and to prepare and approve our annual budget. We believe Non-GAAP Gross Profit is a useful measure to us and to our investors to assist in evaluating our core operating performance because it provides consistency and direct comparability with our past financial performance and between fiscal periods, as the metric eliminates the effects of variability of stock-based compensation expense and amortization of acquired developed technology, which are non-cash expenses that may fluctuate for reasons unrelated to overall operating performance. While the amortization expense of acquired developed technology is excluded from Non-GAAP Gross Profit, the revenue related to acquired developed technology is reflected in Non-GAAP Gross Profit as these assets contribute to our revenue generation.

Non-GAAP Gross Profit has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under GAAP. Because of these limitations, Non-GAAP Gross Profit should not be considered as a replacement for gross profit, as determined by GAAP, or as a measure of our profitability. We compensate for these limitations by relying primarily on our GAAP results and using non-GAAP measures only for supplemental purposes.

customer base.

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~~A reconciliation of Non-GAAP Gross Profit to gross profit, the most directly comparable GAAP measure, is as follows:~~

Three Months Ended

Six Months Ended

June 30,

June 30,


2020

2019

2020

2019

(in thousands)

Gross profit

$
48,584

$
34,825

$
93,963

$
65,912

Amortization expense

2,678

2,513

5,355

4,954

Stock-based compensation

38

55

76

118

Non-GAAP Gross Profit

$
51,300

$
37,393

$
99,394

$
70,984

Non-GAAP Gross Profit Margin

82
%

77
%

81
%

77
%

~~Non-GAAP Operating Income~~

Non-GAAP Operating Income is a supplemental measure of operating performance that is not prepared in accordance with GAAP and that does not represent, and should not be considered as, an alternative to operating loss, as determined in accordance with GAAP. We define Non-GAAP Operating Income as operating loss, adjusted for stock-based compensation, amortization, acquisition-related expense and acquisition-related earnout.

We use Non-GAAP Operating Income to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget, and to develop short-term and long-term operating plans. We believe that Non-GAAP Operating Income facilitates comparison of our operating performance on a consistent basis between periods, and when viewed in combination with our results prepared in accordance with GAAP, helps provide a broader picture of factors and trends affecting our results of operations. While the amortization expense of acquired trademarks, customer relationships, and developed technology is excluded from Non-GAAP Operating Income, the revenue related to acquired trademarks, customer relationships, and developed technology is reflected in Non-GAAP Operating Income as these assets contribute to our revenue generation.

Non-GAAP Operating Income has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under GAAP. Because of these limitations, Non-GAAP Operating Income should not be considered as a replacement for operating loss, as determined by GAAP, or as a measure of our profitability. We compensate for these limitations by relying primarily on our GAAP results and using non-GAAP measures only for supplemental purposes.

~~A reconciliation of Non-GAAP Operating Income to operating loss, the most directly comparable GAAP measure, is as follows:~~

Three Months Ended

Six Months Ended

June 30,

June 30,


2020

2019

2020

2019

(in thousands)

Operating income (loss)

$
4,216

$
(4,438)

$
(2,267)

$
(10,566)

Stock-based compensation

764

649

1,575

1,218

Acquisition-related expense

1,636

—

3,236

904

Amortization expense

8,312

8,139

16,663

16,213

Acquisition-related earnout

(3,700)

—

(3,700)

—

Non-GAAP Operating Income

$
11,228

$
4,350

$
15,507

$
7,769

Non-GAAP Operating Income Margin

18
%

9
%

13
%

8
%

~~Non-GAAP Net Income~~

Non-GAAP Net Income is a supplemental measure of operating performance that is not prepared in accordance with GAAP and that does not represent, and should not be considered as, an alternative to net loss, as determined in accordance with GAAP. We define Non-GAAP Net Income as net loss, adjusted for stock-based compensation,

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~~amortization, acquisition-related expense, acquisition-related earnout, foreign currency transaction loss, discrete tax items and provision for income taxes.~~

We use Non-GAAP Net Income to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget, and to develop short-term and long-term operating plans. We believe that Non-GAAP Net Income facilitates comparison of our operating performance on a consistent basis between periods, and when viewed in combination with our results prepared in accordance with GAAP, helps provide a broader picture of factors and trends affecting our results of operations. While the amortization expense of acquired trademarks, customer relationships, and developed technology is excluded from Non-GAAP Net Income, the revenue related to acquired trademarks, customer relationships, and developed technology is reflected in Non-GAAP Net Income as these assets contribute to our revenue generation.

Non-GAAP Net Income has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under GAAP. Because of these limitations, Non-GAAP Net Income should not be considered as a replacement for net loss, as determined by GAAP, or as a measure of our profitability. We compensate for these limitations by relying primarily on our GAAP results and using non-GAAP measures only for supplemental purposes.

~~A reconciliation of Non-GAAP Net Income (Loss) to net loss, the most directly comparable GAAP measure, is as follows:~~

Three Months Ended

Six Months Ended

June 30,

June 30,


2020

2019

2020

2019

(in thousands)

Net loss

$
(423)

$
(7,671)

$
(8,713)

$
(16,681)

Stock-based compensation

764

649

1,575

1,218

Acquistion-related expense

1,636

—

3,236

904

Amortization expense

8,312

8,139

16,663

16,213

Acquisition-related earnout

(3,700)

—

(3,700)

—

Foreign currency transaction loss

13

197

317

450

Discrete tax items

108

5

(210)

24

Benefit for income taxes⁽¹⁾

(1,716)

(2,195)

(4,420)

(4,589)

Non-GAAP Net Income (Loss)

$
4,994

$
(876)

$
4,748

$
(2,461)

(1) The related tax effects of the adjustments to Non-GAAP Net Income (Loss) were calculated using the respective statutory tax rates for applicable jurisdictions, which is not materially different from our annual effective tax rate of approximately 25%.

~~Adjusted EBITDA~~

Adjusted EBITDA is a supplemental measure of operating performance that is not prepared in accordance with GAAP and that does not represent, and should not be considered as, an alternative to net loss, as determined in accordance with GAAP. We define Adjusted EBITDA as net loss, adjusted for interest expense, net, benefit for income taxes, depreciation and amortization, stock-based compensation, acquisition-related expense, acquisition-related earnout, and foreign currency transaction loss.

We use Adjusted EBITDA to understand and evaluate our core operating performance and trends, to prepare and approve our annual budget, and to develop short-term and long-term operating plans. We believe that Adjusted EBITDA facilitates comparison of our operating performance on a consistent basis between periods, and when viewed in combination with our results prepared in accordance with GAAP, helps provide a broader picture of factors and trends affecting our results of operations.

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Adjusted EBITDA has limitations as an analytical tool, and you should not consider it in isolation, or as a substitute for analysis of our results as reported under GAAP. Because of these limitations, Adjusted EBITDA should not be considered as a replacement for net loss, as determined by GAAP, or as a measure of our profitability. We compensate for these limitations by relying primarily on our GAAP results and using non-GAAP measures only for supplemental purposes.

~~A reconciliation of Adjusted EBITDA to net loss, the most directly comparable GAAP measure, is as follows:~~

Three Months Ended

Six Months Ended

June 30,

June 30,


2020

2019

2020

2019

(in thousands)

Net loss

$
(423)

$
(7,671)

$
(8,713)

$
(16,681)

Interest expense, net

4,690

5,481

9,468

10,952

Benefit for income taxes

(28)

(2,390)

(3,248)

(5,177)

Depreciation expense

1,104

999

2,339

1,872

Amortization expense

8,312

8,139

16,663

16,213

Stock-based compensation

764

649

1,575

1,218

Acquisition-related expense

1,636

—

3,236

904

Acquisition-related earnout

(3,700)

—

(3,700)

—

Foreign currency transaction loss

13

197

317

450

Adjusted EBITDA

$
12,368

$
5,404

$
17,937

$
9,751

Components of Results of Operations

~~Revenues~~

Revenue

We recognize revenue under ASC 606 when or as performance obligations are satisfied. We derive revenue primarily from sales of SaaS subscriptions and support and maintenance contracts and, to a lesser extent, sales of on-premise term-based subscriptions and perpetual licenses and services.

~~Subscription.~~

Subscription. Subscription revenue consists of sales of SaaS subscriptions and on-premise term-based subscription licenses as well as support and maintenance contracts. We sell our software solutions primarily with a one-year contract term. We typically invoice SaaS subscription fees and support and maintenance fees annually in advance and recognize revenue ratably over the term of the applicable agreement, provided that all other revenue recognition criteria have been satisfied. The license portion of on-premise subscription revenue is recognized upfront, assuming all revenue recognition criteria are satisfied. See “—“Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting ~~Policies”~~Estimates” in our ~~IPO Prospectus~~Annual Report on Form 10-K for the year ended December 31, 2022 for more information. We expect subscription ~~revenues~~revenue to increase over time as we expand our customer base because sales to new customers are expected to be primarily SaaS subscriptions.

License. License revenue consists of revenue from on-premise perpetual licenses ~~and the license portion of on-premise subscriptions~~ of our Jamf Pro product sold primarily to existing customers. We recognize ~~all~~ license revenue upfront, assuming all revenue recognition criteria are satisfied. We expect license ~~revenues~~revenue to decrease because sales to new customers are primarily cloud-based subscription arrangements and therefore reflected in subscription revenue.

Services. Services ~~revenues consist~~revenue consists primarily of professional services provided to our customers to configure and optimize the use of our software solutions, as well as training services related to the operation of our software solutions. Our services are priced on a fixed fee basis and generally invoiced in advance of the service being delivered. Revenue is recognized as the services are performed. We expect services ~~revenues~~revenue to decrease as a percentage of total revenue as the demand for our services is not expected to grow at the same rate as the demand for our subscription solutions.

Cost of ~~Revenues~~

Revenue

Cost of subscription. Cost of subscription revenue consists primarily of employee compensation costs for employees associated with supporting our subscription and support and maintenance arrangements, our customer success

~~Table of Contents~~

function, and third-party hosting fees related to our cloud services. Employee compensation and related costs include cash compensation and benefits to employees and associated overhead costs. We expect cost of subscription revenue to increase in absolute dollars, but to remain relatively consistent as a percentage of subscription revenue, relative to the extent of the growth of our business.

Cost of services. Cost of services revenue consists primarily of employee compensation costs directly associated with delivery of professional services and training, costs of third-party integrators, and other associated overhead costs. ~~We expect cost~~

Amortization. Amortization expense consists of ~~services revenue to decrease in absolute dollars relative to the decrease~~amortization of ~~our services business.~~

acquired intangible assets.

Gross Profit ~~and Gross Margin~~

Gross profit, or revenue less cost of revenue, has been and will continue to be affected by various factors, including the mix of cloud-based subscription customers, the costs associated with supporting our cloud solution, the extent to which we expand our customer support team, and the extent to which we can increase the efficiency of our technology and infrastructure though technological improvements. We expect our gross profit to increase in absolute dollars. We expect our gross margin to increase over time as compared to the rates we delivered prior to the impact of COVID, as recurring revenue becomes a larger proportion of revenue, and as we increase average ARR per device.

Operating Expenses

Sales and Marketing. Sales and marketing expenses consist primarily of employee compensation costs, sales commissions, costs of general marketing and promotional activities, travel-related expenses, and allocated overhead. Sales commissions ~~earned by our sales force~~as well as associated payroll taxes and retirement plan contributions (together, contract costs) that are ~~deferred~~incremental to the acquisition of customer contracts are capitalized and amortized over the period of benefit, which is estimated to be 5generally five years. We expect our sales and marketing expenses to increase on an absolute dollar basis as we expand our sales personnel and marketing efforts.

Table of Contents

Research and development. Research and development expenses consist primarily of personnel costs and allocated overhead. We will continue to invest in innovation so that we can offer our customers new solutions and enhance our existing solutions. See “Business — Research and Development” in our ~~IPO Prospectus~~Annual Report on Form 10-K for the year ended December 31, 2022 for more information. We expect such investment to increase on an absolute dollar basis as our business grows.

General and Administrative. General and administrative expenses consist primarily of employee compensation costs for corporate personnel, such as those in our executive, human resource, facilities, accounting and finance, legal and compliance, and ~~information technology~~IT departments. In addition, general and administrative expenses include ~~acquisition-related~~acquisition and integration-related expenses which primarily consist of third-party expenses, such as legal and accounting fees, and adjustments to contingent consideration. General and administrative expenses also include system transformation costs, which are primarily associated with the implementation of sales software and software supporting our business including enterprise resource planning, as well as other systems to provide best-in-class processes, governance, and systems. We expect our general and administrative expenses to increase on a dollar basis as our business grows, particularly as we continue to invest in technology infrastructure and expand our operations globally. Also, we ~~expect to~~ incur additional general and administrative expenses as a result of operating as a public company, including costs to comply with the rules and regulations applicable to companies listed on a national securities exchange, costs related to compliance and reporting obligations pursuant to the rules and regulations of the SEC, and increased expenses for insurance, investor relations, and accounting expenses.

Amortization. Amortization expense ~~primarily~~ consists of amortization of acquired ~~trademarks, customer relationships and developed technology.~~

intangible assets.

Interest ~~Expense,~~Income (Expense), Net

Interest ~~expense,~~income (expense), net primarily consists ~~primarily~~ of interest ~~payments on~~charges and amortization of capitalized issuance costs related to our ~~outstanding borrowings under our Credit Facilities~~2026 Notes, as well as ~~the amortization of associated deferred financing costs. See “— Liquidity~~interest income earned on our cash and ~~Capital Resources — Credit Facilities”.~~

cash equivalents.

~~Table of Contents~~

Foreign Currency Transaction ~~Loss~~

~~Our reporting~~Gain (Loss)

Foreign currency istransaction gain (loss) includes gains and losses from transactions denominated in a currency other than the Company’s functional currency, the U.S. dollar. The functional currency of all our international operations is the U.S. dollar. The assets, liabilities, revenues and expenses of our foreign operations are remeasured in accordance with ASC Topic 830, ~~Foreign Currency Matters~~~~. Remeasurement adjustments are recorded as foreign currency transaction gains (losses) in the consolidated statement of operations.~~

Income Tax (Provision) Benefit

Income tax (provision) benefit consists primarily of income taxes related to U.S. federal and state income taxes and income taxes in foreign jurisdictions in which we conduct business.

~~Other Income~~

~~Other income consists primarily~~

Table of ~~sublease rental income.~~

Contents

Results of Operations

The following table sets forth our condensed consolidated statements of operations data for the periods indicated:

Three Months Ended

Six Months Ended

June 30,

June 30,


2020

2019

2020

2019

(in thousands)
Consolidated Statement of Operations Data:







Revenue:







Subscription

$
52,978

$
37,216

$
103,056

$
70,956
Services

2,451

4,794

6,461

9,295
License

6,802

6,300

13,104

12,187
Total revenue

62,231

48,310

122,621

92,438
Cost of revenue:







Cost of subscription⁽¹⁾⁽²⁾(exclusive of amortization expense shown below)

8,762

7,423

18,010

14,380
Cost of services⁽¹⁾⁽²⁾(exclusive of amortization expense shown below)

2,207

3,549

5,293

7,192
Amortization expense

2,678

2,513

5,355

4,954
Total cost of revenue

13,647

13,485

28,658

26,526
Gross profit

48,584

34,825

93,963

65,912
Operating expenses:







Sales and marketing⁽¹⁾⁽²⁾

20,202

16,612

42,484

31,888
Research and development⁽¹⁾⁽²⁾

11,929

9,491

24,546

18,534
General and administrative^(1)(2)(3)

6,603

7,534

17,892

14,797
Amortization expense

5,634

5,626

11,308

11,259
Total operating expenses

44,368

39,263

96,230

76,478
Income (loss) from operations

4,216

(4,438)

(2,267)

(10,566)
Interest expense

(4,690)

(5,481)

(9,468)

(10,952)
Foreign currency transaction loss

(13)

(197)

(317)

(450)
Other income, net

36

55

91

110
Loss before income tax benefit

(451)

(10,061)

(11,961)

(21,858)
Income tax benefit

28

2,390

3,248

5,177
Net loss

$
(423)

$
(7,671)

$
(8,713)

$
(16,681)


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Revenue:
Subscription	$	130,591	$	109,407	$	257,821	$	211,608
Services	4,254		5,027		8,638		8,971
License	244		1,204		842		3,317
Total revenue	135,089		115,638		267,301		223,896
Cost of revenue:
Cost of subscription(1)(2)(3)(4) (exclusive of amortization expense shown below)	24,186		20,634		47,345		40,536
Cost of services(1)(2)(3)(4) (exclusive of amortization expense shown below)	3,385		3,493		6,677		6,600
Amortization expense	3,312		5,265		6,608		10,483
Total cost of revenue	30,883		29,392		60,630		57,619
Gross profit	104,206		86,246		206,671		166,277
Operating expenses:
Sales and marketing(1)(2)(3)(4)(5)	63,890		58,750		124,098		105,075
Research and development(1)(2)(3)(4)(5)	34,725		33,983		66,797		58,785
General and administrative(1)(2)(3)(4)(5)	35,966		48,321		64,402		73,933
Amortization expense	7,247		7,034		14,488		14,063
Total operating expenses	141,828		148,088		269,785		251,856
Loss from operations	(37,622)		(61,842)		(63,114)		(85,579)
Interest income (expense), net	1,481		(641)		2,766		(1,500)
Foreign currency transaction gain (loss)	1,048		(676)		1,652		(1,457)
Loss before income tax (provision) benefit	(35,093)		(63,159)		(58,696)		(88,536)
Income tax (provision) benefit	(1,106)		20		(1,703)		(232)
Net loss	$	(36,199)	$	(63,139)	$	(60,399)	$	(88,768)

(1) Includes stock-based compensation as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Cost of revenue:
Subscription	$	2,715	$	2,061	$	4,982	$	4,016
Services	323		313		632		617
Sales and marketing	9,076		13,811		16,575		19,670
Research and development	6,401		10,631		11,434		14,490
General and administrative	11,668		26,208		16,110		30,241
	$	30,183	$	53,024	$	49,733	$	69,034

Table of Contents

~~(1)~~

~~Includes stock-based compensation as follows:~~

(2) Includes payroll taxes related to stock-based compensation as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Cost of revenue:
Subscription	$	71	$	24	$	83	$	24
Services	12		1		12		1
Sales and marketing	303		65		407		77
Research and development	175		77		246		104
General and administrative	146		86		222		183
	$	707	$	253	$	970	$	389

Three Months Ended

Six Months Ended

June 30,

June 30,


2020

2019

2020

2019

(in thousands)
Cost of Revenue:







Subscription

$
38

$
55

$
76

$
118
Services

—

—

—

—
Sales and marketing

111

143

222

236
Research and development

141

95

298

185
General and administrative

474

356

979

679

$
764

$
649

$
1,575

$
1,218

(3)

~~(2)~~

~~Includes depreciation expense as follows:~~

Includes depreciation expense as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Cost of revenue:
Subscription	$	306	$	286	$	621	$	606
Services	39		41		78		86
Sales and marketing	787		633		1,592		1,317
Research and development	456		397		923		756
General and administrative	267		235		528		473
	$	1,855	$	1,592	$	3,742	$	3,238

Three Months Ended

Six Months Ended

June 30,

June 30,


2020

2019

2020

2019

(in thousands)
Cost of revenue:







Subscription

$
227

$
214

$
465

$
397
Services

47

62

100

121
Sales and marketing

438

404

932

734
Research and development

260

263

552

490
General and administrative

132

56

288

130

$
1,104

$
999

$
2,337

$
1,872

(4)

~~(3)~~

~~Includes acquisition-related expense as follows:~~

Includes acquisition-related expense as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Cost of revenue:
Subscription	$	—	$	23	$	—	$	61
Services	1		—		2		—
Sales and marketing	115		—		115		7
Research and development	124		283		175		546
General and administrative	439		242		1,145		1,035
	$	679	$	548	$	1,437	$	1,649

Three Months Ended

Six Months Ended

June 30,

June 30,


2020

2019

2020

2019

(in thousands)
General and administrative

$
1,636

$
—

$
3,236

$
904

(5)

Includes system transformation costs as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Sales and marketing	$	37	$	—	$	37	$	—
Research and development	10		—		10		—
General and administrative	1,293		—		1,734		—
	$	1,340	$	—	$	1,781	$	—

General and administrative also includes ~~a Digita~~acquisition-related earnout ~~benefit~~ of ~~$3.7~~$0.1 million and $0.2 million for the three and six months ended June 30, ~~2020.~~

2022, respectively. The acquisition-related earnout was an expense for the three and six months ended June 30, 2022 reflecting the increase in fair value of the Digita acquisition contingent liability due to growth in sales of our Jamf Protect product.

Table of Contents

The following table sets forth our condensed consolidated statements of operations data expressed as a percentage of total revenue for the periods indicated:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(as a percentage of total revenue)
Revenue:
Subscription	97	%	95	%	97	%	95	%
Services	3		4		3		4
License	—		1		—		1
Total revenue	100		100		100		100
Cost of revenue:
Cost of subscription (exclusive of amortization expense shown below)	18		18		18		18
Cost of services (exclusive of amortization expense shown below)	3		3		3		3
Amortization expense	2		4		2		5
Total cost of revenue	23		25		23		26
Gross profit	77		75		77		74
Operating expenses:
Sales and marketing	47		51		47		47
Research and development	26		29		25		26
General and administrative	27		42		24		33
Amortization expense	5		6		5		6
Total operating expenses	105		128		101		112
Loss from operations	(28)		(53)		(24)		(38)
Interest income (expense), net	1		(1)		1		(1)
Foreign currency transaction gain (loss)	1		(1)		1		(1)
Loss before income tax (provision) benefit	(26)		(55)		(22)		(40)
Income tax (provision) benefit	(1)		—		(1)		—
Net loss	(27)	%	(55)	%	(23)	%	(40)	%

Table of Contents

Three Months Ended

Six Months Ended

June 30,

June 30,


2020

2019

2020

2019

(as a percentage of total revenue)
Consolidated Statement of Operations Data:







Revenue:







Subscription

85
%
77
%
84
%
77
%
Services

4

10

5

10

License

11

13

11

13

Total revenue

100

100

100

100

Cost of revenue:







Cost of subscription (exclusive of amortization expense shown below)

14

15

15

16

Cost of services (exclusive of amortization expense shown below)

4

7

4

8

Amortization expense

4

5

4

5

Total cost of revenue

22

28

23

29

Gross profit

78

72

77

71

Operating expenses:







Sales and marketing

32

34

35

34

Research and development

19

20

20

20

General and administrative

11

16

15

16

Amortization expense

9

12

9

12

Total operating expenses

71

81

78

83

Income (loss) from operations

7

(9)

(2)

(11)

Interest expense

(8)

(11)

(8)

(12)

Foreign currency transaction loss

0

0

0

0

Other income, net

0

0

0

0

Loss before income tax benefit

(1)

(20)

(9)

(23)

Income tax benefit

0

5

3

6

Net loss

(1)
%
(15)
%
(7)
%
(17)
%

Comparison of the Three and Six Months Ended June 30, ~~2020~~2023 and ~~2019~~

2022

Revenue

Three months ended June 30,

Change

Six months ended June 30,

Change


2020

2019

$

%


2020

2019

$

%

(dollars in thousands)
SaaS subscription and support and maintenance

$
52,978

$
37,216

$
15,762

42
%

$
103,056

$
70,956

$
32,100

45
%
On‑premise subscription

5,770

4,048

1,722

43

10,310

7,089

3,221

45

Recurring revenue

58,748

41,264

17,484

42

113,366

78,045

35,321

45

Perpetual license

1,032

2,252

(1,220)

(54)

2,794

5,098

(2,304)

(45)

Professional services

2,451

4,794

(2,343)

(49)

6,461

9,295

(2,834)

(30)

Non‑recurring revenue

3,483

7,046

(3,563)

(51)

9,255

14,393

(5,138)

(36)

Total revenue

$
62,231

$
48,310

$
13,921

29
%

$
122,621

$
92,438

$
30,183

33
%


	Three Months Ended June 30,				Change				Six Months Ended June 30,				Change
	2023		2022		$		%		2023		2022		$		%
	(in thousands, except percentages)
SaaS subscription and support and maintenance	$	126,566	$	104,291	$	22,275	21	%	$	247,328	$	200,641	$	46,687	23	%
On‑premise subscription	4,025		5,116		(1,091)		(21)		10,493		10,967		(474)		(4)
Subscription revenue	130,591		109,407		21,184		19		257,821		211,608		46,213		22
Professional services	4,254		5,027		(773)		(15)		8,638		8,971		(333)		(4)
Perpetual licenses	244		1,204		(960)		(80)		842		3,317		(2,475)		(75)
Non-subscription revenue	4,498		6,231		(1,733)		(28)		9,480		12,288		(2,808)		(23)
Total revenue	$	135,089	$	115,638	$	19,451	17	%	$	267,301	$	223,896	$	43,405	19	%

~~Total revenue increased by $13.9 million, or 29%, for~~

Three and six months ended

For the three and six months ended June 30, ~~2020 compared to the three months ended June 30, 2019. Overall~~2023, overall revenue increased primarily as a result of higher subscription revenue, partially offset by ~~lower services and license~~a decrease in perpetual licenses revenue. ~~Recurring~~Subscription revenue accounted for ~~94%~~97% of total revenue for the three and six months ended June 30, ~~2020~~2023 compared to ~~85%~~95% for the three and six months ended June 30, ~~2019. The~~2022. For the three and six months ended June 30, 2023, the increase in subscription revenue was driven by device expansion, the addition of new customers, and cross-selling. ~~Services revenue has decreased as COVID-19 impacted our in-person trainings,~~For the three and ~~our product enhancements have reduced the reliance our customers need to~~

~~Table of Contents~~

~~place on our services in order to utilize our products. License revenue decreased as a result of shifting customers to our SaaS model as opposed to on-premise, perpetual licenses.~~

~~Total revenue increased by $30.2 million, or 33%, for the~~ six months ended June 30, ~~2020 compared to~~2023, the ~~six months ended June 30, 2019. Overall~~decrease in perpetual licenses revenue increased as a result of higher subscription revenue partially offset by lower services and license revenue. Recurring revenue accounted for 92% of total revenue for the six months ended June 30, 2020 compared to 84% for the six months ended June 30, 2019. The increase in subscription revenue was driven by device expansion, the addition of newprimarily reflects customers and cross-selling. Services revenue has decreased as COVID-19 impacted our in-person trainings, and our product enhancements have reduced the reliance our customers need to place on our services in order to utilize our products. License revenue decreased as a result of shifting ~~customers to our SaaS model as opposed~~from perpetual licenses to on-premise ~~perpetual licenses.~~

subscriptions.

Cost of Revenue and Gross Margin

Three months ended June 30,

Change

Six months ended June 30,

Change

2020

2019

$

%

2020

2019

$

%

(dollars in thousands)
Cost of revenue:

















Cost of subscription (exclusive of amortization shown below)

$
8,762

$
7,423

$
1,339

18
%

$
18,010

$
14,380

$
3,630

25
%
Cost of services (exclusive of amortization show below)

2,207

3,549

(1,342)

(38)

5,293

7,192

(1,899)

(26)

Amortization expense

2,678

2,513

165

7

5,355

4,954

401

8

Total cost of revenue

$
13,647

$
13,485

$
162

1
%

$
28,658

$
26,526

$
2,132

8
%
Gross margin:

















Subscription (exclusive of amortization)

85
%

82
%





84
%

82
%





Services (exclusive of amortization)

37
%

50
%





43
%

50
%





Total gross margin

78
%

72
%





77
%

71
%


	Three Months Ended June 30,				Change				Six Months Ended June 30,				Change
	2023		2022		$		%		2023		2022		$		%
	(in thousands, except percentages)
Cost of revenue:
Cost of subscription (exclusive of amortization expense shown below)	$	24,186	$	20,634	$	3,552	17	%	$	47,345	$	40,536	$	6,809	17	%
Cost of services (exclusive of amortization expense show below)	3,385		3,493		(108)		(3)		6,677		6,600		77		1
Amortization expense	3,312		5,265		(1,953)		(37)		6,608		10,483		(3,875)		(37)
Total cost of revenue	$	30,883	$	29,392	$	1,491	5	%	$	60,630	$	57,619	$	3,011	5	%
Gross margin	77%		75%						77%		74%

~~Cost of revenue increased by $0.2 million, or 1%, for~~

Three months ended

For the three months ended June 30, ~~2020 compared~~2023, cost of revenue increased primarily due to ~~the three months ended June 30, 2019 primarily reflecting~~ an increase in cost of subscription revenue, partially offset by ~~lower services cost~~a decrease in amortization expense. Cost of ~~revenue. Subscription cost of~~subscription revenue increased ~~$1.3 million~~primarily due to ~~an increase of~~a $1.0 million increase in employee compensation costs primarily related to higher headcount to support the growth in our subscription customer base, ~~and an~~a $1.8 million increase ~~of $0.3 million in third party hosting fees as we increased capacity to support our growth. Cost of services revenue decreased $1.3 million as a result of lower services revenue.~~

Cost of revenue increased by $2.1 million, or 8%, for the six months ended June 30, 2020 compared to the six months ended June 30, 2019 driven by an increase in cost of subscription revenue and amortization expense partially offset by lower services cost of revenue. Subscription cost of revenue increased $3.6 million primarily due to an increase of $2.1 million in employee compensation costs related to higher headcount to support the growth in our subscription customer base, an increase of $1.0 million in third party hosting fees as we increased capacity to support our growth, and ana $0.7 million increase ~~of $0.3 million~~ in ~~computer hardware~~stock-based compensation expense and ~~software costs to support the growth of the business.~~related payroll taxes. Amortization expense ~~increased $0.4 million~~decreased due to ~~intangibles added to our balance sheet as~~certain intangible assets reaching the ~~result~~end of ~~acquisitions occurring in 2019. Cost of services revenues decreased $1.9 million as a result of lower services revenue.~~

~~Our subscription gross margin was 85% for the three~~their useful life.

Six months ended ~~June 30, 2020 compared to 82% for the three months ended June 30, 2019. Our subscription gross margin was 84% for~~

For the six months ended June 30, ~~2020 compared~~2023, cost of revenue increased primarily due to ~~82% for~~an increase in cost of subscription revenue, partially offset by a decrease in amortization expense. Cost of subscription revenue increased primarily due to a $3.3 million increase in employee compensation costs primarily related to higher headcount to support the ~~six months ended June 30, 2019. The improvement~~growth in our subscription customer base, a $2.4 million increase in third party hosting fees as we increased capacity to support our growth, and a $1.0 million increase in stock-based compensation expense and related payroll taxes. Amortization expense decreased due to certain intangible assets reaching the end of their useful life.

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Total gross margin for the three and six months ended June 30, ~~2020 compared to the prior year periods was due to the growth in subscription revenue outpacing the growth in the support and hosting costs required to deliver our subscription solution.~~

~~Table of Contents~~

Services gross margin was 37% for the three months ended June 30, 2020 compared to 50% for the three months ended June 30, 2019. Services gross margin was 43% for the six months ended June 30, 2020 compared to 50% for the six months ended June 30, 2019. The decrease in services gross margin for the three and six months ended June 30, 2020 compared to the prior year periods primarily reflected a larger decrease in services revenues than services costs due to the cancellation of in-person trainings as a result of COVID-19.

~~Total gross margin was 78% and 72% for the three months ended June 30, 2020 and 2019, respectively, and 77% and 71% for the six months ended June 30, 2020 and 2019, respectively,~~2023 increased as our revenue expanded faster than the costs required to deliver the ~~revenue.~~

revenue and amortization expense decreased.

Operating Expenses

Three months ended June 30,

Change

Six months ended June 30,

Change


2020

2019

$

%


2020

2019

$

%

(dollars in thousands)
Operating expenses:

















Sales and marketing

$
20,202

$
16,612

$
3,590

22
%

$
42,484

$
31,888

$
10,596

33
%
Research and development

11,929

9,491

2,438

26

24,546

18,534

6,012

32

General and administrative

6,603

7,534

(931)

(12)

17,892

14,797

3,095

21

Amortization expense

5,634

5,626

8

0

11,308

11,259

49

0

Operating expenses

$
44,368

$
39,263

$
5,105

13
%

$
96,230

$
76,478

$
19,752

26
%

~~Sales and Marketing.~~ ~~Sales and marketing expenses increased by $3.6 million, or 22%, for~~


	Three Months Ended June 30,				Change				Six Months Ended June 30,				Change
	2023		2022		$		%		2023		2022		$		%
	(in thousands, except percentages)
Operating expenses:
Sales and marketing	$	63,890	$	58,750	$	5,140	9	%	$	124,098	$	105,075	$	19,023	18	%
Research and development	34,725		33,983		742		2		66,797		58,785		8,012		14
General and administrative	35,966		48,321		(12,355)		(26)		64,402		73,933		(9,531)		(13)
Amortization expense	7,247		7,034		213		3		14,488		14,063		425		3
Operating expenses	$	141,828	$	148,088	$	(6,260)	(4)	%	$	269,785	$	251,856	$	17,929	7	%

Three months ended

For the three months ended June 30, ~~2020 compared to the three months ended June 30, 2019. The increase was~~2023, sales and marketing expenses increased primarily due to an $8.1 million increase ~~of $4.1 million~~ in employee compensation costs ~~related~~primarily driven by higher headcount due to ~~headcount~~ growth in the business, a $0.8 million increase in marketing costs, a $0.4 million increase in travel-related expenses, and ana $0.4 million increase ~~of $0.3 million~~ in computer hardware and software costs to support the growth of the business, partially offset by a ~~$1.0~~$4.5 million decrease in ~~travel-related expenses reflecting less travel~~stock-based compensation expense and related payroll taxes due to ~~COVID-19.~~

~~Sales and marketing expenses increased by $10.6 million, or 33%,~~the modification of return target options in the second quarter of 2022. See Note 9 for additional information on share-based compensation.

For the ~~six~~three months ended June 30, ~~2020 compared to the six months ended June 30, 2019. The increase was~~2023, research and development expenses increased primarily due to ana $4.9 million increase ~~of $8.9 million~~ in employee compensation costs ~~related~~primarily driven by higher headcount due to ~~headcount~~ growth in our overall business and ana $0.3 million increase ~~of $1.1 million~~ in computer hardware and software costs to support the growth of the business, partially offset by a ~~$0.4~~$4.1 million decrease in ~~travel-related expenses reflecting less travel~~stock-based compensation expense and related payroll taxes due to ~~COVID-19. Marketing costs increased by $0.6 million primarily due to increases~~the modification of return target options in ~~demand generation programs, advertising, and brand awareness campaigns focused on new customers acquisition.~~

~~Research and Development.~~ ~~Research and development expenses increased by $2.4 million, or 26%, for~~the second quarter of 2022.

For the three months ended June 30, ~~2020 compared to the three months ended June 30, 2019. The increase was~~2023, general and administrative expenses decreased primarily due to ana $14.5 million decrease in stock-based compensation expense and related payroll taxes due to the modification of return target options in the second quarter of 2022, partially offset by a $1.8 million increase ~~of $2.1 million~~ in employee compensation costs ~~due to~~primarily driven by higher headcount to support our continued growth and ana $1.3 million increase ~~of $0.3 million in outside services.~~

~~Research and development expenses increased by $6.0 million, or 32%, for~~related to system transformation costs.

Six months ended

For the six months ended June 30, ~~2020 compared to the six months ended June 30, 2019. The increase was~~2023, sales and marketing expenses increased primarily due to an $18.2 million increase ~~of $4.6 million~~ in employee compensation costs primarily driven by higher headcount due to ~~higher headcount, an~~growth in the business, a $1.7 million increase ~~of $0.6~~in marketing costs, a $1.0 million increase in ~~outside services~~travel-related expenses, and ana $0.7 million increase ~~of $0.5 million~~ in computer hardware and software costs to support the growth of the ~~business.~~

~~General~~business, partially offset by a $2.8 million decrease in stock-based compensation expense and ~~Administrative.~~ ~~General and administrative expenses decreased by $0.9 million, or 12%, for~~related payroll taxes due to the ~~three~~modification of return target options in the second quarter of 2022.

For the six months ended June 30, ~~2020 compared to the three months ended June 30, 2019. The decrease was~~2023, research and development expenses increased primarily due to a ~~$3.7~~$10.4 million ~~reduction to contingent consideration and a $1.1 million decrease in consulting services related to process improvements. The decrease was partially offset by an~~ increase ~~of $1.7 million~~ in employee compensation costs primarily driven by higher headcount due to growth in our overall business and a $0.6 million increase in computer hardware and software costs to support the growth of the business, partially offset by a $2.9 million decrease in stock-based compensation expense and related payroll taxes due to the modification of return target options in the second quarter of 2022.

For the six months ended June 30, 2023, general and administrative expenses decreased due to a $14.1 million decrease in stock-based compensation expense and related payroll taxes due to the modification of return target options in the second quarter of 2022, partially offset by a $3.7 million increase in employee compensation costs primarily driven by higher headcount to support our continued growth and ~~transition to becoming~~ a ~~public company, an increase of $1.6 million in acquisition-related expenses and a $0.5~~$1.7 million increase ~~in allowance for bad debt.~~

~~General~~related to system transformation costs.

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Interest Income (Expense), Net


	Three Months Ended June 30,				Change			Six Months Ended June 30,				Change
	2023		2022		$		%	2023		2022		$		%
	(in thousands, except percentages)
Interest income (expense), net	$	1,481	$	(641)	$	2,122	NM	$	2,766	$	(1,500)	$	4,266	NM

NM Not Meaningful.

Three and ~~administrative expenses increased by $3.1 million, or 21%, for~~six months ended

For the three and six months ended June 30, ~~2020 compared~~2023, interest income, net increased primarily due to higher earned interest rates and higher average invested balances.

Foreign Currency Transaction Gain (Loss)


	Three Months Ended June 30,				Change			Six Months Ended June 30,				Change
	2023		2022		$		%	2023		2022		$		%
	(in thousands, except percentages)
Foreign currency transaction gain (loss)	$	1,048	$	(676)	$	1,724	NM	$	1,652	$	(1,457)	$	3,109	NM

NM Not Meaningful.

Three and six months ended

For the three and six months ended June 30, ~~2019. The increase was primarily due to an increase of $4.0 million in~~

~~Table of Contents~~

employee compensation costs primarily related to higher headcount to support our continued growth and transition to becoming a public company, a $2.3 million increase in acquisition-related expenses, a $0.8 million increase in allowance for bad debt and returns and an increase of $0.4 million in travel costs which slowed in the second quarter due to COVID-19, partially offset by a $3.7 million reduction to contingent consideration and a $1.4 million decrease in consulting services related to process improvements. The remainder of the cost increase related to costs to support the growth in business and headcount of approximately $0.7 million.

~~Interest Expense, Net~~

Three months ended June 30,

Change

Six months ended June 30,

Change


2020

2019

$

%


2020

2019

$

%

(dollars in thousands)
Interest expense, net

$
4,690

$
5,481

$
(791)

(14)
%

$
9,468

$
10,952

$
(1,484)

(14)
%

Interest expense, net decreased by $0.8 million, or 14%, for the three months ended June 30, 2020 compared to the three months ended June 30, 2019. The decrease was driven by a lower interest rate in the second quarter of 2020 compared to the second quarter of 2019, as well as a lower average debt balance.

Interest expense, net decreased by $1.5 million, or 14%, for the six months ended June 30, 2020 compared to the six months ended June 30, 2019 driven by a lower interest rate, as well as a lower average debt balance.

~~Foreign Currency Transaction Loss~~

Three months ended June 30,

Change

Six months ended June 30,

Change


2020

2019

$

%


2020

2019

$

%

(dollars in thousands)
Foreign currency transaction loss

$
13

$
197

$
(184)

(93)
%

$
317

$
450

$
(133)

(30)
%

~~Foreign~~2023, foreign currency transaction loss decreased by $0.2 million, or 93%, for the three months ended June 30, 2020 compared to the three months ended June 30, 2019. Foreign currency transaction loss decreased by $0.1 million, or 30%, for the six months ended June 30, 2020 compared to the six months ended June 30, 2019. The loss was driven primarily by the weakening of the U.S. dollar relative to the Euro on significant Euro denominated intercompany loans that were utilized to fund the acquisition of ZuluDesk.

~~Other Income, Net~~

Three months ended June 30,

Change

Six months ended June 30,

Change


2020

2019

$

%


2020

2019

$

%

(dollars in thousands)
Other income, net

$
36

$
55

$
(19)

(35)
%

$
91

$
110

$
(19)

(17)
%

~~Income Tax Benefit~~

Three months ended June 30,

Change

Six months ended June 30,

Change


2020

2019

$

%


2020

2019

$

%

(dollars in thousands)
Income tax benefit

$
28

$
2,390

$
(2,362)

(99)
%

$
3,248

$
5,177

$
(1,929)

(37)
%

Income tax benefit was $28 thousand and $2.4 million for the three months ended June 30, 2020 and 2019, respectively. The effective tax rates for the three months ended June 30, 2020 and 2019 were 6.2% and 23.8%, respectively. The key components of the Company’s income tax benefit primarily consist of state and federal income taxes, federal research and development credits, and Global Intangible Low-Taxed Income provisions. The effective tax rate for the three months ended June 30, 2020 was impacted by $108 thousand of discrete income tax expense primarily due to the finalization of the net operating loss carryback changes related to the CARES Act. The Company’s annual effective tax rates for the three months ended June 30, 2020 and 2019 were 25.4% and 23.8%, respectively.

~~Table of Contents~~

Income tax benefit was $3.2 million and $5.2 million for the six months ended June 30, 2020 and 2019, respectively. The effective tax rates for the six months ended June 30, 2020 and 2019 were 27.2% and 23.7%, respectively. The key components of the Company’s income tax benefit primarily consist of state and federal income taxes, federal research and development credits, and Global Intangible Low-Taxed Income provisions. The effective tax rate for the six months ended June 30, 2020 was higher than the prior year period due to the impact of the net operating loss carryback and interest limitation changes related to the CARES Act, and a change in valuation allowance on foreign deferred tax assets related to a merger of subsidiaries. The effective tax rate for the six months ended June 30, 2020 was impacted by $210 thousand of discrete income tax benefitgain increased primarily due to the impact of changes in foreign currency exchange rates, primarily the ~~net~~GBP and EUR.

Income Tax Benefit (Provision)


	Three Months Ended June 30,						Change			Six Months Ended June 30,						Change
	2023			2022			$		%	2023			2022			$		%
	(in thousands, except percentages)
Income tax benefit (provision)	$	(1,106)		$	20		$	(1,126)	NM	$	(1,703)		$	(232)		$	(1,471)	NM
Effective tax rate	(3.2)		%	—		%				(2.9)		%	(0.3)		%

NM Not Meaningful.

See Note 11 for additional information on income taxes.

Non-GAAP Financial Measures

In addition to our results determined in accordance with GAAP, we believe the following non-GAAP financial measures are useful in evaluating our operating performance. We believe that non-GAAP financial measures, when taken collectively with GAAP financial measures, may be helpful to investors because they provide consistency and comparability with our past financial performance (for example, by eliminating items that fluctuate for reasons unrelated to operating performance or that represent non-recurring, one-time events), provide additional understanding of factors and trends affecting our business, and assist in comparisons with other companies, some of which use similar non-GAAP information to supplement their GAAP results.

Our non-GAAP financial measures are presented for supplemental informational purposes only, and should not be considered a substitute for financial measures presented in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude certain expenses that are required by GAAP to be recorded in our financial statements, including stock-based compensation expense and amortization of acquired intangible assets. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by our management about which expenses are excluded or included in determining these non-GAAP financial measures. Further, non-GAAP financial measures are not standardized. It may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names. While the amortization expense of acquired intangible assets is excluded from certain non-GAAP measures, the revenue related to acquired intangible assets is reflected in such measures as those assets contribute to revenue generation. A

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reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures. In addition, investors are encouraged to review our condensed consolidated financial statements and the notes thereto in their entirety and not to rely on any single financial measure.

Non-GAAP Gross Profit and Non-GAAP Gross Profit Margin

We use non-GAAP gross profit and non-GAAP gross profit margin, and believe it is useful to our investors, to understand and evaluate our operating performance and trends and to prepare and approve our annual budget. We define non-GAAP gross profit as gross profit, adjusted for amortization expense, stock-based compensation expense, acquisition-related expense, and payroll taxes related to stock-based compensation. We define non-GAAP gross profit margin as non-GAAP gross profit as a percentage of total revenue.

A reconciliation of non-GAAP gross profit to gross profit and non-GAAP gross profit margin to gross profit margin, the most directly comparable GAAP measures, are as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
	(in thousands)
Gross profit	$	104,206	$	86,246	$	206,671	$	166,277
Amortization expense	3,312		5,265		6,608		10,483
Stock-based compensation	3,038		2,374		5,614		4,633
Acquisition-related expense	1		23		2		61
Payroll taxes related to stock-based compensation	83		25		95		25
Non-GAAP gross profit	$	110,640	$	93,933	$	218,990	$	181,479
Gross profit margin	77%		75%		77%		74%
Non-GAAP gross profit margin	82%		81%		82%		81%

Non-GAAP Operating Income and Non-GAAP Operating Income Margin

We use non-GAAP operating income and non-GAAP operating income margin, and believe it is useful for our investors, to understand and evaluate our operating performance and trends, to prepare and approve our annual budget, and to develop short-term and long-term operating plans. We define non-GAAP operating income as operating loss, ~~carryback and interest limitation changes~~adjusted for amortization expense, stock-based compensation expense, acquisition-related expense, acquisition-related earnout, offering costs, payroll taxes related to stock-based compensation, and system transformation costs. System transformation costs are primarily associated with the ~~CARES Act.~~

implementation of sales software and software supporting our business including enterprise resource planning, as well as other systems to provide best-in-class processes, governance, and systems. The transformation includes a comprehensive redesign in the way we go to market, including the quoting, contracting, fulfilling, and invoicing processes, and the systems and tools we use. Offering costs were incurred in connection with prospective and completed secondary offerings following our IPO. We define non-GAAP operating income margin as non-GAAP operating income as a percentage of total revenue.

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A reconciliation of non-GAAP operating income to operating loss and non-GAAP operating income margin to operating loss margin, the most directly comparable GAAP measures, are as follows:
Three Months Ended June 30, Six Months Ended June 30,
2023 2022 2023 2022
(in thousands)
Operating loss $ (37,622) $ (61,842) $ (63,114) $ (85,579)
Amortization expense 10,559 12,299 21,096 24,546
Stock-based compensation 30,183 53,024 49,733 69,034
Acquisition-related expense 679 548 1,437 1,649
Acquisition-related earnout — 100 — 188
Offering costs — 124 — 124
Payroll taxes related to stock-based compensation 707 253 970 389
System transformation costs 1,340 — 1,781 —
Non-GAAP operating income $ 5,846 $ 4,506 $ 11,903 $ 10,351
Operating loss margin (28)% (53)% (24)% (38)%
Non-GAAP operating income margin 4% 4% 4% 5%
Non-GAAP Net Income
We use non-GAAP net income, and believe it is useful for our investors, to understand and evaluate our operating performance and trends. We define non-GAAP net income as net loss, adjusted for income tax (provision) benefit, amortization expense, stock-based compensation expense, foreign currency transaction (gain) loss, amortization of debt issuance costs, acquisition-related expense, acquisition-related earnout, offering costs, payroll taxes related to stock-based compensation, and system transformation costs, and adjustment to income tax expense based on the non-GAAP measure of profitability using our blended U.S. statutory tax rate.
We define non-GAAP income before income taxes as loss before income taxes adjusted for amortization expense, stock-based compensation expense, foreign currency transaction (gain) loss, amortization of debt issuance costs, acquisition-related expense, acquisition-related earnout, offering costs, payroll taxes related to stock-based compensation, and system transformation costs.
We define non-GAAP provision for income taxes as the current and deferred income tax expense commensurate with the non-GAAP measure of profitability using our blended U.S. statutory tax rate.
41
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A reconciliation of non-GAAP net income to net loss, the most directly comparable GAAP measure, is as follows:
Three Months Ended June 30, Six Months Ended June 30,
2023 2022 2023 2022
(in thousands)
Net loss $ (36,199) $ (63,139) $ (60,399) $ (88,768)
Exclude: income tax (provision) benefit (1,106) 20 (1,703) (232)
Loss before income tax (provision) benefit (35,093) (63,159) (58,696) (88,536)
Amortization expense 10,559 12,299 21,096 24,546
Stock-based compensation 30,183 53,024 49,733 69,034
Foreign currency transaction (gain) loss (1,048) 676 (1,652) 1,457
Amortization of debt issuance costs 684 679 1,368 1,358
Acquisition-related expense 679 548 1,437 1,649
Acquisition-related earnout — 100 — 188
Offering costs — 124 — 124
Payroll taxes related to stock-based compensation 707 253 970 389
System transformation costs 1,340 — 1,781 —
Non-GAAP income before income taxes 8,011 4,544 16,037 10,209
Non-GAAP provision for income taxes (1)
(1,923) (1,090) (3,849) (2,450)
Non-GAAP net income $ 6,088 $ 3,454 $ 12,188 $ 7,759
(1) In accordance with the SEC’s Non-GAAP Financial Measures Compliance and Disclosure Interpretation, the Company’s blended U.S. statutory rate of 24% is used as an estimate for the current and deferred income tax expense associated with our non-GAAP income before income taxes.
Adjusted EBITDA
We define adjusted EBITDA as net loss, adjusted for interest (income) expense, net, provision (benefit) for income taxes, depreciation expense, amortization expense, stock-based compensation expense, foreign currency transaction (gain) loss, acquisition-related expense, acquisition-related earnout, offering costs, payroll taxes related to stock-based compensation, and system transformation costs.
A reconciliation of adjusted EBITDA to net loss, the most directly comparable GAAP measure, is as follows:
Three Months Ended June 30, Six Months Ended June 30,
2023 2022 2023 2022
(in thousands)
Net loss $ (36,199) $ (63,139) $ (60,399) $ (88,768)
Interest (income) expense, net (1,481) 641 (2,766) 1,500
Provision (benefit) for income taxes 1,106 (20) 1,703 232
Depreciation expense 1,855 1,592 3,742 3,238
Amortization expense 10,559 12,299 21,096 24,546
Stock-based compensation 30,183 53,024 49,733 69,034
Foreign currency transaction (gain) loss (1,048) 676 (1,652) 1,457
Acquisition-related expense 679 548 1,437 1,649
Acquisition-related earnout — 100 — 188
Offering costs — 124 — 124
Payroll taxes related to stock-based compensation 707 253 970 389
System transformation costs 1,340 — 1,781 —
Adjusted EBITDA $ 7,701 $ 6,098 $ 15,645 $ 13,589
42
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Liquidity and Capital Resources

General

As of June 30, ~~2020,~~2023, our principal sources of liquidity were cash and cash equivalents totaling ~~$38.4~~$211.5 million, which were held for general corporate purposes, which may include working capital, ~~purposes,~~capital expenditures, and potential acquisitions and strategic transactions, as well as the available balance of ~~our Prior~~the 2020 Revolving Credit Facility, described ~~further below.~~in Note 8 to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. Our cash and cash equivalents ~~when held,~~ are comprised of cash, money market ~~funds.~~deposit accounts, and money market funds with original maturities at the time of purchase of three months or less. Our ~~positive~~ cash ~~flows from operations enable us~~and cash equivalents are held at a diversified portfolio of global banks and money market investments, and we do not have material exposure to ~~make continued investments in supporting the growth of our business.~~recent banking-sector events. We expect that our operating cash flows, in addition to our cash and cash equivalents, will enable us to ~~continue to~~ make ~~such~~continued investments in supporting the ~~future.~~

~~On July 24, 2020, we closed~~growth of our IPO through which we issued and sold 13,500,000 shares of common stock at a price per share of $26.00. We received aggregate proceeds of approximately $319.0 million from the IPO, after deducting the underwriting discount and offering expenses payable by us. Upon closing of the IPO, the Company repaid $205.0 million of the principal amount of the Term Loan Facility and paid $3.4 million of accrued interest and $2.0 million of prepayment penalty. The Company also wrote off $3.2 million of remaining debt issuance costs upon repayment of the debt. The Company recorded a loss on debt extinguishment of $5.2 million for the prepayment penalty and write off of debt issuance costsbusiness in the ~~third quarter of 2020.~~

We believe our cash and cash equivalents, our New Revolving Credit Facility and cash provided by sales of our software solutions and services will be sufficient to meet our working capital and capital expenditure needs for at least the next 12 months. Our future capital requirements will depend on many factors including our growth rate, the timing and extent of spending to support development efforts, the expansion of sales and marketing activities, the introduction of new and enhanced products and services offerings, and the continuing market acceptance of our products. In the future, we may enter into arrangements to acquire or invest in complementary businesses, services and technologies, including intellectual property rights.

We may be required to seek additional equity or debt financing. In the event that additional financing is required from outside sources, we may not be able to raise it on terms acceptable to us or at all. If we are unable to raise additional capital or generate cash flows necessary to expand our operations and invest in new technologies, this could reduce our ability to compete successfully and harm our results of operations.

future.

A majority of our customers pay in advance for subscriptions and support and maintenance contracts, a portion of which is recorded as deferred revenue. Deferred revenue consists of the unearned portion of billed fees for our subscriptions, which is later recognized as revenue in accordance with our revenue recognition policy. As of June 30, ~~2020,~~2023, we had deferred revenue of ~~$157.7~~$355.1 million, of which ~~$130.3~~$290.7 million was recorded as a current liability and is expected to be ~~recorded~~recognized as revenue in the next 12 months, provided all other revenue recognition criteria have been met.

~~Credit Facilities~~

On November 13, 2017, we entered into a Credit Agreement with a syndicate of lenders, comprised of the $175.0 million Term Loan Facility and the $15.0 million Prior Revolving Credit Facility, in each case with a maturity date of November 13, 2022. Pursuant to the Amendment Agreement No. 1, dated as of January 30, 2019, the Term Loan Facility was increased to $205.0 million.

As of June 30, 2023, there were no amounts outstanding under the 2020 ~~we had $205.0~~Credit Agreement, other than $1.0 million ~~and no borrowings~~in outstanding

~~Table of Contents~~

~~under our Term Loan Facility and Prior Revolving Credit Facility, respectively, and $1.2 million of~~ letters of ~~credit outstanding under our Prior Revolving~~credit. Effective April 7, 2023, we entered into the Credit ~~Facility.~~

~~Borrowings~~Agreement Amendment, which amended certain provisions of the 2020 Credit Agreement. The Credit Agreement Amendment updated the benchmark interest rate provisions to replace the LIBO Rate with the Adjusted Term SOFR for purposes of calculating interest for U.S. dollar-denominated borrowings under the ~~Prior~~terms of the 2020 Credit Agreement. Except as amended by the Credit Agreement ~~bore~~Amendment, the remaining terms of the 2020 Credit Agreement remain in full force and effect. See Note 8 for additional information.

On September 17, 2021, we completed a private offering of the 2026 Notes and received net proceeds of approximately $361.4 million after deducting the initial purchasers’ discounts and commissions and the offering expenses paid by us. The 2026 Notes bear interest at a rate of 0.125% per ~~annum, at~~year, payable semiannually in arrears on March 1st and September 1st of each year, beginning on March 1, 2022.

On July 13, 2023, the ~~borrower’s option, equal to an applicable margin, plus, (a)~~Company acquired dataJAR for ~~alternate base rate borrowings,~~total purchase consideration of £18.9 million (or approximately $24.6 million using the highest of (i) the rate last quoted by The Wall Street Journal as the “prime rate” in the United States, (ii) the Federal Funds Rate in effect on such day plus 1/2 of 1.00% and (iii) the Adjusted LIBO Rate for a one month interest period on such day plus 1.00% and (b) for eurodollar borrowings, the Adjusted LIBO Rate determined by the greater of (i) the LIBO Rate for the relevant interest period divided by 1 minus the statutory reserves (if any) and (ii) 1.00%.

The applicable margin for borrowings under the Prior Credit Agreement was (a)(1) prior to June 30, 2020 and (2) on or after June 30, 2020 (so long as the total leverage ratio is greater than 6.00 to 1.00), (i) 7.00% for alternate base rate borrowings and (ii) 8.00% for eurodollar borrowings and (b) on or after June 30, 2020 (so long as the total leverage ratio is less than or equal to 6.00 to 1.00), subject to step downs to (i) 5.50% for alternate base rate borrowings and (ii) 6.50% for eurodollar borrowings. The total leverage ratio was determined in accordance with the terms of the Prior Credit Agreement.

~~The contract interest~~exchange rate on July 13, 2023), of which £16.2 million (or approximately $21.1 million using the ~~Term Loan~~exchange rate on July 13, 2023) was paid upon closing. See Note 13 for additional information.

Future Liquidity and Capital Resource Requirements

We believe our cash and cash equivalents, the 2020 Revolving Credit Facility, ~~was 8.00% per annum as~~and cash provided by sales of ~~June 30, 2020. The effective interest~~our software solutions and services will be sufficient to meet our working capital and capital expenditure needs, debt service requirements for at least the next 12 months, and other known long-term cash requirements. Our future capital requirements will depend on many factors including our growth rate, ~~was 8.70% per annum as~~the timing and extent of ~~June 30, 2020. The effective interest rate was higher than~~spending to support development efforts, the ~~contract rate due~~expansion of sales and marketing activities, the introduction of new and enhanced products and services offerings, and the continuing market acceptance of our products. In the future, we may use cash to ~~amortization of debt issuance costs related to the Term Loan Facility. The Term Loan Facility did not require periodic principal payments.~~

acquire or invest in complementary businesses, services, and technologies, including intellectual property rights.

As of June 30, ~~2020,~~2023, our principal commitments consist of obligations under our 2026 Notes, contractual agreements for hosting services and other support software, and operating leases for office space. During the ~~interest rate for the Prior Revolving Credit Facility was 7% per annum. As of~~six months ended June 30, ~~2020, the Company had used $1.2 million as collateral~~2023, there have been no material changes to our commitments under our 2026 Notes and operating leases for office space ~~letters of credit, which is an off-balance sheet arrangement. The borrower was also required to pay a commitment fee~~as disclosed in our Annual Report on the average daily undrawn portion of the Prior Revolving Credit Facility of 0.50% per annum, and a letter of credit participation fee equal to the applicable margin for eurodollar revolving loans on the actual daily amount of the letter of credit exposure.

~~The Prior Credit Agreement contained customary representations and warranties, affirmative covenants, reporting obligations, negative covenants and events of default.~~

On July 27, 2020, we entered into a new secured Credit Agreement for an initial revolving credit facility of $150 million, which may be increased or decreased under specific circumstances, with a $25 million letter of credit sublimit and a $50 million alternative currency sublimit. In addition, the New Credit Agreement providesForm 10-K for the ~~ability of the Company to request incremental term loan facilities, in a minimum amount of $5 million~~year ended December 31, 2022. See Note 7 for ~~each facility. Borrowings~~additional information on commitments under ~~the New Credit Agreement mature on July 27, 2025. The New Credit Agreement contains customary representations~~contractual agreements for hosting services and warranties, affirmative covenants, reporting obligations, negative covenants and events of default. In the third quarter of 2020, the Company recorded debt issuance costs of $1.2 million related to the New Credit Agreement. There have been no borrowings against the New Credit Agreement.

other support software.

The following table presents a summary of our condensed consolidated cash flows from operating, investing, and financing activities:


	Six Months Ended June 30,
	2023		2022
	(in thousands)
Net cash (used in) provided by operating activities	$	(13,231)	$	16,342
Net cash used in investing activities	(2,561)		(6,978)
Net cash provided by (used in) financing activities	2,482		(3,375)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	92		(790)
Net (decrease) increase in cash, cash equivalents, and restricted cash	(13,218)		5,199
Cash, cash equivalents, and restricted cash, beginning of period	231,921		177,150
Cash, cash equivalents, and restricted cash, end of period	$	218,703	$	182,349
Cash paid for interest	$	391	$	371
Cash paid for purchases of equipment and leasehold improvements	1,786		2,876

Six Months Ended

June 30,

2020

2019

(in thousands)
Net cash provided by (used in) operating activities

$
9,457

$
(9,719)
Net cash used in investing activities

(1,366)

(38,625)
Net cash provided by (used in) financing activities

(2,100)

39,106
Net increase (decrease) in cash and cash equivalents

5,991

(9,238)
Cash and cash equivalents at beginning of period

32,433

39,240
Cash and cash equivalents at end of period

$
38,424

$
30,002
Cash paid for interest

$
9,262

$
10,568
Cash paid for purchases of equipment and leasehold improvements

1,366

3,319

Operating Activities

Our largest source of operating cash is cash collections from our subscription customers. Our primary use of cash from operating activities is related to employee-related expenditures, marketing expenses, and third-party hosting costs.

For the six months ended June 30, ~~2020,~~2023, net cash ~~provided by~~used in operating activities was ~~$9.5~~$13.2 million reflecting our net loss of ~~$8.7~~$60.4 million, adjusted for non-cash charges of ~~$19.3~~$86.9 million and net cash outflows of ~~$1.1~~$39.7 million from changes in our operating assets and liabilities. Non-cash charges primarily consisted of share-based compensation, depreciation and amortization of property and equipment and intangible assets, amortization of deferred contract costs, non-cash lease expense, and amortization of debt issuance ~~costs, provision for bad debt expense and returns and share-based compensation, partially offset by deferred taxes and a $3.7 million adjustment to our Digita earnout.~~costs. The primary drivers of net cash outflows from changes in operating assets and liabilities included an increase of $19.1 million in deferred contract costs, ~~of $10.0 million,~~ an increase of $12.0 million in trade accounts receivable due to higher sales and the timing of ~~$7.4 million, and~~cash receipts from our customers, a decrease of $10.7 million in accounts payable and accrued liabilities primarily due to cash paid for employee bonuses and cash paid for the contingent consideration associated with the Digita acquisition, and an increase of ~~$2.1~~$6.7 million in prepaid expenses and other assets. These changes were partially offset by ~~a $17.0~~an increase of $8.8 million ~~increase~~ in deferred revenue ~~and a $1.2 million increase~~due to growth in ~~other liabilities.~~

subscription revenue.

For the six months ended June 30, ~~2019,~~2022, net cash ~~used in~~provided by operating activities was ~~$9.7~~$16.3 million reflecting our net loss of ~~$16.7~~$88.8 million, adjusted for non-cash charges of ~~$17.3~~$109.7 million and net cash outflows of ~~$10.3~~$4.6 million from changes in our operating assets and liabilities. Non-cash charges primarily consisted of share-based compensation, depreciation and amortization of property and equipment and intangible assets, amortization of deferred contract costs, non-cash lease expense, and amortization of debt issuance ~~costs, provision for bad debt expense and returns and share-based compensation, partially offset by deferred taxes.~~costs. The primary drivers of net cash outflows from changes in operating assets and liabilities included an increase of $17.9 million in trade accounts receivable due to higher sales and the timing of ~~$10.6 million,~~cash receipts from our customers, an increase of $15.4 million in deferred contract costs, ~~of $8.7 million,~~ an increase of $3.9 million in prepaid expenses and other assets, ~~of $2.7 million,~~ and a decrease of $2.8 million in accounts payable and accrued ~~liabilities of $2.3 million,~~liabilities. These changes were partially offset by ~~a $14.2~~an increase of $35.2 million ~~increase~~ in deferred revenue due to growth in subscription revenue.

Investing Activities

During the six months ended June 30, ~~2020,~~2023, net cash used in investing activities was ~~$1.4~~$2.6 million ~~due to~~driven by purchases of $1.8 million in equipment and leasehold improvements ~~to support our higher headcount with additional office space~~ and ~~hardware and software.~~

purchases of investments of $0.8 million.

During the six months ended June 30, ~~2019,~~2022, net cash used in investing activities was ~~$38.6~~$7.0 million driven by ~~the acquisition~~cash paid for two acquisitions of ~~ZuluDesk of $35.3~~$4.0 million ~~net of cash acquired,~~ and purchases of ~~$3.3~~$2.9 million in equipment and leasehold ~~improvements to support our higher headcount with additional office space and hardware and software.~~

improvements.

Financing Activities

Net cash ~~used in~~provided by financing activities of ~~$2.1~~$2.5 million during the six months ended June 30, ~~2020~~2023 was primarily due to ~~cash paid for offering costs, partially offset by~~ proceeds of $3.0 million from the exercise of stock options.

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Net cash ~~provided by~~used in financing activities of ~~$39.1~~$3.4 million during the six months ended June 30, ~~2019~~2022 was primarily due to ~~increased borrowings on our Credit Facilities of $40.0~~$4.6 million paid for ~~the ZuluDesk acquisition.~~

~~Contractual Obligations and Commitments~~

~~Our principal commitments consist of obligations under operating leases for office space and repayments of long-term debt and the respective interest expense.~~In “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” included in our IPO Prospectus, we disclosed our total contractual obligations as of December 31, 2019 and a new contractual agreement for hosting services entered into in March 2020. In connectioncontingent consideration associated with the ~~closing~~Digita acquisition, partially offset by proceeds of ~~the IPO on July 24, 2020, we repaid $205.0~~$1.5 million ~~of the principal amount of our Term Loan Facility using the proceeds~~ from the ~~IPO. Outside~~exercise of ~~the above and routine transactions made in the ordinary course of business, there have been no material changes to the contractual obligations as disclosed in our IPO Prospectus.~~

stock options.

Indemnification Agreements

In the ordinary course of business, we enter into agreements of varying scope and terms pursuant to which we agree to indemnify customers, channel partners, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of the breach of such agreements, services to be provided by us, or from intellectual property infringement, misappropriation, or other violation claims made by third parties. See “Risk Factors — We have indemnity provisions under our contracts with our customers, channel partners, and other third parties, which could have a material adverse effect on our business” in our ~~IPO Prospectus.~~Annual Report on Form 10-K for the year ended December 31, 2022. In addition, ~~in connection with the completion of our IPO,~~ we have entered into indemnification agreements with our directors and certain ~~executive~~ officers that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers, or employees. No demands have been made upon us to provide indemnification under such agreements, and there are no claims that we are aware of that could have a material effect on our condensed consolidated balance sheets, condensed consolidated statements of operations and comprehensive loss, or condensed consolidated statements of cash flows.

~~Off-Balance Sheet Arrangements~~

As of June 30, 2020, we did not have any relationships with unconsolidated organizations or financial partnerships, such as structure finance or special purpose entities, which would have been established for the purpose of facilitating off-balance sheet arrangements or for other contractually narrow or limited purposes.

~~JOBS Act~~

We qualify as an “emerging growth company” pursuant to the provisions of the JOBS Act. For as long as we are an “emerging growth company”, we may take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not “emerging growth companies”, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, exemptions from the requirements of holding advisory “say-on-pay” votes on executive compensation and shareholder advisory votes on golden parachute compensation.

The JOBS Act also permits an emerging growth company like us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We have elected to use the extended transition period for complying with new or revised accounting standards and, therefore, we will not be subject to the same new or revised accounting standards as other public companies that comply with such new or revised accounting standards on a non-delayed basis.

Critical Accounting ~~Policies~~

Estimates

Our discussion and analysis of financial condition and results of operations are based upon our condensed consolidated financial statements. The preparation of our financial statements in accordance with GAAP requires us to make estimates

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and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses. We base our estimates on experience and other assumptions that we believe are reasonable under the circumstances, and we evaluate these estimates on an ongoing basis. Actual results may differ from those estimates, impacting our reported results of operations and financial condition.

There have been no material changes to our critical accounting ~~policies and~~ estimates disclosed in our ~~IPO Prospectus.~~Annual Report on Form 10-K for the year ended December 31, 2022. For more information, refer to “Note 2 — Summary of ~~Significant Accounting Policies”~~significant accounting policies” to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Recent Accounting Pronouncements

For a description of our recently adopted accounting pronouncements and recently issued accounting standards not yet adopted, see “Note 2 — Summary of ~~Significant Accounting Policies”~~significant accounting policies” to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

~~Market risk represents the risk of loss that may impact~~

There were no material changes to our ~~financial position due to adverse changes in financial market prices~~quantitative and ~~rates. Our~~qualitative disclosures about market risk ~~exposure is primarily a result of exposure due to potential changes in inflation or interest rates. We do not hold financial instruments for trading purposes.~~

~~Foreign Currency Exchange Risk~~

~~The functional currency of our foreign subsidiaries is~~during the U.S. dollar. Most of our sales are denominated in U.S. dollars, and therefore our revenue is not currently subject to significant foreign currency risk. Our operating expenses are denominated in the currencies of the countries in which our operations are located, which are primarily in the U.S., Poland, and the Netherlands. Our consolidated results of operations and cash flows are, therefore, subject to fluctuations due to changes in foreign currency exchange rates and may be adversely affected in the future due to changes in foreign exchange rates. To date, we have not entered into any hedging arrangements with respect to foreign currency risk or other derivative financial instruments. During the three and six months ended June 30, ~~2020,~~2023. See Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of our Annual Report on Form 10-K for the year ended December 31, 2022 for a ~~hypothetical 10% change in foreign currency exchange rates applicable to~~detailed discussion of our ~~business would not have had a material impact on our consolidated financial statements.~~

~~Interest Rate Risk~~

~~Our primary~~ market risk exposure is changing Eurodollar-based interest rates. Interest rate risk is highly sensitive due to many factors, including E.U. and U.S. monetary and tax policies, U.S. and international economic factors and other factors beyond our control.

The contract interest rate on the Term Loan Facility was 8.00% per annum as of June 30, 2020. The effective interest rate was 8.70% per annum as of June 30, 2020. The effective interest rate was higher than the contract rate due to amortization of debt issuance costs related to the Term Loan Facility. The Term Loan Facility does not require periodic principal payments.

At June 30, 2020, we had total outstanding debt of $205.0 million and no borrowings outstanding under our Term Loan Facility and Prior Revolving Credit Facility, respectively. Based on the amounts outstanding, a 100-basis point increase or decrease in market interest rates over a twelve-month period would result in a change to interest expense of $2.1 million on an annual basis.

~~See “— Liquidity and Capital Resources — Credit Facilities” for more information with respect to the calculation of interest rates under our Credit Facilities.~~

risks.

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~~Impact of Inflation~~

While inflation may impact our net revenue and costs of revenue, we believe the effects of inflation, if any, on our results of operations and financial condition have not been significant. However, there can be no assurance that our results of operations and financial condition will not be materially impacted by inflation in the future.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain “disclosure controls and procedures,” as defined in Rule 13a–15(e) and Rule 15d–15(e) under the Exchange Act that are designed to provide reasonable assurance that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to provide reasonable assurance that information required to be disclosed by the Company in the reports that we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Our

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management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2023. Based on ~~such~~this evaluation, our principal executive officer and principal financial officer have concluded that ~~as of June 30, 2020,~~ our disclosure controls and procedures were not effective atas of June 30, 2023 due to the material weakness described below. Notwithstanding such material weakness in internal control over financial reporting, our principal executive officer and principal financial officer have concluded that our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q present fairly, in all material respects, our financial position, results of operations, and cash flows for the periods presented in conformity with GAAP.

Material Weakness in Internal Control over Financial Reporting

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable ~~assurance level.~~

possibility that a material misstatement of a company’s annual or interim financial statements will not be prevented or detected on a timely basis. Because the control deficiency described below could have resulted in a material misstatement of our annual or interim financial statements, we determined that this deficiency constitutes a material weakness.

During the fourth quarter of 2022, we identified that we did not design and maintain effective IT general controls for financial IT applications used for revenue recognition by Wandera, which we acquired in July 2021. Specifically, we did not design and maintain access controls relating to maintaining appropriate segregation of duties and user access as well as controls relating to change management over IT program and data changes. We have concluded that process-level automated and manual controls which were dependent upon IT general controls and data derived from impacted IT systems were ineffective because they could have been adversely impacted. Wandera accounts for less than 5% of our consolidated total revenue, and the material weakness did not result in any misstatements to our interim or annual financial statements.

We are working to remediate this material weakness in our internal control over financial reporting. We have implemented and are currently testing new controls over the financial IT applications used by Wandera with the intention of remediation later this year. These controls include authorization of changes to financial IT applications and enhanced user access controls to ensure appropriate segregation of duties, as well as process-level controls which are dependent upon data from the impacted IT systems. The material weakness will not be considered remediated until a sustained period of time has passed to allow management to test the design and operational effectiveness of the new controls.

Changes in Internal Control

~~There~~

Except for the remediation measures implemented in connection with the material weakness described above, there have been no changes in internal control over financial reporting during the quarter ended June 30, ~~2020~~2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

Our management, including our principal executive officer and principal financial officer, does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. The design of any system of controls is also based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not bedetected.

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PART II

II. OTHER INFORMATION

Item 1. Legal Proceedings

~~We are~~

The information set forth in “Note 7 — Commitments and contingencies” to the condensed consolidated financial statements in Part I, Item 1 of this Quarterly Report on Form 10-Q is incorporated herein by reference.

From time to time, we may be subject to legal proceedings and claims that arise in the ordinary course of business, including patent, commercial, product liability, employment, class action, whistleblower, and other litigation and claims, as well as governmental and other regulatory investigations and proceedings. In addition, third parties may from time to time assert claims against us in the form of letters and other communications. Although the results of these proceedings, claims, inquiries, and investigations cannot be predicted with certainty, we do not ~~presently a party to any litigation~~believe that the final outcome of ~~which, we believe, if determined adversely~~these matters is reasonably likely to ~~us, would individually or taken together~~ have a material adverse effect on our business, ~~operating~~financial condition, or results ~~cash flows~~of operations. Our evaluation of any current matters may change in the future as the legal proceedings and claims and events related thereto unfold. Future litigation may be necessary to defend ourselves, our partners, and our customers by determining the scope, enforceability, and validity of third-party proprietary rights, or ~~financial condition.~~

to establish our proprietary rights. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.

Item 1A. Risk Factors

This quarterly report should be read in conjunction with the risk factors included in our Annual Report on Form 10-K for the year ended December 31, 2022. There have been no material changes to the risk factors disclosed in Part 1, Item ~~1A. Risk Factors of~~1A “Risk Factors” in our ~~IPO Prospectus.~~

Annual Report on Form 10-K for the year ended December 31, 2022.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

~~Unregistered Sales of Equity Securities~~

~~There were no unregistered sales of equity securities during the three months ended June 30, 2020.~~

~~Use of Proceeds from Initial Public Offering of Common Stock~~

On July 24, 2020, we closed our IPO in which we sold 13,500,000 shares of common stock at a public offering price of $26.00 per share. The offer and sale of all of the shares in the IPO were registered under the Securities Act pursuant to the Company’s registration statement on Form S-1 (File No. 333-239535), as amended (the “Initial Registration Statement”), which was declared effective by the SEC on July 21, 2020 and the Company’s registration statement on Form S-1 (File No. 333- 239991) filed on July 21, 2020 pursuant to Rule 462(b) under the Securities Act (the “462(b) Registration Statement”, and together with the Initial Registration Statement, the “Registration Statements”). The representatives of the several underwriters of the IPO were Goldman Sachs & Co. LLC, J.P. Morgan Securities LLC, BofA Securities, Inc. and Barclays Capital Inc. The offering commenced on July 21, 2020 and did not terminate before all of the securities registered in the registration statement were sold.

We raised approximately $319.0 million in net proceeds after deducting underwriting discounts and commissions of $24.7 million and offering expenses of $7.3 million. There was no material change in the use of the IPO proceeds as described in the IPO Prospectus. On July 27, 2020, the net proceeds from the IPO were used to repay $205.0 million of our Term Loan Facility, together with $3.4 million of accrued interest and $2.0 million of prepayment penalty.

In connection with our entry into the Term Loan Facility, affiliates of Vista collectively acquired $45.0 million of term loans under the Term Loan Facility and immediately prior to the repayment on July 27, 2020, affiliates of Vista collectively owned $34.9 million of the Term Loan Facility. Accordingly, Vista received $34.9 million of the net proceeds from the IPO in connection with the repayment of $205.0 million of the Term Loan Facility.

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

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Item 5. Other Information

Insider Trading Arrangements

On ~~September 1, 2020,~~May 15, 2023, Linh Lam, the Company's Chief Information Officer terminated a trading plan intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) under the Exchange Act (a “10b5-1 Plan”). Ms. Lam’s 10b5-1 Plan was adopted on May 27, 2022 and provided for the potential sale of up to 19,139 shares of common stock through August 26, 2023. Following the termination of the previous 10b5-1 Plan on May 15, 2023, Ms. Lam also entered into a new 10b5-1 Plan. Ms. Lam’s new 10b5-1 Plan provides for the potential sale of up to 55,973 shares of common stock, including shares obtained from the settlement of vested RSUs, from August 11, 2023 through May 16, 2024.

Jamf Holding Corp. Annual Cash Incentive Plan

On August 2, 2023, the Compensation and Nominating Committee of the Company’s Board of Directors adopted the Cash Plan. The purpose of the Cash Plan is to align officers’ and other employees’ efforts with the strategic goals of the Company ~~entered into an amended~~through competitive annual incentive opportunities and ~~restated director nomination agreement (the “Amended~~govern the terms and ~~Restated Director Nomination Agreement”),~~conditions of such cash incentive awards granted thereunder. The Cash Plan will be administered by ~~and among~~ the ~~Company~~Compensation & Nominating Committee of the Company’s Board of Directors. The Compensation & Nominating Committee will have the power to grant awards under the Cash Plan, determine the amount of cash to be paid pursuant to each award and the ~~other signatories thereto.~~ terms and conditions of each award. Awards may provide for payment upon the satisfaction of qualitative performance standards or quantitative performance standards, on

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an individual, business unit, affiliate, divisional, or Company-wide basis, as determined by the Compensation & Nominating Committee.

The ~~Amended~~foregoing description of the Cash Plan does not purport to be complete and ~~Restated Director Nomination Agreement amended~~is qualified in its entirety by reference to the Cash Plan which is attached hereto as Exhibit 10.4, and ~~restated the director nomination agreement entered into on July 24, 2020 in connection with the Company’s IPO.~~

is incorporated herein by reference.

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Item 6. Exhibits

The following is a list of all exhibits filed or furnished as part of this report:


Exhibit Number		Description
3.1		Second Amended and Restated Certificate of Incorporation of Jamf Holding Corp., dated July 24, 2020 (incorporated by reference to Exhibit 3.1 to the Company’s Form 8-K filed with the SEC on July 27, 2020).

3.2		Amended and Restated Bylaws of Jamf Holding Corp., dated July 24, 2020 (incorporated by reference to ~~the Company’s~~ Exhibit 3.2 to the Company’s Form 8-K filed with the SEC on July 27, 2020).

~~4.1~~ 10.1		~~Registration Rights Agreement,~~Amendment No. 2, dated ~~July 24, 2020, by and among the Company and the other signatories party thereto (incorporated by reference to the Company’s Exhibit 4.1 to the Company’s Form 8-K filed on July 27, 2020).~~

~~10.1~~	Form of Indemnification Agreement (incorporated by reference to Exhibit 10.13 to Jamf Holding Corp.’s Registration Statement on Form S-1 filed with the Securities and Exchange Commission on June 29, 2020).

~~10.2+~~	Jamf Holding Corp. Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 to Jamf Holding Corp.’s Registration Statement on Form S-8 filed with the Securities and Exchange Commission on July 24, 2020).

~~10.3+~~	~~Form of Stock Option Award Agreement (incorporated by reference to Exhibit 10.9 to the Registrant’s Registration Statement on Form S-1 (No. 333-239535), filed with the Commission on June 29, 2020).~~

~~10.4+~~	Form of Restricted Shares Award Agreement (incorporated by reference to Exhibit 10.10 to the Registrant’s Registration Statement on Form S-1 (No. 333-239535), filed with the Commission on June 29, 2020).

~~10.5+~~	Form of Stock Appreciation Rights Award Agreement (incorporated by reference to Exhibit 10.11 to the Registrant’s Registration Statement on Form S-1 (No. 333-239535), filed with the Commission on June 29, 2020).

~~10.6+~~	Form of Restricted Stock Unit Award Agreement (incorporated by reference to Exhibit 10.12 to the Registrant’s Registration Statement on Form S-1 (No. 333-239535), filed with the Commission on June 29, 2020).

~~10.7+~~	Amended and Restated Jamf Holding Corp 2017 Stock Option Plan (incorporated by reference to Exhibit 10.6 to Jamf Holding Corp.’s Registration Statement on Form S-8 filed with the Securities and Exchange Commission on July 24, 2020).

~~10.8+~~	Form of Amended and Restated Jamf Holding Corp. Stock Option Plan Grant Agreement (incorporated by reference to Exhibit 10.16 to the Registrant’s Registration Statement on Form S-1 (No. 333-239535), filed with the Commission on June 29, 2020).

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~~10.9~~	~~Credit Agreement, dated as of July 27, 2020,~~March 30, 2023, by and among JAMF Holdings, Inc., as borrower, Juno Intermediate, Inc., as a guarantor, Juno Parent, LLC, as a guarantor, the other loan parties thereto, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to ~~the Company’s~~ Exhibit 10.1 to the Company’s Form 8-K filed with the SEC on ~~July 29, 2020)~~April 11, 2023).

~~10.10~~ 10.2+		Amended and Restated ~~Director Nomination~~Letter Agreement, dated ~~September 1, 2020,~~May 2, 2023, between JAMF Holdings, Inc. and John Strosahl (incorporated by ~~and among~~reference to Exhibit 10.1 to the ~~Company and~~Company’s Form 8-K filed with the ~~signatories party thereto, filed herewith.~~SEC on May 4, 2023).

~~31.1~~ 10.3+		Transition and Retirement Agreement, dated May 2, 2023, between JAMF Holdings, Inc. and Dean Hager (incorporated by reference to Exhibit 10.2 to the Company’s Form 8-K filed with the SEC on May 4, 2023).

10.4+		Jamf Holding Corp. Annual Cash Incentive Plan, filed herewith.

31.1		Certification of the Chief Executive Officer pursuant to Exchange Act Rules ~~Rule~~ 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

31.2		Certification of the Chief Financial Officer pursuant to Exchange Act Rules ~~Rule~~ 13a-14(a) and 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002, filed herewith.

32.1*		Certification of the Chief Executive Officer pursuant to 18 U.S.C. Section 1350, ~~filed~~furnished herewith.

32.2*		Certification of the Chief Financial Officer pursuant to 18 U.S.C. Section 1350, ~~filed~~furnished herewith.

101.INS		Inline XBRL Instance Document

101.SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB		Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document

104		Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101)

* The certifications furnished in Exhibit 32.1 and Exhibit 32.2 hereto are deemed to accompany this Quarterly Report on Form 10-Q and will not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, except to the extent that the registrant specifically incorporates it by reference.

+ Indicates a management contract or compensatory plan or arrangement.

Table of Contents

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the ~~Registrant~~registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			~~Jamf Holding Corp.~~JAMF HOLDING CORP. (Registrant)

Date: ~~September 2, 2020~~ August 8, 2023	By:	~~By:~~	/s/ ~~Jill Putman~~ Ian Goodkind
		Ian Goodkind	~~Jill Putman~~
			Chief Financial Officer (Principal Financial and Accounting Officer)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the quarterly period ended June 30, ~~2020~~ 2023


				PAGE
PART I.			FINANCIAL INFORMATION	4
				~~PAGE~~
~~PART I.~~Item 1.			~~FINANCIAL INFORMATION~~

~~Item 1~~.	Financial Statements (unaudited)	3 4

	Condensed Consolidated Balance Sheets ~~as of~~— June 30, ~~2020~~2023 and December 31, ~~2019~~2022	3 4

	Condensed Consolidated Statements of Operations ~~for the~~— Three and Six Months ~~ended~~Ended June 30, ~~2020~~2023 and ~~2019~~2022	4 5
			Condensed Consolidated Statements of Comprehensive Loss — Three and Six Months Ended June 30, 2023 and 2022	6
			Condensed Consolidated Statements of Stockholders’ Equity ~~for the~~— Three and Six Months ~~ended~~Ended June 30, ~~2020~~2023 and ~~2019~~2022	5 7

	Condensed Consolidated Statements of Cash Flows ~~for the~~— Six Months Ended June 30, ~~2020~~2023 and ~~2019~~2022	6 9

	Notes to Condensed Consolidated Financial Statements	7 11
			Note 1. Basis of presentation and description of business	11
			Note 2. Summary of significant accounting policies	12
			Note 3. Financial instruments fair value	14
			Note 4. Acquisitions	16
			Note 5. Goodwill and other intangible assets	18
			Note 6. Leases	19
			Note 7. Commitments and contingencies	20
			Note 8. Debt	21
			Note 9. Share-based compensation	22
			Note 10. Net loss per share	24
			Note 11. Income taxes	25
			Note 12. Related party transactions	25
			Note 13. Subsequent events	25
Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations	25 29
Item 3.
~~Item 3~~.	Quantitative and Qualitative Disclosures About Market Risk	43 45
Item 4.
~~Item 4~~.	Controls and Procedures	44 45

PART II.			OTHER INFORMATION	47
Item 1.			Legal Proceedings	47
Item 11A..			~~Legal Proceedings~~Risk Factors	45 47
Item 2.
~~Item 1A~~.	~~Risk Factors~~	45

~~Item 2~~.	Unregistered Sales of Equity Securities and Use of Proceeds	45 47
Item 3.
~~Item 3~~.	Defaults Upon Senior Securities	45 47
Item 4.
~~Item 4~~.	Mine Safety Disclosures	45 47
Item 5.			Other Information	47
Item 56..			~~Other Information~~Exhibits	46 49

~~Item 6~~Signatures.				~~Exhibits~~50	46


	June 30, 2020		December 31, 2019
		(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	38,424	$	32,433
Trade accounts receivable, net		53,275		46,513
Income taxes receivable		554		14
Deferred contract costs		7,270		5,553
Prepaid expenses		10,880		10,935
Other current assets		6,314		3,133
Total current assets		116,717		98,581
Equipment and leasehold improvements, net		11,494		12,477
Goodwill		539,818		539,818
Other intangible assets, net		218,430		235,099
Deferred contract costs		20,334		16,234
Other assets		2,557		2,599
Total assets	$	909,350	$	904,808
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	3,909	$	3,684
Accrued liabilities		26,099		26,927
Income taxes payable		1,081		819
Deferred revenues		130,309		120,089
Total current liabilities		161,398		151,519
Deferred revenues, noncurrent		27,429		20,621
Deferred tax liability		14,913		18,133
Debt		201,891		201,319
Other liabilities		6,876		9,338
Total liabilities		412,507		400,930
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par value, 132,000,000 shares authorized, 102,862,404 and 102,843,612 shares issued and outstanding at June 30, 2020 and December 31, 2019, respectively		103		103
Additional paid‑in capital		570,434		568,756
Accumulated deficit		(73,694)		(64,981)
Total stockholders’ equity		496,843		503,878
Total liabilities and stockholders’ equity	$	909,350	$	904,808


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2020		2019		2020		2019
Revenue:
Subscription	$	52,978	$	37,216	$	103,056	$	70,956
Services		2,451		4,794		6,461		9,295
License		6,802		6,300		13,104		12,187
Total revenue		62,231		48,310		122,621		92,438
Cost of revenue:
Cost of subscription (exclusive of amortization shown below)		8,762		7,423		18,010		14,380
Cost of services (exclusive of amortization shown below)		2,207		3,549		5,293		7,192
Amortization expense		2,678		2,513		5,355		4,954
Total cost of revenue		13,647		13,485		28,658		26,526
Gross profit		48,584		34,825		93,963		65,912
Operating expenses:
Sales and marketing		20,202		16,612		42,484		31,888
Research and development		11,929		9,491		24,546		18,534
General and administrative		6,603		7,534		17,892		14,797
Amortization expense		5,634		5,626		11,308		11,259
Total operating expenses		44,368		39,263		96,230		76,478
Income (loss) from operations		4,216		(4,438)		(2,267)		(10,566)
Interest expense, net		(4,690)		(5,481)		(9,468)		(10,952)
Foreign currency transaction loss		(13)		(197)		(317)		(450)
Other income, net		36		55		91		110
Loss before income tax benefit		(451)		(10,061)		(11,961)		(21,858)
Income tax benefit		28		2,390		3,248		5,177
Net loss	$	(423)	$	(7,671)	$	(8,713)	$	(16,681)
Net loss per share, basic and diluted	$	(0.00)	$	(0.07)	$	(0.08)	$	(0.16)
Weighted‑average shares used to compute net loss per share, basic and diluted		102,862,404		102,709,405		102,861,475		102,694,756


	Stock Class			Additional
	Common			Paid‑In		Accumulated		Stockholders’
	Shares	Amount		Capital		Deficit		Equity
Three Months Ended June 30, 2020:

Balance, March 31, 2020	102,862,404	$	103	$	569,670	$	(73,271)	$	496,502
Issuance of common stock	—		—		—		—		—
Share‑based compensation	—		—		764		—		764
Net loss	—		—		—		(423)		(423)
Balance, June 30, 2020	102,862,404	$	103	$	570,434	$	(73,694)	$	496,843


Balance, March 31, 2019	102,692,784	$	103	$	566,177	$	(41,391)	$	524,889
Issuance of common stock	76,540		—		422		—		422
Share‑based compensation	—		—		649		—		649
Net loss	—		—		—		(7,671)		(7,671)
Balance, June 30, 2019	102,769,324	$	103	$	567,248	$	(49,062)	$	518,289


Balance, December 31, 2019	102,843,612	$	103	$	568,756	$	(64,981)	$	503,878
Issuance of common stock	18,792		—		103		—		103
Share‑based compensation	—		—		1,575		—		1,575
Net loss	—		—		—		(8,713)		(8,713)
Balance, June 30, 2020	102,862,404	$	103	$	570,434	$	(73,694)	$	496,843


Balance, December 31, 2018	102,649,701	$	103	$	565,372	$	(32,381)	$	533,094
Issuance of common stock	119,623		—		658		—		658
Share‑based compensation	—		—		1,218		—		1,218
Net loss	—		—		—		(16,681)		(16,681)
Balance, June 30, 2019	102,769,324	$	103	$	567,248	$	(49,062)	$	518,289



Assets acquired:
Cash	$	3,325
Other current assets		1,306
Long‑term assets		154
Liabilities assumed:
Accounts payable and accrued liabilities		(419)
Deferred revenue		(3,050)
Deferred tax liability		(2,996)
Intangible assets acquired		12,310
Goodwill		28,000
Total purchase consideration	$	38,630


								Weighted‑
								Average
				Accumulated		Net Carrying		Remaining
	Useful Life	Gross Value		Amortization		Value		Useful Life

		(in thousands)
Trademarks	1‑8 years		34,320		9,167		25,153	5.8 years
Customer relationships	2‑12 years		214,320		37,564		176,756	9.7 years
Developed technology	5 years		53,560		20,419		33,141	3.2 years
Non‑competes	2 years		90		41		49	1.1 years
Balance, December 31, 2019		$	302,290	$	67,191	$	235,099
Trademarks	8 years		34,320		11,310		23,010	5.3 years
Customer relationships	2‑12 years		214,320		46,711		167,609	9.2 years
Developed technology	5 years		53,560		25,775		27,785	2.7 years
Non‑competes	2 years		90		64		26	0.6 years
Balance, June 30, 2020		$	302,290	$	83,860	$	218,430


		Per Unit
	Units	Fair Value
Outstanding, December 31, 2019	36,520	$	12.60
Granted	—		—
Restrictions lapsed	—		—
Forfeited	—		—
Outstanding, June 30, 2020	36,520	$	12.60


	Three months ended June 30,				Change				Six months ended June 30,				Change
	2020		2019		$		%		2020		2019		$		%

	(dollars in thousands)
SaaS subscription and support and maintenance	$	52,978	$	37,216	$	15,762	42	%	$	103,056	$	70,956	$	32,100	45	%
On‑premise subscription		5,770		4,048		1,722	43			10,310		7,089		3,221	45
Recurring revenue		58,748		41,264		17,484	42			113,366		78,045		35,321	45
Perpetual license		1,032		2,252		(1,220)	(54)			2,794		5,098		(2,304)	(45)
Professional services		2,451		4,794		(2,343)	(49)			6,461		9,295		(2,834)	(30)
Non‑recurring revenue		3,483		7,046		(3,563)	(51)			9,255		14,393		(5,138)	(36)
Total revenue	$	62,231	$	48,310	$	13,921	29	%	$	122,621	$	92,438	$	30,183	33	%