
☐
	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☒ 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 ~~May 7, 2021,~~April 29, 2022, the ~~Registrant~~registrant had ~~117,725,132~~119,828,395 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
2021 Term Loan Facility						364-day term loan facility incurred under the Credit Agreement Amendment
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 820						ASC Topic 820, Fair Value Measurement
ASC 850						ASC Topic 850, Related Party Disclosures
ASU						Accounting Standards Update
cmdSecurity						cmdSecurity Inc.
CODM						Chief operating decision maker
Credit Agreement Amendment						Incremental Facility Amendment No. 1 to the 2020 Credit Agreement, dated July 1, 2021
Current Period ARR						ARR from the same cohort of customers used to calculate Prior Period ARR as of the current period end
Digita						Digita Security LLC
FASB						Financial Accounting Standards Board
GAAP						U.S. generally accepted accounting principles
IPR&D						In-process research and development
JNGF						Jamf Nation Global Foundation
LTIP						Long-term incentive plan
Merger Agreement						Agreement and Plan of Merger, dated as of May 5, 2021 in connection with the acquisition of Wandera
Prior Period ARR						ARR from the cohort of all customers as of 12 months prior to period end
RSU						Restricted stock unit
SEC						Securities and Exchange Commission
UK						United Kingdom
Vista						Vista Equity Partners, LLC and its affiliates
Wandera						Wandera, Inc.
ZTNA						Zero Trust Network Access

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

JAMF HOLDING CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Inin thousands, except share and per share amounts)

March 31, 2021

December 31, 2020

(unaudited)

Assets




Current assets:




Cash and cash equivalents

$
196,190

$
194,868
Trade accounts receivable, net of allowances of $603 and $530 at March 31, 2021 and December 31, 2020, respectively

75,882

69,056
Income taxes receivable

632

632
Deferred contract costs

11,155

9,959
Prepaid expenses

15,009

13,283
Other current assets

2,325

1,113
Total current assets

301,193

288,911
Equipment and leasehold improvements, net

16,965

12,755
Goodwill

541,850

541,480
Other intangible assets, net

197,504

202,878
Deferred contract costs

28,774

26,770
Other assets

28,898

5,359
Total assets

$
1,115,184

$
1,078,153
Liabilities and stockholders’ equity




Current liabilities:




Accounts payable

$
5,744

$
6,967
Accrued liabilities

28,131

31,574
Income taxes payable

1,153

713
Deferred revenues

167,868

160,443
Total current liabilities

202,896

199,697
Deferred revenues, noncurrent

53,711

45,507
Deferred tax liability, net

5,475

6,422
Other liabilities

33,839

11,046
Total liabilities

295,921

262,672
Commitments and contingencies (Note 8)




Stockholders’ equity:




Preferred stock, $0.001 par value, 50,000,000 shares authorized at March 31, 2021 and December 31, 2020; no shares issued and outstanding at March 31, 2021 and December 31, 2020

—

—
Common stock, $0.001 par value, 500,000,000 shares authorized at March 31, 2021 and December 31, 2020; 117,705,895 and 116,992,472 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively

118

117
Additional paid‑in capital

909,966

903,116
Accumulated deficit

(90,821)

(87,752)
Total stockholders’ equity

819,263

815,481
Total liabilities and stockholders’ equity

$
1,115,184

$
1,078,153


	March 31, 2022		December 31, 2021
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	164,595	$	177,150
Trade accounts receivable, net of allowances of $492 and $391 at March 31, 2022 and December 31, 2021, respectively	81,121		79,143
Income taxes receivable	287		608
Deferred contract costs	14,142		12,904
Prepaid expenses	19,616		17,581
Other current assets	4,318		4,212
Total current assets	284,079		291,598
Equipment and leasehold improvements, net	18,237		18,045
Goodwill	841,984		845,734
Other intangible assets, net	251,072		264,593
Deferred contract costs, non-current	31,793		29,842
Other assets	39,159		30,608
Total assets	$	1,466,324	$	1,480,420
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	8,808	$	9,306
Accrued liabilities	45,558		54,022
Income taxes payable	376		167
Deferred revenues	234,389		223,031
Total current liabilities	289,131		286,526
Deferred revenues, non-current	58,110		59,097
Deferred tax liability, net	8,097		8,700
Convertible senior notes, net	362,648		362,031
Other liabilities	26,417		25,640
Total liabilities	744,403		741,994
Commitments and contingencies (Note 7)	0		0
Stockholders’ equity:
Preferred stock, $0.001 par value, 50,000,000 shares authorized at March 31, 2022 and December 31, 2021; no shares issued and outstanding at March 31, 2022 and December 31, 2021	—		—
Common stock, $0.001 par value, 500,000,000 shares authorized at March 31, 2022 and December 31, 2021; 119,659,455 and 119,426,064 shares issued and outstanding at March 31, 2022 and December 31, 2021, respectively	119		119
Additional paid‑in capital	930,788		913,581
Accumulated other comprehensive loss	(15,949)		(7,866)
Accumulated deficit	(193,037)		(167,408)
Total stockholders’ equity	721,921		738,426
Total liabilities and stockholders’ equity	$	1,466,324	$	1,480,420

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 March 31,


2021

2020

Revenue:





Subscription

$
74,923

$
54,618

Services

4,003

4,010

License

2,242

1,762

Total revenue

81,168

60,390

Cost of revenue:





Cost of subscription (exclusive of amortization expense shown below)

12,014

9,248

Cost of services (exclusive of amortization expense shown below)

2,465

3,086

Amortization expense

2,777

2,677

Total cost of revenue

17,256

15,011

Gross profit

63,912

45,379

Operating expenses:





Sales and marketing

29,332

22,282

Research and development

15,626

12,617

General and administrative

16,105

11,289

Amortization expense

5,627

5,674

Total operating expenses

66,690

51,862

Loss from operations

(2,778)

(6,483)

Interest expense, net

(55)

(4,778)

Foreign currency transaction loss

(171)

(304)

Other income, net

—

55

Loss before income tax (provision) benefit

(3,004)

(11,510)

Income tax (provision) benefit

(65)

3,220

Net loss

$
(3,069)

$
(8,290)

Net loss per share, basic and diluted

$
(0.03)

$
(0.08)

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

117,386,322

102,860,545


	Three Months Ended March 31,
	2022		2021
Revenue:
Subscription	$	102,201	$	74,482
Services	3,944		4,003
License	2,113		2,242
Total revenue	108,258		80,727
Cost of revenue:
Cost of subscription (exclusive of amortization expense shown below)	19,902		12,014
Cost of services (exclusive of amortization expense shown below)	3,107		2,465
Amortization expense	5,218		2,777
Total cost of revenue	28,227		17,256
Gross profit	80,031		63,471
Operating expenses:
Sales and marketing	46,325		30,167
Research and development	24,802		15,626
General and administrative	25,612		16,244
Amortization expense	7,029		5,627
Total operating expenses	103,768		67,664
Loss from operations	(23,737)		(4,193)
Interest expense, net	(859)		(55)
Foreign currency transaction loss	(781)		(218)
Loss before income tax provision	(25,377)		(4,466)
Income tax provision	(252)		(123)
Net loss	$	(25,629)	$	(4,589)
Net loss per share, basic and diluted	$	(0.21)	$	(0.04)
Weighted‑average shares used to compute net loss per share, basic and diluted	119,594,341		117,386,322

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)


	Three Months Ended March 31,
	2022		2021
Net loss	$	(25,629)	$	(4,589)
Other comprehensive loss:
Foreign currency translation adjustments	(8,083)		—
Total other comprehensive loss	(8,083)		—
Comprehensive loss	$	(33,712)	$	(4,589)

Stock Class

Additional

Common

Paid‑In

Accumulated

Stockholders’


Shares

Amount

Capital

Deficit

Equity

Three Months Ended March 31, 2021:

Balance, December 31, 2020

116,992,472

$
117

$
903,116

$
(87,752)

$
815,481

Exercise of stock options

713,423

1

4,018

—

4,019

Share-based compensation

—

—

2,832

—

2,832

Net loss

—

—

—

(3,069)

(3,069)

Balance, March 31, 2021

117,705,895

$
118

$
909,966

$
(90,821)

$
819,263

~~Three Months Ended March 31, 2020:~~

Balance, December 31, 2019

102,843,612

$
103

$
568,756

$
(64,981)

$
503,878

Exercise of stock options

18,792

—

103

—

103

Share-based compensation

—

—

811

—

811

Net loss

—

—

—

(8,290)

(8,290)

Balance, March 31, 2020

102,862,404

$
103

$
569,670

$
(73,271)

$
496,502

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)

Three Months Ended March 31,


2021

2020

Cash flows from operating activities

Net loss

$
(3,069)

$
(8,290)

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





Depreciation and amortization expense

9,784

9,586

Amortization of deferred contract costs

3,296

2,090

Amortization of debt issuance costs

69

279

Non-cash lease expense

1,267

—

Provision for bad debt expense and returns

159

240

Share‑based compensation

2,832

811

Deferred tax benefit

(758)

(2,564)

Adjustment to contingent consideration

300

—

Other

62

10

Changes in operating assets and liabilities:

Trade accounts receivable

(7,066)

220

Income tax receivable/payable

463

(789)

Prepaid expenses and other assets

(3,317)

(2,255)

Deferred contract costs

(6,496)

(4,788)

Accounts payable

(1,191)

(1,989)

Accrued liabilities

(7,694)

(4,928)

Deferred revenue

15,472

5,025

Other liabilities

(90)

(13)

Net cash provided by (used in) operating activities

4,023

(7,355)

Cash flows from investing activities





Acquisition, net of cash acquired

(3,041)

—

Purchases of equipment and leasehold improvements

(3,290)

(1,039)

Proceeds from sale of equipment and leasehold improvements

12

—

Net cash used in investing activities

(6,319)

(1,039)

Cash flows from financing activities





Cash paid for offering costs

—

(1,465)

Proceeds from the exercise of stock options

4,019

103

Net cash provided by (used in) financing activities

4,019

(1,362)

Effect of exchange rate changes on cash and cash equivalents

(401)

—

Net increase (decrease) in cash and cash equivalents

1,322

(9,756)

Cash and cash equivalents, beginning of period

194,868

32,433

Cash and cash equivalents, end of period

$
196,190

$
22,677

Supplemental disclosures of cash flow information:





Cash paid for interest

$
3

$
4,734

Cash paid for income taxes, net of refunds

351

216

Offering costs accrued but not paid

—

2,378

Operating lease assets obtained in exchange for operating lease liabilities

(19)

—


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

Three Months Ended March 31, 2022:

Balance, December 31, 2021	119,426,064	$	119	$	913,581	$	(7,866)	$	(167,408)	$	738,426
Exercise of stock options	211,200	—		1,197		—		—		1,197
Vesting of restricted stock units	22,191	—		—		—		—		—
Share‑based compensation	—	—		16,010		—		—		16,010
Foreign currency translation adjustments	—	—		—		(8,083)		—		(8,083)
Net loss	—	—		—		—		(25,629)		(25,629)
Balance, March 31, 2022	119,659,455	$	119	$	930,788	$	(15,949)	$	(193,037)	$	721,921

Three Months Ended March 31, 2021:

Balance, December 31, 2020	116,992,472	$	117	$	903,116	$	—	$	(92,219)	$	811,014
Exercise of stock options	713,423	1		4,018		—		—		4,019
Share‑based compensation	—	—		2,832		—		—		2,832
Net loss	—	—		—		—		(4,589)		(4,589)
Balance, March 31, 2021	117,705,895	$	118	$	909,966	$	—	$	(96,808)	$	813,276

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

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS


	Three Months Ended March 31,
	2022		2021
Cash flows from operating activities
Net loss	$	(25,629)	$	(4,589)
Adjustments to reconcile net loss to cash (used in) provided by operating activities:
Depreciation and amortization expense	13,893		9,784
Amortization of deferred contract costs	3,755		2,700
Amortization of debt issuance costs	679		69
Non-cash lease expense	1,291		1,267
Provision for credit losses and returns	128		159
Share‑based compensation	16,010		2,832
Deferred tax benefit	(468)		(613)
Adjustment to contingent consideration	88		300
Other	725		201
Changes in operating assets and liabilities:
Trade accounts receivable	(2,190)		(7,066)
Income tax receivable/payable	533		376
Prepaid expenses and other assets	(3,668)		(3,317)
Deferred contract costs	(6,952)		(5,065)
Accounts payable	(413)		(1,191)
Accrued liabilities	(11,250)		(7,683)
Deferred revenue	10,478		15,913
Other liabilities	—		(54)
Net cash (used in) provided by operating activities	(2,990)		4,023
Cash flows from investing activities
Acquisitions, net of cash acquired	(4,023)		(3,041)
Purchases of equipment and leasehold improvements	(1,964)		(3,290)
Proceeds from sale of equipment and leasehold improvements	8		12
Net cash used in investing activities	(5,979)		(6,319)
Cash flows from financing activities
Debt issuance costs	(50)		—
Cash paid for contingent consideration	(4,588)		—
Proceeds from the exercise of stock options	1,197		4,019
Net cash (used in) provided by financing activities	(3,441)		4,019
Effect of exchange rate changes on cash and cash equivalents	(145)		(401)
Net (decrease) increase in cash and cash equivalents	(12,555)		1,322
Cash and cash equivalents, beginning of period	177,150		194,868
Cash and cash equivalents, end of period	$	164,595	$	196,190


Supplemental disclosures of cash flow information:
Cash paid for:
Interest	$	293	$	3
Income taxes, net of refunds	192		351
Non-cash activities:
Operating lease assets obtained in exchange for operating lease liabilities	8,314		(19)

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 Apple Enterprise Management, and our cloud software platform is the only vertically-focused Apple infrastructure and security platform of scale in the world. 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.

~~Vista Equity Partners acquisition~~

~~On November 13, 2017, Vista Equity Partners (“Vista”) acquired a majority share~~

Basis of ~~all~~presentation and principles of consolidation

The accompanying condensed consolidated financial statements, which include the ~~issued and outstanding shares~~accounts of the Company ~~at the purchase price of $733.8 million (the “Vista Acquisition”). As of March 31, 2021, funds controlled by Vista~~and its wholly owned ~~approximately 61.9% of our outstanding common stock. As a result, we are a “controlled company” under NASDAQ Global Select Market (“NASDAQ”) corporate governance rules.~~

~~Emerging growth company status~~

We are an emerging growth company as defined in the Jumpstart Our Business Startups Act 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 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, our consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

We will remain an emerging growth company for the first five fiscal years after the completion of our initial public offering (“IPO”), unless one of the following occurs: (i) our total annual gross revenue is at least $1.07 billion, (ii) we have issued more than $1.0 billion in non-convertible debt securities during the prior three year period, or (iii) 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.

~~Basis of presentation~~

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

The condensed consolidated financial statements and related notes in this Quarterly Report on Form 10-Q reflect the revisions previously made for immaterial errors related to certain commissions that were incorrectly capitalized in prior periods as well as various other immaterial errors. See Exhibit 99.2 titled, “Updates to the Company’s Quarterly Report on Form 10-Q for the ~~fair presentation~~Quarter Ended March 31, 2021”, of our Form 8-K, filed with the SEC on August 27, 2021, for more information.

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

Certain reclassifications of prior period amounts have been made to conform to the current presentation. In the fourth quarter of 2020, the Company reclassified on-premise subscription revenue from license revenue to subscription revenue in the consolidated statements of operations on a retroactive basis. information

The amount reclassified for the three months ended March 31, 2020 was $4.5 million. The revised presentation is consistent with our disaggregated revenue disclosure and is more consistent with how investors and other users of the financial statements evaluate overall subscription revenue. The reclassification had no ~~impact on total revenue.~~

~~Table of Contents~~

~~JAMF HOLDING CORP.~~

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

~~(unaudited)~~

~~In 2020, the Company reclassified cash paid for offering costs of $1.5 million during the~~ ~~three months~~ ended March 31, 2020 from operating activities to financing activities in the consolidated statements of cash flows as a result of the completion of our IPO in July 2020. The impact of the reclassification was not material to current or prior period financial statements.

~~Unaudited Interim Consolidated Financial Information~~

~~The accompanying~~ interim condensed consolidated balance sheet as of March 31, ~~2021,~~2022, the condensed consolidated statements of operations, of comprehensive loss, of stockholders’ equity, and of cash flows for the three months ended March 31, ~~2021~~2022 and ~~2020~~2021 and the related ~~footnote disclosures~~notes are unaudited. The condensed consolidated balance sheet as of December 31, 2021 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, 2021, which was filed with the SEC on March 1, 2022. 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, 2021.

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 the three months ended March 31, ~~2021~~2022 are not necessarily indicative of the results to be expected for the year ending December 31, ~~2021~~2022 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 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 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

Our ~~chief operating decision maker (“CODM”)~~CODM is our Chief Executive Officer, 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 1 operating segment and therefore we have 1 reportable segment.

~~Revenue~~

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


	Three Months Ended March 31,
	2022		2021 (1)
	(in thousands)
The Americas (2)	$	75,149	$	58,845
Europe, the Middle East, India, and Africa	25,997		16,229
Asia Pacific	7,112		5,653
	$	108,258	$	80,727

(1) Previously reported revenues by geographic region for the three months ended March 31, 2021 have been revised to correct an immaterial error in the disclosure. There was ~~as follows:~~

no impact to total revenues.

(2)

Three Months Ended March 31,

2021

2020

(in thousands)
The Americas

$
61,258

$
47,026
Europe, the Middle East, India, and Africa

14,523

10,121
Asia Pacific

5,387

3,243

$
81,168

$
60,390

The vast majority of the Americas is 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 the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2020. Except for the accounting policies for leases that were updated as a result of adopting the new accounting standard, there~~2021. 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 months ended March 31, ~~2021.~~2022. The following describes the impact of certain policies.

Trade accounts receivable, net

Credit is extended to customers in the normal course of business, generally with 30-day payment terms. Trade accounts receivable are recorded at the invoiced amount, net of allowances.

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 future economic and market conditions, and ongoing review of customers’ account balances.

The Company writes-off a receivable against the allowance when a determination is made that the balance is uncollectible and collection of the receivable is no longer being actively pursued. This determination is based on the delinquency of the account, the financial condition of the customer, and the Company’s collection experience.

Activity related to our allowance for credit losses for trade accounts receivable was as follows:


	Three Months Ended March 31,
	2022		2021
	(in thousands)
Balance, beginning of period	$	391	$	530
Provision	122		156
Write-offs	(27)		(127)
Recoveries of amounts previously written off	6		44
Balance, end of period	$	492	$	603

Table of Contents

JAMF HOLDING CORP.

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

~~(unaudited)~~

(continued)

(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.

Disaggregation of Revenue

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

Three Months Ended March 31,

2021

2020

(in thousands)
SaaS subscription and support and maintenance

$
66,669

$
50,078
On‑premise subscription

8,254

4,540
Subscription revenue

74,923

54,618
Professional services

4,003

4,010
Perpetual licenses

2,242

1,762
Non‑subscription revenue

6,245

5,772
Total revenue

$
81,168

$
60,390


	Three Months Ended March 31,
	2022		2021
	(in thousands)
SaaS subscription and support and maintenance	$	96,350	$	66,776
On‑premise subscription	5,851		7,706
Subscription revenue	102,201		74,482
Professional services	3,944		4,003
Perpetual licenses	2,113		2,242
Non‑subscription revenue	6,057		6,245
Total revenue	$	108,258	$	80,727

If revenue is recognized in advance of the right to invoice, a contract asset is ~~recorded.~~recorded in other current assets on the condensed consolidated balance sheet. The opening and closing balances of contract assets were ~~$1.2 million and $0.9 million~~ as offollows:


	Three Months Ended March 31,
	2022		2021
	(in thousands)
Balance, beginning of the period	$	1,792	$	947
Balance, end of the period	1,885		1,186
Change	$	93	$	239

For the three months ended March 31, 2022 and 2021, ~~and December 31, 2020, respectively.~~

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.

Table of Contents

JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

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 March 31,

2021

2020

(in thousands)
Balance, beginning of the period

$
205,950

$
140,710
Revenue earned

(60,925)

(47,723)
Deferral of revenue

76,554

52,748
Balance, end of the period

$
221,579

$
145,735


	Three Months Ended March 31,
	2022		2021
	(in thousands)
Balance, beginning of the period	$	282,128	$	205,509
Revenue earned	(85,337)		(60,633)
Deferral of revenue	95,708		76,703
Balance, end of the period	$	292,499	$	221,579

There were no significant changes to our contract assets and liabilities during the three months ended March 31, ~~2021~~2022 and ~~2020~~2021 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 March 31, ~~2021 and December 31, 2020,~~2022, the Company had ~~$243.1~~$343.9 million ~~and $224.5 million, respectively,~~ of remaining performance

~~Table of Contents~~

~~JAMF HOLDING CORP.~~

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

~~(unaudited)~~

obligations, with ~~78% and 80%, respectively,~~72% 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 in the condensed consolidated balance sheets when the period of benefit is determined to be greater than one year.

Total amortization of contract costs for the three months ended March 31, 2022 and 2021 ~~and 2020~~ was ~~$3.3~~$3.8 million and ~~$2.1~~$2.7 million, 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 months ended March 31, ~~2021~~2022 and ~~2020.~~

~~Concentration~~2021.

Adoption of ~~Credit Risk~~

For the three months ended March 31, 2021, the Company had 1 distributor that accounted for more than 10% of total net revenues. Total receivables related to this distributor were $17.3 million as of March 31, 2021. For the three months ended March 31, 2020, the Company had 2 distributors that accounted for more than 10% of total net revenues. Total receivables related to these distributors were $19.8 million as of December 31, 2020.

~~No single end customer accounted for more than 10% of total revenue for the three months ended March 31, 2021 and 2020.~~

~~Recently issued accounting pronouncements not yet adopted~~

~~From time to time,~~ new accounting pronouncements ~~are issued by the Financial~~

Business Combinations — Accounting ~~Standards Board (“FASB”) or other standard setting bodies~~for Contract Assets 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.

Contract Liabilities from Contracts with Customers

~~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,~~October 2021, the FASB issued ASU No. ~~2019-10~~ ~~Financial Instruments — Credit Losses~~2021-08, Business Combinations (Topic ~~326)~~805), ~~Derivatives~~Accounting for Contract Assets 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,~~Contract Liabilities from Contracts with early adoption permitted. 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.

~~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”)~~Customers, which ~~provides entities with temporary~~

~~Table of Contents~~

~~JAMF HOLDING CORP.~~

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

~~(unaudited)~~

~~optional financial reporting alternatives~~requires contract assets and contract liabilities acquired in a business combination to ~~ease~~be recognized and measured by 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 adoption of this standard is not expected to have a material impactacquirer on the ~~Company’s consolidated financial statements.~~

~~Adoption of new accounting pronouncements~~

~~Leases~~

~~In February 2016, the FASB issued ASU No. 2016-02,~~ ~~Leases~~~~(Topic 842)~~ to increase transparency and comparability among organizations related to their leasing arrangements. The update requires lessees to recognize most leases on their balance sheets, with the exception of short-term leases if a policy election is made, while recognizing lease expense on their income statements in a manner similar to current GAAP. The guidance also requires entities to disclose key quantitative and qualitative information about its leasing arrangements. The Company adopted the new lease standard on January 1, 2021 using the optional transition method to the modified retrospective approach. Under this transition provision, results for reporting periods beginning on January 1, 2021 are presented under ASC Topic 842, ~~Leases~~ ~~(“ASC 842”) while prior period amounts continue to be reported and disclosed in accordance with the Company’s historical accounting treatment under ASC Topic 840,~~ ~~Leases~~ ~~(“ASC 840”).~~

To reduce the burden of adoption and ongoing compliance with ASC 842, a number of practical expedients and policy elections are available under the new guidance. The Company elected the “package of practical expedients” permitted under the transition guidance, which among other things, did not require reassessment of whether contracts entered into prior to adoption are or contain leases, and allowed carryforward of the historical lease classification for existing leases. The Company has not elected to adopt the “hindsight” ~~practical expedient, and therefore measured the right-of-use (“ROU”) asset and lease liability using the remaining portion of the lease term at adoption on January 1, 2021.~~

The Company made an accounting policy election under ASC 842 not to recognize ROU assets and lease liabilities for leases with a term of twelve months or less. For all other leases, the Company recognizes ROU assets and lease liabilities based on the present value of lease payments over the lease term at the commencementacquisition date of the lease (or January 1, 2021 for existing leases upon the adoption of ASC 842). The ROU assets also include any initial direct costs incurred and lease payments made at or before the commencement date and are reduced by any lease incentives.

Future lease payments may include fixed rent escalation clauses or payments that depend on an index (such as the consumer price index). Subsequent changes to an index and other periodic market-rate adjustments to base rent are recorded in variable lease expense in the period incurred.

The Company has made an accounting policy election to account for lease and non-lease components in its contracts as a single lease component for all asset classes. The non-lease components typically represent additional services transferred to the Company, such as common area maintenance for real estate, which are variable in nature and recorded in variable lease expense in the period incurred.

The Company uses its incremental borrowing rate to determine the present value of lease payments as the Company’s leases do not have a readily determinable implicit discount rate. The incremental borrowing rate is the rate of interest the Company would have to pay to borrow on a collateralized basis over a similar term and amount in a similar economic environment. Judgement is applied in assessing factors such as Company specific credit risk, lease term, nature and quality of the underlying collateral, currency and economic environment in determining the incremental borrowing rate to apply to each lease.

~~Table of Contents~~

~~JAMF HOLDING CORP.~~

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

~~(unaudited)~~

Upon adoption, the Company recorded ROU assets and lease liabilities of approximately $25.0 million and $28.6 million, respectively, related to the Company’s operating leases. The adoption of the new lease standard did not materially impact our consolidated statements of operations or consolidated statements of cash flows. See Note 6 for more information.

~~Debt~~ w~~ith Conversion and Other Options and Contracts in Entity’s Own Equity~~

~~In August 2020, the FASB issued ASU No. 2020-06,~~ Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging — Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), which simplifies the accounting for certain financial instruments with characteristics of liabilities and equity. Among other changes, the standard eliminates the beneficial conversion and cash conversion accounting models for convertible instruments. As a result, entities will account for a convertible debt instrument wholly as debt unless the instrument contains features that require bifurcation as a derivative in accordance with ASC ~~Topic 815,~~ ~~Derivatives~~606. Generally, this new guidance will result in the acquirer recognizing contract assets and ~~Hedging~~~~, or a convertible debt instrument was issued~~contract liabilities at ~~a substantial premium. In addition,~~ the ~~amendments also require~~same amounts recorded by the ~~if-converted method to~~acquiree. Historically, such amounts were recognized by the acquirer at fair value in accordance with acquisition accounting. The new guidance should be applied ~~for all convertible instruments when calculating diluted earnings per share.~~prospectively to acquisitions occurring on or after the effective date. The standard is effective for fiscal years beginning after December 15, ~~2021,~~2022, including interim periods within those fiscal years. Early adoption is ~~permitted.~~permitted, including in interim periods, for any financial statements that have not been issued. The Company early adopted the new standard on January 1, ~~2021.~~2022. The adoption of the standard did not have ~~a material~~any impact on the Company’s condensed consolidated financial statements.

We will apply the new guidance to future acquisitions.

Note 3. Financial instruments fair value

We report financial assets and liabilities and nonfinancial assets and liabilities that are recognized or disclosed at fair value in the condensed consolidated financial statements on a recurring basis in accordance with ASC ~~Topic 820,~~ ~~Fair Value Measurement~~ ~~(“ASC 820”).~~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

Table of Contents

JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

between market participants at the measurement date. When determining the fair value measurements for assets and liabilities, which are required to be recorded at fair value, we consider the principal or most advantageous 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 value based on the observability of significant inputs to the measurement. The levels of the fair value hierarchy are as follows:

Level 1: Fair value is determined using an unadjusted quoted price in an active market for identical assets or liabilities.

Level 2: Fair value is 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.

Assets and liabilities measured at fair value on a recurring basis

The Company invests in money market funds ~~and U.S. Treasuries~~ with original ~~or remaining~~ maturities at the time of purchase of three months or less, which are measured and recorded at fair value on a recurring basis. Money market funds are valued based on quoted market prices in active markets and classified within Level 1 of the fair value

hierarchy.

In addition, the contingent consideration associated with the Digita and cmdReporter acquisitions are measured and recorded at fair value on a recurring basis. The estimated fair value of the contingent payments associated with the Digita acquisition is determined using a Monte Carlo simulation model, which uses 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 estimated fair value of the contingent payments associated with the cmdReporter acquisition was determined using projected contract wins, which used Level 3 inputs, including assumptions about the probability of closing contracts based on their current stage in the sales process. See Note 4 for more information.

Table of Contents

JAMF HOLDING CORP.

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

~~(unaudited)~~

(continued)

~~hierarchy. U.S. Treasuries include treasury bills that generally mature within 30 days and are classified within Level 1 of the fair value hierarchy.~~ (unaudited)

The fair value of these financial instruments were as follows:

March 31, 2021

Level 1

Level 2

Level 3

Total

(in thousands)
Cash equivalents:

Money market funds

$
150,006

$
—

$
—

$
150,006
Total cash equivalents

$
150,006

$
—

$
—

$
150,006

December 31, 2020

Level 1

Level 2

Level 3

Total

(in thousands)
Cash equivalents:

Money market funds

$
100,000

$
—

$
—

$
100,000
U.S. Treasuries

25,000

—

—

25,000
Total cash equivalents

$
125,000

$
—

$
—

$
125,000


	March 31, 2022
	Level 1		Level 2		Level 3		Total
	(in thousands)
Cash equivalents:
Money market funds	$	126,048	$	—	$	—	$	126,048
Total cash equivalents	$	126,048	$	—	$	—	$	126,048

Contingent consideration:
Accrued liabilities	$	—	$	—	$	5,600	$	5,600
Total contingent consideration	$	—	$	—	$	5,600	$	5,600


	December 31, 2021
	Level 1		Level 2		Level 3		Total
	(in thousands)
Cash equivalents:
Money market funds	$	146,037	$	—	$	—	$	146,037
Total cash equivalents	$	146,037	$	—	$	—	$	146,037

Contingent consideration:
Accrued liabilities	$	—	$	—	$	4,588	$	4,588
Other liabilities	—		—		5,512		5,512
Total contingent consideration	$	—	$	—	$	10,100	$	10,100

The carrying value of accounts receivable and accounts payable approximate their fair 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 March 31,
	2022		2021
	(in thousands)
Balance, beginning of period	$	10,100	$	8,200
Additions	—		359
Total (gains) losses included in:
Net loss	88		300
Payments	(4,588)		—
Other	—		(60)
Balance, end of period	$	5,600	$	8,799

The change in the fair value of the contingent consideration is included in general and administrative expenses in the condensed consolidated statements of operations. The adjustment for the three months ended March 31, 2022 primarily reflected updated assumptions about the probability of growth of subscription services.

Table of Contents

JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

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:


	March 31, 2022				December 31, 2021
	Net Carrying Value		Estimated Fair Value		Net Carrying Value		Estimated Fair Value
	(in thousands)
2026 Notes	$	362,648	$	371,044	$	362,031	$	398,044

As of March 31, 2022 and December 31, 2021, the difference between the net carrying value of the 2026 Notes and the principal amount of $373.8 million represents the unamortized debt issuance costs of $11.1 million and $11.7 million, respectively. See Note 8 for more information. The estimated fair value of the 2026 Notes, which is classified as Level 2, was determined based on quoted bid prices of the 2026 Notes in an over-the-counter market on the last trading day of the reporting period.

Note 4. Acquisitions

~~cmdReporter~~

During the first quarter of 2022, the Company completed 2 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 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 were expensed as incurred and totaled $0.4 million for the three months ended March 31, 2022. These expenses were recognized as acquisition costs in general and administrative expenses in the condensed consolidated statement of operations.

On ~~February 26,~~July 1, 2021, the Company ~~entered into an asset purchase agreement with cmdSecurity Inc. (“cmdSecurity”) to acquire certain cmdSecurity assets, including cmdReporter,~~completed its acquisition of Wandera. Wandera is a ~~suite of~~leader in zero trust cloud security and ~~compliance tools purpose-built~~access for ~~macOS. With cmdReporter,~~mobile devices. As an Apple-first provider of unified cloud security, Wandera expands the Company’s security offering for the enterprise. Building on the Company’s existing capabilities, Wandera adds ZTNA, mobile threat defense, and data policy features to ensure mobile workers can simply and safely access the network resources they need while complying with organizational policies and reducing mobile charges. This acquisition uniquely positions the Company ~~will further extend~~to help IT and security teams confidently protect the ~~security capabilities of its expansive~~devices, data, and applications used by a mobile workforce, while extending the intended Apple experience through the Company’s robust and scalable Apple Enterprise Management platform. ~~cmdSecurity’s software complements~~

Under the ~~Company’s existing product offerings.~~ terms of the Merger Agreement, the Company acquired 100% of the voting equity interest in Wandera and paid total cash consideration of $409.3 million. The total consideration consisted of an initial payment of $359.3 million at close and deferred consideration of $50.0 million that was paid in $25.0 million increments on October 1, 2021 and December 15, 2021. The initial payment of $359.3 million included $0.7 million held back as partial security for post-closing true-up adjustments as well as indemnification claims made within one year of the acquisition date. The amount held back was released in the fourth quarter of 2021. The acquisition was initially financed with cash on hand and borrowings under the 2021 Term Loan Facility.

The Company accounted for the acquisition by applying the acquisition method of accounting for business combinations in accordance with ASC ~~Topic 805,~~ ~~Business Combinations~~ ~~(“ASC 805”). The final aggregate~~805. Accordingly, the purchase price was ~~approximately $3.4 million. This acquisition was funded by~~allocated to the assets acquired and liabilities assumed based on their estimated fair values as of the date of acquisition. In accordance with GAAP, fair value is defined as 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. Any residual purchase price is recorded as goodwill. The allocation of the purchase price required

Table of Contents

JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

management to make significant estimates in determining the fair value of assets acquired and 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;

•historical and expected customer attrition rates and anticipated growth in revenue;

•royalty rates applied to acquired developed technology platforms;

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

•discount rates; and

•uncertain tax positions and tax-related valuation allowances.

The final purchase accounting allocations for the Wandera acquisition will be determined within one year from the acquisition date and depend on ~~hand~~a number of factors, including finalization of income tax effects of the opening balance sheet. The actual fair values of Wandera’s tax assets and ~~includes future contingent consideration due~~liabilities and resulting goodwill may differ from the adjustments set forth in this Form 10-Q. The following table summarizes the preliminary allocation of the purchase price to the ~~sellers.~~ estimated fair values of the assets acquired and liabilities assumed and reflects measurement period adjustments as of March 31, 2022 (in thousands):


Assets acquired:
Cash and cash equivalents	$	9,605
Trade accounts receivable, net	3,882
Prepaid expenses	900
Other current assets	426
Equipment and leasehold improvements, net	58
Intangible assets acquired	102,050
Operating lease assets	1,474
Deferred tax asset	918
Liabilities assumed:
Accounts payable	(788)
Accrued liabilities	(3,464)
Income taxes payable	(94)
Deferred revenue	(5,200)
Operating lease liabilities	(1,474)
Deferred tax liability	(9,374)
Goodwill	310,356
Total purchase consideration	$	409,275

During the fourth quarter of 2021, the Company recorded measurement period adjustments including an increase to other current assets of $0.4 million and an increase to deferred tax assets of $0.1 million, resulting in a decrease to goodwill of $0.5 million. The adjustments related to new information obtained about facts and circumstances that existed as of the acquisition date. The increase to other current assets relates to UK refundable research and development tax credits.

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 cmdSecurity assembled workforce~~expected synergies in sales opportunities across complementary products, customers, and ~~was~~geographies and cross-selling opportunities. The goodwill is not ~~material. The acquired intangible assets and goodwill are~~ deductible for income tax purposes.

~~At the time~~

Table of ~~the acquisition, the contingent consideration was valued at $0.4 million, which was based on the acquired business signing new business or renewing acquired contracts during the~~ ~~90 days~~Contents ~~following the close of the acquisition.~~

JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

The estimated useful lives and fair value of these contingent payments is determined using projected contract wins, which uses Level 3 inputs for fair value measurements, including assumptions about the probability of closing contracts based on their current stage in the sales process.

Substantially all of the purchase price consideration related to the fair value of the acquired separately identifiable intangibles assets, which related to acquired developed technology and in-process research and development (“IPR&D”). The fair valuevalues of the identifiable intangible assets ~~was estimated using the replacement cost method, whereby the components of the~~ acquired ~~intangibles~~ were reviewed to determine the cumulative cost of development for each component, inclusive of a developer’s profit and an entrepreneurial incentive. The cumulative cost of development was not discounted to account for obsolescence factor as ~~the replacement cost accounted for present day development.~~ follows:


	Useful Life	Gross Value
		(in thousands)
Developed technology	6.5 years	$	60,500
Customer relationships	11.0 years	35,600
Order backlog	2.5 years	3,800
Non-competes	2.5 years	1,750
Trademarks	3.0 years	400
Total identifiable intangible assets		$	102,050

The ~~developed technology will be amortized over its estimated~~ weighted-average useful life ~~which was determined to be~~

~~Table~~ of ~~Contents~~

~~JAMF HOLDING CORP.~~

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

~~(unaudited)~~

~~5.0 years. The IPR&D is an indefinite lived intangible asset that is not amortized, but will be evaluated at least annually for impairment. For more details on~~ the intangible assets ~~see Note 5.~~

~~Acquisition-related expenses were expensed~~acquired is 7.8 years.

Developed technology represents the estimated fair value of the features underlying the Wandera products as ~~incurred~~well as the platform supporting Wandera customers. Customer relationships represent the estimated fair value of the underlying relationships with Wandera customers. Order backlog represents the estimated fair value of existing order backlog with Wandera customers. Non-competes represent the estimated fair value of non-compete agreements acquired from Wandera. Trademarks represent the estimated fair value of the Wandera brand.

cmdReporter

On February 26, 2021, the Company entered into an asset purchase agreement with cmdSecurity to acquire certain cmdSecurity assets, including cmdReporter, a suite of security and ~~totaled $0.1~~compliance tools purpose-built for macOS. The final aggregate purchase price was approximately $3.4 million, ~~for the three months ended March 31, 2021. These expenses were recognized as acquisition costs in general~~which consisted of cash consideration of $3.0 million and ~~administrative expenses in the consolidated statement~~contingent consideration of ~~operations.~~

$0.4 million. The ~~Company~~purchase price was allocated ~~the net purchase consideration~~ to the ~~net~~ assets acquired based on their ~~respective~~estimated fair values ~~at the time~~as of the ~~acquisition as follows (in thousands):~~

Cash consideration

$
3,041
Contingent consideration

359
Final aggregate purchase price

$
3,400

Intangible assets acquired:

Developed technology

$
2,630
IPR&D

400
Goodwill

370
Total purchase consideration

$
3,400

date of the acquisition. The allocation included $2.6 million to developed technology with an estimated useful life of 5.0 years and $0.4 million to IPR&D, with the remaining $0.4 million allocated to goodwill. The IPR&D was completed in the first quarter of 2022 and is amortized over its estimated useful life of 5.0 years.

Digita ~~Security LLC~~

In 2019, the Company recorded contingent consideration in connection with its purchase of the outstanding membership interests of Digita. The maximum contingent consideration is $15.0 million if the acquired business achieves certain revenue milestones by December 31, 2022. The ~~estimated fair value~~acquired business achieved the minimum revenue milestones, which resulted in the Company making cash payments of ~~these contingent payments is determined using a Monte Carlo simulation model, which uses Level 3 inputs for fair value measurements, including assumptions about~~$4.6 million and $4.2 million in the ~~probability~~first quarter of ~~growth of subscription services~~2022 and the ~~related pricing~~second quarter of 2021, respectively, to the former owners of the ~~services offered. During~~acquired business. If the ~~three months ended March~~acquired business continues to achieve the revenue milestones, an additional cash payment will be made within 30 days of December 31, ~~2021,~~2022. See Note 3 for more information on the fair value of the contingent consideration was increased by $0.3 million, which was reflected in general and administrative expenses in the consolidated statement of operations. The adjustment for the three months ended March 31, 2021 primarily reflects an increase in the liability due to updated market assumptions. As of March 31, 2021 and December 31, 2020, the fair value of the contingent consideration was $8.5 million and $8.2 million, respectively, which is included in other liabilities in the consolidated balance sheets.

consideration.

Note 5. Goodwill and other intangible assets

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

Three Months Ended March 31,

2021

2020

(in thousands)
Goodwill, beginning of period

$
541,480

$
539,818
Goodwill acquired

370

—
Goodwill, end of period

$
541,850

$
539,818


	Three Months Ended March 31,
	2022		2021
	(in thousands)
Goodwill, beginning of period	$	845,734	$	541,480
Goodwill acquired	3,014		370
Foreign currency translation adjustment	(6,764)		—
Goodwill, end of period	$	841,984	$	541,850

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

8 years

$
34,320

$
13,454

$
20,866

4.8 years
Customer relationships

2 - 12 years

214,428

55,810

158,618

8.7 years
Developed technology

5 years

54,563

31,173

23,390

2.3 years
Non‑competes

2 years

90

86

4

0.1 years
Balance, December 31, 2020

$
303,401

$
100,523

$
202,878



Trademarks

8 years

$
34,300

$
14,506

$
19,794

4.6 years
Customer relationships

2 - 12 years

214,408

60,342

154,066

8.5 years
Developed technology

5 years

57,193

33,949

23,244

2.4 years
Non‑competes

2 years

90

90

—

—
In-process research and development

Indefinite

400

—

400

Balance, March 31, 2021

$
306,391

$
108,887

$
197,504


	March 31, 2022
	Useful Life	Gross Value		Accumulated Amortization		Net Carrying Value		Weighted‑ Average Remaining Useful Life
	(in thousands)
Trademarks	3 - 8 years	$	34,680	$	18,891	$	15,789	3.6 years
Customer relationships	2 ‑ 12 years	248,959		80,934		168,025		8.0 years
Developed technology	5 - 6.5 years	115,677		52,186		63,491		5.0 years
Non‑competes	2 - 3 years	1,711		511		1,200		1.8 years
Order backlog	2.5 years	3,688		1,121		2,567		1.8 years
Total intangible assets		$	404,715	$	153,643	$	251,072


	December 31, 2021
	Useful Life	Gross Value		Accumulated Amortization		Net Carrying Value		Weighted‑ Average Remaining Useful Life
	(in thousands)
Trademarks	3 - 8 years	$	34,690	$	17,788	$	16,902	3.8 years
Customer relationships	2 ‑ 12 years	249,495		75,600		173,895		8.3 years
Developed technology	5 - 6.5 years	116,193		47,142		69,051		5.1 years
Non‑competes	2 - 2.5 years	1,797		439		1,358		2.0 years
Order backlog	2.5 years	3,745		758		2,987		2.0 years
Total intangible assets subject to amortization		405,920		141,727		264,193
IPR&D	Indefinite	400		—		400
Total intangible assets		$	406,320	$	141,727	$	264,593

The gross value in the tables above includes a cumulative foreign currency translation adjustment of $(4.3) million and $(2.1) million as of March 31, 2022 and December 31, 2021, respectively. The accumulated amortization in the table above includes a cumulative foreign currency translation adjustment of $(0.3) million as of March 31, 2022. The cumulative foreign currency translation adjustment for accumulated amortization was not material as of December 31, 2021.

Amortization expense was $12.2 million and $8.4 million ~~for both the three months ended March 31, 2021 and 2020.~~

~~Therewere 0 impairments to goodwill or intangible assets recorded~~ for the three months ended March 31, 2022 and 2021, ~~and 2020.~~

~~Note 6. Leases~~

~~The Company determines if an arrangement is or contains a lease at inception, which is the date on which the terms of the contract are agreed~~respectively.

Therewere no impairments to and the agreement creates enforceable rights and obligations. Under ASC 842, a contract is or contains a lease when (i) explicitly or implicitly identified assets have been deployed in the contract and (ii) the customer obtains substantially all of the economic benefits from the use of that underlying asset and directs how and for what purpose the asset is usedgoodwill during the term of the contract. The Company also considers whether its service arrangements include the right to control the use of an asset. See Note 2 for more information on the Company’s accounting policies for leases.

~~The Company leases office facilities and vehicles under operating lease agreements that have initial terms ranging from 1 to~~ ~~9 years. Some leases include one or more options to renew, generally at our sole discretion, with renewal terms that can extend the lease term up to~~ ~~10 years~~. In addition, certain leases contain termination options, where the rights to terminate are held by either the Company, the lessor, or both parties. These options to extend or terminate a lease are included in the lease terms when it is reasonably certain that the Company will exercise that option. The Company’s leases generally do not contain any material restrictive covenants or residual value guarantees. The Company also leases office equipment under a finance lease agreement with a term of ~~4 years. The Company’s finance lease was not material to the consolidated financial statements as of~~three months ended March 31, 2022 and 2021.

There were no material impairments to intangible assets during the three months ended March 31, 2022 and 2021.

Table of Contents

JAMF HOLDING CORP.

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

~~(unaudited)~~

(continued)

(unaudited)

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

Leases

Balance Sheet Classification

March 31, 2021

(in thousands)
Assets

Operating lease assets

Other assets

$
23,868

Liabilities

Operating lease liabilities - current

Accrued liabilities

$
4,870
Operating lease liabilities - non-current

Other liabilities

23,184
Total operating lease liabilities

$
28,054

The weighted-average remaining term of the Company’s operating leases was 6.5 years as of March 31, 2021. The weighted-average discount rate used to measure the present value of the operating lease liabilities was 3.5% as of March 31, 2021.

~~The components of lease expense were as follows:~~

Three Months Ended

March 31, 2021

(in thousands)
Operating lease cost

$
1,514
Short-term lease cost

52
Variable lease cost

439
Total lease expense

$
2,005

Operating lease cost is recognized on a straight-line basis over the lease term. The Company leases certain office facilities with a related party, including the office space in Eau Claire, Wisconsin. Operating lease cost with related parties was $0.3 million for the three months ended March 31, 2021.

Total rent expense, including the Company’s share of the lessors’ operating expenses, was $1.4 million for the three months ended March 31, 2020. Rent expense with related parties, including the Company’s share of the lessors’ operating expenses, was $0.3 million for the three months ended March 31, 2020.

~~For the three months ended March 31, 2021, operating cash flows included $1.2 million of cash paid for operating lease liabilities.~~

~~Table of Contents~~

~~JAMF HOLDING CORP.~~

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

~~(unaudited)~~

Maturities of the Company’s operating lease liabilities as of March 31, ~~2021~~2022 were as follows:

Operating Leases

(in thousands)
Years ending December 31:

2021 (remaining nine months)

$
4,326
2022

5,407
2023

5,331
2024

4,589
2025

2,519
Thereafter

9,482
Total lease payments

31,654
Less: imputed interest

3,600
Total present value of lease liabilities

$
28,054

~~Note 7. Debt~~

On July 27, 2020, the Company entered into a new secured credit agreement (the “New Credit Agreement”) for an initial revolving credit facility of $150.0 million (the “New Revolving Credit Facility”), 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 New 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 maturity date of the New Credit Agreement is July 27, 2025. The New 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 March 31, 2021 and December 31, 2020. As of both March 31, 2021 and December 31, 2020, we had $1.0 million of letters of credit outstanding under our New Revolving Credit Facility. In the third quarter of 2020, the Company recorded debt issuance costs of $1.3 million, which are amortized to interest expense over the term of the New Credit Agreement. As of both March 31, 2021 and December 31, 2020, debt issuance costs of $1.1 million were included in other assets in the consolidated balance sheets.


	Operating Leases
	(in thousands)
Years ending December 31:
2022 (remaining nine months)	$	4,963
2023	7,540
2024	6,495
2025	4,825
2026	4,831
Thereafter	7,169
Total lease payments	35,823
Less: imputed interest	3,584
Total present value of lease liabilities	$	32,239

Note 8.7. Commitments and contingencies

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 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 had 0no liabilities for contingencies ~~recorded~~ as of March 31, ~~2021 and~~2022 or December 31, ~~2020.~~

2021.

~~Note 9. Net loss per share~~

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

Three Months Ended March 31,


2021

2020

(in thousands, except share and per

share amounts)
Numerator:

Net loss

$
(3,069)

$
(8,290)
Denominator:



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

117,386,322

102,860,545
Basic and diluted net loss per share

$
(0.03)

$
(0.08)

~~Basic net loss per share is computed by dividing~~interest expense related to the ~~net loss by the weighted-average number of common shares outstanding for the period. Because we have reported a net loss~~2026 Notes for the three months ended March 31, 2022 (in thousands):


Contractual interest expense	$	117
Amortization of issuance costs	617

Table of Contents

JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

The effective interest rate on the 2026 Notes was 0.81% for the three months ended March 31, 2022. See Note 3 for additional information on the Company’s 2026 Notes.

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 maturity date of the 2020 Credit Agreement is July 27, 2025. 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 March 31, 2022 and December 31, 2021. As of both March 31, 2022 and December 31, 2021, we had $1.0 million of letters of credit outstanding under our 2020 Revolving Credit Facility.

As of March 31, 2022 and December 31, 2021, debt issuance costs related to the 2020 Credit Agreement of $0.8 million and $0.9 million, respectively, are included in other assets in the condensed consolidated balance sheets.

In connection with the closing of the Wandera acquisition on July 1, 2021, the Company entered into the Credit Agreement Amendment, which amended the Company’s existing 2020 Credit Agreement. The Credit Agreement Amendment provided for a new 364-day term loan facility in an aggregate principal amount of $250.0 million on substantially the same terms and conditions as the Company’s existing 2020 Revolving Credit Facility. The Company repaid the principal amount of the 2021 Term Loan Facility on September 23, 2021 with proceeds from the issuance and sale of the 2026 Notes.

Note 9. Share-based compensation

The Company’s equity incentive plans provide for granting various share-based awards to eligible employees, non-employee directors, and consultants of the 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 follows:


	Three Months Ended March 31,
	2022		2021
	(in thousands)
Cost of revenue:
Subscription	$	1,955	$	324
Services	304		77
Sales and marketing	5,859		842
Research and development	3,859		778
General and administrative	4,033		811
	$	16,010	$	2,832

Equity Incentive Plans

The maximum number of shares ~~used to calculate diluted net loss per~~of common ~~share is~~stock available for issuance under the ~~same~~2020 Plan was 24,256,740 shares as of January 1, 2022. As of March 31, 2022, 15,484,707 shares of common stock are reserved for additional grants under the ~~number~~2020 Plan. As of March 31, 2022, 128,928 shares ~~used to calculate basic net loss per~~of common ~~share because~~stock are reserved for additional grants under the ~~potentially dilutive shares~~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. No options were granted during the three months ended March 31, 2022.

Table of Contents

JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

Return Target Options

The table below summarizes return target option activity for the three months ended March 31, 2022:


	Options	Weighted‑ Average Exercise Price		Weighted‑ Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in thousands)
Outstanding, December 31, 2021	3,687,664	$	6.75	6.8	$	115,278
Granted	—	—			—
Exercised	—	—			—
Forfeitures	—	—			—
Outstanding, March 31, 2022	3,687,664	$	6.75	6.5	$	103,477
Options exercisable at March 31, 2022	—	$	—	—	$	—
Vested or expected to vest at March 31, 2022	—	$	—	—	$	—

The aggregate intrinsic value in the table above represents the total intrinsic value that would have been ~~antidilutive if~~received by the optionholders had all optionholders exercised their options on the last day of the period. No return target options vested during the three months ended March 31, 2022. There was approximately $33.0 million of unrecognized compensation expense related to these return target options as of March 31, 2022.

Service-Based Options

The table below summarizes the service-based option activity for the three months ended March 31, 2022:


	Options	Weighted‑ Average Exercise Price		Weighted‑ Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in thousands)
Outstanding, December 31, 2021	1,643,266	$	5.68	6.1	$	53,129
Granted	—	—			—
Exercised	(211,200)	5.67			6,725
Forfeitures	—	—			—
Outstanding, March 31, 2022	1,432,066	$	5.68	5.8	$	41,716
Options exercisable at March 31, 2022	1,270,476	$	5.50	5.7	$	37,244
Vested or expected to vest at March 31, 2022	1,432,066	$	5.68	5.8	$	41,716

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 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 total fair value of service-based options vested during the three months ended March 31, 2022 was $0.2 million. There was $0.8 million of unrecognized compensation expense related to service-based options that is expected to be recognized over a weighted-average period of 1.4 years as of March 31, 2022. 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.

Table of Contents

JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

Restricted Stock Units

RSU activity for the three months ended March 31, 2022 was as follows:


	Units	Weighted-Average Grant Date Fair Value (per share)
Outstanding, December 31, 2021	6,890,938	$	31.59
Granted	1,516,117	31.60
Vested	(22,191)	37.37
Forfeited	(165,054)	31.17
Outstanding, March 31, 2022	8,219,810	$	31.58

RSUs under the 2020 Plan generally vest ratably over four years. There was $224.5 million of unrecognized compensation expense related to unvested RSUs that is expected to be recognized over a weighted-average period of 3.4 years as of March 31, 2022. The total fair value of RSUs vested during the three months ended March 31, 2022 was $0.8 million.

Long-Term Incentive Plan

In the third quarter of 2021, the Company offered employees with LTIP grants the opportunity to convert those awards into RSUs under the 2020 Plan. Upon conversion, 50% of the RSUs vested immediately and the remaining 50% vest on the one year anniversary of the grant date, provided the employee remains continuously employed by the Company through the vesting date. All employees elected to convert their outstanding LTIP grants into RSUs, resulting in grants totaling 413,234 shares.

The conversion of the previously outstanding LTIP grants into RSUs resulted in the recognition of $1.6 million of stock-based compensation expense during the three months ended March 31, 2022. The expense on the unvested RSUs is recognized on a straight-line basis over the vesting period.

Employee Stock Purchase Plan

As of March 31, 2022, the Company withheld, at the employees’ request, $2.9 million of eligible employee compensation, which is included in accrued liabilities in the ~~calculation.~~

~~The following potentially dilutive securities outstanding have been excluded from~~condensed consolidated balance sheet, for purchases of common stock under the ~~computation~~2021 ESPP.

As of ~~diluted weighted-average~~March 31, 2022, 4,194,260 shares ~~outstanding because such securities have an antidilutive impact due~~of common stock are reserved for future issuance under the 2021 ESPP. No shares of common stock were issued under the 2021 ESPP during the three months ended March 31, 2022. There was $0.2 million of unrecognized compensation expense related to ~~losses reported:~~

Three Months Ended March 31,

2021

2020
Stock options outstanding

6,521,067

7,742,158
Unvested restricted stock units

1,374,401

36,520
Total potential dilutive securities

7,895,468

7,778,678

the 2021 ESPP that is expected to be recognized over a period of one month as of March 31, 2022.

Note 10. ~~Share-based compensation~~

~~On July 21, 2020,~~Net loss per share

The following table sets forth the ~~Company adopted the Jamf Holding Corp. Omnibus Incentive Plan (the “2020 Plan”). The 2020 Plan provides for grants~~computation of ~~(i) stock options, (ii) stock appreciation rights, (iii) restricted shares, (iv) performance awards, (v) other share-based awards~~basic and (vi) other cash-based awards to eligible employees, non-employee directors and consultants of the Company. We initially reserved 14,800,000 shares of our common stock for issuance under the 2020 Plan. The total number of shares reserved for issuance under the 2020 Plan increases on January 1^st of each of the first 10 calendar years during the term of the 2020 Plan by the lesser of: (i) a number of shares of our common stock equal to 4% of the total number of shares of our common stock outstanding on December 31^st of the preceding calendar year or (ii) a number of shares of our common stock as determined by our board of directors. The maximum number of shares of common stock available for issuance under the 2020 Plan was 19,479,699 shares as of January 1, 2021. ~~As of March 31, 2021, 18,105,298 shares of common stock are reserved for additional grants under the 2020 Plan.~~

The 2017 Stock Option Plan (“2017 Option Plan”) became effective November 13, 2017 upon the approval of the board of directors and, prior to the adoption of the 2020 Plan, served as the umbrella plan for the Company’s stock-based and cash-based incentive compensation program for its officers and other eligible employees. The aggregate number of shares of common stock that may be issued under the 2017 Option Plan may not exceed 8,470,000 shares. As of March 31, 2021, 128,928 shares of common stock are reserved for additional grants under the 2017 Option Plan. All stock options 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 three months ended March 31, 2021.

diluted net loss per share:


	Three Months Ended March 31,
	2022		2021
	(in thousands, except share and per share amounts)
Numerator:
Net loss	$	(25,629)	$	(4,589)
Denominator:
Weighted-average shares used to compute net loss per share, basic and diluted	119,594,341		117,386,322
Basic and diluted net loss per share	$	(0.21)	$	(0.04)

Table of Contents

JAMF HOLDING CORP.

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

~~(unaudited)~~

(continued)

~~The table below summarizes return target options activity~~(unaudited)

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 months ended March 31, ~~2021:~~

Weighted-

Weighted-

Average

Aggregate

Average

Remaining

Intrinsic

Exercise

Contractual

Value


Options

Price

Term (Years)

(in thousands)
Outstanding, December 31, 2020

3,687,664

$
6.75

7.8

$
85,444
Granted

0

—

—
Exercised

—

—

—
Forfeitures

—

—

—
Outstanding, March 31, 2021

3,687,664

$
6.75

7.5

$
105,358
Options exercisable at March 31, 2021

—

$
—

—

$
—
Vested or expected to vest at March 31, 2021

—

$
—

—

$
—

~~There was approximately $33.0 million~~2022 and 2021, the number of ~~unrecognized compensation expense related~~shares used to ~~these return target options~~calculate diluted net loss per common share is the same as the number of ~~March 31, 2021. The aggregate intrinsic value in~~shares used to calculate basic net loss per common share because the ~~table above represents the total intrinsic value that~~potentially dilutive shares would have been ~~received by the optionholders had all optionholders exercised their options.~~

~~Restricted stock unit (“RSU”) activity for the three months ended March 31, 2021 was as follows:~~

Per Unit

Units

Fair Value
Outstanding, December 31, 2020

1,293,107

$
26.34
Granted

88,764

37.37
Restrictions lapsed

—

—
Forfeited

(7,470)

26.00
Outstanding, March 31, 2021

1,374,401

$
27.05

RSUs under the 2020 Plan vest ratably over four years. RSUs under the 2017 Option Plan 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. There was $31.3 million of total unrecognized compensation cost related to unvested restricted stock that is expected to be recognized over a weighted-average period of 3.4 years as of March 31, 2021.

~~The table below summarizes the service-based option activity for the three months ended March 31, 2021:~~

Weighted‑

Weighted‑

Average

Aggregate

Average

Remaining

Intrinsic

Exercise

Contractual

Value


Options

Price

Term (Years)

(in thousands)
Outstanding, December 31, 2020

3,546,826

$
5.65

7.1

$
86,098
Granted

—

—

—
Exercised

(713,423)

5.63

21,328
Forfeitures

—

—

—
Outstanding, March 31, 2021

2,833,403

$
5.65

6.8

$
84,072
Options exercisable at March 31, 2021

1,790,693

$
5.50

6.7

$
53,395
Vested or expected to vest at March 31, 2021

2,833,403

$
5.65

6.8

$
84,072

~~The aggregate intrinsic value~~antidilutive if included in the ~~table above represents the total intrinsic value that would~~calculation.

The following potentially dilutive securities outstanding have been ~~received by~~excluded from the ~~optionholders had all optionholders exercised their options on the last date~~computation of ~~the period. The total fair~~

diluted weighted-average shares outstanding because such securities have an antidilutive impact due to losses reported:

~~Table of Contents~~

~~JAMF HOLDING CORP.~~

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

~~(unaudited)~~

value of service-based options vested during the three months ended March 31, 2021 was $0.7 million. There was $2.7 million of unrecognized compensation expense related to service-based options that is expected to be recognized over a weighted-average period of 1.5 years as of March 31, 2021.

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

Three Months Ended March 31,


2021

2020

(in thousands)
Cost of revenue:



Subscription

$
324

$
38
Services

77

—
Sales and marketing

842

111
Research and development

778

157
General and administrative

811

505

$
2,832

$
811

Note 11. Income taxes

The Company’s effective tax rates for the three months ended March 31, 2022 and 2021 ~~and 2020~~ were ~~(2.2)~~(1.0)% and ~~28.0%~~(2.8)%, respectively. The effective tax rate for the three months ended March 31, ~~2021 was lower than~~2022 differs from the ~~prior year period due to Section 162(m)~~statutory rate primarily as a result of ~~the Internal Revenue Code, stock option activity and the domestic~~ valuation ~~allowance.~~allowances. The effective tax rate for the three months ended March 31, ~~2021 differs from the statutory rate primarily as a result of the domestic valuation allowance. The effective tax rate for the three months ended March 31, 2021~~2022 was impacted by ~~less than $0.1~~$0.6 million of discrete income tax expense. The Company’s annual effective tax rates for the three months ended March 31, 2022 and 2021 were 1.3% and ~~2020 were (0.5)~~(1.6)% ~~and 25.2%~~, respectively.

Note 12. ~~Related-party~~Related party transactions

~~The Company made pledges to the Jamf Nation Global Foundation (“JNGF”) of $0.1 million for the three months ended March 31, 2021. The Company did not make any pledges to the JNGF for the three~~ ~~months~~ ~~ended March 31, 2020.~~

As of March 31, ~~2021~~2022 and December 31, ~~2020,~~2021, the Company accrued ~~$0.4~~$0.6 million and ~~$0.9~~$1.5 million, respectively, related to JNGF pledges, which are included in accrued liabilities in the condensed consolidated balance sheets. 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. 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 carries out these transactions on customary terms.

Vista is a U.S.-based investment firm that controls the funds which ~~own~~previously owned a majority of the Company. ~~The Company has paid for consulting services and other expenses related to services provided by~~In 2021, Vista ~~and Vista affiliates. The total expenses incurred by~~sold a portion of its investment in the Company ~~for these services~~such that its funds no longer owned a majority of the Company as of March 31, 2022. However, Vista is deemed a related party in accordance with ASC 850 as it continues to be a principal owner of the Company. There were ~~less than $0.1 million and $0.2 million for~~no material transactions with Vista or its affiliates during the three months ended March 31, ~~2021~~2022 and ~~2020, respectively. The Company had less than $0.1 million in accounts payable related to these expenses as of both March 31, 2021 and December 31, 2020.~~

The Company also has revenue arrangements with Vista affiliates. The Company recognized revenue related to these arrangements of $0.2 million and $0.3 million for the three months ended March 31, 2021 and 2020, respectively. The Company had $0.2 million in accounts receivable related to these agreements as of March 31, 2021 and $0.3 million in accounts receivable related to these agreements as of December 31, 2020.

2021.

Table of Contents

~~JAMF HOLDING CORP.~~

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

~~(unaudited)~~

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 $0.2 million and $0.1 million for the three months ended March 31, 2021 and 2020, respectively. The Company had less than $0.1 million in accounts payable related to these expenses as of March 31, 2021 and $0.1 million in accounts payable related to these expenses as of December 31, 2020.

Prior to its termination and repayment in full on July 27, 2020, the Company was party to a term loan facility (the “Prior Term Loan”) and 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. During the three months ended March 31, 2020, affiliates of Vista were paid $0.8 million in interest on the portion of the Prior Term Loan held by them.

~~Note 13. Subsequent event~~

On May 11, 2021, the Company announced that it has signed a definitive agreement (the “Merger Agreement”) to acquire Wandera, Inc. (“Wandera”), a leader in zero trust cloud security and access for mobile devices. Under the terms of the Merger Agreement, Jamf will acquire Wandera for total cash consideration of $400.0 million subject to customary adjustments, including working capital, indebtedness, closing cash on hand and transaction expenses. The total consideration consists of an initial payment of $350.0 million at close and deferred consideration of $50.0 million to be paid in $25.0 million increments on October 1, 2021 and ~~December 15, 2021. The transaction is expected to close during the third quarter of 2021, subject to the satisfaction of customary closing conditions, including required U.S. regulatory approvals.~~

~~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”~~“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 ability of Jamf and Wandera to close the announced transaction;~~

●

~~the ability of Jamf to realize the potential benefits of the acquisition of Wandera;~~

●

~~the possibility that the closing of the transaction may be delayed;~~

●

~~other risks related to Jamf’s integration of Wandera’s business, team, and technology;~~

●

~~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;~~

●

~~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;~~

•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 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;

•our ability to retain our current customers;

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

•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;

•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;

Table of Contents

●

~~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;~~

●

~~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 (“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;~~

●

~~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 develop and expand our marketing and sales capabilities;~~

●

~~the risks associated with sales to new and existing enterprise customers;~~

●

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

●

~~the risks associated with indemnity provisions in our contracts;~~

●

~~our management team’s limited experience managing a public company;~~

●

~~the impact of any catastrophic events;~~

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

•our ability to offer high-quality support;

~~Table~~•risks and uncertainties associated with acquisitions and divestitures (such as our recent acquisition of ~~Contents~~Wandera);

●

~~the impact of global economic conditions;~~

●

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

●

~~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;~~

●

~~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; and~~

●

~~other factors disclosed in the section entitled “Risk Factors” and elsewhere in our Annual Report on Form 10-K and this Quarterly Report on Form 10-Q.~~

•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;

•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;

•the risks associated with sales to new and existing enterprise customers;

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

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

•the risks associated with indemnity provisions in our contracts;

•our management team’s limited experience managing a public company;

•risks associated with cyber-security 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;

•risks associated with global events (such as Russia’s invasion of Ukraine and related sanctions); 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, 2021, 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

Table of Contents

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~~“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” ~~in Part I, Item 2~~ of ~~this~~our subsequent Quarterly ~~Report~~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.

Table of Contents

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.~~10-K for the year ended December 31, 2021. 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, ~~and~~elsewhere in this Quarterly Report on Form 10-Q, in our Annual Report on Form 10-K for the year ended December 31, 2021, and in our subsequent Quarterly Reports on Form 10-Q, particularly in the sections entitled “Risk Factors” and “Forward-Looking Statements.”

The following discussion and analysis reflects the revisions previously made for immaterial errors related to certain commissions that were incorrectly capitalized in prior periods as well as various other immaterial errors. See Note 1 to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q for more information.

Overview

We are the standard in Apple Enterprise Management, and our cloud software platform is the only vertically-focused Apple infrastructure and security platform of scale in the world. 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, operating systems, and services. This expertise enables us to fully support new innovations and operating 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.

On ~~May 11,~~July 1, 2021, we ~~announced the~~completed our acquisition of Wandera, a leader in zero trust cloud security and access for mobile devices, extending our leadership in Apple Enterprise Management. ~~See Note 13 for further information on~~The acquisition uniquely positions us to help IT and security teams protect devices, data, and applications while extending the ~~acquisition. Until close,~~intended Apple experience through the ~~companies will continue to operate independently.~~most robust and scalable Apple Enterprise Management platform in the market. We ~~currently intend to finance~~initially financed the acquisition with a combination of cash on hand and ~~debt financing.~~

borrowings under the 2021 Term Loan Facility (which borrowings were repaid in September 2021 with the proceeds from the 2026 Notes).

Response to COVID-19

~~With social distancing measures having been implemented to curtail the spread of~~

Our COVID-19 ~~we enacted a robust~~approach is focused on promoting employee choice, health, and safety, serving our customers, and ensuring 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.continuity. Our product portfolio and platform has enabled our commercial customers to continue with their

efforts to work ~~remotely,~~in a hybrid environment, our K-12 and higher-education customers to deliver distance and hybrid 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

~~Table of Contents~~

business like ours is well-suited to navigate the ~~current environment in which customers are focused on effectively conducting business remotely,~~shift to hybrid work environments, while the underlying demand for our core products remains relatively unchanged.

~~The~~

Although to date we have not suffered an adverse effect from the COVID-19 pandemic, the extent to which the COVID-19 pandemic ultimately affects our business ~~will~~continues to 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.world. Although the ultimate impact of the COVID-19 pandemic on our business and financial results remains 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~~Associated with Our Business, Operations, and Industry — The COVID-19 pandemic could materially adversely affect our business, operating results, financial condition, and prospects” included in Part ~~II,~~I, Item 1A ~~in this Quarterly~~of our Annual Report on Form ~~10-Q~~10-K for ~~additional~~the year ended December 31, 2021 for more 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. 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 customer base. Our ability to increase revenue within our existing customer base 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 their usage more broadly within the enterprise as they realize the benefits of our platform. We believe that our “land and 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 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, in 2018, we introduced Jamf Connect to provide users with a seamless connection to corporate resources using a single identity and in 2019 we introduced Jamf Protect to extend ~~Apple's~~Apple’s security and privacy model to enterprise teams by creating unprecedented visibility into MacOS fleets through customized remote monitoring and threat detection and prevention.

In July 2021, we completed our acquisition of Wandera, which enhanced our Apple Enterprise Management Platform and strengthens our position in security and mobile with expansion opportunities. Wandera solutions include Jamf Threat Defense, Jamf Data Policy, and Jamf Private Access, which uniquely position us to address trends in digital transformation, remote work, and ZTNA.

Continue 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

~~Table of Contents~~

make focused investments in marketing to drive

Table of Contents

brand awareness and enhance the effectiveness of our customer acquisition model. We also intend to continue to add headcount to 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.

Continue 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, and commercial markets. 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.

Our acquisition of Wandera, a global company with key offices in London, Brno, and San Francisco, further expands our international presence.

Enhance our offerings via our partner network. 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 and Microsoft 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” solutions and workflows that help tie our software solutions together with those delivered by others.

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, 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 ~~21.8~~27.3 million and ~~16.3~~21.8 million as of March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, representing a ~~34%~~25% year-over-year growth rate. ~~We have seen particular strength~~The increase in number of devices reflects our growth across industries, products, and geographies, as well as the Wandera acquisition in the ~~growth rate~~third quarter of ~~devices as COVID-19 has accelerated the demand for organizations to connect remotely, manage, and protect their Apple devices.~~

2021.

Annual Recurring Revenue

~~Annual Recurring Revenue (“ARR”)~~

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

~~Table of Contents~~

sales mix of subscriptions for term-based licenses and SaaS. 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

Table of Contents

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 ~~$308.0~~$436.5 million and ~~$224.9~~$308.0 million as of March 31, ~~2021~~2022 and ~~2020,~~2021, respectively, which is an increase of ~~37%~~42% year-over-year. The growth in our ARR is primarily driven by our ~~high~~ device expansion rates, our new logo acquisition, ~~and~~ the upselling and cross selling of products into our installed ~~base.~~

base, and the acquisition of Wandera.

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 (“~~Prior Period ~~ARR”).~~ARR. We then calculate the ~~ARR from these same customers as of the current period end (“~~Current Period ~~ARR”).~~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%~~120% and ~~120%~~117% for the trailing twelve months ended March 31, 2022 and 2021, respectively. Our dollar-based net retention rates are based on our Jamf legacy business and ~~2020, respectively.~~do not include Wandera since they have not been a part of our business for the full trailing twelve months. 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 Gross Profit Margin, Non-GAAP Operating Income, Non-GAAP Operating Income Margin, 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 and Non-GAAP Gross Profit Margin are supplemental measures of operating performance that are not prepared in accordance with GAAP and that do not represent, and should not be considered as, alternatives to gross profit or gross profit margin, 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 define Non-GAAP Gross Profit Margin as Non-GAAP Gross Profit as a percentage of total revenue.

We use Non-GAAP Gross Profit and Non-GAAP Gross Profit Margin to understand and evaluate our core operating performance and trends and to prepare and approve our annual budget. We believe Non-GAAP Gross Profit and Non-GAAP Gross Profit Margin are useful measures to us and to our investors to assist in evaluating our core

Protect.

~~Table of Contents~~

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 and Non-GAAP Gross Profit Margin have limitations as analytical tools, and you should not consider them in isolation, or as substitutes for analysis of our results as reported under GAAP. Because of these limitations, Non-GAAP Gross Profit and Non-GAAP Gross Profit Margin should not be considered as replacements for gross profit or gross profit margin, as determined by GAAP, or as measures 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 Gross Profit to gross profit, the most directly comparable GAAP measure, is as follows:~~

Three Months Ended March 31,

2021

2020

(in thousands)
Gross profit

$
63,912

$
45,379

Amortization expense

2,777

2,677

Stock-based compensation

401

38

Non-GAAP Gross Profit

$
67,090

$
48,094

Non-GAAP Gross Profit Margin

83
%

80
%

~~Non-GAAP Operating Income~~

Non-GAAP Operating Income and Non-GAAP Operating Income Margin are supplemental measures of operating performance that are not prepared in accordance with GAAP and that do not represent, and should not be considered as, alternatives to operating loss or operating loss margin, as determined in accordance with GAAP. We define Non-GAAP Operating Income as operating loss, adjusted for amortization, stock-based compensation, acquisition-related expense, acquisition-related earnout, payroll taxes related to stock-based compensation and costs associated with our secondary offerings. In the first quarter of 2021, we began excluding payroll taxes related to stock-based compensation from our non-GAAP measures as these expenses are tied to the exercise or vesting of underlying equity awards and the price of our common stock at the time of vesting or exercise. As a result, these taxes may vary in any particular period independent of the financial and operating performance of our business. Payroll taxes related to stock-based compensation were not material prior to the first quarter of 2021. We define Non-GAAP Operating Income Margin as Non-GAAP Operating Income as a percentage of total revenue.

We use Non-GAAP Operating Income and Non-GAAP Operating Income Margin 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 and Non-GAAP Operating Income Margin facilitate comparison of our operating performance on a consistent basis between periods, and when viewed in combination with our results prepared in accordance with GAAP, help 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 and Non-GAAP Operating Income Margin have limitations as analytical tools, and you should not consider them in isolation, or as substitutes for analysis of our results as reported under GAAP. Because of these limitations, Non-GAAP Operating Income and Non-GAAP Operating Income Margin should not be considered as replacements for operating loss or operating loss margin, as determined by GAAP, or as measures of our

~~Table of Contents~~

~~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 March 31,

2021

2020

(in thousands)
Operating loss

$
(2,778)

$
(6,483)

Amortization expense

8,404

8,351

Stock-based compensation

2,832

811

Acquisition-related expense

110

1,600

Acquisition-related earnout

300

—

Payroll taxes related to stock-based compensation

395

—

Non-GAAP Operating Income

$
9,263

$
4,279

Non-GAAP Operating Income Margin

11
%

7
%

~~Non-GAAP Net Income (Loss)~~

Non-GAAP Net Income (Loss) 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 (Loss) as net loss, adjusted for amortization, stock-based compensation, foreign currency transaction loss, ~~loss on extinguishment of debt,~~ acquisition-related expense, acquisition-related earnout, costs associated with our secondary offerings, payroll taxes related to stock-based compensation, discrete tax items and provision (benefit) for income taxes.

We use Non-GAAP Net Income (Loss) 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 (Loss) 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 (Loss), the revenue related to acquired trademarks, customer relationships, and developed technology is reflected in Non-GAAP Net Income (Loss) as these assets contribute to our revenue generation.

Non-GAAP Net Income (Loss) 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 (Loss) 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.

~~Table of Contents~~

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

Three Months Ended March 31,

2021

2020

(in thousands)
Net loss

$
(3,069)

$
(8,290)

Amortization expense

8,404

8,351

Stock-based compensation

2,832

811

Foreign currency transaction loss

171

304

Acquisition-related expense

110

1,600

Acquisition-related earnout

300

—

Payroll taxes related to stock-based compensation

395

—

Discrete tax items

49

(318)

Provision (benefit) for income taxes⁽¹⁾

66

(2,703)

Non-GAAP Net Income (Loss)

$
9,258

$
(245)

⁽¹⁾In the first quarter of 2020, the related tax effects of the adjustments to Non-GAAP Net Income (Loss) were calculated using the respective statutory tax rate for applicable jurisdictions, which was not materially different from our annual effective tax rate for full year 2020 of approximately 25%. In the first quarter of 2021, our annual effective tax rate was impacted by changes in the domestic valuation allowance. Therefore, we used the annual effective tax rate of (0.5)% in the first quarter of 2021 as this rate was materially different than our statutory rate.

~~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, provision (benefit) for income taxes, depreciation and amortization, stock-based compensation, foreign currency transaction loss, loss on extinguishment of debt, acquisition-related expense, acquisition-related earnout, costs associated with our secondary offerings and payroll taxes related to stock-based compensation.

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.

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.

~~Table of Contents~~

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

Three Months Ended March 31,

2021

2020

(in thousands)
Net loss

$
(3,069)

$
(8,290)

Interest expense, net

55

4,778

Provision (benefit) for income taxes

65

(3,220)

Depreciation expense

1,380

1,235

Amortization expense

8,404

8,351

Stock-based compensation

2,832

811

Foreign currency transaction loss

171

304

Acquisition-related expense

110

1,600

Acquisition-related earnout

300

—

Payroll taxes related to stock-based compensation

395

—

Adjusted EBITDA

$
10,643

$
5,569

Components of Results of Operations

Revenues

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 subscriptions and perpetual licenses and services.

~~Subscription.~~

Subscription. Subscription revenue consists of sales of SaaS subscriptions and on-premise 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. In the fourth quarter of 2020, we reclassified the license portion of on-premise subscription revenue from license revenue to subscription revenue in the consolidated statements of operations on a retroactive basis. See additional information in “Note 1 — Basis of Presentation and Description of Business” to the consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. 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 Annual Report on Form 10-K for the year ended December 31, 2021 for more information. Beginning in the third quarter of 2021, we updated how we deliver our Jamf Connect product resulting in a change in revenue recognition, with less revenue recognized upfront as on-premise subscription revenue. This revenue will now be recognized ratably over the term of the subscription, in line with the majority of our revenue. We expect subscription 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 of our Jamf Pro product sold primarily to existing customers. We recognize license revenue upfront, assuming all revenue recognition criteria are satisfied. We expect license 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 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.

Table of Contents

Cost of Revenues

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 of services revenue to decrease in absolute dollars relative to the decrease of our services business.

Gross Profit

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.

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 that are incremental to the acquisition of customer contracts are deferred and amortized over the period of benefit, which is estimated to be generally 5 years. We expect our sales and marketing expenses to increase on an absolute dollar basis as we expand our sales personnel and marketing efforts.

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.

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 Annual Report on Form 10-K for the year ended December 31, 2021 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 departments. In addition, general and administrative expenses include acquisition-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 costs incurred in secondary offerings. 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 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, Net

Interest 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 interest income earned on our cash and cash equivalents. In the ~~amortization~~third quarter of ~~associated deferred financing costs. See “Liquidity~~2021, we reclassified the unused commitment fee on our line of credit from general and ~~Capital Resources — Credit Facilities.”~~

administrative expenses to interest expense, net on a prospective basis. The impact to prior period financial statements was not material.

~~Table of Contents~~

Foreign Currency Transaction Gain (Loss)

Our reporting currency is 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 gain (loss) includes gains ~~(losses)~~and losses from transactions denominated in a currency other than the ~~consolidated statement~~Company’s functional currency.

Table of ~~operations.~~

Contents

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 of sublease rental income. The sublease was terminated in the second quarter of 2020.~~

Results of Operations

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

Three Months Ended March 31,


2021

2020

(in thousands)
Consolidated Statement of Operations Data:



Revenue:



Subscription

$
74,923

$
54,618
Services

4,003

4,010
License

2,242

1,762
Total revenue

81,168

60,390
Cost of revenue:



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

12,014

9,248
Cost of services⁽¹⁾⁽²⁾(exclusive of amortization expense shown below)

2,465

3,086
Amortization expense

2,777

2,677
Total cost of revenue

17,256

15,011
Gross profit

63,912

45,379
Operating expenses:



Sales and marketing⁽¹⁾⁽²⁾

29,332

22,282
Research and development⁽¹⁾⁽²⁾

15,626

12,617
General and administrative^(1)(2)(3)

16,105

11,289
Amortization expense

5,627

5,674
Total operating expenses

66,690

51,862
Loss from operations

(2,778)

(6,483)
Interest expense, net

(55)

(4,778)
Foreign currency transaction loss

(171)

(304)
Other income, net

—

55
Loss before income tax (provision) benefit

(3,004)

(11,510)
Income tax (provision) benefit

(65)

3,220
Net loss

$
(3,069)

$
(8,290)


	Three Months Ended March 31,
	2022		2021
	(in thousands)
Revenue:
Subscription	$	102,201	$	74,482
Services	3,944		4,003
License	2,113		2,242
Total revenue	108,258		80,727
Cost of revenue:
Cost of subscription(1)(3)(4) (exclusive of amortization expense shown below)	19,902		12,014
Cost of services(1)(3) (exclusive of amortization expense shown below)	3,107		2,465
Amortization expense	5,218		2,777
Total cost of revenue	28,227		17,256
Gross profit	80,031		63,471
Operating expenses:
Sales and marketing(1)(2)(3)(4)	46,325		30,167
Research and development(1)(2)(3)(4)	24,802		15,626
General and administrative(1)(2)(3)(4)	25,612		16,244
Amortization expense	7,029		5,627
Total operating expenses	103,768		67,664
Loss from operations	(23,737)		(4,193)
Interest expense, net	(859)		(55)
Foreign currency transaction loss	(781)		(218)
Loss before income tax provision	(25,377)		(4,466)
Income tax provision	(252)		(123)
Net loss	$	(25,629)	$	(4,589)

(1) Includes stock-based compensation as follows:


	Three Months Ended March 31,
	2022		2021
	(in thousands)
Cost of revenue:
Subscription	$	1,955	$	324
Services	304		77
Sales and marketing	5,859		842
Research and development	3,859		778
General and administrative	4,033		811
	$	16,010	$	2,832

Table of Contents

~~(1)~~

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

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


	Three Months Ended March 31,
	2022		2021
	(in thousands)
Sales and marketing	$	12	$	87
Research and development	27		93
General and administrative	97		215
	$	136	$	395

(3)

~~(2)~~

~~Includes depreciation expense as follows:~~

Includes depreciation expense as follows:


	Three Months Ended March 31,
	2022		2021
	(in thousands)
Cost of revenue:
Subscription	$	320	$	263
Services	45		43
Sales and marketing	684		574
Research and development	359		305
General and administrative	238		195
	$	1,646	$	1,380

Three Months Ended March 31,


2021

2020

(in thousands)
Cost of revenue:



Subscription

$
263

$
238
Services

43

53
Sales and marketing

574

494
Research and development

305

292
General and administrative

195

156

$
1,380

$
1,233

(4)

~~(3)~~

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

Includes acquisition-related expense as follows:


	Three Months Ended March 31,
	2022		2021
	(in thousands)
Cost of revenue:
Subscription	$	38	$	—
Sales and marketing	7		—
Research and development	263		—
General and administrative	793		110
	$	1,101	$	110

Three Months Ended March 31,

2021

2020

(in thousands)
General and administrative

$
110

$
1,600

General and administrative also includes ~~a Digita~~acquisition-related earnout ~~expense~~ of $0.1 million and $0.3 million for the three months ended March 31, ~~2021.~~

2022 and 2021, respectively. The acquisition-related earnout was an expense for both the three months ended March 31, 2022 and 2021 reflecting the increase in fair value of the Digita acquisition contingent liability due to growth in sales of our Jamf Protect product.

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 March 31,
	2022		2021
	(as a percentage of total revenue)
Revenue:
Subscription	94	%	92	%
Services	4		5
License	2		3
Total revenue	100		100
Cost of revenue:
Cost of subscription (exclusive of amortization expense shown below)	18		15
Cost of services (exclusive of amortization expense shown below)	3		3
Amortization expense	5		3
Total cost of revenue	26		21
Gross profit	74		79
Operating expenses:
Sales and marketing	43		38
Research and development	23		19
General and administrative	24		20
Amortization expense	6		7
Total operating expenses	96		84
Loss from operations	(22)		(5)
Interest expense, net	(1)		—
Foreign currency transaction loss	(1)		(1)
Loss before income tax benefit	(24)		(6)
Income tax benefit	—		—
Net loss	(24)	%	(6)	%

Table of Contents

Three Months Ended March 31,


2021

2020


(as a percentage of total revenue)

Consolidated Statement of Operations Data:



Revenue:



Subscription

92
%
90
%
Services

5

7

License

3

3

Total revenue

100

100

Cost of revenue:



Cost of subscription (exclusive of amortization expense shown below)

15

15

Cost of services (exclusive of amortization expense shown below)

3

5

Amortization expense

3

5

Total cost of revenue

21

25

Gross profit

79

75

Operating expenses:



Sales and marketing

36

37

Research and development

19

21

General and administrative

20

19

Amortization expense

7

9

Total operating expenses

82

86

Loss from operations

(3)

(11)

Interest expense, net

—

(7)

Foreign currency transaction loss

(1)

(1)

Other income, net

—

—

Loss before income tax (provision) benefit

(4)

(19)

Income tax (provision) benefit

—

5

Net loss

(4)
%
(14)
%

Comparison of the Three Months Ended March 31, ~~2021~~2022 and ~~2020~~

2021

Revenue

Three Months Ended March 31,

Change


2021

2020

$

%

(in thousands, except percentages)

SaaS subscription and support and maintenance

$
66,669

$
50,078

$
16,591

33
%
On‑premise subscription

8,254

4,540

3,714

82

Subscription revenue

74,923

54,618

20,305

37

Professional services

4,003

4,010

(7)

(0)

Perpetual licenses

2,242

1,762

480

27

Non‑subscription revenue

6,245

5,772

473

8

Total revenue

$
81,168

$
60,390

$
20,778

34
%


	Three Months Ended March 31,				Change
	2022		2021		$		%
	(in thousands, except percentages)
SaaS subscription and support and maintenance	$	96,350	$	66,776	$	29,574	44	%
On‑premise subscription	5,851		7,706		(1,855)		(24)
Subscription revenue	102,201		74,482		27,719		37
Professional services	3,944		4,003		(59)		(1)
Perpetual licenses	2,113		2,242		(129)		(6)
Non-subscription revenue	6,057		6,245		(188)		(3)
Total revenue	$	108,258	$	80,727	$	27,531	34	%

Total revenue increased by ~~$20.8~~$27.5 million, or 34%, for the three months ended March 31, ~~2021~~2022 compared to the three months ended March 31, ~~2020.~~2021. Overall revenue increased as a result of higher subscription ~~revenue and license~~ revenue. Subscription revenue accounted for ~~92%~~94% of total revenue for the three months ended March 31, ~~2021~~2022 compared to ~~90%~~92% for the three months ended March 31, ~~2020.~~2021. The increase in subscription revenue was driven by device expansion, the addition of new customers and ~~cross-selling. License~~cross-selling, as well as the contribution of revenue ~~increased due to additional licenses for an existing customer,~~from Wandera in the first quarter of 2022, partially offset by ~~shifting customers~~the impact from a change in revenue recognition related to our ~~SaaS model as opposed~~Jamf Connect product resulting from updates to ~~on-premise perpetual licenses.~~

how we deliver the product.

~~Table of Contents~~

Cost of Revenue and Gross Margin

Three Months Ended March 31,

Change


2021

2020

$

%

(in thousands, except percentages)

Cost of revenue:









Cost of subscription (exclusive of amortization expense shown below)

$
12,014

$
9,248

$
2,766

30
%
Cost of services (exclusive of amortization expense show below)

2,465

3,086

(621)

(20)

Amortization expense

2,777

2,677

100

4

Total cost of revenue

$
17,256

$
15,011

$
2,245

15
%
Gross margin

79
%

75
%


	Three Months Ended March 31,				Change
	2022		2021		$		%
	(in thousands, except percentages)
Cost of revenue:
Cost of subscription (exclusive of amortization expense shown below)	$	19,902	$	12,014	$	7,888	66	%
Cost of services (exclusive of amortization expense show below)	3,107		2,465		642		26
Amortization expense	5,218		2,777		2,441		88
Total cost of revenue	$	28,227	$	17,256	$	10,971	64	%
Gross margin	74%		79%

Cost of revenue increased by ~~$2.2~~$11.0 million, or ~~15%~~64%, for the three months ended March 31, ~~2021~~2022 compared to the three months ended March 31, ~~2020~~2021 driven by an increase in cost of subscription revenue ~~partially offset by lower cost of services revenue.~~and amortization expense. Cost of subscription revenue increased ~~$2.8~~$7.9 million, or ~~30%~~66%, primarily due to ana $3.2 million increase ~~of $1.5~~in third party hosting fees as we increased capacity to support our growth and the Wandera acquisition, a $2.6 million increase in employee compensation costs related to higher headcount to support the growth in our subscription customer base ~~an increase of $1.2 million in third party hosting fees as we increased capacity to support our growth~~and the Wandera acquisition, and a ~~$0.3~~$1.6 million increase in stock-based compensation ~~expense. Cost of services revenue decreased $0.6~~expense and related payroll taxes. Amortization expense increased $2.4 million, or 88%, primarily reflecting the increase in intangible assets due to ~~lower travel-related costs and costs of third-party integrators.~~

the Wandera acquisition.

Total gross margin was ~~79%~~74% and ~~75%~~79% for the three months ended March 31, 2022 and 2021, ~~and 2020, respectively,~~respectively. The decline in total gross margin was due to the increase in total cost of revenue described above as well as an impact to revenue due to a change in revenue recognition related to our ~~revenue expanded faster than the costs required~~Jamf Connect product resulting from updates to how we deliver the ~~revenue.~~

product.

Table of Contents

Operating Expenses

Three Months Ended March 31,

Change


2021

2020

$

%

(in thousands, except percentages)

Operating expenses:









Sales and marketing

$
29,332

$
22,282

$
7,050

32
%
Research and development

15,626

12,617

3,009

24

General and administrative

16,105

11,289

4,816

43

Amortization expense

5,627

5,674

(47)

(1)

Operating expenses

$
66,690

$
51,862

$
14,828

29
%


	Three Months Ended March 31,				Change
	2022		2021		$		%
	(in thousands, except percentages)
Operating expenses:
Sales and marketing	$	46,325	$	30,167	$	16,158	54	%
Research and development	24,802		15,626		9,176		59
General and administrative	25,612		16,244		9,368		58
Amortization expense	7,029		5,627		1,402		25
Operating expenses	$	103,768	$	67,664	$	36,104	53	%

Sales and Marketing. Sales and marketing expenses increased by ~~$7.1~~$16.2 million, or ~~32%~~54%, for the three months ended March 31, ~~2021~~2022 compared to the three months ended March 31, ~~2020. The increase was~~2021 primarily due to an $8.2 million increase ~~of $5.5 million~~ in employee compensation costs driven by higher headcount due to growth in the business and the Wandera acquisition, a ~~$1.4~~$4.9 million increase in stock-based compensation expense and related payroll taxes, a $1.2 million increase in marketing costs, ana $0.7 million increase ~~of $0.3~~in travel-related expenses, and a $0.7 million increase in computer hardware and software costs to support the growth of the business and a $0.7 million increase in stock-based compensation expense reflecting the IPO grant, partially offset by a $1.2 million decrease in travel-related expenses reflecting less travel due to COVID-19.business. Marketing costs increased primarily due to increases in demand generation programs, advertising, and brand awareness campaigns focused on new customer acquisition.

Research and Development. Research and development expenses increased by ~~$3.0~~$9.2 million, or ~~24%~~59%, for the three months ended March 31, ~~2021~~2022 compared to the three months ended March 31, ~~2020. The increase was~~2021 primarily due to ana $5.5 million increase ~~of $2.1 million~~ in employee compensation costs driven by higher headcount due to ~~higher headcount, an increase of $0.7 million~~growth in ~~outside services~~the business and the Wandera acquisition, a ~~$0.6~~$3.0 million increase in stock-based compensation expense ~~reflecting the IPO grant, partially offset by~~and related payroll taxes, and a $0.4 million ~~decrease~~increase in ~~travel-related expenses reflecting less travel due~~computer hardware and software costs to ~~COVID-19.~~

support the growth of the business.

General and Administrative. General and administrative expenses increased by ~~$4.8~~$9.4 million, or ~~43%~~58%, for the three months ended March 31, ~~2021~~2022 compared to the three months ended March 31, ~~2020.~~2021. The increase was primarily

~~Table of Contents~~

due to ana $4.5 million increase ~~of $2.8 million~~ in employee compensation costs driven by higher headcount to support our continued growth ~~$2.0~~and the Wandera acquisition, a $3.1 million increase in ~~additional expenses as~~stock-based compensation expense and related payroll taxes, a ~~result of operating as~~$0.7 million increase in acquisition-related costs, and a ~~public company,~~ an$0.6 million increase ~~of $0.9 million~~ in computer hardware and software costs to support the growth of the ~~business,~~ business.~~a $0.3 million increase in stock-based compensation~~

Amortization Expense. Amortization expense ~~and a $0.3 million increase to contingent consideration, partially offset~~increased by ~~a $1.5 million decrease in acquisition-related expenses and a~~ ~~$1.1 million decrease in travel-related expenses reflecting less travel due to COVID-19~~. ~~The remainder of the cost increase is primarily related to costs to support the growth in business and headcount.~~

~~Interest Expense, Net~~

Three Months Ended March 31,

Change


2021

2020

$

%

(in thousands, except percentages)

Interest expense, net

$
55

$
4,778

$
(4,723)

(99)
%

~~Interest expense, net decreased by $4.7~~$1.4 million, or ~~99%~~25%, for the three months ended March 31, ~~2021~~2022 compared to the three months ended March 31, ~~2020~~2021 primarily reflecting the ~~repayment of~~increase in intangible assets due to the ~~Prior Term Loan Facility.~~

~~Foreign Currency Transaction Loss~~

Wandera acquisition.

Three Months Ended March 31,

Change


2021

2020

$

%

(in thousands, except percentages)

Foreign currency transaction loss

$
171

$
304

$
(133)

(44)
%

~~Foreign currency transaction loss decreased~~

Interest Expense, Net


	Three Months Ended March 31,				Change
	2022		2021		$		%
	(in thousands, except percentages)
Interest expense, net	$	859	$	55	$	804	NM

NM Not Meaningful.

Interest expense, net increased by ~~$0.1~~$0.8 million ~~or 44%,~~ for the three months ended March 31, ~~2021~~2022 compared to the three months ended March 31, ~~2020. The decrease in~~2021 primarily reflecting interest charges and amortization of issuance costs on the 2026 Notes.

Table of Contents

Foreign Currency Transaction Loss


	Three Months Ended March 31,				Change
	2022		2021		$		%
	(in thousands, except percentages)
Foreign currency transaction loss	$	781	$	218	$	563	NM

NM Not Meaningful.

Foreign currency transaction loss ~~was driven~~increased by ~~a favorable impact from the remeasurement of monetary assets and liabilities denominated in Euros and Australian dollars compared to the prior year period.~~

~~Other Income, Net~~

Three Months Ended March 31,

Change


2021

2020

$

%

(in thousands, except percentages)

Other income, net

$
—

$
55

$
(55)

(100)
%

~~Other income, net decreased by $0.1~~$0.6 million ~~or 100%,~~ for the three months ended March 31, ~~2021~~2022 compared to the three months ended March 31, ~~2020.~~2021. The ~~decrease~~increase in ~~Other income, net~~the loss was primarily due to ~~the termination of our sublease~~foreign currency transaction loss attributable to Wandera, which we acquired in the ~~second~~third quarter of ~~2020.~~

2021.

Income Tax ~~(Provision) Benefit~~

Three Months Ended March 31,

Change


2021

2020

$

%

(in thousands, except percentages)

Income tax (provision) benefit

$
(65)

$
3,220

$
(3,285)

NM

Provision


	Three Months Ended March 31,				Change
	2022		2021		$		%
	(in thousands, except percentages)
Income tax provision	$	252	$	123	$	129	NM

NM Not Meaningful.

Income tax ~~(provision) benefit~~provision was ~~$(0.1)~~$0.3 million and ~~$3.2~~$0.1 million for the three months ended March 31, ~~2021~~2022 and ~~2020,~~2021, respectively. The effective tax rates for the three months ended March 31, 2022 and 2021 ~~and 2020~~ were ~~(2.2)~~(1.0)% and ~~28.0%~~(2.8)%, respectively. The effective tax rate for the three months ended March 31, ~~2021~~2022 was ~~lower than the prior year period due to Section 162(m)~~impacted by $0.6 million of ~~the Internal Revenue Code, stock option activity and the domestic valuation allowance.~~

~~Table of Contents~~

discrete income tax expense. The Company’s annual effective tax ~~rate~~rates for the three months ended March 31, 2022 and 2021 were 1.3% and ~~2020 was (0.5)~~(1.6)% ~~and 25.2%~~, respectively.

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 gross profit margin, non-GAAP operating income, non-GAAP operating income margin, non-GAAP income before income taxes, non-GAAP provision for income taxes as it relates to the calculation of non-GAAP net 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 and Non-GAAP Gross Profit Margin

Non-GAAP gross profit and non-GAAP gross profit margin are supplemental measures of operating performance that are not prepared in accordance with GAAP and that do not represent, and should not be considered as, alternatives to gross profit or gross profit margin, as determined in accordance with GAAP. 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.

We use non-GAAP gross profit and non-GAAP gross profit margin to understand and evaluate our core operating performance and trends and to prepare and approve our annual budget. We believe non-GAAP gross profit and non-GAAP gross profit margin are useful measures 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 intangible assets, which are non-cash expenses that may fluctuate for reasons unrelated to overall operating performance. While the amortization

Table of Contents
expense of acquired intangible assets is excluded from non-GAAP gross profit, the revenue related to acquired intangible assets is reflected in non-GAAP gross profit as these assets contribute to our revenue generation.
Non-GAAP gross profit and non-GAAP gross profit margin have limitations as analytical tools, and you should not consider them in isolation, or as substitutes for analysis of our results as reported under GAAP. Because of these limitations, non-GAAP gross profit and non-GAAP gross profit margin should not be considered as replacements for gross profit or gross profit margin, as determined by GAAP, or as measures 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 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 March 31,
2022 2021
(in thousands)
Gross profit $ 80,031 $ 63,471
Amortization expense 5,218 2,777
Stock-based compensation 2,259 401
Acquisition-related expense 38 —
Non-GAAP gross profit $ 87,546 $ 66,649
Gross profit margin 74% 79%
Non-GAAP gross profit margin 81% 83%
Non-GAAP Operating Income and Non-GAAP Operating Income Margin
Non-GAAP operating income and non-GAAP operating income margin are supplemental measures of operating performance that are not prepared in accordance with GAAP and that do not represent, and should not be considered as, alternatives to operating loss or operating loss margin, as determined in accordance with GAAP. We define non-GAAP operating income as operating loss, adjusted for amortization expense, stock-based compensation expense, acquisition-related expense, acquisition-related earnout, costs associated with our secondary offerings, payroll taxes related to stock-based compensation, and legal settlement. We define non-GAAP operating income margin as non-GAAP operating income as a percentage of total revenue.
We use non-GAAP operating income and non-GAAP operating income margin 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 and non-GAAP operating income margin facilitate comparison of our operating performance on a consistent basis between periods, and when viewed in combination with our results prepared in accordance with GAAP, help provide a broader picture of factors and trends affecting our results of operations. While the amortization expense of acquired intangible assets is excluded from non-GAAP operating income, the revenue related to acquired intangible assets is reflected in non-GAAP operating income as these assets contribute to our revenue generation.
Non-GAAP operating income and non-GAAP operating income margin have limitations as analytical tools, and you should not consider them in isolation, or as substitutes for analysis of our results as reported under GAAP. Because of these limitations, non-GAAP operating income and non-GAAP operating income margin should not be considered as replacements for operating loss or operating loss margin, as determined by GAAP, or as measures of our profitability. We compensate for these limitations by relying primarily on our GAAP results and using non-GAAP measures only for supplemental purposes.
38
Table of Contents
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 March 31,
2022 2021
(in thousands)
Operating loss $ (23,737) $ (4,193)
Amortization expense 12,247 8,404
Stock-based compensation 16,010 2,832
Acquisition-related expense 1,101 110
Acquisition-related earnout 88 300
Payroll taxes related to stock-based compensation 136 395
Non-GAAP operating income $ 5,845 $ 7,848
Operating loss margin (22)% (5)%
Non-GAAP operating income margin 5% 10%
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 amortization expense, stock-based compensation expense, foreign currency transaction loss, loss on extinguishment of debt, amortization of debt issuance costs, acquisition-related expense, acquisition-related earnout, costs associated with our secondary offerings, payroll taxes related to stock-based compensation, and legal settlement, 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 loss, loss on extinguishment of debt, amortization of debt issuance costs, acquisition-related expense, acquisition-related earnout, costs associated with our secondary offerings, payroll taxes related to stock-based compensation, and legal settlement.
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.
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 intangible assets is excluded from non-GAAP net income, the revenue related to acquired intangible assets 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.
39
Table of Contents
A reconciliation of non-GAAP net income to net loss, the most directly comparable GAAP measure, is as follows:
New Method Prior Method
Three Months Ended March 31, Three Months Ended March 31,
2022 2021 2022 2021
(in thousands)
Net loss $ (25,629) $ (4,589) $ (25,629) $ (4,589)
Exclude: Income tax provision (252) (123) (252) (123)
Loss before income tax provision (25,377) (4,466) (25,377) (4,466)
Amortization expense 12,247 8,404 12,247 8,404
Stock-based compensation 16,010 2,832 16,010 2,832
Foreign currency transaction loss 781 218 781 218
Amortization of debt issuance costs 679 — 679 —
Acquisition-related expense 1,101 110 1,101 110
Acquisition-related earnout 88 300 88 300
Payroll taxes related to stock-based compensation 136 395 136 395
Non-GAAP income before income taxes 5,665 7,793 5,665 7,793
Non-GAAP provision for income taxes (1)
(1,360) (1,870) (46) (73)
Non-GAAP net income $ 4,305 $ 5,923 $ 5,619 $ 7,720
(1) Beginning in the first quarter of 2022, the Company changed its method of calculating its non-GAAP provision for income taxes in accordance with the SEC’s Non-GAAP Financial Measures Compliance and Disclosure Interpretation on a retroactive basis. For this Quarterly Report on Form 10-Q only, we are providing the calculations under our prior method and the new method. Under the new method, 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. Historically, the Company has approximated the effective tax rate by taking into account the sizeable U.S. net operating loss carryforwards and tax credit carryforwards that have not been recorded where the Company does not expect to record or pay tax for the foreseeable future.
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, provision (benefit) for income taxes, depreciation and amortization expense, stock-based compensation expense, foreign currency transaction loss, loss on extinguishment of debt, acquisition-related expense, acquisition-related earnout, costs associated with our secondary offerings, payroll taxes related to stock-based compensation, and legal settlement.
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.
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.
40
Table of Contents
A reconciliation of adjusted EBITDA to net loss, the most directly comparable GAAP measure, is as follows:
Three Months Ended March 31,
2022 2021
(in thousands)
Net loss $ (25,629) $ (4,589)
Interest expense, net 859 55
Provision for income taxes 252 123
Depreciation expense 1,646 1,380
Amortization expense 12,247 8,404
Stock-based compensation 16,010 2,832
Foreign currency transaction loss 781 218
Acquisition-related expense 1,101 110
Acquisition-related earnout 88 300
Payroll taxes related to stock-based compensation 136 395
Adjusted EBITDA $ 7,491 $ 9,228

Liquidity and Capital Resources

General

As of March 31, ~~2021,~~2022, our principal sources of liquidity were cash and cash equivalents totaling ~~$196.2~~$164.6 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 New~~the 2020 Revolving Credit Facility, described in Note 78 to ~~our Consolidated Financial Statements.~~the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. Our cash equivalents are comprised of money market funds and/or U.S. Treasuries with original ~~or remaining~~ maturities at the time of purchase of three months or less. ~~Our positive cash flows from operations enable us to make continued investments in supporting the growth of our business.~~ 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 growth of our business in the 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 March 31, 2022, we had deferred revenue of $292.5 million, of which $234.4 million was recorded as a current liability and is expected to be recorded as revenue in the next 12 months, provided all other revenue recognition criteria have been met.

On ~~May 5,~~July 1, 2021, we completed our acquisition of Wandera for total consideration of $409.3 million. The total consideration consisted of an initial payment of $359.3 million at close and deferred consideration of $50.0 million that was paid in $25.0 million increments on October 1, 2021 and December 15, 2021. We initially financed the acquisition with cash on hand and proceeds from the Company’s $250.0 million 2021 Term Loan Facility. On July 1, 2021, we entered into the Credit Agreement Amendment, which amended our existing 2020 Credit Agreement. The Credit Agreement Amendment provided for a commitment letter (the “Commitment Letter”) with JPMorgan Chase Bank, N.A. and other commitment parties thereto (the “Commitment Parties”), pursuant to which, subject to the terms and conditions set forth therein, the Commitment Parties have committed to provide anew 364-day term loan facility in an aggregate principal amount of ~~up to~~ $250.0 million on substantially the same terms and conditions as ~~the New~~our existing 2020 Credit Agreement. The ~~funding~~Company repaid the principal amount of the ~~term loan facility provided for~~2021 Term Loan Facility on September 23, 2021 with proceeds from the issuance and sale of the 2026 Notes. As of March 31, 2022, there were no amounts outstanding under the 2020 Credit Agreement, other than $1.0 million in outstanding letters of credit.

On September 17, 2021, we completed our 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 year, payable semiannually in arrears on March 1st and September 1st of each year, beginning on March 1, 2022. We used (i) approximately $250.0 million of the ~~Commitment Letter is contingent on~~net proceeds from the ~~satisfaction~~offering of ~~customary conditions, including~~ the ~~execution~~2026 Notes to repay the Company’s 2021 Term Loan Facility and ~~delivery of definitive documentation with respect~~to pay any associated prepayment penalties and accrued and unpaid interest to the ~~term loan facility in accordance with~~date of repayment and (ii) approximately $36.0 million of the ~~terms set forth in~~net proceeds from the ~~Commitment Letter.~~

offering of the 2026 Notes to fund the cost of entering into privately negotiated capped call transactions, and will use the remainder of the net proceeds for general corporate purposes, which may include working capital, capital expenditures, and potential acquisitions and strategic transactions.

Table of Contents

Future Liquidity and Capital Resource Requirements

We believe our cash and cash equivalents, ~~our New~~the 2020 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 as well as our debt service requirements for at least the next 12 ~~months.~~months and to meet our known long-term cash requirements. 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 use cash to acquire or invest in complementary businesses, services, and technologies, including intellectual property rights.

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 March 31, 2021, we had deferred revenue of $221.6 million, of which $167.9 million was recorded as a current liability and is expected to be recorded as revenue in the next 12 months, provided all other revenue recognition criteria

There have been ~~met.~~

no material changes to our commitments as disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.

~~Table of Contents~~

Cash Flows

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


	Three Months Ended March 31,
	2022		2021
	(in thousands)
Net cash (used in) provided by operating activities	$	(2,990)	$	4,023
Net cash used in investing activities	(5,979)		(6,319)
Net cash (used in) provided by financing activities	(3,441)		4,019
Effect of exchange rate changes on cash and cash equivalents	(145)		(401)
Net (decrease) increase in cash and cash equivalents	(12,555)		1,322
Cash and cash equivalents, beginning of period	177,150		194,868
Cash and cash equivalents, end of period	$	164,595	$	196,190
Cash paid for interest	$	293	$	3
Cash paid for purchases of equipment and leasehold improvements	1,964		3,290

Three Months Ended March 31,

2021

2020

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

$
4,023

$
(7,355)
Net cash used in investing activities

(6,319)

(1,039)
Net cash provided by (used in) financing activities

4,019

(1,362)
Effect of exchange rate changes on cash and cash equivalents

(401)

—
Net increase (decrease) in cash and cash equivalents

1,322

(9,756)
Cash and cash equivalents at beginning of period

194,868

32,433
Cash and cash equivalents at end of period

$
196,190

$
22,677
Cash paid for interest

$
3

$
4,734
Cash paid for purchases of equipment and leasehold improvements

3,290

1,039

Operating Activities

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

For the three months ended March 31, 2022, net cash used in operating activities was $3.0 million reflecting our net loss of $25.6 million, adjusted for non-cash charges of $36.1 million and net cash outflows of $13.5 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, and non-cash lease expense. The primary drivers of net cash outflows from changes in operating assets and liabilities included a decrease of $11.7 million in accounts payable and accrued liabilities primarily due to cash paid for employee bonuses, an increase of $7.0 million in deferred contract costs due to an increase in capitalized costs, an increase of $3.7 million in prepaid expenses and other assets, and an increase of $2.2 million in trade accounts receivable. These changes were partially offset by an increase of $10.5 million in deferred revenue due to growth in subscription revenues.

For the three months ended March 31, 2021, net cash provided by operating activities was $4.0 million reflecting our net loss of ~~$3.1~~$4.6 million, adjusted for non-cash charges of ~~$17.3~~$16.7 million and net cash outflows of ~~$10.2~~$8.1 million from changes in our operating assets and liabilities. Non-cash charges primarily consisted of depreciation and amortization of property and equipment and intangible assets, amortization of deferred contract costs, non-cash lease expense, share-based compensation, and a $0.3 million adjustment to our Digita earnout, partially offset by the deferred tax benefit. The primary drivers of net cash outflows from changes in operating assets and liabilities included a $7.1 million increase in trade accounts receivable due to higher sales and the timing of cash receipts from our customers, a ~~$6.5~~$5.1 million increase in deferred contract costs due to an increase in capitalized contract costs, a $3.3 million increase in prepaid expenses and other assets, and an $8.9 million decrease

Table of Contents

in accounts payable and accrued liabilities due to the timing of cash disbursements. These changes were partially offset by a ~~$15.5~~$15.9 million increase in deferred revenue due to the upfront billing for a majority of our subscriptions.

~~For~~

Investing Activities

During the three months ended March 31, ~~2020,~~2022, net cash used in ~~operating~~investing activities was ~~$7.4~~$6.0 million ~~reflecting our net loss~~driven by cash paid for two acquisitions of ~~$8.3 million, adjusted for non-cash charges of $10.5~~$4.0 million and ~~net cash outflows~~purchases of ~~$9.5~~$2.0 million ~~from changes~~ in ~~our operating assets and liabilities. Non-cash charges primarily consisted of depreciation and amortization of property and~~ equipment and intangible assets, amortization of deferred contract costs, amortization of debt issuance costs and share-based compensation, partially offset by deferred taxes. The primary drivers of net cash outflows from changes in operating assets and liabilities included an increase in deferred contract costs of $4.8 million, an increase in prepaid expenses and other assets of $2.3 million and a decrease in accounts payable and accrued liabilities of $6.9 million, partially offset by a $5.0 million increase in deferred revenue.

~~Investing Activities~~

leasehold improvements.

During the three months ended March 31, 2021, net cash used in investing activities was $6.3 million driven by purchases of $3.3 million in equipment and leasehold improvements primarily reflecting updates to office space and hardware and software and the acquisition of cmdReporter offor $3.0 million.

~~During~~

Financing Activities

Net cash used in financing activities of $3.4 million during the three months ended March 31, ~~2020, net cash used in investing activities~~2022 was ~~$1.0~~primarily due to $4.6 million ~~driven~~paid for contingent consideration associated with the Digita acquisition, partially offset by ~~purchases~~proceeds of ~~equipment and leasehold improvements to support our higher headcount with additional office space and hardware and software.~~

$1.2 million from the exercise of stock options.

~~Table of Contents~~

~~Financing Activities~~

Net cash provided by financing activities of $4.0 million during the three months ended March 31, 2021 was due to proceeds from the exercise of stock options.

Net cash used in financing activities of $1.4 million during the three months ended March 31, 2020 was due to the payment of offering costs of $1.5 million, partially offset by $0.1 million of proceeds from the exercise of stock options.

~~Contractual Obligations and Commitments~~

~~As of March 31, 2021, our principal commitments consist of obligations under operating leases for office space.~~In “Management’s Discussion and Analysis of Financial Conditions and Results of Operations” included in our Annual Report on Form 10-K, we disclosed our total contractual obligations as of December 31, 2020. Outside 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 Annual Report on Form 10-K.

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 Annual Report on Form ~~10-K.~~10-K for the year ended December 31, 2021. In addition, 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.

~~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 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.

~~Table of Contents~~

~~Except for the accounting policies for leases that were updated as a result of adopting the new accounting standard, there~~There have been no material changes to our critical accounting ~~policies and~~ estimates disclosed in our Annual Report on Form ~~10-K.~~10-K for the year ended December 31, 2021. 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 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. Duringduring the three months ended March 31, 2022. 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, 2021 ~~and 2020,~~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.~~

~~Impact~~market risks.

Table 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.

Contents

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 management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2022. Based on ~~such~~this evaluation, our principal executive officer and principal financial officer have concluded that ~~as of March 31, 2021,~~ our disclosure controls and procedures were not effective atas of March 31, 2022 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.

In connection with the preparation of our financial statements for the quarter ended June 30, 2021, we identified misstatements in our accounting related to certain commissions that were incorrectly capitalized in prior periods. The misstatements resulted from a deficiency in the controls over the commissions process. We did not design or maintain effective controls to identify commissions that should have been expensed as incurred rather than capitalized in accordance with GAAP. Specifically, we did not have controls over (i) the communication of commission plan changes between the sales and accounting teams to identify and correctly account for commission plan changes in the financial statements and (ii) reviewing the evaluation of various terms in the commission plans to the relevant accounting guidance. As a result, sales and marketing expenses were understated and deferred contract costs were overstated in prior periods. This material weakness resulted in the revision of our previously issued consolidated financial statements as of and for the years ended December 31, 2020, 2019, and 2018 and for each of the quarters during the years ended December 31, 2020 and 2019 and the quarter ended March 31, 2021.

Our management is committed to remediating this material weakness and has implemented several steps to enhance our internal controls and commissions processes. Our steering committee, anchored by the Chief Financial Officer and Chief Operating Officer, hired a third-party consultant that provided recommendations to standardize and automate our commission processes. Based on these recommendations, we have begun to implement changes in our processes and internal controls in 2022 with the intention of remediation later this year. 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 corrective actions. Until the material weakness is remediated, we plan to continue to perform additional analyses and other procedures to ensure that our consolidated financial statements are prepared in accordance with GAAP.

Changes in Internal Control

There have been no changes in internal control over financial reporting during the quarter ended March 31, ~~2021~~2022 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.

PART II

II. OTHER INFORMATION

Item 1. Legal Proceedings

~~We are not presently a party~~

The information set forth in “Note 7 — Commitments and contingencies” to ~~any litigation~~ the ~~outcome~~condensed consolidated financial statements in Part I, Item 1 of ~~which, we believe, if determined adversely to us, would individually or taken together have a material adverse effect~~this Quarterly Report on ~~our business, operating results, cash flows or financial condition.~~

Form 10-Q is incorporated herein by reference.

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. Except~~10-K for the ~~risk factors set forth below that are new or contain changes to the similarly titled risk factors included in our Annual Report on Form 10-K, there~~year ended December 31, 2021. There have been no material changes to the risk factors disclosed in Part 1, Item 1A “Risk Factors” in our Annual Report on Form ~~10-K.~~

~~Risks Related to the Proposed Acquisition of Wandera~~

Our ability to complete the acquisition of Wandera is subject to various closing conditions, approvals from governmental authorities, which may impose conditions that could adversely affect us or cause the acquisition not to be completed.

~~On May 11, 2021, we entered into the Merger Agreement~~10-K for the acquisition of Wandera, a leader in zero trust cloud security and access for mobile devices. The acquisition is subject to a number of customary conditions to closing as specified in the Merger Agreement. These closing conditions include, among others, the receipt of required approvals under U.S. competition laws, and the absence of governmental or other legal restraints or prohibitions preventing the consummation of the acquisition. No assurance can be given that the required regulatory approvals will be obtained or that the required conditions to closing will be satisfied, and, if all required consents and approvals are obtained and the required conditions are satisfied, no assurance can be given as to the terms, conditions and timing of such consents and approvals. Any delay in completing the acquisition could cause the combined company not to realize, or to be delayed in realizing, some or all of the benefits that we and Wandera expect to achieve if the acquisition is successfully completed within its expected time frame. Additionally, either we or Wandera may terminate the Merger Agreement under certain circumstances, including, among other reasons, if the acquisition is not completed by August 3,year ended December 31, 2021.

We can provide no assurance that the various closing conditions will be satisfied and that the necessary approvals will be obtained, or that any required conditions will not materially adversely affect the combined company following the acquisition. In addition, we can provide no assurance that these conditions will not result in the abandonment or delay of the acquisition. The occurrence of any of these events individually or in combination could have a material adverse effect on our results of operations and the trading price of our common stock.

~~The termination of the Merger Agreement could negatively impact our business.~~

If the acquisition is not completed for any reason, our ongoing business may be adversely affected and, without realizing any of the expected benefits of having completed the acquisition, we would be subject to a number of risks, including the following:

•

~~we may experience negative reactions from the financial markets, including negative impacts on our stock price;~~

•

~~we may experience negative reactions from our customers, suppliers, distributors and employees;~~

•

~~we will be required to pay our costs relating to the acquisition, such as legal, advisory, and accounting costs and associated fees and expenses, whether or not the acquisition is completed;~~

~~Table of Contents~~

•

~~we could be subject to time-consuming and costly litigation related to the acquisition; and~~

•

matters relating to the acquisition (including integration planning) require substantial commitments of time and resources by our management, which could otherwise have been devoted to day-to-day operations or to other opportunities that may have been beneficial to our business.

Whether or not the acquisition is completed, the announcement and pendency of the acquisition could cause disruptions in our and Wandera’s business, which could have an adverse effect on our business and financial results.

~~Whether or not the acquisition is completed, the announcement and pendency of the acquisition could cause disruptions in our and Wandera’s business. Specifically:~~

•

~~disruptions to ongoing operations;~~

•

~~retaining and motivating key Wandera personnel;~~

•

~~declining employee morale and retention issues affecting Wandera employees, which may result from changes in management, reporting relationships, or other changes to employment relationships;~~

•

maintaining good relationships with customers or business partners of Wandera or our own customers as a result of the acquisition announcement, any uncertainty regarding completion of the acquisition, and any integration of operations; and

•

~~the attention of our and Wandera’s management may be directed toward the completion of the acquisition.~~

We have diverted significant management resources in an effort to complete the acquisition. If the acquisition is not completed, we will have incurred significant costs, including the diversion of management resources, for which we will have received little or no benefit.

~~We will incur significant acquisition-related costs in connection with the Wandera acquisition, and we could incur substantial expenses related to the integration of Wandera.~~

We have incurred and expect to incur a number of non-recurring costs associated with combining the operations of the two companies, as well as transaction fees and other costs related to the acquisition. These costs and expenses include fees paid to financial, legal and accounting advisors, potential employment-related costs, filing fees, and other related charges. We will need to pay some of these costs regardless of whether the acquisition is completed.

We will also incur integration costs in connection with the acquisition. There are a large number of processes, policies, procedures, operations, technologies and systems that must be integrated in connection with the acquisition and the integration of Wandera’s business. Although we expect that the elimination of duplicative costs, strategic benefits, and additional income, as well as the realization of other efficiencies related to the integration of the businesses, may offset incremental transaction and acquisition-related costs over time, any net benefit may not be achieved in the near term or at all. We will bear many of these costs even if the acquisition is not completed. While we have assumed that certain expenses would be incurred in connection with the acquisition and the other transactions contemplated by the Merger Agreement, there are many factors beyond our control that could affect the total amount or the timing of the integration and implementation expenses.

Integrating Wandera’s business may be more difficult, costly or time-consuming than expected and we may fail to realize the anticipated benefits of the acquisition, which may adversely affect our business results and negatively affect the value of our common stock.

The success of the acquisition will depend on, among other things our ability to integrate Wandera’s businesses in a manner that facilitates growth opportunities and realizes expected cost savings. We may encounter difficulties in integrating our and Wandera’s businesses and realizing the anticipated benefits of the acquisition. We must achieve

~~Table of Contents~~

anticipated post-closing growth and cost savings without adversely affecting current revenues and investments in future growth. If we are not able to successfully achieve these objectives, the anticipated benefits of the acquisition may not be realized fully, or at all, or may take longer to realize than expected.

The acquisition involves the combination of two companies which currently operate, and until the completion of the acquisition will continue to operate, as independent companies. There can be no assurances that our respective businesses can be integrated successfully. It is possible that the integration process could result in the loss of key employees from both companies, the loss of customers, the disruption of our, Wandera’s or both companies’ ongoing businesses, inconsistencies in standards, controls, procedures and policies, unexpected integration issues, higher than expected integration costs and an overall post-completion integration process that takes longer than originally anticipated. We will be required to devote management attention and resources to business integration efforts, and prior to the acquisition, management attention and resources will be required to plan for such integration. Potential difficulties we may encounter in the integration process include the following:

•

~~lost sales and customers as a result of certain of our and/or Wandera’s customers deciding not to do business with us post-close;~~

•

~~differences in customer and vendor composition, sales cycles, and other business dissimilarities;~~

•

~~integrating personnel from the two companies while maintaining focus on providing consistent, high-quality products and services, especially in the COVID-19 environment;~~

•

~~potential unknown liabilities and unforeseen increased expenses, delays or regulatory conditions associated with the acquisition; and~~

•

~~our and/or Wandera’s performance shortfalls as a result of the diversion of management’s attention caused by completing the acquisition and integrating the companies’ operations.~~

Any of these factors could result in us failing to realize the anticipated benefits of the acquisition, on the expected timeline or at all. An inability to realize the full extent of the anticipated benefits of the acquisition and the other transactions contemplated by the Merger Agreement, as well as any delays encountered in the integration process, could have an adverse effect upon the revenues, level of expenses and our operating results, which may adversely affect the value of our common stock.

In addition, the actual integration may result in additional and unforeseen expenses, and the anticipated benefits of the integration plan may not be realized. Actual growth and cost savings, if achieved, may be lower than what we expect and may take longer to achieve than anticipated. If we are not able to adequately address integration challenges, we may be unable to successfully integrate their operations or realize the anticipated benefits of such integration.

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

None.

Item 3. Defaults Upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

~~None.~~

None.

Table of Contents

Item 6. Exhibits

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


Exhibit Number		Description
~~2.1~~ 3.1		~~Agreement~~Second Amended and ~~Plan~~Restated Certificate of ~~Merger, dated as~~Incorporation of ~~May 5, 2021, by and among JAMF~~Jamf Holding Corp.~~, JAMF Software, LLC, White Wolf Merger Sub, Inc., Wandera, Inc., and Shareholder Representative Services LLC, filed herewith.~~

~~10.1~~	~~First Amendment, dated as of April 22, 2021, to the Letter Agreement between JAMF Holdings, Inc. and Dean Hager~~ (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K filed with the ~~SEC~~Commission on ~~April 26, 2021)~~July 27, 2020).

~~10.2~~ 3.2		~~First Amendment, dated as~~Amended and Restated Bylaws of ~~April 22, 2021, to the Letter Agreement between JAMF Holdings, Inc. and Jill Putman~~Jamf Holding Corp. (incorporated by reference to Exhibit 3.2 to the Company’s Current Report on Form 8-K filed with the ~~SEC~~Commission on ~~April 26, 2021)~~July 27, 2020).

~~10.3~~ 31.1		First Amendment, dated as of April 22, 2021, to the Letter Agreement between JAMF Holdings, Inc. and John Strosahl (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on April 26, 2021).

~~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 herewith.

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

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: May ~~11, 2021~~ 10, 2022	By:	~~By:~~	/s/ Ian Goodkind
			Ian Goodkind
			Chief Accounting Officer (Principal Accounting Officer)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the quarterly period ended March 31, ~~2021~~ 2022


				PAGE
PART I.			FINANCIAL INFORMATION

Item 1.			Financial Statements (unaudited)	4
				~~PAGE~~
~~PART I.~~	~~FINANCIAL INFORMATION~~

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

	Condensed Consolidated Balance Sheets ~~as of~~— March 31, ~~2021~~2022 and December 31, ~~2020~~2021	3 4

	Condensed Consolidated Statements of Operations ~~for the~~— Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021	4 5
			Condensed Consolidated Statements of Comprehensive Loss — Three Months Ended March 31, 2022 and 2021	6
			Condensed Consolidated Statements of Stockholders’ Equity ~~for the~~— Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021	5 7

	Condensed Consolidated Statements of Cash Flows ~~for the~~— Three Months Ended March 31, ~~2021~~2022 and ~~2020~~2021	6 8

	Notes to Condensed Consolidated Financial Statements	7 9
			Note 1. Basis of presentation and description of business	9
			Note 2. Summary of significant accounting policies	10
			Note 3. Financial instruments fair value	12
			Note 4. Acquisitions	15
			Note 5. Goodwill and other intangible assets	17
			Note 6. Leases	19
			Note 7. Commitments and contingencies	19
			Note 8. Debt	19
			Note 9. Share-based compensation	20
			Note 10. Net loss per share	22
			Note 11. Income taxes	23
			Note 12. Related party transactions	23
Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations	25 27
Item 3.
~~Item 3~~.	Quantitative and Qualitative Disclosures About Market Risk	42 43
Item 4.
~~Item 4~~.	Controls and Procedures	42 44

PART II.			OTHER INFORMATION	46
Item 1.			Legal Proceedings	46
Item 11A..			~~Legal Proceedings~~Risk Factors	43 46
Item 2.
~~Item 1A~~.	~~Risk Factors~~	43

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

~~Item 6~~Signatures.				~~Exhibits~~48	46

	~~Signatures~~	47


	March 31, 2021		December 31, 2020
		(unaudited)
Assets
Current assets:
Cash and cash equivalents	$	196,190	$	194,868
Trade accounts receivable, net of allowances of $603 and $530 at March 31, 2021 and December 31, 2020, respectively		75,882		69,056
Income taxes receivable		632		632
Deferred contract costs		11,155		9,959
Prepaid expenses		15,009		13,283
Other current assets		2,325		1,113
Total current assets		301,193		288,911
Equipment and leasehold improvements, net		16,965		12,755
Goodwill		541,850		541,480
Other intangible assets, net		197,504		202,878
Deferred contract costs		28,774		26,770
Other assets		28,898		5,359
Total assets	$	1,115,184	$	1,078,153
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	5,744	$	6,967
Accrued liabilities		28,131		31,574
Income taxes payable		1,153		713
Deferred revenues		167,868		160,443
Total current liabilities		202,896		199,697
Deferred revenues, noncurrent		53,711		45,507
Deferred tax liability, net		5,475		6,422
Other liabilities		33,839		11,046
Total liabilities		295,921		262,672
Commitments and contingencies (Note 8)
Stockholders’ equity:
Preferred stock, $0.001 par value, 50,000,000 shares authorized at March 31, 2021 and December 31, 2020; no shares issued and outstanding at March 31, 2021 and December 31, 2020		—		—
Common stock, $0.001 par value, 500,000,000 shares authorized at March 31, 2021 and December 31, 2020; 117,705,895 and 116,992,472 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively		118		117
Additional paid‑in capital		909,966		903,116
Accumulated deficit		(90,821)		(87,752)
Total stockholders’ equity		819,263		815,481
Total liabilities and stockholders’ equity	$	1,115,184	$	1,078,153


	Three Months Ended March 31,
	2021		2020
Revenue:
Subscription	$	74,923	$	54,618
Services		4,003		4,010
License		2,242		1,762
Total revenue		81,168		60,390
Cost of revenue:
Cost of subscription (exclusive of amortization expense shown below)		12,014		9,248
Cost of services (exclusive of amortization expense shown below)		2,465		3,086
Amortization expense		2,777		2,677
Total cost of revenue		17,256		15,011
Gross profit		63,912		45,379
Operating expenses:
Sales and marketing		29,332		22,282
Research and development		15,626		12,617
General and administrative		16,105		11,289
Amortization expense		5,627		5,674
Total operating expenses		66,690		51,862
Loss from operations		(2,778)		(6,483)
Interest expense, net		(55)		(4,778)
Foreign currency transaction loss		(171)		(304)
Other income, net		—		55
Loss before income tax (provision) benefit		(3,004)		(11,510)
Income tax (provision) benefit		(65)		3,220
Net loss	$	(3,069)	$	(8,290)
Net loss per share, basic and diluted	$	(0.03)	$	(0.08)
Weighted-average shares used to compute net loss per share, basic and diluted		117,386,322		102,860,545


	Stock Class			Additional
	Common			Paid‑In		Accumulated		Stockholders’
	Shares	Amount		Capital		Deficit		Equity
Three Months Ended March 31, 2021:

Balance, December 31, 2020	116,992,472	$	117	$	903,116	$	(87,752)	$	815,481
Exercise of stock options	713,423		1		4,018		—		4,019
Share-based compensation	—		—		2,832		—		2,832
Net loss	—		—		—		(3,069)		(3,069)
Balance, March 31, 2021	117,705,895	$	118	$	909,966	$	(90,821)	$	819,263


Balance, December 31, 2019	102,843,612	$	103	$	568,756	$	(64,981)	$	503,878
Exercise of stock options	18,792		—		103		—		103
Share-based compensation	—		—		811		—		811
Net loss	—		—		—		(8,290)		(8,290)
Balance, March 31, 2020	102,862,404	$	103	$	569,670	$	(73,271)	$	496,502


	March 31, 2021
	Level 1		Level 2		Level 3			Total

	(in thousands)
Cash equivalents:
Money market funds	$	150,006	$	—	$	—	$	150,006
Total cash equivalents	$	150,006	$	—	$	—	$	150,006

	December 31, 2020
	Level 1		Level 2		Level 3			Total

	(in thousands)
Cash equivalents:
Money market funds	$	100,000	$	—	$	—	$	100,000
U.S. Treasuries		25,000		—		—		25,000
Total cash equivalents	$	125,000	$	—	$	—	$	125,000


Cash consideration	$	3,041
Contingent consideration		359
Final aggregate purchase price	$	3,400

Intangible assets acquired:
Developed technology	$	2,630
IPR&D		400
Goodwill		370
Total purchase consideration	$	3,400


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

		(in thousands)
Trademarks	8 years	$	34,320	$	13,454	$	20,866	4.8 years
Customer relationships	2 - 12 years		214,428		55,810		158,618	8.7 years
Developed technology	5 years		54,563		31,173		23,390	2.3 years
Non‑competes	2 years		90		86		4	0.1 years
Balance, December 31, 2020		$	303,401	$	100,523	$	202,878

Trademarks	8 years	$	34,300	$	14,506	$	19,794	4.6 years
Customer relationships	2 - 12 years		214,408		60,342		154,066	8.5 years
Developed technology	5 years		57,193		33,949		23,244	2.4 years
Non‑competes	2 years		90		90		—	—
In-process research and development	Indefinite		400		—		400
Balance, March 31, 2021		$	306,391	$	108,887	$	197,504


Leases	Balance Sheet Classification	March 31, 2021
		(in thousands)
Assets
Operating lease assets	Other assets	$	23,868

Liabilities
Operating lease liabilities - current	Accrued liabilities	$	4,870
Operating lease liabilities - non-current	Other liabilities		23,184
Total operating lease liabilities		$	28,054


	Three Months Ended
	March 31, 2021
	(in thousands)
Operating lease cost	$	1,514
Short-term lease cost		52
Variable lease cost		439
Total lease expense	$	2,005


Leases	Balance Sheet Classification	March 31, 2022		December 31, 2021
		(in thousands)
Assets
Operating lease assets	Other assets	$	28,603	$	21,600

Liabilities
Operating lease liabilities - current	Accrued liabilities	$	5,859	$	5,251
Operating lease liabilities - non-current	Other liabilities	26,380		20,086
Total operating lease liabilities		$	32,239	$	25,337


	Operating Leases
	(in thousands)
Years ending December 31:
2021 (remaining nine months)	$	4,326
2022		5,407
2023		5,331
2024		4,589
2025		2,519
Thereafter		9,482
Total lease payments		31,654
Less: imputed interest		3,600
Total present value of lease liabilities	$	28,054


				Weighted-
		Weighted-		Average	Aggregate
		Average		Remaining	Intrinsic
		Exercise		Contractual	Value
	Options	Price		Term (Years)	(in thousands)
Outstanding, December 31, 2020	3,687,664	$	6.75	7.8	$	85,444
Granted	0		—			—
Exercised	—		—			—
Forfeitures	—		—			—
Outstanding, March 31, 2021	3,687,664	$	6.75	7.5	$	105,358
Options exercisable at March 31, 2021	—	$	—	—	$	—
Vested or expected to vest at March 31, 2021	—	$	—	—	$	—


		Per Unit
	Units	Fair Value
Outstanding, December 31, 2020	1,293,107	$	26.34
Granted	88,764		37.37
Restrictions lapsed	—		—
Forfeited	(7,470)		26.00
Outstanding, March 31, 2021	1,374,401	$	27.05



	Three Months Ended March 31,				Change
	2021		2020		$		%

	(in thousands, except percentages)
SaaS subscription and support and maintenance	$	66,669	$	50,078	$	16,591	33	%
On‑premise subscription		8,254		4,540		3,714	82
Subscription revenue		74,923		54,618		20,305	37
Professional services		4,003		4,010		(7)	(0)
Perpetual licenses		2,242		1,762		480	27
Non‑subscription revenue		6,245		5,772		473	8
Total revenue	$	81,168	$	60,390	$	20,778	34	%


	New Method				Prior Method
	Three Months Ended March 31,				Three Months Ended March 31,
	2022		2021		2022		2021
	(in thousands)
Net loss	$	(25,629)	$	(4,589)	$	(25,629)	$	(4,589)
Exclude: Income tax provision	(252)		(123)		(252)		(123)
Loss before income tax provision	(25,377)		(4,466)		(25,377)		(4,466)
Amortization expense	12,247		8,404		12,247		8,404
Stock-based compensation	16,010		2,832		16,010		2,832
Foreign currency transaction loss	781		218		781		218
Amortization of debt issuance costs	679		—		679		—
Acquisition-related expense	1,101		110		1,101		110
Acquisition-related earnout	88		300		88		300
Payroll taxes related to stock-based compensation	136		395		136		395
Non-GAAP income before income taxes	5,665		7,793		5,665		7,793
Non-GAAP provision for income taxes (1)	(1,360)		(1,870)		(46)		(73)
Non-GAAP net income	$	4,305	$	5,923	$	5,619	$	7,720