UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
			For the quarterly period ended ~~September 30, 2022~~March 31, 2023


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

Commission File Number: 001-39399

JAMF HOLDING CORP.

(Exact name of registrant as specified in its charter)


Delaware (State or other jurisdiction of incorporation or organization)						82-3031543 (I.R.S. Employer Identification No.)

100 Washington Ave S, Suite 1100

Minneapolis, MN 55401

(Address of principal executive offices)

(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 ☐	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 ~~October 28, 2022,~~April 26, 2023, the registrant had ~~121,387,337~~123,987,014 shares of common stock, $0.001 par value, outstanding.

Table of Contents

JAMF HOLDING CORP.

TABLE OF CONTENTS


		PAGE
PART I.	FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited)	4
	Condensed Consolidated Balance Sheets — ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021~~2022	4
	Condensed Consolidated Statements of Operations — Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~	5
	Condensed Consolidated Statements of Comprehensive Loss — Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~	6
	Condensed Consolidated Statements of Stockholders’ Equity — Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~	7
	Condensed Consolidated Statements of Cash Flows — ~~Nine~~Three Months Ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~	98
	Notes to Condensed Consolidated Financial Statements	1110
	Note 1. Basis of presentation and description of business	1110
	Note 2. Summary of significant accounting policies	1211
	Note 3. Financial instruments fair value	1513
	Note 4. Acquisitions	1615
	Note 5. Goodwill and other intangible assets	1917
	Note 6. Leases	2118
	Note 7. Commitments and contingencies	2119
	Note 8. Debt	2220
	Note 9. Share-based compensation	2321
	Note 10. Net loss per share	2623
	Note 11. Income taxes	2623
	Note 12. Related party transactions	2624
	Note 13. Subsequent events	2724
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	3127
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4842
Item 4.	Controls and Procedures	4842

PART II.	OTHER INFORMATION	5044
Item 1.	Legal Proceedings	5044
Item 1A.	Risk Factors	5044
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	5044
Item 3.	Defaults Upon Senior Securities	5044
Item 4.	Mine Safety Disclosures	5044
Item 5.	Other Information	5044
Item 6.	Exhibits	5145

Signatures		5246

Table of Contents

GLOSSARY

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 321~~						~~ASC Topic 321,~~ ~~Investments - Equity Securities~~
ASC 606						ASC Topic 606, Revenue from Contracts with Customers
ASC 805						ASC Topic 805, Business Combinations
ASC 850						ASC Topic 850, Related Party Disclosures
~~ASU~~BYOD						~~Accounting Standards Update~~
~~Capped Calls~~						~~Privately negotiated capped call transactions with third-party banks that were entered into in the third quarter of 2021~~Bring your own device
CODM						Chief operating decision maker
Credit Agreement Amendment						~~Incremental Facility~~ Amendment No. 12 to the 2020 Credit Agreement, ~~dated July 1, 2021~~effective April 7, 2023
Current Period ARR						ARR from the same cohort of customers used to calculate Prior Period ARR as of the current period end
Digita						Digita Security LLC
EUR						Euro
Exchange Act						The Securities Exchange Act of 1934, as amended
~~FASB~~						~~Financial Accounting Standards Board~~
GAAP						U.S. generally accepted accounting principles
GBP						British pound sterling
~~IPR&D~~IT						~~In-process research and development~~Information technology
JNGF						Jamf Nation Global Foundation
~~JNUC~~LIBO Rate						~~Jamf Nation User Conference~~
~~LTIP~~						~~Long-term incentive plan~~London interbank offered rate
Prior Period ARR						ARR from the cohort of all customers as of 12 months prior to period end
R&E						Research and experimental
RSU						Restricted stock unit
SaaS						Software-as-a-service
SAFE						Simple agreement for future equity
SEC						Securities and Exchange Commission
SMBs						Small-to-medium-sized businesses
SwiftConnect, Inc.						SwiftConnect
Term SOFR						Forward-looking secured overnight financing rate
UK						United Kingdom
U.S.						United States
Vista						Vista Equity Partners, LLC and its affiliates
Wandera						Wandera, Inc.
~~Wandera~~ZecOps						ZecOps, Inc.
ZecOps Merger Agreement						Agreement and Plan of Merger, dated as of ~~May 5, 2021~~September 23, 2022 in connection with the acquisition of ~~Wandera~~
ZecOps						~~ZecOps, Inc.~~
~~ZTNA~~						~~Zero Trust Network Access~~

Table of Contents

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

JAMF HOLDING CORP.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)


		September 30, 2022		December 31, 2021			March 31, 2023		December 31, 2022
		(Unaudited)					(Unaudited)
Assets	Assets					Assets
Current assets:	Current assets:					Current assets:
Cash and cash equivalents	Cash and cash equivalents	$	225,480	$	177,150	Cash and cash equivalents	$	200,340	$	224,338
Trade accounts receivable, net of allowances of $462 and $391 at September 30, 2022 and December 31, 2021, respectively		92,882		79,143
Trade accounts receivable, net of allowances of $427 and $445 at March 31, 2023 and December 31, 2022, respectively						Trade accounts receivable, net of allowances of $427 and $445 at March 31, 2023 and December 31, 2022, respectively	84,392		88,163
Income taxes receivable	Income taxes receivable	406		608		Income taxes receivable	806		465
Deferred contract costs	Deferred contract costs	16,472		12,904		Deferred contract costs	18,780		17,652
Prepaid expenses	Prepaid expenses	16,186		17,581		Prepaid expenses	22,903		14,331
Other current assets	Other current assets	6,224		4,212		Other current assets	6,535		6,097
Total current assets	Total current assets	357,650		291,598		Total current assets	333,756		351,046
Equipment and leasehold improvements, net	Equipment and leasehold improvements, net	19,116		18,045		Equipment and leasehold improvements, net	18,615		19,421
Goodwill	Goodwill	800,524		845,734		Goodwill	862,747		856,925
Other intangible assets, net	Other intangible assets, net	215,064		264,593		Other intangible assets, net	209,509		218,744
Deferred contract costs, non-current	Deferred contract costs, non-current	36,960		29,842		Deferred contract costs, non-current	41,933		39,643
Other assets	Other assets	38,128		30,608		Other assets	42,409		43,763
Total assets	Total assets	$	1,467,442	$	1,480,420	Total assets	$	1,508,969	$	1,529,542
Liabilities and stockholders’ equity	Liabilities and stockholders’ equity					Liabilities and stockholders’ equity
Current liabilities:	Current liabilities:					Current liabilities:
Accounts payable	Accounts payable	$	16,870	$	9,306	Accounts payable	$	14,982	$	15,393
Accrued liabilities	Accrued liabilities	57,351		54,022		Accrued liabilities	48,993		67,051
Income taxes payable	Income taxes payable	752		167		Income taxes payable	547		486
Deferred revenues	Deferred revenues	271,721		223,031		Deferred revenues	278,407		278,038
Total current liabilities	Total current liabilities	346,694		286,526		Total current liabilities	342,929		360,968
Deferred revenues, non-current	Deferred revenues, non-current	69,509		59,097		Deferred revenues, non-current	62,435		68,112
Deferred tax liability, net	Deferred tax liability, net	5,418		8,700		Deferred tax liability, net	5,539		5,505
Convertible senior notes, net	Convertible senior notes, net	363,885		362,031		Convertible senior notes, net	365,127		364,505
Other liabilities	Other liabilities	22,173		25,640		Other liabilities	27,480		29,114
Total liabilities	Total liabilities	807,679		741,994		Total liabilities	803,510		828,204
Commitments and contingencies (Note 7)	Commitments and contingencies (Note 7)					Commitments and contingencies (Note 7)
Stockholders’ equity:	Stockholders’ equity:					Stockholders’ equity:
Preferred stock, $0.001 par value, 50,000,000 shares authorized at September 30, 2022 and December 31, 2021; no shares issued and outstanding at September 30, 2022 and December 31, 2021		—		—
Common stock, $0.001 par value, 500,000,000 shares authorized at September 30, 2022 and December 31, 2021; 121,340,085 and 119,426,064 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively		120		119
Preferred stock, $0.001 par value, 50,000,000 shares authorized at March 31, 2023 and December 31, 2022; no shares issued and outstanding at March 31, 2023 and December 31, 2022						Preferred stock, $0.001 par value, 50,000,000 shares authorized at March 31, 2023 and December 31, 2022; no shares issued and outstanding at March 31, 2023 and December 31, 2022	—		—
Common stock, $0.001 par value, 500,000,000 shares authorized at March 31, 2023 and December 31, 2022; 123,907,489 and 123,170,172 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively						Common stock, $0.001 par value, 500,000,000 shares authorized at March 31, 2023 and December 31, 2022; 123,907,489 and 123,170,172 shares issued and outstanding at March 31, 2023 and December 31, 2022, respectively	124		123
Additional paid‑in capital	Additional paid‑in capital	1,011,205		913,581		Additional paid‑in capital	1,072,148		1,049,875
Accumulated other comprehensive loss	Accumulated other comprehensive loss	(64,084)		(7,866)		Accumulated other comprehensive loss	(33,904)		(39,951)
Accumulated deficit	Accumulated deficit	(287,478)		(167,408)		Accumulated deficit	(332,909)		(308,709)
Total stockholders’ equity	Total stockholders’ equity	659,763		738,426		Total stockholders’ equity	705,459		701,338
Total liabilities and stockholders’ equity	Total liabilities and stockholders’ equity	$	1,467,442	$	1,480,420	Total liabilities and stockholders’ equity	$	1,508,969	$	1,529,542

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

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JAMF HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except share and per share amounts)

(unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Revenue:	Revenue:									Revenue:
Subscription	Subscription	$	118,524	$	90,700	$	330,132	$	245,900	Subscription	$	127,230	$	102,201
Services	Services	5,216		4,083		14,187		12,015		Services	4,384		3,944
License	License	817		838		4,134		4,671		License	598		2,113
Total revenue	Total revenue	124,557		95,621		348,453		262,586		Total revenue	132,212		108,258
Cost of revenue:	Cost of revenue:									Cost of revenue:
Cost of subscription (exclusive of amortization expense shown below)	Cost of subscription (exclusive of amortization expense shown below)	22,334		18,317		62,870		44,206		Cost of subscription (exclusive of amortization expense shown below)	23,159		19,902
Cost of services (exclusive of amortization expense shown below)	Cost of services (exclusive of amortization expense shown below)	3,584		2,955		10,184		8,027		Cost of services (exclusive of amortization expense shown below)	3,292		3,107
Amortization expense	Amortization expense	5,277		5,198		15,760		10,835		Amortization expense	3,296		5,218
Total cost of revenue	Total cost of revenue	31,195		26,470		88,814		63,068		Total cost of revenue	29,747		28,227
Gross profit	Gross profit	93,362		69,151		259,639		199,518		Gross profit	102,465		80,031
Operating expenses:	Operating expenses:									Operating expenses:
Sales and marketing	Sales and marketing	54,096		40,856		159,171		103,640		Sales and marketing	60,208		46,325
Research and development	Research and development	30,799		25,608		89,584		58,437		Research and development	32,072		24,802
General and administrative	General and administrative	30,061		25,536		103,994		69,288		General and administrative	28,436		25,612
Amortization expense	Amortization expense	7,040		7,025		21,103		18,275		Amortization expense	7,241		7,029
Total operating expenses	Total operating expenses	121,996		99,025		373,852		249,640		Total operating expenses	127,957		103,768
Loss from operations	Loss from operations	(28,634)		(29,874)		(114,213)		(50,122)		Loss from operations	(25,492)		(23,737)
Interest income (expense), net	Interest income (expense), net	45		(1,386)		(1,455)		(1,608)		Interest income (expense), net	1,285		(859)
Loss on extinguishment of debt		—		(449)		—		(449)
Foreign currency transaction loss		(2,624)		(269)		(4,081)		(795)
Loss before income tax (provision) benefit		(31,213)		(31,978)		(119,749)		(52,974)
Income tax (provision) benefit		(89)		1,595		(321)		1,535
Foreign currency transaction gain (loss)										Foreign currency transaction gain (loss)	604		(781)
Loss before income tax provision										Loss before income tax provision	(23,603)		(25,377)
Income tax provision										Income tax provision	(597)		(252)
Net loss	Net loss	$	(31,302)	$	(30,383)	$	(120,070)	$	(51,439)	Net loss	$	(24,200)	$	(25,629)
Net loss per share, basic and diluted	Net loss per share, basic and diluted	$	(0.26)	$	(0.26)	$	(1.00)	$	(0.44)	Net loss per share, basic and diluted	$	(0.20)	$	(0.21)
Weighted‑average shares used to compute net loss per share, basic and diluted	Weighted‑average shares used to compute net loss per share, basic and diluted	121,014,325		118,640,565		120,188,587		117,983,463		Weighted‑average shares used to compute net loss per share, basic and diluted	123,422,066		119,594,341

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

Table of Contents

JAMF HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(in thousands)

(unaudited)


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
Net loss	Net loss	$	(31,302)	$	(30,383)	$	(120,070)	$	(51,439)	Net loss	$	(24,200)	$	(25,629)
Other comprehensive loss:
Other comprehensive income (loss):										Other comprehensive income (loss):
Foreign currency translation adjustments	Foreign currency translation adjustments	(26,510)		(8,120)		(56,218)		(8,120)		Foreign currency translation adjustments	6,047		(8,083)
Total other comprehensive loss		(26,510)		(8,120)		(56,218)		(8,120)
Total other comprehensive income (loss)										Total other comprehensive income (loss)	6,047		(8,083)
Comprehensive loss	Comprehensive loss	$	(57,812)	$	(38,503)	$	(176,288)	$	(59,559)	Comprehensive loss	$	(18,153)	$	(33,712)

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

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JAMF HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share amounts)

(unaudited)

Stock Class Additional Paid‑In
Capital Accumulated Other Comprehensive Loss Accumulated
Deficit Stockholders’
Equity
Common
Shares Amount
Three Months Ended September 30, 2022:
Balance, June 30, 2022 120,310,047 $ 120 $ 987,576 $ (37,574) $ (256,176) $ 693,946
Exercise of stock options 476,637 — 3,139 — — 3,139
Vesting of restricted stock units 553,401 — — — — —
Share‑based compensation — — 20,490 — — 20,490
Foreign currency translation adjustments — — — (26,510) — (26,510)
Net loss — — — — (31,302) (31,302)
Balance, September 30, 2022 121,340,085 $ 120 $ 1,011,205 $ (64,084) $ (287,478) $ 659,763
Three Months Ended September 30, 2021:
Balance, June 30, 2021 118,249,912 $ 118 $ 917,116 $ — $ (113,275) $ 803,959
Exercise of stock options 269,416 1 1,506 — — 1,507
Vesting of restricted stock units 507,776 — — — — —
Share‑based compensation — — 15,836 — — 15,836
Purchase of capped calls — — (36,030) — — (36,030)
Foreign currency translation adjustments — — — (8,120) — (8,120)
Net loss — — — — (30,383) (30,383)
Balance, September 30, 2021 119,027,104 $ 119 $ 898,428 $ (8,120) $ (143,658) $ 746,769

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

~~Table of Contents~~

~~JAMF HOLDING CORP.~~

~~CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (continued)~~

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

~~(unaudited)~~


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

Nine Months Ended September 30, 2022:
Three Months Ended March 31, 2023:																				Three Months Ended March 31, 2023:

Balance, December 31, 2022																				Balance, December 31, 2022	123,170,172			$	123					$	1,049,875			$	(39,951)			$	(308,709)			$	701,338
Exercise of stock options																				Exercise of stock options	367,171			—					2,723				—				—				2,723
Vesting of restricted stock units																				Vesting of restricted stock units	370,146			1					—				—				—				1
Share‑based compensation																				Share‑based compensation	—			—					19,550				—				—				19,550
Foreign currency translation adjustments																				Foreign currency translation adjustments	—			—					—				6,047				—				6,047
Net loss																				Net loss	—			—					—				—				(24,200)				(24,200)
Balance, March 31, 2023																				Balance, March 31, 2023	123,907,489			$	124				$	1,072,148			$	(33,904)			$	(332,909)			$	705,459

Three Months Ended March 31, 2022:																				Three Months Ended March 31, 2022:

Balance, December 31, 2021	Balance, December 31, 2021	119,426,064	$	119			$	913,581							$	(7,866)					$	(167,408)		$	738,426		Balance, December 31, 2021	119,426,064				$	119			$	913,581			$	(7,866)			$	(167,408)		$	738,426
Exercise of stock options	Exercise of stock options	747,410	1				4,681							—					—				4,682	Exercise of stock options		211,200					—				1,197				—				—			1,197
Vesting of restricted stock units	Vesting of restricted stock units	1,036,161	��		—				—			—					—			Vesting of restricted stock units	22,191			—					—				—				—				—
Issuance of common stock under the employee stock purchase plan		130,450	—		3,419				—			—					3,419
Share‑based compensation	Share‑based compensation	—	—		89,524				—			—					89,524			Share‑based compensation	—			—					16,010				—				—				16,010
Foreign currency translation adjustments	Foreign currency translation adjustments	—	—		—				(56,218)			—					(56,218)			Foreign currency translation adjustments	—			—					—				(8,083)				—				(8,083)
Net loss	Net loss	—	—		—				—			(120,070)					(120,070)			Net loss	—			—					—				—				(25,629)				(25,629)
Balance, September 30, 2022		121,340,085	$	120	$	1,011,205			$	(64,084)		$	(287,478)				$	659,763

Nine Months Ended September 30, 2021:

Balance, December 31, 2020		116,992,472	$	117	$	903,116			$	—		$	(92,219)				$	811,014
Exercise of stock options		1,526,856	2		8,568				—			—					8,570
Vesting of restricted stock units		507,776	—		—				—			—					—
Share‑based compensation		—	—		22,774				—			—					22,774
Purchase of capped calls		—	—		(36,030)				—			—					(36,030)
Foreign currency translation adjustments		—	—		—				(8,120)			—					(8,120)
Net loss		—	—		—				—			(51,439)					(51,439)
Balance, September 30, 2021		119,027,104	$	119	$	898,428			$	(8,120)		$	(143,658)				$	746,769
Balance, March 31, 2022																				Balance, March 31, 2022	119,659,455			$	119				$	930,788			$	(15,949)			$	(193,037)			$	721,921

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

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JAMF HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(unaudited)


		Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021			2023		2022
Operating activities	Operating activities					Operating activities
Net loss	Net loss	$	(120,070)	$	(51,439)	Net loss	$	(24,200)	$	(25,629)
Adjustments to reconcile net loss to cash provided by operating activities:
Adjustments to reconcile net loss to cash used in operating activities:						Adjustments to reconcile net loss to cash used in operating activities:
Depreciation and amortization expense	Depreciation and amortization expense	41,738		33,249		Depreciation and amortization expense	12,424		13,893
Amortization of deferred contract costs	Amortization of deferred contract costs	12,091		9,034		Amortization of deferred contract costs	4,774		3,755
Amortization of debt issuance costs	Amortization of debt issuance costs	2,040		573		Amortization of debt issuance costs	684		679
Non-cash lease expense	Non-cash lease expense	4,373		3,705		Non-cash lease expense	1,493		1,291
Provision for credit losses and returns	Provision for credit losses and returns	310		(7)		Provision for credit losses and returns	14		128
Loss on extinguishment of debt		—		449
Share‑based compensation	Share‑based compensation	89,524		22,774		Share‑based compensation	19,550		16,010
Deferred tax benefit	Deferred tax benefit	(2,019)		(2,568)		Deferred tax benefit	(27)		(468)
Adjustment to contingent consideration	Adjustment to contingent consideration	388		4,837		Adjustment to contingent consideration	—		88
Other	Other	4,603		1,144		Other	(677)		725
Changes in operating assets and liabilities:	Changes in operating assets and liabilities:					Changes in operating assets and liabilities:
Trade accounts receivable	Trade accounts receivable	(15,125)		3,184		Trade accounts receivable	3,915		(2,190)
Income tax receivable/payable	Income tax receivable/payable	688		(107)		Income tax receivable/payable	(273)		533
Prepaid expenses and other assets	Prepaid expenses and other assets	(3,351)		(8,129)		Prepaid expenses and other assets	(8,598)		(3,668)
Deferred contract costs	Deferred contract costs	(22,919)		(18,052)		Deferred contract costs	(8,145)		(6,952)
Accounts payable	Accounts payable	7,766		5,020		Accounts payable	(575)		(413)
Accrued liabilities	Accrued liabilities	2,872		1,644		Accrued liabilities	(19,765)		(11,250)
Deferred revenue	Deferred revenue	59,922		59,464		Deferred revenue	(5,394)		10,478
Other liabilities		—		52
Net cash provided by operating activities		62,831		64,827
Net cash used in operating activities						Net cash used in operating activities	(24,800)		(2,990)
Investing activities	Investing activities					Investing activities
Acquisitions, net of cash acquired	Acquisitions, net of cash acquired	(4,023)		(352,711)		Acquisitions, net of cash acquired	—		(4,023)
Purchases of equipment and leasehold improvements	Purchases of equipment and leasehold improvements	(5,645)		(7,261)		Purchases of equipment and leasehold improvements	(1,121)		(1,964)
Purchase of investments	Purchase of investments	(3,100)		—		Purchase of investments	(750)		—
Other	Other	(151)		35		Other	14		8
Net cash used in investing activities	Net cash used in investing activities	(12,919)		(359,937)		Net cash used in investing activities	(1,857)		(5,979)
Financing activities	Financing activities					Financing activities
Proceeds from convertible senior notes		—		373,750
Proceeds from bank borrowings		—		250,000
Payment of bank borrowings		—		(250,000)
Payment for purchase of capped calls		—		(36,030)
Debt issuance costs	Debt issuance costs	(50)		(12,636)		Debt issuance costs	—		(50)
Cash paid for offering costs		(104)		(543)
Cash paid for contingent consideration	Cash paid for contingent consideration	(4,588)		(4,206)		Cash paid for contingent consideration	(206)		(4,588)
Payment of acquisition-related holdback		(200)		—
Proceeds from the exercise of stock options	Proceeds from the exercise of stock options	4,682		8,570		Proceeds from the exercise of stock options	2,723		1,197
Net cash (used in) provided by financing activities		(260)		328,905
Net cash provided by (used in) financing activities						Net cash provided by (used in) financing activities	2,517		(3,441)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(1,322)		(865)		Effect of exchange rate changes on cash, cash equivalents, and restricted cash	42		(145)
Net increase in cash, cash equivalents, and restricted cash		48,330		32,930
Net decrease in cash, cash equivalents, and restricted cash						Net decrease in cash, cash equivalents, and restricted cash	(24,098)		(12,555)
Cash, cash equivalents, and restricted cash, beginning of period	Cash, cash equivalents, and restricted cash, beginning of period	177,150		194,868		Cash, cash equivalents, and restricted cash, beginning of period	231,921		177,150
Cash, cash equivalents, and restricted cash, end of period	Cash, cash equivalents, and restricted cash, end of period	$	225,480	$	227,798	Cash, cash equivalents, and restricted cash, end of period	$	207,823	$	164,595

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

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JAMF HOLDING CORP.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (continued)

(in thousands)

(unaudited)


		Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021			2023		2022
Supplemental disclosures of cash flow information:	Supplemental disclosures of cash flow information:					Supplemental disclosures of cash flow information:
Cash paid for:	Cash paid for:					Cash paid for:
Interest	Interest	$	683	$	944	Interest	$	313	$	293
Income taxes, net of refunds	Income taxes, net of refunds	1,630		1,047		Income taxes, net of refunds	894		192
Non-cash activities:	Non-cash activities:					Non-cash activities:
Employee stock purchase plan		3,419		—
Deferred consideration accrued but not paid		—		50,000
Debt issuance costs accrued but not paid		—		489
Offering costs accrued but not paid		17		—
Operating lease assets obtained in exchange for operating lease liabilities	Operating lease assets obtained in exchange for operating lease liabilities	7,320		1,469		Operating lease assets obtained in exchange for operating lease liabilities	—		8,314
Purchases of equipment and leasehold improvements accrued but not paid	Purchases of equipment and leasehold improvements accrued but not paid	311		—		Purchases of equipment and leasehold improvements accrued but not paid	83		—

Reconciliation of cash, cash equivalents, and restricted cash within the condensed consolidated balance sheets to the amounts shown in the condensed consolidated statements of cash flows above:	Reconciliation of cash, cash equivalents, and restricted cash within the condensed consolidated balance sheets to the amounts shown in the condensed consolidated statements of cash flows above:					Reconciliation of cash, cash equivalents, and restricted cash within the condensed consolidated balance sheets to the amounts shown in the condensed consolidated statements of cash flows above:
Cash and cash equivalents	Cash and cash equivalents	$	225,480	$	227,148	Cash and cash equivalents	$	200,340	$	164,595
Restricted cash included in other current assets	Restricted cash included in other current assets	—		650		Restricted cash included in other current assets	283		—
Restricted cash included in other assets						Restricted cash included in other assets	7,200		—
Total cash, cash equivalents, and restricted cash	Total cash, cash equivalents, and restricted cash	$	225,480	$	227,798	Total cash, cash equivalents, and restricted cash	$	207,823	$	164,595

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

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JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(unaudited)

Note 1. Basis of presentation and description of business

Description of business

We are the standard in managing and securing Apple ~~Enterprise Management,~~at work, and ~~our cloud software platform is~~we are the only ~~vertically-focused Apple infrastructure~~company in the world that provides a complete management and security ~~platform~~solution for an Apple-first environment that is designed to be enterprise secure, consumer simple, and protective of ~~scale in the world.~~personal privacy. We help IT and security teams confidently protect the devices, data, and applications used by their workforce, while providing employees with consumer-simple, privacy-protecting technology. With Jamf’s software, 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 lifecycle of the device. Our customers are located throughout the world.

Basis of presentation and principles of consolidation

The accompanying condensed consolidated financial statements, which include the accounts of the Company and its wholly owned subsidiaries, have been prepared in accordance with GAAP and applicable rules and regulations of the SEC regarding interim financial reporting. All intercompany accounts and transactions have been eliminated.

Unaudited interim condensed consolidated financial information

The interim condensed consolidated balance sheet as of ~~September 30, 2022,~~March 31, 2023, the condensed consolidated statements of operations, of comprehensive loss, ~~and~~ of stockholders’ equity, ~~for the three~~ and ~~nine months ended September 30, 2022 and 2021, the condensed consolidated statements~~ of cash flows for the ~~nine~~three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ and the related notes are unaudited. The condensed consolidated balance sheet as of December 31, ~~2021~~2022 was derived from our audited consolidated financial statements that were included in our Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, which was filed with the SEC on March 1, ~~2022.~~2023. The accompanying unaudited condensed consolidated financial statements and related notes should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022.

These unaudited interim condensed consolidated financial statements have been prepared on the same basis as the annual consolidated financial statements and, in management’s opinion, include all adjustments necessary for the fair presentation of the consolidated financial position, results of operations, and cash flows of the Company. All adjustments made were of a normal recurring nature. The results for the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 are not necessarily indicative of the results to be expected for the year ending December 31, ~~2022~~2023 or for any future period.

Use of estimates

The preparation of the condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities as of the reporting date, and the reported amounts of revenues 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, 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 and related valuation allowances against deferred tax assets. Actual results could differ from those estimates.

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JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

Segment and geographic information

Our 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 one operating segment and therefore we have one reportable segment.

Revenues by geographic region as determined based on the location where the sale originated were as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021 (1)		2022		2021 (1)			2023		2022
		(in thousands)									(in thousands)
The Americas ~~(2)~~(1)	The Americas ~~(2)~~(1)	$	86,687	$	67,330	$	241,816	$	188,594	The Americas ~~(2)~~(1)	$	89,811	$	75,149
Europe, the Middle East, India, and Africa	Europe, the Middle East, India, and Africa	28,622		21,815		82,136		55,745		Europe, the Middle East, India, and Africa	32,351		25,997
Asia Pacific	Asia Pacific	9,248		6,476		24,501		18,247		Asia Pacific	10,050		7,112
		$	124,557	$	95,621	$	348,453	$	262,586		$	132,212	$	108,258

(1) Previously reported revenues by geographic region for the three and nine months ended September 30, 2021 have been revised to correct an immaterial error in the disclosure. There was no impact to total revenues.

~~(2)~~ The vast majority of our Americas revenues comes from the United States.

Note 2. Summary of significant accounting policies

The Company’s significant accounting policies are discussed in Note 2 to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022. There have been no significant changes to these policies during the three ~~and nine~~ months ended ~~September 30, 2022.~~March 31, 2023. The following describes the impact of certain policies.

Trade accounts receivable, net

The allowance for credit losses is based on an expected loss model that estimates losses over the expected life of the trade accounts receivable. The Company estimates expected credit losses based on the Company’s historical loss information, current and future economic and market conditions, and ongoing review of customers’ account balances.

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
		(in thousands)									(in thousands)
Balance, beginning of period	Balance, beginning of period	$	479	$	480	$	391	$	530	Balance, beginning of period	$	445	$	391
Provision	Provision	48		37		310		93		Provision	14		122
Write-offs	Write-offs	(99)		(66)		(281)		(238)		Write-offs	(55)		(27)
Recoveries of amounts previously written off	Recoveries of amounts previously written off	34		9		42		75		Recoveries of amounts previously written off	23		6
Balance, end of period	Balance, end of period	$	462	$	460	$	462	$	460	Balance, end of period	$	427	$	492

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JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

Revenue recognition

The Company applies 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 were as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
		(in thousands)									(in thousands)
SaaS subscription and support and maintenance	SaaS subscription and support and maintenance	$	112,351	$	83,775	$	312,992	$	222,672	SaaS subscription and support and maintenance	$	120,762	$	96,350
On‑premise subscription	On‑premise subscription	6,173		6,925		17,140		23,228		On‑premise subscription	6,468		5,851
Subscription revenue	Subscription revenue	118,524		90,700		330,132		245,900		Subscription revenue	127,230		102,201
Professional services	Professional services	5,216		4,083		14,187		12,015		Professional services	4,384		3,944
Perpetual licenses	Perpetual licenses	817		838		4,134		4,671		Perpetual licenses	598		2,113
Non‑subscription revenue	Non‑subscription revenue	6,033		4,921		18,321		16,686		Non‑subscription revenue	4,982		6,057
Total revenue	Total revenue	$	124,557	$	95,621	$	348,453	$	262,586	Total revenue	$	132,212	$	108,258

Contract Balances

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
		(in thousands)									(in thousands)
Balance, beginning of the period	Balance, beginning of the period	$	1,840	$	1,596	$	1,792	$	947	Balance, beginning of the period	$	817	$	1,792
Balance, end of the period	Balance, end of the period	1,775		1,726		1,775		1,726		Balance, end of the period	636		1,885
Change	Change	$	(65)	$	130	$	(17)	$	779	Change	$	(181)	$	93

For the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ the allowance for expected credit losses associated with contract assets was not material.

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

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
		(in thousands)									(in thousands)
Balance, beginning of the period	Balance, beginning of the period	$	316,952	$	238,457	$	282,128	$	205,509	Balance, beginning of the period	$	346,150	$	282,128
Acquisitions		—		5,200		—		5,200
Revenue earned	Revenue earned	(96,542)		(71,574)		(199,357)		(144,038)		Revenue earned	(107,595)		(85,337)
Deferral of revenue	Deferral of revenue	120,820		98,284		258,459		203,696		Deferral of revenue	103,895		95,708
Other (1)										Other (1)	(1,608)		—
Balance, end of the period	Balance, end of the period	$	341,230	$	270,367	$	341,230	$	270,367	Balance, end of the period	$	340,842	$	292,499

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

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JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

There were no significant changes to our contract assets and liabilities during the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 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 noncancellable amounts to be invoiced. As of ~~September 30, 2022,~~March 31, 2023, the Company had ~~$407.3~~$424.5 million of remaining performance obligations, with ~~73%~~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 was ~~$4.2~~$4.8 million and ~~$3.1~~$3.8 million for the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and $12.1 million and $9.0 million for the nine months ended September 30, 2022 and 2021,~~ 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 no impairment losses recorded during the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 and ~~2021.~~2022.

Strategic investments

In the third quarter of 2022, the Company made a $1.0 million investment via a SAFE in ZecOps. The SAFE contains customary terms for an instrument of its type, including repayment or conversion upon certain future liquidity events. The investment, which does not have a readily determinable fair value, is measured using the measurement alternative in accordance with ASC 321~~and included in other assets on the condensed consolidated balance sheet. As of September 30, 2022, the balance of the investment was $1.0 million. In the third quarter of 2022, the Company also~~ executed a $2.0 million convertible promissory note with SwiftConnect. The note contains customary terms for an instrument of its type, including repayment or conversion upon certain future liquidity events. The note matures on July 29, 2024, and the Company intends to hold the note until maturity, unless it is otherwise repaid or converted pursuant to its terms. The investment is recorded at cost and included in other assets on the condensed consolidated balance ~~sheet.~~sheets. As of ~~September 30,~~both March 31, 2023 and December 31, 2022, the balance of the investment was $2.0 million. The Company evaluates its strategic investments quarterly for impairment. During the period ended ~~September 30, 2022,~~March 31, 2023, there were no changes in the carrying value of the Company’s strategic investments. All gains and losses on the Company’s strategic investments, whether realized or unrealized, are recognized in the condensed consolidated statements of operations.

~~Adoption of new accounting pronouncements~~

~~Business Combinations — Accounting for Contract Assets and Contract Liabilities from Contracts with Customers~~

~~In October 2021, the FASB issued ASU No. 2021-08,~~ ~~Business Combinations (Topic 805), Accounting for Contract Assets and Contract Liabilities from Contracts with Customers~~, which requires contract assets and contract liabilities acquired in a business combination to be recognized and measured by the acquirer on the acquisition date in accordance with ASC 606. Generally, this new guidance will result in the acquirer recognizing contract assets and contract liabilities at the same amounts recorded by the acquiree. Historically, such amounts were recognized by the acquirer at fair value in accordance with acquisition accounting. The new guidance should be applied prospectively to acquisitions occurring on or after the effective date. The standard is effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including in interim periods, for any financial statements that have not been issued. The Company early adopted the new standard on January 1, 2022. The adoption of the standard did not have any impact on the

~~Table of Contents~~

~~JAMF HOLDING CORP.~~

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

~~(unaudited)~~

~~Company’s condensed consolidated financial statements. We are applying the new guidance to acquisitions completed in 2022 and thereafter.~~

Note 3. Financial instruments fair value

Assets and liabilities measured at fair value on a recurring basis

The Company invests in money market funds with original 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~~acquisition was measured and recorded at fair value on a recurring basis. The estimated fair value of the contingent payments associated with the Digita acquisition iswas 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~~Company made the final payment related to 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 stageconsideration in the ~~sales process.~~first quarter of 2023. See Note 4 for more information.

Table of Contents

JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

The fair value of these financial instruments were as follows:


		September 30, 2022									March 31, 2023
		Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total
		(in thousands)									(in thousands)
Assets	Assets									Assets
Cash equivalents:	Cash equivalents:									Cash equivalents:
Money market funds	Money market funds	$	193,848	$	—	$	—	$	193,848	Money market funds	$	114,808	$	—	$	—	$	114,808
Total cash equivalents	Total cash equivalents	$	193,848	$	—	$	—	$	193,848	Total cash equivalents	$	114,808	$	—	$	—	$	114,808

Liabilities
Contingent consideration:
Accrued liabilities		$	—	$	—	$	5,900	$	5,900
Total contingent consideration		$	—	$	—	$	5,900	$	5,900


		December 31, 2021									December 31, 2022
		Level 1		Level 2		Level 3		Total			Level 1		Level 2		Level 3		Total
		(in thousands)									(in thousands)
Assets	Assets									Assets
Cash equivalents:	Cash equivalents:									Cash equivalents:
Money market funds	Money market funds	$	146,037	$	—	$	—	$	146,037	Money market funds	$	132,306	$	—	$	—	$	132,306
Total cash equivalents	Total cash equivalents	$	146,037	$	—	$	—	$	146,037	Total cash equivalents	$	132,306	$	—	$	—	$	132,306

Liabilities	Liabilities									Liabilities
Contingent consideration:	Contingent consideration:									Contingent consideration:
Accrued liabilities	Accrued liabilities	$	—	$	—	$	4,588	$	4,588	Accrued liabilities	$	—	$	—	$	6,206	$	6,206
Other liabilities		—		—		5,512		5,512
Total contingent consideration	Total contingent consideration	$	—	$	—	$	10,100	$	10,100	Total contingent consideration	$	—	$	—	$	6,206	$	6,206

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.

~~Table of Contents~~

~~JAMF HOLDING CORP.~~

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

~~(unaudited)~~

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
		(in thousands)									(in thousands)
Balance, beginning of period	Balance, beginning of period	$	5,700	$	8,300	$	10,100	$	8,200	Balance, beginning of period	$	6,206	$	10,100
Additions		—		—		—		359
Total (gains) losses included in:	Total (gains) losses included in:									Total (gains) losses included in:
Net loss	Net loss	200		600		388		4,837		Net loss	—		88
Payments	Payments	—		—		(4,588)		(4,206)		Payments	(6,206)		(4,588)
Other		—		—		—		(290)
Balance, end of period	Balance, end of period	$	5,900	$	8,900	$	5,900	$	8,900	Balance, end of period	$	—	$	5,600

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 ~~adjustments~~adjustment for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2022 ~~and 2021~~ primarily reflected updated assumptions about the probability of growth of subscription services.

Fair value measurements of other financial instruments

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

September 30, 2022 December 31, 2021
Net Carrying Value Estimated Fair Value Net Carrying Value Estimated Fair Value
(in thousands)
2026 Notes $ 363,885 $ 305,290 $ 362,031 $ 398,044


	March 31, 2023				December 31, 2022
	Net Carrying Value		Estimated Fair Value		Net Carrying Value		Estimated Fair Value
	(in thousands)
2026 Notes	$	365,127	$	307,671	$	364,505	$	308,504

Table of Contents

JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

As of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, 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 ~~$9.9~~$8.6 million and ~~$11.7~~$9.2 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

ZecOps

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

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

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


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

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JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

The Company accounted for the acquisition by applying the acquisition method of accounting for business combinations in accordance with ASC 805. The allocation of the purchase price required 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;

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

•research and development costs;

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

•discount rates; and

•tax-related valuation allowances.

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

The estimated useful lives and fair values of the identifiable intangible assets acquired were as follows:


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

The weighted-average useful life of the intangible assets acquired was 4.7 years.

Developed technology represents the estimated fair value of the features underlying the ZecOps products as well as the platform supporting ZecOps customers and was valued using an excess earnings income approach. Customer relationships represent the estimated fair value of the underlying relationships with ZecOps customers and were valued using a replacement cost method, which estimates the cost to recreate the asset. Non-competes represent the estimated fair value of non-compete agreements acquired from ZecOps and were valued using a with-and-without income approach.

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

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JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

Other

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

~~Wandera~~

On July 1, 2021, the Company completed its acquisition of Wandera. Wandera is a leader in zero trust cloud security and access for mobile devices. As an Apple-first provider of unified cloud security, Wandera expanded the Company’s security offering for the enterprise. Building on the Company’s existing capabilities, Wandera added 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 positioned the Company to help IT and security teams confidently protect the 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.

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~~JAMF HOLDING CORP.~~

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

~~(unaudited)~~

Under the terms of the Wandera 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.

~~Acquisition-related costs were expensed as incurred and were as follows:~~

Three Months Ended
September 30, 2021 Nine Months Ended
September 30, 2021
(in thousands)
Cost of revenue:
Subscription $ 17 $ 17
Sales and marketing 34 34
Research and development 549 590
General and administrative 1,859 4,007
$ 2,459 $ 4,648

The Company accounted for the acquisition by applying the acquisition method of accounting for business combinations in accordance with ASC 805. Accordingly, the purchase price was 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 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 product offerings;~~

•~~discount rates; and~~

•~~uncertain tax positions and tax-related valuation allowances.~~

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~~JAMF HOLDING CORP.~~

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

~~(unaudited)~~

During the second quarter of 2022, the Company finalized its purchase accounting for the Wandera acquisition. The following table summarizes the final allocation of the purchase price to the estimated fair values of the assets acquired and liabilities assumed and reflects all measurement period adjustments (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 estimated useful lives and fair values of the identifiable intangible assets acquired were as 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 weighted-average useful life of the intangible assets acquired is 7.8 years.~~

Developed technology represents the estimated fair value of the features underlying the Wandera products as 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.

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~~JAMF HOLDING CORP.~~

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

~~(unaudited)~~

Wandera contributed revenue and net loss of $5.1 million and $8.3 million, respectively, from the acquisition date through September 30, 2021, excluding the effects of the acquisition and integration costs.

The following unaudited pro forma information presents the combined results of Jamf and Wandera assuming the acquisition was completed on January 1, 2020. As required by ASC 805, these unaudited pro forma results are presented for informational purposes only and are not necessarily indicative of what the actual results of operations of the combined companies would have been had the acquisition occurred at the beginning of the period presented, nor are they indicative of future results of operations. The pro forma results below have been adjusted for the amortization of acquired intangibles, reduction of deferred revenue, deferred commissions, stock-based compensation expense, and additional interest expense. The pro forma results for the three and nine months ended September 30, 2021 have also been adjusted to exclude the impact of $2.5 million and $4.6 million, respectively, of acquisition-related costs (pre-tax) incurred by the Company that are directly attributable to the transaction. The adjustments do not reflect the effect of costs or synergies that would have been expected to result from the integration of the acquisition.

~~Pro forma consolidated revenues and net loss for the three and nine months ended September 30, 2021, calculated as if Wandera had been acquired as of January 1, 2020, are as follows:~~

Three Months Ended
September 30, 2021 Nine Months Ended
September 30, 2021
(in thousands)
Revenues $ 95,621 $ 274,194
Net loss (28,537) (61,237)

Digita

In 2019, the Company recorded contingent consideration in connection with its purchase of the outstanding membership interests of Digita. The maximum contingent consideration iswas $15.0 million if the acquired business ~~achieves~~achieved certain revenue milestones by December 31, 2022. The acquired business achieved the minimum revenue milestones, which resulted in the Company making cash payments of $6.2 million, $4.6 million, and $4.2 million in the first quarter of 2023, the first quarter of 2022, and the second quarter of 2021, respectively, to the former owners of the acquired business. ~~If the acquired business continues to achieve the revenue milestones, an additional cash payment will be made within 30 days of December 31, 2022.~~ See Note 3 for more information on the fair value of the contingent consideration.

Note 5. Goodwill and other intangible assets

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
		(in thousands)									(in thousands)
Goodwill, beginning of period	Goodwill, beginning of period	$	823,671	$	541,850	$	845,734	$	541,480	Goodwill, beginning of period	$	856,925	$	845,734
Goodwill acquired	Goodwill acquired	—		310,833		3,014		311,203		Goodwill acquired	—		3,014
Measurement period adjustments										Measurement period adjustments	339		—
Foreign currency translation adjustment	Foreign currency translation adjustment	(23,147)		(6,626)		(48,224)		(6,626)		Foreign currency translation adjustment	5,483		(6,764)
Goodwill, end of period	Goodwill, end of period	$	800,524	$	846,057	$	800,524	$	846,057	Goodwill, end of period	$	862,747	$	841,984

1917

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JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

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


		September 30, 2022									March 31, 2023
		Useful Life	Gross Value		Accumulated Amortization		Net Carrying Value		Weighted‑ Average Remaining Useful Life		Useful Life	Gross Value		Accumulated Amortization		Net Carrying Value		Weighted‑ Average Remaining Useful Life
		(in thousands)									(in thousands)
Trademarks	Trademarks	3 - 8 years	$	34,616	$	21,079	$	13,537	3.1 years	Trademarks	3 - 8 years	$	34,657	$	23,309	$	11,348	2.6 years
Customer relationships	Customer relationships	2 ‑ 12 years	245,673		91,343		154,330		7.5 years	Customer relationships	2 ‑ 12 years	250,094		102,518		147,576		7.0 years
Developed technology	Developed technology	5 - 6.5 years	106,028		61,112		44,916		4.8 years	Developed technology	5 - 6.5 years	118,157		70,029		48,128		4.5 years
Non‑competes	Non‑competes	2 - 3 years	1,432		753		679		1.3 years	Non‑competes	2 - 3 years	2,901		1,381		1,520		2.1 years
Order backlog	Order backlog	2.5 years	3,337		1,735		1,602		1.3 years	Order backlog	2.5 years	3,564		2,627		937		0.8 years
Total intangible assets	Total intangible assets		$	391,086	$	176,022	$	215,064		Total intangible assets		$	409,373	$	199,864	$	209,509


		December 31, 2021									December 31, 2022
		Useful Life	Gross Value		Accumulated Amortization		Net Carrying Value		Weighted‑ Average Remaining Useful Life		Useful Life	Gross Value		Accumulated Amortization		Net Carrying Value		Weighted‑ Average Remaining Useful Life
		(in thousands)									(in thousands)
Trademarks	Trademarks	3 - 8 years	$	34,690	$	17,788	$	16,902	3.8 years	Trademarks	3 - 8 years	$	34,649	$	22,200	$	12,449	2.8 years
Customer relationships	Customer relationships	2 ‑ 12 years	249,495		75,600		173,895		8.3 years	Customer relationships	2 ‑ 12 years	249,659		96,973		152,686		7.2 years
Developed technology	Developed technology	5 - 6.5 years	116,193		47,142		69,051		5.1 years	Developed technology	5 - 6.5 years	116,881		66,373		50,508		4.7 years
Non‑competes	Non‑competes	2 - 2.5 years	1,797		439		1,358		2.0 years	Non‑competes	2 - 3 years	2,864		1,066		1,798		2.3 years
Order backlog	Order backlog	2.5 years	3,745		758		2,987		2.0 years	Order backlog	2.5 years	3,518		2,215		1,303		1.0 year
Total intangible assets subject to amortization			405,920		141,727		264,193
IPR&D		Indefinite	400		—		400
Total intangible assets	Total intangible assets		$	406,320	$	141,727	$	264,593		Total intangible assets		$	407,571	$	188,827	$	218,744

The gross value in the tables above includes a cumulative foreign currency translation adjustment of ~~$(18.0)~~$(9.2) million and ~~$(2.1)~~$(11.0) million as of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, respectively. The accumulated amortization in the ~~table~~tables above includes a cumulative foreign currency translation adjustment of ~~$(2.4)~~$(0.5) million and $(1.0) million as of ~~September 30, 2022. The cumulative foreign currency translation adjustment for accumulated amortization was not material as of~~March 31, 2023 and December 31, ~~2021.~~2022, respectively.

Amortization expense was ~~$12.3~~$10.5 million and $12.2 million for the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and $36.9 million and $29.1 million for the nine months ended September 30, 2022 and 2021,~~ respectively.

There were no impairments to goodwill ~~during the three and nine months ended September 30, 2022 and 2021. There were no material impairments to~~or intangible assets during the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 and ~~2021.~~2022.

Note 6. Leases

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


Leases	Balance Sheet Classification	March 31, 2023		December 31, 2022
		(in thousands)
Assets
Operating lease assets	Other assets	$	22,343	$	23,828

Liabilities
Operating lease liabilities - current	Accrued liabilities	$	6,494	$	6,539
Operating lease liabilities - non-current	Other liabilities	20,265		21,895
Total operating lease liabilities		$	26,759	$	28,434

2018

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JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

~~Note 6. Leases~~

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

Leases Balance Sheet Classification September 30, 2022 December 31, 2021
(in thousands)
Assets
Operating lease assets Other assets $ 24,445 $ 21,600
Liabilities
Operating lease liabilities - current Accrued liabilities $ 6,025 $ 5,251
Operating lease liabilities - non-current Other liabilities 22,147 20,086
Total operating lease liabilities $ 28,172 $ 25,337

Maturities of the Company’s operating lease liabilities as of ~~September 30, 2022~~March 31, 2023 were as follows:


		Operating Leases			Operating Leases
		(in thousands)			(in thousands)
Years ending December 31:	Years ending December 31:			Years ending December 31:
2022 (remaining three months)		$	1,713
2023		6,966
2023 (remaining nine months)				2023 (remaining nine months)	$	5,580
2024	2024	6,030		2024	6,407
2025	2025	4,465		2025	4,775
2026	2026	4,468		2026	4,781
2027				2027	2,726
Thereafter	Thereafter	7,646		Thereafter	5,341
Total lease payments	Total lease payments	31,288		Total lease payments	29,610
Less: imputed interest	Less: imputed interest	3,116		Less: imputed interest	2,851
Total present value of lease liabilities	Total present value of lease liabilities	$	28,172	Total present value of lease liabilities	$	26,759

Note 7. Commitments and contingencies

Hosting Services and Other Support Software Agreements

InThe Company has various contractual agreements for hosting services and other support software. The below table reflects the ~~second quarter~~minimum payments under these agreements as of ~~2022,~~March 31, 2023:


	Unrelated
	(in thousands)
Years ending December 31:
2023 (remaining nine months)	$	31,373
2024	38,590
2025	20,243
2026	1,126
2027	1,126
Thereafter	—
	$	92,458

As of March 31, 2023, the Company also has a variable obligation of $17.5 million over the term of a three-year contract for third-party hosting services. The Company entered into ~~an amended contractual agreement with an unrelated party for hosting services, which includes a non-cancelable commitment of $100.0 million over~~this contract in May 2022. The variable obligation is not reflected in the ~~next three years. Any remaining commitments under the prior agreement were terminated upon the commencement date of the amended agreement.~~table above.

Contingencies

From time to time, the Company may be subject to various claims, charges, and litigation. The Company records a liability when it is both probable that a liability has been incurred and the amount of the loss can be reasonably 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 no liabilities for contingencies as of ~~September 30, 2022~~March 31, 2023 or December 31, ~~2021.~~2022.

2119

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JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

Note 8. Debt

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


		Outstanding (1)				Unutilized Amount				Interest Rate		Maturity Date		Outstanding (1)				Unutilized Amount				Interest Rate				Maturity Date
		September 30, 2022		December 31, 2021		September 30, 2022		December 31, 2021		September 30, 2022	December 31, 2021			March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022		March 31, 2023		December 31, 2022
		(in thousands)												(in thousands)
2026 Notes	2026 Notes	$	363,885	$	362,031	N/A		N/A		0.125%	0.125%	Sept. 1, 2026	2026 Notes	$	365,127	$	364,505	N/A		N/A		0.125%		0.125%		Sept. 1, 2026
2020 Revolving Credit Facility	2020 Revolving Credit Facility	1,037		1,037		$	148,963	$	148,963	1.25%	1.25%	July 27, 2025	2020 Revolving Credit Facility	1,037		1,037		$	148,963	$	148,963	1.25%	(2)	1.25%	(2)	July 27, 2025

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

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

Convertible Senior Notes

On September 17, 2021, the Company issued $373.8 million aggregate principal amount of 0.125% 2026 Notes in a private offering. The initial conversion rate for the 2026 Notes is 20.0024 shares of the Company’s common stock per $1,000 principal amount of 2026 Notes, which is equivalent to an initial conversion price of approximately $49.99 per share of common stock. As of ~~September 30, 2022,~~March 31, 2023, the conditions allowing holders of the 2026 Notes to convert were not met.

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
		(in thousands)									(in thousands)
Contractual interest expense	Contractual interest expense	$	116	$	18	$	350	$	18	Contractual interest expense	$	117	$	117
Amortization of issuance costs	Amortization of issuance costs	620		95		1,854		95		Amortization of issuance costs	622		617

The effective interest rate on the 2026 Notes was 0.81% for both the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 and ~~2021.~~2022. See Note 3 for additional information on the Company’s 2026 Notes.

~~Capped Calls~~

In the third quarter of 2021, the Company also entered into the Capped Calls. The Capped Calls each have an initial strike price of approximately $49.99 per share and an initial cap price of $71.42 per share, subject to certain adjustments. The Capped Calls cover, subject to anti-dilution adjustments, approximately 7.5 million shares of the Company’s common stock. The Capped Calls are generally intended to reduce or offset the potential dilution to the common stock upon any conversion of the 2026 Notes with such reduction or offset, as the case may be, subject to a cap based on the cap price. The Company paid approximately $36.0 million from the net proceeds from the issuance and sale of the 2026 Notes to purchase the Capped Calls and recorded the Capped Calls as a reduction to additional paid-in capital in the condensed consolidated balance sheet.

Credit Agreement

The 2020 Credit Agreement provides for the 2020 Revolving Credit Facility of $150.0 million, which may be increased or decreased under specific circumstances, with a $25.0 million letter of credit sublimit and a $50.0 million alternative currency sublimit. In addition, the 2020 Credit Agreement provides for the ability of the Company to request incremental term loan facilities, in a minimum amount of $5.0 million for each facility. The 2020 Credit Agreement contains customary representations and warranties, affirmative covenants, reporting obligations, negative covenants, and events of default. We were in compliance with such covenants as of both ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021.~~2022.

AsEffective April 7, 2023, we entered into the Credit Agreement Amendment, which amends certain provisions of ~~September 30, 2022 and December 31, 2021, debt issuance costs related~~the 2020 Credit Agreement. The Credit Agreement Amendment updates the benchmark interest rate provisions to replace the LIBO Rate with the Adjusted Term SOFR for purposes of calculating interest for U.S. dollar-denominated borrowings under the terms of the 2020 Credit Agreement. Except as amended by the Credit Agreement Amendment, the remaining terms of the 2020 Credit Agreement remain in full force and effect. The interest rates applicable to revolving borrowings under the 2020 Credit Agreement are, at the Company’s option, either (i) a base rate, which is equal to the greater of ~~$0.7 million~~(a) the Prime Rate, (b) the Federal Funds Effective Rate plus 0.50%, and ~~$0.9 million, respectively, are included in other assets~~(c) the Adjusted Term SOFR Rate (subject to a floor) for a one month interest period (each term as defined in the ~~condensed consolidated balance sheets.~~2020 Credit Agreement) plus 1.00%, (ii) the Adjusted Term SOFR Rate (subject to a floor) equal to the Term SOFR Rate for the applicable interest period plus 0.10%, or (iii) the Adjusted LIBO Rate (subject to a floor) equal to the LIBO Rate for the applicable interest period multiplied by the Statutory Reserve Rate, plus in the case of each of clauses (i), (ii), and (iii), the Applicable Rate (each term as defined in the 2020 Credit Agreement). The Applicable Rate (i) for

2220

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JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

~~In connection with~~base rate loans range from 0.25% to 1.00% per annum and (ii) for LIBO Rate and Term SOFR Rate loans range from 1.25% to 2.00% per annum, in each case, based on the ~~closing~~Senior Secured Net Leverage Ratio (each term as defined in the 2020 Credit Agreement). Base rate borrowings may only be made in dollars. The Company pays a commitment fee during the term of the ~~Wandera acquisition on July 1, 2021, the Company entered into the~~2020 Credit Agreement ~~Amendment, which amended~~ranging from 0.20% to 0.35% per annum of the ~~Company’s~~average daily undrawn portion of the revolving commitments based on the Senior Secured Net Leverage Ratio.

As of March 31, 2023 and December 31, 2022, debt issuance costs related to the 2020 Credit ~~Agreement. The Credit~~ Agreement ~~Amendment provided for~~of $0.6 million and $0.7 million, respectively, are included in other assets in the 2021 Term Loan Facility, 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.condensed consolidated balance sheets.

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 September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
		(in thousands)									(in thousands)
Cost of revenue:	Cost of revenue:									Cost of revenue:
Subscription	Subscription	$	2,479	$	1,716	$	6,495	$	2,384	Subscription	$	2,267	$	1,955
Services	Services	344		229		961		381		Services	309		304
Sales and marketing	Sales and marketing	6,955		4,833		26,625		6,763		Sales and marketing	7,499		5,859
Research and development	Research and development	5,130		5,145		19,620		7,076		Research and development	5,033		3,859
General and administrative	General and administrative	5,582		3,913		35,823		6,170		General and administrative	4,442		4,033
		$	20,490	$	15,836	$	89,524	$	22,774		$	19,550	$	16,010

Equity Incentive Plans

The maximum number of shares of common stock available for issuance under the 2020 Plan was ~~24,256,740~~29,183,546 shares as of January 1, ~~2022~~2023. As of ~~September 30, 2022, 13,868,695~~March 31, 2023, 14,101,048 shares of common stock ~~are~~were reserved for additional grants under the 2020 ~~Plan. As of September 30, 2022,~~Plan and 128,928 shares of common stock ~~are~~were reserved for additional grants under the 2017 Option Plan. All stock options previously granted by the Company were at an exercise price at or above the estimated fair market value of the Company’s common stock as of the grant date. ~~No options were granted during the nine months ended September 30, 2022.~~

Return Target Options

The table below summarizes return target option activity for the ~~nine~~three months ended ~~September 30, 2022:~~March 31, 2023:

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 (384,744) 6.85 7,465
Forfeitures — — —
Outstanding, September 30, 2022 3,302,920 $ 6.74 6.0 $ 50,938
Options exercisable at September 30, 2022 3,302,920 $ 6.74 6.0 $ 50,938
Vested or expected to vest at September 30, 2022 3,302,920 $ 6.74 6.0 $ 50,938


	Options	Weighted‑ Average Exercise Price		Weighted‑ Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in thousands)
Outstanding, December 31, 2022	3,272,920	$	6.75	5.8	$	47,623
Granted	—	—
Exercised	(347,234)	7.37
Forfeitures	—	—
Outstanding, March 31, 2023	2,925,686	$	6.68	5.2	$	37,287
Options exercisable at March 31, 2023	2,925,686	$	6.68	5.2	$	37,287
Vested or expected to vest at March 31, 2023	2,925,686	$	6.68	5.2	$	37,287

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JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

The aggregate intrinsic value in the table above represents the total intrinsic value that would have been received by the optionholders had all optionholders exercised their options on the last day of the period. The return target options outstanding on June 27, 2022 were modified such that these options were deemed fully vested as of June 30, 2022. ~~This modification resulted in the recognition of $33.0 million of stock-based compensation expense during~~During the three months ended June 30, ~~2022.~~2022, with the filing of a Form S-3 “shelf” registration statement, the market condition and the implied performance obligation were deemed to be satisfied and the Company recognized $33.0 million of stock-based compensation expense. There is no remaining unrecognized compensation expense related to these return target options as of ~~September 30, 2022.~~March 31, 2023. The ~~total~~aggregate intrinsic value of the options exercised, which represents the difference between the fair market value of the Company’s common stock on the date of exercise and the exercise price of each option, was $4.7 million for the three months ended March 31, 2023. The Company issues new shares when return target options ~~vested during the nine months ended September 30, 2022 was $33.0 million.~~are exercised.

Service-Based Options

The table below summarizes the service-based option activity for the ~~nine~~three months ended ~~September 30, 2022:~~March 31, 2023:

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 (362,666) 5.65 10,258
Forfeitures — — —
Outstanding, September 30, 2022 1,280,600 $ 5.69 5.3 $ 21,093
Options exercisable at September 30, 2022 1,202,964 $ 5.55 5.2 $ 19,984
Vested or expected to vest at September 30, 2022 1,280,600 $ 5.69 5.3 $ 21,093


	Options	Weighted‑ Average Exercise Price		Weighted‑ Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in thousands)
Outstanding, December 31, 2022	1,215,822	$	5.70	5.1	$	18,968
Granted	—	—
Exercised	(19,937)	8.21
Forfeitures	—	—
Outstanding, March 31, 2023	1,195,885	$	5.66	4.0	$	16,459
Options exercisable at March 31, 2023	1,156,009	$	5.57	3.9	$	16,012
Vested or expected to vest at March 31, 2023	1,195,885	$	5.66	4.0	$	16,459

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 nine months ended September 30, 2022 was $0.5 million. There was $0.5 million of unrecognized compensation expense related to service-based options that is expected to be recognized over a weighted-average period of 1.1 years as of September 30, 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.

The aggregate intrinsic value of the options exercised, which represents the difference between the fair market value of the Company’s common stock on the date of exercise and the exercise price of each option, was $0.2 million for the three months ended March 31, 2023. The total fair value of service-based options vested during the three months ended March 31, 2023 was $0.1 million. There was $0.2 million of unrecognized compensation expense related to service-based options that is expected to be recognized over a weighted-average period of 0.6 years as of March 31, 2023.

Restricted Stock Units

RSU activity for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 was as follows:


		Units	Weighted-Average Grant Date Fair Value (per share)			Units	Weighted-Average Grant Date Fair Value (per share)
Outstanding, December 31, 2021		6,890,938	$	31.59
Outstanding, December 31, 2022					Outstanding, December 31, 2022	8,417,357	$	29.61
Granted	Granted	3,491,707	28.45		Granted	4,593,134	20.02
Vested	Vested	(1,036,161)	32.66		Vested	(370,146)	31.75
Forfeited	Forfeited	(524,632)	30.95		Forfeited	(353,645)	29.95
Outstanding, September 30, 2022		8,821,852	$	30.26
Outstanding, March 31, 2023					Outstanding, March 31, 2023	12,286,700	$	25.99

RSUs under the 2020 Plan generally vest ratably on an annual basis over four years. There was ~~$226.0~~$279.0 million of unrecognized compensation expense related to unvested RSUs that is expected to be recognized over a weighted-average period ~~of 3.1 years as of September 30, 2022. The total fair value of RSUs vested during the nine months ended September 30, 2022 was $33.9 million.~~

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JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

~~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%~~3.1 years as of ~~the~~March 31, 2023. The total fair value of RSUs vested immediately and the remaining 50% vested on the one year anniversary of the grant date, provided the employee remained 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 $1.3 million and $4.5 million of stock-based compensation expense~~ during the three ~~and nine~~ months ended ~~September 30, 2022, respectively, and $8.0 million of stock-based compensation expense during both the three and nine months ended September 30, 2021. The expense on the unvested RSUs~~March 31, 2023 was ~~recognized on a straight-line basis over the vesting period.~~$11.8 million.

Employee Stock Purchase Plan

As of ~~September 30,~~March 31, 2023 and December 31, 2022, the Company ~~has~~ withheld, at the employees’ request, ~~$3.0~~$2.7 million and $1.1 million, respectively, of eligible employee compensation, which is included in accrued liabilities in the condensed consolidated balance ~~sheet,~~sheets, for purchases of common stock under the 2021 ESPP.

As of ~~September 30, 2022, 4,063,810~~March 31, 2023, 5,130,772 shares of common stock ~~are~~were reserved for future issuance under the 2021 ESPP. ~~During the nine months ended September 30, 2022, the Company’s employees purchased 130,450~~No shares of common stock were issued under the 2021 ESPP ~~at a purchase price of $26.18 per share. Total proceeds to the Company were $3.4 million~~ during the ~~nine~~three months ended ~~September 30, 2022.~~

The average grant date fair value for the offering period under the 2021 ESPP that commenced on May 2, 2022 was $9.22 per share. The Company used the following assumptions in the Black-Scholes option pricing model to estimate the fair value:


			~~Three and Nine Months Ended September 30, 2022~~
~~Expected term~~			~~0.5 years~~
~~Expected volatility~~			~~60.05%~~
~~Risk-free interest rate~~			~~1.49%~~
~~Expected dividend yield~~			—%

March 31, 2023. There was ~~$0.2~~$0.3 million of unrecognized compensation expense related to the 2021 ESPP that is expected to be recognized over a period of one month as of ~~September 30, 2022.~~

March 31, 2023.

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~~JAMF HOLDING CORP.~~

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

~~(unaudited)~~

Note 10. Net loss per share

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
		(in thousands, except share and per share amounts)									(in thousands, except share and per share amounts)
Numerator:	Numerator:									Numerator:
Net loss	Net loss	$	(31,302)	$	(30,383)	$	(120,070)	$	(51,439)	Net loss	$	(24,200)	$	(25,629)
Denominator:	Denominator:									Denominator:
Weighted-average shares used to compute net loss per share, basic and diluted	Weighted-average shares used to compute net loss per share, basic and diluted	121,014,325		118,640,565		120,188,587		117,983,463		Weighted-average shares used to compute net loss per share, basic and diluted	123,422,066		119,594,341
Basic and diluted net loss per share	Basic and diluted net loss per share	$	(0.26)	$	(0.26)	$	(1.00)	$	(0.44)	Basic and diluted net loss per share	$	(0.20)	$	(0.21)

Basic net loss per share is computed by dividing the net loss by the weighted-average number of common shares outstanding for the period. Because we have reported a net loss for the three ~~and nine~~ months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ the number of shares used to calculate diluted net loss per common share is the same as the number of shares used to calculate basic net loss per common share ~~because~~given that the potentially dilutive shares would have been antidilutive if included in ~~the~~this calculation.

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


		As of September 30,			As of March 31,
		2022	2021		2023	2022
Stock options outstanding	Stock options outstanding	4,583,520	5,707,634	Stock options outstanding	4,121,571	5,119,730
Unvested restricted stock units	Unvested restricted stock units	8,821,852	3,427,190	Unvested restricted stock units	12,286,700	8,219,810
Shares related to the 2026 Notes	Shares related to the 2026 Notes	7,475,897	7,475,897	Shares related to the 2026 Notes	7,475,897	7,475,897
Shares committed under the 2021 ESPP	Shares committed under the 2021 ESPP	196,410	—	Shares committed under the 2021 ESPP	208,013	117,705
Total potentially dilutive securities	Total potentially dilutive securities	21,077,679	16,610,721	Total potentially dilutive securities	24,092,181	20,933,142

Note 11. Income taxes

The ~~Company’s~~Company calculated the year-to-date income tax provision by applying the estimated annual effective tax rate to the year-to-date pre-tax income for each applicable jurisdiction and adjusted for discrete tax items in the period. For the three months ended March 31, 2023 and 2022, the Company had tax provisions of $0.6 million and $0.3 million on pretax losses of $23.6 million and $25.4 million, respectively. The effective tax rates for the three months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ were ~~(0.3)~~approximately (2.5)% and ~~5.0%~~(1.0)%, respectively. ~~The change in~~

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JAMF HOLDING CORP.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued)

(unaudited)

For the periods presented, the difference between the statutory rate and the Company’s effective tax rate ~~for the three months ended September 30, 2022 compared to the prior year period~~ was primarily due to the valuation allowances on its U.S. and ~~the Wandera acquisition purchase accounting impacts.~~UK tax assets. The effective tax rate ~~for the three months ended September 30, 2022 differs from the statutory rate primarily as a result of valuation allowances. The effective tax rate for the three months ended September 30, 2022 was~~is also impacted by ~~$0.5 million of discrete income tax expense. The Company’s annual effective tax rates for the three months ended September 30, 2022 and 2021 were 1.4% and 2.8%, respectively.~~earnings realized in foreign jurisdictions.

The ~~Company’s effective~~Tax Cuts and Jobs Act enacted on December 22, 2017 amended Internal Revenue Code Section 174 to require that specific R&E expenditures be capitalized and amortized over five years (U.S. R&E) or fifteen years (non-U.S. R&E) beginning in 2022. Although Congress has considered legislation that would defer, modify, or repeal the capitalization and amortization requirement, there is no assurance that the provision will be deferred, repealed, or otherwise modified. If the requirement is not modified, the Company may be required to utilize some of its federal and state tax rates for the nine months ended September 30, 2022 and 2021 were (0.3)% and 2.9%, respectively. The change in the effective tax rate for the nine months ended September 30, 2022 compared to the prior year period was primarily due to valuation allowances and the Wandera acquisition purchase accounting impacts. The effective tax rate for the nine months ended September 30, 2022 differs from the statutory rate primarily as a result of valuation allowances. The effective tax rate for the nine months ended September 30, 2022 was impacted by $2.0 million of discrete income tax expense.attributes.

Note 12. Related party transactions

As of ~~September 30, 2022~~March 31, 2023 and December 31, ~~2021,~~2022, the Company accrued ~~$1.0~~$1.5 million and ~~$1.5~~$1.3 million, respectively, related to JNGF pledges, which are included in accrued liabilities in the condensed consolidated balance sheets. The Company may engage in transactions in the ordinary course of business with significant shareholders or other companies whose directors

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~~JAMF HOLDING CORP.~~

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

~~(unaudited)~~

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 previously owned a majority of the Company. In 2021, Vista sold a portion of its investment in the Company such that its funds no longer owned a majority of the Company as of ~~September 30, 2022.~~March 31, 2023. 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 no material transactions with Vista or its affiliates during the three ~~and nine~~ months ended ~~September 30, 2022~~March 31, 2023 and ~~2021.~~2022.

Note 13. Subsequent events

On May 4, 2023, the Company announced that Dean Hager has decided to retire from his position as Chief Executive Officer (Principal Executive Officer) of the Company, effective September 1, 2023. In ~~September 2022, we entered into~~connection with Mr. Hager’s resignation, on May 2, 2023, the Company’s Board of Directors approved the leadership transition plan and appointed John Strosahl, the Company’s Chief Operating Officer and President, to succeed Mr. Hager. Mr. Hager will remain a ~~definitive agreement~~member of the Company’s Board of Directors following his retirement as Chief Executive Officer. Mr. Strosahl will also join the Company’s Board of Directors concurrently with his appointment to acquire ZecOps, a leader in mobile detection and response. This acquisition uniquely positions Jamf to help IT and security teams strengthen their organization’s mobile security posture. The transaction is expected to close in the fourth quarter of 2022, subject to customary closing conditions.Chief Executive Officer.

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Forward-Looking Statements

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

•the impact ~~on our operations from macroeconomic~~of adverse general and industry-specific economic and market conditions ~~including heightened inflation, slower growth or recession, changes to fiscal~~ and ~~monetary policy, higher interest rates, currency fluctuations, challenges~~reductions in ~~the supply chain, and the effects of the ongoing COVID-19 pandemic;~~IT spending;

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

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

•changes in our continued relationship with Apple;

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

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

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

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

•customers and maintain and expand our ~~ability to retain our current customers;~~

•~~our ability to sell additional functionality to~~relationships with our current customers;

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

•~~risks associated with failing~~our ability to ~~continue~~effectively manage our ~~recent growth rates;~~future growth;

•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;

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

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

•our ability to offer high-quality support;

•risks and uncertainties associated with acquisitions, divestitures, and ~~divestitures (such as our acquisition~~strategic investments;

Table of ~~ZecOps);~~Contents

•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 effectively expand and develop our sales 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~~cybersecurity events;

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

•the impact of general disruptions to data transmission;

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

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

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

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

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

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

•~~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,~~2022, as supplemented by our subsequent Quarterly Reports on Form 10-Q.

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

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

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

The following discussion and analysis summarizes the significant factors affecting the consolidated operating results, financial condition, liquidity, and cash flows of our company as of and for the periods presented below. The following discussion and analysis should be read in conjunction with our condensed consolidated financial statements and the related notes included elsewhere in this Quarterly Report on Form 10-Q and our consolidated financial statements and the related notes in our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022. The discussion contains forward-looking statements that are based on the beliefs of management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those discussed in or implied by forward-looking statements as a result of various factors, including those discussed below, elsewhere in this Quarterly Report on Form 10-Q, in our Annual Report on Form 10-K for the year ended December 31, ~~2021,~~2022, and in our subsequent Quarterly Reports on Form 10-Q, particularly in the sections entitled “Risk Factors” and “Forward-Looking Statements.”

Overview

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 primary focus on being the leading solution for Apple in the 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 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.

Key Factors Affecting Our Performance

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

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

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

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addressing additional use cases. Often our customers will begin with a small deployment and then later expand

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their usage more broadly within the enterprise as they realize the benefits of our platform. We believe that our “land 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~~Product innovation and technology leadership. Our success is dependent on our ability to sustain product innovation and technology leadership in order to maintain our competitive advantage. We believe that we have built a highly differentiated platform, and we intend to further extend the adoption of our platform through additional innovation. While sales of subscriptions to our Jamf Pro product account for most of our revenue, we intend to continue to invest in building additional products, features, and functionality that expand our capabilities and facilitate the extension of our platform to new use cases. Our future success is dependent on our ability to successfully develop, market, and sell additional products to both new and existing customers. For example, we announced our BYOD solution in ~~2018, we introduced~~March 2022 to help organizations manage and secure personally owned devices that employees bring to work, while upholding employee personal privacy. We also announced Jamf ~~Connect to provide users with a seamless connection to corporate resources using a single identity, and,~~Executive Threat Protection in 2019, we introduced Jamf Protect to extend Apple’s security and privacy model to enterprise teams by creating unprecedented visibility into MacOS fleets through customized remote monitoring and threatApril 2023, as an advanced detection and ~~prevention. In July 2021, we completed our acquisition of Wandera, which enhanced our Apple Enterprise Management Platform~~response tool designed for mobile devices that provides organizations with an efficient, remote method to monitor devices and ~~strengthened 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~~respond to ~~address trends in digital transformation, remote work, and ZTNA.~~advanced attacks.

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

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

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

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

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Key Business Metrics

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

Number of Devices

We believe our ability to grow the number of devices on our software platform provides a key indicator of the growth of our business and our future business opportunities. We define a device at the end of any particular period as a device owned by a customer, 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 ~~29.3~~30.8 million and ~~25.0~~26.8 million as of ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively, representing a ~~17%~~15% year-over-year growth rate. The increase in number of devices reflects our growth across industries, products, and geographies.

Annual Recurring Revenue

ARR represents the annualized value of all subscription and support and maintenance contracts as of the end of the period. ARR mitigates fluctuations due to seasonality, contract term, and the sales mix of subscriptions for term-based licenses and SaaS. ~~In 2022,~~ ARR is calculated on a constant currency basis using a rate ~~which approximates~~that estimates the exchange rate at the beginning of the ~~year exchange rate.~~year. ARR does not have any standardized meaning and is therefore unlikely to be comparable to similarly titled measures presented by other companies. ARR should be viewed independently of revenue and deferred revenue and is not intended to be combined with or to replace either of those items. ARR is not a forecast and the active contracts at the end of a reporting period used in calculating ARR may or may not be extended or renewed by our customers.

Our ARR was ~~$490.5~~$526.6 million and ~~$384.8~~$436.5 million as of ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively, which is an increase of ~~27%~~21% year-over-year. The growth in our ARR is primarily driven by device expansion, the addition of new customers, and ~~cross-selling.~~cross-selling additional solutions to our installed customer base.

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 Prior Period ARR. We then calculate the Current Period ARR. Current Period ARR includes any expansion and is net of contraction or attrition over the last 12 months but excludes ARR from new customers in the current period. We then divide the total Current Period ARR by the total Prior Period ARR to arrive at the dollar-based net retention rate.

Our dollar-based net retention rates were ~~115%~~111% and ~~119%~~120% for the trailing twelve months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021,~~ respectively. Our dollar-based net retention rate for the trailing twelve months ended ~~September 30, 2021~~March 31, 2022 was based on our Jamf legacy business and did not include Wandera since it had 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 and our ability to cross-sell our new solutions to our installed customer base.

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Components of Results of Operations

Revenue

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

Subscription. Subscription revenue consists of sales of SaaS subscriptions and on-premise term-based subscription licenses as well as support and maintenance contracts. We sell our software solutions primarily with a one-year contract term. We typically invoice SaaS subscription fees and support and maintenance fees annually in advance and recognize revenue ratably over the term of the applicable agreement, provided that all other revenue recognition criteria have been satisfied. The license portion of on-premise subscription revenue is recognized upfront, assuming all revenue recognition criteria are satisfied. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Critical Accounting Estimates” in our Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 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 is now 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 revenue consists primarily of professional services provided to our customers to configure and optimize the use of our software solutions, as well as training services related to the operation of our software solutions. Our services are priced on a fixed fee basis and generally invoiced in advance of the service being delivered. Revenue is recognized as the services are performed. We expect services ~~revenues~~revenue to decrease as a percentage of total revenue as the demand for our services is not expected to grow at the same rate as the demand for our subscription solutions.

Cost of Revenue

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

Amortization. Amortization expense consists of amortization of acquired intangible assets.

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 as well as associated payroll taxes and retirement plan contributions (together, contract costs) that are incremental to the acquisition of customer contracts are capitalized and amortized over the period of benefit, which is estimated to be

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generally 5five years. We expect our sales and marketing expenses to increase on an absolute dollar basis as we expand our sales personnel and marketing efforts.

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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~~2022 for more information. We expect such investment to increase on an absolute dollar basis as our business grows.

General and Administrative. General and administrative expenses consist primarily of employee compensation costs for corporate personnel, such as those in our executive, human resource, facilities, accounting and finance, legal and compliance, and ~~information technology~~IT departments. In addition, general and administrative expenses include acquisition and integration-related expenses which primarily consist of third-party expenses, such as legal and accounting fees, and adjustments to contingent consideration. General and administrative expenses also include system transformation costs, ~~incurred in secondary offerings.~~which are associated with the implementation of sales software and software supporting our business including enterprise resource planning, as well as other systems to provide best-in-class processes, governance, and systems. We expect our general and administrative expenses to increase on a dollar basis as our business grows, particularly as we continue to invest in technology infrastructure and expand our operations globally. Also, we 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 consists of amortization of acquired intangible assets.

Interest Income (Expense), Net

Interest income (expense), net primarily consists of interest charges and amortization of capitalized issuance costs related to our 2026 Notes, as well as interest income earned on our cash and cash equivalents. In the third quarter of 2021, we reclassified the unused commitment fee on our line of credit from general and administrative expenses to interest expense, net on a prospective basis. The impact to prior period financial statements was not material.

~~Loss on Extinguishment of Debt~~

~~In the third quarter of 2021, we repaid the principal amount of the 2021 Term Loan Facility and recorded debt extinguishment costs of $0.4 million for the write-off of remaining debt issuance costs.~~

Foreign Currency Transaction Gain (Loss)

Foreign currency transaction gain (loss) includes gains and losses from transactions denominated in a currency other than the Company’s functional ~~currency.~~currency, the U.S. dollar.

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.

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Results of Operations

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
		(in thousands)									(in thousands)
Revenue:	Revenue:									Revenue:
Subscription	Subscription	$	118,524	$	90,700	$	330,132	$	245,900	Subscription	$	127,230	$	102,201
Services	Services	5,216		4,083		14,187		12,015		Services	4,384		3,944
License	License	817		838		4,134		4,671		License	598		2,113
Total revenue	Total revenue	124,557		95,621		348,453		262,586		Total revenue	132,212		108,258
Cost of revenue:	Cost of revenue:									Cost of revenue:
Cost of subscription(1)(2)(3)(4) (exclusive of amortization expense shown below)	Cost of subscription(1)(2)(3)(4) (exclusive of amortization expense shown below)	22,334		18,317		62,870		44,206		Cost of subscription(1)(2)(3)(4) (exclusive of amortization expense shown below)	23,159		19,902
Cost of services(1)(2)(3) (exclusive of amortization expense shown below)		3,584		2,955		10,184		8,027
Cost of services(1)(3)(4) (exclusive of amortization expense shown below)										Cost of services(1)(3)(4) (exclusive of amortization expense shown below)	3,292		3,107
Amortization expense	Amortization expense	5,277		5,198		15,760		10,835		Amortization expense	3,296		5,218
Total cost of revenue	Total cost of revenue	31,195		26,470		88,814		63,068		Total cost of revenue	29,747		28,227
Gross profit	Gross profit	93,362		69,151		259,639		199,518		Gross profit	102,465		80,031
Operating expenses:	Operating expenses:									Operating expenses:
Sales and marketing(1)(2)(3)(4)	Sales and marketing(1)(2)(3)(4)	54,096		40,856		159,171		103,640		Sales and marketing(1)(2)(3)(4)	60,208		46,325
Research and development(1)(2)(3)(4)	Research and development(1)(2)(3)(4)	30,799		25,608		89,584		58,437		Research and development(1)(2)(3)(4)	32,072		24,802
General and administrative~~(4)~~(5)	General and administrative~~(4)~~(5)	30,061		25,536		103,994		69,288		General and administrative~~(4)~~(5)	28,436		25,612
Amortization expense	Amortization expense	7,040		7,025		21,103		18,275		Amortization expense	7,241		7,029
Total operating expenses	Total operating expenses	121,996		99,025		373,852		249,640		Total operating expenses	127,957		103,768
Loss from operations	Loss from operations	(28,634)		(29,874)		(114,213)		(50,122)		Loss from operations	(25,492)		(23,737)
Interest income (expense), net	Interest income (expense), net	45		(1,386)		(1,455)		(1,608)		Interest income (expense), net	1,285		(859)
Loss on extinguishment of debt		—		(449)		—		(449)
Foreign currency transaction loss		(2,624)		(269)		(4,081)		(795)
Loss before income tax (provision) benefit		(31,213)		(31,978)		(119,749)		(52,974)
Income tax (provision) benefit		(89)		1,595		(321)		1,535
Foreign currency transaction gain (loss)										Foreign currency transaction gain (loss)	604		(781)
Loss before income tax provision										Loss before income tax provision	(23,603)		(25,377)
Income tax provision										Income tax provision	(597)		(252)
Net loss	Net loss	$	(31,302)	$	(30,383)	$	(120,070)	$	(51,439)	Net loss	$	(24,200)	$	(25,629)

(1) Includes stock-based compensation as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
		(in thousands)									(in thousands)
Cost of revenue:	Cost of revenue:									Cost of revenue:
Subscription	Subscription	$	2,479	$	1,716	$	6,495	$	2,384	Subscription	$	2,267	$	1,955
Services	Services	344		229		961		381		Services	309		304
Sales and marketing	Sales and marketing	6,955		4,833		26,625		6,763		Sales and marketing	7,499		5,859
Research and development	Research and development	5,130		5,145		19,620		7,076		Research and development	5,033		3,859
General and administrative	General and administrative	5,582		3,913		35,823		6,170		General and administrative	4,442		4,033
		$	20,490	$	15,836	$	89,524	$	22,774		$	19,550	$	16,010

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
		(in thousands)									(in thousands)
Cost of revenue:	Cost of revenue:									Cost of revenue:
Subscription	Subscription	$	109	$	112	$	133	$	112	Subscription	$	12	$	—
Services		23		22		24		22
Sales and marketing	Sales and marketing	366		270		443		416		Sales and marketing	104		12
Research and development	Research and development	142		174		246		291		Research and development	71		27
General and administrative	General and administrative	92		148		275		501		General and administrative	76		97
		$	732	$	726	$	1,121	$	1,342		$	263	$	136

(3) Includes depreciation expense as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
		(in thousands)									(in thousands)
Cost of revenue:	Cost of revenue:									Cost of revenue:
Subscription	Subscription	$	285	$	302	$	891	$	814	Subscription	$	315	$	320
Services	Services	40		43		126		124		Services	39		45
Sales and marketing	Sales and marketing	669		608		1,986		1,706		Sales and marketing	805		684
Research and development	Research and development	409		341		1,165		923		Research and development	467		359
General and administrative	General and administrative	234		194		707		572		General and administrative	261		238
		$	1,637	$	1,488	$	4,875	$	4,139		$	1,887	$	1,646

(4) Includes acquisition-related expense as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
		(in thousands)									(in thousands)
Cost of revenue:	Cost of revenue:									Cost of revenue:
Subscription	Subscription	$	—	$	17	$	61	$	17	Subscription	$	—	$	38
Services										Services	1		—
Sales and marketing	Sales and marketing	—		34		7		34		Sales and marketing	—		7
Research and development	Research and development	246		549		792		590		Research and development	51		263
General and administrative	General and administrative	1,536		1,859		2,571		4,143		General and administrative	706		793
		$	1,782	$	2,459	$	3,431	$	4,784		$	758	$	1,101

(5) Includes system transformation costs as follows:


	Three Months Ended March 31,
	2023		2022
	(in thousands)
General and administrative	$	441	$	—

General and administrative also includes acquisition-related earnout of ~~$0.2 million and $0.6~~$0.1 million for the three months ended ~~September 30, 2022 and 2021, respectively, and $0.4 million and $4.8 million for the nine months ended September 30, 2022 and 2021, respectively.~~March 31, 2022. The acquisition-related earnout was an expense for ~~both~~ the three ~~and nine~~ months ended ~~September 30,~~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. ~~General and administrative also includes legal reserve of $4.2 million for the nine months ended September 30, 2021.~~

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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 September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
		(as a percentage of total revenue)									(as a percentage of total revenue)
Revenue:	Revenue:									Revenue:
Subscription	Subscription	95	%	95	%	95	%	94	%	Subscription	96	%	94	%
Services	Services	4		4		4		4		Services	3		4
License	License	1		1		1		2		License	1		2
Total revenue	Total revenue	100		100		100		100		Total revenue	100		100
Cost of revenue:	Cost of revenue:									Cost of revenue:
Cost of subscription (exclusive of amortization expense shown below)	Cost of subscription (exclusive of amortization expense shown below)	18		19		18		17		Cost of subscription (exclusive of amortization expense shown below)	18		18
Cost of services (exclusive of amortization expense shown below)	Cost of services (exclusive of amortization expense shown below)	3		3		3		3		Cost of services (exclusive of amortization expense shown below)	2		3
Amortization expense	Amortization expense	4		6		4		4		Amortization expense	2		5
Total cost of revenue	Total cost of revenue	25		28		25		24		Total cost of revenue	22		26
Gross profit	Gross profit	75		72		75		76		Gross profit	78		74
Operating expenses:	Operating expenses:									Operating expenses:
Sales and marketing	Sales and marketing	43		43		46		40		Sales and marketing	46		43
Research and development	Research and development	25		27		26		22		Research and development	24		23
General and administrative	General and administrative	24		26		30		26		General and administrative	22		24
Amortization expense	Amortization expense	6		7		6		7		Amortization expense	5		6
Total operating expenses	Total operating expenses	98		103		108		95		Total operating expenses	97		96
Loss from operations	Loss from operations	(23)		(31)		(33)		(19)		Loss from operations	(19)		(22)
Interest income (expense), net	Interest income (expense), net	—		(1)		—		(1)		Interest income (expense), net	1		(1)
Loss on extinguishment of debt		—		(1)		—		—
Foreign currency transaction loss		(2)		—		(1)		—
Loss before income tax (provision) benefit		(25)		(33)		(34)		(20)
Income tax (provision) benefit		—		1		—		—
Foreign currency transaction gain (loss)										Foreign currency transaction gain (loss)	—		(1)
Loss before income tax provision										Loss before income tax provision	(18)		(24)
Income tax provision										Income tax provision	—		—
Net loss	Net loss	(25)	%	(32)	%	(34)	%	(20)	%	Net loss	(18)	%	(24)	%

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Comparison of the Three ~~and Nine~~ Months Ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~

Revenue


		Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change					Three Months Ended March 31,				Change
		2022		2021		$		%		2022		2021		$		%			2023		2022		$		%
		(in thousands, except percentages)																	(in thousands, except percentages)
SaaS subscription and support and maintenance	SaaS subscription and support and maintenance	$	112,351	$	83,775	$	28,576	34	%	$	312,992	$	222,672	$	90,320	41	%	SaaS subscription and support and maintenance	$	120,762	$	96,350	$	24,412	25	%
On‑premise subscription	On‑premise subscription	6,173		6,925		(752)		(11)		17,140		23,228		(6,088)		(26)		On‑premise subscription	6,468		5,851		617		11
Subscription revenue	Subscription revenue	118,524		90,700		27,824		31		330,132		245,900		84,232		34		Subscription revenue	127,230		102,201		25,029		24
Professional services	Professional services	5,216		4,083		1,133		28		14,187		12,015		2,172		18		Professional services	4,384		3,944		440		11
Perpetual licenses	Perpetual licenses	817		838		(21)		(3)		4,134		4,671		(537)		(11)		Perpetual licenses	598		2,113		(1,515)		(72)
Non-subscription revenue	Non-subscription revenue	6,033		4,921		1,112		23		18,321		16,686		1,635		10		Non-subscription revenue	4,982		6,057		(1,075)		(18)
Total revenue	Total revenue	$	124,557	$	95,621	$	28,936	30	%	$	348,453	$	262,586	$	85,867	33	%	Total revenue	$	132,212	$	108,258	$	23,954	22	%

Total revenue increased by ~~$28.9~~$24.0 million, or ~~30%~~22%, for the three months ended ~~September 30, 2022~~March 31, 2023 compared to the three months ended ~~September 30, 2021.~~March 31, 2022. Overall revenue increased primarily as a result of higher subscription revenue, partially offset by a decrease in perpetual licenses revenue. Subscription revenue accounted for ~~95%~~96% of total revenue for ~~both~~ the three months ended ~~September 30, 2022 and 2021.~~March 31, 2023 compared to 94% for the three months ended March 31, 2022. The increase in subscription revenue was driven by device expansion, the addition of new customers, and cross-selling.

~~Total~~ The decrease in perpetual licenses revenue ~~increased by $85.9 million, or 33%, for the nine months ended September 30, 2022 compared~~primarily reflects customers shifting from perpetual licenses to the nine months ended September 30, 2021. Overall revenue increased primarily as a result of higher subscription revenue. Subscription revenue accounted for 95% of total revenue for the nine months ended September 30, 2022 compared to 94% for the nine months ended September 30, 2021. The increase in subscription revenue was driven by device expansion, the addition of new customers, and cross-selling, as well as the contribution of revenue from Wandera, partially offset by the impact from a change in revenue recognition related to our Jamf Connect product resulting from updates to how we deliver the product.on-premise subscriptions.

Cost of Revenue and Gross Margin


		Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change					Three Months Ended March 31,				Change
		2022		2021		$		%		2022		2021		$		%			2023		2022		$		%
		(in thousands, except percentages)																	(in thousands, except percentages)
Cost of revenue:	Cost of revenue:																	Cost of revenue:
Cost of subscription (exclusive of amortization expense shown below)	Cost of subscription (exclusive of amortization expense shown below)	$	22,334	$	18,317	$	4,017	22	%	$	62,870	$	44,206	$	18,664	42	%	Cost of subscription (exclusive of amortization expense shown below)	$	23,159	$	19,902	$	3,257	16	%
Cost of services (exclusive of amortization expense show below)	Cost of services (exclusive of amortization expense show below)	3,584		2,955		629		21		10,184		8,027		2,157		27		Cost of services (exclusive of amortization expense show below)	3,292		3,107		185		6
Amortization expense	Amortization expense	5,277		5,198		79		2		15,760		10,835		4,925		45		Amortization expense	3,296		5,218		(1,922)		(37)
Total cost of revenue	Total cost of revenue	$	31,195	$	26,470	$	4,725	18	%	$	88,814	$	63,068	$	25,746	41	%	Total cost of revenue	$	29,747	$	28,227	$	1,520	5	%
Gross margin	Gross margin	75%		72%						75%		76%						Gross margin	78%		74%

Cost of revenue increased by ~~$4.7~~$1.5 million, or ~~18%~~5%, for the three months ended ~~September 30, 2022~~March 31, 2023 compared to the three months ended September 30, 2021 driven by an increase in cost of subscription revenue. Cost of subscription revenue increased $4.0 million, or 22%, primarily due to a $1.6 million increase in employee compensation costs related to higher headcount to support the growth in our subscription customer base, a $0.8 million increase in stock-based compensation expense and related payroll taxes, and a $1.3 million increase in third party hosting fees as we increased capacity to support our growth. Cost of services revenue increased $0.6 million, or 21%, as a result of higher employee compensation costs and stock-based compensation expense.

~~Cost of revenue increased by $25.7 million, or 41%, for the nine months ended September 30,~~March 31, 2022 ~~compared to the nine months ended September 30, 2021~~ driven by an increase in cost of subscription revenue, ~~and~~partially offset by a decrease in amortization expense. Cost of subscription revenue increased ~~$18.7~~$3.3 million, or ~~42%~~16%, primarily due to a ~~$7.7~~$2.3 million increase in employee compensation costs related to higher headcount to support the growth in our subscription customer base and ~~the Wandera acquisition,~~ a ~~$5.9~~$0.6 million increase in third party hosting fees as we increased capacity to support our ~~growth and the Wandera acquisition, and a $4.1 million increase in stock-based compensation~~growth. Amortization expense ~~and related payroll taxes. Cost of services revenue increased $2.2~~decreased $1.9 million, or ~~27%~~37%, ~~as a result of higher employee compensation costs and stock-based compensation expense.~~

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~~Amortization expense increased $4.9 million, or 45%, primarily reflecting the increase in~~due to certain intangible assets ~~due to~~reaching the ~~Wandera acquisition.~~end of their useful life.

Total gross margin was ~~75%~~78% and ~~72%~~74% for the three months ended ~~September 30,~~March 31, 2023 and 2022, ~~and 2021, respectively, and 75% and 76% for the nine months ended September 30, 2022 and 2021,~~ respectively. Total gross margin for the three months ended ~~September 30, 2022~~March 31, 2023 increased compared to the prior year period as our revenue expanded faster than the costs required to deliver the ~~revenue. The decline in total gross margin for the nine months ended September 30, 2022 compared to the prior year period was due to the increase in total cost~~revenue and amortization expense decreased.

Table of ~~revenue described above as well as an impact to revenue due to a change in revenue recognition related to our Jamf Connect product resulting from updates to how we deliver the product.~~Contents

Operating Expenses


		Three Months Ended September 30,				Change				Nine Months Ended September 30,				Change					Three Months Ended March 31,				Change
		2022		2021		$		%		2022		2021		$		%			2023		2022		$		%
		(in thousands, except percentages)																	(in thousands, except percentages)
Operating expenses:	Operating expenses:																	Operating expenses:
Sales and marketing	Sales and marketing	$	54,096	$	40,856	$	13,240	32	%	$	159,171	$	103,640	$	55,531	54	%	Sales and marketing	$	60,208	$	46,325	$	13,883	30	%
Research and development	Research and development	30,799		25,608		5,191		20		89,584		58,437		31,147		53		Research and development	32,072		24,802		7,270		29
General and administrative	General and administrative	30,061		25,536		4,525		18		103,994		69,288		34,706		50		General and administrative	28,436		25,612		2,824		11
Amortization expense	Amortization expense	7,040		7,025		15		—		21,103		18,275		2,828		15		Amortization expense	7,241		7,029		212		3
Operating expenses	Operating expenses	$	121,996	$	99,025	$	22,971	23	%	$	373,852	$	249,640	$	124,212	50	%	Operating expenses	$	127,957	$	103,768	$	24,189	23	%

Sales and Marketing. Sales and marketing expenses increased by ~~$13.2~~$13.9 million, or ~~32%~~30%, for the three months ended ~~September 30, 2022~~March 31, 2023 compared to the three months ended ~~September 30, 2021~~March 31, 2022 primarily due to a ~~$6.6~~$10.1 million increase in employee compensation costs driven by higher headcount due to growth in the business, a ~~$2.2~~$1.7 million increase in stock-based compensation expense and related payroll taxes, a ~~$2.6~~$0.9 million increase in marketing costs, a ~~$1.1~~$0.6 million increase in travel-related expenses, and a $0.4 million increase in computer hardware and software costs to support the growth of the business. Marketing costs increased primarily due to increases in demand generation programs, advertising, and brand awareness campaigns focused on new customer acquisition, as well as timing of costs associated with JNUC.

Sales and marketing expenses increased by $55.5 million, or 54%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021 primarily due to a $23.5 million increase in employee compensation costs driven by higher headcount due to growth in the business and the Wandera acquisition, a $19.9 million increase in stock-based compensation expense and related payroll taxes, a $6.5 million increase in marketing costs, a $2.7 million increase in travel-related expenses, and a $1.5 million increase in computer hardware and software costs to support the growth of the business. Marketing costs increased primarily due to increases in demand generation programs, advertising, and brand awareness campaigns focused on new customer acquisition, as well as timing of costs associated with JNUC. The increase in stock-based compensation expense was primarily due to $7.4 million of expense related to the modification of return target options in the second quarter of 2022 and an increase in expense related to RSU awards.

~~Research and Development.~~ Research and development expenses increased by $5.2 million, or 20%, for the three months ended September 30, 2022 compared to the three months ended September 30, 2021 primarily due to a $4.0 million increase in employee compensation costs driven by higher headcount due to growth in the business, a $1.0 million increase in outside services, and a $0.5$0.3 million increase in computer hardware and software costs to support the growth of the business.

Research and Development. Research and development expenses increased by ~~$31.1~~$7.3 million, or ~~53%~~29%, for the ~~nine~~three months ended ~~September 30, 2022~~March 31, 2023 compared to the ~~nine~~three months ended ~~September 30, 2021~~March 31, 2022 primarily due to a ~~$15.7~~$5.5 million increase in employee compensation costs driven by higher headcount due to growth in ~~the~~our overall business, ~~and the Wandera acquisition,~~ a ~~$12.5~~$1.2 million increase in stock-based compensation expense and related payroll taxes, and a ~~$1.3~~$0.3 million increase in computer hardware and software costs to support the growth of the business, and a $0.7 million increase in outside services. The increase in stock-based compensation expense was primarily due to $5.7 million of expense related to the modification of return target options in the second quarter of 2022 and an increase in expense related to RSU awards.business.

General and Administrative. General and administrative expenses increased by ~~$4.5~~$2.8 million, or ~~18%~~11%, for the three months ended ~~September 30, 2022~~March 31, 2023 compared to the three months ended ~~September 30, 2021. The increase was~~March 31, 2022 primarily due to a ~~$2.9~~$1.9 million increase in employee compensation costs driven by higher headcount to support our continued growth, a ~~$1.6~~$0.4 million increase in stock-based compensation expense and related payroll taxes, and a $0.4 million increase ~~in computer~~

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~~hardware and software costs to support the growth of the business, partially offset by a $0.4 million decrease in acquisition-related earnout.~~

General and administrative expenses increased by $34.7 million, or 50%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021. The increase was primarily due to a $10.8 million increase in employee compensation costs driven by higher headcount to support our continued growth and the Wandera acquisition, a $29.4 million increase in stock-based compensation expense and related payroll taxes, a $1.9 million increase in outside services, and a $1.6 million increase in computer hardware and software costs to support the growth of the business, partially offset by a $4.2 million decrease in legal reserve, a $4.4 million decrease in acquisition-related earnout, a $1.6 million decrease in acquisition-related costs, and a $0.5 million decrease in offering costs. The increase in stock-based compensation expense was primarily due to $19.9 million of expense related to ~~the modification of return target options in the second quarter of 2022 and an increase in expense related to RSU awards.~~

~~Amortization Expense.~~ Amortization expense increased by $2.8 million, or 15%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021 primarily reflecting the increase in intangible assets due to the Wandera acquisition.system transformation costs.

Interest Income (Expense), Net

Three Months Ended
September 30, Change Nine Months Ended
September 30, Change
2022 2021 $ % 2022 2021 $ %
(in thousands, except percentages)
Interest income (expense), net $ 45 $ (1,386) $ 1,431 NM $ (1,455) $ (1,608) $ (153) (10) %


	Three Months Ended March 31,				Change
	2023		2022		$		%
	(in thousands, except percentages)
Interest income (expense), net	$	1,285	$	(859)	$	2,144	NM

NM Not Meaningful.

Interest income (expense), net increased by ~~$1.4~~$2.1 million for the three months ended ~~September 30, 2022~~March 31, 2023 compared to the three months ended ~~September 30, 2021~~March 31, 2022 primarily reflecting higher interest income due to higher average invested balances and higher earned interest rates as well as lower interest charges, partially offset by higher amortization of issuance costs on the 2026 Notes.

~~Interest expense, net decreased by $0.2~~a $2.2 million ~~or 10%, for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021 primarily reflecting higher interest~~increase in investment income due to higher earned interest rates and ~~lower interest charges, partially offset by~~ higher ~~amortization of issuance costs on the 2026 Notes.~~

~~Loss on Extinguishment of Debt~~

Three Months Ended
September 30, Change Nine Months Ended
September 30, Change
2022 2021 $ % 2022 2021 $ %
(in thousands, except percentages)
Loss on extinguishment of debt $ — $ 449 $ (449) (100) % $ — $ 449 $ (449) (100) %

Loss on extinguishment of debt of $0.4 million for the three and nine months ended September 30, 2021 consists of the write off of debt issuance costs upon the early repayment of the 2021 Term Loan Facility.average invested balances.

Foreign Currency Transaction ~~Loss~~Gain (Loss)

Three Months Ended
September 30, Change Nine Months Ended
September 30, Change
2022 2021 $ % 2022 2021 $ %
(in thousands, except percentages)
Foreign currency transaction loss $ 2,624 $ 269 $ 2,355 NM $ 4,081 $ 795 $ 3,286 NM


	Three Months Ended March 31,				Change
	2023		2022		$		%
	(in thousands, except percentages)
Foreign currency transaction gain (loss)	$	604	$	(781)	$	1,385	NM

NM Not Meaningful.

Foreign currency transaction ~~loss~~gain (loss) increased by ~~$2.4~~$1.4 million for the three months ended ~~September 30, 2022~~March 31, 2023 compared to the three months ended ~~September 30, 2021~~March 31, 2022 primarily due to the impact of ~~the decline~~changes in foreign currency exchange rates, primarily the GBP and ~~EUR against the dollar on the remeasurement of foreign currency transactions.~~EUR.

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Foreign currency transaction loss increased by $3.3 million for the nine months ended September 30, 2022 compared to the nine months ended September 30, 2021 primarily due to the impact of the decline in the GBP and EUR against the dollar on the remeasurement of foreign currency transactions.

Income Tax ~~(Provision) Benefit~~Provision

Three Months Ended
September 30, Change Nine Months Ended
September 30, Change
2022 2021 $ % 2022 2021 $ %
(in thousands, except percentages)
Income tax (provision) benefit $ (89) $ 1,595 $ (1,684) NM $ (321) $ 1,535 $ (1,856) NM


	Three Months Ended March 31,				Change
	2023		2022		$		%
	(in thousands, except percentages)
Income tax provision	$	597	$	252	$	345	NM

NM Not Meaningful.

Income tax provision was $0.6 million and $0.3 million for the three months ended March 31, 2023 and 2022, respectively. The effective tax rates for the three months ended ~~September 30,~~March 31, 2023 and 2022 ~~and 2021~~ were ~~(0.3)~~approximately (2.5)% and ~~5.0%~~(1.0)%, respectively. ~~The change in the effective tax rate~~See Note 11 for the three months ended September 30, 2022 compared to the prior year period was primarily due to valuation allowances and the Wandera acquisition purchase accounting impacts. The Company’s annual effective tax rates for the three months ended September 30, 2022 and 2021 were 1.4% and 2.8%, respectively.

The effective tax rates for the nine months ended September 30, 2022 and 2021 were (0.3)% and 2.9%, respectively. The change in the effective tax rate for the nine months ended September 30, 2022 compared to the prior year period was primarily due to valuation allowances and the Wandera acquisition purchase accounting impacts. The effective tax rate for the nine months ended September 30, 2022 was impacted by $2.0 million of discreteadditional information on income ~~tax expense.~~taxes.

Non-GAAP Financial Measures

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

Our non-GAAP financial measures are presented for supplemental informational purposes only, and should not be considered a substitute for financial measures presented in accordance with GAAP. The principal limitation of these non-GAAP financial measures is that they exclude certain expenses that are required by GAAP to be recorded in our financial statements, including stock-based compensation expense and amortization of acquired intangible assets. In addition, they are subject to inherent limitations as they reflect the exercise of judgment by our management about which expenses are excluded or included in determining these non-GAAP financial measures. Further, non-GAAP financial measures are not standardized. It may not be possible to compare these financial measures with other companies’ non-GAAP financial measures having the same or similar names. While the amortization expense of acquired intangible assets is excluded from certain non-GAAP measures, the revenue related to acquired intangible assets is reflected in such measures as those assets contribute to revenue generation. A reconciliation is provided below for each non-GAAP financial measure to the most directly comparable financial measure stated in accordance with GAAP. Investors are encouraged to review the related GAAP financial measures and the reconciliation of these non-GAAP financial measures to their most directly comparable GAAP financial measures. In addition, investors are encouraged to review our condensed consolidated financial statements and the notes thereto in their entirety and not to rely on any single financial measure.

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

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

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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 September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
		(in thousands)									(in thousands)
Gross profit	Gross profit	$	93,362	$	69,151	$	259,639	$	199,518	Gross profit	$	102,465	$	80,031
Amortization expense	Amortization expense	5,277		5,198		15,760		10,835		Amortization expense	3,296		5,218
Stock-based compensation	Stock-based compensation	2,823		1,945		7,456		2,765		Stock-based compensation	2,576		2,259
Acquisition-related expense	Acquisition-related expense	—		17		61		17		Acquisition-related expense	1		38
Payroll taxes related to stock-based compensation	Payroll taxes related to stock-based compensation	132		134		157		134		Payroll taxes related to stock-based compensation	12		—
Non-GAAP gross profit	Non-GAAP gross profit	$	101,594	$	76,445	$	283,073	$	213,269	Non-GAAP gross profit	$	108,350	$	87,546
Gross profit margin	Gross profit margin	75%		72%		75%		76%		Gross profit margin	78%		74%
Non-GAAP gross profit margin	Non-GAAP gross profit margin	82%		80%		81%		81%		Non-GAAP gross profit margin	82%		81%

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

We use non-GAAP operating income and non-GAAP operating income margin, and believe it is useful for our investors, to understand and evaluate our operating performance and trends, to prepare and approve our annual budget, and to develop short-term and long-term operating plans. We define non-GAAP operating income as operating loss, 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 reserve.~~system transformation costs. System transformation costs are associated with the implementation of sales software and software supporting our business including enterprise resource planning, as well as other systems to provide best-in-class processes, governance, and systems. The transformation includes a comprehensive redesign in the way we go to market, including the quoting, contracting, fulfilling, and invoicing processes, and the systems and tools we use. We define non-GAAP operating income margin as non-GAAP operating income as a percentage of total revenue.

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 September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
		(in thousands)									(in thousands)
Operating loss	Operating loss	$	(28,634)	$	(29,874)	$	(114,213)	$	(50,122)	Operating loss	$	(25,492)	$	(23,737)
Amortization expense	Amortization expense	12,317		12,223		36,863		29,110		Amortization expense	10,537		12,247
Stock-based compensation	Stock-based compensation	20,490		15,836		89,524		22,774		Stock-based compensation	19,550		16,010
Acquisition-related expense	Acquisition-related expense	1,782		2,459		3,431		4,784		Acquisition-related expense	758		1,101
Acquisition-related earnout	Acquisition-related earnout	200		600		388		4,837		Acquisition-related earnout	—		88
Offering costs		—		—		124		594
Payroll taxes related to stock-based compensation	Payroll taxes related to stock-based compensation	732		726		1,121		1,342		Payroll taxes related to stock-based compensation	263		136
Legal reserve		—		—		—		4,200
System transformation costs										System transformation costs	441		—
Non-GAAP operating income	Non-GAAP operating income	$	6,887	$	1,970	$	17,238	$	17,519	Non-GAAP operating income	$	6,057	$	5,845
Operating loss margin	Operating loss margin	(23)%		(31)%		(33)%		(19)%		Operating loss margin	(19)%		(22)%
Non-GAAP operating income margin	Non-GAAP operating income margin	6%		2%		5%		7%		Non-GAAP operating income margin	5%		5%

Non-GAAP Net Income

We use non-GAAP net income, and believe it is useful for our investors, to understand and evaluate our operating performance and trends. We define non-GAAP net income as net loss, adjusted for income tax provision, amortization expense, stock-based compensation expense, foreign currency transaction (gain) 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 reserve,~~system transformation costs, and adjustment to income tax expense based on the non-GAAP measure of profitability using our blended U.S. statutory tax rate.

We define non-GAAP income before income taxes as loss before income taxes adjusted for amortization expense, stock-based compensation expense, foreign currency transaction (gain) loss, ~~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 reserve.~~acquisition-

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related expense, acquisition-related earnout, payroll taxes related to stock-based compensation, and system transformation costs.

We define non-GAAP provision for income taxes as the current and deferred income tax expense commensurate with the non-GAAP measure of profitability using our blended U.S. statutory tax rate.

A reconciliation of non-GAAP net income to net loss, the most directly comparable GAAP measure, is as follows:


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
		(in thousands)									(in thousands)
Net loss	Net loss	$	(31,302)	$	(30,383)	$	(120,070)	$	(51,439)	Net loss	$	(24,200)	$	(25,629)
Exclude: Income tax (provision) benefit		(89)		1,595		(321)		1,535
Loss before income tax (provision) benefit		(31,213)		(31,978)		(119,749)		(52,974)
Exclude: income tax provision										Exclude: income tax provision	(597)		(252)
Loss before income tax provision										Loss before income tax provision	(23,603)		(25,377)
Amortization expense	Amortization expense	12,317		12,223		36,863		29,110		Amortization expense	10,537		12,247
Stock-based compensation	Stock-based compensation	20,490		15,836		89,524		22,774		Stock-based compensation	19,550		16,010
Foreign currency transaction loss		2,624		269		4,081		795
Loss on extinguishment of debt		—		449		—		449
Foreign currency transaction (gain) loss										Foreign currency transaction (gain) loss	(604)		781
Amortization of debt issuance costs	Amortization of debt issuance costs	682		324		2,040		324		Amortization of debt issuance costs	684		679
Acquisition-related expense	Acquisition-related expense	1,782		2,459		3,431		4,784		Acquisition-related expense	758		1,101
Acquisition-related earnout	Acquisition-related earnout	200		600		388		4,837		Acquisition-related earnout	—		88
Offering costs		—		—		124		594
Payroll taxes related to stock-based compensation	Payroll taxes related to stock-based compensation	732		726		1,121		1,342		Payroll taxes related to stock-based compensation	263		136
Legal reserve		—		—		—		4,200
System transformation costs										System transformation costs	441		—
Non-GAAP income before income taxes	Non-GAAP income before income taxes	7,614		908		17,823		16,235		Non-GAAP income before income taxes	8,026		5,665
Non-GAAP provision for income taxes (1)	Non-GAAP provision for income taxes (1)	(1,828)		(218)		(4,278)		(3,896)		Non-GAAP provision for income taxes (1)	(1,926)		(1,360)
Non-GAAP net income	Non-GAAP net income	$	5,786	$	690	$	13,545	$	12,339	Non-GAAP net income	$	6,100	$	4,305

(1) ~~Beginning in the first quarter of 2022, the Company changed its method of calculating its non-GAAP provision for income taxes in~~In accordance with the SEC’s Non-GAAP Financial Measures Compliance and Disclosure Interpretation, ~~on a retroactive basis. 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 had 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

We define adjusted EBITDA as net loss, adjusted for interest (income) expense, net, provision ~~(benefit)~~ for income taxes, depreciation and amortization expense, stock-based compensation expense, foreign currency transaction (gain) 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 reserve.~~

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system transformation costs.

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


		Three Months Ended September 30,				Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021		2022		2021			2023		2022
		(in thousands)									(in thousands)
Net loss	Net loss	$	(31,302)	$	(30,383)	$	(120,070)	$	(51,439)	Net loss	$	(24,200)	$	(25,629)
Interest (income) expense, net	Interest (income) expense, net	(45)		1,386		1,455		1,608		Interest (income) expense, net	(1,285)		859
Provision (benefit) for income taxes		89		(1,595)		321		(1,535)
Provision for income taxes										Provision for income taxes	597		252
Depreciation expense	Depreciation expense	1,637		1,488		4,875		4,139		Depreciation expense	1,887		1,646
Amortization expense	Amortization expense	12,317		12,223		36,863		29,110		Amortization expense	10,537		12,247
Stock-based compensation	Stock-based compensation	20,490		15,836		89,524		22,774		Stock-based compensation	19,550		16,010
Foreign currency transaction loss		2,624		269		4,081		795
Loss on extinguishment of debt		—		449		—		449
Foreign currency transaction (gain) loss										Foreign currency transaction (gain) loss	(604)		781
Acquisition-related expense	Acquisition-related expense	1,782		2,459		3,431		4,784		Acquisition-related expense	758		1,101
Acquisition-related earnout	Acquisition-related earnout	200		600		388		4,837		Acquisition-related earnout	—		88
Offering costs		—		—		124		594
Payroll taxes related to stock-based compensation	Payroll taxes related to stock-based compensation	732		726		1,121		1,342		Payroll taxes related to stock-based compensation	263		136
Legal reserve		—		—		—		4,200
System transformation costs										System transformation costs	441		—
Adjusted EBITDA	Adjusted EBITDA	$	8,524	$	3,458	$	22,113	$	21,658	Adjusted EBITDA	$	7,944	$	7,491

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Liquidity and Capital Resources

General

As of ~~September 30, 2022,~~March 31, 2023, our principal sources of liquidity were cash and cash equivalents totaling ~~$225.5~~$200.3 million, which were held for general corporate purposes, which may include working capital, capital expenditures, and potential acquisitions and strategic transactions, as well as the available balance of the 2020 Revolving Credit Facility, described in Note 8 to the condensed consolidated financial statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q. Our cash and cash equivalents are comprised of cash, money market deposit accounts, and money market funds ~~and/or U.S. Treasuries~~ with original maturities at the time of purchase of three months or less. Our cash and cash equivalents are held at a diversified portfolio of global banks and money market investments, and we do not have material exposure to recent banking-sector events. We expect that our operating cash flows, in addition to our cash and cash equivalents, will enable us to make 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 ~~September 30, 2022,~~March 31, 2023, we had deferred revenue of ~~$341.2~~$340.8 million, of which ~~$271.7~~$278.4 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 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 2020 Credit Agreement. The Credit Agreement Amendment provided for the 2021 Term Loan Facility, a new 364-day term loan facility in an aggregate principal amount of $250.0 million on substantially the same terms and conditions as our existing 2020 Credit Agreement. 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. As of ~~September 30, 2022,~~March 31, 2023, there were no amounts outstanding under the 2020 Credit Agreement, other than $1.0 million in outstanding letters of credit.

Effective April 7, 2023, we entered into the Credit Agreement Amendment, which amends certain provisions of the 2020 Credit Agreement. The Credit Agreement Amendment updates the benchmark interest ~~rates applicable~~rate provisions to replace the LIBO Rate with the Adjusted Term SOFR for purposes of calculating interest for U.S. dollar-denominated borrowings under the terms of the 2020 Credit Agreement. Except as amended by the Credit Agreement Amendment, the remaining terms of the 2020 Credit Agreement ~~are, at the borrower's option, either (i) a base rate, which is equal to the greater of (a) the Prime Rate, (b) the Federal Funds Effective Rate plus 0.5%~~remain in full force and ~~(c) the Adjusted LIBO Rate (subject to a floor)~~effect. See Note 8 for a one month Interest Period (each term as defined in the 2020 Credit Agreement) plus 1%, or (ii) the Adjusted LIBO Rate (subject to a floor of 0.0%) equal to the LIBO Rate (as defined in the 2020 Credit Agreement) for the applicable Interest Period multiplied by the Statutory Reserve Rate (each term as defined in the 2020 Credit Agreement), plus in the case of each of clauses (i) and (ii), the Applicable Rate (as defined in the 2020 Credit Agreement). The

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Applicable Rate (i) for base rate loans range from 0.25% to 1.0% per annum and (ii) for LIBO Rate loans range from 1.25% to 2.0% per annum, in each case, based on the Senior Secured Net Leverage Ratio (as defined in the 2020 Credit Agreement).additional information.

On September 17, 2021, we completed ~~our~~a private offering of the 2026 Notes and received net proceeds of approximately $361.4 million after deducting the initial purchasers’ discounts and commissions and the offering expenses paid by us. The 2026 Notes bear interest at a rate of 0.125% per 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 net proceeds from the offering of the 2026 Notes to repay the Company’s 2021 Term Loan Facility and to pay any associated prepayment penalties and accrued and unpaid interest to the date of repayment and (ii) approximately $36.0 million of the net proceeds from the 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.

Future Liquidity and Capital Resource Requirements

We believe our cash and cash equivalents, 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, and ~~to meet our~~other 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.

~~In the second quarter~~As of ~~2022, the Company entered into an amended~~March 31, 2023, our principal commitments consist of obligations under our 2026 Notes, contractual ~~agreement with an unrelated party~~agreements for hosting services ~~which included a non-cancelable commitment from~~and other support software, and operating leases for office space. During the ~~Company of $100.0 million over the next~~ three ~~years. Any remaining commitments under the prior agreement were terminated upon the commencement date of the amended agreement. There~~months ended March 31, 2023, there have been no ~~other~~ material changes to our commitments under our 2026 Notes and operating leases for office space as disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022. See Note 7 for additional information on commitments under contractual agreements for hosting services and other support software.

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Cash Flows

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


		Nine Months Ended September 30,					Three Months Ended March 31,
		2022		2021			2023		2022
		(in thousands)					(in thousands)
Net cash provided by operating activities		$	62,831	$	64,827
Net cash used in operating activities						Net cash used in operating activities	$	(24,800)	$	(2,990)
Net cash used in investing activities	Net cash used in investing activities	(12,919)		(359,937)		Net cash used in investing activities	(1,857)		(5,979)
Net cash (used in) provided by financing activities		(260)		328,905
Net cash provided by (used in) financing activities						Net cash provided by (used in) financing activities	2,517		(3,441)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash	Effect of exchange rate changes on cash, cash equivalents, and restricted cash	(1,322)		(865)		Effect of exchange rate changes on cash, cash equivalents, and restricted cash	42		(145)
Net increase in cash, cash equivalents, and restricted cash		48,330		32,930
Net decrease in cash, cash equivalents, and restricted cash						Net decrease in cash, cash equivalents, and restricted cash	(24,098)		(12,555)
Cash, cash equivalents, and restricted cash, beginning of period	Cash, cash equivalents, and restricted cash, beginning of period	177,150		194,868		Cash, cash equivalents, and restricted cash, beginning of period	231,921		177,150
Cash, cash equivalents, and restricted cash, end of period	Cash, cash equivalents, and restricted cash, end of period	$	225,480	$	227,798	Cash, cash equivalents, and restricted cash, end of period	$	207,823	$	164,595
Cash paid for interest	Cash paid for interest	$	683	$	944	Cash paid for interest	$	313	$	293
Cash paid for purchases of equipment and leasehold improvements	Cash paid for purchases of equipment and leasehold improvements	5,645		7,261		Cash paid for purchases of equipment and leasehold improvements	1,121		1,964

Operating Activities

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

For the ~~nine~~three months ended ~~September 30, 2022,~~March 31, 2023, net cash ~~provided by~~used in operating activities was ~~$62.8~~$24.8 million reflecting our net loss of ~~$120.1~~$24.2 million, adjusted for non-cash charges of ~~$153.0~~$38.2 million and net cash ~~inflows~~outflows of ~~$29.9~~$38.8 million from changes in our operating assets and liabilities. Non-cash charges primarily consisted of share-based compensation, depreciation

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and amortization of property and equipment and intangible assets, amortization of deferred contract costs, non-cash lease expense, and amortization of debt issuance costs. The primary drivers of net cash ~~inflows~~outflows from changes in operating assets and liabilities included ~~an increase~~a decrease of ~~$59.9 million in deferred revenue due to growth in subscription revenues and an increase of $10.6~~$20.3 million in accounts payable and accrued ~~liabilities.~~liabilities primarily due to cash paid for employee bonuses and cash paid for the contingent consideration associated with the Digita acquisition, an increase of $8.6 million in prepaid expenses and other assets primarily due to annual prepaid contract renewals, an increase of $8.1 million in deferred contract costs, and a decrease of $5.4 million in deferred revenue. These changes were partially offset by ~~an increase~~a decrease of ~~$22.9 million in deferred contract costs due to an increase in capitalized costs, an increase of $15.1~~$3.9 million in trade accounts ~~receivable due to higher sales and the timing of cash receipts from our customers, and an increase of $3.4 million in prepaid expenses and other assets.~~receivable.

For the ~~nine~~three months ended ~~September 30, 2021,~~March 31, 2022, net cash ~~provided by~~used in operating activities was ~~$64.8~~$3.0 million reflecting our net loss of ~~$51.4~~$25.6 million, adjusted for non-cash charges of ~~$73.2~~$36.1 million and net cash ~~inflows~~outflows of ~~$43.1~~$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, share-based compensation, and a $4.8 million adjustment to contingent consideration.~~expense. The primary drivers of net cash ~~inflows~~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 ~~$59.5~~$7.0 million in deferred contract 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, an increase of $6.7 million in accounts payable and accrued liabilities due to growth of the business, and a decrease in trade accounts receivable of $3.2 million due to timing of cash receipts from our customers and higher collections. These changes were partially offset by an increase of $18.1 million in deferred contract costs due to an increase in capitalized costs and an increase of $8.1 million in prepaid expenses and other assets.revenues.

Investing Activities

During the ~~nine~~three months ended ~~September 30,~~March 31, 2023, net cash used in investing activities was $1.9 million driven by purchases of $1.1 million in equipment and leasehold improvements and purchases of investments of $0.8 million.

During the three months ended March 31, 2022, net cash used in investing activities was ~~$12.9~~$6.0 million driven by ~~purchases of $5.6 million in equipment and leasehold improvements,~~ cash paid for two acquisitions of $4.0 million and ~~cash paid for the purchase of investments of $3.1 million.~~

During the nine months ended September 30, 2021, net cash used in investing activities was $359.9 million driven by the acquisition of Wandera for $349.7 million, net of cash acquired, the acquisition of cmdReporter for $3.0 million, and purchases of ~~$7.3~~$2.0 million in equipment and leasehold ~~improvements for updates to office space and hardware and software.~~improvements.

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Financing Activities

Net cash provided by financing activities of $2.5 million during the three months ended March 31, 2023 was primarily due to proceeds of $2.7 million from the exercise of stock options.

Net cash used in financing activities of ~~$0.3~~$3.4 million during the ~~nine~~three months ended ~~September 30,~~March 31, 2022 was primarily due to $4.6 million paid for contingent consideration associated with the Digita acquisition, partially offset by proceeds of ~~$4.7~~$1.2 million from the exercise of stock options.

Net cash provided by financing activities of $328.9 million during the nine months ended September 30, 2021 was primarily due to proceeds of $373.8 million from the issuance and sale of the 2026 Notes and proceeds of $8.6 million from the exercise of stock options, partially offset by $36.0 million paid for the purchase of the Capped Calls, $12.6 million paid for debt issuance costs, and $4.2 million paid for contingent consideration associated with the Digita acquisition.

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 for the year ended December 31, ~~2021.~~2022. In addition, we have entered into indemnification agreements with our directors and certain 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.

Critical Accounting 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

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

There have been no material changes to our critical accounting estimates disclosed in our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022. For more information, refer to “Note 2 — Summary of 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” 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

There were no material changes to our quantitative and qualitative disclosures about market risk during the ~~nine~~three months ended ~~September 30, 2022.~~March 31, 2023. See Part II, Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” of our Annual Report on Form 10-K for the year ended December 31, ~~2021~~2022 for a detailed discussion of our market risks.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

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

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management, with the participation of our principal executive officer and principal financial officer, evaluated the effectiveness of our disclosure controls and procedures as of ~~September 30, 2022.~~March 31, 2023. Based on this evaluation, our principal executive officer and principal financial officer have concluded that our disclosure controls and procedures were not effective as of ~~September 30, 2022~~March 31, 2023 due to the material weakness described below. Notwithstanding such material weakness in internal control over financial reporting, our principal executive officer and principal financial officer have concluded that our unaudited condensed consolidated financial statements included in this Quarterly Report on Form 10-Q present fairly, in all material respects, our financial position, results of operations, and cash flows for the periods presented in conformity with GAAP.

Material Weakness in Internal Control over Financial Reporting

A material weakness is a deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable 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~~During the ~~preparation~~fourth quarter of ~~our financial statements for the quarter ended June 30, 2021,~~2022, 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~~we did not design orand maintain effective IT general controls ~~to identify commissions that should have been expensed as incurred rather than capitalized~~for financial IT applications used for revenue recognition by Wandera, which we acquired in ~~accordance with GAAP.~~July 2021. Specifically, we did not design and maintain access controls relating to maintaining appropriate segregation of duties and user access as well as controls relating to change management over IT program and data changes. We have concluded that process-level automated and manual controls ~~over (i)~~which were dependent upon IT general controls and data derived from impacted IT systems were ineffective because they could have been adversely impacted. Wandera accounts for less than 5% of our consolidated total revenue, and the 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~~did not result in ~~the revision of~~any misstatements to our ~~previously issued consolidated~~interim or annual 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.~~statements.

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~~Our management is committed~~We are working to ~~remediating~~remediate this material weakness ~~and has implemented several steps to enhance~~in our internal control over financial reporting. We are in the process of implementing and testing new controls ~~and commissions processes. Our steering committee, anchored~~over the financial IT applications used 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 implemented changes in our processes and internal controls in 2022Wandera with the ~~continued~~ intention of remediation inlater this year. These controls include authorization of changes to financial IT applications and enhanced user access controls to ensure appropriate segregation of duties, as well as process-level controls which are dependent upon data from the ~~fourth quarter.~~impacted IT systems. The material weakness will notnot 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, which is currently underway.~~ Until the material weakness is remediated, we are continuing to perform additional analyses and other procedures to ensure that our consolidated financial statements are prepared in accordance with GAAP.new controls.

Changes in Internal Control

Except for the remediation measures implemented in connection with the material weakness described above, there have been no changes in internal control over financial reporting during the quarter ended ~~September 30, 2022~~March 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations on Effectiveness of Controls

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

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

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

From time to time, we may be subject to legal proceedings and claims that arise in the ordinary course of business, including patent, commercial, product liability, employment, class action, whistleblower, and other litigation and claims, as well as governmental and other regulatory investigations and proceedings. In addition, third parties may from time to time assert claims against us in the form of letters and other communications. Although the results of these proceedings, claims, inquiries, and investigations cannot be predicted with certainty, we do not believe that the final outcome of these matters is reasonably likely to have a material adverse effect on our business, financial condition, or results of operations. Our evaluation of any current matters may change in the future as the legal proceedings and claims and events related thereto unfold. Future litigation may be necessary to defend ourselves, our partners, and our customers by determining the scope, enforceability, and validity of third-party proprietary rights, or to establish our proprietary rights. The results of any current or future litigation cannot be predicted with certainty, and regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.

Item 1A. Risk Factors

This quarterly report should be read in conjunction with the risk factors included in our Annual Report on Form 10-K for the year ended December 31, ~~2021.~~2022. 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 for the year ended December 31, ~~2021.~~2022.

Item 3. Defaults Upon Senior Securities

None.

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

~~None.~~As previously reported, of the 711,111 aggregate shares of the Company’s common stock issued on November 16, 2022 as partial consideration for its purchase of ZecOps, 420 shares were issued in a reserve account, subject to the completion of customary shareholder certifications. The reserved shares were subsequently released in January 2023. The offer, sale, and issuance of these shares was deemed to be exempt from registration under the Securities Act in reliance on Rule 506 of Regulation D. The recipient of the reserved shares acquired them for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to these shares. The recipient of the reserved shares was an accredited investor within the meaning of Rule 501 of Regulation D under the Securities Act and had adequate access to information about us. No underwriters or placement agents were involved in this transaction.

~~Item 3. Defaults Upon Senior Securities~~

~~None.~~

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

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


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

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

10.1						~~Letter Agreement~~Amendment No. 2, dated ~~August 8, 2022~~March 30, 2023, by and among JAMF Holdings, Inc., as borrower, Juno Intermediate, Inc., as a guarantor, Juno Parent, LLC, as a guarantor, the other loan parties thereto, the lenders party thereto, and JPMorgan Chase Bank, N.A., as administrative agent (incorporated by reference to Exhibit 10.1 to the Company’s ~~Current Report on~~ Form 8-K filed with the ~~Commission~~SEC on ~~August 12, 2022)~~April 11, 2023).

31.1						Certification of the Chief Executive Officer pursuant to Exchange Act Rules 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 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, furnished herewith.

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

101.INS						Inline XBRL Instance Document

101.SCH						Inline XBRL Taxonomy Extension Schema Document

101.CAL						Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF						Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB						Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE						Inline XBRL Taxonomy Extension Presentation Linkbase Document

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

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

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SIGNATURES

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


	JAMF HOLDING CORP. (Registrant)

Date: ~~November 9, 2022~~May 4, 2023	By:	/s/ Ian Goodkind
		Ian Goodkind
		Chief Financial Officer (Principal Financial and Accounting Officer)

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	Three Months Ended September 30, 2021		Nine Months Ended September 30, 2021
	(in thousands)
Cost of revenue:
Subscription	$	17	$	17
Sales and marketing	34		34
Research and development	549		590
General and administrative	1,859		4,007
	$	2,459	$	4,648