Yahoo Finance Jamf Holding Corp (JAMF) Q1 2024 Earnings Call Transcript Highlights: Robust Growth and ...
Total ARR: Reached $602.4 million, up 14% year-over-year.
Q1 Revenue: Grew 15% year-over-year, exceeding outlook.
Non-GAAP Operating Income: $22.1 million, with a margin of 15%.
Customer Base: Ended Q1 with 75,900 customers.
Devices Managed: 32.8 million devices on platform.
Security ARR: Grew 31% year-over-year to $138 million, representing 23% of total ARR.
Non-GAAP Gross Profit Margin: Reported at 81% for Q1.
Unlevered Free Cash Flow Margin: Trailing 12 months at 13%.
Effective Tax Rate: Negative 5.4% for Q1.
Net Retention Rate: Decreased slightly to 107% in Q1 from Q4 2023.
Release Date: May 08, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
Jamf Holding Corp (NASDAQ:JAMF) achieved a total ARR of $602.4 million in Q1, marking a 14% year-over-year growth.
Q1 revenue and non-GAAP operating income both exceeded the high end of Jamf's outlook, with revenue growing 15% year-over-year.
Non-GAAP operating income for Q1 was $22.1 million, with a non-GAAP operating margin of 15%, showing a 1000 basis point improvement from Q1 2023.
Security ARR grew 31% year-over-year to $138 million, representing 23% of total ARR, indicating strong growth in security solutions.
International expansion is showing positive results, with significant wins in the Middle East and India, particularly with government agencies.
Negative Points
The largest industries for Jamf, Tech & K through 12, showed muted device expansion, indicating a slowdown in these sectors.
Despite overall growth, the net retention rate decreased slightly to 107% in Q1 from Q4 2023, reflecting some challenges in customer retention.
The effective tax rate for Q1 was negative 5.4%, which could indicate potential volatility in future tax obligations.
Challenges in the SMB segment due to higher for longer interest rates, impacting customer purchasing decisions.
While PC shipments are showing signs of recovery, the outlook for 2024 does not rely on a significant uplift in device expansion, suggesting cautious optimism.
Q & A Highlights
Q: Can you provide insights into the factors contributing to the ARR growth in Q1, particularly regarding pricing and macroeconomic changes? A: Ian Goodkind, CFO, explained that the ARR growth aligned with expectations set during the Investor Day, despite a strong Q4 pulling forward some deals from Q1. He noted that while there was a bit more churn in January, it normalized in the following months. The company sees potential bright spots in professional services, financial services, and retail, which are leaning more into IT investments. Additionally, adjustments in incentive plans are showing positive results in the security pipeline.
Q: How is the SMB segment performing given the current economic climate with higher interest rates? A: John Strosahl, CEO, acknowledged that higher interest rates have impacted SMBs, which typically act as a precursor to broader market trends. While there has been consistent new logo growth, some smaller companies have dropped off due to financial pressures. However, bundled sales, which are significant to the SMB market, have grown over 60% year-over-year.
Q: What are your expectations for the three-year revenue and ARR growth model presented at the Investor Day? A: Ian Goodkind reaffirmed the company's commitment to the three-year growth targets, citing overachievement in the current year's growth rate and ongoing strategic initiatives. He highlighted the focus on security pipeline growth and cross-selling, which are expected to contribute to achieving these targets.
Q: Can you discuss the dynamics of the RPO in Q1 and its implications? A: Ian Goodkind explained that the slight sequential decline in RPO is typical for Q1, reflecting seasonal patterns. He emphasized that Q1 is historically the slowest quarter, with Q2 and Q3 boosted by the education sector and Q3 and Q4 by heavier commercial business.
Q: How did security ARR perform this quarter, and what are the expectations moving forward? A: Ian Goodkind noted a 31% growth in security ARR, exceeding the 25% target. The focus on cross-selling security solutions across commercial and education sectors is strong, with significant interest from customers in consolidating management and security on a single platform.
Q: Are there any updates on the impact of the Workspace ONE acquisition and divestiture on customer opportunities? A: John Strosahl mentioned that the acquisition has created opportunities, particularly as customers approach their renewal cycles. Jamf's focus on innovating at the pace of Apple gives it a competitive edge, especially as the previous owner's innovation pace may not meet customer expectations.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
