Summary
Jamf's fiscal 2023 third quarter produced revenue of $142.6 million, up 14.5% from the prior-year quarter. Gross profit rose 18.2% to $110.4 million, and gross margin reached 77.4%, up 2.4 percentage points. Costs below the gross line still outrun the top line. GAAP operating loss widened to $31.9 million from $28.6 million a year earlier, and the net loss widened to $32.3 million from $31.3 million. Diluted loss per share was $0.26, flat against the prior-year quarter. Operating margin of negative 22.3% was up 0.6 percentage points, so the loss grew in dollars even as it shrank as a share of revenue.
Across nine months, revenue was $409.9 million, up 17.6%, and gross profit of $317.1 million was up 22.1%. The year-to-date operating loss narrowed to $95.0 million from $114.2 million, and the year-to-date net loss narrowed to $92.7 million from $120.1 million. Diluted loss per share for the nine months narrowed to $0.74.
Cash generation was the weak spot. Operating cash flow was $33.3 million in the quarter, down 28.4% from the prior-year quarter, and it fell 68.1% to $20.0 million year to date. Capital expenditures dropped 73.4% in the quarter to $0.7 million and 55.3% to $2.5 million year to date. Unlevered free cash flow, a non-GAAP measure, was $60.6 million for the trailing twelve months ended September 30, 2023, compared with $64.0 million for the trailing twelve months ended September 30, 2022.
The recurring base kept building. ARR was $566.3 million as of September 30, 2023, up 15% year over year. Security ARR grew 31% to $119.9 million and accounts for 21% of total ARR. Jamf finished the quarter with more than 74,400 customers and 31.8 million devices on its platform, up 9% year over year. Deferred revenue of $369.8 million rose 8.4%, and remaining performance obligations of $477.4 million rose 17.2%. Dollar-based net retention was 108%, compared with 115% a year earlier, a sign that expansion within existing accounts is cooling even as the customer count grows.
Product activity stayed busy. Jamf released Jamf Pro 11, added support for Apple's Platform Single Sign-In with Okta, achieved StateRAMP Ready status for Jamf Pro and Jamf School, introduced AI-powered functionality for Jamf Protect, and delivered same-day support for macOS Sonoma, iOS 17, iPadOS 17 and tvOS 17. The company closed the dataJAR acquisition on July 13, 2023, for total consideration of 19.3 million pounds, or roughly $25.1 million.
Non-GAAP results look far healthier than the GAAP numbers. Non-GAAP operating income was $12.4 million, or 9% of revenue, compared with $6.9 million a year earlier. Non-GAAP gross profit was $117.0 million, or 82% of revenue. Non-GAAP net income was $11.2 million and non-GAAP diluted earnings per share were $0.08, compared with $5.8 million and $0.04. The gap between the two views comes from stock-based compensation, amortization of acquired intangibles, acquisition costs, system transformation costs and related payroll taxes. Sales and marketing, research and development, and general and administrative spending all grew year over year, driven by headcount, marketing, stock-based compensation and system transformation work.
Guidance points to continued growth. For the fourth quarter of 2023, management expects non-GAAP operating income of $19.5 million to $20.5 million. For the full year 2023, the outlook is non-GAAP operating income of $43.8 million to $44.8 million. Amortization is expected to be about $10.9 million in the fourth quarter and about $42.9 million for the full year, while stock-based compensation and related payroll taxes are expected to be roughly $25.2 million and $104.9 million. Jamf does not reconcile forward-looking non-GAAP operating income to GAAP operating income, citing items it cannot reasonably predict.
The macro backdrop carries the main risks. Management cites record inflation, elevated interest rates, supply chain challenges, financial instability and recession uncertainty, and notes that some customers have taken a more moderate view of hiring and device growth for the rest of 2023. Professional services revenue declined on softer customer demand tied to budget constraints, and perpetual license revenue continued to shrink as buyers move to subscriptions. Jamf also points to a competitive and rapidly changing market and to the risk factors in its annual report for the year ended December 31, 2022. The convertible senior notes due 2026 carry a 0.125% coupon, and the company expects its cash, its revolving credit facility and cash from sales to cover working capital, capital expenditures and debt service for at least the next 12 months.
Forecast
Reported figures
GAAP, from SEC filings| Metric | Q3 FY2023 | Q2 FY2023 | QoQ | Q3 FY2022 | YoY |
|---|---|---|---|---|---|
| Revenue | $142.6M | $135.1M | +5.6% | $124.6M | +14.5% |
| Gross profit | $110.4M | $104.2M | +5.9% | $93.4M | +18.2% |
| Gross margin | 77.4% | 77.1% | +0.3 pp | 75.0% | +2.4 pp |
| Research & development | $34.7M | $34.7M | -0.1% | $30.8M | +12.7% |
| Sales & marketing | $64.2M | $63.9M | +0.5% | $54.1M | +18.8% |
| General & administrative | $35.9M | $36.0M | -0.2% | $30.1M | +19.4% |
| Total operating expenses | $142.3M | $141.8M | +0.3% | $122.0M | +16.6% |
| Operating income (loss) | -$31.9M | -$37.6M | +15.3% | -$28.6M | -11.3% |
| Operating margin | -22.4% | -27.9% | +5.5 pp | -23.0% | +0.6 pp |
| Net income (loss) | -$32.3M | -$36.2M | +10.8% | -$31.3M | -3.1% |
| Net margin | -22.6% | -26.8% | +4.2 pp | -25.1% | +2.5 pp |
| Diluted EPS | -$0.26 | -$0.29 | +$0.03 | -$0.26 | ±$0.00 |
| Net retention rate | 108.0% | 109.0% | -1.0 pp | 115.0% | -7.0 pp |
Risks
MD&A states the U.S. and other key international economies are impacted by record inflation, elevated interest rates, supply chain challenges, financial instability and banking liquidity concerns, and possible recession, which could reduce IT spending or prompt contract renegotiation, payment defaults, or non-renewals. Management notes some customers have taken a more moderate outlook on future hiring and device growth needs and expects these conditions to continue throughout 2023.
Dollar-based net retention rate declined to 108% for the trailing twelve months ended September 30, 2023 from 115% for the trailing twelve months ended September 30, 2022, which the company attributes to expansion of devices and cross-selling. A lower retention rate directly pressures the land and expand model that drives ARR growth.
The business is built around being the leading management and security solution for Apple in the enterprise, and MD&A states international growth depends on the rate of market adoption of Apple products in international markets. The company also sells indirectly through channel partners, including Apple, making its growth trajectory dependent on a small set of partner relationships.
Non-subscription revenue declined 32% in the quarter and 26% year to date, with perpetual license revenue down 82% in the quarter and 76% year to date as customers shift to subscriptions, and professional services revenue down 24% in the quarter and 11% year to date on lower demand given customer budget constraints. The company expects license and services revenue to continue decreasing.
Operating cash flow fell 68.1% year to date to $20.0 million from $62.8 million in the prior-year period, driven by a $28.8 million increase in deferred contract costs and a $6.5 million increase in trade accounts receivable, while the nine-month net loss was $92.7 million. Weaker cash generation could constrain the growth investments management plans.
MD&A discloses $10.0 million of incremental stock-based compensation recognized during the nine months ended September 30, 2023 in connection with the former CEO's retirement, and total stock-based compensation rose to $28.3 million in the quarter from $20.5 million a year earlier. The company also cites its ability to maintain corporate culture as headcount expands as a factor affecting performance.
MD&A states international growth requires considerable management attention and is subject to multiple languages, cultures, customs, legal and regulatory systems including data transfer and privacy, alternative dispute systems, and geopolitical challenges. Foreign currency transaction loss was $2.6 million in the quarter, roughly flat versus the prior-year quarter.
SaaS KPIs
All quarters →ARR
Non-GAAP Gross Profit Margin
Non-GAAP Operating Income
Non-GAAP Operating Income Margin
Customers
Devices
Security ARR
ARR from commercial customers as a percent of total ARR
ARR from education customers as a percent of total ARR
ARR from management solutions as a percent of total ARR
ARR from security solutions as a percent of total ARR
Dollar-Based Net Retention Rate
Summary, forecast, risks and KPIs are extracted from Jamf Holding Corp.'s SEC filings for Q3 FY2023 (10-Q / 10-K and the 8-K earnings release); GAAP figures in the summary are checked against the reported XBRL data. They can contain errors; the filings are authoritative. Processed Oct 2, 2026.