Jamf Holding Corp. (JAMF) Bundle
Understanding Jamf Holding Corp. (JAMF) Revenue Streams
Understanding Jamf Holding Corp.’s Revenue Streams
Primary Revenue Sources:
- Subscription Revenue: $156,070,000 for Q3 2024, up from $138,521,000 in Q3 2023.
- Services Revenue: $3,192,000 for Q3 2024, down from $3,956,000 in Q3 2023.
- License Revenue: $24,000 for Q3 2024, down from $148,000 in Q3 2023.
Total Revenue: $159,286,000 for Q3 2024, compared to $142,625,000 in Q3 2023, indicating a year-over-year increase of 11.6%.
Year-over-Year Revenue Growth Rate
The year-over-year revenue growth rate for the nine months ended September 30, 2024, was 13.2%, increasing from $409,926,000 in 2023 to $464,425,000 in 2024.
Contribution of Different Business Segments to Overall Revenue
| Segment | Q3 2024 Revenue (in thousands) | Q3 2023 Revenue (in thousands) | Year-over-Year Change |
|---|---|---|---|
| Subscription | $156,070 | $138,521 | +12.7% |
| Services | $3,192 | $3,956 | -19.4% |
| License | $24 | $148 | -83.8% |
| Total Revenue | $159,286 | $142,625 | +11.6% |
Analysis of Significant Changes in Revenue Streams
Subscription revenue has shown a significant increase, primarily driven by new customer additions and cross-selling strategies. The services revenue has declined, reflecting a shift in focus towards subscription-based models. License revenue has decreased sharply, indicating a transition away from traditional licensing towards subscription services.
Annual Recurring Revenue (ARR)
The ARR was reported at $635.0 million as of September 30, 2024, compared to $566.3 million in 2023, marking a 12% increase year-over-year.
Dollar-Based Net Retention Rate: The dollar-based net retention rate was 106% for the trailing twelve months ended September 30, 2024, down from 108% in 2023.
Revenue by Geographic Region
| Region | Q3 2024 Revenue (in thousands) | Q3 2023 Revenue (in thousands) |
|---|---|---|
| The Americas | $104,750 | $95,469 |
| Europe, the Middle East, India, and Africa | $41,399 | $36,639 |
| Asia Pacific | $13,137 | $10,517 |
Total revenue by region for Q3 2024 was $159,286,000, compared to $142,625,000 in Q3 2023, indicating growth across all regions.
A Deep Dive into Jamf Holding Corp. (JAMF) Profitability
Profitability Metrics
Gross Profit, Operating Profit, and Net Profit Margins
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Total Revenue | $159,286 | $142,625 | $464,425 | $409,926 |
| Cost of Revenue | $36,028 | $32,239 | $106,124 | $92,869 |
| Gross Profit | $123,258 | $110,386 | $358,301 | $317,057 |
| Operating Loss | ($15,859) | ($31,873) | ($56,936) | ($94,987) |
| Net Loss | ($12,241) | ($32,277) | ($52,027) | ($92,676) |
| Net Profit Margin | (7.69%) | (22.65%) | (11.22%) | (22.61%) |
Trends in Profitability Over Time
- Q3 2024 gross profit increased by 11.6% year-over-year.
- Operating loss improved by 50.3% in Q3 2024 compared to Q3 2023.
- Net loss decreased by 62% in Q3 2024 compared to Q3 2023.
Comparison of Profitability Ratios with Industry Averages
| Metric | JAMF (Q3 2024) | Industry Average |
|---|---|---|
| Gross Margin | 77.4% | 70% - 75% |
| Operating Margin | (9.95%) | 5% - 10% |
| Net Margin | (7.69%) | 10% - 15% |
Analysis of Operational Efficiency
- Cost of subscription revenue increased by 16.6% in Q3 2024 compared to Q3 2023, reflecting growth in operational costs.
- Research and development expenses rose to $35,977 for Q3 2024, up from $34,704 in Q3 2023.
- Sales and marketing expenses decreased to $60,056 in Q3 2024, compared to $64,239 in Q3 2023, indicating improved cost management.
Key Profitability Metrics Summary
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Gross Profit Margin | 77.4% | 77.3% | 77.1% | 77.4% |
| Operating Profit Margin | (9.95%) | (22.34%) | (12.27%) | (23.14%) |
| Net Profit Margin | (7.69%) | (22.65%) | (11.22%) | (22.61%) |
Debt vs. Equity: How Jamf Holding Corp. (JAMF) Finances Its Growth
Debt vs. Equity: How Jamf Holding Corp. Finances Its Growth
Debt Levels:
As of September 30, 2024, the company reported total liabilities of $863.7 million, which includes:
- Convertible senior notes, net: $368.9 million
- Other liabilities: $18.3 million
- Accounts payable: $22.0 million
- Accrued liabilities: $69.5 million
- Deferred revenue: $378.2 million
Debt-to-Equity Ratio:
The debt-to-equity ratio is calculated as total debt divided by total equity. With total liabilities at $863.7 million and total stockholders' equity at $720.5 million, the debt-to-equity ratio is:
Debt-to-Equity Ratio = Total Debt / Total Equity = $863.7 million / $720.5 million = 1.20
This ratio indicates that the company has 1.20 in debt for every dollar of equity, which is above the industry average of approximately 0.80 for tech companies in the SaaS sector.
Recent Debt Issuances and Credit Ratings:
On September 17, 2021, the company issued $373.8 million in aggregate principal amount of 0.125% convertible senior notes due in 2026. As of September 30, 2024, these notes have a net carrying value of $368.9 million and an estimated fair value of $336.7 million.
The company maintains a credit rating of B2 from Moody's, reflecting a stable outlook.
Refinancing Activity:
On May 3, 2024, the company entered into a new credit agreement to refinance its previous revolving credit facility, establishing a $175 million revolving credit facility with a 1.50% interest rate.
Balancing Debt Financing and Equity Funding:
The company uses a mix of debt and equity to finance its growth initiatives. As of September 30, 2024, the total stockholders' equity is $720.5 million. The company has consistently issued equity through stock options and employee stock purchase plans, raising $2.7 million from the issuance of common stock during the nine months ended September 30, 2024.
| Debt Instrument | Amount (in millions) | Interest Rate | Maturity Date |
|---|---|---|---|
| Convertible Senior Notes | $368.9 | 0.125% | Sept 1, 2026 |
| Revolving Credit Facility | $175.0 | 1.50% | May 3, 2029 |
Assessing Jamf Holding Corp. (JAMF) Liquidity
Assessing Liquidity and Solvency
As of September 30, 2024, the liquidity position of the company can be evaluated using key financial metrics, including the current and quick ratios.
Current and Quick Ratios
The current ratio is calculated as current assets divided by current liabilities. As of September 30, 2024:
- Current Assets: $398.7 million
- Current Liabilities: $419.0 million
- Current Ratio: 0.95
The quick ratio, which excludes inventories from current assets, is calculated as follows:
- Quick Assets: $398.7 million - Inventory (not specified)
- Quick Liabilities: $419.0 million
- Quick Ratio: Not calculable due to lack of inventory data
Analysis of Working Capital Trends
Working capital, defined as current assets minus current liabilities, provides insight into short-term financial health:
- Working Capital (September 30, 2024): $398.7 million - $419.0 million = $(20.3) million
- Working Capital (December 31, 2023): $402.6 million - $422.2 million = $(19.6) million
This indicates a slight deterioration in working capital position over the period.
Cash Flow Statements Overview
The following table summarizes cash flow activities from operating, investing, and financing activities for the nine months ended September 30, 2024, and 2023:
| Cash Flow Activity | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Net cash provided by operating activities | $21,516 | $20,045 |
| Net cash used in investing activities | $(9,477) | $(22,083) |
| Net cash (used in) provided by financing activities | $(40,863) | $5,157 |
| Net (decrease) increase in cash and cash equivalents | $(28,722) | $2,929 |
| Cash and cash equivalents at end of period | $222,087 | $234,850 |
Potential Liquidity Concerns or Strengths
As of September 30, 2024, the company had cash and cash equivalents totaling $218.4 million, with an additional $174.0 million available under the 2024 Revolving Credit Facility. The deferred revenue stood at $378.2 million, indicating strong future revenue recognition potential.
Despite the current ratio of 0.95 suggesting a liquidity challenge, the substantial cash reserves and credit availability provide a buffer against short-term obligations. Operating cash flows, which increased to $21.5 million for the nine months ended September 30, 2024, further support liquidity.
However, the significant cash used in financing activities, primarily for stock repurchases amounting to $35.4 million, could raise concerns about long-term liquidity if continued without sufficient cash inflows.
Overall, while the current liquidity ratios indicate challenges, the strong cash reserves and future revenue recognition from deferred revenues suggest a more favorable liquidity position than the ratios alone may indicate.
Is Jamf Holding Corp. (JAMF) Overvalued or Undervalued?
Valuation Analysis
The valuation analysis of the company focuses on key financial ratios that provide insights into whether the company is overvalued or undervalued. Below are the primary metrics used in this evaluation.
Price-to-Earnings (P/E) Ratio
The current P/E ratio is calculated based on a stock price of $11.09 and a net loss per share of $0.10 for the latest quarter. This results in a P/E ratio of - (not applicable due to negative earnings).
Price-to-Book (P/B) Ratio
The P/B ratio is calculated using the book value per share. The total stockholders' equity is $720.529 million and the number of shares outstanding is 128.272 million, leading to a book value per share of approximately $5.62. Thus, the P/B ratio is approximately 1.97 based on a current stock price of $11.09.
Enterprise Value-to-EBITDA (EV/EBITDA) Ratio
The enterprise value is calculated as market capitalization plus total debt minus cash. With a market cap of $1.423 billion, total debt of $368.883 million, and cash of $218.426 million, the enterprise value is $1.573 billion. The EBITDA for the trailing twelve months is $39.69 million, resulting in an EV/EBITDA ratio of approximately 39.6.
Stock Price Trends
Over the last 12 months, the stock price has fluctuated significantly. The stock opened at approximately $14.00 a year ago, reached a peak of $16.00, and has seen a low of $9.00. As of the latest data, the stock is trading at $11.09, reflecting a 20.7% decline over the past year.
Dividend Yield and Payout Ratios
The company does not currently pay a dividend, resulting in a dividend yield of 0%. The payout ratio is also not applicable as there are no dividends paid to shareholders.
Analyst Consensus on Stock Valuation
According to the latest analyst reports, the consensus rating for the stock is Hold, with a median price target of $12.00. This indicates a potential upside of approximately 8.2% from the current price of $11.09.
| Metric | Value |
|---|---|
| Current Stock Price | $11.09 |
| P/E Ratio | - |
| P/B Ratio | 1.97 |
| EV/EBITDA Ratio | 39.6 |
| 12-Month Stock Price Change | -20.7% |
| Dividend Yield | 0% |
| Analyst Consensus | Hold |
| Median Price Target | $12.00 |
Key Risks Facing Jamf Holding Corp. (JAMF)
Key Risks Facing Jamf Holding Corp.
Internal and External Risks: The company faces several internal and external risks that could impact its financial health. Key risks include intense competition in the software-as-a-service (SaaS) market, regulatory changes, and fluctuating market conditions. As of September 30, 2024, the company reported a net loss of $52.0 million, compared to a net loss of $92.7 million in the same period of the previous year.
Additionally, the overall demand for IT solutions continues to be influenced by macroeconomic factors, such as inflation and interest rates, which could lead to reduced IT spending by customers.
Operational Risks:
The company's operational risks include the reliance on a limited number of key customers, which constitutes a significant portion of its revenue. As of September 30, 2024, the annual recurring revenue (ARR) was $635.0 million, an increase of 12% year-over-year. However, a downturn in demand or loss of major customers could adversely affect revenue stability.
Financial Risks:
Financial risks are highlighted in the company's earnings reports. As of September 30, 2024, total liabilities stood at $863.7 million, with an accumulated deficit of $506.2 million. The company's debt structure includes convertible senior notes totaling $368.9 million. This level of indebtedness poses a risk, particularly if cash flows do not improve sufficiently to cover interest obligations.
Strategic Risks:
The company has also undertaken a workforce reduction plan impacting approximately 6% of its full-time employees in response to macroeconomic conditions. Such strategic decisions, while aimed at improving operational efficiency, could lead to disruptions in service delivery or loss of talent, affecting customer satisfaction and retention.
Mitigation Strategies:
To address these risks, the company has implemented various mitigation strategies. This includes diversifying its customer base to reduce dependency on key accounts and investing in new product development to stay competitive. The dollar-based net retention rate was reported at 106% for the trailing twelve months, indicating a stable revenue growth from existing customers.
| Risk Category | Description | Current Financial Impact |
|---|---|---|
| Internal Risks | Intense competition and market demand fluctuations | Net loss of $52.0 million |
| Operational Risks | Reliance on key customers | ARR of $635.0 million |
| Financial Risks | High levels of debt | Total liabilities of $863.7 million |
| Strategic Risks | Workforce reduction and operational efficiency | Reduction of 6% of workforce |
| Mitigation Strategies | Diversification and product development | Dollar-based net retention rate of 106% |
Future Growth Prospects for Jamf Holding Corp. (JAMF)
Future Growth Prospects for Jamf Holding Corp.
Analysis of Key Growth Drivers
Several key growth drivers can be identified for the company:
- Product Innovations: The company has focused on expanding its product offerings, particularly in the realm of managing Apple devices in enterprise and educational environments.
- Market Expansions: The company has been actively targeting new geographical markets, particularly in regions like Asia Pacific, where revenue increased to $36.7 million for the nine months ended September 30, 2024, up from $30.8 million in the prior year.
- Acquisitions: The acquisition of dataJAR for approximately $25.1 million in July 2023 has enhanced the company's service capabilities and customer reach.
Future Revenue Growth Projections and Earnings Estimates
The company's annual recurring revenue (ARR) reached $635.0 million as of September 30, 2024, marking a 12% increase year-over-year from $566.3 million in 2023. Revenue for the nine months ended September 30, 2024, totaled $464.4 million, compared to $409.9 million in the same period of 2023.
Strategic Initiatives or Partnerships
The company has fostered strategic partnerships to enhance its service offerings and customer acquisition. Notably, its collaboration with various managed service providers (MSPs) has been pivotal in driving new customer engagement and expanding its market footprint.
Competitive Advantages
The company holds several competitive advantages that position it favorably for future growth:
- High Dollar-Based Net Retention Rate: The company reported a dollar-based net retention rate of 106% for the trailing twelve months ended September 30, 2024, showcasing strong customer loyalty and upsell opportunities.
- Device Growth: The number of devices managed on its platform increased to 33.9 million as of September 30, 2024, up from 31.8 million in 2023, reflecting a 7% year-over-year growth rate.
Financial Overview Table
| Metric | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Annual Recurring Revenue (ARR) | $635.0 million | $566.3 million | +12% |
| Total Revenue | $464.4 million | $409.9 million | +13% |
| Number of Devices | 33.9 million | 31.8 million | +7% |
| Dollar-Based Net Retention Rate | 106% | 108% | -2% |
| Geographical Revenue (Asia Pacific) | $36.7 million | $30.8 million | +19% |
These growth opportunities, combined with the company's strategic initiatives and competitive advantages, position it well for continued expansion in the coming years.
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Resources:
- Jamf Holding Corp. (JAMF) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Jamf Holding Corp. (JAMF)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Jamf Holding Corp. (JAMF)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.