Basis of presentation and description of business

9 Months Ended

Sep. 30, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of presentation and description of business

Basis of presentation and description of business

Description of business

Jamf Holding Corp. and its wholly owned subsidiaries, collectively, are referred to as the “Company,” “we,” “us” or “our.” We are the standard in Apple Enterprise Management, and our cloud software platform is the only vertically-focused Apple infrastructure and security platform of scale in the world. We help organizations connect, manage and protect Apple products, apps and corporate resources in the cloud without ever having to touch the devices. With our products, Apple devices can be deployed to employees brand new in the shrink-wrapped box, automatically set up and personalized at first power-on and continuously administered throughout the life of the device. Our customers are located throughout the world.

Initial public offering

On July 24, 2020, the Company closed its initial public offering (“IPO”) through which it issued and sold 13,500,000 shares of common stock at the IPO price of $26.00 per share. In connection with the IPO, the Company raised approximately $319.0 million after deducting the underwriting discount and commissions of $24.7 million and offering expenses of $7.3 million. Upon completion of the IPO, authorized capital stock consisted of 500,000,000 shares of common stock, par value $0.001 per share, and 50,000,000 shares of undesignated preferred stock, par value $0.001 per share.

Concurrently with the Company’s IPO, the Company issued and sold 85,880 shares of its common stock in a private placement to certain of its named executive officers, certain of its other employees and its independent directors at the IPO Price for aggregate consideration of approximately $2.2 million.

Upon closing of the IPO, the Company repaid $205.0 million of the principal amount of its then existing Term Loan Facility (the “Prior Term Loan Facility”) and paid $3.4 million of accrued interest and $2.0 million of prepayment penalty. The Company also wrote off $3.2 million of remaining debt issuance costs upon repayment of the debt. The Company recorded a loss on debt extinguishment of $5.2 million for the prepayment penalty and write off of debt issuance costs in the third quarter of 2020.

Emerging growth company status

We are currently an emerging growth company as defined in the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies.

We have elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it is (i) no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates.

On June 30, 2021, the last day of our second fiscal quarter in 2021, the market value of our common stock held by non-affiliates exceeded $700.0 million. Accordingly, we will be deemed a large accelerated filer as of December 31, 2021 and will no longer qualify as an emerging growth company or be able to take advantage of the extended timeline to comply with new or revised accounting standards applicable to public companies beginning with our Annual Report on Form 10-K for the year ending December 31, 2021.

Unaudited interim consolidated financial information

The accompanying interim consolidated balance sheet as of September 30, 2021, the consolidated statements of operations and of stockholders’ equity for the three and nine months ended September 30, 2021 and 2020 and the consolidated statements of cash flows for the nine months ended September 30, 2021 and 2020 and the related footnote disclosures are unaudited. These unaudited interim 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. Except for the revision discussed below, all adjustments made were of a normal recurring nature. The results for the three and nine months ended September 30, 2021 are not necessarily indicative of the results to be expected for the year ending December 31, 2021 or for any future period.

Basis of presentation

The accompanying consolidated financial statements have been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). Certain reclassifications of prior period amounts have been made to conform to the current presentation. In the fourth quarter of 2020, the Company reclassified on-premise subscription revenue from license revenue to subscription revenue in the consolidated statements of operations on a retroactive basis. The amount reclassified for the three and nine months ended September 30, 2020 was $7.8 million and $18.2 million, respectively. The revised presentation is consistent with our disaggregated revenue disclosure and is more consistent with how investors and other users of the financial statements evaluate overall subscription revenue. The reclassification had no impact on total revenue.

Revision of previously issued consolidated financial statements

In connection with the preparation of its financial statements for the quarter ended June 30, 2021, the Company identified immaterial errors related to certain commissions that were incorrectly capitalized in prior periods. The commissions, as well as the associated payroll taxes and retirement plan contributions, were not incremental to the acquisition of customer contracts and should have been expensed as incurred in accordance with GAAP, rather than capitalized. As a result, sales and marketing expenses were understated and deferred contract costs were overstated by $2.5 million, $2.0 million, $1.8 million and $0.8 million for the years ended December 31, 2020, 2019 and 2018 and the three months ended March 31, 2021, respectively.

In accordance with Staff Accounting Bulletin (“SAB”) No. 99, Materiality and SAB No. 108, Considering the Effects of Prior Year Misstatements When Quantifying Misstatements in Current Year Financial Statements, the Company evaluated the materiality of this error both quantitatively and qualitatively and determined that it was not material to our previously issued consolidated financial statements. However, adjusting for the cumulative effect of this error in the consolidated statement of operations for 2021 would be material to the Company’s results for this period as the cumulative amount of the error increased over time. As such, the Company has revised its previously issued consolidated financial statements as of and for the years ended December 31, 2020, 2019 and 2018 and its unaudited consolidated financial statements as of and for the quarter ended March 31, 2021 and quarters and year-to-date periods ended June 30, 2020 and September 30, 2020 to correct the error.

The revisions also include the corrections of other immaterial errors that the Company had previously recorded as out-of-period adjustments in the period of identification, as well as other previously identified immaterial errors. The previously recorded out-of-period adjustments included the establishment of state valuation allowances, as well as other immaterial errors. The Company had previously determined that these errors did not, both individually and in the aggregate, result in a material misstatement of our previously issued consolidated financial statements and reached the same conclusion when aggregating these immaterial errors with the commissions error described above.

The accompanying financial statements and relevant footnotes to the consolidated financial statements in this Quarterly Report on Form 10-Q have been revised to correct for the immaterial errors discussed above. The tables below provide reconciliations of our previously reported amounts to revised amounts to correct for these immaterial errors in our consolidated financial statements as of December 31, 2020 and for the quarter and year-to-date periods ended September 30, 2020.

	December 31, 2020
	As Previously Reported		Adjustments				As Revised
			Commissions		Other
	(in thousands)
Assets
Current assets:
Cash and cash equivalents	$	194,868	$	—	$	—	$	194,868
Trade accounts receivable, net of allowances	69,056		—		—		69,056
Income taxes receivable	632		—		—		632
Deferred contract costs	9,959		(1,675)		—		8,284
Prepaid expenses	13,283		—		—		13,283
Other current assets	1,113		—		—		1,113
Total current assets	288,911		(1,675)		—		287,236
Equipment and leasehold improvements, net	12,755		—		2,375		15,130
Goodwill	541,480		—		—		541,480
Other intangible assets, net	202,878		—		—		202,878
Deferred contract costs, non-current	26,770		(4,568)		—		22,202
Other assets	5,359		—		—		5,359
Total assets	$	1,078,153	$	(6,243)	$	2,375	$	1,074,285
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	6,967	$	—	$	—	$	6,967
Accrued liabilities	31,574		—		342		31,916
Income taxes payable	713		—		—		713
Deferred revenues	160,443		—		(441)		160,002
Total current liabilities	199,697		—		(99)		199,598
Deferred revenues, non-current	45,507		—		—		45,507
Deferred tax liability, net	6,422		(1,535)		200		5,087
Other liabilities	11,046		—		2,033		13,079
Total liabilities	262,672		(1,535)		2,134		263,271
Commitments and contingencies
Stockholders’ equity:
Preferred stock	—		—		—		—
Common stock	117		—		—		117
Additional paid‑in capital	903,116		—		—		903,116
Accumulated deficit	(87,752)		(4,708)		241		(92,219)
Total stockholders’ equity	815,481		(4,708)		241		811,014
Total liabilities and stockholders’ equity	$	1,078,153	$	(6,243)	$	2,375	$	1,074,285

	Three Months Ended September 30, 2020
	As Previously Reported (1)		Adjustments				As Revised
			Commissions		Other
	(in thousands, except share and per share amounts)
Revenue:
Subscription	$	65,782	$	—	$	(148)	$	65,634
Services	3,605		—		292		3,897
License	1,017		—		—		1,017
Total revenue	70,404		—		144		70,548
Cost of revenue:
Cost of subscription (exclusive of amortization expense shown below)	10,117		—		(85)		10,032
Cost of services (exclusive of amortization expense shown below)	2,443		—		4		2,447
Amortization expense	2,679		—		—		2,679
Total cost of revenue	15,239		—		(81)		15,158
Gross profit	55,165		—		225		55,390
Operating expenses:
Sales and marketing	23,251		488		34		23,773
Research and development	12,736		—		21		12,757
General and administrative	13,921		—		(76)		13,845
Amortization expense	5,633		—		—		5,633
Total operating expenses	55,541		488		(21)		56,008
Loss from operations	(376)		(488)		246		(618)
Interest expense, net	(1,207)		—		—		(1,207)
Loss on extinguishment of debt	(5,213)		—		—		(5,213)
Foreign currency transaction loss	(154)		—		—		(154)
Loss before income tax benefit	(6,950)		(488)		246		(7,192)
Income tax benefit	1,857		119		(172)		1,804
Net loss	$	(5,093)	$	(369)	$	74	$	(5,388)
Net loss per share, basic and diluted	$	(0.04)					$	(0.05)
Weighted-average shares used to compute net loss per share, basic and diluted	113,203,074						113,203,074

(1) Previously reported amounts reflect the reclassification of on-premise subscription revenue from license revenue to subscription revenue, which we applied on a retrospective basis in the fourth quarter of 2020. See further information in Basis of Presentation above.

	Nine Months Ended September 30, 2020
	As Previously Reported (1)		Adjustments				As Revised
			Commissions		Other
	(in thousands, except share and per share amounts)
Revenue:
Subscription	$	179,148	$	—	$	(710)	$	178,438
Services	10,066		—		550		10,616
License	3,811		—		—		3,811
Total revenue	193,025		—		(160)		192,865
Cost of revenue:
Cost of subscription (exclusive of amortization expense shown below)	28,127		—		(107)		28,020
Cost of services (exclusive of amortization expense shown below)	7,736		—		11		7,747
Amortization expense	8,034		—		—		8,034
Total cost of revenue	43,897		—		(96)		43,801
Gross profit	149,128		—		(64)		149,064
Operating expenses:
Sales and marketing	65,735		1,722		101		67,558
Research and development	37,282		—		62		37,344
General and administrative	31,813		—		(225)		31,588
Amortization expense	16,941		—		—		16,941
Total operating expenses	151,771		1,722		(62)		153,431
Loss from operations	(2,643)		(1,722)		(2)		(4,367)
Interest expense, net	(10,675)		—		—		(10,675)
Loss on extinguishment of debt	(5,213)		—		—		(5,213)
Foreign currency transaction loss	(471)		—		—		(471)
Other income, net	91		—		—		91
Loss before income tax provision	(18,911)		(1,722)		(2)		(20,635)
Income tax provision	5,105		430		(618)		4,917
Net loss	$	(13,806)	$	(1,292)	$	(620)	$	(15,718)
Net loss per share, basic and diluted	$	(0.13)					$	(0.15)
Weighted-average shares used to compute net loss per share, basic and diluted	106,333,836						106,333,836

(1) Previously reported amounts reflect the reclassification of on-premise subscription revenue from license revenue to subscription revenue, which we applied on a retrospective basis in the fourth quarter of 2020. See further information in Basis of Presentation above.

	Stock Class			Additional Paid‑In Capital		Accumulated Deficit		Stockholders’ Equity
	Common
	Shares	Amount
	(in thousands, except share amounts)
As Previously Reported
Balance, June 30, 2020	102,862,404	$	103	$	570,434	$	(73,694)	$	496,843
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions and offering costs	13,500,000	14		318,979		—		318,993
Private placement	85,880	—		2,233		—		2,233
Exercise of stock options	15,000	—		82		—		82
Share‑based compensation	—	—		2,328		—		2,328
Net loss	—	—		—		(5,093)		(5,093)
Balance, September 30, 2020	116,463,284	$	117	$	894,056	$	(78,787)	$	815,386
Commissions Adjustment
Balance, June 30, 2020	—	$	—	$	—	$	(3,753)	$	(3,753)
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions and offering costs	—	—		—		—		—
Private placement	—	—		—		—		—
Exercise of stock options	—	—		—		—		—
Share‑based compensation	—	—		—		—		—
Net loss	—	—		—		(369)		(369)
Balance, September 30, 2020	—	$	—	$	—	$	(4,122)	$	(4,122)
Other Adjustments
Balance, June 30, 2020	—	$	—	$	—	$	(1,020)	$	(1,020)
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions and offering costs	—	—		—		—		—
Private placement	—	—		—		—		—
Exercise of stock options	—	—		—		—		—
Share‑based compensation	—	—		—		—		—
Net loss	—	—		—		74		74
Balance, September 30, 2020	—	$	—	$	—	$	(946)	$	(946)
As Revised
Balance, June 30, 2020	102,862,404	$	103	$	570,434	$	(78,467)	$	492,070
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions and offering costs	13,500,000	14		318,979		—		318,993
Private placement	85,880	—		2,233		—		2,233
Exercise of stock options	15,000	—		82		—		82
Share‑based compensation	—	—		2,328		—		2,328
Net loss	—	—		—		(5,388)		(5,388)
Balance, September 30, 2020	116,463,284	$	117	$	894,056	$	(83,855)	$	810,318

	Stock Class				Additional Paid‑In Capital		Accumulated Deficit		Stockholders’ Equity
	Common
	Shares		Amount
	(in thousands, except share amounts)
As Previously Reported
Balance, December 31, 2019	102,843,612		$	103	$	568,756	$	(64,981)	$	503,878
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions and offering costs	13,500,000		14		318,979		—		318,993
Private placement	85,880		—		2,233		—		2,233
Exercise of stock options	33,792		—		185		—		185
Share‑based compensation	—		—		3,903		—		3,903
Net loss	—		—		—		(13,806)		(13,806)
Balance, September 30, 2020	116,463,284		$	117	$	894,056	$	(78,787)	$	815,386
Commissions Adjustment
Balance, December 31, 2019	—		$	—	$	—	$	(2,830)	$	(2,830)
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions and offering costs	—	.	—		—		—		—
Private placement	—		—		—		—		—
Exercise of stock options	—		—		—		—		—
Share‑based compensation	—		—		—		—		—
Net loss	—		—		—		(1,292)		(1,292)
Balance, September 30, 2020	—		$	—	$	—	$	(4,122)	$	(4,122)
Other Adjustments
Balance, December 31, 2019	—		$	—	$	—	$	(326)	$	(326)
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions and offering costs	—		—		—		—		—
Private placement	—		—		—		—		—
Exercise of stock options	—		—		—		—		—
Share‑based compensation	—		—		—		—		—
Net loss	—		—		—		(620)		(620)
Balance, September 30, 2020	—		$	—	$	—	$	(946)	$	(946)
As Revised
Balance, December 31, 2019	102,843,612		$	103	$	568,756	$	(68,137)	$	500,722
Issuance of common stock upon initial public offering, net of underwriting discounts and commissions and offering costs	13,500,000		14		318,979		—		318,993
Private placement	85,880		—		2,233		—		2,233
Exercise of stock options	33,792		—		185		—		185
Share‑based compensation	—		—		3,903		—		3,903
Net loss	—		—		—		(15,718)		(15,718)
Balance, September 30, 2020	116,463,284		$	117	$	894,056	$	(83,855)	$	810,318

	Nine Months Ended September 30, 2020
	As Previously Reported		Adjustments				As Revised
			Commissions		Other
	(in thousands)
Cash flows from operating activities
Net loss	$	(13,806)	$	(1,292)	$	(620)	$	(15,718)
Adjustments to reconcile net loss to cash provided by operating activities:
Depreciation and amortization expense	28,378		—		254		28,632
Amortization of deferred contract costs	6,705		(1,187)		—		5,518
Amortization of debt issuance costs	700		—		—		700
Provision for bad debt expense and returns	894		—		—		894
Gain on disposal of equipment and leasehold improvements	(23)		—		23		—
Loss on extinguishment of debt	5,213		—		—		5,213
Share‑based compensation	3,903		—		—		3,903
Deferred tax benefit	(5,357)		(430)		618		(5,169)
Adjustment to contingent consideration	(3,100)		—		—		(3,100)
Other	—		—		(277)		(277)
Changes in operating assets and liabilities:
Trade accounts receivable	(18,332)		—		58		(18,274)
Income tax receivable/payable	(183)		—		—		(183)
Prepaid expenses and other assets	(4,699)		—		499		(4,200)
Deferred contract costs	(16,879)		2,909		—		(13,970)
Accounts payable	3,145		—		(158)		2,987
Accrued liabilities	(4,207)		—		—		(4,207)
Deferred revenue	47,528		—		(339)		47,189
Other liabilities	3,161		—		—		3,161
Net cash provided by operating activities	33,041		—		58		33,099
Cash flows from investing activities
Purchases of equipment and leasehold improvements	(1,836)		—		—		(1,836)
Net cash used in investing activities	(1,836)		—		—		(1,836)
Cash flows from financing activities
Payment of bank borrowings	(205,000)		—		—		(205,000)
Debt issuance costs	(1,264)		—		—		(1,264)
Payment of debt extinguishment costs	(2,050)		—		—		(2,050)
Proceeds from initial public offering, net of underwriting discounts and commissions	326,316		—		—		326,316
Cash paid for offering costs	(6,601)		—		—		(6,601)
Proceeds from private placement	2,233		—		—		2,233
Proceeds from the exercise of stock options	185		—		—		185
Net cash provided by financing activities	113,819		—		—		113,819
Net increase in cash and cash equivalents	145,024		—		58		145,082
Cash and cash equivalents, beginning of period	32,433		—		(58)		32,375
Cash and cash equivalents, end of period	$	177,457	$	—	$	—	$	177,457
Supplemental disclosures of cash flow information:
Cash paid for interest	$	12,647	$	—	$	—	$	12,647
Cash paid for income taxes, net of refunds	703		—		—		703

Subsequent events

The Company evaluated events or transactions that occurred after the balance sheet date for potential recognition or disclosure through the date the financial statements were issued. No subsequent events or transactions were identified.

Use of estimates

The preparation of the 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, and accounting for income taxes. Actual results could differ from those estimates.

Segment and geographic information

Our chief operating decision maker (“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.

Revenue by geographic region as determined based on the end user customer address was as follows:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2021		2020 (1)		2021		2020 (1)
			(As Revised)				(As Revised)
	(in thousands)
Revenue:
The Americas	$	69,865	$	54,707	$	195,408	$	149,723
Europe, the Middle East, India, and Africa	19,543		11,786		49,721		32,347
Asia Pacific	6,213		4,055		17,457		10,795
	$	95,621	$	70,548	$	262,586	$	192,865

(1) Certain prior period amounts have been revised to correct immaterial errors. See above for more information.