Share-based compensation

12 Months Ended

Dec. 31, 2021

Share-based Payment Arrangement [Abstract]

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:


	Years Ended December 31,
	2021		2020		2019
	(in thousands)
Cost of revenue:
Subscription	$	3,755	$	732	$	194
Services	594		139		—
Sales and marketing	10,938		1,748		460
Research and development	10,512		1,533		394
General and administrative	10,006		2,591		1,413
	$	35,805	$	6,743	$	2,461

The Company recognized a tax benefit related to stock-based compensation of $12.8 million, $3.8 million, and $0.5 million for the years ended December 31, 2021, 2020, and 2019, respectively.

Equity Incentive Plans

On July 21, 2020, the Company adopted the Jamf Holding Corp. Omnibus Incentive Plan (the “2020 Plan”). The 2020 Plan provides for grants of (i) stock options, (ii) stock appreciation rights, (iii) restricted shares, (iv) performance awards, (v) other share-based awards, and (vi) other cash-based awards to eligible employees, non-employee directors, and consultants of the Company. We initially reserved 14,800,000 shares of our common stock for issuance under the 2020 Plan. The total number of shares reserved for issuance under the 2020 Plan increases on January 1st of each of the first 10 calendar years during the term of the 2020 Plan by the lesser of: (i) a number of shares of our common stock equal to 4% of the total number of shares of our common stock outstanding on December 31st of the preceding calendar year or (ii) a number of shares of our common stock as determined by our Board. The maximum number of shares of common stock available for issuance under the 2020 Plan was 19,479,699 shares as of January 1, 2021. As of December 31, 2021, 12,058,729 shares of common stock are reserved for additional grants under the 2020 Plan.

The 2017 Stock Option Plan (“2017 Option Plan”) became effective November 13, 2017 upon the approval of the Board and, prior to the adoption of the 2020 Plan, served as the umbrella plan for the Company’s stock-based and cash-based incentive compensation program for its officers and other eligible employees. The aggregate number of shares of common stock that may be issued under the 2017 Option Plan may not exceed 8,470,000 shares. As of December 31, 2021, 128,928 shares of common stock are 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 year ended December 31, 2021.

Return Target Options

The table below summarizes return target options activity for the years ended December 31, 2021, 2020, and 2019:


	Options	Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in thousands)
Outstanding, January 1, 2019	2,200,189	$	5.49	8.9	$	—
Granted	1,653,209	8.29			—
Exercised	—	—			—
Forfeitures	(165,734)	5.49			—
Outstanding, December 31, 2019	3,687,664	6.75		8.8	29,908
Granted	—	—			—
Exercised	—	—			—
Forfeitures	—	—			—
Outstanding, December 31, 2020	3,687,664	6.75		7.8	85,444
Granted	—	—			—
Exercised	—	—			—
Forfeitures	—	—			—
Outstanding, December 31, 2021	3,687,664	$	6.75	6.8	$	115,278
Options exercisable at December 31, 2021	—	$	—	—	$	—
Vested or expected to vest at December 31, 2021	—	$	—	—	$	—

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. No return target options vested during the years ended December 31, 2021, 2020, and 2019. There was approximately $33.0 million of unrecognized compensation expense related to these return target options as of December 31, 2021. See Note 2 for the Company’s policy on recognizing expense for return target options.

The Company used the following assumptions in the Modified Black-Scholes option pricing model to estimate the fair value of return target options modified during the year ended December 31, 2020 and granted during the year ended December 31, 2019:


	Years Ended December 31,
	2020	2019
Expected life of options	1.50 years	3 - 3.25 years
Expected volatility	55%	50% - 55%
Risk-free interest rates	0.16%	1.49% - 1.67%
Expected dividend yield	—%	—%
Weighted-average grant-date fair value	$8.95	$6.02

Service-Based Options

The table below summarizes the service-based option activity for the years ended December 31, 2021, 2020, and 2019:


	Options	Weighted‑ Average Exercise Price		Weighted‑ Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value (in thousands)
Outstanding, January 1, 2019	4,245,709	$	5.51	8.9	$	—
Granted	212,668	8.21			—
Exercised	(168,391)	5.49			256
Forfeitures	(216,700)	5.49			—
Outstanding, December 31, 2019	4,073,286	5.65		8.1	37,520
Granted	—	—			—
Exercised	(526,460)	5.67			13,899
Forfeitures	—	—			—
Outstanding, December 31, 2020	3,546,826	5.65		7.1	86,098
Granted	—	—			—
Exercised	(1,903,560)	5.62			54,716
Forfeitures	—	—			—
Outstanding, December 31, 2021	1,643,266	$	5.68	6.1	$	53,129
Options exercisable at December 31, 2021	1,434,887	$	5.49	5.9	$	46,658
Vested or expected to vest at December 31, 2021	1,643,266	$	5.68	6.1	$	53,129

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 years ended December 31, 2021, 2020, and 2019 was $2.6 million, $2.6 million, and $2.4 million, respectively. There was $1.0 million of unrecognized compensation expense related to service-based options that is expected to be recognized over a weighted-average period of 1.6 years as of December 31, 2021. 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 Company used the following assumptions in the Black-Scholes option pricing model to estimate the fair value of service-based options granted during the year ended December 31, 2019:


			Year Ended December 31, 2019
Expected life of options			6.25 years
Expected volatility			45.1% - 45.3%
Risk-free interest rates			1.6% - 1.7%
Expected dividend yield			—%
Weighted-average grant-date fair value			$7.29

Restricted Stock Units

Restricted stock unit activity for the years ended December 31, 2021, 2020, and 2019 was as follows:


	Units	Weighted-Average Grant Date Fair Value (per share)
Outstanding, January 1, 2019	25,520	$	5.87
Granted	36,520	12.60
Vested	(25,520)	5.87
Forfeited	—	—
Outstanding, December 31, 2019	36,520	12.60
Granted	1,317,719	26.33
Vested	(36,520)	12.60
Forfeited	(24,612)	26.00
Outstanding, December 31, 2020	1,293,107	26.34
Granted	6,339,974	32.51
Vested	(530,032)	30.57
Forfeited	(212,111)	29.74
Outstanding, December 31, 2021	6,890,938	$	31.59

RSUs under the 2020 Plan vest ratably over four years. RSUs under the 2017 Option Plan vest 100% on the one year anniversary of the date of the grant. There was $197.1 million of unrecognized compensation expense related to unvested RSUs that is expected to be recognized over a weighted-average period of 3.5 years as of December 31, 2021. The total fair value of RSUs vested during the years ended December 31, 2021, 2020, and 2019 was $16.2 million, $0.5 million, and $0.2 million, respectively.

Employee Stock Purchase Plan

On May 25, 2021, the Company adopted the 2021 ESPP. The 2021 ESPP provides for six-month offering periods beginning May 1st and November 1st of each fiscal year and provides eligible employees the opportunity to purchase shares of the Company’s common stock through accumulated payroll deductions at a 15% discount. On each purchase date, the purchase price of the shares is the lesser of (i) 85% of the fair market value of the Company’s common stock on the first day of trading of the offering period (the “grant date”) or (ii) 85% of the fair market value of the Company’s common stock on the last day of trading of the offering period. Payroll deductions are limited to 15% of an employee’s eligible compensation. The number of shares an employee may purchase during any offering period is limited to an aggregate value of $25,000 per calendar year based on the stock price on the grant date. During the year ended December 31, 2021, the Company withheld, at the employee’s request, $1.2 million of eligible employee compensation, which is included in accrued liabilities in the consolidated balance sheet, for purchases of common stock under the 2021 ESPP.

As of December 31, 2021, 3,000,000 shares of our common stock are reserved for future issuance under the 2021 ESPP. The total number of shares reserved for issuance under the 2021 ESPP will increase on January 1st of each of the first 10 calendar years after the first offering date by a number of shares of our common stock equal to 1% of the total number of shares of our common stock outstanding on December 31st of the preceding calendar year. The aggregate number of shares issued over the term of the 2021 ESPP will not exceed 16,000,000 shares. No shares of common stock were issued under the 2021 ESPP during the year ended December 31, 2021.

The grant date fair value of shares issued under the 2021 ESPP equals the sum of (i) 15% of the Company’s quoted stock price at the grant date and (ii) 85% of the fair market value of a stock option using the Black-Scholes option pricing model. The average grant date fair value for the offering period that commenced in 2021 was $11.97 per share. The Company used the following assumptions in the Black-Scholes option pricing model:


			Year Ended December 31, 2021
Expected term			0.5 years
Expected volatility			40.31%
Risk-free interest rate			0.06%
Expected dividend yield			—%

There was $0.7 million of unrecognized compensation expense related to the 2021 ESPP that is expected to be recognized over a period of four months as of December 31, 2021.