Jamf Holding Corp. (JAMF) Earnings Call Transcript & Summary

All right. Well, good afternoon, everybody, and welcome to the 25th Annual Needham Growth Conference. My name is Joshua Reilly, and I'm an analyst on the enterprise software team. This afternoon, I'm excited to have Jamf. We have CEO, Dean Hager and CFO, Ian Goodkind. And Ian, you're new to the seat. So I'm excited to have you. And maybe we'll just start off, Dean, maybe you can give us an overview of the business for those who are less familiar and maybe touch specifically on how security over the last 1.5 years has become a more important part of the business.

First of all, thanks everybody for joining us. Josh, thanks for having us. I appreciate it. Even saying that Ian is new, I had to do a double tick because it feels now that he's been in the seat for what feels like years, but why don't I -- I'll take those 2 separate. I'll go to this a real quick overview of Jamf first and then talk about the evolution of our security solutions. So at Jamf our purpose is to bring consumer simplicity to the workplace. We believe the best consumer technology to fulfill that purpose is offered by Apple. So that's really how we're in to helping organizations succeed with Apple. The result of that Jamf strategy is both managed and secure apple at work. It's completely unique in the industry. Very few companies offer both device management and security solutions are really only Microsoft successfully. And literally, no one else does it in an Apple first way. Jamf is very unique in that perspective. 2022 was -- is our -- or actually 2023 is our 21st year of business, and we've grown significantly over those years, now supporting 71,000 customers approximately running Jamf on approximately 30 million devices now. And of those 71,000 customers, there was a net add of approximately 11,000 customers in 2022 alone, just making Jamf the clear market leader in this space for Apple. And our diversity is tremendous. We really don't have -- we're not locked into any geography or reseller that is we're overly dependent on I think our largest customer is like a half of 1% of our ARR. So even there, we're -- we have great tremendous diversity in our installed base. And we obviously do extraordinarily well in industries where Apple performs well. In fact, years ago, we got our start in the education market, but that now represents under 30%, about 29% of our ARR. Over 70% of our ARR is from commercial market, which is also our fastest-growing part of our business, were used in 22 of the top 25 most valuable brands, 9 of the top 10 largest companies in the world 7 of the top 10 technology companies and all 15 of our U.S. largest 15 banks. So that's kind of a backdrop on Jamf. Just a touch on security. We really got in the business through device management for many, many years. And then in 2018, with Jamf Connect, we really started the first step into the security realm with a cloud identity-based solution, connecting users and their devices to cloud identity providers, all the major cloud identity providers, and that's become Jamf's second bestselling product. In 2019, we expanded into the threat hunting and endpoint protection business with our Jamf Protect solution, and that was launched just months prior to Apple's launch of Apple Silicon Mac with the M1 chips, that wasn't a coincidence. We knew that the security market was going to be disruptive with that new hardware, and we were able to really kind of come out of the gates really fast with our security solutions. And then in 2021, we branched into preventing threats from ever reaching the noises with filtering, anti-malicious download, anti-phishing and cloud VPN solutions as part of our acquisition of Wandera. And we just believe that security solutions are a natural extension of management solutions because almost every mitigation I can think of as a result of the security threat would be done with device management, blocking users from the network, updating software, quaratining software, that's all done with management software. And the result of that has been Jamf security business has grown ARR from less than $10 million in Q3 2020 to over $90 million in Q3 2022.

Got it, helpful. Helpful overview there. All right, shifting to everybody's current favorite topic, the macro. I guess a couple of items here to highlight. One, are you finding that the greater mix of security products is proving more defensive to growth in the current environment? And then second, can you just review kind of maybe how did demand ebb and flow throughout the year as the economy softens?

Yes. So obviously, the topic of the day and nobody, nobody in technology is immune to it, nothing about today's economic environment changes Jamf's long-term strategic premise. We don't believe we're market limited. The demand for our unique solutions is strong and our customer loyalty is extraordinary strong. Furthermore, Apple's growth is tremendous. In 2022, iPhone actually overtook Android for market share in the United States. Everybody knows that Apple has the leading tablet. And the Mac even -- if you -- IDC just came out with PC shipments for the year, 2 days ago, and Mac is -- for the year is the only computer that grew year-over-year, the Windows-based PCs all declined double digit. But yet the entire market, of course, in Q4 started to tail. But the good news there is that Mac grew in market share compared to the rest of the PC industry by 3 percentage points, which is the biggest leap I've ever seen since tracking it. So we think that all bodes well for the long term. With that said, Jamf's economic unit is largely seeds and therefore, the number of people that are using devices. And so we all see the headlines of layoffs and slower hiring. And so as we said in Q3, Q3 was really that first quarter that we started to see the muted number of seats being signed on for with initial deals and Q3 was really the first quarter that we started seeing a muted device growth at renewal. And we had said in those calls that we expected that to continue forward. And I think everybody in the technology industry has been seeing that in Q4 as well. But as you point out, on the positive side, while Jamf's economic unit is devices, we now have such a broad set of security solutions that can sell back to the devices that we're already managing that gives us another trajectory of growth other than just a new seat adoption. And you can see that in our ARR per device has just gone continually up. The other thing that I would mention is that 29% of our ARR comes from education and specifically providing student devices. Well, student count doesn't go down, right? The number of students and schools is still where it's at. So overall, the entire tech industry is seeing fewer people in the workplace. And we, of course, are seeing that as well. But our resiliency, our customer loyalty, our healthy financial profile put us all in an excellent position. And now our broader solution-based sell back puts us in a terrific position to withstand a temporary economic challenges.

Got it. I think that's a helpful overview there. If you look at the expected macro for 2023, do you feel that your current customer contracts are rightsized in terms of device counts? Or was there a lot of volume that was sold ahead that could slow NRR more than current levels that investors should be aware of?

Yes. I can jump in and take that one. On the education side, let's start there. So we did see a little bit of a reconciliation on the education side, right? During COVID education did -- educator spot ahead a little bit, too many they rightsized that within Q3. We're going to continue to monitor that, but we think that's probably the biggest adjustment, I'll say, on the education side. On the commercial side, yes, we're continuing, as Dean alluded to a little bit earlier, will continue to see muted growth in this economy based on company's hiring plans and headcount plans. But again, the good thing -- a couple of things for us, specifically, we on the commercial side typically have an annual renewal. So what we'll see is that they grew so many hats, which is typically more than what they're actually playing off. And so we're still seeing that growth at renewal. It's just not as big, and they're not buying ahead for the future, I think. So that's one thing to consider. I think the other thing and Dean hit on it and the last point was that we're not while -- we're still reliant on device count and growth on seeds, we still have, again, the security portfolio now, right? And we have typically companies who will buy one management product, but they have a multitude of products to actually select from a security profile. So that will drive our ARR up in the future as well.

Got it. This is an important nuance question, which we're asking a lot of our companies as well as on the macro and FX, can you touch on how pricing and contract structure is in U.S. dollars or foreign currency -- and thus far, the FX impact actually has been fairly limited for you guys versus some of the other companies we cover, given the strong mix of international business that you have.

Yes. Great question. So we bill mostly in U.S. dollars. And we do have some exposures with some of our Wandera business and some of the Jamf School business. Most of our exposure is really on the expense side. Our markets outside the U.S. are growing faster than in the U.S. So you will see the exposure continue to grow over time. But as a reminder, our ARR is on a constant currency basis, and we do adjust that annually. So we do have a lot of things that mitigate it for us, but it is a growing exposure for us in the future.

Got it. One thing I think is a bit underappreciated for you guys is product differentiation, especially versus the legacy UEM vendors. If you talk to the channel partners and the IT admins who actually use the product, I think they appreciate the differences. Is this becoming even more of a factor as Apple continues to accelerate innovation within their software stack which just continually requires more updates?

Josh, I think you are touching on something that is, as you said, hugely underappreciated not only for how we got here. But what I believe will be a transformation going forward as well. The notion of unified endpoint management, which is really organizations to say, I'm going to treat all the devices, no matter what the manufacturer is the same as if they were all a shade of gray within organization. That notion grew in popularity, I want to say, between 5 and 10 years ago after the invention of MDM, but it was built on a false premise. And that was that the MDM framework could fully satisfy the enterprise requirements of Apple, Google and Microsoft ecosystems. And it could had Apple, Google and Microsoft all agreed to stop differentiating. And of course, none would agree to do that, especially. And Apple has continued to offer frameworks for a solution provider like Jamf that are completely unique. Apple Business Manager, automated enrollment, customer enrollment, user enrollment, their SSL extensions, their security framework. They are all common across Mac, iPad and iPhone, none of them work on Android or Windows -- So the cross platform providers have been stretched to try and support the uniqueness of each ecosystem. Meanwhile, Apple sells the uniqueness of their ecosystem and customers want it, which is why Jamf ends up getting selected. Jamf innovates at the pace of Apple so that IT teams never have to wonder whether a feature will be supported. And IT will never have to send that e-mail to their users saying, hold off on upgrading to the latest operating system, something that Apple users expect to do to the moment it's available which virtually eliminates the cost of upgrade projects for IT teams. And as you mentioned, in my view, -- the pace of Apple separating, how Apple is managed and secured in the enterprise versus Android and Windows is actually accelerating, not converging -- and Apple is a large part the reason for Jamf's success, while really all 3 leading UEM providers from 5 years ago, they've been consolidated or almost one is in the process of that happening. And on that notion, when VMware is ultimately acquired by Broadcom, who has been our historic largest competitor, we believe that's going to end up creating the largest replacement market that Jamf's ever been faced with. So -- we think that, that will probably really start more in volume in the latter half of 2023, but we're optimistic on the opportunities it will create.

Excellent. Following up on product and the competitive dynamics, do you see any differences in the competitive landscape at the enterprise level versus the SMB level?

I would say at the enterprise level, our competitors are almost always the UEMs that I just described. At the SMB level, which we define as 2,500 users or less, there are a couple of -- now I'll say, companies who are mimicking Jamf's strategy by focusing on Apple, that's actually good, I think, because it is shown that the market is accepting what Jamf's strategy is, and that is at each ecosystem needs level of expertise. I should note, by the way, that, that SMB market of less than 2,500, about 40% of Jamf's overall ARR. And we won I mentioned that we had a net add of 11,000 customers in 2022. That would suggest that we're winning a lot of SMB business because there just aren't that many enterprise organization, so we still compete well there. At the end of the day, those organizations that are attempting to sort of mimic Jamf's strategy, if you look at just LinkedIn, publicly available information, you'll notice that when looking at the number of people that those organizations have added, very, very low. I think that they started to get a little bit challenged in 2022 because Jamf's breadth of scope of product and go-to-market, our pace of innovation, and our overwhelmingly amount of industry support from the likes of Apple, Amazon, Google, Microsoft and Okta is just super difficult to overcome. So we've seen pretty much the same dynamics in that SMB space as we've seen in the prior year. And if anything, we saw those organizations competing with us, maybe suffer just a touch in these tougher economic environments.

Got it. You highlighted BYOD at the September JNUC event. It was a great presentation you did there, particularly like how you separated work from Life that was interesting to see that on stage. What kind of demand are you seeing from that from customers at this point? And let me throw in one other kind of adjacent point that I just got a question from the audience. Can you just discuss how quarterly MacBook shipments affect the business or don't affect the business as well?

Yes. So 2 questions there. I'll take the MacBook shipments first. Quarterly, not much; annually and beyond annually, yes, of course. The greater the popularity that Mac becomes, the better it is for us, and which is why if you look at the last 3 years, these numbers come straight from IDC, last 3 years, Mac has gained in share every year on average for 3 years Mac has grown twice as fast as the rest of the PC industry. And so as I mentioned, they've reached double-digit growth worldwide according to IDC numbers 2 days ago. Mac market share has gotten up to now 17% in the U.S. in Q4. So it is really coming on strong. And I think every 10 percentage points of growth going forward is actually going to be easier than what it's been historically, especially in the workplace, the growth from 15% share and 25% share is going to be way easier than the growth from 5% share to 15% share because we had to overcome the whole notion that the Mac wasn't the business machine. I mean, frankly, the only industry that, that continues to be somewhat of a problem is the industry that your audience is in. Financial services is kind of the laggard industry when it comes to Mac. And by the way, I blame Excel and the Blueberry app for that. But other industry's Mac growth is much faster. On BYOD, which this device that I have in my hand here is one, it presents an enormous opportunity for Jamf, but in the early going, it's going to be a bit slow because there's so much market education that needs to occur to the uniqueness of the Jamf and Apple solution together. There's literally no combination like it where the device actually gets segmented, partitioned natively into a user side and a work side where we're able to fully secure the work side. All of the communication is just automatically going through a next gen cloud VPN. The apps are secured. You have data loss prevention, fully managed work side. Personal side, 100% personal. IT has absolutely no ability to impact it whatsoever, and it strikes that tricky balance of users being able to have complete and total privacy on their device without IT control, and yet have full access to work as well in a secure way. With the ability using Apple focused features to simply say, "I think I'm going to turn off work for now" and all of a sudden, mail, text work apps, everything just disappears and you go away for the weekend with a completely personal device. And the ability to have a second eSIM on the device that is your work phone number means that you can also tell users, hey, we want all communication, all work communication to be done with work communication tools and work phone numbers, and you can never say that you don't have it available to you because it's right there on your BYOD phone, and you have the power to mute them anytime you want. So it really solves that tricky little having to carry 2 phones issue but so few organizations even know such tech as possible. We'll be going through a market education for a while. But in Q3, we were we actually signed a couple of notable thousands of devices, BYO devices deals that not only what we have won 1 year ago, we wouldn't have competed for them 1 year ago because we did believe that we or anyone else had a differentiated BYOD solution, now we do with BYOD pricing.

Got it. That's helpful. A while ago, there was a lot of noise around Apple entering the market here. Interestingly, as you predicted, it all died down. We still get some questions about it, though. So what's the status of your relationship with Apple? And what has been the impact of ABE, Apple Business Essentials for those who are less familiar on your business over the last year?

Sure. So on this one, you will find that I'm going to be as blunt as I possibly can be. I've learned that I just got to be -- actually, we just had a speaker today to our company, the author of Radical Candor. And so I am going to practice some Radical Candor on this. I have had in the last year, several conversations about Apple Business Essentials with potential investors and people from the investment community. I've had never a single conversation about Apple Business Essentials with a customer, nor have I heard a single in a year -- have I heard a single story of a Jamf customer being lost to Apple. I can't say that about any other competitor. When I say that it had -- it was going to have and it has had 0 impact to our business. I mean zero impact to our business. I would use a negative number, but that would imply that we're benefiting from it, and while I actually think that, that will be true for some complex reasons that I won't get into, I can't prove it with data, so I won't claim it. So I'm just going to stick to zero impact on our business. On our relationship with Apple, it's as strong as ever. Apple continues to be a reseller of ours through Apple retail, they're small business channels and also through other education channels. Apple continues to be an enterprise partner of ours, where we go to market hand in hand. Our dev teams work together using all public APIs. We have no private access to anything internally at Apple. We make sure we always keep that level of abstraction between our solution and their solutions. And Apple continues to be a Jamf customer. As a matter of fact, Apple has been a Jamf customer since 2010 and at no time in their history have they been committed to being a Jamf customer for as many devices using as many products for as long a period of committed time as they are today. Right now is their biggest commitment they've ever had to Jamf in that realm.

All right. Got it. Can you discuss the priorities around security product development for the next year. One of the questions I get from investors a lot is, Wandera for those who are less familiar, provided security for non-Apple devices as well. Does this remain a priority for the company going forward?

Yes. We actually support with, for instance, our private capability, which is our next gen VPN and Zero Trust Network Access. That works across all device types. Now because of our Apple specialty, it means a couple of things. One is, we always make sure the experience is optimized on Apple. So therefore, we don't deal like other providers do where we don't embrace native Apple capabilities because we have to make it work exactly the same on every device type. No, we're going to use the native out capabilities, we are going to make sure that, that experience is fantastic, and we expand from there to actually break down the potential buying hindrances there might be because we're not cross-platform. And so that's just a nuance. We're not Apple only, we're Apple first when it comes to security, and that's one of the things that makes us so unique if we have to innovate at the pace of Apple. But we do have security solutions across other device types as well. And as a matter of fact, in Education where we launched Jamf Safe Internet on July 1; and in Q3, we announced that it was the best first quarter product launch in Jamf history. That's all based on Wandera tech, and we have already previewed that in 2023, we will be extending Jamf safe Internet and education, to Chromebooks as well, which as you know are very popular in schools. So that's going to give us a whole another trajectory of growth going forward that we haven't had historically.

Got it. All right. Just moving ahead here a little bit. What do you see in the education business here in 2023 in terms of renewals and RFPs -- is there a lot of business potential or potential business coming up for renewal this year that investors should be aware of? And what's the outlook for some of the country-wide education deals?

Yes, 2 big whopper of questions there. One is I still think that there's a little bit of post-covid sort of reassessment and strategy development within schools in that -- when we went into COVID, it was buy as fast as you possibly can because we've got to get devices out to students. And now there's a little bit more of a wait a second, what is the optimal use of this. Now working to our advantage there, some of that panic buying that occurred within COVID involved schools deploying devices without the required student safety solutions that needed beyond those devices, which is one of the reasons why we launched a student safety solution in July. So I think in the coming years, while there may not be the type of device growth in education that of course -- I will almost assuredly tell you there won't be the same type of device growth that we saw raging during the heart of distance learning with COVID, but I think there's going to be a significant amount of strategy development of what type of software should be on those devices, and that's going to actually make safe Internet and security solutions very popular in the coming year. So I think that's going to be a very popular within our current installed base. And then when it comes to government investment, I mean let's face it. Governments woke up in the heart of COVID it went, wait a second. We've got students that have no ability to learn from home. And then somebody said, that was always true; meaning, when we sent students home to do their homework, they did not have the same advantages equally, and you have the poor kids with literally no ability to do some of the assignments that the students that have far greater resources were able to do. So several governments you've seen, United States have offered funding for this, Japan has offered funding for this, Germany has offered funding for this. Taiwan, most notably has offered funding. And we've already caught wind of some other governments looking for the same types of programs. And so while we certainly can't disclose those things prior to the governments disclosing those things, we do see the potential of, let's call it, maybe 1 or 2 a year of additional government going toward government-funded programs.

Got it. All right. Well, let's move on to some financial and capital allocation questions. I actually got a financial question from the audience, I think I'm going to lead with, which I think you guys all like would be helpful. Ian, maybe you can address this. Can you frame -- and this is kind of following up on the earlier point. Can you frame the impact the device per customer headwind, potentially could have over the next year here in the more challenging macro? And I guess the question they're asking is, is that headwind, can that be relatively contained in terms of the overall business? Or could it get from a magnitude perspective, be a bigger challenge.

Yes. I think the way I'll talk about is what we've been talking about for 2023, the headwinds and the tailwinds, right? And what we look at is still the global macroeconomic environment, the hiring plans, if companies continue to hire it'll reduce another 10% of people, et cetera, et cetera, right? Those are things that would be headwinds to us. I think the other one is less prevalent, but we did mention the elongated supply chain like if there was any long supply chain issue with Mac specifically, those could have impacts on our devices and other things as we move forward. I think from a tailwinds perspective, though, and this is what helps devices as we move forward, is a couple of things. First, on the education side. When you think about that, Dean talked about the ability to go, have safe Internet on the Chromebook, right? That -- having the ability to go on Chromebook that actually expands the ability to have devices. Some of those educational programs in other countries. And again, having this management and security and education will help us. On the commercial side, we see, as Dean mentioned a little bit earlier, there is this ability to have a replacement market. There's -- we think we're going to have this -- the largest replacement market we've ever had in our history this year. So that's something that will definitely weave in. And then lastly, I talked about it a little bit earlier. But I'm going to mention it again, again, customers will buy one management product. We have let's call it, like 8 -- 6 to 8 different security products. They have the ability to buy a multitude of those, which will also help our ARR per device go up over time. So I think those are the things we think about from tailwinds, and we're going to be monitoring both the headwinds and tailwinds in 2023. And you will hear more from us on our Q4 call.

Yes. So we all know you guys have a nice attractive financial profile and strong free cash flow margins. That was one of the first things I noticed when I first started looking at picking up coverage of you guys. Maybe just give us some perspective here. If the economy continues to weaken, can you discuss what actions you can take on the cost front to kind of further strengthen those margins?

Yes, I will -- I'll touch on a few things here first. First, we've always been prudent. We're going to continue to be prudent. We're going to be balancing our approach of balancing both growth and profitability and really try to manage the rule of 40. As you saw in the last 2 quarters, Q2 and Q3, we did actually overachieve on our profitability metrics, and we did push that through for the full year. So we have some of those abilities. As we move forward, we're going to continue similar levers. I think one lever that we are continuing to focus on is hiring in those places only that provide the highest and fastest returns. We will slow hiring in those other areas, as an anecdotal point or a point that you can reference back to is in 2020, when we actually had the pandemic hit and everyone was just like, let's see what happens with this, we actually slowed down hiring, actually even froze it at that time. And you could see looking at that how profitable we really became. So how we're going to look at management and think about it as we move forward, is on the hiring side. I think there's obviously other areas if you talk to any other software company, we're all looking at our software contracts, right? How do we manage that appropriately. Look at our facility now that we're more of a hybrid workplace. How do we think about that? And how do we turn that from a cost center and a profit center. So those are some of the ways we're going to be looking at in 2023. And again, we'll invest in those areas that provide us the highest and fastest returns.

Got it. You recently announced the 2022 end of year device and customer accounts. Is this the correct run rate that we should think about for the business. How should investors think about both ARR device and customer growth going forward? And then I actually got a question from the audience that goes along with this. Why give the device in customer count, but not a preliminary look on revenue or ARR or some of the other metrics?

Yes. These are always fun ones to answer in this time, right? So let me start with customers first. I mean customers you saw. I mean, we added approximately 2,000 customers within the quarter. If you go back over time and you look at that, it's actually kind of within the norm. Last year, we had Wandera. So that actually skewed it. Before that, we had COVID, and I'm not sure what normal times are, by the way, but during the COVID, we had customers -- and then even if you look at -- we announced a big Taiwan deal even this year in Q2. So do I think that's a run rate? Absolutely. That's within the reasonable range of run rates. I think we're in different economic times today. So that will definitely ebb and flow depending on the global economy. On the devices, specifically, I talked a little bit -- just a little bit to go about headwinds and tailwinds. I would tell you those same things apply here, right? The thing that really makes us strong. I mean, again, we have 71,000 customers, 30 million devices. We have -- we're a diverse business. We have a lot of different areas we can go out. We're really strong at industry workflows. We applaud when Apple does things. We do things with them. We have our security portfolio now, and we're balancing profitability with growth. And we take all those things, and that's what builds the confidence within 2023, plus the replacement market, right? That we talked a little bit about. But our long-term thesis really hasn't changed. And we're going to continue to add the devices, but we're not -- we're not going to be as dependent as we move in the future on that. Again, back to that security, back to Q3, at least, in order at 18% of our ARR came from security. So if you think about that, and we -- again, over 2 years, we've grown that to $90 million plus, right? And to see that type of growth really shows that we're able to have this additional product and really focus on management and security as we move forward. But again, we'll give you more details on our Q4 call. Dean, if you have something else you want in...

Just comment specifically on the person's question about releasing the customer and device count. Obviously, customers and devices, that's not closing your financial books. We pretty much know that right away as you get into a new quarter. So we have the information, of course, and we actually -- we historically have released that pretty much the first week into January then the reason is this week, every January, we have what we call our sub-zero event. We're Minnesota headquartered company. It's sub-0 in Minnesota. It's our company kickoff. And we always like to announce to our employees where we're at when it comes to device and customer account. So this is the one quarter that we released that information because we don't want to release that information to our employees and not publicly share it with the market, so it was just being transparent with something that we as a company want to celebrate the close of the year. But obviously, our financial statements, we've got a little bit of work that we've got to do to go through and close those. So that's why we would provide visibility to one and not the other.

Got it. And then we actually got another financial question from the audience. I'll throw out there as well. How do you think about maintaining a rule of 40 if growth decelerates below 20%? Like how do you think about how much action you would take on the cost side to kind of maintain that structure?

Yes, it's a great question. I mean, again, we're focused -- the first lever for any tech company is your people cost. And it's really the hiring side. I mean, again, I want to point back to, I think it was second quarter of 2020, right? March hit, we actually froze hiring in April, and I think even part of May and then you open it up in June. And if you look at the profitability within that quarter, and even I think on the trailing 12 months that year, I think it was some -- I want to say it was like if I'm remembering things right. It's a big unlevered free cash flow model. We do have the ability to ramp up cash flows. That's just 1 lever, right? You heard about some of the others, again, software initiatives. One thing I'll prereview just a little bit today, we also will talk about scalability projects that we're going to be working on from here and into the future as a part of year-end, and that's the way to focus right? Our back office operations, other operations to make it more scalable and cost efficient. Again, our footprint, our leasing footprint. Again, we can definitely move the dial on this. And this year, I mean -- I think we just even turned those down just a little bit this year, and you saw how much profitability we were able to ramp up. We moved those out a little bit harder. We'll be able to adjust profitability even more.

And for clarity, we're very committed to the Rule of 40 on a trailing 12-month basis. And we've already taken, as Ian mentioned, a pretty substantial mitigate cost actions to make sure that we have a level of confidence going forward as we assess what's going to happen with the market. So the -- what -- if questions in the future, we're going to do what we need to do in those what-if scenarios, but we watch it closely, and we're very committed to it.

Got it. All right. Well, with that, I believe we are out of time, and I want to thank Dean and Ian so much for the Q&A this afternoon and look forward to what Jamf is going to achieve in 2023. Thank you.

Thank you so much. Appreciate.

Thank you.