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

Good morning. Welcome to the third annual Jamf Investor Event. We're so delighted that you're here with us. I hope you've had a chance to attend or at least listen into some of the sessions that we've had so far this week. My name is Jen Gaumond. I head up Investor Relations for Jamf, a few logistics [Audio gap] this room to your right. There's food right outside the doors, beverages here in the back of the room. We'll be doing a live Q&A at the end of the prepared remarks, where we will have the whole senior leadership team up here to live stream. The questions will be doing for those live in the room. If you, on the live stream, do you have any questions after the session is over. Please reach out to Andrea. She's in the teal shirt in the back, and she can help you. Jamf senior leadership team here, as I mentioned. You will be seeing all of them up here at the end for Q&A, as I mentioned. Here's our agenda for today. John is going to start out and talk a little bit about JNUC and jamf Nation, and he'll then move into our strategy and some positioning. Henry and Beth will talk to some of the innovations that we've announced this week. Liz and Sam will hit on how we're simplifying the customer journey. And then Ian will bring us home and talk a little bit about how we're balancing the business from a growth and profitability perspective. And then as I mentioned, we'll roll into Q&A. One last thing. If you want to read all the details. Today's discussion may include forward-looking statements. Please refer to our most recently filed reports with the SEC for a list of risk factors. And with that, I'll hand this over to John.

Thank you, Jen, and thanks for everybody for making the trip out here. So it's much appreciated. We're so glad you could join us at Jamf Nation User Conference. And this year's theme is the power of and. And if you heard the keynote, you would have learned a little bit more about that, but the power of And to manage and secure for Mac and mobile and devices, whether they're deployed to a person and for a specific purpose. So what is Jamf Nation. Well, Jeff Nation was actually an e-mail distribution list that started back in 2007 and has grown into the world's largest online community of Apple administrators, staff and experts in the world. And it's a key part of our leadership. This is something that's not easy to create overnight, no matter how large your organization is. And we've seen that platforms that have a robust and active and engaged community tend to be much more successful, and we've certainly seen that in Jamf. Now not only do the customers learn from one another during this user conference, but we also learn from our customers. We're always talking to our customers and trying to help them out succeed with Apple. But in this -- during this week and every year that we've done this, we get some key customers together, and we asked them, what's going on in your organization, how can we help you better succeed with Apple. And a few years ago, we asked that question to our users. If you had -- how many MACs are in your environment today. And we ask that same group, if everyone in your organization could choose a Mac or Apple device, how many would there be? And there was a pretty large difference between those two. And so we asked them -- what's the reason for that delta. And the predominant answer was we don't necessarily trust all of those devices to access our corporate resources. And so that led us to believe we need to lean more into the security piece of it. We acquired some technology. We developed some technology, and that's what became Jamf Protect, and we've extended it from there. And then we became management and security. So we're really doing what we can. We're learning from our customers to help them succeed with Apple. And like I said, I'm glad that you all are here, and I hope you've had a chance to walk around. And if you haven't already, certainly feel the energy and the passion of this group, thousands of people actually around the Apple and Jamf technology together. People have asked, what makes Jam special, what's made it successful to date. And it's really about our culture. And our culture, what is a culture. It's a belief system. It's a way of behaving. And if you look at Jamf, we have two major values that underpin that. Selflessness, how can I help that colleague do something. How can I help that customer have an experience that's going to delight them. Those are things that when you think of other people or other people more than yourself, that's where that selflessness comes from. And then relentless self improvement. We're just not satisfied with the status quo. Always challenging, always pushing, trying to get things more effective and more efficient. And so those two things, the selflessness and relentless self-improvement are the things that really underpin the things that make up our culture. It was established by our founders. It was encouraged and supported and lived by my predecessor, and that's something that I'm going to continue because it's what made us successful today. Now if you look at our purpose being to simplify work, we choose the best way to do that is through leveraging Apple's consumer simple technology. That's really where their benefit is, and we bridge the gap between what Apple produces and what the organizations need. And our strategy to manage and secure Apple at Work is really is where we're focused, and we're doubling down on that. But it's also something that's evolved, as I just mentioned. We listen to our customers. And when they tell us they need something to help them get successful and be more successful with Apple at work. That's something that will help them and lean into. So manage and secure is our strategy, but that will continue to evolve as our customers need. In the effort and in the light of relentless self improvement. People have often asked too, why Apple. Why? There's other large operating systems out there? Why do you concentrate on Apple and simply, we just believe that Apple is going to be the predominant endpoint in the enterprise. And why simply because it's growing faster than the others. You have access to the IDC data, certainly. So do we and if you look at IDC data, it shows over the past consecutive six quarters, PC sales have gone backwards. And the past four consecutive quarters, they've gone backwards by 22%. And while Mac in those same past 4 quarters, has actually increased by 1%. Now that's not where we would all like to see it. But certainly, it shows it demonstrates that Apple is taking market share from other operating systems. IDC also indicates in one of the recent articles that they wrote that they believe that Mac is going to increase in the enterprise 20% year-over-year next year over this year, again, indicating a growth of Mac and the enterprise and a growth of it's taking more market share. If you still had questions about how organizations look at Apple, I hope that you caught Fletcher's presentation yesterday. And if you didn't, you could go back because he did a very similar presentation a few years ago, when he was the CIO at IBM. And now he's the CIO of Cisco, and he's done two very similar studies within those large organizations that come up with pretty similar results. And those being that -- not only do more employees choose Apple Mac when they have the opportunity to choose but then it's less expensive for the company to actually operate those devices given the fact that there's lower support costs and the extended life cycle of that product. So we've got that it's cheaper, actually or less expensive for those companies to have the Mac in the organization. And he's also found that at least in the sales and development areas that there's double-digit productivity gains from those employees now on top of all that I'm meeting with all kinds of customers and especially customers that don't necessarily tech forward, airline companies. Thank you. I should have a bottle of water up here. Airline companies, beverage companies, major retailers, again, organizations that aren't necessarily technology forward, but they're asking what's coming next and how can -- what -- how is this going to work? And how can we -- they're looking forward to that technology. Now I've been in this tech business for over 30 years. And I remember that back in the day when you'd make a process and then you figure out the technology that would support the process that you have in place. And now what I'm seeing, given the technology that we're seeing coming out, that organizations, even those that aren't necessarily technology forward are asking, when is this coming out? Because when this comes out, I'm actually going to alter my process because I know the technology can do that, and I'm going to become much more efficient and that's expanding in the organizations. And from what I've seen over the past several years. So again, there's a lot of indications that organizations are continuing to embrace Apple environment and the Mac. And that's something that we believe in as well. So the next thing is, why do we win and our positioning on this. And people -- and we talk a lot about being Apple First and Apple Best. And the reasons for that are twofold. One is if you create something for cross-platform, what you've done is you've lowered the user experience to the lowest common denominator, and that doesn't work well, and we've actually seen the results of that. In fact, it creates a great replacement market for us and one that we're taking advantage of right now. And the other one is when you try to stitch together products from various other companies into a platform. And what you've done is you've created something that's really hard to integrate, and it creates a pretty poor user experience on top of that. And so that's not a great solution ever but -- either. But if you have products that were designed to work together, specifically for the operating system that they're running on, we see a much better customer experience. And that yields more productivity and companies certainly are taking advantage of that. And we've seen just in the results of our combined -- our bundled sales in the last quarter, up 100% year-over-year. It really is something that's shown and resonates really well with our customer base. And the next is how are we going to win with Apple? How are we aligned with Apple? And when I first came to Jamf, I naively asked so who owns the Apple relationship and they all looked at me like, well, because there's a lot of vectors between Jamf and Apple on many different fronts. It's not just one single choke point at all. We are aligned with them very closely on the development side. That's how we can come out with same-day ready. We're very closely aligned with them on the product. That's how we know how to make solutions that are going to fill the gap between what Apple creates and the enterprise needs. We're very closely aligned with them on the go-to-market side as well and not just in the U.S., but globally as well. So Apple produces these consumer simple devices that users love, they're passionate about. And you can see that when you're in the room. And the fact that we help bridge that gap between that consumer simple device and what the organization needs, especially as it relates to InfoSec or IT requirements. That's really what's going really well with our customers to date as well. And our priorities align because we've done the math and so have others that when Jamf is on installed on the Apple machines, those customers are more successful and they buy more Apple machines. So there's a vested interest with Apple as well to help us because they know that to the extent that we work with them and we partner with them, they're going to buy more Mac machines within the environment. And so how do we do this? What's the next thing that we're going to do differently or to evolve ourselves. And we're going to continue to help organizations succeed with Apple because we believe that Apple is the premier technology and that it is the tech that will be the predominant in the enterprise. And we're also going to continue to listen to our customers and continue to evolve with and find those gaps that we need to help them be successful with Apple. We're going to continue to be a destination employer with high employee voluntary retention as well as very high engagement, and we're going to continue to delight our customers as evident through our NPS scores in the mid-50s. And we're going to continue to deliver on our financial targets as we've done every quarter since we've become public. And the next phase of our journey is really how to take all of this and make it more efficient and profitable as we grow and scale. And if you look at the people that are going to be up here today and Lynn and Michelle and Liz, and Henry, they've all worked for large organizations, Ian as well, and myself. We've all worked for larger organizations and seen this work at scale. And so we know how to do this and grow it as we grow in through the environment. And lastly, we're not also expanded yet geography-wise as far as we need to be. Over half of Apple's installed base is outside the U.S. and yet only 1/3 of our business comes from outside the U.S. And having spent about 1/3 of my career outside the U.S., that's certainly a passion of mine and something we're going to continue to support and take advantage of that market availability. We're also going to leverage our strategic partnerships and our third-party channel. If you look at the logos on this slide, you'll see three of the top cloud providers, three of the cloud -- top cloud identity providers and three of the top end point management companies in the world. And 3 of them were on stage with me on Tuesday during the keynote and the other one is a premier sponsor of this event. And so we have close alignment with our strategic partners. Now many of these companies have products that look similar to ours in some ways, not exactly, of course, but in some ways. But the fact that they choose to partner with us and help us be successful is because their customers see value in that or they wouldn't do it. And so there's a lot of momentum there and something that we can work together to help our joint customers be more successful. In addition to that, our third-party channel is something that we have not leveraged to its full extent as well. And I'm sure that Liz and Sam will talk a little bit more about that as well. But a key part into our success is how do we scale this and how do we continue to leverage those partnerships in order to become more efficient, especially as it relates to the go-to-market side. And lastly, we shouldn't forget we're talking about how we're moving forward. But at the end of the day, despite the economic headwinds we have a very healthy and successful business as it stands here. And we're doing so by retaining the top talent and having high engagements there, and we're also doing so by delighting our customers with our -- as indicative through our high NPS stores. So we're well positioned to take advantage of the market that we see in front of us, and we see expanding out through our interactions with our customers. Now with that, I'd like to hand it off to Beth and Henry, and they can talk more about our trusted access. Thank you.

Good morning, everyone. My name is Henry Patel, Chief Strategy Officer here at Jamf.

I'm Beth Tschida, Chief Technology Officer. Happy to be here.

Yes. As you've seen from the keynote and probably from John's presentation, the concepts of management and identity and security are no longer in isolation. The lines of responsibility between those are fluid. And it's the combination of these concepts that are really going to simplify work but also secure the end users. In essence, trusted access, which means to us only authorized users on enrolled devices that are secure and free of threats are able to access critical applications and data. And that's a premise of what Beth and I will walk you through in terms of some of the innovations we talked about at JNUC in our keynote. So let's start with this. The innovations are focusing on three areas, and these are ones that you already know about us. One is Mac leadership. Jamf is a leader both in Mac management and security. Employee Choice programs are growing. And if you missed Fletcher's presentation, as John mentioned, it will reiterate that choice programs are still live. And the TCO story about how to implement Apple in the environment is still very strong. IDC predicts, as John mentioned, that there's going to be growth in the PC market overall in 2024 and 20% growth on the Mac. So there's a very exciting opportunity there. On Mac and mobile, Apple is the predominant mobile provider in the enterprise, which is no question and Jamf's robust platform can serve customers' entire Apple fleet from [end-to-end]. And consolidating the Mac and mobile actually saves cost for our customers when they start to use the single platform for us. Now on the third pillar, management security, Jamf provides a robust platform for both the management and security of devices irrespective of size or industry or geography. And then we also know that good enough is not always good enough. And so clearly, as John pointed out in his presentation, what we provide in terms of our expertise around Apple really delivers great value for our customers. And then again, consolidating vendors in terms of how they provide the management security also provides cost savings to our customers. So one platform for everything Apple, so we'll get into some of the innovations now.

Great. So let's start with trusted devices. And we were thrilled at JNUC to announce Jamf 11.0, which is the culmination of tremendous amount of work across product and engineering and have heard great things from our customers this week, which is very validating for all the work we put in. One thing I should mention, and John talked about our culture, but we are a culture of T-shirts. T-shirts are our love language, especially celebratory T-shirts like this. And I was inspired at the keynote. So Henry, I'm going to try something here because I always wanted to do this. I'm not going to throw this, I'm here to tell you that you get a T-shirt and you get a T-shirt and you get a t-shirt, everyone here gets a Jamf Pro 11 T-shirt in the back of the room. Make sure you pick them up. Now behind the scenes, Jamf Pro 11, we are using a new design system, which is a part of our platform. And what it has is common UX components accessibility driven. We're going to start to kind of put that throughout our platform. so that our users get a consistent and familiar experience. So there's important things behind Jamf Pro 11 that will continue to expand across the portfolio. Back to you.

When we talk about securing endpoints and preventing threats, you're aware of our flagship endpoint product, Jamf Protect. We talked a little bit about the innovations like device compliance in the keynote. But I want to highlight that Jamf Executive Threat Protection was announced earlier this year. It's an advanced detection and response solution for mobile devices. It gives organizations a powerful method to know what has happened on their mobile devices and the tools to support and remediate around advanced attacks. Now if you think of high target value people such as executives or organizational or government agencies and government officials. Those are really high targets for a lot of attackers. So when we think about how they travel across multiple countries. They travel with their iPhones or mobile devices, iPads, not knowing if they've actually been attacked during that process. Well, they typically either don't know anything and they're attacked or they have to throw away the device after they come back. And so what this allows us to do is really look at the in-depth analysis of the logs and the capabilities of the tool allow us to look at a lot more telemetry inside these mobile devices so we can remediate it. Now Security teams definitely love this because they can go in and see bread crumbs throughout and be able to find out how the device might have been compromised. And because they get a lot of telemetry, it really reduces the time it takes to investigate for the solution for the attack. Now behind all the security products, there's actually some humans and API that help us identify what are some of these attack metrics her and vectors. So it's called a Jamf Threat Labs. It's a -- we're very proud of the Jeff threats labs teams because they do an enormous amount of work to help identify any potential threats. Their research is critical, including the discovery of a Mac crypto mining malware in prior to copies of Final Cut Pro and they published a few other threats that they've seen. So as the growth of Apple continues, there's going to be more attacks. And so the analysis that our Threat Labs team actually performs share among the community to benefit everyone. Now when it comes to users who log into a device authorized users. Many of you may be aware of a Connect product. Now Connect allows you to do several things. It allows account provisioning. It allows you to manage your identity from a cloud IDP. It also allows you to do password sync. Now many of you are aware about Apple's SSO capability, it's a framework. And we know that the password sync capabilities will eventually be depreciated, but there's two things to note about that. One is that in order for an organization to actually implement Apple's capability, the cloud IDP vendor actually has to support it as well. So today, Okta is the only vendor that's actually supported it. And then Microsoft has obviously said in the keynote that they're also planning on delivering that capability soon. And then the other ID vendors would have to do the same. But until that process is done, there's a lot of value in our customers using this feature and this capability and Connect. Now what do we do when Apple starts to built some frameworks to take away some of this functionality? Well, we innovate. And so earlier this year, we had taking our ZTNA technology and brought it into Connect at Zero Trust. So secure access to critical applications and data. So in the combination of things, we definitely see this as a continued growth path for our Connect product because we're innovating as well, even though Apple is bringing some of the technologies in.

So when we think about enhancing the platform, we've just gone through trusted devices, secure endpoints, trusted users. Platform, think of that as the spaces between all those pieces just showed you. The connective tissue, the common components that are going to kind of help us bring all of this together. We do it according to a couple of tenants, and I'll start with Remain Apple Best. So we've said it a couple of times, and this week has been about validating what Apple is coming out with and how we're going to bring that to the enterprise to solve problems. We say when Apple innovates, Jamf celebrates and our teams get to work. we just get to work making sure that we tie that together. And that won't change. And then I already commented on unifying the user experience. That's where this design system and looking at -- making sure that everywhere you go, it feels just like Jamf, everything is familiar and easy to use. In terms of streamlining the customer journey, Liz and Sam are going to touch on that more because this goes well beyond product. This is making sure that across we're looking at taking out any friction. So basically, the next product someone buys from us, should delightful as the first product and looking at those places where we can make that easier. Now during JNUC, the simplifying device compliance got a really nice round of applause. And that was very affirming to us because we see the potential of bringing all of these things together in different ways, really stitching together management and security and using this platform to bring those capabilities to our customers where they need them so that they can manage across their environment. And then in terms of expanding high compliance, our customers have told us, we need you to help us have these frameworks in place so that they can conduct their business. So you heard of JNUC, we announced StateRAMP for Jamf Pro, and Jamf school, and that's very important for our EDU customers, and we're going to kind of continue to build on that. The last thing I'll say is I think the idea of platform, what we have here, these tenants are going to grow and shift and expand as Apple innovates and the Apple ecosystem shifts and certainly, one of the newest ones on here is generative AI. So I want to speak to that for a minute. As we think about what we've shared here, I want to first say that AI is not something new to Jamf. It backs our threat and analysts and our threat defense products, and we use it throughout to kind of help with those AI insights. But we know that large language models are creating a new opportunity for us to solve problems a little bit differently with generative AI. And this week, we looked at a chat interface that will help for interfacing for help of cross Jamf documentation, support our customer community insights as well as a security alert analysis and auto investigation capability on the threat side. So what we believe is that the best generative AI experiences need to be built on top of good data. And there is no one who has more robust Apple ecosystem data than we do. We also believe that generative AI is not a stand-alone strategy, but it is a capability that we're going to build responsibly and in connection with our customers. really so that they can stay ahead of the expanding security requirements they have and the very growing powerful Apple ecosystem, so they're more confident in that they can do their work in the easiest way possible. So to sum it up, if you have Apple in the enterprise. Jamf is the only choice to use for your Apple devices. We know that others are going for -- have to go for a homogeneous approach. You can't be everything to everybody. And often, Apple is an afterthought. And I can guarantee with the one afterthought here. We think about it every day. So when we deliver trust and access, it's leading to lower costs. It's lower cost to purchase, lower cost to integrate and a lower risk of failure. And with that, I'm going to hand it over to Liz and Sam.

Hi, everyone. I'm Liz Benz. I'm the Chief Sales Officer at Jamf. I'm really excited to be here.

And I'm Sam Johnson, Chief Customer Officer of Jamf. Also very excited to be here.

Maybe not as excited as I am.

Not as excited as you're getting Thursday, say, not Tuesday.

Our goal at Jamf is to have our customers buy what, where and how they want to with Jamf products. We started as a direct selling model way back when -- and we've expanded into a multipronged approach with our customers. We have -- we're really proud of our direct selling model. We have most recently expanded and hired and enabled our sellers to become security sellers. We obviously work with our resellers. We're really proud of our partnerships with our resellers. We also are working with partners, as we talked about earlier, as John talked about, AWS, and of course, Apple. We do have self-directed, so in product purchasing with some of our products. And while it's small, we're working on making that bigger and better. And lastly, we have e-commerce which is really tailored for our SMB customers, and it also helps us with global reach with our multicurrency. All of this is supported by Jamf nation. We couldn't do any of this without our customers. So there's like three main ways that we're really focusing on our future of our go-to-market engine. The first one we've talked about at length, which is our amplified trust of access. You heard the power of -- you've heard the power of [indiscernible] in our keynote and today. But our customers are really leaning into it. We're receiving really positive responses from our customers because what Beth just said. It provides the customer's ability to consolidate vendors, which saves on integration costs. It also provides a strong ROI and if they're able to do things that they need to do that's critical for their business. We're really excited about this. We're getting better at it, and you'll hear from Ian a little bit later. He told me I'm not allowed to talk about numbers. So Ian is going to talk about the numbers. I am a salesperson. I love to talk about numbers. The next thing that we're focusing on is exponentially expanding through our indirect markets. Like I said, really proud of our direct sellers. They -- we have -- we're really believe in our direct sellers. And we -- but we know that we have to do -- we have to scale. And the only way we scale is to become less dependent on our direct sellers and more dependent on our indirect models. -- in particular, we know that we have to figure out how to make it not only easy for our customers but also our partners to do business with Jamf. So we're leaning into a partner portal so they have the right tools to be self-sufficient with Jamf. And additionally, -- we are creating a global partner program, which we're really excited about that will create consistency globally for all of our programming. Lastly, you'll see in the future that we're -- we'll have self-directed purchasing. Which means that a customer when they're in our platform, we'll be able to say, yes, I need more users and push a button. Or yes, I'd like to sign up for PROTECT and be able to push a button. Very excited about that. Talk about efficiency. Lastly, expand global reach. The majority of our business comes from EMEA, but we're seeing a lot of growth in rest of world. We're very focused on where Apple is going and also where the market dictates our -- where the growth will be in other markets. In particular, we're focused on APAC. So Japan, Taiwan, India, -- you may have seen in recent Apple earnings, they had a record sales in India, and we believe that, that is a very growing market for us for multiple reasons. Lastly, we think about in EMEA, Germany is a very strong region for us in country, and so we're doubling down our efforts there. With that, I'll turn it over to Sam.

Thanks, Liz. The reason we win customers is pretty straightforward. As you've heard today, we create the most comprehensive and robust solutions for the Apple platform. And I think the key operative word in that is platform, where we believe that there's just a lot more similarities between, say, a Mac and an iPhone, for example, then a Mac and a PC or an iPhone and an Android device. So that gives us the opportunity to go, not only a lot deeper into that Apple ecosystem to create solutions for our customers' needs, but also gives us the ability to sustain that experience that Apple users expect when they're using these devices. Now keeping pace with one of the most innovative and secretive companies in the world can sometimes be a challenge, something that we have a proven track record of being able to keep up not only by proving that we can be ready the same day that Apple releases their software and hardware. But oftentimes, we're well ahead of that. And I think it's also important to call out that independent of Apple. We do spend an awful lot of time working with our customers to come up with industry solutions that allow us to go into key markets such as -- you hear it, transportation with the aviation flight bags and flight crews, you see in retail point of sale, customer direct interaction devices. We've got a lot of work with health care hospitals, patient bedside, clinical communications as examples. All of these are devices in hands of users that otherwise didn't have the capability to use technology as a part of their daily job. And in this trusted access story, there's one of the [ANDs] in that is person and purpose. This is the purpose. And this is a huge market that we're helping bring this technology in, which obviously has a reciprocal benefit not only to Jamf's business, but getting more Apple devices into the field there and making it easier for our customers to win. Now when you have over 70,000 customers, it can also sometimes be just a challenge to see that scale and grow, something that, as John mentioned, we're very proud of having an NPS score in the mid-50s, have for several years. And we accomplished that by just listening to our customers as much as possible, automating and then we do detailed segmentation to make sure that we're delivering to a customer expectation across the different segments that we have, which allows us to build customized journeys that helped meet and exceed our customers' expectations, but also allows us to be considerate of our gross margins as well. Now at the end of the day, where we want our customers and what we're seeing a lot of customers really gravitate towards from an ease standpoint is starting to work with our bundled solutions in per user or per device offerings. This gives them the entire Jamf platform to work with and allows us to really complete that management and security story. So it's great to see our customers starting to leverage that more. They usually come in looking for a component of identity like Zero Trust Network Access, security, endpoint protection, network threat prevention, things like that. And obviously, from there, they start to use more and more. The more they use obviously, the stickier they become and get more value out of the total Jamf solution. So at the end of the day, we're focused on not only winning customers but keeping them for a lifetime. And that's why this event is kind of like our Super Bowl or favorite time of the year. We enjoy this very much. It's circled on our calendars and for anyone that has been in the room who's had an opportunity to interact with our customers, it's fair to say that the thousands that showed up at JNUC this year are engaged, their fans and I think one thing that just can't be overlooked is that they circle this on their calendars every year as well. This isn't just an event where we bring them together, they genuinely want to be together. And I think that's a testament to what John had mentioned at the beginning of not only a very robust online community, but a very robust community in general, which is a strategic differentiation. Now one highlighted customer that I'd like to share who is in the top 25 most valuable brands. They hit all the bases, all right? This is a big win for us in Q2. They told the trusted access story, this is a historical Mac only shop. Not only did they bring security for the Mac, they brought their whole fleet of iOS together. So and not only just for management on iOS security as well. So they got the management and security. They got the Mac and mobile devices and then they really hit it with the person and the purpose. They're not only using it for the employees, but also using it for their retail front of house and point-of-sale solutions as well. So the cool one about this or the interesting stat here is that not only are they fully deploying trusted access, but they also found a lot of savings in there. There was 17 different competitive vendors on the management and security front that can be replaced with the one Jamf platform solution, which is great. So hopefully, we'll hear more from them later. Who knows maybe JNUC 2024, if you all decide to come back, we can not only share more about this story. But we also plan on rinsing and repeating this and doing this several times over with other customers. So with that, we'll hand it over to the man of the hour, Ian Goodkind, CFO.

Good morning, everyone. I'm last up. Of course, CFO is always the last up. But it's been a great week. You heard from John just talk a little bit about our strategy, why we're different than others, again, that focus on the Apple ecosystem why we succeed, what differentiates us. That's how we're going to succeed. We're going to focus on the Apple ecosystem, and we will thrive. You heard from Beth and Henry talk about all our enhancements to our platform. You heard -- if you got a chance to see our keynote, you saw the applause from customers on several [of the things]. Device compliance was one that got a huge round of applause again in the security side. So some really great things going on there. You heard from Liz and Sam talk about our go-to-market motion. Why we win, which is really important, and it's becoming more prevalent in the industry and a really key customer success story that we expect more of those in the future. I'm going to bring it home now. I'm actually going to just talk a little bit about what we see for the future and growth drivers and then how we're going to scale this business as we go forward, i.e., more profitability. So just to do that, you got to talk a little bit about the history. So remember, we did start in education. Education is still growing, just not as fast as it was in COVID but still a key part of our business. This is how we stay in lockstep with Apple. It is a key thing for us to continue to do, and we will continue to do that well. But commercial has become the bigger driver of our business. It's going to continue to drive our business as we go forward. Also, I think a big thing to note is what's on this slide. We have built an extremely successful security business. When we IPO'd, it was about $6 million of ARR. Today, this last quarter, it was almost $115 million. That's a 3-year CAGR of 150%. It's currently growing at 37%. Our business plan, John had mentioned, that's up 100%. That's just another key metric for you. And this quarter alone, it was 40% of our net new ARR. Those are pretty impressive stats and that business alone is a really valuable business. But what it really shows and everyone has been talking about is how our trusted access outcome is resonating with customers. And we're all -- there's a good chunk of us that are Midwesterners. It's showing, we're going to where the puck is going to be, not where it's been at. So what are the big drivers that we look for as we roll forward and into the future. The first one is Mac continues to take share in the enterprise. Others talked about that. John has shared some IDC stats. But I think something more important or something that I would add to that. This week, we've been talking to customers. We've been talking to customers like what are you seeing out there? And they talk about the fact that "hey, to attract the best talent, you got to give them the best experience." And if you don't provide that, you're actually losing talent to other companies. And they can't have that happen. And so they are leaning in more to that. We talked about the fact that IDC recently published a report that talked about 20% growth of Mac in 2024 compared to 2023. Mobile also remains a significant opportunity for us. Now just as a reminder there, we rounded out that platform with the Wandera acquisition in 2021. So we're getting really good at selling that motion, but we're seeing more and more and why we're really excited about in the next couple of years specifically and a few talked about it is the fact that there's a good replacement market there. And we know there's a lot of opportunities. When we talk to customers this week, Yes. We used to use that one. We're definitely thinking about other plays there. So we see that as a great opportunity for us. Also Apple, look, they're actually adding new devices in their ecosystem. Right? They talked about the watch being manageable. That's something they're going to continue to do in the future. Vision Pro is another example of tools that are coming out that we'll be able to manage in the future and help with workflows. Remember, our key is that we simplify work by helping organizations succeed with Apple. So there's some really cool case day at least that we're thinking about with customers that will help us succeed. New logos, that's always been something we continue to find. And even in this environment, customers are interested in using Apple devices, like I said before. Trusted Access outcomes are resonating. Customers see the [indiscernible] identity, all in one tool. They don't have to do these. Beth talked about the cost of integration, the cost of vendors, lowering the cost of risk. Those are all things that resonate with customers. And I'll be honest, sorry. When you talk to CFOs, we are the ones that are pushing on all these people say, lower my cost? And if someone can come to you, your CIO, CECL can come to you and say, I can reduce your cost, and I can reduce our risks all by doing this, but that resonates with CFOs like myself. So -- and we heard that from our customer meeting. This week, I was fortunate enough to sit in some of our customer amazing. So we had meetings based on industry and certain customer advisory board and just listening to our customers talk about all these features and how excited they are for our future is great to hear opportunity. John talked about this, too. I looked at -- we looked at this the other day. It's actually 57% of Apple's revenue comes from outside the U.S. Only 33% of our ARR comes from outside and Liz talked about those markets that we're really focused on. We have tremendous opportunities. And you all asked me, "Hey, Ian, where are you focusing on dollar." We're focusing on those markets to give us the highest returns. So I'd be remiss with just talking about growth without talking about gaining scalability and efficiencies, i.e., profitability. You can see since 2021, we've continued to deliver better profitability. Reminder, though, in 2021, we did buy one dare and we knew and we had said that's going to decrease our profitability. But since then, we've been increasing it. But we're not where we want to be in certain areas. We know our sales and marketing is a little bit higher than we want it to be today. Liz talked about a bunch of ways we're going to actually reduce that in the future. And just to reiterate a few of those, she talked about the fact that we're leaning more in the channel, having a partner portal, having in product purchasing. Those are wonderful experiences. One additional one, I would layer on is the fact we just purchased Data jar. If you think about what Data Jar's technology was, it's to make it easier for an MSP to do business with customers. That's another way we can become scalable. We talked about the fact that we have a security overlay. Well, that overlay isn't -- they're teaching our current reps how to fish. That's not going to last forever. So those are ways that we see we can become more efficient with the sales and marketing area. In the G&A area, we are focused right now on some automation projects. One specifically, we're working on is one were related to the financials systems. We plan to automate a significant amount of our financial processes that we have today. These investments do take a little time, but they will help us grow our profitability over time. So with that, I've summarized kind of our growth drivers, our drivers of increased profitability over time. I'm going to wrap it up with one last little surprise. We want to let you know we're having an Investor Day. At NASDAQ, on March 6. So please mark your calendars. We hope you can join us. What we plan to release that data is more data points around why we're winning, what differentiates us and a midrange model, which I think all of you have been asking me for. I get it. We hear the feedback. We want to produce that for you and give you some more information. So with that, I want to thank you for your time today, and I'd like to invite the rest of the executives up here, so we can take your questions. All right. Thank you.

Just a couple of logistics for Q&A. Michael will be walking around with the microphone. Operator Instructions].

My name is [ Anishta ] from RBC. I was just wondering if you could just expand on some of the use cases for generative AI in the Jamf model? And how should we think about the monetization opportunity with [indiscernible] and is there a potential for it to supplement device growth or ARR per device growth?

Sure. So we started -- I don't know if you had an opportunity to see the keynote, but there's a couple of places that we're leaning in. One is to make sure we have -- our products are used in many different ways, and we have a lot of different features and capabilities. So we are you think is really going to help the end users be able to quickly. So that's one area and navigating all of the wonderful tech that we have. So that's one area. And then the second area that we're looking at is within the security landscape, it can be a lot or whether you aren't. And we think by being able to look at what those threats are combine it with generative AI, we can give at point in within our platforms easier to understand. Like here's what's going on. Here's what we think you should do and here's what you going to help us position our products in a way that we're actually making more user security experts if we can bring those tools together. Now we're also doing it in a very stepwise fashion. So this week, we're spending time with customers. We're kind of testing the tool. Those that have run to throw Gene out there. We have seen them fall and really some misinformation. So how do we continue to tune and train the models we're using, how do we have the right data sanitization coming in and out so that as we give you what we're kind of calling [indiscernible] continue to tune and train the models we're using, how do we have the right data sanitization coming in and out so that as we give you what we're kind of calling a hypothesis, we can just continue to create more credibility for those responses. And when you tie all that together and you think about trusted access and now you think about amplifying that and making it easier, I think kind of and focusing on it.

I would just add, I know you're asking a little bit about the monetization side as well Actually, it's a stickiness thing with customers, right? When they have a more -- a better experience which continues to make it more sticky, which is some of the financial aspects. And as you've seen over time, when we add functionality within our products, over time is when we raise prices. It's not just a thing you do overnight.

Got it. And then maybe one more for me. Just on the international opportunity, it's good to see that it's a focus for you guys. Maybe if you could just double down on that, what are you investing in there? And is there anything fundamentally different about these markets, particularly in terms of Apple's penetration into the enterprise?

Yes, I can talk a little bit. We worked very closely with Apple, not just in the U.S., but globally as well. Apple Japan, for example, and then Apple Taiwan as well as Apple Europe, who also runs the entire enterprise for Apple globally. And we work with them about where they're looking at where they're seeing advancements, where they are investing their resources, and we've actually put legal entities in country specifically because that's where Apple is headed and has had great traction there at a and they want continued support in those areas. When we went, for example, we talked about the Giga project in Japan. That was because we walked hand in hand with Apple into those accounts in order to help those customers and school districts be successful. And because of the leverage that we had in Japan, that also came over, and we talked about last Q2 last year about our Taiwanese Ministry of Education. That wouldn't have happened or been really successful had we not leverage the relationships that we had in Japan with Apple over to Taiwan. And the same thing with Europe. And Europe is not just the United States of Europe. There's a lot of different specific countries over there. And the investment and the penetration of Apple is different in all of them. I meeting with a large company who's based out of out of the dock area or Germany, Austria and Switzerland. And they spoke about the increased penetration in Apple because of two areas, specifically because the new people coming into the organization, or starting in the organization and then the executives bringing their Apple devices in and the IT organizations are trying to figure out how do I accommodate those new hires as well as make sure that the executives are happy, and then everyone in between sees that. So we're seeing expansion in that market on the Apple front. again, working with Apple and with those customers. So we've got -- it's not one size fits all. It's certainly not where we have over 800 people in Europe alone. We have a couple of our larger development centers as well. And we have a very substantial office in Tokyo as well as Sydney and taking advantage aligning very closely with the Apple teams.

Maybe one I could add that I'm at least excited about is India, too. it's already a tech hub, right? And that bodes well from a Mac perspective. We talked about on our last earnings call about our percentage of AR that's in tech and in education. And so I'm really excited about that market. We have a legal entity now as of this last quarter in India, and we have employees there. So we're really excited about that. The other thing Liz mentioned earlier, was on Apple's call, they talked about the iOS side, which was another really good indicator. If you look at that market historically in other markets over there, they've been Android predominant at first because they thought, hey, the first cost is your only cost, but they realize cost of ownership wasn't the same as using an iPhone. And then you heard Apple talk about this was record sales of iOS devices into that market. So not only we're talking Mac in that market, we're talking iOS, and it's really exciting times there for us, too.

DJ Hynes from Canaccord. Maybe I want to direct it Beth, Sam and Wudi. I mean, this event is obviously a massive feedback loop for you guys. I'm curious -- what were customers asking for? What resonated with you, kind of where are you guys in terms of kind of delivering against those asks?

It's a huge broad range of things that the customers were interacting with are bringing to the table. I would say, if I tried to group it in some of the meetings that I had an opportunity to participate in they are asking for more of what we've actually given them, how do I get to see that adoption and here are the few barriers that we would have inside of our organization. John talked about some of our expansion in the past has been directly from feedback where we go, we've taken care of these barriers, but here's the next hurdle to seeing that adoption. It's still in the -- we got to tighten up our integration, both with the tools and technologies that exist in those orgs. And there's things that we can bring into our platform. I still find sometimes that they would rather see it come through us than maybe sometimes tie it back in, depending upon the customer and where they're positioned. So a lot of questions there. I would say, number two, we have added a ton of tech in the last few years. There's been a lot of conversation with customers where they don't actually know everything that they currently own from us. A good portion of the meetings that I've had I'm coming back and responding with that's here we can actually connect you with one of our customer success team members or otherwise to actually get you involved and start rolling that out to deploying it, you actually own it. And that's been a fun part sometimes when you get that validation if they're asking for something that's there and they're delighted when they walk out and they're excited. And I would say the third piece that comes in when I kind of take a look at it is they are talking about -- they expect to see growth actually coming back in as they're looking at it. And it's in areas that are all of the edges that Sam when he kind of talked about it is they may have the for person, and they're looking at specific purpose that they're trying to bring in or actually bringing it into the platform. And they're asking questions about, hey, this is a different workflow or a different solution. An example of that, that I would give that kind of comes on to the tech is it's been a number of years that Apple's had great solutions that require a managed Apple ID. I feel like this is the year when we've talked to enterprise customers, they are all working and planning to do their projects to actually move over, which means they unlock a whole pile of technology that's actually sitting there for their uses and workflows. These are not weekend projects for them. These are 6 months or more kind of planned activities, but the discussion is about how do they take advantage of that and continuing to leverage into the platform.

Yes. Thanks, One that I'll just -- first, let me just say when you're talking about adding to the existing things that they own, we also announced during JNUC this year, just to make sure everybody is aware, we kind of preloaded everybody with the full Jamf platform who attended and we heard from several customers that they are already in there starting to use and trial that software to see where it fits in their organization. So that's a big win, and people are excited about the additional value that they can find from Jamf. The one that I'll tack on is well that I'm hearing a lot from several different organizations is around compliance. And specifically, when it comes to education, there's something in the United States now called StateRAMP. And that's something that we're one of the only vendors that I'm aware of that actually are StateRAMP compliant right now. And as we're seeing compliance not come through some of those traditionally high-compliant areas like financial services or government into more of these other industries, everyone is thinking about it. So we're getting a lot of great feedback from our customers. There's a lot of work that we're doing on the back end to make sure that we can support them, but also from the product side, we're coming out with some innovations to help make sure that, that's an easy journey for them to get to these new compliance standards internationally.

I agree with everything they said. I would just add that we have some of these boots and we're able to really talk through with our customers. So I talked about the UX design ability. So we're getting affirmation. We love what you're doing. We'd like to see more of it. Because some -- it's really more on the compliance track. It's not just the stateRAMP at stake, accessibility requirements. All the things that they're being asked to do that we're trying to meet them where they are, are some of the things that are validating, we just need to keep moving on them and we'll look at them more.

That's helpful commentary. Maybe a follow-up for Liz. Well, clearly, the value of Jamf is kind of connectivity management, security, all in one. I'm curious from a go-to-market messaging has -- given the momentum you're seeing in security, has that become like the pointy tip of the spear with the sales pitch? Like how much of the go-to-market motion is security-led now?

Yes. So it's -- we used to talk about we lead with management and then we add on security. Now we'll lead with trusted access. And so all of our sales teams are becoming conversationally fluent in trust of access. So when we go to a customer, we're just talking about a customer visit that we have coming out. And we're leading with the trusted access message, even though the conversation is around management, right? We want to make sure that the -- our customers understand our full breadth and depth of our platform. And so we're not only doing that with our direct sellers, but also with our channel and partners as well.

Point of privilege, I guess. Rob Owens from Piper. And could you talk a little bit about NRR trends and I know you said it's going to continue to decline here, but we do have a cycle coming soon. So any kind of guardrails you can put around where it trends to and then just thought process around how it turns and what it could look like.

Yes. Thanks, Rob, for the question. Yes, when we looked at that, it's at I right now as of quarter two. When I looked at that compared to last year, let's say, 75% of that was a decrease in upsell, meaning we're not having that device expansion, about, I don't know, call it, 15% related to downsell i.e. That customer actually shrank a little bit and the remainder was churn. But when I looked at it actually from Q2 to Q1, we saw those percentages just change a little bit. So we saw our upsell component come down about 65% of that decrease. The other 35% relate to downsell. Notice I didn't say anything about churn. So that means at least that's one data point we've been looking at to say, "hey, are things at least just starting to stabilize, not get worse. We're not calling bottom but just starting to stabilize". I do think now that we've kind of gone through a year of this it will trickle down a little bit further, but I think that the tailwinds I talked about and the growth drivers, the replacement market, the Mac adoption, the trusted access, the new logo the international opportunities, I'm sure I'm missing some. I think those all bodes well. And I think it kind of stabilizes towards the end of this year. The last comment I'd make is I think it just trickles down the last 2 quarters here. I don't think it goes down. We've been seeing about 200 basis points decline quarter-to-quarter. I think it goes down less than that each of the next 2 quarters. And I think it stabilizes. And as the macro turns, I think that will accelerate nicely.

Josh Reilly from Needham. Thanks for a fun event this week. We have learned a lot, I think. So you've given some data on vertical market exposure recently. After doing this analysis, how do you think about what verticals you target, maybe outside technology that are a little less challenged than the current macro? And then are you pivoting some of your go-to-market investments accordingly?

Yes. Well, I think -- let's -- I think that's a great question. Henry, maybe you can talk a little bit about that, and then we can pop it over to Liz to talk about some of the efficiencies.

Sure, absolutely. As was mentioned earlier that we do have a lot of focus around our industry plays. We look at both where Apple is working closely with Apple's industry teams and what they're looking at. So obviously, health care is a pretty strong area for us where we've been focusing on. The other areas are retail aviation. And as we look at these markets improve, we start to look at where are the places that we can add value. Things that you heard this week at JNUC was around workflow capability within Jamf Pro. Those are additive and those are the reasons why we're looking at how do we increase our penetration in other industries because some of the capabilities they want are going to be to tie in third-party systems. And so how do we create extensibility within a platform to tying to areas that we're not really familiar with, right? So obviously, we've done our homework around health care, aviation, other areas. But there will be more industries that will come across that we just will learn and but we have the platform to actually deliver the workflows in that.

Got it. And then maybe just a follow-up on pricing. We've seen the commercial price increases kind of roll into the model here over the last couple of quarters. How should we think about the magnitude of the tailwind to ARR growth maybe over the next several quarters or even the next year, given kind of the differences in contract terms in commercial?

This is all me. Yes, absolutely. Yes, so the price increase. As a reminder, for the group, we did a 10% increase in our price of Jamf Pro on commercial only. So that's not education. So when you start kind of knocking down the levels and you think about, okay, it's only Jamf Pro commercial, so it's on security, it's on education, you run through that math. The percentage is just isn't really that big of an impact this year, a couple of things and a couple of reasons why. One, when you look at -- we announced last Q4, we had some customers come in right away and say, hey, let's get this done. And then in Q1, you just don't drop that on people, right? But Q2, Q3, we've seen customers adopt it. We haven't seen any real increases in customer churn. But our average contract right now is actually up. It's around 21 months. So we would expect that to come in over kind of a 2-year period versus just within 1 year. So when I look at the question I've gotten, Josh, other than this, what's the real impact on ARR growth this year, and it's really been only about 2%. It's not a big impact. Our growth has really driven by our success, but the things we've talked about like trusted access.

This is Tom from Decade. Probably one for you, Liz, but would love to hear, I guess, your perspective on some of the changes, I guess, that you've seen in -- on the security suite, more specifically over the last 12 months that you think have contributed probably more to the success you've been having recently?

Yes. So our security suite, it's been really fun actually to sell security. I love my job. My team loves their job. It's interesting when we've seen our sales teams make this huge transition from this management only kind of thought process to security management and security in this trusted access. What's really cool with our customers is that -- they love the fact that not only have we continued to invest in our product, but it's purpose-built for Apple, right? And so when we go into our customers and not all of our customers have -- actually, the majority of our customers aren't just using all of the Apple products. They might have some window products in there as well. And where we come in and where our customers get really excited is that we can ride along with a lot of our security, even security competitors. Sometimes we replace them, sometimes we ride along with Them. Because we bring that focus to the customers. And interestingly enough, when you think about security, like our CISOs, our customers that are in the security side of our customers they're really interested in that single pane of glass. However, we have been able to come in and talk about how -- why Apple is so important in making sure that we've got security products just focused on Apple so that their devices and their employees are secure. So it's been really fun to see the customers make that journey as well.

And Liz, if I could just tackle one more thing on. One thing that I think is really compelling is when we go in with our security suite, often time, we tell our customers just to run it side-by-side with their existing solutions. And the things that we find is that because we are so focused on Apple, we're -- especially in things like our network threat prevention or our endpoint security solutions, we're able to detect vulnerabilities or things that are going wrong on those devices for Apple specifically better than our competitors because we maintain that focus. So while others might be looking for more windows-based attacks, we're looking all Apple all the time. And so we stand up very well against our competition when we come into a customer environment with that solution.

And just if I can just a follow-up, Liz, just on -- in terms of just your, I guess, education and the sale -- more of the direct sales teams, even the partners around security, where do you think you're at in terms of getting them to kind of run on their own eventually without, I guess, some of these kind of overlaid teams that we've been hearing and helping a lot, I guess, at the moment.

Yes. I'm really proud of where we are. We certainly -- we brought in the security expertise to help kind of jump-start that and teach our traditional sellers, our territory sellers how to sell. You saw it with Ian's numbers that the numbers are just getting better and better. And I think we talked about our business plan right, is one of our shining stars. And really, that's an attribute to our teams leading with trusted access because that incorporates our whole message. I think we've got ways to go. I don't think we're all the way there. And we certainly have some ways -- some areas of improvement. But I think when I look at -- when I just look at -- I look at pipeline every week, right? And I look at how are we doing against not only pipeline build, but just in general, when we look at security. And that's a goodly share of our pipeline bill, and you don't do that with just a security overlay team. You do that with our entire sales force.

Yes, Tom, I'll just add on to that. Just listening to the sales people in the hallway. I saw or listen to two salespeople that were -- that have been here long before we even started security, and they were both talking about two different deals that they were working on and both of them were leading with security. And that's what I knew that there was really starting to catch fire a little bit in the sales organization. And we'll just continue that maturation process until we can integrate the teams completely. But they're still -- there's still some things out there that they're really helpful with some things, security is a more complex area, which is why we brought the expertise in, and they're really teaching the nuances to the rest of the team members. So we'll continue that and we'll phase them in as we can see that progress. But we're certainly seeing the progress, and we're seeing it accelerate.

I have a question from the live stream, if I could ask it. This is from Greg Moskowitz from Mizuho. He wants to know the timetable for introducing self-directed selling. So Liz, this is probably for you. And how actively do you plan to educate your installed base and promote this capability?

Do you want to?

Yes, go ahead and do the first one, maybe Sam can do second.

Yes. So we currently do in product selling today. We've got a couple of our product lines in our platform. We can do that today, in particular, Jamf School and Jamf Now. And we're working on -- well, I'm not working on our collective technical team and Henry and Beth are working on providing in-product purchasing for all of our customers and all of our platform solutions. I'm really excited about it. We don't have a time line right now, but in the near future.

And in regards to informing our customers about this, our customers are asking for this. So especially in our SMB space, it will be pretty easy to overlay that into their workflows. We use a multitude of communication mechanisms to get out to our customers. Everything from traditional e-mails to in-product notification. So when available, we plan to run through a normal release cycle with this and inform customers. We want -- with like most decisions, we want to do what's right for the customer and be there. And so we think that this will be a great opportunity to help them out, no matter how they want to work with us.

Kind of many others, I guess, sitting next to you, just on, I guess, some of the things that you're working on and your perspective is more generally on the culture, I guess, coming from I guess the outside at 10 months ago.

Yes. Yes, happy to take it. Thanks. Jamf is a really special place. I'm privileged to be there. And I think that's the way all of our employees feel as well. Just walking down the halls here and just hearing that reiterated over and over again, is just fantastic. There are some special things that we do, and we really focus, it's a very employee forward kind of culture and our employees know that their managers really care about them and they're well-being. You can see in our booth for this year, we've got a huge focus on DE&I, right, diversity, equity and inclusion. That's something that our employees care about. We've got incredibly active ERGs, employee resource groups that help drive activities. We've got leaders across the bench here who are the executive sponsors on each of those ERGs. John talked about the values, the selflessness just -- it's everywhere. It's how can I help each other. It's how can I help the customers. I was talking to a customer last night on the bus on the way to the event. And they were like, wow, I've heard that Jamf has a really amazing culture. So the employees actually are projecting that out to our customers. And we wouldn't have a customer base like we do. And Wudi told me this a long time ago, if you don't have happy employees, you're not going to have a Jamf Nation like we do today. So it's pretty special.

And what would you call out as some of the key things that you might, I guess, the business might need to kind of improve as we kind of think about the scale that the business kind of will achieve over the next few years just from an organizational perspective.

Yes. We like to meet our employees' needs, and we need to figure out how we can do some of that in more of a scaled way. It's not hard stuff. We need to put processes together, similar to the things that Ian was talking about. So we've got some of those activities to take place in the kind of the people realm as well. We're operating with employees in 20 countries now. So making sure that we're not customizing in every activity in every country. So those are some of the things that we're thinking about now to try to get to more scale and there's opportunity.

DJ from Canaccord again. Ian, you talked about kind of drivers of operating leverage. Sales and marketing efficiency, pretty straightforward, leveraging the channel, et cetera. The other one you mentioned was financial process automation. Can you just talk a little bit about what that means, what you're doing, kind of where you are in those processes?

Yes, I can absolutely and then Lynn. Where is she? But I want -- I do want Lynn to chime in on this as well. I can give you some of the specifics around the financial side. Yes, we're looking at automating things from -- we're on a system that I would say we've outgrown, right? We started this journey when we IPO-ed, I don't know, $225 million today, we're over $550 million. We've doubled in that time, right? And we've got to continue to be scalable. Our back-office ERP system is something that we've probably outgrown at this point in time, and we need to really automate that, really get it to talk to the HR systems, get to talk to itself, get to automate more journal entries. More of our financial planning and analysis to automate our tax processes. So I think there's a lot of opportunity there and that for billing is another example, making sure we're not touching every single bill, that type of thing. But Lynn, maybe you want to chime in a little bit more on that journey and what you're seeing?

Yes, certainly can. So we have been working together with the sales organization as well as the finance organization. and they have been looking at their processes, standardization, right? How can we take a step back and look at making sure that what we're doing is it different for every geography? Which adds a lot of overhead and we're thinking about what the process should look like for the future. And now we're in a stage where we're going to automate and put in the right systems for that future state. So it's not just automating what we're doing today. We're trying to become more efficient. We're trying to make sure that it is easier for our employees to actually work to serve our customers as well. And then eventually, what that leads to, and our ultimate goal is to make sure that it is easier for our customers and partners to do business with us. So all of the automation and the optimization that we're doing on the back end isn't just for today, but to scale, but to eventually make it easier for our customers to interact with us.

Beth, maybe just would love to hear from you around Obviously, acquisitions have been a successful part of the strategy for Jamf kind of tuck-in types. But would love to hear just how you think about the phases of integration and kind of philosophically how you approach them from, I guess, a technology and engineering perspective.

That's a great question. And I am such a fan of all the acquisitions we've done. I have the privilege of working with the best engineering team I have ever worked with. We are not -- our approach has never been the Board. We acquire you, we assimilate you. We actually take each one of those as an opportunity to lean in to the talent that's joining us to see what they do well, and then you bring that all back. So when we talk about this platform thinking. It is not -- this is how we've always done it at Jamf. It is looking at how Wandera has done it, how most recently Data Jar and taking a look at kind of as best-of-breed model. And where it is, you don't have to run everyone the same to be successful, but you have to understand where you're running too to be successful. And that's kind of how we've looked at that whole process. And we -- I think the testament is they all stay. They enjoy joining us. They see how this all fits together, and they're tremendously excited about everything I shared today. This idea. It's hard to get to a platform. There are things you need to work through. but the capabilities that we're unlocking are really fun to do. And so they're engaged. And I think the biggest testament is the people that join us back to the culture find that Jamf Jan is the culture we say it is plus the T-shirts.

Speaking of one of those who just recently joined us from an acquisition has assumed a senior executive position in the company. Ben, maybe you can say a few words about that from acquire e-side

Yes, it's not as recent now. It's about just over 2 years ago, but I came with the Wandera business. I was the Chief Operating Officer there. I think Beth pretty much said it, right? They've integrated a number of our team that we had into really senior leadership positions, which I think has really helped the overall talent pool stick and stay. I just here today or at the conference this week. It's been a real nice chance for me to catch up with colleagues that I've worked with. and the well for a number of years and see them having risen up through the team. I don't actually know the statistics I would guess, at least 80%, if not more percent of the people that joined from Wandera, which is around 250 people at the time, probably still with us. And I think, again, that's a testament to the culture. It was relatively easy to become part of the Jamf culture. They weren't different significantly between the way that we were before and the way that Jamf worked. But yes, it's been a nice journey.

Fantastic. And maybe just for Sam and Jason, I guess, being on this journey for as long as you have, would love to your perspectives on, I guess, they're obviously much easier to innovate very quickly at a much smaller scale, but how you would rate I guess, the innovation velocity of the business today and the areas where you kind of maybe would like to go faster.

These are our two culture carriers, so they're the perfect people to answer that question.

Thanks, Tom, for the question. And I'll get I'll go first this time. Wudi you can go next. All right. Thanks for the question, Tom. Rating it. I'll give it an 11, all right? But it has been a journey, obviously, being with the company as long as both of us have, even though they still stick us at the end of the table, nonetheless. But it's only gotten better. And one of the things that I think is really important, and I tell every new joiner that comes into Jamf is like the thing that stays the same is our customer focus and the thing that changes is our culture. And it's because the people that join actually contribute to that culture, just as much as the culture impacts them. And so we're bigger, stronger and better than we ever have been and really looking forward to the future.

I would say that the opportunity that we have to go faster. I believe that what we put on the table as we talk to customers and what gone through the keynote is moving faster than it ever has. And the thing that I'm most excited about is it's not good enough for most of my coworkers. The people who want to be moving and continue to be out there, a lot of the other leaders that aren't actually sitting here that were doing our best to represent. But if you go talk to the halls, you go, look, they want to see there's things that they're working on that -- they want to get their hands on that they want to do, and they get energized from the group of customers that are here. When they hear it from me, it's really not relevant. When they hear it from the person who came to the booth that they want it done. They are jack to go back home and actually try and figure out a way to get it done and want to get it in market. And that's the part that actually sticks through everything that we have. I'm actually really appreciative of the fact that we brought all of the talented, experienced and have done it before people along because if it was left to just people like Sam and I, it would be a different story, and we get to rely on the knowledge and expertise of everybody else that's come along. But to the credit of those that have been tolerant of working with Sam and I and some of the rest that are around, they've all brought an approach of, let's take a look at what you have and how do we get better. And it goes a little bit to the culture that John talked about right off the top. The relentless self-improvement and the selflessness. There's very little ego when you walk with this group into a room about who it is, who owns it or how that's actually going to impact them, it's almost always a conversation. And can I say back to the employee base, I can say to a customer, it's here, we have a lot of discussion at times, but there's never a point where somebody throws down and says, I want it to be that way. It always comes back to is that the right thing for the customer and how we're going to communicate it to the employees as we go do it. And knowing that you can walk into a room and have a spirited conversation, most of the time I'm apparently in the spirit. That is a good place to be when you work with a group of people who know they're going to stand up behind it and actually go get it done. That's what endures. Many, many changes and see many generations of this, there's many more to go and super excited that John and the way that things have been put together to see how this journey continues.

Relentless self-improvement.

Liz, can I ask you one about like competitive dynamics and what you're seeing in the field? And I think we all understand the value prop that Jam delivers versus the horizontal device management players. But maybe speak to kind of the Apple specific or Apple focused firms that are out there? I know they're much, much smaller. You guys clearly have kind of the brand in the space. What are they used to sell against you? Where are they trying to put holes in the Jamf story? Who's showing up the most? I'd love to hear that sort of stuff.

Yes. So yes, I mean, the Apple focused competitors, you're right. The -- when you look at how we compete with them. We really -- it goes back to the trusted access message, right? Our Apple focused competitors cannot deliver trusted access. We can. And so we really focus on that. The other thing that when we're talking about -- when we're up against some of those competitors, we really want to install with our customers on how they're going to scale. So some of the things that they talk about, which maybe it's a different user interface or something like that is all well and good, but then when the customer tries to grow, that's when we typically will see customers running into different challenges. And so those customers that we love competition, it makes us better. And those customers that choose an alternative solution, we do see them come back when it comes to scale as well.

Just on the competitive piece, absolutely aware and customers often bring back feedback and kind of benchmark and compare. I would say the way that at least I get an opportunity to work with Henry, Beth, and Nick is in the back as far as a product aspect goes because we have access to this event that we're all sitting at. We actually know why we're doing the next thing and have the customers validating it before we get there. I believe that we are always in the lead, not because of how awesome we are, but because how awesome the community is and their joint excitement to regularly critique us about what we need to be doing. They want it to be better. And I don't think anybody has access to that. We don't take that for granted. It actually is the customer that's driving. And so I don't mean it to be disparaging. We actually enjoy aspects of the competition and get to see this market be validated and ride along as the adoption is out there. We also believe that everyone else, if they're focused on what their competitor is doing is following whereas if you follow the customer, you're leading.

And maybe just to put one last note on that. A few of us have been around current competitive landscape in that environment is nothing new. It's been around for the entire existence of Jamf. And we've seen some come, we've seen some go. And maybe just to -- one more comment, where most often, they come in at is a price conversation and that is not a sustainable model for success. And so no one tries to come toe to toe with the value proposition of what Jamf is bringing. So more often than not, we hold our ground and we prove that we can sustain in this environment with the value that we're giving back to the customers. And that's something that I think our customers understand as well as to Liz's point, we call them boomerangs. But oftentimes, we see if that comes up in a conversation that it's a quicker turn back. Rob has a question.

Rob Owens again with Piper. And we're another group that gets to critique you. Fortunately or unfortunately.

We're well aware.

The next time we'll see it is in March and by a lot of estimations and calculations, we should be amid this PC cycle happening. And so as we think about that, and Ian, you spoke to sales and marketing potential leverage, but I would think you might be leaning into this opportunity a little bit more. We talked about go-to-market programs, and there's a lot of TBDs. So as we walk away from here today, help us get confidence that you're very well positioned not just to ride the way but truly capture share because it seems like a tremendous opportunity. It's about to hit you guys in the next 6 to 9 months.

Yes. I can start with that, and then Ian or somebody else can add on to it. This hasn't happened overnight. This is an evolution of us getting -- being prepared and to understand the market -- we're seeing economic headwinds for sure, not just us but everywhere. We're seeing PC sales decline, as I mentioned before but that's not going to continue forever. Companies are going to start hiring as well. And we've anticipated this. We don't know exactly what month it's going to happen. IDC will tell you it's probably either late this year or the beginning of next year, we're preparing for in our financial models at the beginning of next year and how we invest. We've taken that very seriously because we could go back and get real skinny in a lot of areas, but then we don't have any dry powder to take advantage of this opportunity when it comes back, and it will come back. And so I think we've really done that by design. We've strategically invested in not just the capabilities and keeping the dry powder from the sales side, but also from the infrastructure side. So that it's easier to become a customer of Jamf. It's easier to stay a customer of Jamf. We talked about our internal processes. Can we have our third-party channel go into a partner portal and create their own quote. So we don't have to have a channel sales person to go in there. we're making that investment now. That's impacted our margin in the short term. But again, that's by design, we're shooting for to make sure that we can take advantage of this -- the return to the market. The other thing that we've done is cross-sell. Our cross-sell is up tremendously in this last quarter, as we announced, because we really learned how to in the absence of device expansion, we've really learned how to sell the security and to cross-sell into those existing customers. As the device expansion comes back, we'll be able to sell both the security piece as well as the management piece and the trusted access to those customers, and that's where we expect to see that knee in the curve. So we're anticipating this, we're leaning into it. We're keeping the dry powder to take advantage of it. So I don't know, Ian, if you want to add anything more to it.

Just a little. I've talked to the group about taking this balanced approach, right? We look at both growth and profitability and you're right. And we talk about real conversations. I'm actually going with Liz to our Austin office later this afternoon to talk about sales investments next year. We look at this constantly. You've heard us talk about the geographies. Well, guess where we're investing. Like we are investing in those areas that are going to provide us the best returns and the closest returns, right? And we're going to balance that with ensuring we have good profitability. So I don't think we're taking away. We're just investing in those areas that give us the greatest returns.

Just maybe as a follow-up to the competitive question. Can you talk about what you're seeing as it relates to Apple Business Essentials? I understand it's not a direct competitive product. But have there been any deals where you've gone head-to-head against it? And then on the flip side, you've talked about how Apple Business Essentials can actually build top of funnel for Jamf. Have you seen that pan out so far? Or is that more of a long-term opportunity?

I can start off on that. We haven't. We haven't seen what [indiscernible] in a competitive situation at all. And in fact, I don't know -- I don't know a customer or Wudi that has used it.

I would say that we see use, but we actually see that use being exactly what the Apple team had set out to do is introduce concept that was unfamiliar to people who need that to be able to take care of those needs. I would make the argument that it has actually led to more positive conversations about engaging with the rest of the tools than being a direct product competitor. I don't think they ever evaluate this org. It's -- We may have started here as a conversation. And if there is any -- it very rapidly comes in, that's a more educated customer for us and it usually goes way better is how we've typically viewed it. There's also other aspects that come along with that. When it comes to managed Apple IDs and storage, and it's actually driving some of the core technologies that we all need to succeed through every scale of enterprise and getting the awareness and the Apples making improvements to be able to support that, that we're able to leverage and the customers who are here taking advantage of. So I would say every sign is that, that has kind of flown in and actually provided some air cover for the entirety of the market and that SMB moving up and it has not changed our penetration or adoption of all the products that would be in that space.

Yes. Liz, do you want to talk about -- have you seen it?

No. Apple Business Essentials does not come into conversations at all. And I would know because my teams love to talk about competition and all sorts of things. I would say, you asked a question about seeing a top of funnel, right? Apple Business Essentials into Jamf and we have seen that. And primarily, we see it in the SMB space. And primarily, they would go from Apple Business Essentials to our business plan. And so that's where we're seeing the really nice runway for us. And we're really excited about the Apple business essentials. It just makes all of us better and it helps us -- helps Apple go deep and wide into the market. So it only helps

Looks like we've gotten all the questions from the audience and the ones that I've received via e-mail. So I think we'll close it out here. I want to thank everyone for coming and also for those on the live stream listening in and also to our leadership team here who have had a long week, and this is kind of the closing part of it, so I want to thank them for that. And one last plug. We will see you all, hopefully, March 6 in New York for our first Investor Day. But hopefully, we'll be connecting with all of you when we report Q3 earnings in November. So thanks so much again. We appreciate you being here. Have a good rest of the day. Thank you.