Jamf outlines 2025 revenue growth targets with new product expansions

Insights from the Earnings Call: Jamf Holding Corp. (JAMF) First Quarter 2025

Management View

• CEO John Strosahl emphasized that Jamf saw a 10% increase in year-over-year revenues along with a non-GAAP operating income margin of 22%. Both figures surpassed expectations set at the higher range of forecasts. The total Annual Recurring Revenue (ARR) climbed 9% from the previous year to reach $658 million, including an uptick in security-related ARR by 17%, which now stands at $162 million. Additionally, when adjusting for foreign exchange impacts, net new ARR experienced acceleration for the first time since the second quarter of 2022.
• Jamf introduced two new platform solutions: Jamf for Mac and Jamf for K-12. The aim was to boost Apple usage by combining security with management within one product package. Each release targets distinct user groups like educational institutions and businesses.
• A significant acquisition was completed, with Jamf acquiring Identity Automation for $215 million. This move adds dynamic identity management capabilities, supporting industries relying on mobile-centric workflows like healthcare and education.
• CFO David Rudow emphasized the company's disciplined investment approach, noting an 800 basis point improvement in non-GAAP operating margin over Q1 2024. Sales and marketing costs improved by 400 basis points year-over-year.

Outlook

• Revenue guidance for Q2 2025 is set at $167.5 million to $169.5 million, representing a 10% year-over-year growth midpoint. Full-year 2025 revenue is projected at $691 million to $695 million, with a 21% non-GAAP operating income margin midpoint.
• The guidance includes $15 million in revenue contribution from Identity Automation for the remaining three quarters of 2025. Management highlighted that Identity Automation's revenue is seasonal, with higher contributions expected in Q3 and Q4.
• CFO Rudow noted that unlevered free cash flow growth is expected to exceed 75% for the year.

Financial Results

• Total revenue for the quarter grew 10% year-over-year. Recurring revenue accounted for 98% of total revenue, growing 11% year-over-year. Non-strategic sources of revenue, such as services and licenses, continued to decline.
• The non-GAAP operating income amounted to $37.6 million, which corresponds to a margin of 22%. By the end of Q1, the company held $222 million in cash.
• The trailing 12-month unlevered free cash flow margin stood at 12.3%, just under the previous year’s figure of 12.5%. This slight dip can be attributed to the scheduling of billing cycles and collection times.

Q&A

• Joshua Riley, Needham: Asked about the commercial potential of Identity Automation beyond education. CEO Strosahl explained that while education will remain a priority, the acquisition's dynamic identity capabilities can also support deskless workflows in industries like retail and healthcare.
• Koji Ikeda, Bank of America: Inquired about the maintenance of guidance amid strong demand. CFO Rudow clarified that while demand trends are positive, the guidance reflects a cautious approach given macroeconomic uncertainties.
• Jake Roberge, William Blair: Queried the drivers behind ARR reacceleration. Management highlighted strong traction in new platform solutions, particularly Jamf for Mac and Jamf for K-12.

Sentiment Analysis

• Analysts expressed cautious optimism, focusing on the potential of new product launches and the Identity Automation acquisition while seeking clarity on macroeconomic risks.
• Management maintained a confident tone during prepared remarks, emphasizing growth and profitability initiatives. During Q&A, responses were measured, reflecting prudent optimism about market dynamics and execution capabilities.
• Compared to the previous quarter, both analysts and management appeared slightly more optimistic, buoyed by new product rollouts and ARR improvements.

Quarter-over-Quarter Comparison

• The guidance for 2025 continues to align with the previous quarter’s growth objectives, indicating steady demand patterns yet factoring in prudent estimates regarding economic circumstances.
• The ARR growth of 9% in Q1 2025 is more favorable compared to the 8% revenue growth reported in Q4 2024.
• The management style has become somewhat more optimistic, fueled by improved annual recurring revenue and the success of new product releases.

Risks and Concerns

• Macroeconomic challenges and geopolitical instabilities might affect customer budgets and purchasing timelines.
• Fluctuations in FX were observed as a slight obstacle, mainly due to a growing expenditure at an international level.
• The seasonal variability in Identity Automation's revenue contributions should be kept an eye on as a crucial element to watch.

Final Takeaway

Jamf Holding Corp. demonstrated solid performance in Q1 2025, with strong ARR growth and successful product launches, including Jamf for Mac and Jamf for K-12. The acquisition of Identity Automation is expected to enhance the company's capabilities in dynamic identity management, particularly in mobile-centric industries. Revenue and operating income guidance for 2025 reflect cautious optimism amid a stable demand environment. Management remains focused on achieving the Rule of 40 by fiscal 2026, with continued emphasis on growth and operational efficiency.

Review the complete earnings call transcript here.

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