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Jamf (NASDAQ:JAMF) Exceeds Q3 Expectations


Kayode Omotosho /
2022/11/09 4:18 pm EST
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Apple device management company, Jamf (NASDAQ:JAMF) reported Q3 FY2022 results that beat analyst expectations, with revenue up 30.2% year on year to $124.5 million. The company expects that next quarter's revenue would be around $129 million, which is the midpoint of the guidance range. That was in roughly line with analyst expectations. Jamf made a GAAP loss of $31.3 million, down on its loss of $30.3 million, in the same quarter last year.

Is now the time to buy Jamf? Access our full analysis of the earnings results here, it's free.

Jamf (JAMF) Q3 FY2022 Highlights:

  • Revenue: $124.5 million vs analyst estimates of $121.9 million (2.15% beat)
  • EPS (non-GAAP): $0.04 vs analyst estimates of $0.03 ($0.01 beat)
  • Revenue guidance for Q4 2022 is $129 million at the midpoint, below analyst estimates of $130 million
  • Free cash flow of $43.7 million, up 137% from previous quarter
  • Gross Margin (GAAP): 74.9%, down from 77.9% same quarter last year

Founded in 2002 by Zach Halmstad and Chip Pearson, right around the time when Apple began to dominate the personal computing market, Jamf (NASDAQ:JAMF) provides software for companies to manage Apple devices such as Macs, iPads, and iPhones.

The whole purpose of software is to automate tasks to increase productivity. Today, innovative new software techniques, often involving AI and machine learning, are finally allowing automation that has graduated from simple one- or two-step workflows to more complex processes integral to enterprises. The result is surging demand for modern automation software.

Sales Growth

As you can see below, Jamf's revenue growth has been very strong over the last two years, growing from quarterly revenue of $70.5 million in Q3 FY2020, to $124.5 million.

Jamf Total Revenue

And unsurprisingly, this was another great quarter for Jamf with revenue up 30.2% year on year. On top of that, revenue increased $8.91 million quarter on quarter, a very strong improvement on the $7.38 million increase in Q2 2022, and a sign of re-acceleration of growth.

Guidance for the next quarter indicates Jamf is expecting revenue to grow 24.2% year on year to $129 million, slowing down from the 36.1% year-over-year increase in revenue the company had recorded in the same quarter last year. Ahead of the earnings results the analysts covering the company were estimating sales to grow 22.3% over the next twelve months.

In volatile times like these we look for robust businesses with strong pricing power. Unknown to most investors, this company is one of the highest-quality software companies in the world, and their software products have been the default standard in critical industries for decades. The result is an impressive business that is up an incredible 18,152% since the IPO. You can find it on our platform for free.

Profitability

What makes the software as a service business so attractive is that once the software is developed, it typically shouldn't cost much to provide it as an ongoing service to customers. Jamf's gross profit margin, an important metric measuring how much money there is left after paying for servers, licenses, technical support and other necessary running expenses was at 74.9% in Q3.

Jamf Gross Margin (GAAP)

That means that for every $1 in revenue the company had $0.74 left to spend on developing new products, marketing & sales and the general administrative overhead. Despite the recent drop this is still around the average of what we typically see in SaaS businesses. Gross margin has a major impact on a company’s ability to invest in developing new products and sales & marketing, which may ultimately determine the winner in a competitive market, so it is important to track.

Key Takeaways from Jamf's Q3 Results

With a market capitalization of $2.55 billion Jamf is among smaller companies, but its more than $225.4 million in cash and positive free cash flow over the last twelve months put it in a very strong position to invest in growth.

It was good to see Jamf deliver strong revenue growth this quarter. On the other hand, it was less good to see the pretty significant deterioration in gross margin and the revenue guidance for the next quarter slightly missed analysts' expectations. Overall, this quarter's results were not the best we've seen from Jamf. The company is flat on the results and currently trades at $20 per share.

Jamf may have had a tough quarter, but does that actually create an opportunity to invest right now? It is important that you take into account its valuation and business qualities, as well as what happened in the latest quarter. We look at that in our actionable report which you can read here, it's free.

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The author has no position in any of the stocks mentioned.