Jamf (NASDAQ:JAMF) Q4 Sales Beat Estimates But Guidance Weaker Than Expected

Jabin Bastian /
2023/02/28 4:12 pm EST

Apple device management company, Jamf (NASDAQ:JAMF) reported results ahead of analyst expectations in the Q4 FY2022 quarter, with revenue up 25.5% year on year to $130.3 million. However, guidance for the next quarter was less impressive, coming in at $129.5 million at the midpoint, being 1.57% below analyst estimates. Jamf made a GAAP loss of $21.2 million, improving on its loss of $23.8 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) Q4 FY2022 Highlights:

  • Revenue: $130.3 million vs analyst estimates of $128.9 million (1.09% beat)
  • EPS (non-GAAP): $0.06 vs analyst estimates of $0.04 (42.9% beat)
  • Revenue guidance for Q1 2023 is $129.5 million at the midpoint, below analyst estimates of $131.6 million
  • Management's revenue guidance for upcoming financial year 2023 is $561 million at the midpoint, missing analyst estimates by 1.8% and predicting 17.2% growth (vs 31% in FY2022)
  • Free cash flow of $25.1 million, down 42.6% from previous quarter
  • Gross Margin (GAAP): 76.7%, down from 78.8% 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 $76.3 million in Q4 FY2020, to $130.3 million.

Jamf Total Revenue

This quarter, Jamf's quarterly revenue was once again up a very solid 25.5% year on year. But the growth did slow down compared to last quarter, as the revenue increased by just $5.77 million in Q4, compared to $8.92 million in Q3 2022. We'd like to see revenue increase by a greater amount each quarter, but a one-off fluctuation is usually not concerning.

Guidance for the next quarter indicates Jamf is expecting revenue to grow 19.6% year on year to $129.5 million, slowing down from the 34.1% year-over-year increase in revenue the company had recorded in the same quarter last year. For the upcoming financial year management expects revenue to be $561 million at the midpoint, growing 17.2% compared to 30.7% increase in FY2022.

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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 76.7% in Q4.

Jamf Gross Margin (GAAP)

That means that for every $1 in revenue the company had $0.77 left to spend on developing new products, marketing & sales and the general administrative overhead. Despite the recent drop, this is still a good gross margin that allows companies like Jamf to fund large investments in product and sales during periods of rapid growth and be profitable when they reach maturity.

Key Takeaways from Jamf's Q4 Results

With a market capitalization of $2.6 billion Jamf is among smaller companies, but its more than $224.3 million in cash and positive free cash flow over the last twelve months put it in a very strong position to invest in growth.

Jamf delivered solid revenue growth and free cash flow this quarter. And we were also happy to see it topped analysts’ revenue expectations, even if just narrowly. On the other hand, it was unfortunate to see that Jamf's revenue guidance for the full year missed analysts' expectations and it indicates quite a significant slowdown in growth. Overall, this quarter's results were mixed. The company is flat on the results and currently trades at $21.22 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.