Jamf (JAMF)

Apple device management company, Jamf (NASDAQ:JAMF) reported revenue ahead of Wall Street’s expectations in Q2 CY2025, with sales up 15.3% year on year to $176.5 million. Guidance for next quarter’s revenue was better than expected at $177 million at the midpoint, 0.7% above analysts’ estimates. Its non-GAAP profit of $0.18 per share was in line with analysts’ consensus estimates.

Company Overview

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.

A company’s long-term sales performance is one signal of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Over the last three years, Jamf grew its sales at a 16.3% compounded annual growth rate. Although this growth is acceptable on an absolute basis, it fell slightly short of our standards for the software sector, which enjoys a number of secular tailwinds.

This quarter, Jamf reported year-on-year revenue growth of 15.3%, and its $176.5 million of revenue exceeded Wall Street’s estimates by 4.7%. Company management is currently guiding for a 11.1% year-on-year increase in sales next quarter.

Looking further ahead, sell-side analysts expect revenue to grow 8.6% over the next 12 months, a deceleration versus the last three years. This projection is underwhelming and implies its products and services will face some demand challenges.

Billings is a non-GAAP metric that is often called “cash revenue” because it shows how much money the company has collected from customers in a certain period. This is different from revenue, which must be recognized in pieces over the length of a contract.

Jamf’s billings punched in at $176.5 million in Q2, and over the last four quarters, its growth slightly outpaced the sector as it averaged 10.1% year-on-year increases. This performance aligned with its total sales growth and shows the company is successfully converting sales into cash. Its growth also enhances liquidity and provides a solid foundation for future investments.

The customer acquisition cost (CAC) payback period measures the months a company needs to recoup the money spent on acquiring a new customer. This metric helps assess how quickly a business can break even on its sales and marketing investments.

Jamf does a decent job acquiring new customers, and its CAC payback period checked in at 44 months this quarter. The company’s relatively fast recovery of its customer acquisition costs gives it the option to accelerate growth by increasing its sales and marketing investments.

For software companies like Jamf, gross profit tells us how much money remains after paying for the base cost of products and services (typically servers, licenses, and certain personnel). These costs are usually low as a percentage of revenue, explaining why software is more lucrative than other sectors.

Jamf’s robust unit economics are better than the broader software industry, an output of its asset-lite business model and pricing power. They also enable the company to fund large investments in new products and sales during periods of rapid growth to achieve outsized profits at scale. As you can see below, it averaged an excellent 78.6% gross margin over the last year. Said differently, roughly $78.58 was left to spend on selling, marketing, and R&D for every $100 in revenue.

Jamf produced a 75.2% gross profit margin in Q2, marking a 4.1 percentage point decrease from 79.3% in the same quarter last year. Jamf’s full-year margin has also been trending down over the past 12 months, decreasing by 1.1 percentage points. If this move continues, it could suggest a more competitive environment with some pressure to lower prices and higher input costs.

Many software businesses adjust their profits for stock-based compensation (SBC), but we prioritize GAAP operating margin because SBC is a real expense used to attract and retain engineering and sales talent. This metric shows how much revenue remains after accounting for all core expenses – everything from the cost of goods sold to sales and R&D.

Jamf’s expensive cost structure has contributed to an average operating margin of negative 7.1% over the last year. Unprofitable software companies require extra attention because they spend heaps of money to capture market share. As seen in its historically underwhelming revenue performance, this strategy hasn’t worked so far, and it’s unclear what would happen if Jamf reeled back its investments. Wall Street seems to think it will face some obstacles, and we tend to agree.

Over the last year, Jamf’s expanding sales gave it operating leverage as its margin rose by 8.5 percentage points. Still, it will take much more for the company to reach long-term profitability.

This quarter, Jamf generated a negative 8.5% operating margin. The company's consistent lack of profits raise a flag.

Although earnings are undoubtedly valuable for assessing company performance, we believe cash is king because you can’t use accounting profits to pay the bills.

Jamf has shown mediocre cash profitability over the last year, giving the company limited opportunities to return capital to shareholders. Its free cash flow margin averaged 9.7%, subpar for a software business.

Jamf’s free cash flow clocked in at $36.91 million in Q2, equivalent to a 20.9% margin. This result was good as its margin was 12.2 percentage points higher than in the same quarter last year, but we wouldn’t read too much into the short term because investment needs can be seasonal, leading to temporary swings. Long-term trends carry greater meaning.

Over the next year, analysts predict Jamf’s cash conversion will improve. Their consensus estimates imply its free cash flow margin of 9.7% for the last 12 months will increase to 21.8%, giving it more flexibility for investments, share buybacks, and dividends.

Jamf reported $481.5 million of cash and $768.5 million of debt on its balance sheet in the most recent quarter. As investors in high-quality companies, we primarily focus on two things: 1) that a company’s debt level isn’t too high and 2) that its interest payments are not excessively burdening the business.

With $135.5 million of EBITDA over the last 12 months, we view Jamf’s 2.1× net-debt-to-EBITDA ratio as safe. We also see its $5.88 million of annual interest expenses as appropriate. The company’s profits give it plenty of breathing room, allowing it to continue investing in growth initiatives.

We enjoyed seeing Jamf beat analysts’ EBITDA expectations this quarter. We were also happy its revenue outperformed Wall Street’s estimates. Overall, this print had some key positives. The stock traded up 5.6% to $7.77 immediately after reporting.

Updated: November 8, 2025 at 9:12 PM EST

When considering an investment in Jamf, investors should account for its valuation and business qualities as well as what’s happened in the latest quarter.

Jamf isn’t a terrible business, but it doesn’t pass our quality test. Although its revenue growth was solid over the last five years, it’s expected to deteriorate over the next 12 months and its operating margins are low compared to other software companies. And while the company’s admirable gross margin indicates excellent unit economics, the downside is its ARR has disappointed and shows the company is having difficulty retaining customers and their spending.

Jamf’s price-to-sales ratio based on the next 12 months is 2.3x. This valuation multiple is fair, but we don’t have much faith in the company. We're fairly confident there are better investments elsewhere.

Wall Street analysts have a consensus one-year price target of $12.76 on the company (compared to the current share price of $12.87).