Jamf (NASDAQ:JAMF) Beats Q3 Sales Targets, Stock Soars
Apple device management company, Jamf (NASDAQ:JAMF) reported Q3 FY2023 results topping analysts' expectations , with revenue up 14.5% year on year to $142.6 million. Revenue guidance for the full year also exceeded analysts' estimates. Turning to EPS, Jamf made a non-GAAP profit of $0.08 per share, improving from its loss of $0.26 per share in the same quarter last year.
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Jamf (JAMF) Q3 FY2023 Highlights:
Revenue: $142.6 million vs analyst estimates of $140.1 million (1.8% beat)
EPS (non-GAAP): $0.08 vs analyst estimates of $0.07 (18.4% beat)
Revenue Guidance for Q4 2023 is $148.5 million at the midpoint, roughly in line with what analysts were expecting
Free Cash Flow of $32.54 million, up 198% from the previous quarter
Gross Margin (GAAP): 77.4%, down from 79.3% in the same quarter last year
“Jamf’s industry-leading Apple management and security solutions, delivered as an integrated platform, help IT and security teams deliver an experience that is loved by users and trusted by organizations,” said John Strosahl, CEO.
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.
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Sales Growth
As you can see below, Jamf's revenue growth has been strong over the last two years, growing from $95.62 million in Q3 FY2021 to $142.6 million this quarter.
This quarter, Jamf's quarterly revenue was once again up 14.5% year on year. We can see that Jamf's revenue increased by $7.54 million quarter on quarter, which is a solid improvement from the $2.88 million increase in Q2 2023. Shareholders should applaud the re-acceleration of growth.
Next quarter's guidance suggests that Jamf is expecting revenue to grow 13.9% year on year to $148.5 million, slowing down from the 25.5% year-on-year increase it recorded in the same quarter last year. Looking ahead, analysts covering the company were expecting sales to grow 15.1% over the next 12 months before the earnings results announcement.
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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's left after paying for servers, licenses, technical support, and other necessary running expenses, was 77.4% in Q3.
That means that for every $1 in revenue the company had $0.77 left to spend on developing new products, sales and marketing, and general administrative overhead. Despite the recent drop, Jamf still has an excellent gross margin that allows it to fund large investments in product and sales during periods of rapid growth and achieve profitability when reaching maturity.
Key Takeaways from Jamf's Q3 Results
Sporting a market capitalization of $2.09 billion, Jamf is among smaller companies, but its more than $227.6 million in cash on hand and positive free cash flow over the last 12 months puts it in an attractive position to invest in growth.
It was encouraging to see Jamf narrowly top analysts' revenue expectations this quarter. Strong free cash flow also stood out as a positive in these results. On the other hand, its gross margin declined. Overall, this was a good quarter for Jamf. The stock is up 9.8% after reporting and currently trades at $17.77 per share.
So should you invest in Jamf right now? When making that decision, it's important to consider its valuation, business qualities, as well as what has happened in the latest quarter. We cover that in our actionable full research report which you can read here, it's free.
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The author has no position in any of the stocks mentioned in this report.
