All right, welcome to the continuation of day two here at the RBC Tech Conference. My name is Matthew Swanson, a tech analyst. Super excited to be here today with Jamf. We have Ian Goodkind, CFO, and John Strosahl, CEO. Thank you guys both for making the trip here. Yeah. I was actually talking to you guys a second ago. This is kind of a full circle moment. The last time I was with Jamf in New York was, it was my last trip pre-COVID, and the irony of it all is that in Minneapolis, I look out my window onto Jamf's office. We all had to fly to New York in order to be with the rest of the group. Anyway, you guys have different roles since the time of the IPO. Maybe, Ian, could you start CFO for a little over a year, previously part of the leadership team? Could you just kinda maybe level set what you've learned in the last year, and if there's anything maybe you appreciate more that surprised you? And then, John, if you wanna add in with your, you know, time in the new role as well. Okay. Yeah, sure. It's funny because I was teasing Matt, I'm like, "This is the most exciting question for me, because most times people are asking me about margins," right? "Hey, what about this margin? What about this percentage?" But to talk about things that surprised me, nothing surprised me. I was part of the team, the leadership team, prior to being the CFO, but there are things I definitely appreciate more now. And I think one of the things from my humble perspective is the culture. It's one of our secret sauces, I think, that make us successful. And I step back and look at what is our... you know, what are our values? And we have two. One is relentless self-improvement, and one is selflessness. And those may be basically putting people in front of you and always trying to do better. I think that's been part of our secret sauce and how important for us is tone at the top to be, you know, showing that and working with employees to understand what that is. I honestly believe that's part of our secret sauce that makes us so successful. Lots of S's there, but successful in the market, and I think that's one thing that I've, you know, appreciate more today than I did in my previous role. Yeah. I would agree, you know, the culture certainly is something. We've had that for, obviously, as long as I've been at Jamf, which is eight years. What has pleasantly surprised me, though, since being in the role is, you know, I've worked with all these individuals over a number of years, and as you can see, you know, we've had a number of years of fantastic growth. And given the economic headwinds today, growth has slowed across the company or across the industry. And to really have the team pivot into, "I'm not gonna... I need to go find, you know, six people to fill this role and get them up to speed," we've paused on that, and we've talked about managing responsibly. But then also, they're really leaning into making the efficiencies work, looking at what they have, doing the things that they need to do with the tools that they have available to them without just rushing out and trying to hire a bunch of people to do. And I really appreciated that, to have that switch, because I've never seen them in that mode. Now, the market, you know, will return. We all know that, but it's certainly in these times, we need to be responsible, and to have them lean into that so heavily was pleasantly surprising to me. And maybe doubling down on kind of those macro pressures, heading into the year, you took those into account, thinking about renewals, new logos. Could you just maybe talk about how the macros progressed throughout the year? And then in Q3, we saw a slight improvement in the decline for NRR, similar expectation for Q4. Is that a sign of stabilization, something that we can kinda set maybe a firmer foundation to start building on into next year? Yeah, I'll jump in on that one. So rewind the clock to last year, kinda Q3, Q4. You know, we were out there meeting with banks and others, "Hey, you know, hey, don't worry, end of Q, Q... you know, second half of 2023, and every quarter, you know, all of us have been rolling forward." "Well, it's maybe one quarter more, one quarter more," right? And we've, we've rolled through this full year, and what you've seen in our NRR, you've seen about a 200 basis point decline every quarter since that Q3, until this last quarter. And if you even rewind the clock, the last earnings call, say, so the Q2 earnings call, what I said then is, "Look, we're starting to lap those times. I'm not calling bottom, but I'm starting to call stabilization." And where most of our decrease came from was from lack of upsells. So saying that differently, companies weren't hiring, they were laying off folks, so the device expansion at renewal just wasn't there, and that's what we've seen over this whole year. We've seen some downsells with that. Yeah, we've seen some, you know, churn at the lower end, but that's not the big pieces. It's the lack of upsell. And we've seen that, and then this quarter, I said, "Hey, it's probably come down 100%," and I've even said that same thing for Q4. I think it's gonna come down about another 100 basis points here for Q4. But you're starting to see it level off, so I'm starting to see stability. We looked at our, you know, top 10 deals, and also eight of those had a component of upsell. While it's not as big as it's been in the past, we just see these little green shoots out there that say, "Hey, are things starting to stabilize?" At least not calling bottom, but are things starting to stabilize. And so that's our view on the economy right now is that we think, hey, maybe there's some stabilization out there. And then maybe looking at some areas that have been stronger, the growth in the S&P and the enterprise remains strong, and the replacement market doesn't seem to be showing signs of slowing down. Could you maybe talk about the current dynamics around the commercial strength? Yeah, I mean, certainly we, you know, we Ian talked a little bit about the upsell, and as the hiring comes back, we should see that return as well. What we're seeing in the commercial market is Mac is really advancing there. If any of you watched Fletcher Previn's presentation at our JNUC, it's also online, you can take a look at. He did a total cost of ownership, Mac versus PC, because they offer a choice program. When you come to Cisco, they ask you, "Do you want a Mac or a PC?" He did the same thing at IBM in a very similar study with very similar results, and that's two-thirds of the employees that come into the organization will choose a Mac over a PC, which is consistent with what we've seen in education as well, as the two-thirds of students will use a Mac over a PC, and then they graduate and go into the workforce. So it's pretty logical... So we see, you know, we see expansion of Mac in the enterprise. And then we've also seen a lot of security cross-sell- Mm. In the security. Now that we've brought that out, how management and security work together, it's really two sides of the same coin, and that has also given us a lot of traction in the enterprise. So with those three things happening, we feel pretty good about it. Could you maybe double-click for a second on that total cost of ownership? Mm-hmm Idea of a Mac? 'Cause it's something that I've always wondered a little bit, is that in a challenging macro, it seems like the sticker price, at least if I was going to my IT people- Yeah ... were like, "Hey, I wanna replace my laptop, and I'd like a laptop that's twice as expensive as the one I have now." How well do people understand that from a total cost of ownership, and how open are they to that conversation? Well, they're learning quickly, and Fletcher's not the only CIO out there doing- Mm ... cost of ownership studies internally. And the fact that one is that Apple just came out with the M3, which and they lowered the price of that, the 14-inch MacBook Pro with the M3, and the price for performance on that is fantastic. And the studies that were done by Fletcher and others that have done them, showing that the Mac users, it's a lower cost of ownership because they have a lot more... it's more intuitive, it's a consumer-simple device. There's less calls into technical support and IT. There's a longer life cycle of the product, and that was before they factored in the price for performance of the M3. So I'm excited to see once that's done again, but, on across the board there, it was less expensive to operate a Mac than it was a PC. and then you mentioned in education, seeing a similar dynamic. Mm-hmm ... where when given the choice, students are choosing to have MacBooks. You know, during COVID, that's obviously a very challenging environment for everything, but very challenging environment for school kids, right? Sure. There's so much work from home, school from home. Can you kinda describe the dynamic that had on your business? Sure. And what kinda gets us back to, you know, accelerating education? Yep. Well, to be clear, the choice of a Mac versus a PC is a higher education, not K through twelve. My fifth grader doesn't get to choose what device she's gonna have, although she does have an iPad. But you know, when COVID hit, and we sent a lot of students home, a lot of school districts, not just in the U.S., but internationally as well. And if you've seen, we landed the GIGA Project in Japan. There's the DigitalPakt project in Germany, Ministry of Education in Taiwan, plus the CARES Act in the U.S. They all funded their local school districts to accelerate that one-to-one. Not all of them got one-to-one, one student to one device, but many of them got a lot closer than they would have. They kinda accelerated that through the funding. Well, they tend to lease the devices for anywhere from 3-5 years, with an average of four years. Our products go on that with a commensurate license to that, and that happened in 2020. So at the average refresh rate for the devices, we should see that come up in 2024, and that's not just us seeing that. That's what we're hearing from our customers, education customers, K through 12, and that's also what IDC and other third parties would say. So we're excited about that opportunity. There's been some issues with other devices that haven't had the durability of the iPad, so we expect when that refresh cycle happens, 'cause not all of them bought Apple devices, some of them bought other devices, but the fact that the Apple devices have held up better, and they don't have a finite life cycle, has benefited Apple. And so when those things come up for refresh, there's again the total cost of ownership. Yes, it was cheaper to buy this other device immediately, but it didn't last very long, and now I can't update it, so it's a brick. And where the Apple doesn't have that issue, and so we're seeing some of those go toward Apple, which also benefits our install base. And thinking about that installed base and some of the trends from a mixed perspective, how should we think about the trends of, like, the information communication K-twelve? Mm-hmm ... which is about 50% of ARR- Yeah ... versus the professional services, financial services, wholesale, retail, that's about 25% of ARR? Yeah. And on whatever horizon you wanna talk about, how those mixes are gonna change. Well, sure. I mean, the tech, you know, is a big industry for us. It makes sense because it's just a faster adopter of Apple technology. You go to Salesforce, for example, you're given an Apple device unless you create a business class or business case for something else. Mm-hmm. And those that do offer choice, Cisco being one of them, IBM being another, you'll get a higher choice for the Apple device. So at that, and all that's in tech, and we saw the biggest hit in at least the technology industry, across the board, but certainly in technology, where there was a bit of an up as COVID kinda slowed down, then an uptick when everybody started to work from home, and our products are fantastic for that because you can basically open shrink wrap, open the shrink wrap on an Apple device, and never even have zero-touch deployment is what we call it. You can just open it up in your house, and it's populated with all the applications and everything that you need, specific to your company. So that worked really, really well in tech. We just talked about the education, so we talked about when the market expects for that to come back. And we've seen a lot of what we would call signs of stabilization in the information technology area, and that's commensurate with the hiring. We know that hiring is gonna come back. It's maybe the downsizing has slowed down a bit. We don't know how long that's gonna last, but at some point, it's gonna come back up, and we're well-positioned for when that expansion happens back in the tech area. By the answer to that question, I'm guessing this is gonna vary a lot, vertical by vertical, but how do you think about Apple's general expansion within the enterprise? I guess, how much, too, has Apple's kind of changing view of the enterprise market... help kind of support your long-term growth? Well, Apple, you know, they create tremendous consumer simple devices, and very powerful devices as well. And the tech adoption of that has been really good, but then there's areas outside of tech that are adopting the technology as well. You mentioned the professional services, the financial services, which tend to have been a laggard in, at least for Apple adoption, but we've seen some great progress there. We've seen banks go all Mac. Yeah, and that was one of our nice wins last quarter. And then wholesale retail. It's hard to go into a store or even a gas station, and the point of sale not be a tablet of some sort. So we really see the desk-less work environment expand beyond what we've seen just specifically in the commercial and the enterprise, as someone sitting at their desk with a, you know, with a, with a MacBook Pro. We're really excited about that too, because they all need not only device management, but they also need device protection and security. Yeah. Well, I mean, if banking can make it to Apple, it wasn't that long ago, we had BlackBerrys. Yeah. Right. But the best thing is when everybody comes in and meets with us, and they've all got their Dell, you know, and we of course kid them about it a little bit, but then they all have a MacBook, their personal MacBook, and it's in the bag next to them. Well, there you go. So security cross-sell, I mean, it's a great long-term opportunity. Can you talk about a couple different aspects of this? One, how security is complementary- Sure ... to the management side? And then also just kind of what's a realistic progression when you've got, you know, the five security products to one management, but adoption's 23%? Is that the most recent number? Mm-hmm. Kind of how to think about that progression of going, you know, one security product to five. What, you know, what's a good goal for the company? Sure. Well, first off, we didn't just build security and then hope customers would buy it. We talked to our customers quite a bit. Obviously, we have an annual Jamf Nation User Conference or JNUC, and we had it this year in Austin, Texas. And we spoke to our customers about how many Apple devices do you have in your environment today? And they gave a number, and then we said, "If you could have everyone who wanted an Apple in your environment, what would the device count be?" And there was a difference in those numbers, and we asked them why. And, you know, we're talking to IT, and CISO and InfoSec people, and they said, "Well, because we're not sure that we trust all of those devices to access the corporate resources." So we thought about that, and that's when we expanded it into security- Mm-hmm ... specific for the Apple ecosystem. And that's really resonated with our customers, and it's obvious through the cross-sell that we had and the pipeline that we've talked about. 40% of our new generated pipeline has been in security. It's 21% of our ARR, and growing, and 23% of our customers actually have a security product on with their device management. But that's one security product. There's many aspects of security. And while every device can have one device management product on it, it can have five different security products on it. So I think we're right at the beginning or the early innings of that security. Customers have asked for it. We know that the reason they need it is so they can trust those devices to hit their corporate resources, and you can't have a secure device without it also being managed. So if you find something, first, you have to deploy the security product, which you need a management product to do. Secondly, if you find a vulnerability, how do you stop access to that device? Or how do you make sure that the application that had that vulnerability is updated and enforced, actually updated, if necessary? All that happens on the management side. So the two really go hand in hand, and our sales teams go to the market now with what they call a trusted access outcome. It's not a product or a SKU, but it's an outcome. How does the InfoSec trust that the resources can access the... or that the devices can access the corporate resources? And that's what's really done well so far. And then one part of the security story I've always really liked, just as kind of a follow-up here, and it's a question that comes up from investors all the time, is, like, what are you displacing? And can you talk just for a second about how you kind of fit in the security ecosystem? Mm-hmm ... in most customers? As you know, are you displacing something, or is it more of adding a new level of visibility kind of into the framework? Well, sometimes both. In the small to medium-sized companies, they generally start off with our bundled solution- Mm-hmm ... with our business plan, and that has both security and management in it. At the enterprise level, they generally have some sort of security product on those devices. And generally, it is in most all cases, it's a product that was built for Windows, that they're also running on their Mac. And we've heard from our customers that there are some issues with that. One, it's not written specifically for the Mac operating system. And secondly, it's not integrated to work with the other products that are on that that were also written for the Windows operating system. So we have a device management product that was written specifically for Apple, and then we have security products that not only were written specifically for Apple, but then also integrate into the management product. So you don't have to figure out how to integrate those pieces that weren't designed for that operating system to begin with. And so you've got the cost of integration, you've got the potential cost of failure, and many times you'll have performance degradation on the machine because it's not designed to operate in that way. We've also heard of false positives. So you have a product that was written for Windows, and all of a sudden it detects a vulnerability on a Mac, but that's just how the Mac is supposed to operate. So you chase your tail on the false positives. We've had enterprise run both of the products on the same device. When they become comfortable that it's exposing vulnerabilities that the Windows product did not, then sometimes they'll go ahead and switch that off and just keep us on the Mac devices. ... And then maybe we'll get Ian back involved. Yeah, let's get Ian back in the mix. Fall asleep back here. You're having a nice time over there. Could you talk about the customer payment schedules? Yeah ... and the move to upfront multi-year billings to annual billings? And kinda the two follow-up questions, is this, you know, customer-driven, Jamf driven, somewhere in between? When will it become more pronounced? And then how do we think about the impact on free cash flow, specifically? Yeah. What you saw this quarter is a shift in timing when people were paying. So, we saw a lot of our upfront or multi-year upfront contracts, they were paying them upfront for multi-year shift to annual payments or even quarterly payments. So we looked at the top nile multi-year contracts that were historically paid upfront. Yeah, eight of them shifted to either annual or even a quarterly basis. So in today's environment, right, customers are going: "Well, wait a minute, I'm earning over 5% in my bank account. Like, I need a bigger discount to not pay this thing upfront," right? And we just, our practice hasn't been to discount that high. We believe our product yields the price it does, and so this was definitely customer-driven. We saw a much bigger change this quarter. We'd seen trickles throughout the year, but this quarter we saw a significant change, and so we've factored that in our models. I think, you know, when we go forward, the way I would think about our unlevered free cash flows is I think about our operating income. And what we've done this year is we've delivered, you know, using our midpoint of our guidance range, 250 basis points more in 2023 than 2022. And I think you can expect that we'll continue to deliver more margin in 2024. So I think as that goes up, our unlevered free cash will go up. And I think we've, you know, our Q3 and Q4 are our biggest commercial quarters, and that's what we've really factored in at this point. When you think about the international opportunity, when you look at, you know, kinda the difference between your revenue mix and the Apple device shipment mix, and our assumption that every Apple device in the world should be on Jamf, there's a little bit of a disconnect, right? Mm-hmm. I guess multiple parts of it is, like, what do you think your international revenue should be longer term, and how you're investing towards it? And how much do you look at things like those device shipments or what you're hearing from enterprise side to influence what markets you're investing in the most heavily? Yeah, good question. When I first came to Jamf, less than 15% of our business was outside the U.S., and now it's about a third of our business. It should be over 50% of our business, because that's... If you look at Apple's financials, you know, over 50% of their business comes from outside the United States. And if your theory holds that we should be on every, Apple device out there, we should certainly have that, which I, I agree with. And we've made a concerted effort to, to get there. So we, we've partnered very closely with Apple, not just in the U.S., but also, in Asia, in, in APAC as well, the Pacific Rim, as well as in Europe. We meet with them regularly. We have overlaid sales territories, so one rep on the Apple side and one rep on the Jamf side to really, really go in together. We've talked to them about geographies that they are investing in, and we've followed that investment because we know that there's gonna be an install base there. Apple spoke on their last earnings call about their successes in India and some of the things they've been doing there. Well, we too have a legal entity now. We have employees in space working with the Apple teams and the local channel partners as well. That's another thing outside the United States, working through the channel is even more important because you have languages, and you have, you know, support issues and currency and all those types of things that the channel partners can help you with. So leaning heavily on the partners internationally, working very closely with Apple, following their investment flow. And then, we're also just talking to our customers. We'll have a multinational company, maybe they're based in the U.S. or maybe they're based in Europe, and then how do they deploy that across their international locations is also something we've worked very closely with. If we were able to somehow just take a step away from macro and ignore that for a minute, how would you think about the environment heading in 2024 in terms of tailwinds, headwinds, company-specific catalysts? Yeah, I mean, if we just don't consider the macro right now because we all know that, you know, hiring is gonna return and device expansion happens with that. But absent of that, just Apple growing in the enterprise, the total cost of ownership things we talk about, the choice programs, so we're seeing an expansion of Mac in the enterprise and Apple in the enterprise. We're seeing a lot of non-traditional workflows or deskless workflows. We talked about that. I spoke at our last customer conference, several customers, but one customer from an airline and one customer from a beverage company, and they're all leaning into, "Hey, when's the management gonna come out for the Apple Watch?" And Apple's announced that they're gonna make that possible. And as soon as they do, we're gonna be there to support that, like we have with other device and form factors. Apple TV, we manage today over 300,000 Apple TVs. That's not even talking about the Vision Pro, which has some great hands-free medical use cases and others. So there's a lot of things happening outside of the traditional desk workflow that we see growing, so that's a great opportunity for us. We talked about the international opportunity. Security, I mean, security is not getting less important, and it's not becoming easier either because the bad actors, they've got a bigger footprint, a bigger target now with Apple, especially as higher-level executives and government agencies are using Apple devices. Of course, that's a high-value target for them. So security opportunity, international opportunity, expansion of Mac in the enterprise, and all the deskless things that we see, you know, going on. When I, when I hear from a beverage company that's saying: "You've got to do this with the watch because I need to do this, this, and this," they're, they're changing their processes around the technology that they're anticipating coming down the pipe. I've never seen that in my 30+ year career. It's always been, you figure out a process, and then you go sort out the technology to support that. And it's almost being flipped on its head now with all the great things coming down the pipe. ... Yeah, that's, that's super helpful. You know, we started this conversation, Ian, with you saying you were happy I didn't ask you about margins. Coming, huh? Well, now we're here. So how do you think about balancing growth and margins, especially in a challenging macro? You know, how do you think about investment? Yeah. Yeah, I mean, we've always taken a prudent approach to balance both, you know, growth with profitability. You've seen us grow margins over the last couple of years. We did the Wandera acquisition, we transitioned to doing security. We knew that was gonna take some time to kind of work out. We worked out of that. You know, as we roll forward here, the way I think about 2024 is we do have some, you know, long-term initiatives that will come to fruition. So what I mean by that is, maybe you've heard me talk about, you know, we're not where we wanna be with sales and marketing and GNA. Those are two areas we're hyper-focused on. You know, a few examples within sales and marketing. This customer journey, it's been too manual, and it's something we've been investing in to really automate. We don't have a partner portal today to really, you know, leverage the channel even more, and that's something we're getting in place within 2024. Automating some of our back office, finance functions. Again, another area we're automating. And some of those product projects come to fruition next year, which will help us build for scalability and reduce some of those costs. So those are things I would expect to help us continue to build margin as we go, especially in light of today's account. You know, we're inside five minutes. Is there anyone in the audience that would like to ask a question? All right. I mean, you mentioned some automation. I've not made it through one of these meetings yet without asking about Gen AI. And just how do you think about within Jamf, within, like, your ecosystem or, you know, even just how you guys are gonna use it internally- Mm-hmm. costs and things of that nature? Well, I can talk a little bit about it, and you can add color if you'd like. We use it today. We use it in our threat detection, within our security products. Our developers are using it to supplement their coding capability. We use it in our support organization. All of those areas we're using it today. And AI is not a strategy in itself. It is a supplement or an amplifier to the things that you're doing to become more efficient, and we're certainly using that. We have, you know, opportunities in AI and Gen AI that are tremendous because it's all based on the data that you have. And we have over 100,000 users or members in our Jamf Nation membership group. So our user group is over 100,000 members strong. If you ever wanna know something about managing an Apple or not even securing an Apple, a lot of that is already in our user group capability. So we have the largest accumulation or gathering at JNUC, and then just online, of Apple IT experts, and now leaning into security. So we can and we know what's going on on all of those Mac and Apple devices. So using that data to help teach an AI capability for the benefit of our customers, to the extent that there's no information shared and things like that, but that's really the benefit that we see, you know, in AI. The only thing I'd add is that as we advance our bundles, too, I think, you know, this is about stickiness and, and keeping, you know, customers happy. I think, you know, there'll be some interesting stuff, you know, over time that will come with our bundles. You know, you look at the way we've been moving from product to... 'Cause we are a platform, right? We're not, we're not product, anymore. We're- we are a platform, and some of this can be built in with some of those bundles, and I think there'll be some interesting things in the future that'll help us. Maybe as a final question, what's the thing within Jamf that you're most excited for in the next three to five years? And as a management team, what do you think are the biggest strategic decisions you need to make to make that happen? Well, we kinda started with it, and it's the culture, and one of the strategic decisions that we need to make sure that we continue to foster that internal culture, because we have two values, relentless self-improvement and selflessness. And it's written on the wall when you walk in the door, and it sounds kinda, you know, cheesy, but it's true. And I do believe that this is a company that really lives by those values, and that's kinda gotten us to where we're at today. And we don't wanna throw that out, and certainly not to make sure that we continue to scale while retaining the capability that got us there, you know, if that makes sense. I would just add, yeah, that I think, you know, in the role, now five quarters and, you know, 60 days, and we've said this is the right strategy. It's just now how do we make it, and John said the word, scalable, right? Mm-hmm. Again, leaning in, we both have, we've both come from bigger companies where we've done scalability, and that's where we're focused. I think the other thing to think about, and John talked about this earlier, too, is expansion worldwide, right? Continuing to be more global. We both, John's worked a third, I think, of your career outside the US. I've actually managed operations outside the US. So we both have those experiences and hope to bring that to get to the next level where we're gonna be. Well, with that, we're at time. Thank you, guys, so much for being here, and I'll see you on the flight back to Minneapolis. Yeah, that's right.