Jamf Holding Corp. (JAMF) Q4 2021 Earnings Call Transcript | #macos | #macsecurity | #hacking | #aihp

Jamf Holding Corp. (NASDAQ:JAMF)
Q4 2021 Earnings Call
Mar 01, 2022, 4:30 p.m. ET

Contents:

• Prepared Remarks
• Questions and Answers
• Call Participants

Prepared Remarks:

Operator

Thank you for standing by, and welcome to the fourth quarter 2021 Jamf earnings conference call. [Operator instructions] As a reminder, today’s program is being recorded. I would now like to introduce your host for today’s program, Jennifer Gaumond, vice president, investor relations. Please go ahead.

Jen Gaumond — Vice President, Investor Relations

Good afternoon, and thank you for joining us on today’s conference call to discuss Jamf’s fourth quarter and full year 2021 financial results. With me on today’s call are Dean Hager, chief executive officer; and Jill Putman, chief financial officer. Before we begin, I’d like to remind you that shortly after the market closed today, we issued a press release announcing our fourth quarter and full year 2021 financial results. We also published a Q4 earnings presentation, updated investor presentation and Excel file containing quarterly financial statements for fiscal years 2019 through 2021 to assist with modeling.

You may access this information on the investor relations section of jamf.com. Today’s discussion may include forward-looking statements. Please refer to our most recent SEC filings, including our most recent annual report on Form 10-K where you will see a discussion of factors that could cause actual results to differ materially from these statements. I would also like to remind you that during the call, we will discuss some non-GAAP measures related to Jamf’s performance.

You can find the reconciliation of these measures to the nearest comparable GAAP measures in our SEC filings and press release. Additionally, to ensure we can address as many analyst questions as possible during the call, we ask that you please limit your questions to one initial question and one follow-up. Now I’d like to turn the call over to Dean Hager. Dean?

Dean Hager — Chief Executive Officer

Thank you, Jen, and thank you, everyone, for joining us. On today’s call, I will share highlights from Jamf’s fourth quarter and fiscal year and how we plan to build upon our continued momentum in the coming year. Then Jill will review the fourth quarter and fiscal 2021 financial results and provide our financial outlook for 2022. 2021 was a pivotal year for Jamf, as we continued our mission to help organization succeed with Apple.

We strengthened our Apple Enterprise Management platform with new products and functionality with an emphasis on security and hybrid work. We completed Jamf’s largest acquisition to date, closed the three largest customer contracts in Jamf’s history, added a record number of devices to our platform, completed our first full fiscal year as a public company and consistently delivered strong financial results that exceeded expectations. In February last year, we strengthened our security platform with the acquisition of cmdReporter, a suite of security and compliance tools purpose-built for macOS. Based on this technology, we launched a new Compliance Reporter solution in the second quarter, closing a 14,000 Mac fleet subscription in its very first quarter of availability.

Compliance Reporter was a significant addition to Jamf’s platform, continuing to produce results all year for both new and existing customers, including in Q4, where we closed both an 8,000 Mac fleet subscription to a net new customer who is not running Jamf’s management solution and a 10,000 fleet subscription to an existing Jamf customer, extending the value of our Apple Enterprise Management platform. In July, we continued our product expansion with the acquisition of Wandera, a leader in Zero-Trust Cloud Security and Access Solutions. This acquisition uniquely positions Jamf to help IT and security teams confidently protect devices, data and applications across Windows, Android and Apple endpoints, while delivering the intended Apple Best experience when coupled with the most robust and scalable Apple Enterprise Management platform on the market. The acquisition of Wandera led to launching several rebranded Jamf solutions that are sold both through the traditional Wandera resellers like carriers and security partners and now through Jamf’s highly effective sales team, these products include Jamf’s Private Access, a zero-trust network access solution that replaces legacy VPN and conditional access technology.

Jamf Threat Defense, a mobile security solution that protects endpoints from threats with zero-day phishing prevention and Jamf data policy, a solution to automate, enforce and manage usage policies and data consumption. All three of these products enhance Jamf’s Apple Enterprise Management platform, creating substantial upsell and cross-sell opportunities, while also providing Jamf new landing products that deliver value for Apple, Windows and Android endpoints, regardless of the device management solution used. We have been very encouraged by the early customer response to these new solutions and our ability to minimize disruption from the acquisition. Employee turnover has been very low from the Wandera team.

And for the first six months, the Wandera solutions were offered by Jamf in the second half of 2021, new annual subscription bookings grew by more than 30% year over year. In Q4, the traditional Wandera sales channel alone delivered 38% bookings growth year over year. When combined with the additional sales through Jamf, total new annual subscription bookings from the products we acquired from Wandera, grew by over 60% year over year in Q4. Altogether, Jamf has seen significant success with all of our new security solutions, ending 2021 with approximately 8,000 commercial customers running Jamf Connect, Jamf Protect, Jamf Private Access, Jamf Threat Defense or Jamf Data Policy on millions of Apple devices and also on Android and Windows devices.

In October, at the Jamf Nation User Conference, we also announced key product enhancements to help organizations succeed in today’s hybrid work world, including new Bring Your Own Device, or BYOD, functionality, industry-leading application life cycle management capabilities, device compliance integration with Google and data loss prevention features. We expect that all of these announcements will be generally available by early spring of this year, further cementing Jamf as the most complete and scalable Apple Enterprise Management platform available. For Q4 and the full fiscal year, we demonstrated our continued ability to drive consistent balanced growth across our business. Strong new logo acquisition and device expansion resulted in Jamf adding over 6 million devices and 13,000 customers to the platform, ending the year with 26.6 million devices and more than 60,000 customers.

Over the past two years, Jamf has added over 10 million devices and 24,000 customers, demonstrating both market leadership and continued consistent momentum throughout changing market conditions. Jamf’s total ARR growth in Q4 was 45% year over year, driven by new customers, device expansion, a growing portfolio of add-on products and the Wandera acquisition. Once again, all legacy Jamf products saw a year-over-year ARR growth of at least 25%. All three major geographies and all of Jamf’s top 10 commercial industries experienced ARR growth of at least 30%.

In education, growth rates have returned to pre-pandemic levels, while we continue to see acceleration in commercial markets. Despite every economic, geographic and industry-specific challenges we’ve been encountering, Jamf has continued to deliver consistent strong results. 2021 was a historic year for Jamf and a testament of our commitment to deliver outstanding customer results. Jamf’s earnest focus on customer success led to the lowest gross revenue churn rate in Jamf’s history of tracking this metric, which resulted in completing the year with a record high net revenue retention.

In 2021, Jamf’s top 10 flagship commercial accounts all renewed and all grew their subscription contracts with Jamf. Additionally, Jamf retained 100% of our top 100 customers across both commercial and education markets and 82% of these customers grew their existing subscription. During the year, we also closed the three largest deals in Jamf’s history, two of which were the current customers expanding their Apple footprint and one was to a new customer implementing a transformative business workflow with iPad. All three customers committed to Jamf for multiple years, deploying a total of over 250,000 Apple devices.

Despite this success at the high end of the market, no single customer represents 1% of Jamf’s total ARR. We believe Jamf’s consistent results are due to our market-leading solutions, significant competitive differentiation, extraordinary focus on customer success and the increasing momentum of Apple’s popularity in the enterprise, in particular, with the Mac. According to IDC data, the Mac has been the fastest-growing computer worldwide for the past two years, with a compound annual growth rate of 25%, more than 10 percentage points faster than the growth of the PC industry and faster than all other major PC brands. We believe the changing employee demographics, preference for Apple among younger workers, combined with the consumerization of IT, growth in remote work and the popularity of the new line of Apple Silicon Mac, is changing the landscape of the PC marketplace, and we are still in the early stages.

We’ve seen this change firsthand and have played a vital role in accelerating it by helping customers deploy approximately 1 million Mac powered by the M1 chip during the first year of M1 availability. With each Apple innovation, Apple’s competitiveness in the enterprise and education increases. And Jamf has always been there to support and extend those innovations same day. In addition to supporting new hardware and operating system, Apple Business Manager, Apple Classroom and Apple School Manager, are all examples of Apple Cloud services that Jamf has historically been the first to support and extend, all having led to accelerated Jamf’s success in the market.

We expect the same to be true when Apple Business Essentials comes to market. True to our mission, Jamf will help customers succeed with Apple Business Essentials, which we expect to reach the low end of the market in a way that no third-party provider has been able to, thus creating more opportunity for Jamf to offer our solutions that extend the value of Apple in a manner that uniquely enhances the experience for users, IT and information security teams, especially as organizations scale in their Apple deployments and business needs. This unique approach to supporting Apple customers has led to 20 years of a mutually beneficial relationship with Apple. With all our customers, Jamf’s ability to deliver a combination of enterprise security, personal privacy and consumer simplicity has played a significant role in the growth of Mac at work, in particular, with the emerging Employee Choice Program.

One example of the continued prevalence of Employee Choice Program is HSBC, one of the world’s largest banking and financial services organizations. HSBC is on the forefront of employee choice within financial services, launching its program in late 2020, empowering employees to choose Mac globally as their primary work computer. HSBC renewed their contract with Jamp in Q4, expanding in both Jamf Pro and Jam Connect. Additionally, HSBC purchased Jamf Protect in Q4, showing the power of our broad platform capabilities to solve more IT and security challenges for organizations and our ability to continue growing customers’ use of Jamf.

In late 2020, we made it easier for customers to take advantage of our full platform for Mac with Jamf business plan. During 2021, over 1,000 customers purchased Jamf business plan with more purchases in Q4 than in any other quarter. Offering Jamf business plan has transformed the buying process, eliminating multiple sales and approval cycles, enabling customers to experience faster return on investment. One of our first Jamf business plan customers a year ago was Shipt, an organization founded on the mission to simplify lives through the delivery of groceries and everyday essentials.

Last year, Shipt licensed over 1,000 users of Jamf business plan, to help implement their remote workforce efficiently and better meet their security needs for macOS. One year later in Q4 of 2021, due to the popularity of Mac at work, Shipt was able to simply and significantly renew and grow their Jamf business plan subscription as they continue to meet the increasing demand for Shipt services. Jamf is also continuing to transform the customer experience with whole industry solutions in healthcare, where Jamf workflows like virtual visits supports the social and care connectivity needs of patients and families. Clinical communication changes the iPhone experience for providers and staff and patient bedside empowers hospitals to digitally sanitize hospital-owned iPads and Apple TVs between patient visits, which alleviates the need for manual IT or care team intervention.

To simply manage the security, privacy and complexity of these healthcare workloads, we employed Jamf’s one-of-a-kind healthcare listener solution, which integrates Jamf directly into hospital electronic medical record. One customer experiencing Jamf’s commitment to healthcare is Stanford Health Care, the No. 12 hospital in the United States, Stanford selected Jamf Healthcare Listener in 2019 for their interactive patient system project, which included iPads and Apple TVs in patient rooms for entertainment, education and access to the Stanford MyHealth application. They later expanded Jamf to deploy their nursing iPhone for clinical workflow and communication apps like Epic Rover and Voalte One.

In Q4, Stanford expanded these programs by thousands of Apple devices and are now also testing Jamf’s single log-in workflow and are excited to explore how it can simplify and secure their shared iPhone deployments at scale. Jamf recently was challenged by a top 10 children’s hospital in the U.S., to combine the value of our unique healthcare and education solutions. This hospital selected Jamf in 2020 to deploy more than 1,000 nursing iPhones and also use Jamf to deploy iPads to patient rooms for kids. Recently, this hospital asked if we could enable Jamf Parent for hospitals.

Jamf parent is an iPhone and Android-based solution we designed for the education market, to arm parents with the ability to focus their students on specific education content. In Q4, we extended this technology to hospitals where our customer now has deployed Jamf Parent across all of their patient bedside devices. On the topic of education. As we’ve discussed each quarter, 2020 was a year of tremendous Apple device growth as schools initially needed to enable distance learning, but then also became aware of the power of education technology and the importance of equitable access to learning.

Now after the largest expansion of technology and education history, many schools are facing the challenges of device connectivity and student safety. The need to protect our students from the dangers of technology was one of our motivations when acquiring Wandera last July. As a stand-alone company, Wandera did not focus on the education market, but Jamf’s leading position in education, where we empower more than 36 million students with Apple technology, opens up a tremendous opportunity to extend the acquired Wandera products, like Jamf Data Policy, to launch a brand-new student safety solution. Around the world, Jamf is now supporting safe in-classroom and virtual learning.

In Taiwan, Bhushan Elementary School deployed Jamf on over 2,000 iPads that are being used by students while they learn at home. The iPads are provisioned with Jamf School and Jamf Data Policy to provide sufficient support and guidance for teachers, while protecting students from accessing unwanted website. Bhushan Elementary has been able to save school resources and increase efficiency of remote lessons using Apple and Jamf technology together. The local government has provided funding for this initiative and Bhushan Elementary is just one of approximately 90 schools in Taiwan that will benefit from.

Education is not the only industry where Wandera technology has helped us extend Jamf’s value to customers. As we discussed on our last call, Jamf has become a go-to partner for airlines around the world for numerous workflows that engage flight attendants, gate agents and ground crews with over 100,000 devices deployed in the last year for airline specific workflows globally using our patented Jamf setup and reset applications. With Wandera, we have even more value to offer airlines. One example is a major airline based in Asia.

In Q4, this customer committed to all three Jamf products based on the technology acquired from Wandera, including Jamf Threat Defense and Jamf Data Policy for flight crew iPad and also Jamf Private Access for secure encrypted Zero-trust Network Connection and access across the entire fleet of devices including both Apple and Android. Not only has the products from Wandera helped Jamf win new customers, but we have also used these products to expand our relationship with current Jamf customers, like with iOFFICE and SpaceIQ, a global leader in the digital transformation of workplace and asset management. Together, they are a Jamf Pro customer that recently purchased 500 Jamp Private Access licenses to improve regional performance over their previous BPM. They needed a remote access solution that would support their diverse device state, which includes Windows, macOS, iOS and Android and quickly and securely connect users no matter where in the world they’re located.

Jamf Private Access passed the test and integrated seamlessly with their cloud identity provider. These examples demonstrate the continued strength in their traditional Wandera sales channel, as well as the momentum for the Wandera products sold through Jamf, which helped drive the 60%, plus year over year new subscription bookings growth in Q4, I mentioned earlier for these products. As we look at 2022, there are several areas of momentum that will help drive Jamf’s continued strong performance. First, we believe the significant value of Apple Enterprise Management and specifically the Jamf platform, will continue to drive organizations to expand their Apple fleet through Employee Choice Programs, bolstered by the acceleration of IT consumerization, user preference and financial savings for our organization.

Second, we will continue our efforts to win the enterprise by developing innovative solutions that are Apple First and Apple Best, further solidifying Jamf as the most dominant Apple provider. Last, our broad solution set offers numerous growth drivers, like Compliance Reporter, Jamf Data Policy, Jamf Threat Defense and Jamf Private Access, in addition to Jamf Connect and Protect which all have significant runway for growth. In closing, I’d like to thank our team for an exceptional 2021. We achieved a number of milestones and delivered strong financial results, all while experiencing unprecedented growth.

We on-boarded over 800 new Jamfs in 2021 and we’re able to preserve our unique culture, maintain 90%-plus employee retention and received Great Places to Work recognition in several categories. I’m excited to see what our team can accomplish in 2022, as we live our purpose to simplify work by leading and innovating in Apple Enterprise Management. Now I will turn it over to Jill.

Jill Putman — Chief Financial Officer

Thanks, Dean, and thanks again to everyone for joining us today. We’re eager to share our Q4 and full year results, which reflect continued strong growth across all aspects of our business. Total revenue for the fourth quarter grew 36% to $103.8 million, resulting in total revenue growth for the fiscal year of 36% or $366.4 million, exceeding our expectations. Total ARR as of December 31 was $412.5 million, an increase of 45% year over year.

On an organic basis, in Q4 and for each quarter of 2021, this growth was driven by at least 25% growth across every Jamf product with all three major geographies and all of Jamf’s top commercial industries experiencing growth of at least 30%. This diversity makes for a resilient business model that is not reliant on any one product, geography or industry to deliver on our financial outlook. We saw commercial ARR growth rates continue to accelerate, while education growth rates remained strong and similar to pre-pandemic levels. We ended the year with 26.6 million devices on our platform, adding over 6 million devices in 2021 or 30% year-over-year growth.

This growth was driven by new logo acquisitions, device expansion within our installed base and the addition of Wandera devices. Our upsell and cross-sell efforts and our efforts to reduce churn helps drive our dollar-based net retention rate to 120% for the trailing 12 months ended December 31. As a reminder, this figure will not include Wandera until we have 12 months of trailing data. The remainder of my remarks on margins, expense items and profitability will be on a non-GAAP basis.

Our GAAP financial results, along with the reconciliation between GAAP and non-GAAP are found in our earnings release. Q4 gross profit margin is 80%, compared to 82% in the prior-year quarter. When normalizing for the Jamf Connect revenue recognition changes, which began in the second half of 2021, the gross margin is consistent with the prior-year quarter. As we continue to grow, we remain focused on improving the leverage in our business, while balancing investments to support this growth.

Our increases in operating expenses in Q4 over the prior year were primarily due to investments for growth, such as added headcount in sales and R&D, as well as expanded public company costs. Q4 operating margin is 3%, compared to 2% in the prior-year quarter. Our annual effective tax rate increased to 3.9% from 2.8%, primarily as a result of activity related to the Wandera acquisition. This increased our effective tax rate in Q4 to 12.1%.

Unlevered free cash flow for the trailing 12 months ended December 31 to $66.4 million, reflecting an 18% unlevered free cash flow margin. which, when combined with our 2021 revenue growth of 36% and exceeded a rule of 50. Our operating model of high growth and efficient deployment of capital continues to yield strong consistent cash flow generation and differentiates Jamf from any other high-growth tech companies. This provides us with financial flexibility and stability, helping protect us from any rapidly changing market or economic conditions.

This cash flow generation also allows us to continue to make investments in innovation and sustainable top-line growth. We ended the year with $177.2 million in cash and cash equivalents. We believe our cash and cash equivalents, our revolving credit facility and cash from future operations, will be sufficient to meet our current working capital and capex needs for 2022 and beyond. Now I’ll provide thoughts on our financial outlook for the first quarter and full year 2022.

Exiting 2021, education markets remained strong, similar to pre-pandemic levels, while commercial markets continue to strengthen across all geographies. This commercial momentum, along with continued investments in our go-to-market activities and new product offerings will drive strong revenue growth in 2022. As we have discussed on prior earnings calls, we do not believe our business to be market limited, with plenty of market opportunity available as Apple continues to grow in the enterprise, and we continue to expand our offering. Key areas of investment for 2022 include further product investment in strategic areas of the business, including our security platform, BYOD functionality and safe Internet for School.

Increasing capacity to drive new logo acquisitions, device expansions and cross-sell into our installed base, continued geographic expansion in strategic markets and continued investment in our people to ensure Jamf is the destination workplace. While making these investments, we will continue to be mindful of hygiene to ensure we have the infrastructure to support the business now and in the future. As we have done historically, we will continue to reinvest any overperformance against our plan back into the business to fuel growth. Given these considerations for the first quarter of 2022, we expect total revenue in the range of $104.5 million to $106.5 million, representing growth of 29% to 32% year over year.

Non-GAAP operating income in the range of $1 million to $2 million. For the full year of 2022, we expect total revenue in the range of $466 million to $472 million, representing growth of 27% to 29% year over year, compared to current consensus of 25%. Non-GAAP operating income in the range of $18 million to $22 million. As a reminder, our non-GAAP operating income is impacted by the full-year impact of the Wandera acquisition, which we continue to expect to be accretive to Jamf’s non-GAAP operating income as we exit 2022.

Additionally, for modeling purposes, we are providing the following information. For the first quarter and full year 2022, amortization is expected to be approximately $12.6 million and $47.6 million, respectively. For the first quarter and full year 2022, stock-based compensation and related payroll taxes is expected to be approximately $16.9 million and $114.2 million, respectively. We expect an annual effective tax rate of less than 5%, which should also be used in calculating tax effects of non-GAAP adjustments.

In addition, we do not currently pay cash taxes on a U.S. federal basis. Calculating EPS, we expect basic and diluted weighted average shares outstanding to be approximately 119.4 million and 129.3 million, respectively, for the quarter — for the first quarter of 2022. For the full year, we expect basic and diluted weighted average shares outstanding to be approximately 120.1 million and 131.8 million, respectively.

As we embark on 2022, with the momentum we’re seeing across the key geographies, our top commercial industries and all products, along with the continued investment in our go-to-market activities, we expect to continue to deliver strong revenue growth. And now, Dean and I will take your questions. We also have our president and chief operating officer, John Strosahl, joining us for Q&A. Operator? 

Questions & Answers:

Operator

Certainly. [Operator instructions] Our first question comes from the line of Rob Owens from Piper Sandler. Your question, please.

Rob Owens — Piper Sandler — Analyst

Great. Thank you guys for taking my question. As we contemplate the guidance both for Q1 and ’22, how are you discounting some of the supply chain issues that Apple has seen? And have you actually seen despite the strength you’re seeing, have you seen some customers pushing out just because they’re not getting Apple gear? 

Dean Hager — Chief Executive Officer

Thanks for your question, Rob. And I would invite John, if he has anything to add to this as well. But my perspective on that is: One is we will hear anecdotally, occasionally that there will be a supply chain issue perhaps for a school that is purchasing. But then on the flip side, sometimes we will hear scenarios where an organization can actually not get another type of device that they were going to acquire.

And so, as a result, went to Apple. So you get a little bit of a mixed bag there. John, do you wanna comment just a bit on whether you’re seeing supply chain issues? 

John Strosahl — President and Chief Operating Officer

Yeah, thanks, Dean. You answered it. We’ve seen some of that happen before. And then, thankfully, the deal that we’re working with that customer has just migrated to when they get that device, which is generally not very far off.

But we haven’t seen tremendous negative impact from that.

Rob Owens — Piper Sandler — Analyst

And Dean, along the lines of Apple realizing you’re just one quarter into the beta, if you will, but business essentials. It looks like you’re looking for this potentially to be more of a catalyst at the low end. So where are partner discussions, customer discussions at this point in time? Thanks.

Dean Hager — Chief Executive Officer

Yeah, you bet. Our partnership with Apple remains as strong or stronger than it’s ever been. Our communication lines are opened well. We view the arrival of Apple Business Essentials to be very similar to in the past when Apple came out with cloud services like Apple School Manager or Apple Business Manager.

And as I’ve mentioned several times, the low end of the market for some technical reasons, are actually a very hard place for a third party to get to. And we believe that Apple offering that low-end solution in the U.S. is actually going to open up that market a little bit. And the bulk of our product portfolio now is actually add-on value to a simple MDM solution.

So yeah, we’re completely treating it like if a customer does get a device under management that they haven’t been able to do before, that that essentially gives us a way to deploy the rest of our security solutions. So we see it as a net add. 

Rob Owens — Piper Sandler — Analyst

Thank you.

Operator

Thank you. Our next question comes from the line of Sterling Auty from J.P. Morgan. Your question, please.

Sterling Auty — J.P. Morgan — Analyst

Yeah, thanks, guys. I’m just going to ask one question from my side. Just focused around the security. It sounds like we heard the success in the quarter.

But what I’m curious about is just the cybersecurity environment, things that are happening on a global macro geopolitical front, are they changing dramatically at all the sales cycles, as well as the pipeline build for security in particular?

Dean Hager — Chief Executive Officer

Yeah. So let me chat just a little bit of what were because you’re right. It is a very sensitive topic right now. Let me just talk about our security posture right now, and then I’ll kick it over to John to just comment a little bit about what he’s seeing on the demand side for security.

So first of all, given the environment that we’re in, our InfoSec team is highly engaged in on constant word for potential threats. Our security posture here at Jamf is very strong. We work with the industry’s best cloud and identity providers. And also remember that Jamf employees are assigned corporately provided Apple devices which are inherently heightened security posture when coupled with Jamf Enterprise Apple, our Apple Enterprise Management system for device security, malware, threat hunting, anti-phishing and zero-trust network access.

And of course, what we use to protect ourselves, our customers also use or we use to also protect our customers. And although unfortunate, Sterling, good observation that when security concerns are heightened, that usually creates an opportunity for us to serve more Jamf or more organizations. John, what are you seeing from a demand for our security solutions out there?

John Strosahl — President and Chief Operating Officer

Well, we’re certainly seeing a higher security posture by our customers. And those that we’ve been speaking about security with — some of them have accelerated that process. And we’ve had some more inbound requests about our security position and what we can provide them because we are seeing customers really bolster their security positions. 

Sterling Auty — J.P. Morgan — Analyst

Makes sense. Thank you.

Operator

Thank you. Your next question comes from the line of Brian Essex from Goldman Sachs. Your question, please.

Brian Essex — Goldman Sachs — Analyst

Hi. Good afternoon, and thank you for taking the question. I was maybe wondering if you could talk to what you’re seeing with regard to Wandera and now that you’ve had that under your belt for a little while. Are you getting better traction with private access? How are those conversations evolving? And what kind of considerations are enterprises making when you win deals there? 

Dean Hager — Chief Executive Officer

Yeah. So first of all, we couldn’t be happier with kind of how much — how little disruption noise, there’s been in the process, I mentioned as I was in my earlier comments that the employee retention has been extremely high. We had mentioned in the past that Jamf’s historical customer retention is higher than Wandera’s historical customer retention predominantly because investing in customer success. And so, we believe that we are going to bring a lot of value to that over time.

But the good news is that the retention post acquisition of customers pretty much mirrors what it was pre-acquisition. And then also, as I mentioned, after Q3, we said that we had growth, but not a lot of growth because it was really we were just getting started. In Q4, we were really pleased to see, as I mentioned earlier, our bookings growth combined be over 60%. And I can’t really say of the three big products, Private Access, Threat Defense and Data Policy.

The demand is there for all three, and in some cases, the entire suite. So as of right now, I can’t tell you which one of those is the emerging has greater demand than the others. And that’s kind of a good thing — because we’re sort of excited about it across the board. So we’re pleased with the demand.

I mean, in fact, just this morning, I spoke to an account executive who had spoken with a prospect who wasn’t actually looking for a management solutions, so they pivoted and went into talking about our new security products. And in that moment, I got an opportunity. So it’s just broadened the level of discussion that we can have with prospects and it’s given us much more to offer them.

Brian Essex — Goldman Sachs — Analyst

That’s helpful. And when you go through that process, are they considering any other solutions like a Zscaler maybe or are you just winning based on the conversation and overall breadth of your platform as you kind of present that opportunity to your customers? Is there, I guess, what I’m getting, is there a bake-off involved? Or is there a comparison head-to-head involved? 

Dean Hager — Chief Executive Officer

Yeah, both scenarios are true. We will have — we’ve had situations that we’ve had a Jamf customer, and frankly, they didn’t do a bake off. They just saw that Jamf had another solution, and we have served them so well historically, that they said, you know what, I’m going to expand to that additional solution. And then, of course, when we’re competing for new business, usually, that’s going to be a bake-off.

And our competitive positioning, of course, is strongest with Apple, especially when coupled with our Apple Enterprise Management system, but our field personnel now for the very first time ever are able to go in there and compete at the network level as well that is also cross-platform. So a couple of the roadblocks that they’ve had to get over historically, now with our trust platform network security environment, they’re actually able to compete for business that they haven’t been able before. But yeah, in those situations, they will frequently be a bake-off, and we compete very favorably in those environments. 

Brian Essex — Goldman Sachs — Analyst

Got it. That’s helpful. Thank you.

Operator

Thank you. Our next question comes from the line of Gregg Moskowitz from Mizuho. Your question, please.

Gregg Moskowitz — Mizuho Securities — Analyst

Thank you. Good afternoon, and congrats on good quarter. So I had a follow-up on one there. I know that last quarter, Dean, that business grew a little slower than it had been growing on a stand-alone basis.

But as you just mentioned, in Q4, your total new subscription bookings for Wandera grew over 60%. Is this more than a seasonality benefit though? In other words, do you think you’ve truly turned a corner with Wandera upsell and cross-sell? And I’d also be curious to hear — any commentary on how you’re thinking about Wandera’s ARR growth potential in 2022 as compared with the overall business?

Dean Hager — Chief Executive Officer

Yeah, thanks for the question, Gregg. So first of all, I am absolutely not going to say like we’re over the hump. I’m not going to count our chickens there. We had a good — we’ve had good pipeline building and we started to show that it was paying off in Q4, but I still believe the greatest benefit that those solutions are going to have to us are still yet to come in 2022 and it’s going to grow over time.

So it’s really the longevity of the value of the broader portfolio that is going to bring good news to Jamf and to our customers. When it comes to its ARR growth, frankly, we’re kind of done measuring the Wandera company ARR growth because we are using now the same sales channel that we’re using to sell all of the rest of our products. So we don’t think of it that way. We will measure — we don’t disclose, but we will measure internally our ARR by product and we will measure the Wandera products in the exact same way that we measure the growth of Jamf Connect and Jamf Protect for instance.

Gregg Moskowitz — Mizuho Securities — Analyst

OK. That’s helpful. Thanks, Dean. And then, you briefly referenced BYOD.

I know you’ve been talking about that a bit over the past few months. How actively might you go after the BYOD market going forward? How are you thinking about this as an opportunity for incremental growth? 

Dean Hager — Chief Executive Officer

Yeah. Historically speaking, we have not aggressively competed for BYOD devices because, quite frankly, our belief there wasn’t a differentiated enough position with BYOD and, therefore, it just became a race to the bottom on price. We prefer to differentiate with the more complex devices that are being deployed within an organization. However, with Apple’s recent innovations around user enrollment and device data separation on a BYOD device, we now have a BYOD solution that we believe is significantly competitive — has competitive differentiation.

And so, yeah, you will see us market and package more aggressively for BYOD going forward than you saw us historically. And we, the great thing about that is about of the TAM that we have available to us, a very large percentage of it is BYOD and it’s going to just open up that with a much more competitive solution than we’ve ever had before.

Gregg Moskowitz — Mizuho Securities — Analyst

That’s great. Thanks, Dean.

Operator

Thank you. Our next question comes from the line of Joshua Reilly from Needham. Your question, please.

Josh Reilly — Needham and Company — Analyst

Guys, thanks for taking my questions. Congrats on the strong quarter and year there. Can you give us a sense of the assumptions that you have built into guidance around moderating education growth this year? And then, are there some large country deployments that could really move the needle one direction or another based on timing of deployments this year?

Dean Hager — Chief Executive Officer

Yeah. Why don’t we — in terms of our guidance and how we modeled commercial versus education, what our thinking was there, Jill, do you want to take that? 

Jill Putman — Chief Financial Officer

Certainly. Thanks for the question, Josh. So we talked a little bit about as we exited the second half of 2021 and commercial started to come back stronger and continue through the fourth quarter and as we turn the corner this year, and education still strong, but back to more what we consider the pre-pandemic rate, call it somewhere in the 20% rate. We’re going to continue to model that same mix going forward in ’22.

We don’t really see a big shift of really reverting back to what was something kind of more of a normal with still some opportunity and room for commercial to still pull forward a bit from where it has been in the last two quarters.

Josh Reilly — Needham and Company — Analyst

Got it. That’s super helpful. And then, does having a full year of the Connect revenue in SaaS, does that impact the model or create any tailwind to growth versus the split last year in terms of revenue recognition?

Jill Putman — Chief Financial Officer

There’s a little bit of it still. It really the biggest impact was in the second half of last year. We’ll see a little bit of that, call it a few million bucks here in the first half of the year, and then that really starts to normalize as we annualize on it in the beginning of the third quarter. 

Josh Reilly — Needham and Company — Analyst

Got it. Thank you.

Operator

Thank you. Our next question comes from the line of DJ Hynes from Canaccord. Your question, please.

DJ Hynes — Canaccord Genuity — Analyst

Congrats on the strong quarter here, and I appreciate all the growth retention stats that you shared, that’s super impressive. Dean, I want to ask how significant do you think monetization of non-Apple devices can be over time? To be honest, I don’t even know where it stands today, but can it get to 10%, 20% of revenue over time? I know that’s hard to answer, given how fast the Apple business is growing, but I’d love to get your thoughts.

Dean Hager — Chief Executive Officer

Thanks, DJ. Appreciate it. To tell you the truth, we really don’t model it out as how much of it is going to come from the Apple devices versus non-. And just so you know how we break that out.

We now have a suite of very device-specific solutions, and we have a suite of solutions that are focused on network security. Well, it just stands to reason that those network security solutions would be broader in the platforms they support and the device solutions would be more narrow. But together, as they exist, they just create a great Apple First Apple Best solution while being able to broaden the network solutions to cross platform. We have seen — and to be perfectly honest, we wondered being such a strong Apple brand of whether or not we would be able to step in and compete with those new network solutions across non-Apple devices.

And I got to tell you, I’m pretty impressed with it. Our account executives have done a very good job in their dialogues just sort of naturally introducing them, explaining why we expand beyond Apple with those solutions. And it’s really opened up a whole new market for us. And just to quantify a little bit.

When we’ve talked about our TAM historically expanding to $18 billion after the acquisition of Wandera, we didn’t even include non-Apple devices in that TAM because we didn’t want to get over our skis and assume something we would be able to do. But in the early going, it’s feeling pretty natural to be able to more easily just extend that network security sale to the non-Apple devices.

DJ Hynes — Canaccord Genuity — Analyst

Yeah, yeah, that’s great to hear. And then, in terms of — you alluded to some of the success that you’re having with the business plan, right? Are there additional bundles that you’re considering now as the portfolio expands, like can you pull in some of these network security solutions into a bundle that will kind of increase landing ASPs? How are you thinking about that?

Dean Hager — Chief Executive Officer

Great question. You could be part of our product marketing team if you want to be. We’re doing exactly that, and you’re right in that it’s more than one bundle. I mean, our product portfolio has gotten so broad.

I mean, we are, in many ways, almost a different company than the company that IPO-ed less than two years ago with the amount of products that we have. And as a result, the way we think of it is you almost think of it as a matrix where the columns are management connection and protection and the rows are device and network, and we’ve got a lot of different bundles that we can create in there, and we’re actually just doing that right now. So I think, in the coming months and throughout this year, you’re going to see us actually launch a few more bundles — because we’ve had just a lot of great success with simplifying that buying process for the Jamp business plan.

DJ Hynes — Canaccord Genuity — Analyst

Great. Thanks for the color.

Operator

Thank you. Our next question comes from the line of Chad Bennett from Craig-Hallum. Your question, please.

Chad Bennett — Craig-Hallum Capital Group — Analyst

Great. Thanks for taking my questions. Nice job again, exiting the year very strong. So just in terms of — when you look back at last year and the drivers of growth, both from an ARR and subscription perspective, and how you’re thinking about this year? Just I guess, conceptually, how should we think about device or customer growth from kind of compared to last year and heading into this year relative to kind of dollars per device growth.

Are you guys thinking about that any differently, especially it’s fairly early, obviously, in the penetration still with the security products, the demand seems to be very, very strong. You can hear it in Dean’s voices. So how are you guys thinking about that as the year plays out here? 

Dean Hager — Chief Executive Officer

Why don’t I just comment quickly about the kind of the device versus additional product and then kick it over to Jill to maybe give a little bit of a quantification on that dollars per device a bit. But you’re right, because of our expanding product portfolio, we have so many avenues now for ARR expansion other than customers deploying new devices. Jill has talked about that many times in the past that our primary net revenue retention expansion has been through device expansion, but we’ve got a lot more avenues for that now, especially in commercial markets. And Jill, if you want to comment on that a little bit and how that’s changing that dollars per device a little bit. 

Jill Putman — Chief Financial Officer

Yeah, quarter over quarter, our price per device has been increasing nicely, and it’s really driven by a couple of different things. Most recently, the addition of Wandera, which comes to us at a nice price point that’s higher than what our average was a large portion of our products. But then it’s a mix shift between commercial and education devices with commercial garnering a higher price per device, as well as the Mac device garners a significantly higher price per device than the iOS. And so, as commercial is our fastest-growing sector right now, that’s going to continue to be a pull in the upper direction of the average price per device.

Chad Bennett — Craig-Hallum Capital Group — Analyst

OK. And then, maybe just one quick follow-up for me. And I think, the math is pretty straightforward, Jill. Just it’s kind of first-half, second-half story from an operating margin standpoint from what I can tell.

Obviously, we annualize on the Wandera and the cost there starting in the second half. And — by the way, I’m looking at it, you should see pretty significant operating margin leverage in the second half of this year, all else equal. And I guess, I’m assuming that’s the right way to look at it, first of all, and as we kind of go forward, operating leverage should continue to improve as we head into next year. 

Jill Putman — Chief Financial Officer

So as far as seasonality goes, we get operating leverage in the second half just as our revenues are growing faster in the second half than our expenses are. But we’re going to continue to — we still believe that the best use of our profits is to reinvest in the top line to chase the momentum that we see in the market and that untapped TAM that we have. And we’re going to — and then given the fact that we also have our land-and-expand strategy, which is where we focus all of our go-to-market dollars because we have such a high lifetime value of that customer once we win them with an extremely high renewal rate and then the growth rate within that customer base. 

Chad Bennett — Craig-Hallum Capital Group — Analyst

Got it. Thanks much.

Operator

Thank you. Our next question comes from the line of Matt Hedberg from RBC Capital Markets. Your question, please.

Matt Hedberg — RBC Capital Markets — Analyst

OK, guys, thanks for taking my question. I’ll just keep it to one here for the sake of time. Jill, you, obviously, don’t pay to ARR. And obviously, the comparisons are more difficult in the second half due to Wandera.

But I’m wondering, directionally, how should we think about ARR growth relative to the 28% midpoint revenue guide? I mean, should it grow similar to that? Or are there any puts and takes that we should consider? 

Jill Putman — Chief Financial Officer

Hey, Matt, thanks for the question. So we’ve got some — the first half of the year, we are comping against an organic number with Wandera in the second — in the third quarter. We — the way to think about it is growth rates that have been similar to what we were experiencing in this kind of in the third and fourth quarter and really that mix shift between commercial growing faster than it had been earlier in the year with education normalizing back to pre-pandemic levels.

Matt Hedberg — RBC Capital Markets — Analyst

Got it. Thanks a lot, guys. Well done.

Operator

Thank you. Your next question comes from the line of Bhavan Suri from William Blair. Your question, please.

Matt Stotler — William Blair — Analyst

Hi, Dean, it’s actually Matt Stotler. Thanks for taking the questions. Just a couple of quick ones here. One more on Wandera.

Obviously, some really good momentum in that business in Q4. We’d love to just kind of maybe get an update on the integration there. Obviously, there’s been good retention personnel so far. Clearly moving forward with some of the go-to-market stuff.

And particularly, so what’s left there and particularly interested in the ability to sell core Jamf products through that in those traditional Wandera channels and the carriers specifically? I would love an update on that.

Dean Hager — Chief Executive Officer

Yeah, very interesting. So first of all, the functional integration has occurred all of the personnel by the end of 2021. We’re reporting up into the functional areas of the business that they kind of work for and that has all went well. Obviously, we’ve got the systems integration.

It’s not all of the internal systems are completely integrated yet. But we’ve identified that the most important revenue synergy opportunity we had with selling the Wandera products through the Jamf channel. That was our priority. But you have identified another one.

And that is selling Jamf products through the historical Wandera channels, which are mostly carriers. And I would say we have not stuck up any additional partnerships in those areas. They’re still in the early discussions, but a few of those discussions have been encouraging. And so, yeah, we do see that as a potential, but that has not started yet. 

Matt Stotler — William Blair — Analyst

Got it. That’s super helpful. And then, one follow-up. You recently announced the — this Google integration and BeyondCorp Alliance membership I would love to just get your thoughts on the importance of this integration, that membership and how enabling Mac use with GCP either augments the market opportunity or augments the access that you have to your market opportunity? 

Dean Hager — Chief Executive Officer

Yeah. One of the unique things about Jamf is we do partner with the major industry players very well, and that is largely because of the market leadership position that we have with Apple. So the Google BeyondCorp partnership is very similar to the Microsoft partnership that we have enjoyed for years now around device compliance. In both cases, if you want to access — if the user wants to access resources that are governed by the Microsoft identity or the Google identity, we now have partnerships with them that they will turn and check with Jamf and say, does get Jamf know of this device? And is this device in compliance? And if not, actually kick it over to Jamf to get that device properly enrolled or properly compliant.

If so, provide access into the Google enterprise or into the Microsoft enterprise that are governed by those identities. So to be in the position to be so well partnered with both of those organizations puts us in a great position from an enterprise — zero-trust enterprise security perspective.

Matt Stotler — William Blair — Analyst

Got it. Absolutely. Thanks again.

Operator

Thank you. Our next question comes from the line of Raimo Lenschow from Barclays. Your question, please.

Raimo Lenschow — Barclays — Analyst

So thanks for squeezing me in here. Thank you. Two quick ones. Jill, the 120% are very, very strong numbers.

The — if you think about the success you guys have in Wandera but also the cross-sell and upsell, how do you think about the evolution of that number going forward? And then also, on the investments — or the plan that you’re seeing there, what do you see in terms of that’s driving your kind of willingness to kind of double down a little bit on spending given what you talked about in terms of the opportunity set. Thank you.

Jill Putman — Chief Financial Officer

Hey, Raimo, thanks. So as far as the net retention yields, it continues to be primarily driven by device expansion within our installed base. But as we add more products and bring Wandera in as well, that’s another — another product to land with that we can expand off it. So it will be continuing to be expanding devices but also add-on products.

And we’re seeing better than kind of ever retention rates particularly on the commercial side. When it comes to our operating profits and our appetite to, I guess, squeeze a little bit more out of the bottom line, I guess, is what you’re getting at. We could absolutely do that. We have got levers that we can quickly pull to do that, but we continue to believe that the best use of those profits is to reinvest them back into a not only go-to market but also our product development.

We’ve got a lot of technology innovation that we’re working on. And then, again, just going after until we don’t see the opportunity in the top-line momentum, we’re going to continue to go for it. And it’s really the land-and-expand. We land our customers, and then we’ve got this incredible expansion rate that goes and a retention rate as well.

So we have a very high lifetime value for that investment we’re making in that go-to-market. 

Raimo Lenschow — Barclays — Analyst

OK. Bye-bye. Thank you, and congrats.

Operator

Thank you. Our next question comes from the line of Koji Ikeda from Bank of America. Your question, please.

Unknown speaker — Bank of America Merrill Lynch — Analyst

Hi, this is Laurie, on for Koji. Thanks for taking my question. So just a follow-up on the security and Wandera. I was wondering what’s the contribution from Wandera on your security offerings?

Dean Hager — Chief Executive Officer

What are the contributions from a functional perspective, a TAM perspective — what exactly are you asking?

Unknown speaker — Bank of America Merrill Lynch — Analyst

Yeah. Maybe on the product front, kind of what is?

Dean Hager — Chief Executive Officer

Yeah, what Wandera has brought us is essentially a suite of network security solutions, one anti-phishing, threat defense, malicious downloads, another is a zero-trust private access essentially a VPN replacement that has conditional access capability. And then, the third is data policy being able to govern data volumes on a cell plan and also appropriate use of data on the Internet. All three of those solutions now have given us what I’ll refer to as a depth of defense now for our customers, whereas before we were defending at the device level, and now we’re able to defend at the network level that would prevent threats from ever reaching the device. And that is really — that depth of defense is what’s got our customers safe.

Unknown speaker — Bank of America Merrill Lynch — Analyst

Great. Got it. And then, since you have so many product offerings. Just curious about what is — how do you think about bundling and rebranding? What’s the strategy on that? 

Dean Hager — Chief Executive Officer

Yeah, so thank you for that. And obviously, we do sell by product, and we have a wealth of — I even don’t even have the count off the top of my head of how many products that we have right now, but we will, as I mentioned earlier, likely create bundles that are similar to the Jamf business plan, but also potentially around connection, protection and management. So we’ll create a variety of bundles to make that purchasing process simpler for our customers.

Unknown speaker — Bank of America Merrill Lynch — Analyst

Great. Thank you.

Dean Hager — Chief Executive Officer

Thank you.

Operator

Thank you. Our next question comes from the line of Pat Walravens from JMP Securities. Your question, please.

Joey Marincek — JMP Securities — Analyst

Hey, guys, this is Joey Marincek on for Pat. Just one on our end, how are you thinking about hiring plans for this year? And then, how do you feel about your ability to attract and retain the talent, especially in this environment? Thank you, guys.

Dean Hager — Chief Executive Officer

Jill, do you wanna take that one? 

Jill Putman — Chief Financial Officer

Yeah. So those are great questions. And I think, it’s top of mind for almost every executive out there. Our hiring plans for 2022 are going to be pretty similar to what we did in 2021, which is to add.

We added close to 800 people this year, including the Wandera integration. And on an organic basis, we’ll add something similar in this coming year. And there’s not a week that doesn’t go by without staff meetings where we don’t talk about this and how we’re going to attract but not only attract, but retain employees, and we spend a lot of energy on this. And we’re in a fortunate spot where we’ve been able to do some really cool things — we’ve sweetened some of the time off opportunities for our employees.

We’ve held medical benefit costs to our employees relatively flat. We’ve actually expanded those offerings. We’ve — another thing that’s been really important is we’ve maintained the flexibility in where we work and how we work. And then, just really kind of the — I call them big hugs, big virtual hugs to our teams.

— when people are doing a little bit of burnout. But [Inaudible] very well. And I think, a lot of it is the fact that we’ve got a great tone at the top of the organization that goes all the way down through our management group, and we spend a lot of time working together as a team on how to take care of our people, and it’s really paid off nicely.

Dean Hager — Chief Executive Officer

Yeah, I want to give props to the Jamf management team, and I mean, the first-level managers. I speak to a lot of CEOs. And honestly, I don’t know that I’ve spoken to one that had 90%-plus voluntary retention of their employees during this last year. And in our engagement survey that we took in September, something like 90% of our employees answered favorably to the question, “My manager genuinely cares about my well-being”.

And I think, that that is the core reason why so many stay at Jamf and we’ve created a kind of employment environment that we have.

Joey Marincek — JMP Securities — Analyst

That’s super helpful. Thank you, both, and congrats.

Dean Hager — Chief Executive Officer

Thank you.

Jill Putman — Chief Financial Officer

Thank you.

Operator

[Operator signoff]

Duration: 66 minutes

Call participants:

Jen Gaumond — Vice President, Investor Relations

Dean Hager — Chief Executive Officer

Jill Putman — Chief Financial Officer

Rob Owens — Piper Sandler — Analyst

John Strosahl — President and Chief Operating Officer

Sterling Auty — J.P. Morgan — Analyst

Brian Essex — Goldman Sachs — Analyst

Gregg Moskowitz — Mizuho Securities — Analyst

Josh Reilly — Needham and Company — Analyst

DJ Hynes — Canaccord Genuity — Analyst

Chad Bennett — Craig-Hallum Capital Group — Analyst

Matt Hedberg — RBC Capital Markets — Analyst

Matt Stotler — William Blair — Analyst

Raimo Lenschow — Barclays — Analyst

Unknown speaker — Bank of America Merrill Lynch — Analyst

Joey Marincek — JMP Securities — Analyst

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