Jamf, an Apple (NASDAQ: AAPL) device management software provider, is going public this week.
The Minneapolis-based company was founded in 2002, and its cloud software platform makes it easy for businesses, schools, hospitals, and government agencies to manage their Apple devices. It’s probably not something that you think about a lot because it just works. You never question how easily your devices sync up or how information is readily available — it’s just there.
Best known for its relationship with Apple, Jamf has said:
“We are the only vertically focused Apple infrastructure and security platform of scale in the world, and we have built our company through a singular focus on being the primary solution for Apple in the enterprise. We have a collaborative relationship with Apple, which, combined with our accumulated technical experience and expertise, enables us to fully support new Apple innovations and OS releases the moment they are made available by Apple.”
Jamf's relationship with Apple has allowed its business to spread throughout the world. The company sells its solutions — which connect, manage, and protect Apple products, apps, and corporate resources in the cloud without having to touch the devices — through a subscription revenue model. According to the company’s S-1, there are more than 40,000 customers and more than 100,000 Jamf Nation community members.
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Those numbers could see an increase as more businesses and organizations shift to remote work because of COVID-19. The need for secure and easy device setup for employees is exactly where Jamf comes in. Its services allow companies and organizations to maintain their businesses the way they had before the pandemic, without disruption to operations.
There are 12 banks underwriting Jamf's IPO, with Goldman Sachs, JPMorgan, Bank of America, and Barclays leading the deal. The company could be seeking as much as $352 million from its public offering. Its financials show that for the year that ended on December 31, 2019, it had revenue of $204 million, which was an increase of about 39% from the previous year. It also reported a loss of $32.6 million in 2019.
For the first quarter that ended on March 31, 2020, revenue was $60.4 million. In that same quarter, the company's net losses slimmed down to around 10%. However, it’s important to note that the company isn’t profitable right now. Jamf has a little more than $201 million in debt, and it plans to use its IPO proceeds to pay some of that down in order to have more financial flexibility to grow its business.
Jamf has revenue growth despite COVID-19 market volatility, and its IPO has strong investor support, which puts it on the path to success.
The company is offering 16 million shares with its IPO. On Monday, it raised its IPO price to $21–23 per share, up from its original $17–19 price per share. This change of price target most likely indicates that the company, its underwriters, and its investors are expecting a successful market debut. It's also just very important to realistically price an IPO to give a company an accurate valuation, so investors see it as a worthy investment.
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The IPO market has been having anything but a slow summer. Of course, we saw the global IPO market come to a halt in April and May because of the coronavirus. Most companies that were planning to go public put those ideas on pause until there was more certainty surrounding what would happen with the pandemic. A recent report about global IPO trends from EY indicated that, at a global level, listings were down 48% year over year. However, in the past few months that has started to change. The IPO market began to bounce back in June and has managed to continue that momentum into July — and it will most likely go into August.
Paul Go, EY Global IPO leader, said:
“Well-prepared companies in the right sectors and business models that can successfully adjust during the pandemic will find the right window of opportunity amid turbulent capital markets for the rest of 2020.”
For IPOs, some of those right sectors this year, even during the pandemic, have been technology, industrials, and health care — especially in the past few weeks.
Last Thursday, the tech company, nCino (NASDAQ: NCNO), which provides cloud-based software to financial institutions in the U.S. and internationally, had its market debut. It priced its IPO at $31 per share and, as of open on Monday, July 20, shares were at $74.70 — a 141% increase from its IPO price. The anticipation for tech IPOs is strong, especially when those IPOs come from “well-prepared companies” as Go mentioned.
There is growing interest in the IPO market right now. This second half of the year could easily see that trend continue, and Jamf could be another tech company whose market debut performs well. Jamf is expected to go public on Wednesday, July 22.
Until next time,
Monica Savaglia
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