Jamf Holding Corp (JAMF) 2024 Q4 法說會逐字稿

Thank you for standing by and welcome to Jamf's fourth-quarter 2024 earnings conference call.

(Operator Instructions) As a reminder, today's program is being recorded.

Now, I'd like to introduce your host for today's program, Jennifer Gaumond, Vice President, Investor Relations.

Good afternoon, and thank you for joining today's call to discuss Jamf's fourth quarter and full-year 2024 financial results.

Joining me on today's call are John Strosahl, CEO; and David Rudow, CFO.

Before we begin, a reminder that shortly after the market closed today, we issued a press release announcing our fourth quarter and full-year financial results.

We also published our Q4 investor and earnings presentation, along with an Excel file containing quarterly financial statements to assist with modeling.

You may access this information in the Investor Relations section of jamf.com.

Today's discussion includes forward-looking statements, which involve risks and uncertainties that could cause actual results and trends to differ materially from our forecast.

For more details, please refer to the risk factors and other information discussed in our most recent SEC reports, including our most recent annual report on Form 10-K.

Jamf assumes no obligation to update forward-looking statements, which speak only as of the date they are made.

We will also reference some non-GAAP measures related to Jamf's performance.

Reconciliations to the nearest comparable GAAP measures are available in our earnings release.

(Operator Instructions)

Now, I'll turn it over to John.

Thanks, Jen.

Jamf achieved strong results in Q4 with year-over-year revenue growth of 8% and a non-GAAP operating income margin of 18%, exceeding the high end of our outlook for each metric.

This resulted in full-year revenue growth of 12% and a non-GAAP operating income margin of 16%.

I'm pleased we met our objective of exceeding our financial targets for all four quarters of 2024.

I'm especially proud of our team for delivering strong bookings growth in Q4.

This performance was driven by contributions across products, regions, and size of business, reflecting broader stabilization than we have seen over the past two years.

ARR grew 10% year-over-year to $646 million.

We continue to successfully target customers impacted by the recent consolidation of unified endpoint management vendors.

Our win rates for these customers, spanning all industries and business sizes, have remained elevated since late 2023.

Additionally, we continue to see strength in our core Mac business, especially in the tech space.

I'd like to share some of our successes in Q4 across our 4 key growth vectors: security, mobile, international, and channel.

In security, we continue to see demand for Jamf's Apple-first security platform, with 17% year-over-year growth in security ARR to $156 million or 24% of Jamf's total ARR.

Customers increasingly choose Jamf to meet their management and security needs, with Q4 representing another record quarter for ARR added for the Jamf Business Plan.

This includes financial services firms across North America and Europe, representing over $400 billion in market cap.

One of the largest banks in the UK has grown its Mac and Jamf footprint over the last year with Jamf Pro in select divisions.

In Q4, the bank expanded to the Jamf Business Plan as part of its Mac choice program rollout across the entire organization.

The key to winning this five-year renewal was Jamf's ability to meet the UK's stringent regulatory requirements.

Jamf's platform solution is seamlessly integrated across management and security, ensuring that only authorized users on enrolled devices can safely access sensitive data.

In mobile, we continue to demonstrate our ability to support organizations in any business setting, whether deskbound or not.

In the tech space, one of the world's largest semiconductor manufacturers recently renewed and grew with Jamf Pro for mobile, with plans to deploy over 60,000 mobile devices over three years.

In the transportation space, we saw three global airlines expand with Jamf in Q4 as airlines increasingly seek solutions for mobile devices both in the air and on the ground.

Jamf meets the varying needs of airlines with an integrated solution that can be used by pilots and in-flight crews, ramp agents, baggage handlers, and maintenance personnel.

One of these airlines based in Asia became a customer in Q4 of 2023 with Jamf Pro for pilot iOS devices.

In just one year, the airline expanded with Jamf, adding our new mobile security solution.

This solution, which was launched in Q3, combines mobile threat defense and data policy with zero trust network access.

Given that pilot iOS devices are mission-critical during flights and are often used across the globe on various networks, Jamf's ability to manage and protect these devices anywhere was key to this win.

We believe Desko's opportunities will continue to grow as companies look to manage and secure all devices in their fleet, regardless of location.

Now, turning to international.

In 2024, revenue from geographies outside the US grew 17% to just over a third of our total revenue.

We expect international revenues to continue to increase as a percentage of our total revenue over time as we invest in strategic geographies outside the US.

We've utilized success with Lighthouse customers in certain geographies like Asia, where our involvement in Japan's GIGA project, which started back in 2020, has provided additional education opportunities across Asia.

The GIGA School project is a government-funded initiative to provide at least one device to every student in Japan.

In Q4, Jamf was selected by the Ministry of Education in Singapore for all student iPads due to our ability to meet the ministry's requirements for data encryption, threat detection, and access control with Jamf School and Jamf Space Internet.

We're excited about the multiple opportunities that exist with other ministries of education across Asia as we continue to grow our business outside the US.

We're also working to capitalize on the success we've had outside the US in the channel space with the goal of driving more of our business through our partners, increasing the efficiency of our go-to-market organization.

One key milestone in this journey was the launch of the Jamf Partner Hub and our new partner program in Q3.

While it's early, we've seen a significant uptick in partner-led deal registrations since the program's launch.

We're encouraged by the progress we've seen in such a short time and are excited about what this will bring to the space. 2024 was a year of transformation for Jamf, with a number of scalability and efficiency initiatives to drive future growth and margin expansion, including the launch of our new partner program and system updates.

We're excited to see the continued benefits of these initiatives to our business as we progress toward our goal of achieving the Rule of 40.

I'm looking forward to 2025 and what it will bring as we continue to help organizations lead with Apple.

Now, I'll turn it over to David to review our Q4 results and provide our 2025 outlook.

Thanks, John.

We achieved strong results again in Q4 and are pleased with our ability to deliver beat and raise quarters throughout the year.

Year-over-year total revenue growth was 8%, exceeding the high end of our revenue outlook.

Recurring revenue grew 9%, representing 98% of total revenues in Q4.

This performance resulted in fiscal year revenue growth of 12%.

Less strategic sources of revenue, such as services and licenses, continue to experience year-over-year declines as expected.

Our net retention rate decreased slightly, as expected, to 104% in Q4 compared to Q3.

Gross retention rates remained consistent with historical levels.

Non-GAAP operating income exceeded the high end of our Q4 outlook at $30 million, or an 18% margin and a 400 basis point improvement over Q4 2023.

For the full year, non-GAAP operating income dollars more than doubled to $103 million, resulting in a full-year non-GAAP operating income margin of 16%.

This margin reflects an 800-basis-point improvement from 2023 and a 1,100-basis-point improvement from 2022.

This was driven by our continued commitment to disciplined investment while driving top-line growth.

The majority of non-GAAP operating income margin improvement in 2024 came from two areas where we have focused our efficiency efforts: sales and marketing and general and administrative.

Sales and marketing as a percentage of total revenue improved 500 basis points in 2024, and G&A improved 200 basis points, both on a non-GAAP basis.

Our trailing 12-month unlevered free cash flow margin improved to 12% compared to 10% in the prior year, with unlevered free cash flow dollars growing over 30% compared to the prior year.

While we saw improvement in trailing 12-month unlevered free cash flow margin compared to the prior year, the 12% margin was lower than expected due to delayed billings and collections associated with our comprehensive systems update.

We expect the payments related to these delayed billings to benefit 2025.

Our platform supports approximately 33.2 million devices and 76,500 customers.

As we highlighted in Q3, we went live with new systems across sales and back office.

This process included some minor data reconfiguration.

Due to the timing of this change, validation of accounts and metrics continued through year-end and immaterially impacted ARR, customer count, and device count previously reported for Q3.

Excluding this reset, Q4 2024 device ads were similar to Q4 ads from last year.

Looking ahead, we plan to disclose device and customer count on an annual basis.

These metrics do not capture the large opportunity that we have related to cross-selling of mobile and security, which has been a key driver of our growth.

Additionally, given our very large and diverse installed base, these counts are less meaningful and can vary based on the type of devices and size of customers we add on a quarterly basis.

We believe that our quarterly ARR disclosure better informs investors of our financial performance.

Q3 ARR was impacted by the MITRE data configuration work that continued through year-end by $5 million.

The adjustment impacted multiple historical periods, and we chose to apply the cumulative impact to Q3 2024.

This adjustment included system corrections to ARR contract values post contract close and standardization of ARR calculations for customer billing frequency.

As a result, we ended Q4 with an ARR of $646 million, representing a year-over-year growth of 10%.

Security ARR grew 17% year-over-year to $156 million.

Now, turning to our outlook for 2025.

We remain committed to being a profitable growth company and will build upon the progress we made in 2024, improving efficiencies while strategically investing for growth.

I've spent my first four months at Jamf immersing myself in our business to fully understand our strategy, value proposition and growth opportunities.

During this time, I've only become more excited about Jamf's future.

Part of my work included analyzing our financial model and historic targets laid out during the Analyst Day last March.

I believe in creating an achievable model that reflects current trends in our business, which is consistent with how guidance has been provided in the past.

Given this, our 2025 revenue outlook reflects our growth profile exiting Q4.

Changes from what was presented at the Analyst Day include the annualized impact of the adjustment made to our Q3 2024 ARR base.

Continued uncertainty in the selling environment due to ongoing layoffs and budget constraints in our end markets and a higher contribution from mobile, which is at a lower price point than Mac but represents a large opportunity.

As a result, for the first quarter of 2025, we expect total revenues of $165.5 million to $167.5 million, representing a year-over-year growth of 9% to 10%.

Non-GAAP operating income of $35.5 million to $37.5 million, representing a non-GAAP operating income margin of 22% at the midpoint.

For the full-year 2025, we expect a total revenue of $675.5 million to $680.5 million, representing a year-over-year growth of 8.1% at the midpoint.

Non-GAAP operating income of $142.5 million to $146.5 million, representing a non-GAAP operating income margin of 21% at the midpoint and approximately 500-basis-point improvement over fiscal year 2024.

Given our strong margin profile, we anticipate unlevered free cash flow growth of at least 75%.

We are committed to driving incremental operating margin improvement regardless of the environment.

If you've seen over the last few years, we have significantly improved our non-GAAP operating margin, and we plan to continue this trend in 2025.

Our objective is to exit the fiscal year 2026 at a Rule of 40 run rate, defined as the sum of the year-over-year revenue growth plus trailing 12-month unlevered free cash flow margin.

I would also like to thank the entire global Jamf team for all the hard work and effort over the last year and for welcoming me into my new role.

Our team really personifies Jamf's values of selflessness and relentless self-improvement.

They have made my transition seamless, helping me get up to speed quickly.

I look forward to working alongside this great team as we execute our plan in 2025.

Now, we will take your questions.

Operator?

Jake Roberge, William Blair.

John, can you just talk about the recent trends you're seeing in the tech and education sectors?

I know those spaces have seen some headwinds over the past few years, but it sounds like you started to see some signs of stability in the quarter.

So, I'd love to just dig into those comments a little deeper and then what exactly you're expecting from those industries in 2025.

Yeah, sure, Jake.

Thanks for the question.

Let's take it in parts.

Q4 was a great quarter, and we mentioned that in the prepared remarks.

We had nice bookings.

One quarter doesn't make a trend, but we're encouraged by that.

So, we're excited about that.

In the tech space, we've seen some growth as well, particularly in the Mac, which is always good.

Mobile, especially, mobile and mobile security, are two areas that we've seen a lot of uptake in across retail across transportation.

Airlines as an example; we used that as well in the prepared remarks.

Those are very encouraging signs.

And we shouldn't forget about education at all.

It's one; it's a material part of our business.

And it's something that as we watch and work with these jurisdictions, both in the US and internationally, they spent money in late 2020 and then throughout 2021.

Now, in 2025, we're starting to see the beginnings of some of those organizations coming back and not only refreshing some devices but also having some spending.

We saw some of that in early in the GiGA project, for example, for the version 2 of the GiGA project.

We've also announced that the Ministry of Education in Singapore has also selected us for their country there.

So, we're looking at a lot of opportunity on both the education side as well as the tech side as we see buyer confidence return.

And then security growth ticked below 20%.

Can you help us understand how much of that growth was impacted by the data reclassification that you went through this quarter?

And then could you just talk about how demand and pipeline are trending for that suite as we've gotten into the New Year?

Yes, Jake, this is David.

I'll take that first part of the question.

Yes, the ARR adjustment did impact the security business.

That takes about 2% of growth off of the number.

So, it would have been 19% versus 17%.

And I think John might have mentioned this as well.

But on the mobile side, we did see a very nice quarter of mobile as well, which does result in half the cost of Jamf Pro.

The second question was just around how the demand for that solution and pipeline is trending in the new year.

For the security solution.

Yes.

I mean, that's like I mentioned before, we're seeing a lot of interest in that.

Even companies or organizations that have started with the management side of it they've really seen the benefit of the Apple-specific security side of it as well.

And last year, we announced, I think it was Q3, we got an award for the best mobile security solution.

And that is really picking up across both commercial as well as education as we look.

Some of these jurisdictions are required to have security products on their educational devices, and we benefited from both of those.

So, we're seeing some encouraging signs, a bit early to call it a trend.

Every comeback I've seen has been a bit choppy, so we're making sure that we're looking at that and managing it according to what our customers need.

Koji Ikeda, Bank of America.

I just have one.

And so, when I look at the commentary, or I'm sorry, the guidance, it does imply you're going to reach somewhere around a Rule of 30 for 2025 with revenue growth and unlevered free cash flow margins, somewhere around there with the back of the envelope math.

But I think I just heard, David, I think you said in your prepared remarks that you're trying to get to a Rule of 40 in 2026, and so that does imply some sort of either revenue excel or more unlevered free cash flow unlock.

And so I know you're not guiding 2026, but how do we think about the kind of the levers to get to that Rule of 40 in 2026?

Yes.

No, thanks for the question, Koji.

Yes, I think in the prepared remarks, our goal is to exit 2026 at a Rule of 40 run rate.

And so that will come from the revenue growth and our continued focus on margin expansion.

If you look over the last two years, we've increased margins by 1,100 basis points.

Based on the guidance for this year, we expect to increase margins by another 500 basis points.

Actually, maybe I could squeeze in one here.

Maybe a follow-up to the prior question about the slowdown in security growth and fully understand the reclass of the ARR.

But what is your confidence today of security being one of the stronger growth drivers of ARPU growth in 2025 and beyond?

Koji, this is John. I'm very confident. We've actually won management deals because of our security component.

In fact, we even announced when we won the Ministry of Education for Taiwan, the only reason we got that is because we had security alongside our management piece of it.

And there's no other company that does Apple-specific management and security at scale other than us but they don't do it all at once, they'll start with a department, then other departments will start to use that or they'll start with management and then they've expanded into the security spot of it.

So I really see that as a bright spot.

I wouldn't imagine us not having a security component at this point.

So I'm encouraged.

Matt Hedberg, RBC.

John, at the top of the call, you mentioned some share shift, presumably VMware Broadcom.

I'm wondering if you could maybe double-click on a little bit of that.

Is that actually improved now?

I mean, we've heard of some pretty significant price increases in the channel.

Maybe just a little bit more commentary on some of the competitive dynamics you're seeing there.

Yes.

Matt, this is John.

From a competitive standpoint, it's been pretty consistent with what we've seen over the past, I'd say, year, year and a half year.

We haven't really seen much ebbs and flows there.

We continue to have a replacement market.

That's not all going to happen at once because a lot of those customers have longer multi-year contracts as they come up.

But we are seeing them come over.

There's concern about innovating at the pace of Apple without the funding and investment in R&D to do that.

Of course, that's what we do every day, all day.

So we're winning customers because of it, and we're going to continue to do so.

And then, David, for you on the guide for this year, I know you don't guide to ARR.

Should we think that ARR grow roughly in line?

I think revenue was guided.

If I looked at it, it was about 8% growth, if I looked at that right.

Should we think about ARR kind of growing in line with revenue?

And maybe just some of the underlying conservatism that you embedded in your full-year outlook from a revenue perspective would be helpful.

Yes.

That sounds good.

Thanks, Matt.

Yes.

So ARR, we do not guide to ARR.

I think the ARR numbers that we posted 9.8% growth, I mean, that's what we're entering into 2025 with, and that was the starting point of our growth for the year that we were looking at on the revenue side.

I think to give a little more color on the guidance in terms of sequentials, we expect it to be down sequentially seasonally as it was last year in Q2 and then continue to improve sequentially throughout the year.

And then on the margin side, we think operating margins will be down sequentially as well.

We do have merit increases and some additional cloud costs that are coming in.

We have Azure now as a partner in the marketplace.

And then the operating margin should increase throughout the year as well.

DJ Hynes, Canaccord.

Maybe I could pick up on the thread that David just mentioned, which is the Azure channel now live.

Look, you have experience of already adding AWS as a channel partner and seeing how that's progressed, realizing it's still super early with Azure.

But how has that looked relative to what you saw in the early days of the AWS relationship?

And I guess more interestingly, like any learnings from working with that first hyperscaler relationship that you can apply to what you're doing with Microsoft?

Yes, DJ, this is John.

It's encouraging.

Again, we had great success, and we continue to have great success with Amazon and being on that marketplace.

And that's one of the reasons why we leaned really hard into the Azure marketplace because we saw such good success there.

We had customers buy because of it because they could use AWS dollars and now Azure dollars as well as spend forward and to buy our product because we use cycles for that cloud product.

Like you said, it's early days.

We've done a lot of go-to market and sales enablement for the Microsoft team as well as our own team.

We've had their executives in here talking to our salespeople, getting them up to speed, and we've got great traction.

So again, I'm encouraged by the early days in watching this move forward.

I'm also encouraged by the partnership with Microsoft.

They've leaned into it heavily, which I was pleasantly surprised, I guess, by that, but we continue to work together, and I'm looking for great things from this on the Azure side, just like we saw and continue to see on the Amazon side.

And then, John, look, I know you guys went through a period of kind of downsell pressures.

But I'm curious, like how much shelfware or unused license capacity do you think is still out there in the base?

And the reason I ask, if we start to see an improvement in hiring at some point, does Jamf immediately start to benefit from that or is there unused capacity that still needs to be soaked up first?

Just help me think through those dynamics.

Yes.

We monitor that pretty closely because with cloud products, we know what devices have been enrolled and what's being used at that point in time.

So, we're not afraid of that or worried about that at this point.

We do see when companies continue to expand both their Apple footprint and then also adding management onto the security or security onto the management piece of it.

So we've got that expansion there as well.

When hiring does return, we saw some uptick of that in Q4 in some areas, but not across the board yet, and something we can count on going forward.

So, we're looking at that very closely.

But I don't see like we have to take a big pause when hiring returns before we can start generating again.

I think that that is commensurate with hiring as well.

But again, I would say that's not our only way to grow revenues through device expansion, but certainly, it's one of them.

Raimo Lenschow, Barclays.

Going back, like you saw this quarter like strength in mobile.

And obviously, that's coming at a lower price point, as you said, but it's kind of a bigger market.

Do you think that's the beginning of a trend, what's driving that?

Can you kind of talk to that a little bit more because, obviously, the opportunity there would be exciting?

Yes, Raimo, this is John.

It is exciting.

When people ask me what excites me about the business, it's the deskless workflow, and that's primarily mobile.

We're seeing companies and education use mobile in ways that we haven't anticipated in the past.

And it's just a market that hasn't been there before.

And so, as I mentioned in the prepared remarks, we saw a couple of airlines expand tremendously.

I mean it started in the pilot cockpit with the iPads.

And then it went above the wing with the iPhones up and down the aisle.

And then it extended from that on to below the wing, and the maintenance people are using iPads to make sure that they have all of the instructions they need for their maintenance work and tool tracking and all those things, stuff we never thought about.

So and all of that's mobile.

So that's really what's encouraging me is the mobile side of it.

And then when they do expand to the mobile, they think, boom, we need to make sure that these endpoints are secured as well as managed.

And that's where we can lean into the security side.

And then, David, it's kind of like your guidance now.

How do you think about the level of conservatism you kind of built in here?

How does macro play into your guidance outlook?

Just kind of talk a little bit about your philosophy here.

Yes.

So I believe in an achievable model.

And I would say the guidance process is very similar.

My belief in how to do it is very similar to how Jamf has done it.

Over the years, the beat and rise model, of course.

But at the end of the day, what we looked at is what is the exit run rate for ARR, and then we base our model on that.

There's the business, as John said, mobile is strong.

Security is a strong international.

It feels like we are in a very good position entering into '25.

Joshua Reilly, Needham & Company.

So with NRR declining at 2 points sequentially, I believe it was spot on with the guidance that you gave for NRR.

I believe it was at the beginning of last year.

I'm just curious, how did you have such strong visibility into the direction of the NRR throughout the course of the year?

And should we expect that maybe this is a bottom?

Or could it decline again sequentially into 2025?

Or maybe just how are you thinking about trends around NRR moving throughout the course of this year?

Yes.

Thanks, Josh.

Yes, we have a very good modeling team here at Jamf that does a great job on the NRR side.

Yes, it did decline from 105 to 104.

And looking forward into our assumptions for the coming year, we do think it will begin to improve during the year, probably in the back half of the year.

But we are focused on the upsell and the cross-sell.

And I think as the Macro does improve, we're in a really good position to see some traction there as well.

But yes, so $104 million for the quarter, and it should improve throughout the year.

And then as we're looking at the guidance for the year with the pretty significant ramp in free cash flow, can you just talk to the line of sight that you have right now to that cash flow ramp?

And could billings or collections disrupt that potentially?

Is that something we should be considering?

And how do you consider using excess cash throughout the course of the year, given that there is convertible debt that's due, I believe, in the fall of 2026?

Yes.

So, on the cash flow side, DSOs increased to 82 days in Q4.

Normally, it's in the high 60s.

So, we anticipate that that will improve throughout the year as our collections increase throughout the time period.

In terms of the capital allocation strategy, we look at that quarterly.

We have a $175 million line of credit that's untapped.

We have $225 million on the books at the end of the year.

And so we look at that, whether it's look at M&A, additional organic growth opportunities that we look at.

So, I think we're fairly comfortable with our cash flow numbers for the year and where we're sitting right now.

I'd also like to touch on the kind of system upgrade that we did.

I think it positioned us really well as we look out towards the future.

We upgraded to Oracle.

We have Salesforce that we implement as well, and it really puts us in a position to scale the business looking out towards the future.

We can now bill in local currency.

We have a partner channel that we've seen really strong growth from good traction right out of the gate.

And this will take us for the next number of years as we continue to grow.

There's probably no limit how big we can get on this platform.

Patrick Walravens, Citizens JMP.

This is Nicholas Jones on for Pat.

John, one for you.

So Apple devices typically have an end of life of five years.

Is this consistent with what you're seeing with your customers?

If not, how has this changed over the past three years say?

Yes, Nick, it's pretty consistent.

I mean, we typically factor in four years, but we've seen that elongate a little bit just given some uncertainties in the market, and there were some budget constraints and things like that from our buyers across the board, not just for Jamf but across the board.

And so we've seen companies extend the life cycle of those products a little bit.

Remember, when everybody had to learn from home and work from home in 2020, there were a lot of devices that were purchased at that point in time.

And so we watch that very closely, talk to our customers on when that's going to come.

Those choice programs really work to our benefit because, as we've seen in the studies that have been published, two-thirds of the people given a choice of a device will choose an Apple device, even if they had a PC, their first time around, and then they will choose that.

So we tend to be encouraged by that as those devices come to end of life.

Robbie Owens, Piper Sandler.

This is Aidan Burrell on for Rob Owens.

With recent success in education, can you talk about the partner channel role internationally?

And so, how are you thinking about a future road map for added security capabilities?

So this is John.

So just so I understand the question, how do we think about our channel program and how it relates to education and then how security impacts that?

Did I get that right?

Yes.

Well, so on the channel program, for education, again, we're encouraged by the signs we've seen in education, both domestically and internationally.

We mentioned a couple of those international opportunities that we've had, not just across Europe but also across Asia and in the US as well.

Our resellers work very closely with education, especially outside the US.

Our product does go through the channel partners outside the US and inside the US for education.

The security component really is something that does set us apart.

And it's a requirement for more and more jurisdictions to include a security component.

As I mentioned earlier on the call, the reason we won the Ministry of Education in Taiwan was specifically because we had a security component.

And we're seeing that consistent across other areas and other jurisdictions as well.

So we're encouraged by the fact that we do have management and security, not just the on-device security, but also the network filtering security piece as well.

And then also how that works, how that relates to the channel because they have to supply both of those solutions.

And to the extent that they can provide both of them in one product, that's really what's important to them and to their customers.

Does that answer your questions?

Yes.

Samik Chatterjee, JPMorgan.

Priyanka Thapa on for Samik.

I have a couple of questions.

First of all, you saw some growth in Mac in the tech vertical.

Are there any verticals where you're noticing some sluggishness in the Mac?

What's kind of driving that?

And what can be done, what trends need to happen in order for that to improve, if anything?

And I have a follow-up.

Priya, this is John.

As far as sluggishness in the Mac, we haven't seen it really.

We've not seen as robust of a growth as we've seen in the past.

But we haven't seen it go backward by any way, shape, or form.

As I mentioned, when end users are given a choice and more and more companies are providing that choice to their employees, we do see them choose a Mac more often.

We just haven't seen as robust growth in the past, just given the hiring trends and buyer confidence.

But we look forward to that continuing.

We have seen a nice little uptick in Mac and tech.

Tech is one of our largest industries, only because a lot of them, again, were immediately remote workers, and they're kind of the first wave of that as those devices get a little older.

Basically, my follow-up is along those lines.

What are your expectations for hiring trends in 2025?

Do you expect something stronger through tech and other verticals?

Or is this going to be like a broad-based uplift?

It's hard for us.

I'm not an economist.

I don't know.

I read the same documents that you read.

We were encouraged by some nice uptick in Q4, but one quarter does not a trend make.

So we're cautiously optimistic, but we're not ready to call that yet along with the broader market.

And this does conclude the question-and-answer session of today's program.

I'd like to hand the program back to John Strosahl for any further remarks.

Thanks, Jonathan, and thanks, everyone, for your time today.

We finished the fiscal year 2024 with great momentum.

We look forward to extending our leadership position, and I'm exceptionally proud of the team's agility and adaptability they've shown in the past year.

All of us are very energized about the future.

If you can't tell, both David and I will be participating in some conferences next week, and we look forward to seeing some of you there.

So hopefully, you can join us.

Thank you again for joining us today, and have a great evening.

Thank you, ladies and gentlemen, for your participation in today's conference.

This does conclude the program.

You may now disconnect.

Good day.