01—Abstract
Summary
Summary of the 10-K filed March 10, 2014. Cited figures are marked; the original filing is the authoritative source.
Axon Enterprise, Inc. (formerly TASER International, Inc.) demonstrated robust revenue growth in 2013, driven by strong performance in both its TASER Weapons segment and its burgeoning EVIDENCE.com & Video segment.
The company reported a 20.1% increase in net sales, reaching $137.8 milliona. This growth was primarily fueled by the introduction of new products like the TASER X26P and continued adoption of the AXON body cameras and EVIDENCE.com platform by law enforcement agencies. Financially, the company achieved significant profitability improvements, with net income rising to $18.2 million in 2013, up from $14.7 million in 2012.
This performance was supported by improved gross margins and effective management of operating expenses. The company's strategic focus on expanding its video evidence solutions and increasing market penetration, both domestically and internationally, appears to be yielding positive results, positioning it for continued growth in the evolving landscape of law enforcement technology.
02—Key points
Key Highlights
- Net sales increased by 20.1% to $137.8 million in 2013, up from $114.8 million in 2012, indicating strong market demand.
- The EVIDENCE.com & Video segment experienced significant growth, with net sales increasing by 81.8% to $10.4 million in 2013, demonstrating successful expansion into new technology areas.
- Net income improved by $3.5 million to $18.2 million in 2013, compared to $14.7 million in 2012, reflecting enhanced profitability.
- Gross margin improved to 62.3% in 2013 from 59.0% in 2012, driven by favorable product mix and operational efficiencies.
- The company repurchased $25.0 million of its common stock in 2013, indicating a commitment to returning value to shareholders.
- Bookings for the EVIDENCE.com and AXON product lines saw a substantial increase of 282% to $14.5 million in 2013, signaling strong future revenue potential for these segments.
- Despite a challenging litigation environment, the company managed its legal expenses effectively, with litigation judgment expenses decreasing from $3.3 million in 2011 to a net recovery of $2.2 million in 2012, and then rising to $1.5 million in 2013.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2013, Axon Enterprise, Inc. kept $0.13.
- Revenue$136.1M100.0%
- Cost of revenue−$50.3M36.9%
- Gross profit$85.8M63.1%
- Operating costs−$57.9M42.5%
- Operating income$27.9M20.5%
- Interest, other & tax−$9.7M7.1%
- Net income$18.2M13.4%
Where FY2013 revenue went
$136.1M- Cost of revenue: $52.0M, 38% of revenue
- SG&A: $46.6M, 34% of revenue
- Net income: $18.2M, 13% of revenue
- R&D: $9.9M, 7.3% of revenue
- Interest, other & tax: $9.7M, 7.1% of revenue
Kept 13% as net income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2013filed March 10, 2014Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $136.12M$114.13M | +19.3% |
| Cost of Revenue | $51.99M$47.04M | +10.5% |
| Gross Profit | $85.84M$67.72M | +26.8% |
| R&D Expenses | $9.89M$8.14M | +21.5% |
| SG&A Expenses | $46.56M$39.25M | +18.6% |
| Operating Expenses | $57.90M$45.19M | +28.1% |
| Operating Income | $27.95M$22.53M | +24.1% |
| Net Income | $18.24M$14.74M | +23.8% |
| EPS (Basic) | $0.35$0.27 | +29.6% |
| EPS (Diluted) | $0.34$0.27 | +25.9% |
| Shares Outstanding (Basic) | 51.88M53.83M | −3.6% |
| Shares Outstanding (Diluted) | 54.15M54.72M | −1.0% |
05—Questions
Frequently Asked Questions
What is Axon Enterprise's (formerly TASER International) primary business and revenue model?
Axon Enterprise's primary business is the development, manufacture, and sale of Conducted Electrical Weapons (CEWs) under the TASER brand, and integrated hardware and software solutions for video and digital evidence management, notably the AXON body cameras and EVIDENCE.com platform. Revenue is generated from the sale of these products, as well as from recurring service fees for EVIDENCE.com subscriptions and extended warranties.
How did the company perform financially in 2013 compared to 2012?
In 2013, Axon Enterprise reported a net sales increase of 20.1% to $137.8 million, with significant growth in both its TASER Weapons segment and its EVIDENCE.com & Video segment. Net income rose from $14.7 million in 2012 to $18.2 million in 2013, with gross margins improving to 62.3%. This strong financial performance was supported by new product introductions and the increasing adoption of its evidence management solutions.
What are the key growth drivers for Axon Enterprise?
The key growth drivers for Axon Enterprise are the continued innovation and sales of its TASER CEW products, particularly the newer models like the X26P and X2. Additionally, the rapidly expanding market for law enforcement body-worn cameras and digital evidence management systems, represented by the AXON products and EVIDENCE.com platform, is a major growth driver. The company is also focused on increasing its international market penetration.
What are the main risks the company faces?
The company faces several risks, including its material dependence on the law enforcement market's acceptance of its products, the risk of defects in its products, potential security breaches of its EVIDENCE.com platform, delays in product development and sales cycles, intense competition, and regulatory challenges in various jurisdictions. Litigation, particularly related to product liability claims, also presents a significant ongoing risk.
06—Continue