01—Abstract
Summary
Summary of the 10-K filed February 25, 2022. Cited figures are marked; the original filing is the authoritative source.
Axon Enterprise, Inc. (AXON) reported strong revenue growth of 26.8% in fiscal year 2021, reaching $863.4 milliona.
This growth was driven by both its TASER segment (up 19.2%) and its Software and Sensors segment (up 35.6%), with the latter showing particularly robust expansion in cloud services and evidence management solutions. Despite revenue growth, the company reported a net loss of $60.0 millionb for the year, primarily due to a significant increase in stock-based compensation expenses related to its CEO Performance Award and eXponential Stock Performance Plan (XSPP), alongside increased operating expenses from headcount growth and R&D investments. The company anticipates continued growth, projecting revenue of approximately $1 billion for fiscal year 2022 and is making substantial investments in its manufacturing facilities.
Key areas of investment include a new manufacturing and office campus in Scottsdale, Arizona, and capacity expansion for TASER devices. Management is focused on its strategic goal of building highly recurring, highly profitable businesses and expanding its total addressable market through new products, customer segments, and geographic regions. However, investors should be mindful of potential supply chain constraints and the company's reliance on government budgets, which can introduce variability in sales cycles and contract fulfillment.
02—Key points
Key Highlights
- Total net sales increased by 26.8% to $863.4 million in fiscal year 2021, demonstrating strong top-line growth.
- The Software and Sensors segment significantly outpaced the TASER segment in growth, increasing revenue by 35.6% year-over-year, driven by Axon Evidence and cloud services.
- Despite revenue growth, the company reported a net loss of $60.0 million for fiscal year 2021, a substantial increase from the $1.7 million net loss in 2020, largely due to a significant rise in stock-based compensation expenses.
- The company has a substantial backlog of $2.4 billion as of December 31, 2021, primarily within the Software and Sensors segment, indicating strong future revenue potential.
- Axon is investing heavily in its future, planning capital expenditures of $135-$160 million for 2022, including a new manufacturing facility and expansion of TASER device capacity.
- Supply chain constraints impacted fulfillment of certain orders in 2021, with approximately $35.0 million for TASER 7 devices and $15.5 million for Axon Body 3 devices deferred to 2022.
- The company's stock performance significantly outperformed major indices from 2016 to 2021, indicating strong historical investor returns.
03—One dollar
Follow one dollar
For each $1.00 of revenue in FY2021, Axon Enterprise, Inc. lost $0.07.
- Revenue$865.6M100.0%
- Cost of revenue−$319.9M37.0%
- Gross profit$545.7M63.0%
- Operating costs−$708.9M81.9%
- Operating income−$163.1M18.8%
- Interest, other & tax$103.1M11.9%
- Net income−$60.0M6.9%
04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 25, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $865.64M$681.00M | +27.1% |
| Cost of Revenue | $319.92M$264.67M | +20.9% |
| Gross Profit | $545.72M$416.33M | +31.1% |
| R&D Expenses | $194.03M$123.19M | +57.5% |
| SG&A Expenses | $514.85M$307.29M | +67.5% |
| Operating Expenses | $708.87M$430.48M | +64.7% |
| Operating Income | -$163.15M-$14.15M | −1053.0% |
| Net Income | -$60.02M-$1.72M | −3381.3% |
| EPS (Basic) | $-0.85$-0.03 | −2733.3% |
| EPS (Diluted) | $-0.91$-0.03 | −2933.3% |
| Shares Outstanding (Basic) | 66.19M61.78M | +7.1% |
| Shares Outstanding (Diluted) | 66.19M61.78M | +7.1% |
05—Questions
Frequently Asked Questions
What was Axon's financial performance in fiscal year 2021?
In fiscal year 2021, Axon Enterprise, Inc. reported a 26.8% increase in net sales to $863.4 million. The Software and Sensors segment showed particularly strong growth of 35.6%. However, the company experienced a net loss of $60.0 million, significantly wider than the $1.7 million loss in 2020, primarily due to increased stock-based compensation expenses and higher operating costs.
What are the key growth drivers for Axon?
Key growth drivers include the increasing adoption of its cloud-based Software and Sensors solutions, particularly Axon Evidence and cloud services, which saw revenue grow by 39.1% in 2021. The TASER segment also contributed to growth, with a 19.2% revenue increase, driven by TASER 7 devices and cartridges. The company is actively expanding its product offerings and customer base, targeting new market segments and geographies.
What are the main risks or challenges facing Axon?
Key risks include ongoing supply chain constraints impacting product fulfillment, reliance on government budgets for sales which can lead to variable sales cycles, the significant impact of stock-based compensation on net income, and potential litigation related to product use. The company is also subject to various governmental regulations and evolving technological landscapes.
What is Axon's outlook for fiscal year 2022?
Axon expects revenue to reach approximately $1 billion in fiscal year 2022. The company plans to invest between $135 million and $160 million in capital expenditures, including a new manufacturing facility and capacity expansion for its TASER devices, signaling confidence in continued growth.
06—Continue