01—Abstract
Summary
Summary of the 10-K filed February 27, 2024. Cited figures are marked; the original filing is the authoritative source.
Axon Enterprise, Inc. reported strong revenue growth of 31.4% for the year ended December 31, 2023, reaching $1.6 billiona.
This growth was driven by both the TASER segment (up 15.2%b) and the Software and Sensors segment (up 44.4%), with significant contributions from new product introductions like TASER 10 and Axon Body 4. The company's financial strategy emphasizes highly recurring, profitable businesses, reflected in the robust growth of its Axon Evidence cloud services, which saw a 52.2% increase in revenue. The company's commitment to innovation and strategic growth is evident in its continued investment in R&D, which increased by 29.9% year-over-year.
Despite increased operating expenses, particularly in salaries and stock-based compensation, Axon demonstrated improved profitability, with income from operations increasing by 66.0% to $154.8 millionc. The company also highlighted substantial future contracted revenue of $7.1 billion as of year-end 2023, indicating a strong revenue visibility for the coming years.
02—Key points
Key Highlights
- Revenue grew 31.4% year-over-year to $1.6 billion.
- TASER segment revenue increased 15.2%, driven by TASER devices and cartridges, with strong adoption of TASER 10.
- Software and Sensors segment revenue surged 44.4%, led by Axon Evidence and cloud services, as well as Axon Fleet Systems.
- R&D expenses increased 29.9% to $303.7 million, supporting continued innovation.
- Income from operations grew 66.0% to $154.8 million, indicating improved profitability.
- Future contracted revenue stood at $7.1 billion as of December 31, 2023, providing strong revenue visibility.
- The company reported effective internal control over financial reporting and remediated a previously disclosed material weakness.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2023, Axon Enterprise, Inc. kept $0.11.
- Revenue$1.56B100.0%
- Cost of revenue−$605.2M38.8%
- Gross profit$955.5M61.2%
- Operating costs−$798.6M51.2%
- Operating income$156.8M10.0%
- Interest, other & tax$18.9M1.2%
- Net income$175.8M11.3%
Where FY2023 revenue went
$1.56B- Cost of revenue: $605.2M, 39% of revenue
- SG&A: $494.9M, 32% of revenue
- R&D: $303.7M, 19% of revenue
- Operating income: $156.8M, 10% of revenue
Kept 10% as operating income
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2023filed February 27, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $1.56B$1.19B | +31.5% |
| Cost of Revenue | $605.25M$461.03M | +31.3% |
| Gross Profit | $955.45M$726.11M | +31.6% |
| R&D Expenses | $303.72M$233.81M | +29.9% |
| SG&A Expenses | $494.88M$399.33M | +23.9% |
| Operating Expenses | $798.60M$633.14M | +26.1% |
| Operating Income | $156.85M$92.97M | +68.7% |
| Net Income | $175.78M$146.93M | +19.6% |
| EPS (Basic) | $2.37$2.07 | +14.5% |
| EPS (Diluted) | $2.33$2.03 | +14.8% |
| Shares Outstanding (Basic) | 74.19M71.09M | +4.4% |
| Shares Outstanding (Diluted) | 75.46M72.53M | +4.0% |
05—Questions
Frequently Asked Questions
What were the primary drivers of Axon's revenue growth in 2023?
Axon's revenue growth was primarily driven by strong performance in both its TASER segment and its Software and Sensors segment. The TASER segment benefited from increased sales of TASER devices and cartridges, including the new TASER 10. The Software and Sensors segment saw significant growth from its Axon Evidence and cloud services, as well as increased sales of Axon Body cameras and Axon Fleet systems.
How is Axon managing its investments and future growth?
Axon continues to invest significantly in Research and Development (R&D), with a 29.9% increase in R&D expenses for 2023, focusing on product innovation. The company also reported substantial future contracted revenue of $7.1 billion, signaling strong future revenue streams. In January 2024, Axon also completed the acquisition of Fusus, Inc., a real-time crime center technology leader, to enhance its integrated public safety solutions.
What is Axon's financial outlook based on this filing?
The company demonstrated solid top-line growth and improved operating income in 2023, supported by recurring revenue streams from its software and cloud services. The significant backlog of future contracted revenue provides a positive outlook for continued revenue growth and financial performance. However, investors should remain aware of the numerous risk factors outlined in the filing, including those related to strategic, operational, financial, legal, and compliance risks.
06—Continue