10-K/APeriod: FY2024

AXON ENTERPRISE, INC. Annual Report (Amendment), Year Ended Dec 31, 2024

Filed May 7, 2025For Securities:AXON

Summary

Axon Enterprise, Inc. reported strong revenue growth of 33.4% to $2.1 billion for the year ended December 31, 2024. This growth was driven by significant increases in both the TASER segment and the Software and Sensors segment, with notable contributions from TASER device and cartridge sales, as well as Axon Evidence and cloud services. Despite the revenue increase, the company's income from operations decreased to $58.5 million from $156.9 million in the prior year, primarily due to a substantial rise in operating expenses, particularly stock-based compensation and professional/consulting fees related to acquisitions. The company also disclosed two material weaknesses in its internal controls over financial reporting: one related to revenue recognition and another concerning the balance sheet presentation of its convertible senior notes. These weaknesses have led to restatements of prior financial periods. Axon continues to invest heavily in research and development, with R&D expenses increasing by 45.4% year-over-year. The company ended the year with a strong liquidity position, although cash and cash equivalents decreased due to acquisition activities.

Financial Highlights

54 data points
Beta

Revenue

$2.08B

59.6% Gross Margin

Net Income

$377.03M

18.1% Net Margin

EPS (Diluted)

$4.80

Total Assets

$4.47B

Cash & Equivalents

$454.84M

Free Cash Flow

$329.53M

Financial Statements
Beta
Revenue$2.08B
Cost of Revenue$841.15M
Gross Profit$1.24B
R&D Expenses$441.59M
SG&A Expenses$741.25M
Operating Expenses$1.18B
Operating Income$58.54M
Net Income$377.03M
EPS (Basic)$4.98
EPS (Diluted)$4.80
Shares Outstanding (Basic)75.75M
Shares Outstanding (Diluted)78.56M

Key Highlights

  • 1Revenue increased by 33.4% to $2.1 billion for the year ended December 31, 2024, driven by growth in both TASER and Software & Sensors segments.
  • 2Income from operations decreased significantly to $58.5 million due to a substantial increase in operating expenses, notably stock-based compensation and acquisition-related costs.
  • 3The company reported two material weaknesses in internal control over financial reporting related to revenue recognition and convertible note presentation, necessitating restatements of prior financial periods.
  • 4Research and Development (R&D) expenses rose by 45.4% to $441.6 million, reflecting continued investment in innovation.
  • 5Axon completed two significant acquisitions in 2024: Fusus and Dedrone, integrating them into its Software and Sensors segment to enhance its public safety technology ecosystem.
  • 6The company's liquidity remains strong, with $454.8 million in cash and cash equivalents and available-for-sale investments as of December 31, 2024, though this reflects a decrease from the prior year due to acquisition activities.
  • 7Gross margin decreased to 59.6% from 61.2% year-over-year, primarily impacted by increased stock-based compensation and amortization of acquired intangibles.

Frequently Asked Questions

Axon experienced robust revenue growth of 33.4% to $2.1 billion, propelled by strong demand in both its TASER and Software & Sensors segments. Growth in TASER devices and cartridges, alongside increased adoption of Axon Evidence and cloud services, were primary contributors. However, operating income declined due to significant increases in operating expenses, including stock-based compensation and expenses related to recent acquisitions.

Axon identified two material weaknesses: one concerning revenue recognition processes for customer contracts and another related to the balance sheet presentation of its convertible senior notes. These have led to restatements of previously issued financial statements. While the company is implementing remediation plans, these weaknesses indicate potential areas for improved financial reporting controls and may impact investor confidence until fully resolved.

Axon significantly increased its R&D spending by 45.4% to $441.6 million, underscoring its commitment to innovation. The company also completed key acquisitions of Fusus and Dedrone in 2024, integrating them into its operations. While these investments are strategic for long-term growth and expanding its technology offerings, they contributed to the increase in operating expenses and impacted profitability in the short term.

Axon maintains a strong liquidity position, with approximately $454.8 million in cash and cash equivalents and $333.2 million in available-for-sale investments as of December 31, 2024. However, this total liquidity decreased from the prior year, largely due to funds utilized for acquisition activities during the period.