Summary
Axon Enterprise, Inc. (formerly TASER International, Inc.) reported a strong financial performance for the nine months ended September 30, 2016, with net sales increasing by 31.2% to $186.2 million compared to the same period in 2015. This growth was driven by robust performance in both the TASER Weapons segment (+24.7%) and the rapidly expanding Axon segment (+60.0%). The Axon segment, which includes body cameras and Evidence.com, saw significant revenue increases, particularly from Evidence.com services which grew by 145.0%. Despite increased operating expenses, especially in Sales, General & Administrative (SG&A) which rose 61.6% primarily due to investments in sales and marketing for the Axon segment, the company maintained a healthy gross margin of 64.9% for the nine-month period. Financially, the company ended the period with $102.5 million in cash, cash equivalents, and investments. However, net income decreased by $3.9 million to $11.0 million for the nine-month period, largely impacted by increased operating expenses and a higher effective tax rate. The company also actively repurchased stock, spending $33.7 million in the first nine months of 2016. Management is focused on continued growth in the Axon segment and managing operational complexities, as indicated by the remediation efforts for identified material weaknesses in internal controls over financial reporting.
Financial Highlights
50 data points| Revenue | $71.88M |
| Cost of Revenue | $25.32M |
| Gross Profit | $46.56M |
| R&D Expenses | $7.36M |
| SG&A Expenses | $28.12M |
| Operating Expenses | $35.48M |
| Operating Income | $11.09M |
| Net Income | $3.84M |
| EPS (Basic) | $0.07 |
| EPS (Diluted) | $0.07 |
| Shares Outstanding (Basic) | 52.21M |
| Shares Outstanding (Diluted) | 53.14M |
Key Highlights
- 1Net sales grew by 31.2% year-over-year to $186.2 million for the nine months ended September 30, 2016.
- 2The Axon segment demonstrated significant growth, with net sales increasing by 60.0% to $41.9 million for the nine months ended September 30, 2016, driven by Evidence.com services.
- 3Gross margin remained strong at 64.9% for the nine months ended September 30, 2016, indicating effective cost management relative to sales.
- 4Operating expenses increased substantially, with SG&A up 61.6% and R&D up 23.6%, reflecting strategic investments in growth and product development, particularly for the Axon segment.
- 5Cash and cash equivalents, along with short-term investments, totaled $102.5 million as of September 30, 2016, providing ample liquidity.
- 6The company repurchased $33.7 million of its common stock during the nine months ended September 30, 2016, signaling a return of capital to shareholders.
- 7A material weakness in internal controls over financial reporting was identified, related to the identification and recording of liabilities and revenue recognition, with remediation efforts underway.