Summary
Axon Enterprise, Inc. reported $112.4 million in net sales for the second quarter of 2019, a 13.2% increase year-over-year. Despite revenue growth, the company experienced a net loss of $1.3 million from operations, compared to an income of $5.3 million in the prior year's comparable period. This decline in operational profitability was attributed to increased cost of sales and investments in research and development and sales, general, and administrative functions to support growth. Significant R&D investment is ongoing, particularly in the Software and Sensors segment, indicating a strategic focus on expanding its cloud-connected device platform. The company's balance sheet shows total assets of $746.4 million as of June 30, 2019, with a notable increase in contract assets and inventory. Cash reserves decreased by $129.7 million, largely due to net purchases of investments. The company is strategically shifting towards a subscription-based model for its products, aiming to align with municipal budgeting cycles and enhance recurring revenue streams. This transition, along with the rollout of new products like the TASER 7, impacted short-term margins but is expected to drive long-term revenue growth.
Financial Highlights
49 data points| Revenue | $112.36M |
| Cost of Revenue | $46.80M |
| Gross Profit | $65.56M |
| R&D Expenses | $23.49M |
| SG&A Expenses | $43.36M |
| Operating Expenses | $66.86M |
| Operating Income | -$1.29M |
| Net Income | $738K |
| EPS (Basic) | $0.01 |
| EPS (Diluted) | $0.01 |
| Shares Outstanding (Basic) | 59.19M |
| Shares Outstanding (Diluted) | 60.00M |
Key Highlights
- 1Net sales increased by 13.2% to $112.4 million for the three months ended June 30, 2019, compared to $99.2 million in the prior year.
- 2The Software and Sensors segment showed robust growth, with net sales up 34.2% to $51.8 million, driven by increased Axon Evidence and extended warranty revenues.
- 3Gross margin decreased to 58.4% from 63.6% in the prior year's comparable quarter, primarily due to increased cost of sales and product mix shifts in the TASER segment.
- 4Operating expenses increased due to investments in headcount for R&D and SG&A, leading to a loss from operations of $1.3 million, compared to a $5.3 million income in Q2 2018.
- 5Cash, cash equivalents, and restricted cash decreased by $129.7 million to $221.3 million, mainly due to net purchases of investments totaling $116.7 million.
- 6The company is strategically shifting towards a subscription-based revenue model, with bookings for the Software and Sensors segment increasing by 59.8% to $142.0 million.
- 7Remaining performance obligations totaled approximately $1.05 billion as of June 30, 2019, indicating significant future revenue potential.