Summary
Axon Enterprise, Inc. reported strong revenue growth in the third quarter of 2019, with net sales increasing by 24.8% year-over-year to $130.8 million. This growth was primarily driven by the Software and Sensors segment, which saw a 43.5% increase in net sales, fueled by higher adoption of cloud services and devices like Axon Body and Axon Fleet. The TASER segment also contributed positively with a 12.7% increase, though gross margins were compressed due to the rollout of the new TASER 7 device and associated trade-in credits. While the company reported an increase in net income to $6.1 million for the quarter, year-to-date net income saw a significant decrease to $13.3 million compared to $27.1 million in the same period last year, largely due to increased operating expenses, including substantial investments in R&D and SG&A to support future growth. The company ended the quarter with a healthy liquidity position, holding $204.1 million in cash, cash equivalents, and restricted cash. Despite the increase in operating expenses and a strategic shift towards subscription models, Axon maintains a positive outlook, projecting full-year 2019 revenue between $500 million and $510 million. Investors should monitor the impact of new product introductions on gross margins and the continued growth trajectory of the Software and Sensors segment, as well as the effective management of operating expenses.
Financial Highlights
49 data points| Revenue | $130.84M |
| Cost of Revenue | $50.67M |
| Gross Profit | $80.17M |
| R&D Expenses | $25.13M |
| SG&A Expenses | $48.42M |
| Operating Expenses | $73.55M |
| Operating Income | $6.62M |
| Net Income | $6.10M |
| EPS (Basic) | $0.10 |
| EPS (Diluted) | $0.10 |
| Shares Outstanding (Basic) | 59.28M |
| Shares Outstanding (Diluted) | 60.06M |
Key Highlights
- 1Net sales increased by 24.8% to $130.8 million in Q3 2019, driven by strong performance in the Software and Sensors segment (+43.5%).
- 2The TASER segment revenue grew by 12.7% primarily due to increased cartridge and warranty revenue, with a notable shift towards the new TASER 7 device.
- 3Gross margins experienced compression, particularly in the TASER segment, due to the introduction of the TASER 7, higher unit costs, and trade-in credits.
- 4Operating expenses, including SG&A and R&D, increased significantly year-over-year, reflecting investments in headcount and product development to support growth.
- 5Net income for Q3 2019 was $6.1 million, a slight increase from $5.7 million in Q3 2018, but year-to-date net income decreased substantially.
- 6The company ended the period with $204.1 million in cash, cash equivalents, and restricted cash, indicating a strong liquidity position.
- 7Remaining performance obligations totaled approximately $1.13 billion as of September 30, 2019, providing visibility into future revenue.