01—Abstract
Summary
Summary of the 10-Q filed May 7, 2021. Cited figures are marked; the original filing is the authoritative source.
Axon Enterprise, Inc. (AXON) reported its first-quarter 2021 financial results, showing significant top-line growth driven by strong performance in both its TASER and Software and Sensors segments.
Total net sales increased by 32.5% year-over-year to $195.0 milliona. The Software and Sensors segment, in particular, saw a 34.7% increase in net sales, highlighting the growing adoption of its cloud-based solutions and connected devices. Despite robust revenue growth, the company reported a net loss of $47.9 million for the quarter, a significant shift from a net income of $4.1 million in the prior year.
This was largely driven by a substantial increase in operating expenses, primarily due to higher stock-based compensation expenses related to performance awards and increased investments in research and development and sales, general, and administrative functions to support future growth. The company maintains a strong liquidity position with $154.8 millionb in cash and cash equivalents and a clear outlook for the full year with projected revenues between $780 million and $820 million.
02—Key points
Key Highlights
- Total net sales grew 32.5% year-over-year to $195.0 million, driven by strong demand across both TASER and Software & Sensors segments.
- The Software and Sensors segment showed robust growth of 34.7%, indicating continued expansion of cloud services and connected devices.
- TASER segment sales increased by 30.4%, fueled by strong demand for the TASER 7 device and associated cartridges.
- The company reported a net loss of $47.9 million, a significant decrease from a net income of $4.1 million in the prior year's quarter.
- Operating expenses surged by 94.2% ($84.2 million) year-over-year, primarily due to a substantial increase in stock-based compensation expenses ($61.9 million) and higher R&D and SG&A investments.
- The company maintains a solid financial position with $154.8 million in cash and cash equivalents and no long-term debt.
- Axon provided an optimistic revenue outlook for the full year 2021, expecting revenues to be in the range of $780 million to $820 million.
03—One dollar
Follow one dollar
For each $1.00 of revenue in Q1 FY2021, Axon Enterprise, Inc. lost $0.25.
- Revenue$195.0M100.0%
- Cost of revenue−$71.7M36.7%
- Gross profit$123.4M63.3%
- Operating costs−$173.6M89.0%
- Operating income−$50.3M25.8%
- Interest, other & tax$2.3M1.2%
- Net income−$47.9M24.6%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2021filed May 7, 2021Financial Statements
Q1 FY2021 against Q1 FY2020
| Line item | Q1 FY2021Q1 FY2020 | Change |
|---|---|---|
| Revenue | $195.02M$147.16M | +32.5% |
| Cost of Revenue | $71.67M$58.55M | +22.4% |
| Gross Profit | $123.35M$88.61M | +39.2% |
| R&D Expenses | $47.02M$26.38M | +78.2% |
| SG&A Expenses | $126.60M$63.03M | +100.9% |
| Operating Expenses | $173.62M$89.41M | +94.2% |
| Operating Income | -$50.26M-$800K | −6182.7% |
| Net Income | -$47.92M$4.07M | −1276.2% |
| EPS (Basic) | $-0.75$0.07 | −1171.4% |
| EPS (Diluted) | $-0.75$0.07 | −1171.4% |
| Shares Outstanding (Basic) | 64.04M59.61M | +7.4% |
| Shares Outstanding (Diluted) | 64.04M60.39M | +6.0% |
05—Questions
Frequently Asked Questions
What drove the significant increase in operating expenses?
The substantial increase in operating expenses, particularly Sales, General, and Administrative (SG&A) expenses, was primarily driven by a significant rise in stock-based compensation. This increase is largely attributed to updated estimates and probable attainment of performance criteria for the CEO Performance Award and the eXponential Stock Performance Plan (XSPP). Additionally, increased headcount and investments in R&D and marketing also contributed to the higher operating costs.
Why did the company report a net loss this quarter despite strong revenue growth?
While revenue grew significantly (32.5%), the company recorded a net loss of $47.9 million due to a substantial increase in operating expenses. The surge in stock-based compensation, combined with increased investments in research and development and SG&A to support future growth initiatives, outweighed the revenue gains. These investments are strategically aimed at expanding the Software and Sensors segment and developing new products.
What is the company's outlook for the remainder of 2021?
Axon Enterprise, Inc. anticipates continued strong performance in 2021, projecting full-year revenue to be in the range of $780 million to $820 million. Capital expenditure expectations remain unchanged, indicating a focus on strategic investments to support ongoing growth and product development.
How is the company managing its liquidity and financial resources?
The company maintains a healthy liquidity position with $154.8 million in cash and cash equivalents as of March 31, 2021. It also has access to a $50.0 million unsecured revolving line of credit, of which $43.9 million was available for borrowing. Axon has no long-term debt and believes its current funding sources, combined with potential additional financing, will be sufficient to meet its cash requirements for at least the next 12 months, including capital expenditures, working capital, and potential acquisitions.
06—Continue