01—Abstract
Summary
Summary of the 10-Q filed May 10, 2022. Cited figures are marked; the original filing is the authoritative source.
Axon Enterprise, Inc. (AXON) reported strong revenue growth in the first quarter of 2022, with net sales reaching $256.4 milliona, a 31.5% increase year-over-year, driven by significant expansion in the Software and Sensors segment (+48.0%) and continued growth in the TASER segment (+15.5%).
The company achieved profitability with a net income of $54.9 millionb, a substantial improvement from a net loss of $47.9 million in the prior year's quarter. This turnaround was supported by a significant decrease in operating expenses, primarily due to lower stock-based compensation compared to the prior year, and increased revenue. The company has provided an optimistic revenue outlook for the full year 2022, projecting between $1.05 billion to $1.1 billion.
Despite increased costs in areas like freight and labor, Axon is managing its gross margins, which stood at 60.7% for the quarter. The balance sheet remains strong with $386.4 millionc in cash and cash equivalents, and the company anticipates sufficient liquidity to meet its operational and capital expenditure needs.
02—Key points
Key Highlights
- Net sales increased by 31.5% to $256.4 million in Q1 2022 compared to Q1 2021.
- The Software and Sensors segment experienced robust growth of 48.0%, while the TASER segment grew by 15.5%.
- The company returned to profitability, reporting a net income of $54.9 million in Q1 2022, a significant improvement from a net loss of $47.9 million in Q1 2021.
- Operating expenses decreased by 28.8% primarily due to a reduction in stock-based compensation expenses.
- Cash and cash equivalents increased to $386.4 million as of March 31, 2022, providing strong liquidity.
- Full-year 2022 revenue is projected to be between $1.05 billion and $1.1 billion.
- Remaining performance obligations (future contracted revenue) stand at approximately $2.97 billion, providing good visibility into future revenue.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in Q1 FY2022, Axon Enterprise, Inc. kept $0.21.
- Revenue$256.4M100.0%
- Cost of revenue−$100.7M39.3%
- Gross profit$155.7M60.7%
- Operating costs−$138.5M54.0%
- Operating income$17.2M6.7%
- Interest, other & tax$37.7M14.7%
- Net income$54.9M21.4%
04—Financials
Financial Highlights
Figures from 10-QQ1 FY2022filed May 10, 2022Financial Statements
Q1 FY2022 against Q1 FY2021
| Line item | Q1 FY2022Q1 FY2021 | Change |
|---|---|---|
| Revenue | $256.43M$195.02M | +31.5% |
| Cost of Revenue | $100.69M$71.67M | +40.5% |
| Gross Profit | $155.74M$123.35M | +26.3% |
| R&D Expenses | $48.42M$47.02M | +3.0% |
| SG&A Expenses | $90.13M$126.60M | −28.8% |
| Operating Expenses | $138.54M$173.62M | −20.2% |
| Operating Income | $17.19M-$50.26M | +134.2% |
| Net Income | $54.87M-$47.92M | +214.5% |
| EPS (Basic) | $0.77$-0.75 | +202.7% |
| EPS (Diluted) | $0.76$-0.75 | +201.3% |
| Shares Outstanding (Basic) | 70.95M64.04M | +10.8% |
| Shares Outstanding (Diluted) | 72.35M64.04M | +13.0% |
05—Questions
Frequently Asked Questions
What is Axon's revenue outlook for the full year 2022?
Axon Enterprise, Inc. expects its revenue for the full year 2022 to be in the range of $1.05 billion to $1.1 billion.
How did Axon's profitability change in the first quarter of 2022 compared to the prior year?
Axon achieved profitability in the first quarter of 2022, reporting a net income of $54.9 million, a significant turnaround from a net loss of $47.9 million in the same period of 2021. This improvement was driven by increased sales and a reduction in operating expenses.
What is the status of Axon's legal proceedings with the FTC?
The FTC filed an enforcement action regarding Axon's acquisition of Vievu LLC, alleging anticompetitive effects. The administrative hearing is stayed pending Axon's Supreme Court challenge. Axon is vigorously defending the matter and is also evaluating strategic alternatives, which could include divestiture or licensing, to resolve the dispute.
How is Axon managing its supply chain and potential disruptions?
Axon is actively managing its supply chain by bolstering strategic relationships, identifying secondary sourcing, adjusting build plans, and incorporating logistics modes to support increasing demand. The company has experienced supply chain disruptions but is focused on minimizing customer impact.
06—Continue