10-QPeriod: Q1 FY2022

AXON ENTERPRISE, INC. Quarterly Report for Q1 Ended Mar 31, 2022

Filed May 10, 2022For Securities:AXON

Summary

Axon Enterprise, Inc. (AXON) reported strong revenue growth in the first quarter of 2022, with net sales reaching $256.4 million, 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 million, 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 million in cash and cash equivalents, and the company anticipates sufficient liquidity to meet its operational and capital expenditure needs.

Financial Highlights

48 data points
Beta

Revenue

$256.43M

60.7% Gross Margin

Net Income

$54.87M

21.4% Net Margin

EPS (Diluted)

$0.76

Total Assets

$1.77B

Cash & Equivalents

$386.37M

Free Cash Flow

$26.87M

Financial Statements
Beta
Revenue$256.43M
Cost of Revenue$100.69M
Gross Profit$155.74M
R&D Expenses$48.42M
SG&A Expenses$90.13M
Operating Expenses$138.54M
Operating Income$17.19M
Net Income$54.87M
EPS (Basic)$0.77
EPS (Diluted)$0.76
Shares Outstanding (Basic)70.95M
Shares Outstanding (Diluted)72.35M

Key Highlights

  • 1Net sales increased by 31.5% to $256.4 million in Q1 2022 compared to Q1 2021.
  • 2The Software and Sensors segment experienced robust growth of 48.0%, while the TASER segment grew by 15.5%.
  • 3The 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.
  • 4Operating expenses decreased by 28.8% primarily due to a reduction in stock-based compensation expenses.
  • 5Cash and cash equivalents increased to $386.4 million as of March 31, 2022, providing strong liquidity.
  • 6Full-year 2022 revenue is projected to be between $1.05 billion and $1.1 billion.
  • 7Remaining performance obligations (future contracted revenue) stand at approximately $2.97 billion, providing good visibility into future revenue.

Frequently Asked Questions

Axon Enterprise, Inc. expects its revenue for the full year 2022 to be in the range of $1.05 billion to $1.1 billion.

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.

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.

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.