SCOTTSDALE, Ariz., Feb. 27,
2024 /PRNewswire/ --
- Axon Cloud and Services revenue grows 52% to $561 million
- Annual recurring revenue grows 47% to $697 million
- Annual net income of $174 million
supports Adjusted EBITDA of $329
million
- Company projects Full Year 2024 revenue of $1.88 billion to $1.94
billion, representing 20% to 24% annual growth
Fellow shareholders,
Axon is delighted to deliver another year of record company
performance, fueled by product innovation, partnership with our
customers and strong industry trends. Demand for our mission-driven
product ecosystem continued to grow in the fourth quarter of 2023,
and we recorded our fifth consecutive year of 25% or greater
revenue growth, growing 31% year over year. We achieved this growth
with a full year net income margin of 11% and Adjusted EBITDA
margin of 21%.
Our core measure of success as a company is progress on our
mission to protect life. Our mission aligns our people, our
customers and our communities. Together, we focus on solving
problems with modern technology, pioneering new ways of thinking
and taking new approaches to complex social dynamics, driving
toward our moonshot goal to cut gun-related deaths between police
and the public in half by 2033. In this first year after announcing
our moonshot, we introduced new technology, new modern training
capabilities and new sources of improved data and analytics. We've
laid the groundwork for the next nine years, and we are just
getting started.
Our mission and products have resonated with our customers and
afford us a growing pipeline across our business. In 2024, Axon
expects to deliver annual revenue in a range of $1.88 billion to $1.94
billion, and Adjusted EBITDA of $410
million to $430 million,
reflecting more than 20% annual growth and continued Adjusted
EBITDA margin expansion from the prior year. We are propelling our
growth through innovation and diversification while realizing
efficiencies and leverage on our business as it scales. We are
humbled to enter a new year with robust expectations for each of
our product categories and customer verticals. In this letter, we
recap a historic 2023 for our company and provide an update on the
opportunities we see ahead, our roadmap and our progress.
2023 Key Takeaways
Commitment to being a Force for Good
Axon's mission is
embodied in our moonshot goal to cut gun-related deaths between
police and the public by 50% over 10 years. 2023 was the first year
in our moonshot journey, and we progressed significant advancements
to help us achieve this goal, including introducing technology, new
ways of training, and optimized data collection and reporting with
the Axon Public Safety Gun Fatality Database. We also published our
Force For Good report in November, a bi-annual update on our
progress in the areas of Corporate Social Responsibility. In
addition, we summarize 5 Giant Leaps we made over the last year,
here.
Strong financial results
Axon delivered annual revenue
of $1.56 billion and net income of
$174 million in 2023. This represents
31% annual revenue growth and an 11.1% net income margin,
supporting Adjusted EBITDA of $329
million (21.1% margin). We are delivering profitable growth
at scale and improvement in our operating expenses as a percentage
of revenue was primarily driven by leverage on sales, general and
administrative ("SG&A") expenses. Axon continues to grow our
research and development ("R&D") footprint to invest in several
multi-year growth opportunities, and our R&D expenses grew
roughly in-line with revenue. 2023 revenue and Adjusted EBITDA
margin exceeded our expectations and reflect record performance for
our company.
Product innovation
We power our business through
relentless product innovation. In 2023, years of investments
materialized in two major new product launches — TASER 10 and Axon
Body 4 — and a number of advancements in our ecosystem, including
groundbreaking real-time communications features such as two-way
voice communications and WatchMe, as well as an
expanded virtual reality ("VR") training suite
including all-new bespoke TASER VR controllers alongside
expanded training content and more. We also reached key adoption
milestones, including new deployments bringing us to over 100
agencies live on one or more modules of Axon Records.
New customer vertical expansion
Axon has diversified
beyond U.S. state and local law enforcement. In 2023, we achieved
significant growth in emerging customer verticals, including U.S.
federal, international, justice, corrections and enterprise. A few
examples of our progress include the successful deployment of Axon
Records with the U.S. Department of Veterans Affairs, two of our
largest TASER 10 orders coming from international and corrections
customers, and our partnership with the Government of Scotland to power its digital evidence
management system across courts, lawyers, government and police. We
also have several trials kicking off with our newly launched
product for enterprise, including Fairview Health, where they are
trialing Body Workforce with nurses as part of their commitment to
patient and staff safety.
Strategic investments to further enhance our ecosystem and
expand our TAM
Axon's investment and partner strategy is
geared to accelerate our product roadmap and enhance our ecosystem
while building our talent base in product categories accretive to
our long-term growth. In 2023, we acquired Sky-Hero and earlier
this month we announced our acquisition of Fusus. Sky-Hero is an
example of an acquisition supporting Axon in building
next-generation technology in public safety that will leverage
enhanced robotic security capabilities to improve situational
awareness, power more effective means of response and protect life.
With Fusus, Axon advances mission control, the future of real-time
operations for public safety, enabling customers to aggregate
live video, data and sensor feeds from virtually any source. Even
without updating our core total addressable market ("TAM"), which
we updated last year and update on a bi-annual basis, these
acquisitions expand Axon's TAM from $50
billion to more than $63 billion.
Select Highlights
Product Traction & Ecosystem Expansion
Axon
has set out to build the technology ecosystem for public safety —
to enable our customers to protect life, capture truth and
accelerate justice. We invest incrementally each year to
consistently develop and deliver new game-changing technology while
simultaneously enhancing our existing products. When our products
resonate with our customers, we see strong demand and a growing
opportunity set of expanding relationships, measurable through new
product traction and increasing adoption of the expanding Axon
software ecosystem surrounding those new products. This affords us
the opportunity to further invest in new technology categories and
applications, both through our continued investment in R&D and
through strategic investment, fueling our future product
innovation, expansion and growth.
Product highlights from this past year are examples of this
strategy at work:
Our two most successful product launches together in a single
year
The successful launch and ramp of TASER 10 and Axon
Body 4 in the same year is evidence of what our team is able to
accomplish.
After over five years of development, our latest TASER device
features new game changing technology, including individually
targeted probes, the ability to deploy up to 10 probes, and a
longer range of up to 45 feet, along with a host of other features
and upgrades that make this latest generation TASER product the
best yet. These are major steps toward where we see the future of
this critical technology, and together they are generating
unprecedented demand from our customers.
At the same time, our operational advancements are measurable in
our execution in launching the product. In 2023, we shipped over
50,000 units of TASER 10 and the new product was our top selling
TASER device in the fourth quarter.
"TASER 10 is now our fastest growing TASER product in
history." — Rick Smith, Axon Founder and CEO
Following the launch of TASER 10 in January 2023, we introduced Axon Body 4 in
April 2023, which has quickly become
our fastest selling body camera product to date. Axon Body 4
includes a host of advancements from prior generation body cameras,
including expanded communications abilities, more points of view,
upgraded camera features and more streamlined operations. We
shipped more than 100,000 units of Axon Body 4 in the second half
of 2023, only months after introducing this next generation body
camera product to market.
"As Sheriff of Bernalillo County, I've witnessed firsthand
the profound impact that the new TASER 10 audible and visual
warning alert system has had on our law enforcement efforts. The
innovative design, featuring a bright pulsing light paired with a
loud alert sound, has significantly enhanced our deputies' ability
to gain compliance from initially non-compliant suspects without
the need to deploy cartridges. This technology is not just about
maintaining safety; it's about escalating our approach to
de-escalation. We've observed that this generation, in particular,
responds strongly to the visual and audible cues of the TASER 10
warning alert. It captures their attention and conveys a clear
message that they need to reconsider their actions. This tool has
been invaluable in our mission to protect and serve, offering a
powerful alternative that benefits both our deputies and our team
and the results in the field speak volumes to the effectiveness of
this approach. The TASER 10 is a testament to the evolution of law
enforcement tools towards safer, more effective outcomes." —
Sheriff Josh Allen, Bernalillo
County (NM) Sheriff's Office
Software innovation supporting multiple vectors of
growth
We describe our software products as belonging to
three major categories: 1) digital evidence management, 2)
real-time operations and 3) productivity software. Within our
software portfolio, we deliver right-sized and custom subscription
plans that can be configured to meet the needs of any customer, and
we support customers in their journeys to build world-class public
safety organizations. Most often, our customers initially adopt
cloud digital evidence management licenses included with our
standard product subscription plans for Axon Body, Axon Fleet,
TASER, interview rooms and Officer Safety PlanS.
Over time, we see customers opting to upgrade to additional
product features and categories — this includes adding premium
digital evidence management features, such as Axon Performance,
Auto-Tagging and Redaction Assistant, as well as our real-time
operations, live-streaming and two-way voice communications
capabilities with Axon Respond and productivity software with Axon
Standards and Axon Records. Our net revenue retention of 122% in
the fourth quarter of 2023 reflects our success in selling new
premium features to our existing customers.
"Best of all, as the agency continues to leverage [Axon]
Respond, everyone in the agency can have a voice in maximizing the
technology — officers, for example, can proactively request
assistance from supervisors at complicated scenes. This is why
supervisors at Las Cruces have been transparent about when and how
it's being used. The more [patrol officers] know about it, they get
creative and [think of] ways to use it I'm not even aware of...and
then they let me know and it makes everyone
better" — Officer Benavidez, Las Cruces (NM) Police
Department
Strategic acquisition of Fusus accelerates and further
unleashes Axon real-time operations
In addition to our
R&D, Axon also leverages partnerships to deliver on our product
vision. We take a technology first strategic approach to reviewing
potential partners and believe it benefits our customers when we
can provide them more of an ecosystem opportunity. Sometimes we
also see the opportunity to make minority investments in select
partners to further align our goals on delivering strategic
outcomes to customers. Fusus was one of those partners where we saw
strong alignment between our products, we invested in them as a
company, and now we're thrilled to have acquired them to more fully
support our ecosystem vision for real-time operations.
An immediate benefit from this acquisition is empowering
customers to securely access existing CCTV and other camera feeds
from key sources like local businesses in the community — with
appropriate permissions — to see events unfolding in real-time with
greater context and clarity. This open platform improves crucial
real-time situational awareness for our customers, while directly
facilitating collaborative community partnerships.
Over time, real-time crime centers powered by Axon and Fusus
will safely and securely connect to an increasingly wide range of
data sources beyond Axon devices, including fixed, body-worn,
in-car, and automated license plate recognition ("ALPR") cameras;
gunshot detection sensors, social media feeds and various other
sensors and systems — again, with appropriate permissions. By
aggregating all of this information into a single pane of glass,
real-time crime centers can further improve situational awareness,
reduce response times and support proactive crime prevention
efforts by leveraging up-to-minute information and analytics. We
enable information to be quickly and easily shared between
collaborating agencies, ensuring accelerated justice for all
involved, another point of expansion into additional emerging
product areas for our company. We believe Fusus adds approximately
$13 billion to our TAM opportunity,
bringing our total real-time operations TAM to $16 billion, which we discuss in more detail
later in this letter.
Real-time operations is an example of Axon's product innovation
driving category creation. Axon introduced live-streaming through a
body camera to the market with Axon Body 3 and further advanced on
our vision with direct two-way voice communications with Axon Body
4. We believe the integration of Fusus into this product category
will be accretive to our long-term growth, and we saw early signs
of success leading into this strategic acquisition.
Laying the groundwork for a new phase of product innovation
with Sky-Hero and Axon Air
Axon Air is our product category
that powers applications for robotic security, which we believe
holds significant promise in achieving our moonshot goal, and as a
driver of future growth. We think utilizing robotic systems in
tactical high-risk situations to create more distance and time, two
critical factors that can drastically change outcomes for the
better, will become a mission-critical tool leveraged in the future
of public safety operations. Ultimately, we aim to enable customers
to reduce the number of times where humans are forced to face
high-risk, potentially life-altering situations.
Axon Air also supports use cases for drones to increase
situational awareness, providing an additional point of view for an
evolving incident or enabling better visibility into surveying and
disaster search efforts. In crime scene investigations, Axon Air
powered drones can be leveraged to uncover otherwise undiscoverable
evidence to support resolution. Finally, drone as a first responder
("DFR") is a growing application where the utilization of drone
technology can reduce emergency response times and act as a force
multiplier.
We have leveraged our internal talent, as well as strategic
partnerships and our Sky-Hero acquisition, in this emerging product
category. Along with our partners, we are able to drive robotic
security applications and ensure secure operating conditions for
this future technology through highly advanced software and
systems. We estimate Sky-Hero's current products expand our
TAM for Axon Air by more than $400
million to $4.5 billion.
"It didn't take long for us to realize the value of drones.
Now we use them for everything. After the traffic division,
detectives started using drones for crime scene documentation. Then
SWAT started using them. And now, every patrol crew has a drone and
pilot. We tell our people if there's a situation where you think a
drone would be useful, just try it out to see." — Chad Karlewicz, Commander of Special
Operations, Renton (WA) Police Department
Updating TAM for our Expanding Ecosystem
In the
beginning of 2023, we updated our TAM analysis to reflect the
opportunities we see ahead in each of our product categories, with
a breakdown into the primary product drivers, including digital
evidence management, real-time operations and productivity
software, camera hardware, Axon Air, AR/VR training, TASER
professional and personal protection. Our findings resulted in a
TAM of approximately $50 billion,
which we will update in full again at the beginning of 2025.
However, we have updated our TAM with respect to the
acquisitions of Sky-Hero and Fusus. In total, these additions to
our ecosystem expand Axon's TAM to $63
billion in 2024.
Our efforts to build the technology ecosystem for public safety
go beyond our product strategy. We are also diversifying our
business by growing our presence with new types of customer
profiles, or users, and by adding to our core customer base. This
materializes through Axon selling into additional categories of
funding sources beyond U.S. state and local governments, including
the U.S. federal government, international governments, enterprises
and civilians. Simultaneously, the types of customers, or
verticals, who find value in our product offerings expand beyond
law enforcement to include attorneys, fire and emergency medical
services ("EMS") personnel, corrections and the U.S. military.
As we recap our progress over the last year, we are providing a
breakdown of our 2023 TAM by funding source to highlight an
additional view into our opportunities. Collectively, customer
funding sources outside U.S. state and local governments account
for the majority of the TAM we pursue today.
- $15 billion in U.S. state and local governments,
including more than 900,000 law enforcement personnel between sworn
and civilian roles and more than 400,000 vehicles. In addition, we
estimate approximately 30% of our U.S. state and local customer TAM
comprises adjacent public safety customer verticals outside of law
enforcement, including justice, with over 700,000 legal
professionals involved in criminal justice between attorneys and
paralegals; corrections, with approximately 500,000 corrections,
probation, and child services officers; fire, with approximately 1
million career and volunteer firefighters; and EMS, with over
250,000 paramedics. We estimate that our acquisitions of Fusus and
Sky-Hero added nearly $3 billion to
our U.S. state and local government TAM.
- $10 billion in U.S. federal
government, with more than 2 million potential users and
over 300,000 vehicles across various branches of the U.S. federal
government, including the U.S. Department of Defense, U.S.
Department of Justice, U.S. Department of Homeland Security, U.S.
Department of Veterans Affairs and U.S. Department of State, to
name a few.
- $19 billion in international
governments, where a single-country opportunity presents a
200,000 or larger potential user base and, together, the potential
user base of international law enforcement and adjacencies totals
to approximately 10x the user base of U.S. state and local law
enforcement. We estimate that our acquisitions of Fusus and
Sky-Hero added over $3 billion to our
international government TAM.
- $15 billion in
enterprise, comprising more than 20 million potential
users in the United States,
including retail associates, technicians, transportation and
warehouse employees, and private security professionals, among
others. Our recent acquisition of Fusus nearly doubled our
enterprise opportunity, adding $7
billion to this TAM, with Fusus technology helping unlock
our opportunity to access fixed video and CCTV feeds within our
ecosystem.
- $5 billion in
civilian personal protection.
Our TAM estimates are based on publicly available data on
user counts, our estimate of in-scope users for our products over
the next three years, by product and user category, and our
estimated potential value of applicable products. We reference the
most up to date data published by national governments, surveys and
studies and proprietary information in the production of our TAM
estimates. The product and vertical level TAMs shown have
been rounded to the nearest whole number and will not arrive at our
total TAM of $63 billion when added
together due to rounding.
Growing
Customer Verticals
Each year, we provide updates on our progress and activity in
select customer verticals where we have directed our investment.
Last quarter, we discussed our progress in U.S. federal and
international, two areas that have become driving forces of our
growth beyond the growth we see with our U.S. state and local law
enforcement customers. As we recap our year, we are providing an
additional update on corrections, a fast-growing adjacent public
safety vertical, and enterprise, where our new product
introductions open further applications for our technology in the
private sector, including private security, retail and
healthcare.
The future of technology and corrections
One area
where we have identified the opportunity to enable safe means of
de-escalation while improving transparency is in the corrections
vertical — which, as we described above, increases our potential
domestic user base by approximately 50% relative to U.S. state and
local law enforcement.
We introduced TASER devices to corrections customers to provide
a means to safely de-escalate conflict without violence,
particularly useful in a correctional environment, and have found
strong new customer fit for this product. In fact, our second
largest TASER 10 order has come from a corrections customer in
the United States. Further,
conversations during our recent participation at the annual
conference of the Florida Council on Crime and Delinquency
validated our strategy to drive body camera adoption in this
emerging customer vertical for Axon. Body cameras were discussed as
an accountability and transparency tool to keep corrections
facilities safe, and our growing pipeline with this customer
vertical supports our investment here. Corrections was our top
growing adjacent customer vertical in 2023.
"Body-worn cameras have deterred use of force in our
facility" — Correctional Officer, Hardee (FL)
Correctional Institution
Introducing Axon Body Workforce for enterprise
In
January, we announced our first ever dedicated enterprise vertical
product, Axon Body Workforce. This new generation of body cameras
is designed for frontline workers in retail stores and healthcare
facilities and adapts the same life-saving technology trusted by
our public safety customers. Axon has identified applications in
retail, healthcare and other areas within enterprise where body
cameras are a tool to promote personal safety for employees at
work. In addition to deterring and de-escalating incidents with the
presence of a camera, Axon Body Workforce integrates Axon's
real-time capabilities and digital evidence management workflows,
allowing for quicker and more effective interventions and making it
easier to act on captured footage. We have kicked off several
customer trials with this newly launched product for
enterprise.
The enterprise vertical also includes applications in private
security, which more closely mirror public safety professional use
cases. Private security use of Axon technology facilitates
collaboration between local public safety professionals and
governments, creating efficiencies and improving transparency.
Examples of current customer applications include private security
professionals in stadiums, theme parks and other secured public
spaces. Within our potential enterprise user base, the U.S. Bureau
of Labor Statistics reports there are approximately 1 million
private security professionals employed in the United States, today.
"Public safety is about just that — people feeling and being
safe in public, including while at work." — Rick Smith, Axon Founder and CEO.
Q4 2023 Summary Results
- Quarterly revenue of $432
million exceeded our expectations and grew 28.6% year over
year driven by strong demand across product categories. Axon Cloud
software was the primary driver, with increasing adoption of our
premium add-on features, a growing base of software licenses
associated with Axon Fleet systems and expansion into new customers
supporting growth in our now largest product category. Ramping
shipments of TASER 10 and Axon Body 4 also supported our growth as
demand for both new products continues to build.
- Total company gross margin of 61.1% declined 10
basis points year over year, primarily driven by lower TASER
gross margin, partially offset by a higher Sensors gross margin and
increased mix to Axon Cloud and Services.
- Operating profit of $43
million increased 89.9% year over year driven by higher
revenue and operating leverage. Operating expenses of $221 million included $33
million in stock-based compensation expenses. Operating
expenses as a percent of revenue improved to 51.2% as compared to
54.5% in the Q4 2022.
- SG&A expense of $137 million,
31.7% of revenue, included $15
million in stock-based compensation expenses.
- R&D expense of $84 million,
19.4% of revenue, included $18
million in stock-based compensation expenses.
- Net income of $57 million (13.3% net income margin,
compared to 8.7% in Q4 2022), or $0.75 per diluted share,
supported non-GAAP net income of $85
million (19.8% margin), or $1.12 per diluted share.
- Adjusted EBITDA of $91
million reflected an Adjusted EBITDA margin of 21.1%.
Adjusted EBITDA margin expanded from 19.6% in Q4 2022 driven by
operating leverage.
- Both Non-GAAP net income and Adjusted EBITDA exclude
stock-based compensation expenses and net gains or losses related
to our strategic investment portfolio.
- Operating cash flow of $140
million in the quarter supported Free Cash Flow of
$116 million and Adjusted Free Cash
Flow of $121 million.
- As of December 31, 2023, Axon had
$1.2 billion in cash, cash
equivalents and investments, and outstanding convertible notes in
principal amount of $690 million, for
a net cash position of $553 million,
up $121 million sequentially.
Financial commentary by segment
Software &
Sensors
|
|
|
|
THREE MONTHS ENDED
|
|
|
CHANGE
|
|
|
|
31 DEC 2023
|
|
30 SEP 2023
|
|
31 DEC 2022
|
|
QoQ
|
|
YoY
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
Axon Cloud and Services
revenue(1)
|
|
$
|
163,632
|
|
|
$
|
147,963
|
|
|
$
|
113,538
|
|
|
10.6
|
%
|
|
44.1
|
%
|
Axon Cloud gross
margin
|
|
|
74.6
|
%
|
|
|
72.4
|
%
|
|
|
75.5
|
%
|
|
220
|
bp
|
|
(90)
|
bp
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sensors and Other
revenue
|
|
$
|
107,167
|
|
|
$
|
103,068
|
|
|
$
|
85,867
|
|
|
4.0
|
%
|
|
24.8
|
%
|
Sensors and Other gross
margin
|
|
|
46.3
|
%
|
|
|
45.2
|
%
|
|
|
41.5
|
%
|
|
110
|
bp
|
|
480
|
bp
|
|
|
|
|
|
|
|
|
|
(1)
|
The TASER segment
includes Cloud and Services revenue, which is not broken out
here.
|
- Axon Cloud and Services revenue growth of 44.1% year over year
reflects user growth, increasing adoption of premium add-on
features related to Axon Evidence, real-time operations and
productivity software, a growing base of software licenses
associated with Axon Fleet systems and associated growth in
professional services installations.
- Axon Cloud and Services gross margin of 74.6% decreased
modestly year over year due to higher professional services costs
related to Axon Fleet Systems installations. Our software-only
gross margin continues to exceed our software gross margin target
of 80%.
- Sensors and Other revenue growth of 24.8% year over year was
driven by growth in Axon body cameras and accessories, primarily
due to strength in demand for Axon Body 4.
- Sensors and Other gross margin of 46.3% increased year over
year due to scale efficiencies on fixed costs and mix towards
premium products, including Axon Body 4.
TASER
|
|
|
|
THREE MONTHS ENDED
|
|
|
CHANGE
|
|
|
|
31 DEC 2023
|
|
30 SEP 2023
|
|
31 DEC 2022
|
|
QoQ
|
|
YoY
|
|
|
(in thousands)
|
|
|
|
|
|
|
|
Revenue
|
|
$
|
161,343
|
|
|
$
|
162,570
|
|
|
$
|
136,737
|
|
|
(0.8)
|
%
|
|
18.0
|
%
|
Gross margin
|
|
|
57.1
|
%
|
|
|
62.5
|
%
|
|
|
61.6
|
%
|
|
(540)
|
bp
|
|
(450)
|
bp
|
- TASER segment revenue growth of 18% year over year was driven
by the continued ramp of TASER 10, partially offset by a decline in
TASER 7, which remained flat quarter over quarter.
- TASER segment gross margin of 57.1% decreased from 61.6% year
over year primarily due to a 420 basis point headwind from warranty
reserve charges recognized in the quarter related to a TASER 7
production issue that occurred largely in March 2023. Without this charge, TASER gross
margins would have been down modestly due to mix. As a reminder, we
are still ramping to scale volumes on TASER 10 and expect to make
substantial progress in 2024, including moving to more automated
production in the second half of the year.
Forward-looking
performance indicators
|
|
|
|
31 DEC 2023
|
|
30 SEP 2023
|
|
30 JUN 2023
|
|
31 MAR 2023
|
|
31 DEC 2022
|
|
|
($ in millions)
|
|
Annual recurring
revenue (1)
|
|
$
|
697
|
|
|
$
|
619
|
|
|
$
|
559
|
|
|
$
|
520
|
|
|
$
|
473
|
|
Net revenue retention
(1)
|
|
|
122
|
%
|
|
|
122
|
%
|
|
|
122
|
%
|
|
|
121
|
%
|
|
|
121
|
%
|
Total company future
contracted revenue (1)
|
|
$
|
7,140
|
|
|
$
|
5,819
|
|
|
$
|
5,227
|
|
|
$
|
4,778
|
|
|
$
|
4,647
|
|
|
|
|
|
|
|
|
|
|
(1)
|
|
Refer to "Statistical
Definitions" below.
|
- Annual recurring revenue grew 47% year over year to
$697 million, driven by Axon Cloud
software growth, which reflects growing demand for our high-value
software bundles and a growing base of connected devices in our
ecosystem.
- Net revenue retention was 122% in the quarter, reflecting our
ability to deliver additional value to our customers over time and
de minimis attrition. We drive adoption of our cloud software
solutions through subscription plans, which include a variety of
premium software options. This Software-as-a-Service ("SaaS")
metric excludes the hardware portion of customer subscriptions and
is normalized to account for phased customer deployments throughout
the year.
- Total company future contracted revenue grew to $7.1 billion. We expect to recognize between 15%
to 25% of this balance over the next 12 months, and generally
expect the remainder to be recognized over the following ten
years.
2024
Outlook
The following forward-looking statements reflect Axon's
expectations as of February 27, 2024,
and are subject to risks and uncertainties. Please refer
to "Forward-looking statements" below for more
information.
- Axon expects full year 2024 revenue of $1.88 billion to $1.94
billion, representing approximately 20% to 24% annual
growth.
- Axon expects a full year 2024 Adjusted EBITDA dollars of
$410 million to $430 million, implying continued Adjusted EBITDA
margin expansion from 2023.
- We provide Adjusted EBITDA guidance, rather than net income
guidance, due to the inherent difficulty of forecasting certain
types of expenses and gains such as stock-based compensation,
income tax expenses and gains or losses on marketable securities
and strategic investments, which affect net income but not
Adjusted EBITDA. We are unable to reasonably estimate the impact of
such expenses, which could be material, on net income. Accordingly,
we do not provide a reconciliation of projected net income to
projected Adjusted EBITDA.
- We expect stock-based compensation expenses to be approximately
$205 million to $220 million for the full year.
- Full year expected stock based compensation expense includes
approximately $42 million in expenses
related to an enhanced equity compensation opportunity provided to
employees whose compensation is under a specified threshold. We
expect this expense to be primarily reflected within cost of goods
sold with approximately half of the full year expense to be
recognized in the first quarter, in line with vesting schedules
which will occur over the next four years.
- Because our stock-based compensation expenses may vary based on
changes in our stock price or the actual timing of attainment
of certain metrics, it is inherently difficult to forecast future
stock-based compensation expense, which may also be materially
affected by any future stock-based compensation plans, subject to
shareholder approval.
- We expect 2024 CapEx to be in the range of $60 million to $75
million. Our 2024 CapEx plans include investments in TASER
10 automation and capacity expansion, including cartridge capacity
and lab enhancements and global facility build-out and upgrades,
including warehousing support for global shipping facilities.
Long-Term Outlook
Looking ahead, we remain confident in our ability to scale
globally, to penetrate new customer verticals and to introduce new
products that drive highly profitable revenue growth as we progress
on our mission to protect life. We believe our future
opportunities will enable us to drive solid top and bottom-line
growth, generate significant cash flow, and create meaningful value
for our shareholders.
Last year at this time, we provided a three-year target model
for 2025, including a revenue target of $2
billion, implying a 20% revenue compound annual growth rate
("CAGR"), and a 25% Adjusted EBITDA margin target. Given our strong
revenue performance in 2023 and new 2024 guidance, which we are
proud to provide above our outlook from this time last year, along
with our progress on margin expansion, we are updating our
long-term framework.
Beyond 2024, we expect to achieve continued 20% or greater
compound annual revenue growth and continue to target Adjusted
EBITDA margins of approximately 25% as we continue to balance
investing for growth and delivering strong profitability. We also
remain committed to delivering strong cash generation with Adjusted
Free Cash Flow conversion on Adjusted EBITDA of at least 60% by
2025. In addition, we remain focused on reducing annual dilution
related to stock-based compensation and we continue to target
average annual dilution from stock compensation expense of
approximately 3% for 2025 and beyond.
Thank you for investing with us in this mission.
-The Axon team
Quarterly conference call and webcast
We will host our
Q4 2023 earnings conference call webinar on Tuesday, February 27, at 2
p.m. PT / 5 p.m. ET.
The webcast will be available via a link on Axon's investor
relations website at https://investor.axon.com, or can be accessed
directly via https://axon.zoom.us/j/94299685390.
Statistical Definitions
Annual recurring revenue: Annual recurring revenue is a
performance indicator that management believes provides more
visibility into the growth of our revenue generated by our highest
margin, recurring services. Annual recurring revenue should be
viewed independently of revenue and deferred revenue because it is
an operating measure and is not intended to be combined with or to
replace GAAP revenue or deferred revenue, as they can be impacted
by contract start and end dates and renewal rates. Annual recurring
revenue is not intended to be a replacement or forecast of revenue
or deferred revenue. We calculate annual recurring revenue as
monthly recurring license, integration, warranty, and storage
revenue, annualized.
Net revenue retention: Dollar-based net revenue retention is an
important metric to measure our ability to retain and expand our
relationships with existing customers. We calculate it as the
software and camera warranty subscription and support revenue from
a base set of agency customers from which we generated Axon Cloud
subscription revenue in the last month of a quarter divided by the
software and camera warranty subscription and support revenue from
the year-ago month of that same customer base. This calculation
includes high-margin warranty revenue but purposely excludes
the lower-margin hardware subscription component of the
customer contracts, as it is meant to be a SaaS metric that we use
to monitor the health of the recurring revenue business we are
building. This calculation also excludes the implied monthly
revenue contribution of customers that were added since the
year-ago quarter, and therefore excludes the benefit of new
customer acquisition. The metric includes customers, if any, that
terminated during the annual period, and therefore, this metric is
inclusive of customer churn. This metric is downwardly adjusted to
account for the effect of phased deployments—meaning that, for the
year-ago period, we consider the total contractually obligated
implied monthly revenue amount, rather than monthly revenue amounts
that might have been in actuality smaller on a GAAP basis due to
the customer not having yet fully deployed their Axon solution. For
more information relative to our revenue recognition policies,
please reference our filings with the Securities and Exchange
Commission ("SEC").
Total company future contracted revenue: Total company future
contracted revenue represents remaining performance obligation and
includes both recognized contract liabilities as well as amounts
that will be invoiced and recognized in future periods. The
remaining performance obligations are limited only to arrangements
that meet the definition of a contract under Accounting Standards
Codification Topic 606 as of December 31,
2023. We currently expect to recognize between 15% to 25% of
this balance over the next 12 months, and generally expect the
remainder to be recognized over the following ten years, subject to
risks related to delayed deployments, budget appropriation or other
contract cancellation clauses.
Non-GAAP Measures
To supplement the Company's financial results presented in
accordance with GAAP, we present the non-GAAP financial measures of
EBITDA, Adjusted EBITDA, Non-GAAP Net Income, Non-GAAP Diluted
Earnings Per Share, Free Cash Flow, and Adjusted Free Cash Flow.
The Company's management uses these non-GAAP financial measures in
evaluating the Company's performance in comparison to prior
periods. We believe that both management and investors benefit from
referring to these non-GAAP financial measures in assessing its
performance, and when planning and forecasting our future periods.
A reconciliation of GAAP to the non-GAAP financial measures is
presented below.
- EBITDA (Most comparable GAAP Measure: Net income) - Earnings
before interest expense, investment interest income, income taxes,
depreciation and amortization.
- Adjusted EBITDA (Most comparable GAAP Measure: Net income)
- Earnings before interest expense, investment interest
income, income taxes, depreciation, amortization, non-cash
stock-based compensation expense, fair value adjustments to
strategic investments and marketable securities, transaction costs
related to acquisitions and investments, and other unusual,
non-recurring pre-tax items that are not considered representative
of our underlying operating performance (identified and listed
below in the reconciliation).
- Adjusted EBITDA margin (Most comparable GAAP Measure: Net
income margin) – Adjusted EBITDA as a percentage of net sales.
- Non-GAAP Net Income (Most comparable GAAP Measure: Net income)
- Net income excluding the costs of non-cash stock-based
compensation, gain/loss/write-down/disposal/abandonment of
property, equipment and intangible assets; fair value adjustments
to strategic investments and marketable securities; transaction
costs related to acquisitions and investments; costs related to the
Federal Trade Commission ("FTC") litigation and antitrust
litigation and other unusual, non-recurring pre-tax items that
are not considered representative of our underlying operating
performance (listed below). The Company tax-effects non-GAAP
adjustments using the blended statutory federal and state tax rates
for each period presented.
- Non-GAAP Diluted Earnings Per Share (Most comparable GAAP
Measure: Earnings Per share) - Measure of Company's Non-GAAP Net
Income divided by the weighted average number of diluted common
shares outstanding during the period presented.
- Free Cash Flow (Most comparable GAAP Measure: Cash flow from
operating activities) - Cash flows provided by operating activities
minus purchases of property and equipment and intangible
assets.
- Adjusted Free Cash Flow (Most comparable GAAP Measure: Cash
flow from operating activities) - Cash flows provided by operating
activities minus purchases of property and equipment and intangible
assets, excluding the net impact of investments in our new
Scottsdale, Arizona campus and
bond premium amortization.
- We believe that free cash flow and adjusted free cash flow
excluding the impact of bond premium amortization and net campus
investment are non-GAAP measures that are useful to investors and
management to evaluate the Company's ability to generate cash.
These non-GAAP measures can also be used to evaluate the Company's
ability to generate cash flow from operations and the impact that
this cash flow has on the Company's liquidity.
Caution on Use of Non-GAAP Measures
Although these non-GAAP financial measures are not consistent
with GAAP, management believes investors will benefit by referring
to these non-GAAP financial measures when assessing the Company's
operating results, as well as when forecasting and analyzing future
periods. However, management recognizes that:
- these non-GAAP financial measures are limited in their
usefulness and should be considered only as a supplement to the
Company's GAAP financial measures;
- these non-GAAP financial measures should not be considered in
isolation from, or as a substitute for, the Company's GAAP
financial measures;
- these non-GAAP financial measures should not be considered to
be superior to the Company's GAAP financial measures; and
- these non-GAAP financial measures were not prepared in
accordance with GAAP or under a comprehensive set of rules or
principles proposed by a third party.
- Further, these non-GAAP financial measures may be unique to the
Company, as they may be different from similarly titled non-GAAP
financial measures used by other companies. As such, this
presentation of non-GAAP financial measures may not enhance the
comparability of the Company's results to the results of other
companies.
About Axon
Axon is a technology leader in global
public safety. Our moonshot goal is to cut gun-related deaths
between police and the public by 50% before 2033. Axon is
building the public safety operating system of the future by
integrating a suite of hardware devices and cloud software
solutions that lead modern policing. Axon's suite includes TASER
energy devices, body cameras, in-car cameras, cloud-hosted digital
evidence management solutions, productivity software and real-time
operations capabilities. Axon's growing global customer base
includes first responders across international, federal, state and
local law enforcement, fire, corrections and emergency medical
services, as well as the justice sector, enterprises and
consumers.
Non-Axon trademarks are property of their respective owners.
Axon, Axon Air, Axon Body, Axon Auto-Transcribe, Axon Evidence,
Axon Fleet, Axon Records, Axon Respond, Axon Standards, Axon VR,
Sky-Hero, TASER, TASER 7, TASER 10, Protect Life, the Filled Bolt
within Circle Logo and the Delta Logo are trademarks of Axon
Enterprise, Inc., some of which are registered in the United States and other countries. For
more information, visit www.axon.com/legal. All rights
reserved.
Forward-looking statements
Forward-looking statements in this letter include, without
limitation, statements regarding: proposed products and services
and related development efforts and activities; expectations about
the market for our current and future products and services,
including statements related to our user base, customer profiles
and TAM; the impact of pending litigation; strategies and trends
relating to subscription plan programs and revenues; statements
related to recently completed acquisitions; our anticipation that
contracts with governmental customers will be fulfilled; the timing
and realization of future contracted revenue; the fulfillment of
bookings; strategies and trends, including the amounts and benefits
of, R&D investments; the sufficiency of our liquidity and
financial resources; expectations about customer behavior;
statements concerning projections, predictions, expectations,
estimates or forecasts as to our business, financial and
operational results and future economic performance, including our
outlook for 2024 full year revenue, stock-based compensation
expense, Adjusted EBITDA, Adjusted EBITDA margin, and capital
expenditures; statements of management's strategies, goals and
objectives and other similar expressions; as well as the ultimate
resolution of financial statement items requiring critical
accounting estimates, including those set forth in our Annual
Report on Form 10‑K for the year ended December 31, 2022, and the soon-to-be-filed Form
10-K for the year ended December 31,
2023 (collectively, our "Annual Reports"). Such statements
give our current expectations or forecasts of future events; they
do not relate strictly to historical or current facts. Words such
as "may," "will," "should," "could," "would," "predict,"
"potential," "continue," "expect," "anticipate," "future,"
"intend," "plan," "believe," "estimate," and similar expressions,
as well as statements in future tense, identify forward-looking
statements. However, not all forward-looking statements contain
these identifying words.
We cannot guarantee that any forward-looking statement will be
realized, although we believe we have been prudent in our plans and
assumptions. Achievement of future results is subject to risks,
uncertainties and potentially inaccurate assumptions. The following
important factors could cause actual results to differ materially
from those in the forward-looking statements: our exposure to
cancellations of government contracts due to appropriation clauses,
exercise of a cancellation clause, or non-exercise of contractually
optional periods; the ability of law enforcement agencies to obtain
funding, including based on tax revenues; our ability to design,
introduce and sell new products, services or features; our ability
to defend against litigation and protect our intellectual property,
and the resulting costs of this activity; our ability to win bids
through the open bidding process for governmental agencies; our
ability to manage our supply chain and avoid production delays,
shortages and impacts to expected gross margins; the impacts of
inflation, macroeconomic conditions and global events; the impact
of catastrophic events or public health emergencies; the impact of
stock-based compensation expense, impairment expense, and income
tax expense on our financial results; customer purchase behavior,
including adoption of our software as a service delivery model;
negative media publicity or sentiment regarding our products; the
impact of various factors on projected gross margins; defects in,
or misuse of, our products; changes in the costs of product
components and labor; loss of customer data, a breach of security,
or an extended outage, including by our third party cloud-based
storage providers; exposure to international operational risks;
delayed cash collections and possible credit losses due to our
subscription model; changes in government regulations in
the United States and in foreign
markets, especially related to the classification of our products
by the United States Bureau of Alcohol, Tobacco, Firearms and
Explosives; our ability to integrate acquired businesses; the
impact of declines in the fair values or impairment of our
investments, including our strategic investments; our ability to
attract and retain key personnel; litigation or inquiries and
related time and costs; and counter-party risks relating to cash
balances held in excess of federally insured limits. Many events
beyond our control may determine whether results we anticipate will
be achieved. Should known or unknown risks or uncertainties
materialize, or should underlying assumptions prove inaccurate,
actual results could differ materially from past results and those
anticipated, estimated or projected. You should bear this in mind
as you consider forward-looking statements. The Annual Report on
Form 10 K that we expect to file with the Securities and Exchange
Commission ("SEC") on February 27,
2024 lists various important factors that could cause actual
results to differ materially from expected and historical results.
These factors are intended as cautionary statements for investors
within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended, and Section 27A of the Securities Act of 1933, as
amended. Readers can find them under the heading "Risk Factors" in
our Annual Reports, and investors should refer to them. You should
understand that it is not possible to predict or identify all such
factors. You should understand that it is not possible to predict
or identify all such factors. Consequently, you should not consider
any such list to be a complete set of all potential risks or
uncertainties.
Except as required by law, we undertake no obligation to
publicly update forward-looking statements, whether as a result of
new information, future events or otherwise. You are advised,
however, to consult any further disclosures we make on related
subjects in our Form 8-K, 10‑Q and 10‑K reports to the SEC. Our
filings with the SEC may be accessed at the SEC's web site at
www.sec.gov.
Update on Legal Matters:
New Jersey Proposed Antitrust Class Action
Pending in the District of New
Jersey (No. 3:23-cv-7182-RK-RLS) is a consolidated proposed
class action lawsuit brought by the Township of Howell (NJ), the City of Augusta (ME), and the City of Baltimore (MD) alleging Axon's 2018
acquisition of Vievu LLC from Safariland LLC was anticompetitive,
and that certain non-compete provisions in an ancillary holster
supply agreement between Axon and Safariland LLC unlawfully
retrained trade. The complaint is based primarily on claims by the
FTC regarding the transaction, that were dismissed without
condition or consent decree in October
2023. Axon denies the allegations and will vigorously defend
the action.
As previously reported, at the time of the acquisition, Vievu
LLC was a significantly financially distressed company destined to
exit the market, and we believe Axon's action prevented major
body-camera program disruptions for Vievu LLC customers. Plaintiffs
Howell and Augusta have never purchased body-worn camera
systems from Axon. Further, we believe Safariland LLC was never a
TASER energy weapon competitor, had no intention of entering the
energy weapon business, and has not done so in the four years since
the parties rescinded the non-compete provisions of the holster
agreement—provisions intended to protect Axon's proprietary
information and substantial intellectual property investments
during new TASER product development.
On February 5, 2024, Axon served
its motions to dismiss all claims and to strike the class
allegations on numerous grounds, including that Axon's federal,
state, and municipal customers with sovereign immunity cannot be
absent class members. Plaintiffs' response is not due until
mid-April with Axon's reply due in mid-May. A decision is
therefore unlikely before year end.
CONTACT:
Investor Relations
Axon Enterprise, Inc.
IR@axon.com
AXON
ENTERPRISE, INC.
CONSOLIDATED
STATEMENTS OF OPERATIONS
(in thousands,
except per share data)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED
|
|
TWELVE MONTHS ENDED
|
|
|
31 DEC 2023
|
|
30 SEP 2023
|
|
31 DEC 2022
|
|
31 DEC 2023
|
|
31 DEC 2022
|
Net sales from
products
|
|
$
|
258,405
|
|
$
|
256,443
|
|
$
|
214,735
|
|
$
|
967,711
|
|
$
|
801,388
|
Net sales from
services
|
|
|
173,737
|
|
|
157,158
|
|
|
121,407
|
|
|
595,680
|
|
|
388,547
|
Net sales
|
|
|
432,142
|
|
|
413,601
|
|
|
336,142
|
|
|
1,563,391
|
|
|
1,189,935
|
Cost of product
sales
|
|
|
125,664
|
|
|
116,278
|
|
|
102,641
|
|
|
450,718
|
|
|
363,219
|
Cost of service
sales
|
|
|
42,591
|
|
|
42,051
|
|
|
27,822
|
|
|
157,291
|
|
|
98,078
|
Cost of
sales
|
|
|
168,255
|
|
|
158,329
|
|
|
130,463
|
|
|
608,009
|
|
|
461,297
|
Gross margin
|
|
|
263,887
|
|
|
255,272
|
|
|
205,679
|
|
|
955,382
|
|
|
728,638
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales, general and
administrative
|
|
|
137,106
|
|
|
123,279
|
|
|
114,418
|
|
|
496,874
|
|
|
401,575
|
Research and
development
|
|
|
83,972
|
|
|
76,880
|
|
|
68,720
|
|
|
303,719
|
|
|
233,810
|
Total operating
expenses
|
|
|
221,078
|
|
|
200,159
|
|
|
183,138
|
|
|
800,593
|
|
|
635,385
|
Income from
operations
|
|
|
42,809
|
|
|
55,113
|
|
|
22,541
|
|
|
154,789
|
|
|
93,253
|
Interest Income,
net
|
|
|
12,325
|
|
|
10,458
|
|
|
4,140
|
|
|
42,112
|
|
|
4,294
|
Other income (loss),
net
|
|
|
668
|
|
|
3,852
|
|
|
8,049
|
|
|
(41,901)
|
|
|
98,971
|
Income before provision
for income taxes
|
|
|
55,802
|
|
|
69,423
|
|
|
34,730
|
|
|
155,000
|
|
|
196,518
|
Provision for (benefit
from) income taxes
|
|
|
(1,469)
|
|
|
10,026
|
|
|
5,555
|
|
|
(19,227)
|
|
|
49,379
|
Net income
|
|
$
|
57,271
|
|
$
|
59,397
|
|
$
|
29,175
|
|
$
|
174,227
|
|
$
|
147,139
|
Net income per common
and common equivalent shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
0.76
|
|
$
|
0.79
|
|
$
|
0.41
|
|
$
|
2.35
|
|
$
|
2.07
|
Diluted
|
|
$
|
0.75
|
|
$
|
0.78
|
|
$
|
0.40
|
|
$
|
2.31
|
|
$
|
2.03
|
Weighted average number
of common and common equivalent shares outstanding:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
75,060
|
|
|
74,826
|
|
|
71,270
|
|
|
74,195
|
|
|
71,093
|
Diluted
|
|
|
76,178
|
|
|
75,952
|
|
|
72,976
|
|
|
75,456
|
|
|
72,534
|
AXON
ENTERPRISE, INC.
SEGMENT
REPORTING
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED
|
|
|
THREE MONTHS ENDED
|
|
|
THREE MONTHS ENDED
|
|
|
|
31 DEC 2023
|
|
|
30 SEP 2023
|
|
|
31 DEC 2022
|
|
|
|
|
|
|
|
Software
|
|
|
|
|
|
|
|
|
|
|
Software
|
|
|
|
|
|
|
|
|
|
|
Software
|
|
|
|
|
|
|
|
|
|
|
|
and
|
|
|
|
|
|
|
|
|
|
|
and
|
|
|
|
|
|
|
|
|
|
|
and
|
|
|
|
|
|
|
|
TASER
|
|
|
Sensors
|
|
|
Total
|
|
|
TASER
|
|
|
Sensors
|
|
|
Total
|
|
|
TASER
|
|
|
Sensors
|
|
|
Total
|
|
Net sales from products
(1)
|
|
$
|
151,238
|
|
|
$
|
107,167
|
|
|
$
|
258,405
|
|
|
$
|
153,375
|
|
|
$
|
103,068
|
|
|
$
|
256,443
|
|
|
$
|
128,868
|
|
|
$
|
85,867
|
|
|
$
|
214,735
|
|
Net sales from services
(2)
|
|
|
10,105
|
|
|
|
163,632
|
|
|
|
173,737
|
|
|
|
9,195
|
|
|
|
147,963
|
|
|
|
157,158
|
|
|
|
7,869
|
|
|
|
113,538
|
|
|
|
121,407
|
|
Net sales
|
|
|
161,343
|
|
|
|
270,799
|
|
|
|
432,142
|
|
|
|
162,570
|
|
|
|
251,031
|
|
|
|
413,601
|
|
|
|
136,737
|
|
|
|
199,405
|
|
|
|
336,142
|
|
Cost of product
sales
|
|
|
68,067
|
|
|
|
57,597
|
|
|
|
125,664
|
|
|
|
59,746
|
|
|
|
56,532
|
|
|
|
116,278
|
|
|
|
52,447
|
|
|
|
50,194
|
|
|
|
102,641
|
|
Cost of service
sales
|
|
|
1,096
|
|
|
|
41,495
|
|
|
|
42,591
|
|
|
|
1,252
|
|
|
|
40,799
|
|
|
|
42,051
|
|
|
|
—
|
|
|
|
27,822
|
|
|
|
27,822
|
|
Cost of
sales
|
|
|
69,163
|
|
|
|
99,092
|
|
|
|
168,255
|
|
|
|
60,998
|
|
|
|
97,331
|
|
|
|
158,329
|
|
|
|
52,447
|
|
|
|
78,016
|
|
|
|
130,463
|
|
Gross margin
|
|
|
92,180
|
|
|
|
171,707
|
|
|
|
263,887
|
|
|
|
101,572
|
|
|
|
153,700
|
|
|
|
255,272
|
|
|
|
84,290
|
|
|
|
121,389
|
|
|
|
205,679
|
|
Gross margin
%
|
|
|
57.1
|
%
|
|
|
63.4
|
%
|
|
|
61.1
|
%
|
|
|
62.5
|
%
|
|
|
61.2
|
%
|
|
|
61.7
|
%
|
|
|
61.6
|
%
|
|
|
60.9
|
%
|
|
|
61.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
|
16,265
|
|
|
|
67,707
|
|
|
|
83,972
|
|
|
|
15,672
|
|
|
|
61,208
|
|
|
|
76,880
|
|
|
|
14,531
|
|
|
|
54,189
|
|
|
|
68,720
|
|
|
|
TWELVE MONTHS ENDED
|
|
|
TWELVE MONTHS ENDED
|
|
|
|
31 DEC 2023
|
|
|
31 DEC 2022
|
|
|
|
|
|
|
|
Software
|
|
|
|
|
|
|
|
|
|
|
Software
|
|
|
|
|
|
|
|
|
|
|
|
and
|
|
|
|
|
|
|
|
|
|
|
and
|
|
|
|
|
|
|
|
TASER
|
|
|
Sensors
|
|
|
Total
|
|
|
TASER
|
|
|
Sensors
|
|
|
Total
|
|
Net sales from products
(1)
|
|
$
|
577,610
|
|
|
$
|
390,101
|
|
|
$
|
967,711
|
|
|
$
|
511,010
|
|
|
$
|
290,378
|
|
|
$
|
801,388
|
|
Net sales from services
(2)
|
|
|
34,995
|
|
|
|
560,685
|
|
|
|
595,680
|
|
|
|
20,556
|
|
|
|
367,991
|
|
|
|
388,547
|
|
Net sales
|
|
|
612,605
|
|
|
|
950,786
|
|
|
|
1,563,391
|
|
|
|
531,566
|
|
|
|
658,369
|
|
|
|
1,189,935
|
|
Cost of product
sales
|
|
|
238,364
|
|
|
|
212,354
|
|
|
|
450,718
|
|
|
|
194,957
|
|
|
|
168,262
|
|
|
|
363,219
|
|
Cost of service
sales
|
|
|
3,613
|
|
|
|
153,678
|
|
|
|
157,291
|
|
|
|
—
|
|
|
|
98,078
|
|
|
|
98,078
|
|
Cost of
sales
|
|
|
241,977
|
|
|
|
366,032
|
|
|
|
608,009
|
|
|
|
194,957
|
|
|
|
266,340
|
|
|
|
461,297
|
|
Gross margin
|
|
|
370,628
|
|
|
|
584,754
|
|
|
|
955,382
|
|
|
|
336,609
|
|
|
|
392,029
|
|
|
|
728,638
|
|
Gross margin
%
|
|
|
60.5
|
%
|
|
|
61.5
|
%
|
|
|
61.1
|
%
|
|
|
63.3
|
%
|
|
|
59.5
|
%
|
|
|
61.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
|
|
62,393
|
|
|
|
241,326
|
|
|
|
303,719
|
|
|
|
51,607
|
|
|
|
182,203
|
|
|
|
233,810
|
|
|
|
|
|
|
|
|
|
(1)
|
Software and Sensors
"products" revenue consists of sensors, including on-officer body
cameras, Axon Fleet cameras, other hardware sensors, warranties on
sensors, and other products, and is sometimes referred to as
Sensors and Other revenue.
|
(2)
|
Software and Sensors
"services" revenue comprises sales related to the Axon Cloud and
Services, which includes Axon Evidence, cloud-based evidence
management software revenue, other recurring cloud-hosted software
revenue and related professional services, and is sometimes
referred to as Axon Cloud and Services revenue.
|
Note: The level of integration across Axon's business, including
our TASER and Software & Sensors segments, with highly
complementary products sold under subscription plans to our
customers means that much of our SG&A expenses support both
segments, together. This is increasingly true for our R&D
expenses, as well, with our Chief Product Officer and Chief
Technology Officer overseeing all R&D spend. Thus, starting
with our Q1 2024 disclosures, we will no longer break out R&D
by segment, similar to our combined SG&A reporting, but we will
continue to provide revenue and gross margin by segment.
AXON
ENTERPRISE, INC.
SALES BY PRODUCT AND
SERVICE
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED
|
|
31 DEC 2023
|
|
|
30 SEP 2023
|
|
|
31 DEC 2022
|
|
TASER
segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TASER Devices
(Professional)
|
$
|
94,758
|
|
21.9
|
%
|
|
$
|
86,718
|
|
21.0
|
%
|
|
$
|
69,075
|
|
20.5
|
%
|
Cartridges
|
|
43,781
|
|
10.1
|
|
|
|
54,279
|
|
13.1
|
|
|
|
47,541
|
|
14.1
|
|
Axon Evidence and
Cloud Services
|
|
10,105
|
|
2.4
|
|
|
|
8,975
|
|
2.2
|
|
|
|
6,890
|
|
2.0
|
|
Extended
Warranties
|
|
8,226
|
|
1.9
|
|
|
|
8,078
|
|
1.9
|
|
|
|
7,580
|
|
2.3
|
|
Other
(1)
|
|
4,473
|
|
1.0
|
|
|
|
4,520
|
|
1.1
|
|
|
|
5,651
|
|
1.7
|
|
Total TASER
segment
|
|
161,343
|
|
37.3
|
|
|
|
162,570
|
|
39.3
|
|
|
|
136,737
|
|
40.6
|
|
Software and Sensors
segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Axon Body Cameras and
Accessories
|
|
58,957
|
|
13.7
|
|
|
|
52,488
|
|
12.7
|
|
|
|
43,882
|
|
13.1
|
|
Axon Fleet
Systems
|
|
22,481
|
|
5.2
|
|
|
|
26,716
|
|
6.4
|
|
|
|
23,177
|
|
6.9
|
|
Axon Evidence and
Cloud Services
|
|
165,204
|
|
38.2
|
|
|
|
150,563
|
|
36.4
|
|
|
|
113,225
|
|
33.7
|
|
Extended
Warranties
|
|
17,272
|
|
4.0
|
|
|
|
16,054
|
|
3.9
|
|
|
|
13,695
|
|
4.1
|
|
Other
(2)
|
|
6,885
|
|
1.6
|
|
|
|
5,210
|
|
1.3
|
|
|
|
5,426
|
|
1.6
|
|
Total Software and
Sensors segment
|
|
270,799
|
|
62.7
|
|
|
|
251,031
|
|
60.7
|
|
|
|
199,405
|
|
59.4
|
|
Total net
sales
|
$
|
432,142
|
|
100.0
|
%
|
|
$
|
413,601
|
|
100.0
|
%
|
|
$
|
336,142
|
|
100.0
|
%
|
|
|
TWELVE MONTHS ENDED
|
|
|
31 DEC 2023
|
|
|
31 DEC 2022
|
TASER
segment:
|
|
|
|
|
|
|
|
|
|
|
|
TASER Devices
(Professional)
|
$
|
333,923
|
|
21.4
|
%
|
|
$
|
282,698
|
|
23.8
|
%
|
Cartridges
|
|
193,285
|
|
12.4
|
|
|
|
181,686
|
|
15.3
|
|
Axon Evidence and
Cloud Services
|
|
34,775
|
|
2.2
|
|
|
|
18,752
|
|
1.6
|
|
Extended
Warranties
|
|
31,689
|
|
2.0
|
|
|
|
29,008
|
|
2.4
|
|
Other
(1)
|
|
18,933
|
|
1.2
|
|
|
|
19,422
|
|
1.6
|
|
Total TASER
segment
|
|
612,605
|
|
39.2
|
|
|
|
531,566
|
|
44.7
|
|
Software and Sensors
segment:
|
|
|
|
|
|
|
|
|
|
|
|
Axon Body Cameras and
Accessories
|
|
183,023
|
|
11.7
|
|
|
|
157,281
|
|
13.2
|
|
Axon Fleet
Systems
|
|
118,129
|
|
7.6
|
|
|
|
63,017
|
|
5.3
|
|
Axon Evidence and
Cloud Services
|
|
566,183
|
|
36.2
|
|
|
|
371,889
|
|
31.3
|
|
Extended
Warranties
|
|
62,577
|
|
4.0
|
|
|
|
49,765
|
|
4.1
|
|
Other
(2)
|
|
20,874
|
|
1.3
|
|
|
|
16,417
|
|
1.4
|
|
Total Software and
Sensors segment
|
|
950,786
|
|
60.8
|
|
|
|
658,369
|
|
55.3
|
|
Total net
sales
|
$
|
1,563,391
|
|
100.0
|
%
|
|
$
|
1,189,935
|
|
100.0
|
%
|
|
|
|
|
|
|
|
|
(1)
|
TASER segment "Other"
includes smaller categories, such as VR hardware, weapons training
revenue such as revenue associated with our Master Instructor
School, and TASER consumer device sales.
|
(2)
|
Software and Sensors
segment "Other" includes revenue from items including Signal
Sidearm, Interview Room and Axon Air.
|
AXON
ENTERPRISE, INC.
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED
|
|
TWELVE MONTHS ENDED
|
|
|
|
31 DEC 2023
|
|
30 SEP 2023
|
|
31 DEC 2022
|
|
31 DEC 2023
|
|
31 DEC 2022
|
|
EBITDA and Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
57,271
|
|
$
|
59,397
|
|
$
|
29,175
|
|
$
|
174,227
|
|
$
|
147,139
|
|
Depreciation and
amortization
|
|
|
10,051
|
|
|
8,418
|
|
|
6,210
|
|
|
32,638
|
|
|
24,381
|
|
Interest
expense
|
|
|
1,772
|
|
|
1,762
|
|
|
474
|
|
|
6,995
|
|
|
488
|
|
Investment interest
income
|
|
|
(14,097)
|
|
|
(12,220)
|
|
|
(4,614)
|
|
|
(49,107)
|
|
|
(4,782)
|
|
Provision for (benefit
from) income taxes
|
|
|
(1,469)
|
|
|
10,026
|
|
|
5,555
|
|
|
(19,227)
|
|
|
49,379
|
|
EBITDA
|
|
$
|
53,528
|
|
$
|
67,383
|
|
$
|
36,800
|
|
$
|
145,526
|
|
$
|
216,605
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
|
$
|
35,130
|
|
$
|
29,987
|
|
$
|
31,722
|
|
$
|
131,358
|
|
$
|
106,176
|
|
Unrealized loss (gain)
on strategic investments and marketable securities, net
|
|
|
(521)
|
|
|
(4,036)
|
|
|
(6,445)
|
|
|
41,785
|
|
|
(98,943)
|
|
Transaction costs
related to strategic investments and acquisitions
|
|
|
2,708
|
|
|
495
|
|
|
64
|
|
|
4,501
|
|
|
2,368
|
|
Loss on disposal,
abandonment, and impairment of property, equipment and intangible
assets, net
|
|
|
—
|
|
|
137
|
|
|
3,530
|
|
|
317
|
|
|
5,562
|
|
Insurance
recoveries
|
|
|
—
|
|
|
(2,615)
|
|
|
—
|
|
|
(3,404)
|
|
|
—
|
|
Costs related to FTC
litigation and antitrust litigation
|
|
|
169
|
|
|
71
|
|
|
250
|
|
|
241
|
|
|
545
|
|
Payroll taxes related
to 2019 XSPP vesting and 2018 CEO Performance Award option
exercises
|
|
|
50
|
|
|
201
|
|
|
—
|
|
|
9,011
|
|
|
—
|
|
Adjusted
EBITDA
|
|
$
|
91,064
|
|
$
|
91,623
|
|
$
|
65,921
|
|
$
|
329,335
|
|
$
|
232,313
|
|
Net income as a percentage of net
sales
|
|
|
13.3
|
%
|
|
14.4
|
%
|
|
8.7
|
%
|
|
11.1
|
%
|
|
12.4
|
%
|
Adjusted EBITDA as a percentage of net
sales
|
|
|
21.1
|
%
|
|
22.2
|
%
|
|
19.6
|
%
|
|
21.1
|
%
|
|
19.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation
expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of product and
service sales
|
|
$
|
1,910
|
|
$
|
1,687
|
|
$
|
1,276
|
|
$
|
6,595
|
|
$
|
4,607
|
|
Sales, general and
administrative
|
|
|
15,301
|
|
|
12,886
|
|
|
15,441
|
|
|
58,533
|
|
|
51,301
|
|
Research and
development
|
|
|
17,919
|
|
|
15,414
|
|
|
15,005
|
|
|
66,230
|
|
|
50,268
|
|
Total
|
|
$
|
35,130
|
|
$
|
29,987
|
|
$
|
31,722
|
|
$
|
131,358
|
|
$
|
106,176
|
|
AXON
ENTERPRISE, INC.
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES - continued
(in thousands,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED
|
|
TWELVE MONTHS ENDED
|
|
|
|
31 DEC 2023
|
|
30 SEP 2023
|
|
31 DEC 2022
|
|
31 DEC 2023
|
|
31 DEC 2022
|
|
Non-GAAP net income:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP net income
|
|
$
|
57,271
|
|
$
|
59,397
|
|
$
|
29,175
|
|
$
|
174,227
|
|
$
|
147,139
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
|
|
35,130
|
|
|
29,987
|
|
|
31,722
|
|
|
131,358
|
|
|
106,176
|
|
Unrealized loss (gain)
on strategic investments and marketable securities, net
|
|
|
(521)
|
|
|
(4,036)
|
|
|
(6,445)
|
|
|
41,785
|
|
|
(98,943)
|
|
Transaction costs
related to strategic investments and acquisitions
|
|
|
2,708
|
|
|
495
|
|
|
64
|
|
|
4,501
|
|
|
2,368
|
|
Loss on disposal,
abandonment, and impairment of property, equipment and intangible
assets, net
|
|
|
—
|
|
|
137
|
|
|
3,530
|
|
|
317
|
|
|
5,562
|
|
Insurance
recoveries
|
|
|
—
|
|
|
(2,615)
|
|
|
—
|
|
|
(3,404)
|
|
|
—
|
|
Costs related to FTC
litigation and antitrust litigation
|
|
|
169
|
|
|
71
|
|
|
250
|
|
|
241
|
|
|
545
|
|
Payroll taxes related
to 2019 XSPP vesting and 2018 CEO Performance Award option
exercises
|
|
|
50
|
|
|
201
|
|
|
—
|
|
|
9,011
|
|
|
—
|
|
Income tax
effects
|
|
|
(9,391)
|
|
|
(6,168)
|
|
|
(7,276)
|
|
|
(46,015)
|
|
|
(3,936)
|
|
Non-GAAP net
income
|
|
$
|
85,416
|
|
$
|
77,469
|
|
$
|
51,020
|
|
$
|
312,021
|
|
$
|
158,911
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP
|
|
$
|
0.75
|
|
$
|
0.78
|
|
$
|
0.40
|
|
$
|
2.31
|
|
$
|
2.03
|
|
Non-GAAP
|
|
$
|
1.12
|
|
$
|
1.02
|
|
$
|
0.70
|
|
$
|
4.14
|
|
$
|
2.19
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number
of diluted common and common equivalent shares outstanding (in
thousands)
|
|
|
76,178
|
|
|
75,952
|
|
|
72,976
|
|
|
75,456
|
|
|
72,534
|
|
AXON
ENTERPRISE, INC.
CONSOLIDATED BALANCE
SHEETS
(in
thousands)
|
|
|
|
|
|
|
|
|
|
31 DEC 2023
|
|
31 DEC 2022
|
ASSETS
|
|
|
|
|
|
|
Current Assets:
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
$
|
598,545
|
|
$
|
353,684
|
Marketable
securities
|
|
|
77,940
|
|
|
39,240
|
Short-term
investments
|
|
|
644,054
|
|
|
581,769
|
Accounts and notes
receivable, net
|
|
|
417,690
|
|
|
358,190
|
Contract assets,
net
|
|
|
275,779
|
|
|
196,902
|
Inventory
|
|
|
269,855
|
|
|
202,471
|
Prepaid expenses and
other current assets
|
|
|
112,786
|
|
|
73,022
|
Total current
assets
|
|
|
2,396,649
|
|
|
1,805,278
|
|
|
|
|
|
|
|
Property and equipment,
net
|
|
|
200,533
|
|
|
169,843
|
Deferred tax assets,
net
|
|
|
229,513
|
|
|
156,866
|
Intangible assets,
net
|
|
|
19,539
|
|
|
12,158
|
Goodwill
|
|
|
57,945
|
|
|
44,983
|
Long-term
investments
|
|
|
—
|
|
|
156,207
|
Long-term notes
receivable, net
|
|
|
2,588
|
|
|
5,210
|
Long-term contract
assets, net
|
|
|
77,710
|
|
|
45,170
|
Strategic
investments
|
|
|
231,730
|
|
|
296,563
|
Other long-term
assets
|
|
|
220,638
|
|
|
159,616
|
Total assets
|
|
$
|
3,436,845
|
|
$
|
2,851,894
|
|
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS'
EQUITY
|
|
|
|
|
|
|
Current Liabilities:
|
|
|
|
|
|
|
Accounts
payable
|
|
|
88,326
|
|
|
59,918
|
Accrued
liabilities
|
|
|
188,230
|
|
|
155,934
|
Current portion of
deferred revenue
|
|
|
491,691
|
|
|
360,037
|
Customer
deposits
|
|
|
21,935
|
|
|
20,399
|
Other current
liabilities
|
|
|
9,787
|
|
|
6,358
|
Total current
liabilities
|
|
|
799,969
|
|
|
602,646
|
|
|
|
|
|
|
|
Deferred revenue, net
of current portion
|
|
|
281,852
|
|
|
248,003
|
Liability for
unrecognized tax benefits
|
|
|
18,049
|
|
|
10,745
|
Long-term deferred
compensation
|
|
|
11,342
|
|
|
6,285
|
Deferred tax liability,
net
|
|
|
—
|
|
|
1
|
Long-term lease
liabilities
|
|
|
33,550
|
|
|
37,143
|
Convertible notes,
net
|
|
|
677,113
|
|
|
673,967
|
Other long-term
liabilities
|
|
|
2,936
|
|
|
4,613
|
Total liabilities
|
|
|
1,824,811
|
|
|
1,583,403
|
|
|
|
|
|
|
|
Stockholders' Equity:
|
|
|
|
|
|
|
Preferred
stock
|
|
|
—
|
|
|
—
|
Common stock
|
|
|
1
|
|
|
1
|
Additional paid-in
capital
|
|
|
1,347,410
|
|
|
1,174,594
|
Treasury
stock
|
|
|
(155,947)
|
|
|
(155,947)
|
Retained
earnings
|
|
|
431,249
|
|
|
257,022
|
Accumulated other
comprehensive loss
|
|
|
(10,679)
|
|
|
(7,179)
|
Total stockholders' equity
|
|
|
1,612,034
|
|
|
1,268,491
|
Total liabilities and stockholders'
equity
|
|
$
|
3,436,845
|
|
$
|
2,851,894
|
AXON
ENTERPRISE, INC.
CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED
|
|
TWELVE MONTHS ENDED
|
|
|
|
31 DEC 2023
|
|
30 SEP 2023
|
|
31 DEC 2022
|
|
31 DEC 2023
|
|
31 DEC 2022
|
|
Cash flows from operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
|
$
|
57,271
|
|
$
|
59,397
|
|
$
|
29,175
|
|
$
|
174,227
|
|
$
|
147,139
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation
|
|
|
35,130
|
|
|
29,987
|
|
|
31,722
|
|
|
131,358
|
|
|
106,176
|
|
Deferred income
taxes
|
|
|
(19,691)
|
|
|
(15,706)
|
|
|
(8,259)
|
|
|
(73,002)
|
|
|
22,090
|
|
Unrealized (gain) loss
on strategic investments and marketable securities, net
|
|
|
(521)
|
|
|
(4,036)
|
|
|
(6,445)
|
|
|
41,785
|
|
|
(98,943)
|
|
Depreciation and
amortization
|
|
|
10,051
|
|
|
8,418
|
|
|
6,210
|
|
|
32,638
|
|
|
24,381
|
|
Bond
amortization
|
|
|
(4,378)
|
|
|
(4,035)
|
|
|
(1,402)
|
|
|
(16,449)
|
|
|
(1,463)
|
|
Noncash lease
expense
|
|
|
1,956
|
|
|
1,912
|
|
|
1,728
|
|
|
6,846
|
|
|
6,725
|
|
Amortization
of debt issuance cost
|
|
|
798
|
|
|
797
|
|
|
198
|
|
|
3,126
|
|
|
198
|
|
Unrecognized tax
benefits
|
|
|
473
|
|
|
1,435
|
|
|
(44)
|
|
|
4,775
|
|
|
3,475
|
|
Other noncash
items
|
|
|
2,389
|
|
|
(1,524)
|
|
|
3,871
|
|
|
2,322
|
|
|
6,530
|
|
Change in assets and
liabilities:
|
|
|
|
|
|
|
|
|
.
|
|
|
|
|
|
|
|
Accounts and notes
receivable and contract assets
|
|
|
9,944
|
|
|
(80,263)
|
|
|
41,818
|
|
|
(172,524)
|
|
|
(73,228)
|
|
Inventory
|
|
|
(12,332)
|
|
|
(15,979)
|
|
|
(29,720)
|
|
|
(71,896)
|
|
|
(95,987)
|
|
Prepaid expenses and
other assets
|
|
|
(37,762)
|
|
|
(15,318)
|
|
|
(34,336)
|
|
|
(102,370)
|
|
|
(52,207)
|
|
Accounts payable,
accrued and other liabilities
|
|
|
50,961
|
|
|
49,399
|
|
|
52,073
|
|
|
64,384
|
|
|
80,757
|
|
Deferred
revenue
|
|
|
45,749
|
|
|
48,408
|
|
|
44,531
|
|
|
164,043
|
|
|
159,718
|
|
Net cash provided by
operating activities
|
|
|
140,038
|
|
|
62,892
|
|
|
131,120
|
|
|
189,263
|
|
|
235,361
|
|
Cash flows from investing
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Purchases of
investments
|
|
|
(118,995)
|
|
|
(180,944)
|
|
|
(570,232)
|
|
|
(545,988)
|
|
|
(764,374)
|
|
Proceeds from call /
maturity of investments
|
|
|
196,204
|
|
|
80,132
|
|
|
56,653
|
|
|
657,418
|
|
|
72,138
|
|
Purchases of property,
plant and equipment
|
|
|
(24,011)
|
|
|
(13,974)
|
|
|
(11,584)
|
|
|
(59,635)
|
|
|
(55,802)
|
|
Proceeds from disposal
of property and equipment
|
|
|
31
|
|
|
64
|
|
|
61
|
|
|
98
|
|
|
287
|
|
Purchase of intangible
assets
|
|
|
(56)
|
|
|
(392)
|
|
|
(114)
|
|
|
(635)
|
|
|
(307)
|
|
Strategic
investments
|
|
|
—
|
|
|
(6,775)
|
|
|
(3,750)
|
|
|
(17,692)
|
|
|
(80,805)
|
|
Business acquisition,
net of cash acquired
|
|
|
—
|
|
|
(64)
|
|
|
—
|
|
|
(21,090)
|
|
|
(2,104)
|
|
Net cash provided by
(used in) investing activities
|
|
|
53,173
|
|
|
(121,953)
|
|
|
(528,966)
|
|
|
12,476
|
|
|
(830,967)
|
|
Cash flows from financing
activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net proceeds from
equity offering
|
|
|
—
|
|
|
(101)
|
|
|
—
|
|
|
94,705
|
|
|
(74)
|
|
Proceeds from options
exercised
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
54,503
|
|
|
—
|
|
Income and payroll tax
payments for net-settled stock awards
|
|
|
(3,818)
|
|
|
(7,021)
|
|
|
(2,479)
|
|
|
(107,894)
|
|
|
(4,870)
|
|
Net proceeds from
issuance of convertible senior notes
|
|
|
—
|
|
|
—
|
|
|
673,769
|
|
|
—
|
|
|
673,769
|
|
Proceeds from issuance
of warrants
|
|
|
—
|
|
|
—
|
|
|
124,269
|
|
|
—
|
|
|
124,269
|
|
Purchase of convertible
note hedge
|
|
|
—
|
|
|
—
|
|
|
(194,994)
|
|
|
—
|
|
|
(194,994)
|
|
Net cash provided by
(used in) financing activities
|
|
|
(3,818)
|
|
|
(7,122)
|
|
|
600,565
|
|
|
41,314
|
|
|
598,100
|
|
Effect of exchange rate changes on cash and cash
equivalents
|
|
|
3,266
|
|
|
(2,007)
|
|
|
3,403
|
|
|
2,065
|
|
|
(3,380)
|
|
Net increase (decrease)
in cash and cash equivalents and restricted cash
|
|
|
192,659
|
|
|
(68,190)
|
|
|
206,122
|
|
|
245,118
|
|
|
(886)
|
|
Cash and cash
equivalents and restricted cash, beginning of period
|
|
|
408,011
|
|
|
476,201
|
|
|
149,430
|
|
|
355,552
|
|
|
356,438
|
|
Cash and cash
equivalents and restricted cash, end of period
|
|
$
|
600,670
|
|
$
|
408,011
|
|
$
|
355,552
|
|
$
|
600,670
|
|
$
|
355,552
|
|
AXON
ENTERPRISE, INC.
SELECTED CASH FLOW
INFORMATION
(in
thousands)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
THREE MONTHS ENDED
|
|
TWELVE MONTHS ENDED
|
|
|
31 DEC 2023
|
|
30 SEP 2023
|
|
31 DEC 2022
|
|
31 DEC 2023
|
|
31 DEC 2022
|
Net cash provided by
operating activities
|
|
$
|
140,038
|
|
$
|
62,892
|
|
$
|
131,120
|
|
$
|
189,263
|
|
$
|
235,361
|
Purchases of property,
plant and equipment
|
|
|
(24,011)
|
|
|
(13,974)
|
|
|
(11,584)
|
|
|
(59,635)
|
|
|
(55,802)
|
Purchase of intangible
assets
|
|
|
(56)
|
|
|
(392)
|
|
|
(114)
|
|
|
(635)
|
|
|
(307)
|
Free cash flow, a
non-GAAP measure
|
|
$
|
115,971
|
|
$
|
48,526
|
|
$
|
119,422
|
|
$
|
128,993
|
|
$
|
179,252
|
Bond premium
amortization
|
|
|
4,378
|
|
|
4,035
|
|
|
1,402
|
|
|
16,449
|
|
|
1,463
|
Net campus
investment
|
|
|
606
|
|
|
761
|
|
|
2,724
|
|
|
2,669
|
|
|
15,899
|
Adjusted free cash
flow, a non-GAAP measure
|
|
$
|
120,955
|
|
$
|
53,322
|
|
$
|
123,548
|
|
$
|
148,111
|
|
$
|
196,614
|
AXON
ENTERPRISE, INC.
SUPPLEMENTAL
TABLES
(in
thousands)
|
|
|
|
|
|
|
|
|
|
31 DEC 2023
|
|
31 DEC 2022
|
|
|
(Unaudited)
|
|
|
|
Cash and cash
equivalents
|
|
$
|
598,545
|
|
$
|
353,684
|
Short-term
investments
|
|
|
644,054
|
|
|
581,769
|
Long-term
investments
|
|
|
—
|
|
|
156,207
|
Cash and cash
equivalents and investments, net
|
|
|
1,242,599
|
|
|
1,091,660
|
Convertible notes,
principal amount
|
|
|
(690,000)
|
|
|
(690,000)
|
Total cash and cash
equivalents and investments, net of convertible notes
|
|
$
|
552,599
|
|
$
|
401,660
|
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SOURCE Axon