Axon reports Q3 2024 revenue of $544 million, up 32% year over year, raises outlook
- Axon Cloud & Services revenue grows 36% to
$203 million - Annual recurring revenue grows 36% to
$885 million - Net income of
$67 million supports non-GAAP net income of$113 million and Adjusted EBITDA of$145 million - Raises full year revenue outlook to approximately
$2.07 billion , over 32% annual growth; expects full year Adjusted EBITDA margin of approximately 24.6%
Fellow shareholders,
Axon is proud to report strong third quarter results and raise our outlook for the remainder of the year once again. Robust demand for our products and services remains driven by our innovative product leadership and deep customer relationships. We delivered over 30% annual revenue growth in each of the first three quarters of 2024, marking our 11th consecutive quarter of growth above 25%, achieved third quarter net income margin of 12.3%, and Adjusted EBITDA margin of 26.7% — our highest in over three years.
TASER revenue of
Axon's third quarter results demonstrate strong product-market fit and support our increased outlook. We expect fourth quarter revenue in the range of
Select Highlights:
Axon AI — The AI Era Plan
Axon has established itself as a leading technology vendor in public safety through our commitment to continually develop innovative solutions that enhance the customer experience with the Axon ecosystem. Axon AI further advances our leadership, featuring a suite of AI-powered products designed to increase operational efficiency, improve investigative accuracy and support proactive policing. Today, this includes Axon Auto-Transcribe, Draft One, automatic license plate reading (ALPR) and video redaction, to name a few.
Beginning in Q4, our commitment has taken a new step forward with the introduction of the AI Era Plan. The AI Era Plan enables customers to subscribe to an expanding set of AI capabilities and features that further leverage our connected ecosystem as quickly as we can develop them. It provides new AI features in a subscription offering and gives customers access to unmatched value across our AI innovations by including the newest AI products we bring to market. Its exponential value is fully unlocked when combined with our officer safety plans (OSP). Draft One is one illustrative example already live and in customers' hands today, utilizing real-time connected body cameras, cloud evidence management, video transcription and generative AI.
"Axon AI represents not just a single product, but a commitment to continuous innovation for our customers. We have developed a suite of AI-powered products and solutions designed to evolve with the demands of modern law enforcement — and our portfolio is only growing. As new capabilities emerge, we intend to integrate them seamlessly into our hardware and software solutions, enhancing our customers' workflows. This will enable officers to work smarter, faster, and more efficiently — driving real change in public safety."
—
Axon believes we are most successful when we listen to our customers and seek to solve the most pertinent problems they face each day. Our development in AI is no different, and we are building this technology through deep collaboration and partnership with our customers. In October, we highlighted our vision for the AI Era Plan to more than 2,200 attendees at the 2024
Alongside Draft One, we showcased additional AI use cases including Axon Body 4 Live Translation. Axon Body 4 Live Translation utilizes Axon's cloud-connected body cameras to enable real-time translation between two speakers in over 100 languages, removing language barriers, fostering relationships and enhancing transparency. This feature is made possible through the Axon ecosystem, which connects our devices to our advanced cloud software. We expect to make Axon Body 4 Live Translation available to AI Era Plan subscribers in the first half of 2025.
We are not stopping there. Our roadmap continues to expand, and our pace of innovation is accelerating. In addition to Draft One and Axon Body 4 Live translation, we previewed a suite of features in development for the AI Era Plan, including Evidence Translation, Form One, Brief One, Smart Capture, Policy Chat, and CAD Q&A. We also continue to improve existing features and products, including recent enhancements to our redaction tools delivering an estimated 70% time savings from our earlier generation Redaction Assistant.
"We've seen 65-75% time savings just by being able to push a button to get a transcript."
— Lieutenant
"...one of the biggest, [most] exciting changes in technology in policing that I have seen..."
— Chief
"We spend a lot of time thinking about what could go wrong. But we also need to think about what could go right. Can we do better than today?"
—
-
67% decrease in time spent writing incident reports —
Fort Collins Police Department with Draft One -
32 minutes stolen vehicle recovery —
Cobb County Police Department with Fusus AI Image Search -
75% decrease in time spent redacting evidence —
Rowlett Police Department with Redaction Assistant - 400+ unauthorized drone detections — at Tulsa State Fair with Dedrone by Axon
-
1 camera = equivalent of 5 officers searching for vehicle —
Fairfax County Police Department with Fleet 3 ALPR
The statistics related to Axon AI, such as time savings and productivity improvements, reflect data from select customer use cases and specific implementations. These results are not guaranteed and may vary based on a range of factors unique to each customer, including but not limited to the nature of their operations, the specific configurations of Axon AI products, and the integration of AI tools within their workflows. Actual outcomes depend on each customer's operational environment, training, and level of adoption. As with any technology deployment, results will vary, and customers may experience different levels of efficiency and effectiveness.
Axon's innovative momentum extends beyond AI into drones and robotics, where we are leading the way to power drone as first responder (DFR) operations. We are thrilled to announce the closing of our acquisition of Dedrone, bringing integrated airspace security technology — including comprehensive protection, detection, identification and mitigation of unauthorized drones in restricted airspace — into the Axon DFR solution.
Along with Dedrone, Axon's DFR offering has continued to advance through our unmatched partnerships with Skydio and DroneSense. Together, our DFR solution includes
The differentiated capabilities of our DFR offering are evidenced by the
"This FAA approval is a major milestone for our department and our community. With the ability to conduct drone operations day or night without the need for visual observers, we can respond faster and more effectively to emergencies, improving both officer and public safety. This technology is a game changer in ensuring we have the tools to support our community when it matters most."
— Chief
Axon Aid — Partnering with first responders to support heroic efforts
Axon is steadfast in our commitment to supporting first responders and the communities they serve. Helping our customers achieve better outcomes is at the center of everything we do. This is especially true in times of crisis. When hurricanes Helene and Milton devastated communities across the
Supporting their efforts, Axon Aid partnered with agencies, regardless of whether they were Axon customers, to assist in post-disaster assessments and recovery support at no cost. The Axon Aid emergency response team supported missions across four states, assisting more than 10 agencies and communities in what became Axon Aid's longest deployment effort to date, spanning more than 16 days. Axon is proud to play a small part in supporting our first responders on these critical missions, and we are inspired by their dedication to public safety and their communities in times of need.
"During Hurricane Helene in Fairview, I worked in conjunction with Axon Aid to enhance drone operations, coordinating real-time aerial footage to assess damage and improve resource allocation. This experience demonstrated the effectiveness of integrating drone surveillance with Axon systems for rapid decision-making during emergency response."
— Firefighter with
Q3 2024 Summary Results
Quarterly revenue of
Total company gross margin of 60.8% declined 130 basis points year over year, driven by increased stock-based compensation expense and amortization of acquired intangibles in our cost of goods sold (COGS). Excluding the impacts of stock-based compensation and intangibles amortization, non-GAAP company gross margin of 63.2% increased 50 basis points year over year.
Operating profit of
- COGS of
$214 million , 39.2% of revenue, included$10 million in stock-based compensation expense. - SG&A expense of
$192 million , 35.3% of revenue, included$55 million in stock-based compensation expense. - R&D expense of
$114 million , 21.0% of revenue, included$36 million in stock-based compensation expense.
Net income of
Adjusted EBITDA of
Operating cash flow of
As of
During the three months ended
Detailed definitions of our non-GAAP financial measures and caution on the use of non-GAAP measures are included later in this letter.
Financial commentary by segment
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Software & Sensors |
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THREE MONTHS ENDED |
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CHANGE |
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QoQ |
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YoY |
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(in thousands) |
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Axon Cloud & Services revenue(1) |
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3.1 % |
|
35.9 % |
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Axon Cloud & Services gross margin |
72.3 % |
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73.1 % |
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72.7 % |
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(80) bp |
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(40) bp |
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Axon Cloud & Services adjusted gross margin |
75.2 % |
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75.7 % |
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73.7 % |
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(50) bp |
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150 bp |
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Sensors & Other revenue |
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9.1 % |
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18.0 % |
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Sensors & Other gross margin |
41.4 % |
|
39.9 % |
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46.0 % |
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150 bp |
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(460) bp |
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Sensors & Other adjusted gross margin |
43.3 % |
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41.1 % |
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46.5 % |
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220 bp |
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(320) bp |
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(1) |
The TASER segment includes Cloud and Services revenue, which is not included here. |
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- Axon Cloud & Services revenue growth of 36% year over year was primarily driven by new customer adoption of Axon Evidence and expansion with existing customers adopting premium software offerings.
- Axon Cloud & Services gross margin of 72.3% decreased from 72.7% year over year. Excluding the impacts of stock-based compensation expense and intangibles amortization, Axon Cloud & Services adjusted gross margin of 75.2% increased from 73.7% year over year primarily due to a higher software mix revenue relative to professional services. Software-only gross margin continued to exceed our target of 80%.
- Sensors & Other revenue growth of 18% year over year was primarily driven by strong demand for Axon Body 4, partially offset by a decrease in Axon Fleet revenue.
- Sensors & Other gross margin of 41.4% decreased from 46.0% year over year. Excluding the impact of stock-based compensation and intangibles amortization, Sensors & Other adjusted gross margin of 43.3% decreased from 46.5% year over year due to manufacturing overhead reallocations made in the prior year.
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TASER |
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THREE MONTHS ENDED |
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CHANGE |
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QoQ |
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YoY |
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(in thousands) |
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Revenue |
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12.7 % |
|
36.4 % |
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Gross margin |
60.8 % |
|
60.4 % |
|
62.5 % |
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40 bp |
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(170) bp |
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Adjusted gross margin |
63.0 % |
|
62.9 % |
|
62.8 % |
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10 bp |
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20 bp |
- TASER segment revenue growth of 36% year over year was primarily driven by strong demand for TASER 10 devices and associated cartridges and services.
- TASER segment gross margin of 60.8% decreased from 62.5% year over year primarily due to increased stock based compensation expense. Excluding the impact of stock-based compensation expense, TASER segment adjusted gross margin of 63.0% increased from 62.8% year over year driven by investments in automation and cost reduction initiatives.
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Forward Looking Performance Indicators |
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31 MAR |
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($ in millions) |
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Annual recurring revenue (1) |
$ 885 |
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$ 850 |
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$ 825 |
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$ 732 |
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$ 652 |
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Net revenue retention (1) |
123 % |
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122 % |
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122 % |
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122 % |
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122 % |
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Total company future contracted revenue (1) |
$ 7,711 |
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$ 7,353 |
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$ 7,036 |
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$ 7,140 |
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$ 5,819 |
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(1) |
Refer to "Statistical Definitions" below. |
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- Annual recurring revenue grew 36% year over year to
$885 million . Growth in annual recurring revenue is primarily driven by new users adopting our cloud products and upgrades to premium offerings. - Net revenue retention accelerated to 123% 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 integrated 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 of
$7.7 billion increased sequentially and is up 33% year over year. 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
Q4 2024
- For the fourth quarter, we expect revenue within the range of
$560 million to$570 million , representing greater than 30% annual growth at the midpoint. - We expect Adjusted EBITDA within the range of
$130 million to$135 million , representing Adjusted EBITDA margin of approximately 23.5%.- 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.
Full Year
- Axon's full year 2024 revenue expectation has improved to approximately
$2.07 billion , representing greater than 32% annual growth. This is an increase from our prior revenue guidance range of$2.00 billion to$2.05 billion , or 29.5% annual growth at the midpoint. - Axon expects full year 2024 Adjusted EBITDA dollars of approximately
$510 million , representing Adjusted EBITDA margin of approximately 24.6%. This is an increase from our prior Adjusted EBITDA guidance range of$460 million to$475 million , which implied Adjusted EBITDA margin of approximately 23.1% - We expect stock-based compensation expenses to be approximately
$360 million to$380 million , up from$355 million to$370 million previously. Because our stock-based compensation expense 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.- Full year stock-based compensation expense includes approximately
$210 million for broad-based equity compensation programs and a one-time enhanced equity compensation program provided to employees whose compensation is under a specific threshold. Approximately$170 million in full year expected stock-based compensation expense, primarily in SG&A and R&D, is related to the broad-based 2024 eXponential Stock Plan and the 2024 CEO Performance Award approved by our shareholders inMay 2024 . These performance-based incentive programs are achieved through stock price, operational and time-based requirements and are divided into seven substantially equal tranches. As ofSeptember 30, 2024 , we have recognized expenses related to some tranches where we currently deem achievement to be probable. Approximately$43 million in expense, primarily in COGS, is related to a one-time enhanced equity compensation program provided to employees whose compensation is under a specified threshold.
- Full year stock-based compensation expense includes approximately
- We expect 2024 CapEx to be in the range of
$80 million to$95 million , unchanged from prior quarters. Our 2024 CapEx plans include investments in TASER 10 automation and capacity expansion, including cartridge capacity, global facility build-out and upgrades, such as warehousing support for global shipping facilities.
Quarterly conference call and webcast
We will host our Q3 2024 earnings conference call webinar on
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/98297372356.
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, camera and TASER warranty subscription and support revenue from a base set of agency customers from which we generated Axon Cloud subscription and warranty 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
Total company future contracted revenue: Total company future contracted revenue represents remaining performance obligations and includes both recognized contract liabilities as well as amounts that are expected to 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
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, Adjusted EBITDA Margin, Adjusted Gross Margin, 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 strategic 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.
- Adjusted gross margin (most comparable GAAP measure: gross margin) – Gross margin before noncash stock-based compensation expense and amortization of acquired intangible assets.
- 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 strategic investments; costs related to 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 Aid,
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 and customer profiles; 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; our expectations about the future implementation of new strategies related to artificial intelligence; 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 Q4 2024 revenue, 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
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 non-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
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
Additional Disclaimer
The AI Era roadmap is provided for informational purposes only and does not form part of any contract or agreement. It is not a commitment to deliver any specific material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, timing, and pricing of any features or functionality described for products remain at the sole discretion of
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CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) |
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THREE MONTHS ENDED |
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NINE MONTHS ENDED |
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Net sales from products |
$ 327,900 |
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$ 292,763 |
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$ 255,055 |
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$ 891,087 |
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$ 707,563 |
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Net sales from services |
216,374 |
|
210,473 |
|
158,223 |
|
616,294 |
|
422,760 |
|
Net sales |
544,274 |
|
503,236 |
|
413,278 |
|
1,507,381 |
|
1,130,323 |
|
Cost of product sales |
156,167 |
|
142,627 |
|
114,613 |
|
450,954 |
|
323,808 |
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Cost of service sales |
57,360 |
|
54,453 |
|
42,009 |
|
160,896 |
|
115,054 |
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Cost of sales |
213,527 |
|
197,080 |
|
156,622 |
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611,850 |
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438,862 |
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Gross margin |
330,747 |
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306,156 |
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256,656 |
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895,531 |
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691,461 |
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Operating expenses: |
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Sales, general and administrative |
192,189 |
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170,964 |
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122,357 |
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514,228 |
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357,611 |
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Research and development |
114,477 |
|
101,434 |
|
76,880 |
|
307,008 |
|
219,747 |
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Total operating expenses |
306,666 |
|
272,398 |
|
199,237 |
|
821,236 |
|
577,358 |
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Income from operations |
24,081 |
|
33,758 |
|
57,419 |
|
74,295 |
|
114,103 |
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Interest Income, net |
10,978 |
|
9,782 |
|
10,458 |
|
31,134 |
|
29,787 |
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Other income (loss), net |
44,510 |
|
7,934 |
|
3,852 |
|
191,510 |
|
(42,569) |
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Income (loss) before provision for income taxes |
79,569 |
|
51,474 |
|
71,729 |
|
296,939 |
|
101,321 |
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Provision for (benefit from) income taxes |
12,544 |
|
10,001 |
|
10,420 |
|
55,089 |
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(17,401) |
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Net income |
$ 67,025 |
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$ 41,473 |
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$ 61,309 |
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$ 241,850 |
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$ 118,722 |
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Net income per common and common equivalent shares: |
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Basic |
$ 0.89 |
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$ 0.55 |
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$ 0.82 |
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$ 3.20 |
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$ 1.61 |
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Diluted |
$ 0.86 |
|
$ 0.53 |
|
$ 0.81 |
|
$ 3.12 |
|
$ 1.58 |
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Weighted average number of common and common equivalent shares outstanding: |
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Basic |
75,697 |
|
75,511 |
|
74,826 |
|
75,543 |
|
73,904 |
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Diluted |
78,080 |
|
77,550 |
|
75,952 |
|
77,614 |
|
75,212 |
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SEGMENT REPORTING (in thousands) |
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THREE MONTHS ENDED |
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THREE MONTHS ENDED |
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THREE MONTHS ENDED |
|
||||||||||||
|
|
|
|
|
|
|
|
||||||||||||
|
|
Software and Sensors |
|
TASER |
|
Total |
|
Software and Sensors |
|
TASER |
|
Total |
|
Software and Sensors |
|
TASER |
|
Total |
|
|
Net sales from products (1) |
$ 120,026 |
|
$ 207,874 |
|
$ 327,900 |
|
$ 110,020 |
|
$ 182,743 |
|
$ 292,763 |
|
$ 101,680 |
|
$ 153,375 |
|
$ 255,055 |
|
|
Net sales from services (2) |
202,514 |
|
13,860 |
|
216,374 |
|
196,499 |
|
13,974 |
|
210,473 |
|
149,028 |
|
9,195 |
|
158,223 |
|
|
Net sales |
322,540 |
|
221,734 |
|
544,274 |
|
306,519 |
|
196,717 |
|
503,236 |
|
250,708 |
|
162,570 |
|
413,278 |
|
|
Cost of product sales |
70,382 |
|
85,785 |
|
156,167 |
|
66,175 |
|
76,452 |
|
142,627 |
|
54,867 |
|
59,746 |
|
114,613 |
|
|
Cost of service sales |
56,191 |
|
1,169 |
|
57,360 |
|
52,955 |
|
1,498 |
|
54,453 |
|
40,757 |
|
1,252 |
|
42,010 |
|
|
Cost of sales |
126,573 |
|
86,954 |
|
213,527 |
|
119,130 |
|
77,950 |
|
197,080 |
|
95,624 |
|
60,998 |
|
156,622 |
|
|
Gross margin |
$ 195,967 |
|
$ 134,780 |
|
$ 330,747 |
|
$ 187,389 |
|
$ 118,767 |
|
$ 306,156 |
|
$ 155,084 |
|
$ 101,572 |
|
$ 256,656 |
|
|
Gross margin % |
60.8 % |
|
60.8 % |
|
60.8 % |
|
61.1 % |
|
60.4 % |
|
60.8 % |
|
61.9 % |
|
62.5 % |
|
62.1 % |
|
|
Adjusted gross margin |
63.3 % |
|
63.0 % |
|
63.2 % |
|
63.3 % |
|
62.9 % |
|
63.1 % |
|
62.7 % |
|
62.8 % |
|
62.7 % |
|
|
|
|
|
|
|
|
|
|
|
(1) |
Software and Sensors "products" revenue consists of sensors, including body worn 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. |
||||||
|
|
NINE MONTHS ENDED |
|
NINE MONTHS ENDED |
|
||||||||
|
|
|
|
|
|
||||||||
|
|
Software and Sensors |
|
TASER |
|
Total |
|
Software and Sensors |
|
TASER |
|
Total |
|
|
Net sales from products (1) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales from services (2) |
575,997 |
|
40,297 |
|
616,294 |
|
396,965 |
|
25,795 |
|
422,760 |
|
|
Net sales |
909,940 |
|
597,441 |
|
1,507,381 |
|
678,156 |
|
452,167 |
|
1,130,323 |
|
|
Cost of product sales |
201,733 |
|
249,221 |
|
450,954 |
|
153,511 |
|
170,297 |
|
323,808 |
|
|
Cost of service sales |
157,156 |
|
3,740 |
|
160,896 |
|
112,538 |
|
2,516 |
|
115,054 |
|
|
Cost of sales |
358,889 |
|
252,961 |
|
611,850 |
|
266,049 |
|
172,813 |
|
438,862 |
|
|
Gross margin |
551,051 |
|
344,480 |
|
895,531 |
|
412,107 |
|
279,354 |
|
691,461 |
|
|
Gross margin % |
60.6 % |
|
57.7 % |
|
59.4 % |
|
60.8 % |
|
61.8 % |
|
61.2 % |
|
|
Adjusted gross margin |
63.5 % |
|
62.6 % |
|
63.2 % |
|
61.6 % |
|
62.1 % |
|
61.8 % |
|
|
|
|
|
|
|
|
|
|
|
(1) |
Software and Sensors "products" revenue consists of sensors, including body worn 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. |
||||||
|
SALES BY PRODUCT AND SERVICE (in thousands) |
|
|||||||||||
|
|
|
|||||||||||
|
|
THREE MONTHS ENDED |
|
||||||||||
|
|
|
|
|
|
|
|
||||||
|
Software and Sensors segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
Axon Body Cameras and Accessories |
$ 70,363 |
|
12.9 % |
|
$ 59,024 |
|
11.7 % |
|
$ 52,488 |
|
12.7 % |
|
|
Axon Fleet Systems |
23,239 |
|
4.3 |
|
27,083 |
|
5.4 |
|
27,336 |
|
6.6 |
|
|
Axon Evidence and Cloud Services |
203,481 |
|
37.4 |
|
191,237 |
|
38.0 |
|
151,518 |
|
36.7 |
|
|
Extended Warranties |
17,306 |
|
3.2 |
|
15,405 |
|
3.1 |
|
14,046 |
|
3.4 |
|
|
Other (1) |
8,151 |
|
1.4 |
|
13,770 |
|
2.7 |
|
5,320 |
|
1.3 |
|
|
|
322,540 |
|
59.2 |
|
306,519 |
|
60.9 |
|
250,708 |
|
60.7 |
|
|
TASER segment: |
|
|
|
|
|
|
|
|
|
|
|
|
|
TASER Devices (Professional) |
130,515 |
|
24.0 |
|
104,624 |
|
20.8 |
|
86,718 |
|
21.0 |
|
|
Cartridges |
60,179 |
|
11.1 |
|
65,415 |
|
13.0 |
|
54,279 |
|
13.1 |
|
|
Axon Evidence and Cloud Services |
13,861 |
|
2.5 |
|
13,974 |
|
2.8 |
|
8,975 |
|
2.1 |
|
|
Extended Warranties |
9,729 |
|
1.8 |
|
8,908 |
|
1.8 |
|
8,078 |
|
2.0 |
|
|
Other (2) |
7,450 |
|
1.4 |
|
3,796 |
|
0.7 |
|
4,520 |
|
1.1 |
|
|
Total TASER segment |
221,734 |
|
40.8 |
|
196,717 |
|
39.1 |
|
162,570 |
|
39.3 |
|
|
Total net sales |
$ 544,274 |
|
100.0 % |
|
$ 503,236 |
|
100.0 % |
|
$ 413,278 |
|
100.0 % |
|
|
|
|
|
|
|
|
|
|
|
(1) |
Software and Sensors segment "Other" includes revenue from items including Signal Sidearm, |
||||||
|
(2) |
TASER segment "Other" includes smaller categories, such as VR hardware, weapons training revenue such as revenue associated with our |
||||||
|
|
NINE MONTHS ENDED |
||||||
|
|
|
|
|
||||
|
Software and Sensors segment: |
|
|
|
|
|
|
|
|
Axon Body Cameras and Accessories |
$ 180,592 |
|
12.0 % |
|
$ 124,066 |
|
11.0 % |
|
Axon Fleet Systems |
79,620 |
|
5.3 |
|
99,015 |
|
8.8 |
|
Axon Evidence and Cloud Services |
570,222 |
|
37.8 |
|
401,281 |
|
35.5 |
|
Extended Warranties |
48,651 |
|
3.2 |
|
40,194 |
|
3.6 |
|
Other (1) |
30,855 |
|
2.0 |
|
13,600 |
|
1.1 |
|
|
909,940 |
|
60.3 |
|
678,156 |
|
60.0 |
|
TASER segment: |
|
|
|
|
|
|
|
|
TASER Devices (Professional) |
333,815 |
|
22.1 |
|
239,165 |
|
21.2 |
|
Cartridges |
181,792 |
|
12.1 |
|
149,504 |
|
13.2 |
|
Axon Evidence and Cloud Services |
40,297 |
|
2.7 |
|
25,575 |
|
2.3 |
|
Extended Warranties |
27,164 |
|
1.8 |
|
23,463 |
|
2.1 |
|
Other (2) |
14,373 |
|
1.0 |
|
14,460 |
|
1.2 |
|
Total TASER segment |
597,441 |
|
39.7 |
|
452,167 |
|
40.0 |
|
Total net sales |
$ 1,507,381 |
|
100.0 % |
|
$ 1,130,323 |
|
100.0 % |
|
|
|
|
|
|
|
|
|
|
(1) |
Software and Sensors segment "Other" includes revenue from items including Signal Sidearm, |
||||||
|
(2) |
TASER segment "Other" includes smaller categories, such as VR hardware, weapons training revenue such as revenue associated with our |
||||||
|
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES (in thousands) |
|
|||||||||
|
|
|
|||||||||
|
|
THREE MONTHS ENDED |
|
NINE MONTHS ENDED |
|
||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
EBITDA and Adjusted EBITDA: |
|
|
|
|
|
|
|
|
|
|
|
Net income |
$ 67,025 |
|
$ 41,473 |
|
$ 61,309 |
|
|
|
|
|
|
Depreciation and amortization |
14,762 |
|
13,000 |
|
8,418 |
|
39,326 |
|
22,587 |
|
|
Interest expense |
1,646 |
|
1,871 |
|
1,762 |
|
5,273 |
|
5,223 |
|
|
Investment interest income |
(12,624) |
|
(11,653) |
|
(12,220) |
|
(36,407) |
|
(35,010) |
|
|
Provision for (benefit from) income taxes |
12,544 |
|
10,001 |
|
10,420 |
|
55,089 |
|
(17,401) |
|
|
EBITDA |
$ 83,353 |
|
$ 54,692 |
|
$ 69,689 |
|
|
|
$ 94,121 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense |
|
|
$ 74,821 |
|
$ 29,987 |
|
|
|
$ 96,228 |
|
|
Unrealized (gain) loss on strategic investments and marketable securities, net |
(44,459) |
|
(7,967) |
|
(4,036) |
|
(149,845) |
|
42,306 |
|
|
Gain on remeasurement of previously held minority interest, net |
— |
|
(21) |
|
— |
|
(42,313) |
|
— |
|
|
Transaction costs related to strategic investments and acquisitions |
2,652 |
|
4,136 |
|
495 |
|
13,145 |
|
1,793 |
|
|
Loss on disposal, abandonment, and impairment of property, equipment and intangible assets, net |
— |
|
— |
|
137 |
|
— |
|
317 |
|
|
Insurance recoveries |
— |
|
— |
|
(2,615) |
|
— |
|
(3,404) |
|
|
Costs related to antitrust litigation |
— |
|
— |
|
71 |
|
224 |
|
72 |
|
|
Payroll taxes related to XSPP vesting and CEO Award option exercises |
1,727 |
|
— |
|
201 |
|
1,727 |
|
8,961 |
|
|
Adjusted EBITDA |
|
|
|
|
$ 93,929 |
|
|
|
|
|
|
Net income as a percentage of net sales |
12.3 % |
|
8.2 % |
|
14.8 % |
|
16.0 % |
|
10.5 % |
|
|
Adjusted EBITDA as a percentage of net sales |
26.7 % |
|
25.0 % |
|
22.7 % |
|
25.2 % |
|
21.3 % |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense: |
|
|
|
|
|
|
|
|
|
|
|
Cost of product and service sales |
$ 10,123 |
|
$ 8,517 |
|
$ 1,687 |
|
$ 48,235 |
|
$ 4,685 |
|
|
Sales, general and administrative |
55,248 |
|
38,633 |
|
12,886 |
|
117,036 |
|
43,232 |
|
|
Research and development |
36,409 |
|
27,671 |
|
15,414 |
|
86,445 |
|
48,311 |
|
|
Total |
|
|
$ 74,821 |
|
$ 29,987 |
|
|
|
$ 96,228 |
|
|
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES - continued (in thousands, except per share amounts) |
|||||||||
|
|
|||||||||
|
|
THREE MONTHS ENDED |
|
NINE MONTHS ENDED |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
Non-GAAP net income: |
|
|
|
|
|
|
|
|
|
|
GAAP net income |
$ 67,025 |
|
$ 41,473 |
|
$ 61,309 |
|
$ 241,850 |
|
$ 118,722 |
|
Non-GAAP adjustments: |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation expense |
101,780 |
|
$ 74,821 |
|
29,987 |
|
251,716 |
|
96,228 |
|
Unrealized (gain) loss on strategic investments and marketable securities, net |
(44,459) |
|
(7,967) |
|
(4,036) |
|
(149,845) |
|
42,306 |
|
Gain on remeasurement of previously held minority interest, net |
— |
|
(21) |
|
— |
|
(42,313) |
|
— |
|
Transaction costs related to strategic investments and acquisitions |
2,652 |
|
4,136 |
|
495 |
|
13,145 |
|
1,793 |
|
Loss on disposal, abandonment, and impairment of property, equipment and intangible assets, net |
— |
|
— |
|
137 |
|
— |
|
317 |
|
Insurance recoveries |
— |
|
— |
|
(2,615) |
|
— |
|
(3,404) |
|
Costs related to antitrust litigation |
— |
|
— |
|
71 |
|
224 |
|
72 |
|
Payroll taxes related to XSPP vesting and CEO Award option exercises |
1,727 |
|
— |
|
201 |
|
1,727 |
|
8,961 |
|
Income tax effects |
(15,273) |
|
(17,531) |
|
(6,168) |
|
(18,513) |
|
(37,219) |
|
Non-GAAP net income |
$ 113,452 |
|
$ 94,911 |
|
$ 79,381 |
|
$ 297,991 |
|
$ 227,776 |
|
|
|
|
|
|
|
|
|
|
|
|
Diluted income per common share |
|
|
|
|
|
|
|
|
|
|
GAAP |
$ 0.86 |
|
$ 0.53 |
|
$ 0.81 |
|
$ 3.12 |
|
$ 1.58 |
|
Non-GAAP |
$ 1.45 |
|
$ 1.22 |
|
$ 1.05 |
|
$ 3.84 |
|
$ 3.03 |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of diluted common and common equivalent shares outstanding (in thousands) |
78,080 |
|
77,550 |
|
75,952 |
|
77,614 |
|
75,212 |
|
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES - continued (in thousands) |
|||||||||
|
|
|||||||||
|
|
THREE MONTHS ENDED |
|
NINE MONTHS ENDED |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ 544,274 |
|
$ 503,236 |
|
$ 413,278 |
|
$ 1,507,381 |
|
$ 1,130,323 |
|
Cost of sales |
213,527 |
|
197,080 |
|
156,622 |
|
611,850 |
|
438,862 |
|
Gross margin |
330,747 |
|
306,156 |
|
256,656 |
|
895,531 |
|
691,461 |
|
Stock-based compensation expense |
10,123 |
|
8,517 |
|
1,687 |
|
48,235 |
|
4,685 |
|
Amortization of acquired intangible assets |
3,020 |
|
2,989 |
|
955 |
|
8,298 |
|
2,189 |
|
Adjusted gross margin |
$ 343,890 |
|
$ 317,662 |
|
$ 259,298 |
|
$ 952,064 |
|
$ 698,335 |
|
Gross margin |
60.8 % |
|
60.8 % |
|
62.1 % |
|
59.4 % |
|
61.2 % |
|
Adjusted gross margin |
63.2 % |
|
63.1 % |
|
62.7 % |
|
63.2 % |
|
61.8 % |
|
Software and Sensors |
|||||||||||||||||
|
|
|||||||||||||||||
|
|
THREE MONTHS ENDED |
||||||||||||||||
|
|
|
|
|
|
|
||||||||||||
|
|
Axon Cloud & Services |
|
Sensors & Other |
|
Total |
|
Axon Cloud & Services |
|
Sensors & Other |
|
Total |
|
Axon Cloud & Services |
|
Sensors & Other |
|
Total |
|
Net sales |
$ 202,514 |
|
$ 120,026 |
|
$ 322,540 |
|
$ 196,499 |
|
$ 110,019 |
|
$ 306,518 |
|
$ 149,028 |
|
$ 101,680 |
|
$ 250,708 |
|
Cost of sales |
56,191 |
|
70,382 |
|
126,573 |
|
52,955 |
|
66,175 |
|
119,130 |
|
40,758 |
|
54,866 |
|
95,624 |
|
Gross margin |
146,323 |
|
49,644 |
|
195,967 |
|
143,544 |
|
43,844 |
|
187,388 |
|
108,270 |
|
46,814 |
|
155,084 |
|
Stock-based compensation expense |
3,270 |
|
2,045 |
|
5,316 |
|
2,485 |
|
1,057 |
|
3,542 |
|
951 |
|
157 |
|
1,108 |
|
Amortization of acquired intangible assets |
2,638 |
|
338 |
|
2,976 |
|
2,638 |
|
352 |
|
2,990 |
|
617 |
|
338 |
|
955 |
|
Adjusted gross margin |
$ 152,231 |
|
$ 52,027 |
|
$ 204,258 |
|
$ 148,667 |
|
$ 45,253 |
|
$ 193,920 |
|
$ 109,838 |
|
$ 47,309 |
|
$ 157,147 |
|
Gross margin |
72.3 % |
|
41.4 % |
|
60.8 % |
|
73.1 % |
|
39.9 % |
|
61.1 % |
|
72.7 % |
|
46.0 % |
|
61.9 % |
|
Adjusted gross margin |
75.2 % |
|
43.3 % |
|
63.3 % |
|
75.7 % |
|
41.1 % |
|
63.3 % |
|
73.7 % |
|
46.5 % |
|
62.7 % |
|
|
NINE MONTHS ENDED |
||||||||||
|
|
|
|
|
||||||||
|
|
Axon Cloud & Services |
|
Sensors & Other |
|
Total |
|
Axon Cloud & Services |
|
Sensors & Other |
|
Total |
|
Net sales |
|
|
|
|
|
|
|
|
|
|
|
|
Cost of sales |
157,155 |
|
201,732 |
|
358,887 |
|
112,538 |
|
153,511 |
|
266,049 |
|
Gross margin |
418,841 |
|
132,212 |
|
551,053 |
|
284,427 |
|
127,680 |
|
412,107 |
|
Stock-based compensation expense |
7,258 |
|
11,413 |
|
18,671 |
|
2,694 |
|
470 |
|
3,164 |
|
Amortization of acquired intangible assets |
7,240 |
|
1,028 |
|
8,268 |
|
1,850 |
|
338 |
|
2,188 |
|
Adjusted gross margin |
|
|
|
|
|
|
|
|
|
|
|
|
Gross margin |
72.7 % |
|
39.6 % |
|
60.6 % |
|
71.7 % |
|
45.4 % |
|
60.8 % |
|
Adjusted gross margin |
75.2 % |
|
43.3 % |
|
63.5 % |
|
72.8 % |
|
45.7 % |
|
61.6 % |
|
TASER |
|||||||||
|
|
|||||||||
|
|
THREE MONTHS ENDED |
|
NINE MONTHS ENDED |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
Net sales |
$ 221,734 |
|
$ 196,717 |
|
$ 162,570 |
|
$ 597,441 |
|
$ 452,167 |
|
Cost of sales |
86,954 |
|
78 |
|
60,998 |
|
252,963 |
|
172,814 |
|
Gross margin |
$ 134,780 |
|
$ 196,639 |
|
$ 101,572 |
|
$ 344,478 |
|
$ 279,353 |
|
Stock-based compensation expense |
4,808 |
|
4,975 |
|
579 |
|
29,564 |
|
1,521 |
|
Amortization of acquired intangible assets |
44 |
|
— |
|
— |
|
30 |
|
1 |
|
Adjusted gross margin |
$ 139,632 |
|
$ 201,614 |
|
$ 102,151 |
|
$ 374,072 |
|
$ 280,875 |
|
Gross margin |
60.8 % |
|
100.0 % |
|
62.5 % |
|
57.7 % |
|
61.8 % |
|
Adjusted gross margin |
63.0 % |
|
102.5 % |
|
62.8 % |
|
62.6 % |
|
62.1 % |
|
CONSOLIDATED BALANCE SHEETS (in thousands) |
|||
|
|
|||
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
ASSETS |
|
|
|
|
Current Assets: |
|
|
|
|
Cash and cash equivalents |
$ 695,144 |
|
$ 598,545 |
|
Marketable securities |
151,560 |
|
77,940 |
|
Short-term investments |
311,570 |
|
644,054 |
|
Accounts and notes receivable, net |
512,662 |
|
412,961 |
|
Contract assets, net |
372,923 |
|
287,232 |
|
Inventory |
272,295 |
|
269,855 |
|
Prepaid expenses and other current assets |
117,592 |
|
103,055 |
|
Total current assets |
2,433,746 |
|
2,393,642 |
|
|
|
|
|
|
Property and equipment, net |
235,881 |
|
200,533 |
|
Deferred tax assets, net |
244,317 |
|
227,784 |
|
Intangible assets, net |
81,748 |
|
19,539 |
|
|
308,472 |
|
57,945 |
|
Long-term notes receivable, net |
2,898 |
|
2,588 |
|
Long-term contract assets, net |
119,973 |
|
84,382 |
|
Strategic investments |
387,905 |
|
231,730 |
|
Other long-term assets |
190,718 |
|
191,031 |
|
Total assets |
$ 4,005,658 |
|
$ 3,409,174 |
|
|
|
|
|
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|
|
Current Liabilities: |
|
|
|
|
Accounts payable |
$ 75,590 |
|
$ 65,852 |
|
Accrued liabilities |
209,691 |
|
193,550 |
|
Current portion of deferred revenue |
505,008 |
|
470,415 |
|
Customer deposits |
22,234 |
|
21,935 |
|
Other current liabilities |
10,704 |
|
9,787 |
|
Total current liabilities |
823,227 |
|
761,539 |
|
|
|
|
|
|
Deferred revenue, net of current portion |
305,414 |
|
270,901 |
|
Liability for unrecognized tax benefits |
20,342 |
|
18,049 |
|
Long-term deferred compensation |
15,605 |
|
11,342 |
|
Long-term lease liabilities |
41,223 |
|
33,550 |
|
Convertible notes, net |
679,483 |
|
677,113 |
|
Other long-term liabilities |
20,528 |
|
20,915 |
|
Total liabilities |
1,905,822 |
|
1,793,409 |
|
|
|
|
|
|
Stockholders' Equity: |
|
|
|
|
Preferred stock |
— |
|
— |
|
Common stock |
1 |
|
1 |
|
Additional paid-in capital |
1,588,072 |
|
1,347,410 |
|
|
(155,947) |
|
(155,947) |
|
Retained earnings |
676,830 |
|
434,980 |
|
Accumulated other comprehensive loss |
(9,120) |
|
(10,679) |
|
Total stockholders' equity |
2,099,836 |
|
1,615,765 |
|
Total liabilities and stockholders' equity |
$ 4,005,658 |
|
$ 3,409,174 |
|
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) |
|||||||||
|
|
|||||||||
|
|
THREE MONTHS ENDED |
|
NINE MONTHS ENDED |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities: |
|
|
|
|
|
|
|
|
|
|
Net income |
$ 67,025 |
|
$ 41,473 |
|
$ 61,309 |
|
$ 241,850 |
|
$ 118,722 |
|
Adjustments to reconcile net income to net cash provided by operating activities: |
|
|
|
|
|
|
|
|
|
|
Stock-based compensation |
101,780 |
|
74,821 |
|
29,987 |
|
251,716 |
|
96,228 |
|
(Gain) loss on strategic investments and marketable securities, net |
(44,459) |
|
(7,988) |
|
(4,036) |
|
(192,158) |
|
42,306 |
|
Depreciation and amortization |
13,003 |
|
10,386 |
|
5,180 |
|
30,745 |
|
12,844 |
|
Provision for bad debts and inventory |
2,740 |
|
9,504 |
|
1,528 |
|
13,824 |
|
5,083 |
|
Deferred income taxes |
(19,306) |
|
(28,425) |
|
(15,313) |
|
(27,061) |
|
(52,955) |
|
Other noncash items |
6,819 |
|
3,780 |
|
1,277 |
|
13,183 |
|
8,238 |
|
Change in assets and liabilities: |
|
|
|
|
|
|
|
|
|
|
Receivables and contract assets |
(149,667) |
|
(20,355) |
|
(77,561) |
|
(226,759) |
|
(186,614) |
|
Inventory |
5,330 |
|
(14,885) |
|
(16,961) |
|
(11,629) |
|
(65,096) |
|
Deferred revenue |
65,219 |
|
(27,620) |
|
38,020 |
|
56,720 |
|
103,386 |
|
Accounts payable, accrued and other liabilities |
53,775 |
|
42,308 |
|
49,255 |
|
10,243 |
|
13,367 |
|
Other, net |
(10,938) |
|
(236) |
|
(9,793) |
|
(2,528) |
|
(46,284) |
|
Net cash provided by operating activities |
91,321 |
|
82,763 |
|
62,892 |
|
158,146 |
|
49,225 |
|
Cash flows from investing activities: |
|
|
|
|
|
|
|
|
|
|
Purchases of investments |
(124,425) |
|
(240,404) |
|
(187,719) |
|
(615,414) |
|
(444,685) |
|
Business acquisition, net of cash acquired |
— |
|
(25) |
|
(64) |
|
(237,796) |
|
(21,090) |
|
Proceeds from call, maturity, and sale of investments |
193,968 |
|
333,886 |
|
80,132 |
|
858,326 |
|
461,214 |
|
Purchases of property and equipment |
(26,472) |
|
(11,318) |
|
(13,974) |
|
(53,984) |
|
(35,624) |
|
Other, net |
— |
|
— |
|
(328) |
|
34 |
|
(512) |
|
Net cash provided by (used in) investing activities |
43,071 |
|
82,139 |
|
(121,953) |
|
(48,834) |
|
(40,697) |
|
Cash flows from financing activities: |
|
|
|
|
|
|
|
|
|
|
Net proceeds from equity offering |
— |
|
— |
|
(101) |
|
— |
|
94,705 |
|
Proceeds from options exercised |
9,717 |
|
— |
|
— |
|
9,717 |
|
54,503 |
|
Income and payroll tax payments for net-settled stock awards |
(17,430) |
|
(2,185) |
|
(7,021) |
|
(22,325) |
|
(104,076) |
|
Other, net |
— |
|
— |
|
— |
|
— |
|
— |
|
Net cash (used in) provided by financing activities |
(7,713) |
|
(2,185) |
|
(7,122) |
|
(12,608) |
|
45,132 |
|
Effect of exchange rate changes on cash and cash equivalents |
2,161 |
|
(108) |
|
(2,007) |
|
75 |
|
(1,201) |
|
Net increase (decrease) in cash and cash equivalents and restricted cash |
128,840 |
|
162,609 |
|
(68,190) |
|
96,779 |
|
52,459 |
|
Cash and cash equivalents and restricted cash, beginning of period |
568,609 |
|
406,000 |
|
476,201 |
|
600,670 |
|
355,552 |
|
Cash and cash equivalents and restricted cash, end of period |
697,449 |
|
568,609 |
|
408,011 |
|
697,449 |
|
408,011 |
|
SELECTED CASH FLOW INFORMATION (in thousands) |
|||||||||
|
|
|||||||||
|
|
THREE MONTHS ENDED |
|
NINE MONTHS ENDED |
||||||
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating activities |
91,321 |
|
82,763 |
|
62,892 |
|
158,146 |
|
49,225 |
|
Purchases of property and equipment |
(26,472) |
|
(11,318) |
|
(13,974) |
|
(53,984) |
|
(35,624) |
|
Purchases of intangible assets |
— |
|
— |
|
(392) |
|
— |
|
(579) |
|
Free cash flow, a non-GAAP measure |
$ 64,849 |
|
$ 71,445 |
|
$ 48,526 |
|
$ 104,162 |
|
$ 13,022 |
|
Bond premium amortization |
2,566 |
|
3,397 |
|
4,035 |
|
10,953 |
|
12,071 |
|
Net campus investment |
882 |
|
458 |
|
761 |
|
2,373 |
|
2,063 |
|
Adjusted free cash flow, a non-GAAP measure |
$ 68,297 |
|
$ 75,300 |
|
$ 53,322 |
|
$ 117,488 |
|
$ 27,156 |
|
SUPPLEMENTAL TABLES (in thousands) |
|||
|
|
|||
|
|
|
|
|
|
|
(Unaudited) |
|
|
|
Cash and cash equivalents |
695,144 |
|
598,545 |
|
Short-term investments |
311,570 |
|
644,054 |
|
Cash and cash equivalents and investments, net |
1,006,714 |
|
1,242,599 |
|
Convertible notes, principal amount |
$ (690,000) |
|
$ (690,000) |
|
Total cash and cash equivalents and investments, net of convertible notes |
$ 316,714 |
|
$ 552,599 |
CONTACT:
Investor Relations
IR@axon.com
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SOURCE Axon
