STOCK TITAN

Axon reports Q3 2024 revenue of $544 million, up 32% year over year, raises outlook

Rhea-AI Impact
(Moderate)
Rhea-AI Sentiment
(Neutral)
Tags

Axon reported strong Q3 2024 results with revenue of $544 million, up 32% year over year. TASER revenue grew 36% to $222 million, while Cloud & Services revenue increased 36% to $203 million. The company achieved net income of $67 million with a 12.3% margin and Adjusted EBITDA of $145 million. Annual recurring revenue grew 36% to $885 million.

The company raised its full-year revenue outlook to approximately $2.07 billion, representing over 32% annual growth, with expected Adjusted EBITDA margin of 24.6%. Q4 revenue guidance is set at $560-570 million.

Axon ha riportato risultati solidi per il terzo trimestre del 2024 con un fatturato di 544 milioni di dollari, in aumento del 32% rispetto all'anno precedente. Il fatturato di TASER è cresciuto del 36%, raggiungendo 222 milioni di dollari, mentre il fatturato di Cloud & Services è aumentato del 36%, per un totale di 203 milioni di dollari. L'azienda ha ottenuto un utile netto di 67 milioni di dollari con un margine del 12,3% e un EBITDA rettificato di 145 milioni di dollari. Il fatturato annuo ricorrente è cresciuto del 36%, arrivando a 885 milioni di dollari.

L'azienda ha innalzato le previsioni di fatturato per l'intero anno a circa 2,07 miliardi di dollari, rappresentando una crescita annuale di oltre il 32%, con un margine EBITDA rettificato previsto del 24,6%. La guida per il fatturato del quarto trimestre è fissata tra 560 e 570 milioni di dollari.

Axon reportó resultados sólidos en el tercer trimestre de 2024 con ingresos de 544 millones de dólares, lo que representa un aumento del 32% en comparación con el año anterior. Los ingresos de TASER crecieron un 36% hasta alcanzar 222 millones de dólares, mientras que los ingresos de Cloud & Services aumentaron un 36% hasta 203 millones de dólares. La compañía logró un ingreso neto de 67 millones de dólares con un margen del 12.3% y un EBITDA ajustado de 145 millones de dólares. Los ingresos anuales recurrentes crecieron un 36% hasta 885 millones de dólares.

La compañía elevó su perspectiva de ingresos para todo el año a aproximadamente 2.07 mil millones de dólares, lo que representa un crecimiento anual de más del 32%, con un margen de EBITDA ajustado esperado del 24.6%. La guía de ingresos para el cuarto trimestre se establece entre 560 y 570 millones de dólares.

Axon은 2024년 3분기 실적을 발표하며 5억 4400만 달러의 매출을 기록했으며, 이는 작년 대비 32% 증가한 수치입니다. TASER 매출은 36% 증가하여 2억 2200만 달러에 이르렀고, Cloud & Services 매출 또한 36% 증가하여 2억 300만 달러에 달했습니다. 회사는 6700만 달러의 순이익을 기록했으며, 마진은 12.3%이고, 조정 EBITDA는 1억 4500만 달러에 달했습니다. 연간 반복 매출은 36% 증가하여 8억 8500만 달러에 이릅니다.

회사는 연간 매출 전망을 약 20억 7000만 달러로 상향 조정했으며, 이는 연간 32% 이상의 성장률을 나타내며, 예상 조정 EBITDA 마진은 24.6%입니다. 4분기 매출 가이드는 5억 6000만에서 5억 7000만 달러로 설정되었습니다.

Axon a publié des résultats solides pour le troisième trimestre 2024 avec un revenu de 544 millions de dollars, en hausse de 32 % par rapport à l'année précédente. Les revenus de TASER ont augmenté de 36 % pour atteindre 222 millions de dollars, tandis que les revenus de Cloud & Services ont également augmenté de 36 % pour atteindre 203 millions de dollars. L'entreprise a réalisé un bénéfice net de 67 millions de dollars avec une marge de 12,3 % et un EBITDA ajusté de 145 millions de dollars. Les revenus annuels récurrents ont augmenté de 36 % pour atteindre 885 millions de dollars.

L'entreprise a révisé à la hausse ses prévisions de revenus pour l'ensemble de l'année à environ 2,07 milliards de dollars, représentant plus de 32 % de croissance annuelle, avec une marge EBITDA ajustée prévue de 24,6 %. L'objectif de revenus pour le quatrième trimestre est fixé entre 560 et 570 millions de dollars.

Axon berichtete über starke Ergebnisse für das dritte Quartal 2024 mit einem Umsatz von 544 Millionen Dollar, was einem Anstieg von 32% im Vergleich zum Vorjahr entspricht. Der Umsatz von TASER wuchs um 36% auf 222 Millionen Dollar, während der Umsatz von Cloud & Services ebenfalls um 36% auf 203 Millionen Dollar anstieg. Das Unternehmen erzielte einen Nettogewinn von 67 Millionen Dollar mit einer Marge von 12,3% und ein bereinigtes EBITDA von 145 Millionen Dollar. Der jährlich wiederkehrende Umsatz stieg um 36% auf 885 Millionen Dollar.

Das Unternehmen hob seine Umsatzprognose für das Gesamtjahr auf etwa 2,07 Milliarden Dollar an, was über 32% jährliches Wachstum darstellt, mit einer erwarteten bereinigten EBITDA-Marge von 24,6%. Die Umsatzprognose für das vierte Quartal liegt zwischen 560 und 570 Millionen Dollar.

Positive
  • Revenue growth of 32% YoY to $544 million in Q3 2024
  • Annual recurring revenue up 36% to $885 million
  • Net income of $67 million with 12.3% margin
  • Adjusted EBITDA of $145 million with 26.7% margin
  • Raised full-year revenue guidance to $2.07 billion
  • Strong product demand with over 100,000 body cameras shipped
Negative
  • Gross margin declined 130 basis points YoY to 60.8%
  • Operating profit decreased from $57M to $24M YoY
  • Sensors & Other gross margin dropped 460 basis points YoY to 41.4%

Insights

A stellar Q3 performance with significant growth metrics across all segments. Revenue grew 32% YoY to $544 million, with TASER revenue up 36% and Cloud Services revenue also up 36%. The company's Annual Recurring Revenue (ARR) reached $885 million, showing strong SaaS momentum.

Key financial highlights include net income of $67 million and an impressive Adjusted EBITDA margin of 26.7% - the highest in over three years. The net revenue retention rate of 123% indicates strong customer expansion and low churn.

The raised full-year guidance to $2.07 billion in revenue with 24.6% Adjusted EBITDA margin demonstrates management's confidence in continued growth. The strong balance sheet with $1.01 billion in cash and investments provides ample runway for future investments and acquisitions.

Axon's strategic pivot into AI and drone technologies positions it well for future growth. The new AI Era Plan represents a significant opportunity to increase ARPU through value-added AI features. The launch of products like Draft One and Body 4 Live Translation shows strong execution in productizing AI capabilities.

The Dedrone acquisition strengthens Axon's drone-as-first-responder (DFR) offering, creating a comprehensive solution including hardware, software and airspace security. The FAA waiver for 24/7 BVLOS operations in Campbell, CA sets an important precedent for wider DFR adoption.

The 123% net revenue retention and record body camera shipments of over 100,000 units demonstrate strong product-market fit and execution. The ecosystem approach combining hardware, software and AI creates high switching costs and competitive advantages.

SCOTTSDALE, Ariz., Nov. 7, 2024 /PRNewswire/ --

  • 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 $222 million grew 36% year over year, driven by demand for TASER 10 and associated cartridges and services. Axon Cloud & Services revenue of $203 million, grew 36% year over year. Strength in Axon Cloud & Services was driven by new customer adoption of Axon Evidence and continued expansion with our existing customers, supporting increased net revenue retention of 123%. Sensors & Other revenue of $120 million increased 18% year over year, driven by record demand for Axon Body cameras, with more than 100,000 units shipped in the quarter.

Axon's third quarter results demonstrate strong product-market fit and support our increased outlook. We expect fourth quarter revenue in the range of $560 million to $570 million, representing over 30% year-over-year growth at the midpoint. We expect fourth quarter Adjusted EBITDA in the range of $130 million to $135 million, or approximately 23.5% Adjusted EBITDA margin. Our fourth quarter guidance implies full year 2024 revenue of approximately $2.07 billion, representing over 32% annual growth and full year Adjusted EBITDA margin of approximately 24.6%. We provide more detail on our product vision, most recent financial performance and improved outlook, below.

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."
—  Rick Smith, Axon Founder and CEO

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 International Association of Chiefs of Police (IACP) Annual Conference and more than 2,000 attendees at the Association of the United States Army (AUSA) Annual Meeting. Our demonstrations featured products available today and a roadmap of additional, in-development capabilities, enabling us to gather critical feedback on where we are headed over the next 1-2 years. The rapid and accelerating pace of AI innovation also supports us planning ahead for the next 5-10 years — early interest in our AI Era Plan indicates our customers are ready.

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 Steve Ferrie, Rowlett Police Department

"...one of the biggest, [most] exciting changes in technology in policing that I have seen..."
— Chief Steve Redfearn, Boulder Police Department

"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?"
 — Rick Smith, Axon Founder and CEO

  • 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 Air — Drone as First Responder
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 U.S.-made drone hardware and a newly introduced autonomous docking solution from Skydio, enabling fully remote-controlled launches, landings, recharging and airspace deconfliction for beyond visual line of sight (BVLOS) operations. In addition, our DFR solution integrates into Fusus, which provides unified situational awareness by allowing agencies to monitor live drone feeds, share footage and streamline coordinated responses. This combination positions us as the leader in powering scalable, end-to-end DFR operations.

The differentiated capabilities of our DFR offering are evidenced by the Campbell Police Department in California recently receiving a first-of-its-kind waiver from the Federal Aviation Administration (FAA) for BVLOS operations as part of its DFR program. Their approval includes nighttime operations, enabling 24/7 drone use, and allows the department to fly missions without the need for visual observers. We are excited to enable this ground-breaking advancement in DFR operations as we continue to invest in this market opportunity.

"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 Gary Berg, Campbell Police Department

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 Southeast U.S., thousands were left grappling with extensive damage. Heroic first responders worked tirelessly around the clock conducting search and rescue missions, restoring power, and providing essential resources — all while overcoming significant communication challenges.

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 Graham Fire Department

Q3 2024 Summary Results

Quarterly revenue of $544 million grew 32% year over year, exceeding our expectations, driven by growth in each of our product segments. Demand for our latest TASER and body camera products remained strong, driving growth in TASER and Sensors & Other revenue, while adoption of premium software offerings continued to fuel growth in Axon Cloud & Services.

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 $24 million decreased from $57 million year over year primarily due to increased stock-based compensation expense. Stock-based compensation expense of $102 million included $60 million of expenses related to broad-based equity incentive programs due to expected achievement of operational and time based service components.

  • 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 $67 million (12.3% net income margin), or $0.86 per diluted share, supported non-GAAP net income of $113 million (20.8% non-GAAP net income margin), or $1.45 per diluted share.

Adjusted EBITDA of $145 million (26.7% Adjusted EBITDA margin) increased 54% year over year driven by higher revenue and operating leverage.

Operating cash flow of $91 million increased 45% year over year, supporting free cash flow of $65 million and adjusted free cash flow of $68 million.

As of September 30, 2024, Axon had $1.01 billion in cash, cash equivalents and investments, and outstanding convertible notes in principal amount of $690 million, for a net cash position of $317 million, up $38 million sequentially.

During the three months ended September 30, 2024, we revised our previously issued financial statements from 2021 through the second quarter of 2024 to reflect the impact of corrections of certain errors that we concluded were not material to any previously issued financial statements. For additional information related to this revision, see Note 1 to our condensed consolidated financial statements of the Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, which we expect to be available on November 8, 2024.

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

Software & Sensors



THREE MONTHS ENDED


CHANGE


30 SEP 2024


30 JUN 2024


30 SEP 2023


QoQ


YoY


(in thousands)





Axon Cloud & Services revenue(1)

$202,514


$ 196,499


$149,028


3.1 %


35.9 %

Axon Cloud & Services gross margin

72.3 %


73.1 %


72.7 %


       (80) bp


      (40) bp

Axon Cloud & Services adjusted gross margin

75.2 %


75.7 %


73.7 %


      (50) bp


       150 bp











Sensors & Other revenue

$120,026


$ 110,019


$101,680


9.1 %


18.0 %

Sensors & Other gross margin

41.4 %


39.9 %


46.0 %


       150 bp


     (460) bp

Sensors & Other adjusted gross margin

43.3 %


41.1 %


46.5 %


       220  bp


     (320) bp









(1)

The TASER segment includes Cloud and Services revenue, which is not included here.

 

  • 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.

 

TASER



THREE MONTHS ENDED


CHANGE


30 SEP 2024


30 JUN 2024


30 SEP 2023


QoQ


YoY


(in thousands)





Revenue

$ 221,734


$ 196,717


$ 162,570


12.7 %


36.4 %

Gross margin

60.8 %


60.4 %


62.5 %


         40  bp


     (170) bp

Adjusted gross margin

63.0 %


62.9 %


62.8 %


         10  bp


         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.

 

Forward Looking Performance Indicators




30 SEP 2024


30 JUN 2024


31 MAR
2024


31 DEC 2023


30 SEP 2023


($ in millions)

Annual recurring revenue (1)

$      885


$      850


$      825


$      732


$      652

Net revenue retention (1)

123 %


122 %


122 %


122 %


122 %

Total company future contracted revenue (1)

$   7,711


$     7,353


$     7,036


$     7,140


$     5,819



(1)

Refer to "Statistical Definitions" below.

 

  • 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 November 7, 2024, and are subject to risks and uncertainties. Please refer to "Forward-looking Statements" below for more information.

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 in May 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 of September 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.
  • 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 Thursday, November 7, 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/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 Securities and Exchange Commission (SEC).

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 September 30, 2024. 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, 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, Axon Air, Axon Body, Axon Evidence, Axon Fleet, Draft One, TASER, TASER 10, 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 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 December 31, 2023 and our Quarterly Report on Form 10-Q for the quarter ended September 30, 2024. 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 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 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. Our Quarterly Report on Form 10-Q for the quarter ended September 30 2024, which we expect to be available on November 8, 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 in Part II, Item 1A under the heading "Risk Factors" in our Quarterly Reports on Form 10‑Q, 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.

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 Axon Enterprise, Inc., and are subject to change without notice.

 

AXON ENTERPRISE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)



THREE MONTHS ENDED


NINE MONTHS ENDED


30 SEP 2024


30 JUN 2024


30 SEP 2023


30 SEP 2024


30 SEP 2023

Net sales from products

$   327,900


$   292,763


$   255,055


$   891,087


$   707,563

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

Cost of service sales

57,360


54,453


42,009


160,896


115,054

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

Operating expenses:










Sales, general and administrative

192,189


170,964


122,357


514,228


357,611

Research and development

114,477


101,434


76,880


307,008


219,747

Total operating expenses

306,666


272,398


199,237


821,236


577,358

Income from operations

24,081


33,758


57,419


74,295


114,103

Interest Income, net

10,978


9,782


10,458


31,134


29,787

Other income (loss), net

44,510


7,934


3,852


191,510


(42,569)

Income (loss) before provision for income taxes

79,569


51,474


71,729


296,939


101,321

Provision for (benefit from) income taxes

12,544


10,001


10,420


55,089


(17,401)

Net income

$     67,025


$     41,473


$     61,309


$   241,850


$   118,722

Net income per common and common equivalent shares:










Basic

$         0.89


$         0.55


$         0.82


$         3.20


$         1.61

Diluted

$         0.86


$         0.53


$         0.81


$         3.12


$         1.58

Weighted average number of common and common equivalent shares outstanding:










Basic

75,697


75,511


74,826


75,543


73,904

Diluted

78,080


77,550


75,952


77,614


75,212

 

AXON ENTERPRISE, INC.

SEGMENT REPORTING

(in thousands)





THREE MONTHS ENDED


THREE MONTHS ENDED


THREE MONTHS ENDED



30 SEP 2024


30 JUN 2024


30 SEP 2023



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



30 SEP 2024


30 SEP 2023



Software

and

Sensors


TASER


Total


Software

and

Sensors


TASER


Total


Net sales from products (1)

$ 333,943


$ 557,144


$ 891,087


$ 281,191


$ 426,372


$ 707,563


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.

 

AXON ENTERPRISE, INC.

SALES BY PRODUCT AND SERVICE

(in thousands)





THREE MONTHS ENDED



30 SEP 2024


30 JUN 2024


30 SEP 2023


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


Total Software and Sensors segment

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, Interview Room, Axon Air and other sensors and equipment.

(2)

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.

 


NINE MONTHS ENDED


30 SEP 2024


30 SEP 2023

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

Total Software and Sensors segment

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, Interview Room, Axon Air and other sensors and equipment.

(2)

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.

 

AXON ENTERPRISE, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in thousands)





THREE MONTHS ENDED


NINE MONTHS ENDED



30 SEP 2024


30 JUN 2024


30 SEP 2023


30 SEP 2024


30 SEP 2023


EBITDA and Adjusted EBITDA:











Net income

$   67,025


$   41,473


$   61,309


$ 241,850


$ 118,722


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


$ 305,131


$   94,121













  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


Adjusted EBITDA

$ 145,053


$ 125,661


$   93,929


$ 379,785


$ 240,394


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

$ 101,780


$   74,821


$   29,987


$ 251,716


$   96,228


 

AXON ENTERPRISE, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES - continued

(in thousands, except per share amounts)



THREE MONTHS ENDED


NINE MONTHS ENDED


30 SEP 2024


30 JUN 2024


30 SEP 2023


30 SEP 2024


30 SEP 2023

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

 

AXON ENTERPRISE, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES - continued

(in thousands)



THREE MONTHS ENDED


NINE MONTHS ENDED


30 SEP 2024


30 JUN 2024


30 SEP 2023


30 SEP 2024


30 SEP 2023

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


30 SEP 2024


30 JUN 2024


30 SEP 2023


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


30 SEP 2024


30 SEP 2023


Axon Cloud

& Services


Sensors

& Other


Total


Axon Cloud

& Services


Sensors

& Other


Total

Net sales

$ 575,996


$ 333,944


$ 909,940


$ 396,965


$ 281,191


$ 678,156

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

$ 433,339


$ 144,653


$ 577,992


$ 288,971


$ 128,488


$ 417,459

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


30 SEP 2024


30 JUN 2024


30 SEP 2023


30 SEP 2024


30 SEP 2023

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 %

 

AXON ENTERPRISE, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands)



30 SEP 2024


31 DEC 2023


(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

Goodwill

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

Treasury stock

(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

 

AXON ENTERPRISE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)



THREE MONTHS ENDED


NINE MONTHS ENDED


30 SEP 2024


30 JUN 2024


30 SEP 2023


30 SEP 2024


30 SEP 2023

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

 

AXON ENTERPRISE, INC.

SELECTED CASH FLOW INFORMATION

(in thousands)



THREE MONTHS ENDED


NINE MONTHS ENDED


30 SEP 2024


30 JUN 2024


30 SEP 2023


30 SEP 2024


30 SEP 2023

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

 

AXON ENTERPRISE, INC.

SUPPLEMENTAL TABLES

(in thousands)



30 SEP 2024


31 DEC 2023


(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
Axon Enterprise, Inc.
IR@axon.com

Cision View original content to download multimedia:https://www.prnewswire.com/news-releases/axon-reports-q3-2024-revenue-of-544-million-up-32-year-over-year-raises-outlook-302299201.html

SOURCE Axon

FAQ

What was Axon's (AXON) Q3 2024 revenue growth?

Axon's Q3 2024 revenue grew 32% year over year to $544 million.

What is Axon's (AXON) revenue guidance for full-year 2024?

Axon raised its full-year 2024 revenue guidance to approximately $2.07 billion, representing over 32% annual growth.

What was Axon's (AXON) Q3 2024 net income?

Axon reported Q3 2024 net income of $67 million, with a 12.3% net income margin.

How much did Axon's (AXON) Cloud & Services revenue grow in Q3 2024?

Axon's Cloud & Services revenue grew 36% year over year to $203 million in Q3 2024.

Axon Enterprise, Inc.

NASDAQ:AXON

AXON Rankings

AXON Latest News

AXON Stock Data

48.57B
72.84M
4.72%
80.97%
3.18%
Aerospace & Defense
Ordnance & Accessories, (no Vehicles/guided Missiles)
Link
United States of America
SCOTTSDALE