8350cfc8a86847ba63c0a498bc1dc72a0cbdec843278179ba0db0bed536d62d3

f32629aae50804b9251eaf265da5c818cb2caa8135e2a1fe7b3b262b87cd1550

Adjustments for Non-Cash Items [USD, Thousands]

Stock-Based Compensation [USD, Thousands]

Changes in Working Capital [USD, Thousands]

Capital Expenditures (CapEx) [USD, Thousands]

Proceeds from / Repayments of Debt [USD, Thousands]

Share Repurchases [USD, Thousands]

Dividend Payments [USD, Thousands]

Net Change in Cash [USD, Thousands]

3d76301e287fcf1cdd2a4924a6932b15ba13f6e4d0088af83a3f7a7aff2cbd19

United States

Other Countries

Total Revenue

588d65db7a528195c4b97dbf6e5df0b77b9930cdafe9690381d370728f1eb9ee

60a07a3821fd1f72bee3bf9ec0325c1c4585c45b2529c690b574716af11a579a

Total company future contracted revenue (USD billions)

611bfa30c8f1b2dffc31e9248e13cabe813c7e9108cee298ea415958188dd726

46cb42c40ee03e499f41eebb8c7a8d7d3354070451ce6af66280a41a95ea5a2d

Net sales from products [USD, thousands]

Net sales from services [USD, thousands]

Net sales [USD, thousands]

Cost of product sales [USD, thousands]

Cost of service sales [USD, thousands]

Cost of sales [USD, thousands]

Gross margin [USD, thousands]

Sales, general and administrative [USD, thousands]

Research and development [USD, thousands]

Total operating expenses [USD, thousands]

Income from operations [USD, thousands]

Interest income, net [USD, thousands]

Other income (loss), net [USD, thousands]

Income before provision for income taxes [USD, thousands]

Provision for (benefit from) income taxes [USD, thousands]

Net income [USD, thousands]

Basic net income per share [USD]

Diluted net income per share [USD]

Weighted average basic shares outstanding [thousands]

Weighted average diluted shares outstanding [thousands]

Comprehensive income [USD, thousands]

dd90065a87f475850b6cb180b31f5b280e62188ffb73cffd6326f44e7f10c770

Axon’s **high net income** in Q1 2024 was primarily driven by several factors. The company recorded significant **unrealized gains on strategic investments** amounting to **$97,419 thousand**, which was a major contributor to the jump in net income. In addition, strong **34% year-over-year revenue growth**—with notable performances in its Axon Cloud & Services (up **52%**) and TASER segments (up **33%**)—boosted the overall profitability. Improved **operating leverage**, reflected by a reduction in operating expenses as a percentage of revenue from **54.7% to 52.9%**, further enhanced profitability despite increased stock-based compensation expenses that were excluded from non-GAAP net income calculations.  **[20240506LA06545:4]** **[20240506LA06545:17]** **[20240506LA06545:0]** **[20240506LA06545:3]** 

Why was net income so high in Q1 2024?

The EPS jump in Q1 2024 was driven by a **substantial increase in net income**, which rose to **$133.2 million** from **$45.1 million** year-over-year, along with significant **realized and unrealized gains**—including a **$42.3 million** realized gain from the Fusus acquisition and a **$75.6 million** unrealized gain from a strategic investment. Additionally, a **34% revenue growth** to **$461 million** further contributed to the higher EPS.  **[20240506LA06545:4]** **[20240506LA06545:16]** **[0001069183-24-000032_axon-20240331x10q.htm:33]** **[0001069183-24-000029_axon-20240506xex99d1.htm:0]** **[20240506LA06545:0]** 

What drove the EPS jump in Q1 2024?

The drop in operating income in Q3 2024 was primarily due to **significantly higher stock-based compensation expenses**—which reached **$102 million**—combined with **increased operating expenses**. Specifically, **SG&A expenses** rose to **$192,189 thousand** and **R&D expenses** increased to **$114,477 thousand**. Additionally, a **decline in gross margin percentage** from **62.1%** in Q3 2023 to **60.8%** in Q3 2024 also contributed to the decrease in operating income.  **[0001069183-24-000055_axon-20241107xex991.htm:4]** **[0001069183-24-000061_axon-20240930.htm:45]** **[20241107LA51058:16]** 

Why did operating income drop in Q3 2024?

The surge in **net sales** in **Q3 2024** was primarily driven by several key factors. **Axon** experienced significant growth in its **TASER segment**, which increased by **36%** due to strong demand for **TASER 10 devices** along with their cartridges and services.  **[20241107LA51058:16]** **[0001069183-24-000055_axon-20241107xex991.htm:0]** **[20241107LA51058:0]**  Additionally, the **Axon Cloud & Services** segment grew by **36%**, propelled by new customer adoption of **Axon Evidence**, expansion through premium software offerings, and impressive **net revenue retention of 123%**.  **[20241107LA51058:16]** **[0001069183-24-000055_axon-20241107xex991.htm:0]** **[20241107LA51058:6]** **[20241107LA51058:0]**  Furthermore, the **Sensors & Other** segment contributed with an **18% increase** driven by record shipments of **Axon Body cameras** despite a partial offset from decreased Axon Fleet revenue.  **[20241107LA51058:16]** **[0001069183-24-000055_axon-20241107xex991.htm:0]** **[20241107LA51058:6]** **[20241107LA51058:0]**  Overall, Axon’s innovative product leadership and deep customer relationships underpinned these growth drivers, resulting in a **32% year-over-year increase in net sales**.

What factors contributed to the surge in net sales in Q3 2024?

The documents indicate that the Basic EPS was **$1.77** in Q1 2024 versus **$0.55** in Q2 2024.  **[0001069183-24-000032_axon-20240331x10q.htm:4]** **[0001069183-24-000061_axon-20240930.htm:38]**  However, the available details explaining changes in EPS are focused on the year-over-year comparison (Q2 2024 vs. Q2 2023) and do not provide specific reasons for why EPS was lower in Q2 2024 compared to Q1 2024. Therefore, a definitive explanation for this quarter-to-quarter difference is not provided in the documents.

Why was EPS so low in Q2 2024 compared to the prior quarter?

dd756950b640b64cf12195998a3e31930b39b1a66956fac9fcc2ccdc384e271e

The jump in **goodwill** for Q1 2024 is primarily due to the acquisition of additional goodwill worth **$250,653 thousand**, which boosted the balance from **$57,945 thousand** at the beginning of the period to **$308,470 thousand** at the end. Minor adjustments from foreign currency translation and purchase accounting also contributed to this change.  **[0001069183-24-000032_axon-20240331x10q.htm:19]** 

Why did Goodwill jump so prominently in Q1 2024?

The significant increase in **intangible assets, net** in Q1 2024 was primarily driven by the **acquisition of Fusus**, which added **developed technology and other intangible assets** to Axon’s balance sheet. This acquisition notably increased the **developed technology intangible assets** from **$12,840 thousand** to **$67,094 thousand (net)**, although the impact was partially offset by an amortization of **$3.0 million** during the quarter.  **[0001069183-24-000032_axon-20240331x10q.htm:3]** **[0001069183-24-000032_axon-20240331x10q.htm:19]** **[0001069183-24-000029_axon-20240506xex99d1.htm:19]** 

What caused the significant increase in Intangible assets in Q1 2024?

The surge in **cash and cash equivalents** in Q3 2024 was primarily driven by a strong performance in operating activities, which delivered **net cash provided by operating activities of $91,321 thousand**, bolstered by higher net income and adjustments for non-cash items such as stock-based compensation and improvements in working capital components. Additionally, positive **investing activities** contributed **$43,071 thousand** mainly from proceeds resulting from the maturity and sale of investments, while the impact from financing activities was minimal with a usage of **$(12,608) thousand**. A small but positive effect from exchange rate changes, adding **$75 thousand**, further supported the overall increase.  **[20241107LA51058:19]** **[0001069183-24-000061_axon-20240930.htm:59]** 

What led to the surge in Cash and Cash Equivalents in Q3 2024?

The **substantial rise in Total Assets** in Q3 2024 was driven by several factors. **Cash and Cash Equivalents** increased from **$598,545 thousand** to **$695,144 thousand**, and **Marketable Securities** rose from **$77,940 thousand** to **$151,560 thousand**. Additionally, there were higher **Accounts and Notes Receivable** (from **$412,961 thousand** to **$512,662 thousand**), increased **Contract Assets** (from **$287,232 thousand** to **$372,923 thousand**), and significant growth in both **Intangible Assets** (from **$19,539 thousand** to **$81,748 thousand**) and **Goodwill** (from **$57,945 thousand** to **$308,472 thousand**). Finally, **Strategic Investments** also contributed by rising from **$231,730 thousand** to **$387,905 thousand**.  **[0001069183-24-000061_axon-20240930.htm:4]** 

What factors drove the substantial rise in Total Assets in Q3 2024?

f55f203590260b6f1767117b2ac17d3e95720e23ec0dc5c142f609e31101bb04

Axon Enterprise Inc (AXON)

Financials