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Axon Enterprise (AXON) Q1 Earnings & Revenues Top Estimates
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Axon Enterprise, Inc. (AXON - Free Report) reported first-quarter 2024 adjusted earnings of $1.15 per share, which surpassed the Zacks Consensus Estimate of 97 cents. The bottom line increased 30.7% year over year despite a significant rise in the cost of sales.
Total revenues of $460.7 million outperformed the Zacks Consensus Estimate of $438 million and increased 34.3% year over year. The top line benefited from continued strength in Axon Cloud & Services, increasing adoption of TASER 10 driving growth in TASER devices and cartridges, and the adoption of Axon Body 4.
Total operating expenses climbed 30% year over year to $243.8 million. The gross margin declined to 56.4% from 59.5% in the year-ago period.
Segmental Details in Q1
Software & Sensors: Within this segment, Axon’s Cloud and Services revenues rose 51.5% to $176.5 million. The uptick was driven by user growth and increasing adoption of premium add-on features related to Axon Evidence, real-time operations and productivity software. Axon Cloud’s gross margin deteriorated to 72.8% from 73.2% in the year-ago period due to increased stock-based compensation expense related to vesting events from a one-time enhanced equity compensation program and amortization expense of acquired intangible assets.
Sensors & Other revenues climbed 14.3% to $105.5 million driven by increased demand for Axon Body cameras and accessories. The gross margin improved to 38.7% from 38.2% in the year-ago period supported by improvement from manufacturing overhead reallocations made in the second quarter of 2023.
TASER: The segment’s revenues jumped 33.1% year over year to $178.7 million, driven by growth in professional devices and cartridges, associated with rising volumes of TASER 10 and Evidence & Cloud services, supported by increased connected devices in the field and growing adoption of VR products.
Axon Enterprise, Inc Price, Consensus and EPS Surprise
At the end of the first quarter, Axon had cash and cash equivalents of $403.9 million compared with $598.5 million in December 2023 end. Long-term lease liabilities totaled $32.5 million compared with $33.6 million in 2023 end.
In the first three months of 2024, AXON, currently carrying a Zacks Rank #2 (Buy), spent net cash of $15.9 million on operating activities compared with $56.3 million cash spent a year ago. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Adjusted free cash outflow was $26.1 million in the first three months of 2024 compared with $60.1 million cash outflow in the prior year.
Outlook
For 2024, Axon Enterprise expects revenues in the range of $1.94-$1.99 billion, indicating approximately 26% year-over-year growth at the midpoint. Adjusted EBITDA is expected to be approximately $430-$445 million with a continued margin expansion from 2023.
The company expects capital expenditures to be between $80 million and $95 million. This includes investments in TASER 10 automation and capacity expansion. It anticipates stock-based compensation expenses in the range of $215-$230 million for the year.
Performance of Other Industrial Companies
IDEX Corporation’s (IEX - Free Report) second-quarter 2024 adjusted earnings of $1.88 per share surpassed the Zacks Consensus Estimate of $1.75. On a year-over-year basis, the bottom line declined approximately 10.1%.
IDEX’s net sales of $800.5 million underperformed the consensus estimate of $805 million. The top line also decreased 5.3% year over year.
A. O. Smith Corporation’s (AOS - Free Report) second-quarter 2024 adjusted earnings of $1.00 per share surpassed the Zacks Consensus Estimate of 99 cents. The bottom line increased 6% on a year-over-year basis.
Net sales of $978.8 million missed the consensus estimate of $995 million. However, the top line inched up 1% year over year, driven by strong demand for commercial water heaters in North America.
W.W. Grainger, Inc. (GWW - Free Report) has reported earnings per share of $9.62 in second-quarter 2024, beating the Zacks Consensus Estimate of $9.58. The bottom line improved 0.1% year over year.
Grainger’s quarterly revenues rose 3.5% year over year to $4.24 billion. The top line missed the consensus estimate of $4.27 billion.
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Axon Enterprise (AXON) Q1 Earnings & Revenues Top Estimates
Axon Enterprise, Inc. (AXON - Free Report) reported first-quarter 2024 adjusted earnings of $1.15 per share, which surpassed the Zacks Consensus Estimate of 97 cents. The bottom line increased 30.7% year over year despite a significant rise in the cost of sales.
Total revenues of $460.7 million outperformed the Zacks Consensus Estimate of $438 million and increased 34.3% year over year. The top line benefited from continued strength in Axon Cloud & Services, increasing adoption of TASER 10 driving growth in TASER devices and cartridges, and the adoption of Axon Body 4.
Total operating expenses climbed 30% year over year to $243.8 million. The gross margin declined to 56.4% from 59.5% in the year-ago period.
Segmental Details in Q1
Software & Sensors: Within this segment, Axon’s Cloud and Services revenues rose 51.5% to $176.5 million. The uptick was driven by user growth and increasing adoption of premium add-on features related to Axon Evidence, real-time operations and productivity software. Axon Cloud’s gross margin deteriorated to 72.8% from 73.2% in the year-ago period due to increased stock-based compensation expense related to vesting events from a one-time enhanced equity compensation program and amortization expense of acquired intangible assets.
Sensors & Other revenues climbed 14.3% to $105.5 million driven by increased demand for Axon Body cameras and accessories. The gross margin improved to 38.7% from 38.2% in the year-ago period supported by improvement from manufacturing overhead reallocations made in the second quarter of 2023.
TASER: The segment’s revenues jumped 33.1% year over year to $178.7 million, driven by growth in professional devices and cartridges, associated with rising volumes of TASER 10 and Evidence & Cloud services, supported by increased connected devices in the field and growing adoption of VR products.
Axon Enterprise, Inc Price, Consensus and EPS Surprise
Axon Enterprise, Inc price-consensus-eps-surprise-chart | Axon Enterprise, Inc Quote
Balance Sheet & Cash Flow
At the end of the first quarter, Axon had cash and cash equivalents of $403.9 million compared with $598.5 million in December 2023 end. Long-term lease liabilities totaled $32.5 million compared with $33.6 million in 2023 end.
In the first three months of 2024, AXON, currently carrying a Zacks Rank #2 (Buy), spent net cash of $15.9 million on operating activities compared with $56.3 million cash spent a year ago. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Adjusted free cash outflow was $26.1 million in the first three months of 2024 compared with $60.1 million cash outflow in the prior year.
Outlook
For 2024, Axon Enterprise expects revenues in the range of $1.94-$1.99 billion, indicating approximately 26% year-over-year growth at the midpoint. Adjusted EBITDA is expected to be approximately $430-$445 million with a continued margin expansion from 2023.
The company expects capital expenditures to be between $80 million and $95 million. This includes investments in TASER 10 automation and capacity expansion. It anticipates stock-based compensation expenses in the range of $215-$230 million for the year.
Performance of Other Industrial Companies
IDEX Corporation’s (IEX - Free Report) second-quarter 2024 adjusted earnings of $1.88 per share surpassed the Zacks Consensus Estimate of $1.75. On a year-over-year basis, the bottom line declined approximately 10.1%.
IDEX’s net sales of $800.5 million underperformed the consensus estimate of $805 million. The top line also decreased 5.3% year over year.
A. O. Smith Corporation’s (AOS - Free Report) second-quarter 2024 adjusted earnings of $1.00 per share surpassed the Zacks Consensus Estimate of 99 cents. The bottom line increased 6% on a year-over-year basis.
Net sales of $978.8 million missed the consensus estimate of $995 million. However, the top line inched up 1% year over year, driven by strong demand for commercial water heaters in North America.
W.W. Grainger, Inc. (GWW - Free Report) has reported earnings per share of $9.62 in second-quarter 2024, beating the Zacks Consensus Estimate of $9.58. The bottom line improved 0.1% year over year.
Grainger’s quarterly revenues rose 3.5% year over year to $4.24 billion. The top line missed the consensus estimate of $4.27 billion.