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Axon Enterprise (AXON) Q2 Earnings Top Estimates, '24 View Raised
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Axon Enterprise, Inc. (AXON - Free Report) reported second-quarter 2024 adjusted earnings of $1.20 per share, which surpassed the Zacks Consensus Estimate of $1.06. The bottom line increased 9.1% year over year despite a significant rise in the cost of sales.
Total revenues of $504.1 million surpassed the consensus estimate of $477 million and increased 34.6% year over year. The top line benefited from strong demand for TASER and body camera products. Growth in TASER and Sensors revenues with increased adoption of premium software offerings augmented the top-line results.
Segmental Details
Software & Sensors: Within this segment, Axon’s Cloud and Services revenues rose 46.8% to $194.7 million. The uptick was driven by increased adoption of software applications from both new and existing customers, real-time operations and productivity software. Axon Cloud software growth was primarily driven by Axon Evidence. Axon Cloud’s gross margin expanded to 72.4% from 69.7% in the year-ago period, driven by reduced professional services costs related to the installation of Axon Fleet hardware.
Sensors & Other revenues climbed 28.4% to $112.4 million, driven by increased demand for Axon Body 4, partially offset by lower Axon Fleet revenues. The gross margin declined to 38.9% from 52.9% in the year-ago period due to manufacturing overhead reallocations made in the year-ago quarter and inventory reserve charges associated with legacy products.
TASER: The segment’s revenues jumped 27.6% year over year to $197 million, driven by growth in Taser devices and cartridges, associated with rising volumes of TASER 10, Axon Evidence & Cloud services and Virtual Reality training. The gross margin declined to 60.4% from 60.5% in the year-ago period due to increased stock-based compensation expenses.
Axon Enterprise, Inc Price, Consensus and EPS Surprise
Axon Enterprise’s cost of sales increased 40.6% year over year to $200.4 million. Selling, general and administrative expenses increased 41.3% year over year to $169.4 million.
Total operating expenses climbed 41.2% year over year to $270.9 million. The gross margin deteriorated to 60.3% from 62.0% in the year-ago period.
Balance Sheet & Cash Flow
At the end of the second quarter, Axon Enterprise had cash and cash equivalents of $566.5 million compared with $598.5 million in December 2023 end. Long-term lease liabilities totaled $41.7 million compared with $33.6 million in 2023 end.
In the first six months of 2024, the company generated net cash of $66.8 million from operating activities against $13.7 million cash spent in the year-ago period.
Adjusted free cash flow was $49.2 million in the first six months of the year against $26.2 million cash outflow in the prior-year period.
Outlook
For 2024, Axon Enterprise expects revenues to be in the range of $2.00-$2.05 billion compared with $1.94-$1.99 billion guided earlier. The metric indicates approximately 29.5% year-over-year growth at the midpoint. Adjusted EBITDA is expected to be approximately $460-$475 million, implying an adjusted EBITDA margin of 23.1%. This represents growth from its previous guided range of $430-$445 million.
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 to be in the range of $355-$370 million.
Zacks Rank & Other Stocks to Consider
AXON currently carries a Zacks Rank #2 (Buy). Some other top-ranked companies from the Industrial Products sector have been discussed below:
It has a trailing four-quarter average earnings surprise of 10.3%.
The Zacks Consensus Estimate for ALLE’s 2024 earnings has increased 1.1% in the past 60 days.
Flowserve Corporation (FLS - Free Report) currently carries a Zacks Rank of 2. FLS delivered a trailing four-quarter average earnings surprise of 18.2%.
In the past 60 days, the consensus estimate for Flowserve’s 2024 earnings has increased 3%.
AptarGroup, Inc. (ATR - Free Report) presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 7.2%.
In the past 60 days, the Zacks Consensus Estimate for ATR’s 2024 earnings has remained stable.
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Axon Enterprise (AXON) Q2 Earnings Top Estimates, '24 View Raised
Axon Enterprise, Inc. (AXON - Free Report) reported second-quarter 2024 adjusted earnings of $1.20 per share, which surpassed the Zacks Consensus Estimate of $1.06. The bottom line increased 9.1% year over year despite a significant rise in the cost of sales.
Total revenues of $504.1 million surpassed the consensus estimate of $477 million and increased 34.6% year over year. The top line benefited from strong demand for TASER and body camera products. Growth in TASER and Sensors revenues with increased adoption of premium software offerings augmented the top-line results.
Segmental Details
Software & Sensors: Within this segment, Axon’s Cloud and Services revenues rose 46.8% to $194.7 million. The uptick was driven by increased adoption of software applications from both new and existing customers, real-time operations and productivity software. Axon Cloud software growth was primarily driven by Axon Evidence. Axon Cloud’s gross margin expanded to 72.4% from 69.7% in the year-ago period, driven by reduced professional services costs related to the installation of Axon Fleet hardware.
Sensors & Other revenues climbed 28.4% to $112.4 million, driven by increased demand for Axon Body 4, partially offset by lower Axon Fleet revenues. The gross margin declined to 38.9% from 52.9% in the year-ago period due to manufacturing overhead reallocations made in the year-ago quarter and inventory reserve charges associated with legacy products.
TASER: The segment’s revenues jumped 27.6% year over year to $197 million, driven by growth in Taser devices and cartridges, associated with rising volumes of TASER 10, Axon Evidence & Cloud services and Virtual Reality training. The gross margin declined to 60.4% from 60.5% in the year-ago period due to increased stock-based compensation expenses.
Axon Enterprise, Inc Price, Consensus and EPS Surprise
Axon Enterprise, Inc price-consensus-eps-surprise-chart | Axon Enterprise, Inc Quote
Margin Profile
Axon Enterprise’s cost of sales increased 40.6% year over year to $200.4 million. Selling, general and administrative expenses increased 41.3% year over year to $169.4 million.
Total operating expenses climbed 41.2% year over year to $270.9 million. The gross margin deteriorated to 60.3% from 62.0% in the year-ago period.
Balance Sheet & Cash Flow
At the end of the second quarter, Axon Enterprise had cash and cash equivalents of $566.5 million compared with $598.5 million in December 2023 end. Long-term lease liabilities totaled $41.7 million compared with $33.6 million in 2023 end.
In the first six months of 2024, the company generated net cash of $66.8 million from operating activities against $13.7 million cash spent in the year-ago period.
Adjusted free cash flow was $49.2 million in the first six months of the year against $26.2 million cash outflow in the prior-year period.
Outlook
For 2024, Axon Enterprise expects revenues to be in the range of $2.00-$2.05 billion compared with $1.94-$1.99 billion guided earlier. The metric indicates approximately 29.5% year-over-year growth at the midpoint. Adjusted EBITDA is expected to be approximately $460-$475 million, implying an adjusted EBITDA margin of 23.1%. This represents growth from its previous guided range of $430-$445 million.
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 to be in the range of $355-$370 million.
Zacks Rank & Other Stocks to Consider
AXON currently carries a Zacks Rank #2 (Buy). Some other top-ranked companies from the Industrial Products sector have been discussed below:
Allegion plc (ALLE - Free Report) presently carries a Zacks Rank of 2. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
It has a trailing four-quarter average earnings surprise of 10.3%.
The Zacks Consensus Estimate for ALLE’s 2024 earnings has increased 1.1% in the past 60 days.
Flowserve Corporation (FLS - Free Report) currently carries a Zacks Rank of 2. FLS delivered a trailing four-quarter average earnings surprise of 18.2%.
In the past 60 days, the consensus estimate for Flowserve’s 2024 earnings has increased 3%.
AptarGroup, Inc. (ATR - Free Report) presently carries a Zacks Rank of 2. The company delivered a trailing four-quarter average earnings surprise of 7.2%.
In the past 60 days, the Zacks Consensus Estimate for ATR’s 2024 earnings has remained stable.