SCOTTSDALE, Ariz., Aug. 8, 2019 /PRNewswire/ -- Axon (Nasdaq: AAXN),
the global leader in connected public safety technologies, today
released the following quarterly update letter to shareholders.
Dear Shareholders,
In Q2, we delivered excellent progress on our long-term
strategic goals while also working through some operational
challenges in our TASER segment that resulted in revenue and EBITDA
below our expectations.
Unexpected short-term pressure on the TASER segment at
quarter-end was tied to an inventory shortfall relating to a
battery component supplier issue, as well as engineering actions we
took to improve the long-term cost structure of our TASER 7
cartridges. We discuss these below in more detail.
Key highlights since our last update include:
- Our three largest deals feature monthly software ARPUs at more
than double historic levels on our new Officer Safety Plan 7+ (OSP
7+), which is clearly resonating with customers.
- Axon Records passed acceptance testing with two major city law
enforcement agencies, which is a critical milestone where the
agency verifies that Axon Records is functional and meets the
agency's needs.
- Future contracted revenue surpassed $1
billion for the first time.
- Axon Cloud revenue grew 41% annually and 15% sequentially; and
annual recurring revenue grew 40% annually to $129 million.
- Bookings in our Software & Sensors segment set a new record
at $142 million, up 60% over last
year and 86% sequentially. Bookings were driven by strong customer
reception for the Officer Safety Plan (both OSP 7 and OSP 7+), our
new bundle composed of the TASER 7 platform, Axon Body 3, and
several software features including digital evidence management and
Axon Records, at a price of $149 to
$199 per officer per month over 60
months. We are thrilled to welcome Atlanta, Minneapolis and Baltimore City police
departments onto OSP 7+, and are in the process of signing several
more major agencies.
- Software and Sensors segment gross profit grew 45% year over
year, aided by steady user additions and sound execution, allowing
our body-worn camera and digital evidence management business to
become self-supporting.
Product launch updates
As you know, 2019 is a pivotal product launch year for Axon as
we ramp TASER 7, begin shipping Axon Body 3, and roll out Axon
Records to our launch customers.
TASER 7
TASER 7 is an important platform for us that introduces not only
a new weapon, but a new cartridge business model, a new training
program, and a new cloud-connected software model sold on a
subscription-only basis, providing a recurring cash flow stream.
Year over year, we have doubled the percentage of TASER device
orders tied to a subscription from 30% to 60% of total orders.
We continue to see strong customer interest in TASER 7 and
expect to begin selling in international markets next year.
Axon Body 3
We are thrilled to be pioneering a new category with Axon Body
3, our first body camera with real-time streaming directly over LTE
networks. Our current in-market camera, Axon Body 2, established us
as the market leader. And the beta version of Axon Body 3 is
already the best camera we have ever built.
In February, we began Axon Body 3 alpha testing with customers,
and in early June, customers began beta testing the device. Axon
Body 3 features better video, audio, usability, and durability than
Axon Body 2, and is receiving great customer feedback.
We have two key objectives in rolling out the next generation of
body cameras, which we believe will fundamentally improve
policing.
To start, we must ensure that our customers' current experience
remains as good, or better, even with a more advanced device, not
compromising any of the features that made Axon Body 2 the market
leader. In addition to designing highly capable imaging and audio
modules, we have ensured that the robust Axon Body 3 still has
full-shift-ready battery life and retains the simplicity of the
user interface.
Power management is one of the biggest engineering challenges
that we addressed in the device, which has more power-hungry
modules than ever before, including a full wireless suite with LTE,
Wi-Fi, and Bluetooth; our most advanced processor ever; a GPS chip;
an upgraded imaging module and multiple microphones. We were able
to add these capabilities while retaining up to 12 hours of battery
life under predicted usage patterns.
Second, we seek to drive new functionality that expands body
cameras into true smart sensors that can ultimately make policing
more efficient and effective. Axon Body 3 has been in research and
development for three years as our engineers have continuously
solved challenges in bringing the first product of its kind to
market.
We have successfully demonstrated improved core user
functionality, including improved evidence capture and offloading,
and have established a supply chain that achieves manufacturing
scalability. Physical integrity engineering is complete, meaning
that Axon Body 3 is waterproof and ruggedized for tactical
environments. In April, we achieved an important milestone when we
successfully demonstrated live-streaming of video.
The camera is passing our internal lab and field tests and we
are working closely with FirstNet, Built with AT&T, and
Verizon, who have been supportive as we bring a new connected
device category to market. We expect to begin shipping Axon Body 3
in Q3 2019 after the camera passes certifications from our wireless
carrier partners.
Axon Records
Axon Records is our groundbreaking new cloud-hosted incident
reporting system, which will revolutionize the way law enforcement
officers capture and document the details of any incident. Officers
can spend up to two-thirds of their shift writing reports, and the
records system software is the primary means through which
information is captured and disseminated to all the places it needs
to go, including the justice system and government agencies. Our
leadership in body cameras allows us to make body camera video the
heart of the incident record. Over the coming years, we intend to
leverage our network of smart sensors together with artificial
intelligence to automate the entire reporting process.
Axon Records has passed acceptance testing at two major city
police departments, both of which are in the process of end user
training and operational deployment. We have received positive user
feedback, with one early user rating Axon Records as "seven stars
on a scale of one to five." One agency is replacing their entire
records management system (RMS), and the other is replacing several
critical modules with Axon Records and has indicated that they
intend to migrate other modules over time.
Summary of Q2 2019 Results
- Revenue of $112 million
represents 13% year over year growth.
-
- Strong Software and Sensors segment revenue growth of 34% was
offset by TASER segment revenue that was flat year over year. We
discuss both in more detail below.
- Gross margin of 58.3% declined from 59.5% in Q1 2019, driven by
a decrease in TASER segment gross margins, also discussed
below.
- Operating expenses of $66.9
million reflect strong cost discipline.
-
- SG&A of $43.4 million and
R&D of $23.5 million each grew
approximately 1% sequentially.
- Operating expenses included a $1.3
million impairment charge that affected SG&A. Excluding
that charge, operating expenses declined sequentially.
- GAAP EPS was $0.01; Non-GAAP EPS
of $0.14 excludes non-cash
stock-based compensation expenses and an impairment charge.
- Adjusted EBITDA was $11.6
million.
- Cash and short term investments grew $7.4 million sequentially to $336 million. Axon's strong balance sheet, with
zero debt, provides us with the latitude to continue growing our
subscription contracts as a percentage of revenue.
Financial commentary by segment
TASER
|
Three Months
Ended
|
|
Change
|
|
June 30,
2019
|
|
March 31,
2019
|
|
June 30,
2018
|
|
QoQ
|
|
YoY
|
TASER
|
(in
thousands)
|
|
|
|
|
Net sales
|
$
|
60,572
|
|
|
$
|
65,391
|
|
|
$
|
60,624
|
|
|
(7.4)
|
%
|
|
(0.1)
|
%
|
Gross
margin
|
59.9
|
%
|
|
64.4
|
%
|
|
70.8
|
%
|
|
-450bp
|
|
|
-1090bp
|
|
- TASER revenue of $60.6 million
came in below our expectation.
-
- While we have made significant progress toward improving
long-term production yields and gross margins on our TASER 7
program, two factors caused us to be unable to meet demand for
approximately $6 million worth of
TASER 7 conducted energy weapons (CEWs) and cartridges at
quarter-end.
-
- We experienced a disruption in our supply chain when our
battery component supplier on the TASER 7 was unable to meet our
stringent quality standards as it scaled. We have since worked
closely with the supplier to help it scale its manufacturing
process and it is now producing at production volumes. As a result
of the supplier not being able to timely fulfill our production
needs, approximately $3 million of
forecasted TASER 7 sales shifted from Q2 2019 into Q3 2019.
- A design change involving a TASER 7 cartridge component led to
a shortage of cartridges and therefore lower-than-expected revenue
of approximately $3 million in the
quarter. This design change is part of a cost optimization program
that we expect will ultimately reduce per-cartridge material costs
by around 33% around the end of this year. We expect to fulfill
this cartridge demand over the remainder of 2019.
- TASER gross margin of 59.9% decreased sequentially from 64.4%
in Q1 2019. Segment gross margins reflect a strong mix of TASER 7
units, which is not yet a mature hardware program and therefore
carries higher gross costs.
-
- Gross margin reflects approximately $1.6
million in TASER 7 ramp-up and optimization costs related to
scrap, obsolete inventory, and temporarily higher gross labor
costs. The obsolete inventory charge was tied to the cartridge
design change described above.
- The incremental contribution margin on the TASER 7 program,
excluding fixed costs, was approximately 62% in the quarter.
- The sequential gross margin decline was generally not
influenced by pricing or trade-in credits, as CEW pricing remained
relatively flat compared with Q1 2019.
- Approximately 60% of all weapons sold in Q2 were on a recurring
payment plan. In the United
States, recurring payment plans accounted for 62% of new
TASER contracts, with TASER 7 contracts driving subscriptions. This
represents substantial progress on transitioning the TASER business
to a subscription model. One year ago, 30% of new TASER orders were
on a subscription.
Software & Sensors
|
Three Months
Ended
|
|
Change
|
|
June 30,
2019
|
|
March 31,
2019
|
|
June 30,
2018
|
|
QoQ
|
|
YoY
|
Software and
Sensors
|
(in
thousands)
|
|
|
|
|
Axon Cloud net
sales
|
$
|
31,822
|
|
|
$
|
27,631
|
|
|
$
|
22,505
|
|
|
15.2
|
%
|
|
41.4
|
%
|
Axon Cloud gross
margin
|
73.0
|
%
|
|
73.6
|
%
|
|
77.8
|
%
|
|
-60bp
|
|
|
-480bp
|
|
|
|
|
|
|
|
|
|
|
|
Sensors and Other net
sales
|
$
|
19,968
|
|
|
$
|
22,788
|
|
|
$
|
16,097
|
|
|
(12.4)
|
%
|
|
24.0
|
%
|
Sensors and Other
gross margin
|
30.1
|
%
|
|
28.4
|
%
|
|
16.7
|
%
|
|
170bp
|
|
|
1340bp
|
|
- Axon Cloud revenue of $31.8
million grew 41% year over year and 15% sequentially, driven
by customer additions in body-worn cameras and digital evidence
management, growth in Axon Fleet 2 users, and revenue contribution
from deployments on legacy Vievu contracts.
- Axon Cloud gross margin of 73.0% declined year over year and
sequentially due to added installation costs associated with Axon
Fleet 2, which is booked as a service cost. The software-only
revenue in this segment, which includes cloud storage, has
consistently carried a gross margin above 80%. Low-to-negative
margin on professional services for bringing customers online
causes fluctuations in the overall Axon Cloud gross margin.
Professional services revenue and costs negatively affected Axon
Cloud gross margin by roughly 800 basis points in the quarter.
- Sensors and Other revenue of $20
million grew 24% year over year. Revenue fell sequentially,
as expected, ahead of initial shipments of Axon Body 3.
- Sensors and Other gross margin of 30.1% showed improvement as
we exited a period of negative contribution from the acquisition of
Vievu.
Forward-Looking Performance Indicators
|
June 30,
2019
|
|
March 31,
2019
|
|
December 31,
2018
|
|
September 30,
2018
|
|
June 30,
2018
|
|
($ in
thousands)
|
Annual recurring
revenue (1)
|
$
|
129,452
|
|
|
$
|
122,276
|
|
|
$
|
108,496
|
|
|
$
|
101,618
|
|
|
$
|
92,711
|
|
Cumulative Axon
software seats booked
|
397,800
|
|
|
371,100
|
|
|
347,200
|
|
|
325,200
|
|
|
305,200
|
|
Software and Sensors
bookings
|
$
|
142,004
|
|
|
$
|
76,391
|
|
|
$
|
109,779
|
|
|
$
|
92,895
|
|
|
$
|
88,860
|
|
Total company future
contracted revenue
|
$
|
1,050,000
|
|
|
$
|
930,000
|
|
|
$
|
900,000
|
|
|
$
|
820,000
|
|
|
$
|
750,000
|
|
|
(1) Monthly recurring license,
integration, warranty, and storage revenue annualized.
|
- Annual recurring revenue grew 40% year over year to
$129 million, and reflects only that
portion of Axon's 397,800 cumulative booked seats that are online
and contributing to revenue.
- Record Software and Sensors bookings of $142 million reflect strong major agency adoption
for our highest revenue bundles.
- Total company future contracted revenue crossed $1 billion for the first time. The $1.05 billion shown is limited to revenue from
arrangements that meet the definition of a contract under Topic 606
as of June 30, 2019. We expect to
recognize between 15% to 20% of this balance over the next 12
months and generally expect the remainder to be recognized over the
following five to seven years, subject to risks related to delayed
deployments, budget appropriation or other contract cancellation
clauses.
Outlook
We remain constructive in our outlook and are reiterating our
full year 2019 guidance.
- We are reiterating our annual revenue outlook of $485 million to $495
million;
-
- We expect Q3 2019 revenue of $120
million to $125 million;
- We are reiterating annual Adjusted EBITDA guidance of
$80 million to $85 million, which represents 34% year-over-year
growth at the midpoint;
- We expect stock-based compensation expenses to be approximately
$35 million for the full year, which
is subject to change depending on our assessment of the probability
of attaining operational metrics for the CEO Performance Award and
XSU awards, and the expected timing of such attainment; and
- We expect a normalized tax rate of 20% to 25%, which can
fluctuate depending on geography of income and the effects of
discrete items, including changes in our stock price.
We are developing products that serve law enforcement, who are
present in some of the most significant moments in people's lives.
This means that ultimately our products serve the communities and
people whom police protect. We take our public mission seriously
and believe the business is well positioned to continue serving our
customers and communities, while creating value for our
shareholders over the long term.
Signed,
Rick Smith, CEO
Luke Larson, President
Jawad Ahsan, CFO
Quarterly conference call and Webcast
We will host our Q2 2019 earnings conference call on
August 8 at 2 p.m. PT /
5 p.m. ET.
The call will be available via live audio webcast and archived
replay on Axon's investor relations website at
https://investor.axon.com.
Statistical Definitions
Software & Sensors bookings are an indication of the
activity the Company is seeing relative to Software & Sensors
hardware, software and Axon Evidence. We consider bookings to be a
statistical measure defined as the sales price of orders (not
invoiced sales), including contractual optional periods we expect
to be exercised, net of cancellations, inclusive of renewals,
placed in the relevant fiscal period, regardless of when the
products or services ultimately will be provided. Most bookings
will be invoiced in subsequent periods.
Due to municipal government funding rules, in some cases certain
of the future period amounts included in bookings are subject to
budget appropriation or other contract cancellation clauses.
Although Axon has entered into contracts for the delivery of
products and services in the future and anticipates the contracts
will be fulfilled, if agencies do not exercise contractual options,
do not appropriate money in future year budgets or do enact a
cancellation clause, revenue associated with these bookings may not
ultimately be recognized, resulting in a future reduction to
bookings.
For more information relative to our revenue recognition
policies, please reference our SEC filings.
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, Non-GAAP Net Income, Non-GAAP Diluted
Earnings Per Share and 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 herein.
- 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 and pre-tax certain other items (described
below).
- Non-GAAP Net Income (Most comparable GAAP Measure: Net income)
- Net income excluding the costs of non-cash stock-based
compensation and excluding pre-tax certain other items, including,
but not limited to, net gain/loss/write-down/disposal/abandonment
of property, equipment and intangible assets; loss on impairment;
and costs related to business acquisitions. 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, intangible assets and
cash flows related to business acquisitions.
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.
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 network of devices, apps, and people that helps public
safety personnel become smarter and safer. With a mission of
protecting life, our technologies give customers the confidence,
focus and time they need to keep their communities safe. Our
products impact every aspect of a public safety officer's
day-to-day experience.
We work hard for those who put themselves in harm's way for all
of us. To date, there are more than 397,800 software seats booked
on the Axon network around the world and more than 220,000 lives
and countless dollars have been saved with the Axon network of
devices, apps and people. Learn more at www.axon.com or by calling
(800) 978-2737.
AT&T is a trademark of AT&T Intellectual Property,
Bluetooth is a trademark of the Bluetooth SIG, Inc., Facebook is a
trademark of Facebook, Inc., FirstNet is a trademark of the US
Department of Commerce, LTE is a trademark of the European
Telecommunications Standards Institute, Twitter is a trademark of
Twitter, Inc., Verizon is a trademark of Verizon Trademark Services
LLC, and Wi-Fi is a trademark of the Wi-Fi Alliance.
Axon, Axon Body 2, Axon Body 3, Axon Evidence, Axon Fleet,
TASER, TASER 7, Vievu, Protect Life and the Delta Logo are
trademarks of Axon Enterprise, Inc., some of which are registered
in the US and other countries. For more information, visit
www.axon.com/legal. All rights reserved.
Follow Axon here:
- Axon on Twitter: https://twitter.com/axon_us
- Axon on Facebook:
https://www.facebook.com/Axon.ProtectLife/
Forward-looking statements
These forward-looking statements 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; expectations
about customer behavior; statements concerning projections,
predictions, expectations, estimates or forecasts as to our
business, financial and operational results and future economic
performance; and 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 Form 10-K
for the year ended December 31, 2018.
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: customer purchase
behavior, including adoption of our software as a service delivery
model; the impact of product mix on projected gross margins; our
ability to manage our supply chain and avoid production delays,
shortages, and impacts to expected gross margins; changes in the
costs of product components and labor; defects in our products;
delayed cash collections and possible credit losses due to our
subscription model; exposure to international operational risks;
our ability to design, introduce and sell new products or features;
our ability to defend against litigation and protect our
intellectual property, and the resulting costs of this activity;
our exposure to cancellations of government contracts due to
appropriation clauses, exercise of a cancellation clause, or
non-exercise of contractually optional periods; loss of customer
data, a breach of security or an extended outage, including our
reliance on third party cloud-based storage providers; negative
media publicity regarding our products; changes in government
regulations in the U.S. and in foreign markets, especially related
to the classification of our product by the United States Bureau of
Alcohol, Tobacco, Firearms and Explosives and to evolving
regulations surrounding privacy and data protection; our ability to
integrate acquired businesses; our ability to attract and retain
key personnel; and counter-party risks relating to cash balances
held in excess of FDIC insurance 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 Annual Report on
Form 10-K 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 Exchange Act and Section
27A of the Securities Act. Readers can find them under the heading
"Risk Factors" in the Annual Report on Form 10-K and in the
Quarterly Report 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. 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 10-Q, 8-K and 10-K reports to the SEC.
Please visit https://investor.axon.com,
https://www.axon.com/press, www.twitter.com/axon_us and
https://www.facebook.com/Axon.ProtectLife/ where Axon discloses
information about the company, its financial information, and its
business.
For investor relations information please contact Andrea James via email at IR@axon.com.
CONTACT:
Investor Relations
Axon Enterprise, Inc.
IR@axon.com
AXON ENTERPRISE,
INC.
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
|
(in thousands,
except per share data)
|
|
|
Three Months
Ended
|
|
Six Months Ended
June 30,
|
|
June 30,
2019
|
|
March 31,
2019
|
|
June 30,
2018
|
|
2019
|
|
2018
|
Net sales from
products
|
$
|
80,391
|
|
|
$
|
88,089
|
|
|
$
|
76,721
|
|
|
$
|
168,480
|
|
|
$
|
157,695
|
|
Net sales from
services
|
31,971
|
|
|
27,721
|
|
|
22,505
|
|
|
59,692
|
|
|
42,746
|
|
Net sales
|
112,362
|
|
|
115,810
|
|
|
99,226
|
|
|
228,172
|
|
|
200,441
|
|
Cost of product
sales
|
38,220
|
|
|
39,600
|
|
|
31,087
|
|
|
77,820
|
|
|
63,521
|
|
Cost of service
sales
|
8,582
|
|
|
7,293
|
|
|
4,996
|
|
|
15,875
|
|
|
9,316
|
|
Cost of
sales
|
46,802
|
|
|
46,893
|
|
|
36,083
|
|
|
93,695
|
|
|
72,837
|
|
Gross
margin
|
65,560
|
|
|
68,917
|
|
|
63,143
|
|
|
134,477
|
|
|
127,604
|
|
Operating
expenses:
|
|
|
|
|
|
|
|
|
|
Sales, general and
administrative
|
43,362
|
|
|
42,892
|
|
|
39,343
|
|
|
86,254
|
|
|
75,102
|
|
Research and
development
|
23,493
|
|
|
23,354
|
|
|
18,501
|
|
|
46,847
|
|
|
33,620
|
|
Total operating
expenses
|
66,855
|
|
|
66,246
|
|
|
57,844
|
|
|
133,101
|
|
|
108,722
|
|
Income (loss) from
operations
|
(1,295)
|
|
|
2,671
|
|
|
5,299
|
|
|
1,376
|
|
|
18,882
|
|
Interest and other
income (expense), net
|
1,845
|
|
|
2,313
|
|
|
(295)
|
|
|
4,158
|
|
|
968
|
|
Income before
provision for income taxes
|
550
|
|
|
4,984
|
|
|
5,004
|
|
|
5,534
|
|
|
19,850
|
|
Provision for
(benefit from) income taxes
|
(188)
|
|
|
(1,435)
|
|
|
(3,481)
|
|
|
(1,623)
|
|
|
(1,561)
|
|
Net income
|
$
|
738
|
|
|
$
|
6,419
|
|
|
$
|
8,485
|
|
|
$
|
7,157
|
|
|
$
|
21,411
|
|
Net income per common
and common equivalent shares:
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
0.01
|
|
|
$
|
0.11
|
|
|
$
|
0.15
|
|
|
$
|
0.12
|
|
|
$
|
0.39
|
|
Diluted
|
$
|
0.01
|
|
|
$
|
0.11
|
|
|
$
|
0.15
|
|
|
$
|
0.12
|
|
|
$
|
0.38
|
|
Weighted average
number of common and common equivalent shares
outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
59,187
|
|
|
58,914
|
|
|
55,527
|
|
|
59,051
|
|
|
54,330
|
|
Diluted
|
60,000
|
|
|
59,751
|
|
|
57,054
|
|
|
59,876
|
|
|
55,892
|
|
AXON ENTERPRISE,
INC.
|
SEGMENT
REPORTING
|
(Unaudited)
|
(dollars in
thousands)
|
|
|
Three Months Ended
June 30, 2019
|
|
Three Months Ended
March 31, 2019
|
|
Three Months Ended
June 30, 2018
|
|
TASER
|
|
Software and
Sensors
|
|
Total
|
|
TASER
|
|
Software and
Sensors
|
|
Total
|
|
TASER
|
|
Software and
Sensors
|
|
Total
|
Net sales from
products (1)
|
$
|
60,423
|
|
|
$
|
19,968
|
|
|
$
|
80,391
|
|
|
$
|
65,301
|
|
|
$
|
22,788
|
|
|
$
|
88,089
|
|
|
$
|
60,624
|
|
|
$
|
16,097
|
|
|
$
|
76,721
|
|
Net sales from
services (2)
|
149
|
|
|
31,822
|
|
|
31,971
|
|
|
90
|
|
|
27,631
|
|
|
27,721
|
|
|
—
|
|
|
22,505
|
|
|
22,505
|
|
Net sales
|
60,572
|
|
|
51,790
|
|
|
112,362
|
|
|
65,391
|
|
|
50,419
|
|
|
115,810
|
|
|
60,624
|
|
|
38,602
|
|
|
99,226
|
|
Cost of product
sales
|
24,262
|
|
|
13,958
|
|
|
38,220
|
|
|
23,278
|
|
|
16,322
|
|
|
39,600
|
|
|
17,681
|
|
|
13,406
|
|
|
31,087
|
|
Cost of service
sales
|
—
|
|
|
8,582
|
|
|
8,582
|
|
|
—
|
|
|
7,293
|
|
|
7,293
|
|
|
—
|
|
|
4,996
|
|
|
4,996
|
|
Cost of
sales
|
24,262
|
|
|
22,540
|
|
|
46,802
|
|
|
23,278
|
|
|
23,615
|
|
|
46,893
|
|
|
17,681
|
|
|
18,402
|
|
|
36,083
|
|
Gross
margin
|
36,310
|
|
|
29,250
|
|
|
65,560
|
|
|
42,113
|
|
|
26,804
|
|
|
68,917
|
|
|
42,943
|
|
|
20,200
|
|
|
63,143
|
|
Gross margin
%
|
59.9
|
%
|
|
56.5
|
%
|
|
58.3
|
%
|
|
64.4
|
%
|
|
53.2
|
%
|
|
59.5
|
%
|
|
70.8
|
%
|
|
52.3
|
%
|
|
63.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
3,087
|
|
|
20,406
|
|
|
23,493
|
|
|
3,712
|
|
|
19,642
|
|
|
23,354
|
|
|
4,019
|
|
|
14,482
|
|
|
18,501
|
|
|
Six Months Ended
June 30, 2019
|
|
Six Months Ended
June 30, 2018
|
|
TASER
|
|
Software and
Sensors
|
|
Total
|
|
TASER
|
|
Software and
Sensors
|
|
Total
|
Net sales from
products (1)
|
$
|
125,724
|
|
|
$
|
42,756
|
|
|
$
|
168,480
|
|
|
$
|
124,148
|
|
|
$
|
33,547
|
|
|
$
|
157,695
|
|
Net sales from
services (2)
|
239
|
|
|
59,453
|
|
|
59,692
|
|
|
—
|
|
|
42,746
|
|
|
42,746
|
|
Net sales
|
125,963
|
|
|
102,209
|
|
|
228,172
|
|
|
124,148
|
|
|
76,293
|
|
|
200,441
|
|
Cost of product
sales
|
47,540
|
|
|
30,280
|
|
|
77,820
|
|
|
38,224
|
|
|
25,297
|
|
|
63,521
|
|
Cost of service
sales
|
—
|
|
|
15,875
|
|
|
15,875
|
|
|
—
|
|
|
9,316
|
|
|
9,316
|
|
Cost of
sales
|
47,540
|
|
|
46,155
|
|
|
93,695
|
|
|
38,224
|
|
|
34,613
|
|
|
72,837
|
|
Gross
margin
|
78,423
|
|
|
56,054
|
|
|
134,477
|
|
|
85,924
|
|
|
41,680
|
|
|
127,604
|
|
Gross margin
%
|
62.3
|
%
|
|
54.8
|
%
|
|
58.9
|
%
|
|
69.2
|
%
|
|
54.6
|
%
|
|
63.7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Research and
development
|
6,799
|
|
|
40,048
|
|
|
46,847
|
|
|
6,979
|
|
|
26,641
|
|
|
33,620
|
|
|
(1)
Software and Sensors "products" revenue consists of sensors,
including on-officer body 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, 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 revenue. TASER "services" revenue
similarly includes amounts for Axon Evidence and related
professional services.
|
AXON ENTERPRISE,
INC.
|
UNIT SALES
STATISTICS
|
(Unaudited)
|
Units in whole
numbers
|
|
|
Three Months Ended
June 30,
|
|
Six Months Ended
June 30,
|
|
2019
|
|
2018
|
|
Unit
Change
|
|
Percent
Change
|
|
2019
|
|
2018
|
|
Unit
Change
|
|
Percent
Change
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
TASER 7
|
8,135
|
|
|
—
|
|
|
8,135
|
|
|
*
|
|
|
16,970
|
|
|
—
|
|
|
16,970
|
|
|
*
|
|
TASER X26P
|
9,493
|
|
|
18,664
|
|
|
(9,171)
|
|
|
(49.1)
|
|
|
24,478
|
|
|
34,384
|
|
|
(9,906)
|
|
|
(28.8)
|
|
TASER X2
|
9,759
|
|
|
15,537
|
|
|
(5,778)
|
|
|
(37.2)
|
|
|
19,620
|
|
|
36,038
|
|
|
(16,418)
|
|
|
(45.6)
|
|
TASER Pulse and
Bolt
|
3,631
|
|
|
3,158
|
|
|
473
|
|
|
15.0
|
|
|
4,884
|
|
|
7,158
|
|
|
(2,274)
|
|
|
(31.8)
|
|
Cartridges
|
606,220
|
|
|
611,136
|
|
|
(4,916)
|
|
|
(0.8)
|
|
|
1,222,737
|
|
|
1,144,088
|
|
|
78,649
|
|
|
6.9
|
|
Axon Body
|
20,346
|
|
|
20,407
|
|
|
(61)
|
|
|
(0.3)
|
|
|
46,194
|
|
|
42,176
|
|
|
4,018
|
|
|
9.5
|
|
Axon Flex
|
3,508
|
|
|
3,281
|
|
|
227
|
|
|
6.9
|
|
|
7,099
|
|
|
6,974
|
|
|
125
|
|
|
1.8
|
|
Axon Fleet
|
2,441
|
|
|
2,079
|
|
|
362
|
|
|
17.4
|
|
|
4,176
|
|
|
3,936
|
|
|
240
|
|
|
6.1
|
|
Axon Dock
|
3,408
|
|
|
4,534
|
|
|
(1,126)
|
|
|
(24.8)
|
|
|
8,402
|
|
|
10,378
|
|
|
(1,976)
|
|
|
(19.0)
|
|
TASER Cam
|
1,716
|
|
|
1,491
|
|
|
225
|
|
|
15.1
|
|
|
3,457
|
|
|
5,019
|
|
|
(1,562)
|
|
|
(31.1)
|
|
AXON ENTERPRISE,
INC.
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES
|
(Unaudited)
|
Dollars in
thousands
|
|
|
Three Months
Ended
|
|
Six Months
Ended
|
|
June 30,
2019
|
|
March 31,
2019
|
|
June 30,
2018
|
|
June 30,
2019
|
|
June 30,
2018
|
EBITDA and
Adjusted EBITDA:
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
738
|
|
|
$
|
6,419
|
|
|
$
|
8,485
|
|
|
$
|
7,157
|
|
|
$
|
21,411
|
|
Depreciation and
amortization
|
2,687
|
|
|
2,800
|
|
|
2,750
|
|
|
5,487
|
|
|
5,161
|
|
Interest
expense
|
17
|
|
|
6
|
|
|
17
|
|
|
23
|
|
|
37
|
|
Investment interest
income
|
(1,630)
|
|
|
(2,003)
|
|
|
(595)
|
|
|
(3,633)
|
|
|
(670)
|
|
Provision for
(benefit from) income taxes
|
(188)
|
|
|
(1,435)
|
|
|
(3,481)
|
|
|
(1,623)
|
|
|
(1,561)
|
|
EBITDA
|
$
|
1,624
|
|
|
$
|
5,787
|
|
|
$
|
7,176
|
|
|
$
|
7,411
|
|
|
$
|
24,378
|
|
|
|
|
|
|
|
|
|
|
|
Adjustments:
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
$
|
8,627
|
|
|
$
|
7,905
|
|
|
$
|
4,954
|
|
|
$
|
16,532
|
|
|
$
|
9,047
|
|
Transaction costs and
adjustments related to business acquisition
|
—
|
|
|
—
|
|
|
1,382
|
|
|
—
|
|
|
1,382
|
|
Loss on disposal and
abandonment of intangible assets
|
—
|
|
|
18
|
|
|
54
|
|
|
18
|
|
|
54
|
|
Loss on disposal and
impairment of property and equipment, net
|
1,321
|
|
|
242
|
|
|
119
|
|
|
1,563
|
|
|
153
|
|
Adjusted
EBITDA
|
$
|
11,572
|
|
|
$
|
13,952
|
|
|
$
|
13,685
|
|
|
$
|
25,524
|
|
|
$
|
35,014
|
|
Net income as a
percentage of net sales
|
0.7
|
%
|
|
5.5
|
%
|
|
8.6
|
%
|
|
8.9
|
%
|
|
2.9
|
%
|
Adjusted EBITDA as
a percentage of net sales
|
10.3
|
%
|
|
12.0
|
%
|
|
13.8
|
%
|
|
11.2
|
%
|
|
17.5
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense:
|
|
|
|
|
|
|
|
|
Cost of product and
service sales
|
$
|
237
|
|
|
$
|
226
|
|
|
$
|
125
|
|
|
$
|
463
|
|
|
$
|
266
|
|
Sales, general and
administrative
|
4,941
|
|
|
4,681
|
|
|
2,731
|
|
|
9,622
|
|
|
5,035
|
|
Research and
development
|
3,449
|
|
|
2,998
|
|
|
2,098
|
|
|
6,447
|
|
|
3,746
|
|
Total
|
$
|
8,627
|
|
|
$
|
7,905
|
|
|
$
|
4,954
|
|
|
$
|
16,532
|
|
|
$
|
9,047
|
|
AXON ENTERPRISE,
INC.
|
RECONCILIATION OF
GAAP TO NON-GAAP FINANCIAL MEASURES - continued
|
(Unaudited)
|
Dollars in
thousands, except per-share amounts
|
|
|
Three Months
Ended
|
|
Six Months Ended
June 30,
|
|
June 30,
2019
|
|
March 31,
2019
|
|
June 30,
2018
|
|
2019
|
|
2018
|
Non-GAAP net
income:
|
|
|
|
|
|
|
|
|
|
GAAP net
income
|
$
|
738
|
|
|
$
|
6,419
|
|
|
$
|
8,485
|
|
|
$
|
7,157
|
|
|
$
|
21,411
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
8,627
|
|
|
7,905
|
|
|
4,954
|
|
|
16,532
|
|
|
9,047
|
|
Loss on disposal and
abandonment of intangible assets
|
—
|
|
|
18
|
|
|
54
|
|
|
18
|
|
|
54
|
|
Loss on disposal and
impairment of property and equipment, net
|
1,321
|
|
|
242
|
|
|
119
|
|
|
1,563
|
|
|
153
|
|
Transaction costs and
adjustments related to business acquisition
|
—
|
|
|
—
|
|
|
1,382
|
|
|
—
|
|
|
1,382
|
|
Income tax
effects
|
(2,517)
|
|
|
(2,016)
|
|
|
(1,580)
|
|
|
(4,583)
|
|
|
(2,581)
|
|
Income tax benefit of
CEO stock option exercise
|
—
|
|
|
—
|
|
|
(3,362)
|
|
|
—
|
|
|
(3,362)
|
|
Non-GAAP net
income
|
$
|
8,169
|
|
|
$
|
12,568
|
|
|
$
|
10,052
|
|
|
$
|
20,687
|
|
|
$
|
26,104
|
|
|
|
|
Three Months
Ended
|
|
Six Months Ended
June 30,
|
|
June 30,
2019
|
|
March 31,
2019
|
|
June 30,
2018
|
|
2019
|
|
2018
|
Non-GAAP diluted
earnings per share:
|
|
|
|
|
|
|
|
|
|
GAAP diluted earnings
per share
|
$
|
0.01
|
|
|
$
|
0.11
|
|
|
$
|
0.15
|
|
|
$
|
0.12
|
|
|
$
|
0.38
|
|
Non-GAAP
adjustments:
|
|
|
|
|
|
|
|
|
|
Stock-based
compensation expense
|
0.14
|
|
|
0.13
|
|
|
0.09
|
|
|
0.28
|
|
|
0.16
|
|
Loss on disposal and
abandonment of intangible assets
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
Loss on disposal and
impairment of property and equipment, net
|
0.02
|
|
|
—
|
|
|
—
|
|
|
0.03
|
|
|
—
|
|
Transaction costs and
adjustments related to business acquisition
|
—
|
|
|
—
|
|
|
0.02
|
|
|
—
|
|
|
0.02
|
|
Income tax
effects
|
(0.04)
|
|
|
(0.03)
|
|
|
(0.03)
|
|
|
(0.08)
|
|
|
(0.05)
|
|
Income tax benefit of
CEO stock option exercise
|
—
|
|
|
—
|
|
|
(0.06)
|
|
|
—
|
|
|
(0.06)
|
|
Non-GAAP diluted
earnings per share (1)
|
$
|
0.14
|
|
|
$
|
0.21
|
|
|
$
|
0.18
|
|
|
$
|
0.35
|
|
|
$
|
0.47
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
number of diluted common and common equivalent shares outstanding
(in thousands)
|
60,000
|
|
|
59,751
|
|
|
57,054
|
|
|
59,876
|
|
|
55,892
|
|
|
(1)
The per share calculations for GAAP net income,
Non-GAAP adjustments and Non-GAAP diluted earnings per share are
each computed independently. Per share amounts may not sum due to
rounding.
|
AXON ENTERPRISE,
INC.
|
CONDENSED
CONSOLIDATED BALANCE SHEETS
|
(in
thousands)
|
|
|
June 30,
2019
|
|
December 31,
2018
|
|
(Unaudited)
|
|
|
ASSETS
|
Current
Assets:
|
|
|
|
Cash and cash
equivalents
|
$
|
219,720
|
|
|
$
|
349,462
|
|
Short-term
investments
|
116,629
|
|
|
—
|
|
Accounts and notes
receivable, net
|
134,630
|
|
|
130,579
|
|
Contract assets,
net
|
26,648
|
|
|
13,960
|
|
Inventory
|
40,999
|
|
|
33,763
|
|
Prepaid expenses and
other current assets
|
36,429
|
|
|
30,391
|
|
Total current
assets
|
575,055
|
|
|
558,155
|
|
|
|
|
|
Property and
equipment, net
|
40,500
|
|
|
37,893
|
|
Deferred income tax
assets, net
|
20,658
|
|
|
19,347
|
|
Intangible assets,
net
|
14,424
|
|
|
15,935
|
|
Goodwill
|
24,969
|
|
|
24,981
|
|
Long-term notes
receivable, net of current portion
|
35,170
|
|
|
40,230
|
|
Other
assets
|
35,594
|
|
|
22,999
|
|
Total
assets
|
$
|
746,370
|
|
|
$
|
719,540
|
|
|
|
|
|
LIABILITIES AND
STOCKHOLDERS' EQUITY
|
Current
Liabilities:
|
|
|
|
Accounts
payable
|
$
|
9,064
|
|
|
$
|
15,164
|
|
Accrued
liabilities
|
34,011
|
|
|
41,092
|
|
Current portion of
deferred revenue
|
113,351
|
|
|
107,016
|
|
Customer
deposits
|
3,395
|
|
|
2,702
|
|
Other current
liabilities
|
3,852
|
|
|
37
|
|
Total current
liabilities
|
163,673
|
|
|
166,011
|
|
|
|
|
|
Deferred revenue, net
of current portion
|
74,586
|
|
|
74,417
|
|
Liability for
unrecognized tax benefits
|
3,462
|
|
|
2,849
|
|
Long-term deferred
compensation
|
3,755
|
|
|
3,235
|
|
Other long-term
liabilities
|
11,967
|
|
|
5,704
|
|
Total
liabilities
|
257,443
|
|
|
252,216
|
|
|
|
|
|
Stockholders'
Equity:
|
|
|
|
Preferred
stock
|
—
|
|
|
—
|
|
Common
stock
|
1
|
|
|
1
|
|
Additional paid-in
capital
|
467,904
|
|
|
453,400
|
|
Treasury
stock
|
(155,947)
|
|
|
(155,947)
|
|
Retained
earnings
|
178,540
|
|
|
171,383
|
|
Accumulated other
comprehensive loss
|
(1,571)
|
|
|
(1,513)
|
|
Total
stockholders' equity
|
488,927
|
|
|
467,324
|
|
Total liabilities
and stockholders' equity
|
$
|
746,370
|
|
|
$
|
719,540
|
|
AXON ENTERPRISE,
INC.
|
UNAUDITED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
|
(in
thousands)
|
|
|
Three Months
Ended
|
|
Six Months Ended
June 30,
|
|
June 30,
2019
|
|
March 31,
2019
|
|
June 30,
2018
|
|
2019
|
|
2018
|
Cash flows from
operating activities:
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
738
|
|
|
$
|
6,419
|
|
|
$
|
8,485
|
|
|
$
|
7,157
|
|
|
$
|
21,411
|
|
Adjustments to
reconcile net income to net cash provided by operating
activities:
|
|
|
|
|
|
|
|
|
|
Depreciation and
amortization
|
2,687
|
|
|
2,800
|
|
|
2,750
|
|
|
5,487
|
|
|
5,161
|
|
Loss on disposal and
abandonment of intangible assets
|
—
|
|
|
18
|
|
|
54
|
|
|
18
|
|
|
54
|
|
Loss (gain) on
disposal and impairment of property and equipment, net
|
1,321
|
|
|
242
|
|
|
119
|
|
|
1,563
|
|
|
153
|
|
Stock-based
compensation
|
8,627
|
|
|
7,905
|
|
|
4,954
|
|
|
16,532
|
|
|
9,047
|
|
Deferred income
taxes
|
(1,888)
|
|
|
577
|
|
|
(1,572)
|
|
|
(1,311)
|
|
|
(58)
|
|
Unrecognized tax
benefits
|
306
|
|
|
307
|
|
|
108
|
|
|
613
|
|
|
212
|
|
Other noncash,
net
|
926
|
|
|
896
|
|
|
17
|
|
|
1,822
|
|
|
30
|
|
Change in assets and
liabilities:
|
|
|
|
|
|
|
|
|
|
Accounts and notes
receivable and contract assets
|
10,988
|
|
|
(21,994)
|
|
|
(7,731)
|
|
|
(11,006)
|
|
|
(24,791)
|
|
Inventory
|
(3,579)
|
|
|
(3,936)
|
|
|
2,100
|
|
|
(7,515)
|
|
|
4,508
|
|
Prepaid expenses and
other assets
|
(2,609)
|
|
|
(3,152)
|
|
|
(5,727)
|
|
|
(5,761)
|
|
|
(7,429)
|
|
Accounts payable,
accrued liabilities and other liabilities
|
(9,468)
|
|
|
(7,284)
|
|
|
(9,437)
|
|
|
(16,752)
|
|
|
(2,688)
|
|
Deferred
revenue
|
3,345
|
|
|
3,232
|
|
|
3,942
|
|
|
6,577
|
|
|
10,496
|
|
Net cash provided by
(used in) operating activities
|
11,394
|
|
|
(13,970)
|
|
|
(1,938)
|
|
|
(2,576)
|
|
|
16,106
|
|
Cash flows from
investing activities:
|
|
|
|
|
|
|
|
|
|
Purchases of
investments
|
(36,670)
|
|
|
(105,322)
|
|
|
(3,529)
|
|
|
(141,992)
|
|
|
(4,331)
|
|
Proceeds from call /
maturity of investments
|
25,319
|
|
|
—
|
|
|
3,871
|
|
|
25,319
|
|
|
7,038
|
|
Purchases of property
and equipment
|
(2,590)
|
|
|
(5,271)
|
|
|
(3,602)
|
|
|
(7,861)
|
|
|
(4,665)
|
|
Purchases of
intangible assets
|
(182)
|
|
|
(162)
|
|
|
(220)
|
|
|
(344)
|
|
|
(254)
|
|
Business
acquisitions, net of cash acquired
|
—
|
|
|
—
|
|
|
(5,014)
|
|
|
—
|
|
|
(5,014)
|
|
Net cash used in
investing activities
|
(14,123)
|
|
|
(110,755)
|
|
|
(8,494)
|
|
|
(124,878)
|
|
|
(7,226)
|
|
Cash flows from
financing activities:
|
|
|
|
|
|
|
|
|
|
Net proceeds from
equity offering
|
—
|
|
|
—
|
|
|
233,993
|
|
|
—
|
|
|
233,993
|
|
Proceeds from options
exercised
|
4
|
|
|
100
|
|
|
230
|
|
|
104
|
|
|
586
|
|
Income and payroll
tax payments for net-settled stock awards
|
(873)
|
|
|
(1,259)
|
|
|
(7,030)
|
|
|
(2,132)
|
|
|
(10,807)
|
|
Payment of contingent
consideration for business acquisitions
|
—
|
|
|
—
|
|
|
(575)
|
|
|
—
|
|
|
(575)
|
|
Net cash provided by
(used in) financing activities
|
(869)
|
|
|
(1,159)
|
|
|
226,618
|
|
|
(2,028)
|
|
|
223,197
|
|
Effect of exchange
rate changes on cash and cash equivalents
|
(319)
|
|
|
67
|
|
|
(1,007)
|
|
|
(252)
|
|
|
(538)
|
|
Net increase
(decrease) in cash and cash equivalents and restricted
cash
|
(3,917)
|
|
|
(125,817)
|
|
|
215,179
|
|
|
(129,734)
|
|
|
231,539
|
|
Cash and cash
equivalents, beginning of period
|
225,210
|
|
|
351,027
|
|
|
94,798
|
|
|
351,027
|
|
|
78,438
|
|
Cash and cash
equivalents, end of period
|
$
|
221,293
|
|
|
$
|
225,210
|
|
|
$
|
309,977
|
|
|
$
|
221,293
|
|
|
$
|
309,977
|
|
AXON ENTERPRISE,
INC.
|
SUPPLEMENTAL CASH
FLOW INFORMATION
|
(Unaudited)
|
(in
thousands)
|
|
|
Three Months
Ended
|
|
Six Months Ended
June 30,
|
|
June 30,
2019
|
|
March 31,
2019
|
|
June 30,
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
219,720
|
|
|
$
|
223,642
|
|
|
$
|
307,507
|
|
|
$
|
219,720
|
|
|
$
|
307,507
|
|
Restricted
cash
|
1,573
|
|
|
1,568
|
|
|
2,470
|
|
|
1,573
|
|
|
2,470
|
|
Cash, cash
equivalents and restricted cash, end of period
|
$
|
221,292
|
|
|
$
|
225,210
|
|
|
$
|
309,977
|
|
|
$
|
221,292
|
|
|
$
|
309,977
|
|
|
|
|
Three Months
Ended
|
|
Six Months Ended
June 30,
|
|
June 30,
2019
|
|
March 31,
2019
|
|
June 30,
2018
|
|
2019
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by
(used in) operating activities
|
$
|
11,394
|
|
|
$
|
(13,970)
|
|
|
$
|
(1,938)
|
|
|
$
|
(2,576)
|
|
|
$
|
16,106
|
|
Purchases of property
and equipment
|
(2,590)
|
|
|
(5,271)
|
|
|
(3,602)
|
|
|
(7,861)
|
|
|
(4,665)
|
|
Purchases of
intangible assets
|
(182)
|
|
|
(162)
|
|
|
(220)
|
|
|
(344)
|
|
|
(254)
|
|
Cash flows related to
business acquisitions
|
—
|
|
|
—
|
|
|
(5,014)
|
|
|
—
|
|
|
(5,014)
|
|
Free cash flow
(deficit), a non-GAAP measure
|
$
|
8,622
|
|
|
$
|
(19,403)
|
|
|
$
|
(10,774)
|
|
|
$
|
(10,781)
|
|
|
$
|
6,173
|
|
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SOURCE Axon