Axon reports Q1 2025 revenue of $604 million, up 31% year over year
- Revenue grew 31% YoY to $604 million, marking 13th consecutive quarter of 25%+ growth
- Software & Services revenue increased 39% YoY to $263 million
- Annual Recurring Revenue grew 34% YoY to $1.1 billion with strong 123% net revenue retention
- Raised full year revenue guidance to $2.60-2.70 billion
- Strong gross margin of 60.6%, up 440 basis points YoY
- Net income of $88 million with 14.6% margin
- Healthy cash position with $2.2 billion in cash and investments
- Operating loss of $9 million due to increased stock-based compensation expense
- Connected Devices adjusted gross margin decreased to 52.8% from 54.1% YoY
Insights
Axon delivered exceptional Q1 results with 31% revenue growth, 42% EBITDA growth, and raised full-year guidance, while expanding its ecosystem with AI and vehicle intelligence products.
Axon reported $604 million in Q1 2025 revenue, growing 31% year-over-year and marking its 13th consecutive quarter exceeding 25% growth. The company demonstrated robust profitability with $88 million in net income (14.6% margin) and $155 million in Adjusted EBITDA (25.7% margin), the latter growing 42% year-over-year.
The results highlight Axon's successful transition toward a software-centric business model. Software & Services revenue grew 39% to $263 million with a 77.7% adjusted gross margin, significantly outpacing Connected Devices revenue growth of 26% and its 52.8% adjusted gross margin. This favorable mix shift is driving overall margin expansion.
Annual Recurring Revenue (ARR) reached $1.1 billion, growing 34% year-over-year, while net revenue retention remained strong at 123%, indicating existing customers are expanding their Axon deployments. Future contracted bookings increased 41% to $9.9 billion, providing exceptional revenue visibility.
The company introduced two major innovations: Axon Vehicle Intelligence (including Outpost and Lightpost camera systems) and Axon Assistant (an AI voice-enabled tool built into body cameras). These additions expand Axon's ecosystem and addressable market while potentially creating new revenue streams.
Management raised full-year 2025 revenue guidance to $2.60-$2.70 billion (from $2.55-$2.65 billion), representing approximately 27% growth at the midpoint. Adjusted EBITDA guidance increased to $650-$675 million, maintaining the 25% target margin.
Axon's balance sheet remains solid with $2.2 billion in cash and investments against $2.0 billion in debt, resulting in a net cash position of $171 million (up $61 million sequentially). The strong financial position supports continued investment in product innovation and potential strategic acquisitions.
- Software & Services revenue grows
39% to$263 million - Annual recurring revenue grows
34% to$1.1 billion - Net income of
$88 million $115 million $155 million - Raises full year revenue outlook to a range of
$2.60 billion $2.70 billion $2.55 billion $2.65
Fellow shareholders,
Axon delivered a strong start to 2025, achieving record quarterly revenue while maintaining healthy margins and reinforcing our foundation for long-term growth through continued product innovation and a strengthened balance sheet. First quarter revenue reached
Our performance was led by Software & Services, which generated
Connected Devices revenue totaled
Strong alignment with our customers, expanding vertical applications and sustained product innovation underpin Axon's increased outlook for the remainder of the year. For full year 2025, we now expect revenue between
We highlight recent product innovations, financial results and provide more detail on our updated guidance for 2025 in the sections that follow.
Select Highlights
Axon Week 2025
In April, we hosted our tenth annual user conference, Axon Week 2025, where we outlined our vision for the future of public safety technology. Attendance at this year's event exceeded 2,500 participants, more than doubling over the past two years and underscoring the growing strength of our customer relationships. Across nearly 90 breakout sessions and daily keynotes, we highlighted innovations designed to meet the evolving challenges faced by public safety professionals.
This year's event also marked a major milestone with one of our most ambitious product launches to date: the introduction of Axon Vehicle Intelligence—with Axon Outpost and Axon Lightpost—and the unveiling of Axon Assistant, an AI voice-enabled companion built into Axon Body 4. These additions meaningfully expand our product portfolio and enhance our ability to support customers across public safety. In parallel, we broadened our partner ecosystem through new technology integrations and launched "Works With Axon," a certified third-party partner program.
"These aren't just product and capability launches—it's a blueprint for the future of public safety" — Rick Smith, Axon Founder and CEO
Product Highlights
Axon Vehicle Intelligence
Axon Outpost and Axon Lightpost introduce expanded video and automatic license plate reading (ALPR) capabilities for public safety, delivering actionable intelligence to the field through license plate recognition, live-streaming, real-time alerts and innovative form factors that leverage simplified or existing infrastructure. Together with Axon Fleet 3 and Axon Fusus, these systems form the foundation of Axon Vehicle Intelligence—a next-generation advancement to our real-time operations platform that moves beyond traditional ALPR to provide deeper insights, including vehicle make, color, visible damage and other unique identifying features.
To provide Axon Vehicle Intelligence users with greater flexibility and unmatched optionality, we also introduced Works With Axon, a certified third-party camera partner program that enables seamless integrations with self-service onboarding and compatibility assurance. Within Axon Vehicle Intelligence, Works With Axon-certified cameras will appear on agency maps and integrate into real-time workflows, operating like and alongside other Axon devices within the Axon ecosystem.
Axon Outpost is a smart fixed camera solution with on-device processing automatic license plate reader (ALPR) technology and live-streaming designed for high-traffic and hard-to-reach areas.
Axon Lightpost was developed in partnership with Ubicquia, to turn existing streetlights into smart public safety nodes—no new poles or infrastructure required.
"We built Axon Vehicle Intelligence not just to help solve crimes faster, but to do it the right way. With privacy built in. With purpose behind every alert. These are tools that help you make the stop, close the case and bring everyone home safe." — Rick Smith, Axon Founder and CEO
Axon Assistant
Building on the success of Draft One and accelerating momentum behind our AI Era Plan, we introduced Axon Assistant, a voice-activated AI solution embedded within Axon Body 4. Axon Assistant is currently in early access and will launch this year with three initial skills:
- Real-Time Translation transforms the body camera into a live translator, supporting over 50 languages at launch, to enable clear communication during traffic stops, calls for service and other multilingual interactions.
- General Q&A brings real-time internet access to the field, allowing officers to retrieve information without leaving the scene or diverting their focus.
- Voice-Enabled Policy Chat provides instant, reliable answers to agency policy questions—complete with citations—empowering officers to make informed decisions quickly and with confidence.
Axon Assistant will continue to add skills for subscribing customers alongside and within our AI Era Plan, which now includes Axon Assistant, Auto-Transcribe, Draft One, Unlimited Smart Detection and Policy Chat. Additional Axon Assistant skills, such as license plate lookup, weather updates and traffic information, are expected to launch later in 2025.
A Public and Private Safety Network
We believe our mission to protect life requires solutions that extend beyond what public safety agencies can achieve alone. Through Axon Fusus, we began enabling secure video sharing between private enterprises and their local agencies. We are further expanding this network through newly announced integrations with Ring and Citizen, empowering community members to participate more directly in community safety—with privacy and security built in.
Ring, with millions of active devices globally, brings scale exponentially greater than traditional public safety infrastructure. When available through Axon Community Request within Axon Evidence, Ring users will have the option to securely and privately share video footage with law enforcement to support incident response—a fully voluntary tool that respects user control.
Through integration with Citizen, a leading public safety app with millions of active users, agencies will be able to access public alerts and user-shared video feeds directly within Axon Fusus, expanding real-time visibility, particularly in areas without extensive public infrastructure.
Together, these partnerships lay the foundation for a connected public-private safety network—creating new pathways for faster responses, deeper community engagement, and a safer, more resilient future.
"This collaboration with Axon ushers in a new era of privacy-first cooperation between law enforcement and the people they serve—where public safety is not just something that happens to communities, but with them. We're committed to maintaining user control and helping people play an active role in keeping their neighborhoods safe." — Jamie Siminoff, Ring CEO.
Q1 2025 Summary Results
Quarterly revenue of
Total company gross margin of
Operating loss of
- COGS of
$238 million 39% of revenue, included$13 million - SG&A expense of
$224 million 37% of revenue, included$71 million - R&D expense of
$151 million 25% of revenue, included$56 million
Net income of
Adjusted EBITDA of
Operating cash flow of
As of March 31, 2025, Axon had
________________________________ |
1 We provide additional transparency into Connected Devices revenue by product category in a detailed table within this letter, broken out by "TASER", "Personal Sensors" and "Platform Solutions". TASER includes product revenue from TASER devices, cartridges and associated warranties. Personal Sensors includes product revenue from body cameras and accessories, wearable signal sensors and other wearable products. Platform solutions includes product revenue related to vehicle systems, drone and counter-drone equipment, virtual reality training tools, fixed video systems, and related warranties. |
Additional Information
We have realigned our business segments from previously reported "TASER" and "Software & Sensors" to "Connected Devices" and "Software & Services" to provide increased transparency and distinction between our hardware, software and services components. Connected Devices includes the development, manufacture and sale of fully integrated hardware solutions such as conducted energy devices, body, fleet and fixed cameras, drone and counter drone equipment, accessories, extended warranties and other hardware products. Software & Services includes the development and sale of fully integrated cloud-based software solutions and professional services that enable users to securely store, manage, share and analyze video and manage operations.
Certain amounts herein reflect the impact of the revision related to our historical conclusions of principal vs. agent accounting of certain reseller arrangements under ASC 606 previously reported in our Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2024, as well as the restatement related to the balance sheet presentation of our convertible notes due 2027 discussed in Item 4.02 of the Form 8-K filed on May 7, 2025. Refer to such Form 8-K and Notes 1, 23 and 25 in Part II, Item 8 of our Amended 2024 Annual Report on Form 10-K/A we expect to file on May 7, 2025 for additional details.
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 & Services
THREE MONTHS ENDED | CHANGE | ||||||||
31 MAR | 31 DEC | 31 MAR | QoQ | YoY | |||||
(in thousands) | |||||||||
Revenue | $ 262,737 | $ 244,940 | $ 189,447 | 7.3 % | 38.7 % | ||||
Gross margin | 74.2 % | 74.6 % | 74.1 % | (40) bp | 10 bp | ||||
Adjusted gross margin | 77.7 % | 78.0 % | 76.1 % | (30) bp | 160 bp | ||||
- Software & Services revenue growth of
39% year over year was primarily driven by new users and expansion with existing customers adopting premium software offerings. - Software & Services gross margin of
74.2% increased slightly from74.1% year over year. Excluding the impacts of stock-based compensation expense and intangibles amortization, Software & Services adjusted gross margin of77.7% increased from76.1% year over year due to higher software mix.
Connected Devices
THREE MONTHS ENDED | CHANGE | ||||||||
31 MAR | 31 DEC | 31 MAR | QoQ | YoY | |||||
(in thousands) | |||||||||
Revenue | $ 340,896 | $ 330,205 | $ 270,424 | 3.2 % | 26.1 % | ||||
Gross margin | 50.1 % | 49.4 % | 43.7 % | 70 bp | 640 bp | ||||
Adjusted gross margin | 52.8 % | 52.2 % | 54.1 % | 60 bp | (130) bp | ||||
- Connected Devices revenue growth of
26% year over year was primarily driven by strong demand for TASER 10 devices and associated cartridges, Axon Body 4 and growth in platform solutions. - Connected Devices gross margin of
50.1% increased from43.7% year over year. Excluding the impact of stock-based compensation expense and intangibles amortization, Connected Devices adjusted gross margin of52.8% decreased from54.1% year over year, primarily driven by higher mix from sensors.
Forward-Looking Operating Metrics
31 MAR | 31 DEC | 30 SEP | 30 JUN | 31 MAR | |||||
Annual recurring revenue ($ millions) (1) | $ 1,104 | $ 1,001 | $ 885 | $ 850 | $ 825 | ||||
Net revenue retention (1) | 123 % | 123 % | 123 % | 122 % | 122 % | ||||
Future contracted bookings ($ billions) (1) | $ 9.9 | $ 10.1 | $ 8.2 | $ 7.5 | $ 7.0 | ||||
____________________________________________________________________ |
(1) Refer to "Statistical Definitions" below. |
- Annual recurring revenue grew
34% year over year to$1.1 billion - Net revenue retention was
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. - Future contracted bookings grew
41% year over year to$9.9 billion 20% to25% of this balance over the next 12 months and generally expect the remainder to be recognized over the following ten years.
2025 Outlook
The following forward-looking statements reflect Axon's expectations as of May 7, 2025 and are subject to risks and uncertainties. Please refer to "Forward-looking Statements" below for more information.
Full Year
- Axon expects full year 2025 revenue of
$2.60 billion $2.70 billion 27% annual growth at the midpoint. This is an increase from our prior revenue guidance range of$2.55 billion $2.65 billion - Axon expects full year 2025 Adjusted EBITDA dollars of
$650 million $675 million 25% . Our Adjusted EBITDA guidance includes expected impacts from recently introduced reciprocal tariffs. This is an increase from our prior Adjusted EBITDA margin guidance range of$640 million $670 million - 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.
- We expect stock-based compensation expenses to be approximately
$580 million $630 million - Full year stock-based compensation expense includes approximately
$330 million
- Full year stock-based compensation expense includes approximately
- We expect 2025 CapEx to be in the range of
$160 million $180 million
Quarterly conference call and webcast
We will host our Q1 2025 earnings conference call webinar on Wednesday, May 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/95910331995.
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).
Future contracted bookings: This operational metric tracks our total unrecognized contracted bookings, including remaining performance obligations, in addition to contracts with certain termination or other clauses as a result of which they are not otherwise included in remaining performance obligations. Total future contracted bookings for products and services represent total orders that the company has received and not yet performed. We define future contracted bookings as cumulative bookings, net of cancellations, less product and service revenue recognized to date. This operational metric is subject to change based on future events, including terminations for convenience, the execution of optional periods or other contract cancellations. To the extent future contract bookings become recognized as revenue, it is recognized over a period of multiple years. Further, this operational metric may be unique to the Company, as it may be different from similarly titled operational metrics used by other companies. As such, the presentation of this operational metric may not enhance the comparability of the Company's results to the results of other companies.
Supplementary 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; noncash stock-based compensation expense; fair value adjustments related to strategic investments and marketable securities; debt inducement expense associated with the early repurchase of a portion of our 2027 Notes; transaction and integration costs related to strategic investments and acquisitions; inventory step-up amortization related to acquisitions; certain litigation costs and recoveries related to (1) antitrust cases we consider to be non-recurring and outside of our core operating results and (2) litigation matters for acquired companies that were unresolved at the date of the acquisition; and other unusual, non-recurring pre-tax items that are not considered representative of our underlying operating performance.
- 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, amortization of acquired intangible assets and inventory step-up amortization related to acquisitions.
- Non-GAAP net income (most comparable GAAP measure: net income) – Net income excluding the costs of noncash stock-based compensation expense; fair value adjustments related to strategic investments and marketable securities; debt inducement expense associated with the early repurchase of a portion of our 2027 Notes; transaction and integration costs related to strategic investments and acquisitions; inventory step-up amortization related to acquisitions; certain litigation costs and recoveries related to (1) antitrust cases we consider to be non-recurring and outside of our core operating results and (2) litigation matters for acquired companies that were unresolved at the date of the acquisition; and other unusual, non-recurring pre-tax items that are not considered representative of our underlying operating performance. 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
Non-Axon trademarks are property of their respective owners.
Axon, Axon Air, Axon Body, Axon Body Workforce, Axon Community Request, Axon Evidence, Axon Fleet, Axon Fusus, Draft One, Axon Week, 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
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 2025 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, 2024 and our Quarterly Report on Form 10-Q for the quarter ended March 31, 2025. 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
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 website at www.sec.gov.
AXON ENTERPRISE, INC. | |||||
CONSOLIDATED STATEMENTS OF OPERATIONS | |||||
(in thousands, except per share data) | |||||
(unaudited) | |||||
THREE MONTHS ENDED | |||||
31 MAR | 31 DEC | 31 MAR | |||
Net sales from products | $ 340,896 | $ 330,205 | $ 270,424 | ||
Net sales from services | 262,737 | 244,940 | 189,447 | ||
Net sales | 603,633 | 575,145 | 459,871 | ||
Cost of product sales | 170,181 | 167,182 | 152,160 | ||
Cost of service sales | 67,713 | 62,114 | 49,083 | ||
Cost of sales | 237,894 | 229,296 | 201,243 | ||
Gross margin | 365,739 | 345,849 | 258,628 | ||
Operating expenses: | |||||
Selling, general and administrative | 223,509 | 227,019 | 151,075 | ||
Research and development | 151,023 | 134,585 | 91,097 | ||
Total operating expenses | 374,532 | 361,604 | 242,172 | ||
(Loss) income from operations | (8,793) | (15,755) | 16,456 | ||
Interest income | 10,604 | 7,286 | 12,130 | ||
Interest expense | (7,821) | (1,825) | (1,756) | ||
Other income, net | 114,401 | 94,859 | 139,066 | ||
Income before provision for income taxes | 108,391 | 84,565 | 165,896 | ||
Provision for income taxes | 20,411 | (50,619) | 32,544 | ||
Net income | $ 87,980 | $ 135,184 | $ 133,352 | ||
Net income per common and common equivalent shares: | |||||
Basic | $ 1.14 | $ 1.77 | $ 1.77 | ||
Diluted | $ 1.08 | $ 1.67 | $ 1.73 | ||
Weighted average number of common and common equivalent shares | |||||
Basic | 76,890 | 76,360 | 75,355 | ||
Diluted | 81,484 | 81,091 | 77,132 | ||
AXON ENTERPRISE, INC. | |||||||||||||||||
SALES BY PRODUCT AND SERVICE | |||||||||||||||||
(in thousands) | |||||||||||||||||
(unaudited) | |||||||||||||||||
THREE MONTHS ENDED | THREE MONTHS ENDED | THREE MONTHS ENDED | |||||||||||||||
31 MAR 2025 | 31 DEC 2024 | 31 MAR 2024 | |||||||||||||||
Connected | Software | Total | Connected | Software | Total | Connected | Software | Total | |||||||||
TASER (1) | $ — | $ — | $ — | ||||||||||||||
Personal | 88,405 | — | 88,405 | 85,165 | — | 85,165 | 68,000 | — | 68,000 | ||||||||
Platform | 56,996 | — | 56,996 | 44,658 | — | 44,658 | 37,825 | — | 37,825 | ||||||||
Software and | — | 262,737 | 262,737 | — | 244,940 | 244,940 | — | 189,447 | 189,447 | ||||||||
Total | |||||||||||||||||
____________________________________________________________________________________ | |
(1) | 'TASER' includes TASER handles, cartridges and related extended warranties. |
(2) | 'Personal Sensors' primarily includes body cameras and accessories, signal sidearm, and related extended warranties. |
(3) | 'Platform Solutions' primarily includes interview room, fleet in-car video, fixed cameras, drones and counter-drone equipment, virtual reality training hardware, and related extended warranties. |
SALES BY GEOGRAPHY | |||||||||||
(in thousands) | |||||||||||
(unaudited) | |||||||||||
THREE MONTHS ENDED | THREE MONTHS ENDED | THREE MONTHS ENDED | |||||||||
31 MAR 2025 | 31 DEC 2024 | 31 MAR 2024 | |||||||||
$ 529,383 | 88 % | $ 476,419 | 83 % | $ 391,541 | 85 % | ||||||
Other countries | 74,250 | 12 | 98,726 | 17 | 68,330 | 15 | |||||
Total | $ 603,633 | 100 % | $ 575,145 | 100 % | $ 459,871 | 100 % | |||||
AXON ENTERPRISE, INC. | |||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES | |||||
(in thousands) | |||||
THREE MONTHS ENDED | |||||
31 MAR | 31 DEC | 31 MAR | |||
EBITDA and Adjusted EBITDA: | |||||
Net income | $ 87,980 | ||||
Depreciation and amortization | 19,195 | 17,489 | 11,564 | ||
Interest expense | 7,821 | 1,825 | 1,756 | ||
Investment interest income | (10,604) | (7,286) | (12,130) | ||
Provision for (benefit from) income taxes | 20,411 | (50,619) | 32,544 | ||
EBITDA | $ 96,593 | ||||
Non-GAAP adjustments: | |||||
Stock-based compensation expense | $ 75,115 | ||||
Unrealized and realized gains on strategic investments and | (143,921) | (39,432) | (97,419) | ||
Realized gains on previously held minority interests acquired in | — | (51,627) | (42,292) | ||
Debt inducement expense | 28,666 | — | — | ||
Transaction costs related to strategic investments and acquisitions | 2,727 | 2,104 | 6,357 | ||
Loss on disposal, abandonment, and impairment of property, | — | — | — | ||
Loss recoveries | — | — | — | ||
Inventory step-up amortization | 607 | 609 | — | ||
Litigation costs and related recoveries | 2,049 | 1,537 | 224 | ||
Payroll taxes related to 2018 CEO Performance Award option | — | 918 | — | ||
Adjusted EBITDA | |||||
Net income as a percentage of net sales | 14.6 % | 23.5 % | 29.0 % | ||
Adjusted EBITDA as a percentage of net sales | 25.7 % | 24.6 % | 23.7 % | ||
Stock-based compensation expense: | |||||
Cost of product and service sales | $ 12,887 | $ 11,854 | $ 29,595 | ||
Selling, general and administrative expenses | 71,347 | 73,525 | 23,155 | ||
Research and development expenses | 56,005 | 45,509 | 22,365 | ||
Total stock-based compensation expense | $ 75,115 | ||||
AXON ENTERPRISE, INC. | |||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES - continued | |||||
(in thousands, except per share amounts) | |||||
THREE MONTHS ENDED | |||||
31 MAR | 31 DEC | 31 MAR | |||
Non-GAAP net income: | |||||
GAAP net income | $ 87,980 | $ 135,184 | $ 133,352 | ||
Non-GAAP adjustments: | |||||
Stock-based compensation expense | 140,239 | 130,888 | 75,115 | ||
Unrealized and realized gains on strategic investments and marketable | (143,921) | (39,432) | (97,419) | ||
Realized gains on previously held minority interests acquired in | — | (51,627) | (42,292) | ||
Debt inducement expense | 28,666 | — | — | ||
Transaction costs related to strategic investments and acquisitions | 2,727 | 2,104 | 6,357 | ||
Loss on disposal, abandonment, and impairment of property, equipment | — | — | — | ||
Loss recoveries | — | — | — | ||
Inventory step-up amortization | 607 | 609 | — | ||
Litigation costs and related recoveries | 2,049 | 1,537 | 224 | ||
Payroll taxes related to 2018 CEO Performance Award option exercises | — | 918 | — | ||
Income tax effects | (3,412) | (11,897) | 13,647 | ||
Non-GAAP net income | $ 114,935 | $ 168,284 | $ 88,984 | ||
Non-GAAP net income as a percentage of net sales | 19.0 % | 29.3 % | 19.3 % | ||
Diluted income per common share | |||||
GAAP | $ 1.08 | $ 1.67 | $ 1.73 | ||
Non-GAAP | $ 1.41 | $ 2.08 | $ 1.15 | ||
Weighted average number of diluted common and common equivalent | 81,484 | 81,091 | 77,132 | ||
AXON ENTERPRISE, INC. | |||||
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES - continued | |||||
(in thousands) | |||||
THREE MONTHS ENDED | |||||
31 MAR 2025 | 31 DEC 2024 | 31 MAR 2024 | |||
Net sales | $ 603,633 | $ 575,145 | $ 459,871 | ||
Cost of sales | 237,894 | 229,296 | 201,243 | ||
Gross margin | 365,739 | 345,849 | 258,628 | ||
Stock-based compensation expense | 12,887 | 11,854 | 29,595 | ||
Amortization of acquired intangible assets | 4,963 | 5,071 | 2,288 | ||
Inventory step-up amortization | 607 | 609 | — | ||
Adjusted gross margin | $ 384,196 | $ 363,383 | $ 290,511 | ||
Gross margin | 60.6 % | 60.1 % | 56.2 % | ||
Adjusted gross margin | 63.6 % | 63.2 % | 63.2 % | ||
Connected Devices | |||||
THREE MONTHS ENDED | |||||
31 MAR 2025 | 31 DEC 2024 | 31 MAR 2024 | |||
Net sales | $ 340,896 | $ 330,205 | $ 270,424 | ||
Cost of sales | 170,181 | 167,182 | 152,160 | ||
Gross margin | 170,715 | 163,023 | 118,264 | ||
Stock-based compensation expense | 7,476 | 7,521 | 27,827 | ||
Amortization of acquired intangible assets | 1,337 | 1,260 | 325 | ||
Inventory step-up amortization | 607 | 609 | — | ||
Adjusted gross margin | $ 180,135 | $ 172,413 | $ 146,416 | ||
Gross margin | 50.1 % | 49.4 % | 43.7 % | ||
Adjusted gross margin | 52.8 % | 52.2 % | 54.1 % | ||
Software and Services | |||||
THREE MONTHS ENDED | |||||
31 MAR 2025 | 31 DEC 2024 | 31 MAR 2024 | |||
Net sales | $ 262,737 | $ 244,940 | $ 189,447 | ||
Cost of sales | 67,713 | 62,114 | 49,083 | ||
Gross margin | 195,024 | 182,826 | 140,364 | ||
Stock-based compensation expense | 5,411 | 4,333 | 1,768 | ||
Amortization of acquired intangible assets | 3,626 | 3,811 | 1,963 | ||
Adjusted gross margin | $ 204,061 | $ 190,970 | $ 144,095 | ||
Gross margin | 74.2 % | 74.6 % | 74.1 % | ||
Adjusted gross margin | 77.7 % | 78.0 % | 76.1 % | ||
AXON ENTERPRISE, INC. CONSOLIDATED BALANCE SHEETS | |||
(in thousands) | |||
31 MAR 2025 | 31 DEC 2024 | ||
(Unaudited) | |||
ASSETS | |||
Current Assets: | |||
Cash and cash equivalents | $ 1,092,938 | $ 454,844 | |
Short-term investments | 1,099,230 | 333,235 | |
Marketable securities | 174,870 | 198,270 | |
Accounts and notes receivable, net of allowance | 600,371 | 547,572 | |
Contract assets, net | 373,707 | 367,929 | |
Inventory | 279,669 | 265,316 | |
Prepaid expenses and other current assets | 155,804 | 130,315 | |
Total current assets | 3,776,589 | 2,297,481 | |
Property and equipment, net | 259,869 | 247,324 | |
Deferred tax assets, net | 335,742 | 304,282 | |
Intangible assets, net | 168,834 | 175,157 | |
Goodwill | 755,882 | 756,838 | |
Long-term notes receivable, net | 3,318 | 3,460 | |
Long-term contract assets, net | 133,551 | 119,876 | |
Strategic investments | 413,693 | 332,550 | |
Other long-term assets | 235,681 | 237,620 | |
Total assets | $ 6,083,159 | $ 4,474,588 | |
LIABILITIES AND STOCKHOLDERS' EQUITY | |||
Current Liabilities: | |||
Accounts payable | $ 97,670 | $ 71,955 | |
Accrued liabilities | 266,604 | 279,193 | |
Current portion of deferred revenue | 661,116 | 612,955 | |
Current portion of notes payable, net | 278,915 | 680,289 | |
Customer deposits | 21,645 | 20,626 | |
Other current liabilities | 10,672 | 12,857 | |
Total current liabilities | 1,336,622 | 1,677,875 | |
Deferred revenue, net of current portion | 348,614 | 360,685 | |
Liability for unrecognized tax benefits | 28,510 | 25,007 | |
Long-term deferred compensation | 18,691 | 15,877 | |
Long-term lease liabilities | 40,016 | 41,383 | |
Long-term notes payable, net | 1,727,797 | — | |
Other long-term liabilities | 27,056 | 26,096 | |
Total liabilities | 3,527,306 | 2,146,923 | |
Stockholders' Equity: | |||
Preferred stock | — | — | |
Common stock | 1 | 1 | |
Additional paid-in capital | 1,829,755 | 1,689,781 | |
Treasury stock | (155,947) | (155,947) | |
Retained earnings | 899,994 | 812,014 | |
Accumulated other comprehensive loss | (17,950) | (18,184) | |
Total stockholders' equity | 2,555,853 | 2,327,665 | |
Total liabilities and stockholders' equity | $ 6,083,159 | $ 4,474,588 | |
AXON ENTERPRISE, INC. | |||||
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS | |||||
(in thousands) | |||||
THREE MONTHS ENDED | |||||
31 MAR | 31 DEC | 31 MAR | |||
(Unaudited) | (Unaudited) | ||||
Cash flows from operating activities: | |||||
Net income | $ 87,980 | $ 135,184 | $ 133,352 | ||
Adjustments to reconcile net income to net cash provided by (used in) operating | |||||
Stock-based compensation | 140,239 | 130,888 | 75,115 | ||
Gain on strategic investments and marketable securities, net | (143,921) | (91,059) | (139,711) | ||
Debt inducement expense | 28,666 | — | — | ||
Depreciation and amortization | 19,453 | 17,680 | 7,356 | ||
Provision for bad debts and inventory | 3,800 | 6,249 | 1,580 | ||
Deferred income taxes | (48,768) | (58,035) | 20,670 | ||
Other noncash items | 9,515 | 7,994 | 2,584 | ||
Change in assets and liabilities: | |||||
Receivables and contract assets | (73,565) | (19,083) | (56,737) | ||
Inventory | (16,986) | 12,236 | (2,074) | ||
Deferred revenue | 33,505 | 98,921 | 19,121 | ||
Accounts payable, accrued and other liabilities | 8,611 | 44,276 | (85,840) | ||
Prepaid expenses and other assets | (22,735) | (35,085) | 8,646 | ||
Net cash provided by (used in) operating activities | 25,794 | 250,166 | (15,938) | ||
Cash flows from investing activities: | |||||
Purchases of investments | (1,079,169) | (178,005) | (250,585) | ||
Business combinations, net of cash acquired | — | (384,021) | (237,771) | ||
Proceeds from call, maturity, and sale of investments | 401,811 | 145,068 | 330,472 | ||
Purchases of property and equipment | (24,862) | (24,801) | (16,194) | ||
Other, net | 3 | 20 | 34 | ||
Net cash used in investing activities | (702,217) | (441,739) | (174,044) | ||
Cash flows from financing activities: | |||||
Proceeds from issuance of notes | 1,750,000 | — | — | ||
Principal payments for induced conversion of convertible debt | (407,453) | — | — | ||
Payments to third-parties for debt issuance, amendment and repurchase activity | (24,210) | — | — | ||
Income and payroll tax payments for net-settled stock awards | (5,035) | (35,853) | (2,710) | ||
Proceeds from options exercised | — | 4,859 | — | ||
Other, net | (76) | (1,835) | — | ||
Net cash provided by (used in) financing activities | 1,313,226 | (32,829) | (2,710) | ||
Effect of exchange rate changes on cash and cash equivalents | 1,192 | (6,284) | (1,978) | ||
Net increase (decrease) in cash and cash equivalents | 637,995 | (230,686) | (194,670) | ||
Cash and cash equivalents and restricted cash, beginning of period | 466,763 | 697,449 | 600,670 | ||
Cash and cash equivalents and restricted cash, end of period | $ 1,104,758 | $ 466,763 | $ 406,000 | ||
AXON ENTERPRISE, INC. | |||||
SELECTED CASH FLOW INFORMATION | |||||
(in thousands) | |||||
THREE MONTHS ENDED | |||||
31 MAR | 31 DEC | 31 MAR | |||
Net cash provided by (used in) operating activities | $ 25,794 | $ 250,166 | $ (15,938) | ||
Purchases of property and equipment | (24,862) | (24,801) | (16,194) | ||
Free cash flow, a non-GAAP measure | 932 | 225,365 | (32,132) | ||
Bond premium amortization | 1,260 | 1,233 | 4,990 | ||
Net campus investment | 516 | 218 | 1,033 | ||
Adjusted free cash flow, a non-GAAP measure | $ 2,708 | $ 226,816 | $ (26,109) | ||
AXON ENTERPRISE, INC. | |||
SUPPLEMENTAL TABLES | |||
(in thousands) | |||
31 MAR 2025 | 31 DEC 2024 | ||
Cash and cash equivalents | $ 1,092,938 | $ 454,844 | |
Current restricted cash | 11,820 | 11,919 | |
Short-term investments | 1,099,230 | 333,235 | |
Cash, cash equivalents, restricted cash and investments, net | 2,203,988 | 799,998 | |
Current portion of notes payable, principal amount | (282,547) | (690,000) | |
Long-term notes payable, principal amount | (1,750,000) | — | |
Total cash, cash equivalents, restricted cash and investments, net of notes payable | $ 171,441 | $ 109,998 | |
CONTACT:
Investor Relations
Axon Enterprise, Inc.
IR@axon.com
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SOURCE Axon
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