Company Quick10K Filing
Axon Enterprise
Price58.31 EPS0
Shares60 P/E228
MCap3,502 P/FCF176
Net Debt-204 EBIT18
TEV3,298 TEV/EBIT181
TTM 2019-09-30, in MM, except price, ratios
10-Q 2020-09-30 Filed 2020-11-06
10-Q 2020-06-30 Filed 2020-08-07
10-Q 2020-03-31 Filed 2020-05-08
10-K 2019-12-31 Filed 2020-02-28
10-Q 2019-09-30 Filed 2019-11-08
10-Q 2019-06-30 Filed 2019-08-09
10-Q 2019-03-31 Filed 2019-05-10
10-K 2018-12-31 Filed 2019-02-27
10-Q 2018-09-30 Filed 2018-11-07
10-Q 2018-06-30 Filed 2018-08-09
10-Q 2018-03-31 Filed 2018-05-10
10-K 2017-12-31 Filed 2018-03-01
10-Q 2017-09-30 Filed 2017-11-09
10-Q 2017-06-30 Filed 2017-08-09
10-Q 2017-03-31 Filed 2017-05-10
10-K 2016-12-31 Filed 2017-03-06
10-Q 2016-09-30 Filed 2016-11-09
10-Q 2016-06-30 Filed 2016-08-10
10-Q 2016-03-31 Filed 2016-05-10
10-K 2015-12-31 Filed 2016-03-07
10-Q 2015-09-30 Filed 2015-11-06
10-Q 2015-06-30 Filed 2015-08-06
10-Q 2015-03-31 Filed 2015-05-08
10-K 2014-12-31 Filed 2015-03-12
10-Q 2014-09-30 Filed 2014-11-05
10-Q 2014-06-30 Filed 2014-08-05
10-Q 2014-03-31 Filed 2014-05-06
10-K 2013-12-31 Filed 2014-03-10
10-Q 2013-09-30 Filed 2013-11-05
10-Q 2013-03-31 Filed 2013-05-07
10-K 2012-12-31 Filed 2013-03-08
10-Q 2012-09-30 Filed 2012-11-09
10-Q 2012-06-30 Filed 2012-08-09
10-Q 2012-03-31 Filed 2012-05-10
10-K 2011-12-31 Filed 2012-03-13
10-Q 2011-09-30 Filed 2011-11-09
10-Q 2011-06-30 Filed 2011-08-08
10-Q 2011-03-31 Filed 2011-05-09
10-K 2010-12-31 Filed 2011-03-14
10-Q 2010-09-30 Filed 2010-11-08
10-Q 2010-06-30 Filed 2010-08-06
10-Q 2010-03-31 Filed 2010-05-10
10-K 2009-12-31 Filed 2010-03-15
8-K 2020-11-05 Earnings, Exhibits
8-K 2020-09-10 Enter Agreement
8-K 2020-08-06 Earnings, Exhibits
8-K 2020-06-16
8-K 2020-06-12
8-K 2020-05-29
8-K 2020-05-07
8-K 2020-02-27
8-K 2020-01-04
8-K 2020-01-03
8-K 2019-11-07
8-K 2019-10-28
8-K 2019-10-10
8-K 2019-08-23
8-K 2019-08-08
8-K 2019-06-13
8-K 2019-05-31
8-K 2019-05-09
8-K 2019-02-26
8-K 2019-02-12
8-K 2018-12-31
8-K 2018-12-19
8-K 2018-12-19
8-K 2018-12-13
8-K 2018-11-06
8-K 2018-10-07
8-K 2018-09-14
8-K 2018-08-20
8-K 2018-08-07
8-K 2018-06-21
8-K 2018-05-24
8-K 2018-05-16
8-K 2018-05-08
8-K 2018-04-06
8-K 2018-02-27
8-K 2018-02-27

AAXN 10Q Quarterly Report

Part I - Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 3. Defaults Upon Senior Securities
Item 4. Mine Safety Disclosures
Item 5. Other Information
Item 5.02 Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
Item 6. Exhibits
EX-10.1 aaxn-20200930ex1018fc955.htm
EX-31.1 aaxn-20200930ex311a7145a.htm
EX-31.2 aaxn-20200930ex3127df8ec.htm
EX-32 aaxn-20200930xex32.htm

Axon Enterprise Earnings 2020-09-30

Balance SheetIncome StatementCash Flow
0.80.60.50.30.20.02012201420172020
Assets, Equity
0.20.10.10.0-0.0-0.12012201420172020
Rev, G Profit, Net Income
0.30.20.10.0-0.1-0.22012201420172020
Ops, Inv, Fin

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Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2020

or

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                      to                   

Commission File Number: 001-16391

Axon Enterprise, Inc.

(Exact name of registrant as specified in its charter)

Delaware

86-0741227

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

17800 North 85th Street

85255

Scottsdale,  Arizona

(Address of principal executive offices)

(Zip Code)

(480) 991-0797

(Registrant’s telephone number, including area code)

Not Applicable

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, $0.00001 Par Value

AAXN

The Nasdaq Global Select Market

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes      No  

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).   Yes      No  

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

Accelerated filer

Non-accelerated Filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).   Yes       No  

The number of shares of the registrant’s common stock outstanding as of October 30, 2020 was 63,549,898.

Table of Contents

AXON ENTERPRISE, INC.

INDEX TO QUARTERLY REPORT ON FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2020

Page

Special Note Regarding Forward-Looking Statements

ii

PART I - FINANCIAL INFORMATION

1

Item 1. Financial Statements

1

Condensed Consolidated Balance Sheets as of September 30, 2020 (Unaudited) and December 31, 2019

1

Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) for the Three Months and Nine Months Ended September 30, 2020 and 2019

2

Unaudited Condensed Consolidated Statements of Stockholders’ Equity for the Three Months and Nine Months Ended September 30, 2020 and 2019

3

Unaudited Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2020 and 2019

5

Notes to Unaudited Condensed Consolidated Financial Statements

6

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

29

Item 3. Quantitative and Qualitative Disclosures About Market Risk

44

Item 4. Controls and Procedures

45

PART II - OTHER INFORMATION

46

Item 1. Legal Proceedings

46

Item 1A. Risk Factors

46

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

46

Item 3. Defaults Upon Senior Securities

47

Item 4. Mine Safety Disclosures

47

Item 5. Other Information

47

Item 6. Exhibits

48

SIGNATURES

49

Table of Contents

Special Note Regarding Forward-Looking Statements

This Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including statements regarding our expectations, beliefs, intentions and strategies regarding the future. We intend that such forward-looking statements be subject to the safe-harbor provided by the Private Securities Litigation Reform Act of 1995. From time to time, we also provide forward-looking statements in other materials we release to the public as well as verbal forward-looking statements. These forward-looking statements include, without limitation, statements regarding: the impact of the COVID-19 pandemic; proposed products and services and related development efforts and activities; expectations about the market for our current and future products and services; expected costs relating to the FTC litigation; the impact of pending litigation; strategies and trends relating to subscription plan programs and revenues; our anticipation that contracts with governmental customers will be fulfilled; strategies and trends, including the benefits of, research and development investments; the sufficiency of our liquidity and financial resources; that we may repurchase our common stock; expectations about customer behavior; the impact on our investment portfolio of changes in interest rates; our potential use of foreign currency forward and option contracts; statements concerning projections, predictions, expectations, estimates or forecasts as to our business, financial and operational results and future economic performance; 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, 2019. 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: the potential global impacts of the COVID-19 pandemic; our exposure to cancellations of government contracts due to appropriation clauses, exercise of a cancellation clause, or non-exercise of contractually optional periods; 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 ability to manage our supply chain and avoid production delays, shortages, and impacts to expected gross margins; the impact of stock 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 regarding our products; the impact of product mix on projected gross margins; defects in our products; changes in the costs of product components and labor; loss of customer data, a breach of security, or an extended outage, including our reliance on 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 the U.S. and in foreign markets, especially related to the classification of our products 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. The Annual Report on Form 10-K that we filed with the Securities and Exchange Commission ("SEC") on February 28, 2020 and this Quarterly Report on Form 10-Q list 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 Report on Form 10-K and in this 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. Our filings with the SEC may be accessed at the SEC’s web site at www.sec.gov.

ii

Table of Contents

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

AXON ENTERPRISE, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share data)

    

September 30,

December 31, 

2020

2019

(Unaudited)

ASSETS

 

  

 

  

Current assets:

 

  

 

  

Cash and cash equivalents

$

176,000

$

172,250

Short-term investments

 

330,914

 

178,534

Accounts and notes receivable, net of allowance of $1,787 and $1,567 as of September 30, 2020 and December 31, 2019, respectively

 

172,803

 

146,878

Contract assets, net

 

63,105

 

38,102

Inventory

 

97,610

 

38,845

Prepaid expenses and other current assets

 

35,421

 

34,866

Total current assets

 

875,853

 

609,475

Property and equipment, net

 

102,718

 

43,770

Deferred tax assets, net

 

39,773

 

27,688

Intangible assets, net

 

10,260

 

12,771

Goodwill

 

25,012

 

25,013

Long-term investments

 

120,615

 

45,499

Long-term notes receivable, net of current portion

 

22,611

 

31,598

Long-term contract assets, net

15,019

9,644

Other assets

 

67,288

 

40,181

Total assets

$

1,279,149

$

845,639

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

  

 

  

Current liabilities:

 

  

 

  

Accounts payable

$

22,441

$

25,874

Accrued liabilities

 

74,114

 

45,001

Current portion of deferred revenue

 

154,731

 

117,864

Customer deposits

 

2,132

 

2,974

Other current liabilities

 

5,137

 

3,853

Total current liabilities

 

258,555

 

195,566

Deferred revenue, net of current portion

 

87,733

 

87,936

Liability for unrecognized tax benefits

 

4,406

 

3,832

Long-term deferred compensation

 

4,150

 

3,936

Deferred tax liability, net

560

354

Other long-term liabilities

 

28,592

 

10,520

Total liabilities

 

383,996

 

302,144

Commitments and contingencies (Note 13)

 

  

 

  

Stockholders’ equity:

 

  

 

  

Preferred stock, $0.00001 par value; 25,000,000 shares authorized; no shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively

 

 

Common stock, $0.00001 par value; 200,000,000 shares authorized; 63,548,081 and 59,497,759 shares issued and outstanding as of September 30, 2020 and December 31, 2019, respectively

 

1

 

1

Additional paid-in capital

 

908,584

 

528,272

Treasury stock at cost, 20,220,227 shares as of September 30, 2020 and December 31, 2019

 

(155,947)

 

(155,947)

Retained earnings

 

144,067

 

172,265

Accumulated other comprehensive loss

 

(1,552)

 

(1,096)

Total stockholders’ equity

 

895,153

 

543,495

Total liabilities and stockholders’ equity

$

1,279,149

$

845,639

The accompanying notes are an integral part of these condensed consolidated financial statements.

1

Table of Contents

AXON ENTERPRISE, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

AND COMPREHENSIVE INCOME (LOSS)

(in thousands, except per share data)

Three Months Ended September 30, 

Nine Months Ended September 30, 

    

2020

    

2019

    

2020

    

2019

Net sales from products

$

120,091

$

96,497

$

326,134

$

264,977

Net sales from services

 

46,351

 

34,340

 

128,729

 

94,032

Net sales

 

166,442

 

130,837

 

454,863

 

359,009

Cost of product sales

 

57,798

 

42,445

 

150,507

 

120,265

Cost of service sales

 

10,404

 

8,223

 

29,331

 

24,098

Cost of sales

 

68,202

 

50,668

 

179,838

 

144,363

Gross margin

 

98,240

 

80,169

 

275,025

 

214,646

Operating expenses:

 

  

 

  

 

  

 

  

Sales, general and administrative

 

74,443

 

48,424

 

209,763

 

134,678

Research and development

 

29,246

 

25,129

 

85,187

 

71,976

Total operating expenses

 

103,689

 

73,553

 

294,950

 

206,654

Income (loss) from operations

 

(5,449)

 

6,616

 

(19,925)

 

7,992

Interest and other income, net

 

2,040

 

1,820

 

4,594

 

5,978

Income (loss) before provision for income taxes

 

(3,409)

 

8,436

 

(15,331)

 

13,970

Provision for (benefit from) income taxes

 

(2,536)

 

2,332

 

12,227

 

709

Net income (loss)

$

(873)

$

6,104

$

(27,558)

$

13,261

Net income (loss) per common and common equivalent shares:

 

  

 

  

 

  

 

  

Basic

$

(0.01)

$

0.10

$

(0.45)

$

0.22

Diluted

$

(0.01)

$

0.10

$

(0.45)

$

0.22

Weighted average number of common and common equivalent shares outstanding:

 

  

 

  

 

  

 

  

Basic

 

63,496

 

59,278

 

61,159

 

59,128

Diluted

 

63,496

 

60,059

 

61,159

 

59,938

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

Net income (loss)

$

(873)

$

6,104

$

(27,558)

$

13,261

Foreign currency translation adjustments

 

1,238

 

(227)

 

(456)

 

(285)

Comprehensive income (loss)

$

365

$

5,877

$

(28,014)

$

12,976

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Table of Contents

AXON ENTERPRISE, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(in thousands, except share data)

    

    

    

    

    

    

    

Accumulated

    

Additional

Other

Total

Common Stock

Paid-in

Treasury Stock

Retained

Comprehensive

Stockholders’

Shares

Amount

Capital

Shares

Amount

Earnings

Loss

Equity

Balance, December 31, 2019

 

59,497,759

$

1

$

528,272

 

20,220,227

$

(155,947)

$

172,265

$

(1,096)

$

543,495

Cumulative effect of applying a change in accounting principle, net of tax

 

 

 

 

 

 

(640)

 

 

(640)

Issuance of common stock under employee plans, net

 

315,404

 

 

(5,162)

 

 

 

 

 

(5,162)

Stock-based compensation

 

 

 

20,195

 

 

 

 

 

20,195

Net income

 

 

 

 

 

 

4,074

 

 

4,074

Foreign currency translation adjustments

 

 

 

 

 

 

 

(2,372)

(2,372)

Balance, March 31, 2020

 

59,813,163

1

543,305

 

20,220,227

(155,947)

175,699

(3,468)

559,590

Issuance of common stock

3,450,000

306,779

306,779

Issuance of common stock under employee plans, net

 

134,571

(310)

 

(310)

Stock-based compensation

 

33,835

 

33,835

Issuance of common stock for business combination contingent consideration

 

70,613

 

Net income (loss)

 

 

(30,759)

(30,759)

Foreign currency translation adjustments

 

 

678

678

Balance, June 30, 2020

 

63,468,347

1

883,609

 

20,220,227

(155,947)

144,940

(2,790)

869,813

Issuance of common stock under employee plans, net

 

79,734

 

(1,119)

 

 

 

 

 

(1,119)

Stock-based compensation

 

 

 

26,094

 

 

 

 

 

26,094

Net income (loss)

 

 

 

 

 

 

(873)

 

 

(873)

Foreign currency translation adjustments

 

 

 

 

 

 

 

1,238

 

1,238

Balance, September 30, 2020

 

63,548,081

$

1

$

908,584

 

20,220,227

$

(155,947)

$

144,067

$

(1,552)

$

895,153

The accompanying notes are an integral part of these condensed consolidated financial statements.

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Table of Contents

AXON ENTERPRISE, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (CONT’D)

(in thousands, except share data)

    

    

    

    

    

    

    

    

    

    

    

    

    

Accumulated

    

    

Additional

Other

Total

Common Stock

Paid-in

Treasury Stock

Retained

Comprehensive

Stockholders’

Shares

Amount

Capital

Shares

Amount

Earnings

Loss

Equity

Balance, December 31, 2018

    

58,810,637

    

$

1

    

$

453,400

    

20,220,227

    

$

(155,947)

    

$

171,383

    

$

(1,513)

    

$

467,324

Issuance of common stock under employee plans, net

 

298,649

 

 

(1,159)

 

 

 

 

 

(1,159)

Stock-based compensation

 

 

 

7,905

 

 

 

 

 

7,905

Net income

 

 

 

 

 

 

6,419

 

 

6,419

Foreign currency translation adjustments

 

 

 

 

 

 

 

50

 

50

Balance, March 31, 2019

 

59,109,286

1

460,146

 

20,220,227

(155,947)

177,802

(1,463)

480,539

Issuance of common stock under employee plans, net

 

71,832

(869)

 

(869)

Issuance of common stock for business combination contingent consideration

 

70,613

 

Stock-based compensation

 

8,627

 

8,627

Net income

 

 

738

738

Foreign currency translation adjustments

 

 

(108)

(108)

Balance, June 30, 2019

 

59,251,731

1

467,904

 

20,220,227

(155,947)

178,540

(1,571)

488,927

Issuance of common stock under employee plans

 

69,062

 

(1,134)

 

 

 

 

(1,134)

Stock-based compensation

 

 

 

13,977

 

 

 

 

 

13,977

Net income

 

 

 

 

 

 

6,104

 

 

6,104

Foreign currency translation adjustments

 

 

 

 

 

 

 

(227)

 

(227)

Balance, September 30, 2019

 

59,320,793

$

1

$

480,747

 

20,220,227

$

(155,947)

$

184,644

$

(1,798)

$

507,647

The accompanying notes are an integral part of these condensed consolidated financial statements.

4