Financial Data and Key Metrics - Revenue grew 31% YoY in Q2, with EBITDA margins at 22% [17] - Gross margin improved sequentially to 62%, driven by a favorable business mix from software [17] - Axon Cloud and services revenue accounted for 35% of total revenue, up from 29% a year ago [18] - Full-year revenue guidance increased to $1.51 billion to $1.53 billion, representing 27% to 29% growth [20] - Adjusted EBITDA margin guidance maintained at 20%, implying $302 million to $306 million in adjusted EBITDA [20] Business Line Data and Key Metrics - TASER business grew 14% YoY, with TASER 7 remaining the largest contributor, while TASER 10 shipments began to drive incremental growth [15] - Cloud business grew 62% YoY, with strong adoption of body cameras and enterprise software licenses [14] - Emerging product bookings grew nearly 50% YoY, driven by ALPR, auto tagging, Axon Records, and Axon Respond [16] - Axon Body 4 began shipping in June, with positive customer feedback [6] Market Data and Key Metrics - Federal market bookings grew nearly triple digits YoY in H1, while justice segment bookings also saw triple-digit growth YTD [16] - International markets, particularly Tier 1 markets like the UK, Canada, and Australia, showed strong demand for TASER and body cameras [34] - New and emerging markets contributed to 4 of the 10 largest deals in Q2, indicating continued diversification [16] Company Strategy and Industry Competition - The company is focusing on robotic security and generative AI, with the acquisition of Sky-Hero to enhance its indoor tactical drone capabilities [8] - Axon is leveraging large language models and generative AI to create advanced tools for law enforcement, building on its existing AI ecosystem [10] - The company aims to lead in bringing advanced AI with ethical controls to public safety, similar to its pioneering role in cloud software for public safety [12] Management Commentary on Operating Environment and Future Outlook - Management highlighted strong customer reception to new products like TASER 10 and Axon Body 4, which are expected to drive growth in H2 [13] - The company is confident in its ability to deliver on increased guidance due to strong operational visibility and customer demand [26] - Long-term, the company sees significant growth potential in international markets, which could eventually dwarf the U.S. market [37] Other Important Information - The company promoted Brittany Bagley to COO and CFO, and Joshua Isner to President, reflecting a focus on operational excellence and strategic growth [6][7] - Axon continues to invest in automation and scale efficiencies to improve margins, particularly as new products like TASER 10 and Axon Body 4 ramp up [19] Q&A Session Summary Question: Cloud Business Growth Drivers - Cloud growth was driven by body cameras (50% of growth) and enterprise software licenses, with strong adoption of Evidence.com and other software products [22][23] - The company expects continued growth in cloud revenue, supported by recurring software business and new product launches [27] Question: Gross Margin Trends - Gross margin headwinds in 2023 are due to TASER 10 and Axon Body 4 ramp-up costs, but these are expected to benefit margins in 2024 [29][30] - Professional services for Fleet installations also impacted gross margins, but this is a one-time cost that will unlock long-term software revenue [31] Question: International Market Expansion - International markets, particularly Tier 1 markets, are showing strong demand for TASER and body cameras, with potential for OSP-like bundles in the future [34][93] - TASER 10 is seen as a game-changer in international markets, where it could become the primary defensive weapon for police [37] Question: TASER 10 Adoption and Margins - Customers are showing strong interest in upgrading to TASER 10, with early feedback indicating it could drive TASER growth over the next few years [66] - Manufacturing ramp-up for TASER 10 is ongoing, with automation investments expected to improve margins in 2024 [69] Question: Fleet 3 Demand and Supply Constraints - The company has largely caught up on Fleet 3 hardware supply constraints, with the bottleneck now shifting to installations [72] - Normalized demand for Fleet 3 is expected by year-end, with professional services and software revenue contributing to long-term growth [72] Question: Evidence.com and Cloud Services Growth - Growth in Evidence.com and cloud services is driven by both land-and-expand strategies with existing customers and new customer acquisitions [75] - The company is seeing strong demand for premium bundles, with Officer Safety Plan penetration increasing from less than 15% in Q3 2022 to less than 20% in Q2 2023 [77][89] Question: Axon Body 4 Customer Excitement - Customers are most excited about the 2-way voice feature in Axon Body 4, which enhances communication capabilities for dispatchers and officers [79] - The integration of POV functionality as an accessory, rather than a separate product, is also driving adoption [80]

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 June 30, 2023 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. (NASDAQ:AXON) Q1 2023 Earnings Conference Call May 9, 2023 5:00 PM ET Company Participants Andrea James - Chief Communications Officer Patrick Smith - Chief Executive Officer Josh Isner - Chief Operating Officer Brittany Bagley - Chief Financial Officer Jeff Kunins - Chief Product Officer and Chief Technology Officer Conference Call Participants Tim Long - Barclays Sami Badri - Credit Suisse Mike Ng - Goldman Sachs Josh Reilly - Needham Will Power - Baird Jonathan Ho - William Blair Je ...

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 March 31, 2023 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. (NASDAQ:AXON) Q4 2022 Earnings Conference Call February 28, 2023 5:00 PM ET Company Participants Andrea James - Investor Relations Rick Smith - Chief Executive Officer Josh Isner - Chief Operating Officer Brittany Bagley - Chief Financial Officer & Chief Business Officer Conference Call Participants Sami Badri - Credit Suisse Jonathan Ho - William Blair Erik Suppiger - JMP Keith Housum - Northcoast Paul Chung - JPMorgan William Power - Baird Jeremy Hamblin - Craig Hallum Josh Riley - N ...

Financial Performance - Axon's total revenue for the year ended December 31, 2022, was $1,189.9 million, an increase of $326.6 million, or 37.8%, from the prior year[134]. - Net income for 2022 was $147.1 million, compared to a net loss of $60.0 million in 2021, reflecting net unrealized gains of $131.9 million[134]. - Total net sales increased to $1,189,935, up 38% from $863,381 in 2021[235]. - Net income for the year was $147,139, a significant recovery from a net loss of $60,018 in 2021[235]. - Cash provided by operating activities increased to $235.361 million in 2022, compared to $124.494 million in 2021[241]. - The company reported a comprehensive income of $141,277, recovering from a loss of $61,476 in 2021[235]. Revenue Segmentation - Revenue from the TASER segment increased by $94.6 million, or 21.7%, primarily due to a $89.0 million increase in TASER 7 devices[144]. - The Software and Sensors segment saw a revenue increase of $231.9 million, or 54.4%, driven by Axon Evidence and cloud services, which increased by $125.9 million[145]. - Net sales from products were $801.4 million (67.3% of total sales), while net sales from services were $388.5 million (32.7% of total sales)[136]. - Axon Body generated $124.2 million in revenue in 2022, up from $75.5 million in 2021[312]. - Total revenue from Axon Evidence and cloud services was $390.6 million in 2022, compared to $255.2 million in 2021[312]. - TASER product revenue for 2022 was $360.04 million, compared to $265.59 million in 2021, reflecting a significant growth[324]. Expenses and Costs - Operating expenses decreased by $73.6 million, primarily due to a reduction in stock-based compensation expenses[134]. - Research and Development expenses totaled $233.8 million, representing 19.7% of net sales, an increase from $194.0 million or 22.5% of net sales in 2021[157]. - Sales, General and Administrative expenses decreased by $113.4 million, or 22.0%, to $401.6 million, with SG&A as a percentage of net sales dropping to 33.7% from 59.7%[153]. - The company recorded provisions to reduce inventories to their lower of cost and net realizable value of approximately $1.5 million for the year ended December 31, 2022, compared to $0.9 million in 2021[195]. - The company recorded $5.3 million in impairment charges during the year ended December 31, 2022, primarily related to the cease-use of a portion of its Seattle office[207]. Cash Flow and Liquidity - Cash and cash equivalents totaled $353.7 million as of December 31, 2022, a decrease of $2.6 million from the previous year[174]. - The company reported net cash provided by operating activities of $235.4 million for the year ended December 31, 2022[177]. - The company utilized $831.0 million for investing activities in 2022, including $692.2 million for purchases of available-for-sale investments[179]. - Net cash provided by financing activities was $598.1 million for the year ended December 31, 2022, primarily due to net proceeds from issuing Notes and Warrants[180]. - The company has a $200.0 million revolving credit facility, with $193.0 million available for borrowing after accounting for outstanding letters of credit[182]. Backlog and Future Obligations - The total backlog as of December 31, 2022, was $4.6 billion, a significant increase from $2.8 billion as of December 31, 2021[148]. - The TASER segment backlog was $824.4 million, including $111.0 million of deferred revenue and $713.5 million recorded as bookings but not yet invoiced[146]. - The Software and Sensors backlog was $3.8 billion, with $497.1 million of deferred revenue and $3.3 billion recorded as bookings but not yet invoiced[147]. - Remaining performance obligations as of December 31, 2022, were approximately $4.6 billion, with an expected recognition of 15% - 25% over the next twelve months[325]. Tax and Compliance - The effective income tax rate for 2022 was 25.1%, with a provision for income taxes of $49.4 million[161]. - As of December 31, 2022, the company had $21.5 million of gross unrecognized tax benefits related to uncertain tax positions[189]. - The company recorded a reserve of $26.4 million as a valuation allowance against deferred tax assets as of December 31, 2022, due to anticipated unrealized investment losses and expiring R&D tax credits[213]. Strategic Initiatives - The company plans to continue shifting its business to a subscription model to better align with municipal budgeting processes[185]. - The company has strategic investments in various unconsolidated affiliates, with estimated fair value determined based on Level 3 inputs as of December 31, 2022[288]. - The company has not engaged in any currency hedging activities to date, exposing it to foreign exchange rate risks[226].

Axon Enterprise, Inc. (NASDAQ:AXON) Q3 2022 Results Conference Call November 8, 2022 5:00 PM ET Company Participants Andrea James - Investor Relations Rick Smith - Chief Executive Officer Josh Isner - Chief Operating Officer Brittany Bagley - Chief Financial Officer & Chief Business Officer Conference Call Participants Josh Reilley - Needham Jonathan Ho - William Blair Erik Lapinski - Morgan Stanley Keith Housum - Northcoast Sami Badri - Credit Suisse Paul Chung - JPMorgan Will Power - Baird Jeremy Hamblin ...

Axon Enterprise, Inc. (NASDAQ:AXON) Q2 2022 Earnings Conference Call August 9, 2022 5:00 PM ET Company Participants Andrea James - Investor Relations Rick Smith - Chief Executive Officer Josh Isner - Chief Operating Officer Jim Zito - Interim Chief Financial Officer Conference Call Participants Will Power - Baird Erik Suppiger - JMP Sami Badri - Credit Suisse Keith Housum - Northcoast Jonathan Ho - William Blair Josh Riley - Needham Jeremy Hamblin - Craig-Hallum Erik Lapinski - Morgan Stanley Andrea James [ ...