Axon(US:AXON)2023-02-27 16:00Financial 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].