Axon(US:AXON)2025-11-05 00:28Financial Performance - Revenues for the three months ended September 30, 2025, were $710.6 million, an increase of $166.4 million, or 30.6%, from the same period in 2024[145]. - For the nine months ended September 30, 2025, revenues reached $2.0 billion, up $475.4 million, or 31.5%, compared to the same period in 2024[146]. - Net sales for the nine months ended September 30, 2025, were $1,982.8 million, a 31.5% increase from $1,507.4 million in the same period of 2024[164]. - Net sales from the Connected Devices segment increased by 23.6% for the three months ended September 30, 2025, driven by higher TASER and Platform Solutions sales[148]. - Net sales for the Software and Services segment rose by 41.1% for the three months ended September 30, 2025, largely due to an increase in the number of users and adoption of premium features[149]. - The Connected Devices segment net sales increased by 26.0% to $1,122.7 million for the nine months ended September 30, 2025, driven by higher TASER handle and cartridge volume[164]. - The Software and Services segment net sales increased by 39.6% to $860.2 million for the nine months ended September 30, 2025, primarily due to an increase in the aggregate number of users and adoption of premium features[165]. Profitability and Loss - Gross margin for the three months ended September 30, 2025, was 60.1%, down from 60.8% in the prior year, while adjusted gross margin decreased to 62.7% from 63.2%[145]. - Net loss for the three months ended September 30, 2025, was $2.2 million, compared to net income of $67.0 million for the same period in 2024[145]. - For the nine months ended September 30, 2025, the net income was $121.9 million, a decrease from $241.9 million in the same period of 2024[184]. - The company recorded net income of $121.9 million for the nine months ended September 30, 2025, down from $241.9 million in the same period of 2024, with net income per diluted share decreasing to $1.48 from $3.12[179]. - Adjusted EBITDA for the nine months ended September 30, 2025, was $503.8 million, compared to $379.8 million for the same period in 2024, reflecting a 32.7% increase[184]. Expenses - Operating expenses increased by $122.8 million for the three months ended September 30, 2025, primarily due to increased headcount and stock-based compensation[145]. - Research and development expenses for the three months ended September 30, 2025, totaled $176.7 million, an increase of 54.3% compared to the prior year[156]. - Total research and development expenses increased by 59.7% to $490.3 million for the nine months ended September 30, 2025, as a percentage of net sales, this represented 24.7% compared to 20.4% in 2024[173]. - Selling, general and administrative expenses rose by 39.7% to $718.5 million for the nine months ended September 30, 2025, accounting for 36.2% of net sales[168]. Cash Flow and Financing - Cash and cash equivalents increased to $1.4 billion as of September 30, 2025, up by $969.0 million from December 31, 2024[186]. - Net cash used in operating activities was $5.9 million for the nine months ended September 30, 2025, compared to a net cash inflow of $158.1 million for the same period in 2024[196]. - Net cash used in investing activities was $498.5 million for the nine months ended September 30, 2025, primarily due to $2.0 billion in investment purchases, including $1.8 billion for short-term investments[199]. - Net cash provided by financing activities was $1.5 billion for the nine months ended September 30, 2025, driven by $1.8 billion from Senior Notes issuance and $362.2 million from an ATM equity offering[200]. - The company has access to a $300.0 million line of credit, with $291.1 million available for borrowing as of September 30, 2025[206]. Interest and Taxation - Interest income for the three months ended September 30, 2025, was $23.9 million, while interest expense rose to $28.9 million, resulting in a net interest loss of $4.97 million[158]. - Interest income for the nine months ended September 30, 2025, was $57.8 million, while interest expense increased to $(65.4) million, resulting in a net interest loss of $(7.6) million[175]. - The effective tax rate for the nine months ended September 30, 2025, was (43.1)%, a significant change from 18.6% in the same period of 2024, primarily due to net tax benefits related to stock-based compensation[177]. Strategic Initiatives - The company aims to cut gun-related deaths between police and the public in the U.S. in half by 2033, focusing on integrating hardware and cloud software solutions for public safety[144]. - Subsequent to the quarter ended September 30, 2025, the company acquired the remaining outstanding stock of Prepared and entered into a definitive agreement to acquire Carbyne[190]. Market and Currency Risks - The majority of international sales are transacted in foreign currencies, exposing the company to exchange rate fluctuations[207]. - The company has not engaged in currency hedging activities to date but may consider it in the future to mitigate foreign exchange risks[208].