Axon's Q4 Earnings Top Estimates on Solid Software & Sensors Sales

Core Insights - Axon Enterprise, Inc. reported strong financial results for Q4 2024, with adjusted earnings of $2.08 per share, exceeding the Zacks Consensus Estimate of $1.53, marking an 84.1% year-over-year increase [1] - Total revenues reached $575.1 million, surpassing the consensus estimate of $566.1 million, and increased by 33.6% year over year, driven by strong demand for TASER and Axon Body 4 products [2] Financial Performance - For the full year 2024, Axon reported revenues of $2.08 billion, reflecting a 33.4% increase year over year, with adjusted earnings of $5.94 per share, up from $4.16 in 2023 [3] - In Q4, the Software & Sensors segment saw revenues rise 40.6% to $230.3 million, with adjusted gross margin increasing to 77.2% from 75.7% [4] - Sensors & Other revenues climbed 17.5% to $123.6 million, although adjusted gross margin declined to 36.2% from 47.5% due to product mix issues [5] - TASER segment revenues increased 37.1% year over year to $221.2 million, with adjusted gross margin improving to 63.7% from 57.6% [6] Cost and Margin Analysis - Axon's cost of sales rose 37.8% year over year to $229.3 million, while total operating expenses increased 63.5% to $361.6 million [7] - The adjusted gross margin for the company improved to 63.2% from 62% in the previous year [7] Balance Sheet and Cash Flow - At the end of Q4 2024, Axon had cash and cash equivalents of $454.8 million, down from $598.5 million at the end of 2023 [8] - The company generated net cash of $408.3 million from operating activities in 2024, significantly higher than $189.3 million in the previous year, with adjusted free cash flow at $344.3 million compared to $148.1 million [8] Future Outlook - For 2025, Axon expects revenues to be between $2.55 billion and $2.65 billion, indicating approximately 25% year-over-year growth at the midpoint [9] - Adjusted EBITDA is projected to be in the range of $640 million to $670 million, with capital expenditures expected between $140 million and $180 million [9][10]