Axon Enterprise, Inc.
AXON ENTERPRISE, INC. (Form: 8-K, Received: 05/09/2017 16:03:03)


 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form 8-K
 
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

May 9, 2017
Date of Report (Date of earliest event reported)
 
Axon Enterprise, Inc.
( Exact name of registrant as specified in its charter)
Delaware
 (State or other jurisdiction of
 incorporation)
 
001-16391
 (Commission File Number)
 
86-0741227
 (IRS Employer
 Identification No.)

17800 N. 85 th St.
Scottsdale, Arizona 85255
(Address of principal executive offices, including zip code)

(480) 991-0797
(Registrant’s telephone number, including area code)

Not Applicable
(Former name or former address, if changed since last report)


Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

o
 
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
 
o
 
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
 
o
 
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
 
o
 
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).  Emerging growth company  o
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.  o

 





TABLE OF CONTENTS

Item 2.02 Results of Operations and Financial Condition
Item 9.01 Financial Statements and Exhibits
SIGNATURE


Item 2.02 Results of Operations and Financial Condition

On May 9, 2017 Axon Enterprise, Inc. (the "Company" or "Axon"), formerly, TASER International, Inc., issued a press release regarding the Company’s financial results for its first quarter of 2017 . The full text of the press release, together with the unaudited condensed consolidated statements of operations, segment reporting, balance sheets, selected cash flow information, statistical measures and reconciliations of GAAP to non-GAAP financial measures are attached hereto as Exhibit 99.1. The Company has also provided additional unaudited statistical data for its first quarter of 2017 as attached hereto as Exhibit 99.2.

The information pursuant to Item 2.02 in this report on Form 8-K is being furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section.

Item 9.01 Financial Statements and Exhibits

(d)        Exhibits
Exhibit
Number
 
Exhibit Description
99.1
 
Press release dated May 9, 2017
99.2
 
Unaudited operating metrics dated May 9, 2017





 






SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
Dated: May 9, 2017
Axon Enterprise, Inc.
 
 
By:  
 /s/ JAWAD A. AHSAN
 
 
 
Jawad A. Ahsan
 
 
 
Chief Financial Officer 
 















FOR RELEASE ON: May 9, 2017 at 1601 ET

Exhibit 99.1

CONTACT: Arvind Bobra
Investor Relations
Axon Enterprise, Inc.
IR@axon.com

Axon Reports 2017 First Quarter Results
Revenues of $79.2 million , up 43% Year-over-Year


SCOTTSDALE, Ariz., May 9, 2017 − Axon Enterprise, Inc. (Nasdaq: AAXN), today reported financial results for the first quarter ended March 31, 2017 .

“We are off to a strong start on the year as we executed across all of our business lines,” commented Rick. “We recently rebranded the company as Axon to better reflect our ecosystem of connected solutions and robust pipeline of new offerings. We also launched our national free trial offering to accelerate adoption of our body camera program. The initial response has been encouraging, and we see tremendous opportunity to extend our market leadership.”

First Quarter 2017 Financial Highlights:

Net sales increased 43% to $79.2 million in the first quarter of 2017 compared to $55.5 million in the first quarter of 2016 . International sales were $14.5 million in the first quarter of 2017 .

TASER Weapons segment revenues increased 26% to $57.7 million in the first quarter of 2017 compared to $45.8 million in the first quarter of 2016 .

Software and Sensors segment revenues increased 122% to $21.6 million in the first quarter of 2017 compared to $9.7 million in the first quarter of 2016 .

Consolidated gross margin was 61% in the first quarter of 2017 compared to 66% in the first quarter of 2016 .

TASER Weapons segment gross margin remained consistent at 69% in the first quarter 2017 and 2016 .

Software and Sensors segment gross margin was 42% in the first quarter of 2017 compared to 53% in the first quarter of 2016 . Service margin was 70% in the first quarter of 2017 including $1.0 million of non-recurring data migration expense compared to 76% in the first quarter of 2016 . Hardware product margin (excluding services) was 8% in the first quarter 2017 compared to 30% in the first quarter of 2016 .





Income from operations was $5.4 million in the first quarter of 2017 compared to $5.1 million in the first quarter of 2016 .

Net income for the first quarter of 2017 was $4.6 million , or $0.09 per diluted share, compared to $3.5 million , or $0.06 per diluted share, in the first quarter of 2016 . Excluding a $1.0 million discrete tax benefit related to stock-based compensation for restricted stock units that vested and stock options that were exercised during the quarter, net income for the first quarter of 2017 would have been $3.6 million, or $0.07 per diluted share.

Adjusted EBITDA for the first quarter of 2017 was $10.6 million compared to $8.4 million in the first quarter of 2016 .

In the first quarter of 2017 , the Company used $6.6 million in cash from operating activities. Cash, cash equivalents and investments were $71.6 million at March 31, 2017 , compared to $89.3 million at December 31, 2016 .

Business Highlights:

As of the end of the first quarter of 2017 , 36 of the 68 major city law enforcement agencies have purchased Axon body-worn cameras and/or its digital evidence management solution: Albuquerque, Atlanta, Baltimore, Baltimore County, Charlotte-Mecklenburg, Chicago, Cincinnati, Cleveland, Dallas, Denver, Fort Worth, Fresno, Los Angeles, Las Vegas, Louisville, Memphis, Mesa, Miami, Milwaukee, Minneapolis, Montgomery County, New Orleans, Omaha, Philadelphia, Pittsburgh, Sacramento, Salt Lake City, San Antonio, San Diego, San Francisco, San Jose, Seattle, Tampa, Tucson, Washington, DC, and Wichita.

Axon's Evidence.com platform user count continued to grow, extending the Company's market leadership. During the three months ended March 31, 2017 , the Company booked approximately 16,400 seats on its digital evidence management platform, Evidence.com, net of renewals. Since inception, the Company has booked cumulative Evidence.com licenses of approximately 148,400.

Quarterly Conference Call:

The Company will host its first quarter 2017 earnings conference call on Tuesday , May 9, 2017 at 4:30 p.m. ET. To join the live audio presentation, please dial toll free 877-303-9126, or for international callers, please dial +1-253-237-1156.

The Company has posted supplemental materials including its key operating metrics on its website to provide additional information about our first quarter financial results.

The Company plans to update and post its investor relations presentation to http://investor.axon.com within the next two weeks with the first quarter results. Archived presentations from previous quarters can also be found on the website.






Statistical Definitions:

Axon cameras and Evidence.com bookings represent a statistical measure defined as the sales price of orders placed in the relevant time period. Bookings are an indication of the activity the Company is seeing relative to Axon cameras and Evidence.com. We consider bookings to be a statistical measure defined as the sales price of orders (not invoiced sales) placed in the relevant fiscal period, net of cancellations, regardless of when the products or services ultimately will be provided. Some bookings might be invoiced in subsequent years.

Due to municipal government funding rules, certain of the future year amounts included in bookings are subject to budget appropriation or other contract cancellation clauses. Although the Company has entered into contracts for the delivery of products and services in the future and anticipates the contracts will be completed, if agencies invoke a cancellation clause or do not appropriate funds in future year budgets, revenue associated with these bookings will ultimately not be recognized, resulting in a future reduction to bookings. In the first quarter of 2017 , the Company did not record any reversals related to prior period bookings due to non-appropriation or other cancellation reasons.

For more information relative to our revenue recognition policies, please reference our SEC filings.

Non-GAAP Measures:

To supplement the Company’s financial results presented in accordance with GAAP, we present the non-GAAP financial measures of EBITDA, Adjusted EBITDA and Free Cash Flow. Our management uses these non-GAAP financial measures in evaluating the Company’s performance in comparison to prior periods. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing our performance, and when planning and forecasting our future periods. A reconciliation of GAAP to the non-GAAP financial measures is presented at the end of the release.

EBITDA is defined as consolidated net income before interest expense, income taxes and depreciation and amortization. Adjusted EBITDA, as presented herein, is defined as EBITDA before certain other items, including: stock-based compensation; net gain/loss on write-down/disposal of property, equipment and intangible assets; and loss on impairment.

Free Cash Flow is defined as cash flows provided by operating activities minus purchases of property, plant and equipment and intangible assets.






Caution on Use of Non-GAAP Measures

Although these non-GAAP financial measures are not consistent with GAAP, management believes investors will benefit by referring to these non-GAAP financial measures when assessing the Company’s operating results, as well as when forecasting and analyzing future periods. However, management recognizes that:

these non-GAAP financial measures are limited in their usefulness and should be considered only as a supplement to the Company’s GAAP financial measures;
these non-GAAP financial measures should not be considered in isolation from, or as a substitute for, the Company’s GAAP financial measures;
these non-GAAP financial measures should not be considered to be superior to the Company’s GAAP financial measures; and
these non-GAAP financial measures were not prepared in accordance with GAAP and investors should not assume that the non-GAAP financial measures presented in this earnings release were prepared under a comprehensive set of rules or principles.

Further, these non-GAAP financial measures may be unique to the Company, as they may be different from similarly titled non-GAAP financial measures used by other companies. As such, this presentation of non-GAAP financial measures may not enhance the comparability of the Company’s results to the results of other companies.

About Axon

The Axon network is a network of devices, apps, and people that helps law enforcement become smarter and safer. Our mission is to protect life. Our technologies give law enforcement the confidence, focus, and time they need to keep their communities safe. Our products impact every aspect of an officer's day-to-day experience:

In the field  - Our Smart Weapons offer a less-lethal intermediate use of force response and our body-worn and in-car cameras collect video evidence to capture the truth of an incident; and our mobile applications enable simple evidence collection.

At the station  - Our secure, cloud-based digital evidence management solution allows officers and command staff to manage, review, share and process digital evidence using forensic, redaction, transcription and other tools.

In the courtroom  - Our solutions for prosecutors make collaborating across jurisdictions and agencies easy so that cases can be resolved quickly.

We work hard for those who put themselves in harm's way for all of us. To date, there are more than 100,000 licensed users from around the world and more than 182,000 lives and countless dollars have been saved with the Axon network of devices, apps and people. Learn more at www.axon.com or by calling (800) 978-2737.





Axon, the "Axon Delta" logo, Axon network, Smart Weapons, and Evidence.com are trademarks of Axon Enterprise, Inc., some of which are registered in the U.S. and other countries. For more information, visit www.axon.com/legal. All rights reserved.

Note to Investors

This press release 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 or 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. The forward-looking information is based upon current information and expectations regarding Axon Enterprise, Inc. These estimates and statements speak only as of the date on which they are made, are not guarantees of future performance, and involve certain risks, uncertainties and assumptions that are difficult to predict. Axon Enterprise, Inc. assumes no obligation to update the information contained in this press release, except as required by law.

We caution that these statements are qualified by important factors that could cause actual results to differ materially from those reflected by the forward looking statements herein. Such factors include, but are not limited to: market acceptance of our products; our dependence on sales of our TASER X26P and X2 CEWs; our ability to design, introduce and sell new products; delays in development schedules; rapid technological change and competition; product defects; breach of our security measures resulting in unauthorized access to customer data; outages and disruptions relating to our Evidence.com service; budgetary and political constraints of prospects and customers; the length of our sales cycle and our ability to realize benefits from our marketing and selling efforts; our exposure to cancellations of government contracts due to appropriation clauses; changes in civil forfeiture laws; the long-term revenue recognition cycle for our SaaS Evidence.com product; our reliance on third party cloud-based storage providers; litigation risks resulting from alleged product-related injuries and media publicity concerning allegations of deaths occurring after use of the TASER device and the negative impact this publicity could have on sales; the outcome of pending or future litigation; our ability to protect our intellectual property as well as intellectual property infringement claims and relating litigation costs; challenges in obtaining and enforcing our patent rights in foreign countries; risks of governmental regulations, including regulations of our products by the United States Consumer Product Safety Commission, regulation of our products as a "crime control" product by the Federal government, state and local government regulation and foreign regulation and the adverse effects that could result from our products being classified as firearms by the United States Bureau of Alcohol, Tobacco, Firearms and Explosives; regulatory and political challenges presented by international markets; the possibility that the United States may withdraw from or materially modify the North American Free Trade Agreement; the adverse effect of the United Kingdom’s exit from the European Union; our compliance with regulations governing the environment, including but not limited to, regulations within the European Union; regulations relating to voice, data and communications services; regulations relating to conflict minerals;  our dependence on third party suppliers for key components of our products; component shortages; rising costs of raw materials and transportation relating to petroleum prices; that we may experience declines in gross margins due to a shift in product sales





from CEWs to Axon devices; our ability to manage our growth and increase manufacturing production to meet demand; establishment and expansion of our direct and indirect distribution channels; our ability to pursue sales directly with customers; risks relating to acquisitions and joint ventures; goodwill impairment; catastrophic events; the adverse effects on our operations and financial results from foreign currency fluctuations; fluctuations in our effective tax rate; counter-party risks relating to cash balances held in excess of FDIC insurance limits; employee retention risks; volatility in our stock price; quarterly fluctuations in our operating results; and other factors identified in documents filed by us with the Securities and Exchange Commission, including those set forth in our Form 10-K for the year ended December 31, 2016.

Please visit http://investor.axon.com, www.twitter.com/axon_us, and www.facebook.com/axon_us where Axon discloses information from time to time about the company, its financial information, and its business.

For investor relations information please contact Arvind Bobra via email at IR@axon.com.

- More -






AXON ENTERPRISE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share data)

 
Three Months Ended March 31,
 
2017
 
2016
 
 
 
 
Net sales
$
79,242

 
$
55,530

Cost of products sold and services delivered
30,572

 
18,628

Gross margin
48,670

 
36,902

Operating expenses:
 
 
 
Sales, general and administrative
30,857

 
24,833

Research and development
12,463

 
6,927

Total operating expenses
43,320

 
31,760

Income from operations
5,350

 
5,142

Interest and other income, net
206

 
118

Income before provision for income taxes
5,556

 
5,260

Provision for income taxes
976

 
1,797

Net income
$
4,580

 
$
3,463

Net income per common and common equivalent shares:
 
 
 
Basic
$
0.09

 
$
0.06

Diluted
$
0.09

 
$
0.06

Weighted average number of common and common equivalent shares outstanding:
 
 
 
Basic
52,418

 
53,693

Diluted
53,677

 
54,789







AXON ENTERPRISE, INC.
SEGMENT REPORTING
(Unaudited)
(dollars in thousands)

 
Three Months Ended March 31, 2017
 
Three Months Ended March 31, 2016
 
TASER
Weapons
 
Software and Sensors
 
Total
 
TASER
Weapons
 
Software and Sensors
 
Total
 
 
 
 
 
 
 
 
 
 
 
 
Product sales
$
57,671

 
$
9,820

 
$
67,491

 
$
45,834

 
$
4,841

 
$
50,675

Service revenue

 
11,751

 
11,751

 

 
4,855

 
4,855

Net sales
57,671

 
21,571

 
79,242

 
45,834

 
9,696

 
55,530

Cost of products sold
18,026

 
9,046

 
27,072

 
14,077

 
3,378

 
17,455

Cost of services delivered

 
3,500

 
3,500

 

 
1,173

 
1,173

Gross margin
39,645

 
9,025

 
48,670

 
31,757

 
5,145

 
36,902

Sales, general and administrative
17,216

 
13,641

 
30,857

 
15,272

 
9,561

 
24,833

Research and development
2,212

 
10,251

 
12,463

 
1,120

 
5,807

 
6,927

Income (loss) from operations
$
20,217

 
$
(14,867
)
 
$
5,350

 
$
15,365

 
$
(10,223
)
 
$
5,142

 
 
 
 
 
 
 
 
 
 
 
 
Gross margin %
68.7
%
 
41.8
 %
 
61.4
%
 
69.3
%
 
53.1
 %
 
66.5
%
Operating margin %
35.1
%
 
(68.9
)%
 
6.8
%
 
33.5
%
 
(105.4
)%
 
9.3
%








AXON ENTERPRISE, INC.
Software and Sensors Bookings by Quarter
(Unaudited)
(in thousands)

 
March 31, 2017
 
December 31, 2016
 
September 30, 2016
 
June 30, 2016
 
March 31, 2016
 
 
 
 
 
 
 
 
 
 
Bookings
$
60,080

 
$
72,509

 
$
57,491

 
$
72,034

 
$
52,059






Software and Sensors Future Contracted Revenue
(Unaudited)
(in thousands)

 
March 31, 2017
 
December 31, 2016
Cumulative bookings, net of cancellations
$
524,659

 
$
464,579

Cumulative recognized revenue
(134,639
)
 
(113,787
)
Future contracted revenue
$
390,020

 
$
350,792


Future contracted revenue for the Software and Sensors segment represents a statistical measure defined as cumulative bookings minus cumulative recognized revenue related solely to that segment. Future contracted revenues are an indication of momentum of longer-term contracts being signed and the expectations of future revenues in the Software and Sensors segment. These financial metrics are exclusive of TASER Cam recorder revenues.







AXON ENTERPRISE, INC.
UNIT SALES STATISTICS
(Unaudited)
Units in whole number

 
Three Months Ended March 31,
 
2017
 
2016
 
Unit Change
 
Percent Change
 
 
 
 
 
 
 
 
TASER X26P
15,361

 
18,567

 
(3,206
)
 
(17.3
)%
TASER X2
17,137

 
8,737

 
8,400

 
96.1

TASER X26
618

 
821

 
(203
)
 
(24.7
)
TASER Pulse and Bolt
3,572

 
1,566

 
2,006

 
128.1

Cartridges
595,986

 
465,157

 
130,829

 
28.1

Axon Flex
3,101

 
2,397

 
704

 
29.4

Axon Body
20,313

 
6,198

 
14,115

 
227.7

Axon Dock
4,875

 
1,402

 
3,473

 
247.7

TASER Cam
1,339

 
2,005

 
(666
)
 
(33.2
)








AXON ENTERPRISE, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(Unaudited)
Dollars in thousands

 
Three Months Ended March 31,
 
2017
 
2016
 
 
 
 
Net income
$
4,580

 
$
3,463

   Depreciation and amortization
1,604

 
901

   Interest expense, net
38

 

   Provision (benefit) for income taxes
976

 
1,797

EBITDA
$
7,198

 
$
6,161

 
 
 
 
Adjustments:
 
 
 
Stock-based compensation expense
$
3,447

 
$
2,220

Net gain on disposal of property, equipment and intangible assets,

 
(23
)
Adjusted EBITDA
$
10,645

 
$
8,358

Adjusted EBITDA as a percentage of net sales
13.4
%
 
15.1
%
 
 
 
 
Composition of stock-based compensation:
 
Three Months Ended March 31,
 
2017
 
2016
 
 
 
 
Cost of products sold and services delivered
$
79

 
$
100

Sales, general and administrative
2,028

 
1,390

Research and development
1,340

 
730

 
$
3,447

 
$
2,220






AXON ENTERPRISE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands)
 
March 31, 2017
 
December 31, 2016
 
(Unaudited)
 
 
ASSETS
Current Assets:
 
 
 
Cash and cash equivalents
$
41,974

 
$
40,651

Short-term investments
29,630

 
48,415

Accounts and notes receivable, net
44,328

 
39,466

Inventory, net
48,699

 
34,841

Prepaid expenses and other current assets
15,707

 
13,858

Total current assets
180,338

 
177,231

 
 
 
 
Property and equipment, net
26,399

 
24,004

Deferred income tax assets, net
20,055

 
19,515

Intangible assets, net
20,256

 
15,218

Goodwill
13,001

 
10,442

Long-term investments

 
234

Long-term accounts and notes receivable, net of current portion
24,688

 
17,602

Other assets
14,781

 
13,917

Total assets
$
299,518

 
$
278,163

 
 
 
 
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
 
 
 
Accounts payable
$
15,632

 
$
10,736

Accrued liabilities
20,330

 
18,248

Current portion of deferred revenue
49,909

 
45,137

Customer deposits
2,445

 
2,148

Current portion of business acquisition contingent consideration
1,705

 
1,690

Other current liabilities
467

 
80

Total current liabilities
90,488

 
78,039

 
 
 
 
Deferred revenue, net of current portion
41,644

 
40,054

Liability for unrecognized tax benefits
2,030

 
1,896

Long-term deferred compensation
3,407

 
3,362

Business acquisition contingent consideration, net of current portion
2,664

 
1,635

Other long-term liabilities
1,895

 
2,289

Total liabilities
142,128

 
127,275

 
 
 
 
Stockholders’ Equity:
 
 
 
Preferred stock

 

Common stock
1

 
1

Additional paid-in capital
189,710

 
187,656

Treasury stock
(155,947
)
 
(155,947
)
Retained earnings
122,558

 
118,275

Accumulated other comprehensive income
1,068

 
903

Total stockholders’ equity
157,390

 
150,888

Total liabilities and stockholders’ equity
$
299,518

 
$
278,163







AXON ENTERPRISE, INC.
SELECTED CASH FLOW INFORMATION
(Unaudited)
(in thousands)

 
Three Months Ended March 31,
 
2017
 
2016
 
 
 
 
Net income
$
4,580

 
$
3,463

Depreciation and amortization
1,604

 
901

Stock-based compensation
3,447

 
2,220

Net cash provided by (used in) operating activities
(6,609
)
 
7,093

Net cash provided by (used in) investing activities
9,884

 
(3,637
)
Net cash used in financing activities
(1,877
)
 
(9,722
)
Cash and cash equivalents, end of period
41,974

 
53,365

 
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
2017
 
2016
 
 
 
 
Net cash provided by (used in) operating activities
$
(6,609
)
 
$
7,093

Purchases of property and equipment
(2,343
)
 
(1,280
)
Purchases of intangible assets
(95
)
 
(98
)
Purchase of property and equipment and intangible assets in connection with business acquisition
(8,392
)
 

Free cash flow (deficit), a non-GAAP measure
$
(17,439
)
 
$
5,715



# # #





AXONHORIZONTAL.JPG

Operating Metrics (Unaudited)
 
 
2017
 
2016
 
2015
 
 
Q1
 
Q4
Q3
Q2
Q1
 
Q4
Q3
Q2
Q1
 
 
 
 
 
 
 
 
 
 
 
 
 
Axon & Evidence.com Bookings (millions)
 
$60.1
 
$72.5
$57.5
$72.0
$52.1
 
$44.7
$36.9
$30.6
$22.9
Sequential % Change
 
-17%
 
26%
-20%
38%
17%
 
21%
21%
34%
-7%
 
 
 
 
 
 
 
 
 
 
 
 
 
Annual Service Revenue (millions)  (1)
 
$46.2
 
$40.2
$32.0
$21.1
$18.1
 
$16.7
$12.0
$9.8
$7.8
 
 
 
 
 
 
 
 
 
 
 
 
 
Future Contracted Revenue (millions) (2)
 
$390.0
 
$350.8
$302.0
$262.8
$202.3
 
$159.0
$122.4
$94.9
$71.1
Sequential % Change
 
11%
 
16%
15%
30%
27%
 
30%
29%
33%
33%
 
 
 
 
 
 
 
 
 
 
 
 
 
Multiple Year Contract % (3)
 
94%
 
88%
89%
95%
95%
 
92%
91%
88%
90%
 
 
 
 
 
 
 
 
 
 
 
 
 
LTV/CAC
 
4.3x
 
6.0x
4.9x
6.2x
5.1x
 
4.3x
4.6x
4.5x
3.5x
 
 
 
 
 
 
 
 
 
 
 
 
 
Weapons Op Inc %
 
35.1%
 
36.1%
38.0%
33.2%
33.5%
 
37.4%
35.4%
38.7%
40.1%
 
 
 
 
 
 
 
 
 
 
 
 
 
Evidence.com new seats booked
 
16,400
 
21,400
15,600
20,200
15,800
 
13,200
9,300
9,500
7,400
 
 
 
 
 
 
 
 
 
 
 
 
 
Evidence.com cumulative seats booked
 
148,400
 
132,000
110,600
95,000
74,800
 
59,000
45,800
36,400
27,000
 
 
 
 
 
 
 
 
 
 
 
 
 
(1)  Monthly recurring license, integration, warranty and storage revenue annualized.
 
 
 
(2)  Cumulative bookings for the Software and Sensors segment minus cumulative recognized revenue related solely to Software and Sensors segment
(3)  For orders booked with Evidence.com seats, the % that signed multiple year contracts
 
 
 





AXONHORIZONTAL.JPG

SG&A Expenses by Segment (Unaudited)
 
Three Months Ended March 31,
 
Dollar Change
 
Percent Change
 
2017
 
2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TASER Weapons segment:
 
 
 
 
 
 
 
 
 
 
 
Salaries, benefits and bonus
$
8,074

 
26.2
%
 
$
5,719

 
23.0
%
 
$
2,355

 
41.2
 %
Stock-based compensation
1,480

 
4.8

 
758

 
3.1

 
722

 
95.3

Professional, consulting and lobbying
1,852

 
6.0

 
2,958

 
11.9

 
(1,106
)
 
(37.4
)
Sales and marketing
1,255

 
4.1

 
2,668

 
10.7

 
(1,413
)
 
(53.0
)
Travel and meals
1,318

 
4.3

 
945

 
3.8

 
373

 
39.5

Other
3,237

 
10.5

 
2,224

 
9.0

 
1,013

 
45.5

TASER Weapons segment
17,216

 
55.8

 
15,272

 
61.5

 
1,944

 
12.7

Software and Sensors segment:
 
 
 
 
 
 
 
 
 
 
 
Salaries, benefits and bonus
6,002

 
19.5

 
3,955

 
15.9

 
2,047

 
51.8

Stock-based compensation
548

 
1.8

 
632

 
2.5

 
(84
)
 
(13.3
)
Professional, consulting and lobbying
2,712

 
8.8

 
1,034

 
4.2

 
1,678

 
162.3

Sales and marketing
2,158

 
7.0

 
2,139

 
8.6

 
19

 
0.9

Travel and meals
1,354

 
4.4

 
1,074

 
4.3

 
280

 
26.1

Other
867

 
2.8

 
727

 
2.9

 
140

 
19.3

Software and Sensors segment
13,641

 
44.2

 
9,561

 
38.5

 
4,080

 
42.7

Total sales, general and administrative expenses
$
30,857

 
100.0
%
 
$
24,833

 
100.0
%
 
$
6,024

 
24.3











AXONHORIZONTAL.JPG

R&D Expenses by Segment (Unaudited)
 
Three Months Ended March 31,
 
Dollar Change
 
Percent Change
 
2017
 
2016
 
 
 
 
 
 
 
 
 
 
 
 
 
 
TASER Weapons segment:
 
 
 
 
 
 
 
 
 
 
 
Salaries, benefits and bonus
$
1,107

 
8.9
%
 
$
293

 
4.2
%
 
$
814

 
277.8
 %
Stock-based compensation
128

 
1.0

 
143

 
2.1

 
(15
)
 
(10.5
)
Professional and consulting
325

 
2.6

 
354

 
5.1

 
(29
)
 
(8.2
)
Travel and meals
103

 
0.8

 
37

 
0.5

 
66

 
178.4

Other
549

 
4.4

 
293

 
4.2

 
256

 
87.4

TASER Weapons segment
2,212

 
17.7

 
1,120

 
16.2

 
1,092

 
97.5

Software and Sensors segment:
 
 
 
 
 
 
 
 
 
 
 
Salaries, benefits and bonus
6,049

 
48.5

 
$
3,631

 
52.4

 
2,418

 
66.6

Stock-based compensation
1,212

 
9.7

 
587

 
8.5

 
625

 
106.5

Professional and consulting
1,247

 
10.0

 
432

 
6.2

 
815

 
188.7

Travel and meals
199

 
1.6

 
154

 
2.2

 
45

 
29.2

Other
1,544

 
12.4

 
1,003

 
14.5

 
541

 
53.9

Software and Sensors segment:
10,251

 
82.3

 
5,807

 
83.8

 
4,444

 
76.5

Total research and development expenses
$
12,463

 
100.0
%
 
$
6,927

 
100.0
%
 
$
5,536

 
79.9