Axon shoots up on gorgeous earnings beat, raises forecast

Shares of Axon (NASDAQ:AXON) soared as a lot as 18.5% in noon buying and selling on Wednesday after topping third quarter outcomes consensus, because the TASER maker continues to take pleasure in advantages of strong demand and long-term contracts, which allowed it to lift its full-year forecast.

AXON posted Q3 Non-GAAP EPS of 60 cents, 11 greater than common analyst expectations, and income of $312M (+34.5% Y/Y) was forward of Wall Road estimates by $32.1M.

Key metrics: annualized recurring income as at Sept 30, 2022 was $403M (+40% Y/Y), gross margin 62% vs 62.3%, adj EBITDA $67.8M vs $50.5M, whole oper bills $161.2M in comparison with $141.7M a 12 months in the past.

The Scottsdale, Arizona-based agency hiked its income outlook for 2022 to $1.15B to $1.16B, from $1.07B to $1.12B vary given in Q2. Furthermore, AXON mentioned it expects to ship FY adj EBITDA between $215M and $220M vs previous forecast of ~$200M.

Share of TASER units bought on a recurring fee plan was up 63% for 3 months ended Sept 30 vs 58% final 12 months. TASER gross sales spiked 19.3% to $144.9M throughout the quarter.

CEO Rick Smith, in an earnings name with analysts, mentioned he believes the vast majority of TASER adoption stays forward and that they’re beneath 10% penetrated when it comes to world TAM. Smith additionally added that the corporate is seeing quite a lot of curiosity in VR coaching.

Whereas discussing progress technique, new CFO Brittany Bagley throughout the name mentioned, “We see alternatives to enhance gross margin by investing in automation, driving manufacturing effectivity and enhancing fastened value absorption as we scale. Driving the income combine additional in direction of software program can be a key gross margin lever over the long run”.

Inventory +16% at $173.96 in session, AXON stands to erase YTD losses if present features maintain.