Axon(AXON)2024-05-06 22:53Financial Performance - Revenues for the three months ended March 31, 2024, were 117.7 million, or 34.3%, from the prior year[143]. - Net income for the three months ended March 31, 2024, was 42.3 million from the acquisition of Fusus[143]. - Net income for the three months ended March 31, 2024, was 45.1 million for the same period in 2023, resulting in net income per basic share of 0.62[173]. - Total net sales for the three months ended March 31, 2024, were 28.6 million, or 6.6%, compared to 108.9 million, an increase from 65.1 million in the same period last year[183]. Revenue Breakdown - Net sales from products were 188.7 million (41.0% of total sales) for the three months ended March 31, 2024[146]. - International revenue increased, driven by sales growth in Europe, the Middle East, Africa, and Asia Pacific regions[147]. - Net sales for the TASER segment increased by 33.1%, primarily due to strong adoption of the TASER 10 product[150]. - Net sales for the Software and Sensors segment increased by 35.1%, driven by user growth and adoption of premium features[151]. - Net sales for the TASER segment increased by approximately 11.2 million, or 4.1%, during the three months ended March 31, 2024, primarily due to increased adoption of premium add-on features[178]. Expenses and Margins - Gross margin decreased to 56.4% from 59.5% year-over-year, primarily due to higher stock-based compensation and payroll taxes[143]. - Gross margin for the TASER segment decreased to 50.7% from 62.2% year-over-year, while the Software and Sensors segment increased to 60.1% from 57.8%[155][156]. - Operating expenses increased by 36.1 million, or 31.0%, to 116.6 million for the same period in 2023[159]. - Research and development expenses rose by 91.1 million for the three months ended March 31, 2024, compared to 7.7 million, primarily due to increased headcount and additional grants awarded to employees[158]. Cash Flow and Liquidity - Cash and cash equivalents decreased by 403.9 million as of March 31, 2024, compared to December 31, 2023[185]. - Net cash used in operating activities for the first three months of 2024 was 115.4 million[193]. - Cash used in investing activities during the first three months of 2024 was 237.8 million for a business acquisition[197]. - The company has a 200.0 million line of credit, with 7.5 million in outstanding letters of credit[208]. - The company has not borrowed any funds under the line of credit since its inception, but future borrowings could be affected by changes in underlying interest rates[208]. Tax and Interest - The provision for income taxes was 117.9 million[167]. Currency and Market Risks - The company's operations are subject to fluctuations in foreign currency exchange rates, particularly as most international sales are transacted in foreign currencies[209]. - The strengthening of the U.S. dollar against local currencies could increase the cost of products for international customers, potentially impacting sales[209]. - Fluctuations in currency exchange rates could pose risks to the company's business operations in the future[210]. - The company has not engaged in currency hedging activities to date, but may consider entering into foreign currency forward and option contracts in the future[210]. Strategic Initiatives - The company is shifting towards a subscription model to better align with municipal budgeting processes, impacting cash flow timing[189]. - The company plans to consider repurchases of its common stock, subject to market conditions and authorization[190]. - As of March 31, 2024, a hypothetical 100 basis point increase in interest rates would result in a $1.5 million decline in the fair market value of the portfolio[205].