Axon Enterprise, Inc. AXON reported third-quarter 2024 adjusted earnings of $1.45 per share, which surpassed the Zacks Consensus Estimate of $1.22. The bottom line increased 18.9% year over year despite a significant rise in the cost of sales.
Total revenues of $544.3 million surpassed the consensus estimate of $527 million and increased 31.7% year over year. The top line benefited from strong demand for TASER and body camera products. Growth in TASER and Sensors revenues, with increased adoption of premium software offerings, augmented the top-line results.
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AXON’s Segmental Details
Software & Sensors: Within this segment, Cloud and Services revenues rose 36% to $203 million. The uptick was driven by new customer adoption of Axon Evidence and continued expansion with the company’s existing customers. Cloud & Services’ adjusted gross margin increased year over year to 75.2% from 73.7% due to a higher software mix revenues relative to professional services.
Sensors & Other revenues climbed 18% to $120 million, driven by increased demand for Axon Body cameras. The gross margin declined to 38.9% from 52.9% in the year-ago period due to manufacturing overhead reallocations made in the year-ago quarter and inventory reserve charges associated with legacy products.
TASER: The segment’s revenues jumped 36% year over year to $222 million, driven by growth in demand for TASER 10 and associated cartridges and services. The adjusted gross margin increased year over year to 63% from 62.8% driven by investments in automation and cost reduction initiatives.
Axon Enterprise, Inc Price, Consensus and EPS Surprise
Axon Enterprise, Inc price-consensus-eps-surprise-chart | Axon Enterprise, Inc Quote
AXON’s Margin Profile
Axon Enterprise’s cost of sales increased 36.6% year over year to $213.5 million. Selling, general and administrative expenses increased 57.1% year over year to $192.2 million.
Total operating expenses climbed 53.9% year over year to $306.7 million. The gross margin deteriorated to 60.8% from 62.1% in the year-ago period.
AXON’s Balance Sheet & Cash Flow
At the end of the third quarter, Axon Enterprise had cash and cash equivalents of $695.1 million compared with $598.5 million in December 2023-end. Long-term lease liabilities totaled $41.7 million compared with $33.6 million in 2023-end.
In the first nine months of 2024, the company generated net cash of $158.1 million from operating activities against $49.2 million cash spent in the year-ago period.
Adjusted free cash flow was $117.5 million in the first nine months of the year against $27.2 million cash outflow in the prior-year period.
AXON’s Outlook
For 2024, Axon Enterprise expects revenues to be approximately $2.07 billion compared with $2.00-$2.05 billion guided earlier. The metric indicates approximately 32% year-over-year growth. Adjusted EBITDA is expected to be approximately $510 million, implying an adjusted EBITDA margin of 24.6%. This represents growth from its previous guided range of $460-$475 million.
The company expects capital expenditures to be between $80 million and $95 million. This includes investments in TASER 10 automation and capacity expansion. It anticipates stock-based compensation expenses to be in the range of $360-$380 million.
AXON’s Zacks Rank
The company currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Industrial Companies
Avery Dennison Corporation AVY delivered third-quarter adjusted earnings of $2.33 per share, which beat the Zacks Consensus Estimate of $2.32. The bottom line increased 9% year over year, driven by higher volume and productivity gains.
Total revenues grew 4.1% year over year to $2.18 billion and missed the Zacks Consensus Estimate of $2.2 billion.
John Bean Technologies Corporation JBT recorded adjusted earnings of $1.50 per share in third-quarter 2024, 35.1% higher than the prior-year quarter. The figure beat the consensus estimate of $1.41.
Revenues of $454 million increased 12.4% from the year-ago quarter. The top line surpassed the consensus estimate of $445 million.
A. O. Smith Corporation’s AOS third-quarter adjusted earnings of 82 cents per share matched the Zacks Consensus Estimate. The bottom line decreased 8.9% on a year-over-year basis.
Net sales of $902.6 million missed the consensus estimate of $913 million. The top line decreased 4% year over year due to lower sales in China and decreased volumes of water heaters in North America.
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