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Axon Enterprise (AAXN) Q3 Earnings Beat, Revenues Rise Y/Y

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Axon Enterprise, Inc.’s third-quarter 2018 adjusted earnings came in at 20 cents per share surpassing the Zacks Consensus Estimate of 12 cents by 66.7%. The bottom line also improved a massive 300% on a year-over-year basis.

Excluding one-time items, the company recorded GAAP earnings of 10 cents compared with a penny earned in the year-ago quarter. The upside was driven by a solid double-digit top-line improvement.

Total Revenues

Revenues totaled $104.8 million, which outpaced the Zacks Consensus Estimate of $103 million by 2% in the quarter under review. The reported figure also improved 16.1% year over year, buoyed by higher sales at both the TASER Weapon, and the Software and sensors segment.

At the TASER Weapons segment, revenues increased 7.2% year over year to $63.7 million. Also, the Software and Sensors segment’s revenues surged 33.4% to $41.2 million.

Axon Enterprise, Inc Price, Consensus and EPS Surprise

Axon Enterprise, Inc Price, Consensus and EPS Surprise | Axon Enterprise, Inc Quote

In the third quarter, segment bookings increased 5% to $92.9 million from $88.9 million in the preceding quarter. On a year-over-year basis, bookings were up 19%, reflecting solid domestic bookings of Axon Fleet. New international markets adopting Axon solutions also contributed to the improvement in bookings.

Quarter Highlights

Axon Enterprise's gross margin expanded 750 basis points year over year to 62.6% from 55.1%. The uptick can be attributed to an improved mix of body-camera shipments, better margins associated with Axon Fleet and the elimination of duplicate data storage costs.

Total operating expenses rose 22% to $61.7 million. Higher sales, general and administrative expenses (up 9%) as well as research and development expenses (up 55.2%) led to the upside.

Financials

Axon Enterprise had cash and cash equivalents of $324.4 million as of Sep 30, 2018 compared with $75.1 million as of Dec 31, 2017.

Net cash flow from operating activities amounted to $16.5 million as of Sep 30, 2018 compared with cash flow of $6.6 million in the year-ago quarter. Free cash flow summed $14.1 million compared to free cash outflow of $1.1 million in third-quarter 2017.

Zacks Rank

Axon Enterprise currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Recent Security Stocks’ Releases

Alarm.com Holdings (ALRM - Free Report) came out with quarterly earnings of 36 cents per share, beating the Zacks Consensus Estimate of 25 cents per share. This compares to earnings of 27 cents per share a year ago.

Allegion plc’s (ALLE - Free Report) adjusted earnings in the third quarter came in at $1.23 per share, outpacing the Zacks Consensus Estimate of $1.21. Revenues totaled $711.5 million, up 16.8% year over year.

Fortune Brands Home & Security, Inc.’s adjusted earnings of 93 cents per share, increased 12% year over year. However, the bottom-line figure missed the Zacks Consensus Estimate of $1.05.

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