Axon Enterprise (AAXN) Tops Q4 EPS by 3c, Offers FY Guidance

Axon Enterprise (NASDAQ: AAXN) reported Q4 EPS of $0.41, $0.03 better than the analyst estimate of $0.38. Revenue for the quarter came in at $172 million versus the consensus estimate of $146.31 million.

GUIDANCE:

Axon Enterprise sees FY2020 revenue of $615-625 million, versus the consensus of $588 million.

• Revenue in the range of $615 million to $625 million;
• At the midpoint, this represents 17% year-over-year growth, and more than 20% year-over-year growth excluding the surge of Axon Body 3 hardware shipments in Q4 2019;
• We anticipate that Q1 2020 revenue will increase approximately 13% year-over-year;
• We anticipate that 2020 revenue will accelerate in the second half of the year, with a back-half weighting similar to 2019;
• Adjusted EBITDA in the range of $100 million to $105 million;
• Adjusted EBITDA guidance reflects modest gross margin improvement over 2019, which will be partially offset by camera hardware shipments to major city customers;
• Adjusted EBITDA guidance reflects accelerated investments to take advantage of total addressable market expansion opportunities in new product categories, such as communications, and new customer categories, such as federal and corrections, as described above, and in building out systems for scale;
• Adjusted EBITDA guidance excludes expected legal costs of up to $15 million associated with litigation involving the FTC, which we intend to treat as an add-back to Adjusted EBITDA;
• We expect Adjusted EBITDA margin of approximately 10% to 12% in Q1 2020;
• We expect a normalized tax rate of 20% to 25%, which can fluctuate depending on geography of income and the effects of discrete items, including changes in our stock price;
• We expect stock-based compensation expenses to be approximately $85 million for the full year, which is subject to change depending on our assessment of the probability of attaining operational metrics for the CEO Performance Award and XSPP awards, and the expected timing of such attainment; and
• We are closely monitoring our supply chain and operations in the context of the coronavirus crisis. Though the situation is dynamic, at this time, we believe the potential impact to Axon is reflected in our full-year guidance.

For earnings history and earnings-related data on Axon Enterprise (AAXN) click here.

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