Axon (NASDAQ: AXON) reported Q2 EPS of $0.44, $0.05 better than the analyst estimate of $0.39. Revenue for the quarter came in at $286 million versus the consensus estimate of $258.96 million.

GUIDANCE:

Axon sees FY2022 revenue of $1.07-1.12 billion, versus the consensus of $1.08 billion.

• Axon's upwardly revised full year 2022 revenue expectation has improved to a range of $1.07 billion to $1.12 billion, reflecting approximately 27% annual growth at the midpoint. Previously, Axon had guided to a range of $1.05 billion to $1.1 billion, reflecting 25% growth at the midpoint.
• We now expect to deliver 2022 Adjusted EBITDA at the higher end of the previously communicated range of $190 million to $200 million.
• As discussed last quarter, we are facing higher labor, freight and materials costs, which we are working to offset with automation, additional distribution facilities and engineering R&D on products to lower component costs.
• We provide Adjusted EBITDA guidance, rather than net income guidance, due to the inherent difficulty of forecasting certain types of expenses such as stock-based compensation and income tax expenses, which affect net income but not Adjusted EBITDA. We are unable to reasonably estimate the impact of such expenses, if any, on net income. Accordingly, we do not provide a reconciliation of projected net income to projected Adjusted EBITDA.
• We expect stock-based compensation expense to be more than $104 million for the full year. Because our stock-based compensation expense may vary based on changes in the probability of attaining certain operational or market capitalization metrics or attainment of such metrics and with changes in the expected or actual timing of such attainment, it is inherently difficult to forecast future stock-based compensation expense.
• We are maintaining our expected adjusted free cash flow range of $125 million to $145 million in 2022, compared with $85 million in 2021. This range reflects our expectations for operating cash flow, minus our expected purchases of property and equipment (CapEx) of $80 million to $90 million, excluding any investments made in our campus facility, which we expect to be less than $25 million.
• We are revising our expected 2022 capital expenditures to a range of $80 million to $90 million, compared with our previous expectation of $135 million to $160 million.
• We expect our net campus investments in 2022 to be less than $25 million, down from $85 million communicated previously. This reflects adjusted pacing as we continue to monitor remote-hybrid work trends and optimize our facility plans. We also are monitoring the economic environment and are course adjusting to maintain flexibility in how we invest our capital for growth.

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