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Form 10-Q
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x
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Axon Enterprise, Inc.
(Exact name of registrant as specified in its charter)
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Delaware
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86-0741227
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(State or other jurisdiction of
incorporation or organization)
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(I.R.S. Employer
Identification No.)
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17800 North 85th Street
Scottsdale, Arizona
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85255
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(Address of principal executive offices)
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(Zip Code)
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Large accelerated filer
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ý
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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Emerging growth company
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¨
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Page
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March 31, 2018
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December 31, 2017
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||||
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(Unaudited)
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||||
ASSETS
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||||
Current assets:
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|
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||||
Cash and cash equivalents
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$
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92,330
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$
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75,105
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Short-term investments
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4,475
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6,862
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Accounts and notes receivable, net of allowance of $880 and $754 as of March 31, 2018 and December 31, 2017, respectively
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87,849
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56,064
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Contract assets, net
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9,278
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—
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Inventory
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43,104
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45,465
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Prepaid expenses and other current assets
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21,934
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21,696
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Total current assets
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258,970
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205,192
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Property and equipment, net of accumulated depreciation of $37,518 and $36,477 as of March 31, 2018 and December 31, 2017, respectively
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31,175
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31,172
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Deferred income tax assets, net
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14,200
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15,755
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Intangible assets, net
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17,496
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18,823
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Goodwill
|
14,947
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14,927
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Long-term notes receivable, net of current portion
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34,624
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36,877
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Other assets
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21,573
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15,366
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Total assets
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$
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392,985
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$
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338,112
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LIABILITIES AND STOCKHOLDERS’ EQUITY
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||||
Current liabilities:
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||||
Accounts payable
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$
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11,692
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$
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8,592
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Accrued liabilities
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34,869
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23,502
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Current portion of deferred revenue
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76,141
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70,401
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Customer deposits
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3,155
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3,673
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Current portion of business acquisition contingent consideration
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2,505
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1,693
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Other current liabilities
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348
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89
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Total current liabilities
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128,710
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107,950
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Deferred revenue, net of current portion
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58,003
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54,881
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Liability for unrecognized tax benefits
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1,810
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1,706
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Long-term deferred compensation
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3,998
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3,859
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Business acquisition contingent consideration, net of current portion
|
201
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1,048
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Other long-term liabilities
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934
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1,224
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Total liabilities
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193,656
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170,668
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Commitments and contingencies (Note 11)
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Stockholders’ equity:
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Preferred stock, $0.00001 par value; 25,000,000 shares authorized; no shares issued and outstanding as of March 31, 2018 and December 31, 2017
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—
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—
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Common stock, $0.00001 par value; 200,000,000 shares authorized; 53,307,083 and 52,969,869 shares issued and outstanding as of March 31, 2018 and December 31, 2017, respectively
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1
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1
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Additional paid-in capital
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202,344
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201,672
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Treasury stock at cost, 20,220,227 shares as of March 31, 2018 and December 31, 2017
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(155,947
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)
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(155,947
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)
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Retained earnings
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155,105
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123,185
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Accumulated other comprehensive loss
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(2,174
|
)
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(1,467
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)
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Total stockholders’ equity
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199,329
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167,444
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Total liabilities and stockholders’ equity
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$
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392,985
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$
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338,112
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Three Months Ended March 31,
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||||||
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2018
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2017
|
||||
Net sales from products
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$
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80,974
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$
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67,491
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Net sales from services
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20,241
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11,751
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Net sales
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101,215
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79,242
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Cost of product sales
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32,434
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27,072
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Cost of service sales
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4,320
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3,500
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Cost of sales
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36,754
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30,572
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Gross margin
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64,461
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48,670
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Operating expenses:
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Sales, general and administrative
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35,759
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30,857
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Research and development
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15,119
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12,463
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Total operating expenses
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50,878
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43,320
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Income from operations
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13,583
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5,350
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Interest and other income, net
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1,263
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206
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Income before provision for income taxes
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14,846
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5,556
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Provision for income taxes
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1,920
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976
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Net income
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$
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12,926
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$
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4,580
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Net income per common and common equivalent shares:
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Basic
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$
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0.24
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$
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0.09
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Diluted
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$
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0.24
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$
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0.09
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Weighted average number of common and common equivalent shares outstanding:
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Basic
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53,119
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52,418
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Diluted
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54,532
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53,677
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
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|||||||
Net income
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$
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12,926
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$
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4,580
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Foreign currency translation adjustments
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(707
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)
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165
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|
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Comprehensive income
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$
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12,219
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$
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4,745
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Three Months Ended March 31,
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||||||
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2018
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2017
|
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Cash flows from operating activities:
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Net income
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$
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12,926
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$
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4,580
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Adjustments to reconcile net income to net cash provided by (used in) operating activities:
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|
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Depreciation and amortization
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2,411
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1,604
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Loss on disposal of property and equipment
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34
|
|
|
—
|
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Bond premium amortization
|
22
|
|
|
218
|
|
||
Stock-based compensation
|
4,093
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3,447
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|
||
Deferred income taxes
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1,514
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(1,216
|
)
|
||
Unrecognized tax benefits
|
104
|
|
|
134
|
|
||
Change in assets and liabilities:
|
|
|
|
||||
Accounts and notes receivable and contract assets
|
(17,060
|
)
|
|
(11,858
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)
|
||
Inventory
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2,408
|
|
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(13,686
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)
|
||
Prepaid expenses and other assets
|
(1,702
|
)
|
|
(2,707
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)
|
||
Accounts payable, accrued and other liabilities
|
6,749
|
|
|
6,562
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|
||
Deferred revenue
|
6,554
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|
|
6,313
|
|
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Net cash provided by (used in) operating activities
|
18,053
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(6,609
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)
|
||
Cash flows from investing activities:
|
|
|
|
||||
Purchases of investments
|
(802
|
)
|
|
—
|
|
||
Proceeds from maturity of investments
|
3,167
|
|
|
18,801
|
|
||
Purchases of property and equipment
|
(1,063
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)
|
|
(2,343
|
)
|
||
Purchases of intangible assets
|
(34
|
)
|
|
(95
|
)
|
||
Business acquisitions
|
—
|
|
|
(6,479
|
)
|
||
Net cash provided by investing activities
|
1,268
|
|
|
9,884
|
|
||
Cash flows from financing activities:
|
|
|
|
||||
Proceeds from options exercised
|
356
|
|
|
296
|
|
||
Payroll tax payments for net-settled stock awards
|
(3,777
|
)
|
|
(2,165
|
)
|
||
Payments on capital lease obligation
|
(9
|
)
|
|
(8
|
)
|
||
Net cash used in financing activities
|
(3,430
|
)
|
|
(1,877
|
)
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
469
|
|
|
(76
|
)
|
||
Net increase in cash, cash equivalents and restricted cash
|
16,360
|
|
|
1,322
|
|
||
Cash, cash equivalents and restricted cash, beginning of period
|
78,438
|
|
|
43,969
|
|
||
Cash, cash equivalents and restricted cash, end of period
|
$
|
94,798
|
|
|
$
|
45,291
|
|
|
|
|
|
||||
Supplemental disclosures:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
92,330
|
|
|
$
|
41,974
|
|
Restricted cash (Note 6)
|
2,468
|
|
|
3,317
|
|
||
Total cash, cash equivalents and restricted cash shown in the statements of cash flows
|
$
|
94,798
|
|
|
$
|
45,291
|
|
|
|
|
|
||||
Cash paid for income taxes, net of refunds
|
$
|
63
|
|
|
$
|
145
|
|
|
|
|
|
||||
Non-cash transactions
|
|
|
|
||||
Property and equipment purchases in accounts payable and accrued liabilities
|
$
|
136
|
|
|
$
|
794
|
|
Contingent consideration related to business combinations
|
$
|
—
|
|
|
$
|
1,007
|
|
•
|
product warranty reserves,
|
•
|
inventory valuation,
|
•
|
revenue recognition,
|
•
|
valuation of goodwill, intangible and long-lived assets,
|
•
|
recognition, measurement and valuation of current and deferred income taxes,
|
•
|
fair value of stock awards issued and the estimated vesting period for performance-based stock awards, and
|
•
|
recognition and measurement of contingencies and accrued litigation expense.
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Numerator for basic and diluted earnings per share:
|
|
|
|
||||
Net income
|
$
|
12,926
|
|
|
$
|
4,580
|
|
Denominator:
|
|
|
|
||||
Weighted average shares outstanding
|
53,119
|
|
|
52,418
|
|
||
Dilutive effect of stock-based awards
|
1,413
|
|
|
1,259
|
|
||
Diluted weighted average shares outstanding
|
54,532
|
|
|
53,677
|
|
||
Anti-dilutive stock-based awards excluded
|
404
|
|
|
676
|
|
||
Net income per common share:
|
|
|
|
||||
Basic
|
$
|
0.24
|
|
|
$
|
0.09
|
|
Diluted
|
$
|
0.24
|
|
|
$
|
0.09
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Balance, beginning of period
|
$
|
644
|
|
|
$
|
780
|
|
Utilization of accrual
|
(93
|
)
|
|
(66
|
)
|
||
Warranty expense (recovery)
|
8
|
|
|
(367
|
)
|
||
Balance, end of period
|
$
|
559
|
|
|
$
|
347
|
|
•
|
Level 1 – Valuation techniques in which all significant inputs are unadjusted quoted prices from active markets for assets or liabilities that are identical to the assets or liabilities being measured.
|
•
|
Level 2 – Valuation techniques in which significant inputs include quoted prices from active markets for assets or liabilities that are similar to the assets or liabilities being measured and/or quoted prices for assets or liabilities that are identical or similar to the assets or liabilities being measured from markets that are not active. Also, model-derived valuations in which all significant inputs and significant value drivers are observable in active markets are Level 2 valuation techniques.
|
•
|
Level 3 – Valuation techniques in which one or more significant inputs or significant value drivers are unobservable. Unobservable inputs are valuation technique inputs that reflect the Company's own assumptions about inputs that market participants would use in pricing an asset or liability.
|
|
December 31, 2017
(As reported)
|
|
Impact of Adoption
of Topic 606 on
Opening Balance Sheet
|
|
January 1, 2018
(As adjusted)
|
||||||
Accounts and notes receivable, net
|
$
|
56,064
|
|
|
$
|
28,915
|
|
|
$
|
84,979
|
|
Contract assets, net
|
—
|
|
|
5,512
|
|
|
5,512
|
|
|||
Prepaid expense and other current assets
|
21,696
|
|
|
2,003
|
|
|
23,699
|
|
|||
Total impacted current assets
|
77,760
|
|
|
36,430
|
|
|
114,190
|
|
|||
Deferred income tax assets, net
|
15,755
|
|
|
(5,158
|
)
|
|
10,597
|
|
|||
Long-term notes receivable, net of current portion
|
36,877
|
|
|
(12,977
|
)
|
|
23,900
|
|
|||
Other assets
|
15,366
|
|
|
5,323
|
|
|
20,689
|
|
|||
Total impacted assets
|
145,758
|
|
|
23,618
|
|
|
169,376
|
|
|||
|
|
|
|
|
|
||||||
Accrued liabilities
|
23,502
|
|
|
2,512
|
|
|
26,014
|
|
|||
Current portion of deferred revenue
|
70,401
|
|
|
863
|
|
|
71,264
|
|
|||
Total impacted current liabilities
|
93,903
|
|
|
3,375
|
|
|
97,278
|
|
|||
Deferred revenue, net of current portion
|
54,881
|
|
|
1,249
|
|
|
56,130
|
|
|||
Total impacted liabilities
|
148,784
|
|
|
4,624
|
|
|
153,408
|
|
|||
Retained earnings
|
123,185
|
|
|
18,994
|
|
|
142,179
|
|
|||
Total impacted stockholders' equity
|
123,185
|
|
|
18,994
|
|
|
142,179
|
|
|||
Total impacted liabilities and stockholders' equity
|
271,969
|
|
|
23,618
|
|
|
295,587
|
|
|
Three Months Ended March 31, 2018
|
|
Three Months Ended March 31, 2017
(1)
|
||||||||||||||||||||
|
TASER Weapons
|
|
Software and Sensors
|
|
Total
|
|
TASER Weapons
|
|
Software and Sensors
|
|
Total
|
||||||||||||
TASER X26P
|
$
|
16,474
|
|
|
$
|
—
|
|
|
$
|
16,474
|
|
|
$
|
15,668
|
|
|
$
|
—
|
|
|
$
|
15,668
|
|
TASER X2
|
23,932
|
|
|
—
|
|
|
23,932
|
|
|
18,986
|
|
|
—
|
|
|
18,986
|
|
||||||
TASER Pulse and Bolt
|
1,346
|
|
|
—
|
|
|
1,346
|
|
|
1,022
|
|
|
—
|
|
|
1,022
|
|
||||||
Single cartridges
|
16,114
|
|
|
—
|
|
|
16,114
|
|
|
16,664
|
|
|
—
|
|
|
16,664
|
|
||||||
Axon Body
|
—
|
|
|
5,558
|
|
|
5,558
|
|
|
—
|
|
|
3,446
|
|
|
3,446
|
|
||||||
Axon Flex
|
—
|
|
|
1,669
|
|
|
1,669
|
|
|
—
|
|
|
1,475
|
|
|
1,475
|
|
||||||
Axon Dock
|
—
|
|
|
3,035
|
|
|
3,035
|
|
|
—
|
|
|
1,987
|
|
|
1,987
|
|
||||||
Axon Fleet
|
—
|
|
|
2,116
|
|
|
2,116
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Evidence.com
|
—
|
|
|
20,241
|
|
|
20,241
|
|
|
—
|
|
|
11,742
|
|
|
11,742
|
|
||||||
TASER Cam
|
—
|
|
|
1,360
|
|
|
1,360
|
|
|
—
|
|
|
719
|
|
|
719
|
|
||||||
Extended warranties
|
3,706
|
|
|
2,490
|
|
|
6,196
|
|
|
2,843
|
|
|
1,418
|
|
|
4,261
|
|
||||||
Other
|
1,952
|
|
|
1,222
|
|
|
3,174
|
|
|
2,488
|
|
|
784
|
|
|
3,272
|
|
||||||
Total
|
$
|
63,524
|
|
|
$
|
37,691
|
|
|
$
|
101,215
|
|
|
$
|
57,671
|
|
|
$
|
21,571
|
|
|
$
|
79,242
|
|
|
March 31, 2018
|
||
Contract assets
|
$
|
9,278
|
|
Contract liabilities (deferred revenue)
|
134,144
|
|
|
Revenue recognized in the period from:
|
|
||
Amounts included in contract liabilities at the beginning of the period
|
24,269
|
|
|
March 31, 2018
|
|
December 31, 2017
(1)
|
||||||||||||||||||||
|
Current
|
|
Long-Term
|
|
Total
|
|
Current
|
|
Long-Term
|
|
Total
|
||||||||||||
Warranty:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
TASER Weapons
|
$
|
11,601
|
|
|
$
|
17,058
|
|
|
$
|
28,659
|
|
|
$
|
12,501
|
|
|
$
|
18,619
|
|
|
$
|
31,120
|
|
Software and Sensors
|
6,941
|
|
|
5,660
|
|
|
12,601
|
|
|
6,293
|
|
|
4,195
|
|
|
10,488
|
|
||||||
|
18,542
|
|
|
22,718
|
|
|
41,260
|
|
|
18,794
|
|
|
22,814
|
|
|
41,608
|
|
||||||
Hardware:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
TASER Weapons
|
4,283
|
|
|
12,440
|
|
|
16,723
|
|
|
4,164
|
|
|
11,401
|
|
|
15,565
|
|
||||||
Software and Sensors
|
14,152
|
|
|
15,197
|
|
|
29,349
|
|
|
16,956
|
|
|
14,781
|
|
|
31,737
|
|
||||||
|
18,435
|
|
|
27,637
|
|
|
46,072
|
|
|
21,120
|
|
|
26,182
|
|
|
47,302
|
|
||||||
Software and Sensors Services
|
39,164
|
|
|
7,648
|
|
|
46,812
|
|
|
30,487
|
|
|
5,885
|
|
|
36,372
|
|
||||||
Total
|
$
|
76,141
|
|
|
$
|
58,003
|
|
|
$
|
134,144
|
|
|
$
|
70,401
|
|
|
$
|
54,881
|
|
|
$
|
125,282
|
|
|
March 31, 2018
|
|
December 31, 2017
(1)
|
||||||||||||||||||||
|
Current
|
|
Long-Term
|
|
Total
|
|
Current
|
|
Long-Term
|
|
Total
|
||||||||||||
TASER Weapons
|
$
|
15,884
|
|
|
$
|
29,498
|
|
|
$
|
45,382
|
|
|
$
|
16,665
|
|
|
$
|
30,020
|
|
|
$
|
46,685
|
|
Software and Sensors
|
60,257
|
|
|
28,505
|
|
|
88,762
|
|
|
53,736
|
|
|
24,861
|
|
|
78,597
|
|
||||||
Total
|
$
|
76,141
|
|
|
$
|
58,003
|
|
|
$
|
134,144
|
|
|
$
|
70,401
|
|
|
$
|
54,881
|
|
|
$
|
125,282
|
|
|
March 31, 2018
|
||
Current deferred commissions
(1)
|
$
|
5,526
|
|
Deferred commissions, net of current portion
(2)
|
12,881
|
|
|
|
$
|
18,407
|
|
|
As of March 31, 2018
|
||||||||||||||||||
|
Amortized Cost
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Cash and Cash Equivalents
|
|
Short-Term Investments
|
||||||||||
Cash
|
$
|
68,207
|
|
|
$
|
—
|
|
|
$
|
68,207
|
|
|
$
|
68,207
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Level 1:
|
|
|
|
|
|
|
|
|
|
||||||||||
Money market funds
|
22,282
|
|
|
—
|
|
|
22,282
|
|
|
22,282
|
|
|
—
|
|
|||||
Corporate bonds
|
4,974
|
|
|
(3
|
)
|
|
4,971
|
|
|
1,300
|
|
|
3,674
|
|
|||||
Subtotal
|
27,256
|
|
|
(3
|
)
|
|
27,253
|
|
|
23,582
|
|
|
3,674
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Level 2:
|
|
|
|
|
|
|
|
|
|
||||||||||
State and municipal obligations
|
1,342
|
|
|
—
|
|
|
1,342
|
|
|
541
|
|
|
801
|
|
|||||
Total
|
$
|
96,805
|
|
|
$
|
(3
|
)
|
|
$
|
96,802
|
|
|
$
|
92,330
|
|
|
$
|
4,475
|
|
|
As of December 31, 2017
|
||||||||||||||||||
|
Amortized Cost
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Cash and Cash Equivalents
|
|
Short-Term Investments
|
||||||||||
Cash
|
$
|
53,459
|
|
|
$
|
—
|
|
|
$
|
53,459
|
|
|
$
|
53,459
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Level 1:
|
|
|
|
|
|
|
|
|
|
||||||||||
Money market funds
|
20,884
|
|
|
—
|
|
|
20,884
|
|
|
20,884
|
|
|
—
|
|
|||||
Corporate bonds
|
6,632
|
|
|
(6
|
)
|
|
6,626
|
|
|
—
|
|
|
6,632
|
|
|||||
Subtotal
|
27,516
|
|
|
(6
|
)
|
|
27,510
|
|
|
20,884
|
|
|
6,632
|
|
|||||
|
|
|
|
|
|
|
|
|
|
||||||||||
Level 2:
|
|
|
|
|
|
|
|
|
|
||||||||||
State and municipal obligations
|
992
|
|
|
—
|
|
|
992
|
|
|
762
|
|
|
230
|
|
|||||
Total
|
$
|
81,967
|
|
|
$
|
(6
|
)
|
|
$
|
81,961
|
|
|
$
|
75,105
|
|
|
$
|
6,862
|
|
|
2018
|
|
2017
|
||||
Raw materials
|
$
|
19,003
|
|
|
$
|
20,119
|
|
Finished goods
|
24,101
|
|
|
25,346
|
|
||
Total inventory
|
$
|
43,104
|
|
|
$
|
45,465
|
|
|
TASER
Weapons |
|
Software and Sensors
|
|
Total
|
||||||
Balance, beginning of period
|
$
|
1,453
|
|
|
$
|
13,474
|
|
|
$
|
14,927
|
|
Foreign currency translation adjustment
|
10
|
|
|
10
|
|
|
20
|
|
|||
Balance, end of period
|
$
|
1,463
|
|
|
$
|
13,484
|
|
|
$
|
14,947
|
|
|
|
|
March 31, 2018
|
|
December 31, 2017
|
||||||||||||||||||||
|
Useful
Life
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
Amortized:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Domain names
|
5-10 years
|
|
$
|
3,161
|
|
|
$
|
(504
|
)
|
|
$
|
2,657
|
|
|
$
|
3,161
|
|
|
$
|
(428
|
)
|
|
$
|
2,733
|
|
Issued patents
|
4-15 years
|
|
2,724
|
|
|
(959
|
)
|
|
1,765
|
|
|
2,697
|
|
|
(913
|
)
|
|
1,784
|
|
||||||
Issued trademarks
|
3-11 years
|
|
857
|
|
|
(416
|
)
|
|
441
|
|
|
860
|
|
|
(397
|
)
|
|
463
|
|
||||||
Customer relationships
|
4-8 years
|
|
1,396
|
|
|
(518
|
)
|
|
878
|
|
|
1,377
|
|
|
(451
|
)
|
|
926
|
|
||||||
Non-compete agreements
|
3-4 years
|
|
558
|
|
|
(376
|
)
|
|
182
|
|
|
556
|
|
|
(346
|
)
|
|
210
|
|
||||||
Developed technology
|
3-7 years
|
|
13,469
|
|
|
(4,723
|
)
|
|
8,746
|
|
|
13,469
|
|
|
(3,956
|
)
|
|
9,513
|
|
||||||
Re-acquired distribution rights
|
2 years
|
|
2,098
|
|
|
(1,049
|
)
|
|
1,049
|
|
|
2,133
|
|
|
(711
|
)
|
|
1,422
|
|
||||||
Total amortized
|
|
|
24,263
|
|
|
(8,545
|
)
|
|
15,718
|
|
|
24,253
|
|
|
(7,202
|
)
|
|
17,051
|
|
||||||
Not amortized:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
TASER trademark
|
|
|
900
|
|
|
|
|
900
|
|
|
900
|
|
|
|
|
900
|
|
||||||||
Patents and trademarks pending
|
|
|
878
|
|
|
|
|
878
|
|
|
872
|
|
|
|
|
872
|
|
||||||||
Total not amortized
|
|
|
1,778
|
|
|
|
|
1,778
|
|
|
1,772
|
|
|
|
|
1,772
|
|
||||||||
Total intangible assets
|
|
|
$
|
26,041
|
|
|
$
|
(8,545
|
)
|
|
$
|
17,496
|
|
|
$
|
26,025
|
|
|
$
|
(7,202
|
)
|
|
$
|
18,823
|
|
2018
|
$
|
4,047
|
|
2019
|
3,871
|
|
|
2020
|
2,404
|
|
|
2021
|
2,269
|
|
|
2022
|
838
|
|
|
2023
|
568
|
|
|
Thereafter
|
1,721
|
|
|
Total
|
$
|
15,718
|
|
|
2018
|
|
2017
|
||||
Cash surrender value of corporate-owned life insurance policies
|
$
|
3,804
|
|
|
$
|
3,846
|
|
Deferred commissions
(1)
|
12,881
|
|
|
6,803
|
|
||
Restricted cash
(2)
|
2,468
|
|
|
3,333
|
|
||
Prepaid expenses, deposits and other
|
2,420
|
|
|
1,384
|
|
||
Total other long-term assets
|
$
|
21,573
|
|
|
$
|
15,366
|
|
|
2018
|
|
2017
|
||||
Accrued salaries, benefits and bonus
|
$
|
10,217
|
|
|
$
|
8,957
|
|
Accrued professional, consulting and lobbying fees
|
4,046
|
|
|
3,870
|
|
||
Accrued warranty expense
|
559
|
|
|
644
|
|
||
Accrued income and other taxes
|
8,945
|
|
|
2,558
|
|
||
Other accrued liabilities
|
11,102
|
|
|
7,473
|
|
||
Accrued liabilities
|
$
|
34,869
|
|
|
$
|
23,502
|
|
|
Number
of
Units
|
|
Weighted
Average
Grant-Date
Fair Value
|
|
Aggregate
Intrinsic Value |
|||||
Units outstanding, beginning of year
|
2,348
|
|
|
$
|
23.47
|
|
|
|
||
Granted
|
122
|
|
|
30.14
|
|
|
|
|||
Released
|
(329
|
)
|
|
24.14
|
|
|
|
|||
Forfeited
|
(114
|
)
|
|
21.79
|
|
|
|
|||
Units outstanding, end of period
|
2,027
|
|
|
23.93
|
|
|
$
|
79,681
|
|
|
Number
of
Options
|
|
Weighted
Average
Exercise
Price
|
|
Weighted Average Remaining Contractual Life (years)
|
|
Aggregate
Intrinsic Value |
|||||
Options outstanding, beginning of year
|
804
|
|
|
$
|
4.99
|
|
|
|
|
|
||
Granted
|
—
|
|
|
—
|
|
|
|
|
|
|||
Exercised
|
(78
|
)
|
|
4.54
|
|
|
|
|
|
|||
Expired / terminated
|
—
|
|
|
—
|
|
|
|
|
|
|||
Options outstanding, end of period
|
726
|
|
|
5.04
|
|
|
0.99
|
|
$
|
24,879
|
|
|
Options exercisable, end of period
|
722
|
|
|
5.04
|
|
|
1.00
|
|
24,729
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Cost of products sold and services delivered
|
$
|
141
|
|
|
$
|
79
|
|
Sales, general and administrative expenses
|
2,304
|
|
|
2,028
|
|
||
Research and development expenses
|
1,648
|
|
|
1,340
|
|
||
Total stock-based compensation
|
$
|
4,093
|
|
|
$
|
3,447
|
|
Plaintiff
|
|
Month
Served
|
|
Jurisdiction
|
|
Claim Type
|
|
Status
|
Derbyshire
|
|
Nov-09
|
|
Ontario, Canada Superior Court of Justice
|
|
Officer Injury
|
|
Discovery Phase. Trial scheduled for October 14, 2019.
|
Shymko
|
|
Dec-10
|
|
The Queen's Bench, Winnipeg Centre, Manitoba
|
|
Wrongful Death
|
|
Pleading Phase, currently inactive
|
Ramsey
|
|
Jan-12
|
|
12th Judicial Circuit Court, Broward County, FL
|
|
Wrongful Death
|
|
Discovery Phase
|
Bennett
|
|
Sep-15
|
|
11th Judicial Circuit Court, Miami-Dade County, FL
|
|
Wrongful Death
|
|
Discovery Phase. Trial scheduled for June 18, 2018.
|
Masters
|
|
Nov-16
|
|
U.S. District Court, Western District of Missouri
|
|
Suspect Injury
|
|
Discovery Phase. Trial scheduled for December 10, 2018.
|
Taylor
|
|
Mar-17
|
|
U.S, District Court, Southern District of Texas
|
|
Officer Injury
|
|
Discovery Phase. The Company's motion for summary judgment was filed on April 20, 2018. Docket call scheduled for August 31, 2018.
|
Wiggington
|
|
Apr-18
|
|
U.S, District Court, Western District Court of Missouri
|
|
Wrongful Death
|
|
Pleading Phase
|
Policy Year
|
|
Policy
Start
Date
|
|
Policy
End
Date
|
|
Insurance
Coverage
|
|
Deductible
Amount
|
|
Defense
Costs
Covered
|
|
Remaining
Insurance
Coverage
|
|
Active Cases and Cases on
Appeal
|
||||||
2009
|
|
12/15/2008
|
|
12/15/2009
|
|
$
|
10.0
|
|
|
$
|
1.0
|
|
|
N
|
|
$
|
10.0
|
|
|
Derbyshire
|
2010
|
|
12/15/2009
|
|
12/15/2010
|
|
10.0
|
|
|
1.0
|
|
|
N
|
|
10.0
|
|
|
Shymko
|
|||
2011
|
|
12/15/2010
|
|
12/15/2011
|
|
10.0
|
|
|
1.0
|
|
|
N
|
|
10.0
|
|
|
n/a
|
|||
Jan-Jun 2012
|
|
12/15/2011
|
|
6/25/2012
|
|
7.0
|
|
|
1.0
|
|
|
N
|
|
7.0
|
|
|
Ramsey
|
|||
Jul-Dec 2012
|
|
6/25/2012
|
|
12/15/2012
|
|
12.0
|
|
|
1.0
|
|
|
N
|
|
12.0
|
|
|
n/a
|
|||
2013
|
|
12/15/2012
|
|
12/15/2013
|
|
12.0
|
|
|
1.0
|
|
|
N
|
|
12.0
|
|
|
n/a
|
|||
2014
|
|
12/15/2013
|
|
12/15/2014
|
|
11.0
|
|
|
4.0
|
|
|
N
|
|
11.0
|
|
|
n/a
|
|||
2015
|
|
12/15/2014
|
|
12/15/2015
|
|
10.0
|
|
|
5.0
|
|
|
N
|
|
10.0
|
|
|
Bennett
|
|||
2016
|
|
12/15/2015
|
|
12/15/2016
|
|
10.0
|
|
|
5.0
|
|
|
N
|
|
10.0
|
|
|
Masters
|
|||
2017
|
|
12/15/2016
|
|
12/15/2017
|
|
10.0
|
|
|
5.0
|
|
|
N
|
|
10.0
|
|
|
Taylor
|
|||
2018
|
|
12/15/2017
|
|
12/15/2018
|
|
10.0
|
|
|
5.0
|
|
|
N
|
|
10.0
|
|
|
Wiggington
|
Plaintiff
|
|
Month
Served
|
|
Jurisdiction
|
|
Claim Type
|
|
Status
|
Digital Ally
|
|
Jan-16
|
|
U.S. District Court, District of Kansas
|
|
Antitrust Claims
|
|
The Company's motion for dismissal of the antitrust claims was granted on January 12, 2017 with judgment entered in its favor on April 14, 2017 and Plaintiff filed an appeal on April 20, 2017.
|
Axon
|
|
Mar-16
|
|
U.S. District Court, Middle District of Florida
|
|
Judgment and Permanent Injunction
|
|
The Company received judgment in its favor and a permanent injunction against Phazzer on July 21, 2017. Phazzer filed a notice of appeal on August 10, 2017.
|
|
Three Months Ended March 31, 2018
|
|
Three Months Ended March 31, 2017
(1)
|
||||||||||||||||||||
|
TASER
Weapons
|
|
Software and Sensors
|
|
Total
|
|
TASER
Weapons
|
|
Software and Sensors
|
|
Total
|
||||||||||||
Net sales from products
(2)
|
$
|
63,524
|
|
|
$
|
17,450
|
|
|
$
|
80,974
|
|
|
$
|
57,671
|
|
|
$
|
9,820
|
|
|
$
|
67,491
|
|
Net sales from services
(3)
|
—
|
|
|
20,241
|
|
|
20,241
|
|
|
—
|
|
|
11,751
|
|
|
11,751
|
|
||||||
Net sales
|
63,524
|
|
|
37,691
|
|
|
101,215
|
|
|
57,671
|
|
|
21,571
|
|
|
79,242
|
|
||||||
Cost of product sales
|
20,543
|
|
|
11,891
|
|
|
32,434
|
|
|
18,026
|
|
|
9,046
|
|
|
27,072
|
|
||||||
Cost of service sales
|
—
|
|
|
4,320
|
|
|
4,320
|
|
|
—
|
|
|
3,500
|
|
|
3,500
|
|
||||||
Cost of sales
|
20,543
|
|
|
16,211
|
|
|
36,754
|
|
|
18,026
|
|
|
12,546
|
|
|
30,572
|
|
||||||
Gross margin
|
42,981
|
|
|
21,480
|
|
|
64,461
|
|
|
39,645
|
|
|
9,025
|
|
|
48,670
|
|
||||||
Sales, general and administrative
|
21,265
|
|
|
14,494
|
|
|
35,759
|
|
|
17,216
|
|
|
13,641
|
|
|
30,857
|
|
||||||
Research and development
|
2,960
|
|
|
12,159
|
|
|
15,119
|
|
|
2,212
|
|
|
10,251
|
|
|
12,463
|
|
||||||
Income (loss) from operations
|
$
|
18,756
|
|
|
$
|
(5,173
|
)
|
|
$
|
13,583
|
|
|
$
|
20,217
|
|
|
$
|
(14,867
|
)
|
|
$
|
5,350
|
|
|
Three Months Ended March 31,
|
||||||||||||
|
2018
|
|
2017
(1)
|
||||||||||
Net sales from products
|
$
|
80,974
|
|
|
80.0
|
%
|
|
$
|
67,491
|
|
|
85.2
|
%
|
Net sales from services
|
20,241
|
|
|
20.0
|
|
|
11,751
|
|
|
14.8
|
|
||
Net sales
|
101,215
|
|
|
100.0
|
|
|
79,242
|
|
|
100.0
|
|
||
Cost of product sales
|
32,434
|
|
|
32.0
|
|
|
27,072
|
|
|
34.2
|
|
||
Cost of service sales
|
4,320
|
|
|
4.3
|
|
|
3,500
|
|
|
4.4
|
|
||
Cost of sales
|
36,754
|
|
|
36.3
|
|
|
30,572
|
|
|
38.6
|
|
||
Gross margin
|
64,461
|
|
|
63.7
|
|
|
48,670
|
|
|
61.4
|
|
||
Operating expenses:
|
|
|
|
|
|
|
|
||||||
Sales, general and administrative
|
35,759
|
|
|
35.3
|
|
|
30,857
|
|
|
38.9
|
|
||
Research and development
|
15,119
|
|
|
14.9
|
|
|
12,463
|
|
|
15.7
|
|
||
Total operating expenses
|
50,878
|
|
|
50.3
|
|
|
43,320
|
|
|
54.7
|
|
||
Income from operations
|
13,583
|
|
|
13.4
|
|
|
5,350
|
|
|
6.8
|
|
||
Interest and other income, net
|
1,263
|
|
|
1.2
|
|
|
206
|
|
|
0.3
|
|
||
Income before provision for income taxes
|
14,846
|
|
|
14.7
|
|
|
5,556
|
|
|
7.0
|
|
||
Provision for income taxes
|
1,920
|
|
|
1.9
|
|
|
976
|
|
|
1.2
|
|
||
Net income
|
$
|
12,926
|
|
|
12.8
|
%
|
|
$
|
4,580
|
|
|
5.8
|
%
|
|
Three Months Ended March 31,
|
|
Dollar
Change
|
|
Percent
Change
|
|||||||||||||||
|
2018
|
|
2017
(1)
|
|
|
|||||||||||||||
TASER Weapons segment:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
TASER X26P
|
$
|
16,474
|
|
|
16.3
|
%
|
|
$
|
15,668
|
|
|
19.8
|
%
|
|
$
|
806
|
|
|
5.1
|
%
|
TASER X2
|
23,932
|
|
|
23.6
|
|
|
18,986
|
|
|
24.0
|
|
|
4,946
|
|
|
26.1
|
|
|||
TASER Pulse and Bolt
|
1,346
|
|
|
1.3
|
|
|
1,022
|
|
|
1.3
|
|
|
324
|
|
|
31.7
|
|
|||
Single cartridges
|
16,114
|
|
|
15.9
|
|
|
16,664
|
|
|
21.0
|
|
|
(550
|
)
|
|
(3.3
|
)
|
|||
Extended warranties
|
3,706
|
|
|
3.7
|
|
|
2,843
|
|
|
3.6
|
|
|
863
|
|
|
30.4
|
|
|||
Other
|
1,952
|
|
|
1.9
|
|
|
2,488
|
|
|
3.1
|
|
|
(536
|
)
|
|
(21.5
|
)
|
|||
Total TASER Weapons segment
|
63,524
|
|
|
62.8
|
|
|
57,671
|
|
|
72.8
|
|
|
5,853
|
|
|
10.1
|
|
|||
Software and Sensors segment:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
Axon Body
|
5,558
|
|
|
5.5
|
|
|
3,446
|
|
|
4.3
|
|
|
2,112
|
|
|
61.3
|
|
|||
Axon Flex
|
1,669
|
|
|
1.6
|
|
|
1,475
|
|
|
1.9
|
|
|
194
|
|
|
13.2
|
|
|||
Axon Fleet
|
2,116
|
|
|
2.1
|
|
|
—
|
|
|
—
|
|
|
2,116
|
|
|
*
|
|
|||
Axon Dock
|
3,035
|
|
|
3.0
|
|
|
1,987
|
|
|
2.5
|
|
|
1,048
|
|
|
52.7
|
|
|||
Evidence.com
|
20,241
|
|
|
20.0
|
|
|
11,742
|
|
|
14.8
|
|
|
8,499
|
|
|
72.4
|
|
|||
TASER Cam
|
1,360
|
|
|
1.3
|
|
|
719
|
|
|
0.9
|
|
|
641
|
|
|
89.2
|
|
|||
Extended warranties
|
2,490
|
|
|
2.5
|
|
|
1,418
|
|
|
1.8
|
|
|
1,072
|
|
|
75.6
|
|
|||
Other
|
1,222
|
|
|
1.2
|
|
|
784
|
|
|
1.0
|
|
|
438
|
|
|
55.9
|
|
|||
Total Software and Sensors segment
|
37,691
|
|
|
37.2
|
|
|
21,571
|
|
|
27.2
|
|
|
16,120
|
|
|
74.7
|
|
|||
Total net sales
|
$
|
101,215
|
|
|
100.0
|
%
|
|
$
|
79,242
|
|
|
100.0
|
%
|
|
$
|
21,973
|
|
|
27.7
|
|
|
Three Months Ended March 31,
|
|
Unit
Change
|
|
Percent
Change
|
||||||
|
2018
|
|
2017
|
|
|
||||||
TASER X26P
|
15,720
|
|
|
15,361
|
|
|
359
|
|
|
2.3
|
%
|
TASER X2
|
20,501
|
|
|
17,137
|
|
|
3,364
|
|
|
19.6
|
|
TASER Pulse and Bolt
|
4,000
|
|
|
3,572
|
|
|
428
|
|
|
12.0
|
|
Cartridges
|
532,952
|
|
|
595,986
|
|
|
(63,034
|
)
|
|
(10.6
|
)
|
Axon Body
|
21,769
|
|
|
20,313
|
|
|
1,456
|
|
|
7.2
|
|
Axon Flex
|
3,693
|
|
|
3,101
|
|
|
592
|
|
|
19.1
|
|
Axon Fleet
|
1,857
|
|
|
—
|
|
|
1,857
|
|
|
*
|
|
Axon Dock
|
5,844
|
|
|
4,875
|
|
|
969
|
|
|
19.9
|
|
TASER Cam
|
3,528
|
|
|
1,339
|
|
|
2,189
|
|
|
163.5
|
|
|
Three Months Ended March 31,
|
|
Dollar
Change |
|
Percent
Change |
||||||||
|
2018
|
|
2017
(1)
|
|
|
||||||||
Total sales, general and administrative expenses
|
$
|
35,759
|
|
|
$
|
30,857
|
|
|
$
|
4,902
|
|
|
15.9
|
Sales, general, and administrative as a percentage of net sales
|
35.3
|
%
|
|
38.9
|
%
|
|
|
|
|
|
Three Months Ended March 31,
|
|
Dollar
Change |
|
Percent
Change |
||||||||
|
2018
|
|
2017
|
|
|
||||||||
Total research and development expenses
|
$
|
15,119
|
|
|
$
|
12,463
|
|
|
$
|
2,656
|
|
|
21.3
|
Research and development as a percentage of net sales
|
14.9
|
%
|
|
15.7
|
%
|
|
|
|
|
|
Three Months Ended March 31, 2018
|
|
Three Months Ended
December 31, 2017 (1) |
|
Dollar
Change |
|
Percent
Change |
|||||||||||||
TASER Weapons segment:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
TASER X26P
|
$
|
16,474
|
|
|
16.3
|
%
|
|
$
|
19,259
|
|
|
20.3
|
%
|
|
$
|
(2,785
|
)
|
|
(14.5
|
)%
|
TASER X2
|
23,932
|
|
|
23.6
|
|
|
23,662
|
|
|
25.0
|
|
|
270
|
|
|
1.1
|
|
|||
TASER Pulse and Bolt
|
1,346
|
|
|
1.3
|
|
|
1,448
|
|
|
1.5
|
|
|
(102
|
)
|
|
(7.0
|
)
|
|||
Single cartridges
|
16,114
|
|
|
15.9
|
|
|
14,198
|
|
|
15.0
|
|
|
1,916
|
|
|
13.5
|
|
|||
Extended warranties
|
3,706
|
|
|
3.7
|
|
|
3,506
|
|
|
3.7
|
|
|
200
|
|
|
5.7
|
|
|||
Other
|
1,952
|
|
|
1.9
|
|
|
2,336
|
|
|
2.5
|
|
|
(384
|
)
|
|
(16.4
|
)
|
|||
Total TASER Weapons segment
|
63,524
|
|
|
62.8
|
|
|
64,409
|
|
|
68.0
|
|
|
(885
|
)
|
|
(1.4
|
)
|
|||
Software and Sensors segment:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Axon Body
|
5,558
|
|
|
5.5
|
|
|
3,459
|
|
|
3.7
|
|
|
2,099
|
|
|
60.7
|
|
|||
Axon Flex
|
1,669
|
|
|
1.6
|
|
|
2,194
|
|
|
2.3
|
|
|
(525
|
)
|
|
(23.9
|
)
|
|||
Axon Fleet
|
2,116
|
|
|
2.1
|
|
|
1,661
|
|
|
1.8
|
|
|
455
|
|
|
27.4
|
|
|||
Axon Dock
|
3,035
|
|
|
3.0
|
|
|
2,327
|
|
|
2.5
|
|
|
708
|
|
|
30.4
|
|
|||
Evidence.com
|
20,241
|
|
|
20.0
|
|
|
17,143
|
|
|
18.1
|
|
|
3,098
|
|
|
18.1
|
|
|||
TASER Cam
|
1,360
|
|
|
1.3
|
|
|
951
|
|
|
1.0
|
|
|
409
|
|
|
43.0
|
|
|||
Extended warranties
|
2,490
|
|
|
2.5
|
|
|
2,128
|
|
|
2.2
|
|
|
362
|
|
|
17.0
|
|
|||
Other
|
1,222
|
|
|
1.2
|
|
|
379
|
|
|
0.4
|
|
|
843
|
|
|
222.4
|
|
|||
Total Software and Sensors segment
|
37,691
|
|
|
37.2
|
|
|
30,242
|
|
|
32.0
|
|
|
7,449
|
|
|
24.6
|
|
|||
Total net sales
|
$
|
101,215
|
|
|
100.0
|
%
|
|
$
|
94,651
|
|
|
100.0
|
%
|
|
$
|
6,564
|
|
|
6.9
|
%
|
|
Three Months Ended March 31, 2018
|
|
Three Months Ended
December 31, 2017 |
|
Unit
Change |
|
Percent
Change |
||||
TASER X26P
|
15,720
|
|
|
23,350
|
|
|
(7,630
|
)
|
|
(32.7
|
)%
|
TASER X2
|
20,501
|
|
|
21,683
|
|
|
(1,182
|
)
|
|
(5.5
|
)
|
TASER Pulse and Bolt
|
4,000
|
|
|
3,641
|
|
|
359
|
|
|
9.9
|
|
Cartridges
|
532,952
|
|
|
590,126
|
|
|
(57,174
|
)
|
|
(9.7
|
)
|
Axon Body
|
21,769
|
|
|
13,944
|
|
|
7,825
|
|
|
56.1
|
|
Axon Flex
|
3,693
|
|
|
5,253
|
|
|
(1,560
|
)
|
|
(29.7
|
)
|
Axon Fleet
|
1,857
|
|
|
2,197
|
|
|
(340
|
)
|
|
(15.5
|
)
|
Axon Dock
|
5,844
|
|
|
3,908
|
|
|
1,936
|
|
|
49.5
|
|
TASER Cam
|
3,528
|
|
|
2,245
|
|
|
1,283
|
|
|
57.1
|
|
|
Three Months Ended March 31,
|
||||||
|
2018
|
|
2017
|
||||
Net cash provided by (used in) operating activities
|
$
|
18,053
|
|
|
$
|
(6,609
|
)
|
Net cash provided by investing activities
|
1,268
|
|
|
9,884
|
|
||
Net cash used in financing activities
|
(3,430
|
)
|
|
(1,877
|
)
|
||
Effect of exchange rate changes on cash, cash equivalents and restricted cash
|
469
|
|
|
(76
|
)
|
||
Net increase in cash, cash equivalents and restricted cash
|
$
|
16,360
|
|
|
$
|
1,322
|
|
|
Three Months Ended March 31, 2018
|
|
Three Months Ended March 31, 2017
(1)
|
||||||||||||||||||||||||||||||||||||||
|
TASER Weapons
|
|
Software and Sensors
|
|
Total
|
|
TASER Weapons
|
|
Software and Sensors
|
|
Total
|
||||||||||||||||||||||||||||||
Contracts with Multiple Performance Obligations
|
$
|
20,006
|
|
|
31.5
|
%
|
|
$
|
35,285
|
|
|
93.6
|
%
|
|
$
|
55,291
|
|
|
54.6
|
%
|
|
$
|
13,938
|
|
|
24.2
|
%
|
|
$
|
19,514
|
|
|
90.5
|
%
|
|
$
|
33,452
|
|
|
42.2
|
%
|
Contracts without Multiple Performance Obligations
|
43,518
|
|
|
68.5
|
|
|
2,406
|
|
|
6.4
|
|
|
45,924
|
|
|
45.4
|
|
|
43,733
|
|
|
75.8
|
|
|
2,057
|
|
|
9.5
|
|
|
45,790
|
|
|
57.8
|
|
||||||
Total
|
$
|
63,524
|
|
|
100.0
|
%
|
|
$
|
37,691
|
|
|
100.0
|
%
|
|
$
|
101,215
|
|
|
100.0
|
%
|
|
$
|
57,671
|
|
|
100.0
|
%
|
|
$
|
21,571
|
|
|
100.0
|
%
|
|
$
|
79,242
|
|
|
100.0
|
%
|
•
|
for the 2017 year-end close and first quarter 2018 close of our accounting records, we sent accounting personnel from our headquarters in Arizona to the U.K. to perform additional review procedures of the account reconciliations for APS U.K., and our corporate accounting team performed additional reviews of APS U.K. activity;
|
•
|
we plan for our corporate accounting team to continue performing these additional review procedures on an ongoing basis; and
|
•
|
we added internal reporting procedures, including those designed to add depth to our detailed review processes of inventory, sales transactions and related accounting for deferred revenue and cost of goods sold and services delivered for APS U.K.
|
3.5*
|
|
|
3.6*
|
|
|
31.1*
|
|
|
31.2*
|
|
|
32**
|
|
|
101.INS*
|
|
XBRL Instance Document
|
101.SCH*
|
|
XBRL Taxonomy Extension Schema Document
|
101.CAL*
|
|
XBRL Taxonomy Extension Calculation Linkbase Document
|
101.DEF*
|
|
XBRL Taxonomy Extension Definition Linkbase Document
|
101.LAB*
|
|
XBRL Taxonomy Extension Label Linkbase Document
|
101.PRE*
|
|
XBRL Taxonomy Extension Presentation Linkbase Document
|
|
|
|
|
|
AXON ENTERPRISE, INC.
|
|
|
|
|
|
|
|
|
|
Date:
|
May 10, 2018
|
|
|
|
|
|
By:
|
|
/s/ PATRICK W. SMITH
|
|
|
|
|
Chief Executive Officer
|
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
Date:
|
May 10, 2018
|
By:
|
|
/s/ JAWAD A. AHSAN
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(Principal Financial and
|
|
|
|
|
Accounting Officer)
|
(i)
|
The number of shares in and the distinguishing designation of that series;
|
(ii)
|
Whether shares of that series will have full, special, conditional, limited or no voting rights, except to the extent otherwise provided
by the Law,
|
(iii)
|
Whether shares of that series will be convertible and the terms and conditions of the conversion, including provision for adjustment of the conversion rate in circumstances determined by the Board of Directors;
|
(iv)
|
Whether shares of that series will be redeemable and the terms and conditions of the redemption, including the date or dates upon or after which they will be redeemable and the amount per share payable in case of redemption, which amount may vary under different conditions or at different redemption dates;
|
(v)
|
The dividend rate, if any, on shares of that series, the manner of calculating any dividends and the preferences of any dividends;
|
(vi)
|
The rights of shares of that series in the event of voluntary or involuntary dissolution of the Corporation and the right of priority of that series relative to the Common Stock and any
|
(vii)
|
Any other rights, preferences and limitations of that series that are permitted by the Law.”
|
1.
|
The name of the corporation is Axon Enterprise, Inc. (the “Corporation”).
|
Title:
|
General Counsel and Corporate
|
Section Number/file
|
Date Approved
|
2.03-a. Business to be Transacted
|
April 10, 2001 (by Directors)
April 20, 2001 (by Stockholders) |
2.04. Special Meetings
|
April 10, 2001 (by Directors)
April 20, 2001 (by Stockholders) |
3.03. Classes and Terms
|
April 10, 2001 (by Directors)
April 20, 2001 (by Stockholders) |
3.04. Vacancies
|
April 10, 2001 (by Directors)
April 20, 2001 (by Stockholders) |
3.10. Resignation and Removal
|
April 10, 2001 (by Directors)
April 20, 2001 (by Stockholders) |
Article X: Amendments
|
April 10, 2001 (by Directors)
April 20, 2001 (by Stockholders) |
2.12. Action in Writing
|
January 17, 2016 (by Directors)
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2018 of Axon Enterprise, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
|
Date:
|
May 10, 2018
|
By:
|
|
/s/ Patrick W. Smith
|
|
|
|
|
Patrick W. Smith
|
|
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2018 of Axon Enterprise, Inc.;
|
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
|
4.
|
The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
|
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
|
(c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
|
(d)
|
Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
|
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
|
|
|
|
Date:
|
May 10, 2018
|
By:
|
|
/s/ Jawad A. Ahsan
|
|
|
|
|
Jawad A. Ahsan
|
|
|
|
|
Chief Financial Officer
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
/s/ Patrick W. Smith
|
|
Patrick W. Smith
|
|
Chief Executive Officer
|
|
May 10, 2018
|
(1)
|
The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
|
|
|
/s/ Jawad A. Ahsan
|
|
Jawad A. Ahsan
|
|
Chief Financial Officer
|
|
May 10, 2018
|