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☒
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ANNUAL 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.
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(Exact name of registrant as specified in its charter)
|
Delaware
|
|
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
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85255
|
|||
Scottsdale
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,
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Arizona
|
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|
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(Address of principal executive offices)
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|
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(Zip Code)
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Title of each class
|
Trading Symbol(s)
|
Name of exchange on which registered
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Common Stock, $0.00001 par value per share
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AAXN
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The NASDAQ Global Select Market
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Large accelerated filer
|
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☒
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Accelerated filer
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☐
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Non-accelerated filer
|
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☐
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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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1.
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TASER: Axon is the market leader in the development, manufacture and sale of conducted energy weapons ("CEWs"), also known as conducted energy devices ("CEDs"), which we sell under our brand name, TASER. Research has shown that the TASER device is the most effective less-than-lethal force option, with the lowest likelihood of injury to officers and assailants. Since our inception in 1993, the TASER has been adopted by a majority of U.S. police departments and is used daily to help keep communities safe.
|
2.
|
Software and Sensors: Axon is the market leader in on-officer body (Axon Body and Flex) and in-car (Axon Fleet) cameras as well as cloud-based digital evidence management software (Evidence.com). We develop, manufacture and sell fully integrated hardware and cloud-based software solutions that enable law enforcement to capture, securely store, manage, share and analyze video and other digital evidence. Of the 69 largest metropolitan area police departments in the U.S., 47 are on the Axon Network.
|
•
|
Restrictions on foreign ownership and investments, and stringent foreign exchange controls that might prevent us from repatriating cash earned in countries outside the U.S.
|
•
|
Import and export requirements, tariffs, trade disputes and barriers, and customs classifications that may prevent us from offering products or providing services to a particular market or obtaining necessary parts and components to manufacture products, which may lead to decreased sales and may increase our operating costs.
|
•
|
Longer payment cycles in some countries, increased credit risk, and higher levels of payment fraud.
|
•
|
Uncertainty regarding liability for our products and services, including uncertainty as a result of local laws and lack of legal precedent.
|
•
|
Different employee/employer relationships, existence of workers' councils and labor unions, and other challenges caused by distance, language, and cultural differences, making it harder to do business in certain jurisdictions.
|
•
|
actual or anticipated fluctuations in our revenue and other operating results;
|
•
|
the financial projections we may provide to the public, any changes in these projections or our failure to meet these projections;
|
•
|
actions of securities analysts who initiate or maintain coverage of us, changes in financial estimates by any securities analysts who follow our company, or our failure to meet these estimates or the expectations of investors;
|
•
|
investor sentiment with respect to our competitors, our business partners, and our industry in general;
|
•
|
announcements by us or our competitors of significant products or features, technical innovations, acquisitions, strategic partnerships, joint ventures, or capital commitments;
|
•
|
announcements by us or estimates by third-parties of actual or anticipated changes in the size of our user base, addressable market or the effectiveness of our products;
|
•
|
changes in operation performance and stock market valuations of technology companies in our industries, including our developers and competitors;
|
•
|
price and volume fluctuations in the overall stock market, including as a result of trends in the economy as a whole;
|
•
|
media coverage of our business and financial performance;
|
•
|
lawsuits threatened or filed against us;
|
•
|
developments in anticipated or new legislation and pending lawsuits or regulator actions, including interim or final rulings by tax, judicial or regulatory bodies; and
|
•
|
other events or factors, including those resulting from war or incidents of terrorism, or responses to these events.
|
•
|
budgetary cycles of municipal, state and federal law enforcement and corrections agencies;
|
•
|
market acceptance of our products and services;
|
•
|
the timing of large domestic and international orders;
|
•
|
the outcome of any existing or future litigation;
|
•
|
adverse publicity surrounding our products, the safety of our products, or the use of our products;
|
•
|
changes in our sales mix;
|
•
|
new product introduction costs;
|
•
|
increased raw material expenses;
|
•
|
changes in our operating expenses, including stock-based compensation expense;
|
•
|
changes in foreign currency exchange rates and
|
•
|
regulatory changes that may affect the marketability of our products.
|
|
2014
|
|
2015
|
|
2016
|
|
2017
|
|
2018
|
|
2019
|
||||||||||||
Axon Enterprise, Inc.
|
$
|
100.00
|
|
|
$
|
65.29
|
|
|
$
|
91.54
|
|
|
$
|
100.08
|
|
|
$
|
165.22
|
|
|
$
|
276.74
|
|
NASDAQ Composite
|
100.00
|
|
|
106.96
|
|
|
116.45
|
|
|
150.96
|
|
|
146.67
|
|
|
200.49
|
|
||||||
Russell 3000
|
100.00
|
|
|
100.48
|
|
|
113.27
|
|
|
137.21
|
|
|
130.02
|
|
|
170.35
|
|
|
For the Year Ended December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Statements of Operations Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net sales (1)
|
$
|
530,860
|
|
|
$
|
420,068
|
|
|
$
|
343,798
|
|
|
$
|
268,245
|
|
|
$
|
197,892
|
|
Gross margin
|
307,286
|
|
|
258,583
|
|
|
207,088
|
|
|
170,536
|
|
|
128,647
|
|
|||||
Income (loss) from operations (2) (3)
|
(6,394
|
)
|
|
24,841
|
|
|
13,023
|
|
|
31,851
|
|
|
35,335
|
|
|||||
Net income (3) (4)
|
882
|
|
|
29,205
|
|
|
5,207
|
|
|
17,297
|
|
|
19,933
|
|
|||||
Diluted earnings per share (3) (4)
|
$
|
0.01
|
|
|
$
|
0.50
|
|
|
$
|
0.10
|
|
|
$
|
0.32
|
|
|
$
|
0.36
|
|
|
As of December 31,
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
||||||||||
Balance Sheet Data:
|
|
|
|
|
|
|
|
|
|
||||||||||
Working capital (5) (6)
|
$
|
423,525
|
|
|
$
|
392,144
|
|
|
$
|
97,242
|
|
|
$
|
99,192
|
|
|
$
|
123,269
|
|
Total assets (5) (6)
|
845,639
|
|
|
719,540
|
|
|
338,112
|
|
|
278,163
|
|
|
229,881
|
|
|||||
Total current liabilities (7)
|
195,566
|
|
|
166,011
|
|
|
107,950
|
|
|
78,039
|
|
|
38,140
|
|
|||||
Total stockholders’ equity (3) (5) (6) (8)
|
543,495
|
|
|
467,324
|
|
|
167,444
|
|
|
150,888
|
|
|
157,004
|
|
|
Year Ended December 31,
|
||||||||||||
|
2019
|
|
2018
|
||||||||||
United States
|
$
|
446,100
|
|
|
84.0
|
%
|
|
$
|
335,310
|
|
|
79.8
|
%
|
Other Countries
|
84,760
|
|
|
16.0
|
%
|
|
84,758
|
|
|
20.2
|
%
|
||
Total
|
$
|
530,860
|
|
|
100.0
|
%
|
|
$
|
420,068
|
|
|
100.0
|
%
|
|
Year Ended December 31,
|
|
Dollar
Change
|
|
Percent
Change
|
|||||||||||||||
|
2019
|
|
2018
|
|
|
|||||||||||||||
TASER segment:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
TASER 7
|
$
|
56,652
|
|
|
10.7
|
%
|
|
$
|
7,358
|
|
|
1.8
|
%
|
|
$
|
49,294
|
|
|
669.9
|
%
|
TASER X26P
|
52,524
|
|
|
9.9
|
%
|
|
70,638
|
|
|
16.8
|
%
|
|
(18,114
|
)
|
|
(25.6
|
)%
|
|||
TASER X2
|
55,920
|
|
|
10.5
|
%
|
|
78,837
|
|
|
18.8
|
%
|
|
(22,917
|
)
|
|
(29.1
|
)%
|
|||
TASER Pulse and Bolt
|
4,089
|
|
|
0.8
|
%
|
|
5,182
|
|
|
1.2
|
%
|
|
(1,093
|
)
|
|
(21.1
|
)%
|
|||
Cartridges
|
85,987
|
|
|
16.2
|
%
|
|
68,258
|
|
|
16.3
|
%
|
|
17,729
|
|
|
26.0
|
%
|
|||
Axon Evidence and cloud services
|
704
|
|
|
0.1
|
%
|
|
—
|
|
|
—
|
%
|
|
704
|
|
|
*
|
|
|||
Extended warranties
|
18,074
|
|
|
3.4
|
%
|
|
15,753
|
|
|
3.8
|
%
|
|
2,321
|
|
|
14.7
|
%
|
|||
Other
|
7,711
|
|
|
1.5
|
%
|
|
7,089
|
|
|
1.7
|
%
|
|
622
|
|
|
8.8
|
%
|
|||
TASER segment
|
281,661
|
|
|
53.1
|
%
|
|
253,115
|
|
|
60.4
|
%
|
|
28,546
|
|
|
11.3
|
%
|
|||
Software and Sensors segment:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Axon Body
|
44,039
|
|
|
8.3
|
%
|
|
21,883
|
|
|
5.2
|
%
|
|
22,156
|
|
|
101.2
|
%
|
|||
Axon Flex
|
5,928
|
|
|
1.1
|
%
|
|
6,509
|
|
|
1.5
|
%
|
|
(581
|
)
|
|
(8.9
|
)%
|
|||
Axon Fleet
|
16,182
|
|
|
3.0
|
%
|
|
12,527
|
|
|
3.0
|
%
|
|
3,655
|
|
|
29.2
|
%
|
|||
Axon Dock
|
20,449
|
|
|
3.9
|
%
|
|
10,706
|
|
|
2.5
|
%
|
|
9,743
|
|
|
91.0
|
%
|
|||
Axon Evidence and cloud services
|
130,265
|
|
|
24.5
|
%
|
|
90,291
|
|
|
21.5
|
%
|
|
39,974
|
|
|
44.3
|
%
|
|||
TASER Cam
|
3,104
|
|
|
0.6
|
%
|
|
3,871
|
|
|
0.9
|
%
|
|
(767
|
)
|
|
(19.8
|
)%
|
|||
Extended warranties
|
19,188
|
|
|
3.6
|
%
|
|
11,860
|
|
|
2.8
|
%
|
|
7,328
|
|
|
61.8
|
%
|
|||
Other
|
10,044
|
|
|
1.9
|
%
|
|
9,306
|
|
|
2.2
|
%
|
|
738
|
|
|
7.9
|
%
|
|||
Software and Sensors segment
|
249,199
|
|
|
46.9
|
%
|
|
166,953
|
|
|
39.6
|
%
|
|
82,246
|
|
|
49.3
|
%
|
|||
Total net sales
|
$
|
530,860
|
|
|
100.0
|
%
|
|
$
|
420,068
|
|
|
100.0
|
%
|
|
$
|
110,792
|
|
|
26.4
|
%
|
|
TASER
|
|
Software and Sensors
|
|
Total
|
||||||
|
(in thousands)
|
||||||||||
Balance, beginning of period
|
$
|
54,597
|
|
|
$
|
758,125
|
|
|
$
|
812,722
|
|
Add: additions to backlog, net of cancellations
|
282,253
|
|
|
517,266
|
|
|
799,519
|
|
|||
Less: revenue recognized during period
|
(
|
281,661
|
)
|
|
(
|
249,199
|
)
|
|
(
|
530,860
|
)
|
Balance end of period
|
$
|
55,189
|
|
|
$
|
1,026,192
|
|
|
$
|
1,081,381
|
|
|
Year Ended December 31,
|
|
Dollar
Change |
|
Percent
Change |
|||||||||||||||
|
2019
|
|
2018
|
|
|
|||||||||||||||
TASER segment:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cost of product sales
|
$
|
107,188
|
|
|
38.1
|
%
|
|
$
|
80,354
|
|
|
31.7
|
%
|
|
$
|
26,834
|
|
|
33.4
|
%
|
Software and Sensors segment:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Cost of product sales
|
83,495
|
|
|
33.5
|
%
|
|
58,983
|
|
|
35.3
|
%
|
|
24,512
|
|
|
41.6
|
%
|
|||
Cost of service sales
|
32,891
|
|
|
13.2
|
%
|
|
22,148
|
|
|
13.3
|
%
|
|
10,743
|
|
|
48.5
|
%
|
|||
Total cost of sales
|
116,386
|
|
|
46.7
|
%
|
|
81,131
|
|
|
48.6
|
%
|
|
35,255
|
|
|
43.5
|
%
|
|||
Total cost of product and service sales
|
$
|
223,574
|
|
|
42.1
|
%
|
|
$
|
161,485
|
|
|
38.4
|
%
|
|
$
|
62,089
|
|
|
38.4
|
%
|
|
Year Ended December 31,
|
|||||||||||||
|
|
|
Dollar
Change
|
|
Percent
Change
|
|||||||||
|
2019
|
|
2018
|
|
|
|||||||||
TASER segment
|
$
|
174,473
|
|
|
$
|
172,761
|
|
|
$
|
1,712
|
|
|
1.0
|
%
|
Software and Sensors segment
|
132,813
|
|
|
85,822
|
|
|
46,991
|
|
|
54.8
|
%
|
|||
Total gross margin
|
$
|
307,286
|
|
|
$
|
258,583
|
|
|
$
|
48,703
|
|
|
18.8
|
%
|
Gross margin as % of net sales
|
57.9
|
%
|
|
61.5
|
%
|
|
|
|
|
|
Year Ended December 31,
|
|
Dollar
Change
|
|
Percent
Change
|
|||||||||
|
2019
|
|
2018
|
|
|
|||||||||
Salaries, benefits and bonus
|
$
|
67,582
|
|
|
$
|
63,185
|
|
|
$
|
4,397
|
|
|
7.0
|
%
|
Stock-based compensation
|
59,341
|
|
|
12,710
|
|
|
46,631
|
|
|
366.9
|
%
|
|||
Professional, consulting and lobbying
|
21,590
|
|
|
24,469
|
|
|
(2,879
|
)
|
|
(11.8
|
)%
|
|||
Sales and marketing
|
28,961
|
|
|
19,427
|
|
|
9,534
|
|
|
49.1
|
%
|
|||
Travel and meals
|
11,407
|
|
|
9,908
|
|
|
1,499
|
|
|
15.1
|
%
|
|||
Depreciation and amortization
|
5,739
|
|
|
6,051
|
|
|
(312
|
)
|
|
(5.2
|
)%
|
|||
Other
|
18,339
|
|
|
21,136
|
|
|
(2,797
|
)
|
|
(13.2
|
)%
|
|||
Total sales, general and administrative expenses
|
$
|
212,959
|
|
|
$
|
156,886
|
|
|
$
|
56,073
|
|
|
35.7
|
%
|
SG&A expenses as a percentage of net sales
|
40.1
|
%
|
|
37.3
|
%
|
|
|
|
|
|
Year Ended December 31,
|
|
Dollar
Change
|
|
Percent
Change
|
|||||||||
|
2019
|
|
2018
|
|
|
|||||||||
Salaries, benefits and bonus
|
$
|
63,763
|
|
|
$
|
49,792
|
|
|
$
|
13,971
|
|
|
28.1
|
%
|
Stock-based compensation
|
17,588
|
|
|
8,658
|
|
|
8,930
|
|
|
103.1
|
%
|
|||
Professional and consulting
|
4,525
|
|
|
4,183
|
|
|
342
|
|
|
8.2
|
%
|
|||
Travel and meals
|
2,247
|
|
|
2,192
|
|
|
55
|
|
|
2.5
|
%
|
|||
Other
|
12,598
|
|
|
12,031
|
|
|
567
|
|
|
4.7
|
%
|
|||
Total research and development expenses
|
$
|
100,721
|
|
|
$
|
76,856
|
|
|
$
|
23,865
|
|
|
31.1
|
%
|
R&D expenses as a percentage of net sales
|
19.0
|
%
|
|
18.3
|
%
|
|
|
|
|
|
Three Months Ended December 31, 2019
|
|
Three Months Ended September 30, 2019
|
|
Dollar
Change |
|
Percent
Change |
|||||||||||||
TASER segment:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
TASER 7
|
$
|
17,186
|
|
|
10.0
|
%
|
|
$
|
20,214
|
|
|
15.4
|
%
|
|
$
|
(3,028
|
)
|
|
(15.0
|
)%
|
TASER X26P
|
14,692
|
|
|
8.5
|
%
|
|
11,578
|
|
|
8.8
|
%
|
|
3,114
|
|
|
26.9
|
%
|
|||
TASER X2
|
15,507
|
|
|
9.0
|
%
|
|
13,241
|
|
|
10.1
|
%
|
|
2,266
|
|
|
17.1
|
%
|
|||
TASER Pulse and Bolt
|
1,169
|
|
|
0.7
|
%
|
|
1,132
|
|
|
0.9
|
%
|
|
37
|
|
|
3.3
|
%
|
|||
Cartridges
|
28,633
|
|
|
16.7
|
%
|
|
18,901
|
|
|
14.4
|
%
|
|
9,732
|
|
|
51.5
|
%
|
|||
Axon Evidence and cloud services
|
341
|
|
|
0.2
|
%
|
|
218
|
|
|
0.2
|
%
|
|
123
|
|
|
56.4
|
%
|
|||
Extended warranties
|
4,733
|
|
|
2.8
|
%
|
|
4,543
|
|
|
3.5
|
%
|
|
190
|
|
|
4.2
|
%
|
|||
Other
|
1,694
|
|
|
1.0
|
%
|
|
1,916
|
|
|
1.5
|
%
|
|
(222
|
)
|
|
(11.6
|
)%
|
|||
TASER segment
|
83,955
|
|
|
48.9
|
%
|
|
71,743
|
|
|
54.8
|
%
|
|
12,212
|
|
|
17.0
|
%
|
|||
Software and Sensors segment:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Axon Body
|
25,219
|
|
|
14.7
|
%
|
|
6,763
|
|
|
5.2
|
%
|
|
18,456
|
|
|
272.9
|
%
|
|||
Axon Flex
|
1,411
|
|
|
0.8
|
%
|
|
1,670
|
|
|
1.3
|
%
|
|
(259
|
)
|
|
(15.5
|
)%
|
|||
Axon Fleet
|
5,205
|
|
|
3.0
|
%
|
|
4,341
|
|
|
3.3
|
%
|
|
864
|
|
|
19.9
|
%
|
|||
Axon Dock
|
11,048
|
|
|
6.4
|
%
|
|
3,358
|
|
|
2.6
|
%
|
|
7,690
|
|
|
229.0
|
%
|
|||
Axon Evidence and cloud services
|
36,804
|
|
|
21.4
|
%
|
|
34,022
|
|
|
26.0
|
%
|
|
2,782
|
|
|
8.2
|
%
|
|||
TASER Cam
|
623
|
|
|
0.4
|
%
|
|
534
|
|
|
0.4
|
%
|
|
89
|
|
|
16.7
|
%
|
|||
Extended warranties
|
5,124
|
|
|
3.0
|
%
|
|
4,714
|
|
|
3.6
|
%
|
|
410
|
|
|
8.7
|
%
|
|||
Other
|
2,462
|
|
|
1.4
|
%
|
|
3,692
|
|
|
2.8
|
%
|
|
(1,230
|
)
|
|
(33.3
|
)%
|
|||
Software and Sensors segment
|
87,896
|
|
|
51.1
|
%
|
|
59,094
|
|
|
45.2
|
%
|
|
28,802
|
|
|
48.7
|
%
|
|||
Total net sales
|
$
|
171,851
|
|
|
100.0
|
%
|
|
$
|
130,837
|
|
|
100.0
|
%
|
|
$
|
41,014
|
|
|
31.3
|
%
|
|
Three Months Ended
|
|
|
|
|
||||||
|
December 31, 2019
|
|
September 30, 2019
|
|
Unit
Change |
|
Percent
Change |
||||
TASER 7
|
14,577
|
|
|
17,674
|
|
|
(3,097
|
)
|
|
(17.5
|
)%
|
TASER X26P
|
13,554
|
|
|
10,766
|
|
|
2,788
|
|
|
25.9
|
%
|
TASER X2
|
11,534
|
|
|
9,819
|
|
|
1,715
|
|
|
17.5
|
%
|
TASER Pulse and Bolt
|
2,978
|
|
|
3,923
|
|
|
(945
|
)
|
|
(24.1
|
)%
|
Cartridges
|
962,519
|
|
|
566,347
|
|
|
396,172
|
|
|
70.0
|
%
|
Axon Body
|
83,268
|
|
|
22,037
|
|
|
61,231
|
|
|
277.9
|
%
|
Axon Flex
|
3,078
|
|
|
5,409
|
|
|
(2,331
|
)
|
|
(43.1
|
)%
|
Axon Fleet
|
3,324
|
|
|
2,967
|
|
|
357
|
|
|
12.0
|
%
|
Axon Dock
|
10,149
|
|
|
3,724
|
|
|
6,425
|
|
|
172.5
|
%
|
TASER Cam
|
1,177
|
|
|
899
|
|
|
278
|
|
|
30.9
|
%
|
•
|
EBITDA (Most comparable GAAP Measure: Net income) - Earnings before interest expense, investment interest income, taxes, depreciation and amortization.
|
•
|
Adjusted EBITDA (CEO Performance Award) (Most comparable GAAP Measure: Net income) - Earnings before interest expense, investment interest income, taxes, depreciation, amortization and non-cash stock-based compensation expense.
|
•
|
these non-GAAP financial measures are limited in their usefulness and should be considered only as a supplement to our GAAP financial measures;
|
•
|
these non-GAAP financial measures should not be considered in isolation from, or as a substitute for, our GAAP financial measures;
|
•
|
these non-GAAP financial measures should not be considered to be superior to our GAAP financial measures; and
|
•
|
these non-GAAP financial measures were not prepared in accordance with GAAP and investors should not assume that the non-GAAP financial measures presented in this Annual Report on Form 10-K were prepared under a comprehensive set of rules or principles.
|
|
|
For the Years Ended December 31,
|
||||||
|
|
2019
|
|
2018
|
||||
Net income
|
|
$
|
882
|
|
|
$
|
29,205
|
|
Depreciation and amortization
|
|
11,361
|
|
|
10,615
|
|
||
Interest expense
|
|
46
|
|
|
86
|
|
||
Investment interest income
|
|
(7,040
|
)
|
|
(3,002
|
)
|
||
Provision for (benefit from) income taxes
|
|
1,188
|
|
|
(1,101
|
)
|
||
EBITDA
|
|
$
|
6,437
|
|
|
$
|
35,803
|
|
|
|
|
|
|
||||
Adjustments:
|
|
|
|
|
||||
Stock-based compensation expense
|
|
78,495
|
|
|
21,879
|
|
||
Adjusted EBITDA (CEO Performance Award)
|
|
$
|
84,932
|
|
|
$
|
57,682
|
|
|
Year Ended December 31,
|
||||||
|
2019
|
|
2018
|
||||
Operating activities
|
$
|
65,673
|
|
|
$
|
63,875
|
|
Investing activities
|
(240,737
|
)
|
|
(9,860
|
)
|
||
Financing activities
|
(3,937
|
)
|
|
219,348
|
|
||
Effect of exchange rate changes on cash and cash equivalents
|
329
|
|
|
(774
|
)
|
||
Net increase (decrease) in cash and cash equivalents and restricted cash
|
$
|
(178,672
|
)
|
|
$
|
272,589
|
|
|
|
Total
|
|
Less than
1 Year
|
|
1 - 3 Years
|
|
3 - 5 Years
|
|
More than
5 Years
|
||||||||||
Operating lease obligations
|
|
$
|
12,042
|
|
|
$
|
4,539
|
|
|
$
|
6,330
|
|
|
$
|
1,173
|
|
|
$
|
—
|
|
Financing leases including interest
|
|
36
|
|
|
36
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Purchase obligations
|
|
193,322
|
|
|
154,845
|
|
|
24,118
|
|
|
4,413
|
|
|
9,946
|
|
|||||
Total contractual obligations
|
|
$
|
205,400
|
|
|
$
|
159,420
|
|
|
$
|
30,448
|
|
|
$
|
5,586
|
|
|
$
|
9,946
|
|
|
For the Year Ended December 31, 2019
|
|||||||||||||||||||
|
TASER
|
|
Software and Sensors
|
|
Total
|
|||||||||||||||
Contracts with Multiple Performance Obligations
|
$
|
130,761
|
|
|
46.4
|
%
|
|
$
|
245,416
|
|
|
98.5
|
%
|
|
$
|
376,177
|
|
|
70.9
|
%
|
Contracts without Multiple Performance Obligations
|
150,900
|
|
|
53.6
|
|
|
3,783
|
|
|
1.5
|
|
|
154,683
|
|
|
29.1
|
|
|||
Total
|
$
|
281,661
|
|
|
100.0
|
%
|
|
$
|
249,199
|
|
|
100.0
|
%
|
|
$
|
530,860
|
|
|
100.0
|
%
|
|
For the Year Ended December 31, 2018
|
|||||||||||||||||||
|
TASER
|
|
Software and Sensors
|
|
Total
|
|||||||||||||||
Contracts with Multiple Performance Obligations
|
$
|
72,355
|
|
|
28.6
|
%
|
|
$
|
159,318
|
|
|
95.4
|
%
|
|
$
|
231,673
|
|
|
55.2
|
%
|
Contracts without Multiple Performance Obligations
|
180,760
|
|
|
71.4
|
|
|
7,635
|
|
|
4.6
|
|
|
188,395
|
|
|
44.8
|
|
|||
Total
|
$
|
253,115
|
|
|
100.0
|
%
|
|
$
|
166,953
|
|
|
100.0
|
%
|
|
$
|
420,068
|
|
|
100.0
|
%
|
|
For the Year Ended December 31, 2017 (1)
|
|||||||||||||||||||
|
TASER
|
|
Software and Sensors
|
|
Total
|
|||||||||||||||
Contracts with Multiple Performance Obligations
|
$
|
53,865
|
|
|
23.0
|
%
|
|
$
|
102,529
|
|
|
93.8
|
%
|
|
$
|
156,394
|
|
|
45.5
|
%
|
Contracts without Multiple Performance Obligations
|
180,647
|
|
|
77.0
|
|
|
6,757
|
|
|
6.2
|
|
|
187,404
|
|
|
54.5
|
|
|||
Total
|
$
|
234,512
|
|
|
100.0
|
%
|
|
$
|
109,286
|
|
|
100.0
|
%
|
|
$
|
343,798
|
|
|
100.0
|
%
|
Index to Consolidated Financial Statements
|
|
Page
|
|
||
|
||
|
||
|
||
|
||
|
|
December 31,
|
||||||
|
2019
|
|
2018
|
||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
172,250
|
|
|
$
|
349,462
|
|
Short-term investments
|
178,534
|
|
|
—
|
|
||
Accounts and notes receivable, net of allowance of $1,567 and $1,882 as of December 31, 2019 and 2018, respectively
|
146,878
|
|
|
130,579
|
|
||
Contract assets, net
|
47,718
|
|
|
13,960
|
|
||
Inventory
|
38,845
|
|
|
33,763
|
|
||
Prepaid expenses and other current assets
|
34,866
|
|
|
30,391
|
|
||
Total current assets
|
619,091
|
|
|
558,155
|
|
||
Property and equipment, net
|
43,770
|
|
|
37,893
|
|
||
Deferred tax assets, net
|
27,688
|
|
|
19,347
|
|
||
Intangible assets, net
|
12,771
|
|
|
15,935
|
|
||
Goodwill
|
25,013
|
|
|
24,981
|
|
||
Long-term investments
|
45,499
|
|
|
—
|
|
||
Long-term notes receivable, net of current portion
|
31,598
|
|
|
40,230
|
|
||
Other assets
|
40,209
|
|
|
22,999
|
|
||
Total assets
|
$
|
845,639
|
|
|
$
|
719,540
|
|
LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Accounts payable
|
$
|
25,874
|
|
|
$
|
15,164
|
|
Accrued liabilities
|
45,001
|
|
|
41,092
|
|
||
Current portion of deferred revenue
|
117,864
|
|
|
107,016
|
|
||
Customer deposits
|
2,974
|
|
|
2,702
|
|
||
Other current liabilities
|
3,853
|
|
|
37
|
|
||
Total current liabilities
|
195,566
|
|
|
166,011
|
|
||
Deferred revenue, net of current portion
|
87,936
|
|
|
74,417
|
|
||
Liability for unrecognized tax benefits
|
3,832
|
|
|
2,849
|
|
||
Long-term deferred compensation
|
3,936
|
|
|
3,235
|
|
||
Deferred tax liability, net
|
354
|
|
|
—
|
|
||
Other long-term liabilities
|
10,520
|
|
|
5,704
|
|
||
Total liabilities
|
302,144
|
|
|
252,216
|
|
||
Commitments and contingencies (Note 9)
|
|
|
|
||||
Stockholders’ equity:
|
|
|
|
||||
Preferred stock, $0.00001 par value; 25,000,000 shares authorized; no shares issued and outstanding as of December 31, 2019 and 2018
|
—
|
|
|
—
|
|
||
Common stock, $0.00001 par value; 200,000,000 shares authorized; 59,497,759 and 58,810,637 shares issued and outstanding as of December 31, 2019 and 2018, respectively
|
1
|
|
|
1
|
|
||
Additional paid-in capital
|
528,272
|
|
|
453,400
|
|
||
Treasury stock at cost, 20,220,227 shares as of December 31, 2019 and 2018
|
(155,947
|
)
|
|
(155,947
|
)
|
||
Retained earnings
|
172,265
|
|
|
171,383
|
|
||
Accumulated other comprehensive loss
|
(1,096
|
)
|
|
(1,513
|
)
|
||
Total stockholders’ equity
|
543,495
|
|
|
467,324
|
|
||
Total liabilities and stockholders’ equity
|
$
|
845,639
|
|
|
$
|
719,540
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Net sales from products
|
$
|
399,474
|
|
|
$
|
327,635
|
|
|
$
|
285,859
|
|
Net sales from services
|
131,386
|
|
|
92,433
|
|
|
57,939
|
|
|||
Net sales
|
530,860
|
|
|
420,068
|
|
|
343,798
|
|
|||
Cost of product sales
|
190,683
|
|
|
139,337
|
|
|
117,997
|
|
|||
Cost of service sales
|
32,891
|
|
|
22,148
|
|
|
18,713
|
|
|||
Cost of sales
|
223,574
|
|
|
161,485
|
|
|
136,710
|
|
|||
Gross margin
|
307,286
|
|
|
258,583
|
|
|
207,088
|
|
|||
Sales, general and administrative
|
212,959
|
|
|
156,886
|
|
|
138,692
|
|
|||
Research and development
|
100,721
|
|
|
76,856
|
|
|
55,373
|
|
|||
Total operating expenses
|
313,680
|
|
|
233,742
|
|
|
194,065
|
|
|||
Income (loss) from operations
|
(6,394
|
)
|
|
24,841
|
|
|
13,023
|
|
|||
Interest and other income, net
|
8,464
|
|
|
3,263
|
|
|
2,738
|
|
|||
Income before provision for income taxes
|
2,070
|
|
|
28,104
|
|
|
15,761
|
|
|||
Provision (benefit) for income taxes
|
1,188
|
|
|
(1,101
|
)
|
|
10,554
|
|
|||
Net income
|
$
|
882
|
|
|
$
|
29,205
|
|
|
$
|
5,207
|
|
Net income per share:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.01
|
|
|
$
|
0.52
|
|
|
$
|
0.10
|
|
Diluted
|
$
|
0.01
|
|
|
$
|
0.50
|
|
|
$
|
0.10
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
||||||
Basic
|
59,190
|
|
|
56,392
|
|
|
52,726
|
|
|||
Diluted
|
60,018
|
|
|
57,922
|
|
|
53,898
|
|
|||
|
|
|
|
|
|
||||||
Net income
|
$
|
882
|
|
|
$
|
29,205
|
|
|
$
|
5,207
|
|
Foreign currency translation adjustments
|
417
|
|
|
(46
|
)
|
|
(2,370
|
)
|
|||
Comprehensive income
|
$
|
1,299
|
|
|
$
|
29,159
|
|
|
$
|
2,837
|
|
|
Common Stock
|
|
Additional
Paid-in Capital |
|
Treasury Stock
|
|
Retained
Earnings |
|
Accumulated
Other Comprehensive Income (Loss) |
|
Total
Stockholders’ Equity |
||||||||||||||||||
|
Shares
|
|
Amount
|
|
|
Shares
|
|
Amount
|
|
|
|
||||||||||||||||||
Balance, December 31, 2016
|
52,325,251
|
|
|
$
|
1
|
|
|
$
|
187,656
|
|
|
20,220,227
|
|
|
$
|
(155,947
|
)
|
|
$
|
118,275
|
|
|
$
|
903
|
|
|
$
|
150,888
|
|
Cumulative effect of applying a change in accounting principle
|
—
|
|
|
—
|
|
|
475
|
|
|
—
|
|
|
—
|
|
|
(297
|
)
|
|
—
|
|
|
178
|
|
||||||
Issuance of common stock under employee plans, net
|
644,618
|
|
|
—
|
|
|
(2,069
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,069
|
)
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
15,610
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
15,610
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
5,207
|
|
|
—
|
|
|
5,207
|
|
||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,370
|
)
|
|
(2,370
|
)
|
||||||
Balance, December 31, 2017
|
52,969,869
|
|
|
$
|
1
|
|
|
$
|
201,672
|
|
|
20,220,227
|
|
|
$
|
(155,947
|
)
|
|
$
|
123,185
|
|
|
$
|
(1,467
|
)
|
|
$
|
167,444
|
|
Cumulative effect of applying a change in accounting principle
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
18,993
|
|
|
—
|
|
|
18,993
|
|
||||||
Issuance of common stock
|
4,645,000
|
|
|
—
|
|
|
233,993
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
233,993
|
|
||||||
Issuance of common stock business combination
|
58,843
|
|
|
—
|
|
|
8,226
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
8,226
|
|
||||||
Issuance of common stock under employee plans, net
|
1,136,925
|
|
|
—
|
|
|
(12,370
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,370
|
)
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
21,879
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
21,879
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
29,205
|
|
|
—
|
|
|
29,205
|
|
||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(46
|
)
|
|
(46
|
)
|
||||||
Balance, December 31, 2018
|
58,810,637
|
|
|
$
|
1
|
|
|
$
|
453,400
|
|
|
20,220,227
|
|
|
$
|
(155,947
|
)
|
|
$
|
171,383
|
|
|
$
|
(1,513
|
)
|
|
$
|
467,324
|
|
Issuance of common stock under employee plans, net
|
616,509
|
|
|
—
|
|
|
(3,937
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(3,937
|
)
|
||||||
Stock-based compensation
|
—
|
|
|
—
|
|
|
78,809
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
78,809
|
|
||||||
Issuance of common stock for business combination contingent consideration
|
70,613
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Net income
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
882
|
|
|
—
|
|
|
882
|
|
||||||
Foreign currency translation adjustments
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
417
|
|
|
417
|
|
||||||
Balance, December 31, 2019
|
59,497,759
|
|
|
$
|
1
|
|
|
$
|
528,272
|
|
|
20,220,227
|
|
|
$
|
(155,947
|
)
|
|
$
|
172,265
|
|
|
$
|
(1,096
|
)
|
|
$
|
543,495
|
|
|
For the Years Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Cash flows from operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
882
|
|
|
$
|
29,205
|
|
|
$
|
5,207
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|||||||||||
Depreciation and amortization
|
11,361
|
|
|
10,615
|
|
|
8,041
|
|
|||
Loss on disposal and abandonment of intangible assets
|
67
|
|
|
2,117
|
|
|
1,146
|
|
|||
Purchase accounting adjustments to goodwill
|
—
|
|
|
—
|
|
|
(23
|
)
|
|||
Loss (gain) on disposal and impairment of property and equipment, net
|
2,542
|
|
|
303
|
|
|
(28
|
)
|
|||
Stock-based compensation
|
78,495
|
|
|
21,879
|
|
|
15,610
|
|
|||
Deferred income taxes
|
(7,987
|
)
|
|
(3,592
|
)
|
|
2,830
|
|
|||
Unrecognized tax benefits
|
983
|
|
|
1,144
|
|
|
(191
|
)
|
|||
Other noncash, net
|
3,928
|
|
|
34
|
|
|
657
|
|
|||
Change in assets and liabilities:
|
|
|
|
|
|
||||||
Accounts and notes receivable and contract assets
|
(38,830
|
)
|
|
(67,643
|
)
|
|
(35,305
|
)
|
|||
Inventory
|
(4,903
|
)
|
|
14,804
|
|
|
(11,746
|
)
|
|||
Prepaid expenses and other assets
|
(9,845
|
)
|
|
(12,739
|
)
|
|
(8,992
|
)
|
|||
Accounts payable, accrued and other liabilities
|
4,967
|
|
|
13,506
|
|
|
1,530
|
|
|||
Deferred revenue
|
24,013
|
|
|
54,242
|
|
|
39,735
|
|
|||
Net cash provided by operating activities
|
65,673
|
|
|
63,875
|
|
|
18,471
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from investing activities:
|
|
|
|
|
|
||||||
Purchases of investments
|
(354,477
|
)
|
|
(4,331
|
)
|
|
(19,950
|
)
|
|||
Proceeds from call / maturity of investments
|
130,083
|
|
|
11,158
|
|
|
61,080
|
|
|||
Purchases of property and equipment
|
(15,939
|
)
|
|
(11,139
|
)
|
|
(10,419
|
)
|
|||
Proceeds from disposal of property and equipment
|
—
|
|
|
—
|
|
|
24
|
|
|||
Purchases of intangible assets
|
(404
|
)
|
|
(558
|
)
|
|
(1,024
|
)
|
|||
Business acquisitions, net of cash acquired
|
—
|
|
|
(4,990
|
)
|
|
(10,629
|
)
|
|||
Net cash provided by (used in) investing activities
|
(240,737
|
)
|
|
(9,860
|
)
|
|
19,082
|
|
|||
|
|
|
|
|
|
||||||
Cash flows from financing activities:
|
|
|
|
|
|
||||||
Net proceeds from equity offering
|
—
|
|
|
233,993
|
|
|
—
|
|
|||
Proceeds from options exercised
|
114
|
|
|
1,757
|
|
|
1,383
|
|
|||
Income and payroll tax payments for net-settled stock awards
|
(4,051
|
)
|
|
(14,127
|
)
|
|
(3,453
|
)
|
|||
Payment of contingent consideration for business acquisitions
|
—
|
|
|
(2,275
|
)
|
|
(1,750
|
)
|
|||
Net cash provided by (used in) financing activities
|
(3,937
|
)
|
|
219,348
|
|
|
(3,820
|
)
|
|||
|
|
|
|
|
|
||||||
Effect of exchange rate changes on cash and cash equivalents
|
329
|
|
|
(774
|
)
|
|
737
|
|
|||
|
|
|
|
|
|
||||||
Net increase (decrease) in cash and cash equivalents
|
(178,672
|
)
|
|
272,589
|
|
|
34,470
|
|
|||
Cash and cash equivalents and restricted cash, beginning of year
|
351,027
|
|
|
78,438
|
|
|
43,968
|
|
|||
Cash and cash equivalents and restricted cash, end of year
|
$
|
172,355
|
|
|
$
|
351,027
|
|
|
$
|
78,438
|
|
•
|
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,
|
•
|
stock-based compensation,
|
•
|
recognition and measurement of contingencies and accrued litigation expense, and
|
•
|
fair values of identified tangible and intangible assets acquired and liabilities assumed in business combinations.
|
|
2019
|
|
2018
|
|
2017
|
||||||
Balance, January 1
|
$
|
898
|
|
|
$
|
644
|
|
|
$
|
780
|
|
Utilization of reserve
|
(973
|
)
|
|
(458
|
)
|
|
(245
|
)
|
|||
Warranty expense
|
1,551
|
|
|
712
|
|
|
109
|
|
|||
Balance, December 31
|
$
|
1,476
|
|
|
$
|
898
|
|
|
$
|
644
|
|
•
|
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 our own assumptions about inputs that market participants would use in pricing an asset or liability.
|
Volatility
|
|
47.71%
|
Risk-free interest rate
|
|
2.98%
|
Dividend rate
|
|
—
|
Expected life of options
|
|
9.76 years
|
Weighted average grant date fair value of options granted
|
|
$38.64
|
|
For the Year Ended December 31,
|
||||||||||
|
2019
|
|
2018
|
|
2017
|
||||||
Numerator for basic and diluted earnings per share:
|
|
|
|
|
|
||||||
Net income
|
$
|
882
|
|
|
$
|
29,205
|
|
|
$
|
5,207
|
|
Denominator:
|
|
|
|
|
|
||||||
Weighted average shares outstanding—basic
|
59,190
|
|
|
56,392
|
|
|
52,726
|
|
|||
Dilutive effect of stock-based awards
|
828
|
|
|
1,530
|
|
|
1,172
|
|
|||
Diluted weighted average shares outstanding
|
60,018
|
|
|
57,922
|
|
|
53,898
|
|
|||
Anti-dilutive stock-based awards excluded
|
12,627
|
|
|
6,757
|
|
|
386
|
|
|||
Net income per common share:
|
|
|
|
|
|
||||||
Basic
|
$
|
0.01
|
|
|
$
|
0.52
|
|
|
$
|
0.10
|
|
Diluted
|
$
|
0.01
|
|
|
$
|
0.50
|
|
|
$
|
0.10
|
|
|
December 31, 2018
|
|
Impact of Adoption of Topic 842 on Opening Balance Sheet
|
|
January 1, 2019
|
||||||
|
(As reported)
|
|
|
(As adjusted)
|
|||||||
Consolidated Balance Sheet Data:
|
|
|
|
|
|
||||||
Other assets
|
$
|
22,999
|
|
|
$
|
12,483
|
|
|
$
|
35,482
|
|
Total assets
|
719,540
|
|
|
12,483
|
|
|
732,023
|
|
|||
|
|
|
|
|
|
||||||
Accrued liabilities
|
41,092
|
|
|
(1,138
|
)
|
|
39,954
|
|
|||
Other current liabilities
|
37
|
|
|
3,588
|
|
|
3,625
|
|
|||
Total current liabilities
|
166,011
|
|
|
2,450
|
|
|
168,461
|
|
|||
Other long-term liabilities
|
5,704
|
|
|
10,033
|
|
|
15,737
|
|
|||
Total liabilities
|
252,216
|
|
|
12,483
|
|
|
264,699
|
|
|||
Total liabilities and stockholders' equity
|
719,540
|
|
|
12,483
|
|
|
732,023
|
|
|
Year Ended December 31, 2019
|
|
Year Ended December 31, 2018
|
||||||||||||||||||||
|
TASER
|
|
Software and Sensors
|
|
Total
|
|
TASER
|
|
Software and Sensors
|
|
Total
|
||||||||||||
TASER 7
|
$
|
56,652
|
|
|
$
|
—
|
|
|
$
|
56,652
|
|
|
$
|
7,358
|
|
|
$
|
—
|
|
|
$
|
7,358
|
|
TASER X26P
|
52,524
|
|
|
—
|
|
|
52,524
|
|
|
70,638
|
|
|
—
|
|
|
70,638
|
|
||||||
TASER X2
|
55,920
|
|
|
—
|
|
|
55,920
|
|
|
78,837
|
|
|
—
|
|
|
78,837
|
|
||||||
TASER Pulse and Bolt
|
4,089
|
|
|
—
|
|
|
4,089
|
|
|
5,182
|
|
|
—
|
|
|
5,182
|
|
||||||
Cartridges
|
85,987
|
|
|
—
|
|
|
85,987
|
|
|
68,258
|
|
|
—
|
|
|
68,258
|
|
||||||
Axon Body
|
—
|
|
|
44,039
|
|
|
44,039
|
|
|
—
|
|
|
21,883
|
|
|
21,883
|
|
||||||
Axon Flex
|
—
|
|
|
5,928
|
|
|
5,928
|
|
|
—
|
|
|
6,509
|
|
|
6,509
|
|
||||||
Axon Fleet
|
—
|
|
|
16,182
|
|
|
16,182
|
|
|
—
|
|
|
12,527
|
|
|
12,527
|
|
||||||
Axon Dock
|
—
|
|
|
20,449
|
|
|
20,449
|
|
|
—
|
|
|
10,706
|
|
|
10,706
|
|
||||||
Axon Evidence and cloud services
|
704
|
|
|
130,265
|
|
|
130,969
|
|
|
—
|
|
|
90,291
|
|
|
90,291
|
|
||||||
TASER Cam
|
—
|
|
|
3,104
|
|
|
3,104
|
|
|
—
|
|
|
3,871
|
|
|
3,871
|
|
||||||
Extended warranties
|
18,074
|
|
|
19,188
|
|
|
37,262
|
|
|
15,753
|
|
|
11,860
|
|
|
27,613
|
|
||||||
Other
|
7,711
|
|
|
10,044
|
|
|
17,755
|
|
|
7,089
|
|
|
9,306
|
|
|
16,395
|
|
||||||
Total
|
$
|
281,661
|
|
|
$
|
249,199
|
|
|
$
|
530,860
|
|
|
$
|
253,115
|
|
|
$
|
166,953
|
|
|
$
|
420,068
|
|
|
December 31, 2019
|
||
Contract assets, net
|
$
|
47,746
|
|
Contract liabilities (deferred revenue)
|
205,800
|
|
|
Revenue recognized in the period from:
|
|
||
Amounts included in contract liabilities at the beginning of the period
|
101,768
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Current
|
|
Long-Term
|
|
Total
|
|
Current
|
|
Long-Term
|
|
Total
|
||||||||||||
Warranty:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
TASER
|
$
|
12,716
|
|
|
$
|
16,378
|
|
|
$
|
29,094
|
|
|
$
|
12,797
|
|
|
$
|
16,847
|
|
|
$
|
29,644
|
|
Software and Sensors
|
9,852
|
|
|
5,156
|
|
|
15,008
|
|
|
8,273
|
|
|
6,516
|
|
|
14,789
|
|
||||||
|
22,568
|
|
|
21,534
|
|
|
44,102
|
|
|
21,070
|
|
|
23,363
|
|
|
44,433
|
|
||||||
Hardware:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
TASER
|
9,569
|
|
|
15,468
|
|
|
25,037
|
|
|
9,355
|
|
|
15,598
|
|
|
24,953
|
|
||||||
Software and Sensors
|
22,235
|
|
|
33,759
|
|
|
55,994
|
|
|
20,878
|
|
|
24,685
|
|
|
45,563
|
|
||||||
|
31,804
|
|
|
49,227
|
|
|
81,031
|
|
|
30,233
|
|
|
40,283
|
|
|
70,516
|
|
||||||
Services:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
TASER
|
293
|
|
|
765
|
|
|
1,058
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Software and Sensors
|
63,199
|
|
|
16,410
|
|
|
79,609
|
|
|
55,713
|
|
|
10,771
|
|
|
66,484
|
|
||||||
|
$
|
63,492
|
|
|
$
|
17,175
|
|
|
$
|
80,667
|
|
|
$
|
55,713
|
|
|
$
|
10,771
|
|
|
$
|
66,484
|
|
Total
|
$
|
117,864
|
|
|
$
|
87,936
|
|
|
$
|
205,800
|
|
|
$
|
107,016
|
|
|
$
|
74,417
|
|
|
$
|
181,433
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Current
|
|
Long-Term
|
|
Total
|
|
Current
|
|
Long-Term
|
|
Total
|
||||||||||||
TASER
|
$
|
22,578
|
|
|
$
|
32,611
|
|
|
$
|
55,189
|
|
|
$
|
22,152
|
|
|
$
|
32,445
|
|
|
$
|
54,597
|
|
Software and Sensors
|
95,286
|
|
|
55,325
|
|
|
150,611
|
|
|
84,864
|
|
|
41,972
|
|
|
126,836
|
|
||||||
Total
|
$
|
117,864
|
|
|
$
|
87,936
|
|
|
$
|
205,800
|
|
|
$
|
107,016
|
|
|
$
|
74,417
|
|
|
$
|
181,433
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||
Current deferred commissions (1)
|
$
|
9,623
|
|
|
$
|
7,062
|
|
Deferred commissions, net of current portion (2)
|
22,068
|
|
|
15,530
|
|
||
|
$
|
31,691
|
|
|
$
|
22,592
|
|
|
As of December 31, 2019
|
||||||||||||||||||||||||||
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Cash and Cash Equivalents
|
|
Short-Term Investments
|
|
Long-Term Investments
|
||||||||||||||
Cash
|
$
|
103,319
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
103,319
|
|
|
$
|
103,319
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Level 1:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Money market funds
|
8,845
|
|
|
—
|
|
|
—
|
|
|
8,845
|
|
|
8,845
|
|
|
—
|
|
|
—
|
|
|||||||
Agency bonds
|
32,869
|
|
|
14
|
|
|
(4
|
)
|
|
32,879
|
|
|
—
|
|
|
15,131
|
|
|
17,738
|
|
|||||||
Subtotal
|
41,714
|
|
|
14
|
|
|
(4
|
)
|
|
41,724
|
|
|
8,845
|
|
|
15,131
|
|
|
17,738
|
|
|||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Level 2:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
State and municipal obligations
|
25,038
|
|
|
8
|
|
|
—
|
|
|
25,046
|
|
|
|
|
|
21,560
|
|
|
3,478
|
|
|||||||
Certificates of deposit
|
1,400
|
|
|
—
|
|
|
—
|
|
|
1,400
|
|
|
—
|
|
|
1,400
|
|
|
—
|
|
|||||||
Corporate bonds
|
135,175
|
|
|
71
|
|
|
(30
|
)
|
|
135,216
|
|
|
886
|
|
|
113,241
|
|
|
21,048
|
|
|||||||
U.S. Treasury repurchase agreements
|
57,200
|
|
|
—
|
|
|
—
|
|
|
57,200
|
|
|
57,200
|
|
|
—
|
|
|
—
|
|
|||||||
Treasury inflation-protected securities
|
3,235
|
|
|
14
|
|
|
—
|
|
|
3,249
|
|
|
—
|
|
|
—
|
|
|
3,235
|
|
|||||||
Commercial paper
|
29,202
|
|
|
—
|
|
|
—
|
|
|
29,202
|
|
|
2,000
|
|
|
27,202
|
|
|
—
|
|
|||||||
Subtotal
|
251,250
|
|
|
93
|
|
|
(30
|
)
|
|
251,313
|
|
|
60,086
|
|
|
163,403
|
|
|
27,761
|
|
|||||||
Total
|
$
|
396,283
|
|
|
$
|
107
|
|
|
$
|
(34
|
)
|
|
$
|
396,356
|
|
|
$
|
172,250
|
|
|
$
|
178,534
|
|
|
$
|
45,499
|
|
|
As of December 31, 2018
|
||||||||||||||||||||||||||
|
Amortized Cost
|
|
Gross Unrealized Gains
|
|
Gross Unrealized Losses
|
|
Fair Value
|
|
Cash and Cash Equivalents
|
|
Short-Term Investments
|
|
Long-Term Investments
|
||||||||||||||
Cash
|
$
|
144,095
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
144,095
|
|
|
$
|
144,095
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Level 1:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||
Money market funds
|
205,367
|
|
|
—
|
|
|
—
|
|
|
205,367
|
|
|
205,367
|
|
|
—
|
|
|
—
|
|
|||||||
Total
|
$
|
349,462
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
349,462
|
|
|
$
|
349,462
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
2019
|
|
2018
|
||||
Raw materials
|
$
|
20,789
|
|
|
$
|
19,670
|
|
Finished goods
|
18,056
|
|
|
14,093
|
|
||
Total inventory
|
$
|
38,845
|
|
|
$
|
33,763
|
|
|
Estimated
Useful Life
|
|
2019
|
|
2018
|
||||
Land
|
N/A
|
|
$
|
2,900
|
|
|
$
|
2,900
|
|
Building and leasehold improvements
|
3-39 years
|
|
20,089
|
|
|
19,578
|
|
||
Production equipment
|
3-7 years
|
|
29,961
|
|
|
19,817
|
|
||
Computers, equipment and software
|
3-5 years
|
|
8,126
|
|
|
8,392
|
|
||
Furniture and office equipment
|
5-7 years
|
|
6,514
|
|
|
6,529
|
|
||
Vehicles
|
5 years
|
|
1,753
|
|
|
1,385
|
|
||
Website development costs
|
3 years
|
|
204
|
|
|
687
|
|
||
Capitalized internal-use software development costs
|
3 years
|
|
3,670
|
|
|
3,670
|
|
||
Construction-in-process
|
N/A
|
|
12,385
|
|
|
14,820
|
|
||
Total cost
|
|
|
85,602
|
|
|
77,778
|
|
||
Less: Accumulated depreciation
|
|
|
(41,832
|
)
|
|
(39,885
|
)
|
||
Property and equipment, net
|
|
|
$
|
43,770
|
|
|
$
|
37,893
|
|
|
TASER
|
|
Software and
Sensors
|
|
Total
|
||||||
Balance, December 31, 2018
|
$
|
1,338
|
|
|
$
|
23,643
|
|
|
$
|
24,981
|
|
Foreign currency translation adjustments
|
16
|
|
|
16
|
|
|
32
|
|
|||
Balance, December 31, 2019
|
$
|
1,354
|
|
|
$
|
23,659
|
|
|
$
|
25,013
|
|
|
|
|
December 31, 2019
|
|
December 31, 2018
|
||||||||||||||||||||
|
Useful
Life
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
|
Gross
Carrying
Amount
|
|
Accumulated
Amortization
|
|
Net
Carrying
Amount
|
||||||||||||
Amortizable (definite-lived) intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Domain names
|
5-10 years
|
|
$
|
3,161
|
|
|
$
|
(1,035
|
)
|
|
$
|
2,126
|
|
|
$
|
3,161
|
|
|
$
|
(732
|
)
|
|
$
|
2,429
|
|
Issued patents
|
5-25 years
|
|
3,271
|
|
|
(1,339
|
)
|
|
1,932
|
|
|
2,940
|
|
|
(1,106
|
)
|
|
1,834
|
|
||||||
Issued trademarks
|
3-15 years
|
|
1,166
|
|
|
(678
|
)
|
|
488
|
|
|
1,053
|
|
|
(599
|
)
|
|
454
|
|
||||||
Customer relationships
|
4-8 years
|
|
3,721
|
|
|
(1,416
|
)
|
|
2,305
|
|
|
3,701
|
|
|
(880
|
)
|
|
2,821
|
|
||||||
Non-compete agreements
|
3-4 years
|
|
450
|
|
|
(404
|
)
|
|
46
|
|
|
540
|
|
|
(439
|
)
|
|
101
|
|
||||||
Developed technology
|
3-5 years
|
|
10,660
|
|
|
(6,528
|
)
|
|
4,132
|
|
|
13,404
|
|
|
(7,081
|
)
|
|
6,323
|
|
||||||
Re-acquired distribution rights
|
2 years
|
|
2,009
|
|
|
(2,009
|
)
|
|
—
|
|
|
1,928
|
|
|
(1,813
|
)
|
|
115
|
|
||||||
Total amortizable
|
|
|
24,438
|
|
|
(13,409
|
)
|
|
11,029
|
|
|
26,727
|
|
|
(12,650
|
)
|
|
14,077
|
|
||||||
Non-amortizable (indefinite-lived) intangible assets:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
TASER trademark
|
|
|
900
|
|
|
|
|
900
|
|
|
900
|
|
|
|
|
900
|
|
||||||||
Patents and trademarks pending
|
|
|
842
|
|
|
|
|
842
|
|
|
958
|
|
|
|
|
958
|
|
||||||||
Total non-amortizable
|
|
|
1,742
|
|
|
|
|
1,742
|
|
|
1,858
|
|
|
|
|
1,858
|
|
||||||||
Total intangible assets
|
|
|
$
|
26,180
|
|
|
$
|
(13,409
|
)
|
|
$
|
12,771
|
|
|
$
|
28,585
|
|
|
$
|
(12,650
|
)
|
|
$
|
15,935
|
|
2020
|
$
|
3,316
|
|
2021
|
2,868
|
|
|
2022
|
1,266
|
|
|
2023
|
971
|
|
|
2024
|
887
|
|
|
Thereafter
|
1,721
|
|
|
Total
|
$
|
11,029
|
|
|
2019
|
|
2018
|
||||
Cash surrender value of corporate-owned life insurance policies
|
$
|
4,214
|
|
|
$
|
3,596
|
|
Deferred commissions
|
22,068
|
|
|
15,530
|
|
||
Restricted cash
|
56
|
|
|
661
|
|
||
Operating lease assets
|
9,653
|
|
|
—
|
|
||
Prepaid expenses, deposits and other
|
4,218
|
|
|
3,212
|
|
||
Total other long-term assets
|
$
|
40,209
|
|
|
$
|
22,999
|
|
|
2019
|
|
2018
|
||||
Accrued salaries, benefits and bonus
|
$
|
24,737
|
|
|
$
|
19,063
|
|
Accrued professional, consulting and lobbying fees
|
3,235
|
|
|
4,894
|
|
||
Accrued warranty expense
|
1,476
|
|
|
898
|
|
||
Accrued income and other taxes
|
3,362
|
|
|
4,167
|
|
||
Other accrued expenses
|
12,191
|
|
|
12,070
|
|
||
Accrued liabilities
|
$
|
45,001
|
|
|
$
|
41,092
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
United States
|
$
|
(1,449
|
)
|
|
$
|
25,751
|
|
|
$
|
14,978
|
|
Foreign
|
3,519
|
|
|
2,353
|
|
|
783
|
|
|||
Total
|
$
|
2,070
|
|
|
$
|
28,104
|
|
|
$
|
15,761
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
4,247
|
|
|
$
|
4,900
|
|
|
$
|
6,039
|
|
State
|
2,414
|
|
|
1,377
|
|
|
1,263
|
|
|||
Foreign
|
1,533
|
|
|
228
|
|
|
656
|
|
|||
Total current
|
8,194
|
|
|
6,505
|
|
|
7,958
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
(6,060
|
)
|
|
(8,382
|
)
|
|
4,539
|
|
|||
State
|
(1,665
|
)
|
|
(364
|
)
|
|
(1,631
|
)
|
|||
Foreign
|
(264
|
)
|
|
(3
|
)
|
|
(78
|
)
|
|||
Total deferred
|
(7,989
|
)
|
|
(8,749
|
)
|
|
2,830
|
|
|||
Tax impact of unrecorded tax benefits liability
|
983
|
|
|
1,143
|
|
|
(234
|
)
|
|||
Provision for income taxes (Income tax benefit)
|
$
|
1,188
|
|
|
$
|
(1,101
|
)
|
|
$
|
10,554
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Federal income tax at the statutory rate
|
$
|
435
|
|
|
$
|
5,902
|
|
|
$
|
5,518
|
|
State income taxes, net of federal benefit
|
526
|
|
|
(215
|
)
|
|
339
|
|
|||
Difference between statutory and foreign tax rates
|
43
|
|
|
7
|
|
|
(560
|
)
|
|||
Permanent differences (1)
|
1,139
|
|
|
725
|
|
|
300
|
|
|||
Executive compensation limitation
|
7,596
|
|
|
1,167
|
|
|
—
|
|
|||
Research and development
|
(4,911
|
)
|
|
(6,908
|
)
|
|
(2,380
|
)
|
|||
Return to provision adjustment
|
(9
|
)
|
|
1,780
|
|
|
23
|
|
|||
Change in liability for unrecognized tax benefits
|
1,191
|
|
|
1,768
|
|
|
7
|
|
|||
Excess stock-based compensation benefit
|
(4,999
|
)
|
|
(8,907
|
)
|
|
(1,819
|
)
|
|||
Change in valuation allowance
|
368
|
|
|
1,984
|
|
|
1,949
|
|
|||
Tax effects of intercompany transactions
|
16
|
|
|
1,004
|
|
|
(277
|
)
|
|||
Adjustments to deferred tax assets, net resulting from enactment of new tax law (2)
|
—
|
|
|
—
|
|
|
7,601
|
|
|||
Other
|
(207
|
)
|
|
592
|
|
|
(147
|
)
|
|||
Provision for income taxes (Income tax benefit)
|
$
|
1,188
|
|
|
$
|
(1,101
|
)
|
|
$
|
10,554
|
|
Effective tax rate
|
57.4
|
%
|
|
(3.9
|
)%
|
|
66.9
|
%
|
(1)
|
Permanent differences include certain expenses that are not deductible for tax purposes including meals and entertainment, certain transaction costs, lobbying fees, and taxable income as a result of global intangible low-tax income ("GILTI") offset by favorable items including the domestic production activities deduction, for tax year 2017, and a deduction for foreign derived intangible income ("FDII") beginning in 2018.
|
(2)
|
The adjustment to deferred tax assets of $7.6 million in 2017 was a result of the impact of changes in the U.S. federal effective tax rate, as well as a reduction of the stock-based compensation deferred tax asset due to expected permanent limitations on its deductibility for certain key executives under the Tax Cuts and Jobs Act.
|
|
2019
|
|
2018
|
||||
Deferred income tax assets:
|
|
|
|
||||
Net operating loss carryforward
|
$
|
2,341
|
|
|
$
|
2,347
|
|
Deferred revenue
|
15,348
|
|
|
13,304
|
|
||
Deferred compensation
|
971
|
|
|
858
|
|
||
Lease liability
|
2,460
|
|
|
—
|
|
||
Inventory reserve
|
1,258
|
|
|
1,294
|
|
||
Stock-based compensation
|
10,769
|
|
|
3,758
|
|
||
Amortization
|
1,133
|
|
|
412
|
|
||
Research and development tax credit carryforward
|
4,957
|
|
|
5,193
|
|
||
Reserves, accruals, and other
|
3,394
|
|
|
3,094
|
|
||
Total deferred income tax assets
|
42,631
|
|
|
30,260
|
|
||
Deferred income tax liabilities:
|
|
|
|
||||
Customer contract asset
|
(883
|
)
|
|
—
|
|
||
Right of use asset
|
(2,228
|
)
|
|
—
|
|
||
Depreciation
|
(3,715
|
)
|
|
(2,195
|
)
|
||
Amortization
|
(62
|
)
|
|
(57
|
)
|
||
Other
|
(1,237
|
)
|
|
(1,232
|
)
|
||
Total deferred income tax liabilities
|
(8,125
|
)
|
|
(3,484
|
)
|
||
Net deferred income tax assets before valuation allowance
|
34,506
|
|
|
26,776
|
|
||
Valuation allowance
|
(7,172
|
)
|
|
(7,429
|
)
|
||
Net deferred income tax assets
|
$
|
27,334
|
|
|
$
|
19,347
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Balance, beginning of period
|
$
|
6,058
|
|
|
$
|
4,243
|
|
|
$
|
4,050
|
|
Increase (decrease) in previous year tax positions
|
(615
|
)
|
|
213
|
|
|
379
|
|
|||
Increase in current year tax positions
|
1,749
|
|
|
1,982
|
|
|
587
|
|
|||
Decrease due to lapse of statutes of limitations
|
(331
|
)
|
|
(380
|
)
|
|
(773
|
)
|
|||
Balance, end of period
|
$
|
6,861
|
|
|
$
|
6,058
|
|
|
$
|
4,243
|
|
Eight Separate Revenue Goals (1)
(in thousands)
|
|
Eight Separate Adjusted EBITDA (CEO Performance Award) Goals
(in thousands)
|
Goal #1, $710,058
|
|
Goal #9, $125,000
|
Goal #2, $860,058
|
|
Goal #10, $155,000
|
Goal #3, $1,010,058
|
|
Goal #11, $175,000
|
Goal #4, $1,210,058
|
|
Goal #12, $190,000
|
Goal #5, $1,410,058
|
|
Goal #13, $200,000
|
Goal #6, $1,610,058
|
|
Goal #14, $210,000
|
Goal #7, $1,810,058
|
|
Goal #15, $220,000
|
Goal #8, $2,010,058
|
|
Goal #16, $230,000
|
•
|
Total revenue of $710.1 million, $860.1 million, and $1,010.1 million; and
|
•
|
Adjusted EBITDA (CEO Performance Award) of $125.0 million, $155.0 million, $175.0 million, $190.0 million, $200.0 million, and $210.0 million.
|
|
2019
|
|
2018
|
|
2017
|
||||||||||||||||
|
Number
of
Units
|
|
Weighted
Average
Grant-Date
Fair Value
|
|
Number
of
Units
|
|
Weighted
Average
Grant-Date
Fair Value
|
|
Number
of
Units
|
|
Weighted
Average
Grant-Date
Fair Value
|
||||||||||
Units outstanding, beginning of year
|
1,655
|
|
|
$
|
28.34
|
|
|
2,348
|
|
|
$
|
23.47
|
|
|
1,330
|
|
|
$
|
20.40
|
|
|
Granted
|
6,759
|
|
|
37.21
|
|
|
381
|
|
|
46.06
|
|
|
1,731
|
|
|
24.59
|
|
||||
Released
|
(650
|
)
|
|
25.75
|
|
|
(772
|
)
|
|
23.85
|
|
|
(519
|
)
|
|
18.85
|
|
||||
Forfeited
|
(482
|
)
|
|
34.97
|
|
|
(302
|
)
|
|
24.73
|
|
|
(194
|
)
|
|
24.61
|
|
||||
Units outstanding, end of year
|
7,282
|
|
|
36.36
|
|
|
1,655
|
|
|
28.34
|
|
|
2,348
|
|
|
23.47
|
|
||||
Aggregate intrinsic value at year end
|
$
|
533,623
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
2018
|
|
2017
|
|||||||||||||||
|
Number
of
Options
|
|
Weighted
Average
Exercise
Price
|
|
Number
of
Options
|
|
Weighted
Average
Exercise
Price
|
|
Number
of
Options
|
|
Weighted
Average
Exercise
Price
|
|||||||||
Options outstanding, beginning of year
|
6,458
|
|
|
$
|
28.24
|
|
|
804
|
|
|
$
|
4.99
|
|
|
1,008
|
|
|
$
|
5.40
|
|
Granted
|
—
|
|
|
—
|
|
|
6,366
|
|
|
28.58
|
|
|
—
|
|
|
—
|
|
|||
Exercised
|
(27
|
)
|
|
4.27
|
|
|
(664
|
)
|
|
5.09
|
|
|
(198
|
)
|
|
6.99
|
|
|||
Expired / terminated
|
—
|
|
|
—
|
|
|
(48
|
)
|
|
4.55
|
|
|
(6
|
)
|
|
8.32
|
|
|||
Options outstanding, end of year
|
6,431
|
|
|
28.34
|
|
|
6,458
|
|
|
28.24
|
|
|
804
|
|
|
4.99
|
|
|||
Options exercisable, end of year
|
65
|
|
|
4.52
|
|
|
92
|
|
|
4.45
|
|
|
775
|
|
|
5.00
|
|
|
|
Options Outstanding
|
|
Options Exercisable
|
||||||||||||||
Range of
Exercise Price
|
|
Number of
Options
Outstanding
|
|
Weighted
Average
Exercise
Price
|
|
Weighted
Average
Remaining
Contractual
Life (Years)
|
|
Number of
Options
Exercisable
|
|
Weighted
Average Exercise Price |
|
Weighted
Average
Remaining
Contractual
Life (Years)
|
||||||
$4.34 - $4.97
|
|
65
|
|
|
$
|
4.52
|
|
|
0.94
|
|
65
|
|
|
$
|
4.52
|
|
|
0.94
|
|
2019
|
|
2018
|
|
2017
|
||||||
Cost of product and service sales
|
$
|
1,565
|
|
|
$
|
511
|
|
|
$
|
508
|
|
Sales, general and administrative expenses
|
59,342
|
|
|
12,710
|
|
|
9,047
|
|
|||
Research and development expenses
|
17,588
|
|
|
8,658
|
|
|
6,055
|
|
|||
Total stock-based compensation expense
|
$
|
78,495
|
|
|
$
|
21,879
|
|
|
$
|
15,610
|
|
Income tax benefit
|
$
|
11,457
|
|
|
$
|
4,049
|
|
|
$
|
5,791
|
|
Leases (in thousands)
|
|
Classification
|
|
December 31, 2019
|
||
Assets
|
|
|
|
|
||
Operating lease assets
|
|
Other assets
|
|
$
|
9,653
|
|
Liabilities
|
|
|
|
|
||
Current
|
|
|
|
|
||
Operating
|
|
Other current liabilities
|
|
$
|
3,817
|
|
Noncurrent
|
|
|
|
|
||
Operating
|
|
Other long-term liabilities
|
|
6,792
|
|
|
Total lease liabilities
|
|
|
|
$
|
10,609
|
|
|
|
Classification
|
|
Twelve Months Ended December 31, 2019
|
||
Operating lease expense (1)
|
|
Sales, general and administrative expenses (2)
|
|
$
|
4,627
|
|
Sublease income
|
|
Interest and other income, net
|
|
(301
|
)
|
|
Net lease expense
|
|
|
|
$
|
4,326
|
|
|
|
Twelve Months Ended December 31, 2019
|
||
Supplemental Cash Flows Information
|
|
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|
||
Operating cash flows for operating leases
|
|
$
|
4,374
|
|
Right-of-use assets obtained in exchange for lease liabilities:
|
|
|
||
Operating leases
|
|
888
|
|
|
Weighted average remaining lease term:
|
|
|
||
Operating leases
|
|
3.1 years
|
|
|
Weighted average discount rate:
|
|
|
||
Operating leases
|
|
3.55
|
%
|
|
Operating
|
|
Sublease income
|
|
Net
|
||||
2020
|
4,539
|
|
|
(82
|
)
|
|
4,457
|
|
|
2021
|
3,641
|
|
|
—
|
|
|
3,641
|
|
|
2022
|
2,689
|
|
|
—
|
|
|
2,689
|
|
|
2023
|
1,173
|
|
|
—
|
|
|
1,173
|
|
|
2024
|
—
|
|
|
—
|
|
|
—
|
|
|
Thereafter
|
—
|
|
|
—
|
|
|
—
|
|
|
Total minimum lease payments
|
12,042
|
|
|
(82
|
)
|
|
11,960
|
|
|
Less: Amount representing interest
|
|
|
|
|
(1,351
|
)
|
|||
Present value of lease payments
|
|
|
|
|
$
|
10,609
|
|
Accounts receivable
|
$
|
12
|
|
Property and equipment
|
46
|
|
|
Developed technology
|
5,800
|
|
|
Goodwill
|
2,703
|
|
|
Deferred income tax liabilities, net
|
(1,074
|
)
|
|
Total purchase price
|
$
|
7,487
|
|
Re-acquired distribution rights
|
$
|
2,100
|
|
Customer relationships
|
400
|
|
|
Goodwill
|
1,650
|
|
|
Total purchase price
|
$
|
4,150
|
|
Accounts receivable
|
$
|
1,776
|
|
Inventory
|
2,626
|
|
|
Prepaid expenses and other assets
|
362
|
|
|
Property and equipment
|
459
|
|
|
Contract assets
|
1,472
|
|
|
Intangible assets
|
4,510
|
|
|
Goodwill
|
10,285
|
|
|
Accounts payable and accrued liabilities
|
(3,345
|
)
|
|
Deferred revenue
|
(543
|
)
|
|
Total purchase price
|
$
|
17,602
|
|
|
For the year ended December 31, 2019
|
||||||||||
|
TASER
|
|
Software and Sensors
|
|
Total
|
||||||
Net sales from products
|
$
|
280,554
|
|
|
$
|
118,920
|
|
|
$
|
399,474
|
|
Net sales from services
|
1,107
|
|
|
130,279
|
|
|
131,386
|
|
|||
Net sales
|
281,661
|
|
|
249,199
|
|
|
530,860
|
|
|||
Cost of product sales
|
107,188
|
|
|
83,495
|
|
|
190,683
|
|
|||
Cost of service sales
|
—
|
|
|
32,891
|
|
|
32,891
|
|
|||
Cost of sales
|
107,188
|
|
|
116,386
|
|
|
223,574
|
|
|||
Gross margin
|
$
|
174,473
|
|
|
$
|
132,813
|
|
|
$
|
307,286
|
|
|
|
|
|
|
|
||||||
Research and development
|
$
|
14,469
|
|
|
$
|
86,252
|
|
|
$
|
100,721
|
|
|
For the year ended December 31, 2018
|
||||||||||
|
TASER
|
|
Software and Sensors
|
|
Total
|
||||||
Net sales from products
|
$
|
253,115
|
|
|
$
|
74,520
|
|
|
$
|
327,635
|
|
Net sales from services
|
—
|
|
|
92,433
|
|
|
92,433
|
|
|||
Net sales
|
253,115
|
|
|
166,953
|
|
|
420,068
|
|
|||
Cost of product sales
|
80,354
|
|
|
58,983
|
|
|
139,337
|
|
|||
Cost of service sales
|
—
|
|
|
22,148
|
|
|
22,148
|
|
|||
Cost of sales
|
80,354
|
|
|
81,131
|
|
|
161,485
|
|
|||
Gross margin
|
$
|
172,761
|
|
|
$
|
85,822
|
|
|
$
|
258,583
|
|
|
|
|
|
|
|
||||||
Research and development
|
$
|
17,012
|
|
|
$
|
59,844
|
|
|
$
|
76,856
|
|
|
For the year ended December 31, 2017
|
||||||||||
|
TASER
|
|
Software and Sensors
|
|
Total
|
||||||
Net sales from products (1)
|
$
|
234,512
|
|
|
$
|
51,347
|
|
|
$
|
285,859
|
|
Net sales from services (1)
|
—
|
|
|
57,939
|
|
|
57,939
|
|
|||
Net sales (1)
|
234,512
|
|
|
109,286
|
|
|
343,798
|
|
|||
Cost of product sales
|
72,054
|
|
|
45,943
|
|
|
117,997
|
|
|||
Cost of service sales
|
—
|
|
|
18,713
|
|
|
18,713
|
|
|||
Cost of sales
|
72,054
|
|
|
64,656
|
|
|
136,710
|
|
|||
Gross margin
|
$
|
162,458
|
|
|
$
|
44,630
|
|
|
$
|
207,088
|
|
|
|
|
|
|
|
||||||
Research and development
|
$
|
8,377
|
|
|
$
|
46,996
|
|
|
$
|
55,373
|
|
|
Quarter Ended
|
||||||||||||||
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
||||||||
|
2019
|
|
2019
|
|
2019
|
|
2019
|
||||||||
Net sales
|
$
|
115,810
|
|
|
$
|
112,362
|
|
|
$
|
130,837
|
|
|
$
|
171,851
|
|
Gross margin
|
68,917
|
|
|
65,560
|
|
|
80,169
|
|
|
92,640
|
|
||||
Net income
|
6,419
|
|
|
738
|
|
|
6,104
|
|
|
(12,379
|
)
|
||||
Earnings (loss) per share (2):
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.11
|
|
|
$
|
0.01
|
|
|
$
|
0.10
|
|
|
$
|
(0.21
|
)
|
Diluted
|
$
|
0.11
|
|
|
$
|
0.01
|
|
|
$
|
0.10
|
|
|
$
|
(0.21
|
)
|
|
|
|
|
|
|
|
|
||||||||
|
Quarter Ended
|
||||||||||||||
|
March 31,
|
|
June 30,
|
|
September 30,
|
|
December 31,
|
||||||||
|
2018
|
|
2018
|
|
2018
|
|
2018 (1)
|
||||||||
Net sales
|
$
|
101,215
|
|
|
$
|
99,226
|
|
|
$
|
104,836
|
|
|
$
|
114,791
|
|
Gross margin
|
64,461
|
|
|
63,143
|
|
|
65,633
|
|
|
65,346
|
|
||||
Net income
|
12,926
|
|
|
8,485
|
|
|
5,711
|
|
|
2,083
|
|
||||
Earnings per share (2):
|
|
|
|
|
|
|
|
||||||||
Basic
|
$
|
0.24
|
|
|
$
|
0.15
|
|
|
$
|
0.10
|
|
|
$
|
0.04
|
|
Diluted
|
$
|
0.24
|
|
|
$
|
0.15
|
|
|
$
|
0.10
|
|
|
$
|
0.03
|
|
|
2019
|
|
2018
|
|
2017
|
||||||
Supplemental disclosures:
|
|
|
|
|
|
||||||
Cash and cash equivalents
|
$
|
172,250
|
|
|
$
|
349,462
|
|
|
$
|
75,105
|
|
Restricted cash
|
$
|
105
|
|
|
$
|
1,565
|
|
|
$
|
3,333
|
|
Total cash, cash equivalents and restricted cash shown in the statements of cash flows
|
$
|
172,355
|
|
|
$
|
351,027
|
|
|
$
|
78,438
|
|
|
|
|
|
|
|
||||||
Cash paid for income taxes, net of refunds
|
$
|
3,669
|
|
|
$
|
10,609
|
|
|
$
|
11,487
|
|
|
|
|
|
|
|
||||||
Non-cash transactions:
|
|
|
|
|
|
||||||
Contingent consideration related to business combinations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
1,007
|
|
Non-cash purchase consideration related to business combinations
|
—
|
|
|
12,508
|
|
|
—
|
|
|||
Property and equipment purchases in accounts payable
|
834
|
|
|
501
|
|
|
133
|
|
|||
Commission payable converted to stock-based award
|
314
|
|
|
—
|
|
|
—
|
|
Plan Category
|
Number of
Securities to be
Issued upon
Exercise of Outstanding
Options, Warrants and Rights
(a)
|
|
Weighted Average Exercise Price of Outstanding Options,
Warrants and Rights
(b) (1)
|
|
Number of Securities
Remaining Available for
Future Issuance Under Equity
Compensation Plans (Excluding Securities Reflected
in Column (a))
(c)
|
||||
Equity compensation plans approved by security holders
|
13,242,645
|
|
|
$
|
28.34
|
|
|
1,979,076
|
|
Equity compensation plans not approved by security holders(2)
|
470,400
|
|
|
|
|
29,600
|
|
||
Total
|
13,713,045
|
|
|
$
|
—
|
|
|
2,008,676
|
|
(1)
|
The weighted average exercise price is calculated based solely on the exercise prices of the outstanding options and does not reflect the shares that will be issued upon the vesting of outstanding awards of RSUs which have no exercise price.
|
(2)
|
In September 2019, our Board of Directors adopted the Axon Enterprise, Inc. 2019 Stock Inducement Plan (the “2019 Inducement Plan”) pursuant to which we reserved 500,000 shares of common stock for issuance under the Inducement Plan. The 2019 Inducement Plan was adopted without stockholder approval pursuant to Rule 5635(c)(4) and Rule 5635(c)(3) of the Nasdaq Listing Rules. The Inducement Plan provides for the grant of equity-based awards, including restricted stock units, restricted stock, performance shares and performance units, and its terms are substantially similar to our stockholder-approved 2019 Plan. In accordance with Rule 5635(c)(4) and Rule 5635(c)(3) of the Nasdaq Listing Rules, awards under the Inducement Plan may only be made to individuals not previously employees or non-employee directors of the Company (or following such individuals’ bona fide period of non-employment with the Company), as an inducement material to the individuals’ entry into employment with the Company.
|
1.
|
Consolidated financial statements: All consolidated financial statements as set forth under Part II, Item 8 of this report.
|
2.
|
Supplementary Financial Statement Schedules: Schedule II — Valuation and Qualifying Accounts
|
Description
|
Balance at
Beginning
of Period
|
|
Charged to (Recovered from) Costs and
Expenses
|
|
Charged to
Other
Accounts
|
|
Deductions
|
|
Balance at
End of
Period
|
||||||||||
Allowance for doubtful accounts:
|
|
|
|
|
|
|
|
|
|
||||||||||
Year ended December 31, 2019
|
$
|
1,882
|
|
|
$
|
(226
|
)
|
|
$
|
—
|
|
|
$
|
(89
|
)
|
|
$
|
1,567
|
|
Year ended December 31, 2018
|
729
|
|
|
1,189
|
|
|
—
|
|
|
(36
|
)
|
|
1,882
|
|
|||||
Year ended December 31, 2017
|
443
|
|
|
592
|
|
|
—
|
|
|
(306
|
)
|
|
729
|
|
Exhibit
Number
|
|
Description
|
3.1
|
|
|
3.2
|
|
|
4.1+
|
|
|
4.2*
|
|
|
10.1+
|
|
|
10.2+
|
|
|
10.3+
|
|
|
10.4+
|
|
|
10.5+
|
|
|
10.6+
|
|
|
10.7+
|
|
|
Exhibit
Number
|
|
Description
|
10.8+
|
|
|
10.9+
|
|
|
10.10+
|
|
|
10.11+
|
|
|
10.12
|
|
|
10.13+
|
|
|
10.14+
|
|
|
10.15+
|
|
|
10.16+ *
|
|
|
10.17+
|
|
|
21.1*
|
|
|
23.1*
|
|
|
24.1*
|
|
|
31.1*
|
|
|
31.2*
|
|
|
32**
|
|
|
101.INS*
|
|
Inline XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
|
101.SCH*
|
|
Inline XBRL Taxonomy Extension Schema Document
|
101.CAL*
|
|
Inline XBRL Taxonomy Calculation Linkbase Document
|
101.LAB*
|
|
Inline XBRL Taxonomy Label Linkbase Document
|
101.PRE*
|
|
Inline XBRL Taxonomy Presentation Linkbase Document
|
104
|
|
The cover page from the Company's Annual Report for the year ended December 31, 2019, formatted in Inline XBRL
|
|
|
|
|
|
AXON ENTERPRISE, INC.
|
|
|
|
|
|
|
|
|
|
Date:
|
February 27, 2020
|
|
|
|
|
|
By:
|
|
/s/ PATRICK W. SMITH
|
|
|
|
|
Chief Executive Officer, Director
|
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
Date:
|
February 27, 2020
|
By:
|
|
/s/ JAWAD A. AHSAN
|
|
|
|
|
Chief Financial Officer
|
|
|
|
|
(Principal Financial and Accounting Officer)
|
|
|
|
|
|
Signature
|
|
Title
|
|
Date
|
|
|
|
||
|
|
Chief Executive Officer, Director
|
|
|
/s/ PATRICK W. SMITH
|
|
(Principal Executive Officer)
|
|
February 27, 2020
|
Patrick W. Smith
|
|
|
|
|
|
|
|
|
|
|
|
Chief Financial Officer
|
|
|
/s/ JAWAD A. AHSAN
|
|
(Principal Financial and Accounting Officer)
|
|
February 27, 2020
|
Jawad A. Ahsan
|
|
|
|
|
|
|
|
|
|
/s/ RICHARD H. CARMONA
|
|
Director
|
|
February 27, 2020
|
Richard H. Carmona
|
|
|
|
|
|
|
|
|
|
/s/ JULIE A. CULLIVAN
|
|
Director
|
|
February 27, 2020
|
Julie A. Cullivan
|
|
|
|
|
|
|
|
||
/s/ MICHAEL GARNREITER
|
|
Director
|
|
February 27, 2020
|
Michael Garnreiter
|
|
|
|
|
|
|
|
||
/s/ CAITLIN E. KALINOWSKI
|
|
Director
|
|
February 27, 2020
|
Caitlin E. Kalinowski
|
|
|
|
|
|
|
|
||
/s/ MARK W. KROLL
|
|
Director
|
|
February 27, 2020
|
Mark W. Kroll
|
|
|
|
|
|
|
|
||
/s/ MATTHEW R. MCBRADY
|
|
Director
|
|
February 27, 2020
|
Matthew R. McBrady
|
|
|
|
|
|
|
|
|
|
/s/ HADI PARTOVI
|
|
Director
|
|
February 27, 2020
|
Hadi Partovi
|
|
|
|
|
•
|
prior to the date of the transaction, our board of directors approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;
|
•
|
upon completion of the transaction that resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, calculated as provided under Section 203; or
|
•
|
at, or subsequent to, the date of the transaction, the business combination is approved by our board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder.
|
(i)
|
In the case of Company shall be:
|
(ii)
|
In the case of Executive shall be:
|
AXON:
|
EXECUTIVE:
|
|
AXON ENTERPRISE, INC., a corporation organized under the laws of the State of Delaware, U.S.A.
|
Jeff Kunins, an individual
|
|
By: /s/ Patrick W. Smith
|
By: /s/ Jeffrey C. Kunins
|
|
Name: Patrick W. Smith
|
|
|
Title: Chief Executive Officer
|
|
|
|
|
|
(a)
|
Full Release and Waiver. Employee, on behalf of himself/herself, Executive’s marital community, if any, and Executive’s heirs and assigns, irrevocably, unconditionally, and expressly releases, waives, acquits, and forever discharges the Released Parties from any and all claims, complaints, causes of action, liabilities, obligations, agreements, controversies, damages, suits, rights, costs, losses, debts, expenses, and demands of any kind (including attorneys’ fees and costs actually incurred) of any nature whatsoever, whether known or unknown, suspected or unsuspected which Employee has, ever has had, or may have and which are based on acts or omissions which Employee knew or should have known about at the time of the signing of this Release. This FULL RELEASE AND WAIVER includes, without limitation and to the fullest extent permitted by law, all rights and claims arising under the following laws, as amended: Title VII of the Civil Rights Act; Civil Rights Act of 1866 (Section 1981); Lilly Ledbetter Fair Pay Act; Fair Credit Reporting Act; Labor Management Relations Act; Equal Pay Act; Americans with Disabilities Act; Age Discrimination in Employment Act; Fair Labor Standards Act; Older Workers Benefits Protection Act; Family Medical Leave Act; Rehabilitation Act; Occupational Safety and Health Act and its state equivalent; Genetic Information Nondiscrimination Act; Pregnancy Discrimination Act; False Claims Act; Sarbanes-Oxley Act; Employment Retirement Income Security Act; National Labor Relations Act; Health Insurance
|
(i)
|
Employee promises and covenants not to file, commence, or initiate any suits, grievances, demands, or causes of action against the Released Parties on the basis of any claim released herein.
|
(ii)
|
This Release includes any claims that Employee’s spouse, agents, heirs, or assigns, if any, may have against the Released Parties, including those arising from or in any way related to Employee’s work and/or employment with Axon and/or the Released Parties.
|
(iii)
|
It is understood and agreed that this is a full, complete and final general release of any and all claims, as described herein, and that Employee and Axon agree that it shall apply to all unknown, unanticipated, unsuspected and undisclosed claims, demands, liabilities, actions or causes of action, in law, equity or otherwise, as well as those which are now known, anticipated, suspected or disclosed.
|
(iv)
|
This Release does not apply to any claim Employee may have under the workers’ compensation or unemployment compensation statutes or any other claim, which, as a matter of law, cannot be released by private agreement.
|
(1)
|
This Release does not limit Employee’s ability to communicate with any applicable government agencies or otherwise participate in any manner in any investigation or proceeding that may be conducted by any government agency. This Release is not intended to affect the rights and responsibilities of government agencies to enforce the laws within their jurisdiction, including but not limited to the Equal Employment Opportunity Commission (“EEOC”), the National Labor Relations Board (“NLRB”), the Occupational Safety and Health Administration (“OSHA”), the Arizona Division of Occupational Safety and Health (“ADOSH”), the Securities and Exchange Commission (“SEC”), the Civil Rights Division of the Arizona Attorney General Office (“ACRD”), or any other applicable local, state, or federal agency. This means that by signing this Release, Employee may still exercise Executive’s protected right to file an administrative charge with, or participate in an investigation or proceeding conducted by, a local, state, or federal government agency. However, if a government agency commences an investigation or other legal action against the Released Parties on Employee’s behalf, Employee specifically waives and releases Executive’s right to recover monetary damages or other benefits or remedies of any sort whatsoever arising from the governmental action (including any legal action, agency charge, lawsuit, claim, proceeding, or investigation against the Released Parties). The aforementioned waiver of monetary damages and other benefits or remedies does not apply to the Securities Exchange Act of 1934 or the Dodd-Frank Wall Street Reform and Consumer Protection Act, if applicable. Employee acknowledges that this Release
|
(v)
|
Employee represents that Executive has not filed any charge or complaint with, or participated in, an investigation or proceeding conducted by the EEOC, NLRB, OSHA/ADOSH, SEC, ACRD or any other local, state, or federal government entity or agency. Employee specifically acknowledges and represents that Executive has already disclosed to Company any and all information, if any, regarding any action or inaction that Executive reasonably believes, or believed to be, taken by the Released Parties and in violation of law. To the extent Employee has not made such disclosures to date, Employee represents such information, if any, does not or did not exist to disclose now or in the future.
|
(b)
|
Waiver of Age Discrimination in Employment Claims. As noted above, this Release is intended to release and discharge all claims Employee may have under the Age Discrimination in Employment Act (“ADEA”). To satisfy the requirements of the Older Workers’ Benefits Protection Act (“OWBPA”), Employee acknowledges the following:
|
(i)
|
Employee has read and understands the terms of this Release. Employee acknowledges that Executive has 21 calendar days from receipt of this Release to consider whether to sign this Release and that Employee may sign the Release any time within this time period. If Employee signs before the 21-day period expires, Employee does so to expedite the Release and waives the right to take the remaining days to consider the Release. Employee understands and agrees that the Release will be automatically revoked and withdrawn if not accepted and delivered to Human Resources at Company’s address with a copy to Legal@Company.com within 21 calendar days after receipt.
|
(ii)
|
Employee can revoke Employee’s signature any time within seven (7) calendar days after signing it. To revoke Employee’s signature pursuant to the OWBPA, Employee must do so in writing, sent to Human Resources at Company’s address with a copy to Legal@Company.com before the expiration of the seven-day period. If Employee’s signature is not revoked at the expiration of the seven days, this Release will be enforceable and irrevocable.
|
(iii)
|
Employee agrees that this Release is not effective and no money will be paid or owed towards the Severance Benefits until all of the following have occurred: (1) Employee signs the Severance Release in the time period identified in this section above; and (2) the 7-day revocation period contained in this section has passed; and (3) Employee has not revoked Employee’s signature during this time period (hereinafter the “Effective Date”). If Employee does not timely sign and/or revokes this Release, then this Release shall be null and void, and no payments shall be made and/or due under this Release.
|
(iv)
|
Employee understands that this waiver and release does not apply to any rights or claims that may arise after execution date of this Release. Employee has been advised hereby that Employee has the right to consult with an attorney, if desired, prior to executing this Release and acknowledges that Executive has received all advice Employee deems necessary concerning this Release.
|
|
|
Jurisdiction of Incorporation
|
Axon Public Safety B.V.
|
|
The Netherlands
|
1.
|
I have reviewed this Annual Report on Form 10-K 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:
|
February 27, 2020
|
By:
|
|
/s/ PATRICK W. SMITH
|
|
|
|
|
Patrick W. Smith
|
|
|
|
|
Chief Executive Officer
|
1.
|
I have reviewed this Annual Report on Form 10-K 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:
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(a)
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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;
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(b)
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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;
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(c)
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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
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(d)
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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
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5.
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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):
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(a)
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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
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(b)
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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.
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Date:
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February 27, 2020
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By:
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/s/ JAWAD A. AHSAN
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Jawad A. Ahsan
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Chief Financial Officer
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(Principal Financial Officer)
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ PATRICK W. SMITH
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Patrick W. Smith
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Chief Executive Officer
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February 27, 2020
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(1)
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The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
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(2)
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The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
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/s/ JAWAD A. AHSAN
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Jawad A. Ahsan
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Chief Financial Officer
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(Principal Financial Officer)
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February 27, 2020
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