Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2018 | Apr. 30, 2018 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | AXON ENTERPRISE, INC. | |
Entity Central Index Key | 1,069,183 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2018 | |
Document Fiscal Year Focus | 2,018 | |
Document Fiscal Period Focus | Q1 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 53,322,608 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Current assets: | ||
Cash and cash equivalents | $ 92,330 | $ 75,105 |
Short-term investments | 4,475 | 6,862 |
Accounts and notes receivable, net of allowance of $880 and $754 as of March 31, 2018 and December 31, 2017, respectively | 87,849 | 56,064 |
Contract assets, net | 9,278 | 0 |
Inventory | 43,104 | 45,465 |
Prepaid expenses and other current assets | 21,934 | 21,696 |
Total current assets | 258,970 | 205,192 |
Property and equipment, net of accumulated depreciation of $37,518 and $36,477 as of March 31, 2018 and December 31, 2017, respectively | 31,175 | 31,172 |
Deferred income tax assets, net | 14,200 | 15,755 |
Intangible assets, net | 17,496 | 18,823 |
Goodwill | 14,947 | 14,927 |
Long-term notes receivable, net of current portion | 34,624 | 36,877 |
Other assets | 21,573 | 15,366 |
Total assets | 392,985 | 338,112 |
Current liabilities: | ||
Accounts payable | 11,692 | 8,592 |
Accrued liabilities | 34,869 | 23,502 |
Current portion of deferred revenue | 76,141 | 70,401 |
Customer deposits | 3,155 | 3,673 |
Current portion of business acquisition contingent consideration | 2,505 | 1,693 |
Other current liabilities | 348 | 89 |
Total current liabilities | 128,710 | 107,950 |
Deferred revenue, net of current portion | 58,003 | 54,881 |
Liability for unrecognized tax benefits | 1,810 | 1,706 |
Long-term deferred compensation | 3,998 | 3,859 |
Business acquisition contingent consideration, net of current portion | 201 | 1,048 |
Other long-term liabilities | 934 | 1,224 |
Total liabilities | 193,656 | 170,668 |
Commitments and contingencies (Note 11) | ||
Stockholders’ equity: | ||
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 | 0 | 0 |
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 | 1 | 1 |
Additional paid-in capital | 202,344 | 201,672 |
Treasury stock at cost, 20,220,227 shares as of March 31, 2018 and December 31, 2017 | (155,947) | (155,947) |
Retained earnings | 155,105 | 123,185 |
Accumulated other comprehensive loss | (2,174) | (1,467) |
Total stockholders’ equity | 199,329 | 167,444 |
Total liabilities and stockholders’ equity | $ 392,985 | $ 338,112 |
Condensed Consolidated Balance3
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Statement of Financial Position [Abstract] | ||
Allowance on accounts receivable | $ 880 | $ 754 |
Accumulated depreciation | $ 37,518 | $ 36,447 |
Preferred stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Preferred stock, shares authorized (in shares) | 25,000,000 | 25,000,000 |
Preferred stock, shares issued (in shares) | 0 | 0 |
Preferred stock, shares outstanding (in shares) | 0 | 0 |
Common stock, par value (in dollars per share) | $ 0.00001 | $ 0.00001 |
Common stock, shares authorized (in shares) | 200,000,000 | 200,000,000 |
Common stock, shares issued (in shares) | 53,307,083 | 52,969,869 |
Common stock, shares outstanding (in shares) | 53,307,083 | 52,969,869 |
Treasury stock, shares (in shares) | 20,220,227 | 20,220,227 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Income Statement [Abstract] | ||
Net sales from products | $ 80,974 | $ 67,491 |
Net sales from services | 20,241 | 11,751 |
Net sales | 101,215 | 79,242 |
Cost of product sales | 32,434 | 27,072 |
Cost of service sales | 4,320 | 3,500 |
Cost of sales | 36,754 | 30,572 |
Gross margin | 64,461 | 48,670 |
Operating expenses: | ||
Sales, general and administrative | 35,759 | 30,857 |
Research and development | 15,119 | 12,463 |
Total operating expenses | 50,878 | 43,320 |
Income from operations | 13,583 | 5,350 |
Interest and other income, net | 1,263 | 206 |
Income before provision for income taxes | 14,846 | 5,556 |
Provision for income taxes | 1,920 | 976 |
Net income | $ 12,926 | $ 4,580 |
Net income per common and common equivalent shares: | ||
Basic (in dollars per share) | $ 0.24 | $ 0.09 |
Diluted (in dollars per share) | $ 0.24 | $ 0.09 |
Weighted average number of common and common equivalent shares outstanding: | ||
Basic (in shares) | 53,119 | 52,418 |
Diluted (in shares) | 54,532 | 53,677 |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME | ||
Net income | $ 12,926 | $ 4,580 |
Foreign currency translation adjustments | (707) | 165 |
Comprehensive income | $ 12,219 | $ 4,745 |
Unaudited Condensed Consolidat5
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Cash flows from operating activities: | ||
Net income | $ 12,926 | $ 4,580 |
Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 2,411 | 1,604 |
Loss on disposal of property and equipment | 34 | 0 |
Bond premium amortization | 22 | 218 |
Stock-based compensation | 4,093 | 3,447 |
Deferred income taxes | 1,514 | (1,216) |
Unrecognized tax benefits | 104 | 134 |
Change in assets and liabilities: | ||
Accounts and notes receivable and contract assets | (17,060) | (11,858) |
Inventory | 2,408 | (13,686) |
Prepaid expenses and other assets | (1,702) | (2,707) |
Accounts payable, accrued and other liabilities | 6,749 | 6,562 |
Deferred revenue | 6,554 | 6,313 |
Net cash provided by (used in) operating activities | 18,053 | (6,609) |
Cash flows from investing activities: | ||
Purchases of investments | (802) | 0 |
Proceeds from maturity of investments | 3,167 | 18,801 |
Purchases of property and equipment | (1,063) | (2,343) |
Purchases of intangible assets | (34) | (95) |
Business acquisitions | 0 | (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 disclosure: | ||
Cash and cash equivalents | 92,330 | 41,974 |
Total cash, cash equivalents and restricted cash shown in the statements of cash flows | 78,438 | 43,969 |
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 | $ 0 | $ 1,007 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Summary of Significant Accounting Policies | Organization and Summary of Significant Accounting Policies Axon Enterprise, Inc. (“Axon” or the “Company”) is a developer and manufacturer of advanced conducted electrical weapons (“CEWs”) designed for use by law enforcement, military, corrections, private security personnel, and by private individuals for personal defense. In addition, the Company has developed full technology solutions for the capture, secure storage and management of video/audio evidence as well as other tactical capabilities for use in law enforcement. The Company sells its products worldwide through its direct sales force, distribution partners, online store and third-party resellers. The Company was incorporated in Arizona in September 1993, and reincorporated in Delaware in January 2001. The Company’s corporate headquarters and manufacturing facilities are located in Scottsdale, Arizona. The Company’s main software development division is located in Seattle, Washington, and it develops artificial intelligence technologies through its wholly-owned subsidiary in Vietnam, Axon Public Safety Southeast Asia LLC. During 2018, the Company established Axon Public Safety Finland OY in Tampere, Finland that operates a connected hardware team focused on the development of the Company's hardware products. Axon Public Safety BV, a wholly owned subsidiary of the Company, supports the Company's international sales and marketing efforts, and is located in Amsterdam, Netherlands. Axon Public Safety BV wholly owns two subsidiaries, Axon Public Safety U.K. LTD and Axon Public Safety AU, that serve as direct sales operations in the United Kingdom ("U.K.") and Australia, respectively. The Company also sells to certain international markets through a wholly-owned subsidiary, Axon Public Safety Germany SE, and sells into the Canadian market through its wholly-owned subsidiary, Axon Public Safety Canada, Inc. The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its subsidiaries. All material intercompany accounts, transactions, and profits have been eliminated. Basis of Presentation and Use of Estimates These unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information related to the Company’s organization, significant accounting policies and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) has been condensed or omitted. The accounting policies followed in the preparation of these unaudited condensed consolidated financial statements are consistent with those followed in the Company’s annual consolidated financial statements for the year ended December 31, 2017 , as filed on Form 10-K, with the exception of the Company's adoption of Topic 606. In the opinion of management, these unaudited condensed consolidated financial statements contain all material adjustments, consisting only of normal recurring adjustments, necessary to fairly state the Company’s financial position, results of operations and cash flows for the periods presented and the presentations and disclosures herein are adequate when read in conjunction with the Company’s Form 10-K for the year ended December 31, 2017 . The results of operations for the three months ended March 31, 2018 and 2017 are not necessarily indicative of the results to be expected for the full year (or any other period). Significant estimates and assumptions in these unaudited condensed consolidated financial statements include: • 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. Actual results could differ materially from those estimates. Segment Information The Company is comprised of two reportable segments: the manufacture and sale of CEWs, batteries, accessories, extended warranties and other products and services (the “TASER Weapons” segment); and the software and sensors business, which includes the sale of devices, wearables, applications, cloud and mobile products (collectively, the “Software and Sensors” segment). Within the Software and Sensors segment, the Company specifies sales of products and services. Revenue from the Company's “products” in the Software and Sensors segment are generally sales of sensors, including on-officer body cameras, Axon Fleet cameras, other hardware sensors, warranties on sensors,and other products, and is sometimes referred to as Sensors and Other revenue. Revenue from the Company's “services” in the Software and Sensors segment comprise sales related to the Axon Cloud, which includes Evidence.com, cloud-based evidence management software revenue, other recurring cloud-hosted software revenue and related professional services, and is sometimes referred to as Axon Cloud revenue. Within the Software and Sensors segment, the Company includes only revenues and costs attributable to that segment which include: costs of sales for both products and services, direct labor, selling expenses for the sales team, product management and research and development ("R&D") for products included, or to be included, within the Software and Sensors segment. All other costs are included in the TASER Weapons segment. The Company’s Chief Executive Officer, who is the Chief Operating Decision Maker (the “CODM”), is not provided asset information by segment. Reportable segments are determined based on discrete financial information reviewed by the CODM for the Company. The Company organizes and reviews operations based on products and services. The Company performs an annual analysis of its reportable segments. Additional information related to the Company’s business segments is summarized in Note 14. Geographic Information and Major Customers For the three months ended March 31, 2018 and 2017 , no individual country outside the U.S. represented more than 10% of net sales. Individual sales transactions in the international market are generally larger and occur more intermittently than in the domestic market due to the profile of the Company's customers. For the three months ended March 31, 2018 and 2017 , no customer represented more than 10% of total net sales. At March 31, 2018 and December 31, 2017 , no customer represented more than 10% of the aggregate accounts and notes receivable balance and contract assets. Income per Common Share Basic income per common share is computed by dividing net income by the weighted average number of common shares outstanding during the periods presented. Potentially dilutive securities include outstanding stock options and unvested restricted stock units ("RSUs"). The dilutive effect of potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of the Company’s common stock can result in a greater dilutive effect from potentially dilutive securities. The calculation of the weighted average number of shares outstanding and earnings per share are as follows (in thousands except per share data): 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 Standard Warranties The Company warranties its CEWs, Axon cameras and certain related accessories from manufacturing defects on a limited basis for a period of one year after purchase and, thereafter, will replace any defective unit for a fee. Estimated costs for the standard warranty are charged to cost of products sold when revenue is recorded for the related product. Future warranty costs are estimated based on historical data related to warranty claims on a quarterly basis and this rate is applied to current product sales. Historically, reserve amounts have been increased if management becomes aware of a component failure or other issue that could result in larger than anticipated warranty claims from customers. The warranty reserve is reviewed quarterly to verify that it sufficiently reflects the remaining warranty obligations based on the anticipated expenditures over the balance of the warranty obligation period, and adjustments are made when actual warranty claim experience differs from estimates. The warranty reserve is included in accrued liabilities on the accompanying consolidated balance sheets. Changes in the Company’s estimated product warranty liabilities were as follows (in thousands): 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 Fair Value Measurements and Financial Instruments The Company uses the fair value framework that prioritizes the inputs to valuation techniques for measuring financial assets and liabilities measured on a recurring basis and for non-financial assets and liabilities when these items are re-measured. Fair value is considered to be the exchange price in an orderly transaction between market participants to sell an asset or transfer a liability at the measurement date. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. The Company categorizes each of its fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: • 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. The Company has cash equivalents and investments, which at March 31, 2018 and December 31, 2017 were comprised of money market funds, state and municipal obligations, corporate bonds, and certificates of deposits. See additional disclosure regarding the fair value of the Company’s cash equivalents and investments in Note 3. Included in the balance of Other assets as of March 31, 2018 and December 31, 2017 was $3.8 million related to corporate-owned life insurance policies which are used to fund the Company’s deferred compensation plan. The Company determines the fair value of its insurance contracts by obtaining the cash surrender value of the contracts from the issuer, a Level 2 valuation technique. The Company’s financial instruments also include accounts and notes receivable, accounts payable, notes payable and accrued liabilities. Due to the short-term nature of these instruments, their fair values approximate their carrying values on the accompanying condensed consolidated balance sheets. Valuation of Goodwill, Intangibles and Long-lived Assets Management evaluates whether events and circumstances have occurred that indicate the remaining estimated useful life of long-lived assets and identifiable intangible assets, excluding goodwill and intangible assets with indefinite useful lives, may warrant revision or that the remaining balance of these assets may not be recoverable. Such circumstances could include, but are not limited to, a change in the product mix, a change in the way products are created, produced or delivered, or a significant change in the way products are branded and marketed. In performing the review for recoverability, management estimates the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. The amount of the impairment loss, if impairment exists, is calculated based on the excess of the carrying amounts of the assets over their estimated fair value computed using discounted cash flows. The Company does not amortize goodwill and intangible assets with indefinite useful lives, rather such assets are required to be tested for impairment at least annually or sooner whenever events or changes in circumstances indicate that the assets may be impaired. The Company performs its goodwill and intangible asset impairment tests in the fourth quarter of each year. Recently Issued Accounting Guidance In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”) and Accounting Standards Codification ("ASC") Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers ("ASC 340-40"), (collectively, “Topic 606”). On January 1, 2018, the Company adopted Topic 606 by applying the modified retrospective method of adoption for all contracts that were not substantially completed as of the adoption date. ASU 2014-09 requires entities to recognize revenue through the application of a five-step model, which includes identification of the contract, identification of the performance obligations, determination of the transaction price, allocation of the transaction price to the performance obligations and recognition of revenue as the entity satisfies the performance obligations. Refer to Note 2 for further discussion. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous GAAP. ASU 2016-02 requires a lessee to recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. ASU 2016-02 is effective for the fiscal year beginning after December 15, 2018 (including interim periods within that year) using a modified retrospective approach and early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of this ASU on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, which amends ASC 326. The new guidance differs from existing GAAP wherein previous standards generally delayed recognition of credit losses until the loss was probable. ASU 2016-13 eliminates the probable initial recognition threshold and, instead, reflects an entity’s current estimate of all expected credit losses. The use of forecasted information is intended to incorporate more timely information in the estimate of expected credit loss. ASU 2016-13 is effective for the fiscal year beginning after December 15, 2019, and interim periods within that fiscal year, and early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of ASU 2016-13 on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 eliminates the diversity in practice related to the classification of certain cash receipts and payments. ASU 2016-15 designates the appropriate cash flow classification, including requirements to allocate certain components of these cash receipts and payments among operating, investing and financing activities. The Company adopted ASU 2016-15 effective January 1, 2018, and the adoption of this ASU did not have a material impact on its consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) - Intra-Entity Transfers of Assets Other Than Inventory. ASU 2016-16 requires an entity to recognize income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This removes the exception to postpone recognition until the asset has been sold to an outside party. The Company adopted ASU 2016-16 effective January 1, 2018, and the adoption of this ASU did not have a material impact on its consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows - Restricted Cash (Topic 230), which amends the existing guidance relating to the treatment of restricted cash and restricted cash equivalents on the statement of cash flows. The Company adopted ASU 2016-18 effective January 1, 2018, and retrospectively updated the presentation of its unaudited consolidated statements of cash flows to include amounts of restricted cash with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts. The adoption of ASU 2016-18 did not have a material impact on the Company's consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) to provide a more robust framework to use in determining when a set of acquired assets and activities is a business. The Company adopted ASU 2017-01 effective January 1, 2018. The amendments in ASU 2017-01 provide a screen to determine when a set of acquired integrated assets and activities is not a business, and if the screen is not met it may result in fewer transactions that qualify as a business combination under ASC Topic 805. For the three months ended March 31, 2018, the adoption of ASU 2017-01 did not have a material impact on the Company's consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718), which provides guidance on determining which changes to the terms and conditions of share-based payment awards require an entity to apply modification accounting under Topic 708. The Company adopted ASU2017-09 effective January 1, 2018, and the adoption of this ASU did not have a material impact on its consolidated financial statements. Reclassification of Prior Year Presentation Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. |
Revenues
Revenues | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Revenues | Revenues Adoption of ASC Topic 606, "Revenue from Contracts with Customers" On January 1, 2018, the Company adopted Topic 606 using the modified retrospective method applied to those contracts which were not completed as of January 1, 2018. Results for reporting periods beginning after January 1, 2018 are presented under Topic 606, while prior period amounts are not adjusted, and continue to be reported in accordance with our historic accounting under ASC 605. The Company recorded a net increase in stockholders’ equity (retained earnings) of $19.0 million as of January 1, 2018 due to the cumulative impact of adopting Topic 606 on contracts that were not complete as of that date. The areas most significantly impacted were contracts with contingent hardware revenue and the treatment of incremental costs of obtaining contracts with customers. The impacts as a result of applying Topic 606 was a net increase to revenue of $1.7 million and a net decrease to selling, general and administrative expenses of approximately $0.5 million related to the costs of obtaining contracts for the three months ended March 31, 2018 as compared to what would have been recognized under ASC 605. See the impacts to reported results below for the impact of adoption of the Topic 606 on our consolidated financial statements (in thousands): 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 Revenue Recognition Revenues are recognized upon transfer of control of promised products or services to customers in an amount that reflects the consideration the Company expects to receive in exchange for those products or services. The Company enters into contracts that can include various combinations of products and services, each of which are generally distinct and accounted for as separate performance obligations. Revenue is recognized net of allowances for returns and any taxes collected from customers, which are subsequently remitted to governmental taxing authorities. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer, and is the unit of account in Topic 606. For contracts with multiple performance obligations, the Company allocates the contract transaction price to each performance obligation using the Company's estimate of the standalone selling price ("SSP") of each distinct good or service in the contract. Performance obligations to deliver products, including CEWs, Axon cameras and related accessories such as cartridges, batteries and docks, are generally satisfied at the point in time the Company ships the product, as this is when the customer obtains control of the asset under our standard terms and conditions. In certain contracts with non-standard terms and conditions, these performance obligations may not be satisfied until formal customer acceptance occurs. Performance obligations to fulfill service-type extended warranties and provide our Software-as-a-Service (“SaaS”) offerings are generally satisfied over time as the customer receives and consumes the benefits of these services over the stated service period. The Company has elected to recognize shipping costs when the control of hardware products or accessories have transferred to the customer as an expense in Cost of product sales. Nature of Products and Services The following table presents the Company's revenues by primary product and service offering (in thousands): 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 (1) Amounts for the three months ended March 31, 2017 have not been adjusted under the modified retrospective method of adoption of Topic 606, and are presented consistent with the prior period amounts reported under ASC 605. The Company derives revenue from two primary sources: (1) the sale of physical products, including CEWs, Axon cameras, Axon Signal enabled devices, corresponding hardware extended warranties, and related accessories such as Axon docks, cartridges and batteries, among others, and (2) subscription to the Company's Evidence.com digital evidence management SaaS (including secure cloud-based storage fees and other ancillary services), which includes varying levels of support. To a lesser extent, the Company also recognizes revenue from training, professional services and revenue related to other software and SaaS services. Many of the Company's products and services are sold on a standalone basis. The Company also bundles its hardware products and services together and sells them to its customers in single transactions, where the customer can make payments over a multi-year period. These sales may include payments for upfront hardware and services, as well as payments for hardware and services to be provided by the Company at a future date. Additionally, the Company offers customers the ability to purchase CEW cartridges and certain services on an unlimited basis over the contractual term. Due to the unlimited nature of the arrangement whereby the Company is obligated to deliver unlimited products at the customer’s request, the Company accounts for these arrangements as stand-ready obligations, and recognizes revenue ratably over the contract period. Cost of product sales is recognized as the products are delivered to the customer. The following table presents the Company's revenues disaggregated by geography (in thousands): Three Months Ended March 31, 2018 2017 (1) United States $ 77,950 77 % $ 64,752 82 % Other countries 23,265 23 14,490 18 Total $ 101,215 100 % $ 79,242 100 % (1) Amounts for the three months ended March 31, 2017 have not been adjusted under the modified retrospective method of adoption of Topic 606, and are presented consistent with the prior period amounts reported under ASC 605. Contract Balances The timing of revenue recognition may differ from the timing of invoicing to customers. The Company generally has an unconditional right to consideration when it invoices its customers and records a receivable. The Company records a contract asset when revenue is recognized prior to invoicing, or a contract liability (deferred revenue) when revenue is recognized subsequent to invoicing. Contract assets generally result from the Company's subscription programs where the Company satisfies a hardware performance obligation upon shipment to the customer and the right to the portion of the transaction price allocated to that hardware performance obligation is conditional on the Company’s future performance of a SaaS service obligation under the contract. The Company recognizes a portion the amount allocated to hardware products shipped to the customer as accounts receivable when invoiced to the customer, and records the remaining allocated value as a contract asset as the Company has generally fulfilled its hardware performance obligation upon shipment. Contract liabilities generally consist of deferred revenue on the Company’s subscription programs where the Company generally invoices customers at the beginning of each annual period and records a receivable at the time of invoicing when there is an unconditional right to consideration. Deferred revenue is comprised mainly of unearned revenue related to the Company's Evidence.com SaaS platform, secure cloud-based storage, service-type extended warranties, stand-ready obligations in our cartridge programs, and rights to future CEW, camera and related accessories hardware in our subscription programs. Revenue for Evidence.com and cloud-based storage, our service-type extended warranties and stand-ready cartridge programs is generally recognized on a straight-line basis over the subscription term. Revenue for the rights to future hardware is generally recognized at the point in time the hardware products are shipped to the customer. Payment terms and conditions vary by contract type and geography, but our standard terms are that payments are due within 30 days from the date of invoice. The following table presents the Company's contract assets, contract liabilities and certain information related to these balances as of and for the three months ended March 31, 2018 (in thousands): 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 Contract liabilities (deferred revenue) consisted of the following (in thousands): 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 (1) Amounts as of December 31, 2017 have not been adjusted under the modified retrospective method of adoption of Topic 606, and are presented consistent with the prior period amounts reported under ASC 605. Remaining Performance Obligations As of March 31, 2018, the Company had approximately $650 million of remaining performance obligations, which included both recognized contract liabilities as well as amounts that will be invoiced and recognized in future periods. The remaining performance obligations are limited only to arrangements that meet the definition of a contract under Topic 606 as of March 31, 2018. The Company expects to recognize between 15% - 20% of this balance over the next twelve months and expects the remainder to be recognized over the following five to seven years, subject to risks related to delayed deployments, budget appropriation or other contract cancellation clauses. Costs to Obtain a Contract The Company recognizes an asset for the incremental costs of obtaining a contract with a customer, which consist primarily of sales commissions. These costs are ascribed to or allocated to the underlying performance obligations in the contract and amortized consistent with the recognition timing of the revenue for the underlying performance obligations. For contract costs related to performance obligations with an amortization period of one year or less, the Company applies the practical expedient to expense these sales commissions when incurred. These costs are recorded as incurred within sales, general and administrative expenses on the accompanying condensed consolidated statement of operations and comprehensive income. As of March 31, 2018, the Company's assets for costs to obtain contracts were as follows (in thousands): March 31, 2018 Current deferred commissions (1) $ 5,526 Deferred commissions, net of current portion (2) 12,881 $ 18,407 (1) Current deferred commissions are included within "Prepaid expenses and other current assets" on the accompanying condensed consolidated balance sheet. (2) Deferred commissions, net of current portion, are included in "Other assets" on the accompanying condensed consolidated balance sheet. During the three months ended March 31, 2018, the Company recognized $1.1 million of amortization related to deferred commissions. These costs are recorded within sales, general and administrative expenses on the accompanying condensed consolidated statement of operations and comprehensive income. Significant Judgments The Company’s contracts with certain municipal government customers may be subject to budget appropriation, other contract cancellation clauses or future periods which are optional. In contracts where the customer’s performance is subject to budget appropriation clauses, we generally consider the likelihood of non-appropriation to be remote when determining the contract term and transaction price. Contracts with other cancellation provisions or optional periods may require judgment in determining the contract term, including the existence of material rights, transaction price and identifying the performance obligations. At times, customers may request changes that either amend, replace or cancel existing contracts. Judgment is required to determine whether the specific facts and circumstances within the contracts require the changes to be accounted for as a separate contract or as a modification. Generally, contract modifications containing additional goods and services that are determined to be distinct and sold at their SSP, are accounted for as a separate contract. Contract modifications where both criteria are not met, the original contract is updated and the required adjustments to revenue will be made accordingly. The Company's contracts with customers often include promises to transfer multiple products and services to a customer. Determining whether products and services are considered distinct performance obligations that should be accounted for separately versus together may require significant judgment. The Company considers CEW devices and related accessories as well as cameras and related accessories to be separately identifiable from each other as well as from extended warranties on these products and the SaaS subscriptions to Evidence.com. In contracts where there are timing differences between when the Company transfers a promised good or service to the customer and when the customer pays for that good or service, the Company has determined that, with the exception of its TASER 60 installment purchase arrangements, its contracts generally do not include a significant financing component. For the three months ended March 31, 2018 , the Company recorded revenue of $14.0 million , including $0.3 million of interest income, under the Company’s TASER 60 plan, and recorded $8.1 million , including $0.1 million of interest income, for the same period in 2017. Amounts for the three months ended March 31, 2017 have not been adjusted under the modified retrospective method of adoption of Topic 606. Judgment is required to determine the SSP for each distinct performance obligation. The Company analyzes separate sales of its products and services as a basis for estimating the SSP of its products and services and then uses that SSP as the basis for allocating the transaction price when its products and services are sold together in a contract with multiple performance obligations. In instances where the SSP is not directly observable, such as when the Company does not sell the product or service separately, it determines the SSP using information that may include market conditions, time value of money and other observable inputs. The Company typically has more than one SSP for individual products and services due to the stratification of those products and services by customers and circumstances. In these instances, the Company may use information such geographic region and distribution channel in determining the SSP. Sales are typically made on credit and we generally do not require collateral. We perform ongoing credit evaluations of our customers’ financial condition and maintain an allowance for doubtful accounts. Uncollectible accounts are written off when deemed uncollectible, and accounts and notes receivable are presented net of an allowance for doubtful accounts. This allowance represents our best estimate and is based on our judgment after considering a number of factors including third-party credit reports, actual payment history, customer-specific financial information and broader market and economic trends and conditions. In the event that actual uncollectible amounts differ from our estimates, additional expense could be necessary. |
Cash, Cash Equivalents and Inve
Cash, Cash Equivalents and Investments | 3 Months Ended |
Mar. 31, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Cash, Cash Equivalents and Investments | Cash, Cash Equivalents and Investments The following tables summarize the Company's cash, cash equivalents, and held-to-maturity investments at March 31, 2018 and December 31, 2017 (in thousands): 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 The Company believes the unrealized losses on its investments are due to interest rate fluctuations. As these investments are short-term in nature, are expected to be redeemed at par value, and/or because the Company has the ability and intent to hold these investments to maturity, the Company does not consider these investments to be other than temporarily impaired at March 31, 2018 or as of December 31, 2017. |
Inventory
Inventory | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Inventories are stated at the lower of cost and net realizable value. Cost is determined using the weighted average cost of raw materials which approximates the first-in, first-out (“FIFO”) method and includes allocations of manufacturing labor and overhead. Included in finished goods at March 31, 2018 and December 31, 2017 was $1.6 million and $1.4 million , respectively, of trial and evaluation hardware units. Provisions are made to reduce excess, obsolete or slow-moving inventories to their net realizable value. Inventories consisted of the following at March 31, 2018 and December 31, 2017 (in thousands): 2018 2017 Raw materials $ 19,003 $ 20,119 Finished goods 24,101 25,346 Total inventory $ 43,104 $ 45,465 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | Goodwill and Intangible Assets The changes in the carrying amount of goodwill for the three months ended March 31, 2018 were as follows (in thousands): TASER 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 Intangible assets (other than goodwill) consisted of the following (in thousands): 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 Amortization expense of intangible assets for the three months ended March 31, 2018 and 2017 was $1.4 million and $0.9 million , respectively. Estimated amortization for intangible assets with definite lives for the remaining nine months of 2018 , the next five years ended December 31, and thereafter, is as follows (in thousands): 2018 $ 4,047 2019 3,871 2020 2,404 2021 2,269 2022 838 2023 568 Thereafter 1,721 Total $ 15,718 |
Other Long-Term Assets
Other Long-Term Assets | 3 Months Ended |
Mar. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Long-Term Assets | Other Long-Term Assets Other long-term assets consisted of the following at March 31, 2018 and December 31, 2017 (in thousands): 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 (1) Represents assets for the incremental costs of obtaining a contract with a customer, which consist primarily of sales commissions. These costs are ascribed to or allocated to the underlying performance obligations in the contract and amortized consistent with the recognition timing of the revenue for the underlying performance obligations. The amounts as of December 31, 2017 have not been adjusted under the modified retrospective method of adoption of Topic 606, and is presented consistent with the prior period amounts. In connection with the Company's adoption of Topic 606, it recorded an adjustment of $7.3 million as of January 1, 2018, and of that amount, $5.4 million was recorded within long-term other assets. The adjusted balance of long-term deferred commissions as of January 1, 2018 was $12.2 million . (2) As of March 31, 2018 and December 31, 2017, restricted cash primarily consisted of $1.8 million and $2.7 million , respectively, of sales proceeds related to long-term contracts with customers. As of March 31, 2018, the proceeds are held in escrow until certain billing milestones are achieved, and then specified amounts are transferred to the Company's operating accounts. |
Accrued Liabilities
Accrued Liabilities | 3 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued Liabilities Accrued liabilities consisted of the following at March 31, 2018 and December 31, 2017 (in thousands): 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 |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2018 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes ASC 740 requires a company to record the effects of a tax law change in the period of enactment; however, shortly after the enactment of the Tax Cuts and Jobs Act (the "Tax Act"), the SEC staff issued Staff Accounting Bulletin 118 ("SAB 118"), which allows a company to record a provisional amount when it does not have the necessary information available, prepared, or analyzed in reasonable detail to complete its accounting for the change in the tax law. The measurement period ends when the company has obtained, prepared and analyzed the information necessary to finalize its accounting, but cannot extend beyond one year. The Company continues to analyze the impact of the Tax Act and expects that as additional guidance from IRS Treasury is provided, further updates will be necessary. The Tax Act imposes a U.S. entity tax on global intangible low-taxed income ("GILTI") earned by certain foreign subsidiaries. The FASB Staff Q&A, Topic 740, No. 5, Accounting for Global Intangible Low-Taxed Income, states that an entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or provide for the tax expense related to GILTI in the year the tax is incurred as a period expense only. Given the complexity of the GILTI provisions, we are still evaluating the effects of the GILTI provisions and have not yet determined our accounting policy. At March 31, 2018, because we are still evaluating the GILTI provisions and our analysis of future taxable income that is subject to GILTI, we have included GILTI related to current-year operations only in our EAETR (estimated annual effective tax rate) and have not provided additional GILTI on deferred items. Deferred Tax Assets Net deferred income tax assets at March 31, 2018 , include capitalized R&D costs, research and development tax credits, stock-based compensation expense, deferred revenue, warranty and inventory reserves, accrued vacation, and other items, partially offset by accelerated depreciation expense and intangible amortization that is not tax deductible. The Company’s total net deferred tax assets at March 31, 2018 were $14.2 million . In preparing the Company’s condensed consolidated financial statements, management assesses the likelihood that its deferred tax assets will be realized from future taxable income. In evaluating the Company’s ability to recover its deferred income tax assets, management considers all available positive and negative evidence, including its operating results, ongoing tax planning and forecasts of future taxable income on a jurisdiction by jurisdiction basis. A valuation allowance is established if it is determined that it is more likely than not that some portion or all of the net deferred tax assets will not be realized. Management exercises significant judgment in determining its provisions for income taxes, its deferred tax assets and liabilities, and its future taxable income for purposes of assessing its ability to utilize any future tax benefit from its deferred tax assets. Although management believes that its tax estimates are reasonable, the ultimate tax determination involves significant judgments that could become subject to audit by tax authorities in the ordinary course of business. As of each reporting date, management considers new evidence, both positive and negative, that could impact management’s view with regard to future realization of deferred tax assets. As of March 31, 2018 , the Company continues to demonstrate three-year cumulative pre-tax income in the U.S. federal and Arizona tax jurisdictions; however, the Company's Arizona R&D Tax Credits start to expire in 2018 with a significant tranche with a gross value of $1.2 million expiring if not used by the end of 2019. It appears that the Company’s long term investments, which impact short term profits, will likely result in some of the R&D credits expiring before they are utilized. Therefore, management has concluded that it is more likely than not that a portion of the Company’s deferred tax assets will not be realized and has established a valuation allowance. The Company has claimed R&D tax credits of approximately $17.0 million for federal, Arizona and California income tax purposes related to tax years 2003 to 2018. Management has made the determination that it is more likely than not that the full benefit of the R&D tax credits will not be sustained upon examination and recorded a liability for unrecognized tax benefits of $3.6 million as of March 31, 2018. In addition, management accrued $0.1 million for estimated uncertain tax positions related to certain state income tax liabilities, for a total unrecognized tax benefit as of March 31, 2018 of $3.7 million . Management expects the amount of unrecognized tax benefit liability to increase by $0.2 million within the next 12 months. Should the unrecognized benefit of $3.7 million be recognized, the Company's effective tax rate would be favorably impacted. Approximately $2.0 million of the unrecognized tax benefit associated with R&D credits has been netted against the R&D deferred tax asset. Effective Tax Rate The Company’s overall effective tax rate for the three months ended March 31, 2018 , after discrete period adjustments, was 12.9% . Before discrete adjustments, the tax rate was 23.1% , which is more than the federal statutory rate primarily due to state taxes and non-deductible expenses for items such as meals and entertainment, executive compensation limitation under IRC section 162(m), lobbying fees, an income inclusion from GILTI, offset by a reduction for foreign-derived intangible income ("FDII"). This was partially offset by R&D tax credit deductions. The effective tax rate was favorably impacted by a $1.6 million discrete tax benefit primarily associated with windfalls related to stock-based compensation for RSUs that vested or stock options that were exercised during the three months ended March 31, 2018 . |
Stockholders' Equity
Stockholders' Equity | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity In May 2016, the Company’s stockholders approved a new stock incentive plan authorizing an additional 2.0 million shares, plus remaining available shares under a prior plan, for issuance under the new plan. Combined with the legacy stock incentive plans, there are 0.8 million shares available for grant as of March 31, 2018 . Performance-based stock awards The Company has issued performance-based stock options and performance-based restricted stock units ("RSUs"), the vesting of which is contingent upon the achievement of certain performance criteria related to the operating performance of the Company, as well as successful and timely development and market acceptance of future product introductions. In addition, certain of the performance-based RSUs have additional service-based vesting requirements subsequent to the achievement of the performance criteria. Compensation expense is recognized over the implicit service period (the longer of the period the performance condition is expected to be achieved or the required service period) based on management’s estimate of the probability of the performance criteria being satisfied, adjusted at each balance sheet date. Restricted Stock Units The following table summarizes RSU activity for the three months ended March 31, 2018 (number of units and aggregate intrinsic value in thousands): Number of Units Weighted Average Grant-Date Fair Value Aggregate 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 Aggregate intrinsic value represents the Company’s closing stock price on the last trading day of the period, which was $39.31 per share, multiplied by the number of RSUs outstanding. As of March 31, 2018 , there was $39.3 million in unrecognized compensation costs related to RSUs under the Company's stock plans. The Company expects to recognize the cost related to the RSUs over a weighted average period of 2.68 years . RSUs are released when vesting requirements are met. During the three months ended March 31, 2018 , the Company granted no performance-based RSUs As of March 31, 2018 , the performance criteria had not been met for any of the 0.4 million performance-based RSUs outstanding.The performance-based RSUs granted in 2017 and 2016 contain provisions whereby the amount of RSUs that ultimately vest is dependent upon the level of achievement of performance metrics. The amount of RSUs included in the table above related to such grants is the target level, which is the Company's best estimate of the amount of RSUs that will vest. The maximum additional number of performance-based RSUs that could be earned is 0.3 million , which are not included in the table above. Certain RSUs that vested in the three months ended March 31, 2018 were net-share settled such that the Company withheld shares with value equivalent to the employees’ minimum statutory obligation for the applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities. Total shares withheld were 0.1 million and had a value of $3.6 million on their respective vesting dates as determined by the Company’s closing stock price on such dates. Payments for the employees’ tax obligations are reflected as a financing activity within the statement of cash flows. These net-share settlements had the effect of share repurchases by the Company as they reduced the amount of shares that would have otherwise been issued as a result of the vesting had they been settled on a gross basis with the employees responsible for directly remitting the applicable income and other employment taxes. Stock Option Activity The following table summarizes stock option activity for the three months ended March 31, 2018 (number of units and aggregate intrinsic value in thousands): Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate 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 Aggregate intrinsic value represents the difference between the exercise price of the underlying stock option awards and the closing market price of the Company's common stock of $39.31 on March 31, 2018 . The intrinsic value of options exercised for the three months ended March 31, 2018 and 2017 was $2.0 million and $0.7 million , respectively. As of March 31, 2018 , total options outstanding includes 0.2 million performance-based stock options, of which 4,350 were unvested and of those, none are expected to vest. On February 26, 2018, the Company's Board of Directors approved a new stock option grant to Patrick W. Smith, the Company's Chief Executive Officer (“CEO Performance Award”), which is subject to shareholder approval. The CEO Performance Award will consist of 12 vesting tranches, each equal to 1% of the Company's outstanding common stock as of February 23, 2018, the business day prior to the award date. The CEO Performance Award will have a per share exercise price equal to $28.58 , the closing price of our common stock on February 23, 2018, and will have a vesting schedule based entirely on the attainment of both operational and market capitalization goals. Because the CEO Performance Award is still subject to shareholder approval, there was no financial statement impact as of and for the three months ended March 31, 2018. Stock-based Compensation Expense Stock-based compensation cost for RSUs is measured based on the closing fair market value of the Company’s common stock on the date of grant. The Company recognizes stock-based compensation cost over the requisite service period of an award on a straight-line basis for time-based RSUs and on a graded basis for RSUs that are contingent on the achievement of performance conditions. The following table summarizes the composition of stock-based compensation for the three months ended March 31, 2018 and 2017 (in thousands): 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 Stock Repurchase Plan In February 2016, the Company's Board of Directors authorized a stock repurchase program to acquire up to $50.0 million of the Company’s outstanding common stock subject to stock market conditions and corporate considerations. During the three months ended March 31, 2018 and 2017, no common shares were purchased under the program. As of March 31, 2018 , $16.3 million remains available under the plan for future purchases. The Company suspended its 10b5-1 plan during 2016, and any future purchases will be discretionary. |
Line of Credit
Line of Credit | 3 Months Ended |
Mar. 31, 2018 | |
Debt Disclosure [Abstract] | |
Line of Credit | Line of Credit The Company has a $10.0 million revolving line of credit with a domestic bank. At both March 31, 2018 and December 31, 2017 , there were no borrowings under the line. Under the terms of the line of credit, available borrowings are reduced by outstanding letters of credit. As of March 31, 2018 , the Company had letters of credit outstanding of $2.7 million under the facility, and available borrowing of $7.3 million . The line is secured by substantially all of the assets of the Company, and bears interest at varying rates (currently LIBOR plus 1.25% or Prime less 0.50% ). The line of credit matures on December 31, 2018 , and requires monthly payments of interest only. The Company’s agreement with the bank requires it to comply with a maximum funded debt to earnings before interest, taxes, depreciation and amortization ("EBITDA") ratio, as defined, of no greater than 2.00 to 1.00 based upon a trailing twelve -month period. At March 31, 2018 , the Company’s funded debt to EBITDA ratio was 0.002 to 1.00. |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Product Litigation The Company is currently named as a defendant in seven lawsuits in which the plaintiffs allege either wrongful death or personal injury in situations in which a TASER CEW was used by law enforcement officers in connection with arrests. While the facts vary from case to case, the product liability claims are typically based on an alleged product defect resulting in injury or death, usually involving a failure to warn, and the plaintiffs are seeking monetary damages. The information throughout this note is current through the date of these financial statements. As a general rule, it is the Company’s policy not to settle suspect injury or death cases. Exceptions are sometimes made where the settlement is strategically beneficial to the Company. Also, on occasion, the Company’s insurance company has settled such lawsuits over the Company’s objection where the risk is over the Company’s liability insurance deductibles. Due to the confidentiality of the Company's litigation strategy and the confidentiality agreements that are executed in the event of a settlement, the Company does not identify or comment on which specific lawsuits have been settled or the amount of any settlement. In 2009, the Company implemented new risk management strategies, including revisions to product warnings and training to better protect both the Company and its customers from litigation based on “failure to warn” theories - which comprise the vast majority of the cases against the Company. These risk management strategies have been highly effective in reducing the rate and exposure from litigation post-2009. From the third quarter of 2011 to the first quarter of 2018 , product liability cases have been reduced from 55 to seven active cases. Management believes that pre-2009 cases have a different risk profile than cases which have occurred since the risk management procedures were introduced in 2009. Therefore, the Company necessarily treats certain pre-2009 cases as exceptions to the Company’s general no settlement policy in order to reduce caseload, legal costs and liability exposure. The Company intends to continue its successful practice of aggressively defending and generally not settling litigation except in very limited and unusual circumstances as described above.With respect to each of the pending lawsuits, the following table lists the name of plaintiff, the date the Company was served with process, the jurisdiction in which the case is pending, the type of claim and the status of the matter. 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 No product liability cases were dismissed or judgments entered during the first quarter of 2018 and through the date of these financial statements and there are no product litigation matters in which the Company is involved that are currently on appeal. The claims, and in some instances the defense, of each of these lawsuits have been submitted to the Company’s insurance carriers that maintained insurance coverage during the applicable periods. The Company continues to maintain product liability insurance coverage with varying limits and deductibles. The following table provides information regarding the Company’s product liability insurance. Remaining insurance coverage is based on information received from the Company’s insurance provider (in millions). 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 Other Litigation Phazzer Patent Infringement Litigation In November 2015, the Company filed a complaint against Phazzer Electronics Inc. and Sang Min International Co. Ltd. for patent infringement, trademark infringement and false advertising. On July 21, 2017, the U.S. District Court for the Middle District of Florida granted the Company's Motion for Sanctions and for a Permanent Injunction against Florida-based Phazzer Electronics, Inc. The Court issued a broad permanent injunction against Phazzer banning sales of the infringing Phazzer Enforcer CEWs and dart cartridges. The injunction prohibits Phazzer and its officers, agents, employees, and anyone else acting in concert with them, from making, using, offering for sale, selling, distributing, importing or exporting Phazzer CEWs and associated cartridges. Phazzer is further enjoined from dumping its infringing inventory by “donating” CEWs to law enforcement, and from false advertising and comparison to TASER® brand products. Both Phazzer and its U.S. distributors are barred from exporting CEWs or cartridges to fill foreign orders. The injunction also makes clear that nonparties who assist Phazzer in violating the injunction, including specifically Taiwanese CEW manufacturer Sang Min International and Double Dragon Development and Trading Corporation, may be held in contempt of court. On August 10, 2017, Phazzer filed a notice of appeal which is detailed in the following section entitled cases on appeal. On April 19, 2018, the Court denied Phazzer's second motion to stay the injunction pending appeal. On April 4, 2018, the Court entered a judgment for the Company against Phazzer in an amount exceeding $7.8 million which included an award to the Company of compensatory and treble damages for willful infringement, and also an award of reasonable attorneys’ fees and costs. The collectability of this judgment is in doubt since Phazzer has informed the Court that it is insolvent. In imposing severe sanctions against Phazzer, the Court found that Phazzer “engaged in a pattern of bad faith conduct designed and intended to delay, stall, and increase the cost of this litigation,” and that Phazzer repeatedly disregarded Court Orders thereby exhibiting “contemptuous”, “egregious”, “flagrant” and “intentional obstructionist behavior” resulting in willful “abuse [of] the judicial process.” The Company’s patent (U.S. No. 7,234,262) at issue in the litigation (Case No. 6:16-cv-00366-PGB-KRS) relates to the CEW’s data recording of date and time of each trigger operation and duration of the stimulus. The Court found that patent is “valid, enforceable, and infringed by Phazzer.” The injunction will remain in effect until the patent expires, and includes any CEW or device not colorably different from the Phazzer Enforcer CEW. Phazzer filed a second petition for reexamination of the Company's Patent on April 27, 2017 which resulted in a non-final office action on December 5, 2017 rejecting all old and new patent claims. The Company filed its response on February 5, 2018 and a final office action was issued by the USPTO rejecting all old and new patent claims. The Company has appealed this ruling. The injunction is still in full force and effect despite recent USPTO office action. The Company's trademark that is the subject of the injunction is Federal Registration No. 4,423,789, relating to the non-functional shape of TASER CEW cartridges used to launch the darts. The Court found the trademark “valid and enforceable, not generic, functional, or merely descriptive, and infringed by Phazzer.” The permanent injunction covers all Phazzer CEW dart cartridges that are confusingly similar to, or not more than a colorable imitation of, TASER CEW cartridges, and includes Phazzer product numbers 1-DC15, 1-DC21, 1-DC25, 1-DC21-SIDT, 1-PB30, 1-PB8F, 1-PB15943, 1-RB30, 1-PA30, and 1-LOWIMPT2015. Phazzer has filed a petition to cancel Axon’s trademark. The Court expressly found that Phazzer cartridges currently marketed and sold as compatible with TASER brand CEWs embody the protected appearance and constitute infringing products enjoined under its Order. Phazzer was also ordered by the Court “not [to] challenge or continue to challenge the validity or enforceability of the ‘789 Registration in any manner in any forum, including the USTPO.” Accordingly, Phazzer’s pending USPTO cancellation action, which was stayed while the litigation ran its course, will be dismissed. Digital Ally Patent Litigation In February 2016, the Company was served with a first amended complaint filed by Digital Ally in the Federal District Court for the District of Kansas alleging patent infringement regarding the Company's Axon Signal technology, commercial bribery, antitrust, and unfair competition. In March 2016, the Company was served with a second amended complaint with similar allegations. The second amended complaint seeks a judgment of infringement, monetary damages, a permanent injunction, punitive damages and attorneys’ fees and costs. Digital Ally’s complaint has been substantially narrowed based on (1) the district court dismissing all of Digital Ally’s antitrust claims in January 2017; (2) the USPTO granting validity review of Digital Ally’s ‘292 patent in June 2017, and Digital Ally subsequently dismissing this patent from the litigation and covenanting not to sue the Company with respect to existing and prior products; and (3) Digital Ally’s dismissal of certain inconsistent claims in the ‘452 patent, leaving only independent claim 10 for resolution by the Court. The Company believes the remaining claim of the ‘452 patent is invalid and not infringed, and is vigorously defending this litigation. Digital Ally filed an appeal on the dismissal of its antitrust claims on April 20, 2017, which is pending in the Federal Circuit Court of Appeals. The Company’s inter parte review of the ‘292 patent was heard by the PTAB on February 23, 2018, and a decision is expected by early June 2018. The litigation stay has been lifted and the case is in the discovery phase. A third Scheduling Order was entered on December 20, 2017, and a Markman Hearing was held on March 8, 2018. Antoine di Zazzo Arbitration In April 2016, the Company was served with a notice of arbitration claim filed by Antoine di Zazzo, the Company’s former distributor in France, for commissions allegedly owed Mr. di Zazzo. The arbitration claim was filed with the International Court of Arbitration of the International Chamber of Commerce in Paris, France, and the amount that is claimed in controversy is $0.6 million . The Company’s records reflect that all commissions that were due Mr. di Zazzo under his contract were paid or offered to him and the Company will vigorously defend this arbitration claim. VIEVU Commercial Litigation In February 2017, the Company was served with a complaint filed by VieVU, LLC (“VIEVU” ) alleging tortious interference with a business expectancy. In February 2017, the Company filed complaints against VIEVU for unfair competition and false advertising in both the Superior Court of Arizona for Maricopa County as well as the California Superior Court for Santa Cruz County. VIEVU and the Company entered into mutual stipulations for dismissal of both parties’ complaints against the other. On February 21, 2018, the Federal lawsuit against VIEVU was dismissed, and on February 27, 2018 the State lawsuit against the Company was dismissed. Appeals The judgment entered resulting from the Court granting the Company’s motion for dismissal of Digital Ally litigation for antitrust claims as well as the judgment and permanent injunction in the Company’s favor against Phazzer are on appeal as noted in the following table: 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. General From time to time, the Company is notified that it may be a party to a lawsuit or that a claim is being made against it. It is the Company’s policy to not disclose the specifics of any claim or threatened lawsuit until the summons and complaint are actually served on the Company. After carefully assessing the claim, and assuming the Company determines that it is not at fault or it disagrees with the damages or relief demanded, the Company vigorously defends any lawsuit filed against the Company. In certain legal matters, the Company records a liability when losses are deemed probable and reasonably estimable. In evaluating matters for accrual and disclosure purposes, the Company takes into consideration factors such as our historical experience with matters of a similar nature, the specific facts and circumstances asserted, the likelihood of our prevailing, the availability of insurance, and the severity of any potential loss. The Company reevaluates and updates accruals as matters progress over time. Based on the Company's assessment of outstanding litigation and claims as of March 31, 2018 , the Company has determined that it is not reasonably possible that these lawsuits will individually, or in the aggregate, materially affect its results of operations, financial condition or cash flows. However, the outcome of any litigation is inherently uncertain and there can be no assurance that any expense, liability or damages that may ultimately result from the resolution of these matters will be covered by its insurance or will not be in excess of amounts recognized or provided by insurance coverage and will not have a material adverse effect on our operating results, financial condition or cash flows. Off-Balance Sheet Arrangements Under certain circumstances, the Company uses letters of credit and surety bonds to guarantee its performance under various contracts, principally in connection with the installation and integration of its Axon cameras and related technologies. Certain of the Company's letters of credit and surety bonds have stated expiration dates with others being released as the contractual performance terms are completed. At March 31, 2018 , the Company had outstanding letters of credit of $2.7 million that are expected to expire in May 2018. Additionally, the Company had $10.6 million of outstanding surety bonds at March 31, 2018 , with $1.0 million expiring in 2018, $0.1 million expiring in 2020, $2.3 million expiring in 2021, $3.1 million expiring in 2022 and the remaining $4.0 million expiring in 2023. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2018 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions The Company subscribes to various cloud-based applications from Salesforce. Bret Taylor, a member of the Company's Board of Directors, serves as President and Chief Product Officer of Salesforce. The Company incurs costs at different times throughout the year, typically in advance of services being provided, and subsequently amortizes these costs ratably to expense as services are provided over the contractual term. The Company did not make any payments related to these services during the three months ended March 31, 2018, and made payments of $1.0 million during the three months ended March 31, 2017. |
Employee Benefit Plans
Employee Benefit Plans | 3 Months Ended |
Mar. 31, 2018 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Employee Benefit Plans The Company has a defined contribution profit sharing 401 (k) plan for eligible employees, which is qualified under Sections 401 (a) and 401 (k) of the Internal Revenue Code of 1986, as amended. Employees are entitled to make tax-deferred contributions of up to the maximum amount allowed by law of their eligible compensation. The Company also has a non-qualified deferred compensation plan for certain executives, key employees and non-employee directors through which participants may elect to postpone the receipt and taxation of a portion of their compensation, including stock-based compensation, received from the Company. The non-qualified deferred compensation plan allows eligible participants to defer up to 80% of their base salary and up to 100% of other types of compensation. The plan also allows for matching and discretionary employer contributions. Employee deferrals are deemed 100% vested upon contribution. Distributions from the plan are made upon retirement, death, separation of service, specified date or upon the occurrence of an unforeseeable emergency. Distributions can be paid in a variety of forms from lump sum to installments over a period of years. Participants in the plan are entitled to select from a wide variety of investments available under the plan and are allocated gains or losses based upon the performance of the investments selected by the participant. All gains or losses are allocated fully to plan participants and the Company does not guarantee a rate of return on deferred balances. Assets related to this plan consist of corporate-owned life insurance contracts and are included in other assets in the condensed consolidated balance sheets. Participants have no rights or claims with respect to any plan assets and any such assets are subject to the claims of the Company’s general creditors. Contributions to the plans are made by both the employee and the Company. Company contributions to the 401(k) plan are based on the level of employee contributions and are immediately vested. The Company’s matching contributions to the 401(k) plan for the three months ended March 31, 2018 and 2017 , were $0.8 million and $0.7 million , respectively. Future matching or profit sharing contributions to the plans are at the Company’s sole discretion. |
Segment Data
Segment Data | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Segment Data | Segment Data The Company is comprised of two reportable segments: the manufacture and sale of CEWs, batteries, accessories, extended warranties and other products and services (the “TASER Weapons” segment); and the software and sensors business, which includes the sale of devices, wearables, applications, cloud and mobile products (collectively, the “Software and Sensors” segment). Within the Software and Sensors segment, the Company specifies sales of products and services. Revenue from the Company's “products” in the Software and Sensors segment are generally sales of sensors, including on-officer body cameras, Axon Fleet cameras, other hardware sensors, warranties on sensors,and other products, and is sometimes referred to as Sensors and Other revenue. Revenue from the Company's “services” in the Software and Sensors segment comprise sales related to the Axon Cloud, which includes Evidence.com, cloud-based evidence management software revenue, other recurring cloud-hosted software revenue and related professional services, and is sometimes referred to as Axon Cloud revenue. Within the Software and Sensors segment, the Company includes only revenues and costs attributable to that segment which include: costs of sales for both products and services, direct labor, selling expenses for the sales team, product management and R&D for products included, or to be included, within the Software and Sensors segment. All other costs are included in the TASER Weapons segment. The Company’s Chief Executive Officer, who is the CODM, is not provided asset information by segment, and therefore, no asset information is provided. Information relative to the Company’s reportable segments was as follows (in thousands): 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 (1) Amounts for the three months ended March 31, 2017 have not been adjusted under the modified retrospective method of adoption of Topic 606, and are presented consistent with the prior period amounts reported under ASC 605. (2) Software and Sensors “products” revenue consists of sales of sensors, including on-officer body cameras, Axon Fleet cameras, other hardware sensors, warranties on sensors, and other products, and is sometimes referred to as Sensors and Other revenue. (3) Software and Sensors “services” revenue comprises sales related to the Axon Cloud, which includes Evidence.com, cloud-based evidence management software revenue, other recurring cloud-hosted software revenue and related professional services and is sometimes referred to as Axon Cloud revenue. |
Subsequent Event
Subsequent Event | 3 Months Ended |
Mar. 31, 2018 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event On May 3, 2018 (the “Closing Date”), the Company acquired all of the outstanding ownership interests of VIEVU, LLC (“VIEVU”), a public safety camera and cloud-based evidence management system provider for law enforcement agencies. The purchase price consisted of $4.6 million in cash and 58,843 shares of the Company's common stock (the “Closing Stock”) issued to VIEVU’s parent company, Safariland, LLC (“Safariland”), at closing. The number of shares of Closing Stock was determined by dividing $2.5 million in aggregate value by the volume-weighted average price of the Company’s common stock, as reported on the NASDAQ Global Select Market, for the 20 -trading day period up to and including the trading day that was three trading days immediately preceding (but not including) the Closing Date (the “Closing Stock Price”). The Closing Stock Price was $42.49 per share. Pursuant to the terms of the transaction, the Company has agreed to issue up to $6.0 million in aggregate value of its common stock (the “Earn-Out Stock Payments”), at a price per share equal to the Closing Stock Price, if certain conditions relating to retention of VIEVU’s customers are met as of the first and second anniversaries of the Closing Date. Subject to the satisfaction of those conditions, the Company may issue up to 141,226 additional shares of common stock in respect of the Earn-Out Stock Payments. Concurrently with the closing of the VIEVU acquisition, the Company entered into a long-term Product Development and Supplier Agreement (the “Supply Agreement”) with Safariland, pursuant to which Safariland will be the Company’s preferred provider of holsters for its CEW products. The Company will include the fair value of the Supply Agreement as a component of the purchase price to be allocated to the acquired net assets of VIEVU. The acquisition will be accounted for in the second quarter of fiscal year 2018 using the acquisition method in accordance with ASC 805, Business Combinations. Accordingly, the identified assets and liabilities assumed will be measured at their acquisition-date fair value. VIEVU’s operating results will be included in the Company’s consolidated financial statements from the effective date of the acquisition (i.e., May 3, 2018). The Closing Stock and the shares of common stock that may be issued in respect of the Earn-Out Stock Payments (if any), was and will be, as applicable, issued without registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance upon the exemption from registration set forth in Section 4(a)(2) of the Securities Act and Rule 506 of Regulation D promulgated by the SEC thereunder. Safariland represented and warranted to the Company that it is an “accredited investor” as that term is defined in Rule 501 of Regulation D, and the Company did not engage in any general solicitation in connection with the issuances of Company common stock contemplated by the terms of the transaction. All such shares of Company common stock are and will be, as applicable, “restricted securities” as that term is defined in Rule 144 promulgated by the SEC under the Securities Act. |
Organization and Summary of S21
Organization and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Use of Estimates | These unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information related to the Company’s organization, significant accounting policies and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) has been condensed or omitted. The accounting policies followed in the preparation of these unaudited condensed consolidated financial statements are consistent with those followed in the Company’s annual consolidated financial statements for the year ended December 31, 2017 , as filed on Form 10-K, with the exception of the Company's adoption of Topic 606. In the opinion of management, these unaudited condensed consolidated financial statements contain all material adjustments, consisting only of normal recurring adjustments, necessary to fairly state the Company’s financial position, results of operations and cash flows for the periods presented and the presentations and disclosures herein are adequate when read in conjunction with the Company’s Form 10-K for the year ended December 31, 2017 . The results of operations for the three months ended March 31, 2018 and 2017 are not necessarily indicative of the results to be expected for the full year (or any other period). Significant estimates and assumptions in these unaudited condensed consolidated financial statements include: • 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. Actual results could differ materially from those estimates. |
Segment Information | The Company is comprised of two reportable segments: the manufacture and sale of CEWs, batteries, accessories, extended warranties and other products and services (the “TASER Weapons” segment); and the software and sensors business, which includes the sale of devices, wearables, applications, cloud and mobile products (collectively, the “Software and Sensors” segment). Within the Software and Sensors segment, the Company specifies sales of products and services. Revenue from the Company's “products” in the Software and Sensors segment are generally sales of sensors, including on-officer body cameras, Axon Fleet cameras, other hardware sensors, warranties on sensors,and other products, and is sometimes referred to as Sensors and Other revenue. Revenue from the Company's “services” in the Software and Sensors segment comprise sales related to the Axon Cloud, which includes Evidence.com, cloud-based evidence management software revenue, other recurring cloud-hosted software revenue and related professional services, and is sometimes referred to as Axon Cloud revenue. Within the Software and Sensors segment, the Company includes only revenues and costs attributable to that segment which include: costs of sales for both products and services, direct labor, selling expenses for the sales team, product management and research and development ("R&D") for products included, or to be included, within the Software and Sensors segment. All other costs are included in the TASER Weapons segment. The Company’s Chief Executive Officer, who is the Chief Operating Decision Maker (the “CODM”), is not provided asset information by segment. Reportable segments are determined based on discrete financial information reviewed by the CODM for the Company. The Company organizes and reviews operations based on products and services. The Company performs an annual analysis of its reportable segments. Additional information related to the Company’s business segments is summarized in Note 14. |
Geographic Information and Major Customers | For the three months ended March 31, 2018 and 2017 , no individual country outside the U.S. represented more than 10% of net sales. Individual sales transactions in the international market are generally larger and occur more intermittently than in the domestic market due to the profile of the Company's customers. For the three months ended March 31, 2018 and 2017 , no customer represented more than 10% of total net sales. At March 31, 2018 and December 31, 2017 , no customer represented more than 10% of the aggregate accounts and notes receivable balance and contract assets. |
Income per Common Share | Basic income per common share is computed by dividing net income by the weighted average number of common shares outstanding during the periods presented. Potentially dilutive securities include outstanding stock options and unvested restricted stock units ("RSUs"). The dilutive effect of potentially dilutive securities is reflected in diluted earnings per share by application of the treasury stock method. Under the treasury stock method, an increase in the fair market value of the Company’s common stock can result in a greater dilutive effect from potentially dilutive securities. |
Standard Warranties | The Company warranties its CEWs, Axon cameras and certain related accessories from manufacturing defects on a limited basis for a period of one year after purchase and, thereafter, will replace any defective unit for a fee. Estimated costs for the standard warranty are charged to cost of products sold when revenue is recorded for the related product. Future warranty costs are estimated based on historical data related to warranty claims on a quarterly basis and this rate is applied to current product sales. Historically, reserve amounts have been increased if management becomes aware of a component failure or other issue that could result in larger than anticipated warranty claims from customers. The warranty reserve is reviewed quarterly to verify that it sufficiently reflects the remaining warranty obligations based on the anticipated expenditures over the balance of the warranty obligation period, and adjustments are made when actual warranty claim experience differs from estimates. The warranty reserve is included in accrued liabilities on the accompanying consolidated balance sheets. |
Fair Value of Financial Instruments | The Company uses the fair value framework that prioritizes the inputs to valuation techniques for measuring financial assets and liabilities measured on a recurring basis and for non-financial assets and liabilities when these items are re-measured. Fair value is considered to be the exchange price in an orderly transaction between market participants to sell an asset or transfer a liability at the measurement date. The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. The Company categorizes each of its fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are: • 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. The Company has cash equivalents and investments, which at March 31, 2018 and December 31, 2017 were comprised of money market funds, state and municipal obligations, corporate bonds, and certificates of deposits. See additional disclosure regarding the fair value of the Company’s cash equivalents and investments in Note 3. Included in the balance of Other assets as of March 31, 2018 and December 31, 2017 was $3.8 million related to corporate-owned life insurance policies which are used to fund the Company’s deferred compensation plan. The Company determines the fair value of its insurance contracts by obtaining the cash surrender value of the contracts from the issuer, a Level 2 valuation technique. The Company’s financial instruments also include accounts and notes receivable, accounts payable, notes payable and accrued liabilities. Due to the short-term nature of these instruments, their fair values approximate their carrying values on the accompanying condensed consolidated balance sheets. |
Valuation of Goodwill, Intangibles and Long-lived Assets | Management evaluates whether events and circumstances have occurred that indicate the remaining estimated useful life of long-lived assets and identifiable intangible assets, excluding goodwill and intangible assets with indefinite useful lives, may warrant revision or that the remaining balance of these assets may not be recoverable. Such circumstances could include, but are not limited to, a change in the product mix, a change in the way products are created, produced or delivered, or a significant change in the way products are branded and marketed. In performing the review for recoverability, management estimates the future undiscounted cash flows expected to result from the use of the assets and their eventual disposition. The amount of the impairment loss, if impairment exists, is calculated based on the excess of the carrying amounts of the assets over their estimated fair value computed using discounted cash flows. The Company does not amortize goodwill and intangible assets with indefinite useful lives, rather such assets are required to be tested for impairment at least annually or sooner whenever events or changes in circumstances indicate that the assets may be impaired. The Company performs its goodwill and intangible asset impairment tests in the fourth quarter of each year. |
Recently Issued Accounting Guidance | In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, Revenue from Contracts with Customers (“ASU 2014-09”) and Accounting Standards Codification ("ASC") Subtopic 340-40, Other Assets and Deferred Costs - Contracts with Customers ("ASC 340-40"), (collectively, “Topic 606”). On January 1, 2018, the Company adopted Topic 606 by applying the modified retrospective method of adoption for all contracts that were not substantially completed as of the adoption date. ASU 2014-09 requires entities to recognize revenue through the application of a five-step model, which includes identification of the contract, identification of the performance obligations, determination of the transaction price, allocation of the transaction price to the performance obligations and recognition of revenue as the entity satisfies the performance obligations. Refer to Note 2 for further discussion. In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842) in order to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet for those leases classified as operating leases under previous GAAP. ASU 2016-02 requires a lessee to recognize a liability to make lease payments (the lease liability) and a right-of-use asset representing its right to use the underlying asset for the lease term on the balance sheet. ASU 2016-02 is effective for the fiscal year beginning after December 15, 2018 (including interim periods within that year) using a modified retrospective approach and early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of this ASU on its consolidated financial statements. In June 2016, the FASB issued ASU 2016-13, Financial Instruments - Credit Losses, which amends ASC 326. The new guidance differs from existing GAAP wherein previous standards generally delayed recognition of credit losses until the loss was probable. ASU 2016-13 eliminates the probable initial recognition threshold and, instead, reflects an entity’s current estimate of all expected credit losses. The use of forecasted information is intended to incorporate more timely information in the estimate of expected credit loss. ASU 2016-13 is effective for the fiscal year beginning after December 15, 2019, and interim periods within that fiscal year, and early adoption is permitted. The Company is currently in the process of evaluating the impact of adoption of ASU 2016-13 on its consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments. ASU 2016-15 eliminates the diversity in practice related to the classification of certain cash receipts and payments. ASU 2016-15 designates the appropriate cash flow classification, including requirements to allocate certain components of these cash receipts and payments among operating, investing and financing activities. The Company adopted ASU 2016-15 effective January 1, 2018, and the adoption of this ASU did not have a material impact on its consolidated financial statements. In October 2016, the FASB issued ASU 2016-16, Income Taxes (Topic 740) - Intra-Entity Transfers of Assets Other Than Inventory. ASU 2016-16 requires an entity to recognize income tax consequences of an intra-entity transfer of an asset other than inventory when the transfer occurs. This removes the exception to postpone recognition until the asset has been sold to an outside party. The Company adopted ASU 2016-16 effective January 1, 2018, and the adoption of this ASU did not have a material impact on its consolidated financial statements. In November 2016, the FASB issued ASU 2016-18, Statement of Cash Flows - Restricted Cash (Topic 230), which amends the existing guidance relating to the treatment of restricted cash and restricted cash equivalents on the statement of cash flows. The Company adopted ASU 2016-18 effective January 1, 2018, and retrospectively updated the presentation of its unaudited consolidated statements of cash flows to include amounts of restricted cash with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts. The adoption of ASU 2016-18 did not have a material impact on the Company's consolidated financial statements. In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805) to provide a more robust framework to use in determining when a set of acquired assets and activities is a business. The Company adopted ASU 2017-01 effective January 1, 2018. The amendments in ASU 2017-01 provide a screen to determine when a set of acquired integrated assets and activities is not a business, and if the screen is not met it may result in fewer transactions that qualify as a business combination under ASC Topic 805. For the three months ended March 31, 2018, the adoption of ASU 2017-01 did not have a material impact on the Company's consolidated financial statements. In May 2017, the FASB issued ASU 2017-09, Compensation - Stock Compensation (Topic 718), which provides guidance on determining which changes to the terms and conditions of share-based payment awards require an entity to apply modification accounting under Topic 708. The Company adopted ASU2017-09 effective January 1, 2018, and the adoption of this ASU did not have a material impact on its consolidated financial statements. |
Reclassification of Prior Year Presentation | Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on the reported results of operations. |
Organization and Summary of S22
Organization and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Weighted Average Number of Shares Outstanding and Income Per Share | The calculation of the weighted average number of shares outstanding and earnings per share are as follows (in thousands except per share data): 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 |
Summary of Changes in Estimated Product Warranty Liabilities | Changes in the Company’s estimated product warranty liabilities were as follows (in thousands): 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 |
Revenues (Tables)
Revenues (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of New Accounting Pronouncements and Changes in Accounting Principles | See the impacts to reported results below for the impact of adoption of the Topic 606 on our consolidated financial statements (in thousands): 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 |
Summary of Revenue by Product and Service Offering and Geography | The following table presents the Company's revenues by primary product and service offering (in thousands): 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 (1) Amounts for the three months ended March 31, 2017 have not been adjusted under the modified retrospective method of adoption of Topic 606, and are presented consistent with the prior period amounts reported under ASC 605. The following table presents the Company's revenues disaggregated by geography (in thousands): Three Months Ended March 31, 2018 2017 (1) United States $ 77,950 77 % $ 64,752 82 % Other countries 23,265 23 14,490 18 Total $ 101,215 100 % $ 79,242 100 % (1) Amounts for the three months ended March 31, 2017 have not been adjusted under the modified retrospective method of adoption of Topic 606, and are presented consistent with the prior period amounts reported under ASC 605. |
Contract with Customer, Assets and Liabilities | Contract liabilities (deferred revenue) consisted of the following (in thousands): 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 (1) Amounts as of December 31, 2017 have not been adjusted under the modified retrospective method of adoption of Topic 606, and are presented consistent with the prior period amounts reported under ASC 605. The following table presents the Company's contract assets, contract liabilities and certain information related to these balances as of and for the three months ended March 31, 2018 (in thousands): 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 |
Capitalized Contract Cost | As of March 31, 2018, the Company's assets for costs to obtain contracts were as follows (in thousands): March 31, 2018 Current deferred commissions (1) $ 5,526 Deferred commissions, net of current portion (2) 12,881 $ 18,407 (1) Current deferred commissions are included within "Prepaid expenses and other current assets" on the accompanying condensed consolidated balance sheet. (2) Deferred commissions, net of current portion, are included in "Other assets" on the accompanying condensed consolidated balance sheet. |
Cash, Cash Equivalents and In24
Cash, Cash Equivalents and Investments (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Cash and Cash Equivalents [Abstract] | |
Summary of Cash, Cash Equivalents and Held-to-Maturity Investments by Type | The following tables summarize the Company's cash, cash equivalents, and held-to-maturity investments at March 31, 2018 and December 31, 2017 (in thousands): 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 |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventories consisted of the following at March 31, 2018 and December 31, 2017 (in thousands): 2018 2017 Raw materials $ 19,003 $ 20,119 Finished goods 24,101 25,346 Total inventory $ 43,104 $ 45,465 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in the carrying amount of goodwill for the three months ended March 31, 2018 were as follows (in thousands): TASER 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 |
Intangible Assets Other than goodwill | Intangible assets (other than goodwill) consisted of the following (in thousands): 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 |
Estimated Amortization Expense of Intangible Assets | Estimated amortization for intangible assets with definite lives for the remaining nine months of 2018 , the next five years ended December 31, and thereafter, is as follows (in thousands): 2018 $ 4,047 2019 3,871 2020 2,404 2021 2,269 2022 838 2023 568 Thereafter 1,721 Total $ 15,718 |
Other Long-Term Assets (Tables)
Other Long-Term Assets (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Long-Term Assets | Other long-term assets consisted of the following at March 31, 2018 and December 31, 2017 (in thousands): 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 (1) Represents assets for the incremental costs of obtaining a contract with a customer, which consist primarily of sales commissions. These costs are ascribed to or allocated to the underlying performance obligations in the contract and amortized consistent with the recognition timing of the revenue for the underlying performance obligations. The amounts as of December 31, 2017 have not been adjusted under the modified retrospective method of adoption of Topic 606, and is presented consistent with the prior period amounts. In connection with the Company's adoption of Topic 606, it recorded an adjustment of $7.3 million as of January 1, 2018, and of that amount, $5.4 million was recorded within long-term other assets. The adjusted balance of long-term deferred commissions as of January 1, 2018 was $12.2 million . (2) As of March 31, 2018 and December 31, 2017, restricted cash primarily consisted of $1.8 million and $2.7 million , respectively, of sales proceeds related to long-term contracts with customers. As of March 31, 2018, the proceeds are held in escrow until certain billing milestones are achieved, and then specified amounts are transferred to the Company's operating accounts. |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Accrued liabilities consisted of the following at March 31, 2018 and December 31, 2017 (in thousands): 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 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Equity [Abstract] | |
Summary of Restricted Stock Unit Activity | The following table summarizes RSU activity for the three months ended March 31, 2018 (number of units and aggregate intrinsic value in thousands): Number of Units Weighted Average Grant-Date Fair Value Aggregate 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 |
Summary of the Stock Option Activity | The following table summarizes stock option activity for the three months ended March 31, 2018 (number of units and aggregate intrinsic value in thousands): Number of Options Weighted Average Exercise Price Weighted Average Remaining Contractual Life (years) Aggregate 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 |
Stock-Based Compensation | The following table summarizes the composition of stock-based compensation for the three months ended March 31, 2018 and 2017 (in thousands): 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 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Commitments and Contingencies Disclosure [Abstract] | |
Loss Contingencies | The judgment entered resulting from the Court granting the Company’s motion for dismissal of Digital Ally litigation for antitrust claims as well as the judgment and permanent injunction in the Company’s favor against Phazzer are on appeal as noted in the following table: 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. With respect to each of the pending lawsuits, the following table lists the name of plaintiff, the date the Company was served with process, the jurisdiction in which the case is pending, the type of claim and the status of the matter. 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 No product liability cases were dismissed or judgments entered during the first quarter of 2018 and through the date of these financial statements and there are no product litigation matters in which the Company is involved that are currently on appeal. The claims, and in some instances the defense, of each of these lawsuits have been submitted to the Company’s insurance carriers that maintained insurance coverage during the applicable periods. The Company continues to maintain product liability insurance coverage with varying limits and deductibles. The following table provides information regarding the Company’s product liability insurance. Remaining insurance coverage is based on information received from the Company’s insurance provider (in millions). 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 |
Segment Data (Tables)
Segment Data (Tables) | 3 Months Ended |
Mar. 31, 2018 | |
Segment Reporting [Abstract] | |
Summary of Operational Information Relative to the Company's Reportable Segments | Information relative to the Company’s reportable segments was as follows (in thousands): 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 (1) Amounts for the three months ended March 31, 2017 have not been adjusted under the modified retrospective method of adoption of Topic 606, and are presented consistent with the prior period amounts reported under ASC 605. (2) Software and Sensors “products” revenue consists of sales of sensors, including on-officer body cameras, Axon Fleet cameras, other hardware sensors, warranties on sensors, and other products, and is sometimes referred to as Sensors and Other revenue. (3) Software and Sensors “services” revenue comprises sales related to the Axon Cloud, which includes Evidence.com, cloud-based evidence management software revenue, other recurring cloud-hosted software revenue and related professional services and is sometimes referred to as Axon Cloud revenue. |
Organization and Summary of S32
Organization and Summary of Significant Accounting Policies - Additional Information (Detail) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($)subsidiarysegment | Dec. 31, 2017USD ($) | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
Number of wholly owned subsidiaries | subsidiary | 2 | |
Number of reportable segments | segment | 2 | |
Warranty period | 1 year | |
Corporate owned life insurance policies fair value | $ | $ 3,804 | $ 3,846 |
Organization and Summary of S33
Organization and Summary of Significant Accounting Policies - Weighted Average Number of Shares Outstanding and Income Per Share (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Numerator for basic and diluted earnings per share: | ||
Net income | $ 12,926 | $ 4,580 |
Denominator: | ||
Weighted average shares outstanding—basic (in shares) | 53,119 | 52,418 |
Dilutive effect of stock-based awards (in shares) | 1,413 | 1,259 |
Diluted weighted average shares outstanding (in shares) | 54,532 | 53,677 |
Anti-dilutive stock-based awards excluded (in shares) | 404 | 676 |
Net income per common share: | ||
Basic (in dollars per share) | $ 0.24 | $ 0.09 |
Diluted (in dollars per share) | $ 0.24 | $ 0.09 |
Organization and Summary of S34
Organization and Summary of Significant Accounting Policies - Summary of Changes in Estimated Product Warranty Liabilities (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Movement in Standard and Extended Product Warranty Accrual, Increase (Decrease) [Roll Forward] | ||
Balance, beginning of period | $ 644 | $ 780 |
Utilization of accrual | (93) | (66) |
Warranty expense | 8 | (367) |
Balance, end of period | $ 559 | $ 347 |
Revenues - Additional Informati
Revenues - Additional Information (Details) $ in Thousands | 3 Months Ended | |||
Mar. 31, 2018USD ($)sourceday | Mar. 31, 2017USD ($) | Jan. 01, 2018USD ($) | Dec. 31, 2017USD ($) | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Retained earnings (accumulated deficit) | $ 155,105 | $ 142,179 | $ 123,185 | |
Revenue from contract with customer, excluding assessed tax | 101,215 | $ 79,242 | ||
Sales, general and administrative | $ 35,759 | 30,857 | ||
Number of revenue sources | source | 2 | |||
Payment due date from date of invoice | day | 30 | |||
Revenue, remaining performance obligation | $ 650,000 | |||
Amortization of deferred sales commissions | 1,100 | |||
Impact of Adoption of Topic 606 on Opening Balance Sheet | Accounting Standards Update 2014-09 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Retained earnings (accumulated deficit) | $ 18,994 | $ 19,000 | ||
Revenue from contract with customer, excluding assessed tax | 1,700 | |||
Sales, general and administrative | (500) | |||
Taser 60 Plan | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customer, excluding assessed tax | 14,000 | 8,100 | ||
Interest income (expense), net | $ 300 | $ 100 | ||
Minimum | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue, remaining performance obligation to be recognized in the next twelve months, percent | 15.00% | |||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 5 years | |||
Maximum | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue, remaining performance obligation to be recognized in the next twelve months, percent | 20.00% | |||
Revenue, remaining performance obligation, expected timing of satisfaction, period | 7 years |
Revenues - Impact Of Adopting N
Revenues - Impact Of Adopting New Revenue Recognition Standard (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Accounts and notes receivable, net of allowance of $880 and $754 as of March 31, 2018 and December 31, 2017, respectively | $ 87,849 | $ 84,979 | $ 56,064 |
Contract assets, net | 9,278 | 5,512 | 0 |
Prepaid expenses and other current assets | 21,934 | 23,699 | 21,696 |
Total current assets | 258,970 | 114,190 | 205,192 |
Deferred income tax assets, net | 14,200 | 10,597 | 15,755 |
Long-term notes receivable, net of current portion | 34,624 | 23,900 | 36,877 |
Other assets | 21,573 | 20,689 | 15,366 |
Total assets | 392,985 | 169,376 | 338,112 |
Accrued liabilities | 34,869 | 26,014 | 23,502 |
Current portion of deferred revenue | 76,141 | 71,264 | 70,401 |
Total current liabilities | 128,710 | 97,278 | 107,950 |
Deferred revenue, net of current portion | 58,003 | 56,130 | 54,881 |
Total liabilities | 193,656 | 153,408 | 170,668 |
Retained earnings | 155,105 | 142,179 | 123,185 |
Total stockholders’ equity | 199,329 | 142,179 | 167,444 |
Total liabilities and stockholders’ equity | $ 392,985 | 295,587 | 338,112 |
December 31, 2017 (As reported) | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Accounts and notes receivable, net of allowance of $880 and $754 as of March 31, 2018 and December 31, 2017, respectively | 56,064 | ||
Contract assets, net | 0 | ||
Prepaid expenses and other current assets | 21,696 | ||
Total current assets | 77,760 | ||
Deferred income tax assets, net | 15,755 | ||
Long-term notes receivable, net of current portion | 36,877 | ||
Other assets | 15,366 | ||
Total assets | 145,758 | ||
Accrued liabilities | 23,502 | ||
Current portion of deferred revenue | 70,401 | ||
Total current liabilities | 93,903 | ||
Deferred revenue, net of current portion | 54,881 | ||
Total liabilities | 148,784 | ||
Retained earnings | 123,185 | ||
Total stockholders’ equity | 123,185 | ||
Total liabilities and stockholders’ equity | 271,969 | ||
Impact of Adoption of Topic 606 on Opening Balance Sheet | Accounting Standards Update 2014-09 | |||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | |||
Accounts and notes receivable, net of allowance of $880 and $754 as of March 31, 2018 and December 31, 2017, respectively | 28,915 | ||
Contract assets, net | 5,512 | ||
Prepaid expenses and other current assets | 2,003 | ||
Total current assets | 36,430 | ||
Deferred income tax assets, net | (5,158) | ||
Long-term notes receivable, net of current portion | (12,977) | ||
Other assets | 5,323 | ||
Total assets | 23,618 | ||
Accrued liabilities | 2,512 | ||
Current portion of deferred revenue | 863 | ||
Total current liabilities | 3,375 | ||
Deferred revenue, net of current portion | 1,249 | ||
Total liabilities | 4,624 | ||
Retained earnings | 18,994 | $ 19,000 | |
Total stockholders’ equity | 18,994 | ||
Total liabilities and stockholders’ equity | $ 23,618 |
Revenues - Revenues By Products
Revenues - Revenues By Products And Service Offerings (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | $ 101,215 | $ 79,242 |
TASER X26P | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 16,474 | 15,668 |
TASER X2 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 23,932 | 18,986 |
TASER Pulse and Bolt | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 1,346 | 1,022 |
Single cartridges | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 16,114 | 16,664 |
Axon Body | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 5,558 | 3,446 |
Axon Flex | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 1,669 | 1,475 |
Axon Dock | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 3,035 | 1,987 |
Axon Fleet | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 2,116 | 0 |
Evidence.com | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 20,241 | 11,742 |
TASER Cam | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 1,360 | 719 |
Extended warranties | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 6,196 | 4,261 |
Other | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 3,174 | 3,272 |
TASER Weapons | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 63,524 | 57,671 |
TASER Weapons | TASER X26P | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 16,474 | 15,668 |
TASER Weapons | TASER X2 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 23,932 | 18,986 |
TASER Weapons | TASER Pulse and Bolt | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 1,346 | 1,022 |
TASER Weapons | Single cartridges | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 16,114 | 16,664 |
TASER Weapons | Axon Body | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 0 | 0 |
TASER Weapons | Axon Flex | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 0 | 0 |
TASER Weapons | Axon Dock | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 0 | 0 |
TASER Weapons | Axon Fleet | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 0 | 0 |
TASER Weapons | Evidence.com | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 0 | 0 |
TASER Weapons | TASER Cam | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 0 | 0 |
TASER Weapons | Extended warranties | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 3,706 | 2,843 |
TASER Weapons | Other | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 1,952 | 2,488 |
Software and Sensors | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 37,691 | 21,571 |
Software and Sensors | TASER X26P | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 0 | 0 |
Software and Sensors | TASER X2 | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 0 | 0 |
Software and Sensors | TASER Pulse and Bolt | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 0 | 0 |
Software and Sensors | Single cartridges | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 0 | 0 |
Software and Sensors | Axon Body | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 5,558 | 3,446 |
Software and Sensors | Axon Flex | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 1,669 | 1,475 |
Software and Sensors | Axon Dock | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 3,035 | 1,987 |
Software and Sensors | Axon Fleet | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 2,116 | 0 |
Software and Sensors | Evidence.com | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 20,241 | 11,742 |
Software and Sensors | TASER Cam | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 1,360 | 719 |
Software and Sensors | Extended warranties | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | 2,490 | 1,418 |
Software and Sensors | Other | ||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||
Net sales | $ 1,222 | $ 784 |
Revenues - Revenues By Geograp
Revenues - Revenues By Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customers | $ 101,215 | $ 79,242 |
United States | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customers | 77,950 | 64,752 |
Other countries | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customers | $ 23,265 | $ 14,490 |
Geographic Concentration Risk | Revenue from Contract with Customer | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk, percentage | 100.00% | 100.00% |
Geographic Concentration Risk | Revenue from Contract with Customer | United States | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk, percentage | 77.00% | 82.00% |
Geographic Concentration Risk | Revenue from Contract with Customer | Other countries | ||
Disaggregation of Revenue [Line Items] | ||
Concentration risk, percentage | 23.00% | 18.00% |
Revenues - Contract Assets, Con
Revenues - Contract Assets, Contract Liabilities (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | |
Revenue from Contract with Customer [Abstract] | |||
Contract assets | $ 9,278 | $ 5,512 | $ 0 |
Contract liabilities (deferred revenue) | 134,144 | $ 125,282 | |
Revenue recognized in the period from: | |||
Amounts included in contract liabilities at the beginning of the period | $ 24,269 |
Revenues - Schedule Of Contract
Revenues - Schedule Of Contract Liabilities (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Disaggregation of Revenue [Line Items] | ||
Current | $ 76,141 | $ 70,401 |
Long-Term | 58,003 | 54,881 |
Total | 134,144 | 125,282 |
TASER Weapons | ||
Disaggregation of Revenue [Line Items] | ||
Current | 15,884 | 16,665 |
Long-Term | 29,498 | 30,020 |
Total | 45,382 | 46,685 |
Software and Sensors | ||
Disaggregation of Revenue [Line Items] | ||
Current | 60,257 | 53,736 |
Long-Term | 28,505 | 24,861 |
Total | 88,762 | 78,597 |
Warranty: | ||
Disaggregation of Revenue [Line Items] | ||
Current | 18,542 | 18,794 |
Long-Term | 22,718 | 22,814 |
Total | 41,260 | 41,608 |
Warranty: | TASER Weapons | ||
Disaggregation of Revenue [Line Items] | ||
Current | 11,601 | 12,501 |
Long-Term | 17,058 | 18,619 |
Total | 28,659 | 31,120 |
Warranty: | Software and Sensors | ||
Disaggregation of Revenue [Line Items] | ||
Current | 6,941 | 6,293 |
Long-Term | 5,660 | 4,195 |
Total | 12,601 | 10,488 |
Hardware: | ||
Disaggregation of Revenue [Line Items] | ||
Current | 18,435 | 21,120 |
Long-Term | 27,637 | 26,182 |
Total | 46,072 | 47,302 |
Hardware: | TASER Weapons | ||
Disaggregation of Revenue [Line Items] | ||
Current | 4,283 | 4,164 |
Long-Term | 12,440 | 11,401 |
Total | 16,723 | 15,565 |
Hardware: | Software and Sensors | ||
Disaggregation of Revenue [Line Items] | ||
Current | 14,152 | 16,956 |
Long-Term | 15,197 | 14,781 |
Total | 29,349 | 31,737 |
Software and Sensors Services | Software and Sensors | ||
Disaggregation of Revenue [Line Items] | ||
Current | 39,164 | 30,487 |
Long-Term | 7,648 | 5,885 |
Total | $ 46,812 | $ 36,372 |
Revenues - Costs To Obtain Cont
Revenues - Costs To Obtain Contracts (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Revenue from Contract with Customer [Abstract] | |||
Current deferred commissions | $ 5,526 | ||
Deferred commissions, net of current portion | 12,881 | $ 12,200 | $ 6,803 |
Deferred sales commission | $ 18,407 |
Cash, Cash Equivalents, and Inv
Cash, Cash Equivalents, and Investments - Summary of Cash, Cash Equivalents and Held-to-Maturity Investments by Type (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Amortized Cost | $ 96,805 | $ 81,967 |
Gross Unrealized Losses | (3) | (6) |
Fair Value | 96,802 | 81,961 |
Cash and Cash Equivalents | 92,330 | 75,105 |
Short-term investments | 4,475 | 6,862 |
Fair Value, Inputs, Level 1 | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Amortized Cost | 27,256 | 27,516 |
Gross Unrealized Losses | (3) | (6) |
Fair Value | 27,253 | 27,510 |
Cash and Cash Equivalents | 23,582 | 20,884 |
Short-term investments | 3,674 | 6,632 |
Fair Value, Inputs, Level 2 | State and municipal obligations | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Amortized Cost | 1,342 | 992 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 1,342 | 992 |
Cash and Cash Equivalents | 541 | 762 |
Short-term investments | 801 | 230 |
Cash | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Amortized Cost | 68,207 | 53,459 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 68,207 | 53,459 |
Cash and Cash Equivalents | 68,207 | 53,459 |
Short-term investments | 0 | 0 |
Money market funds | Fair Value, Inputs, Level 1 | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Amortized Cost | 22,282 | 20,884 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 22,282 | 20,884 |
Cash and Cash Equivalents | 22,282 | 20,884 |
Short-term investments | 0 | 0 |
Corporate bonds | Fair Value, Inputs, Level 1 | ||
Restricted Cash and Cash Equivalents Items [Line Items] | ||
Amortized Cost | 4,974 | 6,632 |
Gross Unrealized Losses | (3) | (6) |
Fair Value | 4,971 | 6,626 |
Cash and Cash Equivalents | 1,300 | 0 |
Short-term investments | $ 3,674 | $ 6,632 |
Inventory (Detail)
Inventory (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Dec. 31, 2017 |
Inventory Disclosure [Abstract] | ||
Inventory, finished goods, trial and evaluation, gross | $ 1,600 | $ 1,400 |
Raw materials | 19,003 | 20,119 |
Finished goods | 24,101 | 25,346 |
Total inventory | $ 43,104 | $ 45,465 |
Goodwill and Intangible Asset44
Goodwill and Intangible Assets - Schedule of Goodwill (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Goodwill [Roll Forward] | |
Balance, beginning of period | $ 14,927 |
Foreign currency translation adjustment | 20 |
Balance, end of period | 14,947 |
TASER Weapons | |
Goodwill [Roll Forward] | |
Balance, beginning of period | 1,453 |
Foreign currency translation adjustment | 10 |
Balance, end of period | 1,463 |
Software and Sensors | |
Goodwill [Roll Forward] | |
Balance, beginning of period | 13,474 |
Foreign currency translation adjustment | 10 |
Balance, end of period | $ 13,484 |
Goodwill and Intangible Asset45
Goodwill and Intangible Assets - Intangible Assets Other than Goodwill (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Dec. 31, 2017 | |
Indefinite-lived Intangible Assets [Line Items] | ||
Not amortized intangible assets, Carrying Amount | $ 1,778 | $ 1,772 |
Finite-Lived Intangible Assets [Line Items] | ||
Amortized intangible assets, Gross Carrying Amount | 24,263 | 24,253 |
Accumulated Amortization | (8,545) | (7,202) |
Total | 15,718 | 17,051 |
Intangible assets, Gross Carrying Amount | 26,041 | 26,025 |
Intangible assets, Net Carrying Amount | 17,496 | 18,823 |
TASER trademark | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Not amortized intangible assets, Carrying Amount | 900 | 900 |
Patents and trademarks pending | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Not amortized intangible assets, Carrying Amount | 878 | 872 |
Domain names | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortized intangible assets, Gross Carrying Amount | 3,161 | 3,161 |
Accumulated Amortization | (504) | (428) |
Total | $ 2,657 | 2,733 |
Domain names | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 5 years | |
Domain names | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 10 years | |
Issued patents | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortized intangible assets, Gross Carrying Amount | $ 2,724 | 2,697 |
Accumulated Amortization | (959) | (913) |
Total | $ 1,765 | 1,784 |
Issued patents | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 4 years | |
Issued patents | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 15 years | |
Issued trademarks | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortized intangible assets, Gross Carrying Amount | $ 857 | 860 |
Accumulated Amortization | (416) | (397) |
Total | $ 441 | 463 |
Issued trademarks | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 3 years | |
Issued trademarks | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 11 years | |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortized intangible assets, Gross Carrying Amount | $ 1,396 | 1,377 |
Accumulated Amortization | (518) | (451) |
Total | $ 878 | 926 |
Customer relationships | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 4 years | |
Customer relationships | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 8 years | |
Non-compete agreements | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortized intangible assets, Gross Carrying Amount | $ 558 | 556 |
Accumulated Amortization | (376) | (346) |
Total | $ 182 | 210 |
Non-compete agreements | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 3 years | |
Non-compete agreements | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 4 years | |
Developed technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Amortized intangible assets, Gross Carrying Amount | $ 13,469 | 13,469 |
Accumulated Amortization | (4,723) | (3,956) |
Total | $ 8,746 | 9,513 |
Developed technology | Minimum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 3 years | |
Developed technology | Maximum | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 7 years | |
Re-acquired distribution rights | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible asset, useful life | 2 years | |
Amortized intangible assets, Gross Carrying Amount | $ 2,098 | 2,133 |
Accumulated Amortization | (1,049) | (711) |
Total | $ 1,049 | $ 1,422 |
Goodwill and Intangible asset46
Goodwill and Intangible assets - Estimated Amortization Expense of Intangible Assets (Detail) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2018 | Mar. 31, 2017 | Dec. 31, 2017 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Amortization expense | $ 1,400 | $ 900 | |
2,018 | 4,047 | ||
2,019 | 3,871 | ||
2,020 | 2,404 | ||
2,021 | 2,269 | ||
2,022 | 838 | ||
2,023 | 568 | ||
Thereafter | 1,721 | ||
Total | $ 15,718 | $ 17,051 |
Other Long-Term Assets (Details
Other Long-Term Assets (Details) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 |
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Cash surrender value of corporate-owned life insurance policies | $ 3,804 | $ 3,846 | |
Deferred commissions | 12,881 | $ 12,200 | 6,803 |
Restricted cash | 2,468 | 3,333 | |
Prepaid expenses, deposits and other | 2,420 | 1,384 | |
Total other long-term assets | 21,573 | 20,689 | 15,366 |
Deferred sales commission | 18,407 | ||
Cash Receipts Held In Escrow | |||
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Restricted cash | $ 1,800 | 2,700 | |
Restricted Cash For Performance Guarantee | |||
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Restricted cash | $ 600 | ||
Accounting Standards Update 2014-09 | Impact of Adoption of Topic 606 on Opening Balance Sheet | |||
Restricted Cash and Cash Equivalents Items [Line Items] | |||
Deferred commissions | 5,400 | ||
Total other long-term assets | 5,323 | ||
Deferred sales commission | $ 7,300 |
Accrued Liabilities (Detail)
Accrued Liabilities (Detail) - USD ($) $ in Thousands | Mar. 31, 2018 | Jan. 01, 2018 | Dec. 31, 2017 | Mar. 31, 2017 | Dec. 31, 2016 |
Payables and Accruals [Abstract] | |||||
Accrued salaries, benefits and bonus | $ 10,217 | $ 8,957 | |||
Accrued professional, consulting and lobbying fees | 4,046 | 3,870 | |||
Accrued warranty expense | 559 | 644 | $ 347 | $ 780 | |
Accrued income and other taxes | 8,945 | 2,558 | |||
Other accrued liabilities | 11,102 | 7,473 | |||
Accrued liabilities | $ 34,869 | $ 26,014 | $ 23,502 |
Income Taxes - Additional Infor
Income Taxes - Additional Information (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
Tax Credit Carryforward [Line Items] | |
Deferred tax assets, net | $ 14.2 |
Unrecognized tax benefits recognized during period | 3.6 |
Unrecognized tax benefits | 3.7 |
Increase in unrecognized tax benefits in next twelve months | 0.2 |
Research and development tax credit studies | $ 2 |
Overall effective tax rate, after discrete period adjustments | 12.90% |
Effective tax rate, before discrete period adjustment | 23.10% |
Discrete tax benefit, stock-based compensation | $ 1.6 |
State | |
Tax Credit Carryforward [Line Items] | |
Unrecognized tax benefits recognized during period | 0.1 |
Expiring in 2019 | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward, amount | 1.2 |
Research and Development Credits | |
Tax Credit Carryforward [Line Items] | |
Tax credit carryforward, amount | $ 17 |
Stockholders' Equity - Addition
Stockholders' Equity - Additional Information (Detail) | Feb. 26, 2018tranche$ / shares | May 31, 2016shares | Mar. 31, 2018USD ($)$ / sharesshares | Mar. 31, 2017USD ($) | Dec. 31, 2017shares | Feb. 29, 2016USD ($) |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Option available for future grants (in shares) | 800,000 | |||||
Tax payments, for net share settlement of share based award | $ | $ 3,777,000 | $ 2,165,000 | ||||
Chief Executive Officer | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Share-based compensation arrangement by share-based payment award, number of vesting tranches | tranche | 12 | |||||
Share-based compensation arrangement by share-based payment award, options, available for grant as a percentage of common shares outstanding | 1.00% | |||||
Weighted average exercise price, Granted (in dollars per share) | $ / shares | $ 28.58 | |||||
Stock Options | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Aggregate intrinsic value price per share (in dollars per share) | $ / shares | $ 39.31 | |||||
Total intrinsic value of options exercised | $ | $ 2,000,000 | $ 700,000 | ||||
Number of options outstanding (in shares) | 726,000 | 804,000 | ||||
Weighted average exercise price, Granted (in dollars per share) | $ / shares | $ 0 | |||||
Restricted Stock | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Unrecognized stock-based compensation expense related to non-vested stock options | $ | $ 39,300,000 | |||||
Weighted average period over which costs are recognized | 2 years 8 months 5 days | |||||
Number of units, granted (in shares) | 122,000 | |||||
Approximate units outstanding (in shares) | 2,027,000 | 2,348,000 | ||||
Performance Based Restricted Stock Unit | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of units, granted (in shares) | 0 | |||||
Approximate units outstanding (in shares) | 400,000 | |||||
Maximum additional shares to be issued | 300,000 | |||||
Restricted Stock Units (RSUs) | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Shares withheld, for net share settlement of share based award | 100,000 | |||||
Tax payments, for net share settlement of share based award | $ | $ 3,600,000 | |||||
Performance Shares | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Number of options outstanding (in shares) | 200,000 | |||||
Unvested performance options (in shares) | 4,350 | |||||
Unvested shares, expected to vest | 0 | |||||
2016 Stock Incentive Plan | ||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||
Additional shares authorized | 2,000,000 | |||||
Outstanding common stock repurchase program authorized amount (up to) | $ | $ 50,000,000 | |||||
Shares repurchased during period | 0 | |||||
Remaining authorized repurchase amount | $ | $ 16,300,000 |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of Restricted Stock Unit Activity (Detail) - Restricted Stock $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Non-Option Equity Instruments, Outstanding [Roll Forward] | |
Number of Units outstanding, beginning of year (in shares) | shares | 2,348 |
Number of Units, Granted (in shares) | shares | 122 |
Number of Units, Released (in shares) | shares | (329) |
Number of Units, Forfeited (in shares) | shares | (114) |
Number of Units outstanding, end of period (in shares) | shares | 2,027 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Nonvested, Weighted Average Grant Date Fair Value [Abstract] | |
Weighted Average Grant Date Fair Value, Units outstanding, beginning of year (in dollars per share) | $ / shares | $ 23.47 |
Weighted Average Grant Date Fair Value, Granted (in dollars per share) | $ / shares | 30.14 |
Weighted Average Grant Date Fair Value, Released (in dollars per share) | $ / shares | 24.14 |
Weighted Average Grant Date Fair Value, Forfeited (in dollars per share) | $ / shares | 21.79 |
Weighted Average Grant Date Fair Value, Units outstanding, end of period (in dollars per share) | $ / shares | $ 23.93 |
Aggregate intrinsic value at end of period | $ | $ 79,681 |
Stockholders' Equity - Summar52
Stockholders' Equity - Summary of the Company's Stock Options Activity (Detail) - Stock Options $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended |
Mar. 31, 2018USD ($)$ / sharesshares | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Number of options, Options outstanding, beginning of year (in shares) | shares | 804 |
Number of options, Granted (in shares) | shares | 0 |
Number of options, Exercised (in shares) | shares | (78) |
Number of options, Expired / terminated (in shares) | shares | 0 |
Number of options, Options outstanding, end of year (in shares) | shares | 726 |
Number of options, Options exercisable, end of period (in shares) | shares | 722 |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract] | |
Weighted average exercise price, Options outstanding, beginning of year (in dollars per share) | $ / shares | $ 4.99 |
Weighted average exercise price, Granted (in dollars per share) | $ / shares | 0 |
Weighted average exercise price, Exercised (in dollars per share) | $ / shares | 4.54 |
Weighted average exercise price, Expired / terminated (in dollars per share) | $ / shares | 0 |
Weighted average exercise price, Options outstanding, end of period (in dollars per share) | $ / shares | 5.04 |
Weighted average exercise price, Options exercisable, end of period (in dollars per share) | $ / shares | $ 5.04 |
Weighted average remaining contractual life, Options outstanding, end of period | 11 months 27 days |
Weighted average remaining contractual life, Options exercisable, end of period | 1 year |
Aggregate intrinsic value, Options outstanding, end of period | $ | $ 24,879 |
Aggregate intrinsic value, Options exercisable, end of period | $ | $ 24,729 |
Stockholders' Equity - Reported
Stockholders' Equity - Reported Share-Based Compensation (Detail) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 4,093 | $ 3,447 |
Cost of products sold and services delivered | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 141 | 79 |
Sales, general and administrative expenses | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | 2,304 | 2,028 |
Research and development expenses | ||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||
Stock-based compensation expense | $ 1,648 | $ 1,340 |
Line of Credit - Additional Inf
Line of Credit - Additional Information (Detail) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2018USD ($) | Dec. 31, 2017USD ($) | |
Debt Instrument [Line Items] | ||
Maximum ratio of total liabilities to tangible net worth | 2 | |
Trailing period used for calculating ratios | 12 months | |
Line of Credit | ||
Debt Instrument [Line Items] | ||
Total availability under line of credit agreement | $ 10,000,000 | |
Line of credit borrowings | 0 | $ 0 |
Letters of credit outstanding amount | 2,700,000 | |
Available borrowing under letter of credit | $ 7,300,000 | |
Company's leverage ratio | 0.002 | |
Line of Credit | London Interbank Offered Rate (LIBOR) | ||
Debt Instrument [Line Items] | ||
Basis spread plus (minus) on variable interest rate | 1.25% | |
Line of Credit | Prime Rate | ||
Debt Instrument [Line Items] | ||
Basis spread plus (minus) on variable interest rate | (0.50%) |
Commitments and Contingencies -
Commitments and Contingencies - Additional Information (Detail) $ in Millions | Apr. 04, 2018USD ($) | Mar. 31, 2018USD ($)lawsuit | Apr. 30, 2016USD ($) | Sep. 30, 2011lawsuit |
Loss Contingencies [Line Items] | ||||
Number of lawsuits against Company | lawsuit | 7 | 55 | ||
Surety Bond | ||||
Loss Contingencies [Line Items] | ||||
Bonds outstanding | $ 10.6 | |||
Expiring in 2018 | Surety Bond | ||||
Loss Contingencies [Line Items] | ||||
Bonds outstanding | 1 | |||
Expiring in 2020 | Surety Bond | ||||
Loss Contingencies [Line Items] | ||||
Bonds outstanding | 0.1 | |||
Expiring in 2021 | Surety Bond | ||||
Loss Contingencies [Line Items] | ||||
Bonds outstanding | 2.3 | |||
Expiring in 2022 | Surety Bond | ||||
Loss Contingencies [Line Items] | ||||
Bonds outstanding | 3.1 | |||
Expiring in 2023 | Surety Bond | ||||
Loss Contingencies [Line Items] | ||||
Bonds outstanding | 4 | |||
Line of Credit | ||||
Loss Contingencies [Line Items] | ||||
Letters of credit outstanding amount | $ 2.7 | |||
Paris, France | International Chamber of Commerce | ||||
Loss Contingencies [Line Items] | ||||
Loss contingency, estimate of possible loss | $ 0.6 | |||
Subsequent Event | Phazzer | ||||
Loss Contingencies [Line Items] | ||||
Litigation settlement, amount awarded from other party | $ 7.8 |
Commitments and Contingencies56
Commitments and Contingencies - Information Regarding the Company's Insurance Coverage (Detail) $ in Millions | 3 Months Ended |
Mar. 31, 2018USD ($) | |
2,009 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | $ 10 |
Deductible Amount | 1 |
Remaining Insurance Coverage | 10 |
2,010 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 10 |
Deductible Amount | 1 |
Remaining Insurance Coverage | 10 |
2,011 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 10 |
Deductible Amount | 1 |
Remaining Insurance Coverage | 10 |
Jan - Jun 2012 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 7 |
Deductible Amount | 1 |
Remaining Insurance Coverage | 7 |
Jul - Dec 2012 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 12 |
Deductible Amount | 1 |
Remaining Insurance Coverage | 12 |
2,013 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 12 |
Deductible Amount | 1 |
Remaining Insurance Coverage | 12 |
2,014 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 11 |
Deductible Amount | 4 |
Remaining Insurance Coverage | 11 |
2,015 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 10 |
Deductible Amount | 5 |
Remaining Insurance Coverage | 10 |
2,016 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 10 |
Deductible Amount | 5 |
Remaining Insurance Coverage | 10 |
2,017 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 10 |
Deductible Amount | 5 |
Remaining Insurance Coverage | 10 |
2,018 | |
Product Liability Contingency [Line Items] | |
Insurance Coverage | 10 |
Deductible Amount | 5 |
Remaining Insurance Coverage | $ 10 |
Related Party Transactions - Ad
Related Party Transactions - Additional Information (Detail) - USD ($) | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Software Licensing and Subscription | Officer | ||
Related Party Transaction [Line Items] | ||
Quarterly software licensing fee | $ 0 | $ 1,000,000 |
Employee Benefit Plans - Additi
Employee Benefit Plans - Additional Information (Detail) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2018 | Mar. 31, 2017 | |
Defined Benefit Plan Disclosure [Line Items] | ||
Employee deferrals deemed vested percentage upon contribution | 100.00% | |
Defined contribution plan, cost | $ 0.8 | $ 0.7 |
Maximum | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Deferral percentage of base salary (up to) | 80.00% | |
Deferral percentage of other compensation (up to) | 100.00% |
Segment Data - Additional Infor
Segment Data - Additional Information (Detail) $ in Thousands | 3 Months Ended | |
Mar. 31, 2018USD ($)segment | Mar. 31, 2017USD ($) | |
Segment Reporting [Abstract] | ||
Number of reportable segments of company | segment | 2 | |
Segment Reporting Information [Line Items] | ||
Net sales from products | $ 80,974 | $ 67,491 |
Net sales from services | 20,241 | 11,751 |
Net sales | 101,215 | 79,242 |
Cost of product sales | 32,434 | 27,072 |
Cost of service sales | 4,320 | 3,500 |
Cost of sales | 36,754 | 30,572 |
Gross margin | 64,461 | 48,670 |
Sales, general and administrative | 35,759 | 30,857 |
Research and development | 15,119 | 12,463 |
Income from operations | 13,583 | 5,350 |
TASER Weapons | ||
Segment Reporting Information [Line Items] | ||
Net sales | 63,524 | 57,671 |
Software and Sensors | ||
Segment Reporting Information [Line Items] | ||
Net sales | 37,691 | 21,571 |
Operating Segments | TASER Weapons | ||
Segment Reporting Information [Line Items] | ||
Net sales from products | 63,524 | 57,671 |
Net sales from services | 0 | 0 |
Net sales | 63,524 | 57,671 |
Cost of product sales | 20,543 | 18,026 |
Cost of service sales | 0 | 0 |
Cost of sales | 20,543 | 18,026 |
Gross margin | 42,981 | 39,645 |
Sales, general and administrative | 21,265 | 17,216 |
Research and development | 2,960 | 2,212 |
Income from operations | 18,756 | 20,217 |
Operating Segments | Software and Sensors | ||
Segment Reporting Information [Line Items] | ||
Net sales from products | 17,450 | 9,820 |
Net sales from services | 20,241 | 11,751 |
Net sales | 37,691 | 21,571 |
Cost of product sales | 11,891 | 9,046 |
Cost of service sales | 4,320 | 3,500 |
Cost of sales | 16,211 | 12,546 |
Gross margin | 21,480 | 9,025 |
Sales, general and administrative | 14,494 | 13,641 |
Research and development | 12,159 | 10,251 |
Income from operations | $ (5,173) | $ (14,867) |
Subsequent Event (Details)
Subsequent Event (Details) - VIEVU, LLC - Subsequent Event | May 03, 2018USD ($)$ / sharesshares |
Subsequent Event [Line Items] | |
Consideration transferred | $ 4,600,000 |
Shares transferred (in shares) | shares | 58,843 |
Common stock, aggregate value | $ 2,500,000 |
Business acquisition, share price, period leading up to three business days prior to closing date | 20 days |
Business acquisition, share price | $ / shares | $ 42.49 |
Contingent consideration | $ 6,000,000 |
Business combination, contingent consideration, liability, number of shares | shares | 141,226 |
Uncategorized Items - aaxn-2018
Label | Element | Value |
Restricted Cash | us-gaap_RestrictedCash | $ 3,317,000 |
Restricted Cash | us-gaap_RestrictedCash | $ 2,468,000 |