Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2021 | Nov. 10, 2021 | |
Document and Entity Information | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2021 | |
Document Transition Report | false | |
Entity File Number | 001-16391 | |
Entity Registrant Name | Axon Enterprise, Inc. | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 86-0741227 | |
Entity Address, Address Line One | 17800 North 85th Street | |
Entity Address, City or Town | Scottsdale | |
Entity Address, State or Province | AZ | |
Entity Address, Postal Zip Code | 85255 | |
City Area Code | 480 | |
Local Phone Number | 991-0797 | |
Title of 12(b) Security | Common Stock, $0.00001 Par Value | |
Trading Symbol | AXON | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 68,467,571 | |
Entity Central Index Key | 0001069183 | |
Current Fiscal Year End Date | --12-31 | |
Document Fiscal Year Focus | 2021 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Current assets: | ||
Cash and cash equivalents | $ 281,691 | $ 155,440 |
Marketable Securities | 83,340 | |
Short-term investments | 216,557 | 406,525 |
Accounts and notes receivable, net of allowance of $2,425 and $2,105 as of September 30, 2021 and December 31, 2020, respectively | 265,267 | 229,201 |
Contract assets, net | 130,976 | 63,945 |
Inventory | 93,279 | 89,958 |
Prepaid expenses and other current assets | 52,710 | 36,883 |
Total current assets | 1,123,820 | 981,952 |
Property and equipment, net | 128,808 | 105,494 |
Deferred tax assets, net | 104,169 | 45,770 |
Intangible assets, net | 7,426 | 9,448 |
Goodwill | 25,571 | 25,205 |
Long-term investments | 49,431 | 90,681 |
Long-term notes receivable, net of current portion | 12,621 | 22,457 |
Long-term contract assets, net | 43,394 | 20,099 |
Strategic investments | 58,520 | 11,711 |
Other assets | 91,627 | 68,206 |
Total assets | 1,645,387 | 1,381,023 |
Current liabilities: | ||
Accounts payable | 27,418 | 24,142 |
Accrued liabilities | 88,894 | 59,843 |
Current portion of deferred revenue | 250,651 | 163,959 |
Customer deposits | 6,118 | 2,956 |
Other current liabilities | 6,809 | 5,431 |
Total current liabilities | 379,890 | 256,331 |
Deferred revenue, net of current portion | 111,892 | 111,222 |
Liability for unrecognized tax benefits | 4,580 | 4,503 |
Long-term deferred compensation | 5,125 | 4,732 |
Deferred tax liability, net | 155 | 649 |
Other long-term liabilities | 29,842 | 27,331 |
Total liabilities | 531,484 | 404,768 |
Commitments and contingencies (Note 13) | ||
Stockholders' equity: | ||
Preferred stock, $0.00001 par value; 25,000,000 shares authorized; no shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively | ||
Common stock, $0.00001 par value; 200,000,000 shares authorized; 67,577,868 and 63,766,555 shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively | 1 | 1 |
Additional paid-in capital | 1,147,478 | 962,159 |
Treasury stock at cost, 20,220,227 shares as of September 30, 2021 and December 31, 2020 | (155,947) | (155,947) |
Retained earnings | 123,391 | 169,901 |
Accumulated other comprehensive income (loss) | (1,020) | 141 |
Total stockholders' equity | 1,113,903 | 976,255 |
Total liabilities and stockholders' equity | $ 1,645,387 | $ 1,381,023 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Statement of Financial Position [Abstract] | ||
Allowance on accounts receivable | $ 2,425 | $ 2,105 |
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) | 67,577,868 | 63,766,555 |
Common stock, shares outstanding (in shares) | 67,577,868 | 63,766,555 |
Treasury stock, shares (in shares) | 20,220,227 | 20,220,227 |
Unaudited Condensed Consolidate
Unaudited Condensed Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Net sales | $ 231,989 | $ 166,442 | $ 645,803 | $ 454,863 |
Cost of sales | 87,422 | 68,202 | 239,954 | 179,838 |
Gross margin | 144,567 | 98,240 | 405,849 | 275,025 |
Sales, general and administrative | 99,295 | 74,443 | 403,554 | 209,763 |
Research and development | 42,382 | 29,246 | 143,352 | 85,187 |
Total operating expenses | 141,677 | 103,689 | 546,906 | 294,950 |
Income (loss) from operations | 2,890 | (5,449) | (141,057) | (19,925) |
Interest and other income (expense), net | (5,530) | 2,040 | 36,896 | 4,594 |
Loss before provision for income taxes | (2,640) | (3,409) | (104,161) | (15,331) |
Provision for (benefit from) income taxes | (51,164) | (2,536) | (57,651) | 12,227 |
Net income (loss) | $ 48,524 | $ (873) | $ (46,510) | $ (27,558) |
Net income (loss) per common and common equivalent shares: | ||||
Basic (in dollars per share) | $ 0.73 | $ (0.01) | $ (0.71) | $ (0.45) |
Diluted (in dollars per share) | $ 0.67 | $ (0.01) | $ (0.71) | $ (0.45) |
Weighted average number of common and common equivalent shares outstanding: | ||||
Basic (in shares) | 66,192 | 63,496 | 65,139 | 61,159 |
Diluted (in shares) | 72,441 | 63,496 | 65,139 | 61,159 |
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) | ||||
Net income (loss) | $ 48,524 | $ (873) | $ (46,510) | $ (27,558) |
Foreign currency translation adjustments | (793) | 1,238 | (1,161) | (456) |
Comprehensive income (loss) | 47,731 | 365 | (47,671) | (28,014) |
Product | ||||
Net sales | 165,803 | 120,091 | 463,116 | 326,134 |
Cost of sales | 71,336 | 57,798 | 195,253 | 150,507 |
Service | ||||
Net sales | 66,186 | 46,351 | 182,687 | 128,729 |
Cost of sales | $ 16,086 | $ 10,404 | $ 44,701 | $ 29,331 |
Unaudited Condensed Consolida_2
Unaudited Condensed Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands | Cumulative Effect Period Of Adoption Adjusted BalanceRetained Earnings | Cumulative Effect Period Of Adoption Adjusted Balance | Common stock | Additional Paid-in Capital | Treasury Stock | Retained Earnings | Accumulated Other Comprehensive Income (Loss) | ATM Offering | Total |
Beginning balance (in shares) at Dec. 31, 2019 | 59,497,759 | 20,220,227 | |||||||
Beginning balance at Dec. 31, 2019 | $ (640) | $ (640) | $ 1 | $ 528,272 | $ (155,947) | $ 172,265 | $ (1,096) | $ 543,495 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common stock under employee plans, net (in shares) | 315,404 | ||||||||
Issuance of common stock under employee plans, net | (5,162) | (5,162) | |||||||
Stock-based compensation | 20,195 | 20,195 | |||||||
Net income (loss) | 4,074 | 4,074 | |||||||
Foreign currency translation adjustments | (2,372) | (2,372) | |||||||
Ending balance (in shares) at Mar. 31, 2020 | 59,813,163 | 20,220,227 | |||||||
Ending balance at Mar. 31, 2020 | $ 1 | 543,305 | $ (155,947) | 175,699 | (3,468) | 559,590 | |||
Beginning balance (in shares) at Dec. 31, 2019 | 59,497,759 | 20,220,227 | |||||||
Beginning balance at Dec. 31, 2019 | $ (640) | $ (640) | $ 1 | 528,272 | $ (155,947) | 172,265 | (1,096) | 543,495 | |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | (27,558) | ||||||||
Foreign currency translation adjustments | (456) | ||||||||
Ending balance (in shares) at Sep. 30, 2020 | 63,548,081 | 20,220,227 | |||||||
Ending balance at Sep. 30, 2020 | $ 1 | 908,584 | $ (155,947) | 144,067 | (1,552) | 895,153 | |||
Beginning balance (in shares) at Mar. 31, 2020 | 59,813,163 | 20,220,227 | |||||||
Beginning balance at Mar. 31, 2020 | $ 1 | 543,305 | $ (155,947) | 175,699 | (3,468) | 559,590 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common stock (in shares) | 3,450,000 | ||||||||
Issuance of common stock | 306,779 | 306,779 | |||||||
Issuance of common stock under employee plans, net (in shares) | 134,571 | ||||||||
Issuance of common stock under employee plans, net | (310) | (310) | |||||||
Stock-based compensation | 33,835 | 33,835 | |||||||
Issuance of common stock for business combination contingent consideration (in shares) | 70,613 | ||||||||
Net income (loss) | (30,759) | (30,759) | |||||||
Foreign currency translation adjustments | 678 | 678 | |||||||
Ending balance (in shares) at Jun. 30, 2020 | 63,468,347 | 20,220,227 | |||||||
Ending balance at Jun. 30, 2020 | $ 1 | 883,609 | $ (155,947) | 144,940 | (2,790) | 869,813 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common stock under employee plans, net (in shares) | 79,734 | ||||||||
Issuance of common stock under employee plans, net | (1,119) | (1,119) | |||||||
Stock-based compensation | 26,094 | 26,094 | |||||||
Net income (loss) | (873) | (873) | |||||||
Foreign currency translation adjustments | 1,238 | 1,238 | |||||||
Ending balance (in shares) at Sep. 30, 2020 | 63,548,081 | 20,220,227 | |||||||
Ending balance at Sep. 30, 2020 | $ 1 | 908,584 | $ (155,947) | 144,067 | (1,552) | 895,153 | |||
Beginning balance (in shares) at Dec. 31, 2020 | 63,766,555 | 20,220,227 | |||||||
Beginning balance at Dec. 31, 2020 | $ 1 | 962,159 | $ (155,947) | 169,901 | 141 | 976,255 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common stock under employee plans, net (in shares) | 906,536 | ||||||||
Issuance of common stock under employee plans, net | (7,045) | (7,045) | |||||||
Stock-based compensation | 89,610 | 89,610 | |||||||
Net income (loss) | (47,917) | (47,917) | |||||||
Foreign currency translation adjustments | 1 | 1 | |||||||
Ending balance (in shares) at Mar. 31, 2021 | 64,673,091 | 20,220,227 | |||||||
Ending balance at Mar. 31, 2021 | $ 1 | 1,044,724 | $ (155,947) | 121,984 | 142 | 1,010,904 | |||
Beginning balance (in shares) at Dec. 31, 2020 | 63,766,555 | 20,220,227 | |||||||
Beginning balance at Dec. 31, 2020 | $ 1 | 962,159 | $ (155,947) | 169,901 | 141 | 976,255 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | (46,510) | ||||||||
Foreign currency translation adjustments | (1,161) | ||||||||
Ending balance (in shares) at Sep. 30, 2021 | 67,577,868 | 20,220,227 | |||||||
Ending balance at Sep. 30, 2021 | $ 1 | 1,147,478 | $ (155,947) | 123,391 | (1,020) | 1,113,903 | |||
Beginning balance (in shares) at Mar. 31, 2021 | 64,673,091 | 20,220,227 | |||||||
Beginning balance at Mar. 31, 2021 | $ 1 | 1,044,724 | $ (155,947) | 121,984 | 142 | 1,010,904 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common stock under employee plans, net (in shares) | 1,001,255 | ||||||||
Issuance of common stock under employee plans, net | (3,268) | (3,268) | |||||||
Stock-based compensation | 137,549 | 137,549 | |||||||
Net income (loss) | (47,117) | (47,117) | |||||||
Foreign currency translation adjustments | (369) | (369) | |||||||
Ending balance (in shares) at Jun. 30, 2021 | 65,674,346 | 20,220,227 | |||||||
Ending balance at Jun. 30, 2021 | $ 1 | 1,179,005 | $ (155,947) | 74,867 | (227) | 1,097,699 | |||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Issuance of common stock (in shares) | 577,956 | 577,956 | |||||||
Issuance of common stock | 105,615 | 105,615 | |||||||
Issuance of common stock under employee plans, net (in shares) | 1,325,566 | ||||||||
Issuance of common stock under employee plans, net | (172,204) | (172,204) | |||||||
Stock-based compensation | 35,062 | 35,062 | |||||||
Net income (loss) | 48,524 | 48,524 | |||||||
Foreign currency translation adjustments | (793) | (793) | |||||||
Ending balance (in shares) at Sep. 30, 2021 | 67,577,868 | 20,220,227 | |||||||
Ending balance at Sep. 30, 2021 | $ 1 | $ 1,147,478 | $ (155,947) | $ 123,391 | $ (1,020) | $ 1,113,903 |
Unaudited Condensed Consolida_3
Unaudited Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Cash flows from operating activities: | ||
Net loss | $ (46,510) | $ (27,558) |
Adjustments to reconcile net loss to net cash provided by operating activities: | ||
Depreciation and amortization | 13,420 | 8,944 |
Loss on disposal and abandonment of intangible assets | 130 | 252 |
Loss on disposal and impairment of property and equipment, net | 74 | 1,429 |
Net gain on strategic investments and marketable securities | (34,195) | |
Stock-based compensation | 262,221 | 80,124 |
Deferred income taxes | (58,893) | (11,670) |
Unrecognized tax benefits | 77 | 573 |
Bond premium amortization | 4,606 | 1,830 |
Noncash lease expense | 4,087 | 2,743 |
Provision for expected credit losses | 615 | 776 |
Change in assets and liabilities: | ||
Accounts and notes receivable and contract assets | (118,094) | (48,551) |
Inventory | (3,154) | (59,371) |
Prepaid expenses and other assets | (28,906) | (4,822) |
Accounts payable, accrued and other liabilities | 28,528 | 25,365 |
Deferred revenue | 87,558 | 34,099 |
Net cash provided by operating activities | 111,564 | 4,163 |
Cash flows from investing activities: | ||
Purchases of investments | (362,479) | (516,687) |
Proceeds from call / maturity of investments | 499,172 | 287,199 |
Proceeds from sale of strategic investments | 14,546 | |
Purchases of property and equipment | (36,501) | (66,023) |
Proceeds from disposal of property and equipment | 31 | 94 |
Purchases of intangible assets | (157) | (177) |
Strategic investments | (20,500) | (4,700) |
Business acquisition, net of cash acquired | (700) | |
Net cash provided by (used in) investing activities | 93,412 | (300,294) |
Cash flows from financing activities: | ||
Net proceeds from equity offering | 105,615 | 306,779 |
Proceeds from options exercised | 0 | 295 |
Income and payroll tax payments for net-settled stock awards | (182,517) | (6,886) |
Net cash provided by (used in) financing activities | (76,902) | 300,188 |
Effect of exchange rate changes on cash and cash equivalents | (1,827) | (303) |
Net increase in cash and cash equivalents | 126,247 | 3,754 |
Cash and cash equivalents and restricted cash, beginning of period | 155,551 | 172,355 |
Cash and cash equivalents and restricted cash, end of period | $ 281,798 | $ 176,109 |
Unaudited Condensed Consolida_4
Unaudited Condensed Consolidated Statements of Cash Flows - Supplemental - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Supplemental disclosures: | ||
Cash and cash equivalents | $ 281,691 | $ 176,000 |
Restricted cash (Note 1) | 107 | 109 |
Total cash, cash equivalents and restricted cash shown in the statements of cash flows | 281,798 | 176,109 |
Cash paid for income taxes, net of refunds | 5,016 | 7,678 |
Non-cash transactions | ||
Property and equipment purchases in accounts payable and accrued liabilities | $ 1,211 | $ 1,734 |
Organization and Summary of Sig
Organization and Summary of Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Summary of Significant Accounting Policies | Note 1 - Organization and Summary of Significant Accounting Policies Axon Enterprise, Inc. (“Axon,” the “Company,” "we," or "us") is a market-leading provider of law enforcement technology solutions. Our core mission is to protect life. We fulfill that mission through developing hardware and software products that advance the long term objectives of a) obsoleting the bullet, b) reducing social conflict, and c) enabling a fair and effective justice system. Our headquarters in Scottsdale, Arizona houses our executive management, sales, marketing, certain engineering, manufacturing, finance and other administrative support functions. Our global software hub is located in Seattle, Washington, and we also have subsidiaries and / or offices located in Australia, Canada, Finland, Germany, Hong Kong, India, Italy, the Netherlands, the United Kingdom, and Vietnam. The accompanying unaudited condensed consolidated financial statements include the accounts of Axon Enterprise, Inc. and our wholly owned 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 SEC. Certain information related to our 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 our annual consolidated financial statements for the year ended December 31, 2020, as filed on Form 10-K, with the exception of our adoption of certain accounting pronouncements which we describe below. 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 our 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 our Form 10-K for the year ended December 31, 2020. The results of operations for the three months and nine months ended September 30, 2021 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, ● reserve for expected credit loss, ● valuation of goodwill, intangible and long-lived assets, ● recognition, measurement and valuation of current and deferred income taxes, ● stock-based compensation, and ● recognition and measurement of contingencies and accrued litigation expense. Actual results could differ materially from those estimates. Segment Information Our operations are comprised of two reportable segments: the manufacture and sale of conducted electrical devices ("CEDs"), batteries, accessories, extended warranties and other products and services (the “TASER” segment); and the development, manufacture, and sale of software and sensors, which includes the sale of devices, wearables, applications, cloud and mobile products, and services (collectively, the “Software and Sensors” segment). In both segments, we report sales of products and services. Service revenue in both segments includes sales related to Axon Evidence. In the Software and Sensors segment, service revenue also includes other recurring cloud-hosted software revenue and related professional services. Collectively, this revenue is sometimes referred to as "Axon Cloud revenue." Reportable segments are determined based on discrete financial information reviewed by our Chief Executive Officer who is our chief operating decision maker ("CODM"). We organize and review operations based on products and services, and currently there are no operating segments that are aggregated. We perform an analysis of our reportable segments at least annually. Additional information related to our business segments is summarized in Note 15. Geographic Information and Major Customers / Suppliers For the three and nine months ended September 30, 2021, no individual country outside the U.S. represented more than 10% of total 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 our customers. For the three and nine months ended September 30, 2021, no customer represented more than 10% of total net sales. At September 30, 2021 and December 31, 2020, no customer represented more than 10% of the aggregate balance of accounts and notes receivable and contract assets. We currently purchase both off the shelf and custom components, including, but not limited to, finished circuit boards, injection-molded plastic components, small machined parts, custom cartridge components, electronic components, and off the shelf sub-assemblies from suppliers located in the U.S., Canada, China, Israel, Republic of Korea, Mexico, Sri Lanka, and Taiwan. Although we currently obtain many of these components from single source suppliers, we own the injection molded component tooling, most of the designs, and the test fixtures used in their production for all custom components. As a result, we believe we could obtain alternative suppliers in most cases without incurring significant production delays. Although we have experienced supply chain disruptions relating to port constraints, we have remained focused on closely managing our supply chain. We continue to bolster our strategic relationships in our supply chain, identifying secondary/alternate sourcing, adjusting build plans accordingly, and building in logistic modes in support of our increasing demand while working to minimize disruption to customers. We acquire most of our components on a purchase order basis and do not have any significant long-term contracts with component suppliers. 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. Diluted income per share reflects the potential dilution from outstanding stock options and unvested restricted stock units. 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 September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Numerator for basic and diluted earnings per share: Net income (loss) $ 48,524 $ (873) $ (46,510) $ (27,558) Denominator: Weighted average shares outstanding 66,192 63,496 65,139 61,159 Dilutive effect of stock-based awards 6,249 — — — Diluted weighted average shares outstanding 72,441 63,496 65,139 61,159 Anti-dilutive stock-based awards excluded 3,481 12,793 8,920 12,904 Net loss per common share: Basic $ 0.73 $ (0.01) $ (0.71) $ (0.45) Diluted $ 0.67 $ (0.01) $ (0.71) $ (0.45) In October and November 2021, approximately 0.9 million options were exercised under the CEO Performance Award. Refer to Note 11 for further discussion of this award. Standard Warranties We warranty our CEDs, Axon cameras and certain related accessories from manufacturing defects on a limited basis for a period of one year after purchase and, thereafter, will repair or 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 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 condensed consolidated balance sheets. Changes in our estimated product warranty liabilities were as follows (in thousands): Nine Months Ended September 30, 2021 2020 Balance, beginning of period $ 769 $ 1,476 Utilization of reserve (582) (539) Warranty expense (benefit) 1,176 (192) Balance, end of period $ 1,363 $ 745 Fair Value Measurements and Financial Instruments We use 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. We categorize each of our 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 our own assumptions about inputs that market participants would use in pricing an asset or liability. We have cash equivalents and investments, which at September 30, 2021 and December 31, 2020 were comprised of money market funds, certificates of deposit, commercial paper, corporate bonds, municipal bonds, and U.S. Government agency bonds. Also included in cash equivalents and investments at December 31, 2020 were U.S. Treasury bills, U.S. Treasury repurchase agreements and U.S. Treasury inflation-protected securities. See additional disclosure regarding the fair value of our cash equivalents and investments in Note 3. Included in the balance of other assets as of September 30, 2021 and December 31, 2020 was $5.0 million and $4.7 million, respectively, related to corporate-owned life insurance policies which are used to fund our deferred compensation plan. We determine the fair value of insurance contracts by obtaining the cash surrender value of the contracts from the issuer, a Level 2 valuation technique. We have an investment in marketable securities, for which c hanges in fair value are recorded in the consolidated statement of operations as unrealized gain or (loss) on marketable securities, which is included in interest and other income (expense), net. We have strategic investments in three unconsolidated affiliates. The estimated fair value of the investments was determined based on Level 3 inputs. As of September 30, 2021, management estimated that the fair value of the investments equaled the carrying value. Our financial instruments also include accounts and notes receivable, accounts payable and accrued liabilities. Due to the short-term nature of these instruments, their fair values approximate their carrying values on the balance sheet. Restricted Cash Restricted cash balances as of September 30, 2021 and December 31, 2020 included $0.1 million primarily related to funds held in an international bank account for a country in which we are required to maintain a minimum balance to operate. Approximately half of the balance was included in prepaid expenses and other current assets on our condensed consolidated balance sheets, with the remainder included in other assets. Valuation of Goodwill, Intangibles and Long-lived Assets We evaluate 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, we estimate 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. We do 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. We perform our annual goodwill and intangible asset impairment tests in the fourth quarter of each year. Recently Issued Accounting Guidance Recently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Simplifying the Accounting for Income Taxes. Adoption of this ASU on January 1, 2021 did not have a material impact on our consolidated financial statements. In January 2020, the FASB issued ASU No. 2020-01, Investments – Equity Securities (Topic 321), Investments – Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) – Clarifying the Interactions Between Topic 321, Topic 323, and Topic 815 (a Consensus of the Emerging Issues Task Force). The guidance clarifies the interaction between ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities and the ASU on equity method investments. ASU 2016-01 provides companies with an alternative to measure certain equity securities without a readily determinable fair value at cost, minus impairment, if any, unless an observable transaction for an identical or similar security occurs. ASU 2020-01 clarifies that for purposes of applying the Topic 321 measurement alternative, an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting under Topic 323, immediately before applying or upon discontinuing the equity method. In addition, this new ASU provides direction that a company should not consider whether the underlying securities would be accounted for under the equity method or the fair value option when it is determining the accounting for certain forward contracts and purchased options, upon either settlement or exercise. Adoption of this ASU on January 1, 2021 did not have a material impact on our consolidated financial statements. Effective the First Quarter of 2023: In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805) – Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The guidance improves the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and certain inconsistencies in application. Under current GAAP, an acquirer generally recognizes contract assets acquired and liabilities assumed in a business combination at fair value on the acquisition date. The amendments in this update require that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606 as if it had originated the contracts. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. Adoption of this ASU is not expected to have a material impact on our consolidated financial statements. Reclassification of Prior Year Presentation Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications are not material and had no effect on the reported results of operations. |
Revenues
Revenues | 9 Months Ended |
Sep. 30, 2021 | |
Revenues | |
Revenues | Note 2 - Revenues Nature of Products and Services The following tables present our revenues by primary product and service offering (in thousands): Three Months Ended September 30, 2021 Three Months Ended September 30, 2020 Software and Software and TASER Sensors Total TASER Sensors Total TASER 7 $ 50,641 — $ 50,641 $ 21,702 $ — $ 21,702 TASER X26P 9,086 — 9,086 9,766 — 9,766 TASER X2 10,078 — 10,078 14,494 — 14,494 TASER Pulse 967 — 967 2,981 — 2,981 Cartridges 39,313 — 39,313 26,335 — 26,335 Axon Body — 20,862 20,862 — 15,978 15,978 Axon Flex — 1,488 1,488 — 1,589 1,589 Axon Fleet — 6,063 6,063 — 4,215 4,215 Axon Dock — 6,460 6,460 — 5,708 5,708 Axon Evidence and cloud services 2,711 63,272 65,983 692 45,450 46,142 Extended warranties 6,099 8,983 15,082 5,265 6,514 11,779 Other 2,596 3,370 5,966 3,171 2,582 5,753 Total $ 121,491 $ 110,498 $ 231,989 $ 84,406 $ 82,036 $ 166,442 Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020 Software and Software and TASER Sensors Total TASER Sensors Total TASER 7 $ 112,760 — $ 112,760 $ 48,616 $ — $ 48,616 TASER X26P 28,618 — 28,618 30,338 — 30,338 TASER X2 39,001 — 39,001 45,401 — 45,401 TASER Pulse 4,873 — 4,873 6,374 — 6,374 Cartridges 116,409 — 116,409 76,732 — 76,732 Axon Body — 60,545 60,545 — 40,645 40,645 Axon Flex — 3,481 3,481 — 3,452 3,452 Axon Fleet — 15,073 15,073 — 13,088 13,088 Axon Dock — 18,889 18,889 — 14,714 14,714 Axon Evidence and cloud services 5,809 175,933 181,742 1,776 126,495 128,271 Extended warranties 17,602 24,632 42,234 15,340 17,707 33,047 Other 7,946 14,232 22,178 6,214 7,971 14,185 Total $ 333,018 $ 312,785 $ 645,803 $ 230,791 $ 224,072 $ 454,863 The following table presents our revenues disaggregated by geography (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 United States $ 192,756 83 % $ 143,380 86 % $ 518,050 80 % $ 368,390 81 % Other countries 39,233 17 23,062 14 127,753 20 86,473 19 Total $ 231,989 100 % $ 166,442 100 % $ 645,803 100 % $ 454,863 100 % Contract Balances The following table presents our contract assets, contract liabilities and certain information related to these balances as of and for the nine months ended September 30, 2021 (in thousands): September 30, 2021 Contract assets, net $ 174,370 Contract liabilities (deferred revenue) 362,543 Revenue recognized in the period from: Amounts included in contract liabilities at the beginning of the period 145,012 Contract liabilities (deferred revenue) consisted of the following (in thousands): September 30, 2021 December 31, 2020 Current Long-Term Total Current Long-Term Total Warranty: TASER $ 14,332 $ 10,763 $ 25,095 $ 11,635 $ 16,953 $ 28,588 Software and Sensors 19,436 18,850 38,286 13,926 5,025 18,951 33,768 29,613 63,381 25,561 21,978 47,539 Hardware: TASER 24,775 9,252 34,027 16,314 14,304 30,618 Software and Sensors 37,398 42,981 80,379 25,181 50,981 76,162 62,173 52,233 114,406 41,495 65,285 106,780 Services: TASER 1,993 2,308 4,301 996 1,554 2,550 Software and Sensors 152,717 27,738 180,455 95,907 22,405 118,312 154,710 30,046 184,756 96,903 23,959 120,862 Total $ 250,651 $ 111,892 $ 362,543 $ 163,959 $ 111,222 $ 275,181 September 30, 2021 December 31, 2020 Current Long-Term Total Current Long-Term Total TASER $ 41,100 $ 22,323 $ 63,423 $ 28,945 $ 32,811 $ 61,756 Software and Sensors 209,551 89,569 299,120 135,014 78,411 213,425 Total $ 250,651 $ 111,892 $ 362,543 $ 163,959 $ 111,222 $ 275,181 Remaining Performance Obligations As of September 30, 2021, we had approximately $2.39 billion 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 September 30, 2021. We expect to recognize between 15% - 20% of this balance over the next twelve months, and generally expect the remainder to be recognized over the following five |
Cash, Cash Equivalents and Inve
Cash, Cash Equivalents and Investments | 9 Months Ended |
Sep. 30, 2021 | |
Cash, Cash Equivalents and Investments | |
Cash, Cash Equivalents and Investments | Note 3 - Cash, Cash Equivalents and Investments The following tables summarize our cash, cash equivalents, marketable securities, and held-to-maturity investments at September 30, 2021 and December 31, 2020 (in thousands): As of September 30, 2021 Gross Gross Cash and Amortized Unrealized Unrealized Cash Marketable Short-Term Long-Term Cost Gains Losses Fair Value Equivalents Securities Investments Investments Cash $ 162,478 $ — $ — $ 162,478 $ 162,478 $ — $ — $ — Level 1: Money market funds 119,225 — — 119,225 119,225 — — — Agency bonds 48,000 49 — 48,049 — 40,000 8,000 Marketable securities 90,000 (6,660) 83,340 83,340 — — Subtotal 257,225 49 (6,660) 250,614 119,225 83,340 40,000 8,000 Level 2: State and municipal obligations 77,764 4 (22) 77,746 72,383 5,381 Certificates of deposit 500 — — 500 — — 500 — Corporate bonds 119,817 76 (95) 119,798 — — 83,751 36,066 Commercial paper 19,994 — — 19,994 — — 19,994 — Subtotal 218,075 80 (117) 218,038 — 176,628 41,447 Total $ 637,778 $ 129 $ (6,777) $ 631,130 281,703 83,340 216,628 49,447 Expected credit loss reserve (12) — (71) (16) Total, net of reserve for expected credit losses $ 281,691 $ 83,340 $ 216,557 $ 49,431 During the quarter ended September 30, 2021, we acquired 9,000,000 shares of common stock of Cellebrite DI Ltd (“CLBT”) with a fair value of $90.0 million. The CLBT common stock is recorded as marketable securities in the accompanying condensed consolidated balance sheets and its fair value is adjusted every reporting period. Changes in fair value are recorded in the consolidated statement of operations as unrealized gain or (loss) on marketable securities, which is included in interest and other income (expense), net. During the three and nine months ended September 30, 2021, we recorded a $6.7 million unrealized loss on marketable securities relating to CLBT. Because we do not have any history of losses for our held-to-maturity investments, o As of December 31, 2020 Gross Gross Cash and Amortized Unrealized Unrealized Cash Short-Term Long-Term Cost Gains Losses Fair Value Equivalents Investments Investments Cash $ 116,107 $ — $ — $ 116,107 $ 116,107 $ — $ — Level 1: Money market funds 23,611 — — 23,611 23,611 — — Agency bonds 63,794 122 — 63,916 — 23,794 40,000 Treasury Bills 96,384 6 — 96,390 96,384 Subtotal 183,789 128 — 183,917 23,611 120,178 40,000 Level 2: State and municipal obligations 77,130 25 (28) 77,127 — 66,519 10,611 Certificates of deposit 500 — — 500 — 500 — Corporate bonds 212,825 232 (100) 212,957 2,525 170,205 40,095 U.S. Treasury repurchase agreements 13,200 — — 13,200 13,200 — — Treasury inflation-protected securities 3,291 16 — 3,307 — 3,291 Commercial paper 45,974 — — 45,974 45,974 — Subtotal 352,920 273 (128) 353,065 15,725 286,489 50,706 Total $ 652,816 $ 401 $ (128) $ 653,089 155,443 406,667 90,706 Expected credit loss reserve (3) (142) (25) Total, net of reserve for expected credit losses $ 155,440 $ 406,525 $ 90,681 |
Expected Credit Losses
Expected Credit Losses | 9 Months Ended |
Sep. 30, 2021 | |
Expected Credit Losses | |
Expected Credit Losses | Note 4 - Expected Credit Losses We are exposed to credit losses primarily through sales of products and services. Our expected loss allowance methodology for accounts receivable, notes receivable, and contract assets is developed using historical collection experience, published or estimated credit default rates for entities that represent our customer base, current and future economic and market conditions and a review of the current status of customers' trade accounts receivables. Additionally, specific allowance amounts are established to record the appropriate provision for customers that have a higher probability of default. Our monitoring activities include account reconciliation, dispute resolution, payment confirmation, consideration of customers' financial condition and macroeconomic conditions. Balances are written off when determined to be uncollectible. We considered the current and expected future economic and market conditions surrounding the COVID-19 pandemic and recorded an additional reserve for credit loss of approximately $1.2 million as of September 30, 2021. We review receivables for U.S. and international customers separately to better reflect different published credit default rates and economic and market conditions. The following table provides a roll-forward of the allowance for expected credit losses that is deducted from the amortized cost basis of accounts receivable, notes receivable, and contract assets to present the net amount expected to be collected (in thousands): Nine Months Ended September 30, 2021 United States Other countries Total Balance, beginning of period $ 2,902 $ 474 $ 3,376 Provision for expected credit losses 687 11 698 Amounts written off charged against the allowance (54) - (54) Other, including dispositions and foreign currency translation 78 (5) 73 Balance, end of period $ 3,613 $ 480 $ 4,093 September 30, December 31, 2021 2020 Accounts receivable and notes receivable, current $ 2,425 $ 2,105 Contract assets, net 1,409 794 Long-term notes receivable, net of current portion 259 477 Total allowance for expected credit losses on customer receivables $ 4,093 $ 3,376 |
Inventory
Inventory | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Inventory | Note 5 - Inventory Inventories are stated at the lower of cost, determined on the first-in, first-out (“FIFO”) basis, or net realizable value, net of an inventory valuation allowance. We use a standard cost methodology to determine the cost basis for its inventories. Costs include allocations for materials, labor, and overhead. All variances between actual costs and standard costs are apportioned to inventory and cost of goods sold based upon inventory turnover. We evaluate inventory on a quarterly basis for obsolete or slow-moving items to ascertain if the recorded allowance is reasonable and adequate. Additional provisions are made to reduce excess, obsolete or slow-moving inventories to their net realizable value. Inventory consisted of the following at September 30, 2021 and December 31, 2020 (in thousands): September 30, 2021 December 31, 2020 Raw materials $ 33,951 $ 39,194 Finished goods 59,328 50,764 Total inventory $ 93,279 $ 89,958 |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment | Note 6 – Property and Equipment Property and equipment consisted of the following (in thousands): Estimated Useful Life September 30, 2021 December 31, 2020 Land N/A $ 54,868 $ 57,052 Building and leasehold improvements 3- 39 years 25,025 20,912 Production equipment 3-7 years 44,072 37,539 Computers, equipment and software 3- 5 years 13,998 10,889 Furniture and office equipment 5-7 years 6,570 6,954 Vehicles 5 years 2,968 1,980 Website development costs 3 years 204 204 Capitalized internal-use software development costs 3- 5 years 11,876 3,670 Construction-in-process N/A 24,037 13,479 Total cost 183,618 152,679 Less: Accumulated depreciation (54,810) (47,185) Property and equipment, net $ 128,808 $ 105,494 During the three months ended September 30, 2021, we completed an implementation of several phases of our Enterprise Resource Planning (“ERP”) system. Following the implementation, we placed $6.6 million of related software development cost assets into service. |
Strategic Investments
Strategic Investments | 9 Months Ended |
Sep. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Strategic Investments | Note 7 - Strategic Investments Strategic investments include investments in a number of non-public technology-driven companies. We account for strategic investments under the ASC 321 measurement alternative for equity securities without readily determinable fair values, as there are no quoted market prices for the investments. The investments are measured at cost less impairment, adjusted for observable price changes and are assessed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. In conjunction with one of our strategic investments, we have the ability to commit additional capital over time through warrants where the exercisability and exercise prices are conditional on the achievement of certain partnership performance metrics. The amount recorded on our condensed consolidated balance sheets represents the fair value of the preferred stock warrants as of September 30, 2021. The following tables provide a roll-forward of the balance of strategic investments (in thousands): Nine Months Ended September 30, 2021 Strategic investments Warrants for strategic investment Total Balance, beginning of period $ 9,500 $ 2,211 $ 11,711 Investments 20,500 - 20,500 Observable price changes 40,321 534 40,855 Sales (14,546) - (14,546) Balance, end of period $ 55,775 $ 2,745 $ 58,520 Inception to date Strategic investments Warrants for strategic investment Total Investments $ 27,568 $ 2,588 $ 30,156 Observable price changes 42,753 157 42,910 Sales (14,546) - (14,546) Balance, end of period $ 55,775 $ 2,745 $ 58,520 During the nine months ended September 30, 2021, certain of our strategic investees issued new equity to us and/or other investors. These events represented observable price changes for our existing investments and related warrants. Of the total observable price changes, we realized a gain of approximately $12.3 million on the sale of a portion of one of our existing investments. The estimated fair value of the retained existing investments was calculated using valuation techniques that included both observable and unobservable inputs, and was lower than the issue per share of the new equity issued by the strategic investee because of different characteristics of the newly issued equity instruments compared to our existing investments. The valuation techniques included both Level 2 and Level 3 inputs as defined by ASC Topic 820. |
Other Long-Term Assets
Other Long-Term Assets | 9 Months Ended |
Sep. 30, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Other Long-Term Assets | Note 8 - Other Long-Term Assets Other long-term assets consisted of the following at September 30, 2021 and December 31, 2020 (in thousands): September 30, 2021 December 31, 2020 Cash surrender value of corporate-owned life insurance policies $ 4,996 $ 4,654 Deferred commissions (1) 45,663 32,455 Restricted cash 58 62 Operating lease assets 24,732 22,308 Deferred implementation costs (2) 4,132 — Prepaid expenses, deposits and other (3) 12,046 8,727 Total other long-term assets $ 91,627 $ 68,206 (1) Represents the incremental costs of obtaining contracts with customers, which consist primarily of sales commissions. These costs are ascribed to or allocated to the underlying performance obligations in the contracts and amortized consistent with the recognition timing of the revenue for the underlying performance obligations. (2) During the three months ended September 30, 2021, we completed an implementation of several software-as-a-service applications supporting our internal operations. Following the implementation, we placed $4.3 million of deferred implementation costs assets related to these applications into service. (3) During the three months ended September 30, 2021, we recorded a government grant receivable totaling $0.9 million in connection with the Arizona Qualified Facility Tax Credit (“QFTC”). Of that amount, $0.1 million was deferred to the three months ending December 31, 2021. Because U.S. GAAP does not contain authoritative accounting standards on this topic, we determined it most appropriate to account for the QFTC by analogy to International Accounting Standards 20 (“IAS 20”), Accounting for Government Grants and Disclosure of Government Assistance. Under IAS 20, the grant is initially recorded as other assets on the balance sheet and other income is recognized on a systematic basis over the periods in which the qualifying expenses are incurred when we determine that grant assets are no longer contingent. As of September 30, 2021, approximately $0.5 million was recorded in other assets with the remainder recorded in prepaid expenses and other current assets on our condensed consolidated balance sheets . |
Accrued Liabilities
Accrued Liabilities | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
Accrued Liabilities | Note 9 - Accrued Liabilities Accrued liabilities consisted of the following at September 30, 2021 and December 31, 2020 (in thousands): September 30, 2021 December 31, 2020 Accrued salaries, benefits and bonus $ 59,559 $ 36,892 Accrued professional, consulting and lobbying fees 5,282 3,055 Accrued warranty expense 1,363 769 Accrued income and other taxes 4,459 3,848 Accrued inventory in transit 6,316 4,597 Other accrued expenses 11,915 10,682 Accrued liabilities $ 88,894 $ 59,843 |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2021 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Note 10 - Income Taxes We file income tax returns for federal purposes and in many states, as well as in multiple foreign jurisdictions. Our tax filings remain subject to examination by applicable tax authorities for a certain length of time, generally three to four years, following the tax year to which these filings relate. During the second quarter of 2021, an audit with the State of Illinois for our fiscal year 2018 state return commenced. Additionally, we have been notified that an audit may commence for Axon Public Safety Southeast Asia LLC, our entity in Vietnam. The tax period has not yet been defined. On March 11, 2021, the U.S. federal government enacted the American Rescue Plan Act. This act is an emergency economic stimulus package in response to the COVID-19 pandemic, which, among other things, contains numerous income tax provisions. We are continuing to evaluate the implications of the American Rescue Plan Act, but its impact on the financial statements and related disclosures is not expected to be material. Deferred Tax Assets Net deferred income tax assets at September 30, 2021, primarily include R&D tax credits, stock-based compensation expense, deferred revenue, accruals and reserves, and net operating losses, partially offset by accelerated depreciation expense and valuation allowance reserve. Our total net deferred tax assets at September 30, 2021 were $104.0 million. In preparing our condensed consolidated financial statements, management assesses the likelihood that its deferred tax assets will be realized from future taxable income. In evaluating our ability to recover our deferred income tax assets, management considers all available positive and negative evidence, including our 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 our provision for income taxes, our deferred tax assets and liabilities, and our future taxable income for purposes of assessing our ability to utilize any future tax benefit from our deferred tax assets. As of September 30, 2021, we have a three-year cumulative pre-tax loss in the U.S. for federal and state tax jurisdictions. Although this fact provides some negative evidence, management continues to believe the positive evidence from projected future earnings outweighs the negative evidence and a valuation allowance is not needed. However, we have Arizona R&D tax credits expiring unutilized each year; therefore, management has concluded that it is more likely than not that our Arizona R&D deferred tax asset will not be realized and a valuation allowance has been recorded against this net asset. In Australia, we have determined that sufficient deferred tax liabilities will reverse in order to realize all assets except one long-lived intangible where there is not an expectation that the asset may be realized. Therefore, we continue to recognize a partial valuation allowance for Australia. We complete R&D tax credit studies for each year that an R&D tax credit is claimed for federal, Arizona, and California income tax purposes. Management has made the determination that it is more likely than not that the full benefit of the R&D tax credit will not be sustained on examination and recorded a liability for unrecognized tax benefits of $11.4 million as of September 30, 2021. Should the unrecognized benefit of $11.4 million be recognized, our effective tax rate would be favorably impacted. Approximately $7.1 million of the unrecognized tax benefit associated with R&D credits has been netted against the R&D deferred tax asset. Effective Tax Rate Our overall effective tax rate for the nine months ended September 30, 2021, after discrete period adjustments, was 55.3%. Before discrete adjustments, the tax rate was (11.8%), which differs from the federal statutory rate, primarily due to the impact of the executive compensation limitation under Internal Revenue Code ("IRC") Section 162(m), partially offset by R&D tax credits, on a projected pre-tax loss for the year. The effective tax rate was favorably impacted by a $70.0 million discrete tax benefit primarily associated with windfalls related to stock-based compensation for restricted stock units (“RSUs”) and performance stock units (“PSUs”) that vested during the nine months ended September 30, 2021. |
Stockholders' Equity
Stockholders' Equity | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Stockholders' Equity | Note 11 - Stockholders’ Equity At-the-Market equity offering During the three months ended September 30, 2021, we sold 577,956 shares of our common stock under our "at-the-market" equity offering program (the “ATM”). We generated approximately $107.6 million in aggregate gross proceeds from sales under the ATM. Aggregate net proceeds from the ATM were $105.6 million after deducting related expenses, including commissions to the sales agent of $1.6 million and issuance costs of $0.3 million. We may sell up to a total of 3.0 million shares of our common stock under the ATM. The ATM expires on April 20, 2024. We intend to use the net proceeds from this offering for general corporate purposes, which may include, among other things, providing capital to satisfy a portion of the tax obligations related to the vesting and settlement of stock compensation awards granted to our executive officers and other employees under our stock incentive plans, to support our growth, and to acquire or invest in product lines, products, services, technologies or facilities. Performance-based stock awards We have issued performance-based stock options and performance-based RSUs, the vesting of which is generally contingent upon the achievement of certain performance criteria related to our operating performance, as well as successful and timely development and market acceptance of future product introductions. In addition, certain of the performance RSUs have additional service requirements subsequent to the achievement of the performance criteria. Compensation expense is recognized over the requisite service period, which is defined as the longest explicit, implicit or derived service period based on management’s estimate of the probability of the performance criteria being satisfied, adjusted at each balance sheet date. For both service-based and performance-based RSUs, we account for forfeitures as they occur as a reduction to stock-based compensation expense and additional paid-in-capital. For performance-based options with a vesting schedule based entirely on the attainment of both performance and market conditions, stock-based compensation expense is recognized for each pair of performance and market conditions over the longer of the expected achievement period of the performance and market conditions, beginning at the point in time that the relevant performance condition is considered probable of achievement. The fair value of such awards is estimated on the grant date using Monte Carlo simulations. CEO Performance Award On May 24, 2018, our stockholders approved the Board of Directors’ grant of 6,365,856 stock option awards to Patrick W. Smith, our CEO (the “CEO Performance Award”). The CEO Performance Award consists of 12 vesting tranches with a vesting schedule based entirely on the attainment of both operational goals (performance conditions) and market capitalization goals (market conditions), assuming continued employment either as the CEO or as both Executive Chairman and Chief Product Officer and service through each attainment date. Each of the 12 vesting tranches of the CEO Performance Award have a 10-year Eight Separate Adjusted EBITDA (CEO Eight Separate Revenue Goals (1) Performance Award) Goals (in thousands) (in thousands) Goal #1, $710,058 Goal #9, $125,000 Goal #2, $860,058 Goal #10, $155,000 Goal #3, $1,010,058 Goal #11, $175,000 Goal #4, $1,210,058 Goal #12, $190,000 Goal #5, $1,410,058 Goal #13, $200,000 Goal #6, $1,610,058 Goal #14, $210,000 Goal #7, $1,810,058 Goal #15, $220,000 Goal #8, $2,010,058 Goal #16, $230,000 (1) In connection with the business acquisition that was completed during the three months ended September 30, 2018, the revenue goals were adjusted for the acquiree’s Target Revenue, as defined in the CEO Performance Award agreement. As of September 30, 2021, the following operational goals were achieved, with vesting of the related tranches pending certification by the Compensation Committee: ● Adjusted EBITDA (CEO Performance Award) of $230 million; and ● Total revenue of $860.1 million As of September 30, 2021, the following operational goals were considered probable of achievement: ● Total revenue of $1,010.1 million and $1,210.1 million As of September 30, 2021, the following operational goals were previously achieved and the related tranches vested: ● Adjusted EBITDA (CEO Performance Award) of $125.0 million, $155.0 million, $175 million, $190 million, $200 million, $210 million, and $220 million. ● Total revenue of $710.1 million Stock-based compensation expense associated with the CEO Performance Award is recognized over the requisite service period, which is defined as the longest explicit, implicit or derived service period, based on management’s estimate of the probability and timing of the performance criteria being satisfied, adjusted at each balance sheet date. Expense recognition begins at the point in time when the relevant operational goal is considered probable of being met. The probability of attaining an operational goal and the expected attainment date for meeting a probable operational goal are based on a subjective assessment of our forward-looking financial projections, taking into consideration statistical analysis when considered appropriate. The statistical model and the assessment that determine the estimated attainment dates are subject to a number of estimated inputs, including expected volatility rates, management’s forward-looking financial projections, in particular for operational goals that are anticipated to be attained in the near future, and adjustment of other estimates based on the passage of time. The first nine market capitalization goals have been achieved as of September 30, 2021. As of September 30, 2021, 4.2 million stock options have been certified by the Compensation Committee and vested. As twelve operational goals have been achieved or are considered probable of achievement, we recorded stock-based compensation expense of $219.5 million related to the CEO Performance Award from the grant date through September 30, 2021. The number of stock options that would vest related to the remaining unvested tranches is approximately 1.6 million shares. As of September 30, 2021, we had $26.5 million of total unrecognized stock-based compensation expense for the performance goals that were considered probable of achievement, which will be recognized over a weighted-average period of 1.53 years. eXponential Stock Performance Plan On February 12, 2019, our shareholders approved the 2019 Stock Incentive Plan (the “2019 Plan”), which was adopted by the Board of Directors to reserve a sufficient number of shares to facilitate our eXponential Stock Performance Plan (“XSPP”) and grants of eXponential Stock Units (“XSUs”) under the plan. Initial awards under the plan were granted in January 2019, with additional employee awards granted since that date. During the three and nine months ended September 30, 2021 we granted an additional eight thousand and forty thousand XSUs, respectively. The XSUs are grants of RSUs, each with a term of approximately nine years, that vest in 12 equal tranches. Each of the 12 tranches will vest upon certification by the Compensation Committee of the Board of Directors that both (i) the market capitalization goal for such tranche, which begins at $2.5 billion for the first tranche and increases by increments of $1.0 billion thereafter, and (ii) any one of eight operational goals focused on revenue or eight operational goals focused on Adjusted EBITDA (CEO Performance Award) have been met for the previous four consecutive fiscal quarters. Beginning with the quarter ended June 30, 2021, new XSU grants are divided into a reduced number of tranches depending on employee eligibility and current market capitalization attainment. The XSPP contains an anti-dilution provision incorporated into the plan based on shareholder feedback, which affects the calculation of the market capitalization goals in the plan. The plan defines a maximum number of shares outstanding that may be used in the calculation of the market capitalization goals (the “XSU Maximum”). If the actual number of shares outstanding exceeds the XSU Maximum guardrail, then the lower pre-defined number of shares in the XSU Maximum, rather than the higher actual number of shares outstanding, is used to calculate market capitalization for the determination of the market capitalization goals in the XSPP, which, together with the operational goals, determines whether XSUs vest for participating employees. The XSU Maximum is defined as the actual number of shares outstanding on the original XSU grant date of January 2, 2019, increased by a 3% annual rate over the term of the XSPP and by shares issued upon the exercise of CEO Performance Award options. The XSU Maximum is also adjusted for acquisitions, spin-offs or other changes in the number of outstanding shares of common stock, if such changes have a corresponding adjustment on the market capitalization goals. New shares issued for any other reasons, including shares issued upon vesting of XSUs, RSUs, and Performance Stock Units (“PSUs”) as well as shares issued to raise capital through equity issuances or in other transactions, do not increase the XSU Maximum. The market capitalization and operational goals are identical to the CEO Performance Award, but a different number of shares is used to calculate the market capitalization goals if shares outstanding exceed the XSU Maximum. Additionally, because the grant date is different than that of the CEO Performance Award, the measurement period for market capitalization is not identical. As of September 30, 2021, actual shares outstanding exceeded the XSU Maximum as a result of the common stock offering completed in June 2020. Accordingly, market capitalization as calculated for the purposes of achieving additional goals uses the lower XSU Maximum share amount rather than actual shares outstanding. The first eight market capitalization goals had been achieved as of September 30, 2021, and the ninth market capitalization goal was achieved in October 2021. The first XSU tranche vested in March 2021, the second and third tranches vested in May 2021, and five tranches vested in September 2021. As all twelve operational goals have been achieved or are considered probable of achievement, we recorded stock-based compensation expense of $161.4 million related to the XSU awards from their respective grant dates through September 30, 2021. The number of XSU awards that would vest related to the remaining four tranches is approximately 1.8 million shares. As of September 30, 2021, we had $34.6 million of total unrecognized stock-based compensation expense, which will be recognized over a weighted-average period of 2.12 years. Restricted Stock Units The following table summarizes RSU activity for the nine months ended September 30, 2021 (number of units and aggregate intrinsic value in thousands): Number of Weighted Average Aggregate Units Grant-Date Fair Value Intrinsic Value Units outstanding, beginning of year 1,107 $ 76.10 Granted 205 166.29 Released (348) 55.16 Forfeited (108) 96.25 Units outstanding, end of period 856 103.70 $ 149,875 Aggregate intrinsic value represents our closing stock price on the last trading day of the period, which was $175.02 per share, multiplied by the number of RSUs outstanding. As of September 30, 2021, there was $63.7 million in unrecognized compensation costs related to RSUs under our stock plans for shares that are expected to vest. We expect to recognize the cost related to the RSUs over a weighted average period of 2.14 years. RSUs are released when vesting requirements are met. Certain RSUs that vested in the nine months ended September 30, 2021 were net-share settled such that we withheld shares to cover the employees’ tax obligation for the applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities. Total shares withheld related to RSUs were fifty one Performance Stock Units The following table summarizes PSU activity, inclusive of XSUs, for the nine months ended September 30, 2021 (number of units and aggregate intrinsic value in thousands): Number of Weighted Average Aggregate Units Grant-Date Fair Value Intrinsic Value Units outstanding, beginning of year 5,618 $ 35.71 Granted 236 54.16 Released (3,896) 36.50 Forfeited (77) 38.46 Units outstanding, end of period 1,881 36.29 $ 329,211 Aggregate intrinsic value represents our closing stock price on the last trading day of the period, which was $175.02 per share, multiplied by the number of PSUs outstanding. As of September 30, 2021, there was $38.3 million in unrecognized compensation costs related to PSUs under our stock plans for shares that are expected to vest. We expect to recognize the cost related to the PSUs over a weighted average period of 2.10 years. PSUs are released when vesting requirements are met. As of September 30, 2021, the performance criteria had been met for approximately four On March 8, May 17, and September 9, 2021, the Compensation Committee of our Board of Directors approved waivers of the holding period requirements for each XSPP participant who is an Arizona resident and elected to receive XSUs in lieu of On-Target Earnings. This waiver releases the holding period requirements to allow participants the ability to choose to sell a portion of their vested shares to satisfy new income tax obligations pursuant to Arizona Proposition 208, which was passed in the November 2020 state-wide election. This waiver applied to approximately 4% of the XSUs for the impacted participants which vested on March 8, May 17 and September 9, 2021, amounting to approximately 99 thousand shares. The remainder of the shares not sold to satisfy tax obligations are subject to a 2.5 year minimum holding period. We accounted for this change as a Type I modification under ASC 718 since there was no impact on attainment of the operational or market capitalization goals. We recognized additional stock-based compensation expense of $1.9 million and $2.8 million for the three months and nine months ended September 30, 2021, respectively, because of this modification. Certain PSUs that vested in the nine months ended September 30, 2021 were net-share settled such that we withheld shares to cover the employees’ tax obligation for the applicable income and other employment taxes, and remitted the cash to the appropriate taxing authorities. Total shares withheld related to PSUs were approximately 1.0 million and had a value of $174.0 million on their respective vesting dates as determined by the closing stock price on such dates. Of this amount, approximately 0.9 million related to the release of tranches four through eight of the XSPP. Payments for the employees’ tax obligations are reflected as a financing activity within the condensed consolidated statements of cash flows. We record a liability for the tax withholding to be paid by us as a reduction to additional paid-in capital. Stock Option Activity The following table summarizes stock option activity for the nine months ended September 30, 2021 (number of units and aggregate intrinsic value in thousands): Weighted Weighted Average Number Average Remaining of Exercise Contractual Aggregate Options Price Life (years) Intrinsic Value Options outstanding, beginning of year 6,366 $ 28.58 Granted — — Exercised — — Expired / terminated — — Options outstanding, end of period 6,366 28.58 6.41 $ 932,216 Options exercisable, end of period 4,774 28.58 6.41 699,162 Aggregate intrinsic value represents the difference between the exercise price of the underlying stock option awards and the closing market price of our common stock of $175.02 on September 30, 2021. There were no options exercised for the nine months ended September 30, 2021. The intrinsic value of options exercised for the nine months ended September 30, 2020 was $5.1 million. As of September 30, 2021, total options outstanding included 1.6 million unvested performance-based stock options, which relate to the CEO Performance Award and are probable of achievement. In October and November 2021, approximately 0.9 million options were exercised under the CEO Performance Award. Stock-based Compensation Expense The following table summarizes the composition of stock-based compensation expense for the three and nine months ended September 30, 2021 and 2020 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Cost of products sold and services delivered $ 1,112 $ 744 $ 4,439 $ 2,170 Sales, general and administrative expenses 25,969 19,117 211,073 60,853 Research and development expenses 7,981 6,233 46,709 17,101 Total stock-based compensation expense $ 35,062 $ 26,094 $ 262,221 $ 80,124 Stock Incentive Plan In February 2019, our shareholders approved the 2019 Plan authorizing an additional 6.0 million shares, plus remaining available shares under prior plans, for issuance under the new plan. Combined with the legacy stock incentive plans, there are 1.6 million shares available for grant as of September 30, 2021. Stock Repurchase Plan In February 2016, our Board of Directors authorized a stock repurchase program to acquire up to $50.0 million of our outstanding common stock subject to stock market conditions and corporate considerations. During the nine months ended September 30, 2021 and 2020, no common shares were purchased under the program. As of September 30, 2021, $16.3 million remains available under the plan for future purchases. Any future purchases will be discretionary. |
Line of Credit
Line of Credit | 9 Months Ended |
Sep. 30, 2021 | |
Debt Disclosure [Abstract] | |
Line of Credit | Note 12 - Line of Credit We have a $50.0 million unsecured revolving line of credit with a domestic bank, of which $20.0 million is available for letters of credit. The credit agreement matures on December 31, 2023 and has an accordion feature which allows for an increase in the total line of credit up to $100.0 million, subject to certain conditions, including the availability of additional bank commitments. At September 30, 2021 and December 31, 2020, 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 September 30, 2021, we had letters of credit outstanding of approximately $6.1 million under the facility and available borrowing of $43.9 million, excluding amounts available under the accordion feature. Advances under the line of credit bear interest at LIBOR plus 1.0 to 1.5% per year determined in accordance with a pricing grid based on our funded debt to earnings before interest, taxes, depreciation and amortization ("EBITDA") ratio. We are required to comply with a maximum funded debt to EBITDA ratio of no greater than 2.50 to 1.00 based upon a trailing four fiscal quarter period. At September 30, 2021, our funded debt to EBITDA ratio was 0.00 to 1.00. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2021 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Note 13 - Commitments and Contingencies Product Litigation As a manufacturer of weapons and other law enforcement tools used in high-risk field environments, we are often the subject of products liability litigation concerning the use of our products. We are currently named as a defendant in two lawsuits in which the plaintiffs allege either wrongful death or personal injury in situations in which a TASER CED was used by law enforcement officers in connection with arrests or training. While the facts vary from case to case, these product liability claims typically allege defective product design, manufacturing, and/or failure to warn. They seek compensatory and sometimes punitive damages, often in unspecified amounts. We continue to aggressively defend all product litigation. As a general rule, it is our policy not to settle suspect injury or death cases. Exceptions are sometimes made where the settlement is strategically beneficial to us. Due to the confidential nature of our litigation strategy and the confidentiality agreements that are executed in the event of a settlement, we do not identify or comment on specific settlements by case or amount. Based on current information, we do not believe that the outcome of any such legal proceeding will have a material effect on our financial position, results of operations, or cash flows. We are self-insured for the first $5.0 million of any product claim made after 2014. No judgment or settlement has ever exceeded this amount in any products case. We continue to maintain product liability insurance coverage, including an insurance policy fronting arrangement, above our self-insured retention with various limits depending on the policy period. The litigation information in this note is current through the date of these financial statements. U.S. Federal Trade Commission Litigation The U.S. Federal Trade Commission (“FTC”) filed an enforcement action on January 3, 2020 regarding Axon’s May 2018 acquisition of Vievu LLC from Safariland LLC. The FTC alleges the merger was anticompetitive and adversely affected the body worn camera (“BWC”) and digital evidence management systems (“DEMS”) market for “large metropolitan police departments.” The administrative hearing is presently stayed pending Axon’s Supreme Court challenge (see below). If ultimately successful, the FTC may require Axon to divest Vievu and other assets or take other remedial measures, any of which could be material to Axon. We are vigorously defending the matter. At this time, we cannot predict the eventual scope, duration, or outcome of the proceeding and accordingly we have not recorded any liability in the accompanying consolidated financial statements. Prior to the FTC’s enforcement action, Axon sued the FTC in federal court in the District of Arizona for declaratory and injunctive relief alleging the FTC’s structure and administrative processes violate Article II of the U.S. Constitution and our Fifth Amendment rights to due process and equal protection. The district court dismissed the action, without prejudice, for lack of jurisdiction. The Ninth Circuit affirmed in a split decision but granted Axon’s motion to stay the appellate mandate pending the filing of its petition for certiorari with the U.S. Supreme Court. That petition was filed July 20, 2021 and is now fully briefed. The FTC’s administrative case will remain stayed pending resolution of the Supreme Court proceedings. In parallel to these matters, we are evaluating strategic alternatives to litigation, which we might pursue if determined to be in the best interests of shareholders and customers. This could include a divestiture of the Vievu entity and/or related assets and the licensure of certain intellectual and other intangible property. While we continue to believe the acquisition of Vievu was lawful and a benefit to Vievu’s customers, the cost, risk and distraction of protracted litigation merit consideration of settlement if achievable on terms agreeable to the FTC and the company. General From time to time, we are notified that we may be a party to a lawsuit or that a claim is being made against us. It is our policy to not disclose the specifics of any claim or threatened lawsuit until the summons and complaint are actually served on us. After carefully assessing the claim, and assuming we determine that we are not at fault or we disagree with the damages or relief demanded, we vigorously defend any lawsuit filed against us. We record a liability when losses are deemed probable and reasonably estimable. When losses are deemed reasonably possible but not probable, we determine whether it is possible to provide an estimate of the amount of the loss or range of possible losses for the claim, if material for disclosure. In evaluating matters for accrual and disclosure purposes, we take 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. We reevaluate and update accruals as matters progress over time. Based on our assessment of outstanding litigation and claims as of September 30, 2021, we have determined that it is not reasonably possible that these lawsuits will individually, or in the aggregate, materially affect our 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 our 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, we use letters of credit and surety bonds to guarantee our performance under various contracts, principally in connection with the installation and integration of Axon cameras and related technologies. Certain of our letters of credit and surety bonds have stated expiration dates with others being released as the contractual performance terms are completed. At September 30, 2021, we had outstanding letters of credit of $6.1 million that are expected to expire in June 2022. We also had outstanding letters of credit and bank guarantees of $1.5 million that do not draw against our credit facility. The outstanding letters of credit are expected to expire in March 2022 and May 2022. Additionally, we had $21.5 million of outstanding surety bonds at September 30, 2021, with $3.5 million expiring in 2022, $7.5 million expiring in 2023 and the remaining $10.5 million expiring in 2024. |
Employee Benefit Plans
Employee Benefit Plans | 9 Months Ended |
Sep. 30, 2021 | |
Retirement Benefits [Abstract] | |
Employee Benefit Plans | Note 14 - Employee Benefit Plans We have a defined contribution 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. We also have a non-qualified deferred compensation plan for certain executives, 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 us. 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 we do 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; see Note 8 for balances. Participants have no rights or claims with respect to any plan assets and any such assets are subject to the claims of our general creditors. Contributions to the plans are made by both the employee and us. Our contributions to the 401(k) plan are based on the level of employee contributions and are immediately vested. Future matching contributions to the plans are at our sole discretion. We also sponsor defined contribution plans in Australia, Canada, Finland, and the United Kingdom. Our matching contributions for all defined contribution plans were $1.7 million and $1.3 million for the three months ended September 30, 2021 and 2020, respectively, and $5.6 million and $4.1 million for the nine months ended September 30, 2021 and 2020, respectively. |
Segment Data
Segment Data | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Segment Data | Note 15 - Segment Data Our operations are comprised of two reportable segments: the manufacture and sale of CEDs, batteries, accessories, extended warranties and other products and services (the “TASER” segment); and the software and sensors business, which includes the sale of devices, wearables, applications, cloud and mobile products, and services (collectively, the “Software and Sensors” segment). In both segments, we report sales of products and services. Service revenue in both segments includes sales related to Axon Evidence. In the Software and Sensors segment, service revenue also includes other recurring cloud-hosted software revenue and related professional services. Collectively, this revenue is sometimes referred to as "Axon Cloud revenue." Our Chief Executive Officer, who is the CODM, is not provided asset information or sales, general, and administrative expense by segment. Information relative to our reportable segments was as follows (in thousands): Three Months Ended September 30, 2021 Three Months Ended September 30, 2020 Software and Software and TASER Sensors Total TASER Sensors Total Net sales from products $ 118,569 $ 47,234 $ 165,803 $ 83,517 $ 36,574 $ 120,091 Net sales from services 2,922 63,264 66,186 889 45,462 46,351 Net sales 121,491 110,498 231,989 84,406 82,036 166,442 Cost of product sales 41,554 29,782 71,336 31,297 26,501 57,798 Cost of service sales — 16,086 16,086 — 10,404 10,404 Cost of sales 41,554 45,868 87,422 31,297 36,905 68,202 Gross margin $ 79,937 $ 64,630 $ 144,567 $ 53,109 $ 45,131 $ 98,240 Research and development $ 10,476 $ 31,906 $ 42,382 $ 3,355 $ 25,891 $ 29,246 Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020 Software and Software and TASER Sensors Total TASER Sensors Total Net sales from products $ 326,508 136,608 $ 463,116 $ 228,569 97,565 $ 326,134 Net sales from services 6,510 176,177 182,687 2,222 126,507 128,729 Net sales 333,018 312,785 645,803 230,791 224,072 454,863 Cost of product sales 112,200 83,053 195,253 88,787 61,720 150,507 Cost of service sales 145 44,556 44,701 — 29,331 29,331 Cost of sales 112,345 127,609 239,954 88,787 91,051 179,838 Gross margin $ 220,673 $ 185,176 $ 405,849 $ 142,004 $ 133,021 $ 275,025 Research and development $ 32,032 $ 111,320 $ 143,352 $ 10,149 $ 75,038 $ 85,187 |
Organization and Summary of S_2
Organization and Summary of Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of Presentation and Use of Estimates | Basis of Presentation and Use of Estimates These unaudited condensed consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC. Certain information related to our 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 our annual consolidated financial statements for the year ended December 31, 2020, as filed on Form 10-K, with the exception of our adoption of certain accounting pronouncements which we describe below. 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 our 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 our Form 10-K for the year ended December 31, 2020. The results of operations for the three months and nine months ended September 30, 2021 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, ● reserve for expected credit loss, ● valuation of goodwill, intangible and long-lived assets, ● recognition, measurement and valuation of current and deferred income taxes, ● stock-based compensation, and ● recognition and measurement of contingencies and accrued litigation expense. Actual results could differ materially from those estimates. |
Segment Information | Segment Information Our operations are comprised of two reportable segments: the manufacture and sale of conducted electrical devices ("CEDs"), batteries, accessories, extended warranties and other products and services (the “TASER” segment); and the development, manufacture, and sale of software and sensors, which includes the sale of devices, wearables, applications, cloud and mobile products, and services (collectively, the “Software and Sensors” segment). In both segments, we report sales of products and services. Service revenue in both segments includes sales related to Axon Evidence. In the Software and Sensors segment, service revenue also includes other recurring cloud-hosted software revenue and related professional services. Collectively, this revenue is sometimes referred to as "Axon Cloud revenue." Reportable segments are determined based on discrete financial information reviewed by our Chief Executive Officer who is our chief operating decision maker ("CODM"). We organize and review operations based on products and services, and currently there are no operating segments that are aggregated. We perform an analysis of our reportable segments at least annually. Additional information related to our business segments is summarized in Note 15. |
Geographic Information and Major Customers / Suppliers | Geographic Information and Major Customers / Suppliers For the three and nine months ended September 30, 2021, no individual country outside the U.S. represented more than 10% of total 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 our customers. For the three and nine months ended September 30, 2021, no customer represented more than 10% of total net sales. At September 30, 2021 and December 31, 2020, no customer represented more than 10% of the aggregate balance of accounts and notes receivable and contract assets. We currently purchase both off the shelf and custom components, including, but not limited to, finished circuit boards, injection-molded plastic components, small machined parts, custom cartridge components, electronic components, and off the shelf sub-assemblies from suppliers located in the U.S., Canada, China, Israel, Republic of Korea, Mexico, Sri Lanka, and Taiwan. Although we currently obtain many of these components from single source suppliers, we own the injection molded component tooling, most of the designs, and the test fixtures used in their production for all custom components. As a result, we believe we could obtain alternative suppliers in most cases without incurring significant production delays. Although we have experienced supply chain disruptions relating to port constraints, we have remained focused on closely managing our supply chain. We continue to bolster our strategic relationships in our supply chain, identifying secondary/alternate sourcing, adjusting build plans accordingly, and building in logistic modes in support of our increasing demand while working to minimize disruption to customers. We acquire most of our components on a purchase order basis and do not have any significant long-term contracts with component suppliers. |
Income per Common Share | 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. Diluted income per share reflects the potential dilution from outstanding stock options and unvested restricted stock units. 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 September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Numerator for basic and diluted earnings per share: Net income (loss) $ 48,524 $ (873) $ (46,510) $ (27,558) Denominator: Weighted average shares outstanding 66,192 63,496 65,139 61,159 Dilutive effect of stock-based awards 6,249 — — — Diluted weighted average shares outstanding 72,441 63,496 65,139 61,159 Anti-dilutive stock-based awards excluded 3,481 12,793 8,920 12,904 Net loss per common share: Basic $ 0.73 $ (0.01) $ (0.71) $ (0.45) Diluted $ 0.67 $ (0.01) $ (0.71) $ (0.45) In October and November 2021, approximately 0.9 million options were exercised under the CEO Performance Award. Refer to Note 11 for further discussion of this award. |
Standard Warranties | Standard Warranties We warranty our CEDs, Axon cameras and certain related accessories from manufacturing defects on a limited basis for a period of one year after purchase and, thereafter, will repair or 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 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 condensed consolidated balance sheets. Changes in our estimated product warranty liabilities were as follows (in thousands): Nine Months Ended September 30, 2021 2020 Balance, beginning of period $ 769 $ 1,476 Utilization of reserve (582) (539) Warranty expense (benefit) 1,176 (192) Balance, end of period $ 1,363 $ 745 |
Fair Value Measurements and Financial Instruments | Fair Value Measurements and Financial Instruments We use 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. We categorize each of our 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 our own assumptions about inputs that market participants would use in pricing an asset or liability. We have cash equivalents and investments, which at September 30, 2021 and December 31, 2020 were comprised of money market funds, certificates of deposit, commercial paper, corporate bonds, municipal bonds, and U.S. Government agency bonds. Also included in cash equivalents and investments at December 31, 2020 were U.S. Treasury bills, U.S. Treasury repurchase agreements and U.S. Treasury inflation-protected securities. See additional disclosure regarding the fair value of our cash equivalents and investments in Note 3. Included in the balance of other assets as of September 30, 2021 and December 31, 2020 was $5.0 million and $4.7 million, respectively, related to corporate-owned life insurance policies which are used to fund our deferred compensation plan. We determine the fair value of insurance contracts by obtaining the cash surrender value of the contracts from the issuer, a Level 2 valuation technique. We have an investment in marketable securities, for which c hanges in fair value are recorded in the consolidated statement of operations as unrealized gain or (loss) on marketable securities, which is included in interest and other income (expense), net. We have strategic investments in three unconsolidated affiliates. The estimated fair value of the investments was determined based on Level 3 inputs. As of September 30, 2021, management estimated that the fair value of the investments equaled the carrying value. Our financial instruments also include accounts and notes receivable, accounts payable and accrued liabilities. Due to the short-term nature of these instruments, their fair values approximate their carrying values on the balance sheet. |
Restricted cash | Restricted Cash Restricted cash balances as of September 30, 2021 and December 31, 2020 included $0.1 million primarily related to funds held in an international bank account for a country in which we are required to maintain a minimum balance to operate. Approximately half of the balance was included in prepaid expenses and other current assets on our condensed consolidated balance sheets, with the remainder included in other assets. |
Valuation of Goodwill, Intangibles and Long-lived Assets | Valuation of Goodwill, Intangibles and Long-lived Assets We evaluate 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, we estimate 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. We do 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. We perform our annual goodwill and intangible asset impairment tests in the fourth quarter of each year. |
Recently Issued Accounting Guidance | Recently Issued Accounting Guidance Recently Adopted Accounting Pronouncements In December 2019, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2019-12, Simplifying the Accounting for Income Taxes. Adoption of this ASU on January 1, 2021 did not have a material impact on our consolidated financial statements. In January 2020, the FASB issued ASU No. 2020-01, Investments – Equity Securities (Topic 321), Investments – Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) – Clarifying the Interactions Between Topic 321, Topic 323, and Topic 815 (a Consensus of the Emerging Issues Task Force). The guidance clarifies the interaction between ASU 2016-01, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities and the ASU on equity method investments. ASU 2016-01 provides companies with an alternative to measure certain equity securities without a readily determinable fair value at cost, minus impairment, if any, unless an observable transaction for an identical or similar security occurs. ASU 2020-01 clarifies that for purposes of applying the Topic 321 measurement alternative, an entity should consider observable transactions that require it to either apply or discontinue the equity method of accounting under Topic 323, immediately before applying or upon discontinuing the equity method. In addition, this new ASU provides direction that a company should not consider whether the underlying securities would be accounted for under the equity method or the fair value option when it is determining the accounting for certain forward contracts and purchased options, upon either settlement or exercise. Adoption of this ASU on January 1, 2021 did not have a material impact on our consolidated financial statements. Effective the First Quarter of 2023: In October 2021, the FASB issued ASU No. 2021-08, Business Combinations (Topic 805) – Accounting for Contract Assets and Contract Liabilities from Contracts with Customers. The guidance improves the accounting for acquired revenue contracts with customers in a business combination by addressing diversity in practice and certain inconsistencies in application. Under current GAAP, an acquirer generally recognizes contract assets acquired and liabilities assumed in a business combination at fair value on the acquisition date. The amendments in this update require that an acquirer recognize and measure contract assets and contract liabilities acquired in a business combination in accordance with Topic 606 as if it had originated the contracts. The amendments in this update are effective for fiscal years beginning after December 15, 2022, including interim periods within those fiscal years. Early adoption is permitted, including adoption in an interim period. Adoption of this ASU is not expected to have a material impact on our consolidated financial statements. |
Reclassification of Prior Year Presentation | Reclassification of Prior Year Presentation Certain prior year amounts have been reclassified for consistency with the current year presentation. These reclassifications are not material and had no effect on the reported results of operations. |
Organization and Summary of S_3
Organization and Summary of Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Weighted Average Number of Shares Outstanding and Income Per Share | Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Numerator for basic and diluted earnings per share: Net income (loss) $ 48,524 $ (873) $ (46,510) $ (27,558) Denominator: Weighted average shares outstanding 66,192 63,496 65,139 61,159 Dilutive effect of stock-based awards 6,249 — — — Diluted weighted average shares outstanding 72,441 63,496 65,139 61,159 Anti-dilutive stock-based awards excluded 3,481 12,793 8,920 12,904 Net loss per common share: Basic $ 0.73 $ (0.01) $ (0.71) $ (0.45) Diluted $ 0.67 $ (0.01) $ (0.71) $ (0.45) |
Summary of Changes in Estimated Product Warranty Liabilities | Changes in our estimated product warranty liabilities were as follows (in thousands): Nine Months Ended September 30, 2021 2020 Balance, beginning of period $ 769 $ 1,476 Utilization of reserve (582) (539) Warranty expense (benefit) 1,176 (192) Balance, end of period $ 1,363 $ 745 |
Revenues (Tables)
Revenues (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Revenues | |
Summary of Revenue by Product and Service Offering and Geography | The following tables present our revenues by primary product and service offering (in thousands): Three Months Ended September 30, 2021 Three Months Ended September 30, 2020 Software and Software and TASER Sensors Total TASER Sensors Total TASER 7 $ 50,641 — $ 50,641 $ 21,702 $ — $ 21,702 TASER X26P 9,086 — 9,086 9,766 — 9,766 TASER X2 10,078 — 10,078 14,494 — 14,494 TASER Pulse 967 — 967 2,981 — 2,981 Cartridges 39,313 — 39,313 26,335 — 26,335 Axon Body — 20,862 20,862 — 15,978 15,978 Axon Flex — 1,488 1,488 — 1,589 1,589 Axon Fleet — 6,063 6,063 — 4,215 4,215 Axon Dock — 6,460 6,460 — 5,708 5,708 Axon Evidence and cloud services 2,711 63,272 65,983 692 45,450 46,142 Extended warranties 6,099 8,983 15,082 5,265 6,514 11,779 Other 2,596 3,370 5,966 3,171 2,582 5,753 Total $ 121,491 $ 110,498 $ 231,989 $ 84,406 $ 82,036 $ 166,442 Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020 Software and Software and TASER Sensors Total TASER Sensors Total TASER 7 $ 112,760 — $ 112,760 $ 48,616 $ — $ 48,616 TASER X26P 28,618 — 28,618 30,338 — 30,338 TASER X2 39,001 — 39,001 45,401 — 45,401 TASER Pulse 4,873 — 4,873 6,374 — 6,374 Cartridges 116,409 — 116,409 76,732 — 76,732 Axon Body — 60,545 60,545 — 40,645 40,645 Axon Flex — 3,481 3,481 — 3,452 3,452 Axon Fleet — 15,073 15,073 — 13,088 13,088 Axon Dock — 18,889 18,889 — 14,714 14,714 Axon Evidence and cloud services 5,809 175,933 181,742 1,776 126,495 128,271 Extended warranties 17,602 24,632 42,234 15,340 17,707 33,047 Other 7,946 14,232 22,178 6,214 7,971 14,185 Total $ 333,018 $ 312,785 $ 645,803 $ 230,791 $ 224,072 $ 454,863 The following table presents our revenues disaggregated by geography (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 United States $ 192,756 83 % $ 143,380 86 % $ 518,050 80 % $ 368,390 81 % Other countries 39,233 17 23,062 14 127,753 20 86,473 19 Total $ 231,989 100 % $ 166,442 100 % $ 645,803 100 % $ 454,863 100 % |
Contract with Customer, Assets and Liabilities | The following table presents our contract assets, contract liabilities and certain information related to these balances as of and for the nine months ended September 30, 2021 (in thousands): September 30, 2021 Contract assets, net $ 174,370 Contract liabilities (deferred revenue) 362,543 Revenue recognized in the period from: Amounts included in contract liabilities at the beginning of the period 145,012 Contract liabilities (deferred revenue) consisted of the following (in thousands): September 30, 2021 December 31, 2020 Current Long-Term Total Current Long-Term Total Warranty: TASER $ 14,332 $ 10,763 $ 25,095 $ 11,635 $ 16,953 $ 28,588 Software and Sensors 19,436 18,850 38,286 13,926 5,025 18,951 33,768 29,613 63,381 25,561 21,978 47,539 Hardware: TASER 24,775 9,252 34,027 16,314 14,304 30,618 Software and Sensors 37,398 42,981 80,379 25,181 50,981 76,162 62,173 52,233 114,406 41,495 65,285 106,780 Services: TASER 1,993 2,308 4,301 996 1,554 2,550 Software and Sensors 152,717 27,738 180,455 95,907 22,405 118,312 154,710 30,046 184,756 96,903 23,959 120,862 Total $ 250,651 $ 111,892 $ 362,543 $ 163,959 $ 111,222 $ 275,181 September 30, 2021 December 31, 2020 Current Long-Term Total Current Long-Term Total TASER $ 41,100 $ 22,323 $ 63,423 $ 28,945 $ 32,811 $ 61,756 Software and Sensors 209,551 89,569 299,120 135,014 78,411 213,425 Total $ 250,651 $ 111,892 $ 362,543 $ 163,959 $ 111,222 $ 275,181 |
Cash, Cash Equivalents and In_2
Cash, Cash Equivalents and Investments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Cash, Cash Equivalents and Investments | |
Summary of Cash, Cash Equivalents, Marketable Securities, and Held-to-Maturity Investments by Type | The following tables summarize our cash, cash equivalents, marketable securities, and held-to-maturity investments at September 30, 2021 and December 31, 2020 (in thousands): As of September 30, 2021 Gross Gross Cash and Amortized Unrealized Unrealized Cash Marketable Short-Term Long-Term Cost Gains Losses Fair Value Equivalents Securities Investments Investments Cash $ 162,478 $ — $ — $ 162,478 $ 162,478 $ — $ — $ — Level 1: Money market funds 119,225 — — 119,225 119,225 — — — Agency bonds 48,000 49 — 48,049 — 40,000 8,000 Marketable securities 90,000 (6,660) 83,340 83,340 — — Subtotal 257,225 49 (6,660) 250,614 119,225 83,340 40,000 8,000 Level 2: State and municipal obligations 77,764 4 (22) 77,746 72,383 5,381 Certificates of deposit 500 — — 500 — — 500 — Corporate bonds 119,817 76 (95) 119,798 — — 83,751 36,066 Commercial paper 19,994 — — 19,994 — — 19,994 — Subtotal 218,075 80 (117) 218,038 — 176,628 41,447 Total $ 637,778 $ 129 $ (6,777) $ 631,130 281,703 83,340 216,628 49,447 Expected credit loss reserve (12) — (71) (16) Total, net of reserve for expected credit losses $ 281,691 $ 83,340 $ 216,557 $ 49,431 As of December 31, 2020 Gross Gross Cash and Amortized Unrealized Unrealized Cash Short-Term Long-Term Cost Gains Losses Fair Value Equivalents Investments Investments Cash $ 116,107 $ — $ — $ 116,107 $ 116,107 $ — $ — Level 1: Money market funds 23,611 — — 23,611 23,611 — — Agency bonds 63,794 122 — 63,916 — 23,794 40,000 Treasury Bills 96,384 6 — 96,390 96,384 Subtotal 183,789 128 — 183,917 23,611 120,178 40,000 Level 2: State and municipal obligations 77,130 25 (28) 77,127 — 66,519 10,611 Certificates of deposit 500 — — 500 — 500 — Corporate bonds 212,825 232 (100) 212,957 2,525 170,205 40,095 U.S. Treasury repurchase agreements 13,200 — — 13,200 13,200 — — Treasury inflation-protected securities 3,291 16 — 3,307 — 3,291 Commercial paper 45,974 — — 45,974 45,974 — Subtotal 352,920 273 (128) 353,065 15,725 286,489 50,706 Total $ 652,816 $ 401 $ (128) $ 653,089 155,443 406,667 90,706 Expected credit loss reserve (3) (142) (25) Total, net of reserve for expected credit losses $ 155,440 $ 406,525 $ 90,681 |
Expected Credit Losses (Tables)
Expected Credit Losses (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Expected Credit Losses | |
Schedule of roll-forward of allowance for credit losses | The following table provides a roll-forward of the allowance for expected credit losses that is deducted from the amortized cost basis of accounts receivable, notes receivable, and contract assets to present the net amount expected to be collected (in thousands): Nine Months Ended September 30, 2021 United States Other countries Total Balance, beginning of period $ 2,902 $ 474 $ 3,376 Provision for expected credit losses 687 11 698 Amounts written off charged against the allowance (54) - (54) Other, including dispositions and foreign currency translation 78 (5) 73 Balance, end of period $ 3,613 $ 480 $ 4,093 |
Schedule of allowance for expected credit losses for each type of customer receivable | September 30, December 31, 2021 2020 Accounts receivable and notes receivable, current $ 2,425 $ 2,105 Contract assets, net 1,409 794 Long-term notes receivable, net of current portion 259 477 Total allowance for expected credit losses on customer receivables $ 4,093 $ 3,376 |
Inventory (Tables)
Inventory (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventories are stated at the lower of cost, determined on the first-in, first-out (“FIFO”) basis, or net realizable value, net of an inventory valuation allowance. We use a standard cost methodology to determine the cost basis for its inventories. Costs include allocations for materials, labor, and overhead. All variances between actual costs and standard costs are apportioned to inventory and cost of goods sold based upon inventory turnover. We evaluate inventory on a quarterly basis for obsolete or slow-moving items to ascertain if the recorded allowance is reasonable and adequate. Additional provisions are made to reduce excess, obsolete or slow-moving inventories to their net realizable value. Inventory consisted of the following at September 30, 2021 and December 31, 2020 (in thousands): September 30, 2021 December 31, 2020 Raw materials $ 33,951 $ 39,194 Finished goods 59,328 50,764 Total inventory $ 93,279 $ 89,958 |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Property, Plant and Equipment [Abstract] | |
Summary of Property and Equipment | Property and equipment consisted of the following (in thousands): Estimated Useful Life September 30, 2021 December 31, 2020 Land N/A $ 54,868 $ 57,052 Building and leasehold improvements 3- 39 years 25,025 20,912 Production equipment 3-7 years 44,072 37,539 Computers, equipment and software 3- 5 years 13,998 10,889 Furniture and office equipment 5-7 years 6,570 6,954 Vehicles 5 years 2,968 1,980 Website development costs 3 years 204 204 Capitalized internal-use software development costs 3- 5 years 11,876 3,670 Construction-in-process N/A 24,037 13,479 Total cost 183,618 152,679 Less: Accumulated depreciation (54,810) (47,185) Property and equipment, net $ 128,808 $ 105,494 |
Strategic Investments (Tables)
Strategic Investments (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Investments, Debt and Equity Securities [Abstract] | |
Schedule of Roll-Forward of Strategic Investments | The following tables provide a roll-forward of the balance of strategic investments (in thousands): Nine Months Ended September 30, 2021 Strategic investments Warrants for strategic investment Total Balance, beginning of period $ 9,500 $ 2,211 $ 11,711 Investments 20,500 - 20,500 Observable price changes 40,321 534 40,855 Sales (14,546) - (14,546) Balance, end of period $ 55,775 $ 2,745 $ 58,520 Inception to date Strategic investments Warrants for strategic investment Total Investments $ 27,568 $ 2,588 $ 30,156 Observable price changes 42,753 157 42,910 Sales (14,546) - (14,546) Balance, end of period $ 55,775 $ 2,745 $ 58,520 |
Other Long-Term Assets (Tables)
Other Long-Term Assets (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Other Long-Term Assets | Other long-term assets consisted of the following at September 30, 2021 and December 31, 2020 (in thousands): September 30, 2021 December 31, 2020 Cash surrender value of corporate-owned life insurance policies $ 4,996 $ 4,654 Deferred commissions (1) 45,663 32,455 Restricted cash 58 62 Operating lease assets 24,732 22,308 Deferred implementation costs (2) 4,132 — Prepaid expenses, deposits and other (3) 12,046 8,727 Total other long-term assets $ 91,627 $ 68,206 (1) Represents the incremental costs of obtaining contracts with customers, which consist primarily of sales commissions. These costs are ascribed to or allocated to the underlying performance obligations in the contracts and amortized consistent with the recognition timing of the revenue for the underlying performance obligations. (2) During the three months ended September 30, 2021, we completed an implementation of several software-as-a-service applications supporting our internal operations. Following the implementation, we placed $4.3 million of deferred implementation costs assets related to these applications into service. (3) During the three months ended September 30, 2021, we recorded a government grant receivable totaling $0.9 million in connection with the Arizona Qualified Facility Tax Credit (“QFTC”). Of that amount, $0.1 million was deferred to the three months ending December 31, 2021. Because U.S. GAAP does not contain authoritative accounting standards on this topic, we determined it most appropriate to account for the QFTC by analogy to International Accounting Standards 20 (“IAS 20”), Accounting for Government Grants and Disclosure of Government Assistance. Under IAS 20, the grant is initially recorded as other assets on the balance sheet and other income is recognized on a systematic basis over the periods in which the qualifying expenses are incurred when we determine that grant assets are no longer contingent. As of September 30, 2021, approximately $0.5 million was recorded in other assets with the remainder recorded in prepaid expenses and other current assets on our condensed consolidated balance sheets . |
Accrued Liabilities (Tables)
Accrued Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Payables and Accruals [Abstract] | |
Schedule of Accrued liabilities | Accrued liabilities consisted of the following at September 30, 2021 and December 31, 2020 (in thousands): September 30, 2021 December 31, 2020 Accrued salaries, benefits and bonus $ 59,559 $ 36,892 Accrued professional, consulting and lobbying fees 5,282 3,055 Accrued warranty expense 1,363 769 Accrued income and other taxes 4,459 3,848 Accrued inventory in transit 6,316 4,597 Other accrued expenses 11,915 10,682 Accrued liabilities $ 88,894 $ 59,843 |
Stockholders' Equity (Tables)
Stockholders' Equity (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Equity [Abstract] | |
Equity Compensation Goals | Eight Separate Adjusted EBITDA (CEO Eight Separate Revenue Goals (1) Performance Award) Goals (in thousands) (in thousands) Goal #1, $710,058 Goal #9, $125,000 Goal #2, $860,058 Goal #10, $155,000 Goal #3, $1,010,058 Goal #11, $175,000 Goal #4, $1,210,058 Goal #12, $190,000 Goal #5, $1,410,058 Goal #13, $200,000 Goal #6, $1,610,058 Goal #14, $210,000 Goal #7, $1,810,058 Goal #15, $220,000 Goal #8, $2,010,058 Goal #16, $230,000 (1) In connection with the business acquisition that was completed during the three months ended September 30, 2018, the revenue goals were adjusted for the acquiree’s Target Revenue, as defined in the CEO Performance Award agreement. |
Summary of Restricted Stock Unit Activity | The following table summarizes RSU activity for the nine months ended September 30, 2021 (number of units and aggregate intrinsic value in thousands): Number of Weighted Average Aggregate Units Grant-Date Fair Value Intrinsic Value Units outstanding, beginning of year 1,107 $ 76.10 Granted 205 166.29 Released (348) 55.16 Forfeited (108) 96.25 Units outstanding, end of period 856 103.70 $ 149,875 |
Summary of Performance Stock Unit Activity | The following table summarizes PSU activity, inclusive of XSUs, for the nine months ended September 30, 2021 (number of units and aggregate intrinsic value in thousands): Number of Weighted Average Aggregate Units Grant-Date Fair Value Intrinsic Value Units outstanding, beginning of year 5,618 $ 35.71 Granted 236 54.16 Released (3,896) 36.50 Forfeited (77) 38.46 Units outstanding, end of period 1,881 36.29 $ 329,211 |
Summary of the Company's Stock Options Activity | The following table summarizes stock option activity for the nine months ended September 30, 2021 (number of units and aggregate intrinsic value in thousands): Weighted Weighted Average Number Average Remaining of Exercise Contractual Aggregate Options Price Life (years) Intrinsic Value Options outstanding, beginning of year 6,366 $ 28.58 Granted — — Exercised — — Expired / terminated — — Options outstanding, end of period 6,366 28.58 6.41 $ 932,216 Options exercisable, end of period 4,774 28.58 6.41 699,162 |
Reported Share-Based Compensation | The following table summarizes the composition of stock-based compensation expense for the three and nine months ended September 30, 2021 and 2020 (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2021 2020 2021 2020 Cost of products sold and services delivered $ 1,112 $ 744 $ 4,439 $ 2,170 Sales, general and administrative expenses 25,969 19,117 211,073 60,853 Research and development expenses 7,981 6,233 46,709 17,101 Total stock-based compensation expense $ 35,062 $ 26,094 $ 262,221 $ 80,124 |
Segment Data (Tables)
Segment Data (Tables) | 9 Months Ended |
Sep. 30, 2021 | |
Segment Reporting [Abstract] | |
Summary of Operational Information Relative to the Company's Reportable Segments | Information relative to our reportable segments was as follows (in thousands): Three Months Ended September 30, 2021 Three Months Ended September 30, 2020 Software and Software and TASER Sensors Total TASER Sensors Total Net sales from products $ 118,569 $ 47,234 $ 165,803 $ 83,517 $ 36,574 $ 120,091 Net sales from services 2,922 63,264 66,186 889 45,462 46,351 Net sales 121,491 110,498 231,989 84,406 82,036 166,442 Cost of product sales 41,554 29,782 71,336 31,297 26,501 57,798 Cost of service sales — 16,086 16,086 — 10,404 10,404 Cost of sales 41,554 45,868 87,422 31,297 36,905 68,202 Gross margin $ 79,937 $ 64,630 $ 144,567 $ 53,109 $ 45,131 $ 98,240 Research and development $ 10,476 $ 31,906 $ 42,382 $ 3,355 $ 25,891 $ 29,246 Nine Months Ended September 30, 2021 Nine Months Ended September 30, 2020 Software and Software and TASER Sensors Total TASER Sensors Total Net sales from products $ 326,508 136,608 $ 463,116 $ 228,569 97,565 $ 326,134 Net sales from services 6,510 176,177 182,687 2,222 126,507 128,729 Net sales 333,018 312,785 645,803 230,791 224,072 454,863 Cost of product sales 112,200 83,053 195,253 88,787 61,720 150,507 Cost of service sales 145 44,556 44,701 — 29,331 29,331 Cost of sales 112,345 127,609 239,954 88,787 91,051 179,838 Gross margin $ 220,673 $ 185,176 $ 405,849 $ 142,004 $ 133,021 $ 275,025 Research and development $ 32,032 $ 111,320 $ 143,352 $ 10,149 $ 75,038 $ 85,187 |
Organization and Summary of S_4
Organization and Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands, shares in Millions | 2 Months Ended | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Nov. 15, 2021shares | Sep. 30, 2021USD ($)customercountry | Sep. 30, 2021USD ($)itemcustomercountrysegment | Dec. 31, 2020USD ($)customer | |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Number of reportable segments | segment | 2 | |||
Warranty period | 1 year | |||
Cash surrender value of corporate-owned life insurance policies | $ 4,996 | $ 4,996 | $ 4,654 | |
Investments in number of unconsolidated affiliates | item | 3 | |||
Restricted cash balance | 58 | $ 58 | 62 | |
Prepaid Expenses and Other Current Assets | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Restricted cash balance | $ 100 | $ 100 | $ 100 | |
CEO Performance Award | Subsequent Event | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Number of options exercised (in shares) | shares | 0.9 | |||
Net Sales | Geographic Concentration Risk | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Number of countries outside the U.S. representing more than 10% of total net sales | country | 0 | 0 | ||
Net Sales | Customer Concentration Risk | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Number of major customers | customer | 0 | 0 | ||
Accounts and notes receivable and contract assets | Customer Concentration Risk | ||||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||||
Number of major customers | customer | 0 | 0 |
Organization and Summary of S_5
Organization and Summary of Significant Accounting Policies - Weighted Average Number of Shares Outstanding and Income (Loss) Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Numerator for basic and diluted earnings per share: | ||||||||
Net loss | $ 48,524 | $ (47,117) | $ (47,917) | $ (873) | $ (30,759) | $ 4,074 | $ (46,510) | $ (27,558) |
Denominator: | ||||||||
Weighted average shares outstanding basic (in shares) | 66,192 | 63,496 | 65,139 | 61,159 | ||||
Dilutive effect of stock-based awards (in shares) | 6,249 | |||||||
Diluted weighted average shares outstanding (in shares) | 72,441 | 63,496 | 65,139 | 61,159 | ||||
Anti-dilutive stock-based awards excluded (in shares) | 3,481 | 12,793 | 8,920 | 12,904 | ||||
Net loss per common share: | ||||||||
Basic (in dollars per share) | $ 0.73 | $ (0.01) | $ (0.71) | $ (0.45) | ||||
Diluted (in dollars per share) | $ 0.67 | $ (0.01) | $ (0.71) | $ (0.45) |
Organization and Summary of S_6
Organization and Summary of Significant Accounting Policies - Summary of Changes in Estimated Product Warranty Liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2020 | |
Movement in Standard and Extended Product Warranty | ||
Balance, beginning of period | $ 769 | $ 1,476 |
Utilization of reserve | (582) | (539) |
Warranty expense (benefit) | 1,176 | (192) |
Balance, end of period | $ 1,363 | $ 745 |
Revenues - Revenues By Products
Revenues - Revenues By Products And Service Offerings (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | $ 231,989 | $ 166,442 | $ 645,803 | $ 454,863 |
TASER 7 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 50,641 | 21,702 | 112,760 | 48,616 |
TASER X26P | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 9,086 | 9,766 | 28,618 | 30,338 |
TASER X2 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 10,078 | 14,494 | 39,001 | 45,401 |
TASER Pulse | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 967 | 2,981 | 4,873 | 6,374 |
Cartridges | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 39,313 | 26,335 | 116,409 | 76,732 |
Axon Body | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 20,862 | 15,978 | 60,545 | 40,645 |
Axon Flex | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 1,488 | 1,589 | 3,481 | 3,452 |
Axon Fleet | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 6,063 | 4,215 | 15,073 | 13,088 |
Axon Dock | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 6,460 | 5,708 | 18,889 | 14,714 |
Axon Evidence and cloud services | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 65,983 | 46,142 | 181,742 | 128,271 |
Extended warranties | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 15,082 | 11,779 | 42,234 | 33,047 |
Other | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 5,966 | 5,753 | 22,178 | 14,185 |
TASER | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 121,491 | 84,406 | 333,018 | 230,791 |
TASER | TASER 7 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 50,641 | 21,702 | 112,760 | 48,616 |
TASER | TASER X26P | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 9,086 | 9,766 | 28,618 | 30,338 |
TASER | TASER X2 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 10,078 | 14,494 | 39,001 | 45,401 |
TASER | TASER Pulse | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 967 | 2,981 | 4,873 | 6,374 |
TASER | Cartridges | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 39,313 | 26,335 | 116,409 | 76,732 |
TASER | Axon Body | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 0 | |||
TASER | Axon Flex | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 0 | |||
TASER | Axon Fleet | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 0 | |||
TASER | Axon Dock | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 0 | |||
TASER | Axon Evidence and cloud services | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 2,711 | 692 | 5,809 | 1,776 |
TASER | Extended warranties | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 6,099 | 5,265 | 17,602 | 15,340 |
TASER | Other | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 2,596 | 3,171 | 7,946 | 6,214 |
Software and Sensors | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 110,498 | 82,036 | 312,785 | 224,072 |
Software and Sensors | TASER 7 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 0 | |||
Software and Sensors | TASER X26P | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 0 | |||
Software and Sensors | TASER X2 | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 0 | |||
Software and Sensors | TASER Pulse | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 0 | |||
Software and Sensors | Cartridges | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 0 | |||
Software and Sensors | Axon Body | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 20,862 | 15,978 | 60,545 | 40,645 |
Software and Sensors | Axon Flex | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 1,488 | 1,589 | 3,481 | 3,452 |
Software and Sensors | Axon Fleet | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 6,063 | 4,215 | 15,073 | 13,088 |
Software and Sensors | Axon Dock | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 6,460 | 5,708 | 18,889 | 14,714 |
Software and Sensors | Axon Evidence and cloud services | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 63,272 | 45,450 | 175,933 | 126,495 |
Software and Sensors | Extended warranties | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | 8,983 | 6,514 | 24,632 | 17,707 |
Software and Sensors | Other | ||||
Revenue, Initial Application Period Cumulative Effect Transition [Line Items] | ||||
Revenue from contract with customers | $ 3,370 | $ 2,582 | $ 14,232 | $ 7,971 |
Revenues - Revenues By Geograph
Revenues - Revenues By Geographic Area (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customers | $ 231,989 | $ 166,442 | $ 645,803 | $ 454,863 |
United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customers | 192,756 | 143,380 | 518,050 | 368,390 |
Other countries | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenue from contract with customers | $ 39,233 | $ 23,062 | $ 127,753 | $ 86,473 |
Revenue from Contract with Customer | Geographic Concentration Risk | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk (as a percentage) | 100.00% | 100.00% | 100.00% | 100.00% |
Revenue from Contract with Customer | Geographic Concentration Risk | United States | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk (as a percentage) | 83.00% | 86.00% | 80.00% | 81.00% |
Revenue from Contract with Customer | Geographic Concentration Risk | Other countries | ||||
Disaggregation of Revenue [Line Items] | ||||
Concentration risk (as a percentage) | 17.00% | 14.00% | 20.00% | 19.00% |
Revenues - Contract Assets, Con
Revenues - Contract Assets, Contract Liabilities (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Revenues | ||
Contract assets, net | $ 174,370 | |
Contract liabilities (deferred revenue) | 362,543 | $ 275,181 |
Revenue recognized in the period from: | ||
Amounts included in contract liabilities at the beginning of the period | $ 145,012 |
Revenues - Schedule Of Contract
Revenues - Schedule Of Contract Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Disaggregation of Revenue [Line Items] | ||
Current | $ 250,651 | $ 163,959 |
Long-Term | 111,892 | 111,222 |
Total | 362,543 | 275,181 |
TASER | ||
Disaggregation of Revenue [Line Items] | ||
Current | 41,100 | 28,945 |
Long-Term | 22,323 | 32,811 |
Total | 63,423 | 61,756 |
Software and Sensors | ||
Disaggregation of Revenue [Line Items] | ||
Current | 209,551 | 135,014 |
Long-Term | 89,569 | 78,411 |
Total | 299,120 | 213,425 |
Warranty | ||
Disaggregation of Revenue [Line Items] | ||
Current | 33,768 | 25,561 |
Long-Term | 29,613 | 21,978 |
Total | 63,381 | 47,539 |
Warranty | TASER | ||
Disaggregation of Revenue [Line Items] | ||
Current | 14,332 | 11,635 |
Long-Term | 10,763 | 16,953 |
Total | 25,095 | 28,588 |
Warranty | Software and Sensors | ||
Disaggregation of Revenue [Line Items] | ||
Current | 19,436 | 13,926 |
Long-Term | 18,850 | 5,025 |
Total | 38,286 | 18,951 |
Hardware | ||
Disaggregation of Revenue [Line Items] | ||
Current | 62,173 | 41,495 |
Long-Term | 52,233 | 65,285 |
Total | 114,406 | 106,780 |
Hardware | TASER | ||
Disaggregation of Revenue [Line Items] | ||
Current | 24,775 | 16,314 |
Long-Term | 9,252 | 14,304 |
Total | 34,027 | 30,618 |
Hardware | Software and Sensors | ||
Disaggregation of Revenue [Line Items] | ||
Current | 37,398 | 25,181 |
Long-Term | 42,981 | 50,981 |
Total | 80,379 | 76,162 |
Software and Sensors | ||
Disaggregation of Revenue [Line Items] | ||
Current | 154,710 | 96,903 |
Long-Term | 30,046 | 23,959 |
Total | 184,756 | 120,862 |
Software and Sensors | TASER | ||
Disaggregation of Revenue [Line Items] | ||
Current | 1,993 | 996 |
Long-Term | 2,308 | 1,554 |
Total | 4,301 | 2,550 |
Software and Sensors | Software and Sensors | ||
Disaggregation of Revenue [Line Items] | ||
Current | 152,717 | 95,907 |
Long-Term | 27,738 | 22,405 |
Total | $ 180,455 | $ 118,312 |
Revenues - Revenue Performance
Revenues - Revenue Performance Obligations (Details) $ in Millions | Sep. 30, 2021USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation | $ 2,390 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01 | Minimum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation to be recognized in the next twelve months (as a percentage) | 15.00% |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-10-01 | Maximum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation to be recognized in the next twelve months (as a percentage) | 20.00% |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 12 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-10-01 | Minimum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 5 years |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-10-01 | Maximum | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 7 years |
Cash, Cash Equivalents, and Inv
Cash, Cash Equivalents, and Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | |
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Amortized Cost | $ 637,778 | $ 637,778 | $ 652,816 | |
Gross Unrealized Gains | 129 | 129 | 401 | |
Gross Unrealized Losses | (6,777) | (6,777) | (128) | |
Fair Value | 631,130 | 631,130 | 653,089 | |
Cash and Cash Equivalents | 281,703 | 281,703 | 155,443 | |
Marketable Securities | 83,340 | 83,340 | ||
Short-Term Investments | 216,628 | 216,628 | 406,667 | |
Long-Term Investments | 49,447 | 49,447 | 90,706 | |
Expected credit loss reserve | (100) | (100) | 200 | |
Cash and cash equivalents | 281,691 | 281,691 | 155,440 | $ 176,000 |
Short-term investments | 216,557 | 216,557 | 406,525 | |
Long-term investments | 49,431 | 49,431 | 90,681 | |
Marketable securities, unrealized gain (loss) | (6,700) | (6,700) | ||
Fair Value, Inputs, Level 1 | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Amortized Cost | 257,225 | 257,225 | 183,789 | |
Gross Unrealized Gains | 49 | 49 | 128 | |
Gross Unrealized Losses | (6,660) | (6,660) | ||
Fair Value | 250,614 | 250,614 | 183,917 | |
Cash and Cash Equivalents | 119,225 | 119,225 | 23,611 | |
Marketable Securities | 83,340 | 83,340 | ||
Short-Term Investments | 40,000 | 40,000 | 120,178 | |
Long-Term Investments | 8,000 | 8,000 | 40,000 | |
Fair Value, Inputs, Level 2 | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Amortized Cost | 218,075 | 218,075 | 352,920 | |
Gross Unrealized Gains | 80 | 80 | 273 | |
Gross Unrealized Losses | (117) | (117) | (128) | |
Fair Value | 218,038 | 218,038 | 353,065 | |
Cash and Cash Equivalents | 15,725 | |||
Short-Term Investments | 176,628 | 176,628 | 286,489 | |
Long-Term Investments | 41,447 | 41,447 | 50,706 | |
Cash and Cash Equivalents | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Expected credit loss reserve | (12) | (12) | (3) | |
Short-Term Investments | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Expected credit loss reserve | (71) | (71) | (142) | |
Long-Term Investments | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Expected credit loss reserve | (16) | (16) | (25) | |
Common stock | Share Purchase Agreement with Cellebrite DI Ltd. | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Marketable Securities | $ 90,000 | $ 90,000 | ||
Investment owned, shares held | 9,000,000 | 9,000,000 | ||
Cash | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Amortized Cost | $ 162,478 | $ 162,478 | 116,107 | |
Fair Value | 162,478 | 162,478 | 116,107 | |
Cash and Cash Equivalents | 162,478 | 162,478 | 116,107 | |
Money market funds | Fair Value, Inputs, Level 1 | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Amortized Cost | 119,225 | 119,225 | 23,611 | |
Fair Value | 119,225 | 119,225 | 23,611 | |
Cash and Cash Equivalents | 119,225 | 119,225 | 23,611 | |
Agency bonds | Fair Value, Inputs, Level 1 | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Amortized Cost | 48,000 | 48,000 | 63,794 | |
Gross Unrealized Gains | 49 | 49 | 122 | |
Fair Value | 48,049 | 48,049 | 63,916 | |
Short-Term Investments | 40,000 | 40,000 | 23,794 | |
Long-Term Investments | 8,000 | 8,000 | 40,000 | |
Marketable securities | Fair Value, Inputs, Level 1 | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Amortized Cost | 90,000 | 90,000 | ||
Gross Unrealized Losses | (6,660) | (6,660) | ||
Fair Value | 83,340 | 83,340 | ||
Marketable Securities | 83,340 | 83,340 | ||
Treasury bills | Fair Value, Inputs, Level 1 | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Amortized Cost | 96,384 | |||
Gross Unrealized Gains | 6 | |||
Fair Value | 96,390 | |||
Short-Term Investments | 96,384 | |||
State and municipal obligations | Fair Value, Inputs, Level 2 | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Amortized Cost | 77,764 | 77,764 | 77,130 | |
Gross Unrealized Gains | 4 | 4 | 25 | |
Gross Unrealized Losses | (22) | (22) | (28) | |
Fair Value | 77,746 | 77,746 | 77,127 | |
Short-Term Investments | 72,383 | 72,383 | 66,519 | |
Long-Term Investments | 5,381 | 5,381 | 10,611 | |
Certificates of deposit | Fair Value, Inputs, Level 2 | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Amortized Cost | 500 | 500 | 500 | |
Fair Value | 500 | 500 | 500 | |
Short-Term Investments | 500 | 500 | 500 | |
Corporate bonds | Fair Value, Inputs, Level 2 | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Amortized Cost | 119,817 | 119,817 | 212,825 | |
Gross Unrealized Gains | 76 | 76 | 232 | |
Gross Unrealized Losses | (95) | (95) | (100) | |
Fair Value | 119,798 | 119,798 | 212,957 | |
Cash and Cash Equivalents | 2,525 | |||
Short-Term Investments | 83,751 | 83,751 | 170,205 | |
Long-Term Investments | 36,066 | 36,066 | 40,095 | |
U.S. Treasury repurchase agreements | Fair Value, Inputs, Level 2 | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Amortized Cost | 13,200 | |||
Fair Value | 13,200 | |||
Cash and Cash Equivalents | 13,200 | |||
Treasury inflation - protected securities | Fair Value, Inputs, Level 2 | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Amortized Cost | 3,291 | |||
Gross Unrealized Gains | 16 | |||
Fair Value | 3,307 | |||
Short-Term Investments | 3,291 | |||
Commercial paper | Fair Value, Inputs, Level 2 | ||||
Restricted Cash and Cash Equivalents Items [Line Items] | ||||
Amortized Cost | 19,994 | 19,994 | 45,974 | |
Fair Value | 19,994 | 19,994 | 45,974 | |
Short-Term Investments | $ 19,994 | $ 19,994 | $ 45,974 |
Expected Credit Losses (Details
Expected Credit Losses (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |
Balance, beginning of period | $ 3,376 |
Provision for expected credit losses | 698 |
Amounts written off charged against the allowance | (54) |
Other, including foreign currency translation | 73 |
Balance, end of period | 4,093 |
United States | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |
Balance, beginning of period | 2,902 |
Provision for expected credit losses | 687 |
Amounts written off charged against the allowance | (54) |
Other, including foreign currency translation | 78 |
Balance, end of period | 3,613 |
Other countries | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |
Balance, beginning of period | 474 |
Provision for expected credit losses | 11 |
Other, including foreign currency translation | (5) |
Balance, end of period | 480 |
COVID-19 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |
Additional reserve for credit loss | $ 1,200 |
Expected Credit Losses - Type O
Expected Credit Losses - Type Of Customer Receivable (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Expected Credit Losses | ||
Accounts receivable and notes receivable, current | $ 2,425 | $ 2,105 |
Contract assets, net | 1,409 | 794 |
Long-term notes receivable, net of current portion | 259 | 477 |
Total allowance for expected credit losses on customer receivables | $ 4,093 | $ 3,376 |
Inventory (Details)
Inventory (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 33,951 | $ 39,194 |
Finished goods | 59,328 | 50,764 |
Total inventory | $ 93,279 | $ 89,958 |
Property and Equipment - Summar
Property and Equipment - Summary of Property and Equipment (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2021 | Dec. 31, 2020 | |
Property, Plant and Equipment [Line Items] | |||
Total cost | $ 183,618 | $ 183,618 | $ 152,679 |
Less: Accumulated depreciation | (54,810) | (54,810) | (47,185) |
Property and equipment, net | 128,808 | 128,808 | 105,494 |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Total cost | 54,868 | 54,868 | 57,052 |
Building and leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Total cost | 25,025 | $ 25,025 | 20,912 |
Building and leasehold improvements | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life | 3 years | ||
Building and leasehold improvements | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life | 39 years | ||
Production equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total cost | 44,072 | $ 44,072 | 37,539 |
Production equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life | 3 years | ||
Production equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life | 7 years | ||
Computers, equipment and software | |||
Property, Plant and Equipment [Line Items] | |||
Total cost | 13,998 | $ 13,998 | 10,889 |
Computers, equipment and software | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life | 3 years | ||
Computers, equipment and software | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life | 5 years | ||
Furniture and office equipment | |||
Property, Plant and Equipment [Line Items] | |||
Total cost | 6,570 | $ 6,570 | 6,954 |
Furniture and office equipment | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life | 5 years | ||
Furniture and office equipment | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life | 7 years | ||
Vehicles | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life | 5 years | ||
Total cost | 2,968 | $ 2,968 | 1,980 |
Website development costs | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life | 3 years | ||
Total cost | 204 | $ 204 | 204 |
Capitalized internal-use software development costs | |||
Property, Plant and Equipment [Line Items] | |||
Total cost | 11,876 | $ 11,876 | 3,670 |
Property and equipment additions | 6,600 | ||
Capitalized internal-use software development costs | Minimum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life | 3 years | ||
Capitalized internal-use software development costs | Maximum | |||
Property, Plant and Equipment [Line Items] | |||
Estimated Useful Life | 5 years | ||
Construction-in-process | |||
Property, Plant and Equipment [Line Items] | |||
Total cost | $ 24,037 | $ 24,037 | $ 13,479 |
Strategic Investments (Details)
Strategic Investments (Details) - USD ($) $ in Thousands | 9 Months Ended | 19 Months Ended |
Sep. 30, 2021 | Sep. 30, 2021 | |
Equity Securities without Readily Determinable Fair Value [Line Items] | ||
Balance, beginning of period | $ 11,711 | |
Investments | 20,500 | $ 30,156 |
Observable price changes | 40,855 | 42,910 |
Sales | (14,546) | (14,546) |
Balance, end of period | 58,520 | 58,520 |
Realized gain on sale of investment | 12,300 | |
Strategic investments | ||
Equity Securities without Readily Determinable Fair Value [Line Items] | ||
Balance, beginning of period | 9,500 | |
Investments | 20,500 | 27,568 |
Observable price changes | 40,321 | 42,753 |
Sales | (14,546) | (14,546) |
Balance, end of period | 55,775 | 55,775 |
Warrants for strategic investment | ||
Equity Securities without Readily Determinable Fair Value [Line Items] | ||
Balance, beginning of period | 2,211 | |
Investments | 2,588 | |
Observable price changes | 534 | 157 |
Balance, end of period | $ 2,745 | $ 2,745 |
Other Long-Term Assets (Details
Other Long-Term Assets (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Sep. 30, 2021 | Dec. 31, 2020 | |
Cash surrender value of corporate-owned life insurance policies | $ 4,996 | $ 4,654 |
Deferred commissions | 45,663 | 32,455 |
Restricted cash | 58 | 62 |
Operating lease assets | 24,732 | 22,308 |
Deferred implementation costs | 4,132 | |
Prepaid expenses, deposits and other | 12,046 | 8,727 |
Total other long-term assets | 91,627 | $ 68,206 |
Government grant assets | 900 | |
Deferred government grant assets | 100 | |
Deferred implementation costs assets placed into service | 4,300 | |
Other Noncurrent Assets | ||
Grant receivable | $ 500 |
Accrued Liabilities (Details)
Accrued Liabilities (Details) - USD ($) $ in Thousands | Sep. 30, 2021 | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Payables and Accruals [Abstract] | ||||
Accrued salaries, benefits and bonus | $ 59,559 | $ 36,892 | ||
Accrued professional, consulting and lobbying fees | 5,282 | 3,055 | ||
Accrued warranty expense | 1,363 | 769 | $ 745 | $ 1,476 |
Accrued income and other taxes | 4,459 | 3,848 | ||
Accrued inventory in transit | 6,316 | 4,597 | ||
Other accrued expenses | 11,915 | 10,682 | ||
Accrued liabilities | $ 88,894 | $ 59,843 |
Income Taxes (Details)
Income Taxes (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2021USD ($) | |
Tax Credit Carryforward [Line Items] | |
Deferred tax assets, net | $ 104 |
Liability for unrecognized tax benefits | 11.4 |
Research and development tax credit studies | $ 7.1 |
Effective tax rate (as a percentage) | 55.30% |
Effective tax rate, before discrete period adjustment (as a percentage) | (11.80%) |
Restricted Stock Units (RSUs) | |
Tax Credit Carryforward [Line Items] | |
Discrete tax benefit, stock-based compensation | $ 70 |
State Tax | |
Tax Credit Carryforward [Line Items] | |
Unrecognized tax benefits recognized during period | $ 11.4 |
Stockholders' Equity - At-the-M
Stockholders' Equity - At-the-Market equity offering - Additional Information (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Net proceeds | $ 105,615 | $ 306,779 | |
ATM Offering | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Issuance of common stock (in shares) | 577,956 | ||
Gross proceeds | $ 107,600 | ||
Net proceeds | 105,600 | ||
Commissions | 1,600 | ||
Stock issuance costs | $ 300 | ||
Maximum number of common stock to be sold | 3,000,000 |
Stockholders' Equity - CEO Perf
Stockholders' Equity - CEO Performance Award - Additional Information (Details) $ in Thousands | May 24, 2018USD ($)itemtrancheshares | Sep. 30, 2021USD ($)shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Market capitalization goal for such tranche | $ 2,500,000 | |
Market capitalization goal increment | $ 1,000,000 | |
Recorded share-based compensation expense | $ 219,500 | |
Number of awards expected to vest | shares | 1,600,000 | |
Revenue goal number 1 | $ 710,058 | |
Adjusted EBITDA goal number 9 | 125,000 | |
Revenue goal number 2 | 860,058 | |
Adjusted EBITDA goal number 10 | 155,000 | |
Revenue goal number 3 | 1,010,058 | |
Adjusted EBITDA goal number 11 | 175,000 | |
Revenue goal number 4 | 1,210,058 | |
Adjusted EBITDA goal number 12 | 190,000 | |
Revenue goal number 5 | 1,410,058 | |
Adjusted EBITDA goal number 13 | 200,000 | |
Revenue goal number 6 | 1,610,058 | |
Adjusted EBITDA goal number 14 | 210,000 | |
Revenue goal number 7 | 1,810,058 | |
Adjusted EBITDA goal number 15 | 220,000 | |
Revenue goal number 8 | 2,010,058 | |
Adjusted EBITDA goal number 16 | $ 230,000 | |
Performance Shares | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Performance shares authorized (in shares) | shares | 6,365,856 | |
Number of options vested | shares | 4,200,000 | |
Weighted average period over which costs are recognized | 1 year 6 months 10 days | |
CEO Performance Award | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Unrecognized share-based compensation cost related to unvested stock option awards, probable of achievement | $ 26,500 | |
Chief Executive Officer | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Number of vesting tranches of share-based awards | tranche | 12 | |
Vesting period | 10 years | |
Number of performance goals, revenue | item | 8 | |
Number of performance goals, adjusted EBITDA | item | 8 |
Stockholders' Equity - eXponent
Stockholders' Equity - eXponential Stock Performance Plan (Details) $ in Millions | Feb. 12, 2019USD ($)itemtranche | May 24, 2018USD ($)shares | Sep. 30, 2021USD ($)shares | Sep. 30, 2021USD ($)shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Market capitalization goal for such tranche | $ 2,500 | |||
Market capitalization goal increment | $ 1,000 | |||
Recorded share-based compensation expense | $ 219.5 | |||
Number of awards expected to vest | shares | 1,600,000 | 1,600,000 | ||
eXponential Stock Units | 2019 eXponential Stock Performance Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance shares authorized (in shares) | shares | 8,000 | 40,000 | ||
Expiration period | 9 years | |||
Number of vesting tranches of share-based awards | tranche | 12 | |||
Market capitalization goal for such tranche | $ 2,500 | |||
Number of performance goals, revenue | item | 8 | |||
Number of performance goals, adjusted EBITDA | item | 8 | |||
Market capitalization goal increment | $ 1,000 | |||
Anti-dilution provision, maximum shares growth rate per year | 3.00% | |||
Recorded share-based compensation expense | $ 161.4 | |||
Number of awards expected to vest | shares | 1,800,000 | 1,800,000 | ||
Unrecognized stock-based compensation expense | $ 34.6 | $ 34.6 | ||
Weighted average period over which costs are recognized | 2 years 1 month 13 days | |||
Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Performance shares authorized (in shares) | shares | 6,365,856 | |||
Weighted average period over which costs are recognized | 1 year 6 months 10 days |
Stockholders' Equity - Summary
Stockholders' Equity - Summary of RSU and PSU Activity (Details) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended |
Sep. 30, 2021USD ($)$ / sharesshares | |
Restricted Stock Units (RSUs) | |
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 | 1,107 |
Number of Units, Granted (in shares) | shares | 205 |
Number of Units, Released (in shares) | shares | (348) |
Number of Units, Forfeited (in shares) | shares | (108) |
Number of Units outstanding, end of period (in shares) | shares | 856 |
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 | $ 76.10 |
Weighted Average Grant Date Fair Value, Granted (in dollars per share) | $ / shares | 166.29 |
Weighted Average Grant Date Fair Value, Released (in dollars per share) | $ / shares | 55.16 |
Weighted Average Grant Date Fair Value, Forfeited (in dollars per share) | $ / shares | 96.25 |
Weighted Average Grant Date Fair Value, Units outstanding, end of period (in dollars per share) | $ / shares | $ 103.70 |
Aggregate intrinsic value at end of period | $ | $ 149,875 |
Performance Stock Units (PSUs) | |
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 | 5,618 |
Number of Units, Granted (in shares) | shares | 236 |
Number of Units, Released (in shares) | shares | (3,896) |
Number of Units, Forfeited (in shares) | shares | (77) |
Number of Units outstanding, end of period (in shares) | shares | 1,881 |
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 | $ 35.71 |
Weighted Average Grant Date Fair Value, Granted (in dollars per share) | $ / shares | 54.16 |
Weighted Average Grant Date Fair Value, Released (in dollars per share) | $ / shares | 36.50 |
Weighted Average Grant Date Fair Value, Forfeited (in dollars per share) | $ / shares | 38.46 |
Weighted Average Grant Date Fair Value, Units outstanding, end of period (in dollars per share) | $ / shares | $ 36.29 |
Aggregate intrinsic value at end of period | $ | $ 329,211 |
Stockholders' Equity - RSU and
Stockholders' Equity - RSU and PSU - Additional Information (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Sep. 09, 2021 | Sep. 30, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Recorded share-based compensation expense | $ 219,500 | ||||
Tax payments, for net share settlement of share based award | $ 182,517 | $ 6,886 | |||
Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Aggregate intrinsic value price per share (in dollars per share) | $ 175.02 | $ 175.02 | |||
Restricted Stock Units (RSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Aggregate intrinsic value price per share (in dollars per share) | $ 175.02 | $ 175.02 | |||
Unrecognized stock-based compensation expense | $ 63,700 | $ 63,700 | |||
Weighted average period over which costs are recognized | 2 years 1 month 20 days | ||||
Number of shares vested | 348 | ||||
Number of units outstanding (in shares) | 856 | 856 | 1,107 | ||
Shares withheld, for net share settlement of share based award (in shares) | 51 | ||||
Tax payments, for net share settlement of share based award | $ 8,500 | ||||
Performance Stock Units (PSUs) | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Aggregate intrinsic value price per share (in dollars per share) | $ 175.02 | $ 175.02 | |||
Unrecognized stock-based compensation expense | $ 38,300 | $ 38,300 | |||
Weighted average period over which costs are recognized | 2 years 1 month 6 days | ||||
Performance criteria had been met (in shares) | 4 | ||||
Number of shares vested | 3,896 | ||||
Number of units outstanding (in shares) | 1,881 | 1,881 | 5,618 | ||
Shares withheld, for net share settlement of share based award (in shares) | 1,000 | ||||
Tax payments, for net share settlement of share based award | $ 174,000 | ||||
Performance Stock Units (PSUs) | Related to Release Of Tranches Four Through Eight | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Tax payments, for net share settlement of share based award | 900 | ||||
eXponential Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Percentage of vesting | 4.00% | ||||
Modification, number of shares vested | 99 | ||||
Modification, stock-based compensation expense | $ 1,900 | $ 2,800 | |||
Minimum | eXponential Stock Units | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Minimum holding period | 2 years 6 months |
Stockholders' Equity - Summar_2
Stockholders' Equity - Summary of the Company's Stock Options Activity (Details) - Stock Options - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 9 Months Ended |
Sep. 30, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award, Options, Outstanding [Roll Forward] | |
Number of options, Options outstanding, beginning of year (in shares) | 6,366 |
Number of options, Exercised (in shares) | 0 |
Number of options, Options outstanding, end of year (in shares) | 6,366 |
Number of options, Options exercisable, end of period (in shares) | 4,774 |
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) | $ 28.58 |
Weighted average exercise price, Options outstanding, end of period (in dollars per share) | 28.58 |
Weighted average exercise price, Options exercisable, end of period (in dollars per share) | $ 28.58 |
Weighted average remaining contractual life, Options outstanding, end of period | 6 years 4 months 28 days |
Weighted average remaining contractual life, Options exercisable, end of period | 6 years 4 months 28 days |
Aggregate intrinsic value, Options outstanding, end of period | $ 932,216 |
Aggregate intrinsic value, Options exercisable, end of period | $ 699,162 |
Stockholders' Equity - Stock Op
Stockholders' Equity - Stock Option Activity - Additional Information (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 2 Months Ended | 9 Months Ended | ||
Nov. 15, 2021 | Sep. 30, 2021 | Sep. 30, 2020 | Dec. 31, 2020 | |
Stock Options | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Aggregate intrinsic value price per share (in dollars per share) | $ 175.02 | |||
Number of options, Exercised (in shares) | 0 | |||
Total intrinsic value of options exercised | $ 5.1 | |||
Number of options outstanding (in shares) | 6,366 | 6,366 | ||
Performance Shares | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of options outstanding (in shares) | 1,600 | |||
CEO Performance Award | Subsequent Event | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of options, Exercised (in shares) | 900 |
Stockholders' Equity - Reported
Stockholders' Equity - Reported Share-Based Compensation (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 35,062 | $ 26,094 | $ 262,221 | $ 80,124 |
Cost of products sold and services delivered | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 1,112 | 744 | 4,439 | 2,170 |
Sales, general and administrative expenses | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | 25,969 | 19,117 | 211,073 | 60,853 |
Research and development expenses | ||||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | ||||
Stock-based compensation expense | $ 7,981 | $ 6,233 | $ 46,709 | $ 17,101 |
Stockholders' Equity - Stock Re
Stockholders' Equity - Stock Repurchase Plan - Additional Information (Details) - USD ($) | 9 Months Ended | |||
Sep. 30, 2021 | Sep. 30, 2020 | Feb. 28, 2019 | Feb. 29, 2016 | |
2019 Stock Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Common stock reserved for issuance (in shares) | 6,000,000 | |||
Shares available for grant under the plan (in shares) | 1,600,000 | |||
2016 Stock Incentive Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Outstanding common stock repurchase program authorized amount (up to) | $ 50,000,000 | |||
Shares repurchased during period (in shares) | 0 | 0 | ||
Remaining authorized repurchase amount | $ 16,300,000 |
Line of Credit (Details)
Line of Credit (Details) | 9 Months Ended | |
Sep. 30, 2021USD ($) | Dec. 31, 2020USD ($) | |
Debt Instrument [Line Items] | ||
Maximum ratio of total liabilities to tangible net worth | 2.50 | |
Line of Credit | ||
Debt Instrument [Line Items] | ||
Accordion feature allowing for increase in borrowing capacity | $ 100,000,000 | |
Letters of credit outstanding amount | 6,100,000 | |
Available borrowing under letter of credit | 43,900,000 | |
Line of credit borrowings | $ 0 | $ 0 |
EBITDA ratio | 0 | |
Line of Credit | Unsecured Revolving Line of Credit [Member] | ||
Debt Instrument [Line Items] | ||
Total availability under line of credit agreement | $ 50,000,000 | |
Line of Credit | Letter of Credit | ||
Debt Instrument [Line Items] | ||
Available borrowing under letter of credit | $ 20,000,000 | |
Minimum | Line of Credit | London Interbank Offered Rate (LIBOR) | ||
Debt Instrument [Line Items] | ||
Debt instrument basis spread on variable rate (as a percentage) | 1.00% | |
Maximum | Line of Credit | London Interbank Offered Rate (LIBOR) | ||
Debt Instrument [Line Items] | ||
Debt instrument basis spread on variable rate (as a percentage) | 1.50% |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Millions | Sep. 30, 2021USD ($)lawsuit |
Loss Contingencies [Line Items] | |
Number of lawsuits against Company | lawsuit | 2 |
Self insurance on product claim | $ 5 |
Line of Credit | |
Loss Contingencies [Line Items] | |
Letters of credit outstanding amount | 6.1 |
Outstanding letters of credit and bank guarantees not drawn against credit facility | 1.5 |
Surety Bond | |
Loss Contingencies [Line Items] | |
Bonds outstanding | 21.5 |
Expire In March 2022 and May 2022 | Surety Bond | |
Loss Contingencies [Line Items] | |
Letters of credit outstanding amount | 6.1 |
Expiring in 2022 | Surety Bond | |
Loss Contingencies [Line Items] | |
Bonds outstanding | 3.5 |
Expiring in 2023 | Surety Bond | |
Loss Contingencies [Line Items] | |
Bonds outstanding | 7.5 |
Expiring in 2024 | Surety Bond | |
Loss Contingencies [Line Items] | |
Bonds outstanding | $ 10.5 |
Employee Benefit Plans (Details
Employee Benefit Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021 | Sep. 30, 2020 | Sep. 30, 2021 | Sep. 30, 2020 | |
Defined Benefit Plan Disclosure [Line Items] | ||||
Employee deferrals deemed vested upon contribution (as a percentage) | 100.00% | |||
Defined contribution plan, cost | $ 1.7 | $ 1.3 | $ 5.6 | $ 4.1 |
Maximum | ||||
Defined Benefit Plan Disclosure [Line Items] | ||||
Deferral percentage of base salary (as a percentage) | 80.00% | |||
Deferral percentage of other compensation (as a percentage) | 100.00% |
Segment Data (Details)
Segment Data (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2021USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2021USD ($)segment | Sep. 30, 2020USD ($) | |
Segment Reporting Information [Line Items] | ||||
Number of reportable segments of company | segment | 2 | |||
Net sales | $ 231,989 | $ 166,442 | $ 645,803 | $ 454,863 |
Cost of sales | 87,422 | 68,202 | 239,954 | 179,838 |
Gross margin | 144,567 | 98,240 | 405,849 | 275,025 |
Research and development | 42,382 | 29,246 | 143,352 | 85,187 |
TASER | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 121,491 | 84,406 | 333,018 | 230,791 |
Cost of sales | 41,554 | 31,297 | 112,345 | 88,787 |
Gross margin | 79,937 | 53,109 | 220,673 | 142,004 |
Research and development | 10,476 | 3,355 | 32,032 | 10,149 |
Software and Sensors | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 110,498 | 82,036 | 312,785 | 224,072 |
Cost of sales | 45,868 | 36,905 | 127,609 | 91,051 |
Gross margin | 64,630 | 45,131 | 185,176 | 133,021 |
Research and development | 31,906 | 25,891 | 111,320 | 75,038 |
Product | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 165,803 | 120,091 | 463,116 | 326,134 |
Cost of sales | 71,336 | 57,798 | 195,253 | 150,507 |
Product | TASER | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 118,569 | 83,517 | 326,508 | 228,569 |
Cost of sales | 41,554 | 31,297 | 112,200 | 88,787 |
Product | Software and Sensors | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 47,234 | 36,574 | 136,608 | 97,565 |
Cost of sales | 29,782 | 26,501 | 83,053 | 61,720 |
Service | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 66,186 | 46,351 | 182,687 | 128,729 |
Cost of sales | 16,086 | 10,404 | 44,701 | 29,331 |
Service | TASER | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 2,922 | 889 | 6,510 | 2,222 |
Cost of sales | 0 | 0 | 145 | 0 |
Service | Software and Sensors | ||||
Segment Reporting Information [Line Items] | ||||
Net sales | 63,264 | 45,462 | 176,177 | 126,507 |
Cost of sales | $ 16,086 | $ 10,404 | $ 44,556 | $ 29,331 |