Body cameras like these are driving incredible growth at TASER International. Image source: TASER International.

TASER International, Inc. (NASDAQ:AXON) reported second quarter results after the market closed on Thursday, and investors hoping to see significant growth in less lethal weapons and body cameras for law enforcement agencies will be very pleased. The company continues to invest in expanding product offerings and in its global reach, and we are starting to see those investments pay dividends. Here's what investors need to know. 

TASER International, Inc. results: The raw numbers


Q2 2016 Actuals

Q2 2015 Actuals

Growth (YoY)


$58.8 million

$46.7 million


Net Income

$3.7 million

$6.1 million


Adjusted EPS




Data source: TASER International, Inc. second quarter earnings release.

What happened with TASER International, Inc. this quarter?

Tasers continue to be the biggest business for TASER International, but you can start to see the shift to body cameras driving the business long-term. Here are a few metrics that show that trend happening:

  • TASER's weapon segment sales rose 20% to $45.5 million in the quarter. Gross margin in the segment was 68%, slightly lower than 70% a year ago.
  • Axon segment revenues jumped 49% to $13.2 million. Hardware gross margin decreased from 37% a year ago to 33%, but service margin increased from 66% to 71%. The service margin includes subscriptions to, which should be TASER's long-term profit driver.
  • Axon bookings for body cameras and subscriptions surged 135% versus a year ago to $72.0 million. Given the booking trend, this should make body cameras the biggest business for TASER International in the next few years.
  • SG&A expenses rose 58% to $24.4 million and R&D expenses rose 14% to $6.7 million. The total operating expense rose faster than sales, leading to lower net income, but this is an investment TASER International is making in growth, and solid bookings in Axon should make this a worthwhile investment long-term.
  • Management also bought back 1.3 million shares of common stock for $24.8 million under a $50 million share buyback program approved in February. The weighted average price of the buyback was $18.92, significantly below where the stock is trading today.

What management had to say

CEO Rick Smith is certainly focused on growing the Axon segment of the business, and looks at that as a significant growth driver. And the success of the subscription business has allowed the company to move into full subscriptions for tasers, body cameras, and software. Long-term, that should make for a high margin business for TASER International, and keep the latest products in law enforcement's hands. 

International growth also appears to just be getting started. Smith said TASER International is still making key hires and is building out capabilities and sales staff internationally, so investors should see more momentum there over the next year.

New products also keep rolling out of the lab. Axon Interview is expected to see more demand in coming quarters, and a new partnership to improve connectivity of cameras should help improve the product as well.

Looking forward

All of the key metrics investors should be looking at in TASER International seem to be trending in the right direction. Revenue is up, customers are rapidly adopting body cameras and, and new products offer exciting growth opportunities. And with more subscription revenue coming in every quarter, the bottom line should start getting traction soon, helping ensure all of the investments in growth over the past few years pay off.

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