What happened
Shares of body-camera maker Axon Enterprise Inc. (AXON 0.65%) jumped as much as 28.1% in trading Wednesday, after the company reported fourth-quarter 2017 earnings that beat expectations. As of 1:35 p.m. EST shares were holding gains, trading 28% higher on the day.
So what
Fourth-quarter revenue jumped 15.3% to $94.7 million and the company swung to a net loss of $2.1 million, or $0.04 per share, from a $6.3 million a year ago. But after pulling out an $8 million charge for tax-reform related charges, earnings per share were $0.13, easily topping the $0.03 loss analysts were expecting.
Image source: Axon Enterprise.
Weapons sales were up 10% in the quarter to $64.4 million, leading the business, but the software and sensors segment, which includes body cameras, saw a 27% jump in revenue to $30.2 million. With new body-camera products coming out in 2018, we could see further growth this year.
Speaking of guidance, management said it expects 16% to 18% revenue growth in 2018 and an expansion of 300 to 400 basis points in operating margin, showing the renewed focus on the bottom line.
Now what
Axon continues to see a lot of traction in the body-camera market, and that's where the company will find long-term value. I think 2018 will be even stronger, as the company's suite of products grows to include a new car-camera product, a holster that ties drawing a gun to turning on a body camera, and a records management system. This is a company set for growth for many years to come.
