Shares of taser and body camera maker Axon Enterprise Inc (NASDAQ:AAXN) plunged as much as 17.4% after reporting third-quarter 2018 results. There wasn't much of a recovery mid-day, with shares trading down 16.3% at 1:40 p.m. EST.
Revenue was up 16% versus a year ago to $104.8 million, led by a 47% jump in Axon Cloud revenue to $23.9 million. Net income jumped from just $422,000 a year ago to $5.7 million, or $0.10 per share. On a non-GAAP basis, earnings were $0.20 per share, above the $0.13 that analysts expected.
Management gave a small update of guidance, saying they expected revenue growth to be near the midpoint of the 18% to 20% growth range previously given to investors. EBITDA margin is still expected to be 14% to 16%.
Axon has performed so well over the past year that reiterating guidance may appear disappointing to investors. And compared to 25% revenue growth in the second quarter, it looks like the company is losing momentum. But keep in mind that taser weapon sales are still a majority of overall sales and were only up 7% in the quarter. Axon Cloud and body camera sales are still growing far faster than weapons, and over the long term, that's what's going to drive the business. On that growth path, today's dip looks like a great buying opportunity.