What happened
Shares of body camera and Taser company Axon Enterprise (AXON 2.64%) fell as much as 18% in trading Friday after the company reported second-quarter 2019 results. At 3 p.m. EDT, shares were still down 12.4% on the day.
So what
Revenue for the quarter was up 13.2% to $112.4 million, and net income fell from $8.5 million a year ago to $738,000, or $0.01 per share. The problem is, analysts were expecting $115 million of revenue and earnings of $0.16 per share, so you can see why the initial reaction was disappointment.
Image source: Axon.
Dig deeper into the quarter, and we find that there were $6 million in sales of Taser 7 and cartridges that couldn't be met because of production issues. Those sales will be realized later in the year, so demand isn't lacking for the company's products.
What shouldn't be overlooked is that management reiterated full-year revenue guidance of $485 million to $495 million and adjusted EBITDA of $120 million to $125 million.
Now what
There are going to be hiccups with new products, and the ramp-up of Taser 7 isn't going as smoothly as investors might like. But the underlying demand is still strong, and with the Axon Body 3 camera and Axon Records on the horizon, there's no reason to think the steady growth will stop. Traders may have been disappointed by results today, but investors in it for the long haul should see a lot to like from Axon.
