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Body Camera Demand Surges at TASER International, Inc.

By Travis Hoium - May 5, 2016 at 9:50AM

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Taser sales are going strong in 2016, but it's body cameras that investors should have their eyes on.

Image source: TASER International.

TASER International (AXON 0.06%) continues to gain traction with its less lethal weapons and body camera business. And as law enforcement agencies around the world start demanding more and more of these kind of products the company's growth momentum should continue. Wednesday's first-quarter 2016 earnings results showed the beginning of what should be a great year for the company. 

TASER International results: The raw numbers


Q1 2016 Actuals

Q1 2015 Actuals

Growth (YoY)


$55.5 million

$44.8 million


Net income

$3.5 million

$7.2 million


Adjusted EPS




Data source: Company earnings release.

What happened with TASER International this quarter?
2016 will be all about investment in the future and showing the beginning of a major growth trajectory. And the numbers on that front look very positive.

  • Weapons segment revenues were up 19.5% from a year ago to $45.8 million.
  • Axon segment revenue increased 51% from a year ago to $9.7 million. It's growing off a small base, but the numbers are starting to add up for the body camera business.
  • Bookings for Axon and increased 17% sequentially and more than doubled year over year to $52.1 million. This is contracted ongoing revenue the company will generate from storing body camera videos and will give the company great consistency in the services business. In total, future contracted revenue now stands at $202.3 million. 
  • Consolidated gross margin was an impressive 66.5%, driven by a 69.3% gross margin in the weapons segment.
  • The drop in net income was driven by a 69.9% increase in SG&A expenses as the company builds out international sales channels and a 51.9% increase in research and development expenses.

What management had to say
While the weapons business is the majority of TASER International's revenue right now, body cameras are clearly a big focus for the company going forward. And management is spending big on sales and R&D to make sure it takes a major market share in that business.

Body cameras are the new growth driver at TASER. Image source: TASER International.

What management points to as the metric to watch is bookings growing faster than operating expenses. And with bookings up 128% in the quarter to $52.1 million and operating expenses up 66% to $31.8 million the company is on the right track.

Looking forward
What investors should look for in 2016 is continued momentum in Axon and bookings because that's the real growth driver of the business. And as bookings grow we should see profitability improve as well. Axon segment service margins were a whopping 75.8%, so the more customers sign up for, the more money TASER International will make long term.

In a world where it's becoming more important for law enforcement to have less lethal weapon options and more accountability, TASER International is well positioned for growth. And I think we're in early stages of a long-term growth story for the company.

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