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Barclays's Tim Long raised their price target on Axon Enterprise (NASDAQ: AXON) by 23.7% from $308 to $381 on 2024/05/08. The analyst maintained their Strong Buy rating on the stock.

Axon Enterprise reported its Q1 2024 earnings on 2024/05/06.

In connection with their price target move, Long highlighted that the company "started FY strong with revenue up 34% Y/Y, the ninth consecutive quarter of revenue over 25%."

Earnings Report

For Q1 2024, Axon Enterprise reported:

• EPS of $1.15, which beat the Zacks Consensus Estimate of $0.97 and, by 30.7%, Q1 2023's $0.88.
• Revenue of $460.7M, which beat the Zacks Consensus Estimate of $438M and, by 34.3%, Q1 2023's $343M.
• Adjusted EBITDA of $109M, up 67.3% Y/Y.

For FY 2024, management guided:

• Revenue of $1.94B to $1.99B, up from the prior guidance of $1.88B to $1.94B.
• Adjusted EBITDA of $430M to $445M, up from the prior guidance of $410M to $430M.
• Capex of $80M to $95M.

In its Letter to Shareholders, management commented: "Axon is pleased to report a strong start to 2024 with another quarter of impressive financial performance supporting an improved outlook for FY 2024, and continued long-term innovation that we expect will fuel our growth for years to come.

"Q1 revenue growth of 34% marks our 9th consecutive quarter of growth above 25%, and we delivered improved profitability with Q1 net income margin of 28.9% and Adjusted EBITDA margin of 23.6%.

Axon Cloud & Services revenue of $176 million grew 52% year over year, more than doubling over the last two years. Our software revenue growth is driven by both adoption of new products from our existing customers and attracting new users to our ecosystem.

"Our net revenue retention remains a powerful driver at 122%, and we aim to sustain robust software growth over the longer term through disruptive product innovation. This includes recently announced significant new advancements leveraging artificial intelligence (“AI”) and virtual reality (“VR”) to enhance officer training and productivity, and our planned acquisition of Dedrone, which will help make our vision for Drone as a First Responder (“DFR”) a reality.

"Our integrated subscription plans drive value for our customers beyond what can be achieved through disparate point solutions, and our software growth is also linked to record demand for our TASER and Sensors products.

"TASER revenue of $179M grew 33% year over year propelled by demand for TASER 10.

"Sensors & Other revenue of $106M grew 14% Y/Y driven by the adoption of Axon Body 4.

"Axon’s consistent growth at increasing scale is a result of execution on our strategy to build the modern technology ecosystem for public safety and trusting partnership with our customers.

"Their feedback energizes our teams to work on the next innovations to help drive better outcomes, and we see tailwinds across our product portfolio now and in the future.

"Looking ahead, we aim to deliver improved financial performance and are increasing our revenue and Adjusted EBITDA expectations for the year."