An investment thesis in Axon Enterprise (AAXN) can be based on the premise that the business shouldn't be impacted by the Covid-19 crisis as the industries served by Axon's products and solutions continue operations despite the virus. The company provides products and solutions to law enforcement and public safety industries. Axon strives to increase the efficiency of the professionals in those industries. In theory, employing Axon products and solutions should keep those professionals safer while also making them more accessible in their fields.
2019 Fourth Quarter and Full Year Results
On February 27, 2020, Axon Enterprise reported 2019 fourth quarter and full year results. Sales in the quarter set yet another record, improving 49.7% from $114.8 million in 2018 to $171.9 million. Product revenue improved 51% year over year, while services revenue improved 44.9%. Though Axon's history is rooted in tasers or conducted electrical weapons (CEW), shipments of body cameras in the quarter set a new record. As well, 75% of body cameras shipped were the company's most recent Axon Body 3 which features an LTE connection to enable live streaming. This LTE connection is a key link in enabling field professionals' usage of the company's SaaS (Software as a Service) solutions.
With Axon's third quarter reporting, the company updated full-year revenue guidance to a range of $500 million to $510 million. For the year, sales grew 26.4% from $420 million in 2018 to $530.9 million. The mark beat the updated guidance by over 5% at the midpoint. Product revenue increased 21.9% year over year to $399.5 million, while services revenue increased 42% to $131.4 million. Axon's recurring SaaS revenue of $161 million increased 49% compared to 2018 at $108 million. In 2019, 71% of Axon's revenue was derived from recurring contracts, a significant improvement compared to 55% in 2018 and 46% in 2017. Axon projected a 16% to 18% improvement
