Axon raises outlook after Q2 2023 revenue grows 31% to $375 million
- Axon Cloud & Services revenue of $133 million up 62% year over year
- Annual recurring revenue grows 52% to $559 million
- Net income of $12 million supports Adjusted EBITDA of $82 million
- Full year revenue outlook raises to $1.51 billion to $1.53 billion, or approximately 27% to
- 29% annual growth; maintains 20% full year Adjusted EBITDA margin guidance
Axon delivered a strong first half of 2023 supported by robust demand across our product portfolio, with notable strength in Axon Cloud & Services. The company achieved second quarter annual revenue growth of 31% alongside our sixth consecutive quarter of GAAP profitability.
Axon Cloud & Services grew 62% year over year, highlighting the powerful market appetite for their cloud platform and premium bundles. Axon drove this growth through both signing on new customers as well as expanding services to existing customers. Net revenue retention increased to 122% from 121% last quarter. As a reminder, net revenue retention ("NRR") measures our ability to grow with our existing Software-as-a-Service ("SaaS") customers. NRR compares the revenue contribution of their year-ago SaaS cohort with their revenue contribution today. Axon wants to highlight that even with this continued strong growth, the penetration rate of our Officer Safety Plan ("OSP") bundles is less than 20% relative to our potential state and local law enforcement install base in the U.S.(1)
Management are pleased to update their full year outlook to about 28% revenue growth at the midpoint and maintain their Adjusted EBITDA margin guidance of 20%. The updated outlook reflects increased visibility after the successful launch of two new products, TASER 10 and Axon Body 4, as well as continued momentum in Fleet cameras and software.
Axon said they will commit to long term subscription contracts with our customers that allow them to execute on their goals to drive growth and improve profitability.