Stock Market Nerd – Earnings Round-Up – Axon ($AXON), JFrog ($FROG) & ELF ($ELF) – August 10, 2024
Axon ($AXON) Snapshot
Results:
- Axon beat revenue estimates by a comfortable 5.4%. Its 32% 3-year revenue CAGR compares to 33% last quarter and 25.6% 2 quarters ago.
- Missed 61.4% GAAP GPM estimate by 110 bps. This was driven by more stock comp expense due to the rising share price. Excluding this impact, its 62.5% GPM would have been well ahead.
- Beat EBITDA estimate by 21%.
- Missed $0.62 GAAP EPS estimate by $0.09. The same GAAP GPM headwind led to the GAAP EPS miss too.
- Beat $0.98 EPS estimate by $0.22.
Source: Brad Freeman – SEC Filings, Company Presentations, and Company Press Releases
Balance Sheet:
- $1.08B in cash & equivalents.
- No traditional debt.
- $678M in convertible notes.
- Share count rose by 2.3% Y/Y.
Guidance & Valuation:
- Raised annual revenue guide by 3%, which beat by 2.3%.
- Raised annual EBITDA guide by 7.1%, which beat by 6.1%.
Axon trades for 74× 2024 earnings. EPS is expected to grow by 14% Y/Y this year and by 20% Y/Y next year.
Source: Brad Freeman – SEC Filings, Company Presentations, and Company Press Releases
JFrog ($FROG) Snapshot
I’ve held this in the past, but I haven’t for a while. I’m excited to dig into the transcript this weekend to see what happened here and if this aggressive pullback is compelling or not. I’ll include that coverage either in the Nu earnings article next week or next Saturday. This is a good company with a dominant share of Fortune 500 brands as customers. Either that’s still true and this could be interesting again, or things have fundamentally soured since I last looked. We shall see.
Results:
- JFrog missed revenue estimates by 0.6% & missed its guidance by 0.5%.
- Beat EBIT estimates & beat its identical guidance by 0.7%.
- Beat $0.14 EPS estimators & beat its identical guidance by a penny.
Source: Brad Freeman – SEC Filings, Company Presentations, and Company Press Releases
Balance Sheet:
- Nearly $600M in cash & equivalents.
- No debt.
- Basic and diluted share count rose by 6.3% Y/Y.
Guidance & Valuation:
- JFrog lowered annual revenue guidance by 1%, which missed estimates by 1.1%.
- Lowered annual EBIT guidance from $57M to $53M (or by 7%), which missed by 7.5%.
- Lowered annual EPS guidance from $0.60 to $0.55, which missed by $0.06.
Q3 guidance also missed estimates across the board.
JFrog trades for 47× 2024 earnings. Earnings are expected to grow by 9% this year and by 18% next year.
Source: Brad Freeman – SEC Filings, Company Presentations, and Company Press Releases
ELF Beauty ($ELF) Snapshot
Results:
- Beat revenue estimate by 6.3%.
- Beat EBITDA estimates by 4.9%. Missed 24.2% EBITDA margin estimate by 30 bps.
- Beat $0.66 GAAP EPS estimates by $0.15.
- Beat $0.86 EPS estimates by $0.24.
Source: Brad Freeman – SEC Filings, Company Presentations, and Company Press Releases
Balance Sheet:
- $109M in cash & equivalents.
- $159M in long term debt & finance lease obligations.
- Diluted share count grew by 2.4% Y/Y.
Annual Guidance & Valuation:
- Raised annual revenue guide by 4.0%, which missed estimates by 0.8%.
- Raised annual EBITDA guide by 4.2%, which missed estimates by 0.8%.
- Raised annual EPS guide from $3.23 to $3.39, which missed by $0.06.
ELF trades for 45x forward earnings. Earnings are expected to grow by 16% Y/Y this year and by 17% Y/Y next year.
Source: Brad Freeman – SEC Filings, Company Presentations, and Company Press Releases
Two things happened this quarter. Margins were slightly worse than expected, as sales & marketing roughly doubled Y/Y to pursue more growth. This meant the EBITDA raise (and implied EBITDA margin) was a bit disappointing. This will inevitably leave people wondering how much marketing spend is required to keep the growth engine going. Maybe more than previously thought. Next, the world assumed that ELF was aggressively sandbagging guidance. Analysts got a bit ahead of themselves in modeling too large of a raise into their expectations.
