Axon Enterprise Inc. (NASDAQ:AXON)

Goodwill

The value of goodwill remained relatively stable from 2018 through 2020, fluctuating slightly around 25 million USD. A marked increase occurred in 2021, rising sharply to approximately 43.6 million USD, with a modest further increase to around 44.98 million USD in 2022.

Domain Names

Domain name values held steady, showing a slight decline from 3.16 million USD in 2018 and 2019 to 3.04 million USD during 2020 through 2022, indicating a stable but slightly decreasing valuation.

Issued Patents

Issued patents peaked in 2019 at approximately 3.27 million USD, followed by a steady decline through 2022, reaching about 2.98 million USD. This suggests a gradual reduction in patent asset value over the period.

Issued Trademarks

Issued trademarks showed minor fluctuations, with values generally ranging between 1.0 and 1.16 million USD. There was a slight increase in 2019, followed by a modest decline by 2022, highlighting consistent yet mildly variable levels of trademark assets.

Customer Relationships

Customer relationships assets remained broadly stable from 2018 through 2020 at around 3.7 to 3.8 million USD, then increased significantly in 2021 to nearly 5.0 million USD, slightly declining to about 4.9 million USD in 2022. This reflects possible acquisitions or valuation changes boosting customer-related intangible assets.

Non-compete Agreements

Values for non-compete agreements showed a gradual decrease from 540 thousand USD in 2018 to 447 thousand USD in 2022, indicating diminishing amortizable asset value in this category over time.

Developed Technology

Developed technology assets decreased sharply from 13.4 million USD in 2018 to 10.66 million USD in 2019 and remained stable into 2020. They then experienced considerable growth in 2021 to roughly 18.1 million USD, with a slight increase to approximately 18.6 million USD in 2022, suggesting substantial investment or capitalization of developed technology during the latter years.

Re-acquired Distribution Rights

Values rose from about 1.93 million USD in 2018 to 2.2 million USD in 2020, but data is missing beyond 2020. The upward trend through reported years suggests growing valuation or acquisition activity in this asset class.

Amortizable (Definite-lived) Intangible Assets, Gross Carrying Amount

There was a decline from 26.7 million USD in 2018 to 24.4 million USD in 2019 and 2020, followed by a significant increase to 30.7 million USD in 2021 and a slight further rise to 31.1 million USD in 2022, indicating renewed investment or acquisition of definite-lived intangible assets in the recent years.

Accumulated Amortization

Accumulated amortization increased steadily in absolute terms from -12.65 million USD in 2018 to approximately -20.73 million USD in 2022. This shows ongoing amortization expense charged against intangible assets, with a noticeable acceleration from 2021 onwards.

Amortizable (Definite-lived) Intangible Assets, Net Carrying Amount

The net carrying amount declined sharply from 14.1 million USD in 2018 to 7.94 million USD in 2020, showing heavy amortization or write-downs relative to gross amounts. It rebounded significantly to 13.8 million USD in 2021, then declined again to approximately 10.3 million USD in 2022. This volatility may reflect acquisition activity offset by amortization.

TASER Trademark

The value of the TASER trademark was stable at 900 thousand USD throughout the entire period, indicating no changes in valuation or acquisition related to this particular trademark.

My90 Trademark

The My90 trademark appears starting in 2021 at 168 thousand USD and remained constant through 2022, suggesting a recent acquisition or recognition of this intangible asset.

Patents and Trademarks Pending

There was a general decrease in patents and trademarks pending from 958 thousand USD in 2018 to about 608 thousand USD in 2020, followed by a slight increase reaching 751 thousand USD in 2022, indicating variable progress in securing new intellectual property.

Non-amortizable (Indefinite-lived) Intangible Assets

These assets decreased from 1.86 million USD in 2018 to 1.51 million USD in 2020, then rose again to 1.82 million USD in 2022, reflecting small fluctuations but overall relative stability in indefinite-lived intangibles.

Intangible Assets

Overall intangible assets showed a downward trend from 15.9 million USD in 2018 to a low of 9.4 million USD in 2020, followed by a recovery to 15.5 million USD in 2021 and a subsequent decrease to 12.2 million USD in 2022. This pattern suggests variability influenced by acquisitions, disposals, or amortization policies.

Goodwill and Intangible Assets

The combined total of goodwill and intangible assets declined from 40.9 million USD in 2018 to 34.7 million USD in 2020. From there, a pronounced increase to 59.1 million USD occurred in 2021, followed by a slight decline to 57.1 million USD in 2022. This overall growth aligns with the large increase in goodwill during the same period, indicating significant acquisitions or revaluations impacting the balance sheet in recent years.

Asset Growth Trend

The reported total assets of the company exhibit a consistent upward trend over the five-year period, increasing from approximately $719.5 million in 2018 to about $2.85 billion in 2022. This represents nearly a fourfold increase. Adjusted total assets, which exclude goodwill, show a similar growth trajectory, rising from roughly $694.6 million to $2.81 billion over the same period. The close alignment between reported and adjusted figures indicates that goodwill adjustments have a relatively small impact on total asset values.

Stockholders’ Equity Development

Stockholders' equity, both reported and adjusted, also shows significant growth. Reported equity increases from $467.3 million in 2018 to approximately $1.27 billion in 2022, while adjusted equity grows from $442.3 million to $1.22 billion. The parallel growth in both figures suggests that the company is steadily building its equity base. The difference between reported and adjusted equity remains relatively stable, reflecting consistent goodwill-related adjustments.

Relationship Between Assets and Equity

Over the period analyzed, the ratio of equity to total assets appears to decrease slightly when considering reported values, indicating an increase in liabilities or other forms of financing. However, both assets and equity are growing, implying the company is expanding its asset base while sustaining shareholder investment growth. The adjustments for goodwill have a consistent proportional effect on both assets and equity.

Summary of Financial Position

The data reveals robust asset and equity growth, suggesting strong company expansion and increased value creation. The minor difference between reported and adjusted figures indicates goodwill is a part but does not dominate the balance sheet composition. Overall, financial health appears to be improving steadily with substantial capital base growth through the period under review.

Total Asset Turnover

Over the analyzed period, there is a general declining trend in total asset turnover, both in reported and adjusted figures. Beginning at approximately 0.58-0.60 in 2018, the ratio initially increased slightly in 2019 to around 0.63-0.65 but subsequently declined each year to reach 0.42 by the end of 2022. This suggests a decreasing efficiency in the company's use of assets to generate revenue over the period.

Financial Leverage

Financial leverage shows an increasing trend, with reported leverage rising from 1.54 in 2018 to 2.25 in 2022, and adjusted leverage following a similar pattern from 1.57 to 2.29. This indicates that the company has progressively increased its use of debt or other financial obligations relative to equity, reaching the highest level in the final year, which could imply greater financial risk or enhanced capacity for growth.

Return on Equity (ROE)

ROE experienced significant volatility, starting positively at around 6.25-6.60% in 2018 but dropping close to zero in 2019. It turned negative in 2020 and 2021, reflecting losses or decreased profitability, with the lowest point near -5.73% (reported) and -5.98% (adjusted) in 2021. A strong recovery is noted in 2022, with ROE surpassing earlier levels to reach 11.60% (reported) and 12.03% (adjusted), indicating an improvement in profitability and shareholders' returns.

Return on Assets (ROA)

ROA mirrors the pattern observed in ROE, with positive returns near 4.06-4.20% in 2018, declining sharply to near zero in 2019, then turning negative in 2020 and 2021, reaching approximately -3.56% (reported) and -3.65% (adjusted) in 2021. A recovery is again noted in 2022, although not to previous highs, achieving 5.16% reported and 5.24% adjusted. This suggests improvements in generating net income from total assets by the end of the period.

Adjustment Impact

Adjustments for goodwill appear to have minimal impact on overall trends and levels across all financial ratios, as the adjusted ratios closely track the reported ones. Differences between reported and adjusted figures are marginal, indicating that goodwill adjustments do not significantly alter the interpretation of the company's financial performance.

Total Assets

The reported total assets demonstrate a consistent upward trajectory over the analyzed period, increasing from approximately 719.5 million US dollars in 2018 to nearly 2.85 billion US dollars by the end of 2022. This substantial growth reflects significant asset accumulation, which is also confirmed by the adjusted total assets data that follows a similar pattern but at a slightly lower scale, indicating the exclusion of goodwill effects in the adjusted figures. The adjusted total assets rose from about 694.6 million US dollars in 2018 to approximately 2.81 billion US dollars in 2022.

Total Asset Turnover

Both reported and adjusted total asset turnover ratios indicate a declining trend throughout the period. Reported total asset turnover diminished from 0.58 in 2018 to 0.42 in 2022, while the adjusted ratio decreased from 0.60 to 0.42 in the same timeframe. This decline signifies a reduction in the efficiency with which the company is utilizing its assets to generate sales. Despite the growth in total assets, the decrease in turnover ratios suggests that asset expansion has outpaced revenue growth, potentially signaling an increase in investment in assets not yet fully productive or a slowdown in sales growth relative to asset base expansion.

Total Assets

The reported total assets exhibit a consistent and substantial increase over the five-year period, rising from approximately 720 million USD at the end of 2018 to over 2.85 billion USD by the end of 2022. Adjusted total assets, which exclude goodwill, follow a similar upward trend but are slightly lower in magnitude, increasing from around 695 million USD to nearly 2.81 billion USD. This suggests significant asset growth, with the impact of goodwill adjustments being relatively stable but noticeable.

Stockholders’ Equity

Reported stockholders’ equity shows robust growth, almost tripling from about 467 million USD in 2018 to approximately 1.27 billion USD in 2022. The adjusted equity values, which deduct goodwill, parallel this trend closely, moving from 442 million USD to over 1.22 billion USD. This indicates strengthening equity base while acknowledging the influence of goodwill on the total equity figures.

Financial Leverage

The reported financial leverage ratio fluctuates modestly in the first four years, ranging between 1.41 and 1.61, but then surges to 2.25 in 2022. The adjusted financial leverage ratio mirrors this pattern, rising from about 1.57 in 2018 to 2.29 in 2022, with the same initial stability followed by a sharp increase. These increases point to an elevated reliance on debt or other liabilities relative to equity in the most recent year, suggesting a shift in the capital structure or increased borrowing.

Overall Trends and Insights

There is a clear pattern of accelerated growth in total assets and equity from 2018 through 2022, indicating expansion and potential scaling of operations or acquisitions. The relatively stable adjustment gap between reported and adjusted figures implies consistent goodwill levels relative to assets and equity. The notable rise in financial leverage during the final year under review highlights a significant change in financial strategy or market conditions, with greater leverage implying increased financial risk or strategic investment funded through debt.

Stockholders’ Equity

The reported stockholders’ equity exhibited a consistent upward trend over the five-year period. The value increased from approximately $467 million in 2018 to around $1.27 billion in 2022. Similarly, the adjusted stockholders’ equity, which accounts for goodwill adjustments, followed a parallel upward trajectory, rising from about $442 million in 2018 to $1.22 billion in 2022. Both metrics indicate substantial growth in equity, with the adjusted figures consistently slightly lower than reported equity, reflecting the impact of goodwill adjustments.

Return on Equity (ROE)

The reported ROE demonstrated significant fluctuations during the analyzed years. In 2018, the reported ROE was robust at 6.25%, but it sharply declined in 2019 to a marginal 0.16%, then entered negative territory in 2020 and 2021, registering -0.18% and -5.73% respectively. In 2022, ROE recovered strongly to 11.6%. The adjusted ROE mirrored this pattern closely, with values slightly higher or lower but following the same volatility and eventual recovery to 12.03% in 2022.

Insights

The data reveals a steady increase in equity base, suggesting ongoing investment or retained earnings growth. However, despite this growth, the profitability as measured by ROE struggled during 2019 to 2021, indicating operational challenges or increased costs during those years. The negative ROE in two consecutive years signals that the company experienced losses relative to equity during that period. The significant improvement in 2022 suggests a turnaround in profitability, potentially due to enhanced operational performance or other favorable financial factors. The close alignment between reported and adjusted figures suggests that goodwill adjustments had a moderate and consistent effect on equity and profitability measurements.

An analysis of the provided financial data reveals several notable trends related to the company's asset base and its return on assets (ROA) over the five-year period ending December 31, 2022.

Total Assets

The reported total assets exhibited a consistent upward trajectory throughout the period. The value increased from approximately US$719.5 million in 2018 to around US$2.85 billion by the end of 2022, representing nearly a fourfold expansion. This growth was steady each year, with the largest annual increase occurring between 2021 and 2022.

Similarly, the adjusted total assets, which exclude goodwill impacts, mirrored this trend closely. The adjusted figures rose from about US$694.6 million in 2018 to approximately US$2.81 billion in 2022, maintaining a stable differential compared to the reported figures across all years. This suggests that goodwill accounted for a relatively consistent proportion of total assets annually.

Return on Assets (ROA)

The reported ROA demonstrated significant volatility during the period. Starting at 4.06% in 2018, it sharply declined to near zero (0.1%) in 2019, turned slightly negative (-0.12%) in 2020, and deteriorated further to -3.56% in 2021. However, in 2022, the ROA rebounded strongly to 5.16%, the highest value in the period under review.

The adjusted ROA, which factors out goodwill, followed a very similar pattern. Beginning marginally higher than the reported ROA at 4.2% in 2018, it decreased to 0.11% in 2019, then declined to -0.13% in 2020 and -3.65% in 2021, before recovering to 5.24% in 2022. The close alignment between reported and adjusted ROA suggests minimal impact from goodwill on the company’s asset profitability ratios.

In summary, the company experienced substantial growth in its asset base over the five years, nearly quadrupling the total asset value. Despite this expansion, profitability in terms of asset returns was unstable, with a marked decline reaching negative territory mid-period, followed by a significant recovery in the final year. The adjusted measures confirm that goodwill adjustments had a negligible effect on these observed profitability and asset trends.