Axon Enterprise Inc. (NASDAQ:AXON)

The financial data reveals a consistent growth trajectory in net sales from both products and services over the five-year period. Net sales from products increased steadily from approximately $327.6 million in 2018 to about $801.4 million in 2022, while net sales from services showed a significant rise from approximately $92.4 million to $388.5 million during the same period. Overall net sales thus exhibited strong growth, nearly tripling from $420.1 million in 2018 to nearly $1.19 billion in 2022.

The cost of goods sold (COGS) also increased over time, with the cost of product sales rising from $139.3 million in 2018 to $363.2 million in 2022 and the cost of service sales increasing from $22.1 million to $98.1 million. Total cost of sales grew from $161.5 million to $461.3 million, reflecting the expansion in sales volume and business scale.

Gross margin followed a positive trend, rising markedly from $258.6 million in 2018 to $728.6 million in 2022, indicative of maintained or improved profitability at the gross level despite higher sales costs.

Operating expenses showed a somewhat mixed pattern. Sales, general, and administrative expenses rose sharply from $156.9 million in 2018 to a peak of $515.0 million in 2021, before declining to $401.6 million in 2022. Research and development expenditures increased steadily each year from $76.9 million to $233.8 million. Total operating expenses mirrored this trend, increasing from $233.7 million in 2018 to $709.0 million in 2021, then decreasing to $635.4 million in 2022.

Operating income/loss demonstrated fluctuating performance. There was positive operating income of $24.8 million in 2018, followed by operating losses in 2019 through 2021, with the largest loss of $168.1 million occurring in 2021. A substantial recovery occurred in 2022, returning to an operating income of $93.3 million.

Interest expense remained minimal and relatively stable until 2022, when it increased to $0.5 million. Investment interest income varied between years but generally remained in the low single-digit millions. Other income showed significant growth, especially in 2021 and 2022, increasing from modest amounts below $4 million in earlier years to nearly $99 million in 2022. Consequently, total interest and other income net rose sharply, especially in 2022 to approximately $103.3 million.

Income before income taxes displayed volatility, with a slight positive value in 2018, near breakeven in 2019, and losses in 2020 and 2021. In 2022, there was a strong rebound to a substantial pre-tax income of $196.5 million. The provision for income taxes showed alternating signs, with tax benefits in some years and provisions in others, culminating in a tax provision of $49.4 million in 2022.

Net income followed a similar volatile pattern: a profit of $29.2 million in 2018, a significant decline to near breakeven in 2019, losses in 2020 and 2021 (with a peak loss of $60.0 million in 2021), and a strong return to profitability in 2022, registering net income of $147.1 million.

In summary, the data reflects robust top-line growth driven by both product and service sales. Although costs and operating expenses increased, gross margins improved substantially. Operating results experienced volatility with multi-year losses but showed a strong recovery in 2022, supported by significant growth in other income and positive net income. The pattern suggests that after a challenging period, the company achieved improved operational efficiency or benefited from other income streams, leading to a marked return to profitability in the most recent year.