Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

Axon Enterprise Inc., consolidated income statement

US$ in thousands

12 months ended:	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Net sales from products	801,388)	608,525)	500,250)	399,474)	327,635)
Net sales from services	388,547)	254,856)	180,753)	131,386)	92,433)
Net sales	1,189,935)	863,381)	681,003)	530,860)	420,068)
Cost of product sales	(363,219)	(260,098)	(224,131)	(190,683)	(139,337)
Cost of service sales	(98,078)	(62,373)	(40,541)	(32,891)	(22,148)
Cost of sales	(461,297)	(322,471)	(264,672)	(223,574)	(161,485)
Gross margin	728,638)	540,910)	416,331)	307,286)	258,583)
Sales, general and administrative	(401,575)	(515,007)	(307,286)	(212,959)	(156,886)
Research and development	(233,810)	(194,026)	(123,195)	(100,721)	(76,856)
Operating expenses	(635,385)	(709,033)	(430,481)	(313,680)	(233,742)
Income (loss) from operations	93,253)	(168,123)	(14,150)	(6,394)	24,841)
Interest expense	(488)	(28)	(55)	(46)	(86)
Investment interest income	4,782)	1,511)	4,086)	7,040)	3,002)
Other income, net	98,971)	25,265)	3,828)	1,470)	347)
Interest and other income, net	103,265)	26,748)	7,859)	8,464)	3,263)
Income (loss) before (provision) benefit for income taxes	196,518)	(141,375)	(6,291)	2,070)	28,104)
(Provision) benefit for income taxes	(49,379)	81,357)	4,567)	(1,188)	1,101)
Net income (loss)	147,139)	(60,018)	(1,724)	882)	29,205)

Based on: 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31).

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.

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Axon Enterprise Inc. (NASDAQ:AXON)

Income Statement