Balance Sheet: Liabilities and Stockholders’ Equity

The balance sheet provides creditors, investors, and analysts with information on company resources (assets) and its sources of capital (its equity and liabilities). It normally also provides information about the future earnings capacity of a company assets as well as an indication of cash flows that may come from receivables and inventories.

Liabilities represents obligations of a company arising from past events, the settlement of which is expected to result in an outflow of economic benefits from the entity.

Axon Enterprise Inc., consolidated balance sheet: liabilities and stockholders’ equity

US$ in thousands

	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018
Accounts payable	59,918)	32,220)	24,142)	25,874)	15,164)
Accrued salaries, benefits and bonus	97,882)	62,425)	36,892)	24,737)	19,063)
Accrued professional, consulting and lobbying fees	3,861)	7,152)	3,055)	3,235)	4,894)
Accrued warranty expense	811)	2,822)	769)	1,476)	898)
Accrued income and other taxes	13,559)	3,736)	3,848)	3,362)	4,167)
Accrued inventory in transit	10,548)	9,945)	4,597)	4,156)	—)
Other accrued expenses	29,273)	17,627)	10,682)	8,035)	12,070)
Accrued liabilities	155,934)	103,707)	59,843)	45,001)	41,092)
Current portion of deferred revenue	360,037)	265,591)	163,959)	117,864)	107,016)
Customer deposits	20,399)	10,463)	2,956)	2,974)	2,702)
Other current liabilities	6,358)	6,540)	5,431)	3,853)	37)
Current liabilities	602,646)	418,521)	256,331)	195,566)	166,011)
Deferred revenue, net of current portion	248,003)	185,721)	111,222)	87,936)	74,417)
Liability for unrecognized tax benefits	10,745)	3,797)	4,503)	3,832)	2,849)
Long-term deferred compensation	6,285)	5,679)	4,732)	3,936)	3,235)
Deferred tax liability, net	1)	811)	649)	354)	—)
Long-term operating lease liabilities	37,143)	20,439)	18,952)	6,792)	—)
Convertible notes, net	673,967)	—)	—)	—)	—)
Other long-term liabilities	4,613)	5,393)	8,379)	3,728)	5,704)
Long-term liabilities	980,757)	221,840)	148,437)	106,578)	86,205)
Total liabilities	1,583,403)	640,361)	404,768)	302,144)	252,216)
Preferred stock, $0.00001 par value; no shares issued and outstanding	—)	—)	—)	—)	—)
Common stock, $0.00001 par value	1)	1)	1)	1)	1)
Additional paid-in capital	1,174,594)	1,095,229)	962,159)	528,272)	453,400)
Treasury stock at cost	(155,947)	(155,947)	(155,947)	(155,947)	(155,947)
Retained earnings	257,022)	109,883)	169,901)	172,265)	171,383)
Accumulated other comprehensive income (loss)	(7,179)	(1,317)	141)	(1,096)	(1,513)
Stockholders’ equity	1,268,491)	1,047,849)	976,255)	543,495)	467,324)
Total liabilities and stockholders’ equity	2,851,894)	1,688,210)	1,381,023)	845,639)	719,540)

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).

Liabilities Trends

Total liabilities show a significant upward trend, increasing consistently from approximately 252 million USD in 2018 to over 1.58 billion USD by the end of 2022. This represents a more than sixfold increase over the five-year period.

Current liabilities have grown substantially, rising from 166 million USD in 2018 to over 602 million USD in 2022. Notably, the current portion of deferred revenue exhibited strong growth, increasing from 107 million USD in 2018 to 360 million USD in 2022, suggesting growing prepaid or unearned revenue commitments.

Accounts payable increased from roughly 15 million USD in 2018 to nearly 60 million USD in 2022, indicating higher short-term obligations to suppliers or vendors. Similarly, accrued salaries, benefits, and bonuses experienced a marked increase, rising from about 19 million USD to nearly 98 million USD, reflecting potentially expanding workforce costs or accrued compensation liabilities.

Other accrued liabilities and expenses also increased notably, with accrued liabilities nearly quadrupling from 41 million USD in 2018 to 156 million USD in 2022.

Long-term liabilities saw the most dramatic increase, moving from 86 million USD in 2018 to almost 981 million USD by 2022. This surge is largely attributable to the appearance of convertible notes at the end of 2022, totaling approximately 674 million USD, which were not present in previous years.

Additional long-term liabilities such as long-term operating lease liabilities also grew significantly, suggesting increased lease obligations or financing arrangements.

Stockholders' Equity Trends

Stockholders’ equity displayed consistent growth over the five-year period, rising from approximately 467 million USD in 2018 to nearly 1.27 billion USD by 2022. This increase is driven primarily by additional paid-in capital, which more than doubled from 453 million USD in 2018 to about 1.17 billion USD in 2022, indicating substantial equity financing or capital contributions.

Retained earnings showed variability, with a slight increase from 171 million USD in 2018 to 172 million USD in 2019, then a decline to under 110 million USD in 2021, before rebounding to 257 million USD in 2022. This suggests periods of net losses or distributions followed by recovery in profitability or earnings retention.

Treasury stock at cost remained constant at negative 156 million USD throughout the period, reflecting no changes in treasury shares.

Accumulated other comprehensive income (loss) fluctuated between negative 1.5 million USD and negative 7.2 million USD, indicating some volatility in items recognized outside of net income.

Balance Sheet Growth and Composition

Total liabilities and stockholders’ equity increased substantially from roughly 720 million USD in 2018 to over 2.85 billion USD in 2022, reflecting rapid company growth and expansion in both financing and operational scales.

The balance sheet expansion is underpinned more by liabilities growth, particularly long-term liabilities linked to convertible notes and lease obligations, than by equity growth, although equity has risen steadily as well.

The healthy increase in additional paid-in capital alongside growing liabilities might indicate a strategy of combining equity and debt financing to support operational and strategic initiatives.

Other Observations

Customer deposits surged significantly from about 2.7 million USD in 2018 to over 20 million USD in 2022, indicating stronger advance payments or deposits from customers, potentially linked to increased sales or contractual activities.

Accrued income and other taxes showed a substantial increase in 2022, rising from around 3.7 million USD in 2021 to 13.6 million USD in 2022, possibly reflecting higher tax liabilities or changes in tax accounting.

Some accrual categories such as accrued warranty expense experienced fluctuations without a clear trend, reflecting variability in warranty costs or claims.

Download chart

Axon Enterprise Inc. (NASDAQ:AXON)

Balance Sheet: Liabilities and Stockholders’ Equity