Analysis of Reportable Segments
Axon Enterprise Inc. operates in 2 segments: TASER and Software and Sensors.
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- Cash Flow Statement
- Common-Size Balance Sheet: Assets
- DuPont Analysis: Disaggregation of ROE, ROA, and Net Profit Margin
- Selected Financial Data since 2005
- Return on Equity (ROE) since 2005
- Current Ratio since 2005
- Debt to Equity since 2005
- Total Asset Turnover since 2005
- Price to Operating Profit (P/OP) since 2005
- Aggregate Accruals
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Segment Profit Margin
Axon Enterprise Inc., profit margin by reportable segment
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| TASER | |||||
| Software and Sensors |
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).
- TASER Segment Profit Margin
- The profit margin for the TASER segment showed an initial decline from 68.25% in 2018 to 61.94% in 2019. Following this decrease, the margin experienced a slight recovery to 62.65% in 2020 and a further improvement to 65.7% in 2021. However, in 2022, the margin declined again to 63.32%. Overall, the TASER segment demonstrated some volatility with a moderate downward trend compared to the starting point in 2018, indicating fluctuations in profitability over the five-year period.
- Software and Sensors Segment Profit Margin
- The profit margin for the Software and Sensors segment exhibited a consistent upward trend throughout the observed period. Starting at 51.4% in 2018, the margin increased steadily each year, reaching 53.3% in 2019, 59.37% in 2020, and remaining relatively stable at approximately 59.5% in both 2021 and 2022. This pattern suggests a sustained improvement in profitability for the Software and Sensors segment, with gains plateauing at a higher margin level in the most recent years.
- Comparative Insights
- When comparing the two segments, the TASER segment generally maintained a higher profit margin than the Software and Sensors segment throughout the period, despite experiencing more variability. In contrast, the Software and Sensors segment displayed steady growth and margin stability toward the end. This contrast might imply differing dynamics in market conditions, cost structures, or competitive factors affecting each segment differently over time.
Segment Profit Margin: TASER
Axon Enterprise Inc.; TASER; segment profit margin calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Gross margin | |||||
| Net sales | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
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).
1 2022 Calculation
Segment profit margin = 100 × Gross margin ÷ Net sales
= 100 × ÷ =
The analysis of the data reveals several notable trends in the financial performance of the segment over the five-year period.
- Net Sales
- There is a consistent and substantial increase in net sales from 2018 through 2022. Starting at approximately $253.1 million in 2018, net sales rose steadily each year, reaching about $531.6 million by 2022. This represents more than a doubling in net sales over the five-year span, indicating strong growth in revenue generation for the segment.
- Gross Margin
- Gross margin has also increased steadily over the period. Beginning at roughly $172.8 million in 2018, it climbed each year, reaching approximately $336.6 million in 2022. This upward trend in gross margin in both absolute terms and in relation to the growth in net sales suggests improving operational efficiency or favorable cost management within the segment.
- Segment Profit Margin
- The segment profit margin percentage displays some variability. It starts at 68.25% in 2018 and dips to its lowest point of 61.94% in 2019. Afterwards, it marginally increases to 62.65% in 2020 and peaks at 65.7% in 2021 before slightly declining to 63.32% in 2022. Although fluctuating, the margin remains generally strong above 60%, indicating sustained profitability within the segment despite some year-to-year changes.
Overall, the financial data illustrates robust revenue growth and expanded gross margins, with a relatively stable profit margin percentage. The fluctuations in profit margin may reflect changes in cost structure or pricing dynamics, but the segment maintains a healthy profitability profile throughout the period examined.
Segment Profit Margin: Software and Sensors
Axon Enterprise Inc.; Software and Sensors; segment profit margin calculation
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| Selected Financial Data (US$ in thousands) | |||||
| Gross margin | |||||
| Net sales | |||||
| Segment Profitability Ratio | |||||
| Segment profit margin1 | |||||
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).
1 2022 Calculation
Segment profit margin = 100 × Gross margin ÷ Net sales
= 100 × ÷ =
- Net Sales
- Net sales for the segment exhibited a consistent and substantial upward trajectory over the five-year period. Starting at $166,953 thousand in 2018, net sales increased annually, reaching $658,369 thousand by the end of 2022. This represents an approximate fourfold increase, indicating strong growth in market demand or expansion in operational scale for this segment.
- Gross Margin
- Gross margin followed a similar growth pattern, rising from $85,822 thousand in 2018 to $392,029 thousand in 2022. The growth rate in gross margin outpaced that of net sales slightly, which suggests improving efficiency or cost management within the segment. The absolute growth is significant, reflecting increased profitability from the core operations.
- Segment Profit Margin
- The segment profit margin, expressed as a percentage, demonstrated a gradual improvement over the period. Starting at 51.4% in 2018, it increased to approximately 59.55% by 2022. The profit margin stabilized around this upper range in the last three years, indicating effective control over costs relative to revenues and a strong ability to retain earnings as profit.
- Overall Analysis
- The data reveals a robust expansion in sales and profitability for the Software and Sensors segment. Both absolute financial figures and margin percentages point to enhanced operational performance and scalability. The steady increase in profit margin suggests that the segment was able to leverage sales growth while improving or maintaining cost efficiencies, leading to higher profitability. The trends are indicative of a mature and growing segment with positive financial health.
Net sales
Axon Enterprise Inc., net sales by reportable segment
US$ in thousands
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| TASER | |||||
| Software and Sensors | |||||
| Total |
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).
- Overall Sales Growth
- The total net sales have exhibited a consistent upward trajectory from 2018 through 2022. Beginning at approximately $420 million in 2018, total sales increased annually to reach nearly $1.19 billion by the end of 2022. This represents a significant growth over the five-year period.
- Segment Performance: TASER
- The TASER segment demonstrated steady growth over the period. Sales rose from about $253 million in 2018 to over $531 million in 2022. The increase was gradual each year, with the largest absolute growth occurring between 2021 and 2022, indicating sustained demand and expansion within this product category.
- Segment Performance: Software and Sensors
- The Software and Sensors segment showed a more pronounced growth pattern compared to TASER. Starting from approximately $167 million in 2018, this segment's sales nearly quadrupled over five years, reaching roughly $658 million by 2022. The most significant growth was observed between 2021 and 2022, where sales increased by over $230 million, suggesting accelerated adoption or market expansion in this area.
- Comparative Segment Dynamics
- While both segments grew notably, Software and Sensors outpaced TASER in terms of growth rate and absolute increase in sales. By 2022, Software and Sensors sales surpassed TASER sales by a considerable margin, indicating a strategic shift or increasing emphasis on this segment within the company's portfolio.
- Implications
- The data suggests that the company is successfully diversifying and expanding its revenue base, with substantial momentum in the Software and Sensors segment. The consistent growth across both segments reflects robust market demand and possible effective sales or product strategies. The marked increase in Software and Sensors sales especially points to potential future growth drivers and a shift towards technology-oriented revenue streams.
Gross margin
Axon Enterprise Inc., gross margin by reportable segment
US$ in thousands
| Dec 31, 2022 | Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | |
|---|---|---|---|---|---|
| TASER | |||||
| Software and Sensors | |||||
| Total |
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).
- Trend Analysis of TASER Segment
- The TASER segment shows a consistent increase in revenue from 2018 to 2022. Starting at $172,761 thousand in 2018, it experiences moderate growth through 2019 reaching $174,473 thousand, followed by a more pronounced increase to $229,627 thousand in 2020. Growth accelerates further in 2021 to $287,043 thousand and continues upward to $336,609 thousand in 2022. This reflects steady and continuous expansion over the five-year period.
- Trend Analysis of Software and Sensors Segment
- The Software and Sensors segment exhibits a more rapid growth trajectory compared to the TASER segment. Beginning at $85,822 thousand in 2018, revenue increases significantly each year, reaching $132,813 thousand in 2019 and continuing upward to $186,704 thousand in 2020. The upward trend intensifies through 2021 and 2022, with revenues climbing to $253,867 thousand and then $392,029 thousand, respectively. The rate of growth in this segment outpaces that of the TASER segment consistently throughout the period.
- Overall Revenue Trend
- Total revenue, combining the TASER and Software and Sensors segments, reflects a strong and sustained growth pattern from $258,583 thousand in 2018 to $728,638 thousand in 2022. This represents nearly a threefold increase over five years. The total revenue growth is largely influenced by the significant expansion in the Software and Sensors segment, though contributions from the TASER segment remain significant and steadily grow.
- Comparative Insights
- The data indicates that while both segments contribute to overall revenue growth, the Software and Sensors segment is the primary driver of accelerated revenue increases in recent years. The divergence in growth rates suggests a shifting focus or increased demand in the market for software and sensor offerings relative to the traditional TASER products. This trend may signal a strategic evolution in the company's product mix or market positioning.
- Summary
- In summary, the company demonstrates robust revenue growth across both major segments, with the Software and Sensors segment showing markedly faster growth compared to the TASER segment. The consistent upward trajectory in total revenue underscores effective expansion and increasing market penetration. The growing dominance of the Software and Sensors segment highlights an important dynamic in the company’s revenue structure and suggests potential areas for strategic emphasis moving forward.