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Segment Data | 9 Months Ended
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Sep. 30, 2024
Segment Reporting [Abstract] |
Segment Data | Segment Data Our operations comprise two reportable segments: the development, manufacture and sale of fully integrated hardware and cloud-based software solutions that enable law enforcement to capture, securely store, manage, share and analyze video and other digital evidence (collectively, the “Software and Sensors” segment); and the manufacture and sale of our CEDs, batteries, accessories, extended warranties and other products and services (collectively, the “TASER” segment). In both segments, we report sales of products and services. Service revenue in both segments includes sales related to Axon Evidence. In the Software and Sensors segment, service revenue also includes other recurring cloud-hosted software revenue and related professional services. Collectively, this revenue is sometimes referred to as “Axon Cloud revenue.” Reportable segments are determined based on discrete financial information reviewed by our Chief Executive Officer, who is our chief operating decision maker (“CODM”). We organize and review operations based on products and services, and currently there are no operating segments that are aggregated. We perform an analysis of our reportable segments at least annually. During the nine months ended September 30, 2024, the segment measure of profit and loss used by the CODM was changed from gross margin to adjusted gross margin, defined as gross margin before stock-based compensation expense and amortization of acquired intangible assets. This change in segment measure allows the CODM to better assess operating results over time and is consistent with how the CODM evaluates our businesses. Accordingly, we have updated our segment disclosure for the three and nine months ended September 30, 2023 to conform to the new presentation. Information relative to our reportable segments was as follows (in thousands):
| Three Months Ended September 30,
| 2024 |  | 2023
TASER segment net sales | $ | 221,734 |  |  | $ | 162,570 |
Software and Sensors segment net sales | 322,540 |  |  | 250,708 |
Total consolidated net sales | $ | 544,274 |  |  | $ | 413,278 |
TASER adjusted gross margin | $ | 139,632 |  |  | $ | 102,151 |
Software and Sensors adjusted gross margin | 204,258 |  |  | 157,147 |
Total segment adjusted gross margin | $ | 343,890 |  |  | $ | 259,298 |
Stock-based compensation expense | 10,123 |  |  | 1,687 |
Amortization of acquired intangible assets | 3,020 |  |  | 955 |
Gross margin | $ | 330,747 |  |  | $ | 256,656 |
Sales, general and administrative | 192,189 |  |  | 122,357 |
Research and development | 114,477 |  |  | 76,880 |
Interest income, net | 10,978 |  |  | 10,458 |
Other income (loss), net | 44,510 |  |  | 3,852 |
Income (loss) before provision for (benefit from) income taxes | $ | 79,569 |  |  | $ | 71,729 |
| Nine Months Ended September 30,
| 2024 |  | 2023
TASER segment net sales | $ | 597,441 |  |  | $ | 452,167 |
Software and Sensors segment net sales | 909,940 |  |  | 678,156 |
Total consolidated net sales | $ | 1,507,381 |  |  | $ | 1,130,323 |
TASER adjusted gross margin | $ | 374,072 |  |  | $ | 280,875 |
Software and Sensors adjusted gross margin | 577,992 |  |  | 417,460 |
Total segment adjusted gross margin | $ | 952,064 |  |  | $ | 698,335 |
Stock-based compensation expense | 48,235 |  |  | 4,685 |
Amortization of acquired intangible assets | 8,298 |  |  | 2,189 |
Gross margin | $ | 895,531 |  |  | $ | 691,461 |
Sales, general and administrative | 514,228 |  |  | 357,611 |
Research and development | 307,008 |  |  | 219,747 |
Interest income, net | 31,134 |  |  | 29,787 |
Other income (loss), net | 191,510 |  |  | (42,569) |
Income before provision for income taxes | $ | 296,939 |  |  | $ | 101,321 |

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- Definition The entire disclosure for reporting segments including data and tables. 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