AXON ENTERPRISE, INC.AXON

AXON ENTERPRISE, INC. Segments Disclosure

10-KFiled Feb 25, 20263 min read
Segment Data
Segment information for the years ended December 31, 2024, and 2023 has been recast to reflect the Segment Realignment. Refer to Note 1 for additional details. Information relative to our reportable segments was as follows (in thousands):
Year Ended December 31, 2025
Connected DevicesSoftware and ServicesTotal
Net sales$1,576,864 $1,202,672 $2,779,536 
Cost of sales809,303 312,108 1,121,411 
Other segment items (1)
40,005 40,963 80,968 
Adjusted gross margin$807,566 $931,527 $1,739,093 
Other segment items (1)
(80,968)
Selling, general and administrative(1,035,893)
Research and development(684,308)
Interest income75,431 
Interest expense(94,238)
Other income, net99,857 
Income before provision for income taxes$18,974 
(1)    Other segment items includes the adjustment for noncash stock-based compensation expense, amortization of acquired intangible assets, inventory step-up amortization related to acquisitions, payroll taxes related to Employee XSP vesting and non-recurring severance costs to arrive at the profit measure used by the CODM.
Year Ended December 31, 2024
Connected DevicesSoftware and ServicesTotal
Net sales$1,221,292 $861,234 $2,082,526 
Cost of sales618,136 223,010 841,146 
Other segment items (1)
50,880 23,187 74,067 
Adjusted gross margin$654,036 $661,411 $1,315,447 
Other segment items (1)
(74,067)
Selling, general and administrative(741,247)
Research and development(441,593)
Interest income43,693 
Interest expense(7,098)
Other income, net286,369 
Income before provision for income taxes$381,504 
(1)    Other segment items includes the adjustment for noncash stock-based compensation expense, amortization of acquired intangible assets, and inventory step-up amortization related to acquisitions to arrive at the profit measure used by the CODM.
Year Ended December 31, 2023
Connected DevicesSoftware and ServicesTotal
Net sales$964,002 $596,697 $1,560,699 
Cost of sales447,708 157,538 605,246 
Other segment items (1)
3,253 6,486 9,739 
Adjusted gross margin$519,547 $445,645 $965,192 
Other segment items (1)
(9,739)
Selling, general and administrative(494,884)
Research and development(303,719)
Interest income49,107 
Interest expense(6,995)
Other income (loss), net(41,901)
Income before provision for income taxes$157,061 
(1)    Other segment items includes the adjustment for noncash stock-based compensation expense and amortization of acquired intangible assets to arrive at the profit measure used by the CODM.
The following table presents supplemental information included within the measure of profit or loss, adjusted gross margin, reviewed by our CODM (in thousands). There are no other material items presented to our CODM by segment or included within adjusted gross margin for supplemental disclosure.
Year Ended December 31, 2025Year Ended December 31, 2024Year Ended December 31, 2023
Connected DevicesSoftware and ServicesTotalConnected DevicesSoftware and ServicesTotalConnected DevicesSoftware and ServicesTotal
Depreciation and amortization
$38,188 $19,111 $57,299 $23,142 $12,239 $35,381 $14,115 $3,454 $17,569 
Significant noncash items:
Stock-based compensation expense
31,298 21,919 53,217 47,953 12,136 60,089 2,576 4,019 6,595 
Provisions for inventory
4,077 — 4,077 16,599 — 16,599 4,394 — 4,394 
Warranty reserve expense11,628 — 11,628 5,592 — 5,592 8,062 — 8,062 

Historical Timeline

Fiscal YearFiled
2025Feb 25, 2026Showing above
2024Feb 28, 2025
2023Feb 27, 2024
2022Feb 28, 2023
2021Feb 25, 2022
2020Feb 26, 2021
2019Feb 28, 2020
2018Feb 27, 2019
2017Mar 1, 2018
2016Mar 6, 2017
2015Mar 7, 2016

About Segments Disclosures

Segment disclosures break a company into its reportable operating units, revealing revenue, profit, and asset allocation that consolidated financial statements obscure. Under ASC 280, segments must match how the chief operating decision maker views the business, providing a window into internal management structure and resource allocation priorities.

Key signals: compare segment margins to identify which units drive profitability and which destroy value. Watch for changes in the number of reportable segments — segment aggregation or disaggregation often coincides with strategic shifts or attempts to obscure declining performance. Intersegment elimination patterns reveal internal pricing practices. The reconciliation between segment totals and consolidated figures exposes corporate overhead allocation and unallocated items. Geographic revenue concentration highlights regulatory and currency exposure. Compare segment-level capital expenditure against segment revenue to assess where management is investing for future growth versus harvesting existing assets.

Other Available Disclosures

Income TaxesRevenuePP&EGoodwill & IntangiblesLeasesDebtCommitmentsNew StandardsPay vs Performance