Segment Data

The Company’s operations are comprised of two reportable segments: the manufacture and sale of CEWs, accessories and other products and services (the “TASER Weapons” segment); and the video business, which includes the TASER Cam, Axon products, Evidence.com, and MediaSolv (the “Axon” segment). The Company includes only revenues and costs directly attributable to the Axon segment in that segment. Included in Axon segment costs are: costs of sales for both products and services, overhead allocation based on direct labor, selling expense for the Axon sales team, Axon product management expenses, trade shows and related expenses, and research and development for products included in the Axon segment. All other costs are included in the TASER Weapons segment. The CODM does not review assets by segment as part of the financial information provided; therefore, only limited asset information is provided in the following tables.

Information relative to the Company’s reportable segments is as follows (in thousands):



	Three Months Ended September 30, 2015							Three Months Ended September 30, 2014
	TASER Weapons		Axon			Total		TASER Weapons		Axon			Total
Product sales	$	39,520	$	7,745		$	47,265	$	40,010	$	3,181		$	43,191
Service revenue	—		3,111			3,111		—		1,158			1,158
Net sales	39,520		10,856			50,376		40,010		4,339			44,349
Cost of products sold	12,445		5,829			18,274		12,443		2,695			15,138
Cost of services delivered	—		1,034			1,034		—		498			498
Gross margin	27,075		3,993			31,068		27,567		1,146			28,713
Sales, general and administrative	11,941		5,893			17,834		10,028		2,413			12,441
Research and development	1,151		5,377			6,528		1,050		2,709			3,759
Income (loss) from operations	$	13,983	$	(7,277	)	$	6,706	$	16,489	$	(3,976	)	$	12,513
Purchase of property and equipment	$	1,900	$	169		$	2,069	$	803	$	41		$	844
Purchase of intangible assets	114		87			201		14		2			16
Purchase of property and equipment and intangible assets in connection with business acquisitions	1,503		1,502			3,005		—		—			—
Depreciation and amortization	603		345			948		1,010		91			1,101



	Nine Months Ended September 30, 2015							Nine Months Ended September 30, 2014
	TASER Weapons		Axon			Total		TASER Weapons		Axon			Total
Product sales	$	115,686	$	18,177		$	133,863	$	105,160	$	9,812		$	114,972
Service revenue	—		7,988			7,988		—		2,737			2,737
Net sales	115,686		26,165			141,851		105,160		12,549			117,709
Cost of products sold	34,805		12,692			47,497		34,024		8,111			42,135
Cost of services delivered	—		2,695			2,695		—		1,439			1,439
Gross margin	80,881		10,778			91,659		71,136		2,999			74,135
Sales, general and administrative	33,469		14,373			47,842		32,218		7,516			39,734
Research and development	3,418		13,574			16,992		2,660		8,160			10,820
Income (loss) from operations	$	43,994	$	(17,169	)	$	26,825	$	36,258	$	(12,677	)	$	23,581
Purchase of property and equipment	$	2,435	$	1,404		$	3,839	$	1,836	$	230		$	2,066
Purchase of intangible assets	195		207			402		123		2			125
Purchase of property and equipment and intangible assets in connection with business acquisitions	1,503		11,301			12,804		—		—			—
Depreciation and amortization	1,689		621			2,310		3,078		290			3,368