Segment Data

Our operations are comprised of two reportable segments: the manufacture and sale of CEWs, batteries, accessories, extended warranties and other products and services (the “TASER” segment); and the development, manufacture, and sale of software and sensors, which includes the sale of devices, wearables, applications, cloud and mobile products (collectively, the “Software and Sensors” segment). Within the Software and Sensors segment, we specify sales of products and services. Revenue from our “products” in the Software and Sensors segment are generally from sales of sensors, including on-officer body cameras, Axon Fleet cameras, other hardware sensors, warranties on sensors,and other products, and is sometimes referred to as "Sensors and Other revenue." Revenue from our “services” in the Software and Sensors segment comprise sales related to the Axon Cloud, which includes Axon Evidence, cloud-based evidence management software revenue, other recurring cloud-hosted software revenue and related professional services, and is sometimes referred to as "Axon Cloud revenue." Within the Software and Sensors segment, we include only revenues and costs attributable to that segment which costs include: costs of sales for both products and services, direct labor, selling expenses for the sales team, product management and R&D for products included, or to be included, within the Software and Sensors segment. All other costs are included in the TASER segment. Our Chief Executive Officer, who is the CODM, is not provided asset information by segment, and therefore, no asset information is provided.

Information relative to our reportable segments was as follows (in thousands):



	For the year ended December 31, 2018
	TASER		Software and Sensors			Total
Net sales from products	$	253,115	$	74,520		$	327,635
Net sales from services	—		92,433			92,433
Net sales	253,115		166,953			420,068
Cost of product sales	80,354		58,983			139,337
Cost of service sales	—		22,148			22,148
Cost of sales	80,354		81,131			161,485
Gross margin	172,761		85,822			258,583
Sales, general and administrative	90,910		65,976			156,886
Research and development	17,012		59,844			76,856
Income (loss) from operations	$	64,839	$	(39,998	)	$	24,841



	For the year ended December 31, 2017
	TASER		Software and Sensors			Total
Net sales from products ⁽¹⁾	$	234,512	$	51,347		$	285,859
Net sales from services ⁽¹⁾	—		57,939			57,939
Net sales ⁽¹⁾	234,512		109,286			343,798
Cost of product sales	72,054		45,943			117,997
Cost of service sales	—		18,713			18,713
Cost of sales	72,054		64,656			136,710
Gross margin	162,458		44,630			207,088
Sales, general and administrative⁽¹⁾	78,202		60,490			138,692
Research and development	8,377		46,996			55,373
Income (loss) from operations	$	75,879	$	(62,856	)	$	13,023



	For the year ended December 31, 2016
	TASER		Software and Sensors			Total
Net sales from products ⁽¹⁾	$	202,644	$	35,929		$	238,573
Net sales from services ⁽¹⁾	—		29,672			29,672
Net sales ⁽¹⁾	202,644		65,601			268,245
Cost of product sales	61,930		29,606			91,536
Cost of service sales	—		6,173			6,173
Cost of sales	61,930		35,779			97,709
Gross margin	140,714		29,822			170,536
Sales, general and administrative ⁽¹⁾	63,617		44,459			108,076
Research and development	5,887		24,722			30,609
Income (loss) from operations	$	71,210	$	(39,359	)	$	31,851

⁽¹⁾ Amounts for the years ended December 31, 2017 and 2016 have not been adjusted under the modified retrospective method of adoption of Topic 606, and are presented consistent with the prior period amounts reported under ASC 605.