Segment Data

3 Months Ended

Mar. 31, 2024

Segment Data

Segment Data

Note 15 - Segment Data

Our operations comprise two reportable segments: the TASER segment and the Software and Sensors segment. In both segments, we report sales of products and services. Service revenue in both segments includes sales related to Axon Evidence. In the TASER segment, service revenue also includes digital subscription training content. In the Software and Sensors segment, service revenue also includes Axon Cloud revenue. Our Chief Executive Officer, who is our CODM, is not provided asset information, R&D expenses, or SG&A expenses by segment.

During the three months ended March 31, 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 non-cash 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 months ended March 31, 2023 to conform to the new presentation.

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

	Three Months Ended March 31,
	2024		2023
TASER segment net sales	$	178,748	$	134,282
Software and Sensors segment net sales		281,988		208,761
Total consolidated net sales	$	460,736	$	343,043
Adjusted gross margin	$	291,327	$	205,422
Stock-based compensation expense		29,595		1,320
Amortization of acquired intangible assets		1,686		—
Gross margin	$	260,046	$	204,102
Sales, general and administrative		152,669		116,567
Research and development		91,097		70,927
Interest income, net		10,374		9,666
Other income, net		139,066		15,610
Income before provision (benefit) for income taxes	$	165,720	$	41,884