A lot has shifted for Axon Enterprise (NASDAQ:AAXN) in the last few years, including changing its name from TASER International. The company has gone from a leader in Tasers to the dominant player in body cameras as well -- hence the new moniker.
Amid all of the changes, there are a few stats investors should know about the company. Here are the four that I think tell the story of what Axon is today and where the company is going.
Axon Body is the camera of choice
Axon has gone through a few varieties of body cameras over the years, but the Axon Body model is now the dominant product for the company. In 2016, 66,154 Axon Body cameras were sold, up 277.5% from a year earlier. Axon Flex, the camera that attaches to a pair of glasses, sold 14,173 units, down 24.7% from a year ago.
From a unit standpoint, the Axon Body almost matched Taser X26P sales of 79,218 units in 2016 and beat Taser X2 sales of 47,700 units. With sales of body cameras growing rapidly, it's no wonder the company changed its name to reflect this booming business.
2 million Taser cartridges sold
Axon makes money on each Taser sale, but it's cartridge sales that keep the revenue coming in quarter after quarter. And in 2016, cartridge sales increased 16.8% to 2.0 million units. That's an incredibly high number of units, and with new cartridges needed continuously by law enforcement, it's a product that will keep selling for years to come.
Tasers still drive Axon's business today
Axon's body cameras are definitely the future of the business, but Taser weapons are still the dominant product today. In 2016, weapon sales were $202.6 million compared to $65.6 million in sales in the Axon segment.
This will likely continue for a few years in the future because Axon's value is in its high-margin services segment. And with body cameras now on offer to law enforcement agencies for free, weapon sales will continue to dominate finances.
Evidence.com margins are unbelievable
In 2016, it became clear that the real value driver of body cameras wasn't the camera sale -- rather, it was services like cloud subscriptions to Evidence.com and other products the company is rolling out. And the amount of money being made makes it easy to see why Axon is doing everything it can to get body cameras in customers' hands.
Axon's services revenue was $29.7 million in 2016 and gross margin was 79.2%. In the fourth quarter, gross margin was an amazing 82.7%. And revenue from services grew 140.7% in the fourth quarter, so this is a huge growth business.
When Axon makes changes to its product line or sales tactics, like the free body camera offer, look at it through the lens of trying to get more people into the company's services. Because that's where the money is, long term.