Axon Enterprise (AXON -0.23%) is one of the biggest growth stocks on the market and is fundamentally changing the law enforcement landscape. But you wouldn't know its major impact on the world by looking at its stock price, which has fluctuated around the same price for over two years.

Long-term investors looking at this company and whether its future is bright enough to invest in don't need to look far to see what is driving Axon's growth and its bottom line. Here are three charts that explain the company.

Officer with body camera interviewing citizen.

Image source: Axon Enterprise.

Growth without profit

The last five years at Axon have been marked by a tremendous amount of growth, but very little profit. Higher adoption of Tasers has been a big driver of the business, but over the last two years body cameras have really taken over as the face of the company, growing 122.5% in the first quarter of 2017.

AAXN Revenue (TTM) Chart

AAXN Revenue (TTM) data by YCharts.

Nearly tripling sales in five years (up 193%) is impressive for any company. But that growth can come at a cost to the bottom line, which is the case at Axon Enterprise.

Margins are up and stabilizing

You can see in the chart below that Axon's gross margin is up from just over 50% five years ago to over 60% today. And the Axon body camera segment, which includes the high-margin Evidence.com cloud platform and related services, is growing more quickly than the rest of the business.

AAXN Gross Profit Margin (TTM) Chart

AAXN Gross Profit Margin (TTM) data by YCharts.

If Axon can maintain its high margins and continue to grow revenue more quickly than operating costs, it should be a highly profitable business long term. Short term, a free body camera offer could have a negative impact on margins, but with the body camera business generating gross margins of 70% to 80% over the past two years, it's an offer that should pay off long term. And with gross margins expected to stay elevated as body camera adoption grows, it's operating costs that investors should watch in the next few years.

Investing in the future is costly

The reason Axon's high revenue growth and high margins haven't translated to net income is operating costs. Management is investing in research and development for new products and building out a sales force that's helping drive growth. You can see below that operating expense has grown 232% in the last five years, outpacing revenue growth.

AAXN Total Operating Expenses (TTM) Chart

AAXN Total Operating Expenses (TTM) data by YCharts.

Investing in R&D and a sales force is a good investment for the future as long as new products are being introduced and revenue is growing. The growth in expenses above coincides with the introduction of new body cameras, a cloud platform for law enforcement content, and the systems that officers and prosecutors are using to do their jobs. And as more body cameras reach customers, the operating expenses per officer should decline, increasing operating margins.

Investments in new products and sales teams internationally may limit Axon's net income potential in the next few years, but long term, these are investments the company should be making. And when leverage of these systems takes hold and operating expenses begin growing more slowly than revenue, net income will surge.

Axon's long-term bet is paying off

Sometimes it's frustrating to see a company seemingly performing very well but not be rewarded with a rising stock price. Axon is making the right investments in less-lethal weapons and body cameras, and with many customers signing long-term contracts for body cameras and Tasers, the investment in sales and R&D should pay off in spades long term.