Axon reports Q4 2025 revenue of $797 million, up 39% year over year

SCOTTSDALE, Ariz., Feb. 24, 2026 /PRNewswire/ --

Fellow shareholders,

Axon completed another record year in pursuit of our mission to protect life. Revenue grew 33% year over year, marking our fourth consecutive year of annual growth above 30% as demand for our ecosystem continues to build. We delivered a full-year net income margin of 4.5% alongside Adjusted EBITDA margin of 25.5% and maintained a Rule of 40 metric above 55, even as we continued investing in our products and expanding our customer base. Together, we believe our 2025 results reflect disciplined execution of our strategy and are a strong foundation for our longer-term guidance.

Key operational milestones in 2025 are as follows:

Our momentum is accelerating as we enter 2026, supported by disciplined investment, strong product market fit and deep, trusted relationships with our customers. We expect 2026 revenue growth of 27% to 30% with an Adjusted EBITDA margin of 25.5%. Looking further ahead, we are establishing a new target for 2028 of approximately $6 billion in annual revenue and a 28% Adjusted EBITDA margin.

We recap our major product innovations, review our fourth quarter and full-year 2025 results, and outline our 2026 outlook and 2028 targets in more detail below.

2025 Product Innovation — Year In Review

Axon continues to make significant investments, both organically and through strategic acquisitions, to expand and strengthen our ecosystem and deliver differentiated technology solutions. Our approach is rooted in deep partnership with our customers, enabling us to understand the challenges they face every day and build solutions designed to address them. We are frequently first to market with new products, or we enter established categories when technology has not advanced to meet evolving customer needs. The impact of our disciplined innovation is reflected in our consistently strong net revenue retention, which reached 125% in the quarter, and is driven by our existing customers adopting new products. We believe our customer-focused, long-term approach positions Axon to deliver sustained growth and consistently achieve our financial targets.

Axon Ecosystem — Launched & Advancing

The AI Era

In 2025, we continued executing on our strategy with the AI Era Plan, embedding practical, high-impact artificial intelligence (AI) capabilities across our integrated hardware and software ecosystem. The AI Era Plan began with transcription and Draft One, which became foundational tools for reducing report-writing time and administrative burden. This year, we enhanced those capabilities through rolling improvements while bringing Brief One and Form One into broader availability and introducing Axon Assistant.

Together, these innovations represented first of their kind advancements for our customers and are part of consistent evolution we are committed to delivering as part of our AI strategy.

Axon's differentiation in AI is grounded in deep understanding of customer needs and our ability to innovate new solutions leveraging our expertise in building purpose-built sensors, devices and software that work seamlessly together. By designing hardware and cloud workflows in tandem, we are able to deliver AI functionality that is tightly integrated into real-world operations. From automated reporting and intelligent search to translation and contextual assistance, our AI tools are designed to improve speed, accuracy and decision-making in the moments that matter most.

Axon Assistant

Axon Assistant brought a voice-activated AI companion directly into Axon body cameras — embedding AI at the frontline to help users stay focused while accelerating access to critical information. Initial capabilities focus on high-impact everyday tasks, including real-time translation across 50+ languages and voice-enabled policy chat, which delivers reliable answers to policy questions with citations. Built from the ground up to be extensible, Axon Assistant provides a powerful foundation that will continue to expand with additional skills and automation over time. We plan to announce a growing list of transformative capabilities at Axon Week coming up in April and continuing to extend our leadership in AI over the coming years.

In its first year, Axon Assistant saw strong adoption, with approximately 500 customers now live on the platform, and early examples of its real-world impact are already beginning to surface. In September, only months after Axon Assistant with live translation became available, one Axon customer, Bernalillo County Sheriff's Office, relied on the tool to turn a high-risk traffic stop into a successful response.

Here's what they had to say after:

"Everyone talks about AI is coming — AI's here. My vision is, you're always using technology to supplement your personnel. And it's really just a force multiplier. [...] That Russian translation that we put out there — saying there's no language barrier — I think that answered questions for the world. Before, we didn't want AI in police work. Now people are asking for more of it, because they're seeing the advantages."

— Sheriff John Allen, Bernalillo County Sheriff's Office

Axon Vehicle Intelligence

In 2025, we announced and shipped our entry into the fixed automatic license plate recognition (ALPR) segment in less than one year — supporting the expansion of our real-time operations platform with Axon Vehicle Intelligence. The solution brings license plate recognition, live streaming and real-time alerts into a unified, AI-powered Axon workflow. It goes beyond traditional ALPR with deeper vehicle descriptors such as make, color and visible damage — enabling more precise identification and broader situational awareness.

Along with the entry into fixed ALPR with Axon Vehicle Intelligence, we introduced new device form factors, including Axon Outpost and Axon Lightpost, and enhanced deployment flexibility through "Works With Axon," our certified third-party camera program — giving customers greater choice while maintaining seamless integration into Axon's broader ecosystem. Our emergence in this growing category has just begun. Key feature enhancements are expected to ship in the first half of 2026, with deployments expected to scale later this year and beyond.

As public dialogue around this technology continues to evolve, we are focused on building tools that protect life and reflect the responsibility our customers expect from us. Our approach is guided by our Responsible Innovation Framework, which we believe is a meaningful competitive differentiator, and has been built through decades of partnership with our public safety customers and the communities they protect. It is human centric by design and embeds responsible data management, robust usage controls and transparent governance directly into our products so agencies retain control and communities see technology used in ways that align with their expectations. We believe our thoughtful design and responsible deployment are critical differentiators that further position us as a trusted partner and leader in delivering innovation to the field — and customers are voting with their dollars. Key accounts are moving to Axon from competitors — and they're telling us it's because of our unwavering commitment to privacy, transparency, and integrity. That's not just good ethics — it's a competitive superpower.

Axon Ecosystem — Announced & Coming Soon

Axon Body Mini

Announced in 2025 and expected to begin shipping in mid-2026, Axon Body Mini expands our enterprise product suite with a compact, durable body-worn camera purpose-built for commercial environments. It brings Axon's ecosystem — including two-way voice, live streaming, automated alerts, MetaCoach and Axon Assistant — to industries such as retail, healthcare and logistics.

We believe this product marks an important development in our broader enterprise growth strategy, with the opportunity to become a leading connected, AI-powered endpoint behind future enterprise operations workflows. Alongside Fusus, Axon Evidence, counter-drone solutions and AI features, Axon Body Mini enables us to bring integrated safety, security and operational workflows to a wider range of organizations. Many of the challenges faced by enterprise customers — documentation, training, real-time awareness and coordination — closely mirror those in public safety, and our purpose-built platform is uniquely positioned to address them.

Axon 911

Axon 911 extends our ecosystem to the first moment a call for help is made — enabling earlier activation of data, intelligence and connected sensors within our network. By modernizing 911 call handling with AI-enabled communications, we can help agencies begin coordinating response with greater speed and clarity from the initial interaction. We see a major opportunity to drive better outcomes for our customers as we modernize and remove friction from legacy systems, supporting faster, more informed response with capabilities such as precise location, real-time transcription and translation, automated summaries and keyword alerts.

Our acquisitions of Prepared, which closed late last year, and Carbyne, which closed in the first quarter of 2026, are driving Axon's extension into this new product category and reflect our long-standing strategy of pairing deep organic investment with targeted acquisitions to accelerate innovation, attract exceptional talent and broaden our capabilities. Through our integrated product offerings and the AI Era Plan initiatives, we expect to begin delivering expanded 911 capabilities to customers this year. We have already shipped our first major integration connecting Axon 911 and Axon Fusus, advancing our vision of a seamless, AI-enabled response network.

"Here's my conviction: nobody should be more aggressive or more thoughtful on AI than Axon. If we get that balance right, we won't just be a vendor, we'll be the partner our customers can't imagine operating without. That's when the real flywheel kicks in: deeper relationships, expanded footprints, and increasingly mission-critical problems landing on our doorstep."

— Rick Smith, Axon Founder and CEO

Q4 2025 Summary Results

Quarterly revenue of $797 million grew 39% year over year, exceeding our expectations, driven by premium software adoption, TASER 10, Axon Body 4 and counter-drone equipment.

Total company gross margin of 57.9% decreased 220 basis points year over year. Excluding non-GAAP adjustments, adjusted gross margin of 61.1% decreased 210 basis points year over year. The decrease in total company gross margin and adjusted gross margin is primarily due to global tariffs and increased Platform Solutions product mix within Connected Devices, partially offset by growth in Software & Services.

Operating loss of $50 million was primarily driven by increased headcount to support business growth and stock-based compensation expense.

Net income of $3 million (0.3% net income margin), or $0.03 per diluted share, decreased from $135 million (23.5% net income margin), primarily due to operating losses and strategic investment activity. Non-GAAP net income of $178 million (22.3% non-GAAP net income margin), or $2.15 per diluted share, increased from $168 million (29.3% non-GAAP net income margin), driven by higher revenue.

Adjusted EBITDA of $206 million (25.9% Adjusted EBITDA margin) increased 46% year over year, primarily driven by higher revenue, partially offset by continued investment in R&D.

Operating cash flow of $217 million decreased from $250 million in the prior year, primarily driven by receivables timing and inventory investments. Operating cash flow supported free cash flow of $155 million.

As of December 31, 2025, Axon had $1.7 billion in cash, cash equivalents and short-term investments and outstanding convertible and senior notes with a principal amount of $1.8 billion, resulting in a net debt position of $112 million down $469 million sequentially, primarily driven by acquisitions.

Detailed definitions of our non-GAAP financial measures and caution on the use of non-GAAP measures are included later in this letter.

Financial commentary by segment

Software & Services

THREE MONTHS ENDED

CHANGE

31 DEC 2025

30 SEP 2025

31 DEC 2024

QoQ

YoY

(in thousands)

Revenue

$ 342,515

$ 305,242

$ 244,940

12.2 %

39.8 %

Gross margin

72.9 %

73.8 %

74.6 %

(90) bp

(170) bp

Adjusted gross margin

76.7 %

76.8 %

78.0 %

(10) bp

(130) bp

Connected Devices

THREE MONTHS ENDED

CHANGE

31 DEC 2025

30 SEP 2025

31 DEC 2024

QoQ

YoY

(in thousands)

Revenue

$ 454,209

$ 405,399

$ 330,205

12.0 %

37.6 %

Gross margin

46.6 %

49.9 %

49.4 %

(330) bp

(280) bp

Adjusted gross margin

49.3 %

52.1 %

52.2 %

(280) bp

(290) bp

Forward-Looking Operating Metrics

31 DEC 2025

30 SEP 2025

30 JUN 2025

31 MAR 2025

31 DEC 2024

Annual recurring revenue ($ millions) (1)

$ 1,347

$ 1,252

$ 1,183

$ 1,104

$ 1001

Net revenue retention (1)

125 %

124 %

123 %

Future contracted bookings ($ billions) (1)

$ 14.4

$ 11.4

$ 10.7

$ 9.9

$ 10.1

(1)

Refer to "Statistical Definitions" below.

Outlook & Target Model

The following forward-looking statements reflect Axon's expectations as of February 24, 2026 and are subject to risks and uncertainties. Please refer to "Forward-Looking Statements" below for additional information.

Full Year 2026 Guidance

Full-year 2026 stock-based compensation expense includes approximately $230 million related to the broad-based Employee XSP and the CEO Performance Award, primarily within SG&A and R&D. These performance-based incentive programs are tied to stock price, operational, and time-based requirements, and include seven substantially equal tranches.

2026 capital expenditure plans include long-term R&D investment projects, continued capacity expansion, global facility build-outs and new product development costs. Expected capital expenditures do not include costs related to investments in a new headquarters.

2028 Target Model

Axon has established a new 2028 target model to guide our focus as we create meaningful value for society and our shareholders. We exceeded our prior 3-year targets of $2 billion in annual revenue and a 25% Adjusted EBITDA margin for 2025, delivering $2.8 billion in revenue at a 25.5% adjusted EBITDA margin and now we're providing an updated forecast. The strength in our business including an expanded product portfolio across hardware, software and AI, strong future contracted bookings, and deep customer relationships reinforces our confidence in our ability to deliver sustained, robust performance in the years ahead.

Looking forward to 2028, we intend to:

We provide Adjusted EBITDA and Adjusted EBITDA margin guidance, rather than net income and net income margin guidance, due to the inherent difficulty of forecasting certain expenses and gains, such as income tax expense and gains or losses on marketable securities and strategic investments. We are unable to reasonably estimate their potential impact, which could be material. Accordingly, we do not provide a reconciliation of projected net income and net income margin to projected Adjusted EBITDA and Adjusted EBITDA margin, respectively.

We provide an Adjusted Free Cash Flow target, rather than a cash flow from operating activities target, to provide additional transparency into conversion inclusive of expected capital expenditures and sources or uses of cash that are consistent with our core operations. Accordingly, because of inherent challenges associated with predicting capital expenditures and other cash activities that may not be core to our operations in the future, we do not provide a reconciliation of projected cash flow from operating activities to projected Adjusted Free Cash Flow.

Quarterly conference call and webcast

We will host our Q4 2025 earnings conference call webinar on Tuesday, February 24 at 1:30 p.m. PT / 4:30 p.m. ET

The webcast will be available via a link on Axon's investor relations website at https://investor.axon.com or can be accessed directly via https://axon.zoom.us/j/ 91352444721

Statistical Definitions

Annual recurring revenue: Annual recurring revenue is a performance indicator that management believes provides more visibility into the growth of our revenue generated by our highest margin, recurring services. Annual recurring revenue should be viewed independently of revenue and deferred revenue because it is an operating measure and is not intended to be combined with or to replace GAAP revenue or deferred revenue, as they can be impacted by contract start and end dates and renewal rates. Annual recurring revenue is not intended to be a replacement or forecast of revenue or deferred revenue. We calculate annual recurring revenue as monthly recurring license, integration, warranty and storage revenue, annualized.

Net revenue retention: Dollar-based net revenue retention is an important metric to measure our ability to retain and expand our relationships with existing customers. We calculate it as the software, camera and TASER warranty subscription and support revenue from a base set of agency customers from which we generated Axon Cloud subscription and warranty revenue in the last month of a quarter divided by the software and camera warranty subscription and support revenue from the year-ago month of that same customer base. This calculation includes high-margin warranty revenue but purposely excludes the lower-margin hardware subscription component of the customer contracts, as it is meant to be a SaaS metric that we use to monitor the health of the recurring revenue business we are building. This calculation also excludes the implied monthly revenue contribution of customers that were added since the year-ago quarter, and therefore excludes the benefit of new customer acquisition. The metric includes customers, if any, that terminated during the annual period, and therefore, this metric is inclusive of customer churn. This metric is downwardly adjusted to account for the effect of phased deployments—meaning that, for the year-ago period, we consider the total contractually obligated implied monthly revenue amount, rather than monthly revenue amounts that might have been in actuality smaller on a GAAP basis due to the customer not having yet fully deployed their Axon solution. For more information relative to our revenue recognition policies, please reference our filings with the Securities and Exchange Commission (SEC).

Future contracted bookings: This operational metric tracks our total unfulfilled contracted bookings, including remaining performance obligations, in addition to contracts with certain termination or other clauses that exclude them from remaining performance obligations. Total future contracted bookings for products and services represent total orders that the Company has received and not yet performed. Beginning in Q3 2025, we have updated future contracted bookings to include cumulative gross bookings, including amounts associated with third-party agent arrangements, where we may only recognize the net portion expected to be paid on behalf of our customers as revenue. The impact of this change in historical periods was determined to be immaterial, so amounts have not been recast. The amounts associated with third party agent arrangements not recognized will be eliminated from future contracted bookings upon fulfillment. This operational metric is subject to change based on future events, including terminations for convenience, the execution of optional periods or other contract modifications or cancellations. This operational metric may be unique to the Company, as it may be different from similarly titled operational metrics used by other companies. As such, the presentation of this operational metric may not enhance the comparability of the Company's results to the results of other companies.

Bookings: This operational metric represents total products and services orders the Company received during the period, including customer contracts with certain termination or cancellation clauses, optional periods, or other clauses. Bookings include customer orders associated with third-party agent arrangements.

Supplementary Non-GAAP Measures

To supplement the Company's financial results presented in accordance with GAAP, we present the non-GAAP financial measures of EBITDA, Adjusted EBITDA, Adjusted EBITDA Margin, Adjusted Gross Margin, Non-GAAP Net Income, Non-GAAP Diluted Earnings Per Share, Free Cash Flow and Adjusted Free Cash Flow. The Company's management uses these non-GAAP financial measures in evaluating the Company's performance in comparison to prior periods. We believe that both management and investors benefit from referring to these non-GAAP financial measures in assessing its performance, and when planning and forecasting our future periods. A reconciliation of GAAP to the non-GAAP financial measures is presented below.

Caution on Use of Non-GAAP Measures

Although these non-GAAP financial measures are not consistent with GAAP, management believes investors will benefit by referring to these non-GAAP financial measures when assessing the Company's operating results, as well as when forecasting and analyzing future periods. However, management recognizes that:

Further, these non-GAAP financial measures may be unique to the Company, as they may be different from similarly titled non-GAAP financial measures used by other companies. As such, this presentation of non-GAAP financial measures may not enhance the comparability of the Company's results to the results of other companies.

About Axon

Axon (Nasdaq: AXON) is the global leader in public safety technology, relentlessly innovating to protect more lives in more places. Founder-led since 1993, Axon began with a mission to reimagine conflict in law enforcement and has grown into a global company serving everyone who takes on the responsibility of public safety, enterprise security, and national security — from first responders and governments to companies, frontline workers, and communities. Our trusted network connects TASER energy devices, cameras and sensors including body-worn, fixed and in-car cameras, drones and robotics, digital evidence and records management, real-time operations, immersive training, productivity tools, and AI-driven capabilities and insights. Designed to work seamlessly together, these solutions create a connected picture of safety that helps protect people and places with greater speed, clarity, and accountability.

Non-Axon trademarks are property of their respective owners.

Axon, Axon Assistant, Axon AI, Axon Body, Axon Ecosystem, Axon Fusus, Axon Lightpost, Axon Outpost, Axon Vehicle Intelligence, TASER, TASER 10, the Filled Bolt within Circle Logo and the Delta Logo are trademarks of Axon Enterprise, Inc., some of which are registered in the United States and other countries. For more information, visit www.axon.com/legal. All rights reserved.

Forward-looking Statements

Forward-looking statements in this letter include, without limitation, statements regarding: proposed products and services and related development efforts and activities; expectations about the market for our current and future products and services, including statements related to our user base and customer profiles; strategies and trends relating to subscription plan programs and revenues; statements related to recently completed acquisitions; our expectations about the future implementation of new strategies related to artificial intelligence; the timing and realization of future contracted revenue; the fulfillment of bookings; the timing of product shipment and delivery; strategies and trends, including the amounts and benefits of R&D investments; the sufficiency of our liquidity and financial resources; expectations about customer behavior; statements concerning projections, predictions, expectations, estimates or forecasts as to our business, financial and operational results and future economic performance, including our outlook for 2026 full year revenue, stock-based compensation expense, Adjusted EBITDA, Adjusted EBITDA margin, Adjusted Free Cash Flow and capital expenditures, and 2028 targets; statements of management's strategies, goals and objectives and other similar expressions; as well as the ultimate resolution of financial statement items requiring critical accounting estimates, including those set forth in our Annual Report on Form 10‑K for the year ended December 31, 2024 and the soon-to-be-filed Annual Report on Form 10-K for the year ended December 31, 2025. Such statements give our current expectations or forecasts of future events; they do not relate strictly to historical or current facts. Words such as "may," "will," "should," "could," "would," "predict," "potential," "continue," "expect," "anticipate," "future," "intend," "plan," "believe," "estimate," and similar expressions, as well as statements in future tense, identify forward-looking statements. However, not all forward-looking statements contain these identifying words.

We cannot guarantee that any forward-looking statement will be realized, although we believe we have been prudent in our plans and assumptions. Achievement of future results is subject to risks, uncertainties and potentially inaccurate assumptions. The following important factors could cause actual results to differ materially from those in the forward-looking statements: our exposure to cancellations of government contracts due to non-appropriation clauses, exercise of a cancellation clause or non-exercise of contractually optional periods; the ability of law enforcement agencies to obtain funding, including based on tax revenues; our ability to design, introduce and sell new products, services or features; our ability to defend against litigation and protect our intellectual property, and the resulting costs of this activity; our ability to win bids through the open bidding process for governmental agencies; our ability to manage our supply chain and avoid production delays, shortages and impacts to expected gross margins; the impacts of inflation, macroeconomic conditions and global events; the impact of catastrophic events or public health emergencies; the impact of stock-based compensation expense, impairment expense and income tax expense on our financial results; customer purchase behavior, including adoption of our software as a service delivery model; negative media publicity or sentiment regarding our products; the impact of various factors on projected gross margins; defects in, or misuse of, our products; changes in the costs of product components and labor; loss of customer data, a breach of security or an extended outage, including by our third-party cloud-based storage providers; exposure to international operational risks; delayed cash collections and possible credit losses due to our subscription model; changes in government regulations in the United States and in foreign markets, especially related to the classification of our products by the United States Bureau of Alcohol, Tobacco, Firearms and Explosives; our ability to integrate acquired businesses; the impact of declines in the fair values or impairment of our investments, including our strategic investments; our ability to attract and retain key personnel; litigation or inquiries and related time and costs; our ability to remediate the material weakness in our internal controls; and counterparty risks relating to cash balances held in excess of federally insured limits. Many events beyond our control may determine whether results we anticipate will be achieved. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could differ materially from past results and those anticipated, estimated or projected. You should bear this in mind as you consider forward-looking statements. These factors are intended as cautionary statements for investors within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Readers can find them under the heading "Risk Factors" in our Annual and Quarterly Reports, and investors should refer to them. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.

Except as required by law, we undertake no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures we make on related subjects in our Form 8-K, 10‑Q and 10‑K reports to the SEC. Our filings with the SEC may be accessed at the SEC's website at www.sec.gov.

AXON ENTERPRISE, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

THREE MONTHS ENDED

TWELVE MONTHS ENDED

31 DEC 2025

30 SEP 2025

31 DEC 2024

31 DEC 2025

31 DEC 2024

Net sales from products

$ 454,209

$ 405,399

$ 330,205

$ 1,576,864

$ 1,221,292

Net sales from services

342,515

305,242

244,940

1,202,672

861,234

Net sales

796,724

710,641

575,145

2,779,536

2,082,526

Cost of product sales

242,442

203,173

167,182

809,303

618,136

Cost of service sales

92,987

80,120

62,114

312,108

223,010

Cost of sales

335,429

283,293

229,296

1,121,411

841,146

Gross margin

461,295

427,348

345,849

1,658,125

1,241,380

Operating expenses:

Selling, general and administrative

317,369

252,803

227,019

1,035,893

741,247

Research and development

194,044

176,674

134,585

684,308

441,593

Total operating expenses

511,413

429,477

361,604

1,720,201

1,182,840

Income (loss) from operations

(50,118)

(2,129)

(15,755)

(62,076)

58,540

Interest income

17,633

23,941

7,286

75,431

43,693

Interest expense

(28,819)

(28,912)

(1,825)

(94,238)

(7,098)

Other income (loss), net

(4,933)

22,803

94,859

99,857

286,369

Income (loss) before provision for income taxes

(66,237)

15,703

84,565

18,974

381,504

Provision for (benefit from) income taxes

(68,982)

17,889

(50,619)

(105,682)

4,470

Net income (loss)

$ 2,745

$ (2,186)

$ 135,184

$ 124,656

$ 377,034

Net income (loss) per common and common equivalent shares:

Basic

$ 0.03

$ (0.03)

$ 1.77

$ 1.60

$ 4.98

Diluted

$ 0.03

$ (0.03)

$ 1.67

$ 1.51

$ 4.80

Weighted average number of common and common

equivalent shares outstanding:

Basic

78,994

78,416

76,360

78,081

75,748

Diluted

82,818

78,416

81,091

82,370

78,558

AXON ENTERPRISE, INC.

SALES BY PRODUCT AND SERVICE

(in thousands)

THREE MONTHS ENDED

31 DEC 2025

30 SEP 2025

31 DEC 2024

Connected

Devices

Software &

Services

Total

Connected

Devices

Software &

Services

Total

Connected

Devices

Software &

Services

Total

TASER (1)

$ 264,204

$ —

$ 264,204

$ 237,950

$ —

$ 237,950

$ 200,382

$ —

$ 200,382

Personal Sensors (2)

109,134

—

109,134

106,677

—

106,677

85,165

—

85,165

Platform Solutions (3)

80,871

—

80,871

60,772

—

60,772

44,658

—

44,658

Software and Services

—

342,515

—

305,242

—

244,940

Total

$ 454,209

$ 342,515

$ 796,724

$ 405,399

$ 305,242

$ 710,641

$ 330,205

$ 244,940

$ 575,145

(1)

'TASER' includes TASER handles, cartridges and related extended warranties.

(2)

'Personal Sensors' primarily includes body cameras and accessories, signal sidearm, and related extended warranties.

(3)

'Platform Solutions' primarily includes fleet in-car video, interview room, fixed cameras, drones and counter-drone equipment, virtual reality training hardware, and related extended warranties.

TWELVE MONTHS ENDED

31 DEC 2025

31 DEC 2024

Connected

Devices

Software &

Services

Total

Connected

Devices

Software &

Services

Total

TASER (1)

$ 913,883

$ —

$ 913,883

$ 750,141

$ —

$ 750,141

Personal Sensors (2)

397,035

—

397,035

316,938

—

316,938

Platform Solutions (3)

265,946

—

265,946

154,213

—

154,213

Software and Services

—

1,202,672

—

861,234

Total

$ 1,576,864

$ 1,202,672

$ 2,779,536

$ 1,221,292

$ 861,234

$ 2,082,526

(1)

'TASER' includes TASER handles, cartridges and related extended warranties.

(2)

'Personal Sensors' primarily includes body cameras and accessories, signal sidearm, and related extended warranties.

(3)

'Platform Solutions' primarily includes fleet in-car video, interview room, fixed cameras, drones and counter-drone equipment, virtual reality training hardware, and related extended warranties.

SALES BY GEOGRAPHY

(in thousands)

THREE MONTHS ENDED

31 DEC 2025

30 SEP 2025

31 DEC 2024

United States

$ 644,317

81 %

$ 593,939

84 %

$ 476,419

83 %

Other countries

152,407

116,702

98,726

Total

$ 796,724

100 %

$ 710,641

100 %

$ 575,145

100 %

TWELVE MONTHS ENDED

31 DEC 2025

31 DEC 2024

United States

$ 2,305,012

83 %

$ 1,775,194

85 %

Other countries

474,524

307,332

Total

$ 2,779,536

100 %

$ 2,082,526

100 %

AXON ENTERPRISE, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in thousands)

THREE MONTHS ENDED

TWELVE MONTHS ENDED

31 DEC 2025

30 SEP 2025

31 DEC 2024

31 DEC 2025

31 DEC 2024

EBITDA and Adjusted EBITDA:

Net income (loss)

$ 2,745

$ (2,186)

$ 135,184

$ 124,656

$ 377,034

Depreciation and amortization

26,960

21,310

17,489

86,789

56,815

Interest expense

28,819

28,912

1,825

94,238

7,098

Investment interest income

(17,633)

(23,941)

(7,286)

(75,431)

(43,693)

Provision for (benefit from) income taxes

(68,982)

17,889

(50,619)

(105,682)

4,470

EBITDA

$ (28,091)

$ 41,984

$ 96,593

$ 124,570

$ 401,724

Non-GAAP adjustments:

Stock-based compensation expense

$ 184,516

$ 146,152

$ 130,888

$ 610,151

$ 382,604

Unrealized and realized (gains) on

investments and marketable securities, net

(2,645)

(21,820)

(39,432)

(134,658)

(189,277)

Realized (gains) on previously held minority

interests acquired in business combinations, net

(2,193)

—

(51,627)

(2,193)

(93,940)

Debt inducement expense

10,202

—

38,868

—

Severance costs (1)

31,816

—

31,816

—

Transaction costs related to strategic

investments and acquisitions

5,857

4,774

2,104

15,588

15,249

Payroll taxes related to Employee XSP

vesting and 2018 CEO Performance Award

option exercises

4,986

—

918

14,768

2,645

Litigation and regulatory costs

1,266

5,490

1,537

9,579

1,761

Loss on disposal, abandonment, and

impairment of property, equipment and

intangible assets, net

629

430

—

1,059

—

Inventory step-up amortization

—

609

607

609

Adjusted EBITDA

$ 206,343

$ 177,010

$ 141,590

$ 710,155

$ 521,375

Net income (loss) as a percentage of net sales

0.3 %

(0.3) %

23.5 %

4.5 %

18.1 %

Adjusted EBITDA as a percentage of net sales

25.9 %

24.9 %

24.6 %

25.5 %

25.0 %

Stock-based compensation expense:

Cost of product and service sales

$ 15,906

$ 12,703

$ 11,854

$ 54,057

$ 60,089

Selling, general and administrative expenses

123,756

75,072

73,525

342,362

190,561

Research and development expenses

68,934

58,377

45,509

237,812

131,954

Total stock-based compensation expense

208,596

146,152

130,888

634,231

382,604

Severance costs (2)

24,080

—

24,080

—

Total stock-based compensation expense,

excluding non-recurring severance costs

$ 184,516

$ 146,152

$ 130,888

$ 610,151

$ 382,604

(1)

For the three and twelve months ended December 31, 2025, non-recurring severance costs of $31.8 million consisted of stock-based compensation, cash payments and employee benefits.

(2)

For the three and twelve months ended December 31, 2025, stock-based compensation expense includes $24.1 million of non-recurring severance costs. The majority of these costs were recorded in selling, general and administrative expenses.

THREE MONTHS ENDED

TWELVE MONTHS ENDED

31 DEC 2025

30 SEP 2025

31 DEC 2024

31 DEC 2025

31 DEC 2024

Non-GAAP net income:

GAAP net income (loss)

$ 2,745

$ (2,186)

$ 135,184

$ 124,656

$ 377,034

Non-GAAP adjustments:

Stock-based compensation expense

184,516

146,152

130,888

610,151

382,604

Unrealized and realized (gain) loss on strategic

investments and marketable securities, net

(3,129)

(22,893)

(39,432)

(137,776)

(189,277)

Realized (gains) on previously held minority interests

acquired in business combinations, net

(2,193)

—

(51,627)

(2,193)

(93,940)

Debt inducement expense

10,202

—

38,868

—

Severance costs (1)

31,816

—

31,816

—

Transaction costs related to strategic investments and

acquisitions

5,857

4,774

2,104

15,588

15,249

Payroll taxes related to Employee XSP vesting and

2018 CEO Performance Award option exercises

4,986

—

918

14,768

2,645

Litigation and regulatory costs

1,266

5,490

1,537

9,579

1,761

Inventory step-up amortization

—

609

607

609

Income tax effects

(58,310)

(33,771)

(11,897)

(142,072)

(30,410)

Non-GAAP net income

$ 177,756

$ 97,566

$ 168,284

$ 563,992

$ 466,275

Non-GAAP net income as a percentage of net sales

22.3 %

13.7 %

29.3 %

20.3 %

22.4 %

Diluted income per common share

GAAP

$ 0.03

$ (0.03)

$ 1.67

$ 1.51

$ 4.80

Non-GAAP

$ 2.15

$ 1.17

$ 2.08

$ 6.85

$ 5.94

Weighted average number of diluted common and

common equivalent shares outstanding

82,818

83,045

81,091

82,370

78,558

(1)

For the three and twelve months ended December 31, 2025, non-recurring severance costs of $31.8 million consisted of stock-based compensation, cash payments and employee benefits.

AXON ENTERPRISE, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES - continued

(in thousands)

THREE MONTHS ENDED

TWELVE MONTHS ENDED

31 DEC 2025

30 SEP 2025

31 DEC 2024

31 DEC 2025

31 DEC 2024

Net sales

$ 796,724

$ 710,641

$ 575,145

$ 2,779,536

$ 2,082,526

Cost of sales

335,429

283,293

229,296

1,121,411

841,146

Gross margin

461,295

427,348

345,849

1,658,125

1,241,380

Stock-based compensation expense

15,066

12,703

11,854

53,217

60,089

Amortization of acquired intangible assets

7,515

5,399

5,071

23,063

13,369

Severance costs

2,007

—

2,007

—

Payroll taxes related to Employee XSP vesting

586

—

2,074

—

Inventory step-up amortization

—

609

607

609

Adjusted gross margin

$ 486,469

$ 445,450

$ 363,383

$ 1,739,093

$ 1,315,447

Gross margin

57.9 %

60.1 %

59.7 %

59.6 %

Adjusted gross margin

61.1 %

62.7 %

63.2 %

62.6 %

63.2 %

Connected Devices

THREE MONTHS ENDED

TWELVE MONTHS ENDED

31 DEC 2025

30 SEP 2025

31 DEC 2024

31 DEC 2025

31 DEC 2024

Net sales

$ 454,209

$ 405,399

$ 330,205

$ 1,576,864

$ 1,221,292

Cost of sales

242,442

203,173

167,182

809,303

618,136

Gross margin

211,767

202,226

163,023

767,561

603,156

Stock-based compensation expense

8,655

7,584

7,521

31,298

47,953

Amortization of acquired intangible assets

1,455

1,318

1,260

5,443

2,318

Severance costs

1,724

—

1,724

—

Payroll taxes related to Employee XSP vesting

299

—

933

—

Inventory step-up amortization

—

609

607

609

Adjusted gross margin

$ 223,900

$ 211,128

$ 172,413

$ 807,566

$ 654,036

Gross margin

46.6 %

49.9 %

49.4 %

48.7 %

49.4 %

Adjusted gross margin

49.3 %

52.1 %

52.2 %

51.2 %

53.6 %

Software and Services

THREE MONTHS ENDED

TWELVE MONTHS ENDED

31 DEC 2025

30 SEP 2025

31 DEC 2024

31 DEC 2025

31 DEC 2024

Net sales

$ 342,515

$ 305,242

$ 244,940

$ 1,202,672

$ 861,234

Cost of sales

92,987

80,120

62,114

312,108

223,010

Gross margin

249,528

225,122

182,826

890,564

638,224

Stock-based compensation expense

6,411

5,119

4,333

21,919

12,136

Amortization of acquired intangible assets

6,060

4,081

3,811

17,620

11,051

Payroll taxes related to Employee XSP vesting

287

—

1,141

—

Severance costs

283

—

283

—

Adjusted gross margin

$ 262,569

$ 234,322

$ 190,970

$ 931,527

$ 661,411

Gross margin

72.9 %

73.8 %

74.6 %

74.0 %

74.1 %

Adjusted gross margin

76.7 %

76.8 %

78.0 %

77.5 %

76.8 %

AXON ENTERPRISE, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands)

31 DEC 2025

31 DEC 2024

ASSETS

Current Assets:

Cash and cash equivalents

$ 1,201,147

$ 454,844

Short-term investments

505,417

333,235

Marketable securities

27,213

198,270

Accounts and notes receivable, net of allowance

777,486

547,572

Contract assets, net

582,630

367,929

Inventory

341,811

265,316

Prepaid expenses and other current assets

277,348

130,315

Total current assets

3,713,052

2,297,481

Property and equipment, net

330,979

247,324

Deferred tax assets, net

359,803

304,282

Intangible assets, net

196,972

175,157

Goodwill

1,370,189

756,838

Long-term notes receivable, net

6,066

3,460

Long-term contract assets, net

178,249

119,876

Strategic investments

416,833

332,550

Other long-term assets

428,170

237,620

Total assets

$ 7,000,313

$ 4,474,588

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

Accounts payable

$ 139,086

$ 71,955

Accrued liabilities

510,538

279,193

Current portion of deferred revenue

714,708

612,955

Current portion of notes payable, net

80,552

680,289

Customer deposits

16,156

20,626

Other current liabilities

9,107

12,857

Total current liabilities

1,470,147

1,677,875

Deferred revenue, net of current portion

359,902

360,685

Liability for unrecognized tax benefits

24,376

25,007

Long-term deferred compensation

23,675

15,877

Long-term lease liabilities

98,942

41,383

Long-term notes payable, net

1,730,170

—

Other long-term liabilities

50,443

26,096

Total liabilities

3,757,655

2,146,923

Stockholders' Equity:

Common stock

Additional paid-in capital

2,475,035

1,689,781

Treasury stock

(157,242)

(155,947)

Retained earnings

936,670

812,014

Accumulated other comprehensive loss

(11,806)

(18,184)

Total stockholders' equity

3,242,658

2,327,665

Total liabilities and stockholders' equity

$ 7,000,313

$ 4,474,588

AXON ENTERPRISE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

THREE MONTHS ENDED

TWELVE MONTHS ENDED

31 DEC 2025

30 SEP 2025

31 DEC 2024

31 DEC 2025

31 DEC 2024

Cash flows from operating activities:

Net income

$ 2,745

$ (2,186)

$ 135,184

$ 124,656

$ 377,034

Adjustments to reconcile net income to net cash provided by (used in)

operating activities:

Stock-based compensation

208,596

146,152

130,888

634,231

382,604

(Gain) loss on strategic investments and marketable securities, net

(5,322)

(22,893)

(91,059)

(139,969)

(283,217)

Debt inducement expense

10,284

(82)

—

38,868

—

Depreciation and amortization

26,945

19,606

17,680

83,161

48,425

Provision for bad debts and inventory

2,520

2,574

6,249

11,348

20,073

Deferred income taxes

(28,983)

16,369

(58,035)

(82,679)

(85,096)

Other noncash items

7,537

(3,348)

7,994

23,467

21,177

Change in assets and liabilities:

Receivables and contract assets

(139,507)

(153,220)

(19,083)

(505,560)

(245,842)

Inventory

(23,774)

(10,079)

12,236

(81,951)

607

Deferred revenue

61,920

72,699

98,921

83,476

155,641

Accounts payable, accrued and other liabilities

242,155

23,555

44,276

286,885

54,519

Prepaid expenses and other assets

(147,881)

(29,133)

(35,085)

(264,594)

(37,613)

Net cash provided by operating activities

217,235

60,014

250,166

211,339

408,312

Cash flows from investing activities:

Purchases of investments

(30,566)

(251,876)

(178,005)

(2,076,304)

(793,419)

Business combinations, net of cash acquired

(624,066)

(19,000)

(384,021)

(646,875)

(621,817)

Proceeds from call, maturity, and sale of investments

490,000

887,902

145,068

2,134,556

1,003,394

Purchases of property and equipment

(61,808)

(26,635)

(24,801)

(136,258)

(78,785)

Other, net

—

(132)

(49)

Net cash provided by (used in) investing activities

(226,440)

590,259

(441,739)

(724,930)

(490,573)

Cash flows from financing activities:

Net proceeds from equity offering

127,313

178,281

—

489,554

—

Proceeds from issuance of notes

—

1,750,000

—

Proceeds from options exercised

—

4,859

—

14,576

Principal payments for conversion of convertible debt

(201,418)

(19)

—

(608,890)

—

Payments to third parties for debt issuance, amendment and

repurchase activity

(106)

(2,153)

—

(26,994)

—

Income and payroll tax payments for net-settled stock awards

(141,350)

(16,796)

(35,853)

(350,981)

(58,178)

Other, net

(150)

(1,835)

(224)

(1,835)

Net cash provided by (used in) financing activities

(215,559)

159,163

(32,829)

1,252,465

(45,437)

Effect of exchange rate changes on cash and cash equivalents

2,015

(756)

(6,284)

7,756

(6,209)

Net increase (decrease) in cash and cash equivalents

(222,749)

808,680

(230,686)

746,630

(133,907)

Cash and cash equivalents and restricted cash, beginning of period

1,436,142

627,462

697,449

466,763

600,670

Cash and cash equivalents and restricted cash, end of period

$ 1,213,393

$ 1,436,142

$ 466,763

$ 1,213,393

$ 466,763

AXON ENTERPRISE, INC.

SELECTED CASH FLOW INFORMATION

(in thousands)

THREE MONTHS ENDED

TWELVE MONTHS ENDED

31 DEC 2025

30 SEP 2025

31 DEC 2024

31 DEC 2025

31 DEC 2024

Net cash provided by operating activities

$ 217,235

$ 60,014

$ 250,166

$ 211,339

$ 408,312

Purchases of property and equipment

(61,808)

(26,635)

(24,801)

(136,258)

(78,785)

Free cash flow, a non-GAAP measure

155,427

33,379

225,365

75,081

329,527

Bond premium amortization

1,287

2,902

1,233

8,738

12,186

Net campus investment

296

355

218

1,820

2,591

Adjusted free cash flow, a non-GAAP measure

$ 157,010

$ 36,636

$ 226,816

$ 85,639

$ 344,304

AXON ENTERPRISE, INC.

SUPPLEMENTAL TABLES

(in thousands)

31 DEC 2025

31 DEC 2024

Cash and cash equivalents

$ 1,201,147

$ 454,844

Restricted cash

12,246

11,919

Short-term investments

505,417

333,235

Cash, cash equivalents, restricted cash and investments, net

1,718,810

799,998

Current portion of notes payable, principal amount

(81,110)

(690,000)

Long-term notes payable, principal amount

(1,750,000)

—

Total cash, cash equivalents, restricted cash and investments, net of notes payable

$ (112,300)

$ 109,998

CONTACT:

Investor Relations

Axon Enterprise, Inc.

[email protected]

SOURCE Axon