Axon reports Q3 2025 revenue of $711 million, up 31% year over year

SCOTTSDALE, Ariz., Nov. 4, 2025 /PRNewswire/ --

Fellow shareholders,

Axon delivered another record quarter, with revenue growing 31% year over year to $711 million — our seventh consecutive quarter of growth above 30% — and GAAP net loss margin of 0.3% supporting Adjusted EBITDA margin of 24.9%.

Software & Services revenue increased 41% year over year to $305 million, driven by adoption of premium software features and an expanding user base. Annual Recurring Revenue (ARR) increased 41%, to $1.3 billion, while net revenue retention remained strong at 124%. Connected Devices revenue rose 24% year over year to $405 million, reflecting strength across categories — including TASER revenue of $238 million, up 17% year over year; Personal Sensors revenue of $107 million, up 20%; and Platform Solutions revenue of $61 million, up 71%.

Beyond our results, we continued to invest in our ecosystem to support our future growth. This includes our investment in R&D to build and launch new products, such as our Vehicle Intelligence platform, including Axon Outpost and Lightpost, and Axon Body Workforce (ABW) Mini. We also completed the acquisition of Prepared and signed a definitive agreement to acquire Carbyne. These technology leaders bring advanced emergency response and AI capabilities to modernize 911 call handling and dispatch workflows. As part of Axon, they will further empower users of our connected devices and real-time operations software to deliver faster, safer and more efficient outcomes.

Our results, continued robust demand and expanding product roadmap support another increase to our outlook for the remainder of the year. We now expect fourth quarter revenue in the range of $750 million to $755 million, representing approximately 31% year-over-year growth, and fourth quarter Adjusted EBITDA in the range of $178 million to $182 million, representing approximately 24% Adjusted EBITDA margin. This guidance implies full-year 2025 revenue of approximately $2.74 billion, representing approximately 31% annual growth and a full-year Adjusted EBITDA margin of approximately 25%.

The sections below provide additional detail on our vision for Axon 911, the launch of our latest enterprise vertical product, quarterly financial performance and updated outlook.

Select Highlights

Axon 911

Axon 911 marks the next evolution of our connected public safety ecosystem — linking the first moment of crisis to every action that follows. With Prepared and Carbyne combined, we set out to deliver 911 call-handling and AI-enabled communications solutions natively integrated into Axon's network. These solutions eliminate friction from legacy systems, cutting high-priority response times from seven to ten minutes to as little as 120 seconds — through seamless connections between callers, responders, connected devices and command staff.

Prepared and Carbyne are complementary platforms that modernize 911 call taking and response and pave the way for Axon 911. Prepared powers AI features that layer on top of existing call-taking and computer-aided dispatch (CAD) systems, instantly improving efficiency and enabling faster emergency response with workflows directly connected to Axon's real-time operations and evidence-management solutions. Carbyne offers an expansive, full-stack, cloud-native call-taking platform featuring embedded AI for agencies choosing to replace legacy 911 infrastructure. Both solutions provide an open and interoperable product suite without requiring major CAD or other system overhauls — allowing agencies to maximize value through reciprocal data sharing, application programming interfaces (APIs) and flexible deployment options.

This evolution unlocks new workflows and features that accelerate our roadmap to reduce response times, enhance situational awareness and strengthen the value of our ecosystem. Capabilities include intelligent assistants for non-emergency calls, precise location data, real-time transcription and translation, automated summary reporting, keyword-based alerts, and direct connectivity to real-time crime centers, drones-as-first-responder deployments and Axon Assistant. We envision a future where a 911 call activates an integrated response system that delivers new levels of efficiency and capability — connecting callers, call takers, dispatchers, command staff and responders in real time.

Together, these acquisitions extend our ecosystem — which already includes real-time operations, vehicle intelligence, air and robotics — adding $5 billion to a market opportunity now exceeding $74 billion across these product categories, a critical part of Axon's $159 billion total addressable market.

"It's a once-in-a-generation game changer. There is no question that we have taken the first step toward 911 in the future. This is that much of an improvement in handling 911. I think we are going to look back and say this is an important point in 911 history." — Karl Fasold, Executive Director, Orleans Parish Communications District about Carbyne

Axon Body Workforce Mini

In September, we introduced Axon Body Workforce (ABW) Mini, our second dedicated enterprise product, which we expect to begin early deployments in the U.S. and Canada in the first half of 2026, with general availability by mid-year. ABW Mini was built in close collaboration with strategic enterprise customers, and incorporates feedback from their trials. The result is a compact, durable camera purpose-built for commercial environments — bringing Axon's trusted technology to industries such as retail, healthcare, and logistics, where accountability and safety are essential.

ABW Mini brings Axon's connected intelligence features to enterprise customers, including two-way voice, live streaming, automated alerts, Axon MetaCoach and Axon Assistant. It connects directly to our enterprise platform, Axon OS, which unifies sensors, communications, and digital evidence, enabling seamless collaboration with law enforcement while delivering features tailored to enterprise needs — helping keep both workers and communities safer.

"We are excited that our employees' feedback turned into very real progress and very real innovation [...] and that we are able to put the right device on them based on what they said and shared through their journey so far." — Retail trial customer on deploying body-worn cameras with Axon

Q3 2025 Summary Results

Quarterly revenue of $711 million grew 31% year over year, exceeding our expectations, driven by premium software adoption and robust demand for TASER 10, Axon Body 4 and counter-drone equipment.

Total company gross margin of 60.1% decreased 70 basis points year over year. Excluding non-GAAP adjustments, adjusted gross margin of 62.7% decreased 50 basis points year over year, primarily due to global tariffs and increased Platform Solutions product mix in Connected Devices, partially offset by increased Software & Services.

Operating loss of $2 million was primarily driven by increased headcount to support business growth and stock-based compensation expense.

Net loss of $2 million (0.3% net loss margin), or $(0.03) per diluted share, compared to non-GAAP net income of $98 million (13.7% non-GAAP net income margin), or $1.17 per diluted share.

Adjusted EBITDA of $177 million (24.9% Adjusted EBITDA margin) increased 22% year over year, primarily due to higher revenue, partially offset by continued investment in R&D.

Operating cash flow of $60 million, decreased from $91 million in the prior year, primarily driven by working capital and inventory. Operating cash flow supported free cash flow of $33 million and adjusted free cash flow of $37 million.

As of September 30, 2025, Axon had $2.4 billion in cash, cash equivalents and short-term investments, and outstanding convertible and senior notes in principal amount of $2.0 billion, for a net cash position of $356 million, up $290 million sequentially.

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

30 SEP 2025

30 JUN 2025

30 SEP 2024

QoQ

YoY

(in thousands)

Revenue

$ 305,242

$ 292,178

$ 216,374

4.5 %

41.1 %

Gross margin

73.8 %

75.6 %

73.5 %

(180) bp

30 bp

Adjusted gross margin

76.8 %

78.9 %

76.3 %

(210) bp

50 bp

Connected Devices

THREE MONTHS ENDED

CHANGE

30 SEP 2025

30 JUN 2025

30 SEP 2024

QoQ

YoY

(in thousands)

Revenue

$ 405,399

$ 376,360

$ 327,900

7.7 %

23.6 %

Gross margin

49.9 %

48.6 %

52.4 %

130 bp

(250) bp

Adjusted gross margin

52.1 %

51.1 %

54.5 %

100 bp

(240) bp

Forward-Looking Operating Metrics

30 SEP 2025

30 JUN 2025

31 MAR 2025

31 DEC 2024

30 SEP 2024

Annual recurring revenue ($ millions) (1)

$ 1,252

$ 1,183

$ 1,104

$ 1,001

$ 885

Net revenue retention (1)

124 %

123 %

Future contracted bookings ($ billions) (1)

$ 11.4

$ 10.7

$ 9.9

$ 10.1

$ 8.2

____________________________________________________________________

(1) Refer to "Statistical Definitions" below.

2025 Outlook

The following forward-looking statements reflect Axon's expectations as of November 4, 2025 and are subject to risks and uncertainties. Please refer to "Forward-looking Statements" below for more information.

Q4 2025

Full Year 2025

Quarterly conference call and webcast

We will host our Q3 2025 earnings conference call webinar on Tuesday, November 4 at 2 p.m. PT / 5 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/s/95509863228.

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 this quarter, we have updated future contracted bookings to include cumulative gross bookings, including amounts associated with third-party agent arrangements and consideration expected to be paid on behalf of our customers, which may not become recognized as revenue. We have not recast historical periods, as the impact of this change accounts for less than 1% of the balance this quarter and was determined to be immaterial. We define future contracted bookings as cumulative bookings, net of cancellations, less product and service fulfillment to date. 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. To the extent future contracted bookings is fulfilled, it is fulfilled over a period of multiple years. Further, 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.

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 Body, Axon Body Workforce, Axon Lightpost, Axon Outpost, 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; 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 Q4 2025 and full year revenue, stock-based compensation expense, Adjusted EBITDA, Adjusted EBITDA margin and capital expenditures; 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 our Quarterly Report on Form 10-Q for the quarter ended September 30, 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)

(unaudited)

THREE MONTHS ENDED

NINE MONTHS ENDED

30 SEP 2025

30 JUN 2025

30 SEP 2024

30 SEP 2025

30 SEP 2024

Net sales from products

$ 405,399

$ 376,360

$ 327,900

$ 1,122,655

$ 891,087

Net sales from services

305,242

292,178

216,374

860,157

616,294

Net sales

710,641

668,538

544,274

1,982,812

1,507,381

Cost of product sales

203,173

193,507

156,167

566,861

450,954

Cost of service sales

80,120

71,288

57,360

219,121

160,896

Cost of sales

283,293

264,795

213,527

785,982

611,850

Gross margin

427,348

403,743

330,747

1,196,830

895,531

Operating expenses:

Selling, general and administrative

252,803

242,212

192,189

718,524

514,228

Research and development

176,674

162,567

114,477

490,264

307,008

Total operating expenses

429,477

404,779

306,666

1,208,788

821,236

Income (loss) from operations

(2,129)

(1,036)

24,081

(11,958)

74,295

Interest income

23,941

23,253

12,624

57,798

36,407

Interest expense

(28,912)

(28,686)

(1,646)

(65,419)

(5,273)

Other income (loss), net

22,803

(32,414)

44,510

104,790

191,510

Income (loss) before provision for income

taxes

15,703

(38,883)

79,569

85,211

296,939

Provision for (benefit from) income taxes

17,889

(75,000)

12,544

(36,700)

55,089

Net income (loss)

$ (2,186)

$ 36,117

$ 67,025

$ 121,911

$ 241,850

Net income (loss) per common and common

equivalent shares:

Basic

$ (0.03)

$ 0.46

$ 0.89

$ 1.57

$ 3.20

Diluted

$ (0.03)

$ 0.44

$ 0.86

$ 1.48

$ 3.12

Weighted average number of common and

common equivalent shares outstanding:

Basic

78,416

77,999

75,697

77,774

75,543

Diluted

78,416

82,062

78,080

82,218

77,614

AXON ENTERPRISE, INC.

SALES BY PRODUCT AND SERVICE

(in thousands)

(unaudited)

THREE MONTHS ENDED

30 SEP 2025

30 JUN 2025

30 SEP 2024

Connected

Devices

Software &

Services

Total

Connected

Devices

Software &

Services

Total

Connected

Devices

Software &

Services

Total

TASER (1)

$ 237,950

$ —

$ 237,950

$ 216,234

$ —

$ 216,234

$ 203,612

$ —

$ 203,612

Personal

Sensors (2)

106,677

—

106,677

92,819

—

92,819

88,660

—

88,660

Platform

Solutions (3)

60,772

—

60,772

67,307

—

67,307

35,628

—

35,628

Software and

Services

—

305,242

—

292,178

—

216,374

Total

$ 405,399

$ 305,242

$ 710,641

$ 376,360

$ 292,178

$ 668,538

$ 327,900

$ 216,374

$ 544,274

____________________________________________________________________________________

(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 interview room, fleet in-car video, fixed cameras, drones and counter-drone equipment, virtual reality training hardware, and related extended warranties.

NINE MONTHS ENDED

30 SEP 2025

30 SEP 2024

Connected

Devices

Software &

Services

Total

Connected

Devices

Software &

Services

Total

TASER (1)

$ 649,679

$ —

$ 649,679

$ 549,759

$ —

$ 549,759

Personal Sensors (2)

287,901

—

287,901

231,773

—

231,773

Platform Solutions (3)

185,075

—

185,075

109,555

—

109,555

Software and Services

—

860,157

—

616,294

Total

$ 1,122,655

$ 860,157

$ 1,982,812

$ 891,087

$ 616,294

$ 1,507,381

____________________________________________________________________________________

(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 interview room, fleet in-car video, fixed cameras, drones and counter-drone equipment, virtual reality training hardware, and related extended warranties.

SALES BY GEOGRAPHY

(in thousands)

(unaudited)

THREE MONTHS ENDED

30 SEP 2025

30 JUN 2025

30 SEP 2024

United States

$ 593,939

84 %

$ 537,373

80 %

$ 482,596

89 %

Other countries

116,702

131,165

61,678

Total

$ 710,641

100 %

$ 668,538

100 %

$ 544,274

100 %

NINE MONTHS ENDED

30 SEP 2025

30 SEP 2024

United States

$ 1,660,695

84 %

$ 1,298,775

86 %

Other countries

322,117

208,606

Total

$ 1,982,812

100 %

$ 1,507,381

100 %

AXON ENTERPRISE, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in thousands)

THREE MONTHS ENDED

NINE MONTHS ENDED

30 SEP 2025

30 JUN 2025

30 SEP 2024

30 SEP 2025

30 SEP 2024

EBITDA and Adjusted EBITDA:

Net income (loss)

$ (2,186)

$ 36,117

$ 67,025

$ 121,911

$ 241,850

Depreciation and amortization

21,310

19,324

14,762

59,829

39,326

Interest expense

28,912

28,686

1,646

65,419

5,273

Investment interest income

(23,941)

(23,253)

(12,624)

(57,798)

(36,407)

Provision for (benefit from) income taxes

17,889

(75,000)

12,544

(36,700)

55,089

EBITDA

$ 41,984

$ (14,126)

$ 83,353

$ 152,661

$ 305,131

Non-GAAP adjustments:

Stock-based compensation expense

$ 146,152

$ 139,244

$ 101,780

$ 425,635

$ 251,716

Unrealized and realized losses (gains) on

investments and marketable securities, net

(21,820)

33,728

(44,459)

(132,013)

(149,845)

Realized gains on previously held minority

interests acquired in business combinations,

net

—

(42,313)

Debt inducement expense

—

28,666

—

Transaction costs related to strategic

investments and acquisitions

4,774

2,230

2,652

9,731

13,145

Litigation and regulatory costs

5,490

774

—

8,313

224

Inventory step-up amortization

—

607

—

Loss on disposal, abandonment, and

impairment of property, equipment and

intangible assets, net

430

—

430

—

Payroll taxes related to 2024 Employee

XSP vesting and 2018 CEO Performance

Award option exercises

—

9,782

1,727

9,782

1,727

Adjusted EBITDA

$ 177,010

$ 171,632

$ 145,053

$ 503,812

$ 379,785

Net income (loss) as a percentage of net

sales

(0.3) %

5.4 %

12.3 %

6.1 %

16.0 %

Adjusted EBITDA as a percentage of net

sales

24.9 %

25.7 %

26.7 %

25.4 %

25.2 %

Stock-based compensation expense:

Cost of product and service sales

$ 12,703

$ 12,561

$ 10,123

$ 38,151

$ 48,235

Selling, general and administrative expenses

75,072

72,187

55,248

218,606

117,036

Research and development expenses

58,377

54,496

36,409

168,878

86,445

Total stock-based compensation expense

$ 146,152

$ 139,244

$ 101,780

$ 425,635

$ 251,716

THREE MONTHS ENDED

NINE MONTHS ENDED

30 SEP

2025

30 JUN

2025

30 SEP

2024

30 SEP

2025

30 SEP

2024

Non-GAAP net income:

GAAP net income (loss)

$ (2,186)

$ 36,117

$ 67,025

$ 121,911

$ 241,850

Non-GAAP adjustments:

Stock-based compensation expense

146,152

139,244

101,780

425,635

251,716

Unrealized and realized (gain) loss on strategic

investments and marketable securities, net

(22,893)

32,167

(44,459)

(134,647)

(149,845)

Realized gains on previously held minority

interests acquired in business combinations, net

—

(42,313)

Debt inducement expense

—

28,666

—

Transaction costs related to strategic investments

and acquisitions

4,774

2,230

2,652

9,731

13,145

Litigation and regulatory costs

5,490

774

—

8,313

224

Inventory step-up amortization

—

607

—

Payroll taxes related to 2024 Employee XSP

vesting and 2018 CEO Performance Award option

exercises

—

9,782

1,727

9,782

1,727

Income tax effects

(33,771)

(46,579)

(15,273)

(83,762)

(18,513)

Non-GAAP net income

$ 97,566

$ 173,735

$ 113,452

$ 386,236

$ 297,991

Non-GAAP net income as a percentage of net sales

13.7 %

26.0 %

20.8 %

19.5 %

19.8 %

Diluted income per common share

GAAP

$ (0.03)

$ 0.44

$ 0.86

$ 1.48

$ 3.12

Non-GAAP

$ 1.17

$ 2.12

$ 1.45

$ 4.70

$ 3.84

Weighted average number of diluted common and

common equivalent shares outstanding

83,045

82,062

78,080

82,218

77,614

AXON ENTERPRISE, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES - continued

(in thousands)

THREE MONTHS ENDED

NINE MONTHS ENDED

30 SEP 2025

30 JUN 2025

30 SEP 2024

30 SEP 2025

30 SEP 2024

Net sales

$ 710,641

$ 668,538

$ 544,274

$ 1,982,812

$ 1,507,381

Cost of sales

283,293

264,795

213,527

785,982

611,850

Gross margin

427,348

403,743

330,747

1,196,830

895,531

Stock-based compensation

expense

12,703

12,561

10,123

38,151

48,235

Amortization of acquired

intangible assets

5,399

5,186

3,020

15,548

8,298

Inventory step-up amortization

—

607

—

Payroll taxes related to 2024

Employee XSP vesting

—

1,488

—

1,488

—

Adjusted gross margin

$ 445,450

$ 422,978

$ 343,890

$ 1,252,624

$ 952,064

Gross margin

60.1 %

60.4 %

60.8 %

60.4 %

59.4 %

Adjusted gross margin

62.7 %

63.3 %

63.2 %

Connected Devices

THREE MONTHS ENDED

NINE MONTHS ENDED

30 SEP 2025

30 JUN 2025

30 SEP 2024

30 SEP 2025

30 SEP 2024

Net sales

$ 405,399

$ 376,360

$ 327,900

$ 1,122,655

$ 891,087

Cost of sales

203,173

193,507

156,167

566,861

450,954

Gross margin

202,226

182,853

171,733

555,794

440,133

Stock-based compensation

expense

7,584

7,583

6,722

22,643

40,432

Amortization of acquired

intangible assets

1,318

1,333

382

3,988

1,058

Inventory step-up amortization

—

607

—

Payroll taxes related to 2024

Employee XSP vesting

—

634

—

634

—

Adjusted gross margin

$ 211,128

$ 192,403

$ 178,837

$ 583,666

$ 481,623

Gross margin

49.9 %

48.6 %

52.4 %

49.5 %

49.4 %

Adjusted gross margin

52.1 %

51.1 %

54.5 %

52.0 %

54.0 %

Software and Services

THREE MONTHS ENDED

NINE MONTHS ENDED

30 SEP 2025

30 JUN 2025

30 SEP 2024

30 SEP 2025

30 SEP 2024

Net sales

$ 305,242

$ 292,178

$ 216,374

$ 860,157

$ 616,294

Cost of sales

80,120

71,288

57,360

219,121

160,896

Gross margin

225,122

220,890

159,014

641,036

455,398

Stock-based compensation

expense

5,119

4,978

3,401

15,508

7,803

Amortization of acquired

intangible assets

4,081

3,853

2,638

11,560

7,240

Payroll taxes related to 2024

Employee XSP vesting

—

854

—

854

—

Adjusted gross margin

$ 234,322

$ 230,575

$ 165,053

$ 668,958

$ 470,441

Gross margin

73.8 %

75.6 %

73.5 %

74.5 %

73.9 %

Adjusted gross margin

76.8 %

78.9 %

76.3 %

77.8 %

76.3 %

AXON ENTERPRISE, INC.

CONSOLIDATED BALANCE SHEETS

(in thousands)

30 SEP 2025

31 DEC 2024

(Unaudited)

ASSETS

Current Assets:

Cash and cash equivalents

$ 1,423,871

$ 454,844

Short-term investments

952,786

333,235

Marketable securities

68,179

198,270

Accounts and notes receivable, net of allowance

700,742

547,572

Contract assets, net

537,198

367,929

Inventory

317,513

265,316

Prepaid expenses and other current assets

216,447

130,315

Total current assets

4,216,736

2,297,481

Property and equipment, net

283,208

247,324

Deferred tax assets, net

344,803

304,282

Intangible assets, net

159,048

175,157

Goodwill

773,386

756,838

Long-term notes receivable, net

2,893

3,460

Long-term contract assets, net

163,956

119,876

Strategic investments

386,947

332,550

Other long-term assets

326,388

237,620

Total assets

$ 6,657,365

$ 4,474,588

LIABILITIES AND STOCKHOLDERS' EQUITY

Current Liabilities:

Accounts payable

$ 114,995

$ 71,955

Accrued liabilities

293,344

279,193

Current portion of deferred revenue

639,087

612,955

Current portion of notes payable, net

279,560

680,289

Customer deposits

15,045

20,626

Other current liabilities

7,699

12,857

Total current liabilities

1,349,730

1,677,875

Deferred revenue, net of current portion

364,519

360,685

Liability for unrecognized tax benefits

22,354

25,007

Long-term deferred compensation

22,675

15,877

Long-term lease liabilities

90,209

41,383

Long-term notes payable, net

1,729,366

—

Other long-term liabilities

50,762

26,096

Total liabilities

3,629,615

2,146,923

Stockholders' Equity:

Preferred stock

—

Common stock

Additional paid-in capital

2,262,306

1,689,781

Treasury stock

(155,952)

(155,947)

Retained earnings

933,925

812,014

Accumulated other comprehensive loss

(12,530)

(18,184)

Total stockholders' equity

3,027,750

2,327,665

Total liabilities and stockholders' equity

$ 6,657,365

$ 4,474,588

AXON ENTERPRISE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

THREE MONTHS ENDED

NINE MONTHS ENDED

30 SEP 2025

30 JUN 2025

30 SEP 2024

30 SEP 2025

30 SEP 2024

(Unaudited)

Cash flows from operating activities:

Net income

$ (2,186)

$ 36,117

$ 67,025

$ 121,911

$ 241,850

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

operating activities:

Stock-based compensation

146,152

139,244

101,780

425,635

251,716

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

(22,893)

32,167

(44,459)

(134,647)

(192,158)

Debt inducement expense

(82)

—

28,584

—

Depreciation and amortization

19,606

17,157

13,003

56,216

30,745

Provision for bad debts and inventory

2,574

2,454

2,740

8,828

13,824

Deferred income taxes

16,369

(21,297)

(19,306)

(53,696)

(27,061)

Other noncash items

(3,348)

9,763

6,819

15,930

13,183

Change in assets and liabilities:

Receivables and contract assets

(153,220)

(139,268)

(149,667)

(366,053)

(226,759)

Inventory

(10,079)

(31,112)

5,330

(58,177)

(11,629)

Deferred revenue

72,699

(84,648)

65,219

21,556

56,720

Accounts payable, accrued and other liabilities

23,555

12,564

53,775

44,730

10,243

Prepaid expenses and other assets

(29,133)

(64,845)

(10,938)

(116,713)

(2,528)

Net cash provided by (used in) operating activities

60,014

(91,704)

91,321

(5,896)

158,146

Cash flows from investing activities:

Purchases of investments

(251,876)

(714,693)

(124,425)

(2,045,738)

(615,414)

Business combinations, net of cash acquired

(19,000)

(3,809)

—

(22,809)

(237,796)

Proceeds from call, maturity, and sale of investments

887,902

354,843

193,968

1,644,556

858,326

Purchases of property and equipment

(26,635)

(22,953)

(26,472)

(74,450)

(53,984)

Other, net

(132)

—

(49)

Net cash used in investing activities

590,259

(386,532)

43,071

(498,490)

(48,834)

Cash flows from financing activities:

Net proceeds from equity offering

178,281

183,960

—

362,241

—

Proceeds from issuance of notes

—

1,750,000

—

Proceeds from options exercised

—

9,717

—

9,717

Principal payments for conversion of convertible debt

(19)

—

(407,472)

—

Payments to third-parties for debt issuance, amendment and

repurchase activity

(2,153)

(525)

—

(26,888)

—

Income and payroll tax payments for net-settled stock awards

(16,796)

(187,800)

(17,430)

(209,631)

(22,325)

Other, net

(150)

—

(226)

—

Net cash provided by (used in) financing activities

159,163

(4,365)

(7,713)

1,468,024

(12,608)

Effect of exchange rate changes on cash and cash equivalents

(756)

5,305

2,161

5,741

Net increase (decrease) in cash and cash equivalents

808,680

(477,296)

128,840

969,379

96,779

Cash and cash equivalents and restricted cash, beginning of period

627,462

1,104,758

568,609

466,763

600,670

Cash and cash equivalents and restricted cash, end of period

$ 1,436,142

$ 627,462

$ 697,449

$ 1,436,142

$ 697,449

AXON ENTERPRISE, INC.

SELECTED CASH FLOW INFORMATION

(in thousands)

THREE MONTHS ENDED

NINE MONTHS ENDED

30 SEP 2025

30 JUN 2025

30 SEP 2024

30 SEP 2025

30 SEP 2024

Net cash provided by (used in) operating activities

$ 60,014

$ (91,704)

$ 91,321

$ (5,896)

$ 158,146

Purchases of property and equipment

(26,635)

(22,953)

(26,472)

(74,450)

(53,984)

Free cash flow, a non-GAAP measure

33,379

(114,657)

64,849

(80,346)

104,162

Bond premium amortization

2,902

3,289

2,566

7,451

10,953

Net campus investment

355

653

882

1,524

2,373

Adjusted free cash flow, a non-GAAP measure

$ 36,636

$ (110,715)

$ 68,297

$ (71,371)

$ 117,488

AXON ENTERPRISE, INC.

SUPPLEMENTAL TABLES

(in thousands)

30 SEP 2025

31 DEC 2024

Cash and cash equivalents

$ 1,423,871

$ 454,844

Restricted cash

12,271

11,919

Short-term investments

952,786

333,235

Cash, cash equivalents, restricted cash and investments, net

2,388,928

799,998

Current portion of notes payable, principal amount

(282,528)

(690,000)

Long-term notes payable, principal amount

(1,750,000)

—

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

$ 356,400

$ 109,998

CONTACT:

Investor Relations

Axon Enterprise, Inc.

IR@axon.com

SOURCE Axon