AXON

• We face risks associated with rapid technological change and new competing products. • Negative publicity could adversely impact sales, which could cause our revenues or operating results to decline. • Acquisitions of, or investments in, other products, technologies or businesses could disrupt our business, dilute shareholder value, or adversely affect our operating results. • We may not successfully manage our growth or plan for future growth. Operational Risks • Unavailability of materials o

operations software, critical incident and emergency response systems, immersive training, and productivity tools – all enhanced by artificial intelligence. Our revenues for the three months ended March 31, 2026 were $807.3 million, an increase of $203.7 million, or 33.7%, from the three months ended March 31, 2025. We had income from operations of $29.2 million, compared to loss from operations of $8.8 million for the same period in the prior year. Gross margin dollars increased $111.5 million and dec

Evidence, Draft One, Axon Records, Axon Standards, Axon Fusus, and Axon Assistant, among others. The Software and Services segment includes recurring cloud-hosted software revenue, related non-recurring professional services revenue, and revenue from certain software, including on-premise licenses. 2. Connected Devices: We develop, manufacture and sell fully integrated hardware solutions such as conducted energy devices (“CEDs”) sold under the TASER brand, body cameras, fixed and in-car cameras, drone and cou

result of the Segment Realignment, we have recast our segment and other relevant disclosures for the year ended December 31, 2024 to conform to the new presentation. Our revenues for the year ended December 31, 2025 were $2.8 billion , an increase of $697.0 million, or 33.5%, from the year ended December 31, 2024. We had loss from operations of $62.1 million for the year ended December 31, 2025, compared to income from operations of $58.5 million for the same period in the prior year. Gross margin dollars incre

result of the Segment Realignment, we have recast our segment and other relevant disclosures for the year ended December 31, 2024 to conform to the new presentation. Our revenues for the year ended December 31, 2025 were $2.8 billion , an increase of $697.0 million, or 33.5%, from the year ended December 31, 2024. We had loss from operations of $62.1 million for the year ended December 31, 2025, compared to income from operations of $58.5 million for the same period in the prior year. Gross margin dollars incre

operations software, critical incident and emergency response systems, immersive training, and productivity tools – all enhanced by artificial intelligence. Our revenues for the three months ended March 31, 2026 were $807.3 million, an increase of $203.7 million, or 33.7%, from the three months ended March 31, 2025. We had income from operations of $29.2 million, compared to loss from operations of $8.8 million for the same period in the prior year. Gross margin dollars increased $111.5 million and dec

• We face risks associated with rapid technological change and new competing products. • Negative publicity could adversely impact sales, which could cause our revenues or operating results to decline. • Acquisitions of, or investments in, other products, technologies or businesses could disrupt our business, dilute shareholder value, or adversely affect our operating results. • We may not successfully manage our growth or plan for future growth. Operational Risks • Unavailability of materials o

Evidence, Draft One, Axon Records, Axon Standards, Axon Fusus, and Axon Assistant, among others. The Software and Services segment includes recurring cloud-hosted software revenue, related non-recurring professional services revenue, and revenue from certain software, including on-premise licenses. 2. Connected Devices: We develop, manufacture and sell fully integrated hardware solutions such as conducted energy devices (“CEDs”) sold under the TASER brand, body cameras, fixed and in-car cameras, drone and cou

issuance of equity or debt

continues to pose risks to our business, driven by factors such as ongoing conflicts in the Middle East and Ukraine, the volatility of interest rates, high inflation, changes in U

4,308 24.6 441,593 21.2 Total operating expenses 1,720,201 61.9 1,182,840 56.8 Income (loss) from operations (62,076) (2.2) 58,540 2.8 Interest income 75,431 2.7 43,693 2.1 Interest expense (94,238) (3.4) (7,098) (0.3) Other income, net 99,857 3.6 286,369 13.8 Income before provision for income taxes 18,974 0.7 381,504 18.4 Provision for (benefit from) income taxes (105,682) (3.8) 4,470 0.2 Net income $ 124,656 4.5 % $ 377,034 18.2 % The following table presents our revenues disaggregated by geography (dollars in

188,950 23.4 151,023 25.0 Total operating expenses 448,043 55.5 374,532 62.0 Income (loss) from operations 29,243 3.6 (8,793) (1.4) Interest income 10,611 1.3 10,604 1.8 Interest expense (28,643) (3.5) (7,821) (1.3) Other income, net 189,010 23.4 114,401 19.0 Income before provision for income taxes 200,221 24.8 108,391 18.1 Provision for income taxes 30,909 3.8 20,411 3.4 Net income $ 169,312 21.0 % $ 87,980 14.7 % The following table presents our revenues disaggregated by geography (dollars in thousands): Thr

economic uncertainty continues to pose risks to our business, driven by factors such as ongoing conflicts in the Middle East and Ukraine, the volatility of interest rates, high inflation, changes in U

we consider a variety of factors including (1) events impacting the carrying value or composition of a reporting unit or asset group, respectively, (2) changes in the macroeconomic environment, (3) adverse changes in our financial performance, (4) industry and market conditions, among others. Any significant changes in these underlying assumptions may significantly affect our impairment conclusions and net book value of corresponding assets in our consolidated financial statements. Based on our annual impair

economic uncertainty continues to pose risks to our business, driven by factors such as ongoing conflicts in the Middle East and Ukraine, the volatility of interest rates, high inflation, changes in U

For example, there have been and may continue to be disruptions in the semiconductor supply chain that could negatively impact our ability to make our products

Resources Manufacturing and Supply Chain We perform manufacturing, final assembly and final test operations at our facilities in Arizona and own substantially all of the equipment required to develop, prototype, manufacture and assemble our finished products

• disruption to relationships with existing customers, suppliers, or strategic partners

6 million of prepaid expenses and other assets primarily driven by supplier prepayments, receivables for income tax, and commissions as bookings continue to grow, and $83

• disruption to relationships with existing customers, suppliers, or strategic partners

6 million of prepaid expenses and other assets primarily driven by supplier prepayments, receivables for income tax, and commissions as bookings continue to grow, and $83

Resources Manufacturing and Supply Chain We perform manufacturing, final assembly and final test operations at our facilities in Arizona and own substantially all of the equipment required to develop, prototype, manufacture and assemble our finished products

As significant tariffs or other restrictions continue to be placed on foreign imports by the United States, our sales and results of operations may be harmed

The decrease was primarily driven by global tariffs and a higher mix of Platform Solutions revenue

The decrease in gross margin and adjusted gross margin was primarily driven by global tariffs, a higher mix of Platform Solutions revenue, and higher professional services costs

As significant tariffs or other restrictions continue to be placed on foreign imports by the United States, our sales and results of operations may be harmed

The decrease was primarily driven by global tariffs and a higher mix of Platform Solutions revenue

The decrease in gross margin and adjusted gross margin was primarily driven by global tariffs, a higher mix of Platform Solutions revenue, and higher professional services costs

affect our business prospects, operating results, and financial condition. A disruption or failure of our systems or operations in the event of a major earthquake, weather event, fire, water shortage, explosion, failure to contain hazardous materials, industrial accident, utility failure, cyber attack, terrorist attack, public health crisis, pandemic, or other catastrophic event could cause delays in completing sales, providing products and services, or performing other mission-critical functions. A catas

be present in certain products. Laws addressing reporting, restriction, or phase-out of PFAS are under consideration or being implemented. Additional sustainability and climate-related disclosure requirements have been enacted or proposed in jurisdictions in which we operate, including the EU Corporate Sustainability Reporting Directive, the UK Streamlined Energy and Carbon Reporting regime, and California SB 253 and SB 261. Human Capital Resources We attract, retain and motivate top talent by offering equitab

affect our business prospects, operating results, and financial condition. A disruption or failure of our systems or operations in the event of a major earthquake, weather event, fire, water shortage, explosion, failure to contain hazardous materials, industrial accident, utility failure, cyber attack, terrorist attack, public health crisis, pandemic, or other catastrophic event could cause delays in completing sales, providing products and services, or performing other mission-critical functions. A catas

be present in certain products. Laws addressing reporting, restriction, or phase-out of PFAS are under consideration or being implemented. Additional sustainability and climate-related disclosure requirements have been enacted or proposed in jurisdictions in which we operate, including the EU Corporate Sustainability Reporting Directive, the UK Streamlined Energy and Carbon Reporting regime, and California SB 253 and SB 261. Human Capital Resources We attract, retain and motivate top talent by offering equitab

and shifting trade regulations may create significant uncertainty for vendors, consumers, and us; may increase our merchandise costs; negatively impact consumer demand for our products and services; or otherwise negatively impact our operating results

and shifting trade regulations may create significant uncertainty for vendors, consumers, and us; may increase our merchandise costs; negatively impact consumer demand for our products and services; or otherwise negatively impact our operating results

fuel costs

fuel costs

water shortage, explosion, failure to contain hazardous materials, industrial accident, utility failure, cyber attack, terrorist attack, public health crisis, pandemic, or other catastrophic event could cause delays in completing sales, providing products and services, or performing other mission-critical functions

water shortage, explosion, failure to contain hazardous materials, industrial accident, utility failure, cyber attack, terrorist attack, public health crisis, pandemic, or other catastrophic event could cause delays in completing sales, providing products and services, or performing other mission-critical functions

• adverse publicity surrounding our products, including product safety or use; • changes in our sales mix; • new product introduction costs; • increases in raw material costs; • changes in our operating expenses, including stock-based compensation expense; • changes in foreign currency exchange rates, inflation, and interest rates; • inventory obsolescence; • changes in warranty reserves; • existing or future tariffs; • government shutdowns or lapses in federal appropriations; and •

management, real-time operations software, critical incident and emergency response systems, immersive training, and productivity tools – all enhanced by artificial intelligence

In particular, AI and machine learning technologies are rapidly developing and as these technologies are incorporated into our products and the operations of our customers, the pace of change has in the past and may in the future continue to accelerate

and Results of Operations (“MD&A”) provides the perspective of our management on our financial condition, results of operations, liquidity and certain other factors that may affect our future results

management, real-time operations software, critical incident and emergency response systems, immersive training, and productivity tools – all enhanced by artificial intelligence (“AI”)

management, real-time operations software, critical incident and emergency response systems, immersive training, and productivity tools – all enhanced by artificial intelligence

and Results of Operations (“MD&A”) provides the perspective of our management on our financial condition, results of operations, liquidity and certain other factors that may affect our future results

Operational Risks • Unavailability of materials or higher costs could adversely affect our financial results

management, real-time operations software, critical incident and emergency response systems, immersive training, and productivity tools – all enhanced by artificial intelligence (“AI”)

increased $73.2 million in comparison to the prior year December 31, 2024 comparable period, which was primarily attributable to an increase in headcount and higher wages. Sales and marketing expense increased $17.5 million in comparison to the prior year December 31, 2024 comparable period, which was primarily attributable to increased commissions. Other SG&A expenses increased $47.4 million in comparison to the prior year, partially driven by $11.9 million in increased travel expenses. Further increases

and bonus expense increased $10.8 million in comparison to the prior year March 31, 2025 comparable period, primarily attributable to an increase in headcount and higher wages. 23 Table of Conten ts Sales and marketing expense increased $10.2 million in comparison to the prior year March 31, 2025 comparable period, primarily attributable to increased commissions. Other SG&A expenses increased $14.6 million in comparison to the prior year March 31, 2025 comparable period, primarily driven by an increase in profe

misuse. Certain jurisdictions restrict cross-border data transfers or impose data localization requirements, which could affect our operations. For example, the European Union’s (“EU”) General Data Protection Regulation and AI Act impose compliance obligations relating to personal data and AI system deployment. In the U.S., laws such as the California Privacy Rights Act provide enhanced consumer protections and create private rights of action for certain data breaches. Compliance with these and similar la

security or privacy risks; • cultural misalignment with the acquired company, disruptions to our workplace environment, or adverse impacts on investor perception; • unionization, labor organization efforts, or grievances leading to work stoppages, strikes, or operational disruptions; • difficulties integrating accounting, financial reporting, and internal control systems, consistent with our corporate standards and the requirements of the Sarbanes-Oxley Act of 2002; • difficulties supporting legacy pro

security or privacy risks; • cultural misalignment with the acquired company, disruptions to our workplace environment, or adverse impacts on investor perception; • unionization, labor organization efforts, or grievances leading to work stoppages, strikes, or operational disruptions; • difficulties integrating accounting, financial reporting, and internal control systems, consistent with our corporate standards and the requirements of the Sarbanes-Oxley Act of 2002; • difficulties supporting legacy pro

increased $73.2 million in comparison to the prior year December 31, 2024 comparable period, which was primarily attributable to an increase in headcount and higher wages. Sales and marketing expense increased $17.5 million in comparison to the prior year December 31, 2024 comparable period, which was primarily attributable to increased commissions. Other SG&A expenses increased $47.4 million in comparison to the prior year, partially driven by $11.9 million in increased travel expenses. Further increases

misuse. Certain jurisdictions restrict cross-border data transfers or impose data localization requirements, which could affect our operations. For example, the European Union’s (“EU”) General Data Protection Regulation and AI Act impose compliance obligations relating to personal data and AI system deployment. In the U.S., laws such as the California Privacy Rights Act provide enhanced consumer protections and create private rights of action for certain data breaches. Compliance with these and similar la

and bonus expense increased $10.8 million in comparison to the prior year March 31, 2025 comparable period, primarily attributable to an increase in headcount and higher wages. 23 Table of Conten ts Sales and marketing expense increased $10.2 million in comparison to the prior year March 31, 2025 comparable period, primarily attributable to increased commissions. Other SG&A expenses increased $14.6 million in comparison to the prior year March 31, 2025 comparable period, primarily driven by an increase in profe

increased $47.4 million in comparison to the prior year, partially driven by $11.9 million in increased travel expenses. Further increases were driven by litigation and regulatory costs, as well as professional and consulting costs. Research and Development Expenses R&D expenses (dollars in thousands): Year Ended December 31, Dollar Change Percent Change 2025 2024 Total research and development expenses $ 684,308 $ 441,593 $ 242,715 55.0 % As a percentage of net sales 24.6 % 21.2 % We incurred non-recurring se

severance costs, including employee cash payments, equity, and related benefits; costs (or subsequent recoveries of prior costs) related to certain legal or regulatory matters we consider outside of our core operating activities; mark-to-market adjustments on our non-qualified deferred compensation liabilities; payroll taxes related to Employee XSP vesting; losses incurred as a result of the disposal, abandonment, and impairment of property, equipment and intangible assets, net; and inventory step

Governmental Regulation U

• Failure to comply with federal, state, or local regulations applicable to our firearm product, the TASER 10 CED, could result in governmental actions or litigation, potentially harming our business prospects, operating results and financial condition

increased $47.4 million in comparison to the prior year, partially driven by $11.9 million in increased travel expenses. Further increases were driven by litigation and regulatory costs, as well as professional and consulting costs. Research and Development Expenses R&D expenses (dollars in thousands): Year Ended December 31, Dollar Change Percent Change 2025 2024 Total research and development expenses $ 684,308 $ 441,593 $ 242,715 55.0 % As a percentage of net sales 24.6 % 21.2 % We incurred non-recurring se

severance costs, including employee cash payments, equity, and related benefits; costs (or subsequent recoveries of prior costs) related to certain legal or regulatory matters we consider outside of our core operating activities; mark-to-market adjustments on our non-qualified deferred compensation liabilities; payroll taxes related to Employee XSP vesting; losses incurred as a result of the disposal, abandonment, and impairment of property, equipment and intangible assets, net; and inventory step

Governmental Regulation U

• Failure to comply with federal, state, or local regulations applicable to our firearm product, the TASER 10 CED, could result in governmental actions or litigation, potentially harming our business prospects, operating results and financial condition

026 2025 Income from strategic investments, net (1) $ 196,600 $ 167,321 Realized and unrealized loss on marketable securities, net (2) (5,511) (23,400) Loss on foreign currency transactions, net (2,166) (803) Induced conversion of convertible debt — (28,666) Other, net 87 (51) Other income, net $ 189,010 $ 114,401 (1) Reflects the net realized and unrealized income associated with our strategic investments, during

of strategic investments, net (1) $ 186,392 $ 162,887 Realized and unrealized gain (loss) on marketable securities, net (2) (46,422) 120,330 Loss on foreign currency transactions, net (1,454) 3,463 Induced conversion of convertible debt (3) (38,868) — Other, net 209 (311) Other income, net $ 99,857 $ 286,369 (1) Reflects the net realized and unrealized gain associated with our strategic investments durin

functional currency international subsidiaries are transacted in U

of strategic investments, net (1) $ 186,392 $ 162,887 Realized and unrealized gain (loss) on marketable securities, net (2) (46,422) 120,330 Loss on foreign currency transactions, net (1,454) 3,463 Induced conversion of convertible debt (3) (38,868) — Other, net 209 (311) Other income, net $ 99,857 $ 286,369 (1) Reflects the net realized and unrealized gain associated with our strategic investments durin

026 2025 Income from strategic investments, net (1) $ 196,600 $ 167,321 Realized and unrealized loss on marketable securities, net (2) (5,511) (23,400) Loss on foreign currency transactions, net (2,166) (803) Induced conversion of convertible debt — (28,666) Other, net 87 (51) Other income, net $ 189,010 $ 114,401 (1) Reflects the net realized and unrealized income associated with our strategic investments, during

functional currency international subsidiaries are transacted in U

and data privacy

or pending legal or regulatory proceedings, product claims, advertising and promotional practices, sustainability or policy issues, materials sourcing or cybersecurity incidents

provides predictable recurring cash flows, it may adversely impact liquidity because cash is received over time rather than upfront. We record an estimate of expected credit losses and perform ongoing reviews of trade accounts receivables. However, if we become aware of information related to the creditworthiness of a major customer, or if future actual default rates on receivables differ from those currently anticipated, we may have to adjust our expected credit loss reserve. Such adjustments could negative

from internal stakeholders and management. At times, we have experienced, and we may continue to experience, difficulty in hiring personnel who meet the demands of our selection process and with appropriate qualifications, experience, or expertise, and we may not be able to fill positions as quickly as desired. In addition, our recruiting personnel, methodology, and approach may need to be altered to address a changing candidate pool and profile. We may not be able to identify or implement such changes in a ti

policy, an actual recession or fears of a recession, trade policies and tariffs, and geopolitical tensions

also imposed or has indicated its intent to impose increased tariffs on foreign imports into the United States, particularly from the People’s Republic of China (“PRC”), Mexico, and Canada