AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-2: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 5/6 · 18/10/2026
Moat63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · Integrated hardware and operational software, multi-year bundles and reported 125% net revenue retention jointly support a demonstrated switching-cost advantage. Integration alone would be insufficient, and no network effect is established.
durability · 2/4 · Integrated bundles appear in both 2022 and 2026 disclosures, supporting persistence. Competitive rebidding and termination rights limit contractual durability; long-term retention through multiple replacement cycles is not shown.
customer dependency · 3/4 · Critical operational workflows, training considerations and reported customer revenue expansion support meaningful dependency. Retention is assessed from net revenue retention and indirect workflow evidence, without inventing a customer renewal rate.
erosion resilience · 2/4 · Customer expansion and continuing operating growth support current resilience. Open procurement, competing integrations and reliability exposure leave meaningful erosion paths. These risk disclosures describe possibilities rather than demonstrated widespread customer losses.
Pricing power50
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Historical results disclose higher TASER 7 average selling prices, but cartridge increases partly reflect product mix, while other periods show lower cartridge and Fleet selling prices. Software add-ons also explain higher revenue per user. This establishes mixed realization, with limited evidence about current comparable-product pricing.
retention · 3/4 · Reported 125% net revenue retention in 2025 demonstrates strong net repeat demand and expansion. Training and workflow integration support switching friction, but expansion can mask customer losses and does not isolate acceptance of price increases.
margin resilience · 2/4 · First-half 2026 gross margin declined from 60.5% to 59.8%, while operating income improved from a loss to positive income. Software and Services gross margin also declined, with professional services mix and new product scaling cited. Results show mixed resilience and do not establish cost pass-through through pricing.
contractual freedom · 1/4 · Multi-year arrangements, competitive rebidding and customer termination-for-convenience rights constrain protection of terms and pricing. Historical non-appropriation experience is favorable, but unilateral repricing rights or contractual escalators are not disclosed.
Predictability56
Five consecutive annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 75.00
- Revenue growth volatility (pp)
- 223.85
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 11.89
Financial strength25
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, or reported pretax profit plus reported interest expense when operating income is unavailable. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 0.00
- netDebtEbitGrade
- 0.00
- interestCoverageGrade
- 0.00
- currentRatioGrade
- 100.00
- Debt / FCF (x)
- 24.12
- Interest coverage (x)
- -0.66
- Current ratio (x)
- 2.53
Capital allocation—
Missing required inputs: operatingReturn. Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income or, if unavailable, EBIT calculated from reported pretax profit plus reported interest expense; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. Nonpositive invested capital has no defined return and remains unavailable. Does not establish acquisition quality or buyback timing.
- 3-year average dilution (%)
- 3.18
- 3-year average SBC / revenue (%)
- 26.49
- cashConversionGrade
- 79.04
Management56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Operating income improved, but substantial acquisition and strategic-investment spending accompanied falling cash and short-term investments, increasing goodwill and additional shares outstanding. First-half 2026 stock compensation was $278.7 million. These are mixed actual outcomes; acquisition returns and complete cash-generation evidence remain insufficient to establish strong capital discipline.
incentive alignment · 2/4 · The CEO award was actually shareholder-approved, and disclosed awards combine stock-price, operational and service conditions. Employee tranches actually vested. Alignment is tempered by substantial equity expense, operational goals that permit revenue or adjusted EBITDA, acquisition-related goal adjustments and acceleration provisions that can disregard operational conditions. CEO ownership and CEO vesting are not established.
execution · 3/4 · Reported revenue increased from $865.6 million in 2021 to $2.78 billion in 2025, followed by 34.6% first-half 2026 growth and a return to positive operating income. Net revenue retention adds customer-demand evidence. This is demonstrated execution from operating results, although acquisition contributions and investment-related income limit attribution.
governance · 2/4 · Disclosed independent board leadership, majority independence, annual elections and one-share-one-vote rights support oversight. The actual revenue-recognition control weakness is adverse evidence; subsequent testing and reported remediation by June 2026 improve the assessment without establishing a long record of effective controls.
Evidence
Our trusted network seamlessly integrates software and hardware with a range of connected devices, including TASER energy devices, cameras and sensors, drones and robotics, cloud-based evidence management, records management, real-time operations software, critical incident and emergency response systems, immersive training, and productivity tools – all enhanced by artificial intelligence.
MD&A / integrated hardware and software workflows · Filed 07/05/2026
ARR reached $1.3 billion. Net revenue retention accelerated to 125%.
Shareholder letter / 2025 ARR and net revenue retention · Filed 16/04/2026
Before committing to purchase our products, our end-user customers typically consider a wide range of issues such as product benefits, training costs, the cost to use our products in addition to or in place of other products, budget constraints and product reliability, safety and efficacy.
Risk factors / customer purchase and training considerations · Filed 25/02/2026
Because of the nature of our multi-year subscription programs with various product and service performance obligations and multi-year payment plans, the timing of revenue recognition may differ from the timing of invoicing to customers.
Revenue recognition / multi-year subscription programs · Filed 25/02/2026
Axon products are generally cloud-connected, designed to drive better outcomes and customer experiences, and sold via mutually reinforcing integrated bundles.
Business / cloud-connected integrated bundles · Filed 28/02/2023
In contracts where the customer’s performance is subject to budget appropriation clauses, consistent with historical experience we generally consider the likelihood of non-appropriation to be remote when determining the contract term and transaction price.
Revenue recognition / historical non-appropriation experience · Filed 25/02/2026
When these contracts expire, contracts may be reopened to competing bidders, and there is no guarantee that the contracts will be renewed or extended.
Risk factors / competitive rebidding at contract expiry · Filed 25/02/2026
Many of our contracts include termination for convenience provisions that may allow our customers to terminate the contract earlier than their term length.
Risk factors / termination for convenience · Filed 25/02/2026
Interruptions in our services, or loss or corruption of digital evidence, may reduce our revenue, require us to issue credits or pay penalties, expose us to litigation, lead customers to terminate their subscriptions, and adversely affect our renewal rates and ability to attract new customers.
Risk factors / service interruptions and digital evidence loss · Filed 25/02/2026
Our competition in this space includes CentralSquare Technologies (Vertex NG911 Call Handling), Hexagon AB (call-handling capabilities within its public safety platforms such as I/CAD and OnCall), Intrado Life & Safety (including its VIPER and Power 911 offerings), Motorola Solutions (including its VESTA 9-1-1, its other NG911 call-handling solutions and its Rave 911 suite), RapidSOS, Versaterm, and Zetron (MAX Call Taking), among other providers of NG911 call-handling, data and analytics platforms.
Competition / emergency communications competitors · Filed 25/02/2026
Key competitive factors in this product category include the reliability, resiliency and scalability of call handling and routing; support for NG911 standards and multimedia communications (including text, video, and rich device-generated data); the breadth and depth of integrations with computer-aided dispatch, mapping and other public safety software; the ability to leverage AI to assist telecommunicators, improve call-taking efficiency and quality assurance; cybersecurity and data privacy; the ability to integrate with a wide range of legacy and cloud-based PSAP infrastructure; ease and speed of deployment and migration from legacy systems; and overall total cost of ownership.
Competition / emergency communications integration and migration factors · Filed 25/02/2026
patents, over 170 U.S. registered trademarks, over 350 international patents and over 480 international registered trademarks, as well as numerous pending patent and trademark applications.
Intellectual property / patents and registered trademarks · Filed 25/02/2026
We may be unable to enforce patent rights internationally, which may limit our ability to prevent our product features from being used by competitors in some foreign jurisdictions.
Risk factors / international patent enforcement limitations · Filed 25/02/2026
The increase in TASER 7 revenue is the result of increased unit sales and higher average selling prices.
2022 results / TASER 7 units and average selling prices · Filed 28/02/2023
Cartridge revenue increased due to increased unit sales and higher average selling prices due to product mix shift from legacy handles to TASER 7.
2022 results / cartridge selling prices and product mix · Filed 28/02/2023
Cartridge revenue increased due to increased units, partially offset by lower average selling prices.
Sequential results / lower cartridge average selling prices · Filed 28/02/2023
Axon Fleet revenue was driven primarily by increased unit sales, partially offset by a decrease in the average selling price.
Sequential results / lower Fleet average selling price · Filed 28/02/2023
The increase in the aggregate number of users and average revenue per user, driven primarily by software add-ons, drove the majority of the increase in Axon Evidence and cloud services revenue of $14.6 million.
Fourth-quarter 2023 results / users and software add-ons · Filed 27/02/2024
Six Months Ended June 30, 2026 Compared to the Six Months Ended June 30, 2025 The following table presents data from our consolidated statements of operations as well as the percentage relationship to total net sales (dollars in thousands): Six Months Ended June 30, 2026 2025 Net sales from products $ 959,374 56.0 % $ 717,256 56.4 % Net sales from services 752,360 44.0 554,915 43.6 Net sales 1,711,734 100.0 1,272,171 100.0 Cost of product sales 476,017 27.8 363,688 28.6 Cost of service sales 211,984 12.4 139,001 10.9 Cost of sales 688,001 40.2 502,689 39.5 Gross margin 1,023,733 59.8 769,482 60.5 Operating expenses: Selling, general and administrative 550,075 32.1 465,721 36.6 Research and development 397,637 23.3 313,590 24.6 Total operating expenses 947,712 55.4 779,311 61.2 Income (loss) from operations 76,021 4.4 (9,829) (0.7) Interest income 17,426 1.0 33,857 2.7 Interest expense (56,744) (3.3) (36,507) (2.9) Other income, net 196,202 11.5 81,987 6.4 Income before provision for income taxes 232,905 13.6 69,508 5.5 Provision for (benefit from) income taxes 34,166 2.0 (54,589) (4.3) Net income $ 198,739 11.6 % $ 124,097 9.8 % 27 Table of Contents The following table presents our revenues disaggregated by geography (dollars in thousands): Six Months Ended June 30, 2026 2025 United States $ 1,388,834 81 % $ 1,066,756 84 % Other countries 322,900 19 205,415 16 Total $ 1,711,734 100 % $ 1,272,171 100 % International revenue increased compared to the prior year June 30, 2025 comparative period, primarily driven by increased sales in our EMEA region.
MD&A / first-half 2026 comparative operating results · Filed 06/08/2026
As a percentage of net sales, gross margin for the Software and Services segment decreased to 71.3% from 75.6% for the three months ended June 30, 2026 and 2025, respectively.
MD&A / second-quarter Software and Services gross margin · Filed 06/08/2026
The decrease in gross margin and adjusted gross margin was primarily driven by a higher mix of professional services revenue and scaling new product offerings.
MD&A / professional services mix and new product scaling · Filed 06/08/2026
The net investing cash outflow is primarily driven by $551.6 million for business combinations, which is substantially all related to the Carbyne acquisition, $302.8 million for investment purchases, which includes $302.1 million of strategic investments purchases, and $44.2 million for purchases of property and equipment.
Liquidity / acquisition, investment and capital spending · Filed 06/08/2026
CONSOLIDATED BALANCE SHEETS (in thousands, except share data) June 30, 2026 December 31, 2025 (Unaudited) ASSETS Current assets: Cash and cash equivalents $ 597,704 $ 1,201,147 Short-term investments 75,703 505,417 Marketable securities 19,126 27,213 Accounts and notes receivable, net of allowance of $4,949 and $4,198 as of June 30, 2026 and December 31, 2025, respectively 768,637 777,486 Contract assets, net 750,950 582,630 Inventory 486,556 341,811 Prepaid expenses 190,682 149,800 Other current assets 115,347 127,548 Total current assets 3,004,705 3,713,052 Property and equipment, net 341,507 330,979 Deferred tax assets, net 345,500 359,803 Intangible assets, net 281,583 196,972 Goodwill 1,898,827 1,370,189 Long-term notes receivable, net 1,597 6,066 Long-term contract assets, net 296,458 178,249 Strategic investments 853,842 416,833 Other long-term assets 457,138 428,170 Total assets $ 7,481,157 $ 7,000,313 LIABILITIES AND STOCKHOLDERS’ EQUITY Current liabilities: Accounts payable $ 269,957 $ 139,086 Accrued liabilities 423,932 510,538 Current portion of deferred revenue 670,740 714,708 Current portion of notes payable, net — 80,552 Customer deposits 16,477 16,156 Other current liabilities 17,131 9,107 Total current liabilities 1,398,237 1,470,147 Deferred revenue, net of current portion 385,659 359,902 Liability for unrecognized tax benefits 26,587 24,376 Long-term deferred compensation 33,094 23,675 Long-term lease liabilities 101,658 98,942 Long-term notes payable, net 1,731,817 1,730,170 Other long-term liabilities 129,568 50,443 Total liabilities 3,806,620 3,757,655 Commitments and contingencies (Note 11) Stockholders’ equity: Preferred stock, $0.00001 par value; 25,000,000 shares authorized; no shares issued and outstanding as of June 30, 2026 and December 31, 2025, respectively — — Common stock, $0.00001 par value; 200,000,000 shares authorized, 101,510,494 shares issued and 81,235,921 shares outstanding as of June 30, 2026, and 200,000,000 shares authorized, 100,444,971 shares issued and 80,211,537 shares outstanding as of December 31, 2025 1 1 Additional paid-in capital 2,735,708 2,475,035 Treasury stock at cost, 20,274,573 shares and 20,233,434 shares as of June 30, 2026 and December 31, 2025, respectively (180,164) (157,242) Retained earnings 1,135,409 936,670 Accumulated other comprehensive loss (16,417) (11,806) Total stockholders’ equity 3,674,537 3,242,658 Total liabilities and stockholders’ equity $ 7,481,157 $ 7,000,313 The accompanying notes are an integral part of these consolidated financial statements.
Consolidated balance sheets / liquidity, investments, debt and shares · Filed 06/08/2026
Stock-based Compensation Expense The following table summarizes the composition of stock-based compensation expense for the three and six months ended June 30, 2026 and 2025 (in thousands): Three Months Ended June 30, Six Months Ended June 30, 2026 2025 2026 2025 Cost of product and service sales $ 11,341 $ 12,561 $ 22,050 $ 25,448 Selling, general and administrative expenses 70,988 72,187 137,507 143,534 Research and development expenses 61,667 54,496 119,140 110,501 Total stock-based compensation expense (1) $ 143,996 $ 139,244 $ 278,697 $ 279,483 (1)For the six months ended June 30, 2026, stock-based compensation expense included $0.7 million in non-recurring severance costs.
Note 10 / stock-based compensation expense · Filed 06/08/2026
EBITDA Employee XSP CEO Performance Award Goal Expiration 1 $ 1,834 or $ 382 and $ 247.40 and June 2025 December 2028 December 31, 2026 2 2,293 or 497 and 309.25 and December 2025 December 2028 December 31, 2027 3 2,866 or 611 and 386.56 and June 2026 December 2029 December 31, 2028 4 3,583 or 792 and 483.20 and December 2026 December 2029 December 31, 2029 5 4,479 or 1,035 and 604.00 and June 2027 December 2030 December 31, 2030 6 5,599 or 1,347 and 755.00 and December 2027 December 2030 December 31, 2031 7 6,999 or 1,697 and 943.75 and June 2028 December 2030 December 31, 2032 8 8,753 or 2,135 and 1,179.69 and December 2029 — December 31, 2033 9 10,940 or 2,681 and 1,474.61 and June 2031 — December 31, 2034 (1) Operational goals are measured, as of any date, for the previous four consecutive fiscal quarters, beginning with the Company's first full fiscal quarter ending after the fiscal quarter in which the grant date occurred.
Note 10 / employee and CEO award performance and service conditions · Filed 06/08/2026
(2) Tranches 1, 2, and 3 vested in June 2025, December 2025, and June 2026, respectively.
Note 10 / actual Employee XSP tranche vesting · Filed 06/08/2026
| 2026 Proxy Statement | 53 Table of Contents Additional accelerated vesting conditions pursuant to the CEO Performance Award and the Employee XSP are as follows: CEO Performance Award (Patrick Smith) Employee XSP (all other NEOs) Termination for Cause Any tranches of the CEO Performance Award that are unvested as of the date of termination are forfeited Any tranches of the 2024 Employee XSP that are unvested as of the date of termination are forfeited Termination without Cause Operational goals are disregarded and all tranches for which stock price goals have been attained as of the date of termination vest; next unattained tranche will partially vest on a prorated basis by comparing the ninety-day volume-weighted average price to the stock price goal Operational goals are disregarded and all tranches for which stock price goals have been attained as of the date of termination vest; next unattained tranche will partially vest on a prorated basis by comparing the ninety-day volume-weighted average price to the stock price goal Change in Control Without Termination Stock price goals are compared against the greater of closing price immediately prior to Closing Date and per share stock price received by stockholders in such change in control; tranches qualifying as “CIC Units” for which the minimum service date has occurred will vest; CIC Units for which the minimum service date has not yet occurred remain outstanding and eligible to vest based on attainment of minimum service requirements; operational goals are disregarded Stock price goals are compared against the greater of closing price immediately prior to Closing Date and per share stock price received by stockholders in such change in control; tranches qualifying as “CIC Units” for which the minimum service date has occurred will vest; CIC Units for which the minimum service date has not yet occurred remain outstanding and eligible to vest based on attainment of minimum service requirements; operational goals are disregarded Termination By Executive Within 24 Months Following a Change in Control For Good Reason or By the Company Without Cause Any “CIC Unit” tranches of the CEO Performance Award that are unvested as of the date of termination immediately vest Any “CIC Unit” tranches of the 2024 Employee XSP that are unvested as of the date of termination immediately vest Death or Disability Minimum service date requirements are disregarded and any tranches for which stock price goals and operational goals have been achieved as of the date of termination immediately vest Minimum service date requirements are disregarded and any tranches for which stock price goals and operational goals have been achieved as of the date of termination immediately vest Axon Enterprise, Inc.
Executive compensation / accelerated vesting conditions · Filed 16/04/2026
Table of Contents CORPORATE GOVERNANCE HIGHLIGHTS Board Governance Oversight Shareholder Rights & Engagement •Independent board leadership •Majority independent board •Directors with a wide range of skills, expertise and multi-faceted backgrounds •Regular board refreshment—four new directors added since 2023 •Average director age: 58 •Average director tenure: 10 years •One share, one vote equity structure •Annual director elections •Majority vote standard •Public board service limits •Director tenure and term limits •Ability for shareholders to call a special meeting •Ability for shareholders to act by written consent •Regular shareholder engagement with our investors to understand their views and seek feedback •“Proxy access” bylaw provision Governance Structures Unique to Axon’s Business Standing Board Committees Advisory Boards •Audit Committee •Compensation Committee •Nominating and Corporate Governance Committee, including oversight of Environmental, Social and Governance (“ESG”) and sustainability-related risks •Enterprise Risk and Compliance Committee, including oversight of cybersecurity risk in consultation with our Audit Committee •Mergers and Acquisitions and Capital Structure Committee •Ethics & Equity Advisory Council (“EEAC”) composed of community leaders and community- focused academics, provides our Board with insight into the responsible development and deployment of new technology — including artificial intelligence — in both public safety and community contexts.
Corporate governance highlights / board structure and shareholder rights · Filed 16/04/2026
The Company did not design and maintain effective controls related to revenue recognition for its customer contracts.
Internal controls / revenue recognition material weakness · Filed 25/02/2026
During the second quarter of 2026, we completed the necessary testing of these control activities and determined they have been appropriately designed and implemented and have operated effectively for a sufficient period of time to conclude that the material weakness has been remediated as of June 30, 2026.
Internal controls / remediation as of June 30, 2026 · Filed 06/08/2026
| 2026 Proxy Statement | 71 Table of Contents Year Ended December 31, 2025 2024 2023 2022 2021 Net income $124,656 $377,034 $175,783 $146,930 $(56,339) Depreciation and amortization 86,789 56,815 32,638 24,381 18,694 Interest expense 94,238 7,098 6,995 488 28 Investment interest income (75,431) (43,693) (49,107) (4,782) (1,511) Provision for (benefit from) income taxes (105,682) 4,470 (18,722) 49,308 (80,062) EBITDA $124,570 $401,724 $147,587 $216,325 $(119,190) Non-GAAP adjustments: Stock-based compensation expense $610,151 $382,604 $131,358 $106,176 $303,331 Unrealized and realized losses (gains) on investments and marketable securities, net (134,658) (189,277) 41,785 (98,943) (23,035) Realized (gains) on previously held minority interests acquired in business combinations, net (2,193) (93,940) — — — Debt inducement expense 38,868 — — — — Severance costs 31,816 — — — — Transaction costs related to strategic investments and acquisitions 15,588 15,249 4,501 2,368 2,068 Payroll taxes related to Employee XSP vesting and 2018 CEO Performance Award option exercises 14,768 2,645 9,011 — 18,933 Litigation and regulatory costs 9,579 1,761 241 545 741 Loss on disposal, abandonment, and impairment of property, equipment and intangible assets, net 1,059 — 317 5,562 238 Inventory step-up amortization 607 609 — — — Loss recoveries — — (3,404) — — Adjusted EBITDA $710,155 $521,375 $331,396 $232,033 $183,086 Net sales $2,779,536 $2,082,526 $1,560,699 $1,187,143 $865,638 Net income as a percentage of net sales 4.5% 18.1% 11.3% 12.4% (6.5)% Adjusted EBITDA margin (adjusted EBITDA as a percentage of net sales) 25.5% 25.0% 21.2% 19.5% 21.2% Table of Contents Table of Contents
Non-GAAP reconciliation / 2021–2025 reported results · Filed 16/04/2026
Shareholders previously approved a grant of 679,102 XSUs for the CEO Performance Award on May 10, 2024.
Note 10 / May 2024 shareholder approval of CEO award · Filed 06/08/2026
In connection with certain acquisitions which were completed in the first quarter of 2026, the operational goals were adjusted as required by the terms of the Employee XSP and CEO Performance Award grant agreements for the respective tranches.
Note 10 / acquisition-related operational goal adjustments · Filed 06/08/2026
