Commitments and Contingencies

9 Months Ended

Sep. 30, 2026

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Product Litigation

As a manufacturer of weapons and other law enforcement tools used in high-risk field environments, we have historically been the subject of product liability litigation concerning the use of our products. Currently, we are named as a defendant in only one such lawsuit regarding the use of a TASER CED by law enforcement in connection with an arrest.

We continue to aggressively defend all product litigation, which we do not believe will have a material effect on our financial position, results of operations or cash flows. We are self-insured for the first $5.0 million of any product claim. No judgment or settlement has ever exceeded this amount in any product liability case to which we have been a party.

Other Matters

Pending in the District of New Jersey (Case No. 3:23-cv-7182) is a putative antitrust class action brought by three municipalities based largely on the Federal Trade Commission’s dismissed administrative complaint concerning Axon’s 2018 acquisition of insolvent body camera competitor, Vievu LLC. We deny all allegations of anticompetitive or other misconduct and are vigorously defending the case.

Pending in the Eastern District of Virginia (Case No. 1:24-CV-01625) is a patent infringement suit filed by Airspace Systems, Inc. (“Airspace”) against Dedrone and Axon involving certain drone technology. The case has been stayed pending Axon’s invalidity challenges to all three asserted patents in the United States Patent and Trademark Office, which instituted review last fall. On October 7, 2026, the Patent Trial and Appeal Board cancelled two of the patents in their entirety and invalidated all but two claims in the third patent. The litigation is expected to remain stayed during the appellate process. Separately, pending in the Western District of Texas (Case No. 1:24-cv-1497) is a patent infringement suit filed by CentralSquare Technologies LLC (“CST”) against Carbyne, Inc. and Carbyne Ltd. (jointly “Carbyne”) relating to 911 technology. CST seeks injunctive relief and damages in an unspecified amount. Carbyne, which we acquired on February 18, 2026, denies infringement and has countersued CST for infringement of its own patent. No trial date has been set.

Pending in the Northern District of California (Case No. 3:26-cv-11183) and in Riverside County (CA) Superior Court (Case No. CVRI26O6719) are putative class actions seeking statutory damages and injunctive relief for alleged violations of California’s Automated License Plate Reader (“ALPR”) disclosure statute. We deny all allegations, including the statute’s applicability to Axon, and will vigorously defend these cases. We are also aware of a third ALPR complaint recently filed in the Northern District, but we have not yet been served. These cases will likely be consolidated.

General

From time to time, we are notified that we may be a party to a lawsuit or that a claim is being made against us. After carefully assessing the claim, and assuming we determine that we are not at fault or we disagree with the damages or relief demanded, we vigorously defend any lawsuit filed against us. We record a liability when losses are deemed probable and reasonably estimable. When losses are deemed reasonably possible but not probable, we determine whether it is possible to provide an estimate of the amount of the loss or range of possible losses for the claim, if material for disclosure. In evaluating matters for accrual and disclosure purposes, we take into consideration factors such as our historical experience with matters of a similar nature, the specific facts and circumstances asserted, the likelihood of our prevailing, the availability of insurance, and the severity of any potential loss. We reevaluate and update accruals as matters progress over time.

Based on our assessment of outstanding litigation and claims as of September 30, 2026, we have determined that it is not reasonably possible that these losses, if any, from lawsuits will individually, or in the aggregate, materially affect our results of operations, financial condition or cash flows. However, the outcome of any litigation is inherently uncertain and there can be no assurance that any expense, liability or damages that may ultimately result from the resolution of these matters will be covered by our insurance or will not be in excess of amounts recognized or provided by insurance coverage and will not have a material adverse effect on our operating results, financial condition or cash flows.

Off-Balance Sheet Arrangements

Under certain circumstances, we use letters of credit and surety bonds to guarantee our performance under various contracts, principally in connection with the installation and integration of Axon cameras and related technologies. Certain of our letters of credit and surety bonds have stated expiration dates with others being released as the contractual performance terms are completed. At September 30, 2026, we had outstanding letters of credit issued under our credit facility of $9.1 million that are expected to expire through 2029. We also had outstanding letters of credit of $0.6 million that do not draw against our credit facility. Additionally, we had $7.3 million of outstanding surety bonds as of September 30, 2026, with expiration dates ranging through 2029.