These unaudited consolidated financial statements have been prepared pursuant to the rules and regulations of the SEC. Certain information related to our organization, significant accounting policies and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the United States (“GAAP”) has been condensed or omitted. The accounting policies followed in the preparation of these unaudited consolidated financial statements are consistent with those followed in our consolidated financial statements for the year ended December 31, 2025, as filed on our 2025 Annual Report on Form 10-K. In the opinion of management, these unaudited consolidated financial statements contain all material adjustments, consisting only of normal recurring adjustments, necessary to fairly state our financial position, results of operations and cash flows for the periods presented and the presentations and disclosures herein are adequate when read in conjunction with the financial statements included in our 2025 Annual Report on Form 10-K for the year ended December 31, 2025.

Our results of operations for the three and nine months ended September 30, 2026 are not necessarily indicative of the results to be expected for the full year (or any other period). The preparation of the financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and the related disclosures at the date of the financial statements and during the reporting period. We believe the estimates used in the preparation of these unaudited consolidated financial statements are reasonable; however, actual results could differ materially from those estimates.

Certain amounts in prior periods’ consolidated financial statements have been reclassified to conform to current period presentation. These reclassifications are not material and had no effect on the previously reported consolidated financial statements.

Financial instruments that potentially subject us to concentrations of credit risk consist of accounts and notes receivable, contract assets and cash. Historically, we have experienced an immaterial level of write-offs related to uncollectible accounts. We hold the majority of our cash and cash equivalents accounts at three depository institutions. As of September 30, 2026, the aggregate balances in such accounts were $1.2 billion. Our balances with these and other institutions regularly exceed Federal Deposit Insurance Corporation insured limits for domestic deposits and various deposit insurance programs in Australia, Canada, Germany, and the United Kingdom, among others. To manage the related credit exposure, management continually monitors the creditworthiness of the financial institutions where we have deposits.

As described further within our 2025 Annual Report on Form 10-K, we have two reportable segments: Connected Devices and Software and Services. Our chief operating decision maker (“CODM”) is our Chief Executive Officer. The segment measure of profit and loss is adjusted gross margin, as the CODM allocates resources and assesses performance based on review of adjusted gross margin by segment. Assets and other expense items, such as research and development and selling, general, and administrative expenses, are not provided to the CODM by segment, as our CODM does not evaluate our operating segments using this discrete information. For additional details, refer to Note 13.

Restricted cash balances were $13.2 million and $12.2 million as of September 30, 2026 and December 31, 2025, respectively. The restricted cash balance at September 30, 2026 includes a $9.7 million payment held in escrow related to the planned construction of our headquarters building in Arizona. Restricted cash also includes funds held in international bank accounts for various operating and financing activities.

We warrant our conducted energy devices (“CEDs”), Axon cameras and other hardware on a limited basis for a period of primarily one year after purchase. Changes in our estimated product warranty liabilities were as follows (in thousands):

Basic income per common share is computed by dividing net income by the weighted average number of common shares outstanding during the periods presented. Diluted income per share reflects the potential dilution from outstanding stock-based awards, our 2027 Notes, warrants to acquire shares of our common stock (the “Warrants” or “2027 Warrants”), and our 2031 Notes. These items are excluded from the computation of diluted net income per share in periods in which the effect would be antidilutive. For additional information regarding our 2027 Notes, 2027 Warrants, and 2031 Notes, refer to Note 8.


	Three Months Ended September 30,				Nine Months Ended September 30,
	2026		2025		2026		2025
Numerator for basic and diluted earnings per share:
Net income (loss)	$	57,006	$	(2,186)	$	255,745	$	121,911

Denominator:
Weighted average shares outstanding	81,044		78,416		80,592		77,774
Dilutive effect of stock-based awards	1,340		—		1,352		1,846
Dilutive effect of 2027 Notes (1)	—		—		31		1,092
Dilutive effect of 2027 Warrants	980		—		847		1,506
Dilutive effect of 2031 Notes (2)	309		—		106		—
Diluted weighted average shares outstanding	83,673		78,416		82,928		82,218

Net income (loss) per common share:
Basic	$	0.70	$	(0.03)	$	3.17	$	1.57
Diluted	$	0.68	$	(0.03)	$	3.08	$	1.48

(1)We redeemed all of our remaining outstanding 2027 Notes during the three months ended March 31, 2026, and we repurchased a portion of the 2027 Notes during the three months ended March 31, 2025. Accordingly, the dilutive impact to the nine months ended September 30, 2026 and September 30, 2025 related to the 2027 Notes is weighted for (a) the number of days between the beginning of the period and the respective closing dates of each transaction, which includes the total amount of shares issuable upon a conversion of all of the 2027 Notes outstanding as of the beginning of the respective periods, and (b) subsequent to the respective closing dates, which includes the amount of shares issuable upon a conversion of the 2027 Notes that remain after each respective transaction. No 2027 Notes remained outstanding following settlement of the aforementioned redemption. Refer to Note 8 for additional details.

(2)The dilutive effect of our 2031 Notes is calculated based upon the most advantageous conversion rate from the standpoint of the holder. Refer to Note 8 for additional details related to the conversion criteria applicable for our 2031 Notes.

Potentially dilutive securities that are not included in the calculation of diluted net income per share because doing so would be antidilutive are as follows (in thousands):


	Three Months Ended September 30,		Nine Months Ended September 30,
	2026	2025	2026	2025
Stock-based awards	3,256	5,138	3,441	3,299
2027 Notes	—	1,235	—	401
2027 Warrants	1,682	3,017	1,815	1,511
2031 Notes	2,566	—	2,769	—
Total potentially dilutive securities	7,504	9,390	8,025	5,211

In September 2025, the Financial Accounting Standards Board (“FASB”) issued ASU 2025‑06, Intangibles - Goodwill and Other - Internal‑Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal‑Use Software. ASU 2025‑06 is intended to modernize the internal‑use software model primarily by removing software development stages and introducing a “probable-to-complete recognition threshold.” The provisions of ASU 2025-06 are effective for our Annual Report on Form 10-K for the year ending December 31, 2026. We elected to early adopt this ASU in the first quarter of 2026 on a fully prospective basis. The adoption of this standard did not result in any material impacts to our consolidated financial statements.

In July 2025, the FASB issued ASU 2025‑05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. ASU 2025‑05 is intended to provide a practical expedient for estimating expected credit losses on current trade receivables and current contract assets. The provisions of ASU 2025‑05 are effective for annual periods beginning after December 15, 2025. We adopted this standard in the first quarter of 2026. The adoption of this standard did not result in any material impacts to our consolidated financial statements.

Refer to Note 1 to the consolidated financial statements in our 2025 Annual Report on Form 10-K for a discussion of applicable standards issued and not yet adopted. Relevant new unadopted standards issued subsequent to our most recent Annual Report are included below.

In May 2026, the FASB issued ASU 2026-02, Environmental Credits and Environmental Credit Obligations (Topic 818). ASU 2026-02 establishes recognition, measurement, presentation, and disclosure requirements for environmental credits and environmental credit obligations. The provisions of ASU 2026-02 are effective for our Quarterly Report on Form 10-Q for the quarter ending March 31, 2028 and subsequent interim and annual periods thereafter, with early adoption permitted. We are currently evaluating the impact of this update on our consolidated financial statements.