0001069183FALSE00010691832024-11-072024-11-07

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________________________________________________
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
November 7, 2024
Date of Report (Date of earliest event reported)
________________________________________________________
Axon Enterprise, Inc.
(Exact name of registrant as specified in its charter)
Delaware001-1639186-0741227
(State or other jurisdiction of
incorporation)		(Commission File Number)(IRS Employer
Identification No.)
17800 N. 85th St.
Scottsdale, Arizona 85255
(Address of principal executive offices, including zip code)
(480) 991-0797
(Registrant’s telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.00001 Par ValueAXONThe Nasdaq Global Select Market
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
oWritten communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
oSoliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
oPre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
oPre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter). Emerging growth company o
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o


Item 2.02 Results of Operations and Financial Condition
On November 7, 2024, Axon Enterprise, Inc. (the “Company” or “Axon”) issued a shareholder letter regarding the Company’s financial results for its third quarter ended September 30, 2024. The full text of the letter, together with the audited consolidated statements of operations, segment reporting, balance sheets, cash flow information, statistical measures and reconciliations of GAAP to non-GAAP financial measures are attached hereto as Exhibit 99.1.
The information pursuant to Item 2.02 in this report on Form 8-K is being furnished and shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that Section.
Item 9.01 Financial Statements and Exhibits
(d)Exhibits
Exhibit
Number
Exhibit Description
99.1
104The cover page from this Current Report on Form 8-K, formatted as Inline XBRL


SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Dated: November 7, 2024Axon Enterprise, Inc.
By: /s/ BRITTANY BAGLEY
Brittany Bagley
Chief Operating Officer and Chief Financial Officer


Exhibit 99.1
CONTACT:
Investor Relations
Axon Enterprise, Inc.
IR@axon.com
Axon reports Q3 2024 revenue of $544 million, up 32% year over year, raises outlook
•Axon Cloud & Services revenue grows 36% to $203 million
•Annual recurring revenue grows 36% to $885 million
•Net income of $67 million supports non-GAAP net income of $113 million and Adjusted EBITDA of $145 million
•Raises full year revenue outlook to approximately $2.07 billion, over 32% annual growth; expects full year Adjusted EBITDA margin of approximately 24.6%
Fellow shareholders,

Axon is proud to report strong third quarter results and raise our outlook for the remainder of the year once again. Robust demand for our products and services remains driven by our innovative product leadership and deep customer relationships. We delivered over 30% annual revenue growth in each of the first three quarters of 2024, marking our 11th consecutive quarter of growth above 25%, achieved third quarter net income margin of 12.3%, and Adjusted EBITDA margin of 26.7% — our highest in over three years.

TASER revenue of $222 million grew 36% year over year, driven by demand for TASER 10 and associated cartridges and services. Axon Cloud & Services revenue of $203 million, grew 36% year over year. Strength in Axon Cloud & Services was driven by new customer adoption of Axon Evidence and continued expansion with our existing customers, supporting increased net revenue retention of 123%. Sensors & Other revenue of $120 million increased 18% year over year, driven by record demand for Axon Body cameras, with more than 100,000 units shipped in the quarter.

Axon’s third quarter results demonstrate strong product-market fit and support our increased outlook. We expect fourth quarter revenue in the range of $560 million to $570 million, representing over 30% year-over-year growth at the midpoint. We expect fourth quarter Adjusted EBITDA in the range of $130 million to $135 million, or approximately 23.5% Adjusted EBITDA margin. Our fourth quarter guidance implies full year 2024 revenue of approximately $2.07 billion, representing over 32% annual growth and full year Adjusted EBITDA margin of approximately 24.6%. We provide more detail on our product vision, most recent financial performance and improved outlook, below.

Select Highlights:
Axon AI — The AI Era Plan
Axon has established itself as a leading technology vendor in public safety through our commitment to continually develop innovative solutions that enhance the customer experience with the Axon ecosystem. Axon AI further advances our leadership, featuring a suite of AI-powered products designed to increase operational efficiency, improve investigative accuracy and support proactive policing. Today, this includes Axon Auto-Transcribe, Draft One, automatic license plate reading (ALPR) and video redaction, to name a few.

Beginning in Q4, our commitment has taken a new step forward with the introduction of the AI Era Plan. The AI Era Plan enables customers to subscribe to an expanding set of AI capabilities and features that further leverage our connected ecosystem as quickly as we can develop them. It provides new AI features in a subscription offering and gives customers access to unmatched value across our AI innovations by including the newest AI products we bring to market. Its exponential value is fully unlocked when combined with our officer


safety plans (OSP). Draft One is one illustrative example already live and in customers’ hands today, utilizing real-time connected body cameras, cloud evidence management, video transcription and generative AI.

“Axon AI represents not just a single product, but a commitment to continuous innovation for our customers. We have developed a suite of AI-powered products and solutions designed to evolve with the demands of modern law enforcement — and our portfolio is only growing. As new capabilities emerge, we intend to integrate them seamlessly into our hardware and software solutions, enhancing our customers’ workflows. This will enable officers to work smarter, faster, and more efficiently — driving real change in public safety.”
— Rick Smith, Axon Founder and CEO

Axon believes we are most successful when we listen to our customers and seek to solve the most pertinent problems they face each day. Our development in AI is no different, and we are building this technology through deep collaboration and partnership with our customers. In October, we highlighted our vision for the AI Era Plan to more than 2,200 attendees at the 2024 International Association of Chiefs of Police (IACP) Annual Conference and more than 2,000 attendees at the Association of the United States Army (AUSA) Annual Meeting. Our demonstrations featured products available today and a roadmap of additional, in-development capabilities, enabling us to gather critical feedback on where we are headed over the next 1-2 years. The rapid and accelerating pace of AI innovation also supports us planning ahead for the next 5-10 years — early interest in our AI Era Plan indicates our customers are ready.

Alongside Draft One, we showcased additional AI use cases including Axon Body 4 Live Translation. Axon Body 4 Live Translation utilizes Axon’s cloud-connected body cameras to enable real-time translation between two speakers in over 100 languages, removing language barriers, fostering relationships and enhancing transparency. This feature is made possible through the Axon ecosystem, which connects our devices to our advanced cloud software. We expect to make Axon Body 4 Live Translation available to AI Era Plan subscribers in the first half of 2025.

We are not stopping there. Our roadmap continues to expand, and our pace of innovation is accelerating. In addition to Draft One and Axon Body 4 Live translation, we previewed a suite of features in development for the AI Era Plan, including Evidence Translation, Form One, Brief One, Smart Capture, Policy Chat, and CAD Q&A. We also continue to improve existing features and products, including recent enhancements to our redaction tools delivering an estimated 70% time savings from our earlier generation Redaction Assistant.

“We’ve seen 65-75% time savings just by being able to push a button to get a transcript.”
— Lieutenant Steve Ferrie, Rowlett Police Department

“...one of the biggest, [most] exciting changes in technology in policing that I have seen...”
— Chief Steve Redfearn, Boulder Police Department

“We spend a lot of time thinking about what could go wrong. But we also need to think about what could go right. Can we do better than today?”
— Rick Smith, Axon Founder and CEO

• 67% decrease in time spent writing incident reports — Fort Collins Police Department with Draft One
• 32 minutes stolen vehicle recovery — Cobb County Police Department with Fusus AI Image Search
• 75% decrease in time spent redacting evidence — Rowlett Police Department with Redaction Assistant
• 400+ unauthorized drone detections — at Tulsa State Fair with Dedrone by Axon
• 1 camera = equivalent of 5 officers searching for vehicle — Fairfax County Police Department with Fleet 3 ALPR

The statistics related to Axon AI, such as time savings and productivity improvements, reflect data from select customer use cases and specific implementations. These results are not guaranteed and may vary based on a range of factors unique to each customer, including but not limited to the nature of their operations, the specific configurations of Axon AI products, and the integration of AI tools within their workflows. Actual outcomes depend on each customer’s operational environment, training, and level of adoption. As with any technology deployment, results will vary, and customers may experience different levels of efficiency and effectiveness.


Axon Air — Drone as First Responder
Axon’s innovative momentum extends beyond AI into drones and robotics, where we are leading the way to power drone as first responder (DFR) operations. We are thrilled to announce the closing of our acquisition of Dedrone, bringing integrated airspace security technology — including comprehensive protection, detection, identification and mitigation of unauthorized drones in restricted airspace — into the Axon DFR solution.

Along with Dedrone, Axon’s DFR offering has continued to advance through our unmatched partnerships with Skydio and DroneSense. Together, our DFR solution includes U.S.-made drone hardware and a newly introduced autonomous docking solution from Skydio, enabling fully remote-controlled launches, landings, recharging and airspace deconfliction for beyond visual line of sight (BVLOS) operations. In addition, our DFR solution integrates into Fusus, which provides unified situational awareness by allowing agencies to monitor live drone feeds, share footage and streamline coordinated responses. This combination positions us as the leader in powering scalable, end-to-end DFR operations.

The differentiated capabilities of our DFR offering are evidenced by the Campbell Police Department in California recently receiving a first-of-its-kind waiver from the Federal Aviation Administration (FAA) for BVLOS operations as part of its DFR program. Their approval includes nighttime operations, enabling 24/7 drone use, and allows the department to fly missions without the need for visual observers. We are excited to enable this ground-breaking advancement in DFR operations as we continue to invest in this market opportunity.

"This FAA approval is a major milestone for our department and our community. With the ability to conduct drone operations day or night without the need for visual observers, we can respond faster and more effectively to emergencies, improving both officer and public safety. This technology is a game changer in ensuring we have the tools to support our community when it matters most.”
— Chief Gary Berg, Campbell Police Department
Axon Aid — Partnering with first responders to support heroic efforts
Axon is steadfast in our commitment to supporting first responders and the communities they serve. Helping our customers achieve better outcomes is at the center of everything we do. This is especially true in times of crisis. When hurricanes Helene and Milton devastated communities across the Southeast U.S., thousands were left grappling with extensive damage. Heroic first responders worked tirelessly around the clock conducting search and rescue missions, restoring power, and providing essential resources — all while overcoming significant communication challenges.

Supporting their efforts, Axon Aid partnered with agencies, regardless of whether they were Axon customers, to assist in post-disaster assessments and recovery support at no cost. The Axon Aid emergency response team supported missions across four states, assisting more than 10 agencies and communities in what became Axon Aid’s longest deployment effort to date, spanning more than 16 days. Axon is proud to play a small part in supporting our first responders on these critical missions, and we are inspired by their dedication to public safety and their communities in times of need.

“During Hurricane Helene in Fairview, I worked in conjunction with Axon Aid to enhance drone operations, coordinating real-time aerial footage to assess damage and improve resource allocation. This experience demonstrated the effectiveness of integrating drone surveillance with Axon systems for rapid decision-making during emergency response."
— Firefighter with Graham Fire Department

Q3 2024 Summary Results
Quarterly revenue of $544 million grew 32% year over year, exceeding our expectations, driven by growth in each of our product segments. Demand for our latest TASER and body camera products remained strong, driving growth in TASER and Sensors & Other revenue, while adoption of premium software offerings continued to fuel growth in Axon Cloud & Services.
Total company gross margin of 60.8% declined 130 basis points year over year, driven by increased stock-based compensation expense and amortization of acquired intangibles in our cost of goods sold (COGS).


Excluding the impacts of stock-based compensation and intangibles amortization, non-GAAP company gross margin of 63.2% increased 50 basis points year over year.
Operating profit of $24 million decreased from $57 million year over year primarily due to increased stock-based compensation expense. Stock-based compensation expense of $102 million included $60 million of expenses related to broad-based equity incentive programs due to expected achievement of operational and time based service components.
•COGS of $214 million, 39.2% of revenue, included $10 million in stock-based compensation expense.
•SG&A expense of $192 million, 35.3% of revenue, included $55 million in stock-based compensation expense.
•R&D expense of $114 million, 21.0% of revenue, included $36 million in stock-based compensation expense.
Net income of $67 million (12.3% net income margin), or $0.86 per diluted share, supported non-GAAP net income of $113 million (20.8% non-GAAP net income margin), or $1.45 per diluted share.
Adjusted EBITDA of $145 million (26.7% Adjusted EBITDA margin) increased 54% year over year driven by higher revenue and operating leverage.
Operating cash flow of $91 million increased 45% year over year, supporting free cash flow of $65 million and adjusted free cash flow of $68 million.
As of September 30, 2024, Axon had $1.01 billion in cash, cash equivalents and investments, and outstanding convertible notes in principal amount of $690 million, for a net cash position of $317 million, up $38 million sequentially.

During the three months ended September 30, 2024, we revised our previously issued financial statements from 2021 through the second quarter of 2024 to reflect the impact of corrections of certain errors that we concluded were not material to any previously issued financial statements. For additional information related to this revision, see Note 1 to our condensed consolidated financial statements of the Quarterly Report on Form 10-Q for the quarter ended September 30, 2024, which we expect to be available on November 8, 2024.

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 & Sensors
THREE MONTHS ENDED
CHANGE
30 SEP 202430 JUN 202430 SEP 2023QoQYoY
(in thousands)
Axon Cloud & Services revenue(1)
$202,514$196,499$149,0283.1 %35.9 %
Axon Cloud & Services gross margin72.3 %73.1 %72.7 %(80) bp(40) bp
Axon Cloud & Services adjusted gross margin75.2 %75.7 %73.7 %(50) bp150 bp
Sensors & Other revenue$120,026$110,019$101,6809.1 %18.0 %
Sensors & Other gross margin41.4 %39.9 %46.0 %150 bp(460) bp
Sensors & Other adjusted gross margin43.3 %41.1 %46.5 %220 bp(320)bp
____________________________________________________________________
(1)The TASER segment includes Cloud and Services revenue, which is not included here.
•Axon Cloud & Services revenue growth of 36% year over year was primarily driven by new customer adoption of Axon Evidence and expansion with existing customers adopting premium software offerings.


•Axon Cloud & Services gross margin of 72.3% decreased from 72.7% year over year. Excluding the impacts of stock-based compensation expense and intangibles amortization, Axon Cloud & Services adjusted gross margin of 75.2% increased from 73.7% year over year primarily due to a higher software mix revenue relative to professional services. Software-only gross margin continued to exceed our target of 80%.
•Sensors & Other revenue growth of 18% year over year was primarily driven by strong demand for Axon Body 4, partially offset by a decrease in Axon Fleet revenue.
•Sensors & Other gross margin of 41.4% decreased from 46.0% year over year. Excluding the impact of stock-based compensation and intangibles amortization, Sensors & Other adjusted gross margin of 43.3% decreased from 46.5% year over year due to manufacturing overhead reallocations made in the prior year.
TASER
THREE MONTHS ENDED
CHANGE
30 SEP 202430 JUN 202430 SEP 2023QoQYoY
(in thousands)
Revenue$221,734$196,717$162,57012.7 %36.4 %
Gross margin60.8 %60.4 %62.5 %40 bp(170) bp
Adjusted gross margin63.0 %62.9 %62.8 %10 bp20 bp
•TASER segment revenue growth of 36% year over year was primarily driven by strong demand for TASER 10 devices and associated cartridges and services.
•TASER segment gross margin of 60.8% decreased from 62.5% year over year primarily due to increased stock based compensation expense. Excluding the impact of stock-based compensation expense, TASER segment adjusted gross margin of 63.0% increased from 62.8% year over year driven by investments in automation and cost reduction initiatives.
Forward Looking Performance Indicators
30 SEP 202430 JUN 202431 MAR 202431 DEC 202330 SEP 2023
($ in millions)
Annual recurring revenue (1)
$885 $850 $825 $732 $652 
Net revenue retention (1)
123 %122 %122 %122 %122 %
Total company future contracted revenue (1)
$7,711 $7,353$7,036$7,140$5,819
____________________________________________________________________
(1)Refer to “Statistical Definitions” below.
•Annual recurring revenue grew 36% year over year to $885 million. Growth in annual recurring revenue is primarily driven by new users adopting our cloud products and upgrades to premium offerings.
•Net revenue retention accelerated to 123% in the quarter, reflecting our ability to deliver additional value to our customers over time and de minimis attrition. We drive adoption of our cloud software solutions through integrated subscription plans, which include a variety of premium software options. This Software-as-a-Service (SaaS) metric excludes the hardware portion of customer subscriptions and is normalized to account for phased customer deployments throughout the year.
•Total company future contracted revenue of $7.7 billion increased sequentially and is up 33% year over year. We expect to recognize between 15% to 25% of this balance over the next 12 months and generally expect the remainder to be recognized over the following ten years.


2024 Outlook
The following forward-looking statements reflect Axon’s expectations as of November 7, 2024, and are subject to risks and uncertainties. Please refer to “Forward-looking Statements” below for more information.
Q4 2024

•For the fourth quarter, we expect revenue within the range of $560 million to $570 million, representing greater than 30% annual growth at the midpoint.
•We expect Adjusted EBITDA within the range of $130 million to $135 million, representing Adjusted EBITDA margin of approximately 23.5%.
◦We provide Adjusted EBITDA guidance, rather than net income guidance, due to the inherent difficulty of forecasting certain types of expenses and gains such as stock-based compensation, income tax expenses and gains or losses on marketable securities and strategic investments, which affect net income but not Adjusted EBITDA. We are unable to reasonably estimate the impact of such expenses, which could be material, on net income. Accordingly, we do not provide a reconciliation of projected net income to projected Adjusted EBITDA.

Full Year

•Axon’s full year 2024 revenue expectation has improved to approximately $2.07 billion, representing greater than 32% annual growth. This is an increase from our prior revenue guidance range of $2.00 billion to $2.05 billion, or 29.5% annual growth at the midpoint.
•Axon expects full year 2024 Adjusted EBITDA dollars of approximately $510 million, representing Adjusted EBITDA margin of approximately 24.6%. This is an increase from our prior Adjusted EBITDA guidance range of $460 million to $475 million, which implied Adjusted EBITDA margin of approximately 23.1%
•We expect stock-based compensation expenses to be approximately $360 million to $380 million, up from $355 million to $370 million previously. Because our stock-based compensation expense may vary based on changes in our stock price or the actual timing of attainment of certain metrics, it is inherently difficult to forecast future stock-based compensation expense.
◦Full year stock-based compensation expense includes approximately $210 million for broad-based equity compensation programs and a one-time enhanced equity compensation program provided to employees whose compensation is under a specific threshold. Approximately $170 million in full year expected stock-based compensation expense, primarily in SG&A and R&D, is related to the broad-based 2024 eXponential Stock Plan and the 2024 CEO Performance Award approved by our shareholders in May 2024. These performance-based incentive programs are achieved through stock price, operational and time-based requirements and are divided into seven substantially equal tranches. As of September 30, 2024, we have recognized expenses related to some tranches where we currently deem achievement to be probable. Approximately $43 million in expense, primarily in COGS, is related to a one-time enhanced equity compensation program provided to employees whose compensation is under a specified threshold.
•We expect 2024 CapEx to be in the range of $80 million to $95 million, unchanged from prior quarters. Our 2024 CapEx plans include investments in TASER 10 automation and capacity expansion, including cartridge capacity, global facility build-out and upgrades, such as warehousing support for global shipping facilities.
Quarterly conference call and webcast
We will host our Q3 2024 earnings conference call webinar on Thursday, November 7, 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/j/98297372356.
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).

Total company future contracted revenue: Total company future contracted revenue represents remaining performance obligations and includes both recognized contract liabilities as well as amounts that are expected to be invoiced and recognized in future periods. The remaining performance obligations are limited only to arrangements that meet the definition of a contract under Accounting Standards Codification Topic 606 as of September 30, 2024. We currently expect to recognize between 15% to 25% of this balance over the next 12 months, and generally expect the remainder to be recognized over the following ten years, subject to risks related to delayed deployments, budget appropriation or other contract cancellation clauses.
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.
•EBITDA (most comparable GAAP measure: net income) - Earnings before interest expense, investment interest income, income taxes, depreciation and amortization.
•Adjusted EBITDA (most comparable GAAP measure: net income) - Earnings before interest expense, investment interest income, income taxes, depreciation, amortization, non-cash stock-based compensation expense, fair value adjustments to strategic investments and marketable securities, transaction costs related to acquisitions and strategic investments, and other unusual, non-recurring pre-tax items that are not considered representative of our underlying operating performance (identified and listed below in the reconciliation).
•Adjusted EBITDA margin (most comparable GAAP measure: net income margin) – Adjusted EBITDA as a percentage of net sales.
•Adjusted gross margin (most comparable GAAP measure: gross margin) – Gross margin before noncash stock-based compensation expense and amortization of acquired intangible assets.
•Non-GAAP net income (most comparable GAAP measure: net income) - Net income excluding the costs of non-cash stock-based compensation, gain/loss/write-down/disposal/abandonment of property, equipment and intangible assets; fair value adjustments to strategic investments and marketable


securities; transaction costs related to acquisitions and strategic investments; costs related to antitrust litigation and other unusual, non-recurring pre-tax items that are not considered representative of our underlying operating performance (listed below). The Company tax-effects non-GAAP adjustments using the blended statutory federal and state tax rates for each period presented.
•Non-GAAP diluted earnings per share (most comparable GAAP measure: earnings per share) - Measure of Company's Non-GAAP Net Income divided by the weighted average number of diluted common shares outstanding during the period presented.
•Free cash flow (most comparable GAAP measure: cash flow from operating activities) - Cash flows provided by operating activities minus purchases of property and equipment and intangible assets.
•Adjusted free cash flow (most comparable GAAP measure: cash flow from operating activities) - Cash flows provided by operating activities minus purchases of property and equipment and intangible assets, excluding the net impact of investments in our new Scottsdale, Arizona campus and bond premium amortization.
◦We believe that free cash flow and adjusted free cash flow excluding the impact of bond premium amortization and net campus investment are non-GAAP measures that are useful to investors and management to evaluate the Company’s ability to generate cash. These non-GAAP measures can also be used to evaluate the Company’s ability to generate cash flow from operations and the impact that this cash flow has on the Company’s liquidity.
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:
•these non-GAAP financial measures are limited in their usefulness and should be considered only as a supplement to the Company's GAAP financial measures;
•these non-GAAP financial measures should not be considered in isolation from, or as a substitute for, the Company's GAAP financial measures;
•these non-GAAP financial measures should not be considered to be superior to the Company's GAAP financial measures; and
•these non-GAAP financial measures were not prepared in accordance with GAAP or under a comprehensive set of rules or principles proposed by a third party.
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 is a technology leader in global public safety. Our moonshot goal is to cut gun-related deaths between police and the public by 50% before 2033. Axon is building the public safety operating system of the future by integrating a suite of hardware devices and cloud software solutions that lead modern policing. Axon’s suite includes TASER energy devices, body cameras, in-car cameras, cloud-hosted digital evidence management solutions, productivity software and real-time operations capabilities. Axon’s growing global customer base includes first responders across international, federal, state and local law enforcement, fire, corrections and emergency medical services, as well as the justice sector, enterprises and consumers.
Non-Axon trademarks are property of their respective owners.


Axon, Axon Aid, Axon Air, Axon Body, Axon Evidence, Axon Fleet, Draft One, 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; the impact of pending litigation; strategies and trends relating to subscription plan programs and revenues; statements related to recently completed acquisitions; our anticipation that contracts with governmental customers will be fulfilled; 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 2024 revenue, 2024 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, 2023 and our Quarterly Report on Form 10-Q for the quarter ended September 30, 2024. 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; and counter-party 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. Our Quarterly Report on Form 10-Q for the quarter ended September 30 2024, which we expect to be available on November 8, 2024, lists various important factors that could cause actual results to differ materially from expected and historical results. 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 in Part II, Item 1A under the heading “Risk Factors” in our Quarterly Reports on Form 10‑Q, and investors should refer to them. You should understand that it is not possible to predict or identify all such factors.


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 web site at www.sec.gov.
Additional Disclaimer
The AI Era roadmap is provided for informational purposes only and does not form part of any contract or agreement. It is not a commitment to deliver any specific material, code, or functionality, and should not be relied upon in making purchasing decisions. The development, release, timing, and pricing of any features or functionality described for products remain at the sole discretion of Axon Enterprise, Inc., and are subject to change without notice.


AXON ENTERPRISE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
THREE MONTHS ENDEDNINE MONTHS ENDED
30 SEP 202430 JUN 202430 SEP 202330 SEP 202430 SEP 2023
Net sales from products$327,900$292,763$255,055$891,087$707,563
Net sales from services216,374210,473158,223616,294422,760
Net sales544,274503,236413,2781,507,3811,130,323
Cost of product sales156,167142,627114,613450,954323,808
Cost of service sales57,36054,45342,009160,896115,054
Cost of sales213,527197,080156,622611,850438,862
Gross margin330,747306,156256,656895,531691,461
Operating expenses:
Sales, general and administrative192,189170,964122,357514,228357,611
Research and development114,477101,43476,880307,008219,747
Total operating expenses306,666272,398199,237821,236577,358
Income from operations24,08133,75857,41974,295114,103
Interest Income, net10,9789,78210,45831,13429,787
Other income (loss), net44,5107,9343,852191,510(42,569)
Income (loss) before provision for income taxes79,56951,47471,729296,939101,321
Provision for (benefit from) income taxes12,54410,00110,42055,089(17,401)
Net income$67,025$41,473$61,309$241,850$118,722
Net income per common and common equivalent shares:
Basic$0.89$0.55$0.82$3.20$1.61
Diluted$0.86$0.53$0.81$3.12$1.58
Weighted average number of common and common equivalent shares outstanding:
Basic75,69775,51174,82675,54373,904
Diluted78,08077,55075,95277,61475,212


AXON ENTERPRISE, INC.
SEGMENT REPORTING
(in thousands)
THREE MONTHS ENDEDTHREE MONTHS ENDED
THREE MONTHS ENDED
30 SEP 202430 JUN 202430 SEP 2023
Software
and
Sensors		TASERTotalSoftware
and
Sensors		TASERTotalSoftware
and
Sensors		TASERTotal
Net sales from products (1)
$120,026 $207,874 $327,900 $110,020 $182,743 $292,763 $101,680 $153,375 $255,055 
Net sales from services (2)
202,514 13,860 216,374 196,499 13,974 210,473 149,028 9,195 158,223 
Net sales322,540 221,734 544,274 306,519 196,717 503,236 250,708 162,570 413,278 
Cost of product sales70,382 85,785 156,167 66,175 76,452 142,627 54,867 59,746 114,613 
Cost of service sales56,191 1,169 57,360 52,955 1,498 54,453 40,757 1,252 42,010 
Cost of sales126,573 86,954 213,527 119,130 77,950 197,080 95,624 60,998 156,622 
Gross margin$195,967 $134,780 $330,747 $187,389 $118,767 $306,156 $155,084 $101,572 $256,656 
Gross margin %60.8 %60.8 %60.8 %61.1 %60.4 %60.8 %61.9 %62.5 %62.1 %
Adjusted gross margin63.3 %63.0 %63.2 %63.3 %62.9 %63.1 %62.7 %62.8 %62.7 %
____________________________________________________________________________________
(1)Software and Sensors “products” revenue consists of sensors, including body worn cameras, Axon Fleet cameras, other hardware sensors, warranties on sensors, and other products, and is sometimes referred to as Sensors and Other revenue.
(2)Software and Sensors “services” revenue comprises sales related to the Axon Cloud and Services, which includes Axon Evidence, cloud-based evidence management software revenue, other recurring cloud-hosted software revenue and related professional services, and is sometimes referred to as Axon Cloud and Services revenue.
NINE MONTHS ENDEDNINE MONTHS ENDED
30 SEP 202430 SEP 2023
Software
and
Sensors		TASERTotalSoftware
and
Sensors		TASERTotal
Net sales from products (1)
$333,943$557,144$891,087$281,191$426,372$707,563
Net sales from services (2)
575,99740,297616,294396,96525,795422,760
Net sales909,940597,4411,507,381678,156452,1671,130,323
Cost of product sales201,733249,221450,954153,511170,297323,808
Cost of service sales157,1563,740160,896112,5382,516115,054
Cost of sales358,889252,961611,850266,049172,813438,862
Gross margin$551,051$344,480$895,531$412,107$279,354$691,461
Gross margin %60.6 %57.7 %59.4 %60.8 %61.8 %61.2 %
Adjusted gross margin63.5 %62.6 %63.2 %61.6 %62.1 %61.8 %
____________________________________________________________________________________
(1)Software and Sensors “products” revenue consists of sensors, including body worn cameras, Axon Fleet cameras, other hardware sensors, warranties on sensors, and other products, and is sometimes referred to as Sensors and Other revenue.
(2)Software and Sensors “services” revenue comprises sales related to the Axon Cloud and Services, which includes Axon Evidence, cloud-based evidence management software revenue, other recurring cloud-hosted software revenue and related professional services, and is sometimes referred to as Axon Cloud and Services revenue.


AXON ENTERPRISE, INC.
SALES BY PRODUCT AND SERVICE
(in thousands)
THREE MONTHS ENDED
30 SEP 202430 JUN 202430 SEP 2023
Software and Sensors segment:
Axon Body Cameras and Accessories$70,36312.9 %$59,02411.7 %$52,48812.7 %
Axon Fleet Systems23,2394.3 27,0835.4 27,3366.6 
Axon Evidence and Cloud Services203,48137.4 191,23738.0 151,51836.7 
Extended Warranties17,3063.2 15,4053.1 14,0463.4 
Other (1)
8,1511.4 13,7702.7 5,3201.3 
Total Software and Sensors segment322,54059.2 306,51960.9 250,70860.7 
TASER segment:
TASER Devices (Professional)130,51524.0 104,62420.8 86,71821.0 
Cartridges60,17911.1 65,41513.0 54,27913.1 
Axon Evidence and Cloud Services13,8612.5 13,9742.8 8,9752.1 
Extended Warranties9,7291.8 8,9081.8 8,0782.0 
Other (2)
7,4501.4 3,7960.7 4,5201.1 
Total TASER segment221,73440.8 196,71739.1 162,57039.3 
Total net sales$544,274100.0 %$503,236100.0 %$413,278100.0 %
____________________________________________________________________________________
(1)Software and Sensors segment “Other” includes revenue from items including Signal Sidearm, Interview Room, Axon Air and other sensors and equipment.
(2)TASER segment “Other” includes smaller categories, such as VR hardware, weapons training revenue such as revenue associated with our Master Instructor School, and TASER consumer device sales.
NINE MONTHS ENDED
30 SEP 202430 SEP 2023
Software and Sensors segment:
Axon Body Cameras and Accessories$180,59212.0 %$124,06611.0 %
Axon Fleet Systems79,6205.3 99,0158.8 
Axon Evidence and Cloud Services570,22237.8 401,28135.5 
Extended Warranties48,6513.2 40,1943.6 
Other (1)
30,8552.0 13,600 1.1 
Total Software and Sensors segment909,94060.3 678,15660.0 
TASER segment:
TASER Devices (Professional)333,81522.1 239,16521.2 
Cartridges181,79212.1 149,50413.2 
Axon Evidence and Cloud Services40,2972.7 25,5752.3 
Extended Warranties27,1641.8 23,4632.1 
Other (2)
14,3731.0 14,4601.2 
Total TASER segment597,44139.7 452,16740.0 
Total net sales$1,507,381100.0 %$1,130,323100.0 %
____________________________________________________________________________________
(1)Software and Sensors segment “Other” includes revenue from items including Signal Sidearm, Interview Room, Axon Air and other sensors and equipment.
(2)TASER segment “Other” includes smaller categories, such as VR hardware, weapons training revenue such as revenue associated with our Master Instructor School, and TASER consumer device sales.


AXON ENTERPRISE, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES
(in thousands)
THREE MONTHS ENDEDNINE MONTHS ENDED
30 SEP 202430 JUN 202430 SEP 202330 SEP 202430 SEP 2023
EBITDA and Adjusted EBITDA:
Net income$67,025$41,473$61,309$241,850$118,722
Depreciation and amortization14,76213,0008,41839,32622,587
Interest expense1,6461,8711,7625,2735,223
Investment interest income(12,624)(11,653)(12,220)(36,407)(35,010)
Provision for (benefit from) income taxes12,54410,00110,42055,089(17,401)
EBITDA$83,353$54,692$69,689$305,131$94,121
Adjustments:
Stock-based compensation expense$101,780$74,821$29,987$251,716$96,228
Unrealized (gain) loss on strategic investments and marketable securities, net(44,459)(7,967)(4,036)(149,845)42,306
Gain on remeasurement of previously held minority interest, net—(21)—(42,313)—
Transaction costs related to strategic investments and acquisitions2,6524,13649513,1451,793
Loss on disposal, abandonment, and impairment of property, equipment and intangible assets, net——137—317
Insurance recoveries——(2,615)—(3,404)
Costs related to antitrust litigation——7122472
Payroll taxes related to XSPP vesting and CEO Award option exercises1,727—2011,7278,961
Adjusted EBITDA$145,053$125,661$93,929$379,785$240,394
Net income as a percentage of net sales12.3 %8.2 %14.8 %16.0 %10.5 %
Adjusted EBITDA as a percentage of net sales26.7 %25.0 %22.7 %25.2 %21.3 %
Stock-based compensation expense:
Cost of product and service sales$10,123$8,517$1,687$48,235$4,685
Sales, general and administrative55,24838,63312,886117,03643,232
Research and development36,40927,67115,41486,44548,311
Total$101,780$74,821$29,987$251,716$96,228


AXON ENTERPRISE, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES - continued
(in thousands, except per share amounts)
THREE MONTHS ENDEDNINE MONTHS ENDED
30 SEP 202430 JUN 202430 SEP 202330 SEP 202430 SEP 2023
Non-GAAP net income:
GAAP net income$67,025$41,473$61,309$241,850$118,722
Non-GAAP adjustments:
Stock-based compensation expense101,780$74,82129,987251,71696,228
Unrealized (gain) loss on strategic investments and marketable securities, net(44,459)(7,967)(4,036)(149,845)42,306 
Gain on remeasurement of previously held minority interest, net— (21)— (42,313)— 
Transaction costs related to strategic investments and acquisitions2,6524,13649513,1451,793
Loss on disposal, abandonment, and impairment of property, equipment and intangible assets, net——137—317
Insurance recoveries——(2,615)—(3,404)
Costs related to antitrust litigation——7122472
Payroll taxes related to XSPP vesting and CEO Award option exercises1,727—2011,7278,961
Income tax effects(15,273)(17,531)(6,168)(18,513)(37,219)
Non-GAAP net income$113,452$94,911$79,381$297,991$227,776
Diluted income per common share
GAAP$0.86$0.53$0.81$3.12$1.58
Non-GAAP$1.45$1.22$1.05$3.84$3.03
Weighted average number of diluted common and common equivalent shares outstanding (in thousands)78,08077,55075,95277,61475,212


AXON ENTERPRISE, INC.
RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES - continued
(in thousands)
THREE MONTHS ENDEDNINE MONTHS ENDED
30 SEP 202430 JUN 202430 SEP 202330 SEP 202430 SEP 2023
Net sales$544,274$503,236$413,278$1,507,381$1,130,323
Cost of sales213,527197,080156,622611,850438,862
Gross margin330,747306,156256,656895,531691,461
Stock-based compensation expense10,1238,5171,68748,2354,685
Amortization of acquired intangible assets3,0202,9899558,2982,189
Adjusted gross margin$343,890$317,662$259,298$952,064$698,335
Gross margin60.8 %60.8 %62.1 %59.4 %61.2 %
Adjusted gross margin63.2 %63.1 %62.7 %63.2 %61.8 %
Software and Sensors
THREE MONTHS ENDED
30 SEP 202430 JUN 202430 SEP 2023
Axon Cloud
& Services		Sensors
& Other		TotalAxon Cloud
& Services		Sensors
& Other		TotalAxon Cloud
& Services		Sensors
& Other		Total
Net sales$202,514 $120,026 $322,540 $196,499 $110,019 $306,518 $149,028 $101,680 $250,708 
Cost of sales56,191 70,382 126,573 52,955 66,175 119,130 40,758 54,866 95,624 
Gross margin146,323 49,644 195,967 143,544 43,844 187,388 108,270 46,814 155,084 
Stock-based compensation expense3,270 2,045 5,316 2,485 1,057 3,542 951 157 1,108 
Amortization of acquired intangible assets2,638 338 2,976 2,638 352 2,990 617 338 955 
Adjusted gross margin$152,231 $52,027 $204,258 $148,667 $45,253 $193,920 $109,838 $47,309 $157,147 
Gross margin72.3 %41.4 %60.8 %73.1 %39.9 %61.1 %72.7 %46.0 %61.9 %
Adjusted gross margin75.2 %43.3 %63.3 %75.7 %41.1 %63.3 %73.7 %46.5 %62.7 %
NINE MONTHS ENDED
30 SEP 202430 SEP 2023
Axon Cloud
& Services		Sensors
& Other		TotalAxon Cloud
& Services		Sensors
& Other		Total
Net sales$575,996$333,944$909,940$396,965$281,191$678,156
Cost of sales157,155201,732358,887112,538153,511266,049
Gross margin418,841132,212551,053284,427127,680412,107
Stock-based compensation expense7,25811,41318,6712,6944703,164
Amortization of acquired intangible assets7,2401,0288,2681,8503382,188
Adjusted gross margin$433,339$144,653$577,992$288,971$128,488$417,459
Gross margin72.7 %39.6 %60.6 %71.7 %45.4 %60.8 %
Adjusted gross margin75.2 %43.3 %63.5 %72.8 %45.7 %61.6 %


TASER
THREE MONTHS ENDEDNINE MONTHS ENDED
30 SEP 202430 JUN 202430 SEP 202330 SEP 202430 SEP 2023
Net sales$221,734$196,717$162,570$597,441$452,167
Cost of sales86,95477,95060,998252,963172,814
Gross margin$134,780$118,767$101,572$344,478$279,353
Stock-based compensation expense4,8084,97557929,5641,521
Amortization of acquired intangible assets44——301
Adjusted gross margin$139,632$123,742$102,151$374,072$280,875
Gross margin60.8 %60.4 %62.5 %57.7 %61.8 %
Adjusted gross margin63.0 %62.9 %62.8 %62.6 %62.1 %


AXON ENTERPRISE, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
30 SEP 202431 DEC 2023
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents$695,144$598,545
Marketable securities151,56077,940
Short-term investments311,570644,054
Accounts and notes receivable, net512,662412,961
Contract assets, net372,923287,232
Inventory272,295269,855
Prepaid expenses and other current assets117,592103,055
Total current assets2,433,7462,393,642
Property and equipment, net235,881200,533
Deferred tax assets, net244,317227,784
Intangible assets, net81,74819,539
Goodwill308,47257,945
Long-term notes receivable, net 2,8982,588
Long-term contract assets, net119,97384,382
Strategic investments387,905231,730
Other long-term assets190,718191,031
Total assets$4,005,658$3,409,174
LIABILITIES AND STOCKHOLDERS’ EQUITY  
Current Liabilities:  
Accounts payable$75,590$65,852
Accrued liabilities209,691193,550
Current portion of deferred revenue505,008470,415
Customer deposits22,23421,935
Other current liabilities10,7049,787
Total current liabilities823,227761,539
Deferred revenue, net of current portion305,414270,901
Liability for unrecognized tax benefits20,34218,049
Long-term deferred compensation15,60511,342
Long-term lease liabilities41,22333,550
Convertible notes, net679,483677,113
Other long-term liabilities20,52820,915
Total liabilities1,905,8221,793,409
Stockholders’ Equity:  
Preferred stock——
Common stock11
Additional paid-in capital1,588,0721,347,410
Treasury stock(155,947)(155,947)
Retained earnings676,830434,980
Accumulated other comprehensive loss(9,120)(10,679)
Total stockholders’ equity2,099,8361,615,765
Total liabilities and stockholders’ equity$4,005,658$3,409,174


AXON ENTERPRISE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
THREE MONTHS ENDEDNINE MONTHS ENDED
30 SEP 202430 JUN 202430 SEP 202330 SEP 202430 SEP 2023
Cash flows from operating activities:    
Net income$67,025 $41,473 $61,309 $241,850 $118,722 
Adjustments to reconcile net income to net cash provided by operating activities:
Stock-based compensation101,780 74,821 29,987 251,716 96,228 
(Gain) loss on strategic investments and marketable securities, net(44,459)(7,988)(4,036)(192,158)42,306 
Depreciation and amortization13,003 10,386 5,180 30,745 12,844 
Provision for bad debts and inventory2,740 9,504 1,528 13,824 5,083 
Deferred income taxes(19,306)(28,425)(15,313)(27,061)(52,955)
Other noncash items6,819 3,780 1,277 13,183 8,238 
Change in assets and liabilities:
Receivables and contract assets(149,667)(20,355)(77,561)(226,759)(186,614)
Inventory5,330 (14,885)(16,961)(11,629)(65,096)
Deferred revenue65,219 (27,620)38,020 56,720 103,386 
Accounts payable, accrued and other liabilities53,775 42,308 49,255 10,243 13,367 
Other, net(10,938)(236)(9,793)(2,528)(46,284)
Net cash provided by operating activities91,321 82,763 62,892 158,146 49,225 
Cash flows from investing activities:
Purchases of investments(124,425)(240,404)(187,719)(615,414)(444,685)
Business acquisition, net of cash acquired— (25)(64)(237,796)(21,090)
Proceeds from call, maturity, and sale of investments193,968 333,886 80,132 858,326 461,214 
Purchases of property and equipment(26,472)(11,318)(13,974)(53,984)(35,624)
Other, net— — (328)34 (512)
Net cash provided by (used in) investing activities43,071 82,139 (121,953)(48,834)(40,697)
Cash flows from financing activities:
Net proceeds from equity offering— — (101)— 94,705 
Proceeds from options exercised9,717 — — 9,717 54,503 
Income and payroll tax payments for net-settled stock awards(17,430)(2,185)(7,021)(22,325)(104,076)
Other, net— — — — — 
Net cash (used in) provided by financing activities(7,713)(2,185)(7,122)(12,608)45,132 
Effect of exchange rate changes on cash and cash equivalents2,161 (108)(2,007)75 (1,201)
Net increase (decrease) in cash and cash equivalents and restricted cash128,840 162,609 (68,190)96,779 52,459 
Cash and cash equivalents and restricted cash, beginning of period568,609 406,000 476,201 600,670 355,552 
Cash and cash equivalents and restricted cash, end of period$697,449 $568,609 $408,011 $697,449 $408,011 


AXON ENTERPRISE, INC.
SELECTED CASH FLOW INFORMATION
(in thousands)
THREE MONTHS ENDEDNINE MONTHS ENDED
30 SEP 202430 JUN 202430 SEP 202330 SEP 202430 SEP 2023
Net cash provided by operating activities$91,321 $82,763 $62,892 $158,146 $49,225 
Purchases of property and equipment(26,472)(11,318)(13,974)(53,984)(35,624)
Purchases of intangible assets——(392)—(579)
Free cash flow, a non-GAAP measure$64,849$71,445$48,526$104,162$13,022
Bond premium amortization2,5663,3974,03510,95312,071
Net campus investment8824587612,3732,063
Adjusted free cash flow, a non-GAAP measure$68,297$75,300$53,322$117,488$27,156
AXON ENTERPRISE, INC.
SUPPLEMENTAL TABLES
(in thousands)
30 SEP 202431 DEC 2023
(Unaudited)
Cash and cash equivalents$695,144 $598,545 
Short-term investments311,570 644,054 
Cash and cash equivalents and investments, net1,006,7141,242,599
Convertible notes, principal amount(690,000)(690,000)
Total cash and cash equivalents and investments, net of convertible notes$316,714$552,599

v3.24.3
Document and Entity Information Document
Nov. 07, 2024
Cover [Abstract]  
Document Type 8-K
Document Period End Date Nov. 07, 2024
Entity Registrant Name Axon Enterprise, Inc.
Entity Central Index Key 0001069183
Amendment Flag false
Entity Incorporation, State or Country Code DE
Entity File Number 001-16391
Entity Tax Identification Number 86-0741227
Entity Address, Address Line One 17800 N. 85th St.
Entity Address, City or Town Scottsdale
Entity Address, State or Province AZ
Entity Address, Postal Zip Code 85255
City Area Code 480
Local Phone Number 991-0797
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, $0.00001 Par Value
Trading Symbol AXON
Security Exchange Name NASDAQ
Entity Emerging Growth Company false
Axon Enterprise (NASDAQ:AXON)
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