AXON ENTERPRISE, INC. Annual Report, Year Ended Dec 31, 2025

Axon Enterprise, Inc. reported strong revenue growth in the fiscal year ending December 31, 2025, with net sales increasing by 33.5% to $2.8 billion. This growth was driven by robust performance in both the Connected Devices segment (up 29.1%) and the Software and Services segment (up 39.6%). Despite the top-line growth, the company experienced a loss from operations of $62.1 million in 2025, a decrease from the $58.5 million income from operations in the prior year. This shift was largely attributed to a significant increase in operating expenses, primarily due to higher headcount to support growth and increased stock-based compensation expenses. Financially, Axon bolstered its liquidity position, ending the year with $1.2 billion in cash and cash equivalents, a substantial increase driven by proceeds from debt and equity offerings. The company also completed several strategic acquisitions, including Prepared and Dedrone, further strengthening its product ecosystem. However, a material weakness in internal control over financial reporting related to revenue recognition was identified, though remediation efforts are underway. Investors should note the company's ongoing investment in research and development, which represents a significant portion of operating expenses, reflecting a commitment to innovation.