AXON

MKT CAP $32.2BP/E 164.7DIV YIELD —FCF YIELD 0.41%REV TTM $3.2B +34.6%NET INCOME $199.3M −38.9%NET DEBT $1.1B52W 345.94 – 759.44SEC XBRL · TTM TO Invalid Date

How AXON rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

of sentences unchanged

Added

675

new sentences

Dropped

913

sentences removed

Length

−16,433

words, now 21,317

New in FY2025

Intellectual Property We protect our intellectual property with U.S. and foreign patents, U.S. and foreign trademark registrations, and U.S. copyright registrations.
Our patents and pending patent applications relate to technology used by us in connection with our products.
We also rely on international treaties, organizations and laws to protect our intellectual property.
As of December 31, 2025, we hold over 370 U.S. 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.
We continuously assess whether and where to seek formal protection for particular technologies based on such factors as the significance to our operations and our competitors’ operations in particular regions, our strategies in different countries, and the degree to which intellectual property laws exist and are meaningfully enforced in different jurisdictions.
We have the exclusive rights to many Internet domain names, primarily including “Axon.com,” “Evidence.com,” “TASER.com,” and “911.com.” We also execute non-disclosure agreements with employees, consultants and key suppliers.
Competition Sensors — Connected Cameras and Digital Evidence Management Software: The body camera and in-car video/automatic license plate readers industry is highly competitive.
Our competition includes 10-8 Video Systems, 365Labs, Applied Concepts, Axis Communications, Coreforce, Digital Ally, Duress, Genetec, Getac, HALOS Body Cameras, Hikvision, Hytera, Insight LPR, IONODES, i-PRO, Kustom Signals, LensLock, Motorola Solutions, Tait Communications, Oracle, PatrolEyes, Pinnacle Response, Pro-Vision, Recoda, Reveal Media, Safe Fleet, Versaterm, Wireless CCTV, Wolfcom Enterprises, Wrap Technologies and Zepcam.
Our fixed automatic license plate recognition (“ALPR”) offerings, including Axon Outpost and Axon Lightpost, together with integrations enabled through our Works with Axon partnership program, compete with providers of fixed and semi-fixed ALPR cameras and associated analytics software used by public safety agencies and enterprise customers.
Our competition in this area includes Flock Safety, Genetec (AutoVu), Jenoptik, Motorola Solutions (including its Vigilant and fixed LPR solutions), Neology (including its PIPS Technology business), NDI Recognition Systems, PlateSmart Technologies, and Rekor Systems.
Table o f Contents The market for software solutions to improve public safety agency workflows is both highly fragmented and highly competitive.
Our cloud-based digital evidence management system, Axon Evidence, competes with both cloud-based platforms and on-premises based systems designed by third parties or developed internally by an agency's technology staff.
Our competition includes 365Labs, Coreforce, FileOnQ, FotoWare, Genetec, Guardify, i-PRO, Motorola Solutions, NiCE, Omnigo, OpenText Corporation, Oracle, Revir Technologies, Safe Fleet, Veritone, and Vidizmo.
Key competitive factors in these product categories include product performance and reliability; product features (including live-streaming, GPS tracking, pre-event buffering, real-time alerting and license plate recognition accuracy); battery life and power options; ease of deployment and integration with existing infrastructure; product quality and warranty; total cost of ownership; data security, privacy and information workflows; interoperability with other public safety systems; company reputation and financial strength; and customer satisfaction and relationships.
Productivity and Real-Time Operations Software — Records Management System (“RMS”) and Axon Fusus: The RMS vertical area is competitive and highly fragmented.
We have identified more than 50 software providers, including 365Labs, Beacon Software Solutions, Caliber Public Safety (parent, Harris Computer Systems), Central Square Technologies, CivicEye, Coreforce, Core Technology Corporation, CSI Technology Group, EForce Software, Executive Information Services, Hexagon, LawSoft, Mark43, Motorola Solutions, Niche Technology, Oracle, Saab, SmartCop, Sopra Steria, Southern Software, Sun Ridge Systems, Tyler Technologies and Versaterm.
In addition, not all law enforcement agencies use software for report writing — some still use paper.
We believe our network of camera sensors and digital evidence management platform give us a strategic advantage in these product categories.
Our Real Time Crime Center Platform, Axon Fusus, competes both with real-time operations platforms that ingest body camera video feeds, like Genetec's Citigraf, Motorola’s CommandCentral Aware, Coreforce’s Real Time Intelligence, Flock Safety’s FlockOS, Hitachi Vantara’s Visualization Platform, and MIDL Technology, as well as platforms that ingest video feeds exclusively from surveillance cameras, like Hexagon's Connect, Live Earth and Spatialitics's GeoShield.
Emergency Communications Software — 911 Data, AI and Call Handling Platforms : Our emergency communications solutions are designed for public safety answering points (“PSAPs”) and emergency communications centers.
Today, these offerings primarily consist of cloud-based applications that operate alongside existing 911 call-handling systems and provide AI-powered triage, supplemental data and multimedia streaming capabilities.
These include real-time video and text from callers, enhanced device location information and AI-enabled transcription, translation, call summarization and post-call analytics, derived in part from technologies we acquired with Prepared.
These offerings compete with both over-the-top data and AI platforms that integrate with incumbent 911 infrastructure and with more fully integrated Next Generation 911 (“NG911”) platforms.
Furthermore, our acquisition of Carbyne, a provider of cloud-native emergency communications platforms that combine NG911 call-handling, location and multimedia capabilities with AI and rich data integrations, extends our offerings more deeply into the core call-handling layer of the NG911 workflow.
R efer to Note 20 in Part II, Item 8 of this Annual Report on Form 10-K for additional details.
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.
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.
Draft One: The AI-enabled report narrative drafting space is relatively new but fast growing.
We have identified several providers in this space, including Abel, Central Square Technologies’ Centerline AI, Clipr.ai, GovWorx, Karda Analytics, Mark43’s ReportAI, Motorola Solutions, Policereports.ai, and Truleo.
Table o f Contents VR De-Escalation Training for Law Enforcement, Corrections and Private Security: Our VR Training platform competes with several other companies in the space who offer simulation scenarios, including simulated training on the use of both lethal and less lethal alternatives.
Our competition in this space includes Adaptive VR, Apex Officer, Hologate, InVeris Training Solutions, Laser Shot, MILO, OperatorXR, Street Smarts VR, Ti Training Corp, V-Armed, VirTra and Wrap Technologies, among others.
Key competitive factors in this product category include scale of content library, integration to additional sensors and devices, ease of use, visual fidelity and realism, quality of immersion experience (enhanced by capabilities such as eye tracking and speech recognition) and portability.
Axon Air: Our end-to-end drone management software platform competes with several companies in the space who offer drone programs and flight management software solutions.
Our competition in this space includes Auterion Ltd., BRINC Drones’ LiveOps, Flock Safety’s Aerodome, Motorola Solutions’ CAPE, Paladin Drones’ Watchtower, Versaterm’s DroneSense, and Votix, LLC.
Key competitive factors in this product category include integration and compatibility with various drone hardware providers and other technology systems used by first responders (e.g., digital evidence management), drone program management and real-time situational awareness capabilities, intuitiveness of the user interface, the level of training and customer support provided (particularly for the drone-as-first-responder use case), the customization and flexibility allowed by the platform to meet specific operational needs and requirements of different customers (e.g., customizable flight restrictions) and the autonomy capabilities provided by the platform (e.g., creation of autonomous missions).
Our indoor tactical drone hardware platform, Sky-Hero, competes with several companies in the space, including BRINC, Cleo Robotics, Darkhive, DJI, Indoor Robotics, XTEND, FLIR and Flock Safety (through its acquisition of Uniform Sierra Aerospace).
Key competitive factors in this product category include variety and weight limits of compatible payloads, battery life and associated flight range, maneuverability and size, autonomy and onboard intelligence (including ability to navigate in GPS denied environments), sensor and imaging technology, durability and robustness of the drone, cost and maintenance required, reliability and security of communication and control systems, the simplicity of the drone piloting user interface and the training required to operate the drones.
Dedrone: The counter drone space is fast growing and very fragmented.
Within it, Dedrone competes with Advanced Protection Systems, Anduril, ApolloShield, ARTSys360, Aselsan, Belgian Advanced Technology Systems, Big Bang Boom Solutions, Bligther Surveillance Systems, BlueHalo, BSS Holland, CACI, Cerbair, Chess Dynamics, DEFSYS, Department 13, D-Fend, DroneDefence, Droneshield, Dynamite Global Strategies, DZYNE Technologies, EDGE, EdgeSource, Elbit Systems, ELT Group, ESG, Fortem Technologies, FN Herstal, General Atomics, Gradiant, Guardion, Havelsan, Hensoldt, Hertz New Technologies, IEC Infrared Systems, Indra, L3 Harris, Leidos, Leonardo DRS, LiveLink Aerospace, Lockheed Martin, Marduk, MBDA, MC2 Technologies, Meteksan Savunma, Metis, MSI Defense Systems, MyDefence, Northrop Grumman, NSO Group, Openworks, QinetiQ, Raytheon, Regulus, Rheinmetall, SAAB, SAIC, SAMI Advanced Electronics, Securiton, Sensofusion, Sentrycs, Sentry View Systems, Skycope, Skylock, Skysafe, SNC, Sopra Steria, SRC, Teledyne FLIR, Terma, Thales, TRD Systems, UAVOS, Unifly, Vector Solutions, Vigilant Drone Defense, Vorpal, Whitefox Defense, and Zen Technologies, among others.
Key competitive factors in this product category include the breadth and accuracy of detection sensors (e.g., pan-tilt-zoom cameras, radar, and acoustic) and multi-sensor fusion approaches, the chosen methodology for radio frequency-based detection (e.g., radio frequency signature matching or demodulation), integration of detection platforms with robust mitigation solutions (e.g., jammers, cyber-takeover, kinetic and high-energy), the capacity to improve detection through scale and continuous exposure to diverse drone makes and models in areas of high drone activity (e.g., urban centers, active war zones) and the seamless interoperability with existing security and defense ecosystems.

and 635 more.

Gone since FY2024

Item 1A - Risk Factors” and “Part II, Item 8 - Financial Statements and Supplementary Data.” The various sections of our MD&A contain a number of forward-looking statements, all of which are based on our current expectations and could be affected by the uncertainties and risk factors described throughout this filing.
The tables in the MD&A sections below are derived from exact numbers and may have immaterial rounding differences.
Our MD&A discusses our results of operations for the year ended December 31, 2024 as compared to the year ended December 31, 2023.
For a discussion and analysis of the year ended December 31, 2023 as compared to the year ended December 31, 2022, refer to Management’s Discussion and Analysis of Financial Condition and Results of Operations included in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2023, filed with the SEC on February 27, 2024.
Overview Axon is building the public safety operating system of the future by integrating a suite of hardware devices and cloud software solutions that not only revolutionize modern policing but also cater to federal agencies, corrections, justice and enterprise-level security and safety needs.
Axon’s suite includes cloud-hosted digital evidence management solutions, productivity and real-time operations software, body cameras, in-car cameras, TASER energy devices, robotic security and training solutions.
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, commercial enterprises, and consumers.
Our revenues for the year ended December 31, 2024 were $2.1 billion, an increase of $521.8 million, or 33.4%, from the comparable period in the prior year.
We had income from operations of $58.5 million, compared to $156.9 million for the same period in the prior year.
Gross margin dollars increased $285.9 million but decreased as a percentage of revenue to 59.6% from 61.2% compared to the same period in the prior year.
The decrease was primarily driven by higher stock-based compensation expense and amortization of acquired intangibles.
Excluding the impacts of stock-based compensation expense and intangibles amortization in costs of goods sold, adjusted gross margin increased to 63.2% for the year ended December 31, 2024, compared to 61.8% for the same period in the prior year, primarily due to an increased mix of high-margin Axon Cloud & Services revenue and investments in TASER automation and cost-reduction initiatives.
Operating expenses increased $384.2 million, reflecting an increase in salaries, benefits, and stock-based compensation expenses, as well as an increase in professional and consulting expenses related to transaction costs.
For the year ended December 31, 2024, we recorded net income of $377.0 million which included net realized and unrealized gains on fair value adjustments of strategic investments of $162.9 million, a net unrealized gain on marketable securities of $120.3 million, and interest income, net of $36.6 million.
Net income of $175.8 million for the comparable period in the prior year reflected net unrealized losses of $80.5 million related to impairment and observable price changes for our existing investments and related warrants, interest income, net of $42.1 million, and a net unrealized gain of $38.7 million on marketable securities.
Certain prior period amounts previously reported on our consolidated financial statements have been revised to correct for immaterial errors, as described in Note 1, Note 23 and Note 24 included in Part II, Item 8 of this Annual Report on Form 10-K.
Additionally, in Q1 2025 we approved a plan to realign our business to better reflect our continued growth and expansion of product, software and service offerings.
Previously reported within two reportable segments, TASER and Software and Sensors, we will prospectively reorganize our business in a manner that provides increased transparency and distinction between our hardware and software and services components.
As a result of the reorganization, effective with the first quarter of fiscal year 2025, our financial results will be reported in two reportable segments, Connected Devices and Software & Services, which our CODM will use to regularly review information, allocate resources and assess performance.
Connected Devices will include hardware products, such as CEDs, body cameras, and drones.
Software & Services will include products that integrate with our suite of connected devices, such as Axon Evidence, RMS and other cloud services.
We are currently assessing the impact of this change on our financial reporting and related segment disclosures.
We intend to recast prior period segment information to conform to the new reporting structure, as necessary, to ensure consistency and comparability across reporting periods.
Results of Operations The following table presents data from our consolidated statements of operations as well as the percentage relationship to total net sales of items included in our statements of operations (dollars in thousands): Year Ended December 31, 2024 2023 Net sales from products $ 1,221,292 58.6 % $ 964,002 61.8 % Net sales from services 861,234 41.4 596,697 38.2 Net sales 2,082,526 100.0 1,560,699 100.0 Cost of product sales 618,136 29.7 447,708 28.7 Cost of service sales 223,010 10.7 157,538 10.1 Cost of sales 841,146 40.4 605,246 38.8 Gross margin 1,241,380 59.6 955,453 61.2 Selling, general and administrative 741,247 35.6 494,884 31.7 Research and development 441,593 21.2 303,719 19.5 Total operating expenses 1,182,840 56.8 798,603 51.2 Income from operations 58,540 2.8 156,850 10.0 Interest income, net 36,595 1.8 42,112 2.7 Other income (loss), net 286,369 13.8 (41,901) (2.7) Income before provision for income taxes 381,504 18.3 157,061 10.1 Provision for (benefit from) income taxes 4,470 0.2 (18,722) (1.2) Net income $ 377,034 18.1 % $ 175,783 11.3 % The following table presents our revenues disaggregated by geography (dollars in thousands): Year Ended December 31, 2024 2023 United States $ 1,775,194 85 % $ 1,335,516 86 % Other countries 307,332 15 225,183 14 Total $ 2,082,526 100 % $ 1,560,699 100 % International revenue increased as a percentage of revenue compared to the prior year, primarily driven by increased sales in our Americas region (i.e., Central America, South America, and Canada).
Net Sales Net sales by product line were as follows (dollars in thousands): Year Ended December 31, Dollar Change Percent Change 2024 2023 TASER segment: TASER Devices (Professional) $ 453,055 21.8 % $ 333,923 21.4 % $ 119,132 35.7 % Cartridges 246,766 11.8 193,285 12.4 53,481 27.7 Axon Evidence and Cloud Services 54,913 2.6 35,680 2.3 19,233 53.9 Extended Warranties 37,515 1.8 31,689 2.0 5,826 18.4 Other (1) 26,424 1.3 18,933 1.2 7,491 39.6 TASER segment 818,673 39.3 613,510 39.3 205,163 33.4 Software and Sensors segment: Axon Evidence and Cloud Services 808,256 38.8 566,003 36.3 242,253 42.8 Axon Body Cameras and Accessories 246,855 11.9 183,023 11.7 63,832 34.9 Axon Fleet Systems 104,890 5.0 121,842 7.8 (16,952) (13.9) Extended Warranties 66,141 3.2 55,154 3.5 10,987 19.9 Other (2) 37,711 1.8 21,167 1.4 16,544 78.2 Software and Sensors segment 1,263,853 60.7 947,189 60.7 316,664 33.4 Total net sales $ 2,082,526 100.0 % $ 1,560,699 100.0 % $ 521,827 33.4 % (1) 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.
(2) Software and Sensors segment “Other” includes revenue from items including Signal Sidearm, Interview Room, Axon Air, partners' contra-revenue and other sensors and equipment.
Net sales for the TASER segment for the year ended December 31, 2024 increased $205.2 million, or 33.4%, as compared to the prior year, primarily due to an increase of $119.1 million in TASER devices and an increase of $53.5 million in cartridge revenue.
The increase is primarily related to continued adoption of our newest device, TASER 10.
The increase in revenue from Axon Evidence and cloud services of $19.2 million was driven by an increase in the number of cloud-connected TASER devices in the field and software revenue tied to our VR solution.
An increase in TASER devices in the field drove the $5.8 million increase in extended warranties, as most of those devices are sold with extended warranties.
The $7.5 million increase in "Other" revenue is primarily driven by increased VR hardware volume.
Net sales for the Software and Sensors segment for the year ended December 31, 2024 increased $316.7 million, or 33.4%, as compared to the prior year, as we continued to add users and associated devices to our network.
The increase in the aggregate number of users and growing adoption of our premium add-on features by existing customers drove the majority of the increase in Axon Evidence and cloud services revenue of $242.3 million.
Axon Body cameras and accessories revenue increased $63.8 million due to higher unit sales.
Partially offsetting the increase was a $17.0 million decrease in Axon Fleet systems revenue reflecting lower unit volumes on more normalized deployment timelines.
An increase in cameras and docks in the field drove the $11.0 million increase in extended warranties, as most of those devices are sold with extended warranties.
The $16.5 million increase in “Other” revenue was primarily driven by demand for other product offerings within the Software and Sensors segment.
Gross Margin As a percentage of net sales, gross margin for the TASER segment decreased to 58.6% from 60.6% for the years ended December 31, 2024 and 2023, respectively.
The decrease was primarily due to increased stock-based compensation expense.
Excluding the impacts of stock-based compensation expense, adjusted gross margin for the TASER segment is 62.9% for the year ended December 31, 2024, compared to 60.9% for the same period in 2023.

and 873 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

Watch AXON. Know when insiders buy.

One email the day a filing lands. Free.