Axon completed another record year in pursuit of our mission to protect life. Revenue grew 33% year over year, marking our fourth consecutive year of annual growth above 30% as demand for our ecosystem continues to build. We delivered a full-year net income margin of 4.5% alongside Adjusted EBITDA margin of 25.5% and maintained a Rule of 40 metric above 55, even as we continued investing in our products and expanding our customer base. Together, we believe our 2025 results reflect disciplined execution of our strategy and are a strong foundation for our longer-term guidance.

Key operational milestones in 2025 are as follows:

• Delivered $2.8 billion in annual revenue, up 33% year over year

• Surpassed $1.3 billion in annual recurring revenue, up 35% year over year

• Generated annual bookings of $7.4 billion, up 46% year over year

• Reached total future contracted bookings of $14.4 billion, an increase of 43% year over year

• Achieved a full-year net income margin of 4.5% alongside a 25.5% Adjusted EBITDA margin

• Introduced major product expansions, including Axon Vehicle Intelligence, Axon Assistant, Axon Body Mini and Axon 911

Our momentum is accelerating as we enter 2026, supported by disciplined investment, strong product market fit and deep, trusted relationships with our customers. We expect 2026 revenue growth of 27% to 30% with an Adjusted EBITDA margin of 25.5%. Looking further ahead, we are establishing a new target for 2028 of approximately $6 billion in annual revenue and a 28% Adjusted EBITDA margin.

We recap our major product innovations, review our fourth quarter and full-year 2025 results, and outline our 2026 outlook and 2028 targets in more detail below.

2025 Product Innovation — Year In Review

Axon continues to make significant investments, both organically and through strategic acquisitions, to expand and strengthen our ecosystem and deliver differentiated technology solutions. Our approach is rooted in deep partnership with our customers, enabling us to understand the challenges they face every day and build solutions designed to address them. We are frequently first to market with new products, or we enter established categories when technology has not advanced to meet evolving customer needs. The impact of our disciplined innovation is reflected in our consistently strong net revenue retention, which reached 125% in the quarter, and is driven by our existing customers adopting new products. We believe our customer-focused, long-term approach positions Axon to deliver sustained growth and consistently achieve our financial targets.

Axon Ecosystem — Launched & Advancing

The AI Era

In 2025, we continued executing on our strategy with the AI Era Plan, embedding practical, high-impact artificial intelligence (AI) capabilities across our integrated hardware and software ecosystem. The AI Era Plan began with transcription and Draft One, which became foundational tools for reducing report-writing time and administrative burden. This year, we enhanced those capabilities through rolling improvements while bringing Brief One and Form One into broader availability and introducing Axon Assistant.

Together, these innovations represented first of their kind advancements for our customers and are part of consistent evolution we are committed to delivering as part of our AI strategy.

Axon's differentiation in AI is grounded in deep understanding of customer needs and our ability to innovate new solutions leveraging our expertise in building purpose-built sensors, devices and software that work seamlessly together. By designing hardware and cloud workflows in tandem, we are able to deliver AI functionality that is tightly integrated into real-world operations. From automated reporting and intelligent search to translation and contextual assistance, our AI tools are designed to improve speed, accuracy and decision-making in the moments that matter most.

Axon Assistant

Axon Assistant brought a voice-activated AI companion directly into Axon body cameras — embedding AI at the frontline to help users stay focused while accelerating access to critical information. Initial capabilities focus on high-impact everyday tasks, including real-time translation across 50+ languages and voice-enabled policy chat, which delivers reliable answers to policy questions with citations. Built from the ground up to be extensible, Axon Assistant provides a powerful foundation that will continue to expand with additional skills and automation over time. We plan to announce a growing list of transformative capabilities at Axon Week coming up in April and continuing to extend our leadership in AI over the coming years.

In its first year, Axon Assistant saw strong adoption, with approximately 500 customers now live on the platform, and early examples of its real-world impact are already beginning to surface. In September, only months after Axon Assistant with live translation became available, one Axon customer, Bernalillo County Sheriff's Office, relied on the tool to turn a high-risk traffic stop into a successful response.

Here's what they had to say after:

"Everyone talks about AI is coming — AI's here. My vision is, you're always using technology to supplement your personnel. And it's really just a force multiplier. [...] That Russian translation that we put out there — saying there's no language barrier — I think that answered questions for the world. Before, we didn't want AI in police work. Now people are asking for more of it, because they're seeing the advantages."— Sheriff John Allen, Bernalillo County Sheriff's Office

Axon Vehicle Intelligence

In 2025, we announced and shipped our entry into the fixed automatic license plate recognition (ALPR) segment in less than one year — supporting the expansion of our real-time operations platform with Axon Vehicle Intelligence. The solution brings license plate recognition, live streaming and real-time alerts into a unified, AI-powered Axon workflow. It goes beyond traditional ALPR with deeper vehicle descriptors such as make, color and visible damage — enabling more precise identification and broader situational awareness.

Along with the entry into fixed ALPR with Axon Vehicle Intelligence, we introduced new device form factors, including Axon Outpost and Axon Lightpost, and enhanced deployment flexibility through "Works With Axon," our certified third-party camera program — giving customers greater choice while maintaining seamless integration into Axon's broader ecosystem. Our emergence in this growing category has just begun. Key feature enhancements are expected to ship in the first half of 2026, with deployments expected to scale later this year and beyond.

As public dialogue around this technology continues to evolve, we are focused on building tools that protect life and reflect the responsibility our customers expect from us. Our approach is guided by our Responsible Innovation Framework, which we believe is a meaningful competitive differentiator, and has been built through decades of partnership with our public safety customers and the communities they protect. It is human centric by design and embeds responsible data management, robust usage controls and transparent governance directly into our products so agencies retain control and communities see technology used in ways that align with their expectations. We believe our thoughtful design and responsible deployment are critical differentiators that further position us as a trusted partner and leader in delivering innovation to the field — and customers are voting with their dollars. Key accounts are moving to Axon from competitors — and they're telling us it's because of our unwavering commitment to privacy, transparency, and integrity. That's not just good ethics — it's a competitive superpower.

Axon Ecosystem — Announced & Coming Soon

Axon Body Mini

Announced in 2025 and expected to begin shipping in mid-2026, Axon Body Mini expands our enterprise product suite with a compact, durable body-worn camera purpose-built for commercial environments. It brings Axon's ecosystem — including two-way voice, live streaming, automated alerts, MetaCoach and Axon Assistant — to industries such as retail, healthcare and logistics.

We believe this product marks an important development in our broader enterprise growth strategy, with the opportunity to become a leading connected, AI-powered endpoint behind future enterprise operations workflows. Alongside Fusus, Axon Evidence, counter-drone solutions and AI features, Axon Body Mini enables us to bring integrated safety, security and operational workflows to a wider range of organizations. Many of the challenges faced by enterprise customers — documentation, training, real-time awareness and coordination — closely mirror those in public safety, and our purpose-built platform is uniquely positioned to address them.

Axon 911

Axon 911 extends our ecosystem to the first moment a call for help is made — enabling earlier activation of data, intelligence and connected sensors within our network. By modernizing 911 call handling with AI-enabled communications, we can help agencies begin coordinating response with greater speed and clarity from the initial interaction. We see a major opportunity to drive better outcomes for our customers as we modernize and remove friction from legacy systems, supporting faster, more informed response with capabilities such as precise location, real-time transcription and translation, automated summaries and keyword alerts.

Our acquisitions of Prepared, which closed late last year, and Carbyne, which closed in the first quarter of 2026, are driving Axon's extension into this new product category and reflect our long-standing strategy of pairing deep organic investment with targeted acquisitions to accelerate innovation, attract exceptional talent and broaden our capabilities. Through our integrated product offerings and the AI Era Plan initiatives, we expect to begin delivering expanded 911 capabilities to customers this year. We have already shipped our first major integration connecting Axon 911 and Axon Fusus, advancing our vision of a seamless, AI-enabled response network.

"Here's my conviction: nobody should be more aggressive or more thoughtful on AI than Axon. If we get that balance right, we won't just be a vendor, we'll be the partner our customers can't imagine operating without. That's when the real flywheel kicks in: deeper relationships, expanded footprints, and increasingly mission-critical problems landing on our doorstep."— Rick Smith, Axon Founder and CEO

Q4 2025 Summary Results

Quarterly revenue of $797 million grew 39% year over year, exceeding our expectations, driven by premium software adoption, TASER 10, Axon Body 4 and counter-drone equipment.

Total company gross margin of 57.9% decreased 220 basis points year over year. Excluding non-GAAP adjustments, adjusted gross margin of 61.1% decreased 210 basis points year over year. The decrease in total company gross margin and adjusted gross margin is primarily due to global tariffs and increased Platform Solutions product mix within Connected Devices, partially offset by growth in Software & Services.

Operating loss of $50 million was primarily driven by increased headcount to support business growth and stock-based compensation expense.

• COGS of $335 million, or 42.1% of revenue, included $16 million in stock-based compensation expense.

• SG&A expense of $317 million, or 39.8% of revenue, included $124 million in stock-based compensation expense.

• R&D expense of $194 million, or 24.4% of revenue, included $69 million in stock-based compensation expense.

Net income of $3 million (0.3% net income margin), or $0.03 per diluted share, decreased from $135 million (23.5% net income margin), primarily due to operating losses and strategic investment activity. Non-GAAP net income of $178 million (22.3% non-GAAP net income margin), or $2.15 per diluted share, increased from $168 million (29.3% non-GAAP net income margin), driven by higher revenue.

Adjusted EBITDA of $206 million (25.9% Adjusted EBITDA margin) increased 46% year over year, primarily driven by higher revenue, partially offset by continued investment in R&D.

Operating cash flow of $217 million decreased from $250 million in the prior year, primarily driven by receivables timing and inventory investments. Operating cash flow supported free cash flow of $155 million.

As of December 31, 2025, Axon had $1.7 billion in cash, cash equivalents and short-term investments and outstanding convertible and senior notes with a principal amount of $1.8 billion, resulting in a net debt position of $112 million down $469 million sequentially, primarily driven by acquisitions.

Detailed definitions of our non-GAAP financial measures and caution on the use of non-GAAP measures are included later in this letter.

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