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Stockholders' Equity | 3 Months Ended
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Mar. 31, 2025
Equity [Abstract] |
Stockholders' Equity | Stockholders’ Equity Common Stock and Preferred Stock We have authorized the issuance of two classes of stock designated as “common stock” and “preferred stock,” each having a par value of $0.00001 per share. We are authorized to issue 200 million shares of common stock and 25 million shares of preferred stock. 2024 Employee XSP and 2024 CEO Performance Award On May 10, 2024, our shareholders approved the Axon Enterprise, Inc. 2024 eXponential Stock Plan (the “2024 Employee XSP”). The 2024 Employee XSP includes an approved pool of 4.5 million shares of common stock reserved for grants of eXponential Stock Units (“XSUs”) to employee s. A total of approximately 4.1 million XSUs have been granted to employees under this program as of March 31, 2025. There were no XSUs granted to employees during the three months ended March 31, 2025. The program includes seven substantially equal tranches t hat will vest upon certification by the Compensation Committee of the Board of Directors upon achievement of three independent vesting conditions: (1) stock price goals; (2) operational goals; and (3) minimum service conditions. Additionally, on May 10, 2024 shareholders approved a grant of 679,102 XSUs to our CEO, Patrick W. Smith, (the “2024 CEO Performance Award”). The stock price goals and operational goals applicable to the 2024 CEO Performance Award are identical to those under the 2024 Employee XSP, but Mr. Smith is subject to a longer minimum required service period. The three independent vesting conditions are described in the following table:
|  | Operational Goals(1) (in millions) |  | Stock Price Goal |  |  | Minimum Service Requirement |  |
Tranche |  | Revenue |  | Adj. EBITDA(2) |  |  |  | 2024 Employee XSP |  | 2024 CEO Performance Award |  | Goal Expiration
1 |  | $ | 1,834 |  | or | $ | 382 |  | and | $ | 247.40 |  | and |  | June 2025 |  | December 2028 |  | December 31, 2026
2 |  | 2,293 |  | or | 497 |  | and | 309.25 |  | and |  | December 2025 |  | December 2028 |  | December 31, 2027
3 |  | 2,866 |  | or | 633 |  | and | 386.56 |  | and |  | June 2026 |  | December 2029 |  | December 31, 2028
4 |  | 3,583 |  | or | 823 |  | and | 483.20 |  | and |  | December 2026 |  | December 2029 |  | December 31, 2029
5 |  | 4,479 |  | or | 1,066 |  | and | 604.00 |  | and |  | June 2027 |  | December 2030 |  | December 31, 2030
6 |  | 5,599 |  | or | 1,378 |  | and | 755.00 |  | and |  | December 2027 |  | December 2030 |  | December 31, 2031
7 |  | 6,999 |  | or | 1,728 |  | and | 943.75 |  | and |  | June 2028 |  | December 2030 |  | December 31, 2032
(1) Operational goals are measured, as of any date, for the previous four consecutive fiscal quarters, beginning with the Company's first full fiscal quarter ending after the fiscal quarter in which the grant date occurred. (2) In connection with certain acquisitions which were completed during fiscal year 2024, the adjusted EBITDA goals were adjusted as required by the terms of the 2024 Employee XSP and 2024 CEO Performance Award. As the operational goals for tranches 1 and 2 were met as of December 31, 2024, no further adjustment to the adjusted EBITDA goals for these tranches was made in the current period, in accordance with the terms of the awards. Restricted Stock Units The following table summarizes restricted stock unit (“RSU”) activity for the three months ended March 31, 2025 and 2024 (number of units and aggregate intrinsic value in thousands):
| Three Months Ended March 31,
| 2025 |  | 2024
| Number of Units |  | Weighted Average Grant-Date Fair Value |  | Number of Units |  | Weighted Average Grant-Date Fair Value
Units outstanding, beginning of year | 1,684 |  | $ | 356.31 |  |  | 1,615 |  |  | $ | 193.09 |
Granted | 15 |  | 580.51 |  |  | 478 |  | 257.49
Released | (186) |  | 281.66 |  |  | (174) |  |  | 213.88
Forfeited | (27) |  | 398.72 |  |  | (42) |  |  | 186.93
Units outstanding, end of period | 1,486 |  | $ | 367.15 |  |  | 1,877 |  |  | $ | 207.73 |
Aggregate intrinsic value at quarter end | $ | 781,511 |  |  |  |  | $ | 587,321 |  |  |
Aggregate intrinsic value represents our closing stock price on the last trading day of the period, which was $525.95 per share, multiplied by the number of RSUs outstanding. As of March 31, 2025, there was $461.0 million in unrecognized compensation costs related to RSUs under our stock plans for shares that are expected to vest. We expect to recognize the cost related to the RSUs over a weighted average period o f 2.13 years. Shares underlying RSUs are generally released when vesting requirements are met. Performance Stock Units The following table summarizes performance stock unit (“PSU”) activity, inclusive of XSUs, for the three months ended March 31, 2025 and 2024 (number of units and aggregate intrinsic value in thousands):
| Three Months Ended March 31,
| 2025 |  | 2024
| Number of Units |  | Weighted Average Grant-Date Fair Value |  | Number of Units |  | Weighted Average Grant-Date Fair Value
Units outstanding, beginning of year | 4,865 |  | $ | 261.18 |  | 394 |  | $ | 201.61 |
Granted | 16 |  | 499.47 |  | 15 |  | 284.00
Released | (15) |  | 256.23 |  | (1) |  |  | 180.89
Forfeited | (48) |  | 224.83 |  | (7) |  |  | 93.32
Units outstanding, end of period | 4,818 |  | $ | 262.34 |  | 401 |  | $ | 206.75 |
Aggregate intrinsic value at quarter end | $ | 2,533,889 |  |  |  |  | $ | 125,533 |  |  |
Aggregate intrinsic value represents our closing stock price on the last trading day of the period, which was $525.95 per share, multiplied by the number of PSUs outstanding. As of March 31, 2025, there was $677.7 million in unrecognized compensation expense related to PSUs under our stock plans for awards that are expected to vest. We expect to recognize the cost related to PSUs over a weighted average period of 3.99 years. Shares underlying PSUs are generally released when vesting requirements are met. Stock Option Activity The following table summarizes stock option activity for the three months ended March 31, 2025 and 2024 (number of units and aggregate intrinsic value in thousands):
| Three Months Ended March 31,
| 2025 |  | 2024
| Number of Options |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Life (years) |  | Number of Options |  | Weighted Average Exercise Price |  | Weighted Average Remaining Contractual Life (years)
Options outstanding, beginning of year | 21 |  | $ | 28.58 |  |  |  | 531 |  | $ | 28.58 |  |
Granted | — |  | — |  |  |  | — |  | — |  |
Exercised | — |  | — |  |  |  | — |  | — |  |
Expired / terminated | — |  | — |  |  |  | — |  | — |  |
Options outstanding and exercisable, end of period | 21 |  | $ | 28.58 |  | 2.91 |  | 531 |  | $ | 28.58 |  | 3.9
Aggregate intrinsic value at quarter end | $ | 10,410 |  |  |  |  |  |  | $ | 150,944 |  |  |  |  |
Aggregate intrinsic value represents the difference between the exercise price of the underlying stock options and the closing stock price on the last trading day of the period ended March 31, 2025, which w as $525.95 per share. There was no stock option activity during the three months ended March 31, 2025. Stock-based Compensation Expense The following table summarizes the composition of stock-based compensation expense for the three months ended March 31, 2025 and 2024 (in thousands):
| Three Months Ended March 31,
| 2025 |  | 2024
Cost of product and service sales | $ | 12,887 |  |  | $ | 29,595 |
Selling, general and administrative expenses | 71,347 |  |  | 23,155 |
Research and development expenses | 56,005 |  |  | 22,365 |
Total stock-based compensation expense | $ | 140,239 |  |  | $ | 75,115 |
Stock Incentive Plan In May 2024, our shareholders approved the Axon Enterprise, Inc. Amended and Restated 2022 Stock Incentive Plan (the “Amended 2022 Plan”) authorizing an additional 2.2 million shares, plus remaining available shares under prior plans, for issuance under the Amended 2022 Plan. Combined with the shares of our common stock available under our legacy stock incentive plans, there are 3.2 million shares of our common stock available for grant under the Amended 2022 Plan as of March 31, 2025. At-The-Market Equity Offering We participate in an “at-the-market” equity offering program (the “ATM”), pursuant to which we are authorized to sell up to a total of approximately 2.0 million shares of our common stock. As of March 31, 2025, there were approximate ly 2.0 million shares remaining. There were no issuances under the ATM during the three months ended March 31, 2025. Stock Repurchase Plan In February 2016, our Board of Directors authorized a stock repurchase program to acquire up to $50.0 million of our outstanding common stock subject to stock market conditions and corporate considerations. As of March 31, 2025, $16.3 million remained available under the plan for future purchases.

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