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Stockholders' Equity | 9 Months Ended
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Sep. 30, 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 2024 Employee XSP. The 2024 Employee XSP includes an approved pool of approximately 4.5 million shares of common stock reserved for grants of eXponential Stock Units (“XSUs”) to employees, of which approximately 0.8 million XSUs remain available to grant to employees under this program as of September 30, 2025. A total of approximately 0.1 million XSUs were granted during the nine months ended September 30, 2025. The program includes seven substantially equal tranches that wi ll 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 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(2) |  | Revenue |  | Adj. EBITDA(3) |  |  |  | 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 | 611 |  | and | 386.56 |  | and |  | June 2026 |  | December 2029 |  | December 31, 2028
4 |  | 3,583 |  | or | 801 |  | and | 483.20 |  | and |  | December 2026 |  | December 2029 |  | December 31, 2029
5 |  | 4,479 |  | or | 1,044 |  | and | 604.00 |  | and |  | June 2027 |  | December 2030 |  | December 31, 2030
6 |  | 5,599 |  | or | 1,356 |  | and | 755.00 |  | and |  | December 2027 |  | December 2030 |  | December 31, 2031
7 |  | 6,999 |  | or | 1,706 |  | 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) Tranche 1 vested and settled in June 2025. For certain grantees, the shares acquired upon vesting and settlement of Tranche 1 are subject to a holding period requirement under the plan, which will expire on the earlier of (i) December 31, 2030 and (ii) the date on which the subsequent tranche vests and settles. (3) 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 nine months ended September 30, 2025 and 2024 (number of units and aggregate intrinsic value in thousands):
| Nine Months Ended September 30,
| 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 | 121 |  | 696.46 |  |  | 595 |  | 269.18 |
Released | (533) |  | 265.47 |  |  | (488) |  |  | 185.33 |
Forfeited | (73) |  | 446.21 |  |  | (128) |  |  | 202.01 |
Units outstanding, end of period | 1,199 |  | 425.48 |  |  | 1,594 |  |  | 223.16 |
Aggregate intrinsic value at period-end | $ | 860,416 |  |  |  |  | $ | 636,869 |  |  |
Aggregate intrinsic value represents our closing stock price on the last trading day of the period, which was $717.64 per share, multiplied by the number of RSUs outstanding. As of September 30, 2025, there was $381.1 million in unrecognized compensation expense 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 of 1.89 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 nine months ended September 30, 2025 and 2024 (number of units and aggregate intrinsic value in thousands):
| Nine Months Ended September 30,
| 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 | 137 |  |  | 603.12 |  |  | 4,517 |  |  | 240.07 |
Released | (532) |  |  | 293.78 |  |  | (11) |  |  | 149.49 |
Forfeited | (143) |  |  | 317.66 |  |  | (345) |  |  | 232.01 |
Units outstanding, end of period | 4,327 |  |  | 266.10 |  |  | 4,555 |  |  | 237.57 |
Aggregate intrinsic value at period-end | $ | 3,105,220 |  |  |  |  | $ | 1,820,338 |  |  |
Aggregate intrinsic value represents our closing stock price on the last trading day of the period, which was $717.64 per share, multiplied by the number of PSUs outstanding. As of September 30, 2025, there was $555.3 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 3.62 years. Shares underlying PSUs are generally released when vesting requirements are me t. Stock Option Activity The following table summarizes stock option activity for the nine months ended September 30, 2025 and 2024 (number of units and aggregate intrinsic value in thousands):
| Nine Months Ended September 30,
| 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 | — |  | — |  |  |  | (350) |  | 28.58 |  |
Expired / terminated | — |  | — |  |  |  | — |  | — |  |
Options outstanding and exercisable, end of period | 21 |  | $ | 28.58 |  | 2.41 |  | 181 |  | $ | 28.58 |  | 3.41
Aggregate intrinsic value at period-end | $ | 14,423 |  |  |  |  |  |  | $ | 67,085 |  |  |  |  |
Aggregate intrinsic value repr esents 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 September 30, 2025, which was $717.64 per share. There was no stock option activity during the nine months ended September 30, 2025. Stock-based Compensation Expense The following table summarizes the composition of stock-based compensation expense for the three and nine months ended September 30, 2025 and 2024 (in thousands):
| Three Months Ended September 30, |  | Nine Months Ended September 30,
| 2025 |  | 2024 |  | 2025 |  | 2024
Cost of product and service sales | $ | 12,703 |  |  | $ | 10,123 |  |  | $ | 38,151 |  |  | $ | 48,235 |
Selling, general and administrative expenses | 75,072 |  |  | 55,248 |  |  | 218,606 |  |  | 117,036 |
Research and development expenses | 58,377 |  |  | 36,409 |  |  | 168,878 |  |  | 86,445 |
Total stock-based compensation expense | $ | 146,152 |  |  | $ | 101,780 |  |  | $ | 425,635 |  |  | $ | 251,716 |
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 September 30, 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. During the nine months ended September 30, 2025, we sold approximately 0.5 million shares of our common stock under our ATM. We generated approximately $366.3 million in aggregate gross proceeds from sales under the ATM. We recorded aggregate net proceeds of $362.1 million in additional paid-in capital after deducting related expenses, including commissions to the sales agent and issuance costs of $4.2 million. As of September 30, 2025, $0.1 million of these costs were not yet paid. As of September 30, 2025, there were approximately 1.5 million shares remaining. We utilize the net proceeds from this offering program for general corporate purposes, which may include providing capital to satisfy a portion of the tax obligations related to the vesting and settlement of stock compensation awards granted to our employees under our stock plans and funding ongoing strategic investments and acquisitions as we continue to expand our product ecosystem. 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 September 30, 2025, $16.3 million remained available under the plan for future purchases.

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