Axon prospectively realigned its business into Connected Devices and Software & Services segments. This realignment provides increased transparency and distinction between hardware and software/services components.

The company closed transactions to acquire additional equity interests in an existing strategic investee for $203.4 million and recognized a gain of $167.4 million related to a separate strategic investee. They also sold certain interests for cash consideration of $340.7 million.

Axon issued $1.0 billion of Senior Notes due 2030 and $750.0 million of Senior Notes due 2033, providing substantial capital. The company intends to use the funds for growth opportunities and debt refinancing.

Operating expenses increased by $132.4 million, driven by increased headcount and a significant increase in stock-based compensation expense. This indicates a potential shift in compensation strategy or increased equity grants.

Certain prior period amounts were restated to correct for immaterial errors, indicating a commitment to accurate financial reporting. This addresses balance sheet presentation of convertible notes and conclusions of principal vs. agent accounting of certain reseller arrangements.

Shareholders approved the 2024 Employee XSP and 2024 CEO Performance Award, indicating support for management's compensation structure. This plan includes stock price and operational goals.

The company's success depends on acceptance of its products and services by law enforcement agencies. Any decline in their purchasing or usage would materially affect the company's financial condition.

The company faces risks related to the availability and cost of materials, components, and shipping. These risks could be exacerbated by tariffs, trade restrictions, and geopolitical instability.

The company faces potential liability claims, regulatory scrutiny, and legal proceedings related to its products and operations. These risks could result in significant costs, judgments, and reputational harm.

The company faces risks associated with rapid technological change and new competing products. The introduction of products embodying new technologies and the emergence of new industry standards can render existing products obsolete and unmarketable.

The company's future success depends upon its proprietary technology. However, these protective measures, as well as efforts to pursue such protective measures, may prove inadequate.

The company's success also depends on our ability to continue to attract, retain and motivate qualified technical employees. Our ability to compete effectively and our future success depends on our continuing to identify, hire, develop, motivate and retain highly skilled personnel.

While gross margin dollars increased $107.1 million, operating expenses increased by $132.4 million, indicating potential inefficiencies in scaling operations and managing costs.

The Segment Realignment is intended to streamline operations and provide increased transparency. It is not yet clear how this will impact operational efficiency in the long term.

The company faces risks related to the availability and cost of materials, components, and shipping. These risks could be exacerbated by tariffs, trade restrictions, and geopolitical instability.

Research and development expenses increased by $59.9 million (65.8%), indicating a continued commitment to innovation. However, this increase also contributes to the higher operating expenses.

The company is incorporating Al-based technologies, including generative Al, into its products and operations. This presents both opportunities and risks, including potential failures, biases, and legal/regulatory challenges.

Acquisitions may present unforeseen operating difficulties and expenses. If we acquire businesses, technologies or products, we may encounter difficulties in successfully integrating the acquired personnel, operations, systems, technologies, or products successfully, or effectively managing the combined business.

The company issued $1.75 billion in Senior Notes, providing substantial capital for investment and growth initiatives. This represents a significant change in the capital structure.

The company continues to actively manage its strategic investments, with significant investment and divestment activity during the quarter. This indicates a focus on strategic partnerships and acquisitions.

The company repurchased a portion of its 2027 Notes and issued new Senior Notes. These activities impact the capital structure and debt obligations.

Increasingly regulators, customers, investors, employees and other stakeholders are focusing on environmental, social and governance (“ESG”) matters and related disclosures, while certain ESG-related practices have also been increasingly subject to political controversy in the United States.

The company is incorporating Al-based technologies, including generative AI, into its products and operations. This presents both opportunities and risks, including potential failures, biases, and legal/regulatory challenges.

The company is committed to responsible data usage and governance, reflecting our commitment to responsible data usage and governance. However, there remains a significant risk in the nature of data used by

Economic slowdowns can negatively impact municipal and state tax collections and put pressure on law enforcement budgets, which may increase the risk that our customers will be unable to appropriate funds for existing or future contracts with us.

The implementation of tariffs and trade restrictions as well as changes in trade policies between the United States and such foreign countries could lead to increases in our supply costs and make it more difficult to obtain suppliers and may have an adverse effect on our supply chain from a cost and sourcing perspective.

The legal and regulatory landscape surrounding Al technologies is rapidly evolving and uncertain, particularly in areas of intellectual property, cybersecurity, privacy, and data protection.