AXON ENTERPRISE, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES

(in thousands)

THREE MONTHS ENDED

31 MAR 2024

31 DEC 2023

31 MAR 2023

EBITDA and Adjusted EBITDA:

Net income

$

133,218

$

57,271

$

45,139

Depreciation and amortization

11,564

10,051

6,689

Interest expense

1,756

1,772

1,724

Investment interest income

(12,130)

(14,097)

(11,390)

Provision for (benefit from) income taxes

32,502

(1,469)

(3,255)

EBITDA

$

166,910

$

53,528

$

38,907

Adjustments:

Stock-based compensation expense

$

75,115

$

35,130

$

34,350

Unrealized gain on strategic investments and marketable securities, net

(97,419)

(521)

(15,570)

Gain on remeasurement of previously held minority interest, net

(42,292)

—

—

Transaction costs related to strategic investments and acquisitions

6,357

2,708

843

Loss on disposal, abandonment, and impairment of property, equipment and intangible assets, net

—

—

156

Costs related to antitrust and FTC litigations

224

169

—

Payroll taxes related to XSPP vesting and CEO Award option exercises

—

50

6,392

Adjusted EBITDA

$

108,895

$

91,064

$

65,078

Net income as a percentage of net sales

28.9

%

13.3

%

13.2

%

Adjusted EBITDA as a percentage of net sales

23.6

%

21.1

%

19.0

%

Stock-based compensation expense:

Cost of product and service sales

$

29,595

$

1,910

$

1,320

Sales, general and administrative

23,155

15,301

15,445

Research and development

22,365

17,919

17,585

Total

$

75,115

$

35,130

$

34,350