AXON ENTERPRISE, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

THREE MONTHS ENDED

31 MAR 2024

31 DEC 2023

31 MAR 2023

Cash flows from operating activities:

Net income

$

133,218

$

57,271

$

45,139

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Gain on strategic investments and marketable securities, net

(97,419)

(521)

(15,570)

Stock-based compensation

75,115

35,130

34,350

Gain on remeasurement of previously held minority interest, net

(42,292)

—

—

Deferred income taxes

20,670

(19,691)

(9,660)

Depreciation and amortization

11,564

10,051

6,689

Bond amortization

(4,990)

(4,378)

(3,890)

Noncash lease expense

1,795

1,956

1,395

Amortization of debt issuance cost

782

798

756

Unrecognized tax benefits

544

473

855

Other noncash items

461

2,389

1,047

Change in assets and liabilities:

Accounts and notes receivable and contract assets

(51,132)

9,944

(50,431)

Inventory

(710)

(12,332)

(15,811)

Prepaid expenses and other assets

2

(37,762)

(64,348)

Accounts payable, accrued and other liabilities

(84,289)

50,961

(37,043)

Deferred revenue

20,743

45,749

50,199

Net cash provided by (used in) operating activities

(15,938)

140,038

(56,323)

Cash flows from investing activities:

Purchases of investments

(241,457)

(118,995)

(145,124)

Proceeds from call / maturity of investments

330,472

196,204

81,088

Purchases of property and equipment

(16,194)

(24,011)

(8,513)

Purchases of intangible assets

—

(56)

(125)

Proceeds from disposal of property and equipment

34

31

—

Strategic investments

(9,128)

—

—

Business acquisition, net of cash acquired

(237,771)

—

—

Net cash provided by (used in) investing activities

(174,044)

53,173

(72,674)

Cash flows from financing activities:

Net proceeds from equity offering

—

—

33,650

Proceeds from options exercised

—

—

39,181

Income and payroll tax payments for net-settled stock awards

(2,710)

(3,818)

(34,841)

Net cash provided by (used in) financing activities

(2,710)

(3,818)

37,990

Effect of exchange rate changes on cash and cash equivalents

(1,978)

3,266

779

Net increase (decrease) in cash and cash equivalents and restricted cash

(194,670)

192,659

(90,228)

Cash and cash equivalents and restricted cash, beginning of period

600,670

408,011

355,552

Cash and cash equivalents and restricted cash, end of period

$

406,000

$

600,670

$

265,324