AXON · 10-Q · 2026Q2 · Full report

Operating Expense Trends

AXON ENTERPRISE, INC. · 2026-08-06 · Importance 65 · Surprise 48 · In source text

Second-quarter operating expenses increased $94.9 million year over year, while six-month operating expenses increased $168.4 million, primarily because of higher headcount and investments in AI and other initiatives. Quarterly SG&A rose 20.1% to $291.0 million, although it declined to 32.2% of revenue from 36.2%; year-to-date SG&A rose 18.1% to $550.1 million and declined to 32.1% of revenue from 36.6%. Quarterly R&D increased 28.4% to $208.7 million and year-to-date R&D increased 26.8% to $397.6 million, with headcount, engineering costs, and technology licenses supporting AI initiatives as principal drivers. The increased expenses coincided with operating income improving to $46.8 million in the quarter from a $1.0 million loss and to $76.0 million year to date from a $9.8 million loss.

Key facts

• Operating expenses increased by $94.9 million for the three months ended June 30, 2026, primarily reflecting increased headcount and investments in AI and other initiatives. source
• Operating expenses increased by $168.4 million for the six months ended June 30, 2026, primarily reflecting increased headcount and investments in AI and other initiatives. source
• Total research and development expenses for the three months ended June 30, 2026 were $208,687 thousand, an increase of $46,120 thousand or 28.4% versus prior year. source
• Total research and development expenses for the six months ended June 30, 2026 were $397,637 thousand, an increase of $84,047 thousand or 26.8% versus prior year. source
• Total selling, general and administrative expenses for the three months ended June 30, 2026 were $290,982 thousand, an increase of $48,770 thousand or 20.1% versus prior year. source
• Total selling, general and administrative expenses for the six months ended June 30, 2026 were $550,075 thousand, an increase of $84,354 thousand or 18.1% versus prior year. source
• Primary drivers of the non-cash items include $278.7 million of stock-based compensation expense for employee equity programs and $62.8 million of depreciation and amortization, partially offset by $197.9 million in fair value adjustments for net realized and unrealized gains and losses on our strategic investments and marketable securities. source
• The company recorded stock-based compensation expense for the six months ended June 30, 2026: $278,697 (in thousands); total for three months ended June 30, 2026: $143,996 (in thousands). source

Impact estimates