AXON · 10-Q · 2026Q2 · Full report

Income Tax Rate Changes

AXON ENTERPRISE, INC. · 2026-08-06 · Importance 57 · Surprise 64 · No source text

The second-quarter effective tax rate decreased to 10.0% from 192.9% in the prior-year quarter, while the tax provision increased to $3.3 million from a $75.0 million benefit. For the first six months, the effective tax rate increased to 14.7% from negative 78.5%, and the tax provision increased to $34.2 million from a $54.6 million benefit. The changes primarily reflected less favorable net tax benefits from stock-based compensation and R&D tax credits, together with higher pre-tax book income that reduced the relative effect of permanent and discrete items. Six-month pre-tax income increased $163.4 million to $232.9 million, contributing to the $88.8 million year-over-year change in income tax expense.

Key facts

• The effective tax rate was 14.7% for the six months ended June 30, 2026 compared to (78.5)% for the six months ended June 30, 2025. source
• For the six months ended June 30, 2026, the overall effective tax rate was 14.7% and was favorably impacted by a $23.1 million net tax benefit related to stock-based compensation. source
• The effective tax rate was 10.0% for the three months ended June 30, 2026 compared to 192.9% for the three months ended June 30, 2025. source
• For the three months ended June 30, 2026, the overall effective tax rate was 10.0% and was favorably impacted by a $14.3 million net tax benefit related to stock-based compensation. source
• Balance of accumulated other comprehensive income (loss) total at June 30, 2026 was $(16,417) (in thousands). source

Impact estimates