AXON ENTERPRISE, INC.

RECONCILIATION OF GAAP TO NON-GAAP FINANCIAL MEASURES - continued

(in thousands, except per share amounts)

THREE MONTHS ENDED

31 MAR 2024

31 DEC 2023

31 MAR 2023

Non-GAAP net income:

GAAP net income

$

133,218

$

57,271

$

45,139

Non-GAAP 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

Income tax effects

13,647

(9,391)

(6,660)

Non-GAAP net income

$

88,850

$

85,416

$

64,650

Diluted income per common share

GAAP

$

1.73

$

0.75

$

0.61

Non-GAAP

$

1.15

$

1.12

$

0.88

Weighted average number of diluted common and common equivalent shares outstanding (in thousands)

77,132

76,178

73,880