Prime Highlights
- Axon’s shares surged nearly 18% after the company reported better-than-expected earnings and revenue.
- Growing demand for its software tools is driving future growth and strengthening investor confidence.
Key Facts
- The company reported $2.15 earnings per share on $797 million revenue, beating market estimates.
- Axon expects revenue to grow between 27% and 30% in 2026 and aims for $6 billion annual revenue by 2028.
Background:
Axon Enterprise reported strong fourth-quarter results, sending its shares up nearly 18% as rising demand for its artificial intelligence-powered software boosted performance and future outlook.
The company posted adjusted earnings of $2.15 per share on revenue of $797 million, beating analyst expectations of $1.60 per share and $755 million in revenue. The results highlight growing adoption of Axon’s AI-driven tools across its product ecosystem, which includes Tasers, body cameras, and drones.
Chief executive Rick Smith said the company is witnessing a transformative moment driven by artificial intelligence. He said expanding new technology across its products could create strong value for customers, especially when used responsibly.
Axon has been adding these advanced features to its products, such as automatic license plate recognition and a voice-enabled assistant in body cameras. The assistant has already attracted more than 500 customers, showing strong demand for smarter public safety tools. The company said AI-related features contributed around 10% of total bookings last year, amounting to roughly $750 million.
The software segment emerged as a key growth driver, with revenue rising 40% to $343 million during the quarter. Finance chief Brittany Bagley said the company expects software to outpace hardware growth in the near future, supported by increasing demand for AI-enabled solutions.
Overall revenue grew 39% year-on-year, indicating strong business expansion. However, net income fell sharply to about $3 million, or 3 cents per share, compared to $135 million, or $1.67 per share, a year earlier. The company said profits fell because of higher operating costs and continued spending on growth.
Looking ahead, Axon expects revenue to grow between 27% and 30% in 2026, which is higher than market estimates. It also aims to reach $6 billion in annual revenue and a 28% adjusted EBITDA margin by 2028.
The results show Axon’s shift toward a stronger focus on its software business.
