Axon Raises Outlook as Revenue Growth Accelerates
Future contracted bookings climbed to $15.1 billion, 41% above a year earlier.
Axon Enterprise (AXON), the public-safety technology company, reported a 35% increase in quarterly revenue as growth accelerated across its software and connected-device businesses.
Revenue reached $904 million, up 12% sequentially, with year-over-year growth edging above the prior quarter’s 34% while remaining below the fourth quarter’s 39%. Adjusted EBITDA rose more than 40% to $242 million, and the margin widened to 26.8% from 25% in the prior quarter.
Software & Services revenue increased 36% to $398 million, accelerating from 35% growth in the prior quarter. Connected Devices revenue rose 35% to $507 million, compared with 33% growth previously. Platform Solutions grew 123% to $150 million, helped by Dedrone revenue that surpassed $100 million.
Annual recurring revenue increased 39% to $1.639 billion, while net revenue retention rose one percentage point sequentially to 126%. Five-year normalized new contract bookings grew more than 30%, with international and enterprise bookings each roughly tripling.
The revenue mix produced diverging margin trends. Software & Services gross margin narrowed to 71.3% as professional-services revenue increased and newer products scaled, while Connected Devices gross margin expanded to 51.9%, primarily because of tariff refunds. Total gross margin rose 130 basis points sequentially to 60.4%, though it was unchanged from a year earlier.
Net income fell to $29 million from $36 million a year earlier, mainly because the prior-year period included a large tax benefit even as pre-tax income increased. Non-GAAP net income declined to $155 million from $179 million, while operating cash flow improved to $20 million from a $92 million outflow.
Axon now expects 2026 revenue growth of 32% to 34%, up from its previous 30% to 32% range and its initial 27% to 30% outlook. The company maintained its adjusted EBITDA margin forecast of approximately 25.5%. The higher revenue forecast followed the rebound in contracted bookings and faster recurring-revenue growth, leaving execution on newer products and international contracts central to sustaining the pace.