Axon is another victim of the "AI will eat all enterprise software" doldrums, and the stock is currently down -27% YTD. Yet Axon continues to see strong execution in its core audience (US state & local law enforcement), and has been busy pivoting its solutions into new verticals (international, enterprise, and Federal) and personas (corrections, justice, public safety, enterprise security teams, and front-line workers). From here, they have

Part 1 will cover Q425 results, their push into new markets, and the shifting US regulatory environment for drones and counter-drones. Part 2 will cover their product moves and acquisitions, including their new next-gen 911 platform.

  • They've now had 8 quarters of over 30% growth. Mgmt's FY26 guide and new 3-year target (FY28) both suggest it will remain at this level.
  • Axon continues to do well with its core audience (state & local law enforcement) and the ongoing hardware upgrade cycles (TASER 10, Body 4) and AI add-ons. They just had the strongest TASER seq growth in 5Qs, and record Platform Solutions seq growth from their new fixed cameras. Mgmt continues to assert they are only 15% penetrated here.
  • From there, Axon is pushing into new markets across international, enterprise, and Federal. Its extensive portfolio of interrelated products is giving it flexibility in GTM efforts and land-and-expand points. Dedrone helped add new Federal and international customers, and is providing yet another landing point.
  • Axon's bottom line is in flux from past and current acquisitions, as well as new hardware products with lower margins. Dedrone and tariffs have been a drag on GAAP margins, while FCF dipped heavily due to investments. But I see little to worry about.
  • Last week, I looked at Samsara's coming regulatory unlock of telematics demand in Europe. Axon has several regulatory unlocks of its own that look to scale up demand in both drone and counter-drone.

And Axon is now stacking up the S-curves with several adjacent product lines. I remain confident in the resilience and stickiness of Axon's platform, which should continue to see sustainable growth as they execute across all these directions.