Axon reported Q126 results this week. The stock jumped over 10% the next day, but that is now mostly getting erased today. Axon remains down -29% YTD.

As always, their shareholder letter held a wealth of details, including additional product moves out of Axon Week that weren't visible to non-attendees.

  • Axon continues to show durable >30% growth. However, this has been coupled with continued margin impacts from tariffs & strategic improvements in inventory & supply chain.
  • Mgmt is suggesting that deals are landing faster due to the urgency to adopt new technologies (RTCC, drone, counter-drone) and AI.
  • Axon's execution remains lumpy due to hardware sales. Weakness in Q1's sequential growth isn't surprising after the impressive strength here in Q4. Given the improvements in sales cycles, I think (in retrospect) that some pending deals may have been pulled forward last quarter.
  • International saw a massive acceleration to +116% growth, rising to 20% of the mix.
  • A mere 18 months after acquisition, Dedrone is riding significant momentum, accelerating to +300% revenue and +500% bookings growth. This drove the Platform Solutions segment to accelerate to +95%.
  • Their enterprise segment rose +50%, with rising adoption from Fusus, Dedrone, and the ABW Mini front-line wearable still in beta.
  • Both Dedrone and AI features are seeing strong appeal across all market segments.
  • ARR grew +34%, and Future Contracted Bookings rose +44%. FY26 revenue guidance was raised to +32%.
  • Adj FCF TTM margins sank further to 1%, putting them at a Rule of 35 TTM. However, mgmt is guiding FY26 Adj FCF to over 12%, suggesting a massive rebound over the next 3 quarters. This would bring them back above a Rule of 40.
  • In the ongoing Q2, they just landed major new deals with the City of Baltimore and a major enterprise telco. It was exciting to see these new deals include Axon Vision to automate the monitoring of camera feeds in Fusus.
  • They also let us know about other new product moves out of Axon Week, including Axon Guardian and Dedrone enhancements.
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As background, I covered their product runway (including the Safer Skies Act) and their latest Axon Week announcements last month.