Now that we've walked through Axon's Q425, adjacent verticals, and the ongoing regulatory unlock in drones & counterdrone, let's now look at how its product lines are shifting. Axon is now stacking up the S-curves across several adjacent product lines across AI add-ons, real-time operations, drones, counter-drone, and front-line worker body cams. And from here, they are adding next-gen 911 call mgmt and a visual AI detection layer.

Axon Week was all this week, but sadly, they didn't live-stream the keynotes or allow virtual attendance. The main announcement was for three new AI capabilities (Axon Vision, Axon 911, and a greatly expanded Axon Assistant). The session list shows they were also pushing on ALPR cameras and the coming ABW Mini, as well as their recent acquisitions of Prepared and Carbyne as standalone solutions.

Axon has a lot of different product motions going on right now, all of which flow into and strengthen the ecosystem it is building around Fusus. Let's look at their hardware directions in part 1, and software & AI directions in part 2.

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.

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.

Between the two, I have had a heavier position in Axon over the past year and a half, given its consistently strong growth at a larger scale, and the allure of the new AI add-ons being integrated across its software and hardware stacks (such as enhancing body cams with real-time translation and a voice-based AI "dispatcher"). It also didn't help that Samsara's fancy new pager wearable announced at Beyond left me underwhelmed, compared to Axon's new Body Workforce Mini for front-line workers that embeds a voice-based AI Assistant.

Samsara remains a very steady company with an extremely sticky platform that is vital to physical operations with vehicle and equipment fleets. I continue to like its positioning and product moves. Beyond the continued land-and-expand of their core (telematics, video safety, and equipment monitoring), Samsara has a lot of room to grow internationally and in emerging products. While I would have liked to see their FY27 guide show an uptick over last year's, I think Samsara can push on both of these areas to help growth reaccelerate.

• The company continues to show a gradual topline slowdown. A wide set of newly emerging products is helping offset this decline, and the company has a number of software & AI directions it can go from here.
• Samsara's data moat is accelerating. This is not only due to growth in the number of customers and assets tracked, but also the adoption of new software products and ecosystem integrations. This data moat enables them to move into even more software products.
• Mgmt has shown a heavy focus on improving GAAP profitability over the past 2 years. GAAP TTM op margin rose +31pp over the past 2 years.
• They've been GAAP net profitable for 2 quarters now, and op margin swung positive this quarter. While margins are likely to dip back to negative next quarter, FY27 was guided to be GAAP profitable.
• They have consistently been at a Rule of 42 TTM over the past year.
• They initially guided FY27 to +22.0%, which tracks closely with last year's initial guide (of +22.7%, which ended 7pp higher at +29.6%). To start the year off right, they gave the highest sequential guide in over a year for the coming Q1 (+2.6% seq vs +1.7% last year).
• Int'l continues to grow faster than the US. It is only ~15% of the mix, indicating a long runway to continue expanding in newer geos (Canada, Mexico, UK, EU).
• They just saw the highest seq growth in ARR in 2 years (+8.3%) and added record net new ARR (+$145M), which was way over the prior record (+$109M last Q4). This was clearly bolstered by the record net new from large customers (+$112M).
• Large customers are growing ARR faster (+36.8%, +10.7% seq), and the largest customers (>$1M) even more so (+56%). Both have accelerated over the past 2Qs.
• RPO grew to $3.77B (+42.1%, +11.5% seq), reaccelerating over the past 3Qs. cRPO grew faster than sub revenue.
• Emerging product contribution has heavily increased over the past 2Qs. It has gone from 8% of net new ACV in Q2 to now 23%.
• Asset Tag beacons continue to do well. They have improved battery life, added a smaller model, and expanded the Samsara Network to better track them indoors.
• They just debuted a new embedded AI agent (Samsara Coach) to continually monitor driver safety and provide real-time feedback and post-event coaching. The AI appears as a customizable avatar in coaching videos and real-time audio. This is the first of several embedded AI agents to come, with hints of future ones for maintenance, compliance, and dispatching that help automate back-office processes.
• The EU's strict tachograph regulations are expanding to light-duty vehicles in 3 months, increasing the number of commercial vehicles subject to these regulations by ~5x. Samsara is well-positioned to take advantage.
• Motive is about to IPO. Despite being founded 2 years earlier, the S-1 shows they are 3 years behind Samsara in profitability, 4 years behind in revenue, and have ~1/6th of the large customers. Their platform is closest to Samsara's, but they are well behind Samsara in beacons. They do have some interesting product strategies that Samsara could eventually adopt, if desired.
• Meanwhile, other competitors seem to be falling behind. Powerfleet seems likely to miss its organic guidance after lapping 2 massive mergers, and legacy player Geotab is finally moving into equipment monitoring (non-powered asset gateways and asset tags).

The market seems unsure about Samsara's prospects. Since the stock peaked in the mid-50s in late 2024 into 2025, it then bounced between the mid-30s and low-40s for the rest of the year. To start off 2026, the market had taken Samsara down another 28% from there, as part of the ongoing general malaise in software.

However, after Samsara recently reported Q426, the market seemed to wake up to the fact that, as a centralized system of record for fleet-based physical operations , Samsara isn't hurt by AI, but helped. The stock had recovered back to flat YTD, but then drifted down to  -11% YTD over the past few days. I think it remains attractive here.

Sections:

• Q426 financial results
• Major wins & public sector
• Legal battle update
• International push & EU regulatory changes
• Product moves (Asset Tags & Samsara Coach)
• Competitor review (Geotab, Powerfleet, & Motive)

I can somewhat understand the malaise in SSE platforms like Zscaler, which is primarily user-based pricing and whose "re-acceleration" is from its acquisition of MDR provider Red Canary last August. Zscaler's ARR growth was +25.2% in its recent Q226, but that adjusts to +21.0% organically when excluding the over-performance from Red Canary since the acquisition.

Rubrik has been heavily punished since its big rebound in early December after strong Q326 results. I continue to think it's attractive here, both from the ongoing demand for its core resilience & data protection platform, and its more recent shifts into identity, DevOps, and now agentic AI resilience. They are in hypergrowth now and have several S-curves stacked up going forward.

• Overall revenue grew +46.3%, and Sub Revenue grew +49.7%.  The topline continues to be boosted by material rights. Adjusting these out, revenue grew +43%.
• Sub ARR grew +33.8%, and Cloud ARR grew +46.7%. Both had record net new ARR. Cloud is now over 88% of ARR (+8pp).
• Mgmt guided Sub ARR to +25.8% growth in FY27 – a step up from last year's initial +24.5% guide. ARR is likely to continue growing >30%.
• Land and expand metrics look healthy. Large customers grew ARR faster at +38.6%, and they added a record number of net new customers over $1M. NRR remains over 120%.
• They hit their 2nd quarter of non-GAAP profitability, and are at a Rule of 67 TTM.
• The material rights that helped boost revenue growth in FY26 are turning into headwinds over FY27. The initial FY27 guide was +22%, but adjusts to +28% when factoring out that headwind.
• Fears of AI disruption to its core backup & recovery and data protection seem completely backwards. All evidence is that AI adoption is driving enterprise interest in protecting their existing data estate, and that AI use will be driving up data volumes from here.
• Their new directions in identity protection are doing quite well, and they have a whole new S-curve in their agentic resilience solution.  Other cloud backup competitors are following them into these directions.
• Their new agentic resilience solution is going right into a hot & crowded market, with all kinds of AgenticOps solutions cropping up across hyperscalers, next-gen security players, observability players, and AIOps startups. But I think resilience platforms like Rubrik have a key differentiator that will drive demand.

As I have noted before, the market is straddling an extremely odd dichotomy. The market is simultaneously saying that all enterprise software is going to be disrupted by AI, and that hyperscalers and neoclouds are spending too much capex on AI right now without immediate returns to show for it. Between these extremes, I expect the answer to be in the middle.

While I've highlighted the risk of platforms with per-seat pricing facing headwinds from workforce productivity increases (as well as the shrinking Federal workforce), I believe the majority of B2B enterprise SaaS platforms that I follow have carved out a defensible position. The market's worries of a coming massive wave of disruption in enterprise software are way overblown. I believe that the next-gen security platforms, consumption-based data platforms, and full-stack hardware-to-software platforms that I tend to cover will continue to maintain their moats and stickiness – and could even strengthen those moats through thoughtful in-platform AI capabilities or becoming vital infrastructure across AI adoption waves. I have minimal worries of disruption hitting Cloudflare, Rubik, Axon, Samsara, Snowflake, Databricks, CrowdStrike, or GitLab – and, in fact, increasing AI adoption seem likely to accelerate demand for their platforms. On the other side, we have NVIDIA, hyperscalers, and neoclouds that will be powering all of these emerging AI workloads from here.

Lately, I have been looking at some of the heavily punished names in software, including some advertising-driven cash cows like AppLovin and Reddit. As of today, Reddit is down 37% YTD, and AppLovin is down 30%. Both of these companies have had strong performance over the past year as they have strengthened their advertising plays.

Let's look deeper at what makes Reddit tick. I believe it has a strong value prop from its community-driven networking effects, and is proving very adept at monetizing its users through advertising.  This first part will cover their unique stance, and part 2 will cover the financials, audience makeup, AI moves, and platform shifts.

• Reddit has become the de facto platform for Internet users to find communities of other like-minded people, that gather around their topics of interest. This has generated a massive body of human-derived content (posts, comments, feeds, likes) over the past decade+ that is full of opinions, views, trends, advice, and humor.
• It is not only human-derived content, but is it also curated by humans. While Reddit has overarching rules, individual community groups have their own set of rules with volunteer moderators tasked with enforcing them.
• Their audience tends to be a more Internet-aware, technology-forward younger crowd. While surveys show them as being a 60/40 male-to-female mix, that is more like 50/50 in their most mature US and UK markets.
• Reddit mgmt has gotten rid of distractions and is heads-down on maximizing the ad revenue opportunity. I see a number of levers they can pull to continue their hypergrowth, and mgmt appears to be clearly focused on the right areas.
• The biggest lever is improving content discovery and user engagement – both of which drive up session length (page views). When magnified by rising active users (DAUq/WAUq), this all leads to more ad impressions.
• Mgmt is focused on driving more engagement from all access points, and they are hoping to spur more immediate engagement from new users by retooling their onboarding process & feeds.
• The other big lever is improving ad performance (targeting) and improving the campaign automation, tooling, and onboarding for advertisers and ecosystem partners. This drives up demand for their ad platform.
• Their US market is most mature, yet continues to see hypergrowth in ad revenue. Revenue/ARPU growth is clearly outpacing DAUq/WAUq growth.
• While the International market has a long tail of users and faster-growing revenue, it is less mature and its ARPU trails significantly. This presents a big opportunity to expand user engagement and ad impressions further in international users.
• They have covered other English-speaking regions (UK, Canada, Australia), and are now leveraging AI (translation) and local teams to expand more deeply into non-English regions. Mgmt has noted strength in France, Brazil, and India of late.
• They had 2 big partnerships/deals with major AI engines for training data and web search access. The revenue gained is the least important part of this.
• The market is full of AI worries here, with continual FUD around AI citation mix and DAU weakness (2 of their many levers) – yet ad revenue & ARPU remain in hypergrowth, even in their most mature market (US). This company is firing on all cylinders, which shows it is taking full advantage of its many levers.
• The coming Q1 is their seasonally weakest quarter in revenue, margins, and KPIs. This, combined with the ongoing AI-killing-software FUD, is likely to present some opportunities.

• We can now say "Mission Accomplished" on the GTM revamp after 3 quarters of revenue reacceleration, improving sales metrics, growing PoF mix, and continued large deals.
• Revenue accelerated for the 3rd Q, to now +33.6%.
• RPO growth has accelerated +12pp over the past year to +48%. cRPO growth remains above revenue growth.
• Mgmt guided FY26 to +28.9%, a strong signal and improvement over the initial FY25 guide of +25.4% (actual +29.9%).
• Customer growth has remained stellar over the past year, adding record net new customers over the last 2Qs (+29.6K then +36.9K).
• Large customer growth has also been strong, adding record net new large customers over the last 2Qs (+297 and +289).
• These large customers continue to grow faster than overall (+41.4% vs +33.6%).
• NRR has rebounded to 120% now that PoF headwinds have eased.
• FCF margin came in at a record 16%, boosting them back into Rule of 40 TTM.
• Cloudflare is not only taking advantage of a surge in web traffic from AI today, but is also well-positioned for the rise of agentic AI from here.
• BONUS: I also take a brief look at Fastly's latest results.

• They started accepting international advertisers (mostly Canada & Australia) in early September.
• They had a limited release of their new self-service platform, Axon Ads Manager, on October 1, where new advertisers are being accepted via referrals from existing customers and partners.
• This was coupled with a brand change of their advertising segment into Axon.ai. I have started seeing performance ads for Axon.ai ever since.

Let's look at how AppLovin's shift into e-commerce evolved over the past year and half, and the challenges that remain. In part two, I'll walk through what e-commerce customers & tooling partners are saying about the e-commerce pilot.

IREN, at its core, is a company focused on data center design & optimization. Thus far, they used those talents to become one of the largest and most efficient Bitcoin miners. It has now begun to leverage those core talents into a new direction. After years of building up expertise in building data centers near cheap, reliable energy sources, it is now pivoting that wealth of experience into becoming a neocloud offering bare-metal GPUaaS.

Sections:

• IREN's neocloud ambitions
• Different approaches between CoreWeave, Nebius, and IREN
• The rise of their mining
• The phased approach to Childress
• The pivot to Horizon
• The Microsoft whale deal
• British Columbia retrofit
• The coming Sweetwater Hub
• GPU growth trajectory
• Funding sources
• Levers from here

This will be of interest to other neoclouds like CoreWeave and Nebius, the hyperscalers, and AI chipmakers like NVIDIA and AMD.

• IREN is one of the rare cryptominer-to-AI plays that interest me, as it wants to become a neocloud, not a data center landlord to hyperscalers and neoclouds. And while they derive revenue from crypto mining, they don't carry the resulting mining rewards (BTC) on their balance sheet.
• They have visible DC buildout & operational experience, with an existing footprint of 6 DC sites with 810MW active capacity and ~3GW of potential capacity through existing grid connections. This gives them a big head start in the land and power needs that every hyperscaler, neocloud, and cryptominer are battling over.
• In their massive cryptomining expansion across 2024-2025, mgmt built an operational machine capable of building a 50MW data center a month (+150MW a quarter) as they expanded Childress from its 20MW start to full 750MW potential. I believe they will repeat this cadence with Horizon and Sweetwater buildouts, with a pathway to phase in large blocks of GPUs over the next few years without any new sites.
• IREN hits its buildout targets. I go into extensive detail below on how the phased buildout of Childress was guided and executed.
• After a successful year+ of massively scaling up their mining capacity and efficiency, they paused cryptomining expansion in Mar-25, and are now all-in on neocloud from here.
• They are now focused on 2 new massive ongoing buildouts (Horizon and Sweetwater), plus are also retrofitting their 3 BC sites (160MW) – with displaced mining rigs sent to Childress.
• Their history thus far is in cryptomining for themselves (no customers). They have shown they can execute on their buildouts & retrofits, so the real challenge from here is in selling it to hyperscalers or frontier AI firms under long-term contracts and structuring deals to maximize profitability.
• They recently landed a major contract with Microsoft, who is now renting bare metal capacity from them, in addition to its ongoing deals with neocloud competitors CoreWeave and Nebius. Microsoft did its diligence and believes IREN is up to the task, noting their buildout speed as a factor.
• But most of all, this Microsoft deal gives IREN a much-needed boost in brand perception, helping counter the negative "Underperforming" rating that IREN got in ClusterMAX 2.0 in November. (That rating seems mostly due to the lack of software stacks atop the cloud GPUs.)
• They are about to see a massive ramp-up in AI revenue. Mgmt is signalling AI revenue will hit a $200-$250M annualized run rate at the end of 2025 (their Q226, aka today's earnings), $500M in early 2026 (their Q326), and $3.4B by the end of 2026 (their Q227). This implies AI revenue will hit $50-62M in Q226, $125M in Q326, and $850M in Q227.
• Unfortunately, this is more than offset by some significantly poor market dynamics in the Bitcoin market. They will see a drop in mining revenue in Q226, which will likely worsen in Q326 given BTC's drop from $115 to now $66. However, coupling that massive drop with the massive ramp-up in AI revenue, AI revenue might overtake mining as early as Q326 (should BTC not recover).
• Landing Microsoft seems like only the start. They have 3 additional pockets of Blackwell capacity (Horizon 5-10, Sweetwater 1-2, and retrofits across two BC sites) opening up capacity over the next few years – which seem likely to hook another whale customer or three.
• What matters most now is executing for Microsoft (Horizon 1-4) and proving the operational excellence of their buildout expertise from the start. Simultaneously, they have a multi-year runway from here with their 3 active buildouts/retrofits.