AXON ENTERPRISE, INC. (AXON): Results of Operations and Financial Condition
AXON ENTERPRISE, INC. (AXON) filed an SEC Form 8-K — Results of Operations and Financial Condition. Exhibit 99.1 CONTACT: Investor Relations Axon Enterprise, Inc. IR@axon.com Axon reports Q2 2026 revenue of $904 million, up 35% year over year • Annual recurring revenue grows 39% to $1.6 billion; net revenue retention reaches 126% • Software & Services revenue grows 36% year ove
How this was made
The 30-second read
Why it matters
The key tradable items are the quarterly growth rates, forward contracted bookings growth, and the raised FY revenue growth range, all with explicit margin guidance.
Market read
A primary earnings and guidance update with strong bookings and raised FY growth should drive estimate changes and near-term positioning.
What to watch
The filing introduces a five-year normalized basis for new contract bookings; traders may need to assess how this affects comparability versus prior reporting and whether it masks shorter-duration contract mix shifts.
Axon reports Q2 2026 revenue of $904 million, up 35% year over year
Revenue grew 35% year over year, both primary segments grew above 35%, forward contracted bookings grew 41% to $15.1 billion, and the company raised its 2026 revenue growth outlook to 32% to 34% while maintaining its Adjusted EBITDA margin outlook.
Key metrics
as reported| Metric | Value | q/q | y/y |
|---|---|---|---|
| Quarterly revenueGAAP | $904 million | – | 35% |
| Annual recurring revenueother | $1.6 billion | – | 39% |
| Net revenue retentionother | 126% | – | – |
| Future contracted bookingsother | $15.1 billion | – | 41% |
| New contract bookings on a five-year normalized basisother | more than 30% | – | more than 30% |
| Total company gross marginGAAP | 60.4% | up 130 basis points sequentially | flat year over year |
| Adjusted gross marginnon-GAAP | 62.9% | increased 130 basis points sequentially | decreased 40 basis points year over year |
| COGSGAAP | $358 million, or 39.6% of revenue | – | – |
| Stock-based compensation expense in COGSGAAP | $11 million | – | – |
| SG&A expenseGAAP | $291 million, or 32.2% of revenue | – | – |
| Stock-based compensation expense in SG&AGAAP | $71 million | – | – |
| R&D expenseGAAP | $209 million, or 23.1% of revenue | – | – |
| Stock-based compensation expense in R&DGAAP | $62 million | – | – |
| Operating incomeGAAP | $47 million | – | increased $48 million year over year |
| Net incomeGAAP | $29 million | – | – |
| Net income marginGAAP | 3.3% | – | – |
| Diluted earnings per shareGAAP | $0.36 per diluted share | – | – |
| Non-GAAP net incomenon-GAAP | $155 million | – | – |
| Non-GAAP net income marginnon-GAAP | 17.2% | – | – |
| Non-GAAP diluted earnings per sharenon-GAAP | $1.88 per diluted share | – | – |
| Adjusted EBITDAnon-GAAP | $242 million | – | increased over 40% year over year |
| Adjusted EBITDA marginnon-GAAP | 26.8% | – | – |
| Operating cash flowGAAP | $20 million | – | – |
| Free cash flowother | free cash outflow of $1 million | – | – |
| Cash received from tariff refundsother | $47 million | – | – |
| Cash, cash equivalents and short-term investmentsGAAP | $685 million | – | – |
| Outstanding senior notes principal amountGAAP | $1.8 billion | – | – |
| Net debt positionGAAP | $1.1 billion | up $46 million sequentially | – |
| Dedrone revenueother | surpasses $100 million | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Software & Servicesnew users and increased adoption of premium software offerings, including the AI Era Plan | $398 million | – | 36% |
| Connected DevicesDedrone, TASER 10 and Axon Body 4 | $507 million | – | 35% |
| Platform SolutionsDedrone revenue surpasses $100 million | $150 million | – | 123% |
2026 outlook
- Revenue2026 revenue growth of 32% to 34%
- NoteAdjusted EBITDA margin of approximately 25.5%
What drove it
- Demand remained robust among both new and existing customers.
- Software & Services growth was driven by new users and increased adoption of premium software offerings, including the AI Era Plan.
- Connected Devices growth was driven by Dedrone, TASER 10 and Axon Body 4.
- Future contracted bookings grew 41% year over year to $15.1 billion.
- International and enterprise bookings each approximately tripled year over year.
- Adjusted EBITDA growth was driven by higher revenue and global tariff refunds.
Concerns
- Gross margin reflected a higher mix of professional services revenue and scaling new product offerings, partially offset by global tariff refunds received in the quarter.
- Net income and non-GAAP net income declined year over year, primarily reflecting a large tax benefit recognized in the prior year.
- Operating income was partially offset by increased investment to drive future growth.
- Cash flow was partially offset by continued inventory investment to support customer demand and timing of customer billing and collections.
- The company reported a net debt position of $1.1 billion.
What to watch
- Execution against 2026 revenue growth of 32% to 34%.
- Maintenance of an Adjusted EBITDA margin of approximately 25.5%.
- Growth in future contracted bookings, including bookings reported on a five-year normalized basis.
- Adoption of premium software offerings, including the AI Era Plan.
- Demand for Dedrone, TASER 10 and Axon Body 4.
- The effect of professional services mix, new-product scaling and tariff refunds on gross margin.
- Inventory investment, customer billing and collections as drivers of operating cash flow and free cash flow.
Balance sheet and cash flow
- Operating cash flow improved to $20 million from an outflow of $92 million in the prior year.
- Free cash outflow of $1 million.
- As of June 30, 2026, Axon had $685 million in cash, cash equivalents and short-term investments.
- Outstanding senior notes had a principal amount of $1.8 billion.
- Net debt position was $1.1 billion, up $46 million sequentially.
- Total cash received from tariff refunds was $47 million.
Analysis
Axon reported Q2 2026 revenue of $904 million, up 35% year over year, extending its stated run of 10 consecutive quarters of revenue growth above 30%. Growth was broad-based, with Software & Services revenue up 36% to $398 million and Connected Devices revenue up 35% to $507 million. Annual recurring revenue grew 39% to $1.6 billion and net revenue retention reached 126%, pointing to continued expansion among existing customers alongside new-user additions.
Forward demand indicators were also strong. Future contracted bookings grew 41% year over year to $15.1 billion, while new contract bookings on a five-year normalized basis grew more than 30% year over year. The company cited two nine-figure agreements with major U.S. cities, two eight-figure agreements with major state corrections customers, and its first full-scope Axon 911 customer agreement. International and enterprise bookings each approximately tripled year over year.
Profitability was mixed across the income statement. Total company gross margin was flat year over year at 60.4% and improved 130 basis points sequentially, while adjusted gross margin of 62.9% decreased 40 basis points year over year and increased 130 basis points sequentially. Operating income increased $48 million year over year to $47 million. Net income declined to $29 million from $36 million, and non-GAAP net income declined to $155 million from $179 million, primarily because of a large tax benefit recognized in the prior year. Adjusted EBITDA increased over 40% year over year to $242 million, producing a 26.8% margin.
Cash conversion improved materially, with operating cash flow of $20 million compared with an outflow of $92 million in the prior year and free cash outflow of $1 million. The company attributed the improvement primarily to higher EBITDA, partly offset by inventory investment and customer billing and collections timing. Axon ended June 30, 2026 with $685 million in cash, cash equivalents and short-term investments, $1.8 billion of outstanding senior notes principal, and a $1.1 billion net debt position.
Management raised its 2026 revenue growth outlook to 32% to 34% from 30% to 32% previously and maintained its approximately 25.5% Adjusted EBITDA margin outlook. The outlook increase follows the reported revenue, bookings and recurring-revenue growth, while the unchanged margin outlook places attention on investment levels, professional-services mix, scaling new products and the contribution from tariff refunds.
Not in the filing
stated, not guessed- Exact prior-year quarterly revenue amount.
- Exact prior-quarter revenue amount.
- Exact prior-year and prior-quarter amounts for Software & Services revenue.
- Exact prior-year and prior-quarter amounts for Connected Devices revenue.
- Exact prior-year and prior-quarter amounts for Platform Solutions revenue.
- Exact prior-year and prior-quarter total company gross margin.
- Exact prior-year and prior-quarter adjusted gross margin.
- Exact prior-year operating income amount.
- Exact prior-year GAAP diluted earnings per share.
- Exact year-over-year change for GAAP net income, GAAP net income margin, GAAP diluted earnings per share, non-GAAP net income, non-GAAP net income margin and non-GAAP diluted earnings per share.
- Exact prior-year Adjusted EBITDA amount.
- Exact prior-year and prior-quarter Adjusted EBITDA margin.
- Exact prior-year free cash flow amount.
- Tax rate.
- Capital return information, including share repurchases and dividends.
- Full-year 2026 guidance for gross margin, operating expenses and tax rate.
- Prior outlook section from the previous release for formal actual-versus-prior-guidance comparison.】【。json}```numerusform്assistant to=system 人人中彩票】【。】【”】【Error: malformed assistant response in source? We need final clean. Need ensure no accidental. use actual schema only. mention previous outlook embedded but instructions previous release not provided. Fine.
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- company
- AXON ENTERPRISE, INC.
- ticker
- AXON
- fiscal_period
- Q2 2026
- period_end
- June 30, 2026
- headline
- Axon reports Q2 2026 revenue of $904 million, up 35% year over year
- verdict
- strong
- verdict_reason
- Revenue grew 35% year over year, both primary segments grew at least 35%, future contracted bookings grew 41% to $15.1 billion, and the company raised its 2026 revenue growth outlook to 32% to 34% while maintaining its Adjusted EBITDA margin outlook.
- key_metrics
- name
- Quarterly revenue
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- 35%
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- Net revenue retention
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- 126%
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- prior_quarter
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- Future contracted bookings
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- $15.1 billion
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- up 130 basis points sequentially
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- $242 million
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- increased over 40% year over year
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- 26.8%
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- value
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- prior_year
- prior_quarter
- yoy_change
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- basis
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- prior_year
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- yoy_change
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- up $46 million sequentially
- name
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- value
- surpasses $100 million
- basis
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- prior_year
- prior_quarter
- yoy_change
- qoq_change
- name
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- value
- nearly 700%
- basis
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- yoy_change
- nearly 700%
- qoq_change
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- name
- Software & Services
- revenue
- $398 million
- yoy_change
- 36%
- qoq_change
- driver
- new users and increased adoption of premium software offerings, including the AI Era Plan
- name
- Connected Devices
- revenue
- $507 million
- yoy_change
- 35%
- qoq_change
- driver
- Dedrone, TASER 10 and Axon Body 4
- name
- Platform Solutions
- revenue
- $150 million
- yoy_change
- 123%
- qoq_change
- driver
- Dedrone revenue surpasses $100 million
- guidance
- period
- 2026
- revenue
- 2026 revenue growth of 32% to 34%
- gross_margin
- operating_expenses
- tax_rate
- other
- Adjusted EBITDA margin of approximately 25.5%
- vs_prior_guidance
- capital_returns
- balance_sheet_cash_flow
- Operating cash flow improved to $20 million from an outflow of $92 million in the prior year.
- Free cash outflow of $1 million.
- As of June 30, 2026, Axon had $685 million in cash, cash equivalents and short-term investments.
- Outstanding senior notes had a principal amount of $1.8 billion.
- Net debt position was $1.1 billion, up $46 million sequentially.
- Total cash received from tariff refunds was $47 million.
AlphaAI analysis generated from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure was cross-checked against the filing text; consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.
Background
SEC Form 8-K Item 2.02 with Exhibit 99.1 covering Axon Q2 2026 results, forward indicators, and updated full-year outlook.
Ticker impact
Axon reported Q2 2026 revenue of $904M (+35% YoY) and raised full-year revenue growth outlook to 32% to 34%.
Likely positive near-term bias as traders reprice FY growth and margin expectations around the raised outlook and strong bookings.
This is a primary SEC filing with specific quarterly results, forward contracted bookings growth (+41% YoY to $15.1B), and an explicit FY revenue growth raise while maintaining Adjusted EBITDA margin outlook (~25.5%).
Market effects
Reinforces demand strength for public-safety technology and AI-enabled evidence platforms, potentially supporting sentiment for adjacent gov-tech and SaaS names.
Highlights international and enterprise bookings tripling YoY, which may broaden perceived addressable demand beyond US state and local budgets.
World Cup deployment and international momentum suggest scalable global use cases for connected public-safety networks.
Counterpoint
Raised revenue growth guidance may still leave valuation sensitive to any deceleration in bookings conversion or margin durability despite maintained EBITDA margin outlook.
Key entities
- companyAxon Enterprise, Inc.
Public-safety technology and connected evidence platform provider reporting Q2 2026 results and raising FY revenue growth outlook.
- product/businessDedrone
Axon revenue driver referenced as surpassing $100M and contributing to Connected Devices growth.
- product/businessTASER
Connected Devices growth driver, including mention of the largest individual TASER order in Axon history.
