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Axon's Q4 Earnings Top Estimates, Connected Devices' Sales Increase Y/Y
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Key Takeaways
AXON beat Q4 estimates with EPS of $2.15 and revenues up 39% year over year.
Connected Devices and Software & Services revenues jumped 37.6% and 39.8%, respectively.
Axon targets 27-30% revenue growth in 2026 and $6B annual revenues by 2028.
Axon Enterprise, Inc. (AXON - Free Report) reported fourth-quarter 2025 adjusted earnings of $2.15 per share, which beat the Zacks Consensus Estimate of $1.67. The bottom line increased 3.4% year over year.
Total revenues of $797 million surpassed the consensus estimate of $753.7 million and increased 39% year over year. The top line benefited from strong demand for TASER 10, Axon Body 4 and counter-drone equipment. Growing adoption of premium software solutions also augmented the top-line results.
In 2025, AXON reported net revenues of $2.78 billion, which increased 33.5% year over year. The company’s adjusted earnings were $6.85 per share, up 15.3% on a year-over-year basis.
AXON’s Q4 Business Segment Performance
Effective first-quarter 2025, AXON realigned its business segments. The company now reports results under two business segments, namely Connected Devices and Software & Services.
Connected Devices: The segment’s revenues jumped 37.6% year over year to $454.2 million, driven by an increase in demand for TASER 10 devices, Axon Body 4, counter-drone products and fleet systems. However, the adjusted gross margin decreased year over year to 49.3% from 52.2%. The Zacks Consensus Estimate for Connected Devices’ revenues was pegged at $417 million.
Software & Services: The segment’s revenues rose 39.8% year over year to $342.5 million. The uptick was driven by an increase in the aggregate number of users and growing adoption of premium software offerings. However, the adjusted gross margin decreased to 76.7% from 78% in the year-ago period. The Zacks Consensus Estimate for Software & Services’ revenues was pegged at $336 million.
Axon Enterprise, Inc Price, Consensus and EPS Surprise
Axon’s cost of sales increased 46.3% year over year to $335.4 million. Selling, general and administrative expenses increased 39.8% year over year to $317.4 million.
Total operating expenses climbed 41.1% year over year to $511.4 million. The adjusted gross margin decreased to 61.1% from 63.2% in the year-ago period, owing to global tariff-related impacts and a higher Platform Solutions product mix in Connected Devices.
AXON’s Balance Sheet & Cash Flow
At the end of fourth-quarter 2025, Axon had cash and cash equivalents of $1.20 billion compared with $454.8 million at December 2024-end. Long-term lease liabilities totaled $98.9 million compared with $41.4 million at 2024-end.
In 2025, the company generated net cash of $211.3 million from operating activities compared with $408.3 million in the previous year period.
Adjusted free cash flow was $85.6 million in 2025 compared with $344.3 million in the prior-year period.
Outlook for 2026
For 2026, Axon expects revenues to grow 27-30% year over year. Adjusted EBITDA margin is expected to be 25.5%.
The company expects capital expenditures to be between $185 million and $215 million. This includes investments in long-term research & development projects, continued capacity expansion, global facility build-outs and new product development. It anticipates stock-based compensation expenses to be $230 million.
AXON’s Outlook for 2028
In 2028, Axon anticipates achieving revenues of $6 billion annually. Adjusted EBITDA margin is projected to be about 28%. The company aims to generate strong cash flow, with adjusted free cash flow equal to 60% of adjusted EBITDA. It plans to limit annual dilution from stock-based compensation to less than 2.5%.
AXON’s Zacks Rank
The company currently carries a Zacks Rank #3 (Hold).
Graco Inc. (GGG - Free Report) posted quarterly earnings of 77 cents per share in the fourth quarter of 2025, in line with the Zacks Consensus Estimate. This compares with earnings of $0.64 per share a year ago.
Graco posted revenues of $593.2 million for the quarter, surpassing the Zacks Consensus Estimate by 1.39%. This compares with year-ago revenues of $548.67 million.
Baker Hughes Company (BKR - Free Report) reported fourth-quarter 2025 adjusted earnings of 78 cents per share, which beat the Zacks Consensus Estimate of 67 cents. The bottom line also increased from the year-ago level of 70 cents.
Total quarterly revenues of $7,386 million beat the Zacks Consensus Estimate of $7,056 million. The top line also increased from the year-ago quarter’s $7,364 million.
3M Company (MMM - Free Report) delivered adjusted earnings of $1.83 per share in the fourth quarter of 2025, which surpassed the Zacks Consensus Estimate of $1.82. The company reported earnings of $1.68 per share in the year-ago quarter.
MMM’s adjusted revenues of $6.00 billion missed the consensus estimate of $6.08 billion. On an adjusted basis, organic revenues increased 2.2% year over year.
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Axon's Q4 Earnings Top Estimates, Connected Devices' Sales Increase Y/Y
Key Takeaways
Axon Enterprise, Inc. (AXON - Free Report) reported fourth-quarter 2025 adjusted earnings of $2.15 per share, which beat the Zacks Consensus Estimate of $1.67. The bottom line increased 3.4% year over year.
Total revenues of $797 million surpassed the consensus estimate of $753.7 million and increased 39% year over year. The top line benefited from strong demand for TASER 10, Axon Body 4 and counter-drone equipment. Growing adoption of premium software solutions also augmented the top-line results.
In 2025, AXON reported net revenues of $2.78 billion, which increased 33.5% year over year. The company’s adjusted earnings were $6.85 per share, up 15.3% on a year-over-year basis.
AXON’s Q4 Business Segment Performance
Effective first-quarter 2025, AXON realigned its business segments. The company now reports results under two business segments, namely Connected Devices and Software & Services.
Connected Devices: The segment’s revenues jumped 37.6% year over year to $454.2 million, driven by an increase in demand for TASER 10 devices, Axon Body 4, counter-drone products and fleet systems. However, the adjusted gross margin decreased year over year to 49.3% from 52.2%. The Zacks Consensus Estimate for Connected Devices’ revenues was pegged at $417 million.
Software & Services: The segment’s revenues rose 39.8% year over year to $342.5 million. The uptick was driven by an increase in the aggregate number of users and growing adoption of premium software offerings. However, the adjusted gross margin decreased to 76.7% from 78% in the year-ago period. The Zacks Consensus Estimate for Software & Services’ revenues was pegged at $336 million.
Axon Enterprise, Inc Price, Consensus and EPS Surprise
Axon Enterprise, Inc price-consensus-eps-surprise-chart | Axon Enterprise, Inc Quote
AXON’s Margin Profile
Axon’s cost of sales increased 46.3% year over year to $335.4 million. Selling, general and administrative expenses increased 39.8% year over year to $317.4 million.
Total operating expenses climbed 41.1% year over year to $511.4 million. The adjusted gross margin decreased to 61.1% from 63.2% in the year-ago period, owing to global tariff-related impacts and a higher Platform Solutions product mix in Connected Devices.
AXON’s Balance Sheet & Cash Flow
At the end of fourth-quarter 2025, Axon had cash and cash equivalents of $1.20 billion compared with $454.8 million at December 2024-end. Long-term lease liabilities totaled $98.9 million compared with $41.4 million at 2024-end.
In 2025, the company generated net cash of $211.3 million from operating activities compared with $408.3 million in the previous year period.
Adjusted free cash flow was $85.6 million in 2025 compared with $344.3 million in the prior-year period.
Outlook for 2026
For 2026, Axon expects revenues to grow 27-30% year over year. Adjusted EBITDA margin is expected to be 25.5%.
The company expects capital expenditures to be between $185 million and $215 million. This includes investments in long-term research & development projects, continued capacity expansion, global facility build-outs and new product development. It anticipates stock-based compensation expenses to be $230 million.
AXON’s Outlook for 2028
In 2028, Axon anticipates achieving revenues of $6 billion annually. Adjusted EBITDA margin is projected to be about 28%. The company aims to generate strong cash flow, with adjusted free cash flow equal to 60% of adjusted EBITDA. It plans to limit annual dilution from stock-based compensation to less than 2.5%.
AXON’s Zacks Rank
The company currently carries a Zacks Rank #3 (Hold).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Performance of Other Companies
Graco Inc. (GGG - Free Report) posted quarterly earnings of 77 cents per share in the fourth quarter of 2025, in line with the Zacks Consensus Estimate. This compares with earnings of $0.64 per share a year ago.
Graco posted revenues of $593.2 million for the quarter, surpassing the Zacks Consensus Estimate by 1.39%. This compares with year-ago revenues of $548.67 million.
Baker Hughes Company (BKR - Free Report) reported fourth-quarter 2025 adjusted earnings of 78 cents per share, which beat the Zacks Consensus Estimate of 67 cents. The bottom line also increased from the year-ago level of 70 cents.
Total quarterly revenues of $7,386 million beat the Zacks Consensus Estimate of $7,056 million. The top line also increased from the year-ago quarter’s $7,364 million.
3M Company (MMM - Free Report) delivered adjusted earnings of $1.83 per share in the fourth quarter of 2025, which surpassed the Zacks Consensus Estimate of $1.82. The company reported earnings of $1.68 per share in the year-ago quarter.
MMM’s adjusted revenues of $6.00 billion missed the consensus estimate of $6.08 billion. On an adjusted basis, organic revenues increased 2.2% year over year.