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AXON Q1 Earnings Miss Estimates on Tariff-Driven Margins
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Key Takeaways
AXON posted Q1 revenue growth of 33.7%, beating estimates despite an EPS miss.
Axon saw strong demand for TASER 10, Axon Body 4 and counter-drone products.
AXON lifted its 2026 revenue growth outlook to 30-32% while keeping EBITDA targets steady.
Axon Enterprise, Inc. (AXON - Free Report) reported first-quarter 2026 adjusted earnings of $1.61 per share, up 9.5% year over year. However, the figure missed the Zacks Consensus Estimate of $1.66.
Total revenues were $807.3 million, up 33.7% year over year and ahead of the consensus estimate of $781 million.
AXON’s Q1 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 increased 32.8% year over year to $452.8 million, driven by strong demand for TASER 10 devices, Axon Body 4, counter-drone products and fleet systems, along with continued momentum in Platform Solutions. However, the adjusted gross margin decreased year over year to 50.4% from 52.8%.
Software & Services: The segment’s revenues rose 34.9% year over year to $354.5 million, driven by new users and increased adoption of premium software offerings by existing customers. However, the adjusted gross margin decreased to 75.8% from 77.7% in the year-ago period.
Axon Enterprise, Inc Price, Consensus and EPS Surprise
Axon’s cost of sales increased 38.7% year over year to $330.1 million. Selling, general and administrative expenses were $259 million, up 15.9% year over year.
Total operating expenses climbed 19.6% year over year to $448 million. The adjusted gross margin decreased to 61.6% from 63.6% in the year-ago period, owing to an increase in global tariffs and higher professional services costs.
AXON’s Balance Sheet & Cash Flow
At the end of first-quarter 2026, Axon had cash and cash equivalents of $458.9 million compared with $1.20 billion at December 2025-end. Long-term lease liabilities totaled $97.2 million compared with $98.9 million at 2025-end.
In the first quarter of 2026, the company used net cash of $31.5 million in operating activities against $25.8 million net cash generated in the prior-year period.
Adjusted free cash outflow was $54.1 million in the first quarter of 2026 against an inflow of $2.7 million in the prior-year period.
Axon Raises 2026 Revenue Outlook
Management raised its full-year revenue outlook to 30-32% annual growth, up from 27-30% expected earlier, while maintaining an adjusted EBITDA margin target of approximately 25.5%. The updated view reflects continued momentum across TASER, body-worn cameras, counter-drone, real-time operations and AI-enabled offerings.
Axon also expects full-year operating cash flow of more than $600 million and free cash flow of approximately $450 million. Also, capital expenditures are now projected at $160-$190 million, down from the prior $185-$215 million range.
AXON Zacks Rank
The company currently carries a Zacks Rank #3 (Hold).
Graco Inc. (GGG - Free Report) posted quarterly earnings of 66 cents per share in the first quarter of 2026, missing the Zacks Consensus Estimate of 75 cents per share. This compares with earnings of 70 cents per share a year ago.
Graco posted revenues of $540.1 million for the quarter, missing the Zacks Consensus Estimate by 3.5%. This compares with year-ago revenues of $528.3 million.
Stanley Black & Decker, Inc. (SWK - Free Report) reported first-quarter 2026 adjusted earnings of 80 cents per share, which beat the Zacks Consensus Estimate of 61 cents. The bottom line increased 6.7% year over year.
Stanley Black’s net sales of $3.85 billion beat the consensus estimate of $3.74 billion. The top line increased 2.7% from the year-ago quarter.
Ingersoll Rand Inc. (IR - Free Report) reported first-quarter 2026 adjusted earnings of 77 cents per share, which surpassed the Zacks Consensus Estimate of 74 cents. The bottom line increased 7% year over year.
Total revenues of $1.85 billion beat the consensus estimate of $1.83 billion. The top line increased 7.6% year over year.
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AXON Q1 Earnings Miss Estimates on Tariff-Driven Margins
Key Takeaways
Axon Enterprise, Inc. (AXON - Free Report) reported first-quarter 2026 adjusted earnings of $1.61 per share, up 9.5% year over year. However, the figure missed the Zacks Consensus Estimate of $1.66.
Total revenues were $807.3 million, up 33.7% year over year and ahead of the consensus estimate of $781 million.
AXON’s Q1 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 increased 32.8% year over year to $452.8 million, driven by strong demand for TASER 10 devices, Axon Body 4, counter-drone products and fleet systems, along with continued momentum in Platform Solutions. However, the adjusted gross margin decreased year over year to 50.4% from 52.8%.
Software & Services: The segment’s revenues rose 34.9% year over year to $354.5 million, driven by new users and increased adoption of premium software offerings by existing customers. However, the adjusted gross margin decreased to 75.8% from 77.7% in the year-ago period.
Axon Enterprise, Inc Price, Consensus and EPS Surprise
Axon Enterprise, Inc price-consensus-eps-surprise-chart | Axon Enterprise, Inc Quote
AXON Gross Margin Reflects Tariffs and Mix Shift
Axon’s cost of sales increased 38.7% year over year to $330.1 million. Selling, general and administrative expenses were $259 million, up 15.9% year over year.
Total operating expenses climbed 19.6% year over year to $448 million. The adjusted gross margin decreased to 61.6% from 63.6% in the year-ago period, owing to an increase in global tariffs and higher professional services costs.
AXON’s Balance Sheet & Cash Flow
At the end of first-quarter 2026, Axon had cash and cash equivalents of $458.9 million compared with $1.20 billion at December 2025-end. Long-term lease liabilities totaled $97.2 million compared with $98.9 million at 2025-end.
In the first quarter of 2026, the company used net cash of $31.5 million in operating activities against $25.8 million net cash generated in the prior-year period.
Adjusted free cash outflow was $54.1 million in the first quarter of 2026 against an inflow of $2.7 million in the prior-year period.
Axon Raises 2026 Revenue Outlook
Management raised its full-year revenue outlook to 30-32% annual growth, up from 27-30% expected earlier, while maintaining an adjusted EBITDA margin target of approximately 25.5%. The updated view reflects continued momentum across TASER, body-worn cameras, counter-drone, real-time operations and AI-enabled offerings.
Axon also expects full-year operating cash flow of more than $600 million and free cash flow of approximately $450 million. Also, capital expenditures are now projected at $160-$190 million, down from the prior $185-$215 million range.
AXON 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 66 cents per share in the first quarter of 2026, missing the Zacks Consensus Estimate of 75 cents per share. This compares with earnings of 70 cents per share a year ago.
Graco posted revenues of $540.1 million for the quarter, missing the Zacks Consensus Estimate by 3.5%. This compares with year-ago revenues of $528.3 million.
Stanley Black & Decker, Inc. (SWK - Free Report) reported first-quarter 2026 adjusted earnings of 80 cents per share, which beat the Zacks Consensus Estimate of 61 cents. The bottom line increased 6.7% year over year.
Stanley Black’s net sales of $3.85 billion beat the consensus estimate of $3.74 billion. The top line increased 2.7% from the year-ago quarter.
Ingersoll Rand Inc. (IR - Free Report) reported first-quarter 2026 adjusted earnings of 77 cents per share, which surpassed the Zacks Consensus Estimate of 74 cents. The bottom line increased 7% year over year.
Total revenues of $1.85 billion beat the consensus estimate of $1.83 billion. The top line increased 7.6% year over year.