Axon Enterprise (AXON) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue reached $807.3 million, up 34% year over year, marking the ninth consecutive quarter of 30%+ growth, driven by strong demand across product lines including AI and counter-drone solutions.

• Net income was $169.3 million (21% margin), with non-GAAP net income at $133 million and Adjusted EBITDA at $202 million (25% margin).

• AI product revenue grew over 700% year over year, with counter-drone product revenue up over 300% and rapid adoption across large agencies and major events.

• Platform Solutions revenue rose 95% year over year, reflecting rapid adoption of Dedrone and related technologies.

• International revenue more than doubled, now representing 20% of total revenue.

Financial highlights

• Software & Services revenue increased 35% year over year to $355 million, with gross margin at 72.4% and adjusted gross margin at 75.8%.

• Connected Devices revenue rose 33% to $453 million, with gross margin at 48.7% and adjusted gross margin at 50.4%.

• Net revenue retention was 125%, and annual recurring revenue (ARR) grew 35% to $1.5 billion.

• Future contracted bookings climbed 44% year over year to $14.3 billion.

• Adjusted EBITDA margin was 25% in Q1, with a target of 25.5% for the year.

Outlook and guidance

• Full-year 2026 revenue growth outlook raised to 30–32% (from 27–30%), with Adjusted EBITDA margin guidance maintained at 25.5%.

• Expected full-year operating cash flow over $600 million and free cash flow around $450 million.

• Stock-based compensation expected at $590–$620 million for the year, with dilution kept below 2.5%.

• CapEx projected at $160–$190 million for 2026.

• 2028 targets include $6B annual revenue, 28% adjusted EBITDA margin, and average annual free cash flow conversion of 60% of adjusted EBITDA.