Axon Enterprise (AXON) Q1 2025 earnings summary

Executive summary

• Q1 2025 revenue reached $604 million, up 31% year-over-year, marking the 13th consecutive quarter of 25%+ growth.

• Net income was $88 million (14.6% margin), with non-GAAP net income at $115 million and Adjusted EBITDA at $155 million (25.7% margin).

• Software & Services led growth, with revenue up 39% to $263 million, driven by premium software adoption and user expansion.

• Connected Devices revenue rose 26% to $341 million, with strong demand for TASER 10, Axon Body 4, and platform solutions.

• Major product launches included Axon Vehicle Intelligence, Axon Outpost, Axon Lightpost, and Axon Assistant, expanding the public safety technology portfolio.

Financial highlights

• Gross margin improved to 60.6%, up 440 basis points year-over-year; adjusted gross margin was 63.6%.

• Adjusted EBITDA increased 42% year-over-year, driven by higher revenue and improved margins.

• Operating cash flow was $26 million, up $42 million year-over-year; free cash flow was $1 million.

• Cash, cash equivalents, and investments totaled $2.2 billion, with a net cash position of $171 million as of March 31, 2025.

• Net income per diluted share was $1.08, down from $1.73 in Q1 2024.

Outlook and guidance

• Full-year 2025 revenue guidance raised to $2.60–$2.70 billion, representing 27% growth at the midpoint.

• Adjusted EBITDA guidance increased to $650–$675 million, with a target margin of approximately 25%.

• 2025 CapEx expected to be $160–$180 million, focused on R&D, capacity expansion, and new product development.

• Stock-based compensation expense for 2025 projected at $580–$630 million.

• Tariffs expected to impact adjusted EBITDA margin by ~50 basis points for the full year.