Axon Enterprise (AXON) Q1 2026 earnings summary

Executive summary

• Q1 2026 revenue reached $807.3M, 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 $169.3M (21% margin), with non-GAAP net income at $133M and Adjusted EBITDA at $202M (25% margin).

• AI product revenue grew over 700% year-over-year, with Dedrone bookings up 500% and revenue up over 300%.

• International revenue more than doubled, now representing 20% of total revenue, with strong EMEA growth.

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

Financial highlights

• Software & Services revenue increased 35% year-over-year to $355M; Connected Devices revenue grew 33% to $453M.

• Annual recurring revenue (ARR) rose 35% year-over-year to $1.5B, with net revenue retention at 125%.

• Adjusted EBITDA margin was 25% in Q1 2026, with full-year guidance at 25.5%.

• Gross margin was 59.1%, down 150 bps year-over-year; adjusted gross margin was 61.6%.

• Future contracted bookings up 44% year-over-year to $14.3B.

Outlook and guidance

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

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

• 2026 stock-based compensation expected at $590–$620M; CapEx projected at $160–$190M.

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

• Management expects to recognize 20–25% of $9.7B in remaining performance obligations over the next 12 months.