$AXON

AXON Q4 2025 and Full Year Financial Results Analysis 👇

Axon Enterprise, the market leader in cloud-supported integrated hardware and software for public safety, announced strong financial results that exceeded expectations in the fourth quarter of 2025. The company’s core mission is to protect life, capture truth, and reduce gun-related deaths between police and the public by 50% by 2033.
Financial Performance Summary
Axon has a strong ecosystem with more than 1M software users and more than 1M TASER devices sold. Revenue tied to customers in the company’s subscription plans is above 95%. Looking at the financial results, total revenue in Q4 2025 came in at $796.72M, recording 38.6% YoY growth. In this quarter, Non-GAAP EPS was $2.15, adjusted EBITDA margin was 25.9%, and software and services revenue was $343M. When evaluating full-year 2025, the company’s total revenue reached $2.8B with 33% growth. For the full year, Non-GAAP EPS was recorded at $6.85 and adjusted EBITDA margin at 25.5%.
On the other hand, the company’s Future Contracted Bookings reached $14.4B as of Q4 2025. Annual recurring revenue (ARR) also rose to $1.3B as of the same period. Net Revenue Retention, which shows the company’s ability to retain customers, was at a very strong level of 125%.
Market Opportunity and Growth Strategy
Axon’s total addressable market (TAM) is $159B. The largest part of this market is International Governments at $76B, followed by U.S. State and Local Governments at $48B. The U.S. State and Local Law Enforcement market currently has penetration below 15%, and this points to significant growth potential. When examined by product, Digital Evidence Management Systems (DEMS) and add-ons have a $41B market opportunity, while TASER and Training products have a $17B market opportunity. In addition, AI Plans are estimated to offer a $13B opportunity in the market. CEO Rick Smith emphasized that he believes Axon should be the company with the most aggressive and innovative vision in AI in the market.
The Impact of Strategic Acquisitions and AI Integration on Growth
Strategic acquisitions and AI solutions integrated into the product portfolio have played a major role in Axon’s recent strong financial performance and market share gains. The company has significantly expanded its ecosystem through strategic acquisitions such as Fusus and Dedrone. For example, Fusus, a real-time operations platform, enables first responders to make faster and more informed decisions by providing live video streaming, interactive mapping, and critical alerts. It has been reported that, thanks to Fusus integration, the time to locate a stolen vehicle could be reduced by 32 minutes. Another important move, Dedrone, provides a critical security layer in unauthorized drone detection, offering customers a next-generation protection capability.
On the AI side, Axon is developing tools that fundamentally change operational efficiency. In particular, AI-supported productivity solutions such as “Draft One” reduce the time police officers spend writing incident reports by 67%, allowing resources to be used much more effectively. These solutions under the “Axon AI” umbrella create high added value at the intersection of hardware and software, together with summaries and contextual alerts generated from 911 calls. These new features added to subscription packages (for example, the “AI Era Plan”) increase the revenue the company earns per customer and stand out as one of the key factors supporting the 125% net revenue retention rate.
Forward-Looking Expectations (Guidance)
The company updated both its short- and medium-term targets, signaling that strong growth will continue. For 2026, revenue growth is expected to be between 27% and 30% YoY, and adjusted EBITDA margin is projected to be around 25.5%. In addition, 2026 capital expenditures (Capex) were announced to be planned in the range of $185M to $215M. Pointing to increasing demand for its hardware, software, and AI-supported products, the company also announced a target of approximately $6B in revenue and a 28% adjusted EBITDA margin for 2028.