Axon Enterprise (AXON) Stock Surges Over 18% After Strong Q4 Earnings

TLDR

• Axon Enterprise beat Q4 earnings with $2.15 adjusted EPS and $797M revenue, topping forecasts of $1.60 EPS and $755M revenue.
• Revenue grew 39% year-over-year, while the software segment jumped 40% to $343M.
• AI Era products generated $750M in bookings in fiscal 2025, making up 10% of total orders.
• Axon guided for 27–30% revenue growth in 2026, ahead of Wall Street’s 25.8% estimate.
• The company set a 2028 target of $6B in annual revenue with a 28% adjusted EBITDA margin.

Axon Enterprise posted a strong fourth quarter, sending its stock up more than 18% on February 25, 2026.

The company reported adjusted earnings per share of $2.15, well above the analyst forecast of $1.60. Revenue came in at $797 million, beating expectations of $755 million.

Revenue grew 39% compared to the same period a year ago. That kind of growth is hard to ignore.

Axon Enterprise, Inc., AXON

However, net income dropped sharply — falling to $3 million, or $0.03 per share, from $135 million, or $1.67 per share in the prior year. The decline was attributed to operational losses and strategic investments.

The software segment was a standout, growing 40% to $343 million. CFO Brittany Bagley said AI was a key driver of that growth, and the company expects software to outpace hardware revenue before long.

AI Products Driving Bookings

Axon’s AI Era product line pulled in $750 million in bookings during fiscal 2025, representing 10% of total bookings.

Products include automated license plate recognition and Axon Assistant, a voice assistant built into body cameras. Axon Assistant has already picked up over 500 clients.

CEO Rick Smith called AI a transformative factor for the company, pointing to its potential to deliver value through what he described as responsible deployment.

Total bookings grew 53% in Q4, a number that caught Wall Street’s attention.

2026 and 2028 Guidance

For fiscal 2026, Axon guided for revenue growth of 27% to 30%. That beat the Street consensus of around 25.8%. EBITDA margin guidance also came in above expectations.

Looking further out, Axon set a 2028 revenue target of $6 billion with an adjusted EBITDA margin of 28%. Analysts largely welcomed those targets.

International business showed momentum too, with two nine-figure deals closed during the quarter.

Analyst Reactions

TD Cowen raised its price target on AXON to $950 from $925, maintaining its existing rating. The firm noted the stock trades at roughly 9.5 times enterprise value to calendar year 2027 estimated sales, and based its new target on 17 times that same metric.

Craig-Hallum kept a Buy rating but trimmed its target from $910 to $820, still citing the strong quarterly results.

RBC Capital maintained an Outperform rating while lowering its target from $860 to $735, pointing to Axon’s ability to expand into new product categories.

Piper Sandler cut its target from $753 to $690 but held its Overweight rating, highlighting the company’s global sensor network and AI integration.

Raymond James reiterated an Outperform rating with an $800 target, calling the 2028 goals stronger than consensus expected.

Citizens maintained a Market Outperform rating with an $825 price target.

Axon’s revenue over the last twelve months reached $2.78 billion, with gross profit margins of nearly 60%, according to InvestingPro data.

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