Axon Enterprise (AXON) reported revenue of $904.4M in the second quarter ended June 30, 2026, higher than a year earlier and above analyst estimates. On Oct. 24, 2026 it also announced Body 5, a new AI-oriented body camera. The theme is public-safety technology moving from one-off hardware sales toward software and sensors that generate ongoing revenue. Profit is still small relative to sales, and the stock's valuation is high compared with peers.
Key facts
- Q2 FY2026 (quarter ended June 30, 2026): revenue was $904.4M against an analyst estimate of $876.4M. EPS (earnings per share) as measured against analyst estimates, a non-GAAP figure, was 1.88 against an estimate of 1.84. Both beat. (Reported Aug. 5, 2026.)
- Growth: revenue rose 35.3% from the year-ago quarter. Net income fell 18.5% to $29.4M.
- Stock price: $420.37 on Oct. 23, 2026, up 1.39% on the day. The 52-week range is $339.01 to $764.02.
- Next earnings: Nov. 5, 2026. Analysts expect EPS of 1.9 and revenue of $937.8M.
- Product news: on Oct. 24, 2026 Axon announced Body 5, a camera it describes as built for the AI era, according to its press release.
What happened
The theme. As general background, public-safety agencies have often bought a stun weapon or a camera once and replaced it years later. Axon appears to be moving toward a connected system: cameras and sensors that record, plus software for managing and analyzing footage. Software can be attractive because customers tend to pay on a continuing basis. The Body 5 announcement seems to fit this direction. Axon's headline calls it a camera built for the AI era. Our interpretation, not Axon's stated pitch, is that this may mean more work on footage could be handled by software. We have no details on features, pricing or shipping dates, so the financial effect is unknown for now.
The quarter. Revenue for the quarter ended June 30, 2026 was $904.4M, higher than the year-ago $668.5M and $28.0M (3.2%) above the analyst estimate. EPS of 1.88 beat the 1.84 estimate by $0.04, or 2.2%. The GAAP diluted EPS, which follows standard accounting rules, was 0.36. The wide gap between the two suggests the 1.88 figure excludes certain items, though the data we have does not say which.
Where the revenue came from. Axon changed how it labels its segments between the two periods, so the lines do not match exactly. In the latest quarter, the Software and Sensors segment brought in $397.8M, up from $292.2M a year earlier. The company also reported TASER X2 revenue of $261.3M, Platform Solutions revenue of $149.8M and Axon Body revenue of $95.4M. The year-ago report showed a Taser Weapons segment at $376.4M, but because the categories were reorganized, we are not comparing the weapons lines directly. By geography, the United States made up $742.3M and non-US markets $162.1M.
We did not have a call transcript or release figures for this piece, so we are not quoting management on the drivers of growth. The segment data points to software and sensors as the largest line, up from $292.2M a year earlier. Because of the reorganization, we cannot rank the segments by growth.
Trend over the last several quarters.
| Quarter ended | Revenue | Gross margin | Operating margin | Net income | |---|---|---|---|---| | June 30, 2025 | $668.5M | 60.4% | 0.2% | $36.1M | | Sept. 30, 2025 | $710.6M | 60.1% | -0.3% | $-2.2M | | Dec. 31, 2025 | $796.7M | 57.9% | 1.3% | $3.0M | | March 31, 2026 | $807.3M | 59.1% | 3.6% | $169.3M | | June 30, 2026 | $904.4M | 60.4% | 5.2% | $29.4M |
Revenue rose every quarter. Operating margin, which is the share of sales left after running costs, improved from slightly negative to 5.2%. Gross margin (sales minus the direct cost of products) dipped in the December 2025 quarter and then recovered to match the level from a year earlier. The $169.3M net income in the March 2026 quarter stands out. Operating margin that quarter was only 3.6%, so the gain likely came from items outside core operations. The data we have does not say which.
Cash flow is the weak spot. Free cash flow (cash from operations minus spending on equipment and similar items) was negative $972,000 in the June 2026 quarter, after negative $54.6M in the March 2026 quarter. The December 2025 quarter was strongly positive at $155.4M, so the pattern is uneven from quarter to quarter. In the June 2026 quarter Axon spent $130.0M on share buybacks, with no buybacks in the four prior quarters shown.
Balance sheet. As of June 30, 2026, Axon held $692.5M in cash and short-term investments against $1.83B in total debt, for net debt of $1.24B. Shareholders' equity was $3.67B. Financial strength scores are middling to solid: a Piotroski score of 5 (on a 0-9 scale of financial health) and an Altman Z of 6.45 (a bankruptcy-risk gauge where higher is safer).
Why it matters for investors
Valuation is the main debate. On trailing 12-month figures, Axon trades at a P/E (price relative to earnings) of 169.36, a price/sales ratio of 10.61 and a price to free cash flow of 256.40. Net margin is 6.2%. Peers in the broader security and rugged-technology space look very different:
| Company | Market cap | P/E | Net margin | |---|---|---|---| | Axon (AXON) | $34.15B | 169.36 | 6.2% | | Zebra Technologies (ZBRA) | $18.28B | 36.15 | 9.2% | | Cadre Holdings (CDRE) | $1.28B | 34.47 | 5.3% | | Napco Security (NSSC) | $1.39B | 32.08 | 21.3% |
None of these peers is a perfect match for Axon, and the smaller ones are far smaller. Still, the gap in P/E shows how much future growth is built into Axon's price.
Analysts are positive. Of 22 ratings, 18 are Buy and 4 are Hold, with none at Sell. The consensus price target averages $633.63, with a median of $657.50, a high of $750.00 and a low of $440.00. The Oct. 23 price of $420.37 was below even the lowest target, but targets are analysts' opinions, not forecasts we endorse, and they do not guarantee upside. Piper Sandler kept its Overweight rating on Oct. 20, 2026. For later periods, analysts expect revenue of $1.34B and EPS of 2.80 for the quarter ending March 30, 2028, and revenue of $1.47B and EPS of 3.19 for the quarter ending June 30, 2028.
Our MoonshotScore. Stock Expert AI's MoonshotScore V2 for Axon is 54.3, which we label Fair. Compared with other companies in its sector, the pillars are: quality 61, safety 59, growth 42, momentum 41 and valuation 13. In plain terms, the business scores decently on quality and safety, only middling on growth and recent price momentum, and poorly on valuation, which matches the P/E gap above.
What could go wrong
- Pricing in perfection. With a P/E of 169.36, a miss on growth or margins could weigh on the stock. The 52-week range, $339.01 to $764.02, shows how far the price has moved.
- Thin profits. Operating margin of 5.2% and net income that fell from a year earlier mean that heavy spending could absorb the revenue gains.
- Uneven cash flow. Free cash flow was negative or near zero in two of the last three quarters.
- Insider selling. Among the 30 most recent insider filings, those in the last 90 days show 25 sales and no open-market purchases. Insider sales can have many causes, such as pre-planned selling or tax needs, so this is a data point rather than a verdict.
- Model signal. The FMP discounted cash flow model, which values a company from projected cash, returns a negative $78.52 per share as of Oct. 25, 2026. Such models are very sensitive to their inputs and cash flow has been uneven, so we treat this as a caution about how hard Axon is to value, not a firm conclusion.
- Unknown product details. We do not have pricing, timing or customer demand for Body 5.
What to watch next
- Nov. 5, 2026 earnings: whether revenue meets the $937.8M estimate and EPS the 1.9 estimate.
- Operating margin: whether it keeps climbing from 5.2%.
- Free cash flow: whether it turns clearly positive again.
- Software and Sensors revenue: whether it keeps growing as the largest segment.
- Body 5 details: pricing, availability and early customer orders.
- Buybacks and debt: whether Axon repeats the buyback while carrying net debt of $1.24B.
Frequently asked questions
Q: What did Axon announce on Oct. 24, 2026?
Axon announced Body 5, a next-generation body camera that the company says is built for the AI era. The company's release is the source for that description. We have no numbers on pricing, shipping or expected sales.
Q: Is Axon profitable?
Yes, but barely compared with its sales. In the quarter ended June 30, 2026 it earned $29.4M in net income on $904.4M of revenue, with a trailing net margin of 6.2%. Net income was lower than the year-ago $36.1M even as revenue grew.
Q: Is Axon stock expensive compared with similar companies?
On P/E, yes. Axon's trailing P/E is 169.36, against 36.15 for Zebra Technologies, 34.47 for Cadre Holdings and 32.08 for Napco Security. Analysts' average price target is $633.63, but that is an opinion, not a promise. This article is information, not investment advice.
This is educational content, not investment advice. Past performance does not guarantee future results.