What to Note Ahead of Axon Enterprise's Q3 Earnings Release?

Axon Enterprise, Inc. AXON is scheduled to release third-quarter 2025 results on Nov 4, after market close.

The Zacks Consensus Estimate for third-quarter revenues is pegged at $699.6 million, which indicates an increase of 28.5% from the year-ago quarter’s figure. The consensus mark for earnings is pinned at $1.63 per share, which has declined 1.2% in the past 60 days. The estimate indicates growth of 12.4% from the figure reported in the year-ago quarter.

The company has a stellar earnings surprise history, having surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 25.9%. In the last reported quarter, it reported earnings of $2.12 per share, which surpassed the consensus estimate by 37.7%.

Let’s see how things have shaped up for Axon Enterprise this earnings season.

Key Factors Likely to Have Shaped Q3 Performance

Robust demand for TASER 10 products and higher cartridge sales are expected to have boosted the performance of Axon Enterprise’s Connected Devices segment in the third quarter. Also, strong customer response for its next-generation body-worn camera, Axon Body 4, and solid demand for virtual reality training services are expected to have driven the segment’s performance.

Axon Enterprise’s strong presence in the counter-drone space, with the growing capabilities of its Dedrone offerings and Artificial Intelligence (AI)-powered command-and-control platform, is likely to have contributed to the segment’s growth. The Zacks Consensus Estimate for the Connected Devices segment’s revenues is pegged at $396 million, which indicates an increase of 5.3% from the previous-quarter number.

The Software & Services segment is also expected to have put up an impressive show in the upcoming earnings, supported by the addition of new users and associated devices to the AXON network. Strong momentum in Axon Evidence and cloud services, driven by an increase in the aggregate number of users, average revenue per user and software add-ons, is also likely to have augmented the segmental top line.

A rise in adoption of software applications, driven by increased demand for cloud-connected TASER devices, has been driving Axon Evidence and cloud services’ growth within the segment. The Zacks Consensus Estimate for the Software & Services segment’s net sales is pegged at $302 million, indicating a 3.4% growth from the previous-quarter number.

AXON remains focused on acquisitions and strategic collaborations to expand its product offerings and customer base. This is likely to reflect in its third-quarter results. For instance, in October 2024, the company acquired Dedrone, a global leader in airspace security. The inclusion of Dedrone’s advanced airspace technology boosted AXON's capability to enable customers to protect their communities against drone threats and improve response to critical incidents.

Also, Axon Enterprise’s partnership with Skydio (in June 2024) enabled it to bolster its position in the lucrative public safety market, particularly within the Drone as a First Responder solution category.

Despite the positives, escalating costs and operating expenses have been a concern. High costs related to business integration activities, higher wages and stock-based compensation are expected to have weighed on AXON’s bottom line in the to-be-reported quarter.

Axon Enterprise, Inc Price and EPS Surprise

Axon Enterprise, Inc price-eps-surprise | Axon Enterprise, Inc Quote

Earnings Whispers

Our proven model does not conclusively predict an earnings beat for Axon Enterprise this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat, which is not the case here, as elaborated below. 

Earnings ESP: AXON has an Earnings ESP of 0.00% as both the Zacks Consensus Estimate and the Most Accurate Estimate are pegged at $1.63 per share. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: AXON currently carries a Zacks Rank of 3. You can see the complete list of today’s Zacks #1 Rank stocks here.

Stocks With the Favorable Combination

Here are three companies, which according to our model, have the right combination of elements to post an earnings beat this season.

Curtiss-Wright Corporation CW has an Earnings ESP of +1.59% and a Zacks Rank of 3 at present. Curtiss-Wright is scheduled to release third-quarter 2025 results on Nov. 5.

Curtiss-Wright’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 9.3%.

Woodward, Inc. WWD has an Earnings ESP of +0.16% and a Zacks Rank of 3 at present. Woodward is slated to release fourth-quarter fiscal 2025 results on Nov. 24.

Woodward’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being a negative 15%.

Karman Holdings Inc. KRMN has an Earnings ESP of +3.45% and a Zacks Rank of 3 at present. Karman Holdings is slated to release third-quarter 2025 results on Nov. 6.

Karman Holdings’ earnings missed the Zacks Consensus Estimate by 9.1% in the last reported quarter.

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This article originally published on Zacks Investment Research (zacks.com).

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