Axon (NASDAQ:AXON) Beats Expectations in Strong Q4 CY2025, Stock Jumps 15.1%

Self defense company AXON (NASDAQ:AXON) beat Wall Street’s revenue expectations in Q4 CY2025, with sales up 38.5% year on year to $796.7 million. The company’s full-year revenue guidance of $6 billion at the midpoint came in 74.4% above analysts’ estimates. Its non-GAAP profit of $2.15 per share was 34.5% above analysts’ consensus estimates.

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Company Overview

Providing body cameras and tasers for first responders, AXON (NASDAQ:AXON) develops technology solutions and weapons products for military, law enforcement, and civilians.

Revenue Growth

A company’s long-term performance is an indicator of its overall quality. Any business can put up a good quarter or two, but many enduring ones grow for years. Luckily, Axon’s sales grew at an incredible 32.5% compounded annual growth rate over the last five years. Its growth surpassed the average industrials company and shows its offerings resonate with customers, a great starting point for our analysis.

We at StockStory place the most emphasis on long-term growth, but within industrials, a half-decade historical view may miss cycles, industry trends, or a company capitalizing on catalysts such as a new contract win or a successful product line. Axon’s annualized revenue growth of 33.5% over the last two years aligns with its five-year trend, suggesting its demand was predictably strong.

This quarter, Axon reported wonderful year-on-year revenue growth of 38.5%, and its $796.7 million of revenue exceeded Wall Street’s estimates by 5.4%.

Looking ahead, sell-side analysts expect revenue to grow 23.8% over the next 12 months, a deceleration versus the last two years. Still, this projection is healthy and implies the market is baking in success for its products and services.

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Operating Margin

Axon was roughly breakeven when averaging the last five years of quarterly operating profits, inadequate for an industrials business.

On the plus side, Axon’s operating margin rose by 17.2 percentage points over the last five years, as its sales growth gave it immense operating leverage.

This quarter, Axon generated an operating margin profit margin of negative 6.3%, down 3.6 percentage points year on year. This contraction shows it was less efficient because its expenses grew faster than its revenue.

Earnings Per Share

We track the long-term change in earnings per share (EPS) for the same reason as long-term revenue growth. Compared to revenue, however, EPS highlights whether a company’s growth is profitable.

Axon’s astounding 30.8% annual EPS growth over the last five years aligns with its revenue performance. This tells us its incremental sales were profitable.

Like with revenue, we analyze EPS over a shorter period to see if we are missing a change in the business.

Although it performed well, Axon’s two-year annual EPS growth of 28.8% lower than its 33.5% two-year revenue growth.

Diving into the nuances of Axon’s earnings can give us a better understanding of its performance. Axon’s operating margin has declined over the last two yearswhile its share count has grown 8.7%. This means the company not only became less efficient with its operating expenses but also diluted its shareholders.

In Q4, Axon reported adjusted EPS of $2.15, up from $2.08 in the same quarter last year. This print easily cleared analysts’ estimates, and shareholders should be content with the results. Over the next 12 months, Wall Street expects Axon’s full-year EPS of $6.85 to grow 8.3%.

Key Takeaways from Axon’s Q4 Results

It was good to see Axon beat analysts’ EPS expectations this quarter. We were also excited its EBITDA outperformed Wall Street’s estimates by a wide margin. Zooming out, we think this was a solid print. The stock traded up 15.1% to $506.02 immediately after reporting.

Indeed, Axon had a rock-solid quarterly earnings result, but is this stock a good investment here? What happened in the latest quarter matters, but not as much as longer-term business quality and valuation, when deciding whether to invest in this stock. We cover that in our actionable full research report which you can read here (it’s free).