Axon Enterprise Gears Up to Post Q1 Earnings: Is a Beat in Store?

Axon Enterprise, Inc. AXON is scheduled to release first-quarter 2025 results on May 7, after market close. (Find the latest EPS estimates and surprises on Zacks Earnings Calendar.)

The Zacks Consensus Estimate for revenues is pegged at $589.1 million, which indicates an increase of 27.9% from the year-ago quarter’s figure. The consensus mark for earnings is pinned at $1.27 per share, which has been stable in the past 60 days. The estimate indicates growth of 10.4% 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 21.6%. Its bottom line surpassed the consensus estimate by 36% in the last reported quarter.

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

Key Factors Likely to Have Shaped Q1 Performance

Strong demand for TASER devices and higher cartridge revenues are expected to have boosted the performance of Axon Enterprise’s TASER segment in the first quarter. Also, the segmental performance is likely to have benefited from the stable demand for virtual reality training services. The Zacks Consensus Estimate for the TASER segment’s revenues is pegged at $219 million, which indicates an increase of 22.3% from the year-ago number.

The Software & Sensors segment’s results are anticipated to reflect higher revenues, 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. 

Increased demand for cloud-connected TASER devices in the field, driven by a rise in adoption of software applications, has also been driving Axon Evidence and cloud services’ growth within the segment. Also, strong customer response for its next-generation body-worn camera, Axon Body 4, is expected to have driven the segment’s performance. The Zacks Consensus Estimate for the Software & Sensors segment’s net sales is pegged at $372 million, indicating a 31.9% jump from the year-ago number.

The company remains focused on strategic collaborations and buyouts to expand its product offerings and customer base. This is likely to reflect in its first-quarter results. For instance, in June 2024, Axon Enterprise entered into a partnership with Skydio (a leading U.S. drone manufacturer) to introduce a comprehensive line of drones in public safety that includes a scalable Drone as a First Responder solution.

Also, in October 2024, Axon Enterprise acquired Dedrone, a global leader in airspace security. The inclusion of Dedrone’s advanced airspace technology boosted the company’s capability to enable customers to protect their communities against drone threats.

However, the escalating costs and operating expenses, due to business integration activities, higher wages and stock-based compensation expenses, are likely to have weighed on AXON’s bottom line.

Axon Enterprise, Inc Price and EPS Surprise

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

Earnings Whispers

Our proven model predicts 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 the case here, as elaborated below.

Earnings ESP: Axon Enterprise has an Earnings ESP of +9.28% as the Most Accurate Estimate is pegged at $1.39 per share, higher than the Zacks Consensus Estimate of $1.27. You can uncover the best stocks before they’re reported with our Earnings ESP Filter.

Zacks Rank: AXON presently carries a Zacks Rank of 2.

Other Stocks With the Favorable Combination

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

Emerson Electric Co. EMR has an Earnings ESP of +2.42% and a Zacks Rank of 3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.

The company is scheduled to release first-quarter 2025 results on May 7. EMR’s earnings surpassed the Zacks Consensus Estimate in each of the preceding four quarters, the average surprise being 4.3%.

Sealed Air Corporation SEE has an Earnings ESP of +0.12% and a Zacks Rank of 3 at present. The company is slated to release first-quarter results on May 6.

SEE’s earnings surpassed the Zacks Consensus Estimate in each of the trailing four quarters, the average surprise being 27.1%.

TriMas Corporation TRS has an Earnings ESP of +5.44% and a Zacks Rank of 3 at present. The company is slated to release its first-quarter 2025 results on May 7.

TRS delivered an average earnings surprise of 7.8% in the last four quarters, while beating estimates in each of the quarters.

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

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