Axon's Q3 revenue misses; increases stake in Skydio with $1.2 bln investment
Overview
Public safety tech firm's Q3 revenue rose 28% yr/yr but missed analyst expectations
Net income reached $57 mln, reversing a loss in the prior-year period
Company increased its stake in Skydio to 37% with a $1.2 bln investment
Outlook
Axon expects Q4 revenue of $990 mln to $1.01 bln
Axon lowers 2026 revenue growth outlook to about 30% due to Federal Dedrone delays
Company sees 2026 full-year Adjusted EBITDA of $924 mln to $929 mln
Result Drivers
SOFTWARE & SERVICES GROWTH - Co said 43% yr/yr revenue growth in Software & Services was driven by more users and greater adoption of premium solutions, including AI, real-time operations, Axon Records and Axon 911
CONNECTED DEVICES - Connected Devices revenue rose 16% yr/yr, led by Dedrone and continued adoption of Axon Body 4, though growth was partly offset by lower legacy TASER volume and delayed timing of a $30 mln Federal Dedrone deployment
GROSS MARGIN PRESSURE - Co said lower gross margin was mainly due to a higher mix of counter-drone equipment, higher memory costs and scaling of new product categories
Company press release:
Key Details
Metric | Beat/Miss | Actual | Consensus Estimate |
Q3 Revenue | Miss | $909 mln | $937.59 mln (15 Analysts) |
Q3 Net Income | $57 mln | ||
Q3 Adjusted EBITDA | $236 mln |
Analyst Coverage
The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 20 "strong buy" or "buy", 2 "hold" and no "sell" or "strong sell"
The average consensus recommendation for the aerospace & defense peer group is "buy"
Wall Street's median 12-month price target for Axon Enterprise, Inc. is $684.00, about 61.3% above its November 4 closing price of $424.18
The stock recently traded at 42 times the next 12-month earnings vs. a P/E of 56 three months ago
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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)