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Axon's Q3 revenue misses; increases stake in Skydio with $1.2 bln investment

By Reuters News


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


Reuters Recommended Reads

  • Nov 3 - Arista Networks Q3 revenue beats estimates on strong momentum across customer sectors

  • Nov 3 - Apple shares slide as Ternus sounds alarm on memory costs

  • Nov 2 - Palantir Q3 revenue jumps 96%, beats analyst expectations


For questions concerning the data in this report, contact Estimates.Support@lseg.com. For any other questions or feedback, contact reuters.support@thomsonreuters.com.


(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.)

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