Axon Enterprise (AXON) investor relations material

Executive summary

• Achieved Q2 2026 revenue of $904.4 million, up 35.3% year over year, marking the 10th consecutive quarter of 30%+ growth, with net income of $29.4 million and strong momentum in both hardware and software segments.

• Annual recurring revenue rose 39% to $1.6 billion; net revenue retention reached 126%.

• International and enterprise bookings tripled year over year, with major deals in the Middle East, Europe, and U.S. cities.

• Platform Solutions revenue surged 123% year over year to $150 million, driven by Dedrone and counter-drone offerings.

• Over 95% of revenue is tied to customers on subscription plans, supporting high visibility and recurring revenue streams.

Financial highlights

• Q2 2026 net sales: $904.4 million (+35.3% YoY); six-month net sales: $1.71 billion (+34.6% YoY).

• Adjusted gross margin reached 62.9%, up 130 basis points sequentially, aided by tariff refunds; gross margin was 60.4%.

• Adjusted EBITDA was $242 million (26.8% margin) for Q2; operating cash flow improved to $20 million from a $92 million outflow last year.

• Free cash flow outflow was $1 million, reflecting ongoing inventory investments.

• Cash, cash equivalents, and short-term investments totaled $685 million; net debt position was $1.1 billion.

Outlook and guidance

• Raised full-year 2026 revenue growth outlook to 32%-34% (from 30%-32%).

• Maintained full-year adjusted EBITDA margin guidance at approximately 25.5%.

• Expects 2026 stock-based compensation expense of $590-$620 million and CapEx of $160-$190 million.

• Project $450 million in free cash flow for the full year, with seasonality peaking in Q4.

• 2028 targets include $6 billion in annual revenue and 28% adjusted EBITDA margin.