$AXON · AXON ENTERPRISE, INC.
Axon filed its Q3 FY2026 10-Q. Net sales grew 27.8% YoY to $908.6M, with product sales of $471.5M and services of $437.0M. Net income was $57.0M ($0.68 diluted EPS) versus a $2.2M loss a year ago. Gross margin fell to 56.7% from 60.1%, and operating margin was 4.6%. Platform Solutions revenue jumped 105.6% to $125.0M, while TASER declined 2.1%.
- Revenue +27.8% YoY to $908.6M; nine-month revenue $2.62B vs $1.98B.
- Net income $57.0M vs $2.2M loss; diluted EPS $0.68 vs $(0.03).
- Gross margin compressed to 56.7% from 60.1% YoY.
- Platform Solutions revenue +105.6% to $125.0M; TASER -2.1% to $233.0M.
- Long-term notes payable rose to $2.87B from $1.73B at year-end 2025.
Extended-hours last trade $345.50, down 9.69% vs the $382.56 regular close, despite a revenue beat — signaling margin compression and valuation concerns outweighing top-line growth.
A strong revenue beat paired with a ~10% after-hours selloff shows investors are focused on margin compression and mix shift, not just growth.
Axon's 27.8% growth and 56.7% gross margin reflect a shift toward lower-margin Platform Solutions and services, a mix dynamic common across hardware-to-software transitions in public-safety tech.
Gross margin fell 340bps YoY as higher-margin TASER sales declined while Platform Solutions and services grew. Rising long-term debt ($2.87B) and heavy stock-based compensation ($435.1M nine-month) pressure profitability.