Has Axon Stock Been Good for Investors?

A-X-O-N is the ticker symbol for the stock of law enforcement technology company Axon Enterprise (NASDAQ: AXON), which has been a great investment over the past five years and the past decade. Those who invested $10,000 five years ago have over $41,000 today. And those who invested a decade ago have nearly $300,000.

Many investors are likely familiar with Axon's most famous product, the Taser. Many are also likely aware of the company's Axon body cameras used by law enforcement officers. But the company also provides agencies with cloud-based software services, and these services have turbocharged its top-line growth.

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One of the benefits of owning Axon Enterprise stock is the reliability of its revenue. Many of its customers bundle its services and sign multiyear contracts. It also retains a high percentage of its customers year to year. Therefore, it has a fast-flowing stream of recurring revenue.

As of the third quarter of 2025, Axon Enterprise had annualized recurring revenue (ARR) of $1.3 billion, which was up 41% year over year. The company has maintained a strong growth rate for many years, which is a big reason the stock has performed so well.

Axon's ARR is set to continue climbing. As mentioned, much of its revenue is tied to long-term customer contracts, giving investors a glimpse into the future. As of Q3, the company has $11.4 billion in future contracted bookings, which is up an equally impressive 39%.

What Axon's investors can watch now

Axon Enterprise built its durable, recurring revenue base by adapting its product offering and business model to better address the needs it recognized from customers. Instead of just offering a single hardware device to police, it broadened its focus and built what we see today.

It's the adaptability of its business model that could continue making Axon a winner over the next five years. One of the company's big opportunities in coming years is its expansion into federal agencies. Its products have applications for federal agencies such as the Department of Homeland Security, adding $12 billion to Axon's opportunity.

Axon has other upside opportunities as well because it doesn't limit itself to its current product offerings. Right now, it's developing drones and robots with law enforcement applications. And it recently acquired a company called Carbyne to upgrade the existing 911 system.

Axon stock is down about 20% over the past year and down 40% from all-time highs -- drops like that can happen over shorter timespans. But if the company can keep expanding over the long term, the stock will likely go up for patient investors.

Jon Quast has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Axon Enterprise. The Motley Fool has a disclosure policy.