Axon Hits the Mark to Start 2025
Here's our initial take on Axon Enterprise's (NASDAQ: AXON) first-quarter financial report.
Key Metrics
| Metric | Q1 2024 | Q1 2025 | Change | vs. Expectations |
|---|---|---|---|---|
| Total revenue | $460 million | $604 million | +31% | Beat |
| Adjusted earnings per share | $1.15 | $1.41 | +23% | Beat |
| Annual recurring revenue | $825 million | $1.10 billion | +34% | n/a |
| Net revenue retention | 122% | 123% | +1 pp | n/a |
Axon Stays on Target
Axon got good results in the first quarter of 2025, setting a new record for quarterly revenue and seeing year-over-year sales growth top 25% for the 13th quarter in a row. Just about all of Axon's products and services pulled their weight, as sales of connected devices rose 26% and Taser-related revenue was up 19%. Personal sensors had stronger revenue gains of 30%, and the new platform solutions segment grew at a faster-than-50% clip. Axon pointed to the Taser 10 system, the Axon Body 4 sensor, and various virtual-reality and drone equipment as particularly strong contributors to top-line gains.
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Beyond the numbers, Axon was excited about the product rollouts it has recently made in support of public safety. With the 10th annual installment of its Axon Week user conference last month, the company presented its Axon Vehicle Intelligence platform, which incorporates capabilities like expanded video, automated license plate recognition, livestreaming, real-time alerts, and camera systems, including the Outpost fixed camera and the Lightpost streetlight camera.
Other features include the artificial intelligence (AI)-powered, voice-activated Axon Assistant for real-time translation, internet access, and assistance with established policies and protocols. In addition, through collaborations with third-party providers, like the Ring doorbell camera system, Axon intends to bring public and private safety networks together for the greater good.
Immediate Market Reaction
Investors were pleased with what they saw from Axon. The stock was up more than 6% in the first 30 minutes of after-hours trading on Wednesday following the release of the report. With the move upward, the stock is poised to return to its best levels since the stock market started a broader decline in mid-February.
The move higher was reasonable, given the more modest growth expectations most shareholders seemed to have. A $0.17 per share earnings beat and sales at about $18 million higher than the consensus forecast got a positive reception.
What to Watch
Axon also pushed its guidance higher for the full 2025 year. The company now expects revenue of between $2.6 billion and $2.7 billion, which would mark about a 27% growth rate compared to 2024's final figures. That was a $50 million push higher, and adjusted earnings before interest, taxes, depreciation, and amortization got a roughly $5 million to $10 million boost to a new range of $650 million to $675 million.
Axon isn't afraid to invest in its future, with spending plans for between $160 million and $180 million this year. That should help the company stay on the cutting edge of research and development, which could, in turn, be essential in putting Axon in the best possible position to keep growing.
Helpful Resources
- Full 2025 Q1 shareholder letter and investor presentation
- Investor relations page
- Recent Fool.com coverage of whether Axon is still a good buy
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Dan Caplinger has positions in Axon Enterprise. The Motley Fool has positions in and recommends Axon Enterprise. The Motley Fool has a disclosure policy.
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