Axon falls 14.4% after hours as Q3 profit tops estimate and revenue misses
Axon reported Q3 adjusted EPS of $1.72 against the $1.91 consensus estimate, a miss, and revenue of $908.55 million, below the $956.34 million estimate. The company cut its 2026 revenue growth outlook to about 30% after Federal Dedrone deployments were excluded.
Key takeaways
- Axon (AXON) reported third-quarter non-GAAP earnings of $1.72 per share, below the $1.91 consensus estimate, and revenue of $908.55 million, below the $956.34 million estimate. The company expects full-year 2026 revenue growth of about 30%. It also announced a $1.2 billion investment in Skydio, raising its stake to 37%.
Axon (AXON) shares fell 14.4% after hours at 5:19 p.m. ET, from a $385.49 close.
Third-quarter non-GAAP diluted EPS of $1.72 missed the $1.91 consensus estimate, and revenue of $908.55 million fell short of the $956.34 million estimate.
Here's how the company did:
- Revenue: $908.55 million vs. $710.64 million a year earlier
- Non-GAAP diluted EPS: $1.72 vs. $1.24 a year earlier
- Adjusted EBITDA: $235.66 million vs. $177.01 million a year earlier
Revenue grew 28%, led by Software & Services, which reached $437.03 million and grew 43%.
Full-year 2026 guidance
Full-year 2026 revenue growth is now about 30%, down from the prior 32% to 34% range, reflecting the exclusion of three Federal Dedrone deployments totaling about $130 million.
Fourth-quarter revenue is expected at $990 million to $1.01 billion, and Adjusted EBITDA at $245 million to $250 million.
Investment in Skydio
Axon announced an additional $1.2 billion investment in Skydio, which takes its fully diluted ownership to 37%. Axon is also now the exclusive distributor of Skydio for public safety in the U.S. and Canada.
Founder-led since 1993.
Segment results
Connected Devices revenue rose 16% to $471.52 million, and segment gross margin was 43.0%, versus 49.9% a year earlier.
Cash and debt
Operating cash flow was $19.69 million. Free cash flow was an outflow of $18.90 million, reflecting an inventory investment of about $100 million. As of September 30, 2026, Axon had $1.7 billion in cash, cash equivalents and short-term investments against $2.9 billion of outstanding convertible and senior notes, a net debt position of $1.2 billion.