Axon, the stun gun manufacturer, sees shares surge 18% as AI boosts demand for software tools

　　Key Points

• Driven by new AI features boosting the use of software tools, Axon's fourth-quarter performance exceeded Wall Street expectations.
• The company is vigorously integrating AI into more products, including law enforcement body cameras and license plate recognition devices.
• CFO Brittany Bagley stated that, powered by AI, Axon expects software business growth to soon outpace hardware business growth.

　　Taser, body camera, and drone manufacturer Axon Enterprise outperformed Wall Street expectations in the fourth quarter, with artificial intelligence driving demand for its software products, causing the company’s share price to surge over 18%.

　　The company reported adjusted earnings per share of $2.15 and revenue of $797 million, both exceeding analyst expectations tracked by LSEG—earnings per share of $1.60 and revenue of $755 million.

　　Axon also issued an optimistic revenue outlook for 2026, projecting year-over-year growth of 27% to 30%, above the market expectation of 25.8%.

　　CEO Rick Smith stated that since founding the company in 1993, AI has brought a "unique moment of development" he has never seen before.

　　On Tuesday’s earnings call, he told analysts: “If we can deploy AI more proactively and prudently than any other company in the industry, while steadfastly upholding the responsibility required by our business environment, we will create value for customers that cannot be replicated.”

　　Axon stated that as the company integrates more technology into its products, AI-related features accounted for about 10% of total orders last year, amounting to $750 million.

　　These AI features include automatic license plate recognition and voice assistants built into law enforcement body cameras. This tool, called Axon Assistant, has already attracted over 500 clients.

　　CFO Brittany Bagley said that software business grew by 40% this quarter to $343 million, driven by AI, and is expected to soon outpace hardware business growth.

　　Company revenue grew 39% year-over-year. Net profit was about $3 million, or earnings per share of $0.03, down from $135 million (earnings per share of $1.67) in the same period last year. Axon attributed this change to operating losses and strategic investment activities.

　　The company also set a 2028 goal: annual revenue of $6 billion and an adjusted EBITDA margin of 28%.

Editor: Guo Mingyu