Axon Enterprise, Inc. Q4 FY2025 earnings call

Patrick Smith thanked the team for the year. Joshua Isner highlighted 2025 full year bookings surpassed $7 billion, up over 40% from last year. New product bookings including AI and Fusus totaled over $1 billion. International bookings surpassed $2 billion. Corrections team had largest single customer booking. 2026 plans include selling new products to existing U.S. state local customer base, enterprise growth, and U.S. Federal showing promising signs. Brittany Bagley walked through fourth quarter performance, guidance, new 2028 targets. Patrick Smith talked about Moonshot to cut gun-related deaths, VR training, body cameras, Fusus, AI efforts, and vision of being provider of global sensor network supercharged by AI.

Fourth quarter revenue grew 39% year-over-year to $797 million. Software and Services grew 40% year-over-year to $343 million. Connected Devices was up 38% year-over-year with revenue of $454 million. TASER revenue of $264 million grew 32%. Personal Sensors revenue of $109 million grew 28% and Platform Solutions revenue of $81 million grew 81% in the quarter. Adjusted gross margin came in at 61.1%. Adjusted operating expenses increased $245 million sequentially. Adjusted EBITDA grew 46% year-over-year to $206 million. Operating cash flow of $217 million. 2026 revenue growth forecasted in the range of 27% to 30% year-over-year, maintaining adjusted EBITDA margin of 25.5% for the year.

2026 revenue growth forecasted in the range of 27% to 30% year-over-year. Maintaining adjusted EBITDA margin of 25.5% for the year. Q1 expected to have slower new bookings as it builds pipeline for the year, with lower free cash flow conversion typically, but year-over-year revenue growth consistent with overall guide, and ramping into average adjusted EBITDA margins as the year progresses.

Q: Historically, you've given us a sense of what bookings growth could look like on an absolute basis or relative to revenue growth. I was just wondering if you could talk about what you're expecting around bookings growth and discuss the demand environment in 2026? And then relatedly, are you expecting to see any meaningful product or customer vertical inflections over the next 3 years embedded in the guidance?

A: Yes. Thanks a lot, Michael. I'd say at this point in time, we probably want to stay away from any bookings guidance. But I would say qualitatively, as we get toward the later part of the year and I start to have more visibility just like in the past years, I can certainly give more information then. But from a demand perspective, never been more confident across the Board. Like we knew our core was rolling, and we're excited about that. But seeing these new products layer on and just the stand-alone demand for them in some cases and the kind of bundled demand in conjunction with some of our other products, it's just -- it's coming together really nicely. And I think it's very, very possible that all 4 of our core markets are in a place to have banner years this year. And it's going to take a lot of execution and a lot of focus, a lot of discipline, but I'll bet on our team.

Q: Historically, you've given us a sense of what bookings growth could look like on an absolute basis or relative to revenue growth. I was just wondering if you could talk about what you're expecting around bookings growth and discuss the demand environment in 2026? And then relatedly, are you expecting to see any meaningful product or customer vertical inflections over the next 3 years embedded in the guidance?

A: Yes. Thanks a lot, Michael. I'd say at this point in time, we probably want to stay away from any bookings guidance. But I would say qualitatively, as we get toward the later part of the year and I start to have more visibility just like in the past years, I can certainly give more information then. But from a demand perspective, never been more confident across the Board. Like we knew our core was rolling, and we're excited about that. But seeing these new products layer on and just the stand-alone demand for them in some cases and the kind of bundled demand in conjunction with some of our other products, it's just -- it's coming together really nicely. And I think it's very, very possible that all 4 of our core markets are in a place to have banner years this year. And it's going to take a lot of execution and a lot of focus, a lot of discipline, but I'll bet on our team.

Q: Historically, you've given us a sense of what bookings growth could look like on an absolute basis or relative to revenue growth. I was just wondering if you could talk about what you're expecting around bookings growth and discuss the demand environment in 2026? And then relatedly, are you expecting to see any meaningful product or customer vertical inflections over the next 3 years embedded in the guidance?

A: Yes. Thanks a lot, Michael. I'd say at this point in time, we probably want to stay away from any bookings guidance. But I would say qualitatively, as we get toward the later part of the year and I start to have more visibility just like in the past years, I can certainly give more information then. But from a demand perspective, never been more confident across the Board. Like we knew our core was rolling, and we're excited about that. But seeing these new products layer on and just the stand-alone demand for them in some cases and the kind of bundled demand in conjunction with some of our other products, it's just -- it's coming together really nicely. And I think it's very, very possible that all 4 of our core markets are in a place to have banner years this year. And it's going to take a lot of execution and a lot of focus, a lot of discipline, but I'll bet on our team. (And many more Q&A exchanges as per the transcript)