Axon Enterprise reported a strong Q4 FY2025 with significant year-over-year revenue growth, driven by robust demand for its integrated hardware and software ecosystem, particularly in Software & Services and Connected Devices. The company demonstrated continued investment in AI and product innovation, setting ambitious targets for future revenue and profitability.
Revenue grew 39% year over year to $797 million, exceeding expectations.
positiveSoftware & Services revenue grew 40% year over year to $343 million.
positiveConnected Devices revenue grew 38% year over year to $454 million.
positiveAnnual recurring revenue grew 35% year over year to $1.3 billion.
positiveFuture contracted bookings grew 43% year over year to $14.4 billion.
positiveEstablished 2026 outlook of 27% to 30% revenue growth and a 25.5% Adjusted EBITDA margin.
positiveIntroduced new 2028 targets of $6 billion in annual revenue and 28% Adjusted EBITDA margin.
positiveNet revenue retention accelerated to 125% in the quarter.
positiveTotal company gross margin of 57.9% decreased 220 basis points year over year, primarily due to global tariffs and increased Platform Solutions product mix within Connected Devices.
attentionOperating loss of $50 million in Q4 FY2025, primarily driven by increased headcount to support business growth and stock-based compensation expense.
attentionNet income of $3 million (0.3% net income margin) decreased significantly from $135 million (23.5% net income margin) in the prior year, primarily due to operating losses and strategic investment activity.
negativeOperating cash flow of $217 million decreased from $250 million in the prior year, primarily driven by receivables timing and inventory investments.
attentionInventory levels increased to $341.8 million from $265.3 million in the prior year.
attentionMargin expansion indicates improving profitability and operational efficiency. Measured in basis points (bps): 100 bps = 1.0%.
| Segment | Current | Prior Yr | YoY | % Total |
|---|---|---|---|---|
Software & Services | N/A | — | — | — |
Connected Devices | N/A | — | — | — |
| Total Revenue | $0.00M | — | — | 100.0% |
Segment performance shows business unit health and growth drivers.
Forward-looking guidance is subject to change and does not constitute a guarantee. Actual results may differ materially from these estimates.
Axon completed another record year in pursuit of our mission to protect life. Revenue grew 33% year over year, marking our fourth consecutive year of annual growth above 30% as demand for our ecosystem continues to build.
We believe our 2025 results reflect disciplined execution of our strategy and are a strong foundation for our longer-term guidance.
Our momentum is accelerating as we enter 2026, supported by disciplined investment, strong product market fit and deep, trusted relationships with our customers.
Commentary excerpts from earnings call transcripts provide management's perspective on performance, strategy, and outlook. Always review full transcripts for complete context.
Operational metrics provide insight into business drivers and customer engagement beyond traditional financial measures.