AI Takeaway
Axon Enterprise delivered strong Q1 2026 revenue of $807.3M (+33.7% YoY) and net income of $169.3M (+92.4% YoY), though operating cash flow turned negative at -$31.5M and gross margin compressed slightly to 59.1%.
Revenue
$807.35M
++33.75% YoY
EPS (Basic)
$2.11
++85.09% YoY
Gross Margin
59.1%
-1.47% YoY
Operating Income
$29.24M
++432.57% YoY
Filed · Source: SEC EDGAR 10-Q filing
Revenue surged 33.7% YoY to $807.3M in Q1 2026 from $603.6M in Q1 2025, reflecting continued strong demand across Axon's hardware and cloud-connected software segments. This growth rate significantly outpaces the prior year, underscoring the company's expanding market penetration in public safety technology.
Source: Source: 10-Q Income Statement Data
Operating income improved dramatically to $29.2M in Q1 2026 from a loss of -$8.8M in Q1 2025, a 432.6% YoY improvement. This turnaround reflects operating leverage as revenue growth outpaced the combined increase in R&D (+25.1%) and SG&A (+15.9%) expenses.
Source: Source: 10-Q Income Statement Data
Gross margin declined slightly to 59.1% from 60.6% in the prior year period, as cost of revenue grew 38.7% YoY — faster than revenue growth of 33.7%. This suggests some mix shift toward lower-margin hardware products or increased supply chain costs.
Source: Source: 10-Q Income Statement & Ratio Data
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Upgrade to unlockAxon generated -$31.5M in operating cash flow in Q1 2026, a significant reversal from +$25.8M in Q1 2025. Sustained negative operating cash flow could pressure liquidity and limit the company's ability to self-fund growth investments without additional financing.
Source: Source: 10-Q Cash Flow Statement Data
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Upgrade to unlockReported EPS of $1.61 versus the $1.63 analyst consensus — a -1.3% miss for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $807.35M | $603.63M | +33.75% |
Cost of Revenue | $330.06M | $237.89M | +38.74% |
Gross Profit | $477.29M | $365.74M | +30.50% |
Operating Income | $29.24M | $-8.79M | +432.57% |
Net Income | $169.31M | $87.98M | +92.44% |
EPS (Basic) | $2.11 | $1.14 | +85.09% |
EPS (Diluted) | $2.05 | $1.08 | +89.81% |
R&D Expense | $188.95M | $151.02M | +25.11% |
SG&A Expense | $259.09M | $223.51M | +15.92% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $7.07B | $6.08B | +16.17% |
Current Assets | $2.74B | $3.78B | -27.34% |
Total Liabilities | $3.53B | $3.53B | +0.15% |
Current Liabilities | $1.21B | $1.34B | -9.60% |
Stockholders' Equity | $3.53B | $2.56B | +38.28% |
Cash & Equivalents | $458.92M | $1.09B | -58.01% |
Long-Term Debt | $1.73B | $2.01B | -13.74% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $-31.52M | $25.79M | -222.19% |
Investing Cash Flow | $-616.94M | $-702.22M | +12.14% |
Financing Cash Flow | $-92.29M | $1.31B | -107.03% |
D&A | $30.36M | $19.45M | +56.07% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Gross Margin | 59.1% | 60.6% | -1.47% |
Operating Margin | 3.6% | -1.5% | +5.08% |
Net Margin | 21.0% | — | — |
ROE | 4.8% | — | — |
ROA | 2.4% | — | — |
Current Ratio | $2.271 | — | — |
Debt to Equity | $1 | — | — |
Other companies in Aerospace & Defense
Axon reported Q1 2026 revenue of $807.3M, up 33.7% YoY, and net income of $169.3M, up 92.4% YoY. Diluted EPS came in at $2.05 versus $1.08 in Q1 2025, representing an 89.8% increase. However, operating cash flow turned negative at -$31.5M, which was a notable reversal from the prior year.
The key takeaways are strong revenue growth of 33.7% to $807.3M and a dramatic operating income turnaround to $29.2M from a -$8.8M loss. On the cautionary side, gross margin compressed slightly to 59.1% and cash and equivalents fell 58% YoY to $458.9M, raising questions about cash deployment efficiency.
Axon's gross margin declined modestly to 59.1% in Q1 2026 from 60.6% in Q1 2025, a compression of approximately 150 basis points. This was driven by cost of revenue growing 38.7% YoY, which outpaced revenue growth of 33.7%, suggesting potential mix shifts toward hardware or higher input costs.
Axon's balance sheet shows total assets of $7.1B, stockholders' equity of $3.53B (+38.3% YoY), and a current ratio of 2.27x, indicating solid solvency and short-term liquidity. However, cash fell sharply to $458.9M from $1.09B a year ago, and operating cash flow was negative at -$31.5M, which are areas to watch.
Axon's cash and equivalents declined 58% YoY to $458.9M, driven by negative operating cash flow of -$31.5M and investing cash outflows of -$616.9M, likely reflecting capital deployment into growth initiatives, acquisitions, or infrastructure. Financing activities also consumed -$92.3M compared to generating +$1.31B in Q1 2025, when the company likely raised capital.