Axon Enterprise Shares Fall 18% Following Third-Quarter Revenue Miss and Lowered Guidance
Axon Enterprise (AXON) experienced a significant stock decline of 18% after reporting third-quarter revenue of $908.6 million, missing the consensus estimate of $934.3 million. The miss was primarily attributed to a timing delay regarding a $30 million Federal Dedrone deployment. Additionally, the company lowered its full-year free cash flow guidance from $450 million to a range of $350 million-$400 million due to increased investments in inventory to bolster supply chain resilience. Despite the revenue miss and downward revisions for fourth-quarter growth—which is expected to be the company's slowest since 2021—management maintains that underlying demand remains strong. The company noted a shift in product mix, with connected device revenue rising 16.3% while legacy Taser sales saw a slight decline. Investors are also monitoring gross margin fluctuations caused by higher memory costs and an increased mix of counter-drone equipment.