Q2 2026 Axon Enterprise Inc Earnings Call Transcript
Key Points
- Record Q2 2026 results with revenue up 35% year-over-year, marking the 10th consecutive quarter of growth above 30%.
- Strong demand across all markets, with international and enterprise bookings each up approximately 3x year-over-year.
- Dedrone counter-drone business surpassed $100 million in quarterly revenue, with significant growth potential in federal, international, and state/local markets.
- AI Era Plan software revenue grew almost 700% year-over-year, contributing to a 70% growth in non-core software offerings.
- Raised full-year revenue guidance to 32%-34% growth, up 200 basis points from prior guidance, reflecting strong pipeline and demand.
- Adjusted EBITDA margin guidance for Q3 is expected to be impacted by increasing memory component costs, with no benefit from tariff refunds.
- Free cash flow remained negative at -$1 million in Q2, reflecting continued inventory investments to support demand and mitigate supply chain risks.
- The company faces ongoing supply chain disruptions, higher component costs, and tariffs, which could pressure margins.
- Counter-drone and other new product offerings are still scaling, leading to a mix impact that dilutes gross margins.
- Customer resistance and concerns around data privacy and AI adoption persist, particularly in the context of anti-surveillance movements like DeFlock.
All right, we'll just give it a minute here.
Hello, everyone, and thank you for joining Axon's executive team today for our second quarter 2026 earnings conference call. Before we get started, I'll note that our remarks today are intended to build upon our most recent shareholder letter and investor materials, which you can find on our investor website at investor.axon.com.
During this call, we will discuss our business outlook and make forward-looking statements. These comments are based on our expectations as of today and are not guarantees of future performance. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially as discussed in our SEC filings. We will also discuss certain non-GAAP financial measures.
Descriptions and reconciliations of GAAP to GAAP are included in our shareholder letter and available on our investor website.
Now as always, before we kick it over to Rick, we have a quick video to get us started. Let's pull it up.
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