Axon Enterprise, Inc. (AXON) reported an adjusted EBITDA of $201.6 million for the first quarter of 2026, representing a year-over-year increase of 29.9%. However, the adjusted EBITDA margin fell by 70 basis points to 25%, primarily due to rising operating costs, global tariffs, and increased R&D investment. The adjusted gross margin also declined by 200 basis points to 61.6%, with costs of sales rising by 38.8% and selling, general and administrative expenses increasing by 15.9% during the quarter.
Despite these challenges, Axon anticipates an adjusted EBITDA margin of approximately 25.5% for the full year, maintaining a long-term goal of reaching an adjusted EBITDA margin of around 28% by 2028, alongside projected annual revenues of $6 billion. Additionally, the company restructured its business segments beginning first-quarter 2025 to enhance performance visibility and cost management.
In comparison, Kratos Defense & Security Solutions (KTOS) experienced a gross margin decline to 24.2% due to a 22.9% rise in total costs, while Woodward, Inc. (WWD) reported a 23% increase in total costs but saw segmental margins expand due to solid demand. Axon’s shares have risen by 10.6% in the past month, outperforming the industry average of 5.2%.
5 Stocks Our Experts Predict Could Double In the Next Year
By submitting your email, you'll also get a free pivot & flow membership. A free daily market overview. You can unsubscribe at any time.
