Axon Enterprise Inc. (NASDAQ: AXON) reported second-quarter revenue of $904.4 million, a 35% year-over-year increase, alongside adjusted EBITDA of $242 million, reflecting a 26.8% margin. Despite these strong results and an increase in full-year 2026 revenue guidance from 30%-32% to 32%-34%, Axon’s stock fell in after-hours trading due to concerns over inventory and higher memory costs, as well as a slight decline in adjusted gross margins.
The company also withdrew its guidance for operating cash flow and free cash flow for Q1 2026, previously set at $600 million and $450 million, causing further investor uncertainty. Although net revenue retention reached 126% and future contracted bookings escalated to $15.1 billion, the overvaluation of the stock and lack of clear guidance contributed to the decline in investor confidence.
AXON’s stock price remains below its consensus target of $730.92, with key support levels being monitored between $550-$580 after a decline post-earnings. Institutional ownership has decreased, though nearly 80% of the stock is still held by institutions. The current market conditions suggest investors may be waiting for a more favorable entry point.
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