Axon's 4th Quarter Checks All the Boxes

Core Insights - Axon Enterprise reported strong fourth-quarter results, with revenue growth of 34% and adjusted earnings per share (EPS) growth of 84%, both exceeding expectations [2][3][5] Financial Performance - Revenue for Q4 2023 was $430 million, increasing to $575 million in Q4 2024, representing a 34% growth [2] - Adjusted EPS rose from $1.13 to $2.08, marking an 84% increase [2] - Annual recurring revenue (ARR) grew by 37%, reaching $732 million, and now constitutes nearly half of total sales [2][4] - Operating cash flow reached $250 million, reflecting a 79% year-over-year growth [3] Profitability Metrics - Adjusted gross margin improved by 120 basis points year-over-year [3] - Net revenue retention rate was 123%, indicating that customers are spending 23% more than the previous year [2][8] Future Outlook - Axon has $10.1 billion in future contracted bookings and provided a revenue guidance of $2.6 billion for full-year 2025, surpassing analyst expectations [5] - The total addressable market is estimated to be $129 billion, with Axon's 2025 revenue expectation representing about 2% of this market [5] Market Reaction - Following the earnings announcement, Axon’s stock rose over 11% in after-hours trading, reflecting positive investor sentiment [6] Customer Engagement - The net revenue retention rate of 123% is one of the highest in the industry, suggesting increasing customer value perception [8]