Core Insights - Sands Capital Global Growth Fund reported a -2.0% return in Q3 2025, underperforming the MSCI ACWI's 7.6% return, indicating a challenging market environment despite a surge in global equities [1] Company Overview: Axon Enterprise, Inc. - Axon Enterprise, Inc. is a leading provider of public-safety technology, including body cameras, software, and TASER devices [3] - The company's stock closed at $555.06 on December 16, 2025, with a market capitalization of $43.8 billion [2] Financial Performance - Axon reported Q2 revenue of $669 million, a 33% year-over-year increase, exceeding expectations [3] - In Q3, Axon generated $711 million in revenue, representing a 31% increase year-over-year [4] - Annual recurring revenue rose 18% to $1.18 billion, with a gross margin of 63.3% and an adjusted EBITDA margin of 25.7% [3] Market Position and Trends - Despite a decline in stock price, the drop was attributed to technical factors rather than fundamental issues, as business performance remained strong [3] - Net revenue retention was reported at 124%, and future contracted revenue grew to $10.7 billion, indicating robust growth prospects [3] - Axon is enhancing its AI capabilities through the acquisition of Prepared, an AI platform for 911 call centers, which broadens its role in public safety workflows [3] Hedge Fund Interest - At the end of Q3, 61 hedge fund portfolios held Axon shares, a slight decrease from 62 in the previous quarter [4] - While Axon is recognized for its potential, some analysts suggest that other AI stocks may offer greater upside potential with less downside risk [4]

Core Viewpoint - Axon Enterprise is facing significant stock price volatility, with a recent decline of 26.6% over the past month, raising concerns about its high valuation and future performance [2][3][6] Company Performance - On December 3, 2025, the Chief Accounting Officer of Axon sold 74 shares at $536.75 each, leaving her with 14,408 shares [1][6] - The stock price has decreased from $732.23 on October 31, 2025, to $537.75, with a recent slight increase of 1.08% to $543.55 [2][3][6] - The company's market capitalization is approximately $42.89 billion [2] Market Sentiment - Analysts express concerns about Axon's high valuation, suggesting a potential further drop to $377, a level previously reached in the last five years [3] - The trading volume for Axon is 539,276 shares on the NASDAQ, indicating active investor interest despite recent performance [4] Product Offering and Positioning - Axon is recognized as a leader in public-safety technology, with diverse product offerings including the Evidence.com cloud platform and AI-driven video analysis software [5][6] - Despite the high valuation and recent price fluctuations, Axon maintains a strong position in the industry [6]

Core Insights - Axon Enterprise (AXON) shares have experienced a significant decline of 26.6% over the past month, dropping from $732.23 on October 31, 2025, to $537.75 currently, with further declines anticipated due to the stock's Very High valuation [2] - The company specializes in public-safety technology, including TASER devices, body cameras, in-car video systems, and the Evidence.com cloud platform, along with software for law enforcement agencies [3] Historical Performance - Historically, stocks that have experienced sharp declines of 30% or more within a 30-day period have shown an average return of 69% over the following 12 months, with a median peak return of 81% [4][8] - Axon has met the dip threshold of -30% within 30 days on 8 occasions since January 1, 2010 [5] Financial Considerations - Assessing revenue growth, profitability, cash flow, and balance sheet strength is crucial to minimize risks associated with potential declines in stock value [5] - A well-structured portfolio can help mitigate risks associated with individual stocks while allowing for potential upside [6] Portfolio Performance - The Trefis High Quality (HQ) Portfolio, which includes 30 stocks, has consistently outperformed its benchmark indices, yielding superior returns with reduced risk [7]

Core Viewpoint - Axon Enterprise (AXON) shares have experienced a significant decline of 26.6% over the past month, dropping from $732.23 on October 31, 2025, to $537.75 currently, with potential for further downside due to its Very High valuation [2] Company Overview - Axon develops public-safety technology, including TASER devices, body cameras, in-car video systems, and the Evidence.com cloud platform, along with software for real-time operations, records management, and AI-driven video analysis for law enforcement agencies [3] Historical Performance Analysis - Historically, stocks that have experienced sharp drops of 30% or more within a 30-day span have shown an average return of 69% over the following 12 months, with a median peak return of 81% [4][8] - Axon has met the dip threshold of -30% within 30 days on 8 occasions since January 1, 2010 [5] Investment Strategy - A well-structured portfolio can help mitigate risks associated with individual stocks while allowing investors to benefit from potential upside [6] - The Trefis High Quality (HQ) Portfolio, which includes 30 stocks, has consistently outperformed its benchmark indices, yielding superior returns with decreased risk [7]

Core Viewpoint - Axon Enterprise's stock experienced a significant decline following its Q3 earnings report, with a notable drop of 12.1% during trading, and a peak decline of 20.7% at market open, primarily due to earnings missing analyst expectations despite revenue exceeding forecasts [1][3]. Financial Performance - Axon reported non-GAAP adjusted earnings per share of $1.17 on revenue of $710.64 million, surpassing Wall Street's revenue target by approximately $5.8 million, but falling short of earnings expectations by $0.37 [3]. - The company achieved a year-over-year revenue growth of 30.6% in Q3, although weaker-than-expected margins have led to a sell-off in the stock [3][6]. Future Guidance - For Q4, Axon is projecting revenue between $750 million and $755 million, which would lead to an estimated full-year revenue of approximately $2.74 billion, exceeding the average Wall Street analyst target of $2.72 billion [4]. - However, the guidance for adjusted EBITDA between $178 million and $182 million has not met investor expectations, contributing to the stock's decline [4]. Acquisition Announcement - Axon announced its intention to acquire Carbyne, a public-safety technology specialist, for $625 million, with the deal expected to close in the first quarter of the following year [5].

Group 1: Sands Capital Global Growth Strategy Overview - Sands Capital released its second-quarter 2025 investor letter for the Global Growth Strategy, which adopts a flexible approach to identify promising growth companies globally [1] - The portfolio achieved a return of 21.7% in the quarter, outperforming the MSCI ACWI index, which returned 11.5% [1] - This quarter's results marked the fourth best performance since the strategy's inception in 2008, both in absolute and relative terms [1] Group 2: Axon Enterprise, Inc. Performance - Axon Enterprise, Inc. (NASDAQ:AXON) reported a one-month return of -1.34% but has gained 95.99% over the last 52 weeks, closing at $750.67 per share with a market capitalization of $58.93 billion on September 16, 2025 [2] - In the second quarter, Axon generated $669 million in revenue, reflecting a 33% year-over-year increase and marking its 14th consecutive quarter of revenue growth exceeding 25% [4] Group 3: Axon Enterprise, Inc. Growth Strategy - Axon is recognized as a leading provider of public-safety technology, with a strong growth strategy supported by an expanding software portfolio and AI-powered tools [3] - The company raised its full-year revenue guidance to between $2.6 billion and $2.7 billion, despite facing tariff-related challenges [3] - International demand is increasing, with new contracts secured in the U.K., Latin America, and Asia, positioning Axon for continued growth [3]