Axon's Q1 FY2026 results reflect broad-based outperformance, driven by strong demand for AI products and a rapidly scaling counter-drone business. Management raised revenue guidance, pointing to sustained growth and successful cross-selling across its ecosystem. Q1 revenue was $807M, up 34% YoY, exceeding expectations and marking the 9th consecutive quarter of 30%+ growth.
Axon's Q1 FY2026 results reflect broad-based outperformance, driven by strong demand for AI products and a rapidly scaling counter-drone business. Management raised revenue guidance, pointing to sustained growth and successful cross-selling across its ecosystem. Q1 revenue was $807M, up 34% YoY, exceeding expectations and marking the 9th consecutive quarter of 30%+ growth.
Management said AI is moving from early interest to a standard part of how large agencies think about their technology stack, with nearly all large domestic law enforcement agencies now including AI in their purchases. AI bookings were up 140% year-over-year, and AI product…
Management expressed strong confidence in accelerating demand, record bookings across all segments, and positioning for a generational leap in innovation and adoption.
D-Drone bookings up 500% year-over-year, scaling beyond assumptions.. Management expressed strong confidence in accelerating demand, record bookings across all segments, and positioning for a generational leap in innovation and adoption.
Management said AI is moving from early interest to a standard part of how large agencies think about their technology stack, with nearly all large domestic law enforcement agencies now including AI in their purchases. AI bookings were up 140% year-over-year, and AI product…
Management said AI is moving from early interest to a standard part of how large agencies think about their technology stack, with nearly all large domestic law enforcement agencies now including AI in their purchases. AI bookings were up 140% year-over-year, and AI product revenue grew more than 700% year-over-year, though from a small base. They are expanding the AI ecosystem (e.g., Axon Assista
D-Drone bookings up 500% year-over-year, scaling beyond assumptions.. Management expressed strong confidence in accelerating demand, record bookings across all segments, and positioning for a generational leap in innovation and adoption.
Management highlighted significant investment in core product inventory to ensure supply and support growth, with minimal obsolescence risk given long product life cycles. CapEx guidance was refined down slightly for the year, and free cash flow conversion is expected to improve with approximately $450 million of free cash flow in 2026.
Management expressed strong confidence in accelerating demand, record bookings across all segments, and positioning for a generational leap in innovation and adoption.
“Given the expanding geopolitical risks, the competition for key components, and the growing demand of our products worldwide, we are investing in inventory with durability in mind... we had a lot of inventory for this year coming into the…”
“I would say right now we're more limited by our actual ability to scale and get the product out the door than we are by opportunity.”
“We are seeing AI move from early interest to a standard part of how large agencies think about their future technology stack. In fact, nearly all large domestic law enforcement agencies are now including AI in their purchases.”
“In April, our team closed a $40 million opportunity with one of the largest telecom providers in the world, the deployment centers around FUSIS, which continues to garner interest and drive growth in this segment.”
“I would not view D-Drone as being successful only because of events. This is a real trend and a real change in the trajectory and the need for adoption of counter-drone.”
“Draft1 improves with every report and every sensor. The value of each will continue to get stronger.”
| Metric | Period | Range | Midpoint | Status |
|---|---|---|---|---|
| Free cash flow | FY2026 | $450M | $450M | MAINTAINED |
| Op margin | FY2026 | 25.5% | 25.5% | MAINTAINED |
| Revenue | FY2026 | 30%–32% | 31% | RAISED |
While Axon's federal and defense-related (DOW) business is showing renewed momentum, no specific mention of Anduril is made. The partnership is inferred from previous statements, not this call.
“We're seeing renewed interest in body cameras and tasers in federal law enforcement and We're seeing a lot of interest in D-drone. And then, of course, on the DOW side, we're also seeing some D-drone applicability there.”
Great. Thanks so much, guys. Maybe a couple of questions for me. You know, noted still very early days of Carbine and prepared, but just what you're seeing in terms of kind of how you're looking at that market opportunity. And then maybe just second on federal, obviously, some kind of shutdowns at various points this year. No, it's not a major business for you, but just how you're seeing kind of the deal environment on the federal side. Thanks.
And then, Mita, on federal, renewed momentum there. Last year we rebuilt a large portion of the team, including our leadership. Claudia Davidson has come in from Palantir and is a fantastic fit at the company and is someone that I think is going to be a long ball hitter here for a long time. And she's done a nice job kind of rebuilding the momentum. We're seeing renewed interest in body cameras and tasers in federal law enforcement and We're seeing a lot of interest in D-drone. And then, of course, on the DOW side, we're also seeing some D-drone applicability there. So, really, the federal business is trending very much in the right direction. And with a few things going our way, it could be a banner year in Fed. But, again, we've got to do the work still.
D-Drone's explosive growth (500% bookings growth) is constrained by Axon's inability to scale up production fast enough to meet demand, explicitly stating they are 'limited by our actual ability to scale and get the product out the door'. — This indicates a temporary supply-side bottleneck. Competitor AeroVironment could exploit this gap if they can match demand with supply, while Axon's backlog builds.
Hey, guys. Nice quarter. Look, multiple large events are coming up here. You just highlighted a few this past weekend, hopefully a horse fawn. But just how is this impacting bookings and pipeline? And really, how much of the drone kind of uptick and outsized performance is being tied to these events? And really, the crux of it all, guys, is just trying to understand, like, is this event-driven or is it sustainable kind of demand?
I would just add, even if you look at some of the legislation, like the Safer Skies initiative that's coming through, It is really enabling counter-drone technology to be sustainable, and that is a multi-year program. So to Josh's point, the events are great, but I would not view D-Drone as being successful only because of events. This is a real trend and a real change in the trajectory and the need for adoption of counter-drone. And we are seeing that. I would say right now we're more limited by our actual ability to scale and get the product out the door than we are by opportunity.
Enterprise growth is being driven by a $40M telecom deal for Fusus, highlighting that enterprise security is becoming a key driver of growth. — Axon's expansion into enterprise security puts them in direct competition with established players like Microsoft (Azure) in the physical security and video management space, and indicates that Axon is winning large contracts against them.
Axon is building significant inventory buffers, largely to de-risk supply chains against geopolitical shocks, memory cost inflation, and component competition. This puts them in a stronger position to fulfill orders than competitors who depend on just-in-time supply chains.