Axon Q2 2026 Earnings Call Transcript

Axon Enterprise, Inc. (AXON) | Q2 2026 Earnings Call | Wednesday, August 5, 2026

Axon Enterprise, Inc. (AXON)

Q2 2026 Earnings Call

Wednesday, August 5, 2026

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Axon Enterprise, Inc. (AXON) | Q2 2026 Earnings Call | Wednesday, August 5, 2026

CORPORATE PARTICIPANTS

Patrick W. Smith Chief Executive Officer & Joshua Isner President, Axon Enterprise, Inc.

Founder, Axon Enterprise, Inc.

Brittany Bagley Chief Operating Officer & Jeff Kunins Chief Product Officer & Chief

Chief Financial Officer, Axon Enterprise, Inc. Technology Officer, Axon Enterprise, Inc.

Erik Lapinski Vice President, Investor

Relations, Axon Enterprise, Inc.

OTHER PARTICIPANTS

Mike Ng Analyst, Goldman Sachs Will Power Analyst, Robert W. Baird & Co.,

Inc.

Jonathan Ho Analyst, William Blair Andrew Sherman Analyst, TD Cowen

Keith Housum Analyst, Northcoast Securities David Paige Analyst, RBC Capital Markets

Meta Marshall Analyst, Morgan Stanley & Co. Brenden Rogers Analyst, Wolfe Research

LLC

James Fish Analyst, Piper Sandler Trevor Walsh Analyst, Citizens Securities

Joe Cardoso Analyst, J.P. Morgan Jeremy Hamblin Analyst, Craig-Hallum

Capital Group, LLC

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Axon Enterprise, Inc. (AXON) | Q2 2026 Earnings Call | Wednesday, August 5, 2026

MANAGEMENT DISCUSSION SECTION

Erik Lapinski Vice President, Investor Relations, Axon Enterprise, Inc.

Hello, everyone, and thank you for joining Axon's executive team today for our second quarter 2026

Earnings conference call. Before we get started, I'll note that our remarks today are intended to build upon our most recent shareholder letter and investor materials, which you can find on our investor website at investor.axon.com.

During this call, we will discuss our business outlook and make forward-looking statements. These comments are based on our expectations as of today, and are not guarantees of future performance. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially, as discussed in our SEC filings. We will also discuss certain non-GAAP financial measures.

Descriptions and reconciliations of GAAP to GAAP are included in our shareholder letter and available on our investor website.

Now, as always, before we kick it over to Rick, we have a quick video to get us started. Let's pull it up.

>> Quarterly Earnings Video << https://vimeo.com/1215880186/d5eb4df0fc?fl=pl&fe=sh

Patrick W. Smith Chief Executive Officer & Founder, Axon Enterprise, Inc

Alright, thank you, Erik, and great job to the team. I love those videos, they just get me pumped up. So lucky to get to work here. I'd like to thank all of our analysts and investors who are joining us today. As you can see, we had another record quarter. Again, I was just looking at the numbers, like, 39%, like, wow. Okay. So, we had a record quarter, and I could not be more proud of this team. And none of this, none of it happens without our customers. You guys are the foundation, and we can't do any of this without you. This morning, my cybertruck drove me to work. I sat behind the wheel and never touched it. A few years ago, that was a keynote fantasy. Today, it's my commute. And I've stopped noticing.

That's how this goes, right? The impossible becomes remarkable, and then it becomes Tuesday. Two days ago, OpenAI announced an unreleased model had solved 10 open problems in mathematics.

Problems that the best mathematicians alive had been stuck on for decades, one of them unsolved for at least 27 years. And the compute cost to do all this, to do 10 of these unsolved like, PhD career-level problems was $2,000, or $200 per problem. So, for many years, the critique was that AI, sure, it could remix human work, but it can't create anything new. Well… That critique is finished. A Fields Medalist, which is math's highest prize, it's been called the Nobel of Math. Said he would have published a comparable result without hesitation, and there are many that said any of these problems might on their own have qualified a human had they solved it. for the Fields Medal. And yet, within a day, a model from another lab Had reproduced half of the list. Meaning it could solve half those problems on its own.

So this isn't about one company getting lucky, the whole field just crossed a line at once. The cost of an original breakthrough has just collapsed.

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Axon Enterprise, Inc. (AXON) | Q2 2026 Earnings Call | Wednesday, August 5, 2026

So why does this belong on an Axon Earnings call? Well, because an idea on a page Is not an outcome on a street. Every one of these models perceives the world largely through strokes on a keyboard. When

Axon deploys AI, we perceive the world through the largest connected network of sensors in public safety. Millions of eyes and ears already in the field, already running and built for this moment. The intelligence doesn't replace the person, the human, making a decision or making the call, but we hand them a clearer picture of what's happening in the seconds that matter most. And then, it does the one thing software alone can never do. It acts.

A Taser device can stop a violent incident without taking a life. Drones and robotics let us send a machine where a person would otherwise have to go. We both do the same thing. They lower the risk for everyone. The officer. The bystander. And the person That the police were sent to stop. Every person is safer. See it, understand it, act on it. This is the chain of events. It's the same chain that drove me to work this morning, right? Software alone can't close it. Hardware alone can't. But in public safety, Axon holds every link in this chain. Now, when we changed our name from Taser to Axon, we were very specific about that. An Axon is the nerve fiber that carries the signal from the senses to the brain, and the decision from the brain back out to the body, so it can act. We didn't pick a name that just sounded good, we picked a description of what we were building. And we've been busy building it. At the edge, sensors can see what's happening, whether it's body cameras, drones, fixed and in-car cameras, license plate readers, 911 AI assistance. Behind them is the largest customer-controlled data repository in public safety. Then AI and real-time operations can turn these signals into understanding, and then the means to act. Taser devices, drones, communication, training. At the heart of it, of course, is our mission to protect life. This doesn't just add up, it compounds. Every sensor adds a signal. Every workflow adds context. Every outcome improves the next one. Brookhaven, Georgia shows you exactly what this looks like when you connect it end-to-end. Drones on the scene in 53 seconds. Coverage across 96% of their city. Burglaries down 45%. Look, no single product on the list produces these numbers. The system does.

Data shouldn't sit trapped in a silo waiting for someone to find it. It should move securely through the workflows where it does something. A city's cameras, to its 911 center. It's to its officers, to real-time intelligence. It's evidenced to courtroom. A frontline worker in danger to help that arrives in seconds.

And all of this depends on trust. We've earned that over years of stewarding our customers' data, and never treating it as our own. We'll keep deploying this technology responsibly and thoughtfully alongside our customers and their communities, with people at the center of every critical decision. In public safety, power without trust isn't an opportunity, it's a liability. I see this coming together everywhere I look. A few weeks ago, a customer bought body cameras from municipal employees. Not for the police, for building inspectors. A few weeks before that, some of our largest enterprise pilots began putting Axon Body many on frontline workers. And during the World Cup. Our ecosystem supported agencies across North America through one of the most complex public safety missions in the world. So… Where we sit today, the world is being flooded with intelligence. What's scarce is intelligence connected to the real world. Trusted by institutions that depend on it, and aimed at problems that matter. That's what we've spent 30 years building. There is no company better positioned to benefit from the intelligence explosion than Axon. And through us, our customers. And their communities, for whom we operationalize this intelligence with physical hardware and thoughtful design and controls to help maximize benefit with appropriate oversight. What an exciting time to be alive, and an even better time to be at Axon. And with that, I'd like to turn it over to Josh Isner.

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Axon Enterprise, Inc. (AXON) | Q2 2026 Earnings Call | Wednesday, August 5, 2026

Joshua Isner President, Axon Enterprise, Inc.

Thanks a lot, Rick, and good afternoon, everybody. As Rick said, we can't do any of this without our customers. Every day, our focus is on delighting them, because when we do that well, everything else follows. We also can't do any of this without our team. They have embraced our mission and are working hard every day to deliver outsized societal outcomes. And there have been many of those in the last few months, including on the biggest stage in sports. I'm so proud of the Dedrone team for their work to support the World Cup. This was one of the most complex and comprehensive installments we've ever worked on. The expectations were clear. Simultaneous delivery and activation across 11 U.S. host cities, more than 50 additional sites and surrounding areas, international deployments, multiple agencies, with very little margin for error. The team executed with incredible precision, and I believe this deployment further established Axon as the technology leader in public safety. Dedrone is delivering tremendous growth, and the opportunity continues to expand across state and local public safety, international, federal, enterprise, and corrections. It is also one of the areas where we're investing in most aggressively, and the team is earning that investment. This is a business that was still in its infancy just a year ago, and is quickly becoming one of our largest product lines, surpassing $100 million in quarterly revenue. Next, I want to give a shout out to our international team. International bookings came in at roughly 3 times the prior year in Q2, driven by several large deals. What's especially exciting is some of our international customers are adopting our newest offerings right alongside our core products. In fact, they may be even moving faster than some of our US customers. Three of our top 5 AI- era plan deals in the quarter came from international customers. We're also seeing international markets fuel expansion in Taser. In Q2, we want a Taser 10 deal in the Middle East comparable in scale to our largest current U.S. state and local deployment, and another in Europe comparable to a top-five

U.S. agency deployment. These are massive opportunities showing up more and more, and we're just starting to scratch the surface. State and local public safety and corrections continues to show strength as well. We signed not one, but two nine-figure agreements with major cities in the quarter. One of those was our largest-ever individual Taser order. We also signed two eight-figure agreements with major state corrections customers. And another groundbreaker, our first full-scope Axon 911 bill. customer. This customer will deploy a combined prepared and Carbyne solution to power the call-to- closure vision we laid out when we announced these acquisitions, committing to that future just months before both deals closed. And lastly, in the U.S, we continue to see more and more customers who bet on other vendors coming to Axon for body camera pain relief. We expect body camera shipments to be up 20-30% sequentially in Q3, and 15-20% year over year. The success across markets led to our Taser volume being the highest in a quarter to date. We've now booked more Taser 10 units than we booked over the lifetime of Taser 7, with a ton of pipelines still in front of us. That may sound crazy for a product category that has been around for 3 decades. Well, it's real, and it speaks to how much opportunity remains. Next, enterprise. We've been talking about this moment for a long time, the point when those early conversations and pilot programs begin converting into meaningful enterprise deployments. That moment is here. Enterprise bookings were also up about 3X from a year ago, and the volume of opportunities continues to grow. And last but not least, I'm excited to see our federal business showing a lot of promise. We are engaged in opportunities across the federal civilian space, and the team is executing with intensity as we approach the end of the fiscal year. Federal was part of the story with

Dedrone in the World Cup, and we also closed a major deployment of Axon Assistant with a federal agency on our body cameras, because they are using them as body cameras. And just yesterday, we were named one of the participants in the $1.5 billion DHS program for Counter-UAS. I am looking forward to talking more and more about our progress in the federal space. As far as bookings go, every indicator I'm watching looks as good as it ever has. Q2 gross bookings were up 20%. That's on top of nearly 50% bookings growth in Q2 last year. On a 5-year normalized basis, which adjusts for contract

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Axon Enterprise, Inc. (AXON) | Q2 2026 Earnings Call | Wednesday, August 5, 2026 duration, bookings were up even more, over 30%. That matters because some of our newer markets, like international and enterprise, sign deals in the 1-5 year range, compared to some of the 10-year agreements we sometimes sign with state and local customers. Normalizing for duration gives us a clearer view of the underlying demand across markets, and as I review the pipeline, I see a clear line of sight. To finishing the year. With 30%… in the 30% range of normalized bookings. And before I hand it over, I want to spend a minute on how we're operating internally, because this kind of execution doesn't happen by accident. A little over a year ago, we began flattening the organization to empower people closest to the work, reducing layers of friction and moving faster. We paired that organizational change with disciplined investment in AI tools for our teams. We didn't rush to deploy every tool. or asked people to use AI for the sake of using AI. We rolled it out deliberately, and we focused on where it could make our people more effective. That has evolved into regular hackathons and recognition for teams finding new ways to move faster and spend more time on the work that matters. We're seeing that operation model, or operating model, pay off in execution. I believe that discipline is a big part of why we've continued to raise our own expectations. While navigating supply chain disruptions, higher component costs and tariffs, all while scaling to meet demand and never missing a beat for our customers. It is coming together nicely. The team is earning. The mission is fueling them. Our customers can see it, and we are investing in Axon, and they are investing in Axon as their trusted technology partner. We are a next play organization, and we are stacking NextPlays like never before. With that, I'll turn it over to you, Brittany.

Brittany Bagley Chief Operating Officer & Chief Financial Officer, Axon Enterprise, Inc.

Thanks, Josh. We continue to see the power of the Axon ecosystem. We're not just one product, but a system that all works together, getting better all the time to solve real problems for our customers.

From before a call comes in, to during an incident, to closing a case, the sensors, software, and data work together. This is what you're seeing in our results. Revenue was $904 million, up 35% year-over- year, marking our 10th consecutive quarter of growth above 30%, and the demand remains broad- based. Software and services revenue increased 36% year-over-year to $398 million. Axon Evidence remains the backbone of our software business, and the secure data foundation powering the vision

Rick described. Increasingly, our newer software offerings are also meaningful contributors. More than one-third of our software revenue now comes from offerings beyond our core evidence platform, consisting of real-time operations, which includes Fusus, productivity applications including records, the

AI era plan, counter drone software, and Axon 911. Together, that part of our software business grew roughly 70% year-over-year, with the AI era plan a true standout, growing almost 700%. And these businesses are still in early innings. That breadth is supporting strong expansion within our customer base. Net revenue retention reached 126%, and annual recurring revenue increased 39% to $1.6 billion.

Our software, fed by sensors and enhanced by data, is a core pillar for our customers' workflows. We're enhancing these with AI, and the numbers continue to show that this is sticky and growing. On the devices side, connected devices revenue grew 35% to $507 million, primarily driven by Dedrone

Counterdrone, Taser 10, and Axon Body 4. Platform Solutions revenue grew 123% to $150 million, with

DDRON driving much of that performance. Counterdrone was a new category for Axon added at the end of 2024, and it has quickly become a consistent contributor to our results, validating our acquisition strategy alongside our organic product development. We continue to see strong demand across customer markets and expect the business to continue to scale. Taser 10 remained a standout in the quarter, as Josh highlighted. Turning to margins, adjusted gross margin was 62.9%, up 130 basis points sequentially. This increase in gross margin was primarily driven by TRF refunds, partially offset by increased mix from newer product offerings, which are still scaling. Adjusted EBITDA was $242 million,

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Axon Enterprise, Inc. (AXON) | Q2 2026 Earnings Call | Wednesday, August 5, 2026 or a 26.8% margin. Operating cash flow improved to $20 million from an outflow of $92 million in the prior year. This resulted in a free cash flow outflow of $1 million and reflected continued efforts around free cash flow conversion, while still making substantial inventory investments to support customer demand and reduce supply chain risk as we scale. We continue to have line of sight to strong free cash flow generation, consistent with our Q1 guidance of $450 million for the full year, with strong seasonality expected in the fourth quarter. As we've noted before, we also expect long-term free cash flow conversion to improve from these levels, but need to get through this period of inventory investment, which we expect to moderate after this year. Future contracted bookings grew more than

40% year-over-year to $15.1 billion, reflecting the broad-based momentum we're seeing across products and end markets. As Josh mentioned, we continue to feel very good about the momentum we're seeing in the second half of the year. We're raising our full-year revenue guidance to a range of 32-34%, 200 basis points above our prior range of 30-32%. Based on the strong demand, pipeline, and results in the first half, we expect seasonality similar to last year. Where Q4 is our strongest quarter, both in terms of revenue and year-over-year growth. We continue to expect full-year adjusted EBITDA margin of approximately 25.5%. We received a refund in Q2 for tariffs, but we are also facing increasing component costs for the year, especially on memory, which leaves our full year guidance unchanged.

We expect Q3 adjusted EBITDA margin to reflect the impact of those memory costs, with no benefit from tariff refunds, before we scale margins back in Q4 to these levels to hit our full year target. We are also thrilled with the performance of our counter drone segment, but as we scale this and other new businesses rapidly, we are absorbing the mix impact. Over time, these are well worth the investment on the bottom line, as well as the top. While there are a lot of moving pieces in our business, we continue to deliver for our customers, our shareholders, and our employees, and are very proud of our results this quarter. As you think about a rule of 45, we delivered above 60, and are looking forward to continuing to drive a strong second half of the year. With that, I'll turn it over for questions.

Erik Lapinski Vice President, Investor Relations, Axon Enterprise, Inc.

Thanks, team. I think we're all up in gallery view. We have our, one note today, we're going to try to take one question, and then if we have time, we'll come back to everyone around the circle. So we're going to start with Meta Marshall at Morgan Stanley.

Meta Marshall Analyst, Morgan Stanley & Co. LLC

Great, thanks so much, and congrats on the quarter. I guess, Rick, I wanted to ask, just as customers gain comfort with AI, where are your customers asking you to innovate around, and are there any areas where you're still finding any resistance from customers?

Patrick W. Smith Chief Executive Officer & Founder, Axon Enterprise, Inc.

Well, sure, change is always hard, and we… this is a very… Risk-averse customer base when it comes to tech. So, I would say, actually, some of the new areas we're being asked a lot about are around privacy, data security, you know, I'm sure you all have seen the DeFlock movement, which is, you know, has some broader anti-surveillance sort of momentum. Now, for me, this feels a bit familiar. Like, when

Tasers first came out, there was a massive backlash, you know, I view this as sort of the birthing process, almost, of a new… any new real technology in public safety is going to go through an adjustment period, and I would say the critics aren't all wrong. There have been some mistakes, things that could have been

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Axon Enterprise, Inc. (AXON) | Q2 2026 Earnings Call | Wednesday, August 5, 2026 handled better in terms of data privacy and security, and a couple high-profile uses where, you know, police, Employees were… abusing their access to license plate reader data to do things like, you know, track and X. But those are exactly the sorts of things where I think our approach to data privacy, where we have you know, a critic-based system where we bring in critical thinkers that are going to challenge us early. I think we just… we're about to post a new episode of the Boldy Go Podcast with a couple folks off of our EEAC, our Equity and Ethics Advisory Council. And I think that's become a real superpower.

Like, our customers, when we talk about trust, it's not just hand-wavy, it's… You know, we've had a point where our trust with our customers is an incredibly valuable and fragile asset. If we… if we break that trust, it would be very damaging to the overall business, and if we… protect and cherish and continue to earn that trust, it makes our business more durable. So I would say we're seeing a significant number of agencies want to come over to Axon and convert from existing license plate readers to us, specifically because of the controls and privacy work that we've done around the space. And for example, one of the things we're doing is we'll be building AI tools to watch for anomalous search behavior, so that we're watching out for potentially abusive patterns and people have access to the data. So, I would say, in general, there are still, you know, there are places where there's concerns about AI, and we just have to be thoughtful and understand those concerns, and say, look, this is a tool to amplify human ability, not to replace human judgment.

Jeff Kunins Chief Product Officer & Chief Technology Officer, Axon Enterprise, Inc.

And then maybe just to just add, I think you asked about where the demand is. I think there's sort of three broad themes that are, you know, always present. Number one, and this, you know, is anything that helps them get response faster, effective, correct response faster, and many of the things you see us talking about anchor on that. Number two is anything that helps save officer time to get them more time back, to do their jobs in community. And number three is anything that drives officer and community safety directly. And so, again, across all of our lines of business, across all of our categories, and all the investments you see us do in AI, almost all of them line up directly on those three broad categories.

Meta Marshall Analyst, Morgan Stanley & Co. LLC

Great, thanks so much.

Erik Lapinski Vice President, Investor Relations, Axon Enterprise, Inc.

Thank you, Meta. Up next, we have Mike Ng at Goldman Sachs.

Mike Ng Analyst, Goldman Sachs

Hi, good afternoon. Thanks for the question. I just have two as well. First, just on, the momentum that you're seeing in, Dedrone Counter-drone, maybe you could just talk a little bit about, you know, other use cases that you're seeing beyond World Cup, you know, I think it's, you know, natural for some people to think that you guys saw some outsized demand because of the event. You know, what are some of the other, you know, private infrastructure, other use case, use case demands that you're seeing on a go-forward basis to give you confidence around that. Greater than $100 million quarterly revenue run rate. And then second, just as a housekeeping item. On professional services within

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Axon Enterprise, Inc. (AXON) | Q2 2026 Earnings Call | Wednesday, August 5, 2026 software and services, you know, historically, we've thought of that as something that is tied very closely to fleet. You know, I would imagine there are much broader use cases for professional services now, so just wondering if you could talk about what drives that.

Patrick W. Smith Chief Executive Officer & Founder, Axon Enterprise, Inc

Let me take the first one, and then I'll let someone else take the second one. So, look, Counter-drone, there's this war going on in the Middle East and the one in Russia where, like, you look at what the

Ukrainians have been able to do to these Wildberries warehouses now, they're just decimating that. The

Iranians are threatening to go after American infrastructure and data centers, but these aren't confined to just tools of war, right? You can have our customers get it. I think the World Cup was certainly an accelerant. But, you know, every data center understands, especially with now some of the rising controversy around, you know, data centers, that any disgruntled person with a 3D printer, access to a drone, and the internet could build something that could cause real problems. You know, I think people… anyone who's prone to gun violence. could be prone to drone violence, and so I think… and it's not just us saying that, right? I think our customers broadly even in enterprise, like, we have deployments at CEOs' houses as part of their security protocol. We're seeing it at data centers and corporate campuses. You know, it's at the World Cup now, but I think it's going to be at every Friday night football game in 5 or 10 years. So I think the World Cup was certainly a surge, but it's part of just a normalizing acceptance that there's a three-dimensional aspect to safety that we need to be able to police.

Joshua Isner President, Axon Enterprise, Inc.

So I'll add a little bit to that.

Michael, thanks for the question. So, ultimately, one of the more exciting things about our Dedrone business is, yeah, federal is a piece of it for sure, but we're seeing far more opportunity internationally.

And so, I would not necessarily tie any, you know, much of our Dedrone revenue to one specific event.

Those trailers, for example, that we sent to the World Cup are already being repurposed by the customer for other use cases, and so we certainly expect the Dedrone demand to endure. Now, it's important to recognize that these are large revenue shipments of hardware, so quarter to quarter, they can swing a little, but when you add it all up, I don't think it'll look like the World Cup was an outlier. And on top of that, as Rick said, you know, right now, it's really Enterprise, Federal, and International. As drone mitigation becomes legalized for state and local, again, we view that as another potential, you know, surge in demand here. So, we're feeling really, really good about Dedrone, you know, beyond the

World Cup. Now, second on the professional services. We view this as an enabler to customer happiness, but also customer use… the usage of our products. So, a couple years ago, professional services meant show up and deploy body cams or Tasers or integrate to a record system, and so forth.

Now, professional services are showing up and starting to build things on-site for customers using our AI tools. And so. very much like some other companies in some other markets, we really view the opportunity here to start to delight our customers with more and more on-site that could be rapidly built and custom deployed, just as Rick talked about at Axon Week around Axon Gravity. So, professional services will certainly be a strategic enabler to more usage and more purchases of products.

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Axon Enterprise, Inc. (AXON) | Q2 2026 Earnings Call | Wednesday, August 5, 2026

Mike Ng Analyst, Goldman Sachs

Wonderful. Thank you, Rick. Thanks, Josh.

Joshua Isner President, Axon Enterprise, Inc.

You got it.

Erik Lapinski Vice President, Investor Relations, Axon Enterprise, Inc.

Thanks, Mike. Up next, we have Jonathan Ho at William Blair.

Jonathan Ho Analyst, William Blair

Good afternoon. Really appreciate the additional disclosure on your 5-year annualized deals. You know, one thing I would like to understand a little bit better is, you know, when we commented about the nine-figure deals that you signed with the municipal police, you know, some of these are likely, you know, longer-term deals. Can you help us understand, you know, first, like, how much these have really ex… how much you've really expanded with these customers versus prior deals, and, you know, what this potentially looks like as you broaden your engagement, you know, with the entire customer base?

Thank you.

Joshua Isner President, Axon Enterprise, Inc.

Sure thing. I think it's following a trend that we expect to see in a lot of places, right? It's what we've talked about with this idea that we sell products, we delight the customer, and then we earn the right to sell more. And, ultimately, I think that's what's happened in those couple large deals, and they are meaningful deployments, or expanded deployments of our products. It's not simply a renewal, and so…

Oftentimes there's more hardware and a lot more software in those deals. And, you know, I think it's something we can start to see internationally, here and there as well, you know, potentially even this year. And, ultimately, like, our bookings, I feel equally good about them as I did at this time and on this call last year. We're very excited to see how we got out of the gate in the first half of the year. I was just at our sales summit all week in Scottsdale here, and talking to our state and local team, and the attitude is we're expecting a really massive second half of the year, especially just like last year, a little more weighted toward Q4, but certainly plenty of room for growth, and when you add it up, we'll be in the

30% range again for bookings, and so we've got it all in front of us, and now it's time to go do the work.

Erik Lapinski Vice President, Investor Relations, Axon Enterprise, Inc.

Thanks, Jonathan. Up next, we have Trevor Walsh at Citizens.

Trevor Walsh Analyst, Citizens Securities

Great, thanks, Erik. Thanks for taking the questions, team. Josh, great to hear about the full-scope, prepared Carbyne, deal that you signed. That seems a little bit counter, kind of, how you guys set up the

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Axon Enterprise, Inc. (AXON) | Q2 2026 Earnings Call | Wednesday, August 5, 2026 go-to-market there, in terms of, I think, landing more with the prepared use case of getting… bringing some AI capability, and then shifting to Carbyne later, which is more of a larger lift and shift of You know, larger systems and databases. Are we seeing maybe an early trend that that's now changing, and people are going to go whole… whole kit and caboodle from the outset, and then kind of follow onto that? If and when they do that full-scope deal, what's the uplift look like, generally speaking, if a customer already has some flavor of maybe an OSP type of bundle? Thank you.

Joshua Isner President, Axon Enterprise, Inc.

Sure, sure thing. So, the one thing that's becoming apparent to us is customers are actively looking for alternatives in 911, and we're excited that we're in exactly the right place here to help them by virtue of the Prepared and Carbyne acquisitions. One of the things we did early on to your question, Trevor, is when we acquired Carbyne, we actually integrated them into Prepared, not into Axon. So now this apparatus is Axon 911, And so now we are seeing a little more combination in certain places of the desire to do both of these at once. But that's kind of the beauty of it, right? Like, some customers are going to be ready for that, but a lot of customers are going to buy one or the other up front with a clear intention of moving away from their current vendors. And so, I am wildly bullish on the 911 space and our ability to win there. conference was this week, and our prepared team was telling us how much momentum they're picking up and how universally they're hearing that more alternatives and competition in that market is welcome, and so we're excited to compete.

Erik Lapinski Vice President, Investor Relations, Axon Enterprise, Inc.

Thanks, Trevor. Up next, we have Joe Cardoso at JP Morgan.

Joe Cardoso Analyst, J.P. Morgan

Hey, good afternoon, thanks for the question. Maybe you wanted to touch on the body camera shipments commentary that you made in terms of sequential growth going into 3Q. You know, I guess first question is more so, any way you can kind of contextualize the growth that you're seeing from there, and maybe bifurcating it between Axon Body Mini, and maybe Axon Body 4, and then as a second part, too, of that question, you know, just curious how you're thinking about the Axon Body Mini rollout, now that it's at GA. You know, I think your expectations around adoption At least in terms of some of the early conversations, was maybe more measured and, like, thinking about it as more of a tranche deployment, but at least some of the early data points that you guys had in your prepared comments, as well as in the presentation material, does seem like things could be moving a bit faster and more widespread, so just curious if that's a fair read, and how we should be thinking about that, and if there's any limitations we should keep in mind.

Joshua Isner President, Axon Enterprise, Inc.

Yeah, thanks, Joe, and thanks for hosting us at your conference a couple months ago here. Ultimately, on the body cameras, I wouldn't consider AI, or I'm sorry, AB Mini as a big driver of that guidance that I mentioned for next quarter. I think there's some in there, but the real story there is we are winning in public safety, you know, commonly across all of our markets. I think there's a few different flavors of those deals. There's renewals in there, there's expansions in there. Like I said. in the prepared remarks,

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Axon Enterprise, Inc. (AXON) | Q2 2026 Earnings Call | Wednesday, August 5, 2026 there's also win-backs in there, where more and more customers that made a different decision up front are migrating to Axon. And so, I think it's every bit as much of a commentary around U.S. state and local as it is enterprise, and then, of course, international is also showing some real signs of life. And then, as it's been reported publicly, we've got some exciting federal opportunities in the body camera space as well. So, I think hitting on all cylinders, and certainly, you know, very pleased that this late in the product's life cycle, that we continue to see so much demand from so many different places, but I don't want that to be mistaken for a lack of demand in U.S. state and local. It's certainly there. And then the last thing I'll say is on the, you know, on the quarter-to-quarter shipments, just remember that the body camera shipments are a function of our bookings, right? So, in Q1, we, you know, we tend to have seasonally the lightest quarter in bookings of the year, and thus, when we ship those, since a lot of the deals come in late in the quarter, we ship them in Q2, that's a reflection of Q1 bookings. And so, as we go through the year, you should certainly expect those body camera shipments to pick up, and, you know, you know, I think if I were betting, I'd say it'd be closer to 30%. Sequentially, quarter, you know, next quarter versus this quarter, but, you know, we are giving the range of 20 to 30%.

Joe Cardoso Analyst, J.P. Morgan

Got it, and then maybe just the second part on Axon Mini there?

Joshua Isner President, Axon Enterprise, Inc.

Sure, on Axon Mini, it's… driving a lot of interest. We've kicked off, I was just talking to our head of enterprise yesterday, we've kicked off a number of trials with the AB Mini that are starting to gain momentum, and we're kind of brands you've heard of in the market, and brands you might see if you visit their stores, so there'll be, you know, that growing trend. But it does take time, right? And ultimately, you know, we have to do one thing, you know, put one foot in front of the other for a while, succeed very well in the trials, then capture our first orders, and then just like in public safety early on, that second cycle of expansion is where we see the highest volume. So, right now, it's about seeding the market in a number of different large enterprises with, maybe even hundreds of body cameras per deployment, even though some will certainly be in the thousands. And then building from there, just as more interest is coming online with Fusus and Outpost, and Evidence.com in general with, with a number of these enterprise customers.

Joe Cardoso Analyst, J.P. Morgan

Makes sense. Thanks, Josh. Appreciate all the calls.

Erik Lapinski Vice President, Investor Relations, Axon Enterprise, Inc.

Thanks, Joe. Up next, we have Keith Housum at North Coast.

Keith Housum Analyst, Northcoast Securities

Good afternoon, guys, appreciate it. I'm trying to get my video here. In terms of the Outpost and

LightPost now being out there for several months now, perhaps you guys can touch base on a little bit of

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Axon Enterprise, Inc. (AXON) | Q2 2026 Earnings Call | Wednesday, August 5, 2026 what you're seeing in terms of adoption. Obviously, we saw some takeaways that you had in the quarter. Perhaps just talk about success there and the lineups that you guys have.

Joshua Isner President, Axon Enterprise, Inc.

Yeah, so, we… so, Keith, in the first half of 2025, I believe our outpost light bulb bookings were somewhere around, you know, single-digit millions. From 2H, Last year, through 1H of this year, so a full, you know, rolling 12 months. We're right around 100 million of bookings already in Outpost and

LightPost. So, that business is certainly growing. We're very proud of how we've built these products, as

Rick said, keeping privacy and information security, and auditing, and all the accountability features around how this data is used. We're very proud of what we've built there, and we think that is a major tailwind to adoption of these products is, you know, customers are looking for an alternative to what they've been using historically, and they're seeing a very responsibly built product that protects everybody without posts and light posts.

Keith Housum Analyst, Northcoast Securities

Great, thanks. I'll keep it simple, though. Thanks, guys.

Joshua Isner President, Axon Enterprise, Inc.

Thanks, Keith.

Erik Lapinski Vice President, Investor Relations, Axon Enterprise, Inc.

Thanks, Keith. Up next, we have Andrew Sherman at TD Cowan.

Andrew Sherman Analyst, TD Cowen

Great. Hey guys, good to see you. Josh, great to hear the international commentary, especially the three big AI deals. Were you surprised by the early action there? What is really turning the light bulb on for them with some of the newer products, including AI? And are there more of these in the second half, pipeline?

Joshua Isner President, Axon Enterprise, Inc.

Yeah, the second half pipeline is full with a lot of exciting international opportunities, no question about that. in terms of what they're seeing internationally in the AI Aera Plan, I'd probably point to a couple things. Number one, we've enabled Draft 1 in more markets now, and so that is picking up a lot of steam, and that does take some work, because reporting is different in every country, so there's some work to do to bring countries online, but that work has happened and continues to happen. The second one is the translator. Whenever people are speaking two different languages, the real-time translator via the Axon Assistant is the thing that's driving, you know, a lot of the interest there as well. So, was I surprised? I mean, our international team, it's just incredible to see the amount of progress we're making there, the quality of the team, the work ethic, the delivery, the, you know, just everything that it takes to build an exciting business internationally, and so, not a lot surprises me about our sales teams these days. They're… they're pretty effective.

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Axon Enterprise, Inc. (AXON) | Q2 2026 Earnings Call | Wednesday, August 5, 2026

Andrew Sherman Analyst, TD Cowen

Great, thank you.

Erik Lapinski Vice President, Investor Relations, Axon Enterprise, Inc.

Thanks, Andrew. Up next, we have Brenden Rogers at Wolfe.

Brenden Rogers Analyst, Wolfe Research

Hey guys, thanks for taking my question. In the past, you've talked about, longer sales cycles for AI and the OSP bundles. You know, with the bigger price tags on those. Are those cycles shortening now that the products have been in the market for longer periods of time? Customers might be more familiar, more, you know, used to AI? Or are you kind of noticing these conversations are still taking a long time, and maybe that's driving some of the more budget flush, you know, conversations. Thanks.

Joshua Isner President, Axon Enterprise, Inc.

In terms of timing, I don't know that there's a material difference, because ultimately, even, like, when we were selling Tasers just standalone 15 years ago, you still have to go through a government process to buy something. And so, I would say, if anything, yeah, certainly there's more acceptance of the products up front, but it's maybe a little offset by just the sheer size of some of these deals, and when you're up at these levels of, you know, of contract value. you do have to go through, you know, several approvals, and a lot of contract negotiation and so forth. So, I think, you know, one way to look at it is, you know, clearly the team had a fantastic Q4 last year, and they got out of the gate fast, and while delivering the results you've seen in the first half, they've rebuilt the pipeline for the second half. And so, a lot of the work we've done in the first half, you'll see come through clearly in Q4 this year, with another massive bookings quarter, and even some build-up to that in Q3. So, I'd say, you know, everything generally within a year, but still, still have to go through the process and do all the right things, and our team's become very, very good at that.

Erik Lapinski Vice President, Investor Relations, Axon Enterprise, Inc.

Thanks, Brenden. Up next, we have Jim Fisher, Piper Sandler.

James Fish Analyst, Piper Sandler

Hey guys, maybe just on Dedrone, nice to see the greater than $100 million, clearly a lot of momentum around CounterDrone, just generally. You know, first, is there a way to think about how much of the

DHS contract, you guys are looking at? And secondly, more for Rick, probably, how are you thinking about the strategy here between moving beyond Dedrone and into other mitigation and prevention strategies with that counter-drone business? Thanks, guys.

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Axon Enterprise, Inc. (AXON) | Q2 2026 Earnings Call | Wednesday, August 5, 2026

Joshua Isner President, Axon Enterprise, Inc.

So, on the $1.5 billion DHS contract, it's still a little unclear how much of that will be captured, but I think the important thing there is out of 55 or 60 applicants for that contract, a handful were selected, including us, and I think that very much legitimizes the offering. And so, this DHS endeavor, that's not the only way money is going to be spent on counter drones, so… I would look at it, like, certainly we'll capture a portion of it, but it also enables more and more sales, you know, across, federal, but equally so across state and local and international as well.

Patrick W. Smith Chief Executive Officer & Founder, Axon Enterprise, Inc.

Got it, okay, and then for me, in terms of, you know, this is a very fluid space, it is moving quickly, you know, today we… today we live in a world where state and local are just getting the ability to begin to do mitigation, so things like jamming or hacking and taking control of the drone. Obviously, with more advanced drones that are either AI-driven or being flown with a fiber optic cable. jamming and cyber takeover is not going to work, and so you're going to need various types of physical ways to stop the drone. And so we've got Ongoing partnerships and discussions with teams in Ukraine and in other countries. On what types of interceptor drones you may use, or other interception methods, everything from you know, nets to lasers and different ways to mitigate those drones, and we view our footprint with Dedrone is to be the best connector, meaning that we partner with the best in class across a variety of different vendors, that we create the best overall user experience, and that we're able to move at the speed at which the drone and Counter-drone pace is moving. We don't think anyone hardware vendor is going to be able to keep up and win. So, having a great partner strategy and our own, you know, world- class first party on some of the sensors and key elements of the ecosystem is the winning play. And frankly, it's why I've been to Ukraine a couple times in the past year. I was planning to go to the Defense

Tech Valley Conference next month. That's been canceled. Since they ran out of interceptors, the threat of Russian ballistic missiles is much greater. In fact, they just hit. One of my friends, the senior executive in one of the companies we invested in Ukraine was at a conference in Kyiv. Where they… they got hit.

Luckily, none of his people were killed, but it was pretty… pretty scary, so I may be sharing that, if we have any listening heroes in the power to help us get more interceptors to Ukraine, that'd be super helpful. But, you know, I've… I've personally been very engaged there, because I think it's important that we, A, help them win, and B, that's where the next technologies are likely going to come out of, and especially when you're talking about at commercial price points, as opposed to, like, traditional, like,

U.S. military price points. And so I think, you know, I was joking at one of my recent customer summits, I bet for a police chief that was not on their bingo card, they're going to have to run a small air force. but they're going to. They're going to have to have ways to intercept these small drones, and now it's going to be different. You typically don't want big things going boom over American cities and detonating, but deploying nets or things with parachutes, and we're doing some interesting work with our friends at

Skydio on how we could use the DFR capabilities that they've built and start marrying in other sorts of things. So just, I'd say, expect experimentation and innovation and continued evolution.

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Axon Enterprise, Inc. (AXON) | Q2 2026 Earnings Call | Wednesday, August 5, 2026

Jeff Kunins Chief Product Officer & Chief Technology Officer, Axon Enterprise, Inc.

And I think just to wrap that back to your strategy question, it's really, like, three simple things that goes with everything else that we do. Number one is. our software experience and our sensor fusion engine that, you know, ties… for any given combination of hardware you want from any combination of vendors, we're going to deliver the best possible detection and defeat results, given any combination of hardware with our software and sensor fusion. Number two, as Rick said, we're going to be the best in the world, meaning the fastest, the most flexible, and the highest quality at integrating the sort of dizzying array We have new vendors on both the sensor and the effector side that are going to keep coming out. And number three, just like with everything else, you'll see us choose which pieces of the hardware side we think are the most important for us to be first-party leaders on, while partnering very liberally across all of the others.

James Fish Analyst, Piper Sandler

Great, thanks guys.

Erik Lapinski Vice President, Investor Relations, Axon Enterprise, Inc.

Thanks, Jim. Up next, we have Will Power at Baird.

Will Power Analyst, Robert W. Baird & Co., Inc.

Okay, great, thanks. Yeah, congratulations on the broad-based product traction. I've got a number of investor questions on this. This is where I wanted to focus my question. The 5-year normalized bookings, you know, metric, you know, why now? You know, it sounds like perhaps it's tied to expectation for ramping you know, international growth, you know, enterprise, and you're just trying to get the right, you know, duration there. But anything else you're signaling that we should take away from that? And I guess, just for context, are there any historical kind of comparisons you could provide, just to help us kind of frame it up?

Joshua Isner President, Axon Enterprise, Inc.

Sure thing, Will. Great questions. Number one on the historicals, I think in our first earnings call of the year, we had cited the fact that 5-year bookings were also in the 30% range last year. So, you know, similar range to the 10-year bookings of… or the total bookings of last year. In terms of this year, as I mentioned, 30%, over 30% year-over-year and 5-year bookings. The reason you hit on it a little bit, there's really two elements of it. One is, for example, in enterprise, we're seeing it's much more common to do three-year deals. And so, ultimately, figuring out how all these contract durations normalize, I think, is important as the business looks different and different as we win in different markets. The second one, which is equally important, is that Some of these, international deals that we're seeing and working on are so big in size that, They represent such a big swing in years 6 through

10 that it doesn't give a clear picture of what the bookings look like anymore, year to year. And so, you know, if some of these deals approach a half a billion dollars or more than we're looking at in 10-year value, you can imagine that quarter to quarter, some of these, you know, swings will be pretty, you know, pretty interesting. And so normalizing them down to the same common denominator just gives us

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Axon Enterprise, Inc. (AXON) | Q2 2026 Earnings Call | Wednesday, August 5, 2026 a way better look at what the future looks like. As I've said many times on the calls. part of what gives us so much confidence in revenue growth in the out years is the idea that we look at bookings to inform those, and again, looking at 5-year bookings as a common denominator gives us, I think, a lot more context when we talk about out years of revenue growth.

Brittany Bagley Chief Operating Officer & Chief Financial Officer, Axon Enterprise, Inc.

Well, I think, just to add, the other piece is we've received a lot of questions about how is duration impacting our bookings. And so this is a way for us to try and help normalize that for people, so that that duration question comes out. I do think we can still say that our future contracted bookings for the whole year will grow faster than that 30% that we gave for the 5-year normalized bookings, so there's really strong numbers on both metrics. We just wanted to start providing this to be really helpful.

Will Power Analyst, Robert W. Baird & Co., Inc.

Okay, that makes sense, thank you.

Joshua Isner President, Axon Enterprise, Inc.

Thanks a lot, Will.

Erik Lapinski Vice President, Investor Relations, Axon Enterprise, Inc.

Thanks, Will. Up next, we have David Page at RBC.

David Paige Analyst, RBC Capital Markets

Hi, thank you for taking my question. A lot of good color on the call already. I just want to add one on the body cameras. I think you had mentioned some of the growth was due to winning back customers, so I was curious to know What exactly is driving that? Is that they just like the Axon camera better, or is it the connected ecosystem, or is it the trust credibility that you'd built up? Any extra color would be helpful. Thank you.

Joshua Isner President, Axon Enterprise, Inc.

Sure thing. I think it's quite, quite simple in some ways, where customers were… told one thing, or expected one thing, and through their usage of the products, they weren't getting what they expected, or what they were sold. And it's inter… you know, we're seeing customers cancel contracts early with other providers to come over to Axon. It's happened very publicly in a couple cases this year, and We're very proud of the fact that even the first time, if we're not successful, that we remain in, you know, open lines of communication with these customers, we're trying to support them however we can, and often some of our best and most loyal customers had chosen a different vendor up front, initially. And so, we continue to invest heavily in these products. And the experience is really showing. When you, you know, even basic things, like, does the battery last the full shift, for example? That's a really important thing to our customers, and as they see that play out, they have questions about that. And again, we do

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Axon Enterprise, Inc. (AXON) | Q2 2026 Earnings Call | Wednesday, August 5, 2026 the basic things, the fundamentals, very, very well, but when you pair that with a lot of value-added functionality on top, whether it's AI Era Plan, Draft 1 of the real-time translator, or just the Evidence.com workflows that share from, you know, the police department to the prosecutor, through the court system. A lot of that, really, you know, for a first-time body camera buyer. A lot of that doesn't come out until you start using it and understanding how it works and what's going well and what's not, and our customers are, you know, you know. very, very pleased with how we do those things, and they're telling their peers, everybody's on the same team in public safety, which works really well for us, because, you know, the network effects matter a lot, and we're seeing those play out. So, really proud of our teams for continuing to, you know, keep their heads down and working hard, and not take anything for granted, and continuing to win a lot in public safety.

Erik Lapinski Vice President, Investor Relations, Axon Enterprise, Inc.

Thank you, David. Up next, we have Jeremy Hamblin at Craig-Hallum.

Jeremy Hamblin Analyst, Craig-Hallum Capital Group, LLC

Thanks, appreciate it, and congratulations on the results. So, wanted to ask a question that kind of builds on something that Michael asked earlier, which is, you know, the evolution of your business. And, you know, as we look at platform solutions, which has really exploded as a reportable segment. I mean, it's kind of blown by personal sensors here, like, awfully quickly. And… You know, obviously, there could be some things in the near term that are, maybe perceived as shorter-term opportunities. It sounds like you have a lot of confidence that it's, you know, going to continue to build, particularly on the international market. But, you know, as we look at how this business evolves, and you have your 2028 targets. You know, can you give us a sense for, like, do you expect platform solutions to really be bigger than your Taser segment by the time we get to 2028 and you're hitting $6 billion in revenues? Is that the type of growth that you're… Kind of expecting, or how can you, help us kind of think about how your business model's going to evolve over the next couple of years?

Joshua Isner President, Axon Enterprise, Inc

So, let's, like, Brittany can weigh in, but maybe I'll start, Jeremy, I think, ultimately, it's not really the way

I look at our business, in terms of, you know, operating day-to-day. It's more about the idea that, you know, we're seeing growth across U.S. state and local in all products. We're seeing growth in international in all products. We're seeing the same thing in Federal and Enterprise. And when you add up, you know, just using bookings as an example. Last year, I think we were clear we booked over $7 billion, and you normalize that, and you kind of understand the trend line you're on. And then this year, we have our understanding of what that will look like, and so that's informing the revenue growth far more than any, you know, any strong feeling about, is it going to be mainly platform, is it going to be mainly Taser? These things are sold in concert with each other. And so, we look at it much more as, hey, what's the sum of the parts in terms of bookings, understanding that hardware and software in different quarters will look a little different, and when you add it all up, we, you know, feel very confident in that guidance.

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Axon Enterprise, Inc. (AXON) | Q2 2026 Earnings Call | Wednesday, August 5, 2026

Patrick W. Smith Chief Executive Officer & Founder, Axon Enterprise, Inc.

Yeah, I would… I would like to jump in here, too. Like, this question… What we have built, and what we're building. The thing is the interconnectedness of it all, and that these Individual capabilities, may be more valuable or less valuable to another customer, but, like, how is it that we make all these things leverage each other in a way that just creates outsized value. And what I think is a little different, I think, you know, if you think of this as a business, you might be like, well, what's our objective in terms of where we want to grow, and like, do we want to have more platform or more Taser? And I think the way we approach this, it is a bit more mission-oriented, and that might sound a little cheesy, but it's like, what are the problems that matter to our customers? And which of these things solve those problems?

And that's… like, we want to double down on the most valuable customers to solve… customer problems to solve, because that's what they're going to pay us for. we put a lot more focus there versus, like, trying to engineer, like, where do we want to grow to make more or less margin, or more or less hardware or software. And so it… again, this might sound a little like, I don't know, too self- congratulatory that we're very customer-driven, but we really… we have found when we solve things that matter to our customers. we can figure out how to get paid for that in ways that build a sustainable business. And so, I personally don't spend much time at all trying to engineer financial returns around our ecosystem. I spend my time talking to customers, and then working with Jeff. On how we translate where the emerging needs are, and sometimes we learn things are, like, a lot more valuable than we thought they might have been, and we double down on those, and it's really just being responsive to the customer environment. To grow revenue overall.

Jeff Kunins Chief Product Officer & Chief Technology Officer, Axon Enterprise, Inc.

I mean, what… oh, go ahead, Brittany.

Brittany Bagley Chief Operating Officer & Chief Financial Officer, Axon Enterprise, Inc.

Well, you can jump in on the product, I'll just round out on the numbers when you're ready.

Jeff Kunins Chief Product Officer & Chief Technology Officer, Axon Enterprise, Inc.

I was just going to say, again, in the sort of, you know, old, maybe old jargon at this point, but it literally is a network effect. on both inside each individual agency, and then across agencies inside one of these market segments, like state and local, and then across market segments, like the public-private partnerships. And so, when you think about what it means to have, you know, network-affected, you know, product categories, that is quite literally what the Axon ecosystem is.

Brittany Bagley Chief Operating Officer & Chief Financial Officer, Axon Enterprise, Inc.

I mean, I think as you look at our 2028 guide, you know, we have a lot of ways to get there, and obviously, Platform Solutions is performing incredibly well, and we have a lot of enthusiasm behind that.

I certainly would not discount what our Taser business can continue to do as we look ahead to 2028.

And then… and to Rick's point that it's all connected, I would also think about the software pieces that get connected to all of these hardware businesses. What you're seeing a lot in platform solutions right now is you're seeing a lot of big upfront hardware sales, and we're going to be building the software

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Axon Enterprise, Inc. (AXON) | Q2 2026 Earnings Call | Wednesday, August 5, 2026 business on the back of that, and that will be a long tailwind behind that. The body camera business obviously already has everything attached to it, and has a huge Dems business that really goes along hand-in-hand with it. So I wouldn't… I wouldn't separate those. But certainly as you think about

Tailwinds, building out that… you know, counter-drone software business and some of those other software product lines are also big tailwinds, and so as we get to 2028, I think you can think about everything growing into the future. Also, I just… one clarification for everyone on the 5-year normalized bookings. In case it wasn't clear, we don't take shorter bookings and gross them up to 5 years, so these are really all of our shorter bookings, plus anything longer than 5 years normalized down to 5 years. So, just… just to prevent any conspiracy theories there.

Jeremy Hamblin Analyst, Craig-Hallum Capital Group, LLC

Great. And just a quick follow-up there on the last point, and, you know, you've seen your AR growth, kind of re-accelerate here in 26, and… You know, just want to understand, in terms of, kind of, key driver there, is that really just more AI era, adoption plans, and just gravitating a higher portion? Of your, you know, kind of embedded customers into, into that? And is that going to likely continue to see this higher growth rate continue? Into 2027, 2028, and beyond.

Brittany Bagley Chief Operating Officer & Chief Financial Officer, Axon Enterprise, Inc.

I mean, it's certainly part of that, right? We highlighted that about a third of our software business this quarter was coming from outside of DEMS. And that third of the business is growing at 70%, so that is not just AI. AI, we call that at almost 700%, so yes, I think you can expect that that will continue to have outsized growth, but it's not just AI. It's our records business, it's our 911 business, it's the software tried to counter drone and drones. So, what you're really fundamentally seeing is all of these software businesses that we've been investing behind and incubating, they're really starting to contribute to that software growth number. And they're going to continue to do that, because even though they're starting to contribute nicely, they're still relatively small and have a lot of room to grow. And a lot of room to continue getting attached into our customers. It's also why you're seeing our NRR number sort of nicely continue to tick up over time. We're up at 126% this quarter. It's because we're attaching more of those products in.

Jeremy Hamblin Analyst, Craig-Hallum Capital Group, LLC

Thanks so much for the color.

Patrick W. Smith Chief Executive Officer & Founder, Axon Enterprise, Inc.

Yeah, and that's super cool, Brittany. By the way. We used to be stuck at, like, 119% NRR for a very long time. See it up as high as 126. Feels awesome.

Brittany Bagley Chief Operating Officer & Chief Financial Officer, Axon Enterprise, Inc.

Keep coming up with cool things!

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Axon Enterprise, Inc. (AXON) | Q2 2026 Earnings Call | Wednesday, August 5, 2026

Erik Lapinski Vice President, Investor Relations, Axon Enterprise, Inc.

Alright, well, that was our last question, so Rick, you can, close this out.

Patrick W. Smith Chief Executive Officer & Founder, Axon Enterprise, Inc.

Awesome, okay, look, it's… I pinch myself every day. I get to do this job with these people and these customers working on these problems. It is… a privilege, and I, you know, am deeply thankful to you, our shareholders, who make that possible, and of course, the analysts who help our shareholders understand our business, which has grown immensely in its complexity, from the simple book-and-ship business we were 20 years ago, to this amazing ecosystem, hardware, software, cloud, and now AI services business, and… We're in the midst of another major transformation. It's going to be exciting. I can't even tell you what kind of businesses we're going to be in the next 10 years, because the world is changing so fast. But, the people I work with give me hope that we'll solve the problems faster than any of our competitors, and we'll continue to make this moment, just… an epic moment for our company to leverage this change. And with that. We'll see you all in November. If you get a chance to come to the

IACP… Erik, are we doing something at IACP in October?

Erik Lapinski Vice President, Investor Relations, Axon Enterprise, Inc.

Yes.

Patrick W. Smith Chief Executive Officer & Founder, Axon Enterprise, Inc.

Yeah, we have, yeah, we have some cool new stuff, in particular, some new ways to tell the story that differentiates us uniquely that I think you'll find very interesting. So, come see us in Orlando, and I look forward to telling you about the next phase of the Axon story.

Joshua Isner President, Axon Enterprise, Inc.

And some new products, Rick, at IACP.

Erik Lapinski Vice President, Investor Relations, Axon Enterprise, Inc.

Shoot me an email if you want to join our booth. Alright. Thank you, everyone.

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