Self defense company AXON (NASDAQ: AXON) reported Q2 CY2026 results topping the market’s revenue expectations, with sales up 35.3% year on year to $904.4 million. Its non-GAAP profit of $1.88 per share was 2% above analysts’ consensus estimates.

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Company Overview

Providing body cameras and tasers for first responders, AXON (NASDAQ: AXON) develops technology solutions and weapons products for military, law enforcement, and civilians.

Revenue Growth

Reviewing a company’s long-term sales performance reveals insights into its quality. Even a bad business can shine for one or two quarters, but a top-tier one grows for years. Luckily, Axon’s sales grew at an incredible 31.9% compounded annual growth rate over the last five years. Its growth surpassed the average industrials company and shows its offerings resonate with customers, a great starting point for our analysis.

Long-term growth is the most important, but within industrials, a half-decade historical view may miss new industry trends or demand cycles. Axon’s annualized revenue growth of 33.5% over the last two years is above its five-year trend, suggesting its demand was strong and recently accelerated.

This quarter, Axon reported wonderful year-on-year revenue growth of 35.3%, and its $904.4 million of revenue exceeded Wall Street’s estimates by 3.3%.

Looking ahead, sell-side analysts expect revenue to grow 30.3% over the next 12 months, a deceleration versus the last two years. Still, this projection is commendable and indicates the market is forecasting success for its products and services.

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Operating Margin

Operating margin is an important measure of profitability as it shows the portion of revenue left after accounting for all core expenses — everything from the cost of goods sold to advertising and wages. It’s also useful for comparing profitability across companies with different levels of debt and tax rates because it excludes interest and taxes.

Axon’s operating margin has more or less stayed the same over the last 12 months , averaging 3.1% over the last five years. This profitability was lousy for an industrials business and caused by its suboptimal cost structure.

Analyzing the trend in its profitability, Axon’s operating margin might have fluctuated slightly but has generally stayed the same over the last five years. This raises questions about the company’s expense base because its revenue growth should have given it leverage on its fixed costs, resulting in better economies of scale and profitability.

This quarter, Axon generated an operating margin profit margin of 5.2%, up 5.3 percentage points year on year. This increase was a welcome development and shows it was more efficient.

Earnings Per Share

Revenue trends explain a company’s historical growth, but the long-term change in earnings per share (EPS) points to the profitability of that growth — for example, a company could inflate its sales through excessive spending on advertising and promotions.

Axon’s EPS grew at an astounding 26.6% compounded annual growth rate over the last five years. Despite its operating margin improvement during that time, this performance was lower than its 31.9% annualized revenue growth, telling us that non-fundamental factors such as interest and taxes affected its ultimate earnings.

Diving into Axon’s quality of earnings can give us a better understanding of its performance. A five-year view shows Axon has diluted its shareholders, growing its share count by 26.7%. This has led to lower per share earnings. Taxes and interest expenses can also affect EPS but don’t tell us as much about a company’s fundamentals.

Like with revenue, we analyze EPS over a more recent period because it can provide insight into an emerging theme or development for the business.

For Axon, its two-year annual EPS growth of 23.2% was lower than its five-year trend. We still think its growth was good and hope it can accelerate in the future.

In Q2, Axon reported adjusted EPS of $1.88, down from $2.12 in the same quarter last year. Despite falling year on year, this print beat analysts’ estimates by 2%. Over the next 12 months, Wall Street expects Axon’s full-year EPS to grow 32.8% from $6.81 to $9.05.

Key Takeaways from Axon’s Q2 Results

We were impressed by how significantly Axon blew past analysts’ EBITDA expectations this quarter. We were also glad its revenue outperformed Wall Street’s estimates. Zooming out, we think this was a solid print. The stock traded up 2.9% to $627.50 immediately after reporting.

Axon had an encouraging quarter, but one earnings result doesn’t necessarily make the stock a buy. Let’s see if this is a good investment. We think that the latest quarter is only one piece of the longer-term business quality puzzle. Quality, when combined with valuation, can help determine if the stock is a buy. We cover that in our actionable full research report which you can read here (it’s free).