Axon Enterprise: Q2 Was Strong - But Here Are The Reasons Why I Am Not A Buyer

Axon Enterprise delivered 35% YoY revenue growth in Q2, with strong performance across all segments and standout AI-driven revenue expansion. Annual recurring revenue reached $1.6 billion, supported by a 126% net retention rate, highlighting the stickiness and predictability of AXON's business model. Concerns remain over AXON's high stock-based compensation, significant shareholder dilution, and negative operating cash flow despite headline profitability. AXON's limited international diversification and exposure to U.S. policy shifts present material risks, making current valuation levels difficult to justify.