Axon Enterprise, Inc. (AXON): A Bull Case Theory

We came across a bullish thesis on Axon Enterprise, Inc. on Arya’s Substack by Arya. In this article, we will summarize the bulls’ thesis on AXON. Axon Enterprise, Inc.’s share was trading at $758.29 as of August 19^th. AXON’s trailing and forward P/E were 186.77 and 107.53 respectively according to Yahoo Finance.

Axon Enterprise delivered another standout quarter in Q2 2025, underscoring its transition from a hardware-driven business into a vertically integrated SaaS platform embedded in public safety. Revenue rose 33% to $669 million, marking the sixth consecutive quarter above 30% growth, with Annual Recurring Revenue climbing 39% to $1.2 billion. Software & Services grew 39% to $292 million, now comprising ~44% of total revenue, while Connected Devices rose 29% to $376 million, driven by demand for TASER 10, Axon Body 4, and new “platform” products such as drones and VR training kits.

Profitability also improved, with adjusted EBITDA up 37% to $172 million, reflecting strong operating leverage, while net revenue retention remained robust at 124%, highlighting Axon’s ability to expand within its customer base through premium bundle adoption and AI-powered modules. The backlog surged 43% to a record $10.7 billion, providing multi-year revenue visibility and prompting management to raise full-year revenue guidance to $2.65–2.73 billion. Strategically, Axon’s Officer Safety Plan bundles continue to move upmarket, with agencies increasingly adopting premium and AI-enhanced packages that lift monetization per officer fivefold compared to earlier offerings.

This hardware-enabled SaaS model, where every device sold seeds recurring software revenue, has created Apple-like ecosystem dynamics, deepening customer lock-in. With a $129 billion addressable market spanning global public safety, federal agencies, corrections, and enterprise security, Axon is still underpenetrated, particularly internationally. Looking ahead, sustained 25–30% growth could drive revenues to $5–6 billion by 2028 with expanding margins as software becomes the majority of sales, positioning Axon as the dominant global platform for public safety technology.

Previously we covered a bullish thesis on Axon Enterprise, Inc. (AXON) by RadnorCapital in March 2025, which highlighted sustained 30%+ growth, expanding international demand, and a record bookings pipeline. The stock has appreciated ~52% since then as execution delivered. The thesis still stands with strong contracted revenue visibility. Arya shares a similar view but emphasizes Axon’s SaaS shift, ARR strength, and ecosystem lock-in.

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Disclosure: None.