By Nate Wolf

Shares of Axon Enterprise plummeted Wednesday after the maker of tasers and software for law enforcement posted weaker-than-expected earnings even as it recorded record revenue.

Axon reported adjusted earnings of $1.17 a share for the third quarter, well below analysts' consensus calls for $1.52. Revenue totaled $711 million, up 31% from last year and narrowly ahead of Wall Street's call for $705 million. The figure marked a record high for Axon and a seventh consecutive quarter of revenue growth above 30%.

Axon stock was down 19% on Wednesday. It was the worst performer in the S&P 500 in the premarket session.

While revenue keeps going up, so too do costs. Axon reported an operating loss of $2.2 million, down from a profit of $67 million last year. The loss was driven primarily by increased headcount and stock-based compensation expense, Axon said. The company has reported four straight quarters of operating losses.

Axon forecast fourth-quarter revenue of between $750 million and $755 million, representing approximately 31% year-over-year growth, which is in line with analysts' expectations. Adjusted earnings before interest, taxes, depreciation, and amortization are expected to total $178 million to $182 million, below the $187 million Wall Street had anticipated.

The company is still making investments amid the rising costs, though. On Tuesday, Axon announced an agreement to acquire Carbyne, a privately held emergency communications platform. The deal values Carbyne at $625 million and is expected to close in the first quarter of 2026.

Write to Nate Wolf at nate.wolf@barrons.com

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November 05, 2025 08:43 ET (13:43 GMT)

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