Shares of Axon Enterprise, Inc. (NASDAQ: AXON) plummeted 17.96% in Tuesday's post-market trading session following the company's release of disappointing third-quarter earnings results and announcement of a major acquisition.

The maker of Taser stun guns and body cameras reported Q3 adjusted earnings per share of $1.17, falling significantly short of analysts' expectations of $1.54. While Axon's revenue grew 31% year-over-year to $711 million, beating estimates of $704.83 million, the earnings miss overshadowed the top-line growth. The company attributed the profit shortfall to increased hiring costs to support business expansion and higher stock-based compensation expenses.

Adding to investor concerns, Axon announced plans to acquire Carbyne, an emergency communications and response platform, in a deal valuing Carbyne at $625 million. While the acquisition aims to enhance Axon's 911 response capabilities, the timing alongside the earnings disappointment likely amplified worries about the company's financial management and future profitability. Despite raising its full-year 2025 revenue outlook, Axon's after-hours stock plunge reflects a sharp shift in investor sentiment as the market reassesses the company's ability to translate strong sales growth into proportional bottom-line results.