CNBC Television
Axon CEO Rock Smith goes one-on-one with Jim Cramer
11/6/2025, 12:56:51 AM
Economic Summary
- AXON reported a quarter with strong operational metrics (adjusted EBITDA ~25%) but a GAAP net loss driven by stock-based compensation and a tax accounting change, creating investor confusion between GAAP EPS and adjusted results.
- Tariffs have raised supply-chain costs and reduced margins versus a no-tariff scenario, but management says adjusted EBITDA guidance was still met and the company absorbed the impact.
- Axon's acquisitions in the 9-1-1/mission-critical voice space (Prepared 9-1-1 and a second acquisition) aim to modernize a legacy technology stack using AI, enabling features like real-time translation, summaries, and automated handling of non-critical calls.
- Market competition is intensifying: Motorola Solutions (MSI) promotes its AI-driven assistant (SVX) as a competitor, creating potential share-pressure risk even as Axon highlights wins and customer deployments.
- Management emphasizes a large $159 billion market opportunity for public safety solutions, underpinning the growth thesis if Axon can scale its software and AI-enabled services.
Bullish
- Adjusted EBITDA of 25% met company guidance despite GAAP noise.
- Seventh consecutive quarter of >30% revenue growth and strong operating performance.
- Acquisitions (Prepared 9-1-1) modernize emergency call stacks with AI, showing real customer benefits (33% fewer operator calls).
- Large total addressable market (~$159B) for mission-critical public safety technology.
Bearish
- AXON reported a GAAP EPS miss driven by stock-based compensation and tax accounting changes, spooking investors.
- Tariffs compressed margins versus prior expectations, prompting concern about supply-chain cost pressure.
- Increased competition from Motorola Solutions (MSI) and its AI assistant (SVX) could win deals from Axon.
Bullish tickers
AXONPREPARED 9-1-1
Bearish tickers
AXONMSI
AXON
Bullish
Adjusted EBITDA of ~25% met guidance, company reports seventh straight quarter >30% growth, and acquisitions plus AI capabilities expand TAM and customer value.
Bearish
GAAP EPS showed a net loss due to stock-based compensation and tax accounting changes, causing a sharp ~9% stock drop and investor confusion despite adjusted EBITDA strength; tariffs pressured margins.
MSI
Bullish
MSI is investing in AI-driven mission-critical voice products (SVX) and publicly positioning itself as a competitor for public safety contracts.
Bearish
Motorola Solutions claims competitive wins with its SVX AI assistant, which could pressure Axon’s deal flow and market share.
PREPARED 9-1-1
Bullish
Provides a modern 9-1-1 tech stack with AI agents that reduced operator-handled calls by ~33% in a city deployment, enabling cloud migration and real-time automation.
Bearish
Some critics argued the 9-1-1 acquisitions represented older technology, creating skepticism about integration value.
People mentioned
Rick SmithJim Cramer