Yahoo Finance

Shares of Axon getting a boost this week following better than expected earnings on the top and bottom lines. Axon, the company that develops technology products for military and law enforcement saw revenue for the first quarter rise 31% year-over-year. For more on the latest quarter and what's next, let's welcome in now Josh Isner, Axon President. Josh, it is good to see you. So you reported these results first quarter, uh, beats expectations. Josh, you raised your forecast. Walk us through the report, Josh, and what gave you the confidence to raise that forecast?

Yeah, absolutely, and thank you for having me on today. We're really excited about what's going on at Axon right now. We're coming off a great Q1 and really a great, you know, several year run where revenues have grown in the last three years by an average of 30% plus. Uh, we're seeing some EBITDA margin expansion as well. And uh, the pipeline keeps growing into the future. And ultimately when we're making customers really happy and they're expressing a lot of excitement about all the new products that we're launching, uh, gives us more confidence to be able to raise our outlook, which which we're excited to do a couple days ago on our earnings call.

Josh, it's really interesting because most of the companies that we've heard from this earning season have talked about the macroeconomic environment. They've talked about tariffs. I I want to take those two things one by one. Firstly, you guys said on the call there were virtually no headwinds in terms of the macro environment. Why not? Why do you think you're not seeing that?

Well, ultimately, most of our business is tied to, uh, state and local government spending. And there, you know, we're seeing a lot of excited customers that are having great experiences with our technology. We see a very healthy pipeline filled with both existing and and new product opportunities. And the way our customers buy generally is is operationally in their budget. They're not going out and looking for grants or one-time, uh, buckets of money to spend on Axon and and what that's led to is a very stable and predictable business. And uh, you know, we're honored to to be able to service our customers in that way.

And so, and then let's talk about tariffs, the other piece of that. You guys talked about that on the call a little bit as well, that you have diversified your supply chain. Where have you diversified it to and do you guys have any manufacturing in places like China?

So, uh, we're big on seeing around corners at Axon. And a couple years ago, you know, we we took a fresh look at at how we're, uh, managing our inventory and what types of risks there are in inventory. And certainly we saw, you know, uh, what was happening with China as a whole and then, you know, continuing on to the China, uh, Taiwan potential conflict. And we said, look, we've got to have, uh, uh, you know, second suppliers for all of our components, not just the major ones. And so we've really diversified our supply chain globally to include more in the US. And what that's led to in in addition to a lot more investment and inventory on hand has just been more predictability and stability in times like these. And so while there's a small impact to our P&L based on the tariffs, uh, we're really happy to reiterate our EBITDA margin guidance and and raise our revenue guidance. And and we think this is just a result of our operations team doing a really good job managing the situation and and seeing seeing ahead of it.