Axon Enterprise Eyes Software Growth as Q4 Earnings Approach

Axon Enterprise enters its fourth-quarter earnings report for 2025 at a critical juncture in its transition from a hardware-centric defense company to a software-first public safety platform. The market's primary focus remains the rapid adoption of the TASER 10 platform and the subsequent pull-through of Axon Cloud services. Historically, Axon has leveraged its hardware dominance to lock in long-term, high-margin software contracts, a strategy that has consistently yielded double-digit growth in its Axon Evidence and Axon Records segments. Analysts are particularly keen on the early performance data for 'Draft One,' the company’s generative AI tool designed to automate police report writing. If adoption rates mirror previous software launches, Draft One could represent a significant expansion of Axon’s total addressable market within the administrative side of law enforcement.

Beyond the hardware cycle, Axon’s financial health is increasingly tied to its Net Retention Rate (NRR), which has hovered near 120% in recent quarters. This metric indicates that existing customers are not only renewing but expanding their footprint within the Axon ecosystem. The integration of SkyHero and other drone-related acquisitions into the broader Axon Air portfolio also provides a secondary growth lever that investors will be monitoring. As municipal budgets face scrutiny, Axon’s ability to frame its products as efficiency-drivers—reducing the time officers spend on paperwork and increasing safety through non-lethal technology—remains its strongest selling point.

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Beyond the hardware cycle, Axon’s financial health is increasingly tied to its Net Retention Rate (NRR), which has hovered near 120% in recent quarters.

In the broader earnings landscape, specialty pharmaceutical firms Corcept Therapeutics and Supernus Pharmaceuticals are also preparing to report, highlighting a different set of market dynamics. Corcept remains heavily reliant on its flagship product, Korlym, for the treatment of Cushing’s syndrome. Investors are looking for signs of resilience against potential generic competition and progress in its oncology pipeline, specifically its selective cortisol modulators. The company’s ability to diversify its revenue stream beyond Korlym is essential for long-term valuation stability, especially as it faces ongoing litigation and regulatory hurdles typical of the orphan drug space.

Supernus Pharmaceuticals, meanwhile, is navigating a complex transition period. The company has been working to offset the revenue loss from the patent expiration of Trokendi XR by scaling Qelbree, its non-stimulant ADHD treatment. The success of this pivot is the central thesis for Supernus investors. Management’s commentary on the uptake of Qelbree in the adult market and the progress of its Parkinson’s disease pipeline, including the SPN-830 infusion pump, will be the primary drivers of post-earnings price action. Unlike the high-flying tech multiples seen in Axon, Supernus and Corcept are valued on their ability to manage life-cycle transitions and regulatory approvals.

Looking ahead, the divergence between public safety technology and specialty pharmaceuticals illustrates the varied risk-reward profiles currently available in the mid-cap space. While Axon benefits from secular tailwinds in AI and digital transformation within government agencies, Corcept and Supernus must contend with the binary risks of clinical trials and patent law. For the upcoming earnings cycle, Axon’s guidance for 2026 will likely set the tone for the defense tech sector, while the pharma players will be judged on their ability to defend existing margins while funding future innovation.