Move over, Taser. Axon is in its AI era. The company once known for its signature stun gun is now betting that AI software for law enforcement will take it to the next level.
The company is transforming from a hardware-heavy business into a full-service software partner for public safety, with AI-generated police reporting and evidence management software. Its sales nearly doubled between 2022 and 2024 to more than $2 billion, driven by software revenue from groups like cloud services. Around 60% of its sales came from its software business unit last year. Now, enhancements in its AI Era plan are poised to continue that growth trajectory.
“This is a whole new journey under AI,” said Andrew Sherman, an analyst at TD Cowen.
The company launched more than three decades ago with Taser, its ‘less-lethal’ stun gun. It has steadily added new products for law enforcement agencies: body cameras, an evidence management platform, Evidence.com, and even virtual reality training. These expansions have embedded it with its customers, generated recurring revenue and produced valuable data to help further enrich offerings for law enforcement and security clients, though they have also at times prompted backlash and scrutiny.
“They have probably the best data on public safety in the world,” said Michael James Latimore, an analyst at NorthLand Securities. “Over time, they’re going to be able to make police officers and administrators’ lives easier, so that’s where AI comes in.”
Case in point: since Axon launched AI-generated police report software Draft One in 2024, it has been the fastest-adopted product in the company’s history, according to President Josh Isner. It uses a ChatGPT variant to generate a police report from body camera audio.
In 2024, Axon acquired Fusus, a platform that aggregates disparate video and sensor surveillance feeds, with AI now embedded. Earlier this year, it announced the acquisition of Prepared, an AI-enabled emergency response system.
The company’s stock has risen by roughly three quarters in the past twelve months, closing at $732.23 on Friday. And since 2020, it’s grown over 600%, outperforming the NASDAQ.
Between February 2018 and October 2025, its market capitalization grew from $1.5 billion to $57 billion.
The new software offerings mean new potential sales to existing customers. The company has contracts with many local and state law enforcement agencies in the US, sometimes sold in bundles. Departments that started on the earliest version of Axon’s Officer Safety Plan – including Tasers, body cameras, and evidence management for $99 per user each month – may upgrade for access to software like virtual-reality training and Fusus. At the highest tier, with the AI Era add-on, departments have access to Draft One and other tools for $549 a month.
“They’re very well-regarded within big police departments – and small,” said Latimore. “When they come up with a new product, most of the time, these police departments are willing to buy it and they get entrenched, and then there’s kind of a network effect.”
The software also gives Axon access to a steady stream of recurring revenue, or revenue paid on a subscription basis instead of a one-time sale. A police department might upgrade their Tasers or body cameras every few years. But they’ll likely pay their Evidence.com subscription every month. In Q2, Axon said it hit $1.2 billion in annual recurring revenue, up from $850 million in the same quarter of 2024.
In Axon’s latest earnings call, Isner said he expected increased interest from federal agencies by the end of this year as immigration enforcement budgets balloon. Software continues to be a bright spot: Fusus sales more than doubled over the second quarter of 2024, driven in part by private businesses and federal agencies.
“It’s continuing to perform really well, and [to] be one of the segments that continues contributing to the growth in software outside of that Evidence.com piece,” Axon chief financial and operating officer Brittany Bagley said on the company’s earnings call for that period.
Given these tailwinds, analysts project revenue of $2.7 billion this year and of more than $3 billion next year. Net income is expected to hit $530 million this year and $615 million next year.
But the company’s product expansions have sometimes generated backlash over ethical concerns. In 2022, most of Axon’s independent AI Ethics Board resigned after the company announced plans to arm drones with Tasers. The launch of Draft One has brought more scrutiny.
In July, the Electronic Frontier Foundation said that Draft One was “designed to defy transparency” because the software does not store the original version of the AI-generated report. Because there is often no way to know which sections were written by a human or ChatGPT, it’s difficult to audit how the tool shapes a report.
For instance, ChatGPT might infer facts from audio with consequences for a court case: if an officer says “drop the gun,” the AI might say that the suspect was armed, or it could relay exactly what the officer said.
“It gives it a veneer of objectivity which does not exist,” said Matthew Guariglia of EFF.
Axon did not respond to a request for comment.
Jonathan Gerhardson, a journalist from western Massachusetts who has written about Axon, experimented with using AI to transcribe city council meetings and generate reports. He’d been disappointed in the results, and so it caught his attention when, during one such meeting in Chicopee, Massachusetts, discussions turned to the police department’s plans to use Axon’s AI products, including to streamline reporting.
“A lot of caution should be used when you’re trying to automate something with AI,” he said.
States have begun to take notice. In March, Utah passed a bill regulating police departments’ use of technology and requiring notice when police use AI to generate reports. California passed a similar bill, also requiring departments keep the report’s first draft, in October. To comply, Axon will likely need to adapt the software or stop offering Draft One in those states. If more states follow suit, it could raise the stakes in the company’s bet on AI.
So far, however, the backlash has not impacted Axon’s bottom line or share price. During an era in which tech leaders have shifted rightward, killed privacy and content moderation initiatives, and embraced mass surveillance, Draft One is unlikely to stand out – particularly because Axon’s software products tend to operate behind the scenes.
“They are the back end of whole police departments,” said Guariglia. “I think to some extent that shows some awareness of not wanting to be the branded surveillance camera hanging outside your front door.”