Record Revenue That Still Cleared the Wrong Side of Consensus
Axon's shareholder letter on PR Newswire put total revenue at $909 million, up 28% from $711 million a year earlier. Software & Services revenue accelerated 43% to $437 million. Connected Devices revenue rose 16% to $472 million, led by Platform Solutions at $125 million, up 106%. AI annual recurring revenue surpassed $100 million, and company ARR reached $1.75 billion. Adjusted EBITDA was $236 million, a 25.9% margin. GAAP diluted EPS was $0.68; non-GAAP diluted EPS was $1.72.
Those growth rates were not enough for the Street. Investing.com cited consensus near $940 million of revenue and $1.91 of adjusted EPS. Benzinga had revenue consensus near $938 million and an EPS estimate near $1.88. Either way, both the top line and the adjusted bottom line missed. Management pointed to the timing of an approximately $30 million Federal Dedrone deployment that it had expected to recognize in the quarter.
Three Federal Deals Took About $130 Million Off the Year
The outlook cut is concentrated in Dedrone timing, not a broad demand warning. Axon now expects full-year 2026 revenue of about $3.61 billion to $3.63 billion, or roughly 30% growth, down from prior expectations of 32% to 34%. The company said three Federal Dedrone deployments totaling about $130 million are no longer expected in 2026; had they stayed on pace, full-year growth would have been nearly 500 basis points higher than the new guide. Fourth-quarter revenue is guided to $990 million to $1.01 billion, with Adjusted EBITDA of $245 million to $250 million.
In the same letter, Axon announced an additional $1.2 billion investment in Skydio that takes its ownership to 37%, plus exclusive public-safety distribution rights for Skydio in the U.S. and Canada. Software acceleration and the Skydio stake are the longer-duration story; the near-term tape is reacting to the Dedrone slippage and the miss against consensus.
Ten Percent After Hours Inside a Fourteen-Percent Weekly Range
Delayed quotes around Thursday's close showed the November 6 weekly $382.50 call near $22.20 bid / $31.00 ask and the $382.50 put near $23.20 / $30.00, a midpoint straddle near $53.20, or about 13.9% of the $382.56 close (Cboe delayed quotes). Break-evens on that midpoint sit near $329.36 and $435.76. An after-hours print near $344 is still inside that weekly range by roughly $15: the $382.50 put would carry about $38.50 of intrinsic value against a straddle that cost about $53.20 at the midpoint. The after-hours low near $305 did trade through the lower break-even, which is why CNBC's roughly 13% print and Investing.com's 14% print matter for anyone marking to the extremes rather than the latest print.
Front-week implied volatility on those strikes was quoted near 235% annualized. The November 20 monthly $382.50 straddle was nearer $66.10, or about 17.3% of the close, so later expirations still priced more movement after Friday. Those quotes are reference points, not fills, and equity options do not trade until 9:30 AM ET.
Misses That Land Inside the Prepaid Move
A gap that stops inside the weekly straddle is a different problem than a gap that clears it. Short straddles and short puts written into the print can still be underwater on mark-to-market if the stock opens near the after-hours low, but a hold near $344 leaves more of the prepaid premium intact than a move through $329 would. Holders of puts collect from direction and still face the usual post-earnings implied-volatility reset once the front week collapses. Covered-call holders keep the premium but absorb the share loss from both the cash session and the extension. Our implied volatility guide covers how post-earnings IV usually compresses, and the OCC options disclosure document explains the risks of standardized options.
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*By the OptionsPilot Editorial Team. Published November 5, 2026, 3:25 PM PT. This article is for education only and is not investment advice. Options involve risk and are not suitable for all investors.*
