Axon reports Q1 2023 revenue of $343 million, up 34% YOY, raises outlook
- Axon Cloud revenue of $116 million up 51% year over year
- Annual Recurring Revenue grows 49% to $520 million
- Net income of $45 million supports Adjusted EBITDA of $65 million
- Raises full year outlook to 22% revenue growth, maintains 20% Adjusted EBITDA margin
In a statment to it's shareholders Axon reports a strong start to 2023 — highlighted by two new product launches, first quarter revenue growth of 34% and their fifth consecutive quarter of GAAP profitability. Record quarterly revenue of $343 million was primarily driven by strong demand for Axon Cloud SaaS services, Axon Fleet 3, and our TASER 7 platform.
Axon Cloud revenue growth of 51% reflects continuing momentum in ou software business, as our customers increasingly look to deploy new capabilities within our highest value bundled offerings. In addition to continued strength in our Digital Evidence Management platform, we are also seeing growing adoption of our Real-time Operations, Productivity, Axon Air, and Axon VR training products.
We sell our hardware and software services via integrated subscription bundles, which customers purchase on long-term contracts. Axon's core customers fall into roughly four categories of funding sources: U.S. state and local governments, the U.S. federal government, international government customers, and commercial enterprises. Notably, we are extending our reach beyond law enforcement to new customers, including attorneys, fire and EMS personnel, corrections and the U.S. military.
Our pipeline is being fueled by the underlying strength of our business model, Axon's culture of innovation and meaningful, long-term partnerships with our customers, who look to us for the newest, most advanced technology. This year, we introduced two major product innovations — the TASER 10 platform, discussed in more detail in our February update — and our latest generation body camera, Axon Body 4, which we highlight below. Both new hardware products integrate with the Axon network and drive software adoption — and both have been met with exceptional customer response, further supporting our confidence in our long-term growth trajectory.
Our teams executed on a record Q1 with cost discipline, delivering a net income margin of 13% (Adjusted EBITDA margin of 19%) while ramping two new products, investing in our go-to-market and services capacity and navigating inflationary pressures. As we continue to invest in advancing our mission to protect life, we remain committed to delivering strong profitability and cash flow.