Shares of Axon Enterprise (NASDAQ:AXON) surged 11.75% in after-hours trading on Tuesday after the law enforcement technology company reported blowout fourth quarter results and issued bullish guidance for 2025. The stellar performance was driven by continued strong demand for Axon's innovative cloud software, TASER devices, and AI-powered solutions.

For the fourth quarter of fiscal 2024, Axon posted revenue of $575.1 million, up 33% year-over-year, surpassing Wall Street's expectations of $566.1 million. Adjusted earnings per share skyrocketed 85% to $2.08, crushing the consensus estimate of $1.40. This marked the company's third consecutive year of 30%+ annual revenue growth.

The key growth driver was Axon's high-margin Axon Cloud & Services segment, with revenue soaring 41% to $230.3 million. The segment benefited from robust demand for the Axon Evidence digital evidence management platform as well as strong adoption of premium AI-powered offerings like DraftOne. TASER device sales also remained robust, jumping 37% on the back of the TASER 10 launch and virtual reality training solutions.

Axon issued upbeat guidance for fiscal 2025, projecting revenue in the range of $2.55 billion to $2.65 billion, representing approximately 25% growth at the midpoint. The company expects to maintain an impressive adjusted EBITDA margin of around 25% as it continues investing heavily in areas like AI, autonomous systems, and enterprise security integration.

In a note following the results, Barclays analyst Tim Long reiterated an Overweight rating and $585 price target on Axon shares. Long expressed confidence in the development of DraftOne and the company's broader AI strategy, seeing it as a key driver of future expansion for Axon's software business.