Shares of law enforcement technology company Axon Enterprise (NASDAQ: AXON) soared on Friday after the company delivered strong financial results for the third quarter of 2024. As of 10 a.m. ET, Axon stock was up 13% and had hit an all-time high of about $550 per share.

Axon's growth and profits are soaring

Tasers have been around for some time so one wouldn't expect Axon to be a high-growth company at this point. But by expanding into new verticals and product offerings, the company has strung together 11 consecutive quarters of greater than 25% growth, with Q3 revenue up 32% year over year to $544 million.

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Axon's Q3 revenue was better than expected. And its profits were, too. Many investors were impressed by its adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA), which was up 54% to $145 million.

With Q3 ahead of expectations, Axon's management raised its full-year guidance. Previously it guided for full-year 2024 revenue of $2 billion to $2.05 billion along with adjusted EBITDA of $460 million to $475 million. But it raised its revenue guidance to $2.07 billion and its adjusted EBITDA guidance to $510 million.

The beat-and-raise quarter is what sent Axon stock to an all-time high.

The company's long-term outlook is bright

One of the great things about Axon's business is that investors have better-than-average visibility into the future. Much of its revenue is recurring and law enforcement agencies sign long-term contracts.

Looking at these metrics paints an optimistic picture for Axon's shareholders. In Q3, its annual recurring revenue hit $885, which was up 36% year over year -- faster than Q3 revenue growth, suggesting that growth could accelerate further. Moreover, its future contracted revenue hit $7.7 billion, up 33% from the prior-year period.

I believe there could be reasons for investors to question the valuation of Axon stock here but that's a story for another time. The real story here is that Axon's business is extremely healthy and well positioned for strong future growth.

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