Q3 2026 results
| Metric | Result | Change |
|---|---|---|
| Revenue | $2.18 billion | up 55% year-over-year |
| Net Income | $1.44 billion | up 72% year-over-year |
| Adjusted EBITDA | $1.84 billion | up 59% year-over-year |
| Free Cash Flow | $1.4 billion | 77% of adjusted EBITDA |
| Share Repurchases | 4.1 million shares | $1.4 billion total |
Guidance and outlook
- Q4 2026 revenue expected between $2.365 billion and $2.395 billion.
- Q4 2026 adjusted EBITDA expected between $1.995 billion and $2.025 billion.
How management sounded
Positive (+7 on our -10 to +10 scale). Management reported record financial results that beat guidance and expressed strong optimism about the long-term growth potential of their new model architecture and consumer vertical. Management sounded more upbeat than on 48% of the 190 calls we cover; most companies sound positive on their own calls, so the comparison says more than the label.
Q&A summary
Model Rollout
Asked: James Heaney asked about the biggest improvements in the new model generation compared to Axon 2 and the timing of the full rollout.
Answer: Adam Foroughi explained the new models have more room to optimize and allow for larger compute usage, but he could not commit to a specific timeline for a full rollout.
Q4 Guidance
Asked: James Heaney asked why the Q4 revenue guidance implies a sequential deceleration compared to Q3.
Answer: Matt Stumpf stated the guidance reflects normal seasonality, the model updates already launched, and increased data center costs.
Long-term Growth
Asked: Matthew Cost asked if the new model changes expectations for gaming ad revenue growth.
Answer: Adam Foroughi reiterated the commitment to 30% annual growth, noting that the consumer vertical provides significant headroom and the new model is more accurate.
Connected TV (CTV)
Asked: Matthew Cost asked about the current status of the CTV product roadmap.
Answer: Adam Foroughi noted the team is gaining confidence with pilot campaigns, but it is not expected to be accretive to numbers in the near term.
Data Strategy
Asked: Benjamin Black asked if the consumer flywheel is reaching a tipping point and what incremental investments are required.
Answer: Adam Foroughi emphasized that getting more data into the system is a continuous, multi-year process and they are always looking for ways to acquire data to improve model output.
What to watch before the next call
- The progress and performance impact of the full rollout of the new model architecture.
- The ability of the consumer vertical to maintain high growth rates as it scales.
- The development of pilot campaigns in the Connected TV (CTV) market.
