What happened 

Shares of Axon (AXON 13.76%) jumped as much as 35.5% in trading Friday after reporting third-quarter 2019 results. At the close of trading, shares were still up a whopping 24.6%.

So what

Revenue was up 35% over a year ago, to $131 million, and net income was $6.1 million, or $0.10 per share. Software and sensors, which include body cameras and cloud services, led the way with a 42.3% increase in revenue in the cloud segment to $34 million, and a 45.3% increase in sales in sensors to $25.1 million. 

Axon products on a police officer.

Image source: Axon.

Gross margin of 75.8% in the Axon Cloud portion of the business is ultimately what's going to drive the company's bottom-line growth in the future, so growing revenue in the segment is key. 

What also impressed investors was increasing the full-year revenue-guidance range by $15 million, to $500 million to $510 million. Faster revenue from sensor sales will drive more cloud sales long term, and that will eventually lead to much more than a $6 million quarterly profit. 

Now what

Demand is strong for Axon's products, and the company's revenue growth and increased outlook reinforce that. With very few competitors in the law-enforcement space for either tasers or body cameras, I don't see the strong trends slowing down anytime soon.

Axon just began shipping the new Axon Body 3 camera, and its suite of products is only improving. The future is very bright.