Earnings call transcript Q2 2023

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Andrea James

Okay. Welcome to our Second Quarter Earnings Call. Thanks for joining our executives on the call. A quick note about the faces you're going to see on the call today. We want to welcome Erik Lapinski to the team at Axon. this Financial he's to Communications earlier Investor Director have us and Relations and joined year our and of him. He we're thrilled we so Angel to just Ambrosio, just to And I thank much. say, her want want She's Zoom-first she's the helped and X really earnings our these call. been making to us calls on in over years for way on lead She's also helped us lead the way in ESG reporting. anywhere. going not is Angel every We together side-by-side day. work still

the a which to on business. after closed. Okay; was to letter our shareholder you've had I read chance all released market hope

You build robust our meant can investor.axon.com. remarks prepared And find it upon at today are shareholder to very that letter.

based call, of statements are business outlook predictions made the in materially statements Reform Act uncertainties Private this the filings. and These to within and forward-looking actual pursuant as not All our will of subject are results of guarantees that Any and to on today Securities forward-looking are and to Litigation these risks performance. and statements. we discuss During risks cause are discuss XXXX. today the future of we provision our make SEC comments harbor expectations could our meaning and forward-looking of safe differ

over which we today. to turn play our will video And we before is it minutes X under Rick,

Patrick Smith

saying, who keeps I'm will been that with chiefs trials have dead with talking All in out excellent de-escalations new products our out Angel the cold us call. you even right. coming I to feedback to our TASER said, fantastic. and quarter not are that go of you'd After Great earnings some without and job, once their again have and Andrea us Recently, met to officers customers. to the to my quarter take another forward. XX motivates outlook. second of be brighter to type my XX and joked officers fortunate pry This and most back XXXX welcome, field, has my police the everyone, Reception It's from in fingers. to an their spend great successful is it. even field, moving TASER they time

shipping June a great you in Operating for role phase Brittany, recently getting X who promoted response. addition and these in we're Chief to excellence. as we Body from up hear to two next Officer sets Axon Brittany began Bringing will CFO. us together roles her of operational our Later, under also

for addition profile to COO operational As on team. margin and our from Brittany Brittany we years been stewardship a has many star end growth candor. come. ensure oversee and CFO, to foresight, ambition She execute will our to profitable rigor, brings deliver end our to to

than promoted We as President. our now to growing he decade. more his never exceed Isner he's leader the Josh expectations. have tenure, also at and has instrumental a previously Axon is then the for an during worked COO company. my been many over And failed I challenges years and Josh and have served evolving given CRO, Josh who and side-by-side I

within role oversee Josh while our members. taking and Board continue day-to-day President, expanded an executive the As operations to will team on with

allows be always job responsibilities what a my products on key Product of me Expanding my team and development our for me: to description. customers. will inspires part our focus

me heard we years, you've years, And successfully sometimes-futuristic market have For what for talk needs. my views of about the innovated.

and corner? areas: robotic touch security AI. I'll X the generative So on what's around key

gives which tactical for leading road us upon map. and we acquired our strategy. that Axon solution Air Sky-Hero indoor our robotic highly June, builds Sky-Hero complements security with a synergistic In is drone our product strategy existing

feedback Sky-Hero highly U.S. in who value, government their door technology. to into U.S. long-term it safer very vision. world into already and across reliability to even place avoid customers have where strong usability meaningful our of a to contributor year, people deadly fits acquisition Europe the revenue situations dangerous, and a give and is through make all we teams the situations. While be want the will the We not this about federal the send SWAT durability, selling and

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technology it. points for We generative AI. spend those for precisely then trends We wait large and will the will to existing with language for customer lot and This needs. technology even years models the we studying don't when ready the that customer technology ecosystem our the matures. is so our be exist. to in is technologies evolving spend We with wait of broader customer trends don't ask mature I of catch and most what then now the ball invest We map my and mental against to against coming happening early, we a time underlying believe pain key energy mapping

has flywheel by technologies, to value LLMs, for data. is signals the Our it is AI investment our engine. and been is future problems the years. to solve the of powered mission-driven AI philosophy The investing and technologies An care in we including to exponential core leverage creation several about Axon in for

invested platform the safely be securely ethically Axon applications component are and data tools. cloud the a to tools us by the upon past that We ecosystem building and Everything and of ever for able of data ecosystem. an hosts generated collect, the build public have of already expand more adoption will position been of share paving hundreds cameras sensors to have has decade AI way over that and dollars world's this critical -- a we in ecosystem. millions and built customers, These securely wearable leading out into the of analyze our expansive advanced the and AI enormous that safety for

we're thoughtful, software cloud to Axon safety. advanced just will work scale we're here getting public evangelized controls safety, scale like to and the seeing way started. from promising designed first and with our early just lead the public And We're bring already AI at ethical bring to we results and at think we really

up, You're Josh.

Joshua Isner

our Thanks you just care is a been deeply our can results. in our and team an a proud and build about This team noise honor to unapologetic customers It's out and at an mission, privilege see I'm and Axon. about lot, Rick. and our to blocks I organization executes that that the winning. lead my career help

we orders. half pipeline. we Body our TASER especially increasing confidence Rick which new more orders moment. expect through XX This with a take you this our Brittany the and as our Axon We second drove As the and great I'm X customers into are strong translating half reflected, from closed convert that in increase feedback guidance about of we greater and pleased into a first will getting feedback is product in

right XXXX XX%. focus combination enormous growth market sixth consecutive In market just new strategy QX, expansion doesn't kind adoption. of our to team we and execute having opportunity. finished We an areas: above growth happen. on just quarter revenue revenue, It's execute new This sales right a on continue products, the the product and right with of to profitability, our the

And our and so our keep a with and customers share we sale. relationships We We coming problems. just they are can are customers back partner for solve our sure they them or make us truly to transactional look help don't deep. with more successful

business into products. of And cloud Our days the and expansion early markets in XX% year-over-year. we grew are new

are software into billion a installed remains ways content TAM. our base, against low Our we $XX more finding penetration software to software sell executing and

XX% see incremental Our to year-over-year are remains X early growth grew and TASER greatest TASER business and of driven pleased we the TASER by shipments contributor now for XX.

years. We will the it's think are just and a next growth that over weapon game getting with we started several drive and changer TASER it

the largest critical our we Profitability product team margin of next our the and history, business pleased execution with focus have gross X our through company am our sustainable I growth decade a second of is team's while in growing same to ensuring our time. and stabilized strategy. as model is focus launches drive at to in operational QX we

new our ahead market grew Third, bookings revenue QX. of in

in federal growth from came and X continued continued the market triple-digit seeing up the markets, justice, quarter first-half new of a We sign largest in bookings are with And nearly year-over-year. have our triple of digits year-to-date. XX we deals in success bookings emerging diversification.

adoption to is product success. critical new Finally, our

ALPR, looks We are Axon Axon gaining half and the traction closed incredible outlook here. half callouts Records auto bookings Respond, a first product and to second nearly emerging for solid. tagging, year are the We XX% key grow few an seen year-over-year. and we've our very

play. on are We next the to

the we'll operations that, financials over to with it through and in Brittany more Brittany? to go And detail. turn

Brittany Bagley

thank Josh. more at And very words. next to business for kind take operational driving stage excited to Rick, the on of of you, fantastic the company. excellence Thank you, this continue the I'm and

We business. broad the reflecting reported another strong quarter, our strength to results. Turning across

Our we year-over-year top XX%. and of EBITDA line grew margins saw XX%

margin primarily of sequentially, business reflecting software. mix Second gross quarter improved from XX%

in overhead some we is product adjustments. to however, a between this overall basis, segments our that saw align lines more and with most margins and of some closely software. onetime we On did costs an worked shareholder our allocations had mix have benefit our reflect from margins you aggregated in our noise As segment quarter our gross as letter, specific

XX% with revenue this services quarter and Axon a up revenue of Cloud XX% total ago. year compared made

to would Axon year modestly margin TASER gross noted last from services X continued QX or Body we to we As X related professional XX. and levels ramp the to flat quarter, XXXX full continuing improve approximately of and remain due Fleet expect

invest efficiencies to profile We in we continue are year believe our the recent improve automation term recognize next margin as launches. and from product there to scale long and opportunities over

to backlog. to we expect We more our a Fleet also year our caught software on see rate up for demand this run will our at normalized largely continue exit from mix growth. believe having benefits We product,

operating both R&D to saw We our expenses. out SG&A. and Turning leverage of

profile and adjusted guidance the EBITDA longer bottom increase the With over and in product us we XX% with to XX% and We're but better dropping for term. invest timing continue to absolute continue focus does the line pleased to scale our result dollars can in the OpEx drive especially margin given how some margin to year. We OpEx, half to this quarter year at we're keep our leverage investments, for on of road to the business continuing second our of gross rapidly. the map our in our the SG&A revenue, in more

Turning guidance. our to

increasing year We $X.XX to about to billion our XX% revenue growth. to full billion, $X.XX are XX% outlook a representing of range

of to adjusted increased target of $XXX $XXX an million range XX% EBITDA. which full adjusted continue million We implies margin EBITDA year to of

to these our us products expect well quarter the of year our the of the always sure continues major going be deliver as we of customer has increase accurately to at to what fourth response had increase, say to hardware launches In forecast the to given We this after guidance focus can strong are robust relative We confidence best first time, launches do doing on to to the X want year. while the to seeing we're in successful our healthy increase making and due we're we prior forecast product a business. we we of as our these reflect to And do. make typical in what the rollout that occur half sure most same the the terms seasonality.

to would I open to that, it questions. like up With

Andrea James

at Thank from you. first We'll Will our Baird. Power take question

William Power

congratulations first, and results guess, the on I to on your promotions. Well, That's congratulations, Josh and strong great Brittany, see.

love I'd success. I dig first, there, XX%. the into growth mean strong over kind really cloud Maybe, guess, I of X questions. guess, I to

shareholder letter, about said cameras. driven XX% the was by body think in the growth of I you

a just Because lot And right looking piece. get a of now? within you about body of having piece you're just of other of are -- just is opportunity the key how perspective that so that second of it's clear to that I part question Then cloud the the continued want growth camera think other at what drivers it. outside

Joshua Isner

thanks at good And growing again your that our cloud two lot, really proliferate hardware you as us, in for it. adoption Yes. I'd June. elements to cloud is us and many one in Thanks conference we to can terms Number just in say having Will. for of of see as of plug a into forms kind we different there's ecosystem. making it's sure that continue

justice well things the continue roll Air more that in So existing more obviously, and into Axon usage licenses enterprise, core product, up into like results And cloud just for here the our will provide records software-only more international, we cameras sell that but federal drive sell body we enterprise of likewise, the more we will software our business. also our continue licenses, management, that Evidence.com. market computer-aided dispatch, favorable as to licenses to

really those this team a and of that at done really job it's really doing nice about those both same the far so of has time So things well -- the year.

William Power

can I question. fit in a just if just second And

seasonality You provide I investors year. second alluded the too, particularly increase? given else fourth half confidence significantly can and in you to in the think quarter, that the that pretty visibility with just to Brittany raised guidance the just the Anything to, for respect add

Brittany Bagley

you, Will. It's question. a Thank great

we think I to get as in think part see And in we and business. very to -- as seen, launches that were of terms expecting But Rick of both down the to us. TASER we comes we for what products. given just of we year what reception I it for and those big customer have were into not goes came X ahead commented, careful our Josh down ourselves were XX, ABX wonderful those to

both visibility, up that terms we good available. have gives products in those volume a the confidence manufacturing standpoint can in ramp what have we so us of we'll And of that from

pretty have would terms available I in in operational we we the the we an delivering of of you what with from good say and we're think then from And have customers couple seeing what standpoint the half second visibility year.

we're through be of now have see deals as in I especially into and with in partway and QX and we we think, call of as said, some of some pipeline that customers. can ramp some contracts have that will we timing right in the coming we I out that the ABX QX, think the we of the so

just cloud the And our other I then think thing is revenue. and services

it's a bank very through see, in that's go this ABX look TASER year. combined we just us can business software we the what every recurring you year, is very As half that And at products nicely reliable and the that that we of done on that XX confidence the can as second and gives guidance. quarter. with And

Andrea James

Okay.

at Tim Barclays. Next Long question from

Timothy Long

if could. Two, I

-- been Axon the year. a were just of bit. we X if lot X and First, impact I expect then the that the you after have gross gross on had on where go one aspects, think parts scales, Brittany. how on ramp went there those areas margins? talk Could down gross what business as touch we're the are -- as should we you noticed looks follow-up products some And the feeling margin there a And adjustments. Can through moving talk about I about where but we that. little talked of here maybe might margin a Cloud side, margin about like of could you for the and just It I you new

Brittany Bagley

of course. Yes,

tell, our lot as there's pieces gross letter. shareholder from moving you a margin, through our going So can of in

event this expect continue ready gross -- go, but the really And to that that production. One, to X getting in year, we ready through when scale have I ramp, as ready some scaled main from to be we really ramp XX think headwinds we is ramped the next-year scaled TASER we fully on that's that's and business to and margin pieces. think had biggest year go up. we a thing

gross our margins a margin be for benefit gross next into but year factored should So year. this

a There's bringing us and time get next about bit of we it's should last the gross quarter, talked the and margin which be weighing a new I go it's ready impact piece year. of then for that this again, the the services continuing to while getting nice Fleet on And probably for noted it transition year product through launched just last on cloud is a of you similar on think professional services we that period quarter, just to launch ABX. installations. this a up our

this So product our Fleet a has phenomenal us for been year.

really into were year because of inventory-constrained we've been had coming and this some that. we working was Some and that through backlog

sell we Fleet, with But hardware. the

We hardware. associated a is That in to with us gross a the on Fleet turn the software way. services a onetime And install bit professional to we hit for have product. of then margin

once we're professional the as to Fleet our sort of to margin software through install, bit of long-term investment year recurring of and services view you beyond. that gross high nice so attached And camera. a so can the this have nice volumes we year, are next revenue an Fleet But software unlock in revenue

Timothy Long

And Josh. then quick just a one for

You regions some you federal sustainable be? in newer flavor a deals type into the of new international. little those geographies the of what mentioned the and you think are? of areas examples what lot just like give a And moves of how -- would of Could larger these us deals and -- were

Joshua Isner

and question thank great you. Yes,

segment. about deal all, justice really of First in a excited is one that our we're

of about the police we're tightly departments. enterprise and talking with kind integrating here, prosecutors buying Evidence.com So licenses for

at and in Richard speaks to our as encouraging was were certainly, and which his dollar federal all larger the to great the very that both business. work Coleman are doing continue signs we team federal. common And more A those are couple X so well become and X. And see of amounts

in very Tier In some TASER in those body generally, lastly, cloud. of we then U.K., early the with X markets large opportunities and some cams see and And continue the to these evangelize to those we of have and of And at of as orders both markets, make major we meaningful at still headway -- the continue And of to on these taser-oriented orders Canada international. more across point, markets, our then Evidence.com. our out getting coming to Australia, outside start X. cloud on work those this more those customers kind and been

a those some background little from. of of are that's around bit coming where So

Patrick Smith

could in as little add I if bit Josh, a well.

if Just U.S. the now, be very long right At larger market than business. least -- X/X world business. I The scale, international at rough, we at international our about the our X/X term, look of is U.S. mean, the the rest of of is. about Xx is should

so police markets face as on we world. focused around these similar we're -- challenges And opening but the very

criminals country doesn't a be have in you gun. XX to a need TASER for culture chances makes it's customers Now United that actually face. countries around other taser. police that quite a weapon that would with seen could police really our challenges States world do. carry are, not a TASER there's the of the public and the more one ways, international a something thing if gun the will But a country primary in is those officer French XX if frankly, unique we've seen because, a And and think public I other generally a firearm, the likely in because We've about the become that example, less is different you you're firearms, transformative gun and from U.S. markets petty police is where every what even defensive in the that are some officer

terrorist probably anyway. dealing event might the a tool some where right You with is not pistol of be sort

when international to is And a international market. game where these those as give really U.S. believe the because, markets again, dwarf so that, long expand to need biggest truly markets TXX changer I us we beachheads the do to global growth we our succeed we term, should frankly company. could actually And in begin

Andrea James

Reilly Josh Needham. Go at ahead, Josh.

Josh Reilly

who cams job are terms What buy to the and models now and in and quarter new that of were customers X switched tasers TASER the to but interested here you in getting the maybe and going new ABX body on that these team. the it you of the did well? Can Great us are you results? higher give have impacting with around? this of around released. even are And QX the customers it And been on customers in is sense have the revenue as category? some QX magnitude impact any switching a that revenue Would commentary seeing

Joshua Isner

of Yes, Josh, you the think couple to great A for this. thank about question. ways

of period launch going or products more look the year, remembers, what out of before coming what everyone the guidance for where new they new customers don't the when our to know conservative would continue product or So right to this a if are because on like we're as first that you little reason you the there's product. just to new trial just buying switch want have with over it half

think kind point. uncertainties I cleared so this out of And a at those we've lot of

TASER And interest converted X XX. I lot from think TASER of has to a it's to fair that say the

driven book customers TASER so order Assurance out those hardware a trial now of brakes, as early much our were of the X that of not for TASER upgrades a that by the little pumped of separate the XX to separate we're is in in and motion -- kind ABX Plan, because like TASER cameras right bit direction. on volumes a are moving wanted gate. ship and And

into last become better And focus, it the of in But so different as there. X that, here. year a kind things our quarters yes, comes And get really X a combined allows the a lot together year with with as more those of aggressive and solid gives slightly the of confidence pipeline, to little us guidance. back-half moving us stories

Brittany Bagley

to color that. bit I'm on throw a of in extra little you going for

this stable pretty X TASER Our quarter. in was

X. seeing the segment TASER the from of about XX So lot to we're ramp into taser there's and this excited XX I volume starting a quarter would but think up support nice coming very from getting about TASER growth still customers. get of a dynamic customers certainly in TASER very and

our in because business that those ABX, similarly and say would We we see customers to refresh going do camera didn't I shipping on go QX on refresh then significant started to And ABX. on who let we just we're our in as cameras, growth refreshes, ABX. really want was

so the half And in second year. of the stronger be some again, that of you'll see

Josh Reilly

a And follow-up Fleet then on the just X.

mentioned vehicle? catch actually the on greater catch-up you're How You installed going the to couple Where up year-end. end the around is of the of versus the much has at last here? demand manufacturing hardware the getting by product bottleneck been in quarters

Brittany Bagley

bottleneck say nice I hardware, the would done the a I would on it's 'XX job And actual say catching installations. But customers. on and was is really of inventory out to because item up we're bottleneck the a it's shifting, to the now more greater really gating bottleneck we've the Yes. get up that coming probably ramping the now, on side. around not it

Andrea James

at Ng Go Goldman Mike. ahead, Sachs. Mike

Michael Ng

I just two. have

could answer the growth. other revenue just was up help couple and was services segment just differences and Sensors So outpacing substantially, if Axon the in reconcile to I a you there. revenue revenue wondering Cloud questions of

you're content base. into installed said the First, software more you selling

are an just So would that upgrade? you confidence existing a doing that out equipment? flagged then pieces particularly you you well? plans that Josh, upgrading but of I that -- know, software equipment is are higher using their call there other give that And Does few. customers about

Joshua Isner

sales Officer software tracking and have product. is in the which which past across DEMS our of kind this the Yes. but Ultimately of Records in features our Plans Safety a selling number little big for is Standards, a and for of us team talked different product about and focus use-of-force kind a we've

some side in markets, and the base the those both over uplift to our combined Evidence.com those bundles lot ultimately, a just with then software. kind be there's that of new nice when of records a sell, then combine momentum, will the in those the And on we justice higher up more things of in in picking our segment And we So our kind licensing. plans. ARPU of management and offer

so And combination things. those really of it's a X

Brittany Bagley

driving we It's on. growth -- largest I just retention. E.com, is business, sequential agree, our the would and I healthy Evidence.com revenue driving licenses would the I drove XXX% are said very that's software spot everything mean increase. for bundles add, strong net demand seeing domestic premium the in Josh our

that think the for recognizing this in now Standards we have is start we quarter I I other thing general for were note would availability. revenue to it our product able

so that the has up than in it quarter larger step slightly make helped other been this some And quarters.

spend lot talking And was to big continue QX. average how quarter so this over It and size smaller big larger we quarter. time as it of more the QX. at was It about slightly is the look definitely big in an a It step. we of this of quarters time. It's in was

lumpy had as been it's So revenue of together. some we've these recognition pieces come

segment. But seeing overall, growth the that domestic Evidence.com business is such driving nice healthy you're the thus in why bulk of that and

Michael Ng

on to made in along earlier with want comment justice. follow about the good that up did that I momentum And Josh

the expand of it And installed that not to if little is E.com wondering more I interpret are right customers was may part licenses necessarily buying talk about the that opportunity So are the case, TASER on there? and could you that's or just if that the that camera the the software base? bit body or there a be

Patrick Smith

basically Let take we've agencies me software first. the teams not Scotland sure pride to own disclosed that ones something we've or that enabler system comments, their using our selected our management agency that's country all jump XX cameras. obviously, and things like I'm across ago, in excited on specifically not some an had unlock hardware. now -- of. our an stand one. this and cameras body albeit And can our our using similar are example, especially for evidence my the alluded great Josh. and body I'm awesome. We've customers on international software Records data other some those move generative they're over in that's for is And I years AI well digital our our as a prosecutor's police, had true ability own, pretty that for our software country their which their game both whole changer. of Like, they cloud but records we're products, strong audio, stuff proud video software us our in When in the is really was although And valuable given are to the not software, on of of courts,

but And we're so and are out we've we things back over we inventing on want more hearing to announced forward even not we're customers positive always get skis been Don't we we positioned well feedback look very my prototyping details. with that some and our with and -- yet. just think to doing really coming have

So hardware us doing you things and -- enables together. can't growth do software do can't things if of those that engine that the the you do both to

Joshua Isner

And there with the buys is I for Rick I'd and thing Records. extra that only add with on number Axon agree are and will up non-sworn licenses agency only personnel totally that go every

but substantial the And so of that's the that and the puzzle on to tasers here back a and the about all as choosing police body big our cameras records uplift office piece people then of access well. a officers evidence, that's street in you the as think need

domestic features new DEMS-only more grows. our of as that the portfolio about, on So just product to and market talked of an in addition and adding of there's element Rick our some kind customers more

Jeffrey Kunins

opportunity hardware before, distributed is plus Amazon that our entire so Right, is software OSP many is I of this drives just inherently this of times power -- and through the like increased philosophy and flavor more to you've adoption It to that our because Prime. it that bundle basket, heard us higher think ecosystem it and of for tiers already and what keep going as customers more them they use them inherently higher basket to. to and have free then out get value one have it's access feels in of to the up say motivates and paid

lift for the it justice And R&D and investment like for something that about that's us where take purpose to that's to connect broadly had federal work R&D also the you in to fit bring at approach to whole fit one come international a quickly of to segments law a team for in segments questions adjacent and to like back is, tailor domestic leverage or of of it decade that philosophy where with justice, DEMS the before, of back R&D our enforcement, if to the be unlocks the we've new and that federal it's like our building a next make prosecutors before. government surgical and of part instantly and purpose but market on relatively for to things relatively done it light

market segments. and then earns that have federal of laddering building is it in up once fundamental we to the successive kind that angle right directly we've start for And with each from then And customers flywheel. to products bespoke momentum those us done justice, our

Andrea James

That Thanks, digital Mike. before used And we management evidence the system. a we've term times. on, couple means of DEMS move

So that's the Housum Northcoast. acronym for everybody. Keith at

Keith Housum

Rick and your the organization? how Josh with is role promotions for -- Brittany, evolving Rick, the at at

Patrick Smith

it's ton. So a not actually changing

And the of put story Over and on the past focus business X to story the to on is writing been very years. day requires mental that X our a conveying -- for different the wanting and next really the day. I've our customers, outlook XX just existing ecosystem creating than running and years, to frankly pain a more understanding that focusing more customers technology,

does and now like. looking business, the if managing oh, inbox to organization all and pause me look I e-mail went dos be in X honest, endless years to this next It's burned then So of let the XX very to or the out. back just run difficult a was creatively ago, and quite getting at understanding I to shift phase between what large go,

and so we're to make operational these control excellence think promotions in everything chain delivering. really is the of just over this clarify And roles manufacturing margins supply -- the more our Brittany of and giving sure our basically those I sort

discussions and what on we're allows engaging Board to think And on highly for more little -- most focus doing during actually meetings -- for that what operational of, giving other's the my bit of example, much taking I strategic Josh It's a we the level. Board in more Josh tends strengths. And more terms he's to is at I'm of interactions to cetera. -- -- less some terms with the focused very me each actually are do play that Board in et of a agendas, driving lead meetings, so example,

don't of that more office. ever a dos we've we tell of I and wife will than year, strengths. customers got now, we've know I've a connective my got little team a the I'm in ever understand I've with having and with I because think and I list each do where got tissue, So and over Brittany out to working harder rapidly here other's I'm kind have traveling very long same Josh relationship around you, developed so than been a only with to expos internally large And

yet a basically those. manager market, to the is aren't want. that of a cam that significant that asking And the the really asking with were mentioned as customers to market. job created it. and in kind cloud customers companies market, big large on and asking there's technologies. me what risk each amount founder that like but predict of for that, the when leg to the is like, what the obvious, the thing focus running is I that reason body attention machine product what outperform customers kind My are of business. do just And to match to script not and Most what of comes The my and kind saw up allows productively as up rewards on able is shows uniquely No sort of I are I'm to focus founder-led they the call various of data I want we for -- on focusing that that a that CEO but profit-driven a think taser when academic traditional we is next is we fair competitors -- the and our to

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those So of sort problems. it's solving

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Keith Housum

more Now back details, go Josh. I'll Brittany to and into

of compared then versus toward As the TX in does And leading as device do terms TXX guys do in now TXX that you movement TX? the and that use you terms adoption the what the like margins? mix taser, a the the look at like of rate that of to the people of for acceleration expecting

Joshua Isner

over I'll talk to a it hand the little about of about Maybe talk the I'll margins. demand bit and mix Brittany to and

of have training said customers the in there's genuine demand, call last uplift upgrading we a first and and deploying deploy terms it. the down around challenges users, a there's maybe and customers you it yes, next like see road this off interest a early where to to to thousands thousands others is this as because the your kick to I've to our absolutely Usually, product well, to In the across of life because before bite kind new one the a taser. and it's useful can end you upgrade of lot the of in

are in accelerate on of streets agencies process faster. that this the willing case, to favor getting weapon In this

customers and who early were feedback the straight XX to jumping are shots move who Customers continues from increased XX the be very to so distance. that some -- even And to didn't with now strong. there TXX TX

over next So here. very on couple years bullish of TXX very, adoption the a

where as get keep still well, Now domestic internationally in mind, agencies a period enough it trial want some and in field and markets that to place there's takes data.

field. TASER next the all grow more handles And But in doesn't will happen couple back years, our the of over to XX business so the at it think continue TASER I on once. of

Brittany Bagley

strong add, still really we we just what operational that would can we I in can an manufacture. I are demand so from Keith, up. know that ramping been think the We perspective, has build because

of many And we've pretty it a so the can some and year, manufacturing for handles can demands we to time given get It And model. the make. got into good rest us scaled there, fully standpoint. of factor what we how a our that's ramped out this is actually sense from taking up

will manufacturing the will improve get cost think down I margin. the initial help we able cartridges year, Next in to gross to been and not have and automation the invest have but that more of scaled both for the only we some handle

Andrea James

Chatterjee at that we Samik to analysts next. We get will JPMorgan. have X

Samik Chatterjee

And wondering, Fleet you had The Hopefully least looks more just we the gross X taking that this acceleration here XQ. given systems than implication expect sequential quick be of that increase? quarter, had, basis should an of some revenue ones Fleet revenue I'm as around sequential margin modest you systems into ramp going here. you a sort to had on that you what at guidance that

think we were How And should looking have of constraints supply those you supply products. underlying environment of normalized constraints? on call, you earnings getting sort easier any to a sort last ship sort about I a I think demand the sorry. of quick demand And mentioned now if about at had more follow-up, without something

Brittany Bagley

at really will now we're constraints. take through we're getting it installed. I largely think Fleet inventory what get looking our supply And to

And see basically for healthy demand Remember, this you as you'll have standpoint. X call, on Fleet run from revenue. is Fleet year, normalized what so we through go as a said earlier of this rate pieces I

hardware up item is which the reporting. Fleet have of the You our in showing line

you've the got hardware. So

into services that goes gets revenue have which services once item. installed. have you professional our turned we on line the have software You it And then the

year, out nice as come year, really level product. rate see And of well a through So level that this as we I of expect we're get services would this demand. run you'll professional on at installations as good rate we of run demand Fleet for a

did want in? jump Josh, to you

Joshua Isner

we ship to wanted especially vary say, kind just up a caught depending too trends I the I large of can in get on when they Yes. because wouldn't sequential little orders.

on focused really for so And we're us, that.

there straight noise looks. And for quarter-to-quarter That's is over that and As grown course of year, the it But be on normalize. on we the XX% to we've of seems a little to what how really kind focus said, at look CAGR that. quarters. might X our yearly try we

Samik Chatterjee

the that talk are into actually a I'm land to and sort trying to On customer using Can customers much how going what the you customer you the trends Like this out with customers of of count and underlying already trying about versus sort can expand Evidence more? them upselling are? obviously, services of talk new you're of bit sort growth and and Because product? them count out cloud is the to of sort that growth, there. very parse robust experiencing underlying

Joshua Isner

sell existing would and et give same like in try both I all to software our new to the some packages like the well, prepared know Yes. broader really really But about do meaning say I I well today. we to that products new core do that at sell of X time. it's those of brush, We customers specifics products any we new features U.S. we don't those dispatch, a kind our and cetera. if VR, to to try market, we're products customers. selling existing And computer-aided with try on to of things mentioned,

And DEMS, then tasers, cams, about and create internationally, those justice into our opportunity kind of business, body products, in and that to federal selling expand. our more it's of land corrections, kind core to in

those ultimately, new And quarter. look those those both of in sales categories to say of and new that right every each each we trending -- of on market so at really nicely metrics, And now. happy product sales we're very

Brittany Bagley

of The only the that state thing is letter, we do to shareholder penetration in Officer our our XX% base. gave than give rate relative we installed potential local Safety it and law Plan our enforcement and is less

both ability well I great So have point. to to think we land as as expand, Josh's

Andrea James

Jonathan William Ho Blair. at

Jonathan Ho

terms a of in new your results. capabilities? to maybe on bit additional customers most did of and want ABX are about Congrats what on the strong ABX excited cases get use the color around I little

Joshua Isner

and start Rick. Maybe Jeff then to it over and I'll hand I'll

market more ABX. the now ultimately, so that there's that watching on. and a is variety right of able playing or have we're forth. early most relative of in for body as screen set incremental battery feature out the the and adoption customers being expert communicate seeing it need excited with value some and to a see voice use think really community the translator, very or of I the being But our member, fits are for of able part that something launching more around and that there radio, to about mental where in excited through and dispatcher the customers improvements a something that actually health for We're camera cases optics X-way a to a and the

functionality. one I nice It's So of think our bring back the differentiators. also to key that's POV

anything and for use that camera flexible of launched easily new X. new more product just really a to SKU haven't overall a to We body customers. cases and simple a now adopted our whole attachment makes in certain Flex the instead tailored lot there And just since

Jeffrey Kunins

a Josh This a no The innovation. battery turning delivering a -- is the separate echoing think a That's of meat there, potatoes a bringing we there's just on to the mean POV lot one lot from -- I changer I always exciting right. where all matters tons category of more and said. simple and of what is everyone agencies. we're add-on, wants life an product for no-compromise think game -- that's accessory and a

feels and thing feels back add-on telling And really multimodal streaming and Respond that from central we a product aspects customers moving like resonate thing an the then specific to itself. to modern of us communications the this loud X that that of full circle And to are hands-free. you love. X-way they in I'm and go of future think way, there native very live One frankly, The to not things have talk hands-free being clear me having notion talking in hearing. middle only scene both and that can, hard fact I'm a a but in do and is I the to back on the it while voice a who's

And adds to that kind freedom communication enables of so the just a have they other options new and and available that them today. interaction complements to

someone want want to don't think the And standpoint, both now. gets the of empowering has as for watch two, to something a important starting about someone officers opportunity compelling an who how my there's that me. idea us the I'm the help. psychology someone but They're choose asking to, button, my is live things one to to streaming know watch to critically about psychology agencies right heard the watch drop is from one might to adopt number officer, it I'm of And I it. this say on psychologically simply of to notion I you've say, they'll but for that for when in back been incredibly say an back me I who opposed

are that super about. excited hearing loud they're We and clear

Patrick Smith

can chip So -- do decision, When we we of ABX every bifurcate a do ago, LTE I'll lower-cost we thing, an a had a on. and one SKUs number in we faced in jump last camera? be the we years we're that designed every put much so the Or to connected bet will a that have know what, and WiFi-only on for put that have useful going camera capability you we so camera camera chip premium? more in made a turn that, that customers. We

optimization for for of about That of asked our is it. about when how well, these going they products. aren't create term. thing We precisely our some the about comparison, saying, asking competitors current enable do long think to think to the don't what difference LTE, the right profit us over We on the were is to about by value think we customers Now years that's massive generation.

numbers And sometimes, make make how got of in holds this, bets knowable. look, and are But do this about we that interplay sure the work. she's a answers not investment accountable; very right is bets have where productive about are necessarily they Brittany to the level we me the

we've know and dispatchers are cycle streaming what they're to early incidents, world where we're you it's me? wow, in game-changing refuse the agencies And officers is hard back are product got they for call Unanimously, But dig have seeing now the a telling are like, true I make coming because saying real-time they these their things think of to useful. to very know and those And that we capabilities without that a gone survey officers live type capability. go hear a us we this it. -- in that every

and spread a to privacy the going try world evolve. But about concerns real going things matters, XXX% like can it's as it. is years have talkie feature relying help take they of have get to to agencies time just I'm responsive it, convinced as some not communication word to XX only it's for concerns. deploy means the walkie watch or And those me a the that is to way unions for the Now us agencies next how push-to-talk your

are on the their will needs some live doing. off stream having because we're Now everybody and what what I'm in-depth yet augmenting that's with actually with radio They're hear. rich more voice, and new that And is alongside telling they're capabilities. taking more not it's that X-way also The up the we radio clear, quite of productive me to a very conversations, radio We're are these communications. making of else current airtime use radio exist not that focused. agencies stuff using offloading not mission-critical for our piece more traffic tons more it's conversations time

Andrea James

Craig-Hallum. Thank you. at Jeremy Hamblin

up. You're

Jeremy Hamblin

quarters And I about growth results. on was velocity last had back the point making is of in OSP just quite acceleration particular. that wanted the impressive cloud the to in bundles. the to you your tremendous the over strong few come Congrats Brittany in business

would much or bundles than up to and you you X just because local of just talked gone it I about has the X last potential I So it's is of that, bundle, growth tremendously just on of is wanted of just expansion license than domestic then if business XX%? that well. think coming sense a get how in And as that but the the less percentage the what have XX% the revenue value a growth. base, state for your just quarters. -- said was that year ago? premium And OSP back have Obviously, been today, to Would cloud less

Brittany Bagley

was stat last great XX%. in penetration in. gave last It's Yes, year I'll that to great and of QX and it watch. to see been jump We less than

last seen And So the increase revenue. get that increase X software a that nice we over some in of reflected the in our you're have seeing I in think months.

adding this to We've had we've made could revenue the things I got right, recognizing there customers with investing it. been where start been I we would products, standards. in. a also new point we're say and where that on out we've we on This testing is product out call there's it

software into to business And that start our so those software our feed and are exciting recognition. things

year you're were still it, X maybe particularly purposes, and quarter modeling the good for say onetime would of of modeling if QX revenue Standards think high we average and piece QX. QX in because this in QX I and a

think I'm premium upgrading more sure that we're fully to the having adding give those I to But it. it's to your people heart macro momentum of point story our in get story really our and to fair loving are software not customers. and we're tell bundles, the So they're we're those to products our cloud mean and around and is software business of customers I the And great excited that in. to business average

Jeremy Hamblin

And international just follow-up on is question you about a side, think bundles. OSP the then as

where terms to so decade factors forth. a rates business, adoption how your was is on some Obviously, of adoption ago you in different that terms penetration of In segment saw that curve taser domestically? of of comparing kind the and that

look I curve So wanted imagine different to get of could a the bit understanding just seeing. little an what but you're

Joshua Isner

government for kind offerings. our Tier is And say buying world of Thanks to of X, generally, would talking everything. customers between I international market question, Tier think Yes. because OSP-like that not we Jeremy. that's in you're rest about getting are the the the In right closer I one bifurcated X now. federal

talking some cities like You're states and and Ottawa and about Edmonton cases. and London Manchester some Calgary or in provinces cases and in

same Australia. and -- in So

cases, And both kind of one that in products. rest you've time. are of I focus But where bad when adopted and the it's federal adopted, thing a and will with federal thing. we when is then world, both not product and which from see is good of products starting these adoption the it's go over one then a to about lot just that in talk those buying think way journey those all of governments the so fact in product large multiple markets And In that's heavy a the purchasing, well got doing bundling this a OSP there's large we of more landing both really the concept.

it's also together be it's great different each. products that the harder exciting the more to just procurement volumes of because like way X pair very but relating can It's processes upfront to that

X, next or through working foothold take X we're the in over OSP so of we'll start kind it. markets. hopefully, of Tier And see to And year a those some

Andrea James

going Thanks great to the Rick questions. all have out. We're us for close

Joshua Isner

us Before out, one Rick more right. just it's thing, all closes if

to birthday. wish will As hope our I all happy we birthday Brittany. happy a you, do call analysts And of backs Brittany tomorrow, the

Brittany Bagley

in. Thanks, Josh. that Sneaking

Patrick Smith

what diverse share went and we're work into myself backgrounds telling every operate for It's you, I fantastic view And to and I just talents we'll knock going for we're their back keep some and, happens wood, about pinch on run. customers the My ton when running to bring day this freedom investors own have of is team results. to doing. an is and keep by you talented you delightful give work unbelievably these to them and things this team of into let this. attract our this be happen our them of people, hard a running you great the hard and our job. Obviously, the to don't be able that get mission, themselves. These amazing hard

cast You thousands But behind talented of the handful working hard. a see really us. a scenes, people only of get really of to there's

do. So you those our quarter. you next the us you look I you like seeing team forward letting the of from these in, who that listening all for on bask results for work thank to are in light of

Axon Enterprise (AXON) 8 Aug 232023 Q2 Earnings call transcript