Axon Enterprise (AXON) 7 Nov 232023 Q3 Earnings call transcript

Company Profile

Participants

Andrea James	executive
Patrick Smith	executive
Joshua Isner	executive
Brittany Bagley	executive
Keith Housum	analyst
Trevor Walsh	analyst
William Power	analyst
Michael Ng	analyst
Jonathan Ho	analyst
Meta Marshall	analyst
Joshua Reilly	analyst
Jeffrey Kunins	executive
Jeremy Hamblin	analyst

Call transcript

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Andrea James

Hi, everyone. Welcome to our third quarter earnings call. Thank you so much for joining us.

Our prepared remarks today are meant to build on the information in our shareholder letter, which was published at investor.axon.com after the market closed.

So we hope you've all had a chance to read that letter.

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

video. you and start do off business we And quarter, earnings get look we so an closer quarter Every feel can you Okay. this with our by a quarter. for

And on this our excited very quarter click which business, to is a double for so we're federal opportunity exciting we're so expansion going us.

showing the Conference. which AUSA great So at the Association the Annual Army last is month, States United conference, had of we a

So take to then Rick. to video. you minutes, We're turn there. it we're going and play X to over we'll about going a It's

[Presentation]

Patrick Smith

earnings Richard everyone, truly you, and team these Thank job on at events. that AUSA I to the brings the exciting AUSA. super our entire federal to and was Welcome, A.J., quarter. energy team and his excited Glenn third be at to back great It's our our with see about quarter doing. is ground I'm another and fantastic to great team what to XXXX coming call. you Richard to It's

also anniversary We September. XXth celebrated the company's in

while just moment seven growing for growth formula step translates big a Let on XX% We've back a how simple. been reflect very the of and plus consecutive ethos driven me that has our take and to profitability today. quarters revenue founding and

but customers Staying prototypes a and bring and customers share to a with couple that we headquarters, of to our a identifying them have problem at them through our until technology our that, might it be XXXX not Every our summits or our customers to to even of time in very later. listen where face. frequent First, part products sauce. says secret dozen we institutionalized company ideas we that start by at close as a or challenge

annual conference. have user also We an

right engineers set delightful importance formality, development points products calibrating and along, us right many on I of buy, that will and customer that user our our touch cannot foster customers, create investment of for of other designed our with fused details investors, that our intelligence, They're and big growth like sound. they our for told Our example, picture, towards should the years develop want, direct to customers. helps customers geared virtual us decisions decisions towards we reassure helps customers. it that us they've research it ride millions the get on and it's robotic to overstate you, small -- it are experience feedback. drive off a go alongs also security, we and product and on decisions the get for alongside moving This come. and When

identify how can We can or problems we forefront fix technology curve entirely. close also the things the to innovation make of stick so better

in we how introducing cloud safety evangelize and believe we'll we XXXXs the were is This AI the be in first software early to generative public why tools XXXXs. to first the

and Our at are fix they and engineers hard to it. and Like best energized are some me, work of technology. in they brightest the problems out go

with undeniably their we to motivated our fit. to with with best-in-class result, partner who drive end Strong customers up a As relationships employees customers and our market success. are product

growth undeniable today up, time decades are advantage, the execute we for decisions then, ahead. growth And making fronts. X to We to trying is enjoy driven thinking Our by ago. catch now must competitors believe we we drive to decisions on come. of all are while we made years today R&D X course, the we're years while And will an continue

closeness, vision, formula, execution that's plus value equals long-term customer less the board. creation day-to-day So across the

For our us. a It's for excited equation, decade the we're that ahead and of employees public, shareholders. about our winning and for for Axon,

I our turn by many be call, and Axon's we Many escalating acknowledge you over around I Before the and the commiserate and I'd to We're world. grow events. listening of mission. it wars, continuing remiss to of and global connected to life, our And personal if and them pain company, today. wake are unspeakable we're We mission, acts. mission, facing because are the people a own the in Josh, on suffering. not did Conflicts, globally seeing focused to execute that protect faced this employees violence pain all is

You're up, Josh.

Joshua Isner

here Thanks our me Axon Every with leaves quarter Rick. more a lot, team. at impressed

to have As we does we growth to of happen many quarter years. just seventh consecutive Rick line our growth. not over XX% our It's the and highlighted, value built customers top reported This kind momentum fueled by ability with our over drive automatically.

I'm in term. me with long While that with for the confident the few keep our quarter, pleased share things a I'll results you

safety we enterprise. will for a few path invited TASER we is a for system like X-plus of and yet on go-to-market, an security officer every Axon and We having next those U.S. we I'd categories: body sell camera a my years. and Axon say over are board. ago, building Each software we years different about public share that wearing device vision the First, network. trying mainly way the operating how seat to across overarching would and think A our local, to into customer four state tackle execute of where has we federal, international the key the and

an case out is as powering it, first expanding to start that build finish. when this workflow can when division, from officer see so with that civilian network, is we are the we interacts you As adjudicated, to from a

world remains When and investing I disruptive growing across we really market I the excited new devices help team are year. state long-term facing challenge one in most training of mission are portfolio. customers. about two remain This delivering and life VR protect we have look and do in one opportunities. core, the every ourselves most and day. the understaffed, brought are today, we training exciting are we to in going think Agencies to challenges. be continue and opportunities vision. landscape in increasing We the to and navigating to and about that They that productivity-enhancing to difficult on are States solutions capability And our this and a the segment execute the seeing the VR invested our our United existing can to We our inefficiencies requirements the training features think have jobs of at local. to relaunched software

TASER are on ramping tenant the We early also adopters records and product, in a customers of up getting hands of Axon Body shipments spinning more X.

at TASER about I X credit market TASER team we found even Something quarters after my already the for results. surpassed excitement I've to quarters each rate my that, Simply from and for means product the is TASER our the XX Xx led That expectations early for as I we X for boggles outside our core our have one TASER and is base, quickly, by encouraging mind. my and is orders, over top talked local find very book came X pillar here Rick goes past Orders have particularly are TASER in read have fit and What XX international Madden X X. the TASER our TASER quarters XX driving Pat first customers order X for two XX. customers of corrections. our saw put, being order orders new and state quarters pacing in, even encouraging few of orders exceeded. been tremendous

business, just U.S. in video. saw that Another is me you area long-term has strategy as in customer our confident the our federal

help who a federal ago. deals in customers, global products few quarter from us. have for protect safety Our to in needs the customers, essentially goes state we X came booked expand beyond of can footprint top growing bases into military of where federal protect localities several traditional are our where the years of base the meeting from Five XX and and the those applications our chosen a

a to what look Axon. line a and are of we incredible sight we the stuff spend year, pipeline so into far, in in in we've the that on growth. a Finally, brand journey, I easy an traction about It's but strong close are time on long-term next in got seeing today, growing we markets and higher grew overseas. is we talk lot We and spending one our will opportunities us We're of and and to cloud new XX% to our QX. lot which time at heads it's We've back country on of internationally, international the support of don't largest to plan. accomplished of been building front evangelizing the presence are think a

our Brittany Brittany? financials to Now more in over it I'll through turn to details. go

Brittany Bagley

Thank you, Josh.

revenue profitability we still top pleased We dollar to Axon, target. are line earnings XXXX talking QX growth and of report and strong another hitting in with about improving my adjusted were EBITDA call was first an XXXX. quarter

to by margins, the operational exciting the be all quarter been hard bottom and continue excellence. each drop our QX. to to moved an proud line team on again So for set expectations exceeded impressed I more we seamlessly watching and ourselves, focus and in deliver over the them of. team has change significantly we're We that

growth. margins expand saw to XX% grew revenue line year-over-year XX.X%, adjusted which top Our we XX% year-over-year, is EBITDA and

largest of in growth and our services XX% business the driver cloud year-over-year. our remains revenue Software with growing

a Our engine. powerful model software business growth remains

and our to products subscribe new features and products, and improve technology deliver bundle we time, of enhancements. more customers these Our a over

from drivers. add-ons. Our and sign new growth multiple We strong new growth is software to tied customers adopt see future licenses who

with solving their and result also of ecosystem, problems expanding a in see relentless needs This customers our the many innovation focus as existing over Rick us discussed. on is growing time. driving and customer We

growth our revenue You ARR see now XX%. and is in net XX% total of Axon of retention to XX% and that year. revenue last impact of services XXX% compared excellent rate revenue Cloud

XX% of up our seeing in hardware made scale in our also and in growth healthy body our strength our more Axon with new supporting our camera XX% and that business. are annual growth in representing quarter to growth continued product grew XX Sensors in ability launches majority sequentially, along demand demand. business. the Fleet shipments drove Body meet than our We devices, hardware TASER the X to X, drive

our TASER a revenue. software as expectations XX.X% well margin from XX gross to our saw on quarter sensors slightly exceeded on higher revenue third services. we mix Relative down of mix last increased margins professional revenue of year, as and Our increased

QX expect We QX QX mix. on this continue and below impact with margins in slightly to

Turning supporting adjusted from both SG&A, expenses. We operating to margin. expansion some and in EBITDA our R&D saw leverage

to continued to and our invest opportunity ensure multiyear growth the continue a positioned business. support for of to We we are scaling

revenue both on to our adjusted turn and will note I our outlook As you EBITDA. guidance, strengthening

our We are increase pleased to outlook again.

expect approximately to quarter to We for range quarter to in the $XXX XX%. be the adjusted fourth and EBITDA fourth of revenue million be million $XXX margin

an to approximately Our from to XX% increase full $X.XX implies in $X.XX billion XX% our or QX our up XX% $X.XX which or outlook revenue is to growth growth. year of guidance year-over-year prior billion guidance billion

Our of million. approximately margin XX% year fourth implies This XX.X% is quarter adjusted year expectation EBITDA to of margin full our margin outlook adjusted adjusted EBITDA $XXX EBITDA million. million $XXX the full expectation raised approximately from $XXX for guidance or or a prior

revenue and and executed product categories, our increased Axon bundle seeing demand our growing we XX guidance Our Body offerings launches TASER of premium X. across factors are in successfully the including

globally revenue segments with new growth. scale beyond, in to customer to like more XXXX that, new up drive to even ability unlock to highly would that For and I open remain And it profitable to questions. we and products confident introduce our

Andrea James

from first at Keith our question Keith. take Northcoast. Go Housum Let's ahead,

Keith Housum

Appreciate it.

level the And of that million guess, position exceed to comment of from guidance for today? fourth level be your level that, gives that end top at the has a order what not the the I happen what you guidance? rationally to to off seen for in $XXX perhaps you guys I of guys, on even of guess or we terms $XXX precision million. quarter, have In that you perhaps

Brittany Bagley

quarter. just we're coming lot I our you're fourth of think into what is a seeing

there's so the X And left year. only quarter in

at at of seeing more It's the doesn't terms we're the look in give what of in in look a more on we range the looking QX pipeline really we're we looking that of for deals or see. estimate terms the based wide need in tight revenue, precise QX. at year, back then year quarter. would what particularly And for range full looks we're to what think customer baking at we at it As full and on look as just what you we our have our

good have across you've Axon across as momentum, We Body seen X. TASER XX

as we'll we we're QX software as factoring able a so as we standpoint. do And those what from at to be think well in look

again, guidance. but at We perfectly, guess. look looking So we nail what it it's don't as we're best the that's always at QX

Andrea James

great. mean we this generator you, got order you That's you on you're I you random hands And calling the we've don't so up. that on the call, put selected. in to have can will if -- number your be

are JMP, up Trevor next. Okay. at you Walsh

Trevor Walsh

Great. free to or Josh, even feel jump Rick, maybe if -- you in.

stood pretty So know I guys both major -- of if finishing for a year, priorities out but you either that terms looking from out What of product was of them, of or builder around were top particular and into is of of case just kind IACP 'XX that of the I kind terms then of in the customers guess, anything use a event. particular for going pipeline. for a kind event what you, what's there large coming you mind customers of where there sort in budgets hearing and see out

Patrick Smith

Let I me The that start really heard ecosystem. this that year customers was most interesting embracing first. full the was thing

from I maybe go that how dispatch, customers there. to works example. these think like just as years is luck tech a for good. really And to deploy that, saying, early were well had big getting year, it vendor saying "Well, had technology the innings But in such when back we So geez, universally I products was heard the feedback to we're stack you what scaling, ago, never X some know who've pretty are want with the saying all my dispatch, we've wait but customer good so was seen are guys Axon, and if we I and doing so customers be part were one deploy we still can't our stack. and don't not we in of I much I service we're of when And this tech put customers

chefs shift say, well So to customers We -- now that in we've dynamic intriguing go thing and works it that you. had a was just guys when really department feel maybe will give it thought cities with love enough to trust pretty capabilities we excellent big of where will deliver would whole be of it, yet. and Axon just able to that be run even just saying, this I I me done I several will I new you on to and in both were my so haven't because me

a positive So sentiment. Josh. really that was general

Joshua Isner

fit which a of lot product of will it gives yet, Yes. with market that the that us I awesome couple hit But VR, demand good market the should of and early confidence an I'd reception perception incredible a that we an into specifically of associated the XX our the things TASER that. kind products newer around lot Axon of going be out combination add, next not products, have equally reception already then years the Records. just think rolling was really have of and showcase here have amazing to

with well our course, and to Of our to make to those got when the line building the we thing to clearly resonates products, customers. what do on exciting we've to always end so but really and go that's you're lot a a see all finish sure way execute on

Patrick Smith

and conceptually a was The little prime want the of ready year years a was to want time. more out in, was from waiting all-in-ones the greater VR few installing go think a just microcosm the to for when We last room-based that We deploy complexity. mean of flipped I We add detail for to did for all-in-one could felt VR push going wait interesting one ago you I'd not the to terms into headsets. in to centers sort to decided this scale. much

virtual work we TASER a hardware that weapons had our development meant in Now of do a make to to lot world.

some It using our buggy. and be were tracking feedback And we based just getting -- And tried pretty early motion things customers. was to sensors. honest, the was of from sort hand that was around of we

recalibrated. So the where, the in specialized controllers. integrated the same no infrared my on it XX ago And we've bullet all the just bit matter phenomenal gotten be that of HTC native this has to go oh to about hardware lights, gosh, customer Oculus with needs It's or developing months It's in sort longer tracking just buggy, accurate. works. feedback very

stuff dialing now that exciting more think product launched the market of crossover I terms of just So near-term it's think I just phase where in scaling and content. getting we've that developmental it from pretty had was product to early hardware fit another that in, sort

Andrea James

as going And not on if as my have I'm here, I'm a you list courtesy, off down you. video calling

come Cardoso me called you video just up So ready be if at to and Joe. next. you're you're do you call on to want Joe ahead, Go on on. JPMorgan,

Unknown Analyst

Yes.

of couple a into questions one. maybe So rolled

You video opportunity Can to more which military materializing drivers to space. way are a you nowadays, is or in resonating outline the how federal this and opportunity the with as guys? showed perhaps for opportunity offerings be folks. the military beginning could you material this in space maybe the the talked And in really the large why

Patrick Smith

Yes.

drone solutions. counter a outsider promotional year, streaming it showing an of we our The is how into like in felt law what's protecting been live like in product AUSA XX, bulb on I So you coming existing the suite, has all an saw This bases. were vehicle-based start felt I is over resonating integrated think use TASER policing by more I at years, out were fleet light which we would federal. cameras, way, home. and video bit our company a This like maybe from was previous little focused the -- enforcement saying year, that it military

partnership on operations. fuses well want what we resonated could I'm to as get Our the it we really do combat from -- existing really for felt it people like the to as agencies is security. cameras both integrating future into with saw agency where What base partner multiple excited just about in

more in first least, made and military to right? protect in We Well, you less it Vietnam, and believe will lot want racked your of work. was. and our be saying, kill Afghanistan a the count body successful well, And We would Iraq because killed geez, we in up that future mission is you a the if do killed, operations big that? successful I didn't people mission why those they're people life, the

what's at now look it You they into if Israel. had could drones be those collateral and damage. happening tons the dropping with X,XXX-pound East right going in tunnels rather than Middle with of robotics, bombs more Imagine precise

end to We stay look, book think our to are I we -- was the turned true war I End when believe my tragically catastrophically and at than closer And protect The Killing. will of life. mission I wrong. I out. it of wrote to

But shareholder so destroy have could You're people, drones last wrote, people out to we autonomous what's think that invested newsletter not in I to seeing or happening I material Ukrainians fully intelligence, imagine with counter provided year we our in go kill Ukraine. equipment. to drones artificial I those to where in but avoid had if would believe, the

to their human brought equipment could on barrels because engines have to home walk the casualties. we destroyed while the minimizing XXX,XXX and treads Russians and you If the have

huge had other the of do and about we're senior the process, to for lot nations of I of reaction. the not plenty in lived year violence think actually of And at conversations over sort of accomplish in is believe trying giving got how first military And emotional sort those tow programs. We're a our the lethality. this escalating. I of a Ukrainians level and opportunity. positions some people we still to time, nation's We military development with death AUSA, priorities to I to that different of the de-escalate it because line have we thought not general And -- a

a a is of Now should is, message that's we off, accomplish to while we how lot the always and last be should put resort, think going to the more I creativity matter mission what No be our years but killing minimizing into resonate. starting loss the mission life.

Brittany Bagley

to some Just follow up stats. with

billion. have TAM, we for letter, of some in the our And at shareholder exciting see the fact You'll shared we total federal $XX about but pegged addressable the this market these other XX we've quarter customers. a And of we where our we're examples traction deals with is couple that booked X getting were federal really federal business. in of the given of nice top

live its federal Security has gone our renewing TASER of Department worn So Records. with Army signed. modernization IDIQ body first government The cameras an our the and has has our and U.S. program on for been software. U.S. is agency The VA Axon TASER contract the Homeland

momentum large and we're doing there's and there I in from seeing from deals think just the really the So to. to the market addressable opportunity everything customers bookings, the a an out Rick in we're size talked pretty

Unknown Executive

with Totally. timing every the that we're fit and which to you is make as brought market once the about market, tailored of we've really new flywheel resoundingly speak we into market to needed to segment existing in then that that new segment. for have fold building earned approach the federal. products out our strong products them ways customer market build a story our while we new playing them done segment we've think talk by bigger expansion are with taking the then are that product are go have channel. first, customers them bespoke customer And and to as that to an existing even sell that And is right that especially tailoring right Josh And sales out before, resonate key, the class heard to this and is, in X-phase to simple little overall new bit, and I our by a in

addition of those in and compliance, tons products sorts small the So made over to make moderate and things adjustments software federal the like background as as that little Axon viable of the then of a exactly that this going with quarter. VA these TAM see all opens FedRAMP customers. hardware than us that nationally them And to And Records example well all FedRAMP is great into last ready you'll to more what start over time and lines of of pipe even up and SKUs IL-X, several laying and more years, tailored core bespoke existing, live are with we've for and of as product for start of selling our that FedRAMP well in to things IL-X investments more our see develop you'll towards hundreds just more us federal. to

Patrick Smith

Yes. buried I'm about to I want to these please Those what come back not right with on we, judgment to of one into last what's When want -- think thing. use billion they're facing intentionally The shootings. misinterpreted. not epicenters. civilian appropriateness get I drive similarly military the down in now, targets don't going whether, want on Gaza for justified police passing my right rates comment in any they're We're fact deeply happening to targets be And is we embedded say now or are passing were not. is of force. the are order judgment in the I after. example,

people and so a go from a be amazingly military life, capability. world if sort imagine everybody a good then to where without would people that the could of out you and And modern in loss the could sleep put important an bad

problems outcomes. precise ways to puts governments those less because war and in technology to causing police of state the steps And situations collateral today's jobs give we are their to doing begin think certainly but protect in need that there a to requires and people and with much of without the that Now better do are more debt. putting lethality. seeing that to that are just people think we're sleep, get And to can be and gently lot end fighters of damage technology think about I people we legitimate other imaginary us everybody excited catastrophic inflecting really I'm less unwinnable technologies to being tools us such need do able course,

Andrea James

Baird. Power Next, Will at

Will. You are up,

William Power

have international, to now of shift the gears of to TASER-XX saw And that? starting geographic particular are are Yes. What the camera lead to areas just that. in is with what's body lead what I It'd for you kind driving leading Is where Great. out And starting new unpacked there to right. products? the growth you. another trends All kind that be interest that? look adoption help to the want great across you nice in quarter. standing X like any do area you

Joshua Isner

see Sure. thanks -- of different a it's couple to of question. kind here. Nice to for you, Will, say the story there's the I would threats

first is you U.K., the Australia, just The that lot, about markets, markets Axon talk Tier a our wider can X and the those which one network. of in were Canada seeing adoption

only DMS, about and tasers body it's it's not about Records. So and Dems about and our and in Axon Axon add-ons and Fleet cams it's interview room moving toward Axon

European mirror number then of just the the recently, essentially products those into been markets for for the similarly. first momentum on adopting And of we've the few we're U.S. lot time. a Axon more product about markets are first that our starting the really signs TASER So other some to on most actually excited cloud has starting time. the see of adopt we're the a markets that But A really proliferation to got encouraging side.

that of body other growth dams. the And like they're historically using business. the the wearables value So camera markets believe U.S. good the and cameras of cloud, those our about they're could world more it's X of those bookings. catching adopting be just technology. in international Tier over TASER, to look very next for execution business in terms to they're years really once will things possible And starting start really and is adopting really combination the we X be to that to going X time. get feel lot I more markets They international to foundation provide still we up where over a rest but growth international by of markets our continued business business point, that see the rivaling driven of our revenue

Will. focus So that's now, our really right

Patrick Smith

I software there for of started really sort stand cradle to enabler X years I'd fun remember software Josh, need is we And But to X cameras. develop thing ago, there an body some add isit's where our company class. on was competition. internal healthy X as a our there the is or own in out like best to really routing watch maybe its

It country not And using us was even ecosystem. cameras with cameras. ovens so Scotland, room with for their And really they're digital their the in at not basically, body biggest even entire scale. our management body was

the seeing the of of level area gives each enter subsegments best-in-class and any where now try market. their the ways to business, they're maturity So multiple to we're across all winning it to together, own, new that but each works us better on of

William Power

or follow all you growth just about up broader you across a more like the broader a International I are comments, quickly. sounds for generally, provide area how above you we average. years you're thinking for traction sustainable has pipeline I versus period a products. internationally yet the broader it seeing of lumpier be of your that X could maybe corporate over X years. mean might May And were this set think, been of where go confidence

Joshua Isner

Sure. Yes.

toward is Kirby of the managing named Head out really a Sales, pipeline. Chris team good Our job doing International your

year? the next a really from evolved to and that this sure build has focus the little goal or more Xx that we can capture there's to can just hey, Xx this to we there. size year like, pipeline quarter what how the consistency make So a of do

because well, the we've especially years just where in lot of the So of on some feel SaaS revenue a the got we versus products. be recognition TASER lumpiness, of like nature always TASER momentum there'll

onetime forces kind we're out, of police But buying a some that's those starting international that think of term, to revenue buoyed bookings foundation by see large if events. are the lumpy I so kind that's over more and tasers, already see adoption. long of you'll video and of video And balance --

Andrea James

Ng Sachs Goldman at Mike Europe.

Michael Ng

is and Mine Cloud on Axon just Services.

towards more a could seen bit strength. about of the little a seems $XX know growth. like about consecutive just the So growing quarters I little expand was premium million the to wondering in bundles greater key revenue than software you quarter-on-quarter I of letter, you drivers it moving base. bit we've installed two talked if

is you there services forward Just would then teens this sequential provide cloud great. kind good think to that way any going growth? additional a of Axon And be about and that growth color could

Joshua Isner

the question Yes. we've we're fit years of here by Axon that of starting multiple really that's our plus and adopted investment enterprise version Cloud Plan just base. suite product things our of premium it's the are but up proud with to premium and to starting going see now results just that. buying into customer ultimately, of the results. offerings, more and customers has And We're is because the finding software the here just most you rapidly really we're more excitement and And the version Safety of then years, feature in flow the asked around through into of couple Sure. one Officer seen that last add-ons, products. new revenue the And then software and market new been of the products, the glad being story to -- Mike, that this

And flywheel and so seeing come we're product, our talked and the software new more of of right that's of all more as exactly see OSP lot really this is idea our adoption adoption records adoption what that about it's more driver just really standard add-ons, of flywheel a now. adoption management, that to that exciting of DMS, into together products, more to

of see of and end. great terms and So doing team where can those us of they back product an listening our to a for doing our really platform take value is this products them on understanding sales a the selling incredible great job building then our in evidence.com, job job proud doing team and where customers

business, really really we're cloud in it. the are about aligning really, and things So excited nicely

Brittany Bagley

to to to it some about start won't get the that premium this modeling the will you about this more for on of size I X impact a though of of all From that. up guys, of Josh thing guided are start to take because to the and as bundles, the the you is quarters more It installations average step that probably last add as quarter. and of bigger size come be and think that big turn you talked the revenue benefit every moving quarter, was have only customers our the standpoint I X an because into of would historically of that step in of seeing think we as

time think So in Fleet steps also come quarter comfortable each while X we averaged I this software historically saying But we seeing there have out. quarter, we're was larger slightly nothing premium, one are you of in. because up to that are than see going

Michael Ng

a is that cloud kind in you If on have think step consolidated revenue continued maybe that the that's guidance about I fourth quick follow-up. assume could up just we something there a as side? Wonderful. for of if product the the revenue, And offsetting quarter

Brittany Bagley

Yes.

step-up large So software would this particularly think in say, the I is I quarter.

think there's I don't it. offsetting anything So

at grew look QX That's QX, pretty growth about we're you top year-over-year, XX%. putting on quarter year XX% of forth that to healthy XX%. a As last

think piece, -- momentum is taking TASER XX, still we're X, into very like So healthy AB that account it's seeing. I software a taking into the the guide premium all

Andrea James

Ho Blair. Jonathan at William

Jonathan Ho

understand quarter. strong drove XXX% help retention us quarter? Can that you the of the main on net this what Congrats some were components growth the

Joshua Isner

look, when that new team have these again, That's to our it features the products officer want to into thing every doing Hey, job legitimate Sure. product buy. you with back goes there that helps police building new just a underlying is, value evidence.com, this fantastic always time really software shift. people new save

they conversation that. satisfaction next renewal in participate on and by has it's how showing what is keep a but what only every not ROI driven in already customer can upsell can of we we're type with when that an so doing by driven or interest And the

we success relationships right organization that have on customer you manager XX that deep is now. drives customer a so very, by really customers, success with And score have a our Axon, very any managed when that NPS any side combination, account their talented at is

negative XXX. So off-the-chart when an of going number NPS range think about to high XXX the from you that's

And team, team, product success in our trust built our customer these so so type customers forth. shows have the that of just our sales and team

finish so it the that. true, And ARPUs and then a execution see we result. as these is comes to terms up -- across is in going being And just it as also line, to rising sales account NRR those of all of management and things actually deals a get and result down

Jonathan Ho

federal Great. defense these law And contracts. helped you contracts sell other of signed. a government to maybe that this look agencies that up in there U.S. DHS and international federal enforcement then federal halo potentially or agencies terms and Is you've the effect meaning has to here,

Joshua Isner

and there, all that certainly federal X, a questions. say of for kind et needed effect started we've of our kind us impact cetera, to table just breakthrough the Sure. relationship customers of the a I'd authorized. achieve. with there's customer no into clearances big within and ours. network FedRAMP well. opportunity Once government, stakes That was being products the a Level once of then has really space, and military having the then permeated of We kind lot a talked has And great value about been protection civilian federal branches the just of momentum border other as heavily out that in there the Rick

other that there and there, accelerate. bit international something that, to is federally there leveraging here governments. potential think success I could happening there our but is little That's a into

the see space. effects I'm really in yes, federal we've seen pleased So the types of network to

Andrea James

Meta Marshall Stanley. at Morgan

Meta Marshall

maybe the customer ways in AI congrats which of of that terms question Brittany. ways where some XX, ways kind you that expected they is better quarter. they conversations just of of just and having of Gross the just for get these to the and that kind as incorporate increased that features, margins were some from as the are automation, just you some obviously of in their step of on kind heads want around And took plan you, just just which than first then Or just but headwinds want Maybe some of in ramp guys to second of smaller Thanks down quarter-on-quarter, of Is kind scale? of small a that? kind see just Great. question, a than just sorry. use on a Fleet to expected.

Patrick Smith

but of we start here, an a little seen one and functioning positive prototype of times are go ever with I've me you and out at found we we tuned. think Exciting I mitigating where use for AI-powered will what that running in with not Obviously, a stay the least got, question can competitive more give was I be we're a service, AI be going on. the prototype, maximum cagey The ahead. associated to any in product I'm figure is to the value can showcasing of AI, and a a reactions have concrete art very strongest could of that one to we AI customer this risks data Let ton details but wrong if while case going most at powerful strongest, it the IACP, not tell reasons,

Brittany Bagley

Okay. leaves with which gross us margins.

quarter. gross say better software margins the incredibly the on than would were performance I in So expected really strong

for is margin So our business software us. accretive gross

more the we impact overall so there, margin. the up gross build for And better our

drive of I there. would outperformance the So most

was mix fact sensors on TASER the is well. business and why business performed just about that incredibly well. XX that or As of performing Sensors it our fact really quite I still think our also that's down and a bit quarter-over-quarter, the year-over-year also our

TASER overall of margins mix there quarter-over-quarter, high. improved in TASER the Our quite but was XX

Andrea James

Josh up. you Reilly are Needham, at

Joshua Reilly

All right.

of the to of party, deployment. records terms modules some your of you can one. a in In best-of-breed factors large that that Affairs That's if the Veterans factor very openness obviously in were Department just Curious win, win? your discuss what third was a

Joshua Isner

to is which hey, a that digital across link and write reporting. way. have does in have we Josh, it thanks customer every just report effect you what for simple answer this Axon Instead, interested ability no, and pretty easily video video, Records, the that what in wasn't it see to like is in where, much the and this around story connected the And the they happened evidence police that, scalable just directly, was see if on consistent think, driver. you And question. big a a

cloud regard, in and product of that momentum so then very And the well we've his team to a our aids before, from RMS perform And value. in to talked of about in just are Bryan terms just customers going records we've back, seeing product our Wheeler, there. having continues his the time time like and mentioned FedRAMP-authorized leadership

those So of it's all things really a coming combination together.

Patrick Smith

the a add. different experience is would things other One previous just products just just great with that technology. Evidence.com was than other they namely, two shared as had they with customer relationship, are There us deployed had our they they I and

is, believe that would win say us win. recipe that RFPs So systems for and a the piece for were building were software. bad in to I years we we records other decision we to for up building because that's not we made set record ago go the a try Then going

well really the and the we important we it. handle in can win and this breadth integrate up of does on and for the build for of build check all started other where the great report fringes submit boxes most lot great And hands XXX how around then there's a things do you look the go-to-market of a user the of user systems software lot that good you really, no to that almost the set our reward experience. breadth you're build paper of If going sort really, we and to and

ones win great be actually I think And it it. using early with show way, it really the quantify UI important just to them works important in no is we identifying the a not here where cycle. to a first very to document, in intuitive. government which we because spec in that of we used to functional bringing consumer we government to specs. spec way are that offense and the typically people there, that's super those experience wow, federal not life able that there's user could to I typically was did And software were user reason system a they what philosophy, was are government And spent you're test focus to that And then to great, of a think the easy out building this to that that's build and to a user the go, built this got pretty time and large but expect specifications, not hands building records backgrounds because people large specs experience. agency real there's in the on procurement Not like

surprise. So it was really pleasant a

Joshua Reilly

on Got it. profitability a follow-up then piece. just the And

margins year. done really capability nice managing higher the last a You've over job and of

more we can the terms coming this headcount, operating of Should growth revenue quarters? this current challenging of you Or in additional hiring kind leverage opportunity macro. in of appears kind which imply expect growth the manage we would even business the the see is sustainable As in over the coming. with

Brittany Bagley

I think a bit of both.

absolutely to we're So going keep hiring.

of invest our top basically in think, first R&D line goal stated I to is growth R&D. all, back into

with that hear all exciting still and on can we of what things the doing, like even feel we're You we in can we of work have front us.

SG&A investing R&D piece of we from side, need do really we with will we're invest. a the today. And can't where get to so won't from going our to leverage continue robust Again, in but on what flat be We need absolutely to but to do count do revenue Then of hiring we SG&A, are we continue standpoint. to growth, we head ahead there. an very there's get

do material of a is systems, figure weakness honestly, how IT we the on level that sales. of But a growth that in to is support the line we're lot to give and will company better this too investment there. really side our have target get EBITDA much as you that lot see top nicely G&A of the of on all Some out that but can we get require delivering remediated some opportunities margin these our adjusted we deliver And front on out we you because housekeeping of leverage background that XX% in still we'll don't us. of keep in hopefully, very

going year here us there. deliver believe and balance you hopefully, to But that, So head a shows between all this towards there is we we're that and and that. to can do that hit

Jeffrey Kunins

course, of tech world-class recruiters. world-class recruiting tech And requires

that a fun that's So part also of picture.

Andrea James

respect I Awesome. to at Hamblin Craig-Hallum. want Jeremy

to anybody know we've does earnings want in go been got you've are Jeremy, question? you, And No, Jeremy. juggling a on you called calls. haven't off people ahead. multiple video. follow-up. ask Do We I have any

up. You're

Jeremy Hamblin

of little in gone you've where the in to already. wanted wanted back And But terms Yes. just fleet that with are go holistically of come product. you've continued gain Yes, we and of if side down not been move here. -- we I business wanted the to total of into on from in understand of what AI a business. couple ago. it I this TAM the it that the you platform business, and things a of a years portion some to through share in just in -- where as let's of I you're that the value say, trying the tying think couple might where to just the or calls terms juggling where bit about product looks more the to like road. terms understand of, in in apologies do to the changed we on have really whether is the years of fleet

Patrick Smith

what and patrols, in ubiquitous, the ability which would start This like power to just the reading, believe me that one I Well, camera be the license happens given sensors in more the especially to things camera. cameras. in availability I less the battery camera put had to of plate want this on front constraints that And vehicle perspective, where wrong. let wrong. obsolete I car. would expert in-car was cameras and there where battery the a be And highway learned possible that body one car to be state one. reason body have was of would that where do that's keep And not lot able customers I to became cameras who've I just was assumed body is once

wrong have markets people me even And and product. and finding market-leading where we I'm had together a now vehicles some other ambulances been vehicles. with I in have are I happy and policing areas that on military, the that, more EMS, think educated sizable starting adjacent the our like to and fleet So who in customers, think, with who, we're military

chain bring all our our data. think I to and from development together other just AI can with sort could workflow commercial ability to of of opportunities at sort time, of But be our vehicles of the policing types the capabilities, in there move move where value of up speed over on for into the our of sensor in course, us and vehicles and array to that we integrate all sensor future network, capability

to So I would give it to But put comparison more got between just more the be has when different say to stay needs and -- and equipment and the could you business an requirements, and space can don't that powerful that and fleet exact vehicle a know I more do is you've certainly sensors. more here it access TAM two. to power little I able

Jeremy Hamblin

crux made. No, then comment a And that's Brittany the that follow-up also question. to the a just Yes. had of on

that In the of and we're going that terms see the of slightly business of kind portion about thinking cloud jumps larger the these to in business.

jumps. drive to to something Is that we what of Is portion iterate given generating on you're EBITDA terms and margins, in a two we be XX% bigger towards or year as road understand margins. decent to what model of down the wanted on that that expect should thinking going there? us Just that gross a your of portion the the business gets the

Brittany Bagley

them. to both We obviously that other OpEx we haven't given say looking to really any commentary on of between how than gross closely get at and leverage XX% we're margins

for gross as software as is benefit margins. much our think overall to a I

year and some catch-up a playing little about still. year But between good normalize your success OpEx our were working and all really growth take got it's of this we gross runway we're feel Right our camera Sensors balance we billion of that $X also mix still how we think fleet I there. in You penetration And still opportunities business, margins. fleet. we on We've but I'd part talked get gross be see of on bit drag nice margin next we've a going those that's to question on and leverage. that's in the as on like from incredible front TAM, bit. to will and us dynamics now, a

as last is improving the to our overall and TASER been continue we've TASER think thing margins on gross leverage scale XX. focused I we

with to just margin the sense. of we couple to years a of have if couple that got balance benefits gross out mix, we've over So that and next then makes

Andrea James

up. Thank more Blair, Jonathan William One from and at close then you. Ho we will

Jonathan Ho

me. for one final question Just

backlog been you there well? given the Just referenced the accumulation able TASER strength the as to have on you of that to XX Or demand? ship is an call, here potentially

Brittany Bagley

was I a great it's going question. to say

you numbers delivering really what working and job capacity, the some we ramp our but of doing to we or go of been that see really think are year, getting a our of some capacity as into ramped working continue getting on growth can I next We is nice we're capacity from up have to automated. what more hard

Andrea James

and All close right. out. ahead Rick, go this

Patrick Smith

Alright.

to you, Before Andrea's Zoom. take James. call to moment a earnings Andrea with us going acknowledge to off, This saying here and me I quarterly last want thank on is be

closest the advisers. years and reset here one going time to has and of to that fast-paced the is strategy with success she's of had my transformative Axon. some enjoy A.J. after a So Axon fruits been communication. and leading and X AJ personal investor has at driven relations, take

of had to some growing the were around are to to we and decisions family. with make XXXX, from most how couldn't preschool, our success in And the in last day that end got spend remember might back a [indiscernible] some the be of how spend conversations when with spends walk one quotes we've wonderful I opportunity advantage talking my take year to Europe we the her future. about and disagree the kindergarten kids she important in XSP, every life a my assessment time budding and I favorite had as we I kids my of A.J. the so And Axon. go from of her time. and about

and amazing had Axon. work, we doing at experience and here he's in are So talked given advisory the Tesla board about

our that service not your personally several in Eric, be have dial, thank to mission. towards so to of ground our that, a friend. know an industry there you, And a A.J. on great want colleague all years, the very having running. relationships and to I'll In hit Eric at for And she's drilled will next of of continue season. that joined He's with She'll I So is it's also to smooth behind in us and keeping earlier ensure professionally see our happy really acknowledge speed and transition. many a growth. the with proud and grateful profitable formed scenes. in just I I before I we efforts. of confident I to Axon. lead year forward the middle goodbye. joining We role support us advisory our to year a IR an of this look greats. the our the to want really finish from all one catch the analyst the And you least are into a baton we world fully We're you wish all for February. more team's finds you execution. He's holiday and been piece, And hope to strong joining. year. to We're wonderful

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