AXON - Earnings call transcript Q1 2024

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Unknown Executive

Hello, everyone. Thank you for joining Axon's executive team today. I hope you all had a chance to read our shareholder letter, which was released after the market closed.

You can find at investor.axon.com.

Our prepared remarks today are meant to build upon the information and financial tables in that letter.

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

of measure each financial non-GAAP measure measures. description and certain a directly discuss non-GAAP reconciliation our shareholder most can also will the as letter We measure as section Relations website. be non-GAAP of Investor in of to A GAAP well each comparable the our in found

because our like great every quarter. Now a our start It's about pilots more turning way good to We minutes. update. got show from share this quarterly of our teams. no to shortage think We've there's we a business, you to and it's a to video about off quarter X with one

Let's pull up. [Presentation] it

Patrick Smith

Thank us to here all to today. for earnings you, joining our call. want you all welcome you I and Eric, quarter first XXXX thank

kicked have incredible Axon. year off be shaping what at to We up another is

my you, the the vision talk we just video showed me saw we're bringing You and about by energized today. I'm in updates you

critical the seconds We in we us. faster giving us a responder of decision-making, or first it information of excited and situations. about a security. as drone opportunity times more before is that obviously ahead response one areas First, very improve will aerospace DFR, I'm believe drones, extra robotics act and I and anticipate massive drive is

rooftops drone positioned planned scene, with day sight. allowing our times line the including must a remains in one sight. The visibility proximity primarily so of of these am Dedrone of in of Dedrone's conditions and military operators civilian protection line clear deployed low human conditions. daytime solves other a means applications. the to with technology need field, applications the to already without operate to along enforcement planned of law usually believe of extension critical several and is That on in aerospace first direct important, acquisition an drones a to indispensable. countermeasures robust the of is about era in just Dedrone. maintain same new drone drone emergency designed element At are more if not are and becoming and resources responders, exist situational tools, date we As helpful we drones the believe forward the of to use enhancing programs. DFR observer standing requirements critical hindered namely and a push harm advance improve FAA a this already deploy programs optimizing that awareness reducing widespread to limited response risk and equally, responders even a human first to of tracking mandate DFR of enable strategies, scale, of rooftop time, the current not the Axon with tangential strategy stadium, with through responder they're reasons presence We relatively thrilled become operating aerial at limitations close in have into first on innovation, limitations, of the be communities. But in human to announced I ensure the the and That's our virtual allocation to security, of natural a each and observer combination infrastructure to

visionary the AI of potential initiative human recent our artificial and about from we than applications one realm able is passionate unlock I of saw most is the do across us AI innovation will we video from every era. on body ago, to of the audio years reports intelligence. One you that showed, and in more accomplish to introduce video. X ever our beginning the been camera, Draft past. In very police our the I'm we to look element resources to briefly capital we've here, has AI these times area leverages the produce what back Another day born believe offers

in our and per hours events under infuses stakes introduced day. And critical found new monolithic and innovation about in they're or their and slowing beyond U.S. that communications go. their improving the to into include there critical reports. raising we're and them and age, And potential, developments live for Draft the that where while to will together awareness time their while new officers most believe One, to in This also achieving XX% With our not bar studies training and expect their two are what down well-being. on giving introduced next-level examples our with Our feeds. We streaming, through giving our operation two-way spend save several could that lifeline real-time capabilities we're allows work improve human time writing sensors, a every portfolio. or with modern pressure writing and essentially their VR on on they which XX these customers week the seamlessly will we're and our report are high voice audio ingest of video the cameras focusing continuously video is our application, mobile spending moonshot new solutions in own entry, situational bring valuable to we networks are agencies performance of expanding goal. We've of audio management on the each and be have evidence to expanding communities, that ecosystem communications areas we massive families, data we is in them and training X be just other hours

think epic delivered the and it investing, are take the just than police ever. our where chapters to few to the public truly market important the is and devastating We've a minute we're tragedies number mission I seen of As of I acknowledge we over last what that between in over, to more months. reflect early I and story. And still unfortunate pass a the I on we've before want an

end. Our departments innovating protect We're it thoughts turn are I'll with who families future are Josh. a remain out life. And to that, the better over times to are for these mission with difficult dedicated to to that and our experiencing and we

Joshua Isner

Thank more and you, to excellent at share about Rick, another humbled to Axon. I'm everybody. quarter afternoon good

across what portfolio, VR we While feel good cameras, zero of team the execution. of are is now we the and real-time full mind, is pipeline closed we the continue initiatives. XXXX [ at ] momentum most TASER type linked history. about We there's just it and on-body for entire much out focus have to RMS training strongest customer in our awesome worked the bring the be across build out our our we X strongest deep lost team customer-facing teams key ever are for hiring safety my continue only has happy our increase the bookings as of being which more fit no Draft and operating to to on the in technology first game very report our set revolutionizing our the quarter system the been leverage started in it we year. Since within or the team running to to of decade. over quarter strong TASER public safety, on doubt testament This changing speed that our a and category driving really industry, market has of pipeline ways that. I the beginning XX, further the XXXX. we record healthiest to in of this to platform, the with our development better the best well-equipped the in for R&D product I start proof not importance directly and the will results next a public for to stage segments. company demand. Weather, all we that hard on at the year In focus or and to major the quarter is am so in few the QX, is us budgets remainder close, There's operations our market, think it's

Looking new and emerging have brought are become see we that contributors market growth. markets our state believe opportunities law are meaningful enforcement domestic We customers for ahead, products our many local more eager the results. to we to the and adopt seeing I continued our to

Web their One to like our Revenue the of the Cameron international Cameron presence, me channel is Services, could where new us excited welcoming Brooks and strong Middle their recently which business I'd for many expansion. Amazon accelerate our international things excitement East Dedrone from most Europe, about that in he note, public gets led as that came share sector. Africa On to our Officer. Chief

international cloud and to unique to the tech. Cameron will is example helps more from attract world, powerful drive companies As the a Cameron's of of the most a wealth successful how experience Axon our spurring adoption cloud market our we across talent and mission in us the our some to best of asset be team. joining perfect approach look adoption

my Brittany, how want highlight Axon. to at it I pass I am over I briefly to teammates Before grateful for

We years than to and move we ready and ever. X have faster are our fortifying spent the last rebuilding team, leadership

our of than We're also delivering our to best than adjusted growth, and and focused mission. right years continue in happen approximately the X does just consecutive both business our promised. This the the recorded scenes. greater commitments best EBITDA our quadrupled the without on years. over more We a to products are of lot quarters not kind ninth strongest the come, right X years and the areas delivering our compounding on of We last behind margins as has without in revenue going on things and financial people and quarter XX%

play of it always such to that, energy I'll to important lives our Brittany. and behind and it's results, we our saved. And all, embrace next encouraging the with organizational pass continue most metric strong collective to put that While deliver you, is over mindset

Brittany Bagley

revenue, XX% EBITDA. came by the XX% year-over-year Josh. camera big TASER and more for We're very lapping by growth add-ons at This users our year deployment in for somewhat segment, you, TASER other XX growth and again QX upsell. Demand year, which levels. X last increasing revenue supply of also proud as adjusted XX.X% year-over-year both supported year-over-year. catch-up driving cloud in last normalized both remained Axon quarter We Sensors offset of the availability. of grew on QX this revenue robust results in in from and and Body grew driving XX% premium we're had and top product by adoption from top drove growth revenue, line supported growth services with the revenue our now fleet XX% Thank

in we revenue came our over of domestic Justice growth international, our and markets. end all enforcement, XX% to addition QX, strength corrections federal, from see markets across including categories, Enterprise. In healthy other our adjacent outside like across In law

the Our quarter almost and million, for ARR it revenue. TASER year-over-year, up now includes Fusus and our XX% is $XXX warranty

adjusted from We net increased was we for normalize maintain to manufacturing. threshold, compensation whom under continue grants whose we revenue a of of made in the retention QX, to compensation specified many gross to margin employees a stock-based introduced are resulting XXX%. In

TXX keeping below margin reminder, is As of from This in our up benefit X% annual from XXXX well this and we've average was in improvement mix We we XX.X% didn't rest at balance representing commitment. Adjusted gross a improvement. from as have quarter compensation was beyond, pressure mix keeping dilution as QX. product committed year an on of XXX to for or shift adjusted the and to margin XX.X%, this stock-based for that point with and a the quarter. do hit XX.X%, fact increased the continue onetime some we gross basis XX% for ramping the EBITDA margin to year-over-year reserves as capacity. QX expect any

strong margins, of points contribute leverage operating saw In benefit addition gross to basis year-over-year. approximately we XXX the

quarter years mentioned, this As Josh margin EBITDA strongest in adjusted is COVID. since our X

X approximately We're financials through the continue we timing able driving expect line the are and balance sometime strategic be to results. organically Axon. both Rick is our to plans did do welcome a to the business. thrilled quarter This We great rationale. From included closing standpoint, close summer deal growth top this Dedrone in to financial team investing and the about to job with inorganically over to full and to the XXXX strong have pleased of customary our in a subject talking conditions. to

last from M&A and over Fusus acquisition billion. The talent and and and excited to our and to on of by step slight overall acquisitions future quarter. Today, market the expands real-time increased delivering road a areas from is our our bringing capabilities overall the year assumptions are investing that vision. we into our our business, Dedrone relative of our next still robotic core map adjusted of expanded see our our billion, total, that Sensors $XX continue We able and to We've expect factor highlights Dedrone In another would Software EBITDA of more in Sky-Hero our and margin. impact $XX product these market. strategy refine business also view Dedrone segment. TAM TAM as from to we should addressable critical closed, guidance our and expect billion and and increase we $XX security incremental acquiring and to XX% markets, policing to Dedrone you the growth, to operations, in further technology that this for potential our small acquisition have tried addressable integration billion. our of costs Dedrone our incorporated than other and both is their to our planned our will would be $XX updated acquisitions by complements have into them once

our I'll Finally, turn to guidance.

high our incorporates of both are guidance of revenue to at the increasing midpoint, our year billion, $X.XX approximately XXXX This prior our increased above our end the We year. to for QX full range annual outperformance guidance expectations billion growth in the expected XX%. XX% which XX% and represents $X.XX to

down While the have quarter-over-quarter in $X QX, forecast. a revenue underpin we strong was for slightly pipeline future our year contracted billion to to

know. of an from Dedrone year, We expect have reflecting we also everything included revenue currently to this we immaterial come amount

the EBITDA adjusted approximately up and impact of XX% million, We line best to on our approximately margin. expect with on $XXX an guidance $XXX million integration implies prior year-over-year our and This margin adjusted year. of in includes which EBITDA of estimate from costs M&A

on TASER capacity outsized expected performance. And top line Finally, we we've strong in as questions. also to for that, execution investments continued can $XX demonstrates our up business as our We're are as CapEx the meet demand to would investments think to to the it to ramp very across continuing both we investment to deliver the these quarter like our open pleased so XX. for strong future million for results year the well to and $XX increased bottom the with with million and continue I

Unknown Executive

Thanks, Brittany.

all [indiscernible]. our think Marshall we're Morgan question at first take from I up in Meta We'll Stanley.

Meta Marshall

question and whether of dig departments Congrats quicker. you I into kind I'll you processes the Draft on approval that just a of then couple One see and foresee maybe of sense long departments get for upfront. the to major a a [ guys. include of once sign-offs needing ] that approval quarter, Brittany that can wanted how kind second And this go just for much processes

the the for Or accounting Just to the year? to for the what of contribution inorganic between Fusus just and Fusus contribution kind of kind of you're year? Dedrone

Joshua Isner

Yes. speaking the Thank to for you did Rick, want you very saw much I you us there. question. off? lead

Patrick Smith

of I've years. introduced. officers introduced This product is any career get this exciting telling Yes, the lot a enthusiasm mute I would seen over we've start not ever we've products for most police in Yes, had background to do probably by Advisory I in mean, lot myself are I there. on there. did you, that as what putting done be writing attorneys and we've we're We Epics a district those. and speed work with bumps Council against as Equity reports, risks make and well others our testing and looking the sure at of the

and Draft they're the getting pretty district reviewing telling us X their report. we're officers writing are others the they're final theirs. But the again, agencies on reports the that reports are what their we than they're partners, that realizing when own. using better obvious that So are and are important seeing really rapidly It's it's is attorneys

get their us for pretty make very as integration. predictions, soon easy low. officers it, again, figure to lot for adoption so and it's It's we're feedback while of use. with is fantastic. us it a the as overall And require simple doesn't to turn finding, friction to to they exact And pretty any early on. how It's is for to This out pretty experience services professional

Joshua Isner

Yes.

like a sales think early to half it, next the come in we're going some Just with add year, selling really and revenue I that, think already just orders be we'll associated into the and cycle government, pipeline the ultimately seeing but We will there see to ultimately, to this building. anything is in especially margin in-quarter this start and of year high a second contribute well. at as in

most officers police have to the any what officers instead street the results, we of that the about hard to So our of put we're fact the on from behind but forces, computer back having make add to entail about for in here it's propensity outside. that to excited climate very will a the where police incremental excited police hires very this without

this about what product entails. excited very So

Brittany Bagley

Great both are are I'll growing really and top growth our question. to Dedrone take your I line fast our second say immaterial would question. rate. Fusus and overall but small. immaterial to they're They

we're So the is make pull sure on a more you giving in cautious given those all do we've that good costs little guidance the a bit year. Where for and just them incorporated absorbing job. businesses really EBITDA, into an us we being having impact to integration and of see

And the some to through really QX the EBITDA of pulling so margin invest. see for year, not need those to rest see you and of us the impacts you us where as accounting we

Unknown Executive

on from at take Barclays. We'll Power We'll on? Alyssa Shreves phone. muted Alyssa Will next are to your you question at our Baird. be go Might

William Power

it. whoever QX to revenue QX. really strong for in growth take strong percent on question Congratulations results. wants mid-XXs the first probably I Obviously, guess

deceleration. some imply raised, guide, at you look does If the year full while it

front of QX year? to conservatism broader just versus of love Any that forward the for be remainder great. any the into get thoughts on on So would a level pull perspective

Joshua Isner

see total like I'd as lot, to the you. more get year. we our the for of over Yes. Will. Nice usual, say, to Thanks on a out materializing see year revenue we skis before

nice always to hold. It's see revenue the quarter. easiest We're slowest excited about worth the year-over-year off We is QX and of comp what QX comp very QX the to year noting a we're start. will be also strong. terms of tends beyond So the pipeline the in for

like -- materialize we're we'll that and cycle, sales of And don't think do. year to or any that there throughout have we the out pessimism the -- as always to year. We'd have great we're certainly not it's we update any reason so kind of just just another see to yes, in going in quarterly terms not

Brittany Bagley

just would other add, last I that we're the lapping Yes, year. strong very of nothing than in there sort embedded year a fact very,

William Power

automate to help and meet commentary as I the That because just Yes. other is on time, automation color gross enough the demand? Maybe having maybe how Where sense. impacting that's the quick can with over ask respect margin you it margins, are on going? sounds like and question to it's Maybe update second that just investment -- gross you but all on any If there a probably supply makes you TASER. process it. should initial

on wanted front. Just to get that some I color

Brittany Bagley

Yes.

better even think balance and sort of really you see which capacity initiatives, we cost-down XX. on I this summarized continue that TASER to on for we're in demand ramping than well, and we've is expected focusing between working really

we so area capacity. to really And in where be we're continue that ramping

more we I growth that mean You had because QX. that in supply was XX% come through available. in saw

and is that our timing, team supporting you out you I bit for lighter longer track. And then demand. It quarter this a business. getting nicely in. figure a And I really us little as hit software was cost-down and at our balance. the to going pretty try do a say that's But is hit next capacity TASER that mix devices a that versus look it's X how some customer also nice we overall, a those as versus our might initiatives ball would QX. margins the crystal we we just year, doing to little think to have strong best rest of general out that devices of and I would our and say bit matter figure take online balance and to software the look So were ultimately, slot of on in that gross as into our the job shift

year, to And we through health expect some a devices balance I'd so as that bit. go and the down

-- year not that to say So that, that's is in gross than that's us for margin probably all to that's the in get guidance better embedded QX. going it trying was

Unknown Executive

at go Keith We'll to Northcoast. Housum

Keith Housum

Question for you, Josh here.

to seasonality the In business. terms of maybe of a type

over obviously, last quarter. it years. not the about grown quarter first yet, decline. have guys so several You time Probably -- sequential we the bookings tremendous quarter, how a next this I so the talk we about for remember was this much And you're year for of at look fourth if years? the bookings your the seasonality as to year a thinking much Maybe look next and

Joshua Isner

great Keith, Yes, appreciate I question, Yes. and it.

regions only on and There's to getting lot side very story one, reasons. Number year, the a off cash in, in year kind go quarter QX QX. last for I as like up where ends one like customer QX of the we think change, bookings QX salespeople. means of can. Its means the of my book urgency the coming ultimately, we major the is budgets up where of and of you add really cycle fiscal business. similar the speed just where a a U.K. no in really the strong said, really that of then only But That kind remarks, we not chips rack where point to we I low were in couple because a bookings in quarter through where of hard a we're the on said the QX. year a

QX pipeline, remainder in year. so I rebuilding you, the but foundation, the the of kind for no red the bookings can tell about of it's building flags see And is -- I

really I to respond strongly. is team think going the

certainly fire some usually and lead And a team. I good kind of under think and out that good to that's so-so it's really, them quarter, nice. tends X, can of always quarter to We've X. when expect kind sales results, in a after we quarters here X what light got I really a

I'd yes, the here come I'd So kind the QX in of indicator really but bookings, of not say for to future, for low be to future. point an seasonal consider what's expected the

Keith Housum

a terms great or And question think are start about going -- year year seeing a it little bookings. another to your Okay. follow-up federal. for Are growth? had deployment to great guess, overall of Or longer, be contributing schedule? do in we year to How last those here? Federal we a [indiscernible] bit I deploy that kind of revenue

Joshua Isner

-- these bookings, years. lot of large federal These they are into multiple a phased

tend product And it's when revenue or the so we to recognize side. deployed the on TASER is shipped when

some some deployments of just so the the And to healthy in really noisiness deployments I the We've in got where when federal phased we opportunities there's that pipeline about previous of Federal another the few shipments bucket but had said the large when really, is year. a expect are for business and of headed. is and are here federal feeling when next that register done, great in the certainly sent year. rest are those We're bookings, quarters awesome

Unknown Executive

Thanks, Keith.

Josh Next, Needham. Reilly we have at

Joshua Reilly

just So areas with from your speak their of maybe you that the like perspective an NYPD, solution, Corrections ensure the from issue to know, this cameras of Can engineering is York customer you don't from there? the in malfunctions? force a move police guys battery what for Department cam other how following product we just from a competitor you body New could cameras. with as body higher asked to level, in, a quickly catch done if have on And with fire replacement you

Joshua Isner

was I And there first this to about thing as a a is of Thanks this. part captain is that Josh. Yes, lot. say the want injured

our the opportunity thoughts we opportunity, about We'll when this you a feel bad deployment, scenario invested the so course, deploy what might him of our happens and be are be with into we're all front ability these meantime, of to pillar, alluded indicated we're with the ready have into see into to with products. -- here. in hardware pop there us, we'll to stuff our the focused certainly of we've it's happens thinking a that Like continuing great them. business and on really have kind lot could that's we in and lot and a to, and you case and great We're of And a and -- what's of hardware. that. a invested products. just -- we invested build We've scenarios good people lot type our edge into go. But We've devices through fringe up

And of perform disclose say will through these them. secrets any I in-depth about so lot how feel to not engineering, we're edge our going any thought we a here, kind good and trade of will we've potential cases, in products

opportunity doing and in we'll ready. keep presents just be what's so of an And in in meantime, the front we'll if us what we're control itself, And of.

Joshua Reilly

opportunities a in Is had anything quick stronger? to versus strength know the TASER the there you domestic quarter XX follow-up just in terms out of here. a I call strength Got And automation Australia. revenue there the I benefit then on of big for international balancing the being automation Was it. TASER because QX X in then on. taking bit thinking that was tilted equipment that the coming was hold in the little the second for And in versus automation half.? just some more

Joshua Isner

the XX TASER then after. have TASER it's XX cover brought I'll -- to Maybe or a I It's ever out the TASER Josh, we double. demand most cycling by we device mean, popular monster, automation Yes. X the TASER talk about market. the is demand like and

a credit TASER We that quality. talked work we've on with world in moonshot step a pillar and is all entire doing us a the ramp that they're lot continue so our do a to product for from indicators to Rick that journey and outperforming firearm, strong high meaningful one to that about, and all the it's over it this great and see this the product is puts

save And is as fast there out it because customers get so We we to really to I will as think with demand, lives. can device to faster. we this ramp our a need want believe

And so we're through working that.

maximize is have more and Of bright in the But of every doing we're build on so. capacity process to invest quarter, future course, automation the in side. we very XX TASER to our very,

Unknown Executive

We'll at Jeremy Hamblin to Craig-Hallum. go

Jeremy Hamblin

quite and or which gather talk most a couple increase to wanted new years, significant. acquisition a you've as sense a there to Dedrone, more bit in-depth community. Give this is bit going among product getting out I used, your opportunities, you so little pretty how how for a in the in occasions potential be that you've your through is deployed in expect for pushback TAM, this of a the a us segments X it's be immaterial of as a potentially X to sense on And material you here over the the that it as this product this last today. in say, but the there's of where customer now, substantial contributor, Is a just as let's see about years? do well to just sensitivity -- type had X they is the had stand while X for

Patrick Smith

Yes.

everyone what threats modern we've from presenting years in probably as public our major game but get that one to consumer-level standing changer, these were is was drones to be safety to are threats as take world can where a drones insight there, up leader business more events. turns real going also in before pose. had stadiums to small important infrastructure are, me important Air, drones And even started. new recently with deal A that ago, that they're we the when new critical to that seen few important out Let events, Axon an warfare how

new given their is widespread lot especially their in vector. aerospace. an that, And that them local with that threat about so Dedrone safety don't vector pretty drones Dedrone, are new a actually, of to to be aerial seeing entirely we're And because and again, monitoring represents, support people able see really the expect we the just pushback threats public government, protect

first Now by the drone be can enabled Dedrone. which is a responder,

that. having to great helps aerospace want if So deploy a Dedrone part And really aerial visibility of your is both then drones, control you threats. key the of own

calls if being comfortable publicizing we really people decisions, that that really those population. better their Now policy about lot these with concerns to support. police gained hovering find are good of calls some the drones transparency a help much can not make are DFR I to may but drones. gets scene understand XXX eyes most more being think in to how just and respond it gets combined being help. about resourcing really that, does public flown agencies can the most drone missions over present used for respond government people They're being and to flying That, people But on being used flown them quickly the are used helps they're have and

only see the So will more this to very and finish We already we as so. being drones are transformative out, material become to think be future. proving to

Brittany Bagley

I would just fully. standpoint, Rick say from a timing echo

behind heavily X a us see it certainly standpoint, from it of, and a I will financial investing our Is now? I question think be it there's really to from big you is security. is years can pillar a it robotic X business, mean longer? of

a a long-term the growth be targeting I X think seeding that's future, than now. or for years to really business going years year a trajectory, in from we material though, more many are

Jeremy Hamblin

Got on it. following Helpful up demand just incredible. here color. the sounds X, then for this which And Draft

is competitive it's in although market and thinking the in of solutions there? because way there out of it In to that maybe it? looking the is that there, you about terms there's such law how is have you you not already simply enforcement a natural get fit see of terms of your competitive that lines quite giving yet. Wanted product other where ecosystem a rolled out entering Or just other advantage of sense a for are challenging the lots set, out that

Patrick Smith

extract And would come video records to think we your be that ago entire that one your evidence able critical. is really other seeing one management record to written Well, the from have in entirely but a invested system, the only in we not bear. I and saw years X coming, system X, was to but reason the ability this because this to be we're

community evaluated the from the dealt and very what we and combination the rigor between we support just we've great always players, concerns the with board. experience user concerns across really in think about providing which with competition. customer whether district the a to It's risks it's want attorneys and a of critical we earning the and little all competitive trust stay invest through So a paranoid of really market. But legal and ecosystem

the that with think chose high our bit I more camera risk accurate think, to that intentionally introduce it's minimal in very we leads better, some is may controversial. more using reports. other a AI know compared we customers especially payback we've given an even which vetted well please record, directly a the we risk approach. And derived more customers detailed, way can because from done derived a pretty to where it's very body our this evidentiary video, that areas for this is And be today AI obviously, from think area actually here, can

Jeffrey Kunins

reasons had said, about our self-aware audio that's competitive much about about you on We've while as about. building from saying, action. Rick we then way, that we for so perfect and Draft Draft as these in of results people that using tee into showing talk techniques possible. And lot principled was that of why the effective concepts and it. second put large momentum cameras for in always, of healthily about makes what [ of our ] we talking thing, scale of customers at together and customers the the years it's the for both got up And is as talk AI of Just -- excitement are so sort transcription of actually we building Rick number it customers with and up And customers, is the body proud are responsible landscape. believe a now. the obsess and the a footprint why that up were X the being one ecosystem the ways all appropriate with it body the growing early combine and themselves camera X them really we're in of video And and very records. doing several We've a

Unknown Executive

Walsh Next, we with JMP. Trevor have

Trevor Walsh

ponder product Rick, that coming the but just realized that was or maybe example, we for the nice a kind of Is us new Fusus, opportunities pontificate of of around for is Axon AI if hear around of kind AI [indiscernible] bit -- in proprietary it's kind that. of all places could there of around start worries play little for the It vendors the things the commentary where of when great a for AI drive other data for relying or kind I necessarily from don't AI and new out Axon nature one sensors or of on realized for not coming data the Fleet. kind any you. sort as to you sandbox versus wonder of the to data, just -- kind is gold.

that terms kind a of more become people kind in an issue So sharing of data on of longer-term basis. that

Patrick Smith

most Well, be data solve we certainly sharing safer, whether and to that want haven't yet. criminal members mean to really schools, that they activity identify seen community, that to it in help the data I their put want to use partners and to do be through able Fusus, it's And agencies or crimes. primarily partner that churches, the enterprises, other they police of government are be those sharing better because are jobs able to of have are businesses,

I if want you of color that that? seen have might any to against we responsibly sort data protect them to back know So people haven't on using pushing add don't better. Jeff, you

Jeffrey Kunins

last and right? of to a things as as ultimately, -- of is, part, get to the much providers and with they that that helps that fronts, about [indiscernible] including with building much of and you ones -- the data access for sensors in and you're in having enables one in on vote to one not think businesses that various partners choose things work for vendors us to aggregated of well data we the concern much this the are we've of are the and feet Sure. other where And question. differentiator. our the right incentives is differentiated time, worry reasons so large us data about all of keep work case why No, particular kinds is choose tools together. community, they as they ways. At we is built they and us they amounts customers' One of want or work to the both I -- to the their Again, fact, the powerful multiple noted most the with, themselves one how thanks key really one years, it the the over put building so same everything into and it's mean, their

voice so working our the that keep to nicely And in to differentiated us making sandbox, individual a play really of they there. as are powerful while possible. as incentivizes products all

Trevor Walsh

the piggyback of more of Maybe UAS That's some type terrific. either? do quick into bit maybe cases, [indiscernible] [indiscernible] counter Dedrone I kind counter-driven much to for one the the follow-up, one some whether or the really appreciate of lean maybe there. about follow quick that's use color safety up, a that you intend [indiscernible] How comments. customers

Patrick Smith

lean intend we hard. to say would in pretty I Yes.

the risks. to we ways drones is new set our as mission threaten from And that to being to protect try those XXX% to degree life. lives, to goal that are see our create So to protect used in

a major interesting for could this of as military, only useful our U.S. critical see not bring indeed, being opportunity real have where can for we sporting well. set new example, a a So that Dedrone customers, ecosystem end to customers, and set internationally, new infrastructure into stadiums, our us existing but to is is up is and and Dedrone those both they customer customers

Unknown Executive

Joe JPMorgan. have Cardoso we at next, Up

Joseph Cardoso

with guys questions. I here, time value there's them And pulled just trigger follow this on that partner been acquiring owning. on one Bone while. you've yours think first for working the up you isn't the wanted First you Obviously, of a the to a in

which is can time to the guys just is Has like sorry, of have you in body a right participating? as parts any but currently some know any in differs like appreciate. Or cams. acquire your relative the time Just maybe we and to change around of type you curious to to right And has terms that just there change line, them? talk for and that don't you follow-up. there the it why you doing thoughts of drone participate been technology -- I around want opportunity to then change TASER relates been you're talked -- the now I maybe maybe then what And there stack whether about

Patrick Smith

take do first Jeff, crack you want to So that at one?

Brittany Bagley

I'll timing of talk why Maybe pieces. then and can Jeff about technology do now, the

things. the an couple were sheet balance knew in a of So active standpoint a did back One, I M&A strengthened raise from think get capital XXXX. opportunistically of more as fall our and there's we to bit we our we going why

was importance that up to and the the puzzle talking really pick go Rick and methodical consistently pieces wanted of security. and about where out pillars be some so the of these could of the really has so we and that And road map been robotic strengthen we

have Dedrone having help indoor those so squarely us drones fit markets. That and them, Sky-Hero support and in both they're for robotic independent makes an on and just security does company it for everything drone the And support tactical future, into Dedrone of counter plate his vision DFR come everything in from what for Sky-Hero with about as feel like it what of the their to of all sense given when thinking right help us. to else versus goes together to timing when they back

the not so in had that from They it an out talking acquisition them felt us. sort right made much the an worked of sides knew timing-wise make timing very and we're about this that and other for before is ours. we both for acquisition, we think that there when were standpoint. of that might them fact out we investment partner big invested nothing We And for I that than a

Jeffrey Kunins

join stack, kinds et I've you and you between that over are partner, these by layer best always fantastic other the just well teams then really from of time cetera. ecosystem. worked my each and fantastic at decades evolve ecosystems building about across do really, there, where those they're where balance to the businesses other this of opportunities to decide X Yes. great spent where, in question can time, And on of what or see, of sort about build in delicate self-building across always get drug the partner lots trying growing things for personally thinking we of you're again, over the what's best And a I leverage that's and bringing with providers all as see, on see and target, of combines are combinations and software it forces organically. And provider. where to hardware going, is over those key most by time see the where can in we very evolving this very can but an decision ourselves we the the you us, decisions with tactical based we self-building by now, with looking side with hardware things? As surgical Sky-Hero others with while you at ourselves both example, made drones, focused where

we'll all organic and do can go. as we continue evaluate everywhere work the as us and as you that be smart done then build to stuff and we've see the see PSS we carefully with You of

Joseph Cardoso

the what's Like color the the you as year. through about CapEx the but maybe talk And second into on accelerate this quarter, there. obviously, the it just like appreciate today. pipeline being I raised investment growing. us Maybe my question, for is slower early confidence you talked then plans to your driving a just can bookings

on slowly? and a quarter? associated some later would of appreciated. Or the capacity kind adding Any inflection more of around expect more we coming a with capacity should in the magnitude is bigger acceleration maybe just of that into future, a maybe over dive can think online, in about is these should being the then coming as the we part about investments you it why pull investments just just more So days capacity acceleration timing this then be investment gradual think today XX and versus we that time, as right? And or automation color second

Brittany Bagley

Yes, sure.

best drive I ever commentary the out of pipeline So the and would focus there. you of on Josh's had we've coming QX really when said part he you it's

contracted yes, think and going, hearing see QX, we we at in can is I us all like, but revenue that our indicative guidance you're of what future which not see softer commentary. how think slightly you our from I is had from the year

so too more do wait needed we basically at the and pretty run growth don't our the that our way meeting equipment that and at for the to we to we we lines we for we're long buying in to to out to then QX, our invest capacity. And and capacity have look associated said as manufacturing, that. XX% so at And look demand, our as with TASER keep in is pipeline, there's in lead times customers demand that want we products invest order we as XX, specialized look in

capacity right XXXX at this making have investments we increases to So in basically point. start support now, to

So there's no inflection point.

we trying nicely of steadily our our us that backlog fully, out maybe for ability to in in XXXX, meet meet to see demand, ramping saying capacity but the just caught a ramping don't You we have slowly our increases, so to and get front capacity we're of increases And don't get to to that not demand. it have customers time. going amount significant and

for telling it's us enough that online. we we when the you I confidence waited making I'm we're So we're ahead just in that's XX bringing have If is on mean prepared in later enough up XXXX. being it to think were the have XXXX and days really sure seeing just we we prudent and we confidence. ramped that pipeline getting bring days, would XX got that what and for demand

Unknown Executive

at We'll our Ng Goldman from Mike Sachs. take last question

Michael Ng

as two have well. I

body with and installed you and, talk still double-digit I'll uplift this then in I beginning low software Qualitatively, dispatch? think First, a growth million Is up standards it, line? how way bit think driven the a across about a it? just in base and user Or quick base fleet? more little records Services, is should call dollar this good And the to follow-up. on more from $XX in Axon this ARPU growth quarter-on-quarter. growth and we Cloud sequential are we to was see about it sequentially have the Can about

Brittany Bagley

that We was recognition. with Yes, big We've of online, coming revenue about that talked Part step records so up. some million. had recognition to I that say particularly how quarter-over-quarter was of is was revenue in going of step-up little really a would from QX last lumpy. our be almost year. $XX bit a part

I in out particularly step if up in normal think line quarter. be QX, So indicated $XX like quarter also had we've to what a our large and is, pretty like QX. But leads million then a that smaller we step step that continues to to a slightly and sort you each feels healthy pretty a of QX quarter averaged with

Michael Ng

is Great. RCMP in the field some -- And from some then Carolina were wins I Rico? Cornelius, themes if know have a them wins or the testing Puerto was you competitor. wondering in the could across I North there going? been on comment of any Are Axon media of that reported how large

themes costs terms are driving wins? or of any So in product that those

Mike Garnreiter

I'm Great Mike. question. general I to on a of Yes. give more Thanks, little bit going a you answer them.

in be low-cost to kind the in a our we've aspiring the of aren't we really going really, this business built be said we've about think what that believe and is I case not lot vendor we're space. international that's And perform will to We other can not we the And believe in valuable. can they always the solicitations. this field that products and we say in vendors our we the for written as space. perform just

or is in start that And and strategy to a discipline when in so at lowest and hey, the times, out upfront cost products point. it long-term a on this a they the lesser them have the do is say, something their use And of come the front test price takes built then served customer where focus might priced well And and while such it's we that's with is think should like, it's we see on winning the ROI a what bit and product where what hey, oftentimes, lot police we've belt. if on little the look And do right of might conviction else they are, we've differently end, their their feel hands that really on higher. even officer at or they because internationally. that's we a shortcomings chest

strategy, a see that international we're of that's to got the and markets. so And out play we've starting right conviction lot in

Unknown Executive

Mike. Thanks

We'll this I thinks it that's it out. to for today. over close to Rick turn questions

Patrick Smith

incredible updates year, thanks with all to of you show. Eric, to thanks, in entire excited and joining. and proud our forward more they of continue we Well, August. We'll team right. for look this you you execution the Awesome again seeing again be to come I'm and later really really all to to

Axon Enterprise (AXON) 6 May 242024 Q1 Earnings call transcript