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Axon Enterprise (AXON)

Participants
Andrea James Vice President-Corporate Strategy and Investor Relations
Rick Smith Chief Executive Officer
Luke Larson President
Jawad Ahsan Chief Financial Officer
Josh Isner Chief Revenue Officer
Jeff Kunins Chief Product Officer
Scott Berg Needham
Charlie Anderson Dougherty
Jonathan Ho William Blair
Keith Housum Northcoast Research
Will Power Baird
Joe Osha JMP Securities
Erik Lapinski Morgan Stanley
Ryan Sigdahl Craig-Hallum
Mike Latimore Northland
Scott Kessler Imperial
Call transcript
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Andrea James

[Call Starts Abruptly] 2020 earnings conference webinars. I’m Andrea James, Vice President of Corporate Strategy and Investor Relations. Thank you for joining us today. Today we have available Axon CEO, Rick Smith; President, Luke Larson; CFO, Jawad Ahsan; Chief Revenue Officer, Josh Isner; and Chief Product Officer, Jeff Kunins.

We’re really pleased to bring you the whole team. dozens this calls where is in different done public as we’re has a but company, the location. team of together earnings a all This first one

analysts adapting. over lot today We of there’s right earnings do is on we all day joining today Zoom. we’re now. that calls particularly you, investor’s for going like thank Just a our a and appreciate and our us know And crowded I

technology Our company really keep has conferencing to video connected. embraced

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let’s from hear All now right, Rick.

Rick Smith

Awesome. flew different and February our team to Andrea, on on we everyone that employees, today. joining last vacations. are from home; Far or where we mission. that travel we less may does work the curb to agile not it, environment to the from all adapting we our call message very QX business feels you superior against vigor we ate and non-essential conditions to in our it gain thank to to world, for this world our in travel days adaptability and reducing with what was new and to Three us which meetings later XX, we aggressively We clear mean and leverage to spoke update our very our a use now Thanks, like competitors. pursue we restaurants people into meetings curbed our will opportunities seek you all changing but ground Zoom as for are

tweeted President, the partnership campaign using the and of the in free to Citizen global and for Pence, Axon access remainder the XXXX, attention a some of our initiatives supply to even chain PPE to for major Axon it. weeks, about including Police address forth Foundation, with which In National nationwide crisis, this first got past brought source who has Vice responders giving

time money donated employees to Axon of number this large or A personal cause.

risks still significant for to match PPE. are Our continuing donations and we responders face first

us protect the keep Donate Help are able investors, axon.com/covid us scroll our and Go to safe. you, If those support button. and hit please who do. Now to cause, down the

lot over face customer my I’ve my have with getting person teenager, I’ve time a travel than than film I’ve was and from and more time had home product with that’s possible ever in Fortnite when with had lessons and from we day, in son Even customers personally Zoom five about even kids, meetings. my working different for doing helping more I including had, been higher demos been though a Zoom my some to daughter, person. meetings pedicures far

the we as than well. customer in is So way will Zoom up. personal be any years this Jawad engagement attending I at now velocity as can and conferences And quarter my past time investor those more into

it’s proud be never customers our and become pleased on I I’m be this on using well to customer see increasingly technology driving leaders have how had used meetings thought productive. to was today and to We’re them crisis now adoption, most to the three conferencing standard. technology COVID earlier of before adapted and video

Citizen they’re them ever from what me. reduced and even an larger play change Here’s safety. staff will and and being adapt to this seeing technology to rapidly telling with It’s learning I’m crisis. working more customers digital the forcing role what gather the courts, are in due portal and prosecutors those Axon and personnel They’re public prosecutor Customers than as changing evidence is thrives our new on a sharing world needed with business for and cornerstone using every the evidence world in Whether Axon or change. post-COVID. to it’s process from

great key at we we’re conferences industry Luckily helping and innovative replaced thrive them pretty with us. them to industry of group this expertise events, for loading move leadership to partners some help a their online. thought in so both a world canceled bit new reputation being our have good even throwing We’re and

Now about future. talk the let’s

the unchanged for remain our pipeline year best Our strong. estimates remains and

if in any ever any relating the our better facing budget step ascertain who’ve certainty unlike in the horizon will simply the a to us possible government However, rest know customers pipeline out uncertainty additional but are Currently the not macro us to now. will to solid, aid federal right they’re cannot implies environment of is we provide Giving see than large governments. over local state anything you remains to shortfalls that and how of the shake seen. to and sales level that or economy guidance of

no and shareholders To acknowledging has in not most higher the though Hence, guidance know the of be estimates than been unfold recharacterize imply to increased many do acknowledge until telling business level ahead stabilizes. something Chief our speak of have environment those even to will pulling We companies normal we’re today as Officer, believe world characterizing you’re the the of if don’t blunt, uncertainties want prudent be changed, we estimates rest macro doesn’t, longer to how so where in interested. economy pipeline best formal the best where comfortable the resilient namely the can very uncertainty are have to strength on see We estimates that we uncertainty. months. level the would Isner a has to our line, the that Revenue he by environment Q&A an Josh our and the guidance, we the coming it during we our

I on said, be Axon. All bullish that more couldn’t

We agents. are change

changes approaches the Revenue had last wearables Officer, emerged rapidly Our as integrated our from managing we cloud isn’t Axon the faced time XXXX, transform to Myself, for many than all financial we’ve from software. world, unique through when are and adversity. has far tech difficult adaptability innovation advantages into the business device overcome. we’re together the This the making and In centric Chief world crisis and decided curves recession lean a now. simple happening company as our we an TASER first ripped in right learning transition entire our anything to which and business this That was stronger. being is manufacturing us President, easy

But leader at space past retreated, customer. advanced as now a exactly now safety the into we software two major the first new cloud agencies; and or year, in sensors. evidence products, clear in-flight digital Axon just management competitors ourselves deployments in and when went hosted the live that’s signed camera live market we Dispatch, In with our software more we’ve established Axon as opportunities at which Records, and than we dozen shipped is public

and $XXX cash cash and and We revenues. that strong flow is with business Today Axon debt generates in an stronger recurring underlying QX margin nearly ended than high ever. zero equivalents, million

expense, QX XX% year-over-year. grew adjusted million, $XX revenue EBITDA compensation while to than year-over-year Our our more And doubled XX% stock-based net margin. was affected a by income reflecting

several moonshots in We have progress.

weapon power. this Before will we a millimeter decade launch is stopping outperform pistol’s a will X out, TASER that

effective. to continue making system, transparent across make extend efficient. reach more fair it our will both and And we more and the policing justice criminal We will

for great value social or continue and our will create great you, shareholders. We to value society

President, call the turn to Luke? like I’d that, over Luke our Larson. with to And

Luke Larson

we’ve the team, and employees; on leadership our priorities; safety customers. our one, two, number health the Since Thanks, going key curve; as three, a Rick. initiatives COVID and to part laser-focused three our doing flatten to key support help keeping been of number number

Josh have home our lines business out Elizabeth to up to as to specific want and workers our for want shift give allowed CDC the who months. customers recommended out a a are last stepped of open ability as to people to I mission up of VP our all lines. our support keep for to their and entire to our entire IT the with give keeping They’ve from on Ops; team; two I all heads actions Axon’s team, employees. critical These of work Goldman, shout up the workforce knowledge front shout Hart, running well our really to who us truly guidelines.

mission in decision globe keep added major risk occur, factor they lot that manufacturing on awaiting customers in X our to key they enforcement first Body we and points. mission tools critical shipping X. to safe will sure our Early Axon to was responders it departments, receiving flatten our We To continued to many police our city to law making and part critical to open. compressed of need of shareholder were employees our keep from precautions and work. health XXX paying gross a employ’s around safety asking crisis, even basis do have the though out get began high margins devices, TASER the From groups detailed departments we letter a and in the lines and Axon by we that in TASER messages couldn’t small their be if our that keep our communities anxiously

our to If quarter off the QX you customer be Dispatch paying even we and ability initiatives told live going key launched a keep last be thrilled our global we’re a pandemic. We would quarter we first would shows with that this there by were no This secondary bit sooner. results even Axon’s throughout and live. for went Dispatch mid-year is Axon to that major company the start milestone beyond that a year, kicked our that phenomenal headline COVID-XX, strong a

Dispatch software rapidly entry growing into billion a is and real-time our command $X control market.

also XXX which and The We’re pretty of the call powering is for from operations empowers is personnel. firefighters This the is goal dispatchers, hello our hello. to to the It takers, in when first be thrilled That’s response, medical an arrives. first shorten what mission the time partner. protect officer our Maricopa, to involved industry incident between command, everyone here time software city critical life. to XXX patrol launch dispatching time to calls an officers, to somebody calls the the

as in back. for the to Officer, accelerate call rapidly leaning prouder seen last this is Kunins, our us and we particularly doubling on key Air, Evidence filled senior and Digital Axon be of our in and has VP including of velocity with initiative continue leadership while engineering of I as the down SVP holding with that in global Chief hiring, and new Management, rather Vietnam tech far Product as software in our quarter, Scottsdale. today, well who’s Jeff Seattle us to talent raising particular, key roles our grow couldn’t rapidly always In GM and hub we’ve more than of Another AI, hiring bench in

really has to the out as one. Axon want end of customers. a other section in and team crisis is Thank to our started the employees, with well I with I all as a out another leaned great my each during to you dedicated employees. support to our This that shout

CFO, our And to Ahsan. with that, over I’ll turn it Jawad

Jawad Ahsan

world unprecedented. today Thanks, since changed last face earnings The and the we our Luke. has are challenges call,

our on take and come today, stock resilience, pride, where confidence. stand three words QX I mind; As and to we of reflect results

the that I’m campaign source customers. of made campaign. to have the for to the cohesively PPE more the we stepped secret of We infrastructure way to testament with systems productively, first way National our even our no even a to our work our of love contributed proud distributed workforce. hard employees internal in worked in Foundation. place. the responders I’m proud partnership our tools, for Police a up I’m of into new proud continuing and put the adapted employees It’s with to reality, support that way we’ve and nationwide to

an this our conservative This SaaS have we purposefully be to our as resilience growth, investments stronger the emerge and enterprise has in balance At storm that aggressive us brought and ever. sheet. stage device the our with weather chosen us connected and with will to company, allow than strategy

our channel in investments liquidity and are and Our position is strong. both exciting exceptionally product yielding returns

also that add seeing three are We to emerging resilience. trends our

agencies Citizen considered software and fostering current discussions we’re cloud about it, the and globe. wouldn’t of to value Axon agencies is First, the with the have crisis usage demonstrating across previously that utility

move pooling step agencies order as And the federal benefits we’re law bolster to may spending, devices. in to devices committing which third, and sharing and stimulus to outlast seeing more rather Second, the or Axon standard government have budgets enforcement crisis. than law issue, seeing we’re that

we operating the rather budgets majority go-to-market that an bundle than Our of as being is agencies in as unpredictable XX% sell increasingly expense. model is products of our capital pay out to revenue more contracts, And recurring for tied their treated XXXX. resilient,

has is revenue churn for has six business, us as customers nil trended the our factors; it our why we net months business XX-year important SaaS look how is other terms two most about X- and sharing contracts, resilience key at of annual more metric captures retention This past our XXX%. us typically giving sign the contracting almost we’re that become in companies. to over than first, and The In an metric today. SaaS at

contracts In tools portion to second, upgrading all software recaptures in customers retention of advantage of given new to of year, we our their take Axon that agency offer. some the are have any

contracts customers. Axon Some a major XXX% and at committing our prior our value and their we testament cities are again of proposition to upgrades resilience, SaaS to the with to offer that’s

look we remainder out are as feeling year, the Finally, confident. we at of the

and pandemic potential the ability one to be this We the for we we our cannot do withdrawing wide to is a feel extent impact of are we impact What and today in business time. and know serve on evaluating we the at of crisis markets that known respect full current on reason, guidance our of ongoing range confident this through the crisis. are scenarios our the with manage simply

internal and strengthened. In remain federal fact, same. our XXXX to our goals the weeks, In pipelines have that we’re international managing recent

plan hire We and to execute a continue an officer’s continue to multimillion safety closing we dollar, tech pipeline large, robust upon talent at contracts. multi-year bar-raising accelerating pace,

are uncertain are employees and our significant These being impacted times, and in ways. customers

around resolving show to to continue the to grateful our ingenuity employees of We’re all and world mission, our execution. incredible who commitment their

is While we’re days one us. for unprecedented of best thing sure, ahead still today, are adversity facing our

us the take to that, to questions. through Andrea With turn over it I’ll

Andrea James

everybody Thanks, Can turn your view? your camera we cameras? you Analysts, see Jawad. pretty Moderators, Okay. onto up faces. can want you to on bring

Our – you. thank first question

is question from Needham. first at Our Berg Scott

Rick Smith

Scott. questions. your ahead Hey, Go with

Scott Berg

Q&A. Hi, is thanks. of a a well. minutes This late couple everyone doing for to the I little Apologize, Hope call. different is was

I’ll a ask question So guess. redundant I

You’ll see face at it my least. in

I questions. couple guess a So

couple us help been that maybe Can On XXX%. would three Has terms Has for of up? the around you of down? that XXX%? the Has gave, net been retention at over That Jawad in understand be Good you Thank metric. disclosing compares that been that metric trending? it. just that that revenue years helpful. how last

Jawad Ahsan

been disclose something the stable we’ve we’ve past that been we’re to that started quarters it’s is proud over stable, It’s It’s enough start few one that. it. the it’s that of. decided Yes. it disclosing of reasons Scott, to it’s around very that

Scott Berg

really inventory over doing And global protecting level? inventory I that obviously, from Got it’s three the kind around increase then from large uncertainty there. you’ve the something that you does prescriptive opportunity? issues of think how just a my some you do And it. move of levels you’re couple follow-up doing, or least, yourself eye. are of reach of think caught seen that trade quarters? kind a approved you the go But given perspective, question next in because high was it components the the remarks At that

Luke Larson

great question. Hey, Scott,

of cycle We well big with ahead well AB markets upgrade have international expanding X as to us addition in in a TASER adjacent expansion. as as as X corrections

level supply our for That exhaustive up and strategy us the enough through to for an customer months. And is has actually so us great a helped right also in being few de-risk demand, say inventory what make the can expansions. have chain, went that we to sure these we and of ended fulfill exercise last

analysis also fulfillment. to managing through We’re going see inventory cash now our year-end. another We have are customer want levels the right levels throughout ensure right that free to we’re support to what but flow, the

Jawad Ahsan

Yes. the is to We about I cash material want that’s add, to how the the be we going we’ve a think it right And going financial that have thing mentioned. to that position to this to in to it’s sheet a It fund to that a But advantages of do think of that one be from with just for perspective. so to use Scott, fairly year. the that be got inventory something to able built. that’s be balance reasons Luke

Scott Berg

I’ll that’s the Great, again. jump back queue I here. Congrats, have. into all

Andrea James

Dougherty. take from Thanks at next our so Charlie question much, to guys. And we’re Anderson going

Charlie Anderson

guys Can me right? hear you all Great.

Rick Smith

Yes

Charlie Anderson

of yet at want year. just this do, that’s you’re great that demand it any COVID-XX push want like on effects seeing a the sounds as like the on sure strong seen cancellations or haven’t pipeline, that point. outs congrats Well, to profile. sounds that correct, things make you Excellent. not characterize I the to to to start of I the

Just you’re are real characterize want as in conversations to time sort as as evaluating of the seeing far what cities revenue. those

Josh Isner

great question. Hi, Charlie, that’s a

want Before just right an I’ll I want back away and very very we She her. our it, for to involved to her customers, April come and and time sad the who I active a Police passed been we’ve longest is one officer out family. of answer, acknowledge of in Department, to just department and standing and and Breann Metro Indianapolis Leath officer supporting due in her acknowledge shooting to

have on around didn’t risk themselves the the and during are to want families here day. responders thoughts putting and quarantining, front lines the the support our acknowledge out and first also their customers, We and who our or sheltering-in-place all luxury we’re world, of And with this every of them are time. at prayers to

to it say is minor there to pipeline, pertains to and the as Now accurate pipeline. been some it have adjustments

for a hearing are their revenues impacts qualitative federal well expect as on support on and And in budgets. forth, tax that local. as do some are and We state agencies basis so question there’s that

On the we’re also about for that the customers is reason our issue to flip from side, product. thinking COVID hearing they’re standard some going

body contamination well. cams sentiment we’re limit one to not TASER, equipment or as So is way sharing whether and that hearing it’s

a on so both think here. I little sides And there’s

now So major we there’s nothing do material right that But the risk for respect either a way that at exists the view as with pipeline. COVID. this unprecedented we to disruption have point

very our and federal, of our much. focused local, on of state And to and year well. fulfilling newer so all this certainly build international our but long-term goals also in pipeline, channels Thanks continuing terms as we’re some only not executing, and of

Andrea James

a have We do you follow-up? unmute, can have one. if Charlie, you Yes.

Charlie Anderson

do. I Great, Yes. Yes.

So that color. thank you for all

guess I also it So, curious relates software. to I as to, was

this as you presents relates your the to incumbents I relative Records on guys wonder potentially if there. on So strategy to Dispatch, for it opportunity pricing an and

the consider thanks. that as curious under, sort be So I’m of that any so Yes, they may of pressures you’re that that seeing. creates you opportunities sort

Josh Isner

Yes. To view certainly an as this some opportunity. extent, we

in continue our continue channel with virtually to product, are and we and We the than invest, connect creative we’re ways customers to the ever. investing more using to

investing the COVID, still are without certainly to feel we product channel reckoned a force we’re or bringing and new product we side with in like that and on the with, in both think to I any market. side be

in confident CAD, these And so whether very, be the competitive we’re RMS that we’re going of to forth. in very all long-term DMS, and it’s markets, definitely so

Charlie Anderson

guys. Thanks, Great.

Rick Smith

not okay, but how the stronger Yes, officers strategies. safety here. thing is fantastic COVID list approach but a really fantastic we would and broad want do strategy go confidence actually the add elements much, those to win element has allows my XXX every of one getting so to I of try well. don’t I the would to officers developing have plan it’s the sort products I that system our basically does that build software by know really, and say impacted user with win software to battle in and things user-centric try decided – of day I key our We day to to boxes, our check – officers really experience. the through And that of through RFPs

to I strong with sets every great for software, And and be and as expand start oh market we’re we to that is to that playing a it plans on experience field. have a us. allow strategy small our a out wow! them touching ultimately makes that the procurement experience us it great focusing And the they’re hearing, by the have time position this Like appears really in things long-term think cops that up

Charlie Anderson

Thanks.

Andrea James

Okay.

Blair. question So at come will William from Ho next our Jonathan

Jonathan Ho

me Can okay? Hi. you hear

Andrea James

Yes.

Rick Smith

Yes.

Jonathan Ho

Perfect.

little the a much targeting? mid of pretty get that you’re of out, market, potentially to you want about high-end, better and a looking what of CAD of I the with guys just things system. range market segment you the low-end the at are wanted and a set sense that maybe with Since there’s to a the little bit new can bit rolling talk you’re is, feature understand One that what system

Jawad Ahsan

question. Yes, absolutely. Great

So and/or that’s significant Maricopa incredibly product, market it a with the agencies, Maricopa live in to coverage GA our beyond context, Stahl. and fantastic at handful And with happy the with say customer first of our live in a put pipelines year, customers thing be be percentage I the for is first route a of SAM this deployments active in and just we’re of first, Chief to goal en match. end fit steadily is first next sales to the XXXX, we U.S. with growing for to strong excited

what the currency is RMS, kind accelerate our in building on. in specifically of on coverage so of a that which now are journey means to they unit customers that which the great for And you for need, same continuing records to question and up for your way of fit what we’re well for which

For CAD, the main whether dimensions fire a and law primary serves are, once. one, time whether a the And multiple at given the jurisdiction, or at that the aggregated only is jurisdiction dimension it’s also serving EMS. key serves an dispatch jurisdictions if then or staff that jurisdiction serves serves a second it’s piece single enforcement

jurisdiction so same with of a an and becoming of single law then for specifically in we’ll been with a playbook whole we’ve subset see there there, awesome, And is doing one potential progressively like enforcement starting excessive kind so only, for on agencies excellent great what product those, customers. that you’ll Records from of fit tranche

that’s overall approach. our So

Of number the of in we’re categories agency CAD. of to the Dispatch. going course, more way, probably and then time in point to And both share Axon I’m confident over Rick’s will early it’s Records that up-leveling operations and in very be productivity one buying leader records for case up along days, to the wind end-to-end these real-time the case much the criteria about be

said, one loving that are Rick us those bundling be state a together adopt. market the building, are things to as loving no customers just X And approach Plus two going journey, So going. overnight. illusions But it’s should the easier they’re is any to it’s what OSP have where and makes buy helping the way and multi-year we’re

Jonathan Ho

follow-up, a as when coming cannot? balancing your there up, competition are the you. just with some of challenging would do helpful. between operating be that investing you Thank and environments Any leverage maybe think macro And color Fantastic. potentially about how

Jawad Ahsan

and went with. Yes. we Jonathan, actually great XXXX something that’s very into a question that’s purposefully

guidance and have in continue is is geared we’ve in this in team we to had that as aggressively, proof our continue seen the try getting the we’re year, year international for metal that lot Our market, we’ve of bring are making in that to positions R&D of double previous products the products some put the disclosed that footprint. of A the sales very we’re groups our a the markets it’s to we’re investments seeking product budget on debts. Records that about we to very the team to in expand to channel. aggressive which those towards open in and because to grow, enter down going like to pedal And points started our these those is our

Jonathan Ho

you. Thank

Andrea James

And follow-up? Okay. great. do you Okay, have a

Our next Keith Northcoast Research. from Housum question come at will

Keith Housum

with across agencies? this Good there. our business, and software in second, Josh. morning, was sensors I everybody. sales good Probably quarter. different few just more And very this targeted you the the what’s a more board was or question strength weapons international widespread for it is the a Josh, was color some hoping could provide the or but perspective. that Is

Josh Isner

you thank for and sure, Yes, Keith. the question,

channel. of look not to that success. that couple pay feeling characterize And point a in We we three markets, year, it the that large but were were as we for at very but in Tier success years ago outside international as, would at So two good years I pipeline also ago, the our investments of having of really X we of starting made little results, investment seeing X is really Tier only look, off. rest or the QX I’m the

of starting revenue were saw of to CEW to and X team’s those and in CEW we’re the Tier I I strong in throughout continue also side, X we expect putting side, of that Tier world, the the especially been QX while to some terms the fruition. a work XXXX, on so that think lot see And countries from on rest meaningful contributions coming

Keith Housum

during could then second going correctly, points just I said COVID the I a maybe as I pressure for, on margins commentary that I employees thanks. Jawad, gross guess, you there go thought XXX back if into to on quarter? a to if paying Great, is basis And follow-up. And the then continue heard of a for time. guys before, was

Jawad Ahsan

Yes.

guidance. not This to are, is mentioned one on the our basis going in but margins, QX. to estimates, earlier, for degree to internal is guidance. going on it still it’s We’re as disclose We of issuing margins our going what to things to had I not managing formed previous about which trickiest weigh weigh the

On be we’re that the there’s traveling cost are that person seeing to to There much. flip associated some savings not able that. in side, now some aren’t programs had we’re with savings, and right. going People as we to were also committed that do

while going what are than degree also it. to to slightly savings in offset that we are we QX, in going QX impacted see So to a saw we be going to are larger

Keith Housum

you. Thank Great.

Andrea James

best Thanks, one, – in anticipating we a calls come answer came Keith. question learn. call to of earnings is and think We webcast? great actually. test anonymously earnings And on but experience, it. that It Zoom the would public, a says, answer thinking, weren’t a plan our yet. iterate thought providing so you to good it’s I design that, from did continue I one I Do instead traditional

guys on back it. like if come we’ll We’ll you you that to see one. So

right. All

Baird. So from our at next Will be question will Power

Will Power

Yes, great. a Okay, questions. couple of

take other impacts that broadly. start a with respect respect themes transformation to digital that seem in me about along conversations that. maybe COVID-XX lines, that’s Records, focused dialogue so with I is wants Dispatch just wonder with into Or having move big saying entering the it of one to kind Luke you it more it. talk on they’re those as Rick accelerant question to enforcement the cloud, you’re law to or an or to you’re with and as and broader particularly not whoever for trying things really And the let yet? is what to Just software, to the was the feed of

Rick Smith

Yes.

pandemic. interacting. Let this engagement really silver is been this I many this, eyes take bright me literally, I I this cloud had have mean, never I velocity. meetings their some talked to linings think ways customer there one. to I and are new my customer of about open have that the

is the to They’re in controllable over expenses should our I seeing able future an more Zoom. with customers should more effective that travel this that think be to we engage. that be way engage

and also here ago lining again, me silver a were where a shift telling other perceptions is this has started is of two enforcement of another years few lot law negativity. that things. police One, facing I’m to hearing they sensing bright

flow a pandemic Now More cops people there. this and thing this than where by XXX into almost federal And for the hopeful government being is combined. like actually guns in realizing, policing good so first that’s fund that it’s are accidents far support rebuilding that year cops hey, public and helping the will vehicle a responders. killed sort and stepping out we’re that those thing of are are

is, been the some business talking is week that past deliver strong. to instead more to the using to to them The people side to court. to stuff the do evidence.com. And forcing to disks now this the things or the courts impetus customers with on of then put getting agency that digital desk, want prosecutor it, evidence to differently have successful to where in it resistant to We’ve other prosecutors the pushing are courts was downloading start I just of start been burn start accepting right?

of our with out alpha hey, And the I’ve some patient. find let’s customers, been

servers to don’t need They negatives upgrade are I previously it’s they COVID possible. see wasn’t it. that say, it for And we well, a I are hear browser. online. look, barrier the Let’s don’t look, technology stuff, everywhere break need experience. one to things to have driving the like change is, of courts of find some us our that And Like to down opportunity don’t That’s need and going music let’s their judges fantastic great a They systems. ears. the install and hey, move

pushing other the example, And resistance calls, to about and than I’ll There’s one really thumb whole from give the with Europe. Look, hard drives where cloud the in sharing reason customers. stronger going of team what officers up social evidence to engage out with to the hard be and move a want CDs public. drives cloud-hosted platform a of for ton in talked Axon conference we you using been a bunch you on of to to world just for reasons, a Europe the push could your to mainland risk in or we’ve Citizen been pick digital distancing a minimize we’ve previous

include to hearing I digital long-term been of than this changing have positive different. drive across don’t back report transformation. looking anything other we’re traditionally the we can change, what to Customers use help we’re lot material quite at and have is they’re a resistant change, know to we that quite which board can how

Will Power

– second my ahead. Okay. And go

Rick Smith

please. ahead, Go

Will Power

been about second I corrections, in row. calls a say, you was going just up of some my Well, several the I commentary. know have all on talking to a that follow was question

now. other into right stand I How in to that me, of with in you’ve numbers, shipments? referenced Where opportunity? does long you really kind Any a that five think quantification? takes ramp of that front have relationships states terms of bigger maybe

Rick Smith

Sure thing.

necessarily into market. far. corrections. they’re our year year on use independent work And much And in focused up past, specifically body were more third now we’ve last on a coming there. on excited an TASER but side this on more the forth. of there wasn’t so that have in so focused about about becoming ramped the benefits camera where the are doing And clear. control It efforts sales side that we the much So riot focusing are we cases And a terms really obviously place team and – the I’m

really obviously safety risking COVID a environment things on is their contained spread jails actually in are because through quickly And hands officers one COVID could of given going interesting that. like by the really

of CEW from past, risk from So faster we’re hands them officers segment particularly on having than keep to the in seeing in a investment more go and the infection. potential protect to cadence on a

the see meaningful the a on So both domestic corrections part of long-term we state definitely federal and more becoming our on business, local level.

Will Power

Thank you. Okay.

Andrea James

Thank you, Will.

Our from next Joe Securities. Osha question is JMP at

Joe Osha

Hi there.

to to Two doing This good for with a job Thank compliments this great. such Zoom has my IR team. starters, questions. conference. you everybody been For

time. see went plan recurring I might shift to way payment those a I’m the sold in there that was that customers portion some non-U.S. TASERs over just wondering whether the of about First, international. potential the think of behave shifting down as be result a

perhaps resequence And one. just of questions. cause chain CAD. had had a how We’ve of We’ve evidence. second We’ve at might is little whether a general Records management. a more coming wondering are the priorities it’s those question Axon sort then just I’m this had my crisis Those bit.

Josh Isner

take second for your I’d thanks the be to and for Joe, then question. Okay, over the one happy one. hand it first And

subscriptions, Tier our market. we in already international are seeing X that on actually So

UK TASER UK, customer relatively it sign XX over plan. in pay the they up already to the that for is in the TASER on UK is common and So in Especially like agency a Australia, every a CEW U.S. Canada, agencies in contract where a for months. the actually is just XX XX

there So nice through moving direction really as has the Canada lagging job. They’re just the transitioning TASER we’ve the a has yet. authorized that team to not fact done subscription. Canada commonly distribution in is that to little due well. a And bit behind X been is Australia then and in sold

right risk ball might multi-year is Tier say a would some moving little there There some complication more in in on especially X where the the that direction. be more of forth. engagements I and so collectability of X ones And volatile markets so and is

to set closely deals to the make signing. a business. international to confident up very it’s pivot we’re that that more subscription But to monitoring type would expect sure fair we’re in say So of I we’re TASER continue on very to

Joe Osha

Thank you.

Rick Smith

second of from machine. think continuing I’m Obviously like and the of we on adapting there learning as Axon to that part Yes, a question.

as been focus always more. the have think to we But validating continue in has prioritization we’ve the what learn of to front far data that reserve our transformation we right us. front So and I of and re-examine our so wake from up smarter in we us seen of

which sensors double on down about management including is in productivity and across to leverage with we’ve to relation continued the investment, signals, and new operations our Really and forward core in with we for as TASER be real on investment, [Audio categories, forward. aggressive R&D our go and time CAD. records looking and of Our Dip] communications investments pillars categories and the like the

and and bigger sense, but that in these some Air those prioritization. to great makes We pretty evaluate the pretty Axon and addition small drones are the feeling CAD the those And and to that those into But of evaluate seeing live in make those up taken if right feel of rest continue like got right and when last we’re the regularly describing and we’ve like been sequencing. what records we’ve the each with that best about go areas fall, the validation we’ll we in good the with adjustments about we’re in to as and we lake.

Joe Osha

Okay. Thank you.

Andrea James

Thanks, Joe.

Our Erik, Lapinski Give me Erik next at another video question from Morgan your second. is off. is Stanley.

Erik Lapinski

Can you hear see me and Hello? me.

Andrea James

ahead ahead Go question. ask. can’t you. hear ask can the We go it, We and see but and

Erik Lapinski

Sorry. may dispatch you dispatch like I’ll kind cycle share just were customer finalist like roll initial anything but from It look on with the could limitation interest on kind you and customer trials maybe me rollout, paid of typical and of be some and that mine, a learnings of sales and shows would what ask that had systems over from and the there. what on of first kind of

Rick Smith

that Do apologies. my breaking little. repeating you Erik, up question, were a just Sorry, you mind

Erik Lapinski

Yes, no problem. now? Can me you hear

Rick Smith

Yes.

Erik Lapinski

quickly the some what share first you what kind I dispatch from on could had customer pace of your you were cycle. the maybe guess sales of in paid It’s the Just of, learnings there. just rollout and

Rick Smith

question. Thanks thing. Sure the much very for

think like of I focused we’re early learning. all just customers, kind with on right really now

references for is gaining have And and priority we success so working stories. higher deployments. on that a But pipeline use customers with CAD us we forward a some early to of cases, look

pipeline. customers, next three at is making we’re the to really that that’s for and continue focus so build ready lies And scale interest to where our to five least we sure

to can segments with already. speak convert, are there product. the in we’re interest success seeing a lot starts So We the to that pipeline of the when happy their in of it all from market that customers product and plenty anticipate

And so CAD excited very, of very the we’re business. our about potential

Erik Lapinski

actions any That’s there through then kind perspective consider the promotions customers or could going I one from or I a you’ve in follow-up, maybe your could where pricing helpful. or you you are see, everything like just you license help And potential if accommodations could year. kind guess pull that impacts as on of thought customers, of a this look

Rick Smith

that, market, budgets. the or whether the Sure. challenges customers of budget Nothing certainly those of have some that voiced really across they’re timing

just – on normal point, through these we continue right one monitor working to approach seen executing that them our having now type concern across We’ll basis. customer one of the from per and a Frankly, make going But of certainly, a it at deals. like haven’t still overarching the we’re this on But to base. we’re certainly plan necessary. we to But on off kind program kind an market. We’re of adjustments. yet we’re as don’t

Erik Lapinski

Thank you.

Jawad Ahsan

on a would Yes. just just can to And add different that device buying have products individual I ways a customer plans. multiple we – that today acquire from our several we

one. day They premium benefits and just Plus, plan, of OSP is aligned around Our customers. the can the as X start leadership team are the using very this on

And so that’s been received. very positively

Andrea James

and see popped Erik, you, now, you Thank you can guys. I up.

So Sigdahl our question Ryan. at Craig-Hallum. from next Go ahead Ryan will be

Ryan Sigdahl

your I’m is Hey, guess to background start, fake. thanks, to going And Andrea.

Andrea James

got You it. others? Any

Ryan Sigdahl

Jeff. guess to going I’m Oh,

Andrea James

Seattle is the XXth hub. background our floor software at Jeff’s actually So

Ryan Sigdahl

Well, two Okay. for anyways. take flag out I’ll some of one

Jeff Kunins

visit we’re when open. any time Come,

Ryan Sigdahl

Awesome.

a TASER here me carry off, today, the follow-up corrections, on percent what on correctional For approximately separately think officers body and cams. to just first of the you then XXX,XXX do

Rick Smith

the and in are by rapid those numbers Yes. we’re relative population. growth department. But really of state, making progress show in some state low overall quarter Qualitatively that both to quarter to out really

prepared space So start a and but to capture lot meaningful space. at to some for white think white of not point, of we the that first firm momentum numbers I’m there that, that really this we’re give on a qualitatively to seeing in there’s time market

Ryan Sigdahl

want XX%, of XX% XX%, Fair to baseball. if in to a or talk innings you just ballpark put

Jawad Ahsan

that stick I well, appreciate – the sports we’re answer going one on thanks. the analogy, but to first with

Ryan Sigdahl

seems X, launch. the recent TASER the for declined on just given it question second surprising bit consecutive Second quarter a

So how within segment think Thanks. you mix year, product weapons of the the remainder guys do over about that

Rick Smith

thanks again the Ryan, question. So for

seasonality. and the just strongest of year. our QX that’s think I quarters QX

slower of quarters off been coming two kind have strongest So with our starts. historically what

large to X TX And strong and expect to meaningful us work of and QX to pipeline in on TASER deployments. we continue half we’re year surprise be huge as change with QX, here. So it’s not the agencies not definitely sales to back we as the in build are going that that a

Andrea James

Thanks, Latimore guys. from Mike Northland.

up You’re next.

Mike Latimore

Yes, thanks. okay. me, Can you hear

Rick Smith

yes. Okay,

Mike Latimore

good, Sounds thanks.

that I think said the this you I point last into about guess, you that year, guidance the visibility original XX% have year. for kind at was of visibility. what

Rick Smith

Yes, year with we the into typically year, given in any about Mike, that.

a was increasing. less I business, believe. SaaS little have last we it’s think every year year, we as think year to continue I on been probably, this I we’re progress mid-XXs, And the in our

Andrea James

QX be typical, are higher make the It’s full What sales percentage much that this a of would year. percentage QX.

Mike Latimore

Sure, start Makes okay. records recognizing more the I sense. to of quarter going fourth you’re And revenue. then maybe quarter, third believe,

among what get bit little catch event that there’s different think a up – features launched, have the of bundle. a already I customers purchased As

ARR from So bump kind what might get it? you of like

Jawad Ahsan

Yes.

revenue not thing works actually is time. we’re over of catch amount accounting up, the to a same we’re is a going going compressed that get the period of first to The just way take

$XX million it’s about it’s that million range in $XX more is $XX to online. be get million. the this to at $XX grew products, going our of specifically, quarter. software million, we be, we towards dispatch And top end $XX that as of year, million And going the those said to there’s not had catch-up that contracts. be felt cumulative to our conservative remainder of to was million So was we we And previously and was as that had per it’s But another what the right that going step going over our We now a pretty likely to It come range. records going materially up like long-term think – contracts. quarter. end guidance AR of $XX to grow

Mike Latimore

go sort the of terms this then many little additional international touched cloud adoption, you’ve these to some on How in you Is the right won trending of Evidence.com in And are bit as that cloud? willing in internationally. with earlier, now deals a of just but direction?

Rick Smith

say to the internationally, region. in not the are Again, leadership in Yes, and the I’d here, say the a here it in direction. governments dealing and Things each local right governments credit trending the is across team’s huge are CW. video direction I’d trending we’re and federal with state right and international like in everything generally government. team – these

deals past. have we do longer than more in So in interest more CW’s past we cloud seeing have these but interest are in to than materialize, take in the the we the and

Mike Latimore

you. Thank

Andrea James

guys. you, Thank

Rick Smith

backgrounds. guests reach to like and ring Ryan his special the hat for the thank I’d to throwing out in Andrea, on

get the any I’ll your addition of to wouldn’t if Axon schwag, Axon shirt so yourself schwag on. today, who we And personally best you to the throw because want get want their you for analyst tattoos, these ring all to one in pay it encourage in tee fancy to hat for

Andrea, some back questions. more for So you to

Andrea James

Thanks, Rick.

to even actually our like who’ve been Thanks We’re emailing investors buy-side getting me. our on some call, the for investors guessing. on it sounds of And kids are in it.

I like, love that, it’s So I cool. just, super

thanks after your is, guests emailing me So to I’ll call. for respond the

Okay.

at Scott Imperial. and Scott, from your is go question ahead video us. for turn Next Kessler on

Scott Kessler

outside. to the out there. guys. feel person Hey, don’t questions, came next free prepared, I so jump hanging any am I to in have unfortunately

Andrea James

Okay, that’s great.

it not and We like and is if who I’m you’d wondering, dialed a a I’m number ask have sure to XXX in question.

Rick Smith

Josh with got that want was big, the what’s I Andrea. that to Can sure Scott going room take want that addressing epic in focusing and know. I’m time the with is Well, that may I the first with on, there, elephant – we’re for can going Isner. to folks beard? you on share you You’ve waiting on maybe uncomfortable

Josh Isner

I Thanks, really Rick it. for pointing that appreciate out.

made shave At reopen. office my commitment March not I the Scottsdale start. late until time, like yes, would looked early April, May in in that a it a cut or early So that I hair

and on world And to and at am Here we I bigger right X. a X a world even me June now in it’s day. of been are my is every looking wife in hurt May extended of hurt

And time slightly look. So everybody, next thanks Rick. different be the I it’ll hopefully see appreciate it. a I

Andrea James

right. All

window. via go us follow-ups, and if any our So know chat let of the have analysts ahead

time. minutes We questions a some on we’ll taking more off but I’ll one. read take and yes, think you next from hadn’t TASER get just should is, few did a what them, in its features? couple of We that have of have X I the We One answer here. planned is would if Rick, generation development if them there be some a and enhanced public. we

Rick Smith

We are tuned about talk as all X say developments programmatic that Axon. features that, don’t to we’ve continually product buyer some for they’re launched. make fit different always until I evaluating the of Yes. new of got typically we would TASER personas. sure stay And aspects kind of of can with new ways it our

Jawad Ahsan

of primary end the stop the wanted I have big an to piggyback goals to reasons be because to the for we do out the TASER this What direction. technology And in next long what help was the with too they’re bullet, We that decade. that towards one in TASER of the to with the Rick be to have make our generation working now going we’re obviously. the the going on is way to to laid a I means but is officer those accomplished TASER disclose and Rick to and on joined I have towards the a to know the his threat. And I be Rick that. Yes. in one working best much, on, I what want it’s not trying think actually, mind is company that of step team

Andrea James

TASER question. there the dash enter defense devices consumer market? sells consumer the Okay. There’s is Are the any camera self an to market. into next body just Axon one interesting plans cam or

Rick Smith

take be The no. our particularly is, enforcement make answer is cam a me one. professional for elements market in that not applicable the more that and let would Yes, consumer users market. much dash system that law commodity market valuable of The

no. So,

Andrea James

That’s your back to call close you. have Okay. the Thank we Thanks going all over for public. submitting Rick to out. us questions. time from to the I’m for turn

Rick Smith

seeing It’s Awesome. your online. enjoyable format. faces enjoying feedback Well, for thanks. interacting a Hey, and to, the positive and on I me connected new really little feel more been I’m the

It’s is too. keep to in a it and little sure, engaging. harassing hope Josh. and feels you found this like for I more did much if Zoom. be human evaluate certainly more Sorry bit I a just doing see we to we’re this going I there, experience

I’d like all you for us. joining to thank

increasing and we’re we’re lean everything and public as shy continue As software them throw you our our to to productivity. safety got out And us. evangelizing know, from Axon challenges. not in XXXX away to approaches opportunities does to to new has trying We viewed and cloud that going

all hope you again and we disruption. all we to look this So of stay August. you sane And period healthy during safe, forward in updating

So thanks. talk to soon. And you we’ll