Q4 2020 Axon Enterprise Inc Earnings Call

And the result.

Multiple vaccines developed 10 times faster than ever before.

We adapted to a world, where and travel was simply off the table. So we virtualized ourselves and we learned the zoom around the world for business and we got the CR kids for dinner every night.

My customer engagement the jumped more than tenfold as customers are now opened the video conferencing.

And we've enjoyed seeing new our analysts and our investor community face to face and our new quarterly conference calls.

I don't mean to minimize the pain and we all experienced in 2020, I understand and I shared in my.

My mother passed away days before Christmas after contract and Covid.

But even and Thats, our okay and progress as we came together and rebuilds and fractured relationships within our own families.

And would not have chosen for 2020 to turn out as it did.

As we've said before we don't get to choose what the world throws at us, but we can choose how we respond.

The urgency of resulting from the intense social strength for 2020 is accelerating the world's readiness to move beyond bullets to of World. We're telling each other is no longer something we simply accept some immutable facet of human Society.

It is supercharged our energy as we redouble our efforts to deliver Taser energy weapon that will outperform a traditional side arm before this decade is out.

And our customers are embracing this fall and they have told us that the bar will be very high.

But I'm confident our team will deliver.

2020 was also a year, where axon delivered incredible value to our customers and the communities. They serve as you can see.

You can see it and our results.

We knew that adversity would present opportunities for those individuals and those organizations that are nimble and adaptable.

Adjusted <unk> create breakout opportunities for adaptable species to explosively grow and thereafter.

And the weeks following the arrival of Covid and North America, we transformed our offices and to adjunct manufacturing spaces, allowing us spread out create social distance and.

And continuing to deliver exceptional results that far exceeded our most optimistic expectations.

We didn't just deliver on our operational goals, we significantly outperformed the.

I am personally humbled by our team's ability to deliver exceptional results for the year filled with so much turmoil and adversity, we exceeded our goals and exited 2020 better position than we've ever been before from an operational strategic and financial perspective.

Here's a few highlights.

We gave our first two programs of record with the federal government, including a $13 million U S customs and border protection order for body cameras and digital evidence management.

And the fourth quarter, we signed our largest taser contract in company history, a $20 million order for Taser, seven and from an international customer and closing a record $15 5 million tangible order from the department of Homeland security and the prior quarter.

And 2020, we passed $1 billion and total bookings with the majority of that coming from our core market of state and local public safety.

And 2020, and we also delivered the largest single contract deal in company history, a $46 million officer safety plan with one of our major city customers on.

And on the product side, we launched auto and transcribed deployed customers on both response and and records debuted unique new capabilities like priority ranked video audit and ship countless cloud and software and device firmware improvements at.

Net axon and we're continuing to look forward.

We had a recent executive planning session, where we asked ourselves where do we want to be at the end of this decade.

And our answer was simple our vision is to be globally synonymous with our mission of protecting lives by building the worlds largest and most trusted network of safety devices and services.

One of an amazing opportunity to be part of such a talented team with such an aspirational mission.

I would like to conclude by telling you what I'm hearing from our customers today.

They see us as a key partner to transforming public safety, we hear stories daily about customers using our products and save lives and the protect communities.

Our net promoter scores are hitting new highs and our customers are actively and enthusiastically supporting our mission to make the bullet obsolete. So the officers will no longer have to make the most terrible of choices.

We know that we're welcoming of lot of new shareholders onto our growth journey. So thank you for joining us for taking and interest and with that I'd like to turn over the call from our President Luke Larson.

Thanks, Rick as 2020 showed us a lots of happens and this will and outside of our control against the backdrop axon employees. When we showed up and deemed their best and the areas that matter, most and only give and emphatic themes for all of our employees.

And <unk>.

Axon, we built an amazing team and that talent is a huge asset and competitive advantage that doesn't show up on the balance sheet.

The team is laser focused on a clear mission inspired by our purpose and leaning in with an owner's mindset with the maniacal focus on delivering value for our customers and 2020, we focus on our commitment to the mission to our customers and the carrier for the health and safety of our employees.

And 2020, axon was able to outperform and a difficult year, because we built a phenomenal team.

Looking to the future our company has the talent and infrastructure and capabilities to manage challenging environments and thrive the compass.

<unk> earned this position over three decades by taking risks.

The bold decisions and <unk>.

Best and hundreds of millions of dollars and research and development countless hours of engineering tens of thousands of hours of customer meetings, and most importantly, maintaining and unfaltering commitment to our mission.

As we look from 2021, we have for key objectives.

One grow the core to scale, new products, three unlock new markets and for drive efficiency to fuel growth.

We're also taking care of the amazing team, we built our employees' health and growth remains the top priority. We recently added ginger of mental health App, providing of $24 seven and support to our employees as well as rolled out the Linkedin learning to the entire company and.

2021, we will continue to look for ways to support our working parents and caregivers.

In 2021, and we'll continue to invest and our people product and sales channel, helping individuals level of aim higher and push harder make our mission of reality.

I'll close out by talking about one of the areas of added investments, which allows us to go out for a $2 billion.

Total addressable market and that.

That is our investment and virtual reality training.

As a former military officer I saw how the Dod's near unlimited budget will create amazing training like mark talents filled with thousands of Arabic speaking actors huge multi group training as well as the unmatched simulator training pilots use for flight training.

And law enforcement, though they don't have the luxury of these enormous budgets for the benefit of having the majority of their time available free with virtual reality, we can leverage the best in class constructors and training the create scenarios that can be used across hundreds of thousands of officers, bringing the cost down from the very economical.

Price that can democratize training and axon is poised to be a leader and creating this new category just like we've done with the Taser devices, our axon body cameras and digital our digital evidence management system, evidenced dot com and we're going to do it again.

So reality and the training and.

And 2021, we intend to transform how agencies trainer officers by addressing the inefficiencies around the classroom for playing and simulator training and by leveraging VR. We can address the two biggest issues budget and time, we will accomplish this through three opportunities first we have and exciting product lines that we can't say more.

But it is coming soon second we intend to regularly releasing training modules and third we are doubling down on our community engagement and training curriculum.

Seeing encouraging signs of on demand for this product and we're excited about where it can go earlier.

Earlier, I talked about the amazing team and culture, and we built that axon before I hand, it over to our CFO to a lot of time you want to learn more about that holds true I recommend you check out of this book what they didn't tell them and you can get it on Amazon and so with that let me turn it over to our CFO to out of stock.

Thanks Luke.

I wanted to start by talking about the number 28.

I am now referring to the number of days and this months for rather three important milestones we hit as a company this quarter.

We delivered 28% growth on revenue over 2019.

28% compound annual growth and revenue over the last five years and.

And we finished the year with 28% and adjusted EBITDA margins.

Now before I dive deeper into these and I want to talk about something else the perception of our two business segments.

We've discussed with you of great links the investments, we've been making and our pivot to a tech enabled solutions company the.

Perception of our software and sensors segment is best described by letting the numbers speak for themselves year over year total revenues in the segment grew 26% and.

And our <unk> grew 37%.

When I joined the axon and 2017 and our stock price was at $22. Many investors told me that they viewed our stock is appropriately valuing our taser device business with the free option and a high growth software business.

I think it's safe to say that we're now seeing some value and our stock price for our software business.

But what about that Taser devices segment. The one that's been around since 1993.

Was there maybe a perception that its best days are behind it.

If so we shattered that perception with our 2020 results. Our Taser weapons segment grew revenues, 30% year over year outpacing, even our fast growing software and sensors segment.

We're very proud of the change of energy devices that we've built and believe that there's still a large base of untapped customers, who have yet to adopt.

So the 28% revenue growth over 2019 was really fueled by strength across the board and body worn cameras, and software and especially and Taser devices.

We feel that this validates our strategy to invest aggressively in both R&D and channel expansion of.

R&D to stay ahead of the innovation curve and all of our product segments and channel investments that will unlock new markets and new geographies.

We're going to run this play again in 2021.

When we look back over the past five years and the 28% CAGR on revenue that is also the result of investments we've been making along similar lines.

As we look ahead for the next five years, we're very excited by the next wave of new products and technologies that are going to become an important part of our growth story and their own rate.

Technologies, like VR, which Luc just talked about earlier and we feel can have a transformative impact on the critical area of training for law enforcement.

Technologies like axon respond and our live streaming platform, what's particularly exciting with this one is the interest we're seeing outside of our core law enforcement market.

For example, Corona virus and the vaccine rollout is top of mind for communities all over the world.

And municipal security unit, and Chile has been trailing axon respond live streaming to ensure the quality and security of the supply chain and transportation process for COVID-19 vaccine distributions in their community.

Another technology, we're excited about is our new ERP and CRM many people across the axon and are working incredibly hard on upgrading these critical support systems and their associated processes and there are already driving huge efficiencies as the early modules come on line.

Look also talked about the importance of driving efficiencies to fuel growth and we're laying the foundation today for a company that will be able to scale to $1 billion and revenue and well beyond.

Now you might be wondering.

Why am I choosing the highlight our new ERP, along with sexier technologies like VR and live streaming and I'm doing it the highlight something I can sum up and one word.

Discipline.

We have our sights set on some lofty goals by 2030, as Rick mentioned, but our feet are firmly planted and the here and now.

And I'm so proud of the discipline, we exhibit as a company on a day to day basis, and our capital allocation decisions are budgeting our execution.

This is a team that is absolutely dialed in and ready to build on our momentum and take our company to even greater heights.

And with that we're going to turn it over to questions.

Yeah.

Thank you your line and team, let's take our first question from Jonathan Ho at William Blair and go ahead Jonathan.

Hi, there just one.

And just start out with sort of of the tremendous quarter and year net international had can you maybe talk about what is driving sort of that increased demand and is there sort of the broader mindset shift that youre seeing with either how agencies for national Police forces for science and look at the Taser.

Thanks, Jonathan for the question ultimately I think it's just a lot of hard work and execution that our team is putting in.

A few years ago, we said, we're going to continue to focus on tier one markets until we felt really good about earning the right to go into tier two and three markets and now we're starting to see that kind of the mechanism payoffs and this was.

Foundational year end 2020, and some of our tier two markets were seeing new markets by tasers at high volumes and we're extremely excited for that trend to continue this year and so and.

And we're really focused on growing the taser business, and then earning the right and to expand into other product lines and these markets and we're going to continue to execute day to day toward that and.

Got it and just as a follow up.

The state and local government pressures created any sort of headwinds in terms of your pipeline of opportunities or is it actually the reverse where and maybe this is opening up some opportunities just given your strong value proposition. Thank you.

You know I don't I can't really offer an opinion on that to be honest I think it's more just we're focused on covering the market as best we can not only and state and local but and federal and international as well and by doing that certainly we feel like we have the best products and law enforcement and public safety and we're going to continue.

And.

To tell that story and make customers very happy and turn them into evangelists for our company and regardless of what pressures may or may not exist in any given year, we think that the long term and winning formula.

Thank you.

Thank you and Jonathan and analysts do we have you on the Q <unk> one by one and you joining the call. This afternoon, and we've got chat and you'll need to do the handshake and we appreciate the question, Okay, well powered and Baird and our next question go ahead well.

Alright, great. Yeah. This is bit of a.

The follow up I guess to the previous question and the international of comments, but just looking at Taser, obviously, just a huge quarter and any other color you can provide on the key underpinnings. There as you look at the upside in the quarter what was the upside surprise. It was obviously of the what the customer of ellipse broad based more than that is it.

Type of certain geographies certain types of local agencies versus federal and anything else you'd call out respect the taser strength.

Yeah sure. So I think we had some visibility into some large deals in Q4, but.

Not to get too specific but some of the challenges in this environment are making sure we can deliver and debt acceptance and its and short periods of time, and we did get the order and time and Q4 and were able to deliver it we view that as kind of a 50 50 proposition.

And in early November the <unk>.

And did a fantastic job of executing but behind that one large order there were a series of kind of mid size of orders and international across all three geographies of the America, EMEA and APAC and I think it just speaks to the work the team is doing to really focus in on <unk>.

Markets that are now ready to move to more but less lethal solutions and again, we believe we can parlay that into body camera adoption and records management of adoption and virtual reality adoption and so forth over the long term.

If I can sneak a question for Luke I know you talked about the key 'twenty 'twenty. One objectives you had for key was one of them of scale scaling new products. One of if maybe if you could just update us with respect.

Two records and respond what are you putting in place.

And to accelerate growth there what does that cadence of opportunities look like as you kind of move through 'twenty and 'twenty one here.

Yes, well.

We're seeing and lot of it.

The interest from our customers specifically around the entire kind of axon.

The portfolio, where we see the biggest adoption of these capabilities is and our officer safety plan that we offer and I turn it over to Jeff kind of debt a little more color on the specific product details.

Sure Hey, thanks, so much for the question so on records.

We continue to be incredibly pleased with our momentum and records. Our latest good data point of that 40 agencies have now signed our and deployment for our live on one or more modules of records, including more than a dozen the committed to full replacement of their legacy Rms and.

In addition to that within that the early momentum with major city of specifically continues to recent examples are the Atlanta actually went live on the standard use of force module of records in Q4.

And Baltimore, which has been publicly announced before the upcoming flow records customer is on track for their deployment the.

Sure. So we're incredibly excited about the continued.

Accelerating momentum there also as we you saw and the shareholder letter on our respond for devices we had.

<unk> ex growth.

And live streaming and other aspects of engagement of the product over the last six months and should continue to.

And we see.

Really strong adoption of all aspects of response for devices across the footprint and as Rick talked about and the beginning some of the key further additions, we're making of the product line. The compound the value of all of those pieces together and we're most excited about include auto transcribe. So now that our auto transcribe unlimited packages out the powers a whole variety.

<unk> of scenarios, including not just accelerating evidence management, but also.

New capabilities like priority ranked the video audit, which really helps agency of the use the data the underneath their body camera videos.

To help them with with with making sure that they're compliant with policy and helping make them make their body worn camera programs more effective and.

The number.

Thank you.

Okay.

Thanks, well I really appreciate it next question from Jeremy Hamblin with Craig Hallum Go ahead Jeremy.

Thanks, Andrea congratulations on an incredible year to the team.

I wanted to come back to the international for a second where you clearly have a ton of momentum and I think this is probably directed towards Josh.

Just in understanding the international cycle sales cycle, which is typically been longer over the years.

It does seem like with the momentum that potentially there is greater urgency being seen.

With the customers that you're talking to but I wanted to get a sense of whether or not that <unk>.

International sales cycle is starting to compress and.

And if youre realizing these contracts sooner or this is just.

Reaping the fruit of a number of years of blame foundation, but it does feel like that sales cycles compressing a little bit.

Certainly thanks, Jeremy I think it is compressing a little bit and I think the other element we have as we've added to our international team pretty substantially over the last three or four years I think it's probably started around 10 people and 2016, our direct sellers and.

Multiply that by two or three at least and the result of that is we just have more activity and the pipeline quarter to quarter. So the pipeline is starting to come into fruition and theirs.

Certainly an element of the sales cycle seems to be speeding up a little bit, but we just have way more opportunities now every quarter and.

Certainly it relieves a little bit of pressure off of fewer opportunities and we have more ways to get there now which feels great and we're going to continue to focus on building.

Building that out and.

We're making some investments again this year and certain markets to to create even more momentum and hopefully we'll continue to see that trend and the.

The years to come.

Great and.

And wanted to ask I know you can't provide a ton of details around the.

And the the new product launch, but historically when you've had major product launches you would take a little bit of a step back on the margin front and back.

And being made both on the the sales side of the equation, but obviously also and some in R&D.

And just wanted to get a sense in terms of the revenue base as a whole is significantly larger than it's been in the past.

And just to get a sense for if there is going to be some margin drag this year can.

Can you quantify can you give us a sense of the magnitude.

As you look at both what sounds like an entirely new product launch, but also some of the other.

Whether its records.

The developments or or dispatch and whatnot.

The potential drag that you might see on.

On margins.

I'll take this one Jeremy its a good question, we are not expecting any margin drag from the new products that we're launching we're actually expecting some margin expansion in 2020, we were.

And looking at some of the headwinds that we had on Taser. We also had some customer mix as far as international.

Shipments and that's behind us and so and this year.

Even with the new products for launching for for some of the newer ones, specifically like VR theres, a little bit of a drag from a hardware perspective, but it's so small and so as to be negligible overall, we're not expecting any drag.

Great last one for me real quick and.

Supply chain, so as you've gotten more federal contracts and so forth and.

Obviously, we know how youre producing tasers and the cameras has there been any pressure to alter.

Your supply chain is that something that youre considering.

And down the road.

And where you're sourcing cameras and how the how the cameras are coming.

We've got no debt.

Decades of experience producing our teaser devices were ISR restricted which means you have the manufacturer and that in the U S and so we feel really really good about that process on.

On the camera side, it's something that we definitely keep and ion.

As of today, we still feel really really good with the way that we manufactured and then kind of load. The final final firm where on the product and so I don't see anything from kind of of the supply chain side I would defer to Josh at the hearing anything from the customers.

Yes, I think we are and a fantastic position inventory and supply chain wise are customers that have been delighted that we've really of tons of accelerated the speed at which we're able to deliver of large deals and thats the huge.

Credit to Josh Goldman and our entire operations team. They are just doing a fantastic Patrick.

Job supporting our customers and.

This is actually over the years, the best I've ever felt about our ability on the on the supply chain and logistics side to please customers. So I'm really really bullish going into this year in that regard.

Great Congrats and best wishes this year. Thanks.

Thank you Jeremy next question from Eric Lapinski at Morgan Stanley Go ahead, Eric.

Hi, Thanks, and congrats on the quarter.

The last month, you announced the deal with the private security company and I guess I'm, just wondering what kind of opportunity do you think of that market can represent you know are you seeing interest from other private customers or is that maybe of one off type deal that wouldnt be something we could see again and are there investments you could make.

To attack that.

Yeah absolutely.

The great call out last year, our private security business.

And the only thing that really changed was a little more focus on it we have a team led by Mike sure that is the.

Divided between private security and enterprise use cases, and this year that team is really focused on at least doubling hopefully tripling that private security number again and building out our first group of customers and non law enforcement use cases, so we're really.

Excited about both of those opportunities to expand the Tam and and really fine.

He has to generate returns on.

And investment of body cameras for businesses outside of public safety.

Got it that's helpful. And then maybe if I can just kind of squeeze one on on the dispatch side. I know you had mentioned kind of over the last few quarters that you're building and incremental capabilities and maybe that would be of hold off for certain customers that start adopting that and I guess, just wondering like where you are.

With that do you feel that the product and so there is there enough of a road map for even a larger and police department to kind of see it and potentially hold off on a replacement to migrate to you or I guess, just the I know, it's early but and.

The film there sure Thanks, Eric Great question.

First like we said before the dispatch and really more broadly this idea of respond of a real time operations platform is a multiyear journey and so we're very confident that over the.

The next.

Three of five years, we're going to wind up being number one and what the traditionally called the legacy computer aided dispatch market, but our sights are even broader and more ambitious the math, but as <unk> said earlier, our theater also very firmly planted and the present and so like right now today as you know we have one.

One city of live on our dispatch platform and we have multiple more that are <unk>.

<unk> sold and in the queue for deployment over the course of the sheer and going forward. So we feel very good about that pipeline just like we talked about records and really and any software category, where you have and insurgent trying to unseat legacy of competitors.

Which in this case, where the and surgeon.

But there is there's this journey of building up and the right way the capability of needed to be the right fit for each successive chunk of the market, while adding on top of that your unique differentiation that makes you a compelling reason to switch and that's just that has nothing to do with the axon, where CAD or <unk>.

That's just the physics of any day.

Relative and surgeon.

Category like this and we feel really good about where we're positioned and where we're going even though it's early and.

And in the case of dispatch and the sort of sequence or later there is first being great for law enforcement only.

The peace apps as opposed to ones, but also due to the fire and medical for sort of the mid sized cities and then actually after that gearing up the also cover of fire and medical which we're actively working on this year and then ultimately to be not only the largest cities, but the multi jurisdiction peace apps. So we feel fantastic about our trajectory.

Rectory, but it is early and that journey and but we'll continue to keep you apprised as we win and deploy customers along that way.

Let me jump kind of as well I wanted to I want to share of story I talked to at least chief of the first agency I believe and the world certainly in the United States that is live streaming every call and the dispatch and video live stream.

And it was just so rewarding to have that phone call take care of the things that we had been imagining and come to pass and how might that you've shared with me was just the total game changer. They found dispatchers are actually helping the officers in real time became new story, where the dispatch of hurt us Doug.

And that the officer, Dennis right because the officers in the scene there they've got total vision and sometimes they're focused on their own safety, the dispatcher and sort of a dispassionate.

Aid, while it turned out the THAAD and that case was a gun and had been dropped to the person and the card dropped it and tried to kick it under the seat the.

The officer, the dispatchers for the Asa range.

I heard something you should check and they discovered there was a gun and obviously, that's a pretty important piece of information and the way the unfolding. The other thing that they share with me was.

Debt by having the dispatchers watch the call. They just got far greater understanding that and when Theyre just listening to a few cryptic transmissions over the radio and they're getting real time oversight of every incident. So when you think about.

Everything that happened last year and now there's discussion about well how do the agencies ex the right videos have of subsequent supervisor review.

And this agency, they're reviewing every video not by a supervisor, but by of just Ashley just factor and you could imagine if someone was saying something like I can't breathe.

That can be reactive to right now where the dispatch records and say, hey, I need the supervisor to check this out and see what's going on in real time not find out weeks later that that was happening.

And that sort of core transformative new capability that we are uniquely able to position and youll, probably guess, there's a little bit of of dynamic tension between me and Jeff who keeps me honest, where it's like hey, we need to do the things. He was talking about there of we've got to deliver on the core functions of what they need to be a functioning system today.

And blend in the right amount of these new capabilities, you can't you've got to kind of out of both.

And it's just mix of wonder having Jeff on the team and he is really shepherding us through that process of how we blend the right mix of legacy features with the right mix of new features to be transformative and effective and displacing existing incumbents.

Alright, Thanks, and sorry, yes on line.

And one last tiny bit just to put all of that together, it's exactly that combination of why we declare respond and the side do you have a real time operations platform, that's the real category historical.

CAD is cute.

At the time operation of platform is skating to where the puck is going and from a business and the insurgent standpoint. The key is just like how with records and agency can adopt standards our use of force module of rents.

Side by side with their legacy RMS, even before they might be ready to make the migration respond for devices. What we used to call aware of what Rick was just referring to our live streaming any piece of it and.

In conjunction with their law enforcement agency can easily deploy respond for device right and their piece of alongside their legacy cash even if they arent and ready to switch over for their full of CAD, but that not only gets them into these the scenarios earlier, but it also gets them acculturated to our.

And we think that's ultimately and accelerator.

And to when they are ready to consider of full migration.

And that's awesome. Thanks for sharing that example, I mean, that's the point the vision coming to life. So congrats.

Thanks, Eric. Thank you Eric next question from Derek Soderberg at Colliers and go ahead of bank.

Thanks Andrea.

Wanted to start with the consumer Taser and it looks like that was pretty strong again. This quarter. I was wondering if you can sort of elaborate on what drove that strength again.

There have been some tailwind due to the pandemic and.

Some other things that happened in 2020, just curious as to your thoughts.

On that business as we sort of move past that a little bit.

How sustainable is consumed for taser strength and.

Guess, maybe longer term if you can update us on the strategy there to penetrate this the.

Non lethal weapons market.

Yes. Thanks for the question, our consumer business doubled and revenues year over year 2020 over 2019, and some of that early in the year was the pandemic.

And some of the just overall lift and <unk>.

Fire arm sales and we were certainly a beneficiary of that we did put a new general manager of the consumer business and place.

Around second quarter of last year, and he's really up level of our game here of the marketing background, Matt and Gore and he's got a very strong background in marketing and he's tried to move things for us and actually had a very immediate effect and we've seen that momentum continue into 2021, which is how we know it's not a fluke.

<unk> got some pretty lofty goals for the consumer business. We've got two new products that we're bringing to market by the end of this year and longer term. Our ambition is the company is still to make the bullet obsolete and that doesn't just happen with building a better taser device for law enforcement.

And on building.

And the consumer device and also does the same thing and then I want to turn it over to Rick and let him talk one of about his vision his line.

Yes. So we started this business back in 1993 of the original Taser was already being sold the beliefs. Our original business model was to block for consumer.

For two reasons one it is where we can actually do even more moral good by saving lives.

The police officers are involved in hundreds of lethal force incidents every year, but private citizens shoot and kill 35 to 40000 of each other every year. So we can save the most lives if we can have impact there.

And from a market scale perspective, it's frankly, just the much larger market. So even the guac and got and that is ubiquitous and law enforcement has a far larger both dollar and unit volume they sell in the consumer market.

So we're committed both for the business reasons and for the mission and Northstar reasons to see.

And the consumer continue to grow and I think part of that.

I personally believe we will hit a tipping point when we can actually prove that we can outperform the standard nine millimeter.

That is going to be transformative not only in our core U S law enforcement I think every other police agency around the world.

And.

And I don't want of start naming of countries here, but it's pretty much any country is not going out of the same relationship with guns that Americans do so, let's just think of Iceland.

And as an example, if we.

We could outperform their block the handguns and all of a sudden and I think we could become the standard weapon and I just picked out of the totally random country, but to go around the world and I think the minutes and we can actually say this could replace your firearm every police force securities of firearm is now of customer and theyre going to be under tremendous.

Political and moral pressure to use the better safer thing that save lives I think that also opens up the consumer market. So I think we're in the early innings, we entered law enforcement and 1999 to prove the technology works. So we can reenter the consumer market and that plan is still not played out yet and I'd.

Also like to say, we moved the consumer under Jawad, a couple of years ago, and he gets a lot of credit for breathing, new energy and bringing that onboard and.

And this is kind of a July one of its ash and project is helping us and the consumer space.

Great. Thank you for all the detail on that and then as my follow up Rick you know last quarter, you had sort of mentioned the conversation you had had with U S Congress person.

I guess now with the New administration, New Representatives, I guess I'm curious as to how those conversations have evolved over the last quarter.

Are you sort of feeling that same sense of optimism around maybe sort of sweeping lease reform bill that includes body cams.

How is your sort of sense of optimism changes.

Well my sense of optimism.

And it's pretty thoughtful of.

And.

If anything symptoms and that each of people to make sure I keep my feet grounded I would say that so I think net the.

The trends towards body cameras, and lessens the weapons and all of the things. We're doing is really more ground up theres certainly been some.

Talk about whether theres going to be legislative action at the federal level.

I don't want of gas on that and did not what obviously it could be very helpful of it happens.

But we're not that's nowhere in our plans and we think we are just continuing to win the hearts and minds of agencies and communities and the end user.

By delivering stopped exchange of career saved their lives saved some of them.

All of the trauma of Avenue to deploy lethal force or having the integrity question when something controversial happens and knowing they can defend themselves of the body camera and so I think.

I wouldn't say anything has changed positive or negative at the political level I think we're just continuing to see that groundswell from the the state and local that's where these decisions get made.

Great. Thanks, so much.

Awesome great questions.

Okay. Thank you Derrick our next question is from Keytruda and that Great cost go ahead Keith.

Keith Europe next and.

Yeah.

Sorry about that.

I just want to echo guys, congratulations again on the quarter and the great year.

I'm proud of them.

Kicked out of the deeper on the page there is for the year, obviously tremendous growth how much of that growth is coming from the March edition, all state and local agencies and you guys were talking about and number of different initiatives in terms of thorough and gels and corrections and the security and cloud.

For all the color I can break it out between I guess, the sources of our revenue as well as the new.

Yeah, absolutely I appreciate the question Keith International certainly was the big driver of CW weapons growth I think we've.

<unk> talked about that two of large extent already federal also is the place where we had a good year last year in terms of some new agencies coming onboard with some of our newer CW. This year, we certainly expect to see more of that and in our federal business. We're really excited about a couple of the CW opportunities that are out there.

And then state and local with really hitting our stride with Taser seven and state and local bookings of the market. We hear every year of questions about hey is the growth slowing down as the flattening out and last year's state local and bookings were up almost 30% and so that was I would say.

Pretty equal weighting between body cameras, and tasers, and so I think across all segments of the market the.

<unk> is doing just an exceptional job of making sure that we continue to grow the taser the.

The Taser line, we certainly believe like every single cost every single law enforcement officer is better served.

Carrying of Taser than not and until that happens we got a lot of work to do the.

To bring that up and.

And the fruition. So that's really what we're focused on not only and federal or international, but also and state and local and Theres still plenty of room to go there.

I appreciate it and.

And I would be remiss, if I didn't ask the question about the guidance it looks like guidance for the full year next year of about 12% growth year over year, you've obviously got some great tailwind for your back of of your off this call and get some huge numbers that youre pocket.

If I look at cartridges and the consumer devices and obviously some good tailwind for you So and you guys have never grown.

Only 12% I think here or at least in the recent history of EVAR.

What gives you the indication that revenue growth for actually slow down so much year over year.

Yeah, we're certainly not done we and the last couple of years and you've seen growth in the in the mid to high Twenty's and you've also seen that those years tend to be back end loaded Q3, and Q4 combined are usually significantly higher than Q1, and Q2 combined and so as we think about.

And it right. It's early February we're certainly.

Trying to.

So far more than 760 and Thats our goal every year is too.

To exceed our growth rate of the previous year, but having said that we haven't seen the pipeline materialize for the back half of the point.

And where we can be.

A little more aggressive on our guidance and.

And Q quarter, one we have to be responsible and disciplined about how we guide and so this is something we're going to revisit every quarter and as that back half pipeline materializes, you'll certainly hear more about that as of.

It's happening but on day, one here, we're starting with 760 and like.

Like I said, though we got and like you said, we have a lot of tailwind and we're really focused on on another great year and revenue. Okay. Appreciate it. Thank you.

Okay and good evening.

And okay. So we're not seeing any slowdown and.

And just want to make that clear, thank you and Andrea and I actually might piggyback on that from an EBITDA standpoint for guidance just how you should think about that.

Provide some more context so.

Ever since I joined the axon and it's been really important to me that we're demonstrating both growth on our top line as well as driving leverage on our bottom line and we have not only done exactly that over the last few years, but it's also been of central tenet of our long term guidance as you know.

So it's super important.

And to us that we're continuing to invest to stay ahead of the innovation curve and.

And the other sort of thing that we're trying to solve for so every year, we put together and operating plan or budget. That's trying to solve for those three things top line growth driving leverage and investing for growth.

And it is actually Super hard to do but we've got a very talented management team and that's what we've been doing.

However, one of the dynamics as Josh pointed out of our business is that our revenue profile throughout the year is back half weighted and even and then it's really more concentrated in Q4 than in Q3. So what happens is if we hit our revenue targets. Our EBITDA comes in and plan on our internal plan and we drive that a little bit of incremental margin expansion, while still having invested and things.

And like R&D or the channel, but if we beat our revenue targets, especially in the fourth quarter. It's too late in the year to reinvest that upside. So we return it to shareholders, which is exactly what you saw this past quarter. So that's how you should be thinking about it from an EBITDA standpoint, and keep our base plan of solving for top line growth incremental leverage and investing for growth and to the.

The extent that we exceed on the top line that will allow us to drive even more leverage.

Thank you.

Your line, Okay last question and I believe unless anybody has follow up from.

Scott Berg Needham go ahead Scott.

Yeah.

Great. Thanks, and congrats on the OSM corner, I guess I've got a couple of questions. George you sort of point of clarification first of all on the the large teaser sales and the quarter were those was that $20 million order all parties or sevens, given its international and their propensity historically by something other than that I just wanted to clarify.

And that.

Yeah, Josh when should we and debt that was all of Taser seven.

And the stage of <unk> and accessories associated with the cartridges batteries ulcers and so forth.

Got it and then just.

As a part of that as well.

With the all purchase on a subscription plan or where the kind of an upfront product purchase and I saw the mix and the corner certainly downshifted for the mix of teasers on the subscription.

Yes, it's a great question, Scott so for us and tier one markets as well as in the United States, We do sell Taser seven on the subscription but in tier two markets and tier three markets, we actually fell of Taser seven and a similar bundle, but it's available for and upfront purchase and the reason we do that is twofold number one.

And oftentimes theres distributors and the middle of the deal and that complicates how the subscription would work and this case there were there was no distributor, but part two is we don't have a very strong well documented payment history with some of the first time buyers for large taser orders and thus.

<unk>.

To protect the company and the shareholders, we do ask to be paid upfront. So that we're not recognizing revenue ahead of of getting paid more or less.

And that's great and then my final question I don't know if this is for yourself, Josh or maybe for Rick is your livestream usage up seven ex from April to December.

It's a big number and that's coming off of small base. Because you are just starting to get those devices and people's hands at the end of last year.

But is that helping and the sales cycle. Yet are you seeing the ability to take that evidence or the take those customer experiences and actually parlayed that into new customers that are on the fence, whether or not the buy the 83.

Yeah.

Josh I'll, let you take that one yes.

We're really excited about where we're live streaming is going certainly I think over this last year, we've seen a ton of very interesting use cases.

For for the product and we continue to see more and more of this is something that as new ABB, the new body camera customers of.

That of purchasing AB three we are seeing a reasonable number of them by live streaming on day, one and then customers who have been upgraded to a three or try and live streaming early and often building it into their budget and the out quarters and so under.

And are both kind of use cases, we are seeing an uptick and live streaming and we think this is going to be central to the value proposition across all of our products long term, so certainly and as an encouraging sign.

Yeah, and I think the one thing to add to that is that when people buy access to respond for devices.

And even in addition to or instead of if they're not ready to use live streaming per se simply activating their use of that LTE chip and the camera unlocks a bunch of other scenarios as part of our software including simply having.

Accurate location for 100% of their of their evidence, which makes it easier to tag and find things later for like Rady law compliance as well as the transcription scenario I was talking about earlier, where they can now configure it and that all of their the audio from their video automatically goes up as evidenced dot com immediately upon finishing the recording some of it.

Can move even faster on some of the evidence management pieces, so respond for devices.

Love the live streaming scenario, but there's so much more of that they unlock and bye bye bye buying that add on.

Great Congrats again on the wonderful quarter. Thanks, everyone.

Thanks, Scott and wanted to build upon Josh and the answer on the team of subscription question just real quick so those tier two markets of the market that were a little bit and newer too and we don't have only the established team and history and we would have and tier one tier one tends to be 90, 19, Teekay, Australia, Canada, and the English speaking markets and tier two of our Lindbergh.

The new Intel, we feel confident and over time, and youre going to be able to try and Peter subscriptions and those markets. Just like we did in the U S and and the U K.

Still early and we also don't have the payment history of extending credit to do that today.

Okay.

And then any other questions.

The new and put the heat up.

Now, Okay, I think Rick will have equal and this out.

Awesome, Thanks, Andrea and thanks, everybody for for.

Joining us today, obviously, we're delighted to be able to turn in the results like this.

And I couldnt be more proud of the team.

I was just sitting back noticing the inlet.

And my team for all the questions.

Just been amazing to see us come together.

And it's been a challenging environment, but what a year two of turned and I couldn't be more proud of everybody who have to make that happen and any of our employees and team members that are tuned and listening. Thank you for just phenomenal effort and a crazy year, so and.

And then celebration on the great results of 'twenty and 'twenty, it's time to get to work on 2021, and we look forward to talking to you all and our next quarterly update.

Thanks for the stay safe.