Q3 2024 Axon Enterprise Inc Earnings Call
Our relationship with our community and we look at ourselves as really being a part of the community. We started with axon when we introduced taser in the mid two thousands as we've kind of been an observer from the side of all of the amazing things that have been going on we have started to embrace all the different platts.
Forms that axon has to offer and look at our partnership with Exxon is giving us the opportunity to do some amazing things.
One of the exciting things for me right now is draft, one and in our testing periods. We've already identified that its saving at least 50 or 60% of officers report writing time job. One has been really great for me, it's definitely come down my time on running when I have been able to use it I had im missing persons report those.
And a shift of just taking those reports they have to be done quickly normally that are particularly 30 to 45 minutes to do probably also will get it done in under five minutes and actually able to go home on time that day. So it was really great and get that report to the detective. So they can do their policy. They have to do in my position. Some interviews can be very lengthy.
It cuts downtime I find myself doing a five hour interview with a suspect and then I have to do now right.
Our interview.
Do we have broken glass do we have all running from the building do we have regular work or is it occurring as usual. So we get enhance situational awareness that gives us a better understanding of what we were responding to you.
For our agency and when we use.
The drones.
Paul we will typically cleared as much as we can with the drones first and then we will utilize the dog's research areas that drove some might not be able to get into such as close doors cross bases or other areas that drone can't get into the center store.
See if this is giving us a way to Poland video feeds that we were never able to get before and it's also going to integrate.
Some systems that were already log into so it's going to give us that ability to do streaming body worn camera footage in car camera footage drone footage traffic cameras. It gives just factor as an opportunity to be part of the solution.
Technology is changing the way we do law enforcement training is not the same.
I would highly encourage going towards VR. All you need is four walls and a ceiling and you have a training center ready to go with feedback that I've seen from officers as they're just feeling a lot more comfortable were not a large agency, where we're utilizing the teaser every single day real world. So how do I take.
What we're doing in training and related to those 10 deployments and then related back into training, having the ability to do multiple virtual reality scenarios prepares them for the real world when I look at axon.
Alright, Thanks, Eric and I want to thank all of you know we look at.
Speaker Change: Well, we thank all of our shareholders for joining us here today.
Speaker Change: So welcome to axon third quarter 2024 earnings call. It is truly humbling to come back to you with another fantastic update and to show you. These videos to capture what we've been working on and the relationships, we strive to build with our customers.
Speaker Change: These calls are a great opportunity for us to reflect on our recent momentum while thinking about what's next.
Speaker Change: As I've shared with you in the past.
Speaker Change: And the majority of my time with our customers and with our product teams, ensuring that we are inventing and focused on the right things and aligning our efforts, where our customers need us when and where they need us to be for their future.
Speaker Change: I've been able to lean in with hundreds of our customers over the past few months between the.
Speaker Change: Just the Big Army show.
Speaker Change: The chiefs of police conference and several events at our offices and internationally.
Speaker Change: Our customers are as excited as we are about what's ahead and it's energizing to see them ready to move forward with us on this journey together.
Speaker Change: There is no place where this is more clear to me than the area of artificial intelligence.
Speaker Change: The interest is immense here and we are already building a suite of products for our new AI era plan, providing access to an expanding set of solutions are.
Speaker Change: Our strategy here is twofold.
Speaker Change: First we understand and believe that AI innovation is moving at a breakneck pace.
Speaker Change: Would be almost impossible for us to continually update our go to market offerings at the speed that AI is moving with.
Speaker Change: With this plan, we get to deliver an ever changing and expanding offering to drive increased value for our customers over time.
Speaker Change: Second we want to partner with our customers by offering them access to the solutions we have today.
Speaker Change: And those we are building for the future.
Speaker Change: We can work together on this adapting to deliver what they need as technology improves and evolves.
Speaker Change: We know the best way to win is by putting our customers first.
Speaker Change: This is going to be how we help them harness the power of AI as we launched many exciting products over the coming years.
Speaker Change: AI is one of the many areas that excite me about our business, but it's not the only one.
Speaker Change: Taser 10, combined with the power of our expanding virtual reality or VR training portfolio continues to gain traction as a disruptive force to how we escalate in difficult situations.
Speaker Change: Real time capabilities enabled with axon body for and fuses and advanced response in communication in ways that are finally, modernizing public safety communication tools that have been a bit stagnant for decades.
Speaker Change: And our momentum in newer categories like drones, and robotics continues to accelerate with our recently closed acquisition of <unk>, which helped enable kemple BD as you saw to gave the first FAA approval waiver for $24 seven drone operations as first responder.
In my position, some of my interviews can be very lengthy.
Speaker Change: To summarize I.
Speaker Change: I am very excited about what we're seeing in the market today and the energy our customers have put behind what we are doing.
Speaker Change: We're on a multiyear journey to modernize the way public safety operates and the opportunity in front of US is to drive real improvement and outcomes that matter to our communities and to our customers who work tirelessly everyday to make the world safer.
Speaker Change: While we report our results to you on a quarterly basis I believe our success is measured in years and lives saved.
Speaker Change: We remain focused on our moonshot goal and our mission to protect life.
Speaker Change: And we're thankful to have you on this journey with us and with that I'll turn it over to Josh Isner.
Josh Isner: Thanks, a lot Rick.
Josh Isner: And good afternoon, everybody. This week, we are participating in a core element of our culture at axon, putting our customers first together. It is the week of the customer internally, where we invite customers into work to share their stories recognize our internal support teams and double down unemployed.
Josh Isner: On employee training to ensure that the customer remains at the center of our universe.
Josh Isner: Like to share a quick anecdote to that adds.
Josh Isner: In response to the devastating hurricanes that impacted the southeastern U S. In September and October we deployed our axon aid emergency response team to work alongside first responders around the clock for 16 days our team got to witness the magnitude of customers efforts firsthand.
Josh Isner: Axon, we know our customers are heroes and being a small service to them. In this mission was an honor and nothing short of inspirational.
Josh Isner: We work every day to help our customers achieve better outcomes and when we put their needs first we get to share in their successes.
Josh Isner: Understanding this is something I've spent a lot of time on and percolate into how we built our team.
Josh Isner: When I look at what our team is working on with our customers and the results. We are delivering because of our strong partnership with them I continue to be excited and impressed.
Josh Isner: Briefly share a few updates that build my confidence first our record results. We just delivered our 11th consecutive quarter growing above 25% and our third quarter of this year growing above 30%.
Josh Isner: That growth puts us at a level, where we are accomplishing in quarters, what took us years to do only a few years ago.
Josh Isner: While we've been growing fast we still have line of sight to a multiyear growth opportunity that continues to build we closed Q3 with record bookings in excess of $1 billion on both an absolute and normalized five year basis.
Josh Isner: That's our strongest normalized booking quarter in history outside of Q4 last year.
Josh Isner: As we move to close out this Q4, which has historically been our strongest bookings quarter. We are already executing against the largest pipeline we've ever had and we fully expect to post an exceptional and record results again.
Josh Isner: Third what's really encouraging here is that we are seeing strength across the board our state and local business is firing on all cylinders led by Jessica Duncan and the early interest we are seeing in our AI era plan signals to me that this new offering could be one of the more meaningful drivers for us in the year to come.
Josh Isner: Beyond our state and local business our U S. Federal bookings came in higher than what we did in our full year just a few years ago with four of our top 10 domestic deals in the quarter coming from federal customers across several agencies, including DHS IRS and Amtrak looking.
Josh Isner: Looking ahead, we have a clear path to surpass the Q3 federal bookings again in Q4 were our strongest year yet.
Josh Isner: International bookings came in at near record levels match in Q4 of last year up 40% sequentially from Q2.
Josh Isner: And our year to date international bookings are up 40% from last year.
Josh Isner: Similar to federal we see a clear path to surpassed Q3 bookings again in Q4.
Josh Isner: Finally, we saw strong bookings from corrections customers from our and our Justice segment continued to grow and we have several fortune 500 companies conducting retail security trials with axon products in the enterprise segment.
Josh Isner: As is the case every Q4, we must do two things well number one close out the year with maximum intensity and flawless execution.
Josh Isner: A number to ensure that we are well prepared to drive our record 2025.
Josh Isner: We have a lot of sharp adaptable and unstoppable teammates that are embracing this challenge I know I say this a lot, but I truly believe Exxon is in the strongest position we've ever been we have an immense opportunity ahead to grow our business and continue to progress toward our moonshot goal, which we will pursue.
Josh Isner: With vigor.
Brittany: Now I'll pass it over to Brittany to go over everything in more detail.
Josh Isner: Okay.
Brittany: Thank you Josh.
Speaker Change: This quarter marks two years for me in axon and the business has certainly been incredible.
Speaker Change: I couldnt be more pleased to share the results of another great Q3.
Speaker Change: We grew revenue, 32% year over year and delivered strong adjusted EBITDA with a 26, 7% margin.
Speaker Change: We achieved this margin expansion, while driving over 30% top line growth and we continue to successfully prioritize balancing the bottom line with achieving that strong top line growth that we promised.
Speaker Change: As Rick and Jon both talked about the focus on the phone.
Speaker Change: On the product innovation and delivering for our customers remains our north star and this is what enables us to keep delivering these types of results.
Speaker Change: Thank you to everyone on our team.
Speaker Change: Okay.
Speaker Change: As we get into the details I am, particularly excited that the revenue growth is broad based in terms of product and customer vertical.
Speaker Change: I spoke to the strength, we're seeing across different customers.
Speaker Change: Strength across our products as well for.
Speaker Change: For example, our acquisition of thesis has been very positive across a number of Arbor falls and Taser 10 also continues to exceed our expectations on its adoption.
Speaker Change: Taser revenue was a standout in the quarter growing 36% year over year, the strongest growth in our <unk> segment and more than two years on the back of increased capacity and broad based demand.
Speaker Change: So all in services was up 36% year over year with software revenue was the primary driver.
Speaker Change: <unk> of $885 million is up 36% year over year, and our net revenue retention and indicator of growth with our existing and new customers increased to 123%.
Speaker Change: Sensors and other revenue was up 18% year over year with strong demand for axon body for partially offset by fleet.
Speaker Change: Fleet continues to be a very strong product, but given the RFP timing and customer deployment schedules, we expect it to have inconsistent hardware revenue quarter to quarter.
Speaker Change: Overall, our future contracted revenue sits at approximately $7 7 billion exiting the quarter, which is up 33% year over year.
Speaker Change: As a reminder, this is a GAAP definition of our remaining performance obligations and we will not tie exactly to commentary we share about booking.
Josh Isner: Bookings are also seasonally strongest for us in Q3, and Q4 and as Josh here, we're continuing to see that this year with a strong Q4 in front of us.
Josh Isner: Adjusted gross margin of 63, 2% with stable sequentially and up approximately 50 basis points from last year.
Josh Isner: Overall, as we have ramped automation and efficiency and our teams are 10 manufacturing, we have stabilized our margins and expect to maintain its approximate levels subject to the usual business next dynamic.
Josh Isner: Adjusted EBITDA margin of 26, 7% with a three year record driven by operating leverage as we delivered scale on strong revenue.
Josh Isner: One note on our financials that you will see in our forthcoming 10-Q is that we have made a revision to our historical financials to reflect corrections with certain errors related to the categorization of some of our partner relationships as principle instead of as agent.
Josh Isner: We concluded that these were not material to any previously issued financial statements.
Josh Isner: Current period reported financials and revised historical financials reflect revenue and expense recognition consistent with the corrections we made in the revision.
Josh Isner: Now turning to our guidance, we are pleased to raise guidance again on both revenue and adjusted EBITDA. Our Q4 revenue guidance is a range of $5 $60 million to $570 million, representing more than 30% growth at the midpoint.
Josh Isner: This implies approximately $2 7 billion and full year revenue are greater than 32% annual growth.
Josh Isner: From our prior guidance of two to two 5 billion or 29, 5% price.
Josh Isner: Our adjusted EBITDA guidance for the fourth quarter is a range of $130 million to $135 million or approximately 23, 5%.
Josh Isner: Adjusted EBITDA margin.
Josh Isner: This implies full year adjusted EBITDA dollars of approximately $510 million or 24, 6% margin.
Josh Isner: Note that Q4 implies lower adjusted EBITDA margins and we were just able to achieve in Q3, which is a result of timing on some of our expenses and also reflects a full quarter of our now closed Pedro and acquisition and cost to integrate.
Josh Isner: We continue to have conviction in our margin target of 25% for 25, which continues to show nice leverage over full year 'twenty four.
Josh Isner: Overall, we are very pleased with our progress against the three year targets. We set out for 2025, we are on pace to deliver our initial 2 million revenue target for 2025, our full year early and remain confident in our extended target of 20% or greater annual growth all while increasing our adjusted EBITDA margins and achieving.
Josh Isner: The 25% target next year.
Speaker Change: I'd like to turn the call over to take any questions.
Speaker Change: Thanks, Bernie we can all get up into the gallery view.
Speaker Change: Oh.
Speaker Change: We will take our first question from George Notter at Jefferies, Hey, George.
Speaker Change: Hi, guys. Thanks, very much congratulations on the strong results.
Speaker Change: Wanted to ask some questions about dropped one.
Speaker Change: I'm curious if you can give us an update on.
Speaker Change: Our progress in the September quarter, there in terms of pipeline was there any revenue recognition tied to draft one.
Speaker Change: Any significant contributions to your IRR.
Speaker Change: So thanks, a lot for the question I really appreciate it.
Speaker Change: In terms of draft. One yes, we did receive some orders in Q3 from kind of early customers. So there was some impact on revenue from draft, one, but I would still say we're in like the top of the first inning on what that's going to look like moving forward, especially as we go into next year with drops in the one being the anchor product of our AI era bundle.
Speaker Change: And so certainly we're very very bullish on drop one in all of our AI products contributions to both revenue and profitability over time, but we're still not yet seen.
Speaker Change: A major impact on the quarter to quarter results, which was expected due to the SaaS accounting.
Speaker Change: Last quarter I think you guys mentioned, a 100 $100 million pipeline I think in six or seven weeks of selling Andre pollutant is there an update to that number.
Speaker Change: Continues to grow, especially after ICP so were.
Speaker Change: Again, we're converting some of that pipeline into the new AI era bundle that we're coming out with next year as well and again dropped one is really the kind of central driver of interest in that bundle along with a number of other AI features we're developing right now so certainly safe to say that the interest is the most we've seen out of any.
Speaker Change: Year, one product got it.
Speaker Change: One of my follow up and I'll pass it on.
Speaker Change: Where are we going to land in terms of the pricing on that I realize it's going to go into the bundle.
Speaker Change: I know you guys have been selling at all of the car to some degree to early customers and we'd heard price points of $30 $40 a month, but.
Speaker Change: Is that is that kind of the right ZIP code in terms of where this is price or where maybe the incremental bundle.
Speaker Change: Would step up to in terms of pricing and any sense there.
Speaker Change: Sure.
Speaker Change: So right now it dropped one alone is $65 a month and a requires transcription on top of that for another 20, so at $85 a month for just dropped one.
Speaker Change: We're looking at the AI era bundled price of $1 99, and the sum of the parts of that bundle is expected to be somewhere around 250 to $350 in terms of everything included in it so good economics for buying.
Speaker Change: As a group of features instead of individual standalone features but that'll that'll be the price going into next year.
Speaker Change: Great. Thank you and those are just the launch features of course the features in the aeroplan or going to grow.
Speaker Change: Rapidly.
Speaker Change: Makes sense. Thanks.
Speaker Change: I would probably just note that we'll probably you'll hear us talking more and more about the AI bundled plan and less and less about <unk>. One is sort of an individual product or an individual data point, it's really going to as Josh said would be the anchor product in the new AI bundle. We'll continue to add features there, but that's that's what you'll hear us talking about quarter to quarter.
And of course.
Speaker Change: Much everything in that plan are pure SaaS software additions on top of our overall software of course, they build upon people, who have our hardware like cameras and tasers and alike.
Speaker Change: Era plant itself at all good old stuff.
Speaker Change: Thanks George.
Speaker Change: Up next we've got Jonathan Ho at William Blair.
Speaker Change: Okay.
Speaker Change: Good afternoon, just wanted to get a sense from you as you start to think about sort of the broader opportunity around drones as a first responder how should we think about.
Speaker Change: And maybe the ability to monetize this the ability to see broader adoption.
Speaker Change: What sort of has to happen for that to take place. Thank you.
Speaker Change: Greg you want to start and I'll pile on.
Greg: Sorry, I had myself on mute first Jonathan are you cheating honest with the headphone listening to another earnings call at the same time potentially.
Speaker Change: Potentially.
Speaker Change: Yes.
Speaker Change: Hey.
Speaker Change: So, yes, we see drones.
Speaker Change: A huge opportunity.
Speaker Change: The <unk> acquisition, we think is a real key part of that because before you can start flying drones without extra human standing around watching them, you've got to be able to see your aerospace and an array of sensors can see the aerospace far better than a human on rooftop.
Speaker Change: And so part of our.
Speaker Change: Assessment and making the <unk> acquisition was a dual berth number one that it would be a key enabler for <unk> to be able to fly your own joins you got to be able to see the airspace well and then the second is that we're going to see increased interest in counter drone capabilities.
Speaker Change: I just learned this past week that apparently somebody in Pennsylvania put a pipe bomb on a drone is going to fly it into critical infrastructure or something.
Speaker Change: Okay.
Speaker Change: We'd be glad to see there has not been that much of that kind of activity here in the U S. But it's certainly growing all over the world.
Speaker Change: And we certainly hope it doesn't come here I think.
Speaker Change: It is something that is likely to get more nefarious use and right now counter drone is really limited to federal agencies.
Speaker Change: Meaning.
Speaker Change: State and local cannot interdict the drones themselves. So D. Drone is helpful. In that case, because it will tell you where the pilot is and you can go deal with the pilot directly however.
Speaker Change: There was a bill in Congress I believe this year I don't think it's going to make it through but there have been some efforts to give state and local law enforcement the ability to interdict drones.
Speaker Change: Not to get into politics, but my assessment of the shift of.
Speaker Change: Well actually we're coming out of is that that is likely to speed up.
Speaker Change: Law enforcement, enabling legislation potentially including the local ability for law enforcement to interdict drone. So D. Georgia Tech enabler I think Scotty Oh as a partner, we sort of made a shift with the shifting.
Speaker Change: <unk> Dci is the Chinese drone manufacturer.
Speaker Change: We think theres.
Speaker Change: There's legislation afoot to pass the house of Representatives unanimously that's going to be blocking dji and long term.
Speaker Change: They all Chinese drones.
Speaker Change: And so we shifted our focus really with Sky D O who turns out is the world leader in autonomy already for.
Speaker Change: For drugs that can fly themselves effectively so we think between the partnership the acquisition of <unk> and then some pending legislative changes I would expect within 24 months.
Speaker Change: We will see a shifting landscape to where our state and local folks can begin using more aggressive counter drone capabilities and.
Speaker Change: And by the way last thing I will say, we did a full scan of the of the world's sort of counter drone providers a few years ago before we selected the drone.
Speaker Change: We liked deidra and strategy there, we're very focused on detection.
Speaker Change: And not getting too aggressive on mitigation knowing that that.
Speaker Change: Basically owning the detection space and being at a lower cost point than some of the competitors that have been out there focused on more military style interdiction efforts has given them a good footprint to scale for them and then the strategy has been to able to plug in other hardware over time as the legal landscape changes.
Speaker Change: And then John I'd, just add two things on Rick's Great summary, one.
Speaker Change: We're super pumped about is how the market's evolving to think about the real time crime center space and the DLR space together, which we think is both the right and good for agencies and communities and plays right into our strengths and our differentiation of the solutions of the combination of fuses.
Speaker Change: And the real time crime center deeply.
Speaker Change: Deeply connected with all of our other devices and then into the <unk> partnership stuff that Rick was just talking about agencies are thinking about buying those together and thats both great for them as they think about how they use this technology to keep communities safe and it plays right into all of axon strategy.
Speaker Change: And the second which is another example of that same thing we just had a major agency.
Speaker Change: Who is in the middle of rolling out there.
Speaker Change: Other day talk unprompted about the notion of they would love to have an officer would be able to press that watch me button that we have on our AB four cameras and have that under the right conditions automatically trigger.
Speaker Change: The dispatch of our CFR drone to bring health and extra overwatch for that situation, even faster than with any other human in the loop can be and that's exactly the kind of solution that is powered by a combination of all the things we bring to bear for agencies.
Speaker Change: Excellent and then just as a follow up I mean, Taser again had a very strong quarter. We regularly receive your question whether the taser business can sustain this level of growth and just wanted to get a sense from you. What gives you the confidence that we can continue to see taser be one of the major drivers of the business or where maybe.
Speaker Change: C C.
Speaker Change: Shifting leadership, where things like dropped one will start to take over that growth over time. Thank you.
Speaker Change: Yeah.
Speaker Change: But they do compete for the top slot and it does make me proud that the old War horse that Taser can still can still run.
Speaker Change: So we.
Speaker Change: I think we've got so many things that have the opportunity to continue.
Speaker Change: To be disruptive and to grow the big one for Taser just come back on that to me is really international.
Speaker Change: I think we are on the cost, but actually I'm getting text updates from my engineers that are in our lab today actually working on some pretty cool stuff related to taser that.
Speaker Change: We think we have the opportunity in the next couple of years to become the primary weapon internationally now in the U S. The gun is going to remain primary required while culturally because police or deal with so many guns out in the public but in much of the world.
Speaker Change: John is just if you had a viable high reliability alternative.
Speaker Change: Within that 45 foot range I don't what.
Speaker Change: Just over the last thing we're working on as clothing penetration once we get that dialed in we've got a shot at becoming the primary self defense weapon in international markets, where there is not a high propensity of handguns out in the public and I think back to be a real game changer for Taser.
Speaker Change: And I might just add one or two more thoughts there about the question of is a sustainable from the Taser business to keep growing in my opinion the answer is absolutely yes.
Speaker Change: Year two of five in an upgrade cycle right now.
Speaker Change: We continue to see exceptionally strong demand literally double what it was.
Speaker Change: As we've said on previous calls the T seven and so certainly a lot of runway ahead to continue to grow the taser business and looked like as Rick said.
Speaker Change: Taser business is going to solve one of the most critical.
Speaker Change: Issues in policing over the long term, which is that these encounters can and in depth either from the civilian or a police officer and if we can solve that problem I still think we're scratching the surface of what the Taser business is capable of.
Speaker Change: Just from a detailed sort of modeling perspective, I don't know that I would expect every quarter to be as strong as this quarter was this was a particularly strong quarter for teaser.
Speaker Change: And that is partly because we got more capacity on line four the teaser business, which helps us go fulfill all of that demand.
Speaker Change: So just from a growth standpoint, I would say this quarter really stood out and it continues to be across both T tenant and our T seven and legacy hormones.
Speaker Change: And that was a little bit unique, but everything reckon, Josh said about the long term trajectory.
Speaker Change: Power and the ability to sell it into different markets holds over over the long term.
Speaker Change: Excellent. Thank you again and congrats on the strong quarter.
Speaker Change: Thanks, Jonathan up next we have Mike King Goldman Sachs.
Speaker Change: Good afternoon. Thank you very much for the question.
Speaker Change: I wanted to follow up on a comment made about <unk> 24, I think you said it would be likely a record bookings quarter.
Speaker Change: Is that right and was a year ago <unk> bookings in that like 171 $8 billion range just to make sure we're thinking.
Speaker Change: Thinking about that the right way and if you could talk about.
Speaker Change: Some of the visibility and the confidence that you have in there.
Speaker Change: Those things that you mentioned.
Speaker Change: Federal bookings increasing sequentially international bookings isn't it.
Speaker Change: AI era is it.
Speaker Change: The pipeline growth that you've seen coming out of ICP.
Just love some color around the bookings outlook that you gave for <unk>. Thank you.
Speaker Change: Sure, Yes, certainly reiterating that I'm very confident and encouraged here in terms of what we're going to do in Q4 bookings probably won't give you a specific number other than we expected to see last quarter and I think on the last call I said the sum of Q3 and Q4 this year will be comparable to what we did in the full year last year.
Speaker Change: In terms of bookings so we're very bullish on bookings.
Speaker Change: Of what's informing that confidence is just tremendous execution across all four segments of the business.
Speaker Change: State and local enterprise Federal and international we are meaningfully meaningful deals in all four of those segments in Q4 and in a lot of them such that there's no. There's not it's not like a huge percentage of the bookings would be concentrated on one deal we feel really really good about the foundation.
Speaker Change: We're excited to talk in more detail about our Q4 bookings in February.
Speaker Change: Oh.
Speaker Change: There's been a couple of questions now about like what's what's gonna do better or what's going to drive the growth going forward I think one of the things that I like so much that this quarter demonstrates is the growth is across the board that you might get a little more from one segment, one quarter and a little more from another segment another quarter, but really across the business.
Speaker Change: The devices on the strengths of a before teaser on the strength of.
Speaker Change: Taser 10, and then our software.
Speaker Change: On the strength of both our existing software business is continuing to perform well and then the very bright future that we think the AI plan has.
Speaker Change: We'll continue to drive software and so you'll see a slightly different mix every quarter, but as you look long term you really should expect all three of those pieces to continue driving our growth.
Speaker Change: Excellent thanks, and if I could follow up on the earlier case your question.
Speaker Change: The revenue I counted this was the sixth consecutive quarter, where Taser has hit a record revenue record.
Speaker Change: You talked a little bit about faster than expected adoption I think if we look back to taser seven and it probably took you.
Speaker Change: I think five years to get to 80% to 85% adoption.
Speaker Change: How much shorter cannot be and could you just remind us like what's the typical price mix or ASP uplift versus changes or seven thank you.
Speaker Change: So Mike the question was how fast can we get to 85% adoption on <unk> 10 versus <unk> seven.
Speaker Change: Yes, that's right okay.
Speaker Change: Look I think.
Speaker Change: That would be setting our sights short I would say our goal is to.
Speaker Change: Transition every key seven and legacy model Taser into a T 10, and we we think we have an opportunity to do that.
Speaker Change: This this taser 10, while each tasers and incremental improvement over the last one page 10 is just a fundamental <unk>.
Speaker Change: Mass of leap forward and the technology in the Deescalation capabilities and the officer safety features we really believe that.
Speaker Change: Every comp will be best served with the Taser set where the taste of 10, I'm, sorry, and certainly as we go into the next few years here of the KC 10 lifecycle. The primary goal is.
Speaker Change: As upgrade and replacement of the current fleet and again, we're very confident in our ability to do that.
Josh Isner: Great excellent. Thank you Josh.
Speaker Change: Thanks, Mike up next we have Joe Cardoso with J P. Morgan.
Joe Cardoso: Hi, Thanks for the question guys I guess, maybe just a quick clarification on the bookings and Josh can you just quickly clarify if your comments today are you guys on track to meet the bogey that you laid out last quarter and achieving bookings in line with full year 23 in the back half of this year or is it more like unknown I'm just curious if you could.
Speaker Change: Just flesh that out a little bit more because it does seem like perhaps here a little bit off pace and I just wanted to make sure that I'm not thinking about that incorrectly.
Joe Cardoso:
Speaker Change: I'd say, you're thinking about that incorrectly.
Speaker Change: And then so when you when you're going into the back half of this year like where are you actually seeing the growth in driving these bookings across the portfolio is it really all broad base in terms of the entire portfolio are you guys embedding any of the new AI suite in that in terms of the releases. There just curious in terms of like how are you thinking about the drivers and the Marine Corps.
Speaker Change: And then I have a quick follow ups, yeah sure look I.
Speaker Change: I certainly appreciate the question Joe.
Speaker Change:
Speaker Change: These deals that are going to be closed in Q4, our deals that generally six to 12 month sales cycle at a minimum right.
Speaker Change: These things take the full year to come together.
Speaker Change: Terry we talked in Q1, when bookings are seasonally light traditionally that part of that is the team is getting their arms around the new products and the new pricing are getting their arms around their new book of business is the territories can change and so forth and so that's really where the groundwork goes into like building the pipeline for the rest of the year and naturally.
Speaker Change: Most of that closes in Q3, and Q4, especially when you see some of the biggest budgets in the country. The federal government, Florida, Texas, All ending on September 30, you get a lot of September auction and then you've got a lot of new budget dollars being spent in Q4, and so I don't know that the AI bundle is going to have a major impact on Q4 since we.
Speaker Change: <unk> in the same quarter.
Speaker Change: And we're still building the pipe for the long term for some of our newer features and products. So the big driver of a lot of these deals is officer safety plan execution in the state and local markets and some large deals in international federal and enterprise.
Speaker Change: <unk> been coming together over the course of several quarters. So certainly expect Q4 to really Trump Q3 in terms of just the absolute dollars in the normalized bookings, but it's also the result of a lot of pipeline building that happened throughout the year.
Speaker Change: Got it very clear Josh. Thanks, I appreciate the explanation there and then maybe a question for Brittany just.
Speaker Change: Margin subtract nicely through the year and expanded each quarter and even outperforming kind of your expectations. If I'm remembering the guidance correctly. So as we look here into the fourth quarter. The guide here for sequential decline can you maybe just walk us through what has been the driver of outperformance in margins over the past couple of quarters, and then relative to your expectations going into this quarter.
Speaker Change: Like what's different that's driving your expectations for the sequential decline to occur in the fourth quarter itself. Thanks for the questions Yeah.
Speaker Change: We've actually done a pretty good job hitting our expense targets in our Opex targets and then our revenue has outperformed and so what you're really seeing is some nice flow through on that higher top line revenue coming through to the bottom line and it's it's been really nice to see how the team has been able to.
Speaker Change: In its scale and get some leverage out of the out of the Opex and especially on the SG&A side.
Speaker Change: When we look at Q4, though.
Speaker Change: We also expect that some of the benefit has been timing right like we've been talking about timing not everything hits exactly in the quarter. So we've been a little bit behind on some of our expense spend as we've gone through the first three quarters, we expect to catch up on some of that in Q4 and then the other thing is we expect to have a full quarter of <unk>.
Speaker Change: And some of the integration costs associated with <unk> in Q4, now that we have closed that deal.
Speaker Change: I might just add one more thought on an adjusted EBIT just high level, which is the thing I'm. Most excited about is the fact that we are not sacrificing R&D to achieve these results.
Speaker Change: It would be very easy to drive up adjusted EBITDA by mortgaging, the future and I don't think anyone it feels that way right now we're still in the place of just loading up on new opportunities and investing relentlessly in them. We're just seeing like to Britta said over delivery and a lot more discipline in SG&A as well.
Speaker Change: Thanks, Brittany, Thanks, Josh I appreciate the color.
Speaker Change: Thanks, Joe next we have Jamie Reynolds that Murray family.
Jamie Reynolds: Hey, good afternoon, everyone and congrats again on the quarter.
Speaker Change: Rick I know you just mentioned there is probably some stuff to keep an eye on for the international market going forward, but just given the strength in bookings that you've kind of seen through the year I guess could you give us a sense as to what's driving maybe the improved traction kind of near term and kind of as we go into next year.
Speaker Change: It really is broad based.
Speaker Change: <unk>.
Speaker Change: About <unk> six seven months ago.
Speaker Change: I just come back from a Tech conference and told Jeff we need to pull the emergency brake and take a look at all of our product development plans and look at where.
Speaker Change: I would enable new features that weren't even on our.
Speaker Change: On our visibility list of Europe.
Speaker Change: The emergency brake turn the wheel.
Speaker Change: Well no. This is the one where you are in reverse and you pull the break is like the dukes of hazard anyway.
Speaker Change: It was a pretty big shift.
Speaker Change: For example, one that came out of that.
Speaker Change: We also do these AI round tables well.
Speaker Change: Their customer round tables, but we did want really focused on AI.
Speaker Change: And one thing that became very clear was being able to do real time translation on a body camera would be just insanely valuable.
Speaker Change: At the top of the charts and so we pivoted.
Speaker Change: Jeff basically so as you can imagine how disruptive it is.
Speaker Change: He is managing like 1500 engineers.
Speaker Change: Hey hold on I know, you've got everything planned everybody's working but looks like disrupt everything.
Speaker Change: And I think that enabled us to talk about six or seven major eight new AI features by IAC P already and I'm really proud of companies at our scale.
Speaker Change: To move like that.
But I think that our customers are seeing again things that just feel almost magical that are possible with AI.
Speaker Change: Our investment in things like our EAC our ethics.
Speaker Change: <unk> Advisory Council to help US do safety testing on things like draft, one just simply.
Speaker Change: Running tests to see if you change the race of the subject does that pick up any historical bias from the global dataset that these models are trained on it.
Speaker Change: We did pick up some things like word choice.
Speaker Change: If it says the demand flat this year versus the man left the scene you can really change the emotional perception of that statement and so we did things like tuning down the word choice severity. So that our AI rates. The most boring police report it can right because it's a human's job to out emotion and tone to it.
Speaker Change: So anyway, I think that focus is really rejuvenated interest in the real time connectivity of body cameras you.
Speaker Change: You all may remember a few years ago, we had this whole debate about when we were developing a b three should we put a wired or wireless chip cellular LTE chip in the camera our customers were telling us they actually.
Speaker Change: Not only were they are not interested in it they were skeptical of it we're hearing things like I don't want my boss watching me real time and micro managing me from the field.
Speaker Change: And we still said you know just it may not be maybe they don't want a real streamed real time video, but theres going to be something they're going to want to do it. So not only do we decided to put the VLT chip in the camera, we decided to put it in every camera we made a decision not to sell a camera without it because we knew our customers. If we had a cheaper camera.
Speaker Change: The thing they didn't know they needed yet that's the one at Woodbine.
Speaker Change: There were some short term pain, because our cost of goods crept up and as maybe you know our customers are on these upgrade plans, where they get the next camera and we don't get to charge them anymore for it so eating.
Speaker Change: And $80 bomb increase.
Speaker Change: On the hopes and dreams that we would find.
Speaker Change: Our value for that was a bit of a risky bet will now thats really coming home to roost because things like dropped one are only possible because of that real time connectivity real time translation only possible because of that real time connectivity. So I think we're now reaping the gains of some of those bets we've made historically and it's across the <unk>.
Speaker Change: Portfolio I don't think Theres any one thing that's what makes it is just so exciting I mean, it makes judge just job so difficult and Britney because I'm drawing 1000 features at Japanese like hold obviously slowed down we got to like rationalize the sequencing and when we're going to build things and what are the things that are going to be.
Speaker Change: Delightful to use out of the gate now that aren't going to.
Speaker Change: Overset customer expectations and of course.
Speaker Change: Britney's, while making sure that.
Speaker Change: We're holding a line on how much we're spending on all this stuff.
Speaker Change: John.
Speaker Change: I think what you thought I think again, it's so many of the things that are a goldilocks and magical I think about Exxon.
Speaker Change: <unk> for lack of a better phrase connecting like the questions about whats happening with bookings or a demand like right now and then everything Rick is talking about the future is if.
Speaker Change: All of our new innovations.
Speaker Change: A really leading indicators.
Speaker Change: <unk>.
Speaker Change: This time next year's growth not about this quarter's growth because of the sales cycle stopped because of building stuff, but they feed into customers' excitement about their back on axon for the long term, but the bookings that are this quarter next quarter are about the pilot.
Speaker Change: As Josh talked about that.
Speaker Change: That got delayed nine.
Nine months ago, and it all connects and that ongoing SEAQUEST, beating upon itself in a really virtuous thick waves, we're super excited about it.
Jamie Reynolds: Jamie was your question specific to international at all or was that did that yeah. Yeah. I was just kind of what's driving that improved uptake internationally.
Jamie Reynolds: Yes for sure you're going to actually answer the question you asked.
Jamie Reynolds: Everything is optional, but we might as well answer that one as well.
Jamie Reynolds: So on an international look.
Jamie Reynolds: As you know.
Jamie Reynolds: We in searching for a new CRO, our big priority was upping our game internationally and Cameron Brooks has come in really early on this year hit the ground running and is really just helps.
Jamie Reynolds: Up our game in terms of the quality of the team the quality of the execution. How we are executing now but also building for the future and I think just across the board. We've got some new players on the team that are that are really good and in free agent signings we've got.
Jamie Reynolds: Customer momentum from the work that's been done in the last couple of years and we're starting with frankly, just see things come together.
Jamie Reynolds: At a more.
Jamie Reynolds: Polish level, there's still a long way to go there is still a huge tam out there everything is going to take time internationally just due to the fact, you're dealing with federal governments and all of these countries not state and local police forces that are able to operate semi autonomous Lee.
Jamie Reynolds: So it's still going to be.
Jamie Reynolds: Grant, but we really really believe were on the right track and its attributes are kind of a team. We are building here led by camera.
Speaker Change: Great. Thank you so much congrats again, you got to Jamie Thanks.
Speaker Change: Thanks, Jamie of next we have Jordan of Bank of America.
Jordan: Hey, Thank you guys for taking the question.
Speaker Change: On the administration change how are you guys looking at the opportunities versus the risks involved.
Jordan: With.
Speaker Change: What plans have been said.
Speaker Change: If they come through or not the increased emphasis on border security versus tariffs.
Speaker Change: Yeah I appreciate the question Jordan I'd say, the first thing that I want to make really clear as like we have a very a political culture at axon.
We know we've got to be successful in a Democratic administration as well as a Republican administration and we've seen that over the last 10 years with both parties being in power in the business continuing to grow.
Speaker Change: Of course, there are going to be some.
Speaker Change: Interesting opportunities for us.
Speaker Change: The New administration is focused primarily on border security.
Speaker Change: We're excited about how we can help there.
Speaker Change: New capabilities that we can bring to the table to offer support on that but at the high level certainly we believe look like saving lives.
Speaker Change: Driving transparency.
And delivering disruptive technologies to governments and public safety agencies around the world. Those are things that are really not specific to which party is in power and we're really focused on just delivering the best products we can.
Speaker Change: And then on just if tariffs are imposed how are you looking at what levers you can pull to offset any supply chain component changes.
Speaker Change: Yeah, So and we certainly lived in an environment of terrorists before.
Speaker Change: And so I think our our philosophy is generally to be pretty flexible.
Speaker Change: We've got multiple sources from a supplier standpoint.
Speaker Change: We do.
Speaker Change: Manufacturing are teasers like in the U S. So then it will really be on component parts if those come in.
Speaker Change: So well just work through it and we'll be flexible.
Speaker Change: Be nimble as those come through and as we see what they are.
Speaker Change: Thank you guys. Thanks, Jordan of next we have Josh Reilly at Needham.
Speaker Change: Alright, thanks for taking my questions.
Josh Reilly: Just starting off can you discuss how the.
Josh Reilly: Bedroom and status and your position as the I believe the only cloud body Cam vendor with the highest level fed ramp status has been helping you win some of these U S federal opportunities and.
Josh Reilly: Just along with that how does the growth in U S. Federal then I guess relative to the broader business. This year, that's significantly above the consolidated growth rate I know you don't break it out but any color there would be helpful. Yes.
Speaker Change: Yes, Thanks, a lot Josh.
Speaker Change: On the first question on government said rent look like we've invested a lot and we've put a lot of effort into being a fed ramp high product in the federal government no question about that and that's certainly a differentiator for us, but I would be so bold as to say, even if everybody was on fed ramp we're still winning the majority of deals in state and local work where we're competing.
Speaker Change: <unk> against the same companies without fed ramp and so I think it's more of a tribute to the team's quality product delivery and the federal teams phenomenal execution on the sales and more importantly, the support for our for our federal law enforcement customers and so the team has done a nice job. This year there is as I said much.
Speaker Change: In my remarks, Theres, a lot to still close in Q4, we could have a better Q4 than Q3.
Speaker Change: In the federal space.
Speaker Change: Gentlemen, because of the end of the budget year at the end of Q3, and so we will have to see where the dust settles, but certainly exciting double digit growth from federal and a lot of conviction that we're on the right path there.
Speaker Change: Got it that's helpful. And then just going back to the Taser revenues I think we all generally know that the capacity has been increasing sequentially, but maybe just over the next three or four quarters should we assume that.
Speaker Change: I know you said that maybe the sequential increases in revenue may not be the same but is it safe to assume there is still more capacity increases that will be coming in the next kind of three to five quarters as well. Thank you.
Speaker Change: Yeah for sure I mean, we as we talk about capacity, we are both part capacity and handle capacity and as you can imagine we're working to bring both of those out to meet that demand. We see there are lead times, we do have automation equipment.
Speaker Change: So it's not we can always turn on as much supply immediately as we would like you. So you can see the results of us getting more supply on this quarter.
Speaker Change: Then again the growth was particularly impressive this quarter I want to temper everyone's expectations.
Speaker Change: Looking the same every quarter, but yes, we'll keep bringing capacity on as we continue to see demand increase.
Speaker Change: Awesome. Thanks, guys. Thank you.
Speaker Change: Thanks, Josh next we'll go to a terminal Walsh with JMP.
Speaker Change: Great. Thanks, Thanks for taking the questions, maybe Rick or Josh kind of high level. One for you circling back to the <unk> or just general TFR opportunity can you.
Speaker Change: Does that seem to be in your mind.
Speaker Change: Kind of a state and local U S domestic kind of initial push or is their international.
Speaker Change: Opportunities along the lines, there and I guess I ask from the standpoint of.
Speaker Change: It seems like the landing with Taser Taser and any any time, whether it's taser tanger previous models and sort of the kind of the tip of the spear for the U S business.
Speaker Change: And it seems to be following a similar type of path and kind of the international front, but just curious if there is.
Speaker Change: Waste for <unk> types of use cases would be more again in that tip of the spear kind of on the international front with respect to drawn and the other thing you guys are just not sure. If I could start first just be drawn by itself without D. F. R kind of interest internationally I mean.
Speaker Change: Every country in the World is now thinking about how they're going to deal with drone threats in the past 24 months.
Speaker Change: And in many cases.
Speaker Change: <unk>.
Speaker Change: Brian just a great capability as the CEO of drone.
Speaker Change: And he has brought us new customers to whether it was the World Cup in Qatar the NFL stadiums are critical infrastructure.
And then we're seeing the same thing with fuze, assuming both of these acquisitions. These were two big bites for us to take.
Speaker Change: This closely together.
Speaker Change: And it's been really impressive how.
Speaker Change: How much customer interest there has been in those few says.
Speaker Change: That's really supercharged our enterprise customers.
Speaker Change: Enterprises want to be able to work collaboratively with public safety and futures becomes the backbone of doing that in real time D. Drone, we think theres more.
Speaker Change: But it's a new angle into military customers for us militaries around the world are very interested in how you deal with these small first person or mavic style drones.
Speaker Change: Critical infrastructure, and then enterprise there as well so it's a drone even on its own is not.
Speaker Change: Not only interesting to our existing customers frankly, probably even more interesting to the new customer sets they are bringing to us.
Speaker Change: <unk> is worth making counter drone, especially relevant when I survey our customers in state local.
Speaker Change: The responses are yeah, we're kind of interested in counter drone, but that's not really our mission set today to be dealing with hostile drones coming in now that for US is more of a future bet, but that's going to come on your plate as those threats grow.
Speaker Change: The <unk> thing is here and now that's where our customers really lined up if I can use the drone to enable GFR I wouldn't be able to fly on my own drones, not something I can do today, but I've got to do it and it's awkward way, where I've got people standing or rooftops and it's kind of as manual clue GP and we make it much safer and less clued you by putting a.
Speaker Change: He joined sensor up there.
Speaker Change: So I also am getting interest where was it.
Speaker Change: Another <unk> use case.
In one of our other markets. So it has not grown as a first responder, but.
Speaker Change: For competitive reasons I don't want it named sector. It is but this was a non law enforcement sector.
Speaker Change: They don't need to be flying drones, as first responder, but boy they sure wed like to be able to fly drones on automated patrol.
Speaker Change: Around their facilities.
Speaker Change: And so our partnership with <unk> and the acquisition of <unk> drove really come together naturally for us to be able to service a lot more than just drone is a first responder for police if you want to fly a drone without having to have manual human overseers onsite.
Speaker Change: We can take that.
Speaker Change: And by the way Scott He was a partner as well brings us into potentially new customers and critical infrastructure and elsewhere, where we haven't been historically.
Speaker Change: Thanks, Rick Thanks Trevor.
Speaker Change: Next we have Keith housing at Northcoast.
Speaker Change: Good morning, guys I know, we're going to run long here, so I'll try and making my questions quick I'm just real quick Brittany you talk about the product.
Speaker Change: On a pull forward or cannot pro forma catching up with the <unk> 10.
Speaker Change: Passing how much the growth in the quarter would you say it was more of a catching up of capacity as opposed to normalized demand.
Speaker Change: Okay.
Speaker Change: I would break it out necessarily Keith what I would say is we've had incredible demand demand has been outpacing our capacity.
Speaker Change: And so as that demand grows every quarter, we need to bring more capacity on and say what you saw this quarter with the combination of the two but I wouldn't say it's not.
Speaker Change: We chewed through backlog or something like that to deliver you're just seeing the ability for us to ship more into that demand.
Speaker Change: Got you I appreciate it and then services I know services can be lumpy, but we took a sequential growth in services was about $6 million, probably the lowest has grown sequentially for several years.
Speaker Change: Correctly, Amy happened in the quarter, how should we think about services going forward.
Speaker Change: Yes, great Great question, I think theres two pieces in that one.
Speaker Change: There's a little bit of a lag in that stat that you go through each quarter. So what we really booked in Q3 will show up in Q4.
Speaker Change: So a little bit of what youre seeing in the step in the quarter I sort of you know what.
Speaker Change: What's going on in Q2 from a booking standpoint and that because many of the bookings come in pretty late in the quarter.
So they don't the revenue from that doesn't necessarily get captured in our actual number.
Speaker Change: And then the other piece that's going on in there is that both our software stack and our services business.
Speaker Change: With some of the deployment of our fleet hardware being down in the quarter, which you can see in the fleet number we actually had less professional services associated with fleet and so that's actually offsetting some of the software piece. So if you were just looking at software you would see a larger step in what's coming through in <unk> and the number here.
Speaker Change: Actually seeing because we actually had a step down in PFS, which is atypical normally PFS that was growing in software it means growing but because he came down this quarter that youre seeing that dynamics gotcha, Okay, operator, I'll turn it back over thank you.
Speaker Change: Thanks Jay.
Speaker Change: I will try to get everyone in here, we will power of Baird.
Speaker Change: Okay awesome. Thank you congratulations on a strong quarter of execution.
Speaker Change: A question probably for Britney.
Speaker Change: Software and they are our growth continues to be very good there was some deceleration from the trend line you've been on there. So I guess I'm wondering if there's any other.
Speaker Change: I cover or impacts to kind of be aware of there and how to think about modeling that going forward as necessary as kind of the right growth rate and what are the puts and takes there.
Speaker Change: Yeah, I mean, I really look at that sort of on an average basis like I think because of the dynamics I just talked about our timing of when bookings come in and then our Florida looking at any one quarter is not as good as sort of averaging out over the year and you do have things like seasonality playing into that so I would say.
Speaker Change: Nothing underlying it that would change our sort of four to six quarter average on anything on the staff on a gross.
Speaker Change: Any of that and you're just seeing a little bit of timing in the quarter, we lag what's showing up in Q3 is really Q2, but it will show up in Q4 is really what we're talking about with strength in Q3, and then will show up in Q1 will be whatever we deliver in Q4.
Speaker Change: Yes.
Speaker Change: Okay I'll leave it there thank you all.
Speaker Change: We have one left with Jeremy Hamblin with Craig Hallum.
Speaker Change: Thanks, and congrats on another fantastic quarter.
Speaker Change #100: Come back to Taser, just for a second right. So.
<unk>, 50% year over year growth.
Speaker Change #101: Really impressive and it sounds like getting great traction on the international front.
Speaker Change #101: I wanted to see if we could.
Speaker Change #101: Pack.
Speaker Change #101: The driver there.
Speaker Change #101: It sounds like is really picking up on the international.
Speaker Change #101: Piece of the business, we know that Theres, a lot of opportunity domestically still but internationally.
Speaker Change #101: Is this more about the capability and I think just seeing what the device does versus the prior version.
Speaker Change #101: It is a huge step forward from a technology perspective.
Speaker Change #102: But does this make you think that the longer term.
Speaker Change #102: The potential is quite a bit bigger internationally than maybe what you've seen before that's part one of my question. The second part of it actually has to do with cartridge cartridge revenue relative to the growth in Taser was really not that.
Speaker Change #102: It was up I think maybe about 10% year over year and I was just curious if there was something in.
Speaker Change #102: In particular, there why that didn't.
Speaker Change #102: Throw a little bit stronger.
Speaker Change #103: Yeah, I can maybe start with territory, because that's easy and then if Jeff wants to talk more about TSMC Ken.
Speaker Change #104: So most of our Taser customers are on sort of a cartridge deployment plan, which smooth out how do you see cartridge revenue come in but we do have international customers, who are not on our plan and so what you'll see is that right now and then our cartridge revenue it is particularly lumpy quarter.
Speaker Change #104: Corner until last quarter, we had some big international customers come in and place cartridge orders and then those didnt repeat this quarter. So again I look at a longer trend line of cartridge growth.
Speaker Change #104: Versus last quarter to this quarter.
Speaker Change #104: And then I think the only other thing I would add maybe to get a little more color on Taser before I, let it go to Josh as you know last quarter in his script, Josh talked a bit about how much demand, we're seeing for teens or 10 relative to teams or seven I think he said demand is sort of to ask the pace.
Speaker Change #105: We are still seeing really good performance from Taser seven and so part of what Youre seeing in this forecast not a linearity and getting all of those benefits from teeth or 10 that we've been talking about but we do still have customers ordering taser seven and some of our other legacy Ts are handled and products and so that that's sort of timber.
Joining together, particularly next resolved.
Speaker Change #106: Yeah, I'd just add Jeremy.
Jeremy Hamblin: I'd say, it's in part due to international certainly it's a big Tam, we're getting better there we're building relationships with the right customers, we're doing a better job.
Jeremy Hamblin: Planing and demonstrating the value that Taser spring to police both in terms of lives save but also in terms of you know.
Jeremy Hamblin: Officer safety, increasing and workers comp decreasing and just some of the issues that come along with absence of Taser deployments.
Jeremy Hamblin: But I think the bigger thing is just very simple we have phenomenal product market fit with this product and that's really a credit direct like our customers are for the first time really seeing the man. This thing is on track to outperforming a firearm in the field and we've been talking about it for a long time.
Jeremy Hamblin: But for 30 years with only up to two shots that was still kind of a pipe dream and now we're seeing it with 10 shops and customers are same men increased distance of 45 feet combined with the number of shops combined with the better penetration. Those are all things that I think are inspiring more confidence in the device from our customers.
Jeremy Hamblin: They'd be in state local or federal or international and so I think that's really it it's like good sales execution with a product that has phenomenal product market fit.
Speaker Change #108: Great. Thanks for all the color best wishes. Thanks, Jeremy It was nice to see many of you at ICP. Thanks for making the trip out there and always great to see at the Booth.
Speaker Change #108: Thanks, Jeremy and thanks, everyone.
Speaker Change #109: But for US, we'll give it to Rick to close this out alright. So I have two things I want to conclude on one I want to be.
Rick: Careful in my previous statement.
Rick: I talked about the election results.
Rick: Talking about which party, one where I'm talking with the overall political environment. For example, in California voters approved proposition 36 that basically raised the penalties for shoplifting in certain drug crimes, we're seeing a general shift manifested in this election.
Rick: Swing the pendulum more supportive of public safety in general rule and I would say in our company. We are violently nonpartisan, we have passionate gun control advocates and passionate second amendment gun owners, who come to meetings together in a productive and.
Rick: You could stay out across all the divisive.
Rick: Issued in politics.
Speaker Change #111: Josh in particular has got a great job from setting the tone from a leadership perspective that we want to be intellectually diverse place that everyone is welcome and we keep the device of stuff.
Speaker Change #111: Out of the office, because we've got a job to do and we do best when the best brightest smartest most passionate people no matter their political views feel like this is a place where they can come and do their best work.
Speaker Change #111: And then the other thing I wanted to say was you Brittany two years.
Speaker Change #112: It's flown by.
Speaker Change #112: The what Youre seeing right now I mean, we see a lot of britney's fingerprints on the P&L.
Speaker Change #112: She really does a great job of just driving both operating and financial rigor.
Speaker Change #112: I come back from customers with all sorts of ideas some people might say, they're crazy and some of them are between Britney and Jeff We've got to figure out Okay. How do we.
How do we sort through what were actually going to execute on it actually going to go into a product.
Speaker Change #112: Jeff give you thumbs up so it's a great. Rick this is really fuzzy idea and that his idea is to take it from fuzzy to concrete.
Speaker Change #112: And for Britney to work with the team make sure we can make this stuff and execute and make money on it and then Josh the other key members of the team here. He is our Jimmy Johnson is a lifelong Cowboys fan as I'm sure he'll appreciate that reference he's our head coach and really focus on just building the team and the people.
Speaker Change #112: And that is the magic that we're seeing now is we've got this awesome productive dynamic tensions between our team as we each have different strengths and weaknesses and.
And that through the whole organization, you're just seeing a phenomenal execution and I would also say hey, you're the ownership as part of this team as well so we appreciate our shareholders.
Speaker Change #112: The analysts who take the time to get to know us over the years.
Speaker Change #112: Are supportive of us.
Speaker Change #112: Using our shareholders capital to go solve these problems that we're excited and interested to go do that fundamentally we believe make the world a better place when we're done not motivated everybody to.
Speaker Change #112: Come to work excited so.
Speaker Change #113: Would appreciate a belichick comparison over Jimmie Johnson, but we'll let that one slide.
Speaker Change #113: <unk> made a bet whether it could get by without comment.
Speaker Change #113: Alright, so thanks, everybody thanks to our team those people listening on the phone what a phenomenal quarter.
Speaker Change #113: And we're really excited to talk to you. After the first year everybody have a fantastic holiday season.
Speaker Change #113: No.
Speaker Change #113: Hug your kids in your family hopefully the world is going to get.
Speaker Change #113: A little less crazy over the next couple of years and it's been over the last few with what's been happening in the Middle East you greatly.
Speaker Change #113: So much violence in the world.
Speaker Change #113: Self admittedly was maybe too optimistic in late 2017, or 18 book the end up killing the thought we were at the end of war.
Speaker Change #113: We've proven in sort of the thesis was wrong in terms of timing, but I do think humanity can do better and we can find ways to deal with threats.
Speaker Change #113: Minimizing the loss of life, and we're going to stay true to that mission. So thanks, everybody enjoy the holidays, we'll see you next year.
Speaker Change #113: [music].