Q4 2024 Axon Enterprise Inc Earnings Call
Textiles executive team today, I hope that you've all had a chance to read our shareholder letter released after the market closed, which you can find at Investor Axon Dot com. Our prepared remarks today are meant to build upon the information that letter. During this call we will discuss our business outlook and make forward looking statements any forward looking statements made today are pursuant to.
And within the meaning of the Safe Harbor provision of the private Securities Litigation Reform Act of 1995.
These comments are based on our predictions and expectations as of today and are not guarantees of future performance. All forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially.
We discussed these risks in our SEC filings, our most up to date SEC filings, including our Form 10-K will be available this week.
We will also discuss certain non-GAAP financial measures a description of each non-GAAP measure and reconciliation of each non-GAAP measure to the most directly comparable GAAP measure can be found in our shareholder letter as well as on our Investor Relations website.
Now turning to our quarterly update first we're going to pull up a video that highlights some of the things we're proud of accomplishing over the past year.
Private Securities Litigation Reform Act of 1995.
We're showing so many so many products.
These comments are based on our predictions and expectations as of today and are not guarantees of future performance. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially.
We are very excited here are so excited.
Michael: Michael to introduce the AI era plant feed Roni <unk> drop of blood.
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Michael: Let's start with <unk>. This is where you do VR he joined on to move Justice Premier.
Michael: <unk> now.
Michael: Yes.
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Michael: Okay.
Michael: Okay.
Michael: Okay.
Michael: There's been over $1 billion drawn violations this past year and shows how important this topic as we have well over 1000 people joining this call today joining now.
Michael: Yes, and Eric Slush, it's great to have you back on the shelf.
Michael: Okay.
Michael: Yes.
Michael: Okay.
Michael: Right.
Michael: Yes.
Michael: Yeah.
Michael: Thank you Jonathan.
Michael: Okay.
Michael: Okay.
Michael: Okay.
Michael: Originally it was drawn to law enforcement just for a sense of wanting to help.
Michael: My uncle.
Michael: I went on a ride along with him and I was absolutely. So that was it for me I Didnt want like a normal desk job I wanted to be.
Speaker Change: Eric Slush, it's great to have you.
Back on the shelf.
Michael: Helping people out in the community do coffees and when you get into really two years to help others.
Yes.
Okay.
Michael: [music].
Michael: But the sooner.
Speaker Change: Okay.
Michael: Yes.
Speaker Change: Yes.
Michael: Yeah.
Speaker Change: Right.
Michael: Yes.
Michael: Yes.
Michael: Alright.
Speaker Change: Sure.
Michael: Yes.
Speaker Change: Okay.
Michael: [music].
Speaker Change: Sure.
Speaker Change: Yes.
Michael: Yeah.
Speaker Change: Thank you Jonathan.
Michael: Using lethal force is one of the most dramatic things that we can do in this job whether it's justified or not is something an officer has to live with.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: Okay.
Speaker Change: It really was drawn to law enforcement for a sensor.
Michael: I'm glad I don't have to live with that for the rest of my life.
Speaker Change: Okay.
Michael: It could have gone a different way, but we were able to keep everyone safe.
My uncle.
Speaker Change: On arrival.
Michael: It was a very good feeling.
Speaker Change: Absolutely so.
Speaker Change: I Didnt want a normal desk job I wanted to be helping the blue Mountain community.
Michael: [music].
Speaker Change: When you get into.
Speaker Change: On there.
Speaker Change: Anthony.
Speaker Change: Yes.
Speaker Change: Sure.
Speaker Change: Sure.
Speaker Change: Yes.
Speaker Change: Sure.
Speaker Change: Sure.
Michael: John.
Speaker Change: Okay.
Michael: This environment.
Speaker Change: Yes.
Michael: What we see so many new teammates here all committed to the same mission that the same cost.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Thanks.
Michael: I can't imagine a better place to be.
Speaker Change: Using the choices one of the most dramatic things that we've been doing the job, whether it's justified or not is something Mr has to live with.
Michael: Thank you.
Michael: Good morning, Thank you for making displays the way it is.
Speaker Change: I am glad I have to live with that for the rest of.
Speaker Change: My life.
Speaker Change: Got it all in a different way, but we were able to keep.
Speaker Change: Everyone basis.
Michael: What an amazing company wouldn't amazing group of people the people I get to work with our employees my teammates are customers.
Speaker Change: Very good.
Speaker Change: Thank you.
Speaker Change: [music].
Michael: Working on problems, we care about it.
Michael: It's a privilege I get to work here.
Michael: Alright, welcome to another one of our team members our investors and.
Michael: We're here to report our fourth quarter 2024, and year end. We just finished what I believe will be a pivotal year in the history of our company and we're looking forward to another exciting year in 2025.
Speaker Change: John.
Speaker Change: Okay.
Speaker Change: Yes.
Speaker Change: Okay.
Speaker Change: Thank you.
Speaker Change: All right.
Michael: Most rewarding part of my job is getting to spend time with our customers and as you can see in the video we feel like were on this mission together.
Speaker Change: So stay tuned.
Speaker Change: David.
Speaker Change: I can't imagine a better place.
Speaker Change: Thank you.
Understanding the challenges they face every day as our guiding light.
Speaker Change: Okay.
Speaker Change: The way it is.
Speaker Change: Okay.
Michael: <unk> worked tirelessly to become their trusted technology partner.
Speaker Change: Yes.
Michael: How much we can do to make their jobs easier their lives safer and their days, just a little bit better while helping them protect us.
Speaker Change: What an amazing company wouldn't amazing people that people worry about.
Michael: Over the years, we've introduced new tools that have advanced the way our customers operate and how they think about technology. We are at a place where the benefits of adopting newer technologies are so clear, it's almost impossible to imagine what the world would be like if they were never brought forward.
Speaker Change: Ladies my teammates are customers working on brown to care about it.
Speaker Change: Privilege I could work here.
Speaker Change: Welcome.
Speaker Change: Another one of our team members.
Speaker Change: <unk> and <unk>.
Speaker Change: We're here to report our fourth quarter 'twenty 'twenty four and year end. We just finished what I believe will be a pivotal year in the history of our company and we're looking forward to another exciting year in 2025.
Michael: We launched tasty town about two years ago. So just one example of a product that is not only driving growth in our business, but it is changing the world.
Michael: I rarely go a day without one of our customers telling me how this device has changed.
Speaker Change: Most rewarding but my job is to give you spend time with our <unk>.
Michael: Their world and we're investing to make it better we have a lot of work ahead of us to deliver on our moonshot and I believe we have the roadmap to get us there.
Speaker Change: And as you can see in the video.
Speaker Change: Like where ambition together.
Speaker Change: Understand the challenges they face every day as our guiding light.
Speaker Change: We have tirelessly.
Michael: I'm in an international market, where I just came back from the most inspiring days of my career and I can't wait to share the results that will unfold over the next 24 months.
Speaker Change: Okay.
Speaker Change: LNG.
Speaker Change: Through so much we can do to make their jobs easier their lives safer and their data is just a little bit better while helping them protect us.
Michael: As we move forward towards our moonshot, it's bigger than just the United States and cutting unrelated to us between police and the public in the U S. It is a worldwide phenomenon thats going to happen here is stay tuned.
Speaker Change: Over the years, we've introduced new tools that have advanced the way our customers operate and how they think about technology. We are at a place where the benefits of adopting new technologies are so clear, it's almost impossible to imagine what the world will be like.
Michael: We're going to have better efficiency, better training and new ways to apply our technology.
Michael: Over the horizon.
Speaker Change: Yes.
Speaker Change: Okay got it.
Michael: Our cameras in our centers were helping our customers capture more moments are acquisition fuses helps us connect more sensors and cameras. They never before there are countless places where the benefits of better transparency and operations with the increased application of connected technology are just undeniable.
Speaker Change: Sure.
Speaker Change: So just one example of a product that is not only driving growth in our business, but it is changing the world.
Speaker Change: I rarely go day, one of our customers.
Speaker Change: This device changed there.
Speaker Change: Their world.
Speaker Change: And we're investing to make it better.
Speaker Change: We have a lot of work ahead of us to deliver on our moonshot and I believe we have the roadmap to get us there.
Michael: Our investments.
Michael: And our ability to lean in and out of the foresight to invest in the things that led us here that enabled connectivity and software behind not just cameras, but all of these sensors that are now taking flight into so many new sets of customers, where we've never had the chance to engage previously.
Speaker Change: And in international markets, where I just came back from <unk>.
Speaker Change: Firing days of my career.
Speaker Change: Can't wait to share the results of unfolds. The next 24 months.
Speaker Change: As we move forward toward our moonshot.
Michael: Our devices are connected by the most powerful purpose built public safety operating system in the world.
Speaker Change: Bigger than just the United States cutting through related to the public in the U S.
Speaker Change: It is a worldwide phenomenon thats going to happen here is stay tuned.
Michael: Now more than 1 million users of our software solutions spanning evidenced management real time operations productivity.
Speaker Change: We're going to have better efficiency, better training and new ways to apply our technology.
Michael: And yes artificial intelligence.
Over the horizon.
Speaker Change: It was in our center is helping our customers capture more moments are acquisition fuses helps us connect more sensors and cameras. They never before there are countless places where the benefits of better transparency and operations with the increased allocation of connected technology are just undeniable.
Michael: We understand the interconnection of advanced software and hardware and we unlock value and solutions that leverage the seamless connectivity to solve problems we care deeply about.
Michael: This is where we differentiate ourselves.
Michael: For most with our customers.
Michael: With this foundation, we see several major tech trends unfolding before our very eyes exponential advances in artificial intelligence, increasing connectivity real time sensor fusion and growing applications for drones and robotics to name a few these arent just buzzwords to US. These are our passions and were making them real and real businesses.
Speaker Change: Adjustments.
Speaker Change: And our ability to lean in now the foresight to invest in the things that last year.
Speaker Change: That enable connectivity software behind not just cameras, but all of these sensors that are now taking flight into some new sets of customers.
Speaker Change: I've had the chance to engage previously.
Speaker Change: Our devices are connected by the most powerful purpose built public via operating system in the world.
Michael: These product areas were more or less elements of our imagination, a few years ago and today they account for nearly half of the overall opportunities in our pipeline.
Speaker Change: We are now more than 1 billion users of our software solutions spanning evidence management real time operations productivity.
Michael: We believe we will be the partner who enables our customers to leverage these tools to.
Speaker Change: Artificial intelligence.
Michael: To make them work to make their job shaffer to make them better and more efficient.
Speaker Change: We have seen in the intersection of software and hardware and unlock value institutions leverage seamless connectivity to solve problems we care deeply about.
I continue to spend my time thinking about the big picture.
Michael: While ensuring that we're on the right path to make giant leaps to challenge our conventional thinking so we can be prepared for and deliver and be the driver of the future for our customers I've never felt more confident about our position or more just insanely excited and motivated by what we're doing and frankly by the people I get to work with everyday.
Speaker Change: This is where we differentiate ourselves.
Speaker Change: From us with our customers with.
Speaker Change: With this foundation, we see some weaker trends unfolding before our very eyes exponential advances in artificial intelligence, increasing connectivity real time sensor fusion and growing applications for drones and robotics to name a few these arent just buzzwords to US. These are our passions and were making them real and businesses.
Michael: One final note before I pass it on I would like to provide an update about something near and Dear to me.
Michael: It's been one year since we last updated you on our intent to invest in our headquarters campus.
These priorities were realized limits of our imagination few years ago and today they account for nearly half of the overall opportunities in our pipeline.
We have a vision for a campus we've put in a lot of work I personally haven't time in the division and we hope to keep it based here in Arizona.
Michael: We love, Arizona, and we want to be here. Unfortunately, Arizona has a political and legal environment that is making it challenging for businesses like us to invest here. After several years of working with our various selected administrative officials developing plans that we're responsive to our community and we received unanimous approval from a planning commissions and then through a vote of our elected official.
Speaker Change: We believe we will need a partner who enables our customers to leverage these tools.
Speaker Change: To make it work to make the job seeker to.
Speaker Change: To make them better and more efficient.
Speaker Change: I continue to spend my time thinking about the big picture.
Speaker Change: While ensuring that we're on the right path to make giant leaps to challenge our conventional thinking we can be prepared for and deliver be the driver of the future for our customers I've never felt more confident about our position.
Michael: <unk>.
Michael: We've had a setback unlike states like Florida, and Texas, Arizona allowed zoning decisions to be subjected to political.
Speaker Change: Laura just insanely excited and motivated by what we're doing.
Michael: <unk> and frankly political gamesmanship in our case.
Speaker Change: By the people I get to work with everyday.
Speaker Change: We faced paid petitioners, who collected 93% of the signatures on a pay for signature basis with two thirds of those people coming from outside the state of California, I am sorry outside the state of Arizona from another state who I may have just Friday and Lee mentioned.
Speaker Change: One final note before I pass it to I would like to provide an update about something here year to date.
Speaker Change: It's been in years since we last updated you on our intent to invest in our headquarters campus.
Speaker Change: We have a vision for campus, we put a lot of work I personally haven't timing that vision and.
If we allow this to Stan.
Speaker Change: This would delay our project by two years and reduces the risk of having to start over.
Speaker Change: And we hope to keep it based in Arizona.
Speaker Change: Arizona and want to be here.
Speaker Change: Unfortunately, this same phenomenon caused arizona to lose our NHL pro sports team, it's placing axon another major projects at risk.
Speaker Change: Unfortunately.
Speaker Change: The political legal environment is making it challenging for businesses like us to invest here.
Speaker Change: Like many things we're digging into fixed the problem I'm working with our elected officials to try to fix the situation and enable arizona to be an attractive predictable environment for businesses. If we can fix it.
Speaker Change: After several years of working with the various like administrative officials developing plans responsible for acuity and we received unanimous approval from the plant emissions and to Revote our elected officials.
Speaker Change: Keep us here and it will help the state attract other businesses and really grow into the Tech Center I believe it can be if we can't fix it well then we're going to have to move on we have several states. According us that don't have the same risk profile. So we're.
Speaker Change: We've had a setback unlike states like Florida and Texas.
Speaker Change: Arizona allows many decisions to be objected to political.
Speaker Change: Tissue and frankly political gamesmanship in all cases.
Speaker Change: We faced paid petitioners, who collected 93% of the signatures on a paper sector basis with two thirds of those people.
Speaker Change: We're not going to be this decision open forever, we will update you again as soon as we have fully vetted, our options and come to a final decision I intend to make that decision together with our board in the coming weeks.
Speaker Change: Okay Alright.
Speaker Change: Yeah.
Speaker Change: Okay.
Speaker Change: So with that I will.
Speaker Change: Brady and Lee mentioned.
Speaker Change: Pass it on to Guy again, who I'm just excited to work with who really leads the business, which gives me the time to spend a lot of time with our customers.
Speaker Change: David This will delay our project by tiers.
Speaker Change: I'm going to start over.
Speaker Change: Unfortunately same phenomenon caused Arizona to Luiz.
Speaker Change: And Josh is going to give you the details on what our incredible team accomplished in this most recent quarter Josh.
Speaker Change: Pro sports team replaced on another meet projects at risk. So like many things we're digging into fixed the problem I'm working with our elected officials to try to fix the situation and enablers Donna on attractive predictable environment for businesses, if we can pick up.
Josh: Thanks, a lot Rick I appreciate the kind words.
Speaker Change: Good afternoon, everybody as Rick mentioned, our customers remain at the center of our universe I believe that mindset is what has afforded us the results that we have the privilege of reporting to you today.
Speaker Change: Keep us here and it'll have to stick attractive for businesses and really grow into the Tech Center I believe.
Speaker Change: If we can fix it well there.
Speaker Change: I'd like to share a few updates that recap the year and then some thoughts about where we're headed next first we just closed the year with revenue in excess of $2 billion.
Speaker Change: I will have to move on we have several state. According us don't have the same risk profile.
Speaker Change: Hi.
Speaker Change: I can leave this decision open for her.
Speaker Change: Could you again soon as we have fully vetted, our aten and come to a bounce digitally.
Speaker Change: That's nearly double the revenue we reported only two years ago and it marks our third consecutive year of growing over 30%.
Speaker Change: Just want to get with our company.
Speaker Change: So with that.
Guy: I'll pass it on to Guy again, we've just decided to work with who really lead the business, which gives them the time to spend a lot of time with our customers.
Speaker Change: This growth is a testament to our ability to deliver products that drive clear value for our customers and our team's ability to connect our customers with the right solutions. It takes an entire team to deliver results like these and to everyone. At axon continues to rally behind Rick's visionary leadership.
Guy: And she is going to give you details on what our credit team accomplished this most recent quarter Josh.
Guy: Thanks, a lot Rick I appreciate the kind words.
Speaker Change: We booked over $5 billion in business last year with about half of that closing in Q4, and there was strength across the board eight quarters in Taser 10 orders continue to outpace Taser seven by two X and we continue to see encouraging demand from our emerging market customers to that end.
Speaker Change: Good afternoon, everybody as Rick mentioned, our customers remain at the center of our universe.
Speaker Change: I believe that mindset is what has afforded us the results that we have the privilege of reporting to you today.
Speaker Change: I'd like to share a few updates I'll recap the year and then start about where we're headed next.
Speaker Change: We just closed the year with revenue in excess of $2 billion.
Seven of our top 10, Taser 10 orders to date come from outside U S state and local law enforcement, including customers in international Federal and corrections.
Speaker Change: Nearly double the revenue we reported only two years ago and it marks our third consecutive year growing over 30%.
Speaker Change: We also had our highest ever officer safety plan bookings in Q4, nearly booking more seats in the quarter than the prior three quarters combined.
Speaker Change: This growth is a testament to our ability to deliver products that drive clear value for our customers and our team's ability to connect our customers with bright solutions. It takes an entire team to deliver results like these and everyone. At act some continues to rally behind Rick visionary leadership.
Speaker Change: And we continue to see strong adoption of our premium plans within that mix along with adoption of our emerging products dropped one continues to garner strong interest and we were able to close our first 10 AI era plan deals in Q4, we were extremely pleased with this outcome given the fact that the plan launched at ICP and Lee.
Speaker Change: Second we booked over $5 billion in business last year with about half of that closing in Q4, and there was strength across the board eight quarters in tailored 10 orders continue to outpace Taser seven by two X. We continue to see encouraging demand from our emerging market customers to that end.
Speaker Change: October new product pipeline generally takes three to six months to materialize and we view that accelerated adoption of this plan as a positive indicator of the things to come.
Speaker Change: Seven of our top 10, Taser 10 orders to date come from outside U S state and local law enforcement, including customers in international Federal and corrections.
Speaker Change: We updated our Tam and as Rick mentioned, we believe our investments around AI real time operations, and drones and robotics roughly doubles, our overall opportunity set.
Speaker Change: We also had our highest ever office or 60% of bookings in Q4, nearly booking more seats in the quarter than the prior three quarters combined.
Speaker Change: We're seeing early signs in our product bookings to support that outlook.
Speaker Change: Third.
Speaker Change: I wanted to talk about two growing customer groups that I'm, particularly excited about right now international and enterprise are international bookings grew nearly 50% sequentially in Q4, and that's on top of 40% sequential growth that we saw in Q3.
Speaker Change: And we continue to see strong adoption of our premium plans. So then that mix along with adoption of our emerging products dropped one continues to garner strong interests and we were able to close our 10 AI era plan deals in Q4, we are extremely pleased with this outcome given the fact that the plan launched at ACP in late.
Speaker Change: In enterprise, our bookings roughly tripled year over year.
Speaker Change: October.
Speaker Change: I'm happy to report that in Q4, our enterprise team booked the largest deal in company history with a global logistics provider Congrats to Mike sure Billy Corbett and the dozens of axon employees, who supported this deal. This development continues to give us confidence that given the large Tam and <unk>.
Speaker Change: New product pipeline generally takes three to six months materialized and.
Speaker Change: And we do that accelerate the adoption of this plan is a positive indicator of things to come.
Speaker Change: We updated our Tam in that Rick mentioned, we believe our investments around AI real time operations, and drones and robotics roughly doubles, our overall opportunity set.
Speaker Change: Growing product market fit the enterprise segment represents one of axons largest opportunities into the future along with federal and international as we expand and grow these three customer groups account for over $100 billion of opportunity.
Speaker Change: We're seeing early signs in our product bookings to support that outlook.
Speaker Change: Third.
Speaker Change: I won't talk about to growing customer groups that I'm, particularly excited about right now international and enterprise are international bookings grew nearly 50% sequentially in Q4, and that's on top of 40% sequential growth that we saw in Q3.
Speaker Change: Turning what's next we have a lot of runway ahead, we ended the year with total future contracted bookings of over $10 billion.
Speaker Change: And our pipeline is the healthiest it has ever been even in comparison to this time last year.
Speaker Change: In enterprise, our bookings roughly tripled year over year.
We expect another record bookings year in 2025 with line of sight into several years of exciting growth ahead. Our team is focused on executing on the many opportunities in front of us and we are putting in the work to achieve our goals and deliver on our mission of protecting life.
Speaker Change: I'm happy to report that in Q4.
Speaker Change: Our enterprise team booked to the largest deal in company history with a global logistics provider congrats.
Speaker Change: Congrats to Mike sure, Billy Corbett and the dozens of axon employees, who supported this deal.
Speaker Change: Development continues to give us confidence that given a large and growing product market fit the enterprise segment represents one of axon largest opportunities in the future along with federal and international.
I know I say this a lot, but we run our team with the next play mindset, what excites me most about our results is what they signal for the years ahead.
Speaker Change: That's why I love the beginning of the year while.
Speaker Change: As we span and grow these three customer groups accounted for over $100 million of opportunity.
Speaker Change: While it affords the opportunity for others to hypothesize and speculate on varying expectations.
Speaker Change: Turning to what's next we have a lot of runway ahead. We ended the year with total future contracted bookings of over $10 billion and our pipeline is healthy as it has ever been even comparison to this time last year.
Speaker Change: That's the same energy that fuels us to win more often and more places and deliver bigger and bigger societal outcomes and that's exactly what we plan to do in 2025 and beyond over to you Bernie.
Speaker Change: We expect another record bookings during 2025 with line of sight into several years of exciting growth ahead. Our team is focused on executing on the many opportunities in front of us and we are putting in the work to achieve our goals and deliver on our mission of protecting lives.
Bernie: Thank you John.
Bernie: I recognize.
Speaker Change: It's wonderful the comeback will have another great quarter and to report results that exceeded our expectations once again.
Speaker Change: Q4 revenue of 575 million increased 34% year over year for our 12 consecutive quarter of over 25% revenue growth.
Speaker Change: <unk> saves a lot, but we run our team with the next play mindset, what excites me most about our results and what they signal for the years ahead.
Speaker Change: That's why I love the beginning of the year.
Speaker Change: I am, particularly excited that we saw double digit year over year growth in all of our business area.
Speaker Change: While it affords the opportunity for others to hypothesize and speculate on varying expectations. That's the same energy that fuels us to win more often and more places in a bigger and bigger societal outcomes and that's exactly what we plan to do in 2025 and beyond.
Speaker Change: With 37% sensors up 18%.
Speaker Change: Software and services up 41%.
Speaker Change: Our software remains the driver of our overall growth and contributed 40% of our total revenue in Q4.
Speaker Change: IRR increased to $1 billion up 37% year over year.
Bernie: Over to you Bernie.
Bernie: Okay.
Speaker Change: Net revenue retention remains strong at 123% range.
Jay: And last one Jay it's wonderful that come back from that.
Speaker Change: Reinforcing the overburden and predictability in our business.
Jay: Florida and to report results exceeded our expectations.
Speaker Change: Okay.
Speaker Change: Adjusted gross margin was 63, 2% and has been very stable across the year and an overall company level.
Jay: Q4 revenue of 500.
Jay: Yes.
Jay: Increased 34% per year.
Jay: <unk>.
Speaker Change: Adjusted EBITDA margin was 24, 6%.
Jay: Quarter of over 25% revenue growth.
Speaker Change: We continue to invest in our business to ensure we are positioned to grow with new customers and market well driving hurdle showing our technology.
Jay: Sure.
Jay: Double digit year over year.
Jay: All of our business sorry.
Jay: Those are up 32.
Speaker Change: On a full year basis, we delivered over 33% top line growth driven by continuing to deliver more to our customers with strong product performance across the board.
Jay: And so far and sort of reflect accordingly.
Jay: Our software remains the driver of our overall.
Jay: So it will prevent the hartford's properly before.
We also delivered strong bookings totaling our total future bookings above $10 billion.
Jay: <unk> two <unk>.
Jay: They are in dollars.
Speaker Change: Adding support for years to come.
Jay: Perfect.
Jay: And net revenue retention.
Speaker Change: We made significant strides in profitability expanding adjusted EBITDA margins, almost 400 basis points this year.
Jay: Hum.
Jay: Thanks Kristina.
Jay: Reinforcing the visibility and predictability.
Speaker Change: As a result, we achieved a 25% adjusted EBITDA margin for the full year.
Jay: Okay.
Jay: Adjusted gross margin was $63 two.
Jay: And has been very stable.
Speaker Change: Milestone, we initially thought for 2025.
Jay: For our company.
Jay: Adjusted EBITDA margin of 24.
Speaker Change: With that as a result, we reached both our three year revenue and adjusted EBITDA margin target of full year capital.
Jay: Yeah.
Jay: And we continue to invest our business and certainly our progression to grow with new customers and markets.
Speaker Change: And we exited the year.
Jay: Okay.
Speaker Change: Product teams are working on new technology will support our growth outlook for many years.
Jay: On a volume basis, we'll go over to over 33% top line growth driven by continuing to deliver more of our customers with strong product performance across the board.
Speaker Change: We're quite excited about our newer product areas.
Speaker Change: And continue to invest in R&D to support our growth.
Speaker Change: We're entering the new year and our strongest in clean inventory position, we've been in for the last three years.
Jay: We also delivered strong bookings.
Jay: Total future bookings about $10 billion.
Speaker Change: We did all of that with strong free cash flow generation of about 60%.
Jay: Adding support for years to come.
Jay: We made significant strides in profitability expanding adjusted EBITDA margins, almost 400 basis point.
Speaker Change: We continue to drive strong customer satisfaction, which is our north star.
Speaker Change: It's humbling to think about where we are and I think our teams across the company for the work they put in diagnosing credit real busy and exciting year.
Jay: I remember it all with a team of 25%.
Jay: Adjusted EBITDA margin.
Jay: John We initially set for 2020.
Speaker Change: Now I'll turn to our 2025 guidance.
Jay: Right.
Jay: With that as well.
Speaker Change: We expect 2025 revenue in a range of two five to two.
Perfect.
Jay: EBITA margin.
Speaker Change: 265 billion or approximately 25% annual growth at the midpoint.
Jay: Hello.
Jay: Yeah.
Speaker Change: Our product teams are working on new technology that will support our growth for many years.
Speaker Change: This would mark our seventh consecutive year of 25% or greater annual growth.
Jay: We are excited about our product.
Speaker Change: Similar to past years, we looked at the strong execution across all segments momentum in future contracted bookings on our pipeline entering the year to develop its Scott.
Jay: And continue to invest R&D.
Jay: Yep.
Jay: Where im trying to mirror and a stronger and cleaner inventory position we've been in for last year.
Jay: We did all that with strong free cash flow generation.
Speaker Change: We expect 2025 adjusted EBITDA in a range of $640 to $670 million, representing approximately 25% margin.
Jay: We continue to drive strong customer satisfaction, which is.
Jay: Star.
Jay: I'm going to think about where we are and I quote.
Speaker Change: We believe gross margin level, the right balance to invest in our future growth opportunities.
Jay: Company for what they put out Brian that's incredible.
Jay: Yes.
Jay: Now I'll turn to our 2025.
Speaker Change: While still delivering strong profitability and cash flow.
Jay: We went back 345.
Jay: Robert.
Speaker Change: As a management tool and we are focused on delivering year after year over the long term.
Jay: Yes.
Jay: <unk>.
Jay: Six 5 billion.
Jay: Or approximately 25%.
Speaker Change: That requires continued innovation product risk taking.
Jay: Duane.
Duane: Well, Mark our seventh consecutive year of 25% or greater annual growth.
Speaker Change: And we're lucky to have reps, who are such a visionary in this space.
Speaker Change: I Hope you can tell we're excited about the opportunities in front of us.
Jay: Similar to past years.
Jay: We looked at the strong execution across all momentum in future contract bookings on our pipeline entering the year.
Speaker Change: It is this type of product innovation that has allowed us to deliver a consistent and impressive topline growth numbers.
Okay.
Jay: Got it.
Speaker Change: Beyond R&D, we're also investing in our sales function to support new customers and market opportunity as well as continuing to scale the business.
Jay: We expect <unk> adjusted.
Jay: Adjusted EBITDA.
Jay: And a range of $600 million to $670 million representing.
Speaker Change: For some context, we are now four years of hitting 50, well above the rule of 40.
Jay: Approximately 25% margin.
Jay: We believe gross margin level.
Jay: Alright.
Speaker Change: We're pleased our guidance implied.
Jay: The future growth opportunities.
Speaker Change: They are a year ahead of that type of number.
Jay: While still delivering strong profitability.
Speaker Change: We also expect Capex in the range of $140 million to $180 million up year over year on a dollar basis, but only up two 4% of revenue.
Jay: As a management team we are focused on delivering year after year over the long term.
Jay: That repair continues.
Speaker Change: This is driven both by more teams or 10 capacity to keep up with our continuing strong demand as well as investment in both R&D and manufacturing firms many exciting new product area.
Jay: Product risk taking.
And we're lucky to have that reputation.
Jay: I Hope you can tell we're excited about the opportunity.
Jay: And in this type of product innovation that has allowed us to reverse our consistent top line growth.
Speaker Change: We're proud of all we accomplished in 2024 and are looking forward to another dynamic and innovative 2025 that delivers for our customers and our shareholders.
Jay: Okay.
Jay: We're also investing in our sales model.
Speaker Change: Now I will turn it over to take your questions.
Jay: To support new customer as a market opportunity as.
Jay: Well continuing to scale.
Speaker Change: Thanks, Britney, let's call it around into galleries.
Jay: First the comp stat, we allow for years.
Speaker Change: Okay.
Jay: Well the rule of 40.
Jay: We're pleased our guidance.
Jay: And now having that type of number.
Speaker Change: We will take our first question from Jeremy Hamblin with Craig Hallum.
Jay: We also expect Capex in the range of 140 to 180 million.
Jeremy Hamblin: Thanks, and congrats on the very strong results and guidance.
Jay: Up year over year.
Speaker Change: Yes, but only up two points as a percent of revenue.
Speaker Change: I wanted to start with I figure a topical question and just get a sense for.
Speaker Change: That's driven teens are 10 capacity to keep up with that.
Speaker Change: What portion of your total revenues are coming from federal contracts with the U S government, whether or not some of the things that are happening in terms of hiring freezes.
Speaker Change: Strong demand.
Speaker Change: Both R&D and manufacturing savings.
Speaker Change: Yes.
Speaker Change: We're proud of all we accomplished in 2024 and are looking forward to another.
Speaker Change: We are making in 2025 after hours for our customers and our shareholders.
Speaker Change: You expect to have any potential change in the timeline of deployments.
Speaker Change: Anything you might be able to share on that to provide us a little bit better sense. We've certainly got a lot of questions around the potential risk around this area.
Speaker Change: Now I will turn it over to questions.
Brittany: Brittany whatsoever relative to gallery.
Speaker Change: Okay.
Speaker Change: Yes, I really appreciate it Jeremy thanks.
Speaker Change: A couple of thoughts on this one number one.
Speaker Change: Certainly don't think.
Speaker Change: Our first question from Jeremy Hamblin with Craig Hallum.
Speaker Change: <unk> of axons case in our future, there's any real cause for concern about what's happening with the funding cuts and does and so forth actually I think there is a world where we could come out of this with more opportunity as they start to look at hey, where where are.
Jeremy Hamblin: Congrats on the very strong results and guidance.
Speaker Change: I wanted to start with I figure, it's a topical question and just get a sense for.
Speaker Change: What portion of your total revenues coming from federal contracts with the U S government, whether or not.
Speaker Change: Federal law enforcement getting their bang for their Buck in technology, and I think they point back to Exxon and I think we will have the opportunity to continue to support.
Speaker Change: Some other things that are happening in terms of hiring freezes.
Speaker Change: The.
Speaker Change: You expect to have any potential change in the timeline of deployment.
Speaker Change: Federal government.
Speaker Change: Across both federal civilian and Dod hopefully in bigger ways and D. O D. Moving forward and we're excited to compete for more business there. So.
Speaker Change: Anything you might be able to share on that provide us a little bit better sense. We've certainly got a lot of questions around the potential risk around this area.
Speaker Change: I personally think there's more opportunity than risk right now for us in the federal space.
Speaker Change: Yeah, I really appreciate Jeremy thanks.
Speaker Change: A couple of thoughts on this one number one I certainly don't think.
Speaker Change: Great.
Speaker Change: And then potentially related question. So other topical news is it looks like we may be coming towards an end hopefully in the war in Ukraine.
Speaker Change: In terms of excellence case in our future Theres any real cause for concern about what's happening with volume cuts and does and so forth.
Speaker Change: I know the B drone has certainly been impactful in terms of operational support in those efforts I also know that.
Speaker Change: Actually I think there is a world where we could come out of this more opportunity as they start to look at hey, where were.
Speaker Change: Federal law enforcement getting their bank for their Buck in technology, and I think the point back to excellent and I think we'll have the opportunity to continuous support.
Speaker Change: The recent kind of <unk>.
Speaker Change: Government changes in terms of funding outline that drones would not be impacted by any hiring I wanted to understand.
Speaker Change: The.
Speaker Change: Federal government.
Speaker Change: Across the whole federal civilian and Dod.
Speaker Change: The potential mix of change related to if we get into kind of Ukraine or in the next month or two and then visa b.
Speaker Change: Hopefully in big ways, and moving forward and we're excited to compete for more business there. So.
Speaker Change: I personally think there's more opportunity than risk right now for us in the federal space.
Speaker Change: What you expect from a border patrol support and opportunities that that are coming from.
Speaker Change: Great and then potentially related questions. So topical news is it looks like we may be coming towards and then hopefully in the war in Ukraine.
Speaker Change: Or were there for D drone related to those efforts.
Speaker Change: Let me maybe take this one.
Speaker Change: So, yes, I mean drone and sold a lot of stuff in the Ukraine, but thus far bigger picture is what happened in Ukraine has put drones on everybody's roadmap every military in the world is thinking about how do you detect these small drones that traditional military systems are not designed to detect how do you defend against them, we acquired the world leader in drone detect.
Speaker Change: I know <unk> has certainly been impactful in terms of operational support in those efforts.
Speaker Change: So no debt.
Speaker Change: The reason kind of.
Speaker Change: Government changes in terms of funding outlined it.
Speaker Change: <unk>.
Speaker Change: It would not be impacted.
Speaker Change: We acquired <unk>. It was one of the world leaders in indoor tactical drones with Scania, we've partnered with a leading U S.
Speaker Change: Hiring I wanted to understand.
Speaker Change: The potential mix of gains related issue, if we get into.
Speaker Change: Maker of long range autonomous AI driven drones.
Speaker Change: The Ukraine.
Speaker Change: Or in the next month or two and then <unk>.
Speaker Change: In the moment, where.
Speaker Change: Basically dji is largely being made illegal in the United States.
Speaker Change: What you expect from a border patrol support.
Speaker Change: And opportunities there.
Speaker Change: So we think we are in an amazing position for drones and robotics, it's an area we're investing heavily.
Speaker Change: They are clean from.
Speaker Change: We're there for <unk> drone related to that goes.
Speaker Change: Got it let me maybe take this one.
Speaker Change: We're currently either the leader or partnered with the leader in the key market segments.
Speaker Change: So, yes, I mean.
A lot of stuff in Ukraine, but the far bigger picture is what happened in Ukraine, but drones on everybody's roadmap.
Speaker Change: And when you think about things like patrolling borders protecting stadiums.
Speaker Change: And.
Speaker Change: Ukraine has shown what anybody could do with a drone you can buy for less than $500.
Speaker Change: Every military in the World is thinking about how do you detect these small drones that attritional military systems are not designed to detect how do you defend against the we acquired the world leader in drone detection.
Speaker Change: Everybody in the World is thinking about how to defend against those and we think we are if not the best positioned among the best positioned.
For helping our customers globally solve that problem.
Speaker Change: We acquired <unk>.
Speaker Change: He was one of the world leaders in indoor attack drones with guided we partnered with a leading U S.
Speaker Change: So.
Speaker Change: From a human perspective, I, certainly hope that all the violence, we're seeing in the world.
Speaker Change: Maker of long range autonomous Adrian drones.
Speaker Change: It comes to an end, but in a way that is persistent and sort.
Speaker Change: In the moment bear.
Speaker Change: Basically TGI.
Speaker Change: <unk> being made illegal in the United States. So.
Long term puts these issues to rest.
Speaker Change: And we look forward to playing a role in helping use technology to protect people from killer drones.
Speaker Change: So we were in an amazing position for drones and robotics, it's an area we're investing heavily.
Speaker Change: We're currently either Alere are partnered with Alere in the key market segments.
Speaker Change: We're not going to get into the lethal drone business ourselves, but we're going to absolutely be a leader in helping defend against those kinds of threats and then using drones to able to go out.
Speaker Change: And when you think about things like patrolling boards protecting stadiums.
Speaker Change: And I.
Speaker Change: Ukraine has shrunk, but maybe could do drove and you can buy for less than $500.
Act more intelligently save lives and stop threats with out using lethal force.
Speaker Change: And everybody world, taking them out of depend again, it's those we think we are if.
Speaker Change: And we think those those opportunities have all gotten bigger.
Speaker Change: If not the best positioned among better positioned.
Speaker Change: Given the quick evolution this space thats been caused by which.
Speaker Change: Four.
Speaker Change: It would be our customers globally all of that.
Speaker Change: What's been happening in the middle East and in Ukraine.
Speaker Change: Problem.
Speaker Change: So.
Speaker Change: And Rick I might just add one more thing there which is just.
Speaker Change: From a human perspective, I, certainly hope that all of the violence, we're seeing in the world.
Speaker Change: To the first part of your question Jeremy just to address any ambiguity none of our forward looking guidance assumes any incremental revenue from Ukraine.
Speaker Change: It comes.
Speaker Change: But anyway that is.
Speaker Change: Persistent and.
Speaker Change: Long term puts these issues to rest.
Jeremy Hamblin: Understood. Thanks, so much for the color and best wishes on continued success. Thanks.
Speaker Change: And we look forward to playing a role in helping us technology to protect people from Kerr drones.
Marshall: Thanks, Jeremy of next day, a meta Marshall at Morgan Stanley.
Speaker Change: We're not going to get into the lethal drone business ourselves but.
Speaker Change: Great. Thanks, Congrats on the quarter, maybe just start with great traction on kind of noting the hundred thousand incident reports kind of already.
Speaker Change: We're going to absolutely be a leader helping to enhance those kinds of depression and using drones to able to go out.
Speaker Change: We're intelligently stabilize stop threats with our eating we don't foresee and.
Speaker Change: <unk> completed kind of with the AI tools, just what are you seeing in terms of kind of AIA.
Speaker Change: And we think those opportunities are better.
Speaker Change: AI adoption, either what type of bundles. They are opting for just kind of pipeline. There and then maybe as a second question noted kind of the large enterprise win.
Speaker Change: Given the evolution of this disease caused by <unk>, which maybe in the middle East and in Ukraine.
Rick: Rick I might just add one more thing there which is just.
Speaker Change: What was kind of.
Speaker Change: The entry point, there was that Jesus was that kind of body cameras, just any context, there would be helpful. Thanks, Let me take the first part and ill Josh.
Jeremy Hamblin: So the first part of your question Jeremy.
Jeremy Hamblin: To address any ambiguity none of our forward looking guidance assumes any incremental revenue from Ukraine.
Speaker Change: Josh I forgot the second part.
Speaker Change: In terms of AI like without a doubt these are the fastest growing adoption products we've ever had.
Jeremy Hamblin: Understood. Thanks, so much for the color and best wishes on continued success.
Jeremy Hamblin: Yes.
Speaker Change: <unk>.
Gross Germany, Mexico Marshall.
Speaker Change: And it's not by a small margin. So we were seeing these products be services really resonate with our customers and there it.
Jeremy Hamblin: Okay.
Speaker Change: Great. Thanks, and congrats on the quarter and maybe I'll just start with great traction on kind of 900000, and so they report kind of already.
Speaker Change: It's unbelievable the AI aeroplan that we're closing deals within eight or nine weeks of launch.
Speaker Change: Completed the AI tools, just what are you seeing in terms of kind of.
Speaker Change: That's.
Speaker Change: But I don't think we've ever seen things move that fast maybe a little bit with like with the taser, but that's where like somebody on existing Taser line item, we introduced the new Taser and they like went into some details are done. So yes that has happened, but a new product category, you're going from zero to two deals in that short a timeframe as a super encouraging.
Speaker Change: Obviously, neither what type of bundle third update for just kind of pipeline there and then maybe as a second question noted kind of a large enterprise win.
Speaker Change: What what kind of.
Speaker Change: The entry point there was that you said it was a good body cameras, just any context, there would be helpful. Thanks.
Awesome and on the second part of that question on Enterprise I think the really exciting news as.
Speaker Change: Take the first part.
Josh: Josh talked about black box.
Josh: So in terms of like without a doubt these are the fastest growing adopting products we've ever had.
Speaker Change: There are multiple entry points into some of these large opportunities I think thesis is certainly relevant body cameras are certainly relevant drone is relevant drones irrelevant, obviously evidenced dot com.
Josh: Yeah.
Josh: And it's like a small version so.
Josh: We're seeing the products the services really resonate with our customers and there it.
Speaker Change: I think there is.
Josh: It's unbelievable the Arab land closing deals.
Speaker Change: We're starting to see like I said, just better and better product market fit to address this group of customers.
Josh: Within eight or nine weeks of launch.
Josh: That's.
Josh: But I don't know we've ever seen things move that fast maybe a little bit like with a taste, but that's part of it somebody existing Taylor line item into two new states.
Speaker Change: And really the most encouraging thing of that is it still along the lines of our mission and use cases that we really want to support and that they lead to better safer outcomes.
Josh: So, yes that has happened, but the new product category, you're going from zero debt.
Speaker Change: In these enterprise environments and so it really is exciting where were I believe.
Josh: Deals in that shorter timeframe.
Josh: Super encouraging.
Speaker Change: Alicia this is going to be a major major part of our business, maybe even the biggest part of our business long term and I think we're on the right track there for sure.
Josh: Awesome and then the.
Josh: Second part of that question on enterprise.
Josh: I think a really exciting news is.
Josh: There are multiple entry points into some of these large opportunities I think thesis is certainly relevant body cameras are certainly relevant be drawn as relevant drones irrelevant, obviously evident dot com.
Speaker Change: Great. Thanks, I'll pass it on.
Speaker Change: Okay.
Speaker Change: Thanks, Nina up next we have Josh Reilly at Linda.
Speaker Change: Alright, thanks for taking my questions.
Speaker Change: I just wanted to hit on the news with the flock safety partnership.
Josh: I think there is.
Speaker Change: Maybe what happens in terms of the technology licensing.
Josh: We're starting to see like I said just.
Josh: Better and better product market fit to address this group of customers.
Speaker Change: For fleet <unk> technology now that the partnership.
Speaker Change: Maybe ended and then how are you thinking about more broadly your relationship with the company moving forward and your strategy around fixed LPR.
Josh: And really the most encouraging thing about <unk> is it still along the lines of our mission and use cases that we really wanted to support and that they lead to better outcomes.
Speaker Change: Thanks, a lot Josh.
Speaker Change: A lot's been made of this obviously in the last week in and frankly, I think it's somewhat overblown, we did exit our partnership with floc.
Josh: In these enterprise environment and so it really is exciting where we're.
Josh: I believe this is.
Speaker Change: However.
Josh: Going to be a major major part of our business maybe in the biggest part of our business long term and.
Speaker Change: I think both sides have an interest in getting back to that partnership we proposed new terms I think what we're asking for is just a more fair flow of information into few sits just like we support into flock OS and to flux credit they've been receptive.
Josh: We're on the right track for sure.
Speaker Change: Great. Thanks, I'll pass it on.
Speaker Change: Sure.
Speaker Change: Alright, thanks for taking my questions.
Speaker Change: Our feedback there and we hope to be able to resume it and so I'm not going to speculate on what happens if that doesn't come into fruition of course, we'd have to look at how we how we support those customer use cases, but right now our focus is just on making sure that that we can arrive at a new partnership that that.
Speaker Change: Just wanted to hit on the news that block safety partnership.
Speaker Change: I mean, what happened in terms of the technology licensing.
Speaker Change: For fleet <unk> technology now that the partnership.
Speaker Change: It may be added and then how are you thinking about more broadly your relationship with the company moving forward and your strategy around <unk>.
Speaker Change: Really in the end benefits, our customer and the use of their own data.
Speaker Change: Yes, Thanks, a lot Josh.
Speaker Change: A lot's been made of this obviously in the last week in and frankly, I think it's somewhat overblown, we did exit our partnership with block.
Speaker Change: Understood and then maybe just back on the federal business have you heard any feedback thus far from customers with regards to their ability to expand and take down more body cameras or tasers under the existing contract structures, which to my understanding were.
Speaker Change: However.
Speaker Change: I think both sides of an interest in getting back to that partnership we proposed new terms I think what we're asking for is just a more fair flow of information.
Speaker Change: Often open ended with their ability to add more products since the election has happened.
Speaker Change: Just like supporting the flock of western duplex credit they've been receptive to feedback there.
Speaker Change: Yeah. Thanks for the question so on on some of these customers in federal.
Speaker Change: As you probably saw on the news one of the first executive orders address body cameras for federal law enforcement and yet our customers are still wearing our body cameras are seeing a lot of.
Speaker Change: To be able to resume it.
Speaker Change: So I'm not speculate on what happens if that doesn't come to fruition of course, we'd have to look at.
Speaker Change: How we support those customer use cases, but right now our focus is just.
Speaker Change: Great outcomes as a result of wearing them and we do believe these programs will continue to expand into federal so.
Speaker Change: Making sure that we can arrive at that new partnership.
Again, I don't think the world has changed much if at all for us in the federal space I think that's the benefit and reward for having products that drive true outcomes in the field and I think our customers see that and we get a lot of support from them on this so we're proud of the partnership and and certainly think.
Speaker Change: That really in the end benefit our customer and the use of their own data.
Speaker Change: Understood and then just.
Speaker Change: The federal business.
Speaker Change: You heard any feedback thus far from customers with regard to their ability to expand and take down more about ecommerce or under the existing contract structures, which my understanding.
Speaker Change: It's going to be a bright future there.
Speaker Change: Often open ended with her ability to AB product since the election.
Speaker Change: Josh let me as well.
Speaker Change: We first introduced body cameras and law enforcement, most cops didn't want to carry it didn't want to wear them and.
Speaker Change: Yeah. Thanks for the question so on.
Speaker Change: On some of the customers in federal.
Speaker Change: There was a one of a statewide union leaders sort of famously told me no cough once that where a body camera until they've worn one for 30 days and then they will refuse to go on patrol about it because they realize in today's world if protect them from all the crazy allegation somebody can make and Thats also true of our federal customers I meet with them all the time.
Speaker Change: You probably saw the news and one of the first executive orders address body cameras for federal law enforcement and yet our customers are still wearing our body cameras are seeing a lot of.
Speaker Change: Great outcomes as a result of burn them. We do believe these programs will continue to expand into federal so.
Speaker Change: I think the world has changed much if at all for us in the federal space I think thats the benefit of reward for or having products that drive true outcomes in the field and I think our customers see that and we did a lot of support for them on this so we're proud of the partnership.
Speaker Change: And so like early on I think it was kind of helpful to get a political push from the top to get these agencies to try it but once they start using it we see the same phenomenon.
Speaker Change: If your whatever Federal agency you work for you just realize like your job places you know, we have physical risk, but at risk of being accused of just about anything and having a video that shows your professional doing the job the right way.
Speaker Change: And certainly we think it's going to be a bright future there.
Speaker Change: As well.
Speaker Change: We first introduced body cameras and law enforcement.
Speaker Change: Is something that gives them great comfort to go do their jobs with confidence that.
Speaker Change: Wisconsin.
Speaker Change: It didnt require that.
Speaker Change: There was a statewide union leaders.
Speaker Change: They're not going to get hung out to dry by somebody making something up about what they did.
Speaker Change: Famously called me.
Speaker Change: No points of our bicameral inculcated more one for 30 days.
Speaker Change: Understood. Thank you guys.
Speaker Change: Who's going to talk about it because they realize today's world protect them from all the crazy allegation Southern Connecticut, and it's also true of our federal presence as I meet with them all the time.
Speaker Change: And by the way the other thing I'll add is these new tools like draft one cause.
Speaker Change: Absolutely love It I mean cops are over the moon about this the idea that God I don't have to spend four hours of shift doing reports on our cutting not an app and I was just demonstrating our new real time translator outside of the U S right now.
Speaker Change: So like.
Speaker Change: It was helpful to get into political push from the top to these agencies to try it but once they start using it we see this economic downturn.
Speaker Change: If you.
Speaker Change: We did a demo in Icelandic yesterday.
Speaker Change: Whoever Federal agency you work for you just realized like your job places physical risks, but at risk of being accused of just about anything and having a video shows.
Speaker Change: Guys said, there's no way it was going to work and as Jai hit the floor.
Speaker Change: Before we did Arabic Norwegian and couple of other.
Speaker Change: Not exactly.
Speaker Change: Fashion doing the job of the right way.
Speaker Change: In the Shadows.
Speaker Change: As you see it gives us great comfort to go do their jobs have confidence that they're.
Speaker Change: Several of these languages in the World, We think the real time translators going be another real hit so that body camera is evolving and our customers are seeing it. It's not just a recording that can help me. It's now the edge of the AI Internet on my chest I've got a real time AI assistant that help me translate that would help me right. My reports I'll have to look at things I need to know help me ask policy.
Speaker Change: They're not to get hung out to die by somebody making something for about what they did.
Understood. Thank you guys.
Speaker Change: Hey by the way the other thing I'll add is this.
Speaker Change: Tools like round one.
Absolutely love anything cost are over the moon about this the idea that God I don't have to spend four hours shift.
Speaker Change: Question is on the call a lawyer at two a M. In the morning about how to deal with some obscure legal situation I can just immediately cross referenced my reports and all of those capabilities are included in the New era plan, which is why we saw it go from zero to revenue so quickly and I think one of the things you continually hear in the industry right now is a lot of theory.
Cutting on App that was just demonstrating our new real time transfer outside of the U S right now.
Speaker Change: We did a demo in Atlanta yesterday.
Speaker Change: Guys said, there's no way we can work the.
Speaker Change: And a lot of practice and application with the power of <unk>.
Speaker Change: The floor.
Speaker Change: We did Arabic Norwegian and weather.
Speaker Change: AI tools and what we're all about is the applied practice directly in service are real problems for our real customers and that's what they love about what we're building.
Speaker Change: Not exactly.
Speaker Change: In our satellite.
Speaker Change: These languages in the world.
Speaker Change: We think the real time translators can be another real head. So that body camera is bobbing and our customers are seeing it it's not just a recording can help me it now.
Speaker Change: Thank you.
Speaker Change: Thanks, everyone.
Speaker Change: Next we have Mike King at Goldman Sachs.
Speaker Change: <unk> Internet on my Gosh, I've got a real time, AI assistance and there'll be translate of course, when you look at things I need to know how fast policy questions are not callable here at two a M. In the morning about how the oldest obscure little situation.
Mike King: Hey, good afternoon. Thanks for the question I just have two one on bookings and one on cloud.
Mike King: First just on bookings, it's a two parter.
Mike King: You guys had bookings of over $5 billion. This year I think this is at least the third year of bookings growing $1 billion year on year. So when you look at your pipeline going into 2025.
Speaker Change: Immediately referenced my boyfriend and all those capabilities include a new era of land, which is why we saw it go from zero to revenues.
Speaker Change: And I think one of the things you can do.
Speaker Change: In your base case or in your Bull case like are you assuming bookings grow $1 billion again to $6 billion any thoughts qualitative or quantitative would be helpful. Sure thing.
Speaker Change: <unk> here.
Speaker Change: Sure.
Speaker Change: On a theory and practice apt.
Speaker Change: That application.
Speaker Change: Our <unk> and we are all about.
Speaker Change: The applied back to us directly and sort of a.
Speaker Change: Like I said, Mike in my prepared remarks.
Speaker Change: Our real problems for our customers and that's what they love about $1 billion.
Speaker Change: The pipeline is extremely healthy right now even healthier as relative to where it was at this time last year and look our goal is that our bookings growth rate looks similar to our revenue growth rate and that just back of the napkin. It kind of pencils out to hey, we can just keep this this high growth rate.
Speaker Change: Thank you.
Speaker Change: Thanks, Deborah of next year at Colfax.
Speaker Change: Hey, good afternoon. Thanks for the question.
Speaker Change: To.
Speaker Change: Gangs amongst cloud.
Speaker Change: First just on bookings, it's a two parter.
Speaker Change: Doing well into the future. So it's not necessarily about growing 1 billion every year or less or more it's more about hey can we can we have our bookings growth rate somewhat mirror, our revenue growth rate and if we do that every year the business will be very very healthy for a long time.
Speaker Change: You guys had bookings over $5 billion this year.
Speaker Change: I think this is at least the third year of bookings growing a $1 billion year over year.
Speaker Change: So when you look at your pipeline going into 2025.
Speaker Change: In your base case or in your bulk case like are you assuming bookings growth of $1 billion again to 6 billion.
Speaker Change: Great. Thank you and then just on cloud.
Speaker Change: Axon and evidence and cloud services revenue within software and sensors.
Speaker Change: Any thoughts alternative quantitative would be.
Speaker Change: A solid step up Q on Q I think it was up $35 million sequentially I think the largest on record.
Speaker Change: Sure thing.
Speaker Change: Like I said, Mike and in my prepared remarks.
Speaker Change: The pipeline is extremely healthy right now even happier.
Speaker Change: Could you talk a little bit about some of the key things that drove that strength was there anything unusual that made that sequential growth, particularly good this quarter.
Speaker Change: Relative to where it was at this time last year.
Speaker Change: And look our goal is our.
Speaker Change: Our bookings growth rate looked similar to our revenue growth rate and that just it back or is it.
Speaker Change: Or are you thinking that hey, the structural.
Speaker Change: It kind of pulls out to hey, we can just keep this this higher growth rate well into the future. So it's not necessarily about growing 1 billion every year lesser or more it's more of a hey can we can we have our bookings growth rate somewhat mirror, our revenue growth rate and if we do that every year the business will be very very healthy for a long time.
Speaker Change: Run rate of sequential increases may have stepped up thank you.
Speaker Change: Oh, okay.
Speaker Change: I think it's very much what we talk about from a seasonality standpoint, as we go through the year, which was about our step up from a software standpoint, often lags, how we're giving on bookings by a quarter now it's not always perfect right because there is timing.
Speaker Change: Thank you and then just on cloud.
Speaker Change: Axon and evidence and cloud services revenue in software and sensors that saw a solid.
Speaker Change: Timing and part of the quarter, but do you think about it our strongest bookings quarters tend to be Q3, Q4, and then Q1.
Speaker Change: Q on Q and it was up $35 million sequentially I think largest on record.
Speaker Change: One is our seasonally softest.
Speaker Change: It goes through the ear that way I'm fairly full staff is lagging by a quarter. What you see typically Q4 and Q1 of the bigger steps up from a software standpoint.
Speaker Change: Could you talk a little bit about some of the.
Speaker Change: Key things that drove that strength was there any thing.
Speaker Change: Unusual that made that sequential growth, particularly good this quarter.
Speaker Change: We're just seeing the strength in the software business come through we're seeing more user adoption and we're seeing more products more software products get sold into our future.
Speaker Change: Or are you thinking that hey, the showroom.
Speaker Change: Run rate of sequential increases.
Speaker Change: Thank you.
Speaker Change: Oh, okay.
Speaker Change: You also gave around is not material to our business, but they do have some software revenue until you are seeing a small book I'll come on to the software stack over first half split.
Speaker Change: But we talk about from a seasonality standpoint through the year, what does that or step up from a software standpoint.
Speaker Change: How do you think by quarter.
Speaker Change: Great. Thank you Brittany, Thank you Josh.
Speaker Change: It's not always perfect timing.
Jonathan Ho: Thanks, Mike Opex, we have Jonathan Ho at William Blair.
Speaker Change: Timing and part of the quarter.
Speaker Change: You think about it our strongest bookings quarters.
Jonathan Ho: Hi, Good afternoon, and let me Echo my congratulations as well on the strong quarter with your international bookings can you talk a bit about the strength here and maybe what's changed in the decision to expand sort of the Tam.
Speaker Change: Q3, Q4, and then so one is our seasonally softer.
Speaker Change: Perfect.
Speaker Change: Sorry.
Speaker Change: Goodbye.
Speaker Change: Right.
Speaker Change: Q4 and Q1.
Jonathan Ho: Yeah, I think Josh.
Speaker Change: Hum.
Speaker Change: Great.
Jonathan Ho: Josh Let me cover the strength in international, but I think a lot of what youre seeing in return we.
Speaker Change: Thanks.
Speaker Change: Brian software business through a pool of mortgages.
Jonathan Ho: We refresh the PM every two years.
Speaker Change: Sure.
Speaker Change: We're seeing more product more support.
Jonathan Ho: We did a little bit of an interim update when we get our thesis on our D. Brown acquisition for <unk> and our own process and so as we came back to look at our Tam. This year, we really looked out over the next two years.
Speaker Change: Sure.
Speaker Change: You gave.
Speaker Change: <unk> is not material to our business, but they do have some box where Robert I think you are seeing a small.
Speaker Change: Alcohol is the software stack.
Speaker Change: Okay.
Jonathan Ho: Change a lot from two years ago, it's really the number of products.
Speaker Change: Great. Thank you Brittany, Thank you Josh.
Jonathan Ho: So that applies to international as well if you look at the international market. We now have a lot more products, but we can go sell.
Speaker Change: Thanks, Mike.
Speaker Change: Jonathan Ho William Blair.
Speaker Change: Hi, Good afternoon, and let me Echo my congratulations as well on the strong quarter.
Jonathan Ho: Selling into the international market like fast right Pedro right.
Speaker Change: Your international bookings can you talk a little bit about the strange gear and maybe what's changed in the decision to expand sort of the Tam.
Jonathan Ho: And so youre seeing that strength.
Jonathan Ho: We're also continuing to see some nice traction outside of some of our Commonwealth market from provides gives us increasing confidence.
Yeah.
Speaker Change: Josh.
Jonathan Ho: And that higher earnings.
Speaker Change: And I think part of it.
Speaker Change: Steve.
Speaker Change: We refresh the peer average.
Jonathan Ho: Yeah, and I'd just add.
Jonathan Ho: Jonathan on the international bookings piece I think it's just a story about execution.
Speaker Change: We did a little bit of an interim update with our fleet.
Speaker Change: A question for Chris.
Jonathan Ho: I think we have plenty of product market fit to be very successful internationally. I think the team is this has been somewhat of a transformative year for our international business in terms of the team, bringing on camera and brokers are.
Speaker Change: And our own process.
Speaker Change: They came back and look at our P&L here really looked out over the next two years.
Speaker Change: Sure.
Speaker Change: Changed a lot from two years ago, it's really the number.
Jonathan Ho: C CRO out in Europe.
Speaker Change: And so that product internationally.
Jonathan Ho: He has made a couple of key hires in Europe.
Speaker Change: The international market, we now have a lot more that we can go.
Jonathan Ho: Our our Latin America, and Canada function is going very very well under Vishal Deere and we just we've got.
Speaker Change: I'm sorry, the international market.
Pedro: In fact, right Pedro well.
Speaker Change: So you're seeing that strength.
Jonathan Ho: More of the team in place that's just executing on a higher level and so we're we're pretty pretty bullish on international moving into the future here as Bernie was saying I think now as we're landing in more places theres going to be the opportunity to expand with more and more products.
Pedro: We're also continuing to see some nice.
Speaker Change: Al-qaeda from Ohio.
Speaker Change: Yes.
Speaker Change: Thank you Christine.
Speaker Change: Uh huh.
Speaker Change: Okay.
Speaker Change: Yeah, and I'd just add.
Speaker Change: Jonathan on the international bookings.
Speaker Change: Excellent and just as a follow up a bit quick big picture question for Rick.
Speaker Change: I think it's just a story about execution.
Speaker Change: <unk> seen a strong value proposition here from generative AI tools, how do you imagine what you can do with a gentex AI, which seems to be sort of all the rage on the tech side and potentially even more impactful than generate today. Thank you.
Speaker Change: I think we have plenty of product market fit to be very successful internationally. I think the team is this has been somewhat of a transformative year for our international business in terms of the team you know, bringing on camera and Brooks that are.
Speaker Change: C C CRO.
Speaker Change: <unk>.
Speaker Change: Europe and he's he's made a couple of key hires in Europe Ben.
Speaker Change: Yes, I mean, I think it just sort of builds for us. It's all about like where does the workflows matter that will enable our customers to do the things they need to do.
Speaker Change: R R of Latin America.
Speaker Change: <unk> is going very very well under of Scholl here and we just we've got more.
Speaker Change: And their jobs, so I think a lot of it right now is like Okay. Take this transcript run it through and create a report for me.
Speaker Change: More of the team in place that's just executing on a higher level and so we're we're pretty pretty.
Speaker Change: Pretty bullish on international moving into the future year as pretty was saying I think now as we're landing in more places is going to be the opportunity to expand with more and more products.
Speaker Change: Or like Hey, take this translated I think Agentic AI allows you to start to do things like Hey go search across this giant dataset and help me solve some problem that currently have teams of people working on it.
Speaker Change: Just a follow up.
Speaker Change: We think we're in a unique position given our customer trust given that warehousing.
Speaker Change: Big picture question for Rick.
Speaker Change: What are you seeing a strong value proposition from generative tools.
Speaker Change: So much of their data for them and managing their centers.
Speaker Change: It will just kind of keep going down the list of their problems and then for US. It is also a risk reward trade off like we intentionally starting with report writing rather than for example, facial recognition, where there's various privacy and related concerns were report writing was okay.
Speaker Change: How do you imagine what you can do with agent take AI, which seems to be sort of all the rage.
Syed: Syed you pretend to raise even more impact and generic today.
Thank you.
Syed: Yes, I mean, I think it just sort of builds for us. It's all about like where does the work flows matter that will April tumors to do the things.
Speaker Change: We're getting sure Theres human oversight EBITDA gets it wrong like it's actually not a catastrophic failure, you've always got the underlying evidence we can print speed bumps to make the officer do it I mean, we are starting to look at more.
Syed: They need to do.
Syed: But in their jobs, so I think a lot of it right now it's like Okay. If you take a transcript right through and greater <unk>.
Syed: Or like Hey, take us and translate it I think a downtick AI allows you to start to things like Hey go search across a giant data that can help can be sold like him problem. It prudent at teams of people working on.
Speaker Change: Uses of AI that will help with some more core law enforcement functions, we're going to do it in a way that we will always be proud of that respective balances privacy and we want to build the world of gene Roddenberry not George Orwell.
Syed: And we think we're unique positioning and our customer trust warehousing.
Speaker Change: And these <unk> workflows will just allow us to start handling higher levels of complexity.
Similar to their data put them in managing their sensors.
Speaker Change: But for US, it's sorry to I go out and meet with customers.
But we'll just kind of keep go down the list of their problems and then Friday.
Speaker Change: Their problems are and I get to come back to the company look like a genius with all these great ideas like a be carrying Paul and back to the <unk> and then <unk> got to make sense. If at all segment at work with our.
Syed: Rewards traffic, we anticipate starting with.
Syed: Orbiting rather than for example facial recognition.
Syed: Various privacy related reserves for report writing.
Speaker Change: <unk> thousand plus engineers and product people to take these great customer ideas and put them together and then <unk>.
Syed: We will be giving further assuming oversight.
Syed: Strong like it's actually.
Speaker Change: Josh and Britney Youre going to then staff and execute the business to run it and I get to go out on the road again so.
Syed: Not a cash profit failure, you've always got an underlying evidence we couldnt say speed bumps with the officer of doing it I mean, we are starting to look at more use.
Speaker Change: The team works really well together and.
Uses of AI It will help with some more core one enforced with branches where do it in a way at.
Speaker Change: I Love my job getting to go just sort of.
Speaker Change: Imagine talking to customers at their problems and trying to match. It on okay. What tech is going we're going to be honest, Jeff really holds me accountable a lot of our conversations Jeff uses where it actually a lot gabelli. Okay. Rick. This is great stuff what can actually work right now in a way that customers will actually use it won't disappoint them and it's not going to be buggy.
Syed: Always be proud of that respective boundaries privacy and we're going to build the world of gene Roddenberry not George Orwell.
Speaker Change: Hey, Jennifer close which has allowed us to start unduly higher levels of complexity.
Syed: But for US it it starts I go out helix customers.
Syed: I sit there prompted then I get to come back to the company look like a genius with all the great ideas.
Speaker Change: And so.
Speaker Change: I don't think were goes we're going to approach it kind of at the same way, Okay, where are we at.
Syed: Be carrying fallen back to IP, and then jumps out and make sense of it all segmented with ours.
Speaker Change: And.
Speaker Change: What will work well for our customers and it's a lot of it is just getting the sequencing down.
Syed: 1000, plus engineers and product people to these great customer ideas put them together and.
Speaker Change: Thanks, Jonathan.
Speaker Change: Up next we have Andrew Sherman, Andrew welcome to the call great. Thanks, Eric good to be on the call congrats on the quarter.
Syed: Giant Brittany.
Syed: The staff and execute the business run it and I got to go out.
Syed: On the road again.
Speaker Change: Britney one for you on the Rev revenue growth guide of 25% very strong maybe just walk us through your assumptions embedded there for NR Annie.
Syed: The team worked really well together and.
Syed: Just a couple.
Syed: Getting to go into sort of.
Syed: Imagine customers their problems, they're trying to match it on okay.
Speaker Change: Any color on the AI era contribution the sustainability of the strong 123% MLR and any change to your guidance philosophy versus the past couple of years yeah. Thank you.
Syed: Tech demand.
Speaker Change: Jeff really holds us accountable a lot of our conversations.
Syed: Actually a lot of value okay.
Syed: Great stuff, what can actually work right now in a way that customers actually use it won't disappear when they open it's not gonna be bugging.
Speaker Change: You know as I talked about no actual change in our guidance philosophy, what we do.
Syed: Exactly.
Speaker Change: You know we've got our future contracted bookings will know approximately how much of that will convert in the next year.
Syed: Bridget.
Syed: Okay.
Syed: And.
Syed: Well for us, whereas it's allowed to just give him a sequencing down.
Speaker Change: How much of a go get rehab and then we can look at our pipeline and see how our pipeline stacks up and how we feel about that okay. So that's pretty much how we do it and that's how we continue to get continue.
Jonathan: Thanks, Jonathan.
Jonathan: Thanks, Andrew.
Syed: Welcome to the call.
Syed: Great. Thanks, Eric.
Syed: Congrats on quarter Britney.
Speaker Change: Yeah.
Syed: Britney on for you.
Speaker Change: And how about assumptions going forward I mean, we have really low churn.
Syed: Got it at 25% very strong maybe just walk us through your assumptions embedded for.
Speaker Change: <unk> has has really when they continued to be very stable deposit so no major change around assumptions going forward.
Syed: For <unk>.
Any color on the AI era contribution the sustainability of the 143% in IRR in a changed your guidance philosophy versus a couple of years yeah. Thank you.
Speaker Change: Great. Thanks, and for also for Britney and Josh maybe just touch on where the supply demand imbalance for Taser 10, great to see that it is still tracking at two <unk>.
Syed: Yeah, I think you're talking about now.
Syed: No change in our guidance philosophy.
Scott our future practice bookings.
Speaker Change: Two seven but where do we stand today supply demand imbalance I think Brent on your Capex comments would imply more supply coming on.
Syed: Proximately humps.
Syed: Yeah.
Speaker Change: So what does that signal for growth this year.
Syed: Now how much of a go get we have I remember when looking at our pipeline and see how our pipeline gas and how we feel about that okay. So pretty.
Speaker Change: Oh got it we are we are still outpacing our our supply with our demand so still in a great place. We are investing next year to try and bring more supply online. So.
Mark: Hey, Mark how are you.
Syed: And how we continue.
Syed: Yeah.
Syed: And how it functions.
Speaker Change: We'll see where demand goes I think we imagine sometime into next year, we've got that supply demand imbalance.
Syed: I mean, we have really.
Syed: Okay.
Syed: Alright.
Syed: Okay.
Speaker Change: But what you're really seeing right. Now is we are basically selling as much detail as we can make and so we've got to keep investing behind our capacity.
Syed: Yeah.
Syed: On a pro forma number 13 German assumption.
Syed: Yeah.
Syed: Great. Thanks for also for me.
Speaker Change: Great. Andrew Thanks allow are particularly excited about <unk> 10, just because of what it means for our mission and moon shot as well the more customers deploy it we are seeing videos of better and better outcomes in the field and I think that's kind of continuing.
Syed: Josh.
Syed: Just touch on where the supply demand imbalance for 10 grid to suited so tracking.
Syed: T seven, but where do we sit today supply demand imbalance.
Syed: Your Capex concert employ more supply coming on.
Speaker Change: Through a network effect across the entire market and so we're very exciting excited about what the future holds for Taser 10, I don't think.
Syed: So whether thats this year.
Syed: We are we are.
Syed: Oh.
Syed: Okay things are our supply with our demand.
There is any slowdown in sight here.
Speaker Change: Our highest demand CW ever and I think that will continue.
Syed: We are in the next year to try and grow more.
Speaker Change: Notwithstanding some new European customers, who have not had <unk> 10 for very long and two of them told me. They have already have heard at least one shooting saved at least the life and the early you know a few months of them deploy in the field and these are countries, obviously, but don't have the frequency of shootings that we do in the U S. So it was pretty significant to hear that from them.
Syed: So.
Syed: Well see where demand.
Syed: On time interaction, where we provide immune balance.
Syed: What you're really seeing right now we are basically selling much T task.
Speaker Change: Got it.
Syed: Sarcastic.
Speaker Change: All of our products work, so well together as an ecosystem there payers here and there that are <unk>.
Syed: Great Andrew thinks a lot, particularly excited about <unk> 10, just because of what it means for our mission and moonshot well the more customers deploy it we are seeing videos of better and that are out on the field and I think that's kind of.
Speaker Change: <unk> peanut butter, and chocolate and drive each other forward and so with few tab. The story with VR is such a great. One because <unk> is not only so transformational capability, but it is new and different in a way that really motivates the sale of adoption of our VR training that goes along with it and it's the catalyst for getting the best possible outcome.
Syed: Continuing.
Syed: Through our network effect across the entire market and so we're very exciting excited about what the future holds for Taser and I don't think.
Syed: There is any slowdown in sight here.
Syed: It's our highest demands EW ever I think that will continue.
Speaker Change: With T cell.
Speaker Change: Similar story for like VFR, and robotics with juices and <unk>. So you see all these pairings that goes so well together combined with the leverage of them adopting more wherever ecosystem.
Syed: I just met with some new European customers, who have not had the temporary loud and.
Syed: And two of them told me they are already a variety of at least one Judy could at least my life.
Syed: The early few months of them Duane.
Syed: And these are countries obviously.
Speaker Change: Great. Thank you all.
Syed: Don't have a frequency of shooting that we do in the west So it was pretty significant to hear it from them.
Will Power: Thanks, Andrew up next we have will power of Baird.
Speaker Change: Great. Thanks I.
Speaker Change: All of our products were so well together.
Will Power: I guess I got a couple.
Will Power: Well I guess first reconcile the lone Star State voted to have you.
Syed: Under.
Payers are there et cetera.
Will Power: Sure.
Syed: W peanut butter and chocolate and drive each other corridors. So if you had.
Speaker Change: But a question maybe first question for Josh or Ricky who wants to take it look at it it sounds like really strong early success with the AI era plan. I think you noted 10 deals in Q4, I just want to understand the confidence and visibility there before because it's a big lift to newest in OSB pricing I didn't go up $3 50 at the high end of <unk>.
Syed: With VR.
Speaker Change: Because you've had it not only as a transformational capability, but is new and different in a way that really motivated the sale of adoption.
Speaker Change: And that goes along with it and as a catalyst for getting the best possible outcomes with Tcl.
Speaker Change: What's the conviction confidence visibility and agencies, having enough budget to be able to adopt this at a rapid pace from here.
Speaker Change: Similar story for <unk> and robotics with <unk>.
<unk> as you see all these pairing that goes so well together combined with the leverage of them earlier.
Speaker Change: It's interesting it's a great question and it's nice to see again the <unk>.
Speaker Change: Early businesses.
Speaker Change: Great.
Speaker Change: What I would say about the AI era plan and about our AI products in general is.
Speaker Change: Thanks, Andrew.
Speaker Change: Okay.
Speaker Change: They are driving such an ROI that can be measured and in staffing and officer time that our customers are saving money.
Speaker Change: Alright. Thanks.
Speaker Change: Got it helpful.
Speaker Change: Okay.
Speaker Change: Homestar caveat.
Speaker Change: Okay.
Speaker Change: As a result of of deploying this for $200 a person like the U.
Speaker Change: A question maybe first question for you as a recruiter, let's take a look at it sounds like really strong success.
Speaker Change: You can just do the math on draft, one alone and essentially what is allowing you to do it if you're a police chief is up 20% more capacity day to day of your police officers and this is an environment where police departments are still very under staffed they've got dozens and a lot of cases hundreds of open road.
Speaker Change: 10 deals in Q4, I, just wanted to understand the confidence and visibility.
Speaker Change: It's a big lift.
Speaker Change: Right.
Speaker Change: We tend to be at the high end of five years.
What's the condition confidence just 1 billion agencies, having enough budget.
Speaker Change: We will do this at a rapid pace premier.
Speaker Change: Pulls that are unfilled and so when they can allocate some of those dollars over to these tools that that might.
Speaker Change: It's interesting it's a great question and it's nice to see you again.
Speaker Change: Mitigate the need to have more officers at the department to begin with that is highly valued and so where we're very very encouraged.
Speaker Change: What I would say about the AI era plan about our AI products in general is.
Speaker Change: They are driving such ROI that can be measured in staffing up for some time now.
It's it's mostly because we know what what type of financial outcomes.
Speaker Change: Our customers are saving money as a result of.
Some of these AI products are driving for our customers, Yes, Let me, let me jump in on that I met with.
Speaker Change: Of deploying this for $200 a person.
Speaker Change: A large customer in a relatively new segment for us so it's not staying local law enforcement.
Speaker Change: <unk> you.
Speaker Change: You can just do the math on dropped one alone and essentially what it's allowing you to do it you Felicia is that 20% more capacity today of your police officers and in this environment, where police department are still very honors app, they've got dozens and a lot of cases hundreds of openreach.
Speaker Change: Big.
Speaker Change: Agency.
Speaker Change: And meeting I spent a day with the with the customer going through their operations learning how things work. It was a lot of fun for me and there is a new AI service, we could do it with literally offload more than half of what their entire staff spent their time doing that they hate doing this administrative in nature. It's got a lot of the similar.
Speaker Change: Or is that or unfilled and so when they to allocate some of those dollars over to these tool that that might.
Speaker Change: Mitigate the need to have more officers at the department to begin with is.
Speaker Change: <unk> dropped one to where customers like Oh My God. This would this would be game changing for my budget. It would free up my people to do more training and I wouldn't need as many people so I could grow a little slower.
Speaker Change: Highly valued and so we're very very encouraged.
Speaker Change: And it's mostly because we know what what type of financial outcomes. Some of these AI products are driving for our customers. Yes, Let me let me jump in on that I met with.
Speaker Change: And my morale would go up dramatically.
Speaker Change: And.
Speaker Change: That's what I came back to Jasmine ROIC, Okay, let's put a team on how to figure out how to do this and what the new AI tools like it's it can be very doable.
Speaker Change: A large customer in a relatively new segment for us it's not the whole onboarding.
Speaker Change: A big.
Speaker Change: And so again, that's just another example, where AI is allowing us to rapidly.
Speaker Change: Agency.
Speaker Change: And I spent a day with with the customers going through our operations learn how things work. It was a lot of fun for me and there is.
Speaker Change: Bring the promise of like AI Tech doing.
Speaker Change: Repetitive.
Speaker Change: A new AI service, we can do it literally offload more than half of what their entire staff spend our time doing the day doing this administrative nature.
Speaker Change: <unk>.
Speaker Change: Because our customers wanted to see if it's sort of great is it's not like they're firing people are this is taking people's jobs, it's taking the crappy low value time consuming bureaucratic suck of their job away and I think a win win and they are just excited about hey, I got to go do stuff I enjoy doing that gets me excited to go to work and then for the cheap it's a yeah I'm getting more out of my people. So.
Speaker Change: Got a lot of the dealer characteristics dropped one to wear.
Speaker Change: Customers like Oh, My God This wood.
Speaker Change: Would be game changing right, but it would free up my people to do like what training and I wouldn't see it as maybe people will start to grow a little slower.
It's paying for itself.
Speaker Change: And it is great to hear it sounds like Jeff Scott job security.
Speaker Change: And morale go up try to quickly.
Speaker Change: Works on those projects.
Speaker Change: And.
Speaker Change: Maybe just a quick second one.
Speaker Change: So I came back to Jonathan.
Josh the enterprise deal the largest deal I think in history, maybe I missed this but any other color as to exactly what they are utilizing or they use legalizing body worn cameras as it uses as a boat does it I don't know even deidra for facilities, what is kind of good news there.
Speaker Change: Let's put it you might have to figure out how to do that and with the new agile.
Speaker Change: It can.
Speaker Change: It can be very doable.
Speaker Change: Again, it's just another couple of weeks.
Speaker Change: Guy is allowing us to rapidly.
Speaker Change: Bring in front of us.
Speaker Change: Yeah, Hi Tech doing.
Speaker Change: A repetitive.
Speaker Change: I think in this particular deal will its body cameras and few assist with of course evidence dot com licensing as well.
Speaker Change: Jobs.
Speaker Change: But the darkest there's one of the greatest it's not like they're firing people. It's just taking people's jobs, it's taking the crab Ebola valu time consuming bureaucratic socket other job.
Speaker Change: But the same customer has a lot of interest in D drone and other products as well so I think what youre going to see throughout this year in the enterprise segment is.
Speaker Change: And I think a win win.
But again I have to go through stuff I enjoy doing because you decided to go to work and if it <unk> get more out of my people to go.
Speaker Change: We will be landing in a lot of cases with few system and body worn cameras, but just like I was saying about international I think the same holds true where a bigger and bigger part of our product portfolio will be.
Speaker Change: Yeah.
Speaker Change: Now lets get there it sounds like <unk> got about security.
Speaker Change: Works for those projects.
Speaker Change: Applicable to the enterprise segment, and we're very excited about that.
Speaker Change: And maybe just a quick second one.
Speaker Change: Josh just enterprise the largest deal I think in history maybe.
Speaker Change: Thank you.
Will Power: Thanks will.
Speaker Change: Up next we have Trevor Walsh JMP.
Speaker Change: As to exactly what they are utilizing it.
Speaker Change: Great. Thank you for taking the questions.
Speaker Change: Legalizing body worn cameras.
Speaker Change: Josh maybe for you, but I really feel free to jump in I want to ask the federal question, maybe a different way.
Speaker Change: <unk> says about isn't it.
Speaker Change: Deidre facilities whats kind of get you there.
Speaker Change: So I understand it's more opportunity versus risk on the federal opportunity itself, but one of your peers in the state and local technology.
Speaker Change: I think in this particular deal.
Speaker Change: Its body cameras and consist with of course evidence Stockholm licensing as well.
Speaker Change: Entered.
Speaker Change: But at the same customer has a lot of interest in <unk> and other products as well so I think what youre going to see throughout this year and enterprise segments did well.
Speaker Change: Sales motion gave some statistics on their call a few weeks back about kind of how federal funding flows down to the state and local budgets just curious it sounded like from that kind of just general commentary that state budgets can be a little bit more impacted or do draw a lot more from federal funds. So just curious if youre hearing concerns are for that state.
Speaker Change: We'll be landing in a lot of cases with few system and body worn cameras, but just like I was saying about international I think the same holds true where it's a bigger and bigger part of our portfolio will be.
Speaker Change: Level state police whenever it might be types of orix, having maybe worries or concerns around kind of what the federal funding kind of flow will be for that Marcel obviously peak county, and local level if that makes sense. Thanks a lot.
Speaker Change: Applicable to the enterprise segment, and we're very excited about that.
Speaker Change: Thank you.
Speaker Change: Thanks will.
Speaker Change: Up next we have Trevor Wall Street.
Speaker Change: Great. Thanks for taking the questions.
Speaker Change: Personally I am not sure I agree with that commentary it is true that some grants and other programs have dried up a lot of those you know, we're not particularly impactful to axon maybe to some other companies but.
Speaker Change: Josh maybe for you.
Speaker Change: Jonathan.
Speaker Change: Question, maybe a different way.
Speaker Change: So I understand it's more opportunity versus risk on the federal opportunity is one of your peers.
Speaker Change: State and local technology.
Speaker Change: I still think there is a universe where.
Speaker Change: Kind of sales promotion gave some statistics on how do we think about kind of a house.
Speaker Change: Police and federal military are better funded by the federal government state and local police and federal military are better funded by the federal the federal government. In this next year than I think people are assuming and so.
Speaker Change: We closed on the state and local budgets just curious it sounds like.
Speaker Change: Just general commentary that state budgets have been more impacted.
Speaker Change: Personally I don't I don't necessarily see any headwinds in that way that would have any.
Speaker Change: Mark.
Mark: So just curious if you're hearing concerns are for that state level state police whenever might be types of or any worries and concerns around kind of what the federal funding.
Speaker Change: Material impact on our business. If you hear the types of projects that are getting parade in front of the cameras like examples of waste.
Speaker Change: For that myself.
Speaker Change: None of them ROIC.
Speaker Change: And local that makes sense yeah. Thanks, a lot.
Speaker Change: Critical public safety equipment and technology, it's stuff that people, saying, Oh Wow huh.
Speaker Change: Personally I'm not sure I agree with that commentary it is true that some grants and other programs have dried up a lot of those were not particularly impactful to axon, maybe some other companies but.
Speaker Change: Weird Theyre spending my money on that and like we just don't think we're like our products make a ton of sense for customers that bipartisan are pretty universally.
Speaker Change: Both Republicans and Democrats in the in the last election cycle I think we're going out of their way to make sure that they knew that they were broke public safety prolong enforcement.
I still think there is a universe where.
Speaker Change: Police.
Speaker Change: And federal military are better funded by the federal government state and local police and federal military are better funded by federal Federal government in this next year than I.
Speaker Change: So.
Speaker Change: Again, I don't want to be arrogant about it and say where bullet proof, but I would say we think net.
Speaker Change: I think people are assuming so.
Speaker Change: We haven't seen the political wins really.
Speaker Change: Personally I don't I don't necessarily see any headwinds in that way that would have any.
Speaker Change: That does not much as long as we're delivering things that actually help our customers do their job then.
Speaker Change: Zero impact on our business.
It's in a blue city of Red City of Trump administration of <unk> administration.
Speaker Change: And if you hear of a set of projects that are getting parade in front of the cameras like examples of waste.
Speaker Change: The product carries today.
Speaker Change: None of them are.
Speaker Change: Great. Thanks, both for the color I mean, just one quick follow up for Britney I appreciate the new future contracted bookings metric always love, adding a new metric to keep keep tabs on.
Speaker Change: Critical public safety equipment technology.
Speaker Change:
Speaker Change: Huh.
Speaker Change: Weird their spend my money on that.
Speaker Change: But we just don't think we're like.
Speaker Change: Like our products.
Speaker Change: It sounds like it's RPI basically plus additional contracts that have T for C or other causes that obviously don't put them in the RPM is that kind of a new metric a function of that more of those termination clauses or doing more contracts that have more of those types of things and so it kind of helps to give more visibility.
Speaker Change: For customers.
Speaker Change: Bipartisan Nerdy University.
Speaker Change: Both are probably say Democrats selections.
Speaker Change: Collection cycle.
Speaker Change: Another way to.
Speaker Change: Make sure that they knew that they were appropriate safety protocol for cement.
Speaker Change: So.
Speaker Change: I don't want to be arrogant about it.
Speaker Change: But I would say we think net.
Speaker Change: There.
Speaker Change: Where I guess where are those contracts on those federal customers to just generally have that written down or are there other places, where you're seeing that kind of more and more generally from a contract perspective. Thanks.
Speaker Change: Right.
Speaker Change: We have seen the political wins really.
Speaker Change: As much as long as we're delivering.
Speaker Change: Things that are actually our customers do their job then.
Speaker Change: Yeah, I mean, you know exactly what all of them and so we're going to move to talking about our new total future bookings number.
Speaker Change: Whether it's a blues city red.
Speaker Change: Trump administration of VY administration.
Speaker Change: The product carries today.
Speaker Change: Okay. Thanks, both for the color.
Speaker Change: There are more indicative of what the business is doing and the bookings commentary and color we gave.
Speaker Change: And just one quick follow up in Britain.
Speaker Change: Appreciate the new future contracted bookings metric.
Speaker Change: We have been going through a interchanged accountable for us, but we feel.
Speaker Change: Two months.
Speaker Change: Amazon.
Speaker Change: Scrubbing RPM.
Speaker Change: It sounds like <unk>, obviously plus.
Speaker Change: And there's just a lot.
Speaker Change: <unk> allow us to put an from a GAAP standpoint.
Speaker Change: Contacts that have T for C or other causes.
Speaker Change: Yeah.
Speaker Change: We'll still find our GAAP <unk> number.
Speaker Change: Is that kind of new <unk>.
Speaker Change: That more of those termination clauses or doing more contracts that have more of those types of things and so it kind of how long does it give you more visibility there.
Speaker Change: 10-K, we have to report that you'll see that more and more of diverging from how we actually measure our business.
Speaker Change: We don't go back and look at our historical contract even when we have time for convenience our customers don't actually eval.
Speaker Change: I guess were those contracts.
Speaker Change: Customers generally have not written down or are there other places, we see kind of more and more generally and contract perspective. Thanks.
Speaker Change: Utilize that really don't have charge first just non indicative in.
Danielle: Yeah Danielle.
Danielle: Thank you.
Danielle: Okay.
Speaker Change: And how's the where we're seeing it honestly, it's across the board I broke more and more customers just long term for convenience of a best practice.
Danielle: We're talking about.
Danielle: Our new intermodal fewer bookings number.
Danielle: Morning.
Speaker Change: And so we're seeing it in a lot of places.
Danielle: Given your market commentary and color.
Speaker Change: So we're just going to look over sort of non-GAAP metric, which we think it's a better reflection.
Danielle: We have been going through.
Danielle: So we felt like it.
Danielle: Scrubbing RPM.
Speaker Change: Great. Thanks, Tom Great finish to the year.
And there's just a lot.
Karen: Thanks, Karen.
Danielle: Perfect.
Jordan: And next we have Jordan lineup Bank of America.
Danielle: Sure.
Danielle: On a GAAP standpoint.
Speaker Change: Hey, Thanks for taking the question could you guys talk about how you're approaching your go to market with <unk> and.
Danielle: <unk>.
Danielle: Brian.
Danielle: Okay.
Danielle: Put that see that.
Speaker Change: Sky Sky swap program, and how thats been going so far.
Danielle: More and more.
Danielle: How we auction.
Danielle: We don't go back and look at all.
Speaker Change: Yeah, and certainly I'll I'll start, but I think others should chime in on this one look we're really excited to have <unk> as a partner we think they are the most talented team in drone technology, they're a phenomenal cultural fit with us in terms of our go to market motions.
Danielle: Local correct, even when we have firm for convenient customers actually.
Danielle: But <unk> really don't.
Danielle: Uh huh.
Danielle: And how does it work.
Danielle: Great.
Danielle: For more and more tomorrow.
Danielle: For convenience.
Speaker Change: The product is fantastic like Rick was saying dji has fallen out of favor in U S. Public safety and <unk> is the obvious choice behind them and so we're really excited to be able to kind of augment our ecosystem with with Sky D O hardware.
Danielle: Yes.
Danielle: But we are seeing.
Danielle: Oh I'm sorry.
Danielle: Yeah.
Danielle: What do you think about that.
Danielle: Yeah.
Danielle: Great. Thanks, Greg first of the year.
Danielle: Thank you.
Danielle: And next we have line of sight American.
Danielle: Yeah.
Danielle: Hey, Thanks for taking question.
Speaker Change: And and really give our customers more situational awareness and more opportunities for really integrated <unk> drone is a first responder experience. So.
Speaker Change: Can you guys talk about how you're growing your go to market.
Danielle: Idea.
Danielle: Sky Sky swap program and how it is.
Danielle: And it goes so far.
Speaker Change: I think that.
Danielle: And certainly I'll I'll start, but I think others should diamond on this one.
Speaker Change: That's something that we're we're very very excited about and very encouraged about what the results have been so far in that partnership yes, let me jump in.
Speaker Change: We're really excited to have <unk> as a partner we think for the most talented team in drone technology.
Speaker Change: Ste.
Speaker Change: Not even I wouldn't even say Sky D O is behind Dji D J.
Danielle: <unk> cultural fit with us in terms of our go to market motions.
Speaker Change: Got to market first with scale, but sky D. O is actually the world leader in autonomy like many things, but the Chinese companies had really inexpensive hardware and they did a great job with the user experience <unk> is a big team in Silicon Valley has been very much focused on leveraging AI and sensors. So that the drones can launch and fly themselves autonomously.
Speaker Change: The product is fantastic.
Speaker Change: Dji has fallen out of favor in in U S public safety and Sky O is the obvious choice behind them and so.
Speaker Change: We're really excited to be able to.
Speaker Change: To augment our ecosystem with Sky D O hardware.
Speaker Change: Now.
Speaker Change: Look we bought as your own company.
Speaker Change: And really give our customers more situational awareness.
Speaker Change: Two years ago ish with Sky hero.
Speaker Change: More opportunities are really integrated D. Fr draws so first responder experience so I.
Speaker Change: That was sort of a different use case, that's for indoor bike tactical drones.
Speaker Change: I think that that's not where we're very very excited about and very encouraged about.
Speaker Change: We did an assessment on the bake bill by.
Speaker Change: Hi.
Speaker Change: What <unk> is doing is just a different level of complexity leg of a tactical drone falls out of the sky. It falls to the floor from six feet doesn't fall on somebody it doesn't have to fly itself you build it to be more resilient to bump into things and you don't need in fact, all the autonomy can get confused in an indoor environment and Theres other applications for the long term that we felt.
Speaker Change: What's the reception been so far in our partnership yes, let me jump in here.
Speaker Change: It's not even if we need it.
Speaker Change: <unk> behind you.
Speaker Change: D J.
Speaker Change: Marketers with scale, but he was actually the world leader in a tiny like many things to be Chinese companies had really expensive hardware and did a great job with these are experienced.
Speaker Change: Sky hero would be transformative for us to own and work on.
Speaker Change: With <unk>. This was just our assessment was while it took a team of like 600 people working for the better part of a decade with pretty massive investments to do this and they've got a huge head start and as we got to know each other it was one of those you know like jeopardy, chocolate and peanut butter moments it was really a great fit.
Speaker Change: Got it.
Speaker Change: Siemens Silicon Valley is very much focus on leveraging AI and sensors. So that the brands can launch items held economists now.
Speaker Change: Now.
Speaker Change: Look we bought a drilling company.
Speaker Change: Yes.
Speaker Change: Years ago.
Speaker Change: With Sky Hero.
Speaker Change: Those are a different use case for indoor bike tackle bones.
Speaker Change: Developed a great personal relationship with the team in and add them up there and it really fits nicely like.
Speaker Change: But as you get out in SaaS and the bake Dubai.
Speaker Change: Like a lock into key with each other's portfolios and so we're going to market.
Speaker Change: You know what <unk> is doing is just a different level of complexity like a tactical drone falls out of Sky falls north of <unk>.
Speaker Change: Hard to debate with the partnership and we're getting tremendous customer feedback in fact.
Speaker Change: On somebody that doesn't have to by itself you build it to be more resilient to bump things too.
Speaker Change: It actually cost you a lot left to deploy on American Scotty Oh drawn any dji drone for this reason with dji you put it in the trunk of the car and then you basically generally turn.
Speaker Change: In fact, all the autonomy and getting viewed and even indoor environment and Theres other applications for the long term that we all sky hero would be transformative for us to own and work on.
Speaker Change: Your police officer into Uber driver for drones drive so to see him any stands on seen flying a drone, which.
Speaker Change: With Sky D. O. This was just our assessment with Wow.
Speaker Change: Basically cost you 200 grand per year to get that drone driven around the city over the Sky D. O dock, yes, the hardware is a bit more.
Speaker Change: 600 people working for the better part of a decade, we're pretty massive investment to do this and they've got a huge.
Speaker Change: And the software but.
Speaker Change: For $50000 you can have that drone autonomously that does not consume an officer. It can be autonomously flown it fly suicide without any need for like human oversight and you pair that with our D. Drone centers now that is an amazing pairing you can now see the aerospace to see where everything is you can the drone can fly autonomous Lee.
Speaker Change: Start and as we got to know each other it was one of those units representing chocolate peanut butter. It was really a good fit.
The great personal relationship with the team.
Speaker Change: And Adam up there and it really fits nicely.
Speaker Change: We've got a lot of key with each of those portfolios and so we're going into market.
Speaker Change: Hard to debate with the partnership and we're getting tremendous customer feedback in fact.
Speaker Change: Cross connecting the two systems together and then whoever needs to see to feed just magically sees a camera in the sky, where they want it and what they want to see with zero human oversight. So it's actually about a quarter of the price when you consider the human labor elements and we think this is both an interesting political moment.
Speaker Change: Exit costs, you a lot left to deploy on American scottie it around the knee Jade one for this reason.
Speaker Change: I put it in a truck or a car and you.
Speaker Change: Basically generally turn.
Speaker Change: Your police officer, New driver Chrome drive to see if any hands on team when we don't.
Speaker Change: U S government policy in these rift with China is accelerating that transition, but it's just.
Speaker Change: Which.
Speaker Change: Based on cost you 200 grand per year that drum driven around the city.
Speaker Change: Matching this wonderful moment in time, where AI is now making me autonomous flight possible Sky deal is in the process of releasing from beta to production their Doc that unlocks. This a complete autonomy. So it's just a really exciting part of the business and we always look to.
Speaker Change: This video Doc Yeah, so hardware is it more.
Speaker Change: And the software.
Speaker Change: But you know for $10000 you cannot iPhone honestly, the Tronox human officer economists, we've flown it fly to a site.
Speaker Change: Look for and just make the best decisions, where we should make what we should build ourselves where we should partner in this case. It was a we found a great partner and we're confident.
Speaker Change: Any need for like human oversight and you pair that with our drone centers.
Speaker Change: Now that is an amazing carrying you can now see their pay to see where everything goes you could have a drone can fly autonomously cross back into the two systems together and then whoever needs to either feed just magically sees a camera and the guy where they want what they want to see with your human oversight, but it's actually about sort of the price.
Speaker Change: It's got the right relationship fit in long term dynamics.
Speaker Change: And for your customers.
Speaker Change: Sure D or border patrol.
Speaker Change: Can you just go through you to buy the Sky D O drone and you guys will put on your kit. So it's all connected or do you need both of you.
Speaker Change: When you consider the human labor.
Speaker Change: We could we could do those deals on what we call axon paper or on Scottsdale paper got it thank you and more and more and more.
Speaker Change: And we think this is both an interesting political moment in the.
Speaker Change: Just government policy and retro Chinese tolerating that transition.
Speaker Change: It's just matching this work for a moment in time, where AI is nowadays.
Speaker Change: Customers get excited about this space for all the reasons, Rick just went through again, they think of the evolution of the real time crime center space and that opportunity as hand in glove with VFR and drones as first responder and so the combination of fuses Scania with the rest of the axon suite is just hand out on me.
Speaker Change: On a slight bustle CIO is in the process of releasing from beta production their dock.
Speaker Change: <unk>.
Speaker Change: Fleet economy.
Speaker Change: It's just a really exciting part of the business and we always look to.
Speaker Change: Look for and to make the best decisions, we make what we build ourselves we should partner.
Speaker Change: Matched in terms of bringing the capabilities that customers want and need and giving them the situational awareness and autonomous response that theyre looking for.
Speaker Change: In this case it was a we found a partner in.
Speaker Change: We're confident that it's got the right relationship fit in long term dynamic.
Speaker Change: One example is well like an officer with their body camera in the near future, we'll be able to say, hey, I need a drone and redeployment the play the drone to the body camera and as it flies in Sky, who has done a great job integrating youll see a blue augmented reality pillar growing to the Sky that tells you right where you're officer is.
Speaker Change: <unk> for your customers.
Richard Gere: Mr Gere border patrol.
Richard Gere: Can they just go for you to buy this idea of a drone that you guys talked about your debt. So it all connectivity you need both of you.
Richard Gere: We could we could do those deals.
Richard Gere: Okay.
Richard Gere: Okay.
Richard Gere: More and more and more.
Speaker Change: So theres no searching around to find them.
Richard Gere: As customers excited about this space.
Speaker Change: Seamless mash of our body cameras our fuses.
Richard Gere: Richard went through again.
Richard Gere: Again think of it.
Speaker Change: You know <unk> autonomy and their flight software.
Richard Gere: The evolution of real time crime cyber space and the opportunity.
Speaker Change: But to the customer it doesn't matter, it's one experience.
Richard Gere: Hand in glove.
Richard Gere: All right.
Richard Gere: Sure.
Speaker Change: That also we need to draw on there it is and there's my answer and I can see them and I can pass that video feed to whoever I need to pass it too.
Richard Gere: It's a combination.
Richard Gere: With.
Richard Gere: Rapidly.
Richard Gere: It's just hands.
Speaker Change: Alright, thank you.
Richard Gere: In terms of rate.
Speaker Change: Thanks Jordan.
Richard Gere: Our customers want and need.
Speaker Change: Next we have Joe Cardoso at J P. Morgan.
Richard Gere: The situational awareness.
Joe Cardoso: Hey, good afternoon, everyone and thanks for the question.
Richard Gere: I was looking for.
Richard Gere: One example is well liked and officer.
Speaker Change: Maybe just wanted to follow up on the Jerome question, but from a different point of view and maybe a bigger picture point of view like how are you guys thinking about the timing of that opportunity materializing in a more material way for axon relative to a year or two ago, because it sounds like anecdotally, it's ramping much faster than maybe the conversations we are having.
Richard Gere: With our body camera.
Richard Gere: In the near future.
Richard Gere: Roni.
Richard Gere: Despite the drones.
Richard Gere: Two body camera and it plays in.
Richard Gere: Radio has done a great job integrating youll see a boom.
Richard Gere: We entered reality color.
Speaker Change: But you're right where officer.
Richard Gere: So there is no switching around behind that.
Speaker Change: Last year, and just kind of curious like when we're thinking about the size of this potential business for acts on a year out two years out like can we think about this as being material volumes or is that just getting a little bit ahead of our skis. As you guys are doing more kind of pilots and programs with some of your end customers or or are we actually starting to see some.
Richard Gere: Yes.
Richard Gere: Seamless smashed our body cameras our fuses.
Speaker Change: More bigger moves here from your end customers in terms of adoption.
Speaker Change: They typically prevent me from throwing numbers out because I get too enthusiastic, but I would say qualitatively we're at a tipping point.
Speaker Change: Okay. So youre starting to see more of a I'm sorry go ahead Brittany.
Speaker Change: We've got the Tam and about 20 in Birmingham, we are in such early so we took that up because I think we'll see the opportunity much more clearly on the loss now.
Speaker Change: So from a logistics and autonomy, we do long term bookings they don't get bucking backflip, giving us excitement about momentum.
Speaker Change: Talk a little bit of time to start seeing it at all.
Speaker Change: Through the P&L.
Speaker Change: Got it.
Speaker Change: And then maybe quick question for Britney like obviously, you talked about it hit the 25% EBITDA target a year ahead of plan still guiding for 25 for 2025.
Speaker Change: I appreciate that you talked about the investments in your prepared remarks, maybe just flesh out a bit more in terms of where those investments are exactly targeting like is there any particular areas that you guys are kind of putting those dollars to spend in different parts of the portfolio are engineers et cetera, just curious where those dollars are kind of being spend and then anything that we should be in.
Speaker Change: <unk> in terms of implications around gross margin expansion for the year from those comments or is it really just largely taking those dollars and investing it in opex.
Speaker Change: Yeah.
Speaker Change: Taking on dollars and investing back into R&D and it.
Speaker Change: All of the areas we've talked about.
Speaker Change: It's strong it's robotics.
Speaker Change: If all of these new markets, but we're still excited about.
And I'd also add for any adjusted it's also our enterprise go to market function as well that's a big investment for US This year as we're seeing these early results now it's about hey, how do we how do we really cover the market well from a sales and sales support and customer success perspective. So that's that's a large investment center this year.
Speaker Change: For us and one that we have high conviction will pay off nicely in the years to come.
Speaker Change: Got it appreciate the color guys and congrats on the results.
Joe Cardoso: Thank you thanks, Joe.
Speaker Change: Finally, we are on it Keith <unk> Northcoast.
Speaker Change: Good morning.
Joe Cardoso: Alright, guys.
Speaker Change: Good afternoon here. Thanks, I appreciate it guys.
Speaker Change: In terms of the enterprise opportunity, obviously, it sounds like we're having a lot of traction here pretty maybe you can talk about the pricing there I know, it's still nascent but in the public safety space you guys have that nice matrix that you guys private REIT investors over the past several years, how do you think about pricing for the enterprise market is in a similar vein or is there a different pricing schemes had gone through.
Speaker Change: I mean, I would say it's in a similar vein I wouldn't think about it as being materially different obviously, there are some nuances to the enterprise market of course, but they're still buying guns license.
Speaker Change: King about T cell for thinking about body cameras.
Speaker Change:
Certainly nuances, but nothing large I would call out for you on being highly different point, Okay. I appreciate.
Speaker Change: And I apologize if I missed this perhaps earlier in the call, but obviously tariffs are top of mind for a lot of people. These days both on a cost perspective for our company as well as perhaps deal demand issues for a geopolitical issues. How are you guys thinking about tariffs from both aspects.
Speaker Change: Yeah.
Speaker Change: So really flexible in our supply chain envelope rule.
Speaker Change: At this point, we've been delivering.
Speaker Change: So some time for a number of years and so.
Speaker Change: We were overpowering of just just being flexible and diversified.
Speaker Change: Now, it's hard to exactly predict what's going to happen going forward. So.
Speaker Change: Without certainty on what the tariffs are going to be it's hard to give a perfect answer but based on what.
Speaker Change: The talk is at least right now in terms of some of the proposed tariffs.
Speaker Change: There is nothing that I see that would really impact our guidance in anyway, we think we are pretty well baked.
What is knowable today.
Speaker Change: Great. Thanks, guys. Good luck.
Speaker Change: Thanks, everyone I'll kick it to Rick to close this out.
Speaker Change: Awesome alright, well.
Speaker Change: Obviously, we are delighted to have delivered another great year.
Speaker Change: Team's just doing a great job.
Speaker Change: I am insanely motivated by our customer feedback where things I'd mentioned is I think ultimately.
Speaker Change: <unk> has the opportunity to become a primary weapon system and that can drive growth in the international markets, even more than in the U S where they will carry a gun nanny taser frequently on every officer.
Speaker Change: And my confidence in that future is growing.
Speaker Change: So here's to a great 2025, we look forward to seeing you all our next earnings call and thanks for being part of the team.
Unknown Executive: These comments are based on our predictions and expectations as of today and are not guarantees of future performance. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. We discussed these risks in our SEC filings.
Unknown Executive: Our most up-to-date SEC filings, including our Form 10-K, will be available this We will also discuss certain non-GAAP financial measures, a description of each non-GAAP measure and reconciliation of each non-GAAP measure to the most directly comparable GAAP measure can be found in our shareholder letter, as well as on our investor relations website.
Unknown Executive: Now turning to our quarterly update.
Unknown Executive: First, we're going to pull up a video that highlights some of the things we're proud of accomplishing over the past We're showing so many products, so many products.
Unknown Executive: We are very excited. We are so excited. That was pretty cool.
Unknown Executive: To introduce the AI aeroplane.
Unknown Executive: D-Drone.
Unknown Executive: The Axon app.
Unknown Executive: FUSA.
Unknown Executive: One. Let's start with the A2Ps. This is where you do VR.
Unknown Executive: Key drone on the move.
Unknown Executive: Justice premier.
Unknown Executive: Eyes on scene now. There's been over a million drone violations this past year. It shows how important this topic is. We have well over 1,000 people joining this call today.
Rick Smith: Joining me now is Axon CEO and founder Rick Smith.
Josh Isner: Josh Isner. Great to have you back on the show. Welcome.
Unknown Executive: Under the Army.
Unknown Executive: That's done.
Unknown Executive: Harvard, stay away.
Unknown Executive: Originally, I was drawn to law enforcement just for a sense of wanting help. My uncle, I went on a ride along with him and I was absolutely sold.
Unknown Executive: That was it for me. I didn't want like a normal desk job. I wanted to be out and helping people and out in the community and do cool things. And when you get into policing, it really truly is to help others. Give me your hand! Come on! We got you.
Unknown Executive: Okay.
Unknown Executive: Using lethal force is one of the most traumatic things that we can do in this job, whether it's justified or not, it's something an officer has to live with. I'm glad I don't have to live with that for the rest of my life. It could have gone a different way, but we were able to keep everyone safe.
Unknown Executive: a very good Yours truly.
Unknown Executive: Axon has become... It's just inspiring. It's awesome to see so many new teammates here, all committed to the same mission, to the same cause. I can't imagine a better place. Thank you for everything, for making this place the way it is. What an amazing company. What an amazing group of people, the people I get to work with our employees, my teammates, our customers, working on problems we care about.
Unknown Executive: It's it's a privilege I get All right.
Rick Smith: Welcome to another one of our team members, our investors. And we're here to report our fourth quarter 2024 year end. We just finished what I believe will be a pivotal year in the history of our company.
Rick Smith: And we're looking forward to another exciting year in 2025. The most rewarding part of my job is getting to spend time with our customers. As you can see in the video, we feel like we're on this mission together. Understanding the challenges they face every day is our guiding light, and we've worked tirelessly to meet our challenges. There's so much we can do to make their jobs easier, their lives safer, and their days just a little bit better, while helping them protect them. Over the years, we've introduced new tools that have advanced the way our customers operate, and how they think about technology.
Rick Smith: We are at a place where the benefits of adopting newer technologies are so clear, it's almost too impossible to imagine what the world would be like. It's just one example of a product that is not only driving growth in our business, but it's changing the world. I rarely go a day without one of our customers having this device that has changed their world.
Rick Smith: And we're investing to make it We have a lot of work ahead of us to deliver on our moonshot and I believe we have the roadmap to get us there.
Rick Smith: I'm in an international market where I just came back from one of the most inspiring days of my career. And I can't wait to share the results that will unfold over the next 24 months. As we move forward towards our moonshot, it's bigger than just the United States and cutting gun related deaths between police and the public in the US. It is a worldwide phenomenon that's going to happen here.
Rick Smith: Stay tuned. We're going to have better efficiency, better training and new ways to apply our technology.
Rick Smith: Over the Horizon. Our cameras and our sensors are helping our customers capture more moments. Our acquisition fuses helps us connect more sensors and cameras than ever before. There are countless places where the benefits of better transparency and operations with the increased application of connected technology are just undeniable. Our investments and our ability to lean in out of the foresight to invest in the things that led us here that enable connectivity and software behind not just cameras, but all these sensors that are now taking flight into so many new sets of customers where we've never had the chance to engage previously.
Rick Smith: Our devices are connected by the most powerful purpose-built public safety operating system in the world. We now have more than 1 million users of our software solutions, spanning evidence management, real-time operations, productivity, and yes, artificial intelligence. We understand the interconnection of advanced software and hardware, and we unlock value in solutions that leverage the seamless connectivity to solve problems we care deeply about.
Rick Smith: This is where we differentiate ourselves. for most with our. With this foundation, we see several major tech trends unfolding before our very eyes, exponential advances in artificial intelligence, increasing connectivity, real time sensor fusion, and growing applications for drones and robotics, to name a few. These aren't just buzzwords to us. These are our passions, and we're making them real and real business. These product areas were more or less elements of our imagination a few years ago, and today they account for nearly half of the overall opportunities in our pipeline. We believe we will be the party who enables our customers to leverage these tools.
Rick Smith: to make them work, to make their jobs safer, to make them better and more I continue to spend my time thinking about the big picture.
Rick Smith: while ensuring that we're on the right path to make giant leaps that challenge our conventional thinking so we can be prepared for and deliver and be the driver of the future for our customers. I've never felt more confident about our position or more just insanely excited and motivated by what we're doing and frankly by the people I get to work with every day.
Rick Smith: One final note before I pass it on, I would like to provide an update about something near and dear to me.
Rick Smith: It's been one year since we last updated you on our intent to invest in our headquarters. We have a vision for our campus. We've put in a lot of work. I personally haven't timed into that vision, and we hope to keep it based here in Arizona. We love Arizona, and we want to be.
Rick Smith: Unfortunately, Arizona has a political and legal environment that is making it challenging for businesses like us to invest. After several years of working with our various elected administrative officials, developing plans that were responsive to our community, and we received unanimous approvals from the planning commissions and then through a vote of our elected officials. We've had a setback. Unlike states like Florida and Texas, Arizona allows zoning decisions to be subjected to political petitions and frankly, political gamesmanship. In our case, we faced paid petitioners who collected 93% of the signatures on a pay-for-signature basis, with two-thirds of those people coming from states foreign to Arizona, which I may have Freudianly mentioned.
Rick Smith: If we allow this to stand, this would delay our project by two years and reduce the risk of having to start over.
Rick Smith: Unfortunately, this same phenomenon caused Arizona to lose our NHL Pro Sports team, and it's placing Axon and other major projects on hold. So like many things, we're digging in to fix the problem. I'm working with our elected officials to try to fix this situation and enable Arizona to be an attractive, predictable environment for businesses. If we can fix it, it'll keep us here and it'll help the state attract other businesses and really grow into the tech center I believe it can be.
Rick Smith: If we can't fix it, well, then we're going to have to move on. We have several states courting us that don't have this same risk profile. So, I can leave this decision open forever.
Rick Smith: We will update you again as soon as we have fully vetted our options and come to a final decision.
Rick Smith: I thank you all for coming.
Josh Isner: So with that, I'll pass it on to a guy, again, who I'm just excited to work with, who really leads the business, which gives me the time to spend a lot of time with our customers. And Josh is gonna give you the details on what our incredible team accomplished in this most recent quarter.
Josh Isner: Josh. Thanks a lot, Rick. I appreciate the kind words. Good afternoon, everybody. As Rick mentioned, our customers remain at the center of our universe. I believe that mindset is what has afforded us the results that we have the privilege of reporting to you today.
Josh Isner: I'd like to share a few updates that recap the year and then some thoughts about where we're headed. First, we just closed the year with revenue in excess of $2 billion. That's nearly double the revenue we reported only two years ago, and it marks our third consecutive year of growing over 30%. This growth is a testament to our ability to deliver products that drive clear value for our customers, and our team's ability to connect our customers with the right solution. It takes an entire team to deliver results like these, and everyone at Axon continues to rally behind Rick's visionary leadership.
Josh Isner: Second, we booked over $5 billion in business. with about half of that closing in Q4, and there was strength across the board. Eight quarters in, TASER 10 orders continue to outpace TASER 7 by 2x, and we continue to see encouraging demand from our emerging market customers. To that end, seven of our top 10 TASER 10 orders to date come from outside U.S. state and local law enforcement, including customers in international, federal, and correctional. We also had our highest ever officer safety plan bookings in Q4, nearly booking more seats in the quarter than the prior three quarters combined.
Josh Isner: And we continue to see strong adoption of our premium plans within that mix, along with adoption of our emerging products. Draft one continues to garner strong interest, and we're able to close our first 10 AI era plan deals in Q4. We're extremely pleased with this outcome, given the fact that the plan launched at IACP in late October.
Josh Isner: New product pipeline generally takes three to six months to materialize, and we view that accelerated adoption of this plan as a positive indicator of the things to come. We updated our TAM and as Rick mentioned, we believe our investments around AI, real time operations and drones and robotics, roughly doubles our overall opportunity set. We're seeing early signs in our product bookings to support that outlook.
Josh Isner: Third, I want to talk about two growing customer groups that I'm particularly excited about right now, international and enterprise. Our international bookings grew nearly 50 percent sequentially in Q4, and that's on top of 40 percent sequential growth that we saw in Q3. In enterprise, our bookings roughly tripled year over year. I'm happy to report that in Q4, our enterprise team booked the largest deal in company history with a global logistics provider. Congrats to Mike Shore, Billy Corbett, and the dozens of Axon employees who supported this deal. This development continues to give us confidence that given the large TAM and growing product market fit, the enterprise segment represents one of Axon's largest opportunities into the future, along with federal and international.
Josh Isner: As we expand and grow, these three customer groups account for over $100 billion of opportunity.
Josh Isner: Turning to what's next, we have a lot of runway ahead. We ended the year with total future contracted bookings of over $10 billion in our pipeline is the healthiest it has ever been, even in comparison to this time last We expect another record bookings year in 2025, with line of sight into several years of exciting growth ahead. Our team is focused on executing on the many opportunities in front of us, and we are putting in the work to achieve our goals and deliver on our mission of protecting life. I know I say this a lot, but we run our team with a next play mindset.
Josh Isner: What excites me most about our results is what they signal for the years ahead. That's why I love the beginning of the year.
Josh Isner: While it affords the opportunity for others to hypothesize and speculate on varying expectations, that's the same energy that fuels us to win more often in more places and deliver bigger and bigger societal outcomes. And that's exactly what we plan to do in 2025 and beyond.
Brittany Bagley: Over to you, Brittany. Thank you, Josh. As Rick and Josh mentioned, it's wonderful to come back to you with another great quarter and to report results that exceeded our expectations once again. Q4 revenue of 575 million increased 34% year over year for our 12th consecutive quarter of over 25% revenue growth. I'm particularly excited that we saw double-digit year-over-year growth in all of our business areas. with taser up 37% sensors up 18% and software and services up 41%. Our software remains the driver of our overall growth and contributed 40% of our total revenue in Q4. ARR increased to $1 billion, up 37% year over year, and net revenue retention remains strong at 123%, reinforcing the visibility and predictability in our business.
Brittany Bagley: adjusted growth margin with 63.2% and has been very stable across the year at an overall company level. Adjusted EBITDA margin was 24.6% and we continue to invest in our business to ensure we are positioned to grow with new customers and markets while driving innovation in our technology. On a full year basis, we delivered over 33% top line growth, driven by continuing to deliver more to our customers with strong product performance across the board. We also deliver strong bookings, taking our total future bookings above $10 billion and providing support for years to come. We made significant strides in profitability, expanding adjusted EBITDA margins almost 400 basis points this year.
Brittany Bagley: As a result, we achieved a 25% adjusted EBITDA margin for the full year. a milestone we initially set for 2025. With this result, we reached both our three-year revenue and adjusted EBITDA margin targets a full year ahead of schedule. As we exit the year, our product teams are working on new technology that will support our growth outlook for many years ahead. We are quite excited about our newer product areas and continue to invest in R&D to support our growth. We are entering the new year in the strongest and cleanest inventory position we've been in for the last three years.
Brittany Bagley: We did all that with strong free cash flow generation above 60%. We continue to drive strong customer satisfaction, which is our North Star. It's humbling to think about where we are.
Brittany Bagley: And I thank our teams across the company for the work they put in during this incredibly busy and exciting year.
Brittany Bagley: Now I'll turn to our 2025 guidance. We expect 2025 revenue in a range of 2.55 to 2.65 billion, or approximately 25% annual growth at the mid This would mark our seventh consecutive year of 25% or greater annual growth. Similar to past years, we looked at the strong execution across all segments, momentum in future contracted booking, and our pipeline entering the year to develop this guide. We expect 2025 adjust to be the DAS in a range of $640 to $670 million, representing approximately 25% margin. We believe this margin level puts us at the right balance to invest in the future growth opportunities we see, while still delivering strong profitability and cash flow.
Brittany Bagley: As a management team, we are focused on delivering year after year over the long that requires continued innovation, product risk taking, and investment. And we're lucky to have Rick, who is such a visionary in this space. I hope you can tell we're excited about the opportunities in front of us. It is this type of product innovation that has allowed us to deliver our consistent, impressive top-line growth numbers. Beyond R&D, we're also investing in our sales functions to support new customers and market opportunities, as well as continuing to scale the business. For some context, we are now at four years of hitting 50, well above the rule of 40.
Brittany Bagley: We're pleased our guidance implies another year of hitting that type of number. We also expect CapEx in the range of $140 to $180 million, up year over year on a dollar basis, but only up two points to the percent of revenue. This is driven both by Mortazer 10 capacity to keep up with our continued strong demand, as well as investment in both R&D and manufacturing for our many exciting new product areas.
Brittany Bagley: We're proud of all we accomplished in 2024 and are looking forward to another dynamic and innovative 2025 that delivers for our customers and our shareholders.
Brittany Bagley: Now we will turn it over to take your questions. Thanks, Brittany.
Unknown Executive: Let's pull everyone into gallery view.
Jeremy Hamblin: All right, we're going to take our first question from Jeremy Hamblin at Craig Howell. Congrats on the very strong results and guidance. I wanted to start with, I figure, a topical question and, you know, just get a sense for, you know, what portion of your total revenues are coming from federal contracts with the U.S. government, whether or not, you know, some of the things that are happening in terms of hiring freezes, you expect to have any potential change in the timeline of deployments. You know, anything you might be able to share on that to provide us a little bit better sense.
Unknown Executive: We've certainly got a lot of questions around the potential risk around this area. Yeah, I really appreciate it, Jeremy. Thanks. A couple of thoughts on this one. Number one, I certainly don't think, you know, in terms of Axon's case in our future, there's any real cause for concern about what's happening, you know, with funding cuts and DOJ and so forth. Actually, I think there's a world where we could come out of this with more opportunity, as they start to look at, hey, where are, you know, federal law enforcement getting their bang for their buck in technology?
Unknown Executive: And I think they point back to Axon. And I think we'll have the opportunity to continue to support the federal government, you know, across both federal civilian and DOD, hopefully in bigger ways in DOD moving forward. And we're excited to compete for more business there.
Unknown Executive: So I personally think there's more opportunities than risk right now for us in the federal space. Right. And then potentially related questions.
Unknown Executive: So other topical news is, you know, it looks like we may be coming towards an end, hopefully in the war in Ukraine. I know that B-DRONE has certainly been impactful in terms of operational support in those efforts. I also know that, you know, recent kind of government changes in terms of funding outlined that drones would not be impacted by any hiring. I wanted to understand the potential mix of change related to if we get an end to, you know, kind of Ukraine or in the next month or two, and then vis-a-vis, you know, what you expect from a border patrol support and opportunities that are coming from, you know, or there for B-DRONE related to those efforts.
Rick Smith: Got it. Let me maybe take this one. So yes, I mean, dDrone sold a lot of stuff into Ukraine. But the far bigger picture is what happened in Ukraine is put drones on everybody's roadmap. Every military in the world is thinking about how do you detect these small drones that traditional military systems are not designed to detect? How do you defend against them? You know, we acquired the world leader in drone detection. We acquired the least one of the world leaders in indoor tactical drones with Skydia. We've partnered with the leading US maker of long range autonomous AI driven drones, you know, in the moment where basically DJI is largely being made illegal in the with the leader in the key market segments.
Rick Smith: And when you think about things like patrolling borders, protecting stadiums, and I mean, Ukraine has shown what anybody could do with a drone you can buy for less than $500. And everybody in the world is thinking about how to defend against those. And we think we are, if not the best position among the best position for helping our customers globally solve that problem. So, you know, from a human perspective, I certainly hope that all the violence we're seeing in the world comes to an end, but in a way that is persistent and sort of long-term put these issues to rest.
Rick Smith: And we look forward to playing a role in helping use technology to protect people from killer drones. You know, we're not going to get into the lethal drone business ourselves, but we're going to absolutely be a leader in helping defend against those kinds of threats and then using drones to be able to go out. Act More Intelligently, Save Lives, and Stop Threats Without Using Lethal Force.
Rick Smith: And we think those opportunities have all gotten bigger just given the quick evolution of this space that's been caused by what's been happening in the Middle East and in Ukraine.
Unknown Executive: And Rick, I might just add one more thing there, which is just to the first part of your question, Jeremy, just to address any ambiguity, none of our forward looking guidance assumes any incremental revenue from Ukraine. Understood.
Unknown Executive: Thanks so much for the call and best wishes on continued success. Thanks. Thanks, Jeremy.
Meta Marshall: Up next, we have Meta Marshall at Morgan Stanley. Great, thanks. And congrats on the quarter. Maybe to start with, you know, great traction on kind of noting the hundred thousand incident reports kind of already completed with the AI tools. Just what are you seeing in terms of kind of AI adoption, either into what type of bundles they're opting for, or just kind of pipeline there? And then maybe as a second question, you know, noted kind of the large enterprise when, you know, just what was kind of the entry point there? Was it fuses? Was it kind of body cameras?
Unknown Executive: Just any context there would be helpful. Thanks.
Josh Isner: Let me take the first part and I'll have Josh talk about the second part. So in terms of AI, like, without a doubt, these are the fastest growing adoption products we've ever had. And it's not by a small margin. So we, we're seeing these products, these services really resonate with our customers. And they're, it's unbelievable the AI era plan that we were closing deals within eight or nine weeks of launch. That's Like, I don't think we've ever seen things move that fast. Maybe a little bit with like, with a taser. But you know, that's where like somebody had an existing taser line item, we introduced a new taser, and they like went from taser 7 to taser 10.
Josh Isner: So yes, that has happened. But a new product category, you're going from zero to, you know, to deals in that shorter timeframe is super encouraging. Awesome.
Josh Isner: And on the second part of that question on enterprise, I think the really exciting news is there are multiple entry points into some of these large opportunities. I think FUSIS is certainly relevant. Body cameras are certainly relevant. D-Drone is relevant. Drones are relevant. Obviously, Evidence.com. I think we're starting to see, like I said, just better and product market fit to address this group of customers. And really, the most encouraging thing of that is it's still along the lines of our mission and use cases that we really want to support, and that they lead to better, safer outcomes in these enterprise environments.
Josh Isner: And so it really is exciting. I believe this is going to be a major, major part of our business, maybe even the biggest part of our business long term. And I think we're on the right track there, for sure.
Unknown Executive: Great, thanks. I'll pass it on.
Unknown Executive: Thanks, Meta. Up next we have Josh Reilly at Needham. All right, thanks for taking my questions. Just wanted to hit on the news with the Flock Safety Partnership. Maybe what happens in terms of the technology licensing for Fleet 3 ALPR technology now that the partnership is maybe ended? And then how are you thinking about more broadly your relationship with the company moving forward and your strategy around fixed LPR? Yeah, thanks a lot, Josh. Look, a lot has been made of this, obviously, in the last week. And we did exit a partnership with Flock. However, I think both sides have an interest in getting back to that partnership.
Unknown Executive: We've proposed new terms. I think what we're asking for is just a more fair flow of information into FUSIS, just like we support in the Flock OS. And to Flock's credit, they've been receptive to our feedback there. And we hope to be able to resume it. And so I'm not going to speculate on what happens if that doesn't come into fruition. Of course, we'd have to look at how we support those customer use cases.
Unknown Executive: But right now, our focus is just on making sure that we can arrive at a new partnership that really, in the end, benefits our customer and the use of their own data.
Unknown Executive: understood and then maybe just back on the federal business. Have you heard any feedback thus far from customers with regards to their ability to expand and take down more body cameras or tasers under the existing contract structures, which to my understanding were often open ended with their ability to add more products since the election has happened? Yeah, thanks for the question. So on, on some of these customers in federal, as you probably saw in the news, you know, one of the first executive orders address body cameras for federal law enforcement. And yet, our customers are still wearing our body cameras, they're seeing a lot of great outcomes as a result of wearing them.
Unknown Executive: And we do believe these programs will continue to expand into federal. So again, I, I don't think the world has changed much, if at all for us in the federal space. You know, I think that's the benefit and reward for having products that drive true outcomes in the field. And I think our customers see that, and we get a lot of support from them on this. So we're proud of the partnership and, and certainly think it's going to be a bright future there. like early on, I think it was kind of helpful to get a political push from the top to get these agencies to try it.
Unknown Executive: But once they start using it, we see the same phenomenon. Like, you know, if you're whatever federal agency you work for, you just realize like your job places, you're not only a physical risk, but at risk of being accused of just about anything and having a video that shows you're a professional doing the job the right way is It's something that gives them great comfort to go do their jobs with confidence that they're not going to get hung out to dry by somebody making something up about what they did. Understood. Thank you, guys. And by the way, the other thing I'll add is these new tools like DraftOne.
Rick Smith: Customers absolutely love it. I mean, cops are over the moon about this, the idea that God, I don't have to spend four hours of shift doing reports. I'm like cutting that in half. And I was just demonstrating our new real time translator. I'm outside of the US right now. Like, we did a demo in Icelandic yesterday. And the guy said, we think there's no way it was going to work and his jaw hit the floor. Before we did Arabic, Norwegian, and a In the shadow of like the most heavily used languages in the world, we think the real-time translator is going to be another real hit.
Rick Smith: So the body camera is evolving and our customers are seeing it. It's not just a recording that can help me. It's now the edge of the AI internet on my chest. I've got a real-time AI assistant that'll help me translate, that'll help me write my reports, it'll help me look up things I need to know, it'll help me ask policy questions, I don't have to call a lawyer at 2am in the morning about how to deal with some obscure legal situation. I can just immediately cross-reference my reports and all those capabilities are included in the new era plan, which is why we saw it go from zero to revenue so quickly.
Unknown Executive: And I think one of the things you continually hear in the industry right now is a lot of theory and not a lot of practice and application with the power of these new AI tools. And what we are all about is the applied practice directly in service of real problems for our real customers. And that's what they love about what we're doing. Thank you. Thanks, everyone.
Mike Eng: Up next, we have Mike Eng at Goldman Sachs. Hey, good afternoon. Thanks for the question. I just have two, one on bookings and one on cloud. First, just on bookings, it's a two-parter. You know, you guys had bookings of over $5 billion this year. I think this is at least the third year of bookings growing a billion dollars year on year. So when you look at your pipeline going into 2025, in your base case or in your bold case, like, are you assuming bookings grow a billion dollars again to $6 billion? You know, any thoughts, qualitative or quantitative, would be helpful?
Unknown Executive: Sure thing. Like I said, Mike, in my prepared remarks, the pipeline is extremely healthy right now, even healthier as a, you know, relative to where it was at this time last year. And look, our goal is that our bookings growth rate looks similar to our revenue growth rate. And that just, you know, at back of the napkin, it kind of pencils out to, hey, we can just keep this high growth rate going well into the future. So it's not necessarily about growing a billion every year or less or more. It's more about, hey, can we have our bookings growth rate somewhat mirror our revenue growth rate?
Unknown Executive: And if we do that every year, the business will be very, very healthy for a long time.
Unknown Executive: Great, thank you. And then just on cloud, you know, Axon evidence and cloud services revenue within software and sensors. That's a solid step up queue on queue, I think it was about $35 million sequentially, I think the largest on record. Could you talk a little bit about some of the key things that drove that strength? Was there anything unusual that made that sequential growth particularly good this quarter? Or are you thinking that, hey, the structural, you know, run rate of sequential increases may have stepped up?
Unknown Executive: Thank you. Okay, I'll take that one. Um, I think it's very much what we talk about from a seasonality standpoint, as we go through the year, which is that our step up from a software standpoint, often lags how we're doing on bookings by a quarter. Now, it's not always perfect, right, because there's timing inside of the quarter. But as you think about it, our strongest bookings quarters tend to be Q3 and Q4. And then, you know, Q1 is our seasonally softest, and it's up, you know, it goes through the year that way. And so if this step is lagging by a quarter, what you see typically is Q4 and Q1 have the bigger steps up from a software standpoint.
Unknown Executive: I think, you know, you're just seeing the strength in the software business come through, we're seeing more user adoption, and we're seeing more products, more software products get sold into those users. You also, D-Drone is not material to our business, but they do have some software revenue, and so you are seeing a small bit of D-Drone come into the software set for the first time this quarter.
Unknown Executive: Great.
Unknown Executive: Thank you, Brittany.
Unknown Executive: Thank you, Josh.
Unknown Executive: Thanks, Mike.
Jonathan Ho: Up next, we have Jonathan Ho.
Unknown Executive: We'll leave it there. Hi, good afternoon. And let me echo my congratulations as well on the Strong Corridor. With your international bookings, can you talk a little bit about the strength here and maybe what's changed in the decision to expand, you know, sort of the TAM Thank you. Thank you. Yeah, so I think a lot, Josh might cover the strengths on international, but I think a lot of what you're seeing in the TAM is we refresh the TAM every two years. We did a little bit of an interim update when we did our FUSIS and our dDrone acquisitions, but that was really an interim process.
Unknown Executive: And so as we came back to look at our TAM this year, we really looked out over the next two years, and what's changed a lot from two years ago is really the number of products we have. And so that applies to international as well. As you look at the international market, we now have a lot more products that we can go ahead and sell into the international market, like FUSIS, like dDrone, like AI. And so you're seeing that strength come through. We're also continuing to see, you know, some nice traction outside of some of our Commonwealth markets.
Josh Isner: And so that gives us increasing confidence, you know, in that higher international TAM. Yeah, I just add, Jonathan, on the international bookings piece, I think it's just a story about execution. I, you know, I think we have plenty of product market fit to be very successful internationally. I think the team is, this has been somewhat of a transformative year for our international business in terms of the team, you know, bringing on Cameron Brooks as our CRO out in Europe, and he's made a couple key hires in Europe. And our Latin America and Canada function is going very, very well under Vishal Deer.
Josh Isner: And we just, we've got more of the team in place that's just executing on a higher level. And so we're, we're pretty, pretty bullish on international moving into the future here, as Brittany was saying, I think now, as we're landing in more places, there's going to be the opportunity to expand with more and more product.
Rick Smith: Excellent. And just as a follow up, a big picture question for Rick, we've clearly seen a strong value proposition here from generative AI tools. How do you imagine what you can do with agentic AI, which seems to be sort of all the rage on the tech side, and potentially is even more impactful than generative AI? Thank you. Yeah, I mean, I think it just sort of builds for us, it's all about like, where do the workflows matter that will enable our customers to do the things they they need to do in their jobs. So I think a lot of it right now is like, okay, take this transcript, run it through and create a report for me.
Rick Smith: Or like, hey, take this and translate it. I think agentic AI allows you to start to do things like, hey, go search across this giant data set and help me solve, like some problem that currently I have teams of people working on. And we think we're in a unique position, given our customer trust, given that we're housing, you know, so much of their data for them and managing their sensors, that will just kind of keep going down the list of their problems. And then for us, there's also a risk reward trade off, like we intentionally started with report writing, rather than, for example, facial recognition, where there's various privacy and related concerns, where report writing was like, hey, you know, we can ensure there's human oversight, if the AI gets it wrong, like it's actually not a catastrophic failure, you've always got the underlying evidence, we can put it in speed bumps to make the officer do it.
Rick Smith: I mean, we are starting to look at more uses of AI that will help with some more core law enforcement functions. We're going to do it in a way that we will always be proud of, that respects and balances, you know, privacy, and we want to build the world of Gene Roddenberry, not George Orwell. And, you know, these agentic workflows will just allow us to start handling higher levels of complexity. But for us, it starts with, I go out, I meet with customers, I hear what their problems are, and I get to come back to the company looking like a genius with all these great ideas, you know, I'm like a bee carrying pollen back to the hive.
Rick Smith: And then Jeff's got to make sense of it all, segment it, work with our, you know, thousand plus engineers and product people to take these customer ideas and put them together. And then, you know, Josh and Brittany are going to, like, then staff and execute the business to run it. And I get to go out, you know, on the road again. So, the team works really well together. And, you know, I just, I love my job, getting to go just sort of... Imagine talking to customers about their problems and trying to match fit on okay, what tech is going to work?
Rick Smith: And to be honest, Jeff really holds me accountable. A lot of our conversations, Jeff uses the word actually a lot about like, okay, Rick, like, this is great stuff, what can actually work right now in a way that customers will actually use it won't disappoint them, and it's not going to be buggy. And it's like, you know, it sounds like we're going to approach it kind of the same way. Okay, you know, where are we at? And what will work well for our customers? And it's a lot of it's just getting the sequencing down.
Andrew Sherman: Up next, we have Andrew Sherman. Andrew, welcome to the call. Great. Thanks, Erik. Good to be on the call. Congrats on the quarter. Brittany, one for you on the Revenue Growth Guide of 25 percent, very strong.
Brittany Bagley: Maybe just walk us through your assumptions embedded there for NRR, any color on the AI error contribution, the sustainability of the strong 123 percent NRR, and any change to your guidance philosophy versus the past couple years? Yeah, thank you. So, you know, as I talked about, no actual change in our guidance philosophy. What we do is, you know, we've got our future contracted bookings. We know approximately how much of that will convert in the next year. So, we know how much of a go we have, and then we can look at our pipeline and see how our pipeline stacks up and how we feel about that go get.
Brittany Bagley: So, that's pretty much how we do it, and that's how we continue to do it this year. You know, in terms of assumptions going forward, I mean, we have really are all really good to be, you know, very stable to positive. So, no major changes in assumptions going forward. Great. Thanks.
Brittany Bagley: And also for Brittany and Josh, maybe just touch on where the supply, demand and balance for TASER10. Great to see that it's still tracking at 2x T7. But where do we stand today? Supply, demand and balance. I think Brittany, your CAPEX comments would imply more supply coming on. So what is that signal for growth this year? You got it. We are we are still outpacing our, our supply with our demand. So still in a great place. We are investing next year to try and bring more supply online. So, you know, we'll see where demand goes.
Brittany Bagley: I think we imagine that sometime, you know, next year, we've got that supply demand imbalance. But what you're really seeing right now is we are basically selling as much T10 as we can make. And so we've got to keep investing behind our capacity. Andrew, thanks a lot. We're particularly excited about T10, just because of what it means for our mission and moonshot as well. The more customers deploying it, we are seeing videos of better and better outcomes in the field. And I think that's kind of continuing, you know, through a network effect, you know, across the entire market.
Rick Smith: And so we're very exciting, excited about what the future holds for TASER 10. I don't think there's any slowdown in sight here. You know, it's our highest demand CW ever. And I think that will continue.
Rick Smith: Yeah, I just met with some new European customers who have not had T10 for very long. And two of them told me they've already averted at least one shooting, saved at least a life in the early, you know, few months of them deploying the field. And these are countries, obviously, that don't have the frequency of shootings that we do in the US. So it was pretty significant to hear that from them.
Rick Smith: Well, you know, all of our products work so well together. And, you know, as an ecosystem, there are, you know, pairs here and there that are, you know, doubly so peanut butter and chocolate and drive each other forward. And so with T10, the story with VR is such a great one, because T10 is not only so transformational in its capability, but it is new and different in a way that really motivates the sale and adoption of our VR training that goes along with it. And it's the catalyst for getting the best possible outcomes with T10.
Rick Smith: And a similar story for, like, VFR and robotics with FUSIS and RTTC. So you see all these pairings that go so well together combined with the leverage of them adopting more and more of our whole ecosystem.
Unknown Executive: Great. Thank you, Andrew.
William Power: Up next, we have William Power at Baird. Great, thanks. I guess I got a couple. I'm a home starter, I'd love to have you. Um, you know, question, maybe first question for Joshua, Rick, whoever wants to take it. Look, it sounds like really strong early success with the AI era plan. I think it's noted, you know, 10 deals in Q4. I just want to understand the confidence and visibility there's in Q4, because it's a big lift in OSP pricing, right? I mean, you're going from $350 at the high end to $550. What's the conviction, confidence, visibility of agencies having enough budget to be able to adopt this at a rapid pace from here?
Josh Isner: Yeah, it's interesting. Well, it's a great question. And it's nice to see you again. What I would say about the AI era plan and about our AI products in general is they are driving such an ROI that can be measured in staffing and officer time, that our customers are saving money as a result of deploying this for, you know, $200 a person like the, you could just do the math on draft one alone. And essentially, what it's allowing you to do, if you're a police chief is have 20% more capacity day to day of your police officers.
Rick Smith: And, you know, this is an environment where police departments are still very understaffed. They've got dozens, in a lot of cases, hundreds of open roles that are unfilled. And so when they can allocate some of those dollars over to these tools that might be... you know, mitigate the need to have more officers at the department to begin with, that's highly valued. And so we're, we're very, very encouraged. And it's, it's, it's mostly because we know what what type of financial outcomes some of these AI products are driving for our customers. Yeah, let me let me jump in on that.
Rick Smith: I met with a large customer in a relatively new segment for us. So it's not state and local law enforcement, big agency. And meeting, I spent a day with the with the customer going through their operations, learning how things work. It was a lot of fun for me. And there is a new AI service we could do that would literally offload more than half of what their entire staff spends their time doing, that they hate doing, that's administrative in nature. It's got a lot of similar characteristics to draft one, to where, you know, this customer is like, Oh, my God, this would, this would be game changing for my budget, it would free up my people to do, like more training, and and I wouldn't need as many, you know, people so I could grow a little slower.
Rick Smith: And my morale would go up dramatically. And that's, that's when I came back to Jeff, and we're like, Okay, let's, let's put a team on how to figure out how to do this. And with the new AI tools, like can be very doable. And so again, that's just another example where AI is allowing us to rapidly bring the promise of like AI tech doing sort of repetitive Jobs. And because our customers, one of the sort of great is, it's not like they're firing people, or this is taking people's jobs. It's taking the crappy, low value, time consuming, bureaucratic suck of their job away.
Rick Smith: And that's like a win win. And they're just excited. But yeah, I get to go do stuff I enjoy doing that gets me excited to go to work. And then for the chief, it's like, yeah, I'm getting more out of my people. So it's painful. That's good to hear. It sounds like Jeff's got job security as he works on those projects.
Josh Isner: I mean, just a quick second one, probably for Josh, just the enterprise deal, you know, the largest deal, I think, in history, maybe I missed this, do they have a color as to exactly what they're utilizing? Are they utilizing body-worn cameras? Is it fuses? Is it both? Is it, I don't know, even D-drug for facilities? What's kind of getting used there? Yeah, I think in this particular deal, Will, it's body cameras and fuses with, of course, evidence.com licensing as well. But the same customer has a lot of interest in D-drone and other products as well.
Josh Isner: So, I think what you're gonna see throughout this year in the enterprise segment is, you know, we'll be landing in a lot of cases with fuses and body-worn cameras. But just like I was saying about international, I think the same holds true where a bigger and bigger part of our product portfolio will be applicable to the enterprise segment. And we're very excited about that.
Unknown Executive: Thank you. Thanks Will.
Trevor Walsh: Up next we have Trevor Walsh at JMP. Great. Thank you for taking the questions. Josh, maybe for you, but Rick, feel free to jump in. I want to ask the federal question maybe a different way. So, I understand it's more opportunity versus risk on the federal opportunity itself, but one of your peers kind of in the state and local technology centered kind of sales motion gave some statistics on their call a few weeks back about kind of how federal funding flows down to the state and or local budgets. Just curious, it sounds like from that kind of just general commentary that state budgets can be a little bit more impacted or kind of do draw a lot more from federal funds.
Unknown Executive: So, just curious if you're hearing concerns or for that state level, you know, state police, whatever it might be types of orgs having maybe worries or concerns around kind of what the federal fund kind of flow will be for them. So, obviously, like county and local level, if that makes sense. Yeah, thanks a lot. Um, you know, personally, I'm not sure I agree with that commentary. It is true that some grants and other programs have dried up. A lot of those, you know, we're not particularly impactful to Axon, maybe to some other companies, but I still think there's a universe where Police and Federal Military are better funded by the Federal Government, State and Local Police and Federal Military are better funded by the Federal Government in this next year than I think people are assuming.
Rick Smith: And so personally, I don't necessarily see any headwinds in that way that would have any material impact on our business. And if you hear the types of projects that are getting paraded in front of the cameras is like examples of waste. None of them are early. critical public safety equipment and technology. It's, you know, stuff that people are like, Oh, wow, huh. That's weird. They're spending my money on that. And like, we just don't think we're like our products make a ton of sense for customers that bipartisan or pretty universally, you know, both Republicans and Democrats in the in the last election cycle, I think we're going out of their way to make sure that they knew that they were pro public safety, pro law enforcement.
Rick Smith: And so we're, again, I don't want to be arrogant about it and say we're bulletproof. But I would say, you know, we think net We haven't seen the political winds really affect us that much, as long as we're delivering things that actually help our customers do their job, then whether it's in a blue city, a red city, a Trump administration, a Biden administration, like the product carries the day. Great, thanks both for the color.
Brittany Bagley: Maybe just one quick follow up for Brittany. Appreciate the new future contract and bookings metric. Always love adding a new metric to keep tabs on. It sounds like it's RPO basically plus additional contracts that have T for C or other clauses that kind of obviously don't put them into RPO. Is that kind of new metric a function of that more of those termination clauses or doing more contracts that have more of those types of things and so it kind of helps to give more visibility there? Where are those contracts falling? Are those federal customers just generally have that written in or are there other places where you're seeing that kind of more and more generally from a contract?
Brittany Bagley: Yeah, I mean, you nailed it. That's exactly what it is. And so we're going to move to talking about, you know, our new, you know, total future bookings number, because it's really more indicative of what the business is doing and the bookings commentary and color we give. We have been going through and you know, we changed accountants this year. So we've really been been scrubbing RPO. And there's just a lot that ASC 606 doesn't allow us to put in from a GAAP standpoint. So you will still find our GAAP RPO number in the like 10k, we have to report that you'll see that, but just more and more, it's diverging from how we actually measure our business.
Brittany Bagley: And, you know, we don't go back and look at our historical contracts, like even when we have terms for convenience, our customers don't actually leave us, like they don't utilize that we really don't have churn. So it's just not indicative. In terms of where we're seeing it, honestly, it's across the board, like more and more customers just want term for convenience as a best practice. And so we're seeing it in a lot of places. And so we're just going to move to this sort of non GAAP version of the metric, which we think is a better reflection.
Unknown Executive: Great. Thanks all. Great finish of the year. Thank you.
Jordan Lyonnais: Up next, we have Jordan Lyonnais at Bank of America. Hey, thanks for taking the question. Could you guys talk about how you're approaching your go to market with Skydio on the SkySwap program and how that's been going so far?
Josh Isner: Yeah, and certainly I'll start, but I think others should chime in on this one. Look, we're really excited to have Skydio as a partner. We think they're the most talented team in drone technology. They're a phenomenal cultural fit with us in terms of our go-to-market motions. The product is fantastic. Like Rick was saying, DJI has fallen out of favor in U.S. public safety, and Skydio is the obvious choice behind them. And so we're really excited to be able to kind of augment our ecosystem with Skydio hardware and really give our customers more situational awareness and more opportunities for really integrated DFR, drone as a first responder experience.
Rick Smith: So I think that's something that we're very, very excited about and very encouraged about what the results have been so far in that partnership.
Rick Smith: Yeah, let me jump in and actually say, you know, it's not even, I wouldn't even say Skydio is behind DJI. You know, DJI like got to market first with scale, but Skydio is actually the world leader in autonomy. Like many things, the Chinese companies had really inexpensive hardware and they did a great job with the user experience. You know, Skydio has a big team in Silicon Valley that's been very much focused on leveraging AI and sensors so that the drones can launch and fly themselves autonomously.
Rick Smith: Now, like we bought a drone company, two years ago ish with Sky Hero. Oh, that was for a different use case. That's for indoor like tactical drones. And as we did an assessment on the make-build-buy, you know, what Skydio is doing is just a different level of complexity. Like if a tactical drone falls out of the sky, it falls to the floor from six feet. It doesn't fall on somebody. It doesn't have to fly itself. You build it to be more resilient, to bump into things, and you don't need, in fact, all the autonomy can get confused in an indoor environment.
Rick Smith: And there's other applications for the long term that we felt Skyhero would be transformative for us to own and work on. With Skydio, this was just, you know, our assessment was, wow, you know, it took a team of like 600 people working for the better part of a decade with pretty massive investments to do this. And they've got a huge, you know, head start. And as we got to know each other, it was one of those, you know, like chocolate and peanut butter moments. It was really a great fit. I've developed a great personal relationship with the team and Adam up there, and it really fits nicely, like, you know, like a lock and a key with each other's portfolios.
Rick Smith: And so we're going to market, you know, hard to paint with the partnership, and we're getting tremendous customer feedback. In fact, it actually costs you a lot less to deploy an American Skydio drone than a DJI drone for this reason. With DJI, you put it in the trunk of the car, and then you basically generally turned your police officer into an Uber driver for drones. He drives to the scene, then he stands on scene flying the drone, which, you know, basically costs you 200 grand per year to get that drone driven around the city. With the Skydio doc, yes, the hardware is a bit more, and the software, but, you know, for $50,000, you can have that drone autonomously that does not consume an officer.
Josh Isner: It can be autonomously flown. It flies to a site without any need for like human oversight. And you pair that with our dDrone sensors. Now that is an amazing pairing. You can now see the airspace to see where everything is. You can, the drone can fly autonomously connecting those two systems together. And then whoever needs to see the feed just magically sees a camera in the sky where they want it looking at what they want to see with zero human oversight. So it's actually about a quarter the price when you consider the human labor elements.
Josh Isner: And we think this is both an interesting political moment in the, you know, U.S. government policy and the rift with China is accelerating that transition, but it's just matching this wonderful moment in time where AI is now making the autonomous flight possible. Skydio is in the process of releasing from beta to production their doc that unlocks this like complete autonomy. So it's just a really exciting part of the business.
Rick Smith: And we always look to, you know, look for, and just make the best decisions where we should make, what we should build ourselves, where we should partner. In this case, it was a, we found a great partner and we're confident it's got the right relationship fit and long-term dynamic.
Josh Isner: And for your customers, it's your DEA or Border Patrol. Can they just go through you to buy the Skydio drone and you guys will put on your kit so it's all connected or do you need both of you? More and more and more, as customers get excited about this space, for all the reasons Rick just went through, again, think of the evolution of real-time crime center space and that opportunity as hand-in-glove. And so the combination of Pacific Swift Scadia with the rest of the Axon suite is just hands down unmatched in terms of bringing the customers what they need and giving them the situational awareness and positive response.
You know, one example as well, like an officer with their body camera, in the near future, we'll be able to say, hey, I need a drone, and fly the drone to body camera. And as it flies in, Skydio has done a great job integrating, you'll see a blue augmented reality pillar growing to the sky that tells you right where your officer is. So there's no searching around to find them. It's, you know, a seamless mesh of our body cameras, our fuses.