Q3 2025 Axon Enterprise Earnings Call

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There was a minute here.

Hi, everyone and thank you for joining axons executive team today, we hope you've had a chance to read our shareholder letter released after the market close which you can find at Investor Axon Dot Com. Our remarks today are meant to build upon that letter.

During this call we will discuss our business outlook and make forward looking statements. These comments are based on our expectations as of today and are not guarantees of future performance.

Speaker #1: Joining Axon's executive team today . We hope you've had a chance to read our shareholder letter released after the market closed , which you can find at Investor Jackson.com .

All forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially as discussed in our SEC filings. We'll also discuss certain non-GAAP financial measures reconciliations of non-GAAP are included in our shareholder letter and available on our Investor Relations website with that before I turn it over to Rick we have a quick video to.

Speaker #1: Our remarks today are meant to build upon that letter . During this call , we will discuss our business outlook and make forward looking statements .

Speaker #1: These are based on our 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 .

It shows a little bit about our vision processing line on one let's pull it up.

Speaker #1: As discussed in our SEC filings , we'll also discuss certain non-GAAP financial measures , reconciliations to non-GAAP are included in our shareholder letter and available on our Investor Relations website .

Every year more than 249 people, calling line one line in the United States.

Well listen I appreciate again feels like for them.

Speaker #1: With that , before I turn it over to Rick , we have a quick video to show you . It shows a little bit about our vision for axon 901 .

So long as the momentum is good.

Your line waiting for ALS.

Speaker #1: Let's pull it up .

Okay.

Thank you.

Speaker #2: Every year , more than 240 million people call 911 . In the United States . Moments in every second feels like forever . But the longest moment is the one waiting for help .

<unk> itself.

Good morning, before you're in danger fritch.

Okay.

But when you call nine one line a system built Intel still runs on Jack AIDS old technology.

From Landlines line to video to slow from mobile World.

Speaker #2: Your car can drive itself .

This isn't just a man.

Mission critical gap.

Closing is.

Speaker #2: milk when you call 911 . The system built to send help still runs on decades old technology built for comments landlines . Blind to video and to slow for mobile world .

Yes.

Okay.

Okay.

Okay.

Hi, good morning, with your remarks.

Speaker #2: This isn't just a myth . It's a mission critical gap . And we're closing it .

So somewhere in that direction, but items for the first time intelligence from the 911 call from.

Cameron from sensors from cellphones, all converge in real time.

Speaker #3: It's time for one . What's your emergency ?

Or by AI at every turn.

Instantly understood and shared across the axon ecosystem.

Speaker #4: So he went somewhere in that direction . But I didn't for the first time .

Becomes clarity.

Speaker #2: Intelligence from the 911 call from cameras , from sensors , from cell phones . All converge in real time , powered by AI at every turn .

This past year demand and first responders all see this theme evolving picture instantly.

To bring help to do it faster.

Faster.

Yes.

And keep those responding safer.

Speaker #2: Instantly understood and shared across the axon ecosystem . Chaos becomes clarity . Dispatchers command and first responders all see the same evolving picture instantly to bring help to those in need faster and keep those responding safer .

Okay.

Paul.

The call came in at 16 nanometer.

Thanks, Tom.

Understood.

Yes.

[music] and when it is over every word every video every transcript is already preserved and axon evidence flagged by AI ready for review and closing the loop from call to court room.

Speaker #4: Call playing . The call came in at 1115 and the PP says they saw a man with a gun around Main Street .

Speaker #2: And when it's over , every word , every video , every transcript is already preserved in axon evidence flagged by AI . Ready for review .

Sorry, I'll respond it we'll keep it at every moment from call to closure where savings second.

Savings second.

Speaker #2: Closing the loop from call to courtroom . The 911 Call of tomorrow won't just start a response . It will shape it at every moment from call to closure .

Thanks Lyne.

Thanks, Eric and great job to our team who put that video together to help share some of the narrative of where we're going next as we extend the axon ecosystem.

Speaker #2: We're saving seconds and saving seconds saves lives .

System, So I would like to welcome everybody to our third quarter 2025 earnings call. It is truly just an amazing time to be at Exxon just a few weeks ago. We were at the major annual conferences across public safety Federal military and enterprise meeting with hundreds of customers to catch up on their top priorities.

Speaker #5: Thanks , Eric and great job to our team who put that video together to help share some of the narrative of where we're going next .

Speaker #5: As we extend the axon ecosystem . So I'd like to welcome everybody to our third quarter 2020 earnings call . It's truly just an amazing time to be at axon .

Our vision, which you just saw a glimpse of a piece of it and that video.

Like me our team walked away energized, we're incredibly excited about what we're building the future. We envision is coming together and it's even more inspirational than I could have imagined a decade ago.

Speaker #5: Just a few weeks ago , we were at the major annual conferences across public safety , federal and military , and enterprise , meeting with hundreds of customers to catch up on their top priorities and share our vision , which you just saw a glimpse of .

At the heart of that future is the expansion of our ecosystem. Our latest update outlines our path forward delivering axon 911, which will be built on the foundations of prepared in car buying a major leap towards unifying the technology needed to deliver measurably better outcomes for our communities and our customers.

Speaker #5: A piece of it in that video . Like team walked away energized . We're incredibly excited about what we're building . The future we envision is coming together , and it's even more inspirational than I could have imagined a decade ago .

Speaker #5: At the heart of that future is the expansion of our ecosystem , our latest update outlines our path toward delivering axon 91 one , which will be built on the foundations of prepared and Carbyne , a major leap toward unifying the technology needed to deliver measurably better outcomes for communities and our customers .

Prepared in car buying are powerfully complementary.

<unk> is a low friction AI capability that can be rapidly installed in any communication center.

Immediately given call takers superpowers to speed through data collection analysis and sharing.

It can autonomous Lee handle up to half of noncritical calls freeing the human operators for true emergencies.

Speaker #5: Prepared and carbyne are powerfully complementary . Prepared is a low friction AI capability that can be rapidly installed in any communication center , immediately giving call takers superpowers to speed through data collection , analysis and sharing .

On critical calls prepared serves as an intelligent assistant taking on data collection. So operators can focus on the human side of helping people in crisis.

Just last week, we heard a story about a 911 call center for one of the largest U S cities, who installed prepared ahead of the fourth of July.

Speaker #5: It can autonomously handle up to half of non-critical calls , freeing the human operators for true emergencies on critical calls . Prepared serves as an intelligent assistant , taking on data collection so operators can focus on the human side of helping people in crisis .

They completed implementation in about a month, which is incredibly fast its lightning fast for public safety and in the first few days they saw a 33% reduction in calls requiring a human operator, even as the overall inbound volume was up significantly due to the holiday weekend that's real.

Speaker #5: Just last week , we heard a story about a 911 call center for one of the largest US cities who installed , prepared ahead of the 4th of July .

Speaker #5: They completed implementation in about a month , which is incredibly fast . It's lightning fast for public safety , and in the first few days they saw a 33% reduction in calls , requiring a human operator .

<unk> impact.

And car buying replaces on Prem call center infrastructure with highly resilient cloud infrastructure, eliminating the enormous cost of running legacy equipment, and allowing agencies to move with the exponential pace of modern technology, rather than at a glacial pace of procurement.

Speaker #5: Even as the overall inbound volume was up significantly due to the holiday weekend . That's real immediate impact and Carbyne replaces on prem call center infrastructure with highly resilient cloud infrastructure , eliminating the enormous costs of running legacy equipment and allowing agencies to move at the exponential pace of modern technology rather than at the glacial pace of procurement .

We see car buying repeating and voice communications. The success, we had with evidence dot com and moving agency data centers to the cloud now we'll do it with their call centers.

Together.

These capabilities, let agencies make their existing system smarter today and provide a smooth orderly path to full modernization over time, both leverage AI natively to rethink what's possible let.

Speaker #5: We see carbine repeating in voice communications the success we had with Evidence.com in moving agency data centers to the cloud . Now we'll do it with their call centers together , these capabilities let agencies make their existing systems smarter .

Let me bring this to life.

You need help.

You dial 9112.

Today, the operator listens gathers information and for a medically types. It into a command line system that information is then passed via a typed message over to a dispatcher who's at different person, who read that information and then relays it over the radio to police officers.

Speaker #5: Today and provide a smooth , orderly path to full modernization over time . Both leverage AI natively to rethink what's possible . Let me bring this to life .

Speaker #5: Imagine you need help . You dial 911 . Today , the operator listens , gathers information , and frenetically types it into a command line system .

An inherently inefficient system of the old telephone game prone to risks of miscommunication.

We can turn that process and we are now turning it on its head.

Speaker #5: That information is then passed via a typed message over to a dispatcher who's a different person who reads that information and then relays it over the radio to police officers .

When you make that call a network of connected devices and software across your city will activate instantly analyzing information, prompting decisions and allowing the human operator to coordinate a faster more informed response.

Speaker #5: It's an inherently inefficient system of the old telephone game , prone to risks of miscommunication . We can turn that process , and we are now turning it on its head .

Call handlers will focus on helping you instead of typing feverishly, while real time, France will enable the dispatch of human.

Speaker #5: When you make that call , a network of connected devices and software across your city will activate instantly analyzing information , prompting decisions , and allowing the human operator to coordinate a faster , more informed response .

Or drone responders.

And that suspicious reported person, we can handle that call autonomously no need for a human operator.

When there is an emergency critical context will flow directly to those unseen through their body cameras, keeping them more informed less distracted and better supported by a network built to keep people safe.

Speaker #5: Call handlers will focus on helping you instead of typing feverishly while real time prompts will enable the dispatch of human or drone responders .

Speaker #5: Oh , and that suspicious reported person . We can handle that call autonomously . No need for a human operator when there is an emergency .

As a powerful future that's coming into view.

Now to clarify how this fits into our overall approach as you will recall, we exited our computer aided dispatch product line about a year ago. This new approach.

Speaker #5: Critical contacts will flow directly to those on scene through their body cameras , keeping them more informed , less distracted , and better supported by a network built to keep people safe .

US innovate and critical response workflows without rebuilding legacy systems. It means we can innovate faster driving real world impact and value creation, and we will enable reciprocal data sharing and API is to drive true interoperability, giving agencies the flexibility to modernize at their own pace.

Speaker #5: It's a powerful future that's coming into view now to clarify how this fits into our overall approach , as you will recall , we exited our computer aided dispatch product line about a year ago .

Speaker #5: This new approach lets us innovate in critical response workflows without rebuilding legacy systems . It means we can innovate faster , driving real world impact and value creation .

This isn't just a cloud migration, it's a connected platform upgrades of existing systems and makes them better no replacement required customers get immediate capability upgrades, while having the option to migrate older infrastructure to hyperscale or efficiency on their own timeline.

Speaker #5: And we will enable reciprocal data sharing and APIs to drive true interoperability , giving agencies the flexibility to modernize at their own pace .

It also unlocks new potential across our real time operations vehicle intelligence and drone and robotics platforms, creating an integrated ecosystem that delivers on the future. We've long envisioned with fuses serving as the real time sensor network backbone, while prepared and carbon provide the voice layer connecting every persona from the caller to the.

Speaker #5: This isn't just a cloud migration , it's a connected platform that upgrades existing systems and makes them better . No replacement required . Customers get immediate capability upgrades while having the option to migrate older infrastructure to Hyperscaler efficiency on their own timeline .

Speaker #5: It also unlocks new potential across our real time operations vehicle intelligence and drone and robotics platforms , creating an integrated ecosystem that delivers on the future .

<unk> moving toward creating an AI superpowered team.

Voice Communications, we think back this began with operators 100 years ago physically connecting phone lines then it move through rotary dials and key pads. The Nextera is intelligent AI enabled communications that process information at superhuman speed and surface the right insights to each human decision maker when they need.

Speaker #5: We've long envisioned . With Fusus serving as the real time sensor network backbone . While prepared and carbine provide the voice layer connecting every persona from the caller to the responder , moving toward creating an AI super powered team voice communications .

Speaker #5: If we think back, this began with operators 100 years ago, physically connecting phone lines. Then it moved through rotary dials and keypads.

It.

Preparing carbine aren't the end state they are the foundation for the transformation and voice Communications ahead.

Speaker #5: The next era is intelligent AI enabled communications that process information at superhuman speed and surface . The right insights to each human decision maker when they need it prepared , in carbine aren't the end state .

People, often ask where exxon's limits are I believe we're only scratching the surface, we're advancing our ecosystem, while expanding our reach to more new customers. In addition to better serving emergency call centers, we recently introduced.

Speaker #5: They're the foundation for the transformation in voice communications ahead . People often ask where Axon's limits are . I believe we're only scratching the surface .

W. Many are second enterprise body camera opening enterprise opportunities similar to public safety and we're finding new inroads globally.

Speaker #5: We're advancing our ecosystem while expanding our reach to more new customers . In addition to better serving emergency call centers , we recently introduced AB mini , our second enterprise body camera opening enterprise opportunities similar to public safety .

As I think about the next few decades, and what we're building I truly believe that the best is indeed, yet to come what an amazing time to be alive, and what a privilege to be at axon. During this accelerating transformation.

With that I'll turn it over to Josh.

Speaker #5: And we're finding new inroads globally . As I think about the next few decades and what we're building , I truly believe that the best is indeed yet to come .

Thanks, a lot Rick and good afternoon, everyone before we get into our results I want to Echo Rick's comments as we welcome the prepared team and soon the car buying team. The axon I believe our greatest asset is our team nothing excites me more than bringing on exceptional people, who will help accelerate our mission and.

Speaker #5: What an amazing time to be alive and what a privilege to be at axon during this accelerating transformation . And with that , I'll turn it over to Josh .

Speaker #6: Thanks a lot , Rick , and good afternoon , everyone . Before we get into our results , I want to echo Rick's comments as we welcome the prepared team and soon the carbine team to axon .

Ignite our future our growth can only accelerate via elite talent and our team is now stronger than ever with the additions of Michael Dillon Neal and the rest of the prepared team and a mere Alex and the rest of the car buying team.

Speaker #6: I believe our greatest asset is our team . Nothing excites me more than bringing on exceptional people who will help accelerate our mission and ignite our future .

As I reflect on our Q3 results and look ahead to Q4.

I'm excited and grateful we are building an elite business that is still nowhere near its ultimate potential and we are doing it with a team that is rapidly bought into the mission a lot of people around here Buster tails every day and I am thankful for the intensity they bring to work in the bar they set.

Speaker #6: Our growth can only accelerate via elite talent , and our team is now stronger than ever . With the additions of Michael Dillon , Neal and the rest of the team and Amir , Alex and the rest of the carbine team .

Speaker #6: As I reflect on our Q3 results and look ahead to Q4 , I'm excited and grateful we are elite business that is still nowhere near its ultimate potential , and we are doing it with a team that is rapidly bought into the mission .

What we're seeing right now isn't just incredible execution, it's a signal.

The theme that comes to mind is be obsessed our value focusing on relentless focus on our customers and attitude. We drive home every day at axon, because we know their success is what fuels our.

Speaker #6: A lot of people around here bust their tails every day , and I am thankful for the intensity they bring to work and the bar they set .

Let me share a few data points that show, how we are hitting the mark first our state and local customers continue to rely on us for more and more products, Rick talked about expanding our ecosystem and for me. The most important indicator that we're doing it right is simple it's evidence that we're helping customers where they need.

Speaker #6: What we're seeing right now isnt just incredible execution . It's a signal . The theme that comes to mind is be obsessed . Our value focusing on relentless focus on our customers .

Speaker #6: An attitude we drive home every day at axon because we know their success is what fuels our . Let me share a few data points that show how we're hitting the mark .

At most we hear that in conversations every day, but we are seeing that in the data. One clear example is that more and more of our deals now include the full breadth of our portfolio I would say it often we have the best sales team in the world, but when you can sell everything to a customer that's more than just sales execute.

Speaker #6: First , our state and local customers continue to rely on us for more and more products . Rick talked about expanding our ecosystem , and for me , the most important indicator that we're doing it right is simple .

Speaker #6: It's evidence that we're helping customers where they need it most . We hear that in conversations every day , but we are seeing that in the data .

<unk>, it's the trust you built into the product market fit and it's a sign you are making an impact.

Speaker #6: One clear example is that more and more of our deals now include the full breadth of our portfolio . I say it often .

I mentioned that last quarter that a few of our deals were approaching the $600 per user per month.

Speaker #6: We have the best sales team in the world , but when you can sell everything to a customer , that's more than just sales execution .

Level several multiples above our current average.

Q3, we broke that threshold with two of our top 10 deals and our state and local base each representing major upgrades with axon. These long term partnerships across so many different product lines speak to our customers confidence in our future with us.

Speaker #6: It's the trust you've built . It's the product market fit , and it's the sign you're making an impact . I mentioned that last quarter that a few of our deals were approaching the $600 per user per month level .

Speaker #6: Several multiples above our current average. In Q3, we broke that threshold with two of our top ten deals in our state and local base.

Across products. The story is the same the Aeroplan continues to be the fastest booked axon software product to date, we are on pace for AI bookings to contribute over 10% of U S state and local bookings for next year, sorry for this year when you expand that to our newer offerings.

Speaker #6: Each representing major upgrades with axon . These long term partnerships across so many different product lines speak to our customers confidence in a future with us across products .

Speaker #6: The story is the same . The Aeroplan continues to be the fastest booked . Axon Software product to date . We're on pace for AI bookings to contribute over 10% of US state and local bookings for next year .

Axon Air D drone infuses bookings are up more than three <unk> year to date the.

The momentum highlights another key part of our growth strategy, how we pour fuel on the fire when we acquire great businesses across the board our acquisitions over the past year have outperformed initial bookings expectations, which are showing up and adoption of these new products.

Speaker #6: Or sorry for this year when you expand that to our newer offerings , axon Air Drone and fuses , bookings are up more than three x year to date .

Next let's talk about expansion beyond our core state and local base into corrections Justice International and enterprise a standout. This year continues to be corrections, which contributed two of our top 10 deals in Q3 with year to year or year to date bookings up more than two weeks from last year International all.

Speaker #6: The momentum highlights another key part of our growth strategy how we pour fuel on the fire when we acquire great businesses across the board , our acquisitions over the past year have outperformed initial bookings expectations , which are showing up in adoption of these new products .

Speaker #6: Next , let's talk about expansion beyond our core state and local bass into corrections . Justice International and Enterprise , a standout this year continues to be corrections , which contributed two of our top ten deals in Q3 with year to year , year to date bookings up more than two x from last year .

So delivered two of our top 10 deals overall with an additional nine figure cloud deal in Europe that closed in October. We're finally seeing a shift in some countries driven by the value that cloud products spring and we think this will be the start of larger and larger deals in our international segment to come.

Speaker #6: International also delivered two of our top ten deals overall , with an additional nine figure cloud deal in Europe that closed in October .

Growing adoption of Taser 10 in international markets is another part of the story and seven of our top 10-Q, three international deals were driven by Taser 10.

Speaker #6: We're finally seeing a shift in some countries, driven by the value that cloud products bring. We think this will be the start of larger and larger deals in our international segment to come.

Looking ahead, we're executing against a growing pipeline and we're not slowing down year to date bookings are up in excess of 30% and accelerating from last year and we have line of sight to close out the year, even stronger, but we are still in the early innings, we see the healthiest and best indicators across our.

Speaker #6: Growing adoption of Taser ten in international markets is another part of the story , and seven of our top ten Q3 international deals were driven by Taser ten .

Speaker #6: Looking ahead , we're executing against a growing pipeline and we're not slowing down year to date bookings are up in excess of 30% and accelerating from last year .

Business, we have ever had and I am confident we are on the right track as we scale up the investment in our products and sales team to go after the entirety of what's in front of us.

Speaker #6: And we have line of sight to close out the year even stronger . But we are still in the early innings . We see the healthiest and best indicators across our business we have ever had .

I have no doubt, we will deliver another record year in 2026, something that I'm sure. Many of you are wondering about and I think our opportunity has the potential to accelerate much further going into next year.

Speaker #6: And I'm confident we are on the right track as we scale up the investment in our products and sales team to go after the entirety of what's in front of us .

Look for us to continue to drive record growth, ensuring better execution through the use of AI tools and efficient decentralized ownership to tackle new markets and opportunities elite scrappy team doing more and more in parallel we'll be our competitive advantage for years to come that's what our next play looks like.

Speaker #6: I have no doubt we will deliver another record year in 2026 . Something that I'm sure many of you are wondering about . And I think our opportunity has the potential to accelerate much further going into next year .

Speaker #6: Look for us to continue to drive record growth , ensuring better execution through the use of AI tools and efficient , decentralized ownership to tackle new markets and opportunities .

With that overview Brittany.

Thank you Josh.

As Rick and Josh.

Excited to welcome prepared can announce Carmine, which we expect to close in early 2020.

Speaker #6: Elite scrappy team doing more and more in parallel will be our competitive advantage for years to come . That's what our next play looks like .

We're proud of our third quarter results, which again reflect strong execution across our products in the market.

Speaker #6: With that, over to you, Brittany.

Third quarter revenue of 700.

Speaker #7: Thank you . Josh . As Rick and Josh highlighted , we're excited to welcome prepared and announce carbine , which we expect to close in early 2026 .

<unk> increased 31% year over year, marking our seventh consecutive quarter of 30% or greater growth underscoring the robust demand we are seeing.

Speaker #7: We're proud of our third quarter results , which again reflect strong execution across our products and markets . Third quarter revenue of $711 million increased 31% year over year , marking our seventh consecutive quarter of 30% or greater growth .

Software and services really download either increasing 41% year over year to $300 million of revenue.

This growth reflects both new customers and existing customers expanding their use of our platform and capabilities.

Speaker #7: Underscoring the robust demand we are seeing software and services was again the leader , increasing 41% year over year to 305 million of revenue .

We continue to have strong net revenue retention at 124% again next quarter.

<unk> grew 41% to.

One 3 billion.

Speaker #7: This growth reflects both new customers and existing customers , expanding their use of our platform and capabilities . We continue to have strong net revenue retention at 124% .

Connected devices revenue grew 24% year over year to $405 million, reflecting broad based demand.

Teva grew 7% led by teens her tongue personal centers grew 20% driven by axon body for work and platform solutions grew 71% driven by counter Brown virtual reality farms fleet.

Speaker #7: Again this quarter , and are grew 41% to 1.3 billion connected devices . Revenue grew 24% year over year to 405 million , reflecting broad based demand .

Adjusted gross margin of 62, 7% decreased 50 basis points year over year, primarily due to tariffs impacting us for the first full quarter.

Speaker #7: Taser grew 17% , led by Taser ten personal sensors grew 20% , driven by axon body four and platform Solutions grew 71% , driven by Counter-drone virtual reality and sleep .

We also continued scaling platform solutions, which overall has lower margins than teaser on personnel sensors, but offset by continued strong growth in our higher margin software business.

Speaker #7: Adjusted gross margin of 62.7% decreased 50 basis points year over year , primarily due to tariffs impacting us for the first full quarter .

Adjusted EBITDA margin of 24, 9%, reflecting the impact from tariffs and the planned increased R&D investment.

Speaker #7: We also continued scaling platform solutions , which overall has lower margins than Taser and personal sensors , but offset by continued strong growth in our higher margin software business .

These investments are the categories that will support future growth.

<unk>, our vehicle intelligence LPR products axon body workforce needs.

Speaker #7: Adjusted EBITDA margin of 24.9% reflected the impact from tariffs and the planned increased R&D investments . These investments are into categories that will support future growth , including our vehicle Intelligence Alpr products .

AI era plan features such as live translational policy change.

We couldn't be more excited about these products and the traction we're already seeing from our customers and we will deliver a strong ROI on these organic investments over the long term.

Speaker #7: Axon Body Workforce , Mini and new AI era . Planned features such as live translation and policy chat . We couldn't be more excited about these products and the traction they are already seeing from our customers , and we will deliver a strong ROI on these organic investments over the long term .

We've also accelerated strategic investments with recent acquisition.

Other product lines, such as <unk> are scaling quickly and we continue to invest in our growth.

Along now with prepared in car buying is another exciting new category.

While these acquisitions are immaterial from a financial perspective at close we see tremendous value in holidays and stuff.

Speaker #7: We've also accelerated strategic investments with recent acquisitions , newer product lines such as fuses and drone are scaling quickly , and we continue to invest in their growth along .

That's our long term vision and solve challenges for our customers they.

They have strong tools and emerging categories and complement the capabilities, we are already investing in.

Speaker #7: Now with prepared and carbine . As another exciting new category . While these acquisitions are immaterial from a financial perspective , at close we see tremendous value in how these investments advance our long term vision and solve challenges for our customers .

Turning to our outlook, we're again raising revenue guidance for the remainder of the year.

We expect Q4 revenue between 750, and 755 million, implying full year revenue of about $2 74 billion up from $2 six 5% to seven 3 billion and represented approximately 31% growth at the midpoint.

Speaker #7: They have strong teams in emerging categories and complement the capabilities we are already investing in . Turning to our outlook , we're again raising revenue guidance for the remainder of the year .

For adjusted EBITDA, We expect Q4 between 170 $182 million, which means our full year, 25% margin target.

Speaker #7: We expect Q4 revenue between 750 and 755 million , implying full year revenue of about 2.74 billion , up from 2.65 to 2.73 billion , and representing approximately 31% growth at the midpoint .

We are pleased to deliver on our commitment for 25% adjusted EBITDA margin for the year, even with the impact from tariffs.

Speaker #7: For adjusted EBITDA , we expect Q4 between 178 and 182 million , which maintains our full year 25% margin target . We are pleased to deliver on our commitment for a 25% adjusted EBITDA margin for the year .

These R&D investments.

The combination of top line growth bottom line profitability is the right balance for the business delivering at 55 plus versus the rule of 40.

We're incredibly excited by the opportunities in front of us the investments we highlighted our key components of continuing to deliver great performance in the years ahead.

Speaker #7: Even with the impact from tariffs and our increased R&D investments , we think the combination of top line growth and bottom line profitability is the right balance for the business , delivering at 55 plus versus the rule of 40 .

In summary, we are proud of our results that our team and thankful for our terrific customers, we're well positioned for the future and look forward to continued strong performance.

Speaker #7: We're incredibly excited by the opportunities in front of us . The investments we highlighted are key components of continuing to deliver great performance in the years ahead .

With that well open the line for questions.

Okay.

Thanks Brittany.

First we have George Notter at Wolf.

Speaker #7: In summary , we are proud of our results and our team and thankful for our terrific customers . We're well positioned for the future and look forward to continued strong performance .

Hi, guys, thanks very much.

Josh you mentioned that AI should contribute about 10% of total bookings this year.

The bookings with a little bit softer this quarter was there any delayed contract decisions in Q3 that maybe drove that or whats the perspective there.

Speaker #7: With that , we'll open the line for questions .

Speaker #1: Thanks , Brittany . Up first we have George Nader at Wolfe .

Yes. Thanks for the question George look we had said last quarter, we expect.

Speaker #8: Hi , guys . Thanks very much . Hey , Josh , you mentioned that AI should contribute about 10% to total bookings this year , but bookings looked a little bit softer .

Bookings growth to be in the high <unk> year over year, and we still believe that to be true and so you can guess what that means for Q4.

Speaker #8: This quarter . Was there any delayed contract decisions in Q3 that maybe drove that ? Or what's the perspective there ?

Got it Okay and then.

You guys have now acquired I guess, if I look at it you know prepared carbine. Both on the 901 space you talked about them as kind of a foundation.

Speaker #6: Yeah , thanks for the question , George . Look , we had said last quarter we expect , you know , bookings growth to be in the high 30s year over year .

But it would be great. If you could talk a little bit more about sort of the industrial logic why it makes sense for you guys to be in that space given the existing competitive landscape and the types of things that you expect to add to those businesses going forward. So what's the perspective on the two deals yes.

Speaker #6: And we still believe that to be true . And so you can guess what that means for Q4 .

Speaker #8: Got it okay . And then also you guys have now acquired I guess if I look at it , you know , prepared carbine , both in the 911 space , you talked about them as kind of a foundation .

Yes, let me go and take that one if you think about when we build our ecosystem. So far we look at what are the things that are most valuable when they plug in to the broader axon ecosystem. So today, we've got a strong connection to the officers in the field there vehicles through their body cameras, <unk> cameras drones and robotics, but if you look at where information comes in.

Speaker #8: But it'd be great if you could talk a little bit more about sort of the industrial logic , why it makes sense for you guys to be in that space , given the existing competitive landscape and the types of things that you expect to add to those businesses going forward .

Speaker #8: So what's the perspective on those two deals ? Thanks .

Speaker #5: Yeah . Let me go and take that one . If you think about what we've built in our ecosystem so far , we look at what are things that are most valuable when they plug in to the broader axon ecosystem .

That comes in really three or 911 call centers now previously we had like Youre, making a play in dispatch and what we learned was the CAD software frankly was just there was not a lot of room to innovate it was something where its very training intensive typically very old Colgate code bases that have to integrate with a lot of.

Speaker #5: So today we've got a strong connection to the officers in the field . Their vehicles through their body cameras or in-car cameras , drones and robotics .

Speaker #5: But if you look at where information comes in , that comes in really through your 911 call centers . Now , previously , we had looked at making a play in dispatch and what we learned was that CAD software , frankly , was just there was not a lot of room to innovate .

Legacy Federal and other systems and so we pulled back from nursing wasn't a place we could innovate.

And we're looking at where can we use AI and where could we begin to innovate really across the very beginning of an incident right. It starts with a 911 call. The majority of the time.

Speaker #5: It was something where it was very training intensive . Typically very old , cold code bases that have to integrate with a lot of , you know , legacy federal and other systems .

But you can't Skip 911, right, we've looked at different strategies, how else could we connected smartphones rather than through like a 19 seventies voice interface and what we've learned is looking all of that is there are zero appetite to do anything that is not in the 911 call, but once you start with the 911 call. You can then open up parallel channels.

Speaker #5: And so we pulled back from there , seeing was the place we could innovate . And we were looking at where can we use AI and where can we begin to innovate , really across the very beginning of an incident .

Speaker #5: Right . It starts with a 911 call . The majority of the time , but you can't skip 911 , right ? You know , we've looked at different strategies .

As a communication so with prepared for example, we can send a link open up cameras and sensors on the phone. So we can begin to do like AI processing. So that the human we're not limited by the typing speed of the human.

Speaker #5: You know , how else could we connect these smartphones rather than through like a 1970s voice interface ? And what we learned in looking at all that is like there is zero appetite to do anything that is not the 911 call .

Their ability to.

Speaker #5: But once you start with the 911 call , you can then open up parallel channels of communication . So with prepared for example , we can send a link , open up cameras and sensors on the phone .

You finished the initial report before sending it on elsewhere. We can begin processing information in real time, we see this as the ability to deploy drones much faster to begin moving officers into physician before they are even officially deployed and to become much smarter by now basically creating the link between the color.

Speaker #5: We can begin to do like AI processing so that the human being , we're not limited by the typing speed of the human or their ability to , you know , finish the initial report before sending it on elsewhere .

And the whole axon ecosystem.

Speaker #5: We can begin processing information in real time . We see this as the ability to deploy drones much faster . To begin moving officers into position before they're even officially deployed , and to become much smarter .

And I think this is a lot bigger than 91, one prepared is really about AI voice communication automation really starting at 911, and then where car buying gets really interesting. They have built a very high reliability mission critical voice communication platform that also start to 91, one but by no means is it limited that that's where you.

Speaker #5: By now . Basically creating the link between the caller and the whole ecosystem . And I think this is a lot bigger than 911 prepared is really about AI , voice communication , automation , really .

Need to ship. So we think voice communications that today sits in pretty ancient infrastructure.

Speaker #5: Starting in 911 . And then we're combining gets really interesting . They have built a very high reliability mission critical voice communication platform that also starts in 911 , but by no means is it limited that that's where you would need to sit .

Across the whole spectrum, whether it's 911 call center or LMR radios right out of the 19 seventies like you've got all these different voice communication systems, none of which really leverage the latest technology and are not really built to move with the exponential speed of modern tact. We see car buying is the play to go deeper into that voice layer infrastructure.

Speaker #5: So we think voice communications that today sits in pretty ancient infrastructure , you know , across the whole spectrum , whether it's in the 911 call center or LMR radios right out of the 1970s , like you've got all these different voice communication systems , none of which really leverage the latest technology and are not really built to move at the exponential speed of modern tech .

And to be able to deploy it across.

Not just 911, but all of the human beings that are involved in our call.

And to bring to move AI to the center, we named the company Axon right because it's all about the axons of the nerve fibers that connect everything together into the sophisticated nervous system that is the human being we're building the nervous system of the modern police agency and these two acquisitions move us into really being a major player.

Speaker #5: We see car buying is the play to go deeper into that voice layer infrastructure and to be able to deploy it across not just 911 , but all the human beings that are involved in a call and to bring to move AI to the center .

Communications and <unk>.

Speaker #5: We named the company axon , right , because it's all about the axons of the nerve fibers that connect everything together into the sophisticated nervous system that is a human being .

And the ability to link in the consumer rights in the first 911 call.

Thanks very much.

Thanks George.

Speaker #5: We're building the nervous system of the modern police agency , and these two acquisitions move us into really being a major player in voice communications and really an ability to link in the consumer right from that first 911 call .

And actually a Jeremy Hamblin with Craig Hallum.

Thanks.

I wanted to get into just some of the interplay that youre seeing between software and services connected devices. So youre AOR growth was.

Speaker #8: Thanks very much .

Speaker #1: Thanks , George . Up next , we have Jeremy Hamblin , Craig-hallum .

The best growth rate, you've seen in 2025 software and sensor software and services.

Speaker #9: Thanks . And I wanted to get into just some of the interplay that you're seeing between software and services connected devices . So you know , AR growth was , you know , the best growth rate you've seen in 2025 .

Also the best growth.

In a quarter in 2025, and a little bit slower growth with connected devices than you've seen in the first half of the year.

And I wanted to just get a sense for.

Sure.

Whether or not that is a reflection that you are having.

Speaker #9: Software and sensor software and services . Also the best growth in a quarter in 2025 . And a little bit slower growth with connected devices than you've seen in the first half of the year .

Maybe not as many new licenses that the value of those licenses is growing substantially and then as we start to look ahead at how the business is going to change and evolve here over the next few years.

Speaker #9: And I wanted to just get a sense for , you know , whether or not that is a reflection that you are having .

Is that.

How you expect growth.

Speaker #9: Maybe not as many new licenses , but the value of those licenses is growing substantially . And then as we start to look ahead at how the business is going to change and evolve here over the next few years , is that how you expect growth to to go forward here over the next , let's say , 3 to 5 years ?

Go forward here over the next let's say three to five years.

I'm happy to start or he can Josh yes Brittany.

I would say I'll sort of take it in reverse order I would say as we look into the future I think we continue to expect software and services.

Category to be a higher than average growth rate, it's been doing that for the last couple of years. We expect it to continue doing now to what you called out that is on our customers buying more and increasing our features and capabilities, but it's also on increasing user count so that is not.

Speaker #7: I'm happy to start . Or you can . Josh .

Speaker #6: Yeah . Go ahead Brittany .

Speaker #7: Okay . I would say I'll sort of take it in reverse order . I would say as we look into the future , I think we continue to expect software and services as a category to be a higher than average growth rate .

An issue at all we're continuing to see new customers come in and join the platform and then we're upselling them over time.

Speaker #7: It's been doing that for the last couple of years . We expect it to continue doing that to what you called out . That is on our customers buying more and increasing their features and capabilities .

Higher higher growth there across the board.

We continue to be really pleased by the growth that we're seeing in our other segments. Both teams our body cameras segments. We had some really strong wireless nest quarter in those segments and we expect those to continue to drive growth well into the future.

Speaker #7: But it's also on increasing user count . So that is not , you know , an issue at all . We're continuing to see new customers come in and join the platform , and then we're upselling them over time .

Speaker #7: So higher , higher growth there across the board . That said , we continue to be really pleased by the growth that we're seeing in our other segments , both tasers , our body camera segments .

Both teams are anti body cameras are connected sensors are seeing nice growth. This year next year like there is no. There is no real slowing down of that so you should expect that to continue some of that is on new products, we talked about eating up in many we're excited for EW. Many that launches next year. So as usual, we talk about things before that really.

Speaker #7: We had some really strong growth this quarter in those segments , and we expect those to continue to drive growth well into the future .

Speaker #7: So both Taser and our body cameras are connected . Sensors are seeing nice growth this year . Next year like there's no there's no real slowing down of that .

Hitting our numbers so EDW, many it'll be something that will come next year.

I was just a lot of momentum across the board you can see in platform solutions.

Speaker #7: So you should expect that to continue . Some of that's on new products . We talked about AB mini . We're excited for AB mini that launches next year .

We're starting to see both counter drone show up but we're also still getting really nice growth from fleet and were seeing VR grow.

Speaker #7: So as usual we talk about things before they're really hitting our numbers . So AB mini will be something that'll come next year .

So it's kind of across the board I would expect it to continue to be like that.

Yes.

Speaker #7: There's just a lot of momentum across the board . You can see in platform solutions . That's where you're starting to see both counter drones show up .

I agree with everything Britney said I also echo Jeremy like over the next three to five years I think youre going to see the same type of growth as you're seeing now and it's certainly.

Speaker #7: But we're also still getting really nice growth from fleet , and we're seeing VR grow . So it's kind of across the board .

Part of it is is what I talked about earlier with the per user values going up but do not discount the user growth that we're going to see either like international and enterprise. We have a lot of confidence that those are headed in the right direction International we're super excited about results.

Speaker #7: And I would expect it to continue to be like that .

Speaker #6: Yeah , I just . I agree with everything , Brittany said . I also echoed Jeremy , like over the next 3 to 5 years , I think you're going to see the same type of growth as you're seeing now .

Speaker #6: And it's certainly a part of it . Is is what I talked about earlier with , you know , the per user values going up .

We've seen year to date and the early Q4 results that we're seeing.

I think your user growth is absolutely going to be a major part of our future.

Speaker #6: But do not discount the the user growth that we're going to see either . Like , you know , international and enterprise , we have a lot of confidence that those are headed in the right direction .

And then just.

One other question in terms of the company is closing in on kind of $3 billion in annualized revenue.

Speaker #6: International . We're super excited about results . We've seen year to date and the early Q4 results that we're seeing . You know , I think user growth is absolutely going to be a major part of our future .

As we look at some of these newer pieces of the platform.

Exxon 911.

Versus let's say.

Speaker #9: And then just one other question in terms of , you know , the company's closing in on 3 billion in annualized revenue , as we look at some of these newer pieces of the platform , Exxon , you know , 911 versus , let's say , you know , a drone , which of those do you expect to be ?

The drone.

Which of those do you expect to be there is still in early stages and from a materiality standpoint, do you expect faster growth from.

Axon 911 versus deidre.

Maybe I'll take a shot at that to start.

Look part of the reason we acquired both of these businesses on the 911 side Jeremy is because their growth is is very very exciting into the future.

Speaker #9: There's still in early stages . And from a materiality standpoint , do you expect faster growth from axon 911 versus drone ?

But note that those are software businesses and so in terms of hitting our revenue just like with all software. There is it takes time for the software to accumulate and D drone, while our software business is also a hardware business and so you'll see that first in our results by virtue of the fact that these are high dollar.

Speaker #6: Maybe I'll take a shot at that to start , I think , you know , look , part of the reason we acquired both of these businesses on the 911 side , Jeremy , is because their growth is is very , very exciting into the future .

Speaker #6: But note that those are software businesses . And so in terms of hitting our revenue , you know , just like with all software , there's it takes time for the software to accumulate .

Hardware shipments.

Some of which are nine figure opportunities, we're working on right now and so we.

Speaker #6: And drone . While a software business is also a hardware business . And so you'll see that first in our results , by virtue of the fact that these are high dollar hardware shipments , some of which are , you know , like nine figure opportunities , we're working on right now .

<unk> will be the first to hit revenue in a big way, but when you look at.

Paragon car buying over the long term, we think there is a lot to disrupt in the 911 space and the synergy between those opportunities and all the downstream stuff with digital evidence and prosecution.

Speaker #6: And so we , you know , I think . Drone will be the first to hit revenue in a big way . But when you look at prepared and carbine over the long term , we think there's a lot to disrupt in the 911 space and the synergy between those opportunities and all the downstream stuff with digital evidence and prosecution , I think that that workflow from end to end is going to be the long term value that we add to public safety .

I think that that workflow from end to end is going to be the long term value that we add to public safety.

I agree.

I would just like I wouldn't discount that.

And I wouldn't discount some of the new organic investments, we're making in the things like vehicle intelligence and automated license plate reading.

As we think about our acquisitions I think what you're seeing as we are investing in companies that tend to be a little bit earlier stage. So we're not really buying revenue we're not buying.

Speaker #7: I agree with all of that . I would like , I wouldn't discount and I wouldn't discount some of the new organic investments we're making into things like vehicle intelligence and automated license plate reading .

Existing business, we're buying an opportunity and then we're pulling it in to our ecosystem.

Speaker #7: As we think about our acquisitions . I think what you're seeing is we are investing in companies that tend to be a little bit earlier stage , so we're not really buying revenue .

And integrating it and really using that to accelerate the opportunity I think what youre seeing on thesis. Indeed round is now we've had them under our belt for a year plus so you're seeing the power of doing that hopefully a year from now when we've had prepared and car buying under our belt for a year, you'll start to see some of that traction as well.

Speaker #7: We're not buying , you know , an existing business . We're buying an opportunity and then we're pulling it in just add , to our ecosystem and integrating it and really using that to accelerate the opportunity .

Thanks, Thanks for the color.

Speaker #7: I think what you're seeing on fuses and drone is now we've had them under our belt for a year plus . So you're seeing the power of doing that .

Alright up next we have Andrew Sherman T D.

Oh, great. Thanks, good to see you.

Speaker #7: Hopefully a year from now when we've had prepared and carbine under our belt for a year , you'll start to see some of that traction as well .

The international deals good to see the two big deals there, including a nine figure one any more color on where those were what product stay but.

Speaker #9: Thanks for the .

Speaker #10: Color .

<unk>.

Speaker #1: All right . Up next we have Andrew Sherman at TD .

And how is the pipeline shaping up across countries can this momentum youre seeing in Europe, Europe or internationally continue over the next next year or so yes, Andrew nice to see you and thanks for the question.

Speaker #11: Oh great . Thanks . Good to see you . The international deals . Good to see the two big deals there including a nine figure one .

Speaker #11: Any more color on where those were . What products they bought and how is the pipeline shaping up across countries . And can this momentum you're seeing in Europe , in Europe or internationally continue over the next , next year or so ?

We've been talking for years about opening up the cloud in Europe, and we're starting to see that happen and I think it's a credit to the team over there led by Cameron and Nathan Sofitel.

Opened up one large cloud opportunity already this year in Europe.

Speaker #6: Yeah , Andrew , nice to see you and thanks for the question . We've been talking for years about opening up the cloud in Europe , and we're starting to see that happen .

And that might not be it and so we're encouraged to see.

Some of that taking place just as taser and they are starting to accelerate internationally we.

Speaker #6: And I think it's a credit to the team over there led by Cameron and Nathan Sawtelle opened up one large cloud opportunity already this year in Europe .

We see very consistent bookings out of Canada, and Australia, and South America is coming on strong as well. So the international business is all the things we've been talking about and all the investments we've been making there over the years.

Speaker #6: And and that might not be it . And so we're we're encouraged to see some of that taking place just as Taser ten is starting to accelerate internationally .

It's really starting to come into fruition and and look that's part of part of the investment we have to make moving forward is making sure that we capture that opportunity around the world and we're prepared to do that and feel really really good about the results that it's going to yield.

Speaker #6: We see very consistent bookings out of Canada . And Australia and South America is coming on strong as well . So the international business is , you know , all the things we've been talking about and all the investments we've been making there over the years , it's really starting to come into fruition .

Yes, I would add in.

This nine figure deal is not in one of the bigger or more populous countries.

Speaker #6: And and look , that's part of part of the investment we have to make moving forward is making sure that we capture that opportunity around the world .

It just gives you an idea of the scale of the opportunity in Europe, and what I think is even more important is this is the outflow patient when youre introducing a new technology. The hardest part is getting the first customer.

Speaker #6: And and we're prepared to do that and feel really , really good about the results that it's going to yield .

Speaker #5: Yeah , I would add in , you know , this nine figure deal is not in one of the bigger or more populous countries .

To adopt it in the UK that was the London met going to the cloud, but the U K post.

Speaker #5: You know , just gives you an idea of the scale of the opportunity in Europe . And what I think is even more important is this is the alpha patient .

Post Brexit.

Not in the EU.

And they're really considered.

Speaker #5: When you're introducing a new technology , the the hardest part is getting the first customer , you know , to adopt it . In the UK , that was the London Met going to the cloud .

Really more part of the Commonwealth as we look at it we've had a lot of adoption. There. So to me the thing that's more exciting than the value of this order is that we've got.

Speaker #5: But you know , the UK you know , post Brexit is not in the EU . They're they're really considered really , you know , more part of the Commonwealth as we look at it .

Really I'd say, the first customer going all in on the cloud in the EU. We've had some other customers dipping their toe, but this is a big one we get a couple more of these advantageous 10 getting some momentum.

Speaker #5: And we've had a lot of adoption there . So to me the thing that's more exciting than the value of this order is that we've got really I'd say the first customer going all in on the cloud in the EU .

Europe could get pretty exciting.

That's great to hear.

And since you are all wearing the.

New body work.

Speaker #5: You know , we've had some other customers dipping their toe , but this is a big one . We get a couple more of these add in Taser ten , getting some momentum and Europe could get pretty exciting .

Workforce, many of which are nice to see that it live.

These retail trial.

Trials have been in the pipeline for a while that you've talked about we'd love to hear an update on the status of that and what body workforce. Many of them can can do to help that and how this actually deters.

Speaker #11: That's great to hear . And since you're all wearing the the new bodywork Workforce Mini , which nice to see that live . I know these retail trial trials have been in the pipeline for a while that you've talked about .

Organized crime and retailers and how you're thinking about that opportunity next year.

Sure.

Look I think.

Speaker #11: We'd love to hear an update on the status of that and what body workforce Mini can can do to help that , and how this actually deters organized crime in retailers and how you're thinking about that opportunity next year .

<unk>.

I've been excited about enterprise for a while and the closer we get to the launch date of a BW many.

We're excited that we get we already have pent up demand for this product and in the meantime customers are deploying.

Speaker #6: Yeah , sure . Look , I think , you know , I've I've been excited about enterprise for a while . And the closer we get to the launch date of AB mini , the more excited we get .

Deploying our axon body for right now and so.

They're they see the need for body cameras, they're already paying for them and deploying them and.

They really plan to expand in a major way as as a BW many gets to market and so I think I've said a couple of times on these calls.

Speaker #6: We we already have pent up demand for this product . And in the meantime , customers are are deploying our axon body for right now .

At the end of the day enterprise might be the biggest part of our business and so we are investing there and feeling great about.

Speaker #6: And so , you know , they're they see the need for body cameras . They're already paying for them and deploying them . And they really plan to expand in a major way as , as AB mini gets to market .

What our future looks like there are obviously, a massive tam with some very very large customers and enterprises.

Speaker #6: And so , you know , I think I've said a couple times on these calls , at the end of the day , enterprise might be the biggest part of our business .

That that were working with and that are showing a lot of interest in expansion and so very very bullish on enterprise heading into the years to come and that a BW. Many launches certainly a moment in time, where we think we will step up in terms of getting them to the next tier of that opportunity.

Speaker #6: And so we are investing there and feeling great about what our future looks like . There . Obviously , a massive Tam with some very , very large customers and enterprises .

Speaker #6: You know that that we're working with and that are showing a lot of interest and expansion . And so very , very bullish on enterprise heading into the years to come .

I can add in as well there was a moment in time, our first body camera and policing.

It Didnt hit the product market fit axon pro we got it I got a couple of key customers to prove the concept then axon flex made a much smaller but really it was the introduction of axon body, one that hit law enforcement and began to scale I would say enterprise.

Speaker #6: And that AB mini launch is certainly a moment in time where where we think we'll we'll step up in terms of , you know , getting into the next tier of that opportunity .

Speaker #5: If I could add in as well . There was a moment in time , our first body camera in policing , you know , didn't hit the product market fit .

<unk>.

The existing body cameras are seeing Morris police body cameras, yes, we have the axon body.

Speaker #5: Axon Pro we got it out , got a couple key customers to prove the concept . Then axon Flex made it much smaller .

Workforce, which is really sort of a minor re skin of 83 compared to what we've now done I would say this is the moment, where we think well we know we've got product market fit because we jointly developed this with our key customers. So I think this is a we're really positioned now to have the moment that it takes off and we're seeing by the way to early proof points both.

Speaker #5: But really it was the introduction of Axon Body , one that hit law enforcement and began to scale . I would say enterprise , you know , the the existing body cameras are seen more as police body cameras .

Speaker #5: Yes , we have the axon body workforce , which is really , you know , sort of a minor reskin of AB three compared to what we've now done .

Typically very significant reductions in assaults on staff.

In addition, a powerful anecdotes individual stories are very dangerous people seeing theyre being recorded throwing down whatever they were going to steal and just storming out rather than causing trouble right into that.

Speaker #5: I would say this is the moment where we think, well, we know we've got product-market fit because we jointly developed this with our key customers.

Speaker #5: So I think this is a we're really positioned now to have the moment that it takes off . And we're seeing , by the way , the early proof points both statistically very significant reductions in assaults on staff , addition to powerful anecdotes , individual stories of very dangerous people seeing they're being recorded , throwing down whatever they were going to steal and just storming out rather than causing trouble .

Part of your question about how it directly impacts reducing crime, there's the direct impact of the cameras themselves that Rick was referring to but again, it's in it's about the combination of how the cameras work together with fuses and how the cameras, which can get deploy right into the <unk> of these large retailers and other enterprises and how it works with other partners like or.

Speaker #8: Right .

Speaker #1: And to .

Speaker #6: That .

Speaker #1: To the part of your question about how it directly impacts reducing crime , there's the direct impact of the cameras themselves that Rick was just referring to .

Together with all of their workflows right. So therefore is helping them identify and be aware of key individuals that had been repeat offenders are a part of organized crime groups. If there <unk> can be alerted through those alerts as well as people being.

Speaker #1: But again .

Speaker #11: It's it's .

Speaker #1: About the combination of how the cameras work together .

Speaker #11: With faceoffs .

Speaker #1: And how the cameras , which can get deployed right into the GSoC of these large retailers and other enterprises , and how it works with other partners like horror , together with all of their workflows .

As people escalate situations in stores through the body for its that combination of our pieces of the puzzle uses the body cameras and the rest and then the connection with our partners like or that have enterprises incredibly excited and make that the breakthrough moment for why they want to adopt the whole stack, okay I got it.

Speaker #1: Right . So if aura is helping them identify and be aware of key individuals that have been repeat offenders or a part of organized crime groups , if they're GSoC can be alerted through those alerts as well as people being , you know , as people escalate situations in stores through the body for its that combination of our pieces of the puzzle versus the body cameras and the rest .

Back and add one more thing here's how this ecosystem times together, so you've got body cameras that can reduce the salt in the store and I think we've seen so.

Society, why the experiment with decriminalizing theft was a disaster it led to the hollowing out of some of our best cities as retailer's business models, no longer made sense, they left town with catastrophic consequences.

Speaker #1: And then the connection with our partners like aura that have a incredibly excited and make that the breakthrough moment for why they want to adopt the whole stack .

Speaker #5: Okay , I got to come back and add one more thing . Here's how this ecosystem ties together . So you've got body cameras that can reduce assaults in the store .

The politicians, we talked to you know that I have met in the past two weeks with two prosecutors one and one of the largest districts in America and one in one of the largest districts in Commonwealth country and they both shared with us like how important it is for them to be able to drive down.

Speaker #5: And I think we've seen society wide . The experiment with decriminalizing theft was a disaster . It led to the hollowing out of some of our best cities as retailers .

Speaker #5: Business models no longer made sense . They left town with catastrophic consequences . The politicians we talked to know that I've met in the past two weeks with two prosecutors , 1 in 1 of the largest districts in America and 1 in 1 of the largest districts in a Commonwealth country .

Criminal behavior and retail crime, there, we've got to help reduce the friction.

Because there is both the political will to do it but then how do you actually manage all of this data and get it to the prosecutor in a way that they can handle and where they can make sense of the hours and hours of video. They may get with every case is just one example, rolling out our digital evidence in Scotland, and the tough private in Dundee They saw an 80% reduction in backlog. So we are the only ones who can take this from.

Speaker #5: And they both shared with us how important it is for them to be able to drive down criminal behavior and retail crime that we've got to help reduce the friction , because there's both the political will to do it .

Retailer through the police to the prosecutor in the courts entitled whole system together in a way that will fundamentally make society better and safer.

Speaker #5: But then how do you actually manage all of this data and get it to the prosecutor in a way that they can handle and where they can make sense of the hours and hours of video they may get with every case .

Speaker #5: And just one example , rolling out our digital evidence in Scotland and the test pilot in Dundee , they saw an 80% reduction in court backlog .

Wow that was great. Thank you.

Thanks.

Thanks, Andrew.

Jim fish with Piper Sandler and welcome to the excellent call.

Speaker #5: So we are the only ones who can take this from the retailer through the police to the prosecutor and the courts and tie the whole system together in a way that will fundamentally make society better and safer .

Eric good to be on it.

Thanks for the time Tonight everybody.

Just staying on body camera, where are you guys seeing competitively there, especially post motorola's introduction of their new SPX and how much of the car buying acquisition and broader 911 is a way to push back on Motorola given that LMR angled Rick that you alluded to.

Speaker #11: Wow , that was great . Thank you .

Speaker #5: Thanks .

Speaker #1: Thanks , Andrew . Up next we have Jim Fish at Piper Sandler . And welcome to the call .

Speaker #5: Thanks , Eric .

Speaker #11: Good to be .

Speaker #5: On .

Speaker #11: It . Thanks for the time tonight everybody . Maybe just staying on body camera . What are you guys seeing competitively . They're especially post motorolas introduction of their new SV .

Yes, I'll take that one and nice to meet you. Thanks for joining the call.

We're not.

We're focused on what we're doing at axon with our body camera business Theres a lot of chatter out there in the market people like to talk about us or focused on our customers and we see absolutely no headwinds in that way with any.

Speaker #11: And how much of the carbine acquisition and broader 911 is a way to push back on Motorola , given that LMR angle Rick , that you alluded to .

Speaker #6: Yeah , I'll take that one . And nice to meet you . Thanks for joining the call . We're not we're we're focused on what we're doing at axon with our body camera business .

If any.

Concerns from our customers about our body cameras, we make the best products in the market other companies can pick out little things on the edges, where they think there's some ah ha moment, our customers don't see that and so we're going to keep executing we're going to keep focusing on our customer we're going to keep our innovating our.

Speaker #6: There's a lot of chatter out there in the market . People like to talk about us . We're focused on our customers and we see absolutely no headwinds in that way .

Speaker #6: With any you know , with any other concerns from our customers about our body cameras . We make the best products in the market .

Cells, and we're going to keep delivering world class technology to our customers. The 911 stuff is yet another opportunity to do something better than its being done in the field right now and we're really really looking forward to competing in that space.

Speaker #6: Other companies can pick at little things on the edges where they think, you know, there's some moment our customers don't see that.

Speaker #6: And so we're going to keep executing . We're going to keep focusing on our customer . We're going to keep out innovating ourselves , and we're going to keep delivering world class technology to our customers .

Okay, Brittany knock on what you're off the hook here I guess Q4 guidance is acquiring a revenue acceleration exiting the year, what's giving you confidence in that how are you guys thinking about backlog exiting the year as it looks like you guys continue to build it up relative to revenue that provide that level of confidence.

Speaker #6: The 911 stuff is yet another opportunity to do something better than it's being done in the field right now. And we're really, really looking forward to competing in that space.

Yeah, I mean, we have a lot of confidence I think as Josh said, we are just seeing more momentum than ever in our bookings.

Speaker #11: Britney not going to let you off the hook here . I guess . Q4 guide is is implying a revenue acceleration exiting the year .

Speaker #11: What's confidence in that ? How are you guys thinking about backlog exiting the year ? It looks like you guys continue to build it up relative to revenue .

Speaker #11: you the That provides that level of confidence .

We talked about it a little bit we're expecting a really big bookings quarter in Q4.

Plus we have our recurring software business that is just hitting on all cylinders. So I would say at this point in the year, we have really strong visibility a little bit of the variability is just you know Max and exactly what what box and it gets recognized Gwen.

Speaker #7: Yeah , I mean , we have a lot of confidence . I think as Josh said , we are just seeing more momentum than ever in our bookings .

Speaker #7: We talked about it a little bit . We're expecting a really big bookings quarter in Q4 . Plus we , you know , have our recurring software business that is just hitting on all cylinders .

But really strong visibility I'm, just incredible momentum from our customers and from the deals that we have looking out in Q4.

Speaker #7: So I would say at this point in the year , we have really strong visibility , a little bit of the variability is just , you know , mix and exactly what what books and gets recognized when .

Great. Thanks.

Can I just add one more thing there I think ulta.

Ultimately.

We feel really really good about our organic growth for the next few years and we're excited about what that looks like.

Speaker #7: But really strong visibility and just incredible momentum from our customers and from the deals that we have . Looking at in Q4 .

If we want that to continue for years like five or 10 out into the future. We've got to make some investments to do that in sales and in product and in new markets and in new products and so part of this is like Hey, how do we continue to deliver great results to our investors, we understand the importance of money coming through the bottom line and grow.

Speaker #11: Perfect .

Speaker #10: Thanks .

Speaker #6: And can I just add one more thing there ? I think ultimately , you know , we feel really , really good about our organic growth for the next few years .

Speaker #6: And we're excited about what that looks like . If we want that to continue for years , like five through ten out into the future , we've got to make some investments to do that in sales and in product and in markets and in new products .

On the topline in exciting ways if.

If we sit on our laurels, we could do that pretty easily for the next few years, we're playing the long game here and we want to deliver decades of growth like this and to do that there are times, where we have to make investments to make that happen for the long term and so.

Speaker #6: And so part of this is like , hey , how do we continue to deliver great results to our investors ? We understand the importance of money new coming through to the bottom line and growing the top line .

That's where we are right now.

Speaker #6: And exciting ways . If we sit on our laurels , we could do that pretty easily for the next few years . We're playing the long game here and we want to deliver decades of growth like this .

Makes sense thanks, guys.

Thanks, Jim up next we have John any smaller third.

Great. Thanks, Yeah, Jani symbols on for Willpower Tonight. Thanks for taking the question Rick Josh maybe if I just start with a question on the drone and <unk> was hoping you could provide some color on how conversations are progressing at the state and local level I know you've been meeting with a lot of customers lately, especially at IAC P. So there would be great.

Speaker #6: And to do that , there are times where we have to make investments to make that happen for the long term , and so , you know , that's that's where we are right now .

Speaker #11: Makes sense . Thanks .

Speaker #10: Guys .

Speaker #1: Thanks, Jim. Up next, we have Yanni Somalis at third.

Speaker #9: Great . Thanks .

Speaker #6: Yeah Yanni .

Speaker #12: Smollett's on for willpower tonight . Thanks for taking the question . You know , Rick , Josh , maybe if I just start with the question on drone and Dhfr .

To hear how.

That was received coming out of that event and then also the extent to which there might be growing traction across your broader drones portfolio.

Speaker #12: I was hoping you could provide some color on how conversations are progressing at the state and local level . I know you've been meeting with a lot of customers lately , especially at IACP , so it would be great to hear how how that was received coming out of that event .

For military or defense applications going forward, yes.

Yes, so I'll start with that I will tell you every customer is acutely aware of the threat the drones present going forward.

Drone based violence is the big new threat vector.

Speaker #12: And then also , you know , the extent to which there might be growing traction across your broader drones portfolio for military or defense applications going forward .

It's probably more dangerous, even then gun violence in terms of the propensity for somebody to do a lot of damage quickly.

Speaker #5: Yeah . So I'll start with that . I will tell you , every customer is acutely aware of the threat that drones present going forward .

One of the challenges is it right now in the U S state and local police are not legally authorized to mitigate drones.

Speaker #5: You know , drone based violence is the big new threat vector . It's probably more dangerous even than gun violence in terms of the propensity for somebody to do a lot of damage quickly .

But they are seeing especially with things like the World Cup coming up they've got to start investing now in the infrastructure to be able to track drones right now they can mitigate by going to the pilot, but theres a lot of I would say a momentum building in Congress to give state local police the ability to mitigate drones and look where one bad incident away from that just.

Speaker #5: One of the challenges is that right now, in the U.S., state and local police are not legally authorized to mitigate drones. However, they are seeing, especially with events like the World Cup coming up.

And I hate to be.

Speaker #5: They've got to start investing now in the infrastructure to be able to track drones . Right now , they can mitigate by going to the pilot , but there's a lot of I would say , momentum building in Congress to give state and local police the ability to mitigate drones .

I don't wish for that to happen I hope it never does but I think realistically.

That will happen and then there's going to be a rapid movement, where you're just theres not enough beds to go around to operate the counter drone equipment will need to secure every city every stadium every school fair every public gathering.

Speaker #5: And , look , we're one bad incident away from that . Just and I hate to be , you know , I don't wish for that to happen .

And we think with <unk>, we're just incredibly well positioned for that and then look at it every time, we move into a new space, we do a thoughtful make build by partner analysis and for <unk>. It was just exceedingly clear there was one company that stood heading shoulders out from the crowd and that was <unk> and that's why we've become a significant investment.

Speaker #5: I hope it never does . But I think realistically that will happen . And then there's going to be a rapid movement where you just there's not enough feds to go around to operate the counter .

Speaker #5: Drone equipment . We'll need to secure every city , every stadium , every school fair , every , you know , public gathering .

Speaker #5: And we think with drone , we're just incredibly well positioned for that . And then look , you know , every every time we move into a new space , we do a thoughtful make build , buy partner analysis .

<unk> and we've really chosen that was our D var partner and that is really scaling I mean, the docs the automated robotic docks to be able to deploy.

Speaker #5: And for DHFR, it was just exceedingly clear there was one company that stood head and shoulders out from the crowd, and that was Skydio.

And landed drone and have it recharge on its own with zero human interaction those robotic docs really just started becoming available in the last two quarters and it's scaling rapidly we're seeing a ton of interest in some pretty big deals coming in in the <unk> space.

Speaker #5: And that's why we've become a significant investor in Skydio. We've really chosen them as our partner, and that is really scaling.

Speaker #5: I mean, the docs, the automated robotic docs, to be able to deploy and land a drone and have it on its own with zero human interaction.

And the only thing I'll add is I think it's really important to call out that far in the 911 investments, we're making really go hand in hand, because the more you can shrink the time of benign one one response to get a drone up in the air the better outcome, the customer and the community receives and so.

Speaker #5: Those robotic docs really just started becoming available in the last two quarters , and it's scaling rapidly . We're seeing a ton of interest and some pretty big deals coming in in the BFR space .

While at face value it seemed like on different ends of the of the workflow here. They are very very closely related and ultimately we think our investments and 911.

Speaker #6: And the only thing I'll add is I think it's really important to call out that DFR and the 911 investments we're making really go hand in hand, because the more you can shrink the time of the 911 response to get a drone up in the air, the better outcome the customer and the community receives.

We'll we'll accelerate DSR, <unk> adoption and and lead to far better outcomes in the field, Yes, Let me tell you one more thing actually together on ecosystem today, if you call 911, and a retailer like a Walmart.

Speaker #6: And so these , you know , while at face value , they seem like on different ends of the of the workflow here , they

Speaker #6: are very , very recharge on closely related and ultimately , you know , we think our investments in 911 , you know , will will accelerate DSR or DFR adoption and , and lead to far better outcomes in the field .

People in the store I have no idea you've called 911, they are completely unaware that there might be some incident happening when we tied together prepared car buying fuses.

And our enterprise customers, we can begin to have them collaborate in real time, so that theyre getting alerts as well and being aware hey, if theres a 911 call in our parking lot.

Speaker #5: Yeah . Let me try one one more thing actually together on ecosystem today . If you call 911 in a in a retailer like a Walmart , they the people in the store have no idea .

Speaker #5: You've called 911 . They're completely unaware that there might be some incident happening when we tie together prepared car buying fuses . We and our enterprise customers , we can begin to have them collaborate in real time so that they're getting alerts as well and being aware , hey , if there's a 911 call in our parking lot , you know , we're going to need to engage with that or in the store as well .

We were going to need to engage without her in the store as well. So again this is where each of these pieces all sort of build on each other into one highly integrated nervous system. That's right. Every single conversation is about that triangle of Nine-one-one, VFR and real time crime centers with fuses and vehicle intelligence and the.

<unk>, an interplay of those three things are what lead to solving problems faster and more effectively and delivering the platforms that agencies and communities.

Speaker #5: So again, this is where each of these pieces all sort of build on each other into one highly integrated nervous system.

Speaker #1: That's right . Every single conversation is about that triangle of 911 DFR . And real time crime centers with fuses and vehicle intelligence .

Yeah, good to hear it sounds pretty compelling.

And then Britney was just wondering just switching gears if you could talk about the gross margin outlook from here.

Speaker #1: And the intersection and interplay of those three things are what lead to solving crimes faster and more effectively, and delivering the platforms that agencies and communities need.

And maybe if you could just review the tariff impact that you might be seeing on the gross margins.

On the connected devices side.

Yeah happy to so all of the impact from tariffs was obviously hitting that connected devices.

Speaker #12: Yeah , good to hear . Sounds pretty compelling . And then , you know , Brittany was just wondering , you know , switching gears , if you could talk about the gross margin outlook from here and maybe if you could just review the tariff impact that you might be seeing on the gross margins , on the connected devices side ?

Overall.

The first quarter that we had a full quarter of impact from tariffs. So as we look at the year over year step down that really is attributable to tariffs.

Speaker #7: Yeah, happy to. So all of the impact from tariffs is obviously hitting the connected devices business. Overall, this was the first quarter that we had a full quarter of impact from tariffs.

As long as tariffs stay in place I view that as sort of a one time adjustment for now that's baked into the gross margin obviously as our software business continues to outpace from a growth standpoint, like we talked about that become even a bigger dollars that becomes a smaller and smaller percentage of our overall gross margin I'm sorry as you go.

Speaker #7: So as we look at the year over year , step down . That really is attributable to tariffs . As long as tariffs stay in place I view that as sort of a one time adjustment .

For work from next quarter, you'll go back to just the mix shift in our play between software and connected devices corner to corner. So I would imagine that you now own.

Speaker #7: So now that's baked into the gross margins. Obviously, as our software business continues to outpace from a growth standpoint, like we talked about, that becomes an even bigger dollar amount, which means it becomes a smaller and smaller percentage of our overall gross margin.

For a longer period of time, you'll go back just a little tailwind in the gross margin from the software business.

Speaker #7: And so as you go forward from this quarter , you'll go back to just seeing the mix shift interplay between software and connected devices .

We'll also over time with some tailwind as we told them for new businesses, and we scale them something like our platform sensors, which we're calling out as a headwind to gross margins right now and we'll get back to scale over time that'll end up being neutral. So you get into that product mix well for one quarter step down that you're seeing from tariffs now.

Speaker #7: Quarter to quarter. So I would imagine that over a longer period of time, you'll go back to seeing tailwinds in the gross margin from the software business.

Speaker #7: You know , you'll also , over time , see tailwinds as we take in some new businesses . And we scale them . Something like our platform sensors , which we're calling out as a headwind to gross margins right now .

That'll continue to be baked in for as long as we have tariffs, but no question. If there werent tariffs at higher gross margins and higher adjusted EBITDA for this quarter in Q4, but 1% at the end if that makes sense.

Speaker #7: As we get that to scale over time , that'll end up being neutral . So you get into that product mix . This is the one quarter step down that you're seeing from tariffs .

That helps thank you got.

Got it.

Speaker #7: Now . That'll continue to be baked in for as long as we have tariffs like no question . If there weren't tariffs we would have had higher gross margins and then higher adjusted EBITDA for this quarter .

Thanks, Kelly and actually a turbo Walsh at citizens.

Cool. Thanks, <unk>, thanks for taking the questions Rick if I can just circle back to some of the commentary that you made around preparing in Carmine I understand completely the user persona benefits I'm, just making this process and system better, but it seems like between CAD or legacy systems that are in place it is still.

Speaker #7: And Q4 . But once it's in it's in , if that makes sense .

Speaker #12: Yep . That helps .

Speaker #10: Thank you . Got it .

Speaker #1: Thanks , Johnny . Up next we have Trevor Walsh at Citizens . .

Speaker #9: Cool. Thanks. Hey, thanks.

Speaker #12: For taking .

Speaker #9: The questions , Rick . If I .

So those are still kind of in the mix. So is there a risk from a technology perspective.

Speaker #12: Could just circle back to some of the commentary that you made around prepared and carbine , I understand completely kind of the the user persona benefits of just making this process and system better , but it seems like between cat or legacy systems that are in place , it's still those are still kind of in the mix .

Customers are adding these things into the stack that those things break or just become.

Don't scale or whatever kind of technical kind of element there might be aware that just limits the possibility or like customers need to get rid of those things faster and maybe thats. What you are hoping for I guess, the chemicals, a little bit on how kind of the sort of the I guess, the the parts that aren't doing so well.

Speaker #12: So is there risk from just a technology perspective as they , as customers are adding these things into the stack , that those things break or just become , you know , don't scale or whatever kind of technical kind of element there might be where , you know , that that just limits the possibility or , you know , customers need to get rid of those things faster .

Really affect what you guys want to do there that would be helpful. Yeah. So 911 is the entry portal into.

The police and public safety.

Speaker #12: Maybe that's what you're hoping for . If you could just double click a little bit on how kind of the sort of the , I guess the , the parts that aren't doing so well don't negatively affect what you guys want to do there .

The fact that that historically has come through a landline its definitely now moving the majority of our mobile but its still sort of next Gen. 911 was this government initiative I think it was nextgen in like 1987.

Speaker #12: That would be helpful .

Speaker #5: Yeah . So 911 is the entry portal into , you know , the police . You're public safety . The fact that that historically has come through a landline , it's definitely now moving the majority of mobile .

It's certainly not very nextgen compared to where we're at today and that's where we see a strategy that allows us to build parallel systems that respect the existing infrastructure, but allow us to begin to move in parallel alongside it. So yes, we will integrate with CAD overtime, I think cat is going to become less relevant as AI based systems of Prost.

Speaker #5: But it's still sort of next gen 911 . Was this government initiative . I think it was next gen in like 1987 . It's certainly not very next gen compared to where we're at today .

Messing that information and we will see more of those interconnections I think move back into back end in the cloud now will still likely after the past them into local CAD systems, but much like you know your home telephone you didn't have to throw it out the window. When you got your mobile phone, but over time you know.

Speaker #5: And that's where we see a strategy that allows us to . Build parallel systems that respect the existing infrastructure , but allow us to begin to move in parallel alongside it .

Speaker #5: So yes , we'll integrate with CAD over time . I think CAD is going to become less relevant as AI based systems or processing that information , and we'll see more of those interconnections , I think .

People migrated more and when we look at how much your mobile phone is evolve, whereas your landline.

Speaker #5: Move back end to back end in the cloud . Now , we'll still likely have to pass them into local CAD systems , but much like , you know , your home telephone , you didn't have to throw it out the window when you got your mobile phone .

The last big upgrade Joanne landline got was when the rotary dial went away the seventies when I was growing up but mobile moved really fast and then a lot of people just don't even have you wake up one day anyway, I don't I actually couldn't tell you my home telephone number right now for my landline.

Speaker #5: But over time , you know , people migrated more and more and look at how much your mobile phone has evolved . Where's your landline ?

Probably shouldn't admit that on air but.

Speaker #5: Yeah , the last big upgrade your landline got was when the rotary dial went away . You know , in the 70s when I was growing up .

It's become that irrelevant so.

Yes, I think we I think we've got a strategy that is resilient and that we can build all the critical elements with with infrastructure connections in the cloud that make us less dependent but we will respect those systems that our customers have on prem.

Speaker #5: But mobile moved really fast . And then a lot of people just don't even have you wake up one day and you're like , man , I don't .

Speaker #5: I actually couldn't tell you . My home telephone number right now for my landline . Probably shouldn't admit that on air . But , you know , it's become that irrelevant .

But this is allowing us to build a parallel infrastructure.

Speaker #5: So yeah , I think we I think we've got a strategy that is resilient , that we can build all the critical elements with , with infrastructure , connections in the cloud that make us less dependent .

Theres no dependencies, we really have on some creaky old on Prem thing in order for us to go from color to our TCE to drone on site to the officer through their body Cam Yeah, just to build on that really specifically that's another reason why the combination of prepared in car buying is so helpful. As Josh said at the top.

Speaker #5: But we will respect those systems that our customers have on prem . But this is allowing us to build a parallel infrastructure that's , you know , there's no dependencies .

Hub.

Speaker #5: We really have some creaky old on-prem thing in order for us to go from caller to ARTc to drone on site to the officer through their body cam.

And it looks at the top what prepared is is this this extraordinarily easy to deploy AI overlay that interplay is with what they already have with their existing infrastructure in particular with their existing call taking systems like literally all they have to do is tap and audio feed port off of the existing infrastructure and then.

Speaker #1: Yeah . And just .

Speaker #11: To , to .

Speaker #1: Build on that really specifically , it's another reason why the combination of prepared and Carbine is so helpful . You know , as Josh said , at the top and at the top , you know what prepared is , is it's this extraordinarily easy to deploy AI overlay that interplays with what they already have with their existing infrastructure , in particular with their existing call taking systems , like literally all they have to do is tap an audio feed port off of the existing infrastructure , and then the rest just works .

The rest just works its just SaaS software and so it's very easy to deploy very fast to deploy very very minimal integrations and instantly give us both the piece at the ECC a ton of this acceleration and efficiency value and forwards that data instantly too few first to voice assistant for Max on all of those.

Speaker #1: It's just SaaS software . And so it's very easy to deploy very fast to deploy very , very minimal integrations . And it instantly gives both the PSAP , the IC , a ton of this acceleration and efficiency value .

Things that VFR, and then alongside that you're a car buying which is a totally modern totally cloud based call handling infrastructure system, that's already battle hardened improve them and as an agency is ready to get rid of that old school Big Iron Clunky on Prem call handling system.

Speaker #1: And forwards that data instantly . To cease to voice assistant for max on all of those things to dhfr and then alongside that you have carbine , which is a totally modern , totally cloud based call handling infrastructure system that's already battle hardened and proven .

They can plot that in and having a massive cloud eight upgrades similar to as Rick said before the original journeys evidence dot com and so we have both flavors of that and agencies can move at their pace and they can work with us every step of the way as they move through that get instant value from prepared and went in and out of there.

Speaker #1: And as an agency is ready to get rid of that old school big iron , clunky on prem call handling system , they can plop that in and have a massive cloud based upgrade similar to , as Rick said before , the original journey to Evidence.com .

Already get a complete transformation to the cloud with carbon.

Awesome.

Thanks, Paul.

Speaker #1: And so we have both flavors of that, and agencies can move at their pace. They can work with us every step of the way as they move through that and get instant value from Prepared.

Maybe one quick follow up for Britney.

Or Josh feel feel free to weigh in as well just given.

International momentum sounds great corrections deals also great I know those are two kind of big priority areas, but.

Speaker #1: And when, as they're ready, get a complete transformation of the cloud with Carbine.

Federal deals have been as well and kind of progress there I'm just curious if the guidance is influenced at all by the shutdown or even kind of how youre thinking about 2006 kind of where that's where that's looking on that particular area of the business mix, Yes, maybe I'll take guidance and then Josh can talk to federal more broadly.

Speaker #12: Awesome . Thanks both . Maybe one quick follow up for Brittany or Josh . Feel free to weigh in as well . Just given I international momentum .

Speaker #12: Sounds great . Corrections deals also great . I know those are two kind of big priority areas , but federal deals have been as well and kind of progress there .

<unk> talked at the beginning of the year about how we really weren't betting on federal for this year and then it wasn't a big part of you know our our guidance or anything we were counting on I think that continues to be true.

Speaker #12: I'm just curious if the guidance is influenced at all by the shutdown or even kind of how you're thinking about 26 , kind of where that's where that's looking on that particular area of the business .

So there is actually probably this I'll hand over to Jos but there's probably more upside from federal at this point then there isn't any risk from it yes.

Speaker #12: Thanks .

Speaker #7: Yeah , maybe I'll take guidance . And then Josh can talk to federal more broadly . We talked at the beginning of the year about how we really weren't betting on federal for this year , and that it wasn't a big part of , you know , our our guidance or anything .

I would just say weirdly given everything going on it's strange to say, but we expect Q4 to be our best federal quarter of the year and so.

Speaker #7: We were counting on . I think that continues to be true . So there's actually probably , you know , this all hand over to Josh , but there's probably more upside from federal at this point than there is any risk from .

A lot of that is driven by interest in D drone going into major events next year like the World Cup and otherwise.

But certainly even as the shutdown has been going on.

Speaker #10: It .

Speaker #6: Yeah , I'd just say weirdly , given everything going on , it's strange to say , but we expect Q4 to be our best federal quarter of the year .

Significant numbers of personnel are still working through some of these opportunities with us and we.

Speaker #6: And so a lot of that's driven by interest in drones going into major events next year, like the World Cup and otherwise.

We see some upside there for Q4, that's frankly.

Frankly exciting.

Thank you.

Thanks Trevor.

Speaker #6: But certainly even as the shutdown has been going on , you know , significant numbers of personnel are still working through some of these opportunities with us .

Andrew Spinola UBS.

Thanks, Eric.

Strong quarter in international with the U S business day sales again this quarter.

Speaker #6: And we see some upside there for Q4 . That's that's frankly exciting .

Despite really strong software and services growth re accelerating to 41% just wondering if you could provide a little color on the dynamic in the U S business.

Speaker #12: Cool .

Speaker #10: Thank you .

Speaker #1: Thanks , Trevor . Up next , we have Andrew Spinola at UBS .

The U S business is accelerating.

Speaker #9: Thanks , Eric . .

Speaker #13: Strong quarter in international . But the US business DSL again this quarter despite a really strong software and services growth , accelerating 41% .

On the bookings side, what about the revenue side.

Well look the revenues just a function of how we recognize software.

Bookings is the indicator of what the future of the domestic business looks like and not only is it accelerating its actually.

Speaker #13: Just wondering if you could provide a little color on the dynamic in US business .

Speaker #6: The US business is accelerating .

It's it's beyond what we planned for this year frankly, and so we're really proud of the work that's being done in domestic right. Now we think it will shine through in a major way in Q4 and.

Speaker #13: On the booking side , what about the revenue side ?

Speaker #6: Well, look, the revenue is just a function of how we recognize software bookings, which is the indicator of what the future of the domestic business looks like.

When I when I sit thinking about the business.

Speaker #6: And not only is it accelerating , it's actually it's it's beyond what we planned for this year , frankly . And so we're really proud of the work that's being done in domestic right now .

One thing that I do not worry about it all as our execution in state and local I think it's just going to be.

A monster year for that team and it's going to continue into next year.

Speaker #6: We think it will shine through in a major way in Q4 . And when I when I sit thinking about the business , one thing that I do not worry about at all is our execution in state and local .

So it's more timing youre, saying just on revenue rec.

Look Q4 has always been our biggest quarter for domestic.

The deals are getting bigger and bigger and so sometimes you know.

Speaker #6: I think it's just going to be a monster year for that team, and it's going to continue into next year.

It takes a little extra time to close opportunities like that we had an awesome October.

Speaker #13: So it's more time than you're saying . Just on revenue .

I'm feeling I'm feeling great about.

Speaker #6: Rec yeah , I mean , look , Q4 is always been our biggest quarter for for domestic . The deals are getting bigger and bigger .

Bookings and revenue in the domestic segment.

No concerns there.

Speaker #6: And so sometimes , you know , it takes a little extra time to to close opportunities like that . We had an awesome October .

I just wanted to ask one more Oh sure I was just going to add though but nothing fundamental there is a lot of timing that goes into that quarter to quarter and so you can have lumpy deals and international you can have lumpy deals in different segments like I I would look at it last quarter to quarter and more over the course of the year until Josh is playing out over the course of.

Speaker #6: I'm feeling great about bookings and revenue in the domestic segment. I again have no concerns there.

Speaker #10: I just .

Speaker #13: Want to ask one more . Oh sure .

The ear and not really comes through in bookings, we continue to see really incredible strength in the domestic business.

Speaker #7: I was just going to echo like nothing fundamental . There's a lot of timing that goes into that quarter to quarter . And so , you know , you can have lumpy deals in international , you can have lumpy deals in different segments , like I would look at it less quarter to quarter and more over the course of a year .

The second question I wanted to ask you is just on the bookings piece.

Anecdotally I've seen.

A shift towards more and more 10 year contracts with your clients, which I think.

Speaker #7: And to Josh's point , over the course of a year . And that really comes through in bookings . We continue to see really incredible strength in the domestic business .

Unquestionably a good thing, but I'm thinking about it is there any color you can give us around that maybe take rates how big the shift has been from five to 10 years, because I'm just trying to think as we exit the year and looking at how twenty-five perform begins the year end contracted backlog in 'twenty, four and trying to think about how to think.

Speaker #13: The second question I wanted to ask is just on the bookings piece . You know , anecdotally , I've seen a shift towards more and more ten year contracts with your clients , which I think you know , unquestionably a good thing .

Speaker #13: But I'm thinking about is there any color you can give us around that, maybe take rates? How big has the shift been from 5 to 10 years?

About 26, so I'm just wondering how big of a transitioning seeding towards those 10 year contracts yeah, Andrew It's a great. It's a great question, we look at our business both as normalized bookings, which are we normalize everything to five years, and then total bookings and we're not going to comment much on.

Speaker #13: Because I'm I'm just trying to think as we exit the year and looking at how 25 performed against the year end contracted backlog in 24 , I'm trying to think about how to think about 26 .

The 10 year deals in terms of.

Speaker #13: So I'm just wondering how big of a transition are you seeing towards those ten year contracts ?

The waiting there, but in the five year deals, we see the growth rate in <unk>.

Speaker #6: Yeah , Andrew , it's a great it's a great question . We look at our business both as normalized bookings , which are we normalize everything to five years .

<unk> and normalized bookings, surpassing last year's growth rate and so even the five year bookings number is accelerating certainly we're closing more 10 year deals and like you said, we view that as a good thing, but we certainly don't want there to be any misunderstanding, even when you normalize that the growth is accelerating in bookings if I could actually give you won't.

Speaker #6: And then total bookings . And we're not going to comment much on , on on the ten year deals in terms of , you know , the , the weighting there .

Speaker #6: But in , in the five year deals , we see the growth rate in five in normalized bookings surpassing last year's growth rate .

Qualitative takeaway I've got.

Speaker #6: And so even the five year bookings number is accelerating . Certainly we're closing more ten year deals . And like you said , we view that as a good thing .

Maybe five six years ago, we were having some conversations with customers about them, having some concerned about share of wallet like hey are we too dependent like on Exxon, just because youre, taking up a growing portion of our tech budget. Those conversations have largely disappeared what I'm hearing from customers now as you know what when we do.

Speaker #6: But we certainly don't want there to be any misunderstanding , even when you normalize it , the growth is accelerating in bookings .

Speaker #5: If I could actually give you one qualitative takeaway , I've got maybe five , six years ago we were having some conversations with customers about them having some concern about share of wallet , like , hey , are we to dependent like on axon just because you're taking up a growing portion of our tech budget ?

Deploy something with axon, whether its body cameras or records. It just works like you guys hire great people you empower them to get the customer supported we do not like customers fail.

And we're hearing more and more it's peaking we would love to just have axon takeover all detect for our agency because you are a trusted partner, we know what's going to work and I think those 10 year deals are just it's it's.

Speaker #5: Those conversations have largely disappeared . What I'm hearing from customers now is , you know what ? When we deploy something with axon , whether it's body cameras or records , it just works like you guys hire great people , you empower them to get the customer supported .

As a function of that where customers like you know what we believe in this relationship and we wanted to do this for the long term and we're all in together and we're willing to do it over a long time horizons.

Speaker #5: We do not let customers fail , and we're hearing more and more like , hey , can we would love to just have axon take over all the tech for our agency because you're a trusted partner , we know it's going to work .

You should know by the way, it's Super encumbered on us to never let them down the pressure on us to continue to execute only continues to grow as that trust grows. It's so easy to lose trust to take decades to build it and so you'll see us defend it with every fiber of our effort.

Speaker #5: And I think those ten year deals are just it's it's a function of that where customers are like , you know what we we believe in this relationship and we want to do this for the long term .

Speaker #5: And , you know , we're all in together and we're willing to do it over a long time . Horizons , by the way , it's a super incumbent on us to never let them down .

No doubt thank you.

Thanks, Andrew Thanks, Andrew we'll try to squeeze two more people in here Jordan at Bank of America. Your next.

Speaker #5: The pressure on us to continue to execute only continues to grow as that trust grows . It's it's so easy to lose trust .

Awesome, Thanks for taking the question.

Just two quick ones.

Speaker #5: It takes you decades to build it . And so you'll see us defend it with every fiber of our effort .

You guys have a lot of irons in the fire and new product development investments for growth.

Speaker #13: No doubt .

Speaker #10: Thank you .

The company is required.

Speaker #6: Thanks , Andrew .

Speaker #10: Thanks , Andrew .

How should we think about margin mix going forward and then to Greg for the time that you spend in Europe.

Speaker #1: We'll try to squeeze two more people in here. Jordan at Bank of America, you're next.

Speaker #14: Awesome . Thanks for taking the question . Just two quick ones . You guys have a lot of irons in the fire with new product development , investing for growth in the companies you've acquired .

What are the timing items that youre seeing on the drone sales NATO countries.

I can I can start with the margin piece, and then hand it over to Rick.

Speaker #14: How should we think about margin mix going forward ? And then two , brick for the time that you spent in Europe , what are the timing items that you're seeing on drone sales to NATO countries ?

Well I think from a like from a gross margin standpoint, I think we talked about it a bit so that will really just a product mix as tailwind from software and then you'll have the mix between software and hardware if youre thinking about adjusted EBITDA margins, well, we worked really hard to balance the impact of tariffs and all of those again.

Speaker #7: I can I can start with the margin piece and then hand it over to Rick . Look , I think from a from a gross margin standpoint , I think we talked about it a bit .

On these segments, we wanted to invest with our commitment on the 25% adjusted EBITDA margin for the year. So we're really happy and proud that we're delivering on our commitments for the year and managed to balance you know all of the new things that we wanted to do for the long term and tariffs coming through and that will just be what we continue to do it we're always going to take the law.

Speaker #7: So that'll really just be product mix . There's tailwinds from software . And then you'll have mix between software and hardware . If you're thinking about adjusted EBITDA margins look we worked really hard to balance the impact of tariffs and all of those .

Speaker #7: Additional new segments . We wanted to invest in with our commitment on the 25% adjusted EBITDA margin for the year . So we're really happy and proud that we're delivering on our commitment for the year and managed to balance all of the new things that we want to go do for the long term and tariffs coming through , and that'll just be what we continue to do .

In terms of or the multi year view.

Wanted to continue making this an incredible business that compounds and so we're going to make.

Our allowable decision you know almost every quarter about where we need to be investing in what we needed to be doing for the long term and set us up and you all up really well for that I think if you compare to the rule of 40 anytime we're delivering like 55% plus against that rule like we're doing pretty happy with how we're balancing.

Speaker #7: We're always going to take the long term view . The multi-year view . We want to continue making this an incredible business that compounds .

Speaker #7: And so we're going to make the right ROI-based decisions, you know, in any given quarter about where we need to be investing and what we need to be doing for the long term to set us up and you all up really well for that.

I think the margin versus growth profile, and we're going to continue to look at that in the future and I will just add before I hand, it over to Rick Brendan and I are very fiercely align that look when we spend money as a company, we're going to get an ROI on it and so I don't want anyone to be under the illusion like this is going to be a runaway train of inverse.

Speaker #7: I think if you compare to the rule of 40 , anytime we're delivering like 55% plus against that rule , like we're doing pretty happy with how we're balancing the margin versus growth profile , and we're going to continue to look at that in the future .

<unk> like we're going to make smart investments and those investments are going to pay off and we understand the need to balance revenue growth and profitability.

Speaker #6: And I'll just add before we hand it over to Rick , Brittany and I are very fiercely aligned that , you know , look , when we spend money as a company , we're going to get an ROI on it .

And we're prepared to.

It would be responsible there so.

Speaker #6: And so I don't want anyone to be under the illusion that this is going to be a runaway train of investment, like we're going to make smart investments.

We're excited about the ability to to be able to thoughtfully invest in some of our new opportunities across markets and thoughtfully staff all of these new R&D opportunities we have but.

Speaker #6: And those investments are going to pay off. We understand the need to balance revenue growth and profitability, and we are prepared to be responsible there.

Make no mistake profitability is still important to this company.

Speaker #6: So , you know , we're excited about the ability to to be able to thoughtfully invest in some of our new opportunities across markets and thoughtfully staff all of these new R&D opportunities .

Yes, and by the way I would also add if you look at the types of investments or acquisitions, we're making we're not bang mature cash cow businesses.

Those tend to come with a lot of tech that we are a disruptor and when we identify like we looked at that coming out of our strategy meeting earlier. This year one of the takeaways I sat with the team and said look with the AI sort of explosion. That's happening now is the time for us to make our move into AI voice.

Speaker #6: We have. But make no mistake, profitability is still important to this company.

Speaker #5: Yeah. And by the way, I would also add that if you look at the types of investments or acquisitions we're making, we're not buying mature cash cow businesses.

Speaker #5: Those tend to come with a lot of tech debt . We are a disruptor . And when we identify , like we looked at the coming out of our strategy meeting earlier this year , one of the takeaways I sat with the team and said , look , with the AI sort of explosion that's happening , now is the time for us to make our move into AI voice in particular .

In particular on the 911 call space and we did a hard look at should we build this ourselves or not and as we looked around we actually found.

Two very talented teams that we're relatively early with very different sort of product offerings. One that prepare that goes wide quickly and easily and another one that goes deep and it really sets the foundation for the long term and so we said look this was on our roadmap.

Speaker #5: On the 911 call space . And we did a hard look at should we build this ourselves or not ? And as we looked around , we actually found two very talented teams that were relatively early with very different sort of product offerings , one that prepared that goes wide quickly and easily , and another one that goes deep and really sets the foundation for the long term .

The decision was we found two awesome teams. They are both pretty early in their growth cycle, but we think they're at the perfect time of the maturity of their platforms. They are great teams built on modern tech.

What a great way to integrate that into our ecosystem. It's not like we're again buying something thats mature, we're going to rationalize sales teams and try to cut our way to profitability. We think this is what makes our ecosystem, so sticky and so valuable over the long term.

Speaker #5: And so we said , look , this was on our roadmap . The decision was we found two awesome teams . They're both pretty early in their growth cycle , but we think they're at the perfect time of the maturity of their platforms .

Speaker #5: Their great teams built on modern tech . You know what a great way to integrate that into our ecosystem . It's not like we're again , buying something that's mature where we're going to rationalize sales teams and try to cut our way to profitability , but we think this is what makes our ecosystem so sticky and so valuable over the long term .

And Jordan you asked about Deidre and I will just quickly answer that so we can get to one more question look I think the drone is actually the most consistent product we have across federal state and local and international we're not going to go into market by market and NATO on the call, but let's say across those three markets. We are seeing real demand for D drone.

And actually the one that's maybe taken the longest to materialize as U S state and local just based on some of the.

Regulatory issues there right now in terms of mitigating drones, but theres a lot of pent up demand there and while we're waiting for.

Some of those things to take shape.

It's a great contributor to both our federal and international businesses and there is a lot of demand across those segments for it. So I think the the growth trajectory of D drone in and of itself across markets is something that we're excited to see play out.

Awesome. Thank you.

Thanks Jordan.

We will take the last question from Josh Reilly that need them.

Yeah I'll just ask one quick question here I think thesis has about 200 customers correct me, if I'm wrong on that front and Theres roughly 12000 agencies in the U S. Do you think that <unk> programs or some other catalysts is out there, which could drive much higher penetration for users over the next few years or is it more of a natural kind of.

Pipeline building process that you've kind of just executed excellently over the last few years and then one question I get to what that is is is our real time crime center relevant for all 12000 agencies in the U S or is it really just some portion of that mix ultimately that is relevant from the Tam.

You want to take that Josh go ahead, Jeff.

I mean, I think the simple answer is as absolutely every single agency of all size.

Should I think over time will have broadly the notion of real time crime center that doesn't always mean, a big room with giant monitors in it that's the beauty of SaaS software in the cloud as it can be the app on your phone it could be the MTT in your car et cetera, but the notion of having a single pane of glass to aggregate all of the signals.

Whether it's 911 calls whether its 50 V cameras, whether its body cameras drones, deidre et cetera every agency needs that for situational awareness and the demand both in domestic law enforcement and an enterprise is just staggering and I think we're as Britney said earlier, we are extraordinarily excited about the growth.

And then also as a interim step towards that we also already this year migrated and smoothly transition almost every single customer that had previously been doing live streaming on our body cameras and what we used to call respond onto fuses. So every single one of those customers is already now using fuses for there.

Body camera live streaming even if they haven't yet expanded to also connecting CCTV cameras and the rest and so all of that motion is comprehensive and high growth.

Yeah, I think a few such as like the more hardware inputs, we have in the market. The Morpheus. This adoption will grow cross body cameras LPR D F R CCTV et cetera.

Basically I think that 200 is our data I don't think we've updated it for maybe working that are updating it but I would imagine that it is bigger than that now.

Awesome. Thank you guys.

Thanks, Josh Alright, well ill kick it to Rick to close this out.

Awesome. So as we look back with three quarters into the year I couldnt be more proud of the team in terms of the financial results.

Really beat our internal expectations I'm proud of the organic work our teams have been doing products like let me find here again.

W. Many outpost in light posts, we didn't really spend much time talking about that that's a huge.

Potential market for us building on our acquisitions, a few system dethrone and now the new acquisitions.

Prepared in Carmine and then that all leverages, our internal and organic growth of Oliver AI Arab plan offerings. So I'm just delighted that we are executing boat I think world class on our organic programs and Henrik will and his team has done just a masterful job from corporate development to really turn on partnerships and acquisitions.

<unk> to really build out this ecosystem in a way that.

What really matters is do we give our customers well.

Class superpowers.

With Jeff and I were talking about this remember with taxi dispatch used to be life right. You would call an interim person will be looking at a map to figure out where theres a taxi.

That all changed with Uber now I'm not saying they just give you the same kind of change that I think they are given when you are in a crisis youre going to need human beings to help you through that but theres huge tech improvements that are going to happen and we think we're so well positioned to.

To continue to be that tech platform that our partners can work across all of the things that they need to do and not just within an agency, but now reaching out to enterprise users, who then have their security teams that have to interact with customers. But then we're not finding new productivity use cases that are maybe even not even security related for our audio video and cloud.

And AI platforms. So just incredibly exciting time to be where we are I think our team is probably doing as good a job as I've seen of any company turning the AI hype into real valuable products for customers and real repeatable scalable profitable revenue for our investors.

So Matt.

We're going into the holidays on fire and excited and I cant wait I hope you all have a wonderful holiday season, and we will see you in the new year and be ready to update you on the next leg of our growth.