Now, of course, I’m doing the imaginary end state of putting people gently to sleep. But there are steps we can begin to think about being much more precise in ways that are certainly causing less collateral damage and less lethality. And those are problems that get us really excited, because I think we’re seeing today’s technology puts people in unwinnable situations with catastrophic outcomes. And we think, you know, us and other technologists need to give warfighters and police and everybody better tools to be able to do the legitimate jobs that governments need to do to protect their people without such, you know, technology just requires inflicting a lot of death.
Joseph Cardoso: No, makes sense. Rick, I appreciate all the color, guys. Thank you.
Andrea James: Thank you. Next, Will Power at Baird. You are up, Will.
Will Power: All right, great, thanks. Yes, I want to shift gears to international, another area where you saw nice growth in the quarter. It’d be great just to, you know, have you kind of unpacked, you know, what’s driving that. And I’d be interested to know, is body camera, you know, four starting to help lead that? Is TASER 10 starting to lead that? What are the adoption trends look like there across the new products? And what are you kind of leading with in any particular geographic areas that are standing out for you?
Josh Isner: Sure. Nice to see you, Will. And thanks for the question. I would say, it’s — there’s a couple kind of different threads to the story here. The first one is that in our Tier 1 markets, which we talk about a lot, the U.K., Canada and Australia, those markets were just seeing wider adoption of the Axon network. So it’s not only about TASERs and body cams and Dems, it’s about our DEMS, DEMS add-ons, and it’s about Axon Fleet and Axon Interview Room and moving toward Axon Records. So we’re really excited about just the proliferation of our products into those markets that mirror the U.S. most similarly. And then we’ve got, you know, essentially a number of other markets that are starting to adopt one Axon product for the first time.
A lot of the momentum has been on the TASER side, but more recently, we’re actually starting to see some really encouraging signs in a few European markets adopting the cloud for the first time. So the growth of our international business will really be driven by continued execution in the Tier 1 markets, but starting to see more, you know, historically, you know, rest of world markets start to look a lot more like those markets where, you know, they’re adopting cloud, they’re adopting TASER, they’re using DEMS, they value body cameras and other, you know, wearables and camera technology. And just the combination of those things is really going to provide that, you know, foundation of growth for the international business. I still believe, you know, it’s very possible, you know, over the next five to seven years that our international business could be rivaling our U.S. business in terms of bookings.
And, you know, once we get to that point, feel really good about the revenue catching up over time. So that’s really our focus right now, Will.
Rick Smith: Hey, Josh. One thing I’d like to add there is, it’s sort of fun to watch the company develop where there’s some really healthy internal competition. Our software started out really as an enabler for body cameras. And I remember, we got — it’s maybe five or six years ago, there was a rallying cry, like, we need our software to stand on its own. It’s best in class. And so the country of Scotland, basically their biggest move with us was not even with body cameras. It was digital evidence management for their entire ecosystem. And they’re not really even using our body cameras at scale. So each area of the business, it all works better together. But we’re now seeing the level of maturity across each of the subsegments to where they’re winning best in class on their own. And that gives us multiple ways to try to enter any new market.
Will Power: If I can maybe just follow up quickly. You know, international, you know, has been lumpier generally, I think, for you, all over a period of years, and yet it sounds like for your comments, you’re seeing, you know, broader traction across a broader, you know, set of products. But how are you thinking about the broader pipeline internationally versus maybe where you were one or two years ago? That might provide confidence that this could be a more sustainable, you know, area of growth above the corporate average.
Josh Isner: Sure, yes. Our Head of International Sales, named Chris Kirby, is doing a really good job managing the team toward the out-year of pipeline. So the focus has really evolved from like, hey, what can we capture this quarter, this year, to how can we do that and build a pipeline three to four times the size of the goal next year to just make sure that there’s a little more consistency there. So, you know, there’ll always be some lumpiness, especially in years where we feel like we’ve got a lot of TASER momentum because of just the nature of the revenue recognition on TASER versus, you know, the SaaS products. And so, you know, if — you know, if large international police forces are buying TASERs, you’ll see some of those kind of lumpy one-time revenue events. But over the long term, you know, I think that’s — we’re already starting to see that kind of balance out and that’s, you know, buoyed by a foundation of video bookings and more video adoption.
Will Power: Thank you.
Andrea James: Mike Ng at Goldman Sachs. You’re up next.
Mike Ng: Hey, good afternoon. Thank you very much for the question. Mine is just on Axon cloud and services. So it seems like we’ve seen two consecutive quarters of greater than $15 million quarter-on-quarter revenue growth. I was just wondering if you could expand a little bit about the key drivers of the strength. I know in the letter, you know, you talked a little bit about, you know, moving more towards premium software bundles, the growing install base, just any additional color that you could provide there would be great. And then is that a good way to think about Axon cloud and services growth going forward, kind of this teen sequential growth? Thank you.
Josh Isner: Sure. Yes, We’re — Mike, we’re really glad you asked that question because, you know, that’s one of the things we’re most proud of here to see in the results is just this, you know, excitement around the Axon cloud suite of products. And, you know, the story here has been just multiple years of investment into new features, software add-ons, new enterprise software products, just finding product market fit and being rapidly adopted by our customer base. And ultimately, you know, more and more customers are buying our premium offerings, starting with the Officer Safety Plan and then going up to the Plus version of that and then the Premium version of that. And we’ve seen that the last couple of years, but now it’s really starting to flow through into the revenue and the results.
