The paragraph introduces the earnings call for Axon and mentions the release of a shareholder letter. It also states that forward-looking statements will be made and discusses the use of non-GAAP financial measures. A video is played to give a closer look at the business and the CEO, Rick Smith, welcomes everyone to the call. He explains that the video showcases the company's moonshot and the emotions that their customers face.

The company is dedicated to making complex situations safer by constantly innovating and using technology to prevent violence. They have made progress in adding warning sounds and a "watch me" button to their products, as well as introducing individually targeted probes and real-time communication capabilities. They are also working on higher level challenges such as improving decision making and reducing paperwork for police forces. The company is also exploring diverse areas such as robotic security, Generative AI, and virtual reality.

The speaker reflects on the impact of their company's technology, particularly TASER devices and body cameras, on improving outcomes in law enforcement. They emphasize the importance of customer feedback in driving their growth and success, and highlight the collaboration and teamwork within their company and with partners like Fusus.

The CEO discusses their partnership with Fusus and their plans to take their real-time operations to the next level. They also mention their focus on encouraging their employees to be the best versions of themselves and challenge each other, as well as their plans to invest in a new headquarters. However, they are facing challenges with their current location and are exploring other options.

The company is still in the process of making decisions and will update stakeholders as progress is made. The team is focused on execution and has added new members to help with this. The company has seen strong revenue growth and has promising opportunities ahead, including new products and acquisitions. The company's main focus is on delivering a technology ecosystem for public safety globally, which will drive growth through new product introductions and added value for existing customers.

Axon is expanding into new customer verticals, such as federal and international governments, justice, and corrections, as well as the enterprise space. They have seen record federal bookings and strong pipeline for their new Axon Body Workforce camera. The company prides itself on its ability to innovate, with a strong leadership team and partnerships with other companies. The TASER 10 and Axon Body 4 product lines have been successful, with high order rates and shipments.

In 2023, the company saw significant growth in revenue and profitability, with a 31% year-over-year increase and a 21% adjusted EBITDA margin. This was driven by strong performance in all segments of the business and opportunities for expansion in federal, international, and enterprise markets. The company plans to continue investing in R&D to support future growth, particularly in areas such as Axon Air and new software capabilities.

In this paragraph, the speaker discusses the company's balance between investing for the future and increasing profitability. They mention their investments in expanding sales and marketing teams, improving technology capabilities, and strengthening financials. The company expects strong revenue growth for 2024, driven by increased visibility and demand for their products. They also expect a 22% adjusted EBITDA margin and are on track to exceed their 2025 revenue target and meet their adjusted EBITDA margin target. The company plans to maintain a 20% annual revenue growth rate and a 25% adjusted EBITDA margin in the future.

The company is confident in their long-term growth rate and believes it strikes a balance between investing in the business and generating profitability. They are also excited about potential acquisitions and are targeting a 60% free cash flow conversion and 3% annual dilution from stock compensation. They are looking forward to another successful year and are open to questions. The first question is about the TAM expansion, specifically the Axon Body 4 Workforce component and its adoption rate. The company believes this opportunity will contribute to their growth and compares it to the adoption rate of body cameras in law enforcement.

The company's Axon Body Workforce camera will be included in the enterprise section of their Total Addressable Market (TAM). The company is focused on making their early customers successful with this product and building from there. They believe the future is bright in the enterprise sector and have seen positive results in bookings. The product was developed based on feedback from customers in the retail and healthcare industries. The company has announced Fairview Health as an early customer and is looking to expand into the retail and nursing markets. The company has given enterprise a $15 billion TAM and is confident in its potential for growth.

Joe Cardoso from JPMorgan asks about the margins for TASER 10 and how they will progress in the future. Brittany Bagley explains that there was a one-time manufacturing issue in Q4 that affected margins, but without that, they would be stable. She also mentions that as TASER 10 becomes more prominent, they expect margins to improve due to automation and cost-down initiatives. Rick Smith adds that the issue was with TASER 7, not TASER 10, and led to a warranty reserve.

The speaker discusses the impact of the Fusus and Sky-Hero acquisitions on the company's ability to achieve its long-term vision and cross-sell products. They do not provide specific financial details but mention the potential for synergies from these acquisitions.

Brittany Bagley and Rick Smith are discussing the recent acquisitions made by their company. They emphasize that these acquisitions were primarily for the product, team, and market opportunities they bring, rather than for synergies. However, they do see potential benefits in terms of access to customers, channels, and infrastructure. They also mention that the acquisitions are highly strategic, with Fusus bringing a unique integration with various cameras and sensors. They believe this will expand the utility of their ecosystem for customers.

Sky-Hero is a leading tactical drone maker used by special forces and SWAT teams. The company believes that drones and robotics can play a crucial role in eradicating violence from society and could have a significant impact on both society and revenue in the long-term. They expect this to be a major driver of growth in the next 10 years, particularly in the private security sector. The company also expects software to be a key driver of growth in 2024, with expectations for growth across different components such as evidence, records, and dispatch varying depending on the market segment.

The company is focused on selling their officer safety plan and bundled enterprise software to state and local governments, while internationally they are focused on getting customers on the cloud for the first time. In the enterprise and federal segments, they offer tailor-made software offerings. The goal is to provide highly valuable and useful software to customers that will lead to high ROI. T10 and software are expected to drive gross margins, but all segments are performing well and will contribute to revenue next year.

Josh Isner, a representative for the company, says that both existing customers and new markets are interested in upgrading to the new TASER 10. This interest is driven by the potential for early upgrades and the belief that the T10 will open new customer markets. The VR training program is also playing a role in driving customer interest, with the company working to build more training scenarios to simulate real-life situations. The goal is to improve training and safety outcomes in the field.

The paragraph discusses the increase in future contracted revenue for the company, which was driven by a record quarter of $1 billion in bookings. The company is excited about this trend and aims to outperform it in the future. The percentage of revenue expected to be recognized in the next 12 months is 15-25%.

The speaker is discussing the acquisition of Fusus and whether it will require additional investment to drive customer adoption. They mention that the product is ready to go for the customer base, but also note that there may be some incremental investment needed. They also mention that Fusus is already a strong partner and the product is ready to be used in the US and internationally.

The speaker discusses the success of their new CCTV camera partnership and how it is a key part of their real-time operations strategy. They aim to provide an open ecosystem to help agencies with the entire lifecycle of an incident and win more sensors and communication moments. They also mention the benefits of TASER 10 automation on unit growth and discuss the international market and trends, mentioning strong bookings and potential revenue from the previous year.

Josh Isner, CEO of the company, discusses their record-breaking quarter in terms of bookings and revenue. He explains that revenue recognition may fluctuate due to factors such as country-specific approvals and longer lead times for video implementations. However, as long as bookings continue to drive, the revenue will eventually add up and contribute to EBITDA. Isner also mentions the team's efforts in building a stronger presence in continental Europe and their positive outlook for the future of international sales. He acknowledges that there may be some ups and downs in revenue recognition throughout the year. The company also spent a lot of time on their technology, as mentioned in their recent release.

During a Q&A session, the company discusses their strategy for growing their corrections segment, including investments in tasers, body cams, Fusus, drones, and VR training. They believe there is a lot of potential for growth in federal and international corrections markets. They also mention that the drone business may not contribute much this year and provide an update on the integration of Sky-Hero. There is also a question about the timeline for the company's headquarters expansion decision.

Rick Smith discusses the potential for drones to be used as first responders, but notes that there are currently some barriers to this becoming a widespread practice. He mentions the need for more clarity from the FAA and the use of Dedrone technology to track and counter drones.

The company is seeing exponential growth in drone detection and tracking technology, particularly in Ukraine where they are being used for security purposes. They have also acquired Sky-Hero, a company that specializes in indoor drone technology, but are currently facing challenges in obtaining FCC approval for their products. However, the company believes that the acquisition will lead to transformative capabilities and they are working to improve compliance and innovation within the team.

The speaker discusses the success of a small team in building a profitable drone business and the potential for future innovations in both indoor and outdoor drone use. They also mention a hybrid approach being developed by a partner company and the impact of shifting political dynamics between the US and China on the drone market.

The company is seeing competition from up and coming drone companies, such as Skydio and Fotokite. They believe that these new players will lead to significant growth in the market in the next few years. They also hope to make a decision on their new headquarters by the summer. In terms of their software offerings, they expect DEMS to continue growing steadily, while productivity software is seen as a major opportunity for growth in 2024.

The company has found product market fit for their new product and is receiving positive feedback from customers. They plan to expand their deployment and are excited about the potential for their live streaming and real-time products. The company is also focused on increasing productivity for officers by saving time and automating tasks such as transcription.

The company is seeing increasing adoption of its technology and is planning to announce new features using AI. Over 100 agencies are now using Axon records, and the company is excited about its momentum and growth. The future contracted revenue is expected to increase by 15-25%, with the variable being the average contract length and the number of TAP hardware upgrades shipped. The last question from an analyst congratulates the company on its strong results.

The company is expecting moderate gross margin improvement in 2024 due to TASER automation and cost improvements. They do not have any long-term margin guidance beyond that, but the goal is to improve TASER 10 margins and stabilize gross margins over time. In terms of TAM penetration and opportunities, the success in Commonwealth countries has been quicker than in the rest of Europe, where breakthrough contracts were won about 7-9 years ago.

The speaker discusses the performance of their product lines in different regions, noting that TASER sales in Continental Europe are starting to outpace those in Commonwealth countries. They also mention the slow adoption of their cloud technology in Europe, but highlight progress in three key markets. Overall, they are optimistic about the potential for growth in both product lines in the coming years.

In the paragraph, Rick Smith thanks the investors and employees for joining the meeting. He also expresses his excitement and gratitude for the new team members from Fusus and Sky-Hero. He mentions that Axon does not acquire companies to cut costs, but rather to inject new energy into their own mission. He also shares his excitement for upcoming events and the rest of the year.

This summary was generated with AI and may contain some inaccuracies.