Axon (AXON) Q4 2025 Earnings Call Transcript

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Date

Tuesday, Feb. 24, 2026 at 4:30 p.m. ET

Call participants

• Chief Executive Officer — Rick Smith
• President — Joshua M. Isner
• Chief Financial Officer — Brittany Bagley
• Chief Product Officer — Jeffrey C. Kunins
• Chief Revenue Officer — Erik Taylor Lapinski
• Chief Legal Officer — Yani Simolos

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Takeaways

• Bookings -- Full-year bookings exceeded $7.0 billion, up over 40%, with Q4 bookings increasing more than 50% and nearly matching the entire annual total from two years prior.
• New Product Bookings -- AIR, AI, and Fūsus booked over $1.0 billion, nearly tripling the previous year’s result, and the AI Era Plan represented about $750 million or approximately 10% of total bookings.
• International Bookings -- Annual international bookings surpassed $1.0 billion for the first time, driven by two large European cloud deployments and broad regional momentum.
• Corrections Vertical -- The corrections team delivered the largest single-customer booking in company history, including TASER 10, Body 4, and AI features.
• Revenue -- Quarterly revenue grew 39% to $797 million, marking the eighth straight quarter and fourth consecutive year of revenue growth above 30%.
• Software and Services Revenue -- Grew by 40% year over year to $343 million, with contributions from Fūsus, AI, VR, CounterDrone, and evidence management.
• Connected Devices Revenue -- Increased 38% to $454 million; TASER revenue reached $264 million up 32%; Personal sensors contributed $109 million, up 28%; and platform solutions grew 81% to $81 million.
• Net Revenue Retention (NRR) -- Expanded to 125%, signaling strong customer adoption of new products.
• Annual Recurring Revenue (ARR) -- Exceeded $1.3 billion, up 35% year over year.
• Adjusted Gross Margin -- Reached 61.1%, down sequentially, affected by tariffs and product mix, but offset by software strength.
• Adjusted Operating Expenses -- Were $1.1 billion, up $245 million sequentially, but declined as a percentage of revenue from 39.2% to 38.2% year over year.
• Adjusted EBITDA -- Increased 46% to $206 million, with a margin of 25.9%, exceeding internal expectations.
• Operating Cash Flow -- Delivered $217 million, with free cash flow conversion temporarily below the 60% adjusted EBITDA target due to inventory and collections timing.
• 2026 Revenue Growth Guidance -- Projected at 27%-30%, the highest outlook entering any year, with adjusted EBITDA margin forecasted at 25.5%.
• Software as Portion of Revenue -- Software comprised 43% of total business.
• 2028 Financial Targets -- Revenue goal is about $6.0 billion, with an adjusted EBITDA margin of 28% and free cash flow conversion target of 60%.
• Stock-based Compensation Dilution -- Commitment to less than 2.5% annual dilution going forward, lowering from under 3% previously.
• Future Contracted Bookings Visibility -- Between 20%-25% of booked value expected to convert to revenue the next year, supporting long-term guidance consistency.
• M&A Activity -- Completed Prepared acquisition in Q4 and closed Carbyne in early 2026; both had immaterial revenue or EBITDA impact in the reporting period.
• Product Pipeline -- Apollo DART, described as a technical breakthrough for TASER delivery, is entering field tests and targeted for customer deployments in the next cold season.
• Rule of 40 Performance -- Historically sustained performance above 50, recently surpassing 55, and model implies ongoing operation at these levels.

Summary

Axon Enterprise (NASDAQ:AXON) reported a material acceleration in bookings and revenue across hardware and software, underpinned by rapid adoption of emerging AI-driven solutions and significant new wins in corrections and international markets. Management outlined clear guidance for continued strong top-line growth and stable margins, citing visibility from contracted bookings and expanding product suite, while reiterating company-specific execution goals and investment focus. Strategic acquisitions (Prepared, Carbyne) and a broadened customer mix are positioned as ecosystem enablers rather than near-term financial contributors, with operational leverage and software-led expansion supporting margin targets through 2028.

• Management emphasized that only about 30% of customers are on premium subscription plans, leaving ample runway for upsell and ARPU growth.
• Product mix shift and AI solutions led to software outpacing hardware growth, setting up a durable tailwind in gross margin over time.
• International deal flow, particularly outside Commonwealth countries, was called an inflection point, but management stated additional follow-through is required for sustainability.
• AI Era Plan is estimated at $750 million in bookings, with growing adoption across premium offerings, yet not all new features are deployed across the existing base at initial launch.
• Management stated, "We are seeing broad-based demand and we are seeing it at increasing scale in a lot of places," highlighting expansion into enterprise, federal, and new verticals such as retail and healthcare.
• Future margin and revenue guidance incorporate expectations for global tariff headwinds, inflationary component costs, and increased mix from emerging solutions, but maintain confidence due to product adoption trends and backlog.
• Leadership asserted a strategic intent to embed AI natively into all workflows, leveraging an integrated hardware-software ecosystem as a competitive moat.
• On risk management, executive comments stressed privacy and data handling as existential concerns, with significant investment in privacy-by-design cited as a customer acquisition driver.
• Company continues to benchmark business quality against Rule of 40, with sustained output above 50 considered a model validation.

Industry glossary

• Bookings: Value of customer orders signed within a reporting period, reflecting future revenue under contract.
• Net Revenue Retention (NRR): Percentage measure showing recurring revenue preserved and expanded from existing customers after churn and upsells.
• ARR (Annual Recurring Revenue): Total value of recurring revenues on an annualized basis at a given point in time.
• Adjusted EBITDA: Earnings before interest, taxes, depreciation, and amortization, excluding certain items to reflect normalized operating profitability.
• AI Era Plan: Axon's premium subscription offering bundling advanced AI-driven capabilities across cloud and device platforms.
• Fūsus: Cloud-based real-time crime center software platform, acquired to enhance situational awareness and camera integration.
• ALPR: Automated license plate recognition technology within Axon's V-Intelligence product line.
• Platform Solutions: Integrated product suites offering combined hardware and software for mission-critical workflows.
• Rule of 40: SaaS industry benchmark where the sum of growth rate and profit margin exceeds 40%.
• DEDICATED DRONE PRODUCTS (Dedrone, CounterDrone): Axon's counter-drone technology for threat detection and neutralization.
• PSAP: Public Safety Answering Point, the call center responsible for answering 911 calls.

Full Conference Call Transcript

Now on this stage a year ago, we launched Draft One, which is our first major product of the new generative AI era.

Rick Smith: Man, we knew we had a hit on our hands. In fact, Draft One is the fastest growing product or service we have ever launched. But we have not stopped with Draft One. We have several new innovations, like body cameras that can answer policy questions or provide real-time translation, solutions to make interactions safer and more successful, evidence workflows that are more effective, and products like Brief One is transforming justice with technology. This product is going to revolutionize

Erik Taylor Lapinski: the way that we are able to do business. We use technology

Joshua M. Isner: to go in and be our eyes. Be my voice. To help with

Brittany Bagley: that conflict resolution. It is amazing how wonderful it works. Within seconds, a dispatch is vetting it. The users of the drone are so shocked. We are there before the drones even

Yani Simolos: up. Utilizing Policy Chat is a lot easier. It is a lot more efficient. We can shift our focus more on call for service. It is

Erik Taylor Lapinski: potentially the answer to the largest pain for any prosecutor’s office.

Joshua M. Isner: Technology is going to evolve rapidly. D drone. New system.

Rick Smith: Prepared. Carbyte out of the light post.

Yani Simolos: Doctor training. We are looking at the future of law enforcement.

Jeffrey C. Kunins: I would predict the advancement to be in three years what it was in the last 30 years.

Rick Smith: Success is already apparent. It is making us more efficient. We are able to see where that suspect

Joshua M. Isner: was. We would not have caught this guy.

Jeffrey C. Kunins: Just a few years before. And he is captured in six hours. Using this technology is just the next step of serving our citizen. It is

Rick Smith: Relationships are the foundation of high-performing teams. Relationships built on trust and integrity. If you trust your teammates, extraordinary things are possible. You can do anything. And so today, I want to thank you for our relationship, for entrusting us be on your team, because in the coming months and years, we are going to do extraordinary things. Unit 127 responding.

Joshua M. Isner: Together.

Rick Smith: Alright. Thank you, Erik. And thank you everyone for joining us today. We completed another incredible year at Axon Enterprise, Inc., and I am humbled by what our team has accomplished. It goes beyond products and financial performance. It is about our mission and the work we are doing to accomplish even more in the years to come. As Erik mentioned, we are going to do things a little different today. After you hear from Josh and Brittany, I will come back to tie it together with how we see Axon Enterprise, Inc. evolving and why I believe there is no better position to be in than the one we are in right now. Josh, you are up.

Erik Taylor Lapinski: Thanks a lot, Rick, and good afternoon, everybody. I am very proud of our team. They earned this result, and they deserve the credit. They are this good. It is a privilege to work with such talented people who are passionate about serving our customers and pursuing our mission. And in 2025, their hard work yielded a number of exciting outcomes worth highlighting. First, when it comes to our key indicators on our scoreboard, there is no metric more important than bookings. You may recall that over the past few quarters, we laid out an ambitious

Joshua M. Isner: plan

Erik Taylor Lapinski: to drive record bookings. I am proud to say the team left no doubt. 2025 full-year bookings surpassed $7.0 billion and were up more than 40% from last year. That is on the back of Q4 bookings up more than 50%, representing a major acceleration relative to two straight years of bookings growth in the high 20% range.

Rick Smith: To me,

Erik Taylor Lapinski: this is the beginning of a trend. We just booked almost as much business in the quarter as we did in the full year just two years ago, and we see no sign of that slowing down. Generally, we are not big on singling out specific teams, because, frankly, so many of them at Axon Enterprise, Inc. are operating at a world-class level right now.

Joshua M. Isner: But given the Q4 result, I want to call out a few stand-up performances. First, the U.S. state and local team led by Jessica Duncan. This is our best team at the company and possibly the best team in the entire industry. In 2025, they delivered not one, but three 9-figure deals. A few years ago, that did not even seem possible. This demonstrates the tremendous reception that our new products are receiving. Speaking of new products, a second highlight was that new product bookings, which include AIR, AI, and Fūsus, totaled over $1.0 billion for the year and were nearly triple 2024’s result.

For two years, we have recognized that for software companies to win in the age of AI, they must convert their existing customer base to AI users before someone else does. And I believe Axon Enterprise, Inc. is doing that better than any company in public safety. To that end, in our first full year of selling the AI Era Plan, it accounted for approximately $750 million worth of bookings, or about 10% of the overall bookings total. We are positioned to be a winner in this AI-driven environment and we intend to lap the field. Along those lines, we see a lot of runway in our new product portfolio.

ALPR and V-Intelligence is another one that has barely scratched the surface. Our pipeline is sitting in the 9 figures for that new product set, and we expect that to continue to grow. These are exactly the signs we need to see to know we are on the right track, and it is why we keep building more. The industry-wide scrutiny on data privacy and license plate readers is real, and we believe it is a tailwind for Axon Enterprise, Inc. Our early and sustained investment in privacy by design and ethical governance has positioned us well.

We are hearing directly from customers, some of whom came to us from other vendors, that our track record on privacy and ethics was a deciding factor in their decision. Customers are not just buying hardware and software, they are buying confidence that we will help them deploy technology responsibly. That is a durable competitive advantage. Next up, we have new and emerging markets. Bookings in this category—everything outside U.S. state and local law enforcement—surpassed $2.0 billion on the back of record results in international corrections and justice.

A huge shout out to our international team specifically who crossed $1.0 billion in annual bookings for the first time and delivered two of our largest deals in Q4, both of which were large European cloud deployments coupled with connected devices. We are seeing this type of progress across multiple regions as our land-and-expand strategy continues to gain momentum. Additionally, it is impossible to talk about explosive growth at Axon Enterprise, Inc. without mentioning our corrections team. A few years ago, it would have sounded crazy for me to predict this, but the largest single-customer booking in Axon Enterprise, Inc. company history was delivered by our corrections team.

And what is really important about that is what is included—TASER 10, Body 4, real-time capabilities, AI, and more—showing we have product-market fit across the platform. Corrections has become one of our many verticals to prove it can punch well above its weight. While 2025 was a great year, and we are thrilled with such a strong result, we stopped celebrating this at about 12:10 p.m. Pacific time on January 6. That was ten minutes into our 2026 company kickoff event. This is a team that is on to the next play. We are 15% of the way through 2026 already. As we assess what is ahead, I have never been more excited to kick off a new campaign.

We have opportunity in front of us everywhere. Of course, 2026 starts with selling new products to our existing U.S. state and local customer base. At this point, hopefully, there is no more confusion. We are accelerating in this market and delighting customers along the way. As we sell new products to existing customers, we also sell existing products to new customers, and several of those new customer markets represent exciting days ahead. Enterprise is a big one. The market is enormous. And what we are good at translates perfectly. While 2025 is about putting the right team in place to start scaling fast, we also solidified our second high-volume U.S. enterprise customer.

What is particularly exciting is that they will be fielding the recently announced Axon Body Mini, which is getting rave reviews in beta and will launch later this spring. On top of the Mini, expanded capabilities in Fūsus, new AI offerings, counter-drone technology, and Axon Light Post and Outpost will contribute to stronger and stronger product-market fit in the enterprise space. U.S. Federal is also showing promising signs. There is a major opportunity across technology, federal law enforcement for a number of our core products as well as counter-UAS. As I look ahead, our patience and persistence in this customer set is paying off.

Some of our largest opportunities in front of us for 2026 could come from federal customers, and we are excited to help. Our confidence is also bolstered by the arrival of our new federal leader, Claudia Davidson, who is well respected in the federal space and is off to a great start. Rick will talk more about this, but as we enter the new year, we believe Axon Enterprise, Inc. is positioned very well. At our core, we sell integrated hardware and software solutions that help collect and leverage the power of data for our customers that have highly complex regulatory and liability requirements, where technology has lagged for decades.

That is a unique combination that lends itself to swift adoption of AI capabilities, as our $750 million of bookings in this category demonstrates. So the takeaway is simple. We are seeing broad-based demand and we are seeing it at increasing scale in a lot of places. This is a defensible, rapidly expanding business built on a foundation of customer trust, and we cannot wait to put up another record year. Over to you, Brittany.

Brittany Bagley: Thank you, Josh. I echo Rick and Josh’s comments when I say that I am truly thankful for our team and impressed with everything they were able to accomplish over the past year. First, I will walk through our fourth quarter performance, and then we will move to guidance, our new 2028 target, and how we think about the future. Q4 was another very strong quarter across the board. Revenue grew 39% year over year to $797 million, our eighth quarter and fourth year in a row growing above 30%. Our growth is supported across our product lines. Software and services grew 40% year over year to $343 million.

Expansion within existing customers and growth with new customers both drive this segment. We see strong demand with new products, including Fūsus, AI, VR, and CounterDrone, each contributing to our software growth alongside our digital evidence management platform. Net revenue retention expanded to 125% in the quarter and demonstrates the adoption of our new products by our existing customers. ARR grew 35% year over year to over $1.3 billion. We are also gaining new customers and diversified end markets as Josh called out, including strong wins in corrections and international this quarter. Connected devices was up 38% year over year, with revenue of $454 million. TASER revenue of $264 million grew 32%. Personal sensors revenue of $109 million grew 28%.

And platform solutions revenue of $81 million grew 81% in the quarter. TASER 10, Body 4, counter-drone equipment, and VR training solutions were all drivers. Adjusted gross margin came in at 61.1%, down sequentially due to the impact of tariffs and increased mix from solutions, partially offset by continued strong growth in high-margin software and services. We expect to see quarter-to-quarter volatility from product mix, but over time, we will see the benefits of our software mix flow through to gross margins. Adjusted operating expenses of $1.1 billion increased $245 million sequentially and decreased as a percentage of revenue from 39.2% to 38.2% year over year.

Increased operating expenses were driven by continued investment in R&D and our go-to-market functions as we scale the business to support future growth. This was partially offset by leverage on our G&A functions as we work to scale efficiently. Adjusted EBITDA grew 46% year over year to $206 million, and adjusted EBITDA margin of 25.9% outperformed our expectations on higher revenue than forecast and operating leverage. Operating cash flow of $217 million and free cash flow conversion on an adjusted EBITDA basis decreased year over year due to investments in inventory and the timing of collections, which we expect to catch up on in the coming quarters.

We continue to target free cash flow on adjusted EBITDA of 60% and expect 2025 to represent a low point as we get back closer to that 60% level in 2026. On our balance sheet, we leveraged our financing during the year to update our capital structure and completed the redemption of our outstanding convertible notes, limiting dilution while ensuring we have capital available to support our growth strategy. We closed the acquisition of Prepared in Q4 and closed our acquisition of Carbyne this month. Now turning to guidance. Our strong 2025 bookings, scaled manufacturing capacity, continued investment in new products, and a growing bookings backlog support our expectations for another year of robust growth.

Our forecast for 2026 is revenue growth in the range of 27% to 30% year over year, which is the strongest outlook we have had heading into the year. We see robust growth and are maintaining our adjusted EBITDA margin of 25.5% for the year. This expectation includes the impact from our increased investment in several product and market areas, as well as impacts from global tariffs, inflationary component costs including memory, and acquisitions that are still scaling. Obviously, there was big news on tariffs last week. Right now, for us, very little has changed going forward given the implementation of the new 50% global tariff, and that is what we have baked in.

We are not assuming anything on refunds until the process is clearer. In addition to our full-year guidance, I would like to provide some commentary on seasonality. Q4 is usually our strongest quarter for bookings, which we absolutely saw. Q1 is a period where we build pipeline for the year, resulting in our slowest quarter for new bookings. We also pay bonuses and commissions in Q1, resulting in a quarter that typically has lower free cash flow conversion than our average.

We do expect year-over-year revenue growth to be consistent with our overall guide for the year in Q1, and we expect to ramp into our average adjusted EBITDA margins as we scale revenue through the year, which may result in lower adjusted EBITDA margins than our annual target in Q1. Now that is the recap of our quarter and results for the year. As Rick mentioned, we are doing things a little differently today, and we have prepared a brief presentation to walk through our new 2028 target model and the long-term strategy behind it. Let us pull up the presentation.

Brittany Bagley: Our agenda is a brief overview of our financials and targets for May, and then I will pass it over to Rick to cover our longer-term product vision. As I look back on the last five years, I am impressed by the transformation the company has gone through, more than tripling revenue over five years with a 33% CAGR over the past three years, scaling new hardware products and managing through ongoing supply chain disruption and tariffs with stable gross margins, generating strong operating leverage as we expanded adjusted EBITDA over 500 basis points over three years to 25.5%, and delivering over $700 million of in 2025.

Our products have expanded significantly, including TASER 10, Axon Body 4, our VR training portfolio, Fleet 3, AI, and AI, with software at 43% of our business. We have seen traction in markets like enterprise and corrections, each producing some of our largest bookings, and we had our best year ever in international. As I look forward, we are going to keep that momentum, more than doubling revenue, expanding gross margins over time, and delivering adjusted EBITDA expansion of almost 250 basis points as we continue to innovate, add problems, solve problems for our customers, add products, solve problems, and gain traction in new markets.

We have also continued to mature as a company with a strong balance sheet, clean capital structure, and a track record of strong M&A with disruptive companies that complement our organic R&D effort. Let us look a little closer at 2025 and some of the metrics underlying our business that highlight the quality of what we are delivering and underpin the future. First, we did $7.4 billion in annual bookings. That acceleration, growing bookings at 46%, along with our 125% net revenue retention, is a great sign that our products are resonating with our customers.

Today, only about 30% of our customers are on premium versions of our subscription plans, and that includes prior premium plans from several years ago, which actually look more like our entry-level plans today. We think that means we have meaningful room to drive adoption of the new product we continue to deliver. Our current officer-based subscription plans can deliver ARPU of nearly $600. And when we add in other products such as Fleet, Fūsus, Dedrone, and ALPR, that ARPU can get much larger. That is relative to our subscription plan five years ago where our most premium offering was under $250. Those new product offerings, which did over $2.0 billion in bookings, are a major driver of future growth.

International did over $1.0 billion of bookings. There is no one product alone that drives our success, but the portfolio delivers value across our customer base. Our success is driven by being customer-obsessed, innovative, embracing new technologies like AI, and having the data and experience to make it work. We have always been careful with our customers’ data, but we are seeing increasing value in how we can use it to deliver powerful AI solutions, all while respecting privacy. Within our software business, more than 40% of our software growth was driven by products outside our core DEMS business in 2025. In our hardware business, platform solutions drove more than 30% of our growth, also largely driven by newer products.

For our 2028 targets, our 2028 revenue target is approximately $6.0 billion. This more than doubles our revenue today. Along with this growth, we are targeting a 28% adjusted EBITDA margin in 2028. This implies approximately 250 basis points of margin expansion over the next few years, balancing profitability with continuing to invest as a disruptive innovator and reaccelerating margin expansion after this year. As I mentioned before on free cash flow, we expect average annual conversion of approximately 60% over the longer term, and expect to get back close to that level next year. We believe 2025 conversion will be a low point as we look ahead and maintain our conversion target of approximately 60%.

We have a compensation plan that is highly performance-based, attracts and retains the best talent, and met our goal of less than 3% annual dilution from stock-based compensation. We are now dropping that to less than 2.5% on a go-forward basis. No material M&A is contemplated in the forecast, but we expect to continue our strategy of tuck-in deals to expand our ecosystem and bring the best talent to Axon Enterprise, Inc. going forward. We will also continue to mature our business, our operations, and our best practices while staying true to our culture and what makes Axon Enterprise, Inc. special. Another way we benchmark this model is through the lens of the Rule of 40.

Over the last several years, we have consistently operated around 50 or higher, with the most recent years among our strongest and well above 55. Our target model implies we can continue to operate at these levels as we grow and expand margins, maintaining 55 or better. Let us go through what we need to do to get there. Deliver for our customers, solve real problems, and innovate. A core element of our strategy will continue to be reinvestment in the business. We are funding new product development organically. That has been and will remain a primary driver of our growth and our investment.

New organic products have included our TASER devices, body cameras, in-car cameras, VR training solutions, vehicle intelligence, evidence management, and our suite of AI products. Our ability to fund organic investment positions us as an innovator, disruptor, and category leader. We are not simply entering existing markets. We are creating them or taking a new approach. It is a testament to Rick’s visionary leadership and ensures we are not the disrupted, but the disruptor. That is why investing is critical. We will not get complacent. These investments are in both hardware and software, as the deep integration is a strong advantage for us.

The dynamics of our software business today with the nascent adoption of AI and strong trends in our other core software products means we expect software growth to be faster than hardware. But both are critical and valuable. You are seeing us drive upsell and adoption in our existing markets. We continue to have a lot of opportunity in state and local, and it delivered amazing results again this year. We also have tremendous opportunities outside domestic state and local—in federal, corrections, retail, health care, and other enterprise customers. This is not hypothetical.

We have demonstrated this with strong customer wins in each of these markets, investing behind them thoughtfully, and we will execute on and grow those opportunities as we drive longer-term results. We are incredibly excited about what we are going to deliver over the next three years in the business. But we always take a long-term mindset. So let me turn it over to Rick to talk through our product vision.

Rick Smith: Awesome. Thank you, Brittany. It excites me that our team is thinking longer term, and I believe that will be a competitive advantage for many years to come. Five years ahead, three years ahead is no time at all, even in the history of TASER and Axon Enterprise, Inc. But with the technology advancing faster than ever, I have no doubt the world will look unrecognizable in just a few more short years. Before I talk about where we are going, in a good way, I want to ground us in where we are today and what anchors us to do so much of what we do. Let me start with our moonshot.

A few years ago, we introduced a moonshot to cut gun-related deaths between police and the public in the United States in half by 2033. We do a lot of things at Axon Enterprise, Inc., but when you step back and you think about impact, I believe it all harmonizes under this goal and our mission to protect life. I am also excited to share—and, look, this is still preliminary as data is still coming in from last year—but 2025 appears to be the first year the number of gun-related deaths between police and public actually went down substantially in the U.S.

It is too early to claim Axon Enterprise, Inc. had a direct causal impact, but I am encouraged to see the trend is turning the right direction for the first time. We do have numerous anecdotes of specific instances where the capabilities of TASER 10 saved a life in situations where previously people would have been shot and killed. See this video I am going to show you now from our hometown here in Scottsdale, Arizona, where a woman called 911. She wanted to be shot and killed. She wanted to commit what is called suicide by cop.

Rick Smith: Let us play the video. “My name is—I just want to chat with you real quick. Okay? Drop the knife. It is very important to me that you drop the knife. Okay? Drop it. Oh, drop the knife.” “That is TASER. TASER. TASER. TASER. TASER.”

Jeffrey C. Kunins: “Drop the knife. Drop the knife.”

Rick Smith: “Grab her. Go ahead. Grab her.”

Jeffrey C. Kunins: “Do not move. Do not move.”

Rick Smith: Alright. As you can see there, there was another officer with a lethal weapon. I talked to some of the officers that were on scene that day, and they said she very likely would have been shot and killed had she taken another step. And only TASER 10 enabled them to shoot from that distance. Go and advance to the next slide, please. I want to share that we have had customers now coming back and telling us they are seeing a result.

We had a major county sheriff’s office—that means they are one of the largest in the U.S.—tell us that they had a 42% reduction in deputy-involved shootings, and they believe that TASER 10 was a major contributing factor along with de-escalation training, much of which happened in our VR system. So in addition to that quote, I just want to talk about where this translates into our mission. Our mission translates into the products we build and the scale that we are now operating at. TASER is becoming synonymous with de-escalation, saving lives more than ever before and in more places. Today, we estimate a TASER cartridge is fired in the field approximately every 30 seconds in the U.S.

In just the time I was speaking, another TASER cartridge has been fired. Every time a TASER device is used successfully, it has the potential to save life. And that is what grounds us in how we think about this product line. Training is also a critical element. We can build the greatest device ever created, but if people are not trained to use it effectively, it does not deliver its true value. That is why we invested in building a suite of virtual reality training solutions over the last five years. We took a risk. VR training was not common or widely adopted when we started. And as Brittany mentioned, we leaned in to be the innovators, disruptors here.

And today, we see that was definitely the right direction. Last year, customers completed nearly a half a million VR training sessions. That number continues to grow. VR training is nearly sold one-to-one with TASER 10 deployments, and it can do much more than train users on our devices. This year, we are infusing our VR platform with AI-powered features that will transform how police are trained in the decade ahead.

Because we lean in and make bold bets before it is safe to do so, we garner significant first-mover advantages and now have what we believe is the most widely deployed VR training platform in the U.S. public safety sector and are well positioned to layer in AI capabilities just as we are across our massive sensor and software network. Another part of our strategy has been transparency and better decision-making in the moment. That led us to body cameras nearly 15 years ago, and today our cameras are the standard in public safety.

We have stored and enabled recordings of more than 60 million hours of body-worn camera footage on our latest two generations of cameras, Body 3 and Body 4, in just the last year. And we are helping customers use that body camera footage to drive more efficient workflows, provide transparency, and support faster and more effective justice. Beyond body cameras, our real-time efforts expanded into fixed cameras, vehicle intelligence, and real-time operations. Through Fūsus, we now power more than 1,000,000 monthly live streams, with more than 300,000 community cameras connected. That is powerful connectivity and insights unavailable anywhere else. And finally, we are leading and supporting and driving toward the future in the AI era.

We already have more than 500 public safety agencies live with Axon Assistant, generating more than 200,000 monthly messages. We were the first to introduce a suite of industry-leading AI tools for our customers. We are not just enabling the ability to query; we are pioneering the ideas and the ways that we will use AI and its features to do their jobs more safely and more effectively. We are just getting started with what that assistant can do. You will continue to see us push the envelope well ahead of the pack. I know that sounds like a lot already, but in my view, you have not seen anything yet.

It is about to get a lot more exciting, and it is going to happen faster than ever before. Let me summarize the vision in a succinct way. This is how I think about Axon Enterprise, Inc. developing: Axon Enterprise, Inc. can be the provider of the world’s largest global sensor network, fully connected and supercharged by AI.

Rick Smith: We will power the most intelligent, connected safety devices globally. We will connect those sensor devices across the full life cycle of how they are used, and we will build AI into every workflow—safely, securely, and reliably. Let us go to the next slide. And now let us dive into what that means in more detail. Building the leading global sensor network means more than just our body cameras used by law enforcement. We believe devices can be the primary connected AI-powered assistant across many different use cases and industries. We are a leader in AI-powered wearables.

Workers for the government, retailers, utility companies, health care providers, and in many more places today are taking massive amounts of data into their brains and they process that data manually, and they carry out the tasks they have been asked to do, and then they spend hours typing it into systems. Our sensors will become their partners—their virtual eyes, ears, mouths—bringing that real-world data into a digital backbone where it can be analyzed, utilized, and relayed.

Because we have the proven track record in ingesting and managing some of the most sensitive data on Earth, enterprise customers of many varieties now see us as the safest choice to help them use sensors and AI to securely capture multimedia information and transform it into useful knowledge and work product. Today, we connect body cameras, in-car cameras, TASER devices, fixed cameras, drones, and robotics. We have been the industry leader in introducing customers to these sensor product solutions, and we have built them in close partnership to ensure that we understand how they can be used to help.

So I want to take a moment to step back and speak to something I believe is fundamental to Axon Enterprise, Inc.’s long-term value creation. We build for durability, not for the metric of the moment. A decade ago, when our SaaS business was gaining momentum, there was real pressure to shed hardware and shave software margins. I disagreed. My conviction was and remains that the most important customer problems require integrated solutions, not point products. That decision looks prescient today. As AI increasingly commoditizes software development, the companies with defensible positions are those that own the full stack, including hardware. And we do.

What we have built is an interconnected ecosystem of hardware, software, and cloud services embedded in a heavily regulated industry through long-term government contracts. That is not just a business model. It is an ecosystem that grows even more valuable the deeper our customers go into it. And rather than being a target for disruption, we are the disruptor. The current environment is accelerating our growth, as customers consolidate around platforms that they trust to scale with them. The ability to capture data at the point of action and integrate it seamlessly across complex regulated ecosystems is a rare capability—one that we believe will define the next generation public safety technology.

What you see in our sensor and product portfolio today is compelling. What it becomes over the next few years is what truly excites me. Our sensor network is most valuable not as a system of record, but as a system of action. The ability to surface and connect data in real time across active incident and task workflows is what separates a truly integrated platform from a collection of devices. Post-incident analysis has its place, but real-time intelligence is where outcomes change. That is the capability we are building toward, and one where we believe very few organizations in the world are positioned to deliver.

What makes this even more powerful is, of course, AI—not bolted on after the fact, but embedded natively within the workflow and accessible directly through each device. It is the difference between technology that assists and technology that transforms. We are giving our customers genuine superpowers—the ability to do things that simply were not possible before. And we believe that potential has only begun to be realized. For most of my career, people thought we were crazy. But now the breadth of what Axon Enterprise, Inc. has built and the vision that connects it—it was not obvious to the outside world for a long time, and there were moments it was easier to just keep our heads down and build.

But things have changed. The vision that has driven every product decision, every acquisition, and every bet is now coming into focus for the broader market. People are starting to see what we have always envisioned. Let me give you a few examples of why I believe that. So here is one to make the vision tangible. A 911 call comes in and it is answered instantly. If it is not a true emergency, it is handled automatically by AI, freeing human capacity for the moments that matter most. If it is an emergency, the full weight of the Axon Enterprise, Inc. ecosystem activates in seconds.

The call is transcribed and translated from just about any language in real time, breaking down language barriers that have historically cost critical minutes. Location confirmed. Context captured. Crime center notified. Live video from city cameras, public sources, from the 911 caller’s phone, and vehicle intelligence all flowing in real time. A drone already airborne and gathering awareness before the first responder has left the station. By the time the boots hit the ground, the situation is already understood. And in a growing number of cases, the drone does not just inform the response. It is the response. Or it holds the situation safely, creating the time and visibility needed for a better outcome.

This is the power of sensors connected and supercharged with AI. Next, emergency response is just one dimension of what this ecosystem makes

Rick Smith: possible. Consider the challenge of connecting infrastructure and protecting it against a new class of threat. Drones are the physical equivalent of a cyberattack. They are low cost, widely available, and capable of causing outsized disruption and harm in the wrong hands. A single consumer drone can shut down an airport, compromise a stadium, or create chaos at a public event. The question is no longer whether this threat is real. It is whether we are ready for it. At a major venue, an unauthorized drone enters restricted airspace. Our integrated sensor network flags it immediately. The location of the aircraft, flight path, and origin point of the operator are identified in seconds. Security engages on the ground.

Law enforcement has the same real-time picture. The operator standing in a nearby parking lot realizes the response is already underway, and this disruption ends before it escalates. And the event continues. But detection is only half the equation. Knowing a threat exists means nothing if you cannot neutralize it. Our Dedrone Defender uses the same sensor network that identified the threat to aim a sophisticated jamming system directly at the drone, delivering precise electromagnetic interference on the exact frequency it is using to communicate—not a broad blanket, a surgical one. A surgical response. Today, active drone mitigation is reserved for federal agencies. But the threat has democratized faster than the law has adapted.

And many times, we will build ahead of the law and be involved in helping to change the law. So we are active at all levels of government. And what once only mattered at a presidential inauguration now matters at your county fair or your Friday night football game. Drones are a threat everywhere. And we are not building for today’s threats, today’s regulatory environment alone. We are building for tomorrow’s. When the law catches up, and we believe it will, Axon Enterprise, Inc. will already be there. This is the same connected AI-powered ecosystem applied to a different threat, and it works exactly the same way. Now let us take this ecosystem in a completely different direction.

A retail associate faces difficult situations regularly. Before they ever encounter one, they have already been trained for it through our immersive AI-driven Meta Coach—scenarios designed to build confidence and judgment to stay safe, de-escalate, and prevent situations from spiraling. It is AI-centric, and it can be delivered on any screen—conveniently, effectively. When an incident does occur, they are ready. Camera activated. Panic feature engaged. Security team is live within seconds, communicating directly through the device and pulling additional camera angles to guide the response in real time. The incident is automatically summarized and transmitted as an emergency to the local appropriate police department. The closest officer with retail crime training is dispatched. They arrive, de-escalate, and documentation begins immediately.

That is where most systems stop. Ours does not. The post-incident reporting system cross-references the individual against prior incidents, aggregates the supporting evidence, and delivers a complete prosecution-ready summary directly to the prosecutor’s office. Justice is served. And that associate comes back to work the next day, not rattled, but confident—knowing they have the training, the tools, and an entire ecosystem behind them. This is end-to-end community safety—not a product, not a platform. It is really a promise. Sensors deployed citywide by governments, businesses, and private citizens unified, in a privacy-preserving way, into a system that detects threats, accelerates response, and drives outcomes that matter. Every stakeholder connected, every incident better handled than the one before.

The goal was never just faster response times or better documentation. It was a community that works together, feels safer together, is more connected, and trusts one another more because of it. That is what we are building. And, again, we are just getting started. So what excites me most is this: we are not building for just one use case. We are building for many of them. Corrections, retail, health care, federal, the courtroom, the back office—every environment safety, documentation, and accountability matter is an environment where Axon Enterprise, Inc. belongs. A correctional officer with the tools to de-escalate before conflict starts. A retail manager with real-time visibility into store operations.

An ER nurse whose documentation burden drops so she can focus on the patient in front of her. A federal agent on the same integrated platform as the local officer on the beat. A prosecutor who walks into court with a clear evidence-based picture of exactly what happened. The platform is the same. The impact scales to every corner of public safety and now beyond. That is the opportunity in front of us. So let me be direct with you. We are at a moment unlike anything I have seen in 30 years of building this company. AI is not an incremental shift. It is not a bubble. It is not overblown. It is a fundamental disruption.

It is a force, and it will break companies that are not ready for it. I have watched tech cycles come and go. This one is different. The speed is different. The stakes are different. And it is what we have been building for the past decade or more. And I have never been more confident in Axon Enterprise, Inc.’s position. We are not a simple all-software company waiting to be undercut by a cheaper model or a faster startup. We are an integrated ecosystem of hardware, software, and real-world data embedded in regulated environments, trusted by the customers who depend on us most. And that trust is not a marketing line.

It is the result of 30 years of showing up, delivering, and earning the right to be a partner rather than a vendor. Here is how I see the opportunity. If we deploy AI more aggressively and more thoughtfully than anyone else in this space, while honoring the responsibility that comes with operating in the environments we operate, we will create value that our customers simply cannot replicate, cannot replace, and most importantly, they will not want to—because they trust us. They will reward that with deeper partnerships, larger opportunities, and bigger problems for us to go solve together. None of this gives us permission to relax. Complacency is fatal.

In a world moving this fast, yesterday’s success is not a foundation; it is a liability if you let it make you comfortable. As Josh says, we have to focus on the next play. We had a great year. But Axon Enterprise, Inc. is not about getting comfortable. We will lean in harder than we ever have. We will take bold risks. We will invest aggressively. We will reimagine everything AI can touch in what we do. And we will do it without losing sight of the mission that has always driven us. Axon Enterprise, Inc. has never been built on smooth sailing. We have been built on reinvention—on finding a way through when others said there was none.

That is not just our history. It is our competitive advantage. And right now, it has never been more relevant. Let me leave you with this. What I have described today is not a vision deck. It is not a road map for the next few years. It is happening now. It is arriving faster than any of us anticipated. The pace of what our teams are building, the creativity I see accelerating across this company, the acceleration they are delivering against their original road maps—this is the Axon Enterprise, Inc. I have always believed in. So right now, we are hitting—we are firing on every cylinder.

We are living through a pivotal chapter not just for Axon Enterprise, Inc., not just for public safety, but for humanity—the moment where human and machine intelligence begin working together to solve problems that once felt permanent. It is not hyperbole. It is what I see when I walk the halls of this company every day. I have been doing this for over 30 years. I have never been more energized than I am right now—pushing the arc of history away from violence toward a world where killing is no longer necessary or acceptable. That mission has not changed. Our ability to deliver on it has grown, and it has never been greater. Now what matters is execution.

And by that measure, we have never been stronger. Let us roll.

Erik Taylor Lapinski: Thanks, Rick, and everyone. So we will spend the next half of the call today taking everyone’s questions. Up first, we have Michael Ng at Goldman Sachs.

Michael Ng: Wonderful. Good afternoon. Thank you for the question. Historically, you have given us a sense of what bookings growth looked like on an absolute basis or relative to revenue growth. I was just wondering if you could talk about what you are expecting around bookings growth and discuss the demand environment in 2026. And then, relatedly, are you expecting to see any meaningful product or customer vertical inflections over the next three years embedded in the guidance? Thank you very much.

Joshua M. Isner: Thanks a lot, Michael. I would say at this point in time, we probably want to stay away from any bookings guidance, but I would say qualitatively, as we get toward the later part of the year and I start to have more visibility like in the past years, I could certainly give more information then. From a demand perspective, I have never been more confident across the board. We knew our core was rolling, and we are excited about that. But seeing these new products layer on and just be standalone demand for them in some cases, and the kind of bundled demand in conjunction with some of our other products—it is just coming together really nicely.

And I think it is very, very possible that all four of our core markets are in a place to have banner years this year, and it is going to take a lot of execution and a lot of focus, a lot of discipline. I will bet on our team.

Michael Ng: Great. And just as my follow-up, just on the strategy to become the number one global sensor network, it seems like Axon 911—building on Prepared and Carbyne—should be really foundational to that. Could you talk a little bit about the differentiation that you have relative to the incumbents? What does the go-to-market look like to address this wider group of constituents that you may have done a little bit less with in the past, like fire and EMS? Thank you very much.

Joshua M. Isner: Sure. Jeff, why do you not cover the product? And then I or Rick can cover the product. I would be happy to cover the go-to-market motion.

Rick Smith: I am going to give Jeff a little chance to speak here, and then maybe I will top up after.

Jeffrey C. Kunins: Yeah. Sure. Thanks for the question, Michael. I think, like we talked about before, the combination is sort of two steps. One is within 911, and then 911—how it connects to the rest of the ecosystem and everything Rick just talked about. So within 911, the combination of Prepared and Carbyne—and why we were so excited to bring both of them into the Axon Enterprise, Inc. fold—is because it is breadth and depth.

And so what Prepared does is it is this AI-powered modern overlay that instantly adds, with almost zero deployment complexity, that can be done in extremely short order to any PSAP anywhere—instantly turbocharging their ability to have a faster and more efficient workforce and to feed real-time data about incidents into a real-time crime center like Fūsus and the like; I will come back to that in a moment. So it is not competitive with the legacy systems. It is an add-on and an instant overlay that is extremely efficient and effective.

And then Carbyne comes right around behind that and says, as an agency is ready, whenever they are ready—and many and more of them are getting ready sooner—to say we want to modernize our overall call handling infrastructure and have top to bottom the absolute best full stack for powering 911, Carbyne has already proven and continues to prove that, pound for pound, they can outperform incumbent systems on every metric that matters. And so the combination of those two we think sets us up very, very well, both right now and in the years to come. And then both of those connect to the ecosystem in a very advantaged way, in the vignettes that Rick already shared.

So the ability to, as seamlessly as possible, take that signal from 911, flow it right into the RTCC with Fūsus, flow it right into DFR with Skydio and more, and then all the way connected from there to all of our other sensors and signals, including the ones that are being worn by officers. And so, again, agencies will pick individually which pieces they want the most, but the complete combination is really unmatched and unbeatable.

Joshua M. Isner: Thanks a lot, Jeff. And from a go-to-market perspective, Michael, you are right to identify the fact that while there is overlap in the real-time crime center, the PSAPs are an extension of our customer base. I think Prepared’s brand and the Carbyne acquisition closed just very recently, so most of my comments will be more geared toward Prepared as we have made a little more headway given that the acquisition was last year. These folks are very well ingrained in this customer set, and they are very well liked and respected. I would say any acquisition we do ever starts with the quality of the team.

Like, it does not really matter to us who is ahead and who is behind. In this case, we believe Prepared is ahead and Carbyne is ahead in next-gen call handling. But these teams are very, very talented. So not only are we placing a bet on this technology, we are placing a bet on the leaders here, and specifically Michael Chime, CEO of Prepared. This guy is going to win in 911. We are betting on him. We are arming him with what he needs. Coupled with Amir at Carbyne, we think we are going to be a very, very, very competitive group into the future, and we are excited about that.

Michael Ng: Great. Thank you very much.

Rick Smith: One thing I want to just pile on with one other thing. If you look at—there is sort of two general acquisition strategies in our industry. There is buy the mature cash-cow industry leader, and you sort of do that sort of a roll-up, which is not what we do. Or you look at who are the disruptors that bring a fresh tech stack. You have Fūsus, Dedrone, Prepared, Carbyne. These are all category upstarts that have a fresh technology stack that we can bring and integrate with what we are doing.

The alternative is you buy a ton of tech debt under one brand, and just because you have got a bunch of, you know, sort of legacy businesses does not mean the systems play well together. And especially if you do not get the cultural elements right, driving change in large organizations is ever harder. So I want to thank Jeff in particular and Josh. I mean, I drive these guys nuts trying to run a large business, and I am always coming in like, hey, we have to push over here, we have to be changing. And I am really proud. I mean, Jeff has shown me just great examples.

I think our team is adopting AI internally at a speed that I am just really proud of, and it is not easy. There is also, frankly, times there is pressure to, hey, should we be more focused—stay in one market, stay in one product segment. But you look at the breadth of all the different things we are doing across that portfolio and now in so many different markets. And the benefit of that is when the ground is shifting beneath our feet, we are not just reliant. I would not want to be a software-only company right now. I think this whole “SaaSpocalypse” has got some real risk to it.

But when you combine doing integrated hardware and software and all the data handling and network effects with sharing across all these different users—and now in each new market we go into, I just met with a huge company in the medical response space—the ability we can give them to directly communicate and share data with other first responders without having to rely on a radio right out of the 1970s, we think sets us up to continue to really build this ecosystem for the future and disrupt many of the category incumbents.

Erik Taylor Lapinski: Thanks, Mike. Up next, we have William Power at Baird.

William Power: Okay. Great. Well, really strong results. Congratulations to the whole team. And, Rick, and probably most importantly, great to hear some of the early green shoots it seems like you are seeing out of the moonshot plan. So best of luck on that, obviously, moving forward. Look, as I look at the future contracted bookings, that provides really strong visibility seemingly for 2026. So I guess I want to focus on 2027 and 2028, maybe better understand the confidence and visibility to sustain similar growth rates—if you can share on contribution from existing products versus new products, any particular standouts there? And then I have a quick follow-up.

Joshua M. Isner: Sure. I mean, I think, Will, in general, I think we are still growing into these new offers. The AI Era Plan, the new version of OSP that launched this year—there are just more and more products. We have essentially more arrows in our quiver to keep selling, and all of the buying signals are there. And, frankly, we see a multitude of ways to get to that CAGR. I mean, we have, like I said, four markets that are all really showing signs of growth and a bunch of new products that we are really excited to see the adoption of. Maybe I will call out one, which is Dedrone.

That one, I think, has the potential to be really exciting, both because in state and local we have the opportunity to really make an impact there with it, but really opening doors into both federal and international, and often the land-and-expand might not always be TASER into something else anymore. It might be Dedrone into something else, and we are just seeing that play out so beautifully across both federal and international. It gives us a lot of confidence in the out years. And so, certainly, everything we are looking at in terms of indicators suggests that the next three years are going to be really exciting here.

Brittany Bagley: The only thing I would add for everyone is I do not think you need to assume anything differently than what we have just delivered in this last year or underwrite for 2028. Right? There is no major change that you have to forecast. All of the product lines are growing. We are seeing traction in all the markets. You can just continue to roll that forward.

William Power: Okay. And that is all very helpful. I just maybe to follow up on some of the AI commentary. Great to see the bookings strength there. Be great to get any kind of perspective on what any year end—I think last year was kind of the first big year for bookings, right, given when it was rolled out. Is that something that could double this year? I mean, what does the pipeline look like? And what is the product road map there? Anything you can share on that front?

Joshua M. Isner: Will, I take a lot of crap at Axon Enterprise, Inc. for sports analogies, so you are not helping me out here. But I would say we are in the very early innings—like bottom of the first, top of the second. We have got a lot of pipeline ahead of us in AI, and we have got the opportunity to continue to deploy more and more AI products every year into this plan. And as such, the value will continue to increase in it and certainly attract more and more customers along the way. So this is one where the game just started. The national anthem is over, and teams are running out on the field here.

William Power: Awesome. Thank you all.

Erik Taylor Lapinski: Thanks, Will. Up next, we have Jonathan Ho at William Blair.

Jonathan Ho: Hi. Good afternoon, and let me echo my congratulations as well on the strong quarter. I can also appreciate the additional detail on your AI moats, and so I wanted to start there and maybe dig in a little bit more. Can you help us understand some of the domain knowledge and data moats that you have in the AI world, and maybe how does that relationship—the vision for working with some of the frontier models—how does that look like now and in the future?

Rick Smith: I am going to see if Jeff wanted to take that. Yeah. Take that first. Okay. Yeah. I will—

Jeffrey C. Kunins: I will start, and then, Rick, you can chime in. So I think first, the grounding—and you have heard us talk about this before and with what Josh was saying too—is that I think differentiation and success here in AI at its core, in a world where everybody has access to the same commodity but very powerful frontier models, is really, one, having the right physical sockets, and that is why hardware plays a big role. Right? So if you think about something like even translation that we came out with last year that is having such a big hit, the raw technology of translation comes with the core models.

That is not where either our innovation or our differentiation or our moat is. The key is that we are marrying that up with a clear and present, very real specific need for our customers all day, every day in their real job, and we are embedding it ergonomically and physically into the device that a very, very, very large number of the people in this category are already wearing every day.

And that is why—if you think about an officer carrying a phone and trying to pull out the phone and launch an app and this and that and the other, or add some other piece of equipment that they are not used to—all of those things are radically simplified when we simply can build in that functionality into an experience and a physical artifact that we already have that socket for. The second, as you said, is ultimately about the data.

As you know, we simultaneously have, I think, the highest bar of anyone out there in our own or even other segments about thinking ethically and responsibly about how we use any kind of data and certainly customer data in the right ways.

But ultimately, even with the highest possible bar of dedication to responsible innovation, our responsibility and our ability given that massive—you talked about the millions of hours of video and everything else—is for us to use the state of the art as it keeps evolving with what the models can do to get differentiated results out of the same models that everybody else can use, by leveraging in a responsible way unique customer data that we are the custodians of.

Joshua M. Isner: Maybe I will just add one really, really simple add-on to that, which is: our CEO is in the top 0.0001% of AI users globally. You can imagine what that means for everyone else at the company when that is Rick. Right? And so, I think, I am particularly proud of the push we have gotten from Rick, but also Jeff equally leading the charge on this and really establishing our identity as an AI company in public safety.

Rick Smith: The only thing I would add onto that detail is also the fact that we are managing these business process flows of this critical information because of the whole Evidence.com ecosystem. Right? The evidence comes in. We store it. We move it around workflows that have traditionally been manual. The opportunity for us to automate more and more of that with AI is just—we are in this incredible position to automate away just a ton of work for our customers. And then it goes to the prosecutor. It goes to the defense attorney. And now we are selling premium products there.

Years ago—and I think we still do have a free version of Evidence.com for prosecutors to be able to just receive evidence—but they are now buying premium versions because, boy, they would sure love that evidence to come in and get processed for all the things they have to do with it, make sure we are helping track discovery requests and helping them find the needles in the haystack—the things they need to look at most importantly when they get 100 hours of video in a case. So I think it really is that we have got sort of the manual version of these workflows with this highly secure data.

And it is shame on us if we cannot be the ones who really delight our customers by bringing AI in to solve more and more problems for them on their existing workflows and then doing new things that they never thought possible.

Jeffrey C. Kunins: You know, sockets, workflows, and real jobs to be done. So many companies out there that are trying to work their way through this situation—they are trying to sort of, as Rick said before, do AI for AI’s sake or paint it on as an afterthought. Foundationally, we are always grounded in actually solving the real everyday workflows for our customers, and we have the benefit of having these incredibly sticky all-day, every-day workflows and physical sockets that they are already depending on us for, and they are the perfect conduits to insert AI done right to help accelerate what they are trying to get done.

Jonathan Ho: Excellent. It looks like you are a clear beneficiary of this AI trend. One thing I wanted to also better understand is with the enterprise opportunity, you have now called out sort of multiple large contracts. It seems like we are just at the beginning here as well. What maybe has to happen from a go-to-market perspective to achieve that vision? What do you have to do to build out a channel and to sell this even more into newer enterprises? Thank you.

Joshua M. Isner: Sure thing. While it is a different market, I think we have seen this play out before. Some of us were here in 2009, 2010, 2011 when we were building the video business in public safety, and we understand what it takes to get momentum out of the gate, to make your first customer successful, to parlay that into customers two, three, and four. And the reality is it is an exponential curve. It is not linear. We go from one to four to 12 customers. Each of those is the next stone across the creek that we have to cross. It is going to take a little time.

But for me, the most important thing out of the gate is not how many enterprise customers we sign up in short order. It is how many enterprise customers we make successful and delighted with the products early on. And then the rest has a way of figuring itself out. And so for us, it is much more about getting the right team, focusing on the right early customers, focusing on the right channel partners in certain markets like private security. And so that is just a process that is playing out. But every year, we see a few more indicators that this is something that is truly turning into a valuable business.

And while we have got some work to do for sure, my opinion is as long as we keep things simple and put one foot in front of the other, we are going to end up in a very exciting place in the enterprise business.

Erik Taylor Lapinski: Thanks, Jonathan. Up next, we have Andrew Sherman at TD Cowen.

Andrew Michael Sherman: Great. Thanks. Good to see everybody. Congrats on the quarter. Josh, TASER saw a huge acceleration to 32% growth. Congrats on hitting a $1.0 billion run rate there and also the decline in the officer-related deaths. Talk about any specific drivers in the quarter that helped that. Where do you stand from a capacity standpoint? And is the Apollo cartridge still slated for this year?

Joshua M. Isner: So I will let Rick weigh in on the Apollo DART project. In terms of TASER demand, I think it is a matter of just—I think one thing people have to realize a little bit about bookings, and I think Q3 and Q4 were good examples of this, is the bigger the deals get—sometimes Q3, like last year, will be a decent quarter but not a double over the last year. But then we come back in Q4 with a couple of these large, large deals that we thought had a chance to close in Q3, and they closed in Q4 before the end of the year.

So with 9-figure deals and these bigger and bigger deals, there is just a little more variability quarter to quarter, and I think that is more of what happened. I think the demand was there, and we were very confident in it. And the team did a good job getting them sewn up. It is just some of those large deals pushed from Q3 to Q4. But we certainly feel like TASER demand is very strong. And it is exciting to see, obviously, the progress on the moonshot and to hear the testimonials from customers coming in. We are only talking about a low thousands number.

So when you hear agencies say, hey, there were five or seven of these that would have resulted in a shooting, that is a statistically significant amount that we are starting to see in terms of saves instead of shootings in public safety. And so we are really encouraged to see the trend line. And, again, a lot of work to do, but feeling like we are on the right track. Rick, did you want to cover the Apollo DART? Yeah. Apollo is testing extremely well—better than even in laboratory testing—meaning the percentage of time it can get through heavy clothing is very high and the percentage of time we get an overpenetration is very low. So that is great.

It is going to be going shortly up to the Arctic Circle for some field testing.

Rick Smith: We have made heavy investments in the automation. It is not an easy product to make. If you look at the videos, it kind of looks like this pretty cool object. The thing is a flying hypodermic needle that we have cut with incredible precision to create these cascading crumple zones, so we can use the physics and fluid dynamics of skin puncture to create a chain reaction that makes this thing stop cutting through materials and penetrating. So I think it is a really big technological breakthrough.

And I would say it is probably not going to be a meaningful contributor to revenue this year, but it will start to be in real customers’ hands for the next cold season is the goal.

Andrew Michael Sherman: That is great. One more quick one for you, Josh. Europe obviously had a huge year. Great to hear the two big deals in Q4. How is the pipeline for this year tracking? How do you keep up that momentum? What is driving that?

Joshua M. Isner: Sure thing. It is a story that we had two huge deals at the end of the year that certainly helped the result, coupled with a lot of medium-sized deals. And I think that is kind of the thing. As it is growing—we saw this in state and local—we feel good about the foundational level, but for things to really grow fast, we have to have more and more big deals. And so we have a bunch of big-deal hunters over there in Europe now, bringing back more and more opportunity every quarter.

And while the timing is going to vary a little quarter to quarter, we feel like we have got a team that is going to focus on closing a few really, really exciting opportunities in international this year.

Andrew Michael Sherman: Thank you. Congrats.

Erik Taylor Lapinski: Thanks, Andrew. Up next, we have Mike Latimore at Northland.

Mike Latimore: Alright. Thanks. Yeah. Great year. Great year. So I think you have mentioned that within the longer-term guidance, maybe software grows a little faster than hardware. Is there any thought that maybe the software growth rate actually improves or accelerates a little bit given some of the AI applications that are going in there?

Brittany Bagley: I mean, we are obviously really excited with the performance we saw, but our hardware business is also doing great. So I think they are both performing so well it is hard to really call which will be a bigger contributor. I think you have seen in the last couple of years, though, that software has been slightly outpacing hardware growth. And that is a tailwind for us from a gross margin standpoint.

Joshua M. Isner: And just the monetary dynamics there with how much software historically we booked—when you just layer on the AI Era Plan on top of that, now there are just so many more dollars available in software and AI relative to hardware. So, certainly, we are excited about that and seeing more and more software start to pile up here.

Rick Smith: Yep. No. Sure. We do have some more hardware magic up our sleeve over the next couple years here. So I do want to give a shout out to Brittany as well. She had her work cut out working with me on the long-term plan because one of the things I worry about is that if we underinvest in continuing to build out the hardware elements of the ecosystem—which are not going to be as high margin, at least initially, as the software—I think it is important to the health of the business.

And Brittany and her team really did a nice job really rigorously modeling this out to show me we had plenty of room to be able to hit all the investments we want to invest in and continue to deliver growing profitability to our shareholders.

Mike Latimore: Right. Right. And then just a second question for me. It seems like you have won some good international cloud deals lately. Do you see sort of acceleration there? Is it kind of loosening up where the dam is sort of broken and now international cloud—they are more comfortable with that model?

Joshua M. Isner: Yes. For sure. And we think AI is the thing that takes that opportunity to the next level as well. Now it is like, if you want to deploy things on-premise, you are essentially signing up for zero AI tools into the future, which I think is becoming pretty clearly not a winning formula. And so I think that is a nice push to the cloud for some governments that have been slow to adopt it. And we are here certainly waiting for that moment with a lot to offer, not only in cloud but also in AI.

Mike Latimore: Alright. Thank you.

Erik Taylor Lapinski: Thanks, Mike. Up next, we have David Page at RBC. And welcome to the call with us.

David Page: Thanks, Erik. Nice to be here. Congrats on the great results, team. I had a question—maybe jumping back to what Jonathan Ho had asked. In terms of driving growth in the enterprise market and the go-to-market, I guess if I think about U.S. public safety police station, the chief of police would then call the neighboring chief of police and say, “Oh, hey, I have this great Axon product. Why do you not look at it?

Look how beneficial it is.” But a big-box retailer would not exactly call their biggest competitor and say, “Hey, I have this great camera that is reducing theft and all the benefits that it has.” So I was just curious—maybe you could flesh out just how you are going after new business there.

Rick Smith: Yeah. Let me have a go on that one to start, because I would actually tell you they do call each other. The security departments are mostly former law enforcement, and they are under a lot of pressure, and they do not view that as a competitive advantage in any way. It is like that is an area—like we partner with Aura, one of our investment companies out of New Zealand, that basically runs a case management software similar to Evidence.com for retailers, and they share wildly with each other because they want to track—they are all being hit with these organized retail crime organizations. And so there is actually much more collaboration than I was expecting.

I expected a more competitive dynamic, and there certainly is on the retail side, but I am not seeing anybody viewing this as an area of competitive advantage. They are quite collaborative. And then similarly, on the medical side, I was just with a major, major medical provider. It was interesting. There is a fair amount of mission-driven stuff too. This company in particular operates a ton of ambulances and vehicles and EMS services. But their day to day, they are pretty geographically segmented, and they are constantly deploying ambulances to calls that may come into a competitor, or they will have a call that comes in that they will end up shunting over to a competitor.

I think in those cases, I have not seen in those industries a negative competitive dynamic. In fact, there is a lot of the same collaboration.

Joshua M. Isner: Yeah. Just to add, it is incumbent upon us to build the business case also for every customer. Ultimately, I think you are right. In general, there is an element of competition, at least a little more so than in public safety. But, ultimately, all of these decision-makers understand what an ROI looks like and that our products drive that ROI and solve real problems for them. So our lead-gen efforts and how we show up for new prospects matters probably a little more here than in public safety. But at the same time, I think the market is so much bigger as well that I do not think the opportunity slows down as a result of that nuance.

David Page: Great. Thanks. That is it for me. Thank you.

Joshua M. Isner: Thanks, David. Welcome.

Erik Taylor Lapinski: Thanks, David. Up next, we have Jordan Lyonnais at Bank of America.

Jordan J. Lyonnais: Thank you for taking the question. Rick, you touched on it a little bit in the Caldwell League podcast where things had not gone where you expected. So when we look out to 2028, having this giant sensor kit just under the Axon tool belt, what do you worry about could go wrong?

Rick Smith: I think for us a misstep around privacy and data handling. We are seeing that those are concerns right now out in the public. I think that would be one where we could make a mistake that would have outsized negative consequences. I think also our customers are going to expect that we can continue to deliver more and more value. I mean, they are all hearing the same things we all are—that you can do more with less cost in terms of developing technology. So I think it is incumbent on us to make sure we are still earning our way up the value chain the way we always have. It is something I am in particular proud of.

When Josh talks about where we were five years ago, with a much lower peak price point—it was, I think, in the $200 range—we have not just raised prices to get there. We have launched a ton of new products that did not exist. And I think that we have to just continue to deliver there. And Jeff and his team are pretty busy making sure that expectations for what we deliver in the AI Era Plan are going to continue to grow, and we have to hit it.

Jordan J. Lyonnais: Thank you.

Erik Taylor Lapinski: Thanks, Jordan. Up next, we have Keith Housum at Northcoast.

Keith Housum: Good afternoon, all. Thanks for the opportunity here. Hey. Just unpacking the enterprise opportunity a little bit more. Perhaps you can provide a little bit of color about, one, which verticals you are having the initial success in, and perhaps any color you can give on this second large customer that you have in terms of which vertical they lie in. And then, finally, as you are going after the enterprise market, are you leading with Fūsus? Are you leading with the Mini? What is the lead product there? And are people signing up for a multipack, or are they going with one product and your goal is to land and expand?

Joshua M. Isner: Yeah. Thanks, Keith, and good to see you. I would say, look, our salespeople are as allergic as you could possibly be to the show-up-and-throw-up mindset. We want our salespeople showing up and asking a million questions to identify the opportunity and then figure out what product is going to solve the problem. And so I think there are moments where Axon Body Mini leads to more conversations around software and AI. I think there are moments where Fūsus is really the exciting part. I think there are moments where Outpost and Light Post or DFR or counter-drone are the exciting first offer. And I think that is similar to international.

The beauty of it is you just have to get in with one product, and then everything works so synergistically. We will bet on ourselves and our ability to sell more over time. And so I think now more than ever, it varies. For a little while, it was a body cam and then you go to the next step. Now it can be a number of different first products.

Keith Housum: Great. Great. Any color on the large customer that you announced being your second one in enterprise?

Joshua M. Isner: Yeah. So I appreciate you asking, Keith. Personally, I am not sure that we are going to be announcing logos from us on enterprise deals. I am not sure that it serves us. I think we will see. I think some of these will just come out in the press. Or, hopefully, some of you are walking into these major businesses over time and you see our products just being used in the wild. But I think we are trying to do the calculus of, is it worth starting to identify these by name for competitive reasons or not? And so that is hence our trepidation on that.

Keith Housum: Fair enough. I know we are running out of time, so I will turn it back over. Thanks, guys.

Joshua M. Isner: Thanks, Keith.

Erik Taylor Lapinski: Thanks, Keith. Up next, we have Meta Marshall at Morgan Stanley.

Meta Marshall: Great. Thanks, and congrats. I guess just maybe first question on the 911 market. Is that a different buyer within the organization, or how much can you use cross-selling and leveraging the relationships you already have within some of these state and local environments? And then maybe just a second quick question for Brittany. You mentioned the 30% on the premium OSP plan, understanding that continues to get enhanced over time. But do you see any major changes to that percentage driving some of your expectations for 2028? Thanks.

Joshua M. Isner: Brittany, do you want to start with the second one first?

Brittany Bagley: Yeah. Sure. I mean, look, the interesting thing about that is the premium plan goes up every year. So each year, we start with a new premium plan. I do think that over time, we will continue to roll more of our customers onto our most premium plans. That is a little bit of what you are seeing underlining the 125% NRR number. So I think you can continue to see it moving up over time. I also think that we continue to add amazing new products and that takes that premium plan price point up. So it is not like I see us getting saturated on how many people are on the premium plan in the next few years.

Joshua M. Isner: And, Meta, great question on the buyer persona in 911. I do not think it is cut and dry with one buyer. Sometimes the RTCC—the real-time crime center—really has a lot of say over that. Sometimes the police department or county operates their own 911 center, and again it is a very tight decision loop. Sometimes a PSAP supports 5, 10, 20-plus different accounts. In there, that is probably the case where we get the least network effects from our existing customer base, but there is still some. And I think Prepared and Carbyne over the past several years have really built up their own brands and relationships in those spaces.

I think we view this as an opportunity to bring more potential buyers into our universe, not necessarily an uphill battle to go meet a bunch of new buyers for the first time.

Meta Marshall: Okay. Great. Thanks so much.

Erik Taylor Lapinski: Thank you, Meta. Up next, we have George Notter at Wolfe.

George Charles Notter: Thanks a lot, guys. Alright. I think I heard you say earlier in the call that you have 500 agencies deploying Axon Assistant. I think Axon Assistant is an element of the AI Era Plan. I guess I am inferring that you have 500 AI Era customers at this point, and that translates into $750 million bookings. Is that the right math exercise? Am I looking at that correctly?

Joshua M. Isner: Not quite, George, because you could buy some of these as a standalone as well. And so it is not one for one—any customer who adopts a Draft One or an Axon Assistant is automatically an AI Era customer. Directionally, that is kind of the right line of thinking—that a number of those deals will be on the AI plan and translate into a number. And you know what the pricing is. We publish it. It is not a secret. It is just a matter of covering the market.

Brittany Bagley: And I think also, George, what we were calling out is that is one of our very newest features inside the AI Era Plan. And so not every customer turns on a new feature immediately. So we are sharing that because it is a really nice indicator that customers are excited for it, and they are starting to adopt it. But it does not tie exactly back to how many customers are on our AI Era Plan.

George Charles Notter: Got it. Okay. I guess where I was going with this is I am trying to understand the penetration rate you have got at this point on AI Era. And I guess if I think about 15,000 law enforcement agencies in the U.S.—roughly just the U.S.—and I use that 500 number as a proxy for your penetration, am I in the right ballpark in terms of where you are in penetration rate?

Brittany Bagley: I would go back and I would look at what we charge on a per-officer, per-month basis for that, consider that inside of the $750 million of bookings that we shared, and then you can tie that back to the officer count.

George Charles Notter: Alright. Makes sense. Thank you.

Jeffrey C. Kunins: Thanks a lot.

Erik Taylor Lapinski: Thanks, George. Up next, we have Jim Fisher at Piper Sandler.

Jim Fisher: Hey. Thanks, Erik. Thanks, everybody. Look, going back on TASER—TASER noticeably reaccelerated, and we have been hearing customers that had been on TASER 7 were sort of being told end of support on that as they come up for renewal. Not a forced refresh by any means across the base, but encouraging them to move to TASER 10.

So I guess how much refresh of TASER 7 to 10 could we see this year, or what percentage of the base is still actually on some of the legacy offerings that we could actually have a bit of an upgrade cycle on top of the fact that if I look back five years ago, your incremental bookings really improved versus this time last year. So should we be expecting a larger portion of your growth this year actually coming just from contract renewals?

Joshua M. Isner: So, Jim, great question. I do not think it is the case. We view it as failure when a customer buys TASER 10 and then their upgrade is a TASER 10 five years from now. So we are really focused on trying to get the new version of the TASER out to market as fast as we can. I would say, TASER 7—we would never not support the product. Part of our inventory strategy is, hey, we launched a TASER, we know it ships for 15 or 20 years before it is discontinued. And that kind of is the hedge on being more aggressive with holding more inventory upfront. So we will continue to support TASER 7.

Plenty of customers on it and using it. Of course, we view those as the population we have to go earn the right to upgrade, and we believe we will. But, high level, I think you should think of the TASER business this year as plenty of demand and orders to support the revenue guidance. So certainly, we do not see anything different than that.

Brittany Bagley: Yeah. I would maybe just add—I mean, that is all spot on, including the fact that we still have customers we are selling X2 to. So yes, TASER 10 is doing incredibly well, but that is driven a lot more by the efficacy of the product than it is us not supporting it. But I think the thing I would not miss is as we have big corrections deals and we have big international deals, you are seeing new customers come in. Right? So there is always this conversation around TASER of, what is the upgrade cycle? That still exists. Customers do five- to ten-year contracts. We upgrade TASER every five years.

But do not forget the piece in the TASER business as new customers are coming in and actually adopting TASER.

Jim Fisher: Perfect. I will be respectful and let somebody else ask one.

Erik Taylor Lapinski: Thank you. We will go to Tim Long at Barclays next.

Tim Long: Thank you. Yeah. Just two quick ones if I could. First, obviously a lot of success in these other markets outside of state and local. So just curious—anything jump out that is different there relative to deals that are in more of the core things like win rate, deal sizes, bundles, anything like that you can point to directionally on those? And then second, I did want to follow up on these hardware comments. TASER 10 and AB4 both seem to have a ton of incremental utility compared to prior products.

So, Rick, I think you talked about some magic in hardware, but I am just curious—as you have taken such big leaps on this last set of some of the core products, does it get more and more difficult over time to innovate further and take bigger steps compared to what was just accomplished with the really successful ones? Thank you.

Rick Smith: No. I actually can see—I think our next generations of hardware are all going to be pretty compelling. We have got at least one new category in the pipeline as well. I am knee-deep in the next-generation TASER, knee-deep with Rubén Caballero, who Jeff hired on his team, who is leading our sensors space. His last gig—well, I do not know if it is his last gig—but he worked for Steve Jobs directly as the hardware lead on the iPhone. Bringing him in, a lot of new creative energy looking at our personal sensor space. So we still have a lot of room to innovate. Jeff, how would you answer it?

Jeffrey C. Kunins: No, I think that is fine. I was just half-jokingly saying we have at least two whole new categories in the pipeline, but I thought that was good.

And I think to everything we said all the call, it all just keeps coming back to where we continue to differentiate on being the world’s best combination in this area of hardware and software working together, and on having a full-spectrum portfolio of products that we grow both organically and through bringing on early-stage disruptive winning teams and product lines, and bringing them into the fold in a way that is just as if they were organically built—which is a completely different approach to just sort of GE-style stacking together a bunch of independent, separate, nonintegrated companies. I do not think we are anywhere close to running out of ideas and things to be innovative on.

Brittany Bagley: I am not on the product team, but neither Rick nor Jeff nor their teams are slowing down in any way.

Joshua M. Isner: And, Tim, on your first question on the different market dynamics, depending on which buyer we are talking about, ultimately, state and local is a market that values premium products even if they carry premium prices. The only buyers that are buying anything else are doing that on price. They are willing to take a more primitive product at a lower price that is not full-featured. And that is happening very, very rarely in state and local, and I believe that will continue to happen very, very rarely.

Internationally, we have said for years, if you are a customer that wants on-prem with primitive tools and you want to pay a very inexpensive price for that, we are probably not the vendor for you. And there is some of that internationally. But the good news is more and more we are seeing customers that value the premium workflows and products and tools between hardware and software, and those are becoming Axon Enterprise, Inc. customers. And so, I think it just comes down to the intersection of price and quality. And the buyers that really value price above all—they will generally buy something else.

But the good news for us is there are fewer and fewer of those buyers in public safety.

Tim Long: Thank you very much.

Erik Taylor Lapinski: Thanks, Tim. Up next, we have Joseph Cardoso at JPMorgan.

Joseph Cardoso: Hey. Good afternoon, guys, or good evening. Thanks for the question here. Maybe just one for me just to be respectful of time here. When we think about the AI Era Plan traction today, just curious if you could touch on—now that it has been in the market for a while or at least a year plus—if you could touch on customer behavior around adoption of the plan and whether you are seeing any interesting trends.

And maybe specifically curious if adoption is being more done in isolation, meaning you are just seeing folks go out and basically purchase the AI Era Plan, or if you are seeing customers expand spend in other areas of the portfolio at the same time. Just trying to get a sense if you are seeing any pull-in as you are going out to customers and pitching the new plan there. Thank you.

Joshua M. Isner: Yeah. Thanks a lot, Joe. And I think, look, oftentimes, OSP and the AI Era Plan at this point are bought in tandem with each other, and that often includes a newer version of OSP with more new products in it. So I think fair to say that it is not in isolation that customers are buying the AI Era Plan. They are buying it along with other capabilities. And I think, look, we have got our customer success team—their sole measure of success day to day is adoption of new products. That is really what they are focused on.

When we sell AI Era Plan, getting customers comfortable with using it takes a little bit of work, and that is what our customer success team does day in and day out, and they are very, very good at it. I am particularly excited—I think as we ideate and talk about new AI products that are going to go into that plan, this is going to be an exciting year for that. And we are going to start unlocking some new capabilities in that plan for customers over the coming months, and going into next year. I think there will be a lot to talk about in terms of new capabilities in that plan.

So certainly, very bullish on what the future of AI adoption looks like amongst our customers.

Joseph Cardoso: Got it. Thanks for the question.

Joshua M. Isner: Thanks, Joe. Good to see you.

Erik Taylor Lapinski: Thanks, Joe. We will squeeze one more in here. I know we are running up a little runtime, but Trevor Walsh at Citizens.

Joshua M. Isner: Hey, Erik. Let us get through them all. I mean, everybody waited an hour and a half here. Might as well let them ask the questions.

Rick Smith: Cool.

Trevor James Walsh: Thanks. I like it, Josh. Rick, maybe for you, just on the commentary you made around drone legislation. You sounded like there was a little bit left to be desired about what is kind of currently out there. But as we read through the most recently passed National Defense Act, there is pretty robust language in there about moving from federal agency oversight to giving state and local powers around both drone tracking, taking down, or mitigation of threat-type drones. So I guess what do you think is lacking there still, or what still needs to be done for you in that regard? Thanks.

Rick Smith: I just think it is a continued evolution. I know there are some special accommodations being made for the World Cup for those cities. And then there is some more broad-based stuff. But I have been walking all to Congress. We have got a bill to create a new less-lethal category that would—then I understand why people say—exempt the T10 from the firearms act. It will take an act of Congress, which is going to be pretty hard to do. But we are continuing to engage there. To be honest, I have not checked in on the latest status of where each type of regulation is on this.

But I think just directionally, today the state and local really cannot mitigate drones directly. I think in a few years, they will all get that capability, and we may see it go to a fair number of private security-type folks too, like sporting stadiums and people running critical infrastructure. So the main point is it is a narrowly allowed capability today. But we are building the sensor network to be able to expand and to be able to do mitigation work as well. And we just think that is going to grow as the regulations loosen up.

Joshua M. Isner: I would also say, to the administration’s credit, they have been very open to modernizing policy around drones and counter-drones, which we view as very helpful. The engagement and conversations have generally given us a lot of confidence that the government is going to adapt with the technology.

Erik Taylor Lapinski: Thank you, Trevor. Thank you. We have got Joshua Reilly at Needham next.

Joshua Christopher Reilly: Alright. Thanks for squeezing me in here. Just two quick items for me. On the international business outside the Commonwealth countries, you kind of characterized that 2025—was that an inflection point in terms of that becoming a much bigger contributor to international? And then secondarily, on Carbyne and Prepared impact to the guidance, I got a number of emails into the quarter asking about the impact there on revenue and EBITDA. I know it is relatively immaterial, but any comment there? Thank you.

Brittany Bagley: I can take the second one. Yeah. I will start with the second one. On Carbyne, there is literally zero impact because Carbyne was not even closed until this month. And to your point on Prepared, it was only partway through the quarter. It was really an immaterial impact. So we are very excited for both businesses, but you can expect to see those really start to impact going forward.

Joshua M. Isner: And, Josh, what was the first question again? I think it was international related, but—

Joshua Christopher Reilly: Sorry. Yeah. It is just about—is there an inflection point in the international business outside the Commonwealth countries.

Rick Smith: Look. It is only an inflection point if we follow it up with an even better year.

Joshua M. Isner: Right? And so we will see at the end of the year if it was or it was not. It certainly feels that way. But it is not going to feel that way if we do not show up and do our jobs well and bring on more and more international customers. So that will be the focal point. We feel like we have some wind at our back, and now we have to capitalize on it.

Joshua Christopher Reilly: Thanks, guys.

Rick Smith: Thanks, Josh.

Erik Taylor Lapinski: Thanks, Josh. Alright. And our final question will come from Jeremy Hamblin at Craig-Hallum.

Jeremy Scott Hamblin: Thanks, and I will add my congratulations. I am going to ask a high-level question. So I think what is interesting—if we go back three years ago when you unveiled the FY 2025 plan, at that point in time you were assuming a 20% sales CAGR. And with each successive year, you have raised your expectations on your sales growth—your revenue growth for the year on your initial guidance here in February—including this year where it is 27% to 30%. I want to just understand in terms of the visibility. Clearly, you must be significantly higher in how you feel about that today than you did about the business three years ago. What is providing that type of confidence?

Is it that you just have a lot more shots on goal and a lot more ways that you can win? And, obviously, the business has tacked on a lot of different areas, whether it is Axon 911, whether it is Dedrone, etc. But just can you provide a little more insight? You guys are typically pretty conservative. I do not know how many quarters in a row of beat-and-raises in the 20s, I think. But I just wanted to get some insight.

Joshua M. Isner: Yeah. Jeremy, it is a great question. And I appreciate it. I think some of what you said certainly factors into it, but the biggest thing is the bookings growth rate. Right? Like, when we issued that guidance a few years ago, we were seeing bookings in that range as well in terms of year-over-year growth. Now all of a sudden, they are accelerating each year and to a high point last year, and, hopefully, we will be able to trump that this year.

But, you know, when you look at that type of growth and you factor in what all those guaranteed dollars already mean for us as they come in, certainly it gives us more confidence that revenue will continue to be exciting in its growth rate. And, at the end of the day, even five-year normalized bookings were accelerating nicely year over year. And so, again, even when you zero in, it gives us more and more confidence that these bookings are going to continue to translate into growing revenue. And so that is probably the number one consideration. Certainly, we have the pipeline, and some of these larger deals take longer to close.

And so we are talking about deals now that are going to hit next year in some of these markets. And so I think it is a combination of a few things. But ultimately, one of the things we think we do very, very well early every year is establish what the floor looks like, and then as things start to become more and more true throughout the year, we can update that guidance as we go. So that is a little bit of commentary about how we look at the growth rate.

Brittany Bagley: I would echo that, Jeremy. Just mechanically, if you look at it, we have our future contracted bookings, and we talk about how 20% to 25% of that will convert in the following year. So if you think about how we did guidance last year based on our future contracted bookings number, we are actually taking a very, very similar approach to our future contracted bookings number this year and how much we think bakes into it. We just have a bigger future contracted bookings number, so you have more that is naturally carrying over into the next year.

And then the delta between that future contracted bookings number and our guidance is based on the pipeline and what we think we can go get. And there, to your point, we just continue to see these underlying metrics like our NRR and the potential ARPU and what customers can do because we have so many more products and so many more markets. You can imagine that gives us comfort in hitting that relatively larger number with our pipeline each year. And you can actually roll that all the way forward to 2028 and keep a consistent math philosophy.

Jeremy Scott Hamblin: Got it. Thank you so much.

Joshua M. Isner: Alright, Jeremy. Thanks a lot.

Erik Taylor Lapinski: Thank you. We will kick it to Rick to close us out.

Rick Smith: Hell of a year. As Josh would say, next play. Again, just really pumped to be part of this team, getting to work on these problems, and have supportive shareholders. Especially as we enter this—it does feel like this year is different. Just the world is changing really fast. And for years, I keep putting up pictures of Charles Darwin’s quote that it is the adaptable that survive. And I think that is really the incumbent. Can we be as adaptable as the company we are today as we were when we were smaller? And only time will answer that, but we are sure focused on it. So thanks, everybody.

Stay safe, and we will see you maybe at Axon Week where we may have a few announcements.

Joshua M. Isner: Thanks, everyone.

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