Axon Enterprise, Inc. Q2 FY2025 earnings call

• Customer Obsession: Continued emphasis on customer experience as central to business operations. • Bookings and Growth: Second quarter bookings included $150 million from AI Era Plan, with over 30% of bookings from new product categories. State and local teams secured large deals, including the largest in company history. International and enterprise teams saw growth, with TASER gaining a new customer in Africa and an enterprise contract in the gaming space. • Product Pipeline: Broad and cohesive pipeline of products in development, focusing on innovation to meet customer needs.

Software and Services: Revenue grew 39% year-over-year to $292 million, with net revenue retention at 124% for 20 consecutive quarters. Connected Devices: Revenue increased 29% year-over-year to $376 million. TASER grew 19% (driven by TASER 10), Personal sensors grew 24% (driven by Axon Body 4), and Platform Solutions grew 86% (driven by counter-drone and virtual reality). Adjusted gross margin was 63.3%, up 20 basis points year-over-year.

• Raised 2025 revenue guidance to $2.65 billion to $2.73 billion (approx. 29% annual growth at midpoint). • Raised adjusted EBITDA guidance to $665 million to $685 million, maintaining 25% margin target. • Expect to increase hiring, particularly in R&D, to support product roadmap and new markets.

• Uncertainties in execution of growth strategies, including challenges in international expansion and managing tariff-related expenses. • Dependence on successful adoption of new products and maintaining customer trust.

Q: Keith Housum asked about enterprise addressable market and bookings success.

A: Joshua Isner discussed enterprise product interest breadth and noted booking growth exceeding expectations.

Q: Andrew Sherman asked about AI Era Plan demand.

A: Joshua Isner said demand for AI Era Plan is accelerating, with strong pipeline in back half.

Q: William Power asked about Platform Solutions and DFR.

A: Patrick Smith and Joshua Isner discussed counter-drone demand and DFR pipeline.

Q: Michael Ng asked about bookings growth guidance.

A: Joshua Isner explained diversified growth drivers including new products to existing and existing to new markets.

Q: Meta Marshall asked about AI lessons and immigration opportunity.

A: Joshua Isner discussed AI product value through user experience and federal immigration opportunity.

Q: Joe Cardoso asked about second half bookings.

A: Joshua Isner and Patrick Smith discussed high international interest and Q3/Q4 excitement.

Q: Jonathan Ho asked about second half bookings confidence.

A: Joshua Isner cited strong pipeline and execution confidence.

Q: George Notter asked about per officer metric and Officer Safety Plan.

A: Joshua Isner and Brittany Bagley discussed per officer pricing and officer safety plan upgrade potential.

Q: Alyssa Shreves asked about international mix and basic plans.

A: Joshua Isner and Brittany Bagley discussed international growth and basic plan upgrade dynamics.

Q: Jeremy Hamblin asked about Platform Solutions drivers.

A: Joshua Isner and Brittany Bagley said Dedrone is not the biggest driver but part of growth.

Q: Joshua Reilly asked about light post cameras and drone monetization.

A: Joshua Isner and Brittany Bagley discussed light post camera trials and drone partnership referral fees.

Q: Jordan Lyonnais asked about Fusus FedRAMP and Dedrone DoD strategy.

A: Jeffrey Kunins discussed Fusus FedRAMP compliance and Dedrone's strategy in DoD programs.

Q: Trevor Walsh asked about staffing and AI impact.

A: Patrick Smith discussed AI aiding officer productivity and budget reallocation.

Q: Mike Latimore asked about Enterprise deployment and TASER 10 capacity.

A: Brittany Bagley and Joshua Isner discussed Enterprise pipeline and TASER 10 ramp.

Q: Andrew Spinola asked about gaming contract.

A: Joshua Isner discussed video relevance in gaming contracts.