AXONAxon Enterprise, Inc.

“While all of our software products continue to grow, AI was a standout with AI product revenue growing more than 700% year-over-year. This is on a small revenue base, but is delivering on the strong bookings from last year and will continue to scale.”

“just today, a major city in the Mid-Atlantic region, went in front of their city council and had a $150 million deal approved that included the AI Era Plan.”

“we announced the AI Era Plan at the very, very end of 2024. So last year was a great start. We had said we had booked $750 million on it.”

“A major driver of that momentum is the continued adoption of the AI Era Plan. AI bookings were up 140% versus Q1 last year and we are seeing AI move from early interest to a standard part of how large agencies think about their future technology stack. In fact, nearly all large domestic law enforcement agencies are now including AI in their purchases.”

“Axon Vision, Guardian and Assistant are early examples of what this phase looks like, always on, always available and more and more intelligent. Axon Vision enables teams to understand what's happening in time so they can respond with the best and most informed resources. Axon Guardian monitors alongside officers and can call for help before they can. Axon Assistant has already surpassed 1 million uses and will soon be available wherever officers work.”

“Just yesterday, I hosted a collection of chiefs in San Francisco. Two years ago, when I queried the room who used AI, it was almost 0. Today, it's 100% are using AI tools in their personal lives daily, but they know those tools can't be used on government data. And that's why we added the Axon chatbot into a system. So they have sagacious, secure, accredited AI, they can use at work.”

“you're seeing AI come in. So there's really no sort of 1 driver. I would say you're seeing a business hit on all cylinders, and you're seeing the AI plan really kick in on top. So you're seeing the benefit in ARR of our big bookings quarter in Q4. You're starting to see that show up.”

“BriefOne is really focused much more on an investigator or a command staff or a prosecutor compared to Form One, the new feature that enables them to use their digital evidence to fill out any form, not just ours, but any web-based form.”

“that happens very naturally even before the AI Era Plan that was happening relatively naturally because we do release new products every single year. We released some on Axon Week. We'll have more exciting things to talk about at IACP. And those are often catalysts to rewrite contracts. Customers see something they like and says, okay, if I'm going to buy this, we might as well put everything together and create a new contract that contemplates all of this. And between camera upgrades, new products, urgency around AI, these are all catalysts for those conversations.”

“the feedback I got pretty overwhelmingly from customers was that, that really hit home. There's a sense of like, my God, the world is moving fast. It's like almost disorienting, but we know we have to keep up. And the general sense was, look, you guys have always -- you brought us TASERs when we didn't think we needed it. You brought us body cameras when nobody wanted to wear them. And like thanks for making this something where we have a partner that we feel like you guys can help us make sense of all this because it's head spinning.”

“this is where the Era plan is just really loved by customers. This idea that, hey, this is moving so fast like we can't even predict with certainty what we're going to be building next year, and they'll avoid having to constantly going back to procurement cycles that would just be exhausting. So they really love this idea that you know what, Axon Vision is new, you didn't know about it when you signed your contract, frankly, maybe we didn't either, but you're going to get it if we're on that plan.”

“the more features we add, you should expect that to be reflected in the price as we revise it each year. And there is an annual kind of escalator in the contracts to account for the fact that each year will represent more value and functionality in the plan. And so generally speaking, it serves customers well to get in early. And the longer you wait, the more the sum of the parts adds up.”

“the enthusiasm that we're seeing customers have for how quickly we brought the data from Prepared and 911 alerts directly into Fusus and then also bringing that directly into Skydio as part of DFR. Those things together make shorter response times happen, and that is a perfect example of the flywheel that Rick was referring to before.”

“We expect the rapid adoption to continue as we deliver more AI-enabled capabilities into the platform, including Axon 911, Axon Vision, Axon Gravity and an expanded Axon Assistant functionality. We are determined to become the AI company in public safety, and we are well on our way.”

“it is no secret that physical AI infrastructure is going to be a source of record spending in the years to come. Our enterprise team is in conversations with many of the largest infrastructure providers to protect their ever-growing portfolio of sites and data centers.”

“Our AI products are also continuously improving including with the launch of new features at Axon Week, which we highlighted in the shareholder letter. The value proposition is clearly resonating and adds another leg to our consistent software growth.”

“assistant in Draft One are becoming enterprise-ready. We're showing up as a true technology leader in this space with the advantage of already knowing how to deploy at a large scale securely.”

“it's a new sensor in this broader ecosystem. You can run AI on it. At the edge, you have immediate utility from the plate reads and it fits in this broader play with Axon Vision and so forth.”

“We will also be launching Axon Vision directly into enterprise. By recognizing abnormalities as they occur, this product will add immediate value to any security operation.”

“outcomes now depend on the fusion of sensors available and connected in real time, with an increasingly intelligent AI backbone. Across AI, real-time operations, drones and connected devices were moving beyond product adoption and towards system adoption, a system that operates faster, safer and with more awareness.”