Axon Enterprise, Inc.

Hello, everyone, and thank you for joining Axon's executive team today. Before we get started, I'll note that our remarks today are meant to build upon our most recent shareholder letter and investor materials, which you can find at investor.axon.com. During this call, we will discuss our business outlook and make forward-looking statements. These comments are based on our expectations as of today and are not guarantees of future performance. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. as discussed in our SEC filings. We will also discuss certain non-GAAP financial measures. Descriptions and reconciliations to GAAP are included in our shareholder letter and available on our investor website. Now, as always, before we kick it over to Rick, we have a quick video to get us started. Let's pull it up.

Welcome to Axon Week and welcome to Nashville, Tennessee.

Welcome to the Singularity, where AI changes the equation entirely. We're standing on the most extraordinary frontier our species has ever stood at. The explosion of AI capabilities we've introduced this past year has been mind-blowing. For example, fax-on-assisting grouped with a few scales to a chatbot with real-time detection on the way. Prepared and carbine doing AI for 911 and voice. Vehicle intelligence, outposts and light posts with computer vision, draft one, form one, brief one, or streamlining records. Smart detection, auto-intel, attribute search help you make sense of your evidence. Case compass and people search go through your records management. Metacoach and VR are transforming how you train with interactive AI. And next, we're bringing Axon Gravity. One program to pull all of your agency's data into one place. So you have a super intelligent analyst. You can ask it any question powered by AI. 20 years ago, we were a company with one product, the Taser. Today, we operate the largest network of public safety sensors and technology on Earth. And everything we've built sets us up for this moment now. We can layer AI on top of all of this, but we must do this ethically.

This isn't automation replacing judgment. Humans make 100% of decisions.

It's helping humans do things they couldn't do on their own. Speak 30 languages. serves the right information at the right moment.

Our mission is about connection, but the most important connection we've ever made aren't just in the technology, they're here in this room.

In the relationships that we have with Axon, the one thing that really sold me is this is much more than a company.

The relationships with the people who trust us, with the hardest moments of their lives, that's the network that matters most. All right. Thank you, everyone, for joining us for our first quarter 2026 earnings call. I'm really pleased with how the year has started, and I'm even more excited about where we're going. I always say Axon Week is one of my favorite events of the year, and every year it somehow gets better. What we shared with customers this April felt fundamentally different. It's no longer just about our new products. After decades of partnership, it's about how we've earned our customers' trust at a moment when it matters most. I'm more convinced than ever that we're building something the world genuinely needs. I spend my time thinking about how we can make an impact, how we can do more, faster. Today, I think we've passed the inflection point. We are entering what I believe will be a generational leap in both the pace of innovation we can achieve and the speed of customer adoption we will see. There are two things I'm looking at that drive my conviction. First, Technology is no longer evolving linearly or even exponentially. It's evolving across multiple dimensions at once, a hyper-exponential. The result is a compounding effect where more data, more tools, and more connections multiply what's possible. Our ecosystem is built for exactly this moment. We've created secure end-to-end operational workflows across products, customers, and verticals. We made the decision over a decade ago to invest in tightly integrated solutions across hardware and software, creating an ecosystem that allows customers to scale and grow as fast as technology is moving. Our software is better because of our hardware. And our hardware enables software features that wouldn't be possible without capable, connected sensors at the edge. No single tool or even a collection of individual tools can deliver the same value as this kind of unified system. And as technology advances, the difference isn't incremental. It's transformative. The simplest way to think about it is this. 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, we're moving beyond product adoption and towards system adoption, a system that operates faster, safer, and with more awareness. 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. And over time, our Axon Gravity initiative will bring in more data that can be harnessed to make even more possible. Our position is the leading repository of data for our customers will continue to broaden to be the leading unleaser. Importantly, Every capability we add now makes every other capability more valuable. Data flowing through Axon 911 becomes more powerful when connected to first responder drones or body cameras. Insights from vision become more impactful when integrated into real-time operation centers. Draft 1 improves with every report and every sensor. The value of each will continue to get stronger. My second observation is just as important. Adoption is now accelerating akin to innovation and expanding in scope. In the past, new technologies were adopted gradually. Today, demand is immediate. Customers want these tools now, and they want more of them. They are ready. Just yesterday, I hosted a collection of chiefs in San Francisco. Two years ago, when I queried the room who had used AI, it was almost zero. 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 the system, so that they have a secure, accredited AI they can use at work. It's just one of many features we're bringing to them. This isn't limited to law enforcement. BUSIS, D-Drone, Axon 911, licensed flight readers, vehicle intelligence are being deployed across entire cities and countries. And now enterprises are seeing similar needs. The environments may differ, but the requirements and the needs are the same. Safety, efficiency, and trust in a fast-moving world. Everything we do is built on trust. Our customers move faster than anyone else to adopt AI because they trust how we build it. Carefully, deliberately, with the hard conversations happening up front, not after the fact. That's what makes our technology more durable, more trusted, more widely adopted. And that trust is what earns us the privilege to keep pushing forward. Three decades of building, millions of sensors, millions of users, trillions of data points flowing through one connected network. Every camera, every device, every line of code, it's all been leading here. to this moment, the AI breakout. And no one in public safety is positioned like we are, positioned to change the world, positioned to create extraordinary value for our shareholders, our customers, and society itself. I'm incredibly proud of what this team has built. And as I look at all this coming together, I'm just even more excited about what comes next. And with that, I'll turn it over to Josh.

Thanks a lot, Rick, and good afternoon, everybody. I'm proud to report that we're off to another incredible start here at Axon. As Rick mentioned, we welcomed 3,000 people to Axon Week in April. We quickly learned what customers are excited about, what's gaining traction, and ultimately where our pipeline goes from here. The reception from agencies, enterprises, and international partners was unlike anything I've seen before. Frankly, it's reflective of the growth we are seeing every day. Our flywheel is spinning. We are delighting customers with market-leading products, pairing that with customer obsession. We are earning the right to do more, and we wear that as a badge of honor and a badge of responsibility. And that expanding opportunity set is already showing up in our results. We entered 2026 with tremendous momentum coming off a massive Q4 and And the team came out of the gates even faster than we did last year. Q1 was our strongest ever first quarter across revenue, bookings, and new products. And it was a record in markets, U.S. public safety, international, and enterprise, each setting first quarter bookings records. The core is off to a great start with sustained taser growth rates, and the breadth of overall demand is compelling. It tells us that the growth we are seeing is not isolated to one product, one geography, or one customer segment. Across the business, we are tracking indicators like customer engagement, pipeline quality, adoption of new products, and continued strength in the core. And those indicators support another year of 30-plus percent revenue growth. 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. This is a powerful signal that customers are treating AI as a core capability for improving productivity, accelerating workflows, and giving officers time back. 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. But the AI error plan is not the only thing driving explosive growth. DDrone, our counter drone business, is scaling beyond our most aggressive assumptions. Bookings are up 500% year over year, and we are continuing to see rising demand. D-Drone is now on a similar trajectory as the AI era plan, and it's relevant to every market we sell into. Rick saw this opportunity years ago, and as it is coming into fruition, we are well positioned to serve our growing and diversified customer base with this product line. For example, D-Drone protected the 2026 Super Bowl as well as last week's Kentucky Derby. We are proud to support the American World Cup sites as well as several other large-scale events throughout the year. D-Drone is also featured in some of our largest international opportunities of the year. This allows for expansion into other product categories, and we are seeing that play out in real time. We have laid the infrastructure to sell globally over the last several years, and now D-Drone has established itself as a further accelerant to our growth. And finally, 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. And speaking of enterprise, we have exciting news to announce on this front as well. After a 50% year-over-year Q1, In April, our team closed a $40 million opportunity with one of the largest telecom providers in the world, the deployment centers around FUSIS, which continues to garner interest and drive growth in this segment, along with Axon Body Mini and Axon Outpost. 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 operations. At the same time, Assistant and Draft1 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. Something very special is happening at Axon right now. Our core investment in both products and markets are paying off just as our acquisitions are hitting the steepest part of their respective curves. We acquired Fusys two years ago and D-Drone approximately 18 months ago as of Q1. We have now booked over 1.5 times the combined purchase price of those two companies. We see a similarly disruptive opportunity in Axon 911 as we integrate Carbine and Prepared. We are proving our momentum is sustained, and because we expect a lot more growth, I have sponsored a significant investment in core product inventory. We are fortunate that our TASER CEW life cycles are 10 to 15 years, and our body cameras continue to sell for five-plus years. Thus, we have minimal obsolescence risk as compared to most hardware. Given the expanding geopolitical risks, the competition for key components, and the growing demand of our products worldwide, we are investing in inventory with durability in mind. We never want inventory to be the reason we cannot maximize our growth and impact. After all, our customers do the most important jobs in the world, and they rely on more and more of Axon products. We will not let them down. Thanks, everyone. And over to you, Brittany.

Thanks, Josh. Well said on what an exciting opportunity we continue to see in front of us. Rick has consistently provided a compelling vision, and we are seeing the results of that come through in our numbers. Revenue of $807 million was up 34% year-over-year and marks our ninth consecutive quarter of growth above 30%. Software and services increased 35% year-over-year to $355 million. 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. 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. This growth supports strong net revenue retention, which was 125% in the quarter, and strong in ARR, which grew 35% year-over-year to $1.5 billion. Connected devices revenue grew 33% to $453 million. This was a particularly strong Q1 for connected devices. Taser 10 and Body 4 remained durable drivers of growth, and platform solutions, which includes our counter-drone hardware, grew 95% year-over-year. In total, across hardware and software, D-Drone revenue was up over 300% year over year. The need for counter-drone capabilities is becoming increasingly obvious and critical, and we're proud to have a leading solution in this space. As Josh mentioned, we expect this strength to continue, and counter-drone is another major leg supporting our growth. In addition to strength across our products, we are seeing strength across end markets. International revenue was up over 100% year over year as we delivered on the bookings momentum we highlighted last year, and it represented 20% of our revenue for the quarter. Future contracted bookings was up 44% year over year to $14.3 billion, reflecting this broad-based momentum. Given these trends, our strong Q1 results and the momentum we are seeing in our pipeline were well-positioned to deliver on our top-line expectations and are raising our revenue guidance for the year to a range of 30% to 32% growth. We still expect to deliver 25.5% adjusted EBITDA margins for the year, consistent with our prior guidance. This improves upon the 25% adjusted EBITDA margin we delivered in Q1, with operating leverage expected in the second half of the year, allowing us to hit that annual target. Incorporated in this guidance is continued tariffs, inflationary component costs inclusive of memory, and product mix shift from continued platform solutions growth as well as software and services. As we scale the business, we are also focusing on our free cash flow conversion from adjusted EBITDA. Josh talked about the continued investments we're making in inventory this year, which you can see in Q1. These investments will position us well to deliver on demand through the rest of this year. Even with these investments, we expect free cash flow conversion to improve meaningfully and expect to deliver approximately $450 million of free cash flow for the full year in 2026. On stock-based compensation, we expect full year of expense of approximately $590 to $620 million. As a reminder, a portion of our stock-based compensation expense is tied to our performance plans, and will only be realized if we hit the share price and operational milestones laid out as part of our XSP program. This program is long-term in nature and doesn't scale linearly with growth because of how we account for the probability of the tranches. The expected expense from this plan is down from last year. The other portion of stock-based compensation is run rate RSU grants, which are important to hire and retain the best talent. Inclusive of both of these programs, we are committed to average annual dilution less than 2.5%. As the impact from our performance plans normalize, stock-based compensation dollars should remain roughly flat over the next few years, meaning it will decline as a percentage of revenue with our continued growth. We talk about hitting 55 on the rule of 40, and yet again we delivered in excess of that goal this quarter. We're very happy with the results, especially in what is typically a seasonally softer quarter, pointing to the underlying momentum we continue to see in the business. We're focused on growing and scaling for many years to come, supported by our great customers, diversifying end markets, and broad product portfolio. We're excited to deliver another great quarter. And with that, I will turn it over for questions.

Thanks, everyone. All right. Today, at first, we have Will Power at Barrison.

Okay, great. Thanks, everybody. Yeah, congratulations on another, you know, really strong start to the year. You know, probably for, you know, Rick, Josh, Jeff, whoever wants to take it, just coming out of Axon Week, a lot of focus on some of the new AI capabilities, Axon Vision, Guardian, you know, Formula, et cetera. It would be great just to get a sense for, you know, where you saw the highest levels of, you know, customer engagement and interest and, And how that might kind of fold into the pipeline built for the year, if you think about the broader AI portfolio. And I have a question for Brittany, too.

Yeah, so let me start with that one. I would say, you know, the keynote ran a bit long because we had so many things to talk about. And then, frankly, across so many different personas in the audience, we had leaders from healthcare, we had leaders from enterprise, we had prosecutors, police chiefs, taser instructors, and Part of what I really wanted to do was to just share the breadth of everything becoming possible in every role with AI that can impact anybody who's touching this information, and then wrap it up at the end like, hey, this is like more than you can really wrap your head around, and we simplify it all with this AI error plan. And 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 know, you brought us tasers when we didn't think we needed it. You brought us body cameras when we, you know, 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. And so, really, it's just each of those features are targeting different personas. Like, you know, brief one is really focused much more on an investigator or a command staff or a prosecutor compared to, you know, form one, the new feature that enables them to use their DIG11s to fill out any form, not just ours, but any web-based form. And so, for me, it was pretty evenly distributed. I've been – this was the first year I felt that the entire vibe – Nobody was saying, like, I don't know if this AI thing is for real. Everybody was like, wow, it's everywhere, and help us figure this out. So I don't know, Josh or Jeff, if you want to add anything.

Yeah, I'll just add one quick thought, which is I think in times of uncertainty, this is where the 17, 18, 20 years in the cloud and software space and wearable space really pays off. It's like customers – trust us to bring market-leading products to market in responsible ways. And I'm really proud of Jeff and our team as to how fast we've been able to release new features into our AI era plan. I think that's incumbent upon us to continue to delight customers. And look, we're like, you know, Kentucky Derby was last week, the Belmont's in a few weeks. We look at ourselves like Secretariat at the Belmont. We want to be accelerating ahead of everybody in AI. And the sheer volume of new useful tools we are sending out to our customers. Like our customers had, we do this shock tank idea where they come up with new ideas, and we're building one, and our goal is to release that to every customer who came to Axon Week in the next couple months just to show we can go from idea to execution to output in a very condensed period of time now, and we think that's going to be a massive tailwind for our customers, our investors, and our company.

Okay, and if I can, I appreciate that. Great perspective. You know, Brittany, I guess some of the questions I've gotten, I guess, earlier have been on the pre-cash flow side, and I know you addressed it on the inventory piece and the inventory commentary. Is there any way to kind of share, as you think about the higher inventory investment, how much of that relates to higher memory costs and inflationary pressure versus just trying to meet you know, customer demand. And then any of you sharing the cap exchange, which I think came down a little bit. And just putting all that together, how do you get comfortable with kind of the free cash flow conversion targets given the moving pieces here?

Yeah. No, thank you for asking. So as we look at inventory, of course, memory is included in that overall number. But this is really about inventory investments to make sure we have supply across all of our products. and have the ability to scale to meet demand as we look forward into the next year. So I would view it as including memory and making sure that we're in a good place on memory, but not at all, you know, solely driven by memory. We would be doing this with or without memory just to make sure that we are in a good supply chain position. If you look at Q1, Q1 is our, you know, generally our seasonally softest quarter from a free cash flow standpoint. We have bonus payments. We have commission payments. We have one of our two semi-annual interest payments in Q1. And even with all of that, without the inventory investments, we would have been positive from a free cash flow standpoint in Q1. So as we look at the next three quarters of the year, we're very comfortable that with the inventory investments we have in mind, with everything we can do around working capital and the fact that we will have some of those Q1 events reoccurring, that we can get to that target for the year. From a CapEx standpoint, you know, as we go into the year, we tend to have a lot of projects, a lot of things on our plate. And then as we get into the year and we see what we're actually executing on, we can refine that CapEx forecast. And so that's really all you're seeing there is we're just refining and, you know, tightening up that CapEx forecast for the year.

Okay. Thank you. Thanks, Will. Thanks, Will. Up next we have Andrew Sherman at TD Cowan.

Oh, great. Thanks. Good to see everybody. Congrats on the quarter. Josh, the AI error plan bookings up 140%, revenue up, I think, 700%. That was a lot higher than I thought. And interesting comment on all large agencies, including that now. Maybe just expand on that. Are we hitting a tipping point now where the bundle's been out for a while? So are you seeing more viral type of adoption? Are you seeing that in the pipeline?

Thanks, Andrew. Glad we could beat your expectations on how many of these things we're going to sell in Q1 here. And it's been a great start to the year. And I think, you know, like these deals take a long time to come into fruition, right? Like we're talking, you know, 50 to $200 million deals with some of these large major cities. And as a result, you know, sometimes like it takes eight to 12 months to get these things across the goal line. So 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. But we certainly expect that number to keep rising. Like there's more and more belief in what we're doing, there's more and more engagement, there's more and more engagement across the features in the bundle itself, which are driving, you know, a better view of the ROI that we're offering. And so Just today, a major city in the mid-Atlantic region went in front of their city council and had an $150 million deal approved that included the AI era plan. And so we're seeing this all over. We're very excited about it. We know that responsibility comes with it. Like I said, we have to keep iterating and making sure that we're delighting our customers with this feature set. But I certainly have a lot of confidence in our team to be able to do that.

Excellent. Thanks. One more for you, Josh. The enterprise telco deal in April, very impressive. That's your second big deal in enterprise focused on fuses. So talk about the use case in this example. What problems does fuses solve for them? Are there more of these in the pipeline? Thanks.

Sure thing. So I think about our enterprise business in really three buckets, Fusys, D-Drone, and then the ABW or the Axon Body Mini. And so with Fusys, you know, all of these businesses have dozens, hundreds, dozens of thousands, hundreds of thousands, and in some cases, millions of video streams around the world. And as they brought those online, a lot of times they've you know, siloed across different systems, and they don't have a really unified user experience. So we're able to come in with uses and bring everything in together in one place and be able to connect it with public safety, you know, at the customer's option in terms of the protocols there. And so that's been very valuable. It certainly adds value. As camera infrastructure has grown across all cities and businesses, that's been a certain tailwind for FUSIS adoption. But we're seeing similar interest in D-Drone right now, as I said, protecting data centers, high-value warehouses, headquarters. other physical infrastructure. And then, of course, the Axon Body Mini starts shipping, production units start shipping in July. And so, as we get through beta there, we're seeing a lot of momentum, a couple major, major customers growing their deployments already of ABW, or I keep, ABW is Axon Body Workforce, which is the first version of that product. And so, We're seeing it really start to happen in enterprise. It's exciting, but it's also really exciting to see it continue to happen in public safety and to see international grow explosively as well. So a lot to be looking forward to this year. Awesome. Thanks, Josh. Sure thing, Andrew. Thank you. Thanks, Andrew.

Up next, we have Jim Fisher, Piper Sandler.

Hey, guys. Nice quarter. Look, multiple large events are coming up here. You just highlighted a few this past weekend, hopefully a horse fawn. But just how is this impacting bookings and pipeline? And really, how much of the drone kind of uptick and outsized performance is being tied to these events? And really, the crux of it all, guys, is just trying to understand, like, is this event-driven or is it sustainable kind of demand?

I would think of this as infrastructure. Like certainly events are nice moments in time where we can show off the product. They're not super large deployments and they're kind of like ephemeral in nature. But what it does do is it gives the host city and federal law enforcement a view into what's happening. Like federal law enforcement was very complimentary to us. about our D-Drone installation at the Super Bowl, and that drove interest in that segment. And so, think of these as great opportunities to show what we can do, but it's really about translating that into you know, permanent infrastructure in these cities and businesses, you know, and that's where the real long-term value lies, and that's happening. Like, D-Drone is, you know, we're very bullish about, you know, the acquisition and what it would mean for our business and what it would mean for our ability to protect lives, and all of those expectations have been shattered. I mean, the demand for this product is is in terms of hardware, about as fast as I've ever seen, you know, adoption of a hardware product that we've made. So very, very exciting and a lot of work to do to continue to build out the ecosystem there. But certainly, you know, a lot to get us very optimistic about, you know, being a leading counter drone provider.

I would just add, even if you look at some of the legislation, like the Safer Skies initiative that's coming through, It is really enabling counter-drone technology to be sustainable, and that is a multi-year program. So to Josh's point, the events are great, but I would not view D-Drone as being successful only because of events. This is a real trend and a real change in the trajectory and the need for adoption of counter-drone. And we are seeing that. I would say right now we're more limited by our actual ability to scale and get the product out the door than we are by opportunity.

It's really these things are all a catalyst for a shift in mindset to viewing CounterDrone as an essential infrastructure capability for cities, for enterprises, for all of these things. And it triggers the notion of them viewing it as a sacrosanct thing they have to add to their portfolio.

I appreciate all the details there, guys. And Brittany, not just to belabor the point, but what's your purchase commitments at this point? If I look at your inventory today and I understand the investment you're making, it's about half of your product cost for the year. So what's giving you enough confidence here that we have the inventory availability to meet the demand for the year?

Yeah, look, I think part of the thesis behind this investment is you can see how quickly we're growing and how quickly we're ramping all of our hardware. And so we want to make sure that we have the ability to hit that demand. And that is part of the investment behind it. We work really closely with all of our suppliers. We have mission critical hardware. This hardware is It is not a nice-to-have. It is a must-have for our customers. And so as we look at our investments and we look at the year, we're really making sure that we work with our suppliers to get in what we need to get in to give them those long-term forecasts. Because we have products that last for a long time, we have a lot of stability in our demand and our needs. So I would just say it's really, really close collaboration with our partners and our supply chain.

And can I just add to that, just so there's no confusion? You know, we have been investing in inventory for quite a while, and we entered the year. You know, one of the reasons that, you know, we haven't had much impact from the memory costs in terms of our guidance is because of our inventory philosophy, we had a lot of inventory for this year coming into the year, and thus, you know, we were able to be a little more patient and are still able to be a little more patient to ride this wave out on the memory costs, and Really, we're looking toward next year at this point and how we can position ourselves well across our core products so that international, like large, large international orders are not taking away from our ability to ship to U.S. customers and not putting a ceiling on our revenue growth. certainly geopolitical risk going into next year. We've got our eye on that, and we certainly don't want anything, you know, that happens in the world to have an impact on our ability to support our customers. And so we're looking at this as a sustained inventory investment to get up to certain levels where we think we can support the growth and hedge some of the risk. But like Brittany said in her remarks, that is already contemplated in our free cash flow guidance for the year.

Makes sense. Thanks, guys.

Thank you. Thanks, Jim. Up next, we have Jonathan Ho at William Blair.

Hi. Congratulations on the excellent quarter. Can you maybe talk a little bit about your AI cross-sell cadence, particularly for customers that are maybe in the middle of the existing long-term contracts? Are most waiting until their contracts expire? Is there a way for you to sort of restructure these mid-flow, particularly for those contracts that are in place? Any color would be helpful there.

Sure thing, Jonathan. A lot of that is that happens very naturally. Even before the AI era plan, that was happening relatively naturally because, you know, we do release new products every single year. We release some at Axon Week. We'll have more exciting things to talk about at IACP. And those are often catalysts to rewrite contracts. You know, customers see something they like and says, okay, you know, if I'm going to buy this, we might as well put everything together and create a new contract and that contemplates all of this in between camera upgrades, new products, urgency around AI. These are all catalysts for those conversations. And so, you know, we do rewrite these contracts as we go according to, you know, new product availability, and it has been a great driver of Booking's growth.

Got it. And then just as a follow-up, you've referenced multiple times the strength in international growth in it. I just wanted to better understand sort of the drivers here. It seems like you've initially landed with many of the national police forces. Are you seeing this strength come from filter down, or is this new national police forces? Any color would definitely be helpful.

Sure thing. It's a good question. I guess it's not one individual thing, but I think it's a combination of having a far better team and go-to-market operation. And that's not only our own internal team, but that's partners, technology partners, and system integrators and distributors. We've really figured out the right way to go to market in some of these, you know, different nations around the world, and that's been certainly some wind at our back. And then we, you know, parlay that into better product market fit. There's demand for fuses. There's demand for records. There's certainly a lot of demand for D-drone, and that's driving a lot of conversations into other product categories. And so that's certainly a big part of it as well. And ultimately, I just think we're showing up as more of a global company at this point. You know, it's not, you know, kind of one person in a very large country showing up trying to sell tasers for the first time. We're showing up like a technology vendor that can help across a number of different product lines. And that land and expand strategy is starting to really work like it did in the U.S. And the consistency of our results now is showing that. Where last year was our first year over a billion dollars in bookings, this year we have a very, very strong pipeline. and certainly hope to grow well beyond that. And we're certainly, you know, confident as we've ever been in the international business. And I think that's a tribute to Cameron, our chief revenue officer. He's done a really nice job rebuilding a lot of that function, as well as a lot of folks on the ground doing really good work every single day.

I would add in, I just got back from a two-week, two-and-a-half-week overseas trip. We are seeing some of the smaller countries looking at going all in on a national basis. which is kind of a new dynamic, and I think that's really quite helpful, especially, you know, within some of these different blocks where maybe there's historically not been as much comfort with the cloud. You know, seeing some of these smaller countries go all in gives us proof points. I had one of my, you know, first, like, 90-minute sessions with a prime minister where this is rising up to, like, that level, where they're looking at this going, wow, we could sort of leapfrog and become one of the most advanced police agencies on earth because we could just deploy everything with Axon, which is a, it's been a pretty solid dynamic to feel that shift happening, and I think if these smaller countries do it, it would give us the ability to, you know, earn our way up into the larger, as with everything, you know, the really mega forces move much more slowly, and it's true of, like, these big national forces compared to maybe some of the smaller ones, we're finding a bit more nimble, and it's, again, it's plowing the ground by having, like, for example, in the EU, having some some people leading the way, really going all in on cloud.

A lot of people say they're really fast. Similar to the enterprise discussion that Josh said before, you know, in a lot of these other countries, they've spent a tremendous amount on massive networks of CCTV cameras. And so that's another place where FUSIS is a catalyzing part of the equation, right? It's not just our body cameras and just DEMs like FUSIS. is a socket to let them get more value out of the investment they've already made in these other cameras, and that just makes the overall ecosystem story from Axon kind of easier to reach the tipping point of their interest, and so it's a great catalyst.

Thank you. Up next we have Keith Husam at North Coast.

Great. Thanks, guys. Good morning. Obviously, a very solid quarter for you guys. Brittany, if there's anything to pick on from an investor standpoint, it might be in the software and services standpoint. Software and services tends to be very lumpy. I think what we saw here is sequentially probably a little bit lower than what we were expecting. Perhaps walk us through some of the puts and takes about software and services for a quarter and how we should be thinking about that.

Sure. Happy to. I would say this is pretty typical for our seasonality in Q1. And so you saw a similar dynamic in Q1 of 2025. So we just tend to have a slightly smaller software step in Q1. If you want to look at our ARR, though, that's usually where it shows up first. And we had absolutely phenomenal ARR growth this quarter. And so really I'd look at 25 and say it comes through first in the ARR growth, and then you could expect you'll start to see that in the software step for next quarter. So I would dive a little deeper on the picking and look at it as pretty typical seasonality with very nice strength continuing in our software business, and you just see that picking up in ARR first.

Okay, appreciate it. And then, Josh, if I could ask you a follow-up to the enterprise question before. Maybe I missed this. Was this a telecom retailer? Because I understand Q-SYS, XM Body Mini, and not only the retailer, but also is this an option process? Was this you guys going to them? Press the background behind the adoption by this customer.

Sure thing, Keith. Okay. I've said on the call a couple times historically, I'm generally a little more uncomfortable about sharing names of enterprise partners because sometimes they're competitive with our other customers and sometimes there are other dynamics where it doesn't necessarily serve us to be front and center with other brands versus just supporting them behind the scenes and talking about, you know, the customer in more general terms. And so this is, you know, when you think of telecom providers, this is one of the first three or four that's going to enter your brain. I would say that. And then the use cases across retail locations, other company physical assets, certainly any video stream essentially that's in their ecosystem of one of their cameras, that's now being managed and integrated in Diffusus. And so this is really about having complete situational awareness across all of their physical assets.

Great. Thank you.

Thank you, Keith. Thanks, Keith. Up next, we have Brennan Rogers at Wolf.

Hi, guys. Thanks for taking my question. I wanted to ask a quick one on AI. Like, coming out of Axon Week, there was, like, a ton of innovation, ton of new products. How do you guys think about, like, pricing to value as you kind of furiously add these new products into the bundle, like, over the course of the year? I think traditionally, like, a pricing cycle would happen and you guys would revise the pricing in, like, you know, Q4, Q1. But just given, like, Even in the shareholder letter, you guys are talking about Axon Vision being GA and Q4. We just heard about that in Axon Week. You guys probably won't have a chance to update pricing. How do you guys think about that?

Sure, great question. Look, I think, as always, you know, we want our price to be commensurate with the value we're creating. And in our bundles, you know, you can certainly compare the sum of the parts of all the individual features versus the bundle price. And generally, we want those things to tie up. So the more features we add, you know, you should expect that to be reflected in the price as we revise it each year. And there is an annual kind of – you know, escalator in the contracts, you know, to account for the fact that each year will represent more value and functionality in the plan. And so, generally speaking, you know, it serves customers well to get in early. And, you know, the longer you wait, the more the sum of the parts adds up. But no matter what, we're going to make sure that The customer feels like there is a, like, hit-your-forehead simple ROI on what we're providing, you know, relative to the cost.

And this is where the error plan is just really important. loved by customers, you know, 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 to avoid having to constantly be going back to procurement cycles, it 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 you're on that plan.

I would say we're really careful on pricing to make sure that we are delivering more value to our customers before we take prices up. That's a pretty strongly held belief of ours is that it's tied to value. And so I think what you're seeing is we are putting more value into the AI arrow plan, which is great because then it means our customers will see that value. And when we do get to our annual pricing discussions, we will look at the value we're delivering relative to the price.

Got it. Thank you. And then just one more. Sort of on that memory side, any chance you guys can quantify the impact in terms of margins? I'm assuming it's probably not big enough to reprice, or maybe that's the wrong assumption. It's a right assumption.

It's not big enough for us to break it out for all of you guys. If you think about it, the products that we have memory going into the most are our camera products, so they're clearly important for us. but they are only a part of our overall portfolio. So you can imagine that the basis point impact to gross margin is not meaningful enough to break it out. Now, it's certainly something we're looking at. It's certainly one of the many puts and takes going into our gross margin for the year, and it is all contemplated as we think about our guidance. But I wouldn't over-index on it.

Got it. Thank you. Thanks, Brennan. Up next, we have Nita Marshall at Morgan Stanley.

Great. Thanks so much, guys. Maybe a couple of questions for me. You know, noted still very early days of Carbine and prepared, but just what you're seeing in terms of kind of how you're looking at that market opportunity. And then maybe just second on federal, obviously, some kind of shutdowns at various points this year. No, it's not a major business for you, but just how you're seeing kind of the deal environment on the federal side. Thanks.

Sure. On 911, I think I would say I have a lot of confidence that we will be contending for market leadership in this space in the next few years. I believe we have the most talented team in the market. I believe we have the most talented leadership all the way down to the folks building the products and selling the products. I think the value proposition is very, very strong there. It reminds me when we first got into cloud 15 years ago when the options were all on premise, and it's like, hey, this is kind of the next generation, and there's a lot of benefit to doing it this way, and our customers are now seeing that after being entrenched and very, very outdated technology. And so, you know, ultimately there's a lot that goes into it, but I really am pleased with the early progress here. As a reminder, we really think prepared is out there. you know, capturing logos with their over-the-top feature sets, and then Carbine is the capable fast follow for call handling when the time is right for the customer. And one of the things I think we're seeing that we're particularly excited about is Carbine has got a large international, you know, brand and a lot of momentum there as well, so certainly not limited to the U.S. in Carbine's case. And so, yeah, we're feeling good about it. It's still early innings, and we've got a lot of work to do to keep building. But, you know, we've already signed some of the largest jurisdictions in the country on prepared in the last, you know, three or six months here, and we expect that to continue. So feeling really good about what 9-1-1 is going to look like for the year to come.

Yeah, I would tell you my natural inclination, I'm highly biased towards building things ourselves, but when we met, Both Amir and his team at Carbine and Michael Chime and his team at Prepared, we were like, wow, these are great teams. It would take us, you know, it would take time to go build great teams, and they've built great products. Customer feedback has been just phenomenal. I was just with them recently at some customer events, and I can tell you we're getting glowing customer feedback. And it's also kind of fun for me as an entrepreneur who's, you know, Getting a little further in my career, the energy these younger entrepreneurs are bringing into the organization is great. It's like just a fresh wave of energy into the whole company. It's been great.

And it's just one more.

Oh, so good.

Go ahead, Jeff. I was just going to answer the federal question after.

Yeah. I was just going to say really, really quick. It's yet another example of how the whole is greater than the sum of the parts, right? Yeah. enthusiasm that we're seeing customers have for how quickly we brought the data from prepared and 911 alerts directly into FUSIS and then also bringing that directly into Skydio as part of VFR. Those things together make shorter response times happen, and that is a perfect example of the flywheel that Rick was referring to before.

And then, Mita, on federal, renewed momentum there. Last year we rebuilt a large portion of the team, including our leadership. Claudia Davidson has come in from Palantir and is a fantastic fit at the company and is someone that I think is going to be a long ball hitter here for a long time. And she's done a nice job kind of rebuilding the momentum. We're seeing renewed interest in body cameras and tasers in federal law enforcement and We're seeing a lot of interest in D-drone. And then, of course, on the DOW side, we're also seeing some D-drone applicability there. So, really, the federal business is trending very much in the right direction. And with a few things going our way, it could be a banner year in Fed. But, again, we've got to do the work still.

Great. Thanks so much.

Thanks, Mita. Up next, we have Joe Cardoso at J.P. Morgan.

Hey, good evening, guys. Thanks for the questions here. So maybe you can just touch on, I wanted to circle back on the FUSIS conversation and maybe more specifically the level of attach that you guys are seeing with some of the opportunities here, particularly as it relates to outposts. You know, you mentioned it with the telecom win, but curious how much more pervasive that dynamic is playing out. And what's exactly driving customers to adopt the hardware side of things? You know, I guess, like, the crux of the question really comes down to are you actually seeing folks rip and replace hardware to essentially install outposts and what's kind of the driving – force behind that and then I have a follow-up. Thank you.

Sure thing. We absolutely are and there's two or three driving forces behind it. Number one is the product is performing exceptionally well in the field and relative to incumbents in the space, our product is outperforming them in terms of lane coverage. plate reads, performance in bad weather, all the things that our customers would expect from an Axon product, this product is doing. It's cheaper. That's certainly helping, you know, in the context of competing against incumbents. I'd say, you know, the third one is the idea that, again, 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. you know, reminder on Outpost is it's got two cameras in it. One is for plate reads, and the other one is just for CCTV streaming. And so we think this is, again, physical infrastructure that's going to lead to more and more utility, safer outcomes, more AI adoption, and ultimately it's one of those where, again, like the trust – in Axon, the belief from our customers that we do things the right way, from data privacy, from making sure the community had a voice in product development, all these things combined into what looks like another transformative hardware program here.

If I can add in, if you go search, the mayor of Denver did a great video tweet where he's talking about they moved from a competing system to Axon, largely because of the data privacy, data ownership, you know, we really structured this in a way where we It's not just talk, right? When we think about building products rigorously in a way we're going to be proud of, we do that both to our insides match our outsides. You know, employees want to be authentic and know that we're doing things, you know, in a way that they're going to be proud of. But it stands up to scrutiny. And ultimately, you know, that pays off when customers are like, oh, wow, we didn't realize our license plate reads were being shared with a federal agency that's frankly not popular with our constituents in this area, and we, you know, don't want that happening, certainly without our knowledge. And when we come in, we say, look, here's how this system works. It's your data. We don't have any right title or interest to it. We certainly enable you to share with anybody you want to share it to, but in ways that are very explicit and well understood, and it's you making the decision so you're never getting surprised. You know, those sort of things pay off pretty big when – controversy set. And one of the things you'll hear from the customers or that we're actually positioned with them is like, we can help you get your job done and stay out of the headlines. And that's important to them.

I'm just going to add that one of the fun things about talking about prepared and carbine and, you know, outpost is that these are all things that are not called out in our revenue commentary because they're still immaterial to our revenue in this quarter. So we did 34% growth without any of these. And these are amazing drivers to support our long-term growth in our future.

I appreciate the color, guys. And then maybe just as my follow-up here and on the drone opportunity, maybe this one's more geared towards you, Brittany. Obviously, nice work this quarter. Here's the building pipeline here, a strong pipeline building. But just given its infancy, I'm sure it's weighing on the device margins here. So maybe can you help us frame where this business is today within the margin structure versus maybe what's your ambitions at scale and what level of scale would you need to achieve that? Thank you.

Yeah, no, it's a great question, and you're absolutely right. We've called out before that our platform solutions business is the lowest of our three hardware businesses inside of connected devices, and certainly the D-Drone hardware is a portion of that. I do think there's room for us to continue to improve that margin as we scale. I don't have an exact level for you. But that is something where it is small today, and as we scale and as we get repeatability and as we get, you know, larger numbers that we can go leverage, we would, of course, expect it to improve over time. I would also... you know, make a reminder that there's also a nice software component to our D-Drone business. And so that spreads out more years. We get more of the hardware up front. But there is a great software component to D-Drone that shows up inside of our software business. And our software-only gross margins, if you include the services piece, continue to be above 80%. So we're still really happy with the contribution of D-Drone. But certainly with the type of growth we're seeing, we will take a little bit of movement, you know, quarter to quarter in our connected devices gross margin in return for that.

Fair. Thank you. Appreciate the response.

Thanks, Joe. Up next we have Trevor Walsh at Citizens.

Great. Thanks, Eric. Josh and or Jeff, maybe for you guys, I also want to ask about de-journal, but maybe in a different way. So the commentary you had around the strength and the momentum there seems very eventful. driven, protecting the infrastructure, counter drone. But we've thought of D-drone as well as more of the airspace management and how it can relate to DFR opportunities. So is it really being driven by that counter drone piece, or is that DFR element still present, and how is that going? I guess I'm trying to just, like, can you think of it as two separate buckets, or do they really need to be together, I guess, is maybe the question.

No, I think it's two advantages to deploying D-drone. I actually think right now it's far more predicated on the counter drone than it is on DFR. And that's more of, I guess, a reflection on who's buying it now. U.S. state and local is buying it, but international, enterprise, and federal, I'd say, are buying it as much or more. And in those three markets, it's far more for counter drone. And so as DFR becomes more uh, you know, it continues to proliferate. Uh, certainly there'll be a lot of utility with D drone and there's opportunity to make it, um, much more tightly ingrained with fuses. So you see everything on one map and then it's just a very clean user experience in that way. But, uh, the counter drone, uh, functionality is what is driving the D drone, uh, interest up front.

Well, just the technology pieces is shared. So that thesis is still a hundred percent, right. And as, uh, But what you're just seeing is VFR is also explosively growing super duper fast. There's just a mixture of like where they're relying on the onboard autonomy versus where they're relying on the D-drone tech to do it. And it's just a mix and situational. So you have all of these things growing super fast. So right now at this moment, I totally agree with Josh, right? The majority of the D-drone growth is on the counter side, but the tech thesis is the same, and it goes fifth hand in glove with the overall DFR hypergrowth as well.

Thanks, Jess. Maybe just based on your answers, a quick follow-up for Brittany. Just given what your colleagues just said, are you currently or in the future going to be able to maybe differentiate between what revenue is more DFR-related for D-drone versus counter? Do you have that level of visibility, and could we maybe expect something to kind of give us some just breadcrumbs as to how that's all flowing in which direction, if you will, for that line of business.

I mean, I think you might expect us to give breadcrumbs and continue to give color on the call. I think we're a pretty long way from further breaking out platform solutions as a segment. But as we always do on some of these segments, we will, of course, try and give you color as we see developments going places.

Cool.

Great. Thanks, all. Appreciate it.

Thanks, Trevor. Up next, we have Jeremy Hamblin at Cartel.

Thanks, and congrats on the strong results. I want to start with your annual recurring revenue. So, an uptick in the year-over-year growth rate on that from a sequential and total dollar amount, you know, the fastest growth that you've ever had. Just in terms of kind of quantifying how or what's driving that. Is the portion of growth, is that more being driven by user growth or is that being driven by more adoption of AI or a plan and really getting, you know, higher kind of monthly user pricing as a result of adoption of more premium plans?

I mean, it's really both. Honestly, we continue to see nice growth in our user counts and our user adoption, and you're seeing AI come in. So there's really no sort of one driver. I would say you're seeing the business hit on all cylinders, and you're seeing the AI plan really kick in on top. So, you know, you're seeing the benefit in ARR of our big bookings quarter in Q4. You're starting to see that show up. And then we're continuing to have NRR of 125%. So that's been very consistent, but you're seeing those existing customers come back in and trade up and buy more. So, I mean, as I said earlier, sort of strength across the board, but you're seeing it in ARR first.

And then just a follow-up here on the commentary around drone and your international business. So you saw, you know, huge growth internationally, the best in quite some time. and 20% of your total business here. So what portion of that is being driven by DDROM? And is that something that, you know, the international portion because of that and because of what's going on geopolitically, is that something where we should be expecting international is going to be just a bigger portion of the total? here for the foreseeable future?

It's a great question, Jeremy. I think the challenge we always have in predicting that one is just it's a question of how fast U.S. is going to keep growing. And every time international grows fast, we also have a great quarter from U.S., and so the mix doesn't change all that much. But I would say, you know, if we isolated international, it's a little bit of both. We have some markets last year where we opened up on cloud, and then the conversations have really quickly advanced to following fast with Ddrone in large ways. And then there's the inverse of that where we've had some large D-Drone deals, and now we've built some equity with those customers, and we're talking about how else we can help. And so on a revenue basis, you know, D-Drone does factor in a little more because there's a lot of hardware versus, you know, some of our services that are more bookings-oriented that hit revenue over time. So you might see D-Drone. You know, international revenue, you know, it would still be lumpy from quarter to quarter, but as we zoom out on the year, I'm sure D-Drone will be a driver of increased international revenue. I'd say that's a pretty safe bet.

It's going to move around. As Josh said, it's lumpy. It's quarter to quarter. But we are seeing fundamentally more strength in international revenue. And so I would expect you'll continue to see it be a big topic for us and some of the momentum. And we've had sort of two quarters in a row now up at that 20% level. So it is really contributing nicely to the business.

Thanks so much. Best wishes. Thanks, Jeremy. Thanks, Jeremy. And we would love to try to get everyone in here knowing that we're coming up above the hour here. Maybe if everyone could pick their favorite question for the next few. We'll start with Mike and Goldman Sachs.

Great. Good afternoon. Thank you for the question. I think implied bookings in the quarter were up roughly 75% year over year. You know, I certainly appreciate it's the smallest seasonally bookings quarter or, you know, But I was just wondering, you know, what that tells you about the momentum for full-year bookings growth. Could we expect, you know, full-year bookings growth kind of growing in line with revenue growth?

Thank you. I would say so, yeah, Michael. You know, directionally, I think that's how we look at it as well. you know, the back of the napkin is if bookings grow at the same rate of revenue, then we can assume the revenue growth rate continues way out into the future. And so, you know, there's a lot of opportunity out there. We see, you know, a relatively similar pipeline ratio to what we saw last year versus the goals, which gives us confidence that bookings are continuing to grow. As you know, quarter to quarter, they can change a little. You know, back half is very weighted, especially Q4 with the growing size of these deals. But, yeah, we're bullish on bookings like we always are and feeling really good about where we started the year.

Thanks, Mike. Thank you. Up next, we'll go to Andrew Spinola at UBS. You're still with us. Maybe we lost Andrew. Okay, David Page at RBC.

Hi. Thank you for taking my question. Maybe just a quick one again on the drone. It looks like you have a quote here in the back that says, over 400 unauthorized drone detections by D-Drone. So I'm curious, when you actually go to market and sell the drone offering, what are people looking to protect against? What's their main use case? Thank you.

Sure thing. I think it starts with just situational awareness. I'd say my guess is a lot of those 400 were, you know, people who just didn't know what they were doing or, you know, irresponsibly flying a drone, but not necessarily like nefarious predatory drones. So I think the first step is just having a basic understanding of what's going on in your airspace day to day. And as some of these U.S. state and local laws start to change that allow for mitigation. I think you'll see customers follow with jamming capabilities next. Interceptor is probably a little bit of a toss-up, just, you know, that feels like making things explode in the sky will be a lot more highly regulated, but at least those first couple, I think, are more likely to start to happen faster. And so it's a case of one thing building to the next, and And, you know, customers are seeing a lot of value in that, and they're able to locate the pilots as a result of understanding what drone it is and where the pilot is, you know, out in the wild so they can go send the drone home and meet the pilot there. So, yeah, we're doing that. You know, again, this is a new and growing segment, and technology is changing fast, and our job is to stay ahead of that curve, and Jeff is doing a fantastic job with this team doing that, and plenty of problems to still go out and sell and counter drones. So that will be a continued place of focus and momentum for us. Thank you.

Thanks, David. Up next, Jordan Linus at Bank of America.

Hey, thanks for taking the question. On Ddrone, how you guys are going to market for it, how is it different than your other products? Is it customers coming to you, selling through distributors? And then for the defense and international side, how much more do you think we could see this accelerate if G-SYS gets FedRAMP status? Thanks, Jordan.

Thanks, Jordan. On the counter drone go-to-market, I think it varies a little by market. U.S. state and local, we very much sell direct, and so it's in our packaging there, and you can buy it as a standalone as well. But I think the real, like, takeaway on D-Drone, outside of it's just pure momentum and revenue growth and bookings growth and all that, is the idea that this product is truly opening up opportunity across all four of our customer segments. And even more so than Taser, more so than body cameras, like this product solves a need in all four customer segments that's urgent. And so our job is to not only win those deals and delight customers out of the gate, but that land and expand play that is the hallmark of our our execution as a go-to-market apparatus. Like, we've got to do that well in D-Drone across all four markets, and you'll see the tailwinds of that in our other product sales. So, you know, really, really excited about not only the growth, but the doors that are opening as a result of the interest in that one product. And then FUSUS FedRAMP certainly opens up opportunity, you know, in the federal government, and I'm not sure that if I were stack ranking the products, I'd still say, you know, there's interest, you know, across the board and certainly in our core business and core products as well as, you know, Ddrone and DFR and others. But FUSIS is in that bucket, and it'll certainly help, especially across some of these ecosystem deployments where, you know, you're adding to an evidence.com environment with this FUSIS, you know, these FUSIS streams.

Thank you.

Thanks, Jordan. And we'll take our final question today from Alex Lattimore at Northland.

Hey, guys. Thanks for taking my question here. I was curious what your acquisition interest looked like for the year. I felt that you had a $10 million investment in Bontar Aerospace. Maybe it's the acquisition of the drone manufacturer. Anything there would be great. Okay.

We're heads down working on integrating and maximizing the potential of all the acquisitions we've made over the last couple of years, and there's been a bunch of them. So I think, Alex, this is a year where, of course, we'll be opportunistic. Of course, we'll continue to invest in other companies that we think could be great partners or future acquisition targets. But really for this year, it's about going into execution mode, integrating the acquisitions we've made very, very well, and putting up more results like we're seeing out of D-Drone, Fusis, and our 911 business right now.

Alex, I would just note that was an investment, though, and I would expect, like we have been historically, and we will continue to make investments in places that we think are interesting in the ecosystem. I differentiate that pretty dramatically from us making acquisitions where we have to you know, bring the companies and the teams on and integrate them and all of that. So we'll continue to make investments sort of consistently as we go.

That one in particular, Buntar, you know, they are in Ukraine. They're one of the leading reconnaissance drone makers. They're one of several companies we invested in to help build our sort of footprint and our relationship across the Ukrainian drone and counter drone space because, you know, that's where the fastest level of innovation is happening. And, you know, our D drone is one of the key systems there. So I would look at that one more as a key market partnership than like any sort of a near-term acquisition. Lord knows what could happen way down the road, but I would say in Ukraine right now, you know, their hands are pretty busy. They're not looking to get acquired, but we do think it's important for us to put some investments in the market to build those relationships and for us to be able to learn together with them and have people that can help us grow our footprint in Ukraine. And in the long term, we could also be a great sales channel for some of the technology coming out of Ukraine. When the war is over, we think there's going to be a lot of go-to-market opportunities where we might be able to bring that tech, you know, into other markets.

Thank you. Thanks, Alex. And Rick, we'll let you close us out.

Awesome. Well, it's been a wild year geopolitically. You know, the optimist in me hopes that the universe is clearing its throat and we're going to get back after, you know, the pandemic and the wars that have happened to maybe a little more stability in the world. And, you know, I'm proud of the role that we're playing in helping to mitigate, you know, some of those threats to help to reduce some of the effect of violence in society that at times is feeling more polarized and unstable than ever. than ever, at least maybe it feels that way. And I'm really proud of our team's ability to continue to execute and to continue to build out the team with great people and great technology. And it just continues to be a real privilege for me to get to work with awesome people on problems that really matter. doing things that are fundamentally moving the ball down the field. You know, we never look to be second or third in a category. We like to create new categories. New capabilities have never existed. And stay tuned. Over the next year, you're going to see, in addition to, you know, the great stuff we've been doing, we have whole new categories coming. And that's what keeps us really invigorating and exciting. So, great seeing you all. We'll see you on next quarter's call.

Thank you.