00:00Axon shares have come under pressure this year despite beating first quarter profit expectations.
00:06The company is also expanding and has long been expanding beyond tasers and body cameras and pushing deeper into artificial
00:13intelligence for public safety software.
00:16Joining us now is Axon president Josh Eisner. Josh, it's great to have you on the program.
00:20I've been following your company for a while now and yours is one of the first use cases that I
00:26really understood for AI
00:28in terms of helping law enforcement officers do their jobs more efficiently.
00:33So I'm surprised to see you get drawn into the whole Sasspocalypse universe here.
00:40Why do you think the market is getting this wrong?
00:43Sure thing. Yeah. And thank you for having me.
00:45I would say, look, we've built a very diversified business, but, you know, we start out as a taser company
00:50up until about 2009, 2010.
00:52And we and not only do we still sell tasers to public safety, but we also have built a very
00:59large software business.
01:00And we are very proud of that. You know, we manage about 40 times as much data as the entire
01:05Netflix library.
01:06We've built this application that public safety depends on for all of their situational awareness and evidence management.
01:13And sometimes, you know, when you work really hard to build a massive software business, you kind of get dragged
01:18into the basket.
01:18And, you know, we look at this as a moment in time. The company's grown 25 plus percent for seven
01:24straight years.
01:24We've grown 30 plus percent the last three. We're very, very excited about the last couple of quarters we've delivered.
01:31And we'll ride out the wave because at the end of the day, there's a very diverse business across not
01:36only software, but we have a massive hardware business.
01:38We're the market leader in public safety and AI. We booked almost a billion dollars last year in AI products
01:44in our first year of selling them to our customers.
01:46And so we look at this as a moment in time and we're going to continue to execute and deliver
01:51incredible top line growth to our investors as well as profitability.
01:55And we'll ride out the storm. You know, it's incredible, the growth figures, 25 percent annual growth over years.
02:00That's now accelerated to 30 percent as more and more law enforcement agencies start adopting this technology.
02:06And does it doesn't it go beyond, you know, just police forces?
02:09I mean, and and and fire departments to even military applications?
02:14Absolutely. So our core business is U.S. public safety.
02:17But on top of that, we have a growing federal business.
02:19We have an exploding international business and we have this enterprise business, which is more like businesses buying some of
02:27our video situational awareness products.
02:29Large retailers are wearing body cameras.
02:32Now, our counter drone products are protecting data centers and business and warehouses and logistical facilities.
02:37So, again, it's one where our products have great product market fit across a number of industries and all of
02:44them are really growing.
02:45So what's your view on the cost side of A.I.?
02:48You know, there have been increasingly questions about how expensive it is for companies like yours, like Uber, for example,
02:57to be using all of these tokens.
02:59Obviously, that token cost per token number has to come down in the future.
03:05But what does it look like to you now?
03:06Sure. I think we're still getting a lot of tailwinds out of it.
03:09And we're very, you know, we're very safe in how we budget and how we guide our investors.
03:13And so a lot of these assumptions was built in, not only on the A.I. side, but on the
03:17memory side this year as well, as we continue to ship more and more hardware.
03:21And so, yeah, we're feeling really good about where we're positioned.
03:24And ultimately, the value that we're delivering in these A.I. products to our customers certainly justifies the cost we're
03:30paying in development.
03:31I know that most of your time has to be spent on products and clients.
03:36How often do you get to actually spend with shareholders?
03:40Because it seems like investor communications must be ultra important at times like this.
03:45Absolutely. And I'd say again, like we are, you know, as a high growth company, we're kind of used to
03:50the roller coaster.
03:52And so we've got iron stomachs.
03:53We try to keep our heads down and do the same things that have delivered incredible value over the last
03:58five or ten years here.
03:59And so I do spend a lot of time with shareholders.
04:01They're very supportive. Almost I think about 85 percent of Axon is owned by institutional investors.
04:07So and a lot of them have built up their positions over the last quarter as the stock has gone
04:12down.
04:12And so I think we have a lot of support for our investors.
04:15They know that, you know, they can rely on us to deliver.
04:19And and so, sure, I spend spend a fair amount of time with them.
04:22Do you have to continue to invest, be investing aggressively in R&D?
04:26Do you have to continue to be investing in customer satisfaction, retaining customers?
04:30Of course. And that's kind of our superpower.
04:31You know, the way we grow revenue is is is smartly investing in these new opportunities across new markets and
04:38across new products.
04:39And so the biggest thing for us is having a high hit rate on those investments.
04:43And, you know, the last five years have shown that that that's happened.
04:46And we think into the future with all the A.I. bets we've made and the infrastructure bets we've made
04:50and the hardware bets we've made.
04:52We're really well positioned to deliver a lot of value across each of those categories.
04:56One of the things I've noticed is that with all of these A.I. tools, it's difficult for a lot
05:00of times employees.
05:01And in your case, clients. Right. To keep up with training.
05:05How do you deal with that? Because I imagine police officers, for example, who have so many other things to
05:10do, don't have time to sit for seminars.
05:12Ultimately, our customers trust us as the vendor that delivers disruptive products into public safety.
05:18So whereas a customer without a big trusted brand in public safety comes in with A.I., I think there's
05:23some skepticism.
05:24When we show up, our customers know at the end of the day, Axon will not let them fail.
05:28And we've proven that time and time again.
05:30And so we've got the deployment mechanism down on these A.I. products, and that's why we see the scale
05:36we do right now.
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