Axon Enterprise Touts AI, Global Markets and Counter-Drone Demand as Growth Engines

Axon Enterprise (NASDAQ:AXON) President Josh Isner said the company continues to see durable growth opportunities across public safety, international markets, enterprise customers and new artificial intelligence products, speaking during a William Blair & Company fireside chat hosted by research analyst Jonathan Ho.

Isner described Axon’s evolution from its 1993 founding as the maker of TASER devices into a broader public safety technology platform. He said the company’s camera products led to the creation of Evidence.com, which he described as “the largest police evidence repository in the world,” managing about 50 times as much content as the Netflix library and making Axon Microsoft Azure’s biggest customer.

That evidence platform now supports data from body cameras, in-car video, fixed cameras, drones, robots, license plate recognition and other sensors, Isner said. He added that the company’s mission remains “to protect life” by building tools intended to keep police officers and community members safer.

Bookings and margins remain central to growth outlook

Isner pointed to five-year bookings as a leading indicator for revenue, saying that if bookings continue to grow by more than 30%, “you can kind of expect revenue to follow that same trend.” He said Axon’s bookings have increased roughly 4.5 times since 2022, while net revenue retention continues to rise as the company sells more products to existing customers.

He said Axon has been a 30% revenue grower for several years, after growing 25% annually for seven years before that. Isner also highlighted margin expansion, saying adjusted EBITDA margins have risen from about 19% four or five years ago to guidance of 25.5% this year. The company’s long-term guidance calls for 28% EBITDA margins in 2028, he said.

Asked about balancing profitability and growth, Isner said Axon believes it can do both, but would prioritize growth if forced to choose. “It’s way harder to figure out how to grow 30-plus percent than to figure out how to cut costs,” he said.

AI products driving customer interest

Isner said Axon booked more than $750 million in dedicated AI tools last year, and that AI bookings were up 140% year over year in the first quarter. He emphasized that Axon’s AI products are already being used by police agencies rather than remaining theoretical.

The company’s flagship AI product, Draft One, uses the audio from body camera footage to create a draft police report, which officers must review and edit before submission. Isner said officers previously spent about 50% of their time writing reports, and that Draft One has reduced that figure to about 20%, giving officers roughly a day and a half per week back for field work.

Other AI products discussed included:

• Real-time translation: A body camera feature that identifies a spoken language and translates conversations between officers and the public, which Isner said is being used for the World Cup, at the border and internationally.
• Axon Vision: A tool that turns CCTV cameras into detection systems for incidents such as a person lying motionless, a struggle or a vehicle break-in.
• Axon Gravity: A product that connects Evidence.com with other police systems to provide real-time insights across data sets.

Isner said Axon views itself as a distribution channel for frontier AI models in law enforcement. He said the company diversifies across vendors, tests publicly available models and maintains version-control flexibility to reduce operational and reputational risk.

New markets and counter-drone demand

Axon’s core market remains U.S. state and local public safety, but Isner said international, federal and enterprise customers represent significant long-term opportunities. He said international bookings exceeded $1 billion last year and suggested that international could eventually become larger than the U.S. business if the company executes well. He also said enterprise could become larger than both.

Isner cited private security, retail, security operations centers and Fortune 500 companies as examples of enterprise use cases. He said Axon’s approach is to sell existing products into newer markets while continuing to build new products for its established U.S. public safety customers.

Counter-drone technology was another major topic. Isner said Axon’s Dedrone product line was up 300% year over year in the first quarter and has drawn significant interest amid growing awareness of drone threats. He said the largest current markets for Dedrone are international, federal and enterprise customers, while state and local adoption depends on cities gaining more authority to mitigate drones.

According to Isner, World Cup host cities have received waivers allowing them to mitigate drones, an authority that generally resides with the FAA. He said those cities are effectively getting early deployments of the product, often mounted on trailers to protect stadium airspace, with the potential to later install fixed systems around cities.

TASER and 911 initiatives remain in focus

In response to an audience question, Isner said Axon is in the fourth year of its current five-year TASER product cycle. He said TASER 10, which fires 10 darts rather than two cartridges, has sold at twice the volume of TASER 7 over the same period of availability. He said future development is focused on improving effectiveness by addressing resistance from heavy clothing, including new dart designs and machine-vision guidance.

Isner also discussed Axon’s 911 strategy, saying many call centers still rely on antiquated on-premise technology. He said Axon acquired Prepared 911 to add AI capabilities over existing infrastructure, including call transcription, language localization and the potential to dispatch drones using cell phone metadata. He said the company also acquired Carbyne, a cloud-native call center infrastructure provider, as part of a longer-term effort to modernize emergency communications systems.

On distribution, Isner said Axon favors a direct sales model in U.S. state and local markets and generally in federal markets, where it has established relationships. In international and enterprise markets, he said system integrators and partners are more important because Axon does not have the same level of incumbency.

About Axon Enterprise (NASDAQ:AXON)

Axon Enterprise, Inc develops technology and weapons systems for public safety and law enforcement agencies, combining hardware, software and cloud services. The company’s hardware portfolio includes conducted energy weapons (commonly known as TASER devices), body-worn cameras and in-car camera systems. Axon pairs these devices with a suite of connected products and accessories designed to capture, store and manage field evidence.

Beyond hardware, Axon operates a subscription-based software platform for digital evidence management, evidence review and records management.