Welcome to the TASER International Q3 2014 Earnings Conference Call. (Operator Instructions). I would now like to turn the call over to Mr. Rick Smith, Chief Executive Officer. Sir, the floor is yours.

Thank you very much and good morning to everyone. Welcome to TASER International’s third quarter 2014 earnings conference call. And before we get started, we’re going to start with everyone's favorite part with Dan Behrendt, reading our Safe Harbor statement.

Thank you, Rick. So Safe Harbor statement, statements made on today’s call will include forward-looking statements including regarding our expectations, beliefs, intentions and strategies regarding the future, including statements around projected spending. We intend that such forward-looking statements be subject to the Safe Harbor provided by the Private Securities Litigation Reform Act of 1995. The forward-looking information is based upon current information and expectations regarding TASER International Incorporated. These estimates and statements only speak as to the date which they are made, are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. All forward-looking statements that are made on today’s call are subject to risks and uncertainties that could cause our actual results to differ materially. These risks are discussed in our press release we issued today and in greater detail in our Annual Report on Form 10-K for the year ended December 31, 2013 under the caption Risk Factors. You may find both of these filings, as well as our other SEC filings on our website at www.taser.com. And with that, I will turn it back over to Rick.

Thanks Dan. As a reminder we’re going to accepting some questions via Twitter during the Q&A portion of the call which can be submitted using the #tasr_earnings. To follow our page on Twitter during the call which you will want to do, we will be posting various graphics, follow the account @taser_ir, that’s @taser_ir. So we will be posting graphic, then commentary and link to some videos during the call. And for those of you who are without Twitter all updates and graphics streamlined directly to our investor relations website, investor.taser.com The third quarter of 2014 was a business one here at Taser and I'm personally excited to share some of the progress and milestones reached during the quarter. First off, consolidated revenue grew 26% year-over-year to 44.3 million, yet another new record for the company. This marks the 11th consecutive quarter of year-over-year top line double-digit growth. We continue to work hard to aggressively grow the top line and we’re eager to continue to share our progress and success through the remainder of the year and into 2015. The EVIDENCE.com and video business realized another quarter of increasing momentum and exciting announcements which culminated in a strong bookings for year up $15.3 million and we hit the milestone of selling over 100,000 cameras into the field to-date including AXON and our TASER Cams. In the macro environment, it's ever more clear that we are at a tipping point for this technology in law enforcement. The unfortunate event at Ferguson put a brought spotlight on the issue upon officer cameras both within communities and in law enforcement. I believe there has never been a more singular point in time for on officer cameras that has caused such a fundamental shift in customer attitude. Inquiries increased 10 fold, our video pipeline…

Thank you. As we said earlier in the third quarter, consolidated sales of 44.3 million were represent 26% increase from the third quarter of 2013. The increase in sales was primarily driven by the total law enforcement weapons handle sales which increased $6.9 million in the third quarter compared to the prior year. AXON camera revenues increased 1.2 million compared to the prior year and service revenues for EVIDENCE.com of the videos increased 0.7 million to 1.2 million in the third quarter compared to the prior year. The legacy X26 CEW declined $4.3 million in the third quarter as a result of the agencies embracing the new smart weapons platform. As we mentioned in the last quarter's call at the end of the fourth quarter the X26E which is the legacy product, it will be going out in production. While we still support warranty at handles we will start focusing solely on the smart weapon platform going into 2015. The new single shot, smart weapon, the X26p saw sales increase 8.1 million over the third quarter of 2013 which is the main total law enforcement handle sales grew by 6.7 million when compared to the prior year. Gross margin for the third quarter was 28.7 million or 64.7% of revenue which is up from 22.1 million or 62.8% in the prior year. As sales have increased we continue to benefit from higher operating leverage. Due to the price increase institute at the beginning of 2014 and more sales being sold directly to the end users rather than through distribution channels we have also realized higher ASPs on our product and proven gross margin. Cost of services delivered increased 0.9 million in the third quarter compared to the prior year, primarily due to the increased personnel and travel cost associated with…

Okay. With that there are still things that I want to mention that I failed to in my segment. The first, some of you might have noticed that during the IACP we launched the EVIDENCE.com partner platform program with three launch partners, a drone company Aerovironment, iRobot and Net Transcripts [ph]. We stood up a business development function this year and I can tell we were frankly overwhelmed with inquiries from companies that want to come and partner with us. I think it has been seen in the industry that we have the strongest brand and that our platform is the core platform by a fairly large margin. So we see partnering as a way to further solidify the power, the stickiness and the momentum of EVIDENCE.com. And by that I will point out as well our party at ICAP was seemed as a retirement part for the X26, so again our creative team did just a great job. We had a small roast and a send-off for the X26 banking it for it's dozen years of service in the field which is a fun tongue in the cheek way to sort of remind the market that the X26 goes out of production at the end of this year and help customers transition to our newer and smart weapons platform. And so with that we will transition and we will take a few questions.

(Operator Instructions). And our first question comes from the line of Paul Coster, JPMorgan. Your line is now open. Please proceed with your question.

:

As Rick indicated earlier we certainly -- our sales team executed flawlessly this quarter and really there is a number of deals we’re able to pull forward, individually they weren't saying on the orders of magnitude like the San Diego deal last quarter but collectively they are as bigger, bigger than the San Diego deal. We had a number of million dollar deals that we closed this quarter so there is some lumpiness. Obviously we continue to execute hard as Rick said the pipeline for video it continues to be very strong, in fact it increased from the last time we saw I think it continues to be larger than CW pipeline but it's tough predict exactly when those orders will happen but certainly very happy with the results this quarter.

Then switching to weapons, I know you guys don’t give guidance, so this may not be a fair question but is there any way to quantify for us the amounts of orders that were pulled forward into 3Q kind of what the whole level is in 4Q?

That’s a tough one, again we closed the quarter very strong with sales team executing both in the federal space with some of the year-end moneys that we’re able to pull forward and get into Q3 which was useful as well as a couple of the transactions, the Dallas deal is a deal that could have been easily in the fourth quarter it was kind of a lease deal that we did. It's kind of nip and tuck there at the end, that was a deal for about $2.5 million to $3 million. So there is certainly I think that they executed well and I was very pleased -- we’re pleased with this company with the way they executed in the quarter. So, certainly we had both between the large federal deal and Dallas is what they call in particular -- easily deals that could have been fourth quarter deals.

And then one last one if I can, just any thoughts on potentially updating the long term targets or maybe hosting another Analyst Day?

It's certainly something that we’re looking, it's as you can see that things are very much in flux right now in a positive way and we want to make sure that we have got plenty of flexibility to continue to make the investments which we think will pay off long term for our investors but makes it a little bit tougher to predict certainly down to the net income level with the investments we’re making. But we will continue to look at that, we certainly like to do that, have another Analyst Day maybe sometime in 2015 but we will certainly update you once we’re ready to do that.

Our next question comes from the line of Greg McKinley with Dougherty and Company. Your line is now open. Please proceed with your question.

I wanted to touch on a couple of different topics, first of all Rick you talked a little bit about international operations, can you maybe just summarize for us what your infrastructure is in international markets where you see that going and then maybe what are some of the most attractive opportunities you think that will help you capitalize on?

Let me start, so the epicenter is now moving to Amsterdam that’s where Ron Brandt and his team are based. In Amsterdam I would say we probably have around eight employees today, that will be probably going through your 12 to 15 next year as we add international controller, etcetera. There are some tax advantages to operating out of Holland. So obviously we see that as a -- we did a pretty exhaustive review on where it made the most sense for us to be looking at tax implications as well as operational implications one that will be close to the heart of Europe there. That’s our largest team internationally. In Brazil we have got a team I think of about five people. In Brazil we’re still working to try to get approval from the army as we will be able to start manufacturing TASER's with our contract manufacturer and reenter the Brazil in the weapon side. In the meantime, we have had some of the largest agencies in Brazil are now in paid pilots with AXON and EVIDENCE.com, we’re able to deploy from Amazon data center in San Paulo. So those are going well, so even while the weapons approval has taken much longer than we would have hoped, we are seeing that the camera business down there can be very interesting. We have a couple of individuals in other parts of the globe; frankly as we look at 2015 we’re just going to our budgeting process now. It's interesting -- basically ramp-up our investments in international sales and marketing and frankly as we look at history we have done well in the English speaking countries, in the UK, in Australia, New Zealand and not as strong elsewhere. So I think we have realized late last year if we’re going to be truly international we have got to behave more internationally and provide the sorts of investment and infrastructure and personnel to our international customers that we do here. We began internalizing all of our websites in terms of language, we hired a European and a German guy to run -- not just an American, we transplanted overseas. I would say three years ago our international sales plan was largely send Americans around the world on -- senior executives go make presentations but I think we’re strong on having teams on the ground to follow-up and drive the ball down the field. That is changing now and we see a lots of opportunity to drive more growth next year. So you will see some more investments in the international as we build out both the team in Europe and I think you will see investments in putting a more structure in larger team in Asia.

And then on the bookings side within your video business, maybe can you and Dan you also talked about deferred revenue. Can you remind us how much deferred revenue is on the balance sheet today as it relates to EVIDENCE.com and can you talk about a backlog number? How much has been already recognized for software and service revenues versus how much is in backlog just to give us a sense for how that’s aggregating?

We have seen a significant growth, this quarter is almost 3 million of deferred revenue growth just for the video business on top of what was already on the balance sheet. We will have that in the queue.

$3 million sequential increase?

Yes sequential increase. I will get you that total hopefully by the end of the call here, we can sort of look at and pull it out of the queue. We certainly see it's about almost about $7 million on the balance sheet right now for the deferred revenue, for the video business. Again that balance will be partly driven by how much cash we have received. So our future billings are actually significantly higher than that. This year we have had $32.5 million of bookings, the amount of cash that the amount of billing is fraction, that’s probably about maybe 10 million a billing. So even it's future 22.5 million of future billings it will be down in subsequent years. You know most of the customers with multi-year deals will still prefer to pay for the product annually. So it doesn’t create a large deferred revenue but it does create a sort of large future billing amount.

And then regarding the EVIDENCE.com product itself in the AXON hardware, how -- I know you’ve already recently announced new features on the AXON camera to link it back to squad car or turn the camera on remotely. How frequently do you anticipate new features being introduced and is there a long life cycle to be able to get new features into the camera if needed?

I would say one of the things that is unique for TASER and really a competitive advantage, our ability to do a lot of voice [ph] for the customer research. Customers, we have a really good relationship with customers they are very open with us as far as features that they desire. Our marketing team and our R&D team does a really good job of helping customers prioritize the feature so we work on the things that are most important to them and we work on those things first and the things that have the most universal need. So, I think the lot of what the team is working on today has been sort of additional features in EVIDENCE.com that specifically for the larger customers that make it more efficient for them to roll-out the product, make their use of the product more efficient and again it creates a competitive advantage because these are advanced features that are hard for competition to replicate. And I think it's a big reason why we’re winning the large deals. Rick, talked about being the only scalable and the solution -- part of that scalability is having advanced features that make large customers, make their experience in our system excellent and make some reference customers going forward for other big customers, that allows them pulling into the system as well.

Yes one of the thing I would point out is I believe every major deal we have signed last quarter was our ultimate plan or at least the vast majority of them were and our ultimate plan is where we bundle-in and included upgrade every 2.5 to 3 years. So for our customers they love that, we take the risk out of it for them and say, look as you get on this plan you don’t have to worry about, are you going to obsolete when the next camera comes out. We can have you on a regular upgrade cycle and frankly I think that’s something uniquely TASER could do with some of our larger competitors that -- obviously there is a lot of noise out there -- there is a lot of vapor -- lot of competitors have memorized our product specifications to like comical detail. But the fact is our customers is not going to get on effectively a prepaid plan with some of the company (indiscernible) that’s going to be here in a year or two. The stability, the customer relationship we have with TASER allows us to enter in indigenous relationships and take down risks off the table for our customers and that’s something that is not replicable.

Our next question comes from the line of Steve Dyer with Craig Hallum Capital Group. Your line is now open. Please proceed with your question.

(Indiscernible). I was wondering if you can go on to some detail on the bookings number, obviously a big jump sequentially and I'm sure Ferguson had something to do with that but can you talk about the cadence for those orders received, you know obvious results will be lumpy on a quarterly basis going forward but given the active deployments and pilots you guys have talked about. Kind of what's the right level to think about it going forward?

First of all let me just Ferguson had very little to do with the bookings number this quarter. Our customers don’t buy in 30 day cycles, Ferguson drove a big shift in inquiries and new trials but we won't see the effects of Ferguson in the booking number for another quarter or two. Dan?

I agree with that. I think as I’ve indicated before earlier on the call, I mean we have had a number of $1 million deals this quarter which I think is really encouraging, you know that quarter is not dependent on the single deal. Last quarter we had pretty good percentage of the total quarter bookings were one transaction. So having a number of sort of $1 million size deals I think it's useful. Certainly on a go forward basis as Rick indicated in his comments earlier I think that certainly some lumpiness, it makes it tough to predict we feel very good about the macro environment. We think we continue to win the vast, vast majority of any competitive situation we’re in. So as the faster the market moves, the faster the bookings will grow but we’re at a number of outside influence here as well.

And one another anecdote I will share about the Ferguson incident, you know we did have a number of agencies in that area obviously, they will call us up and say we want to get cameras out fast. We’re able to deploy 70 or 80 cameras at one agency, they wanted them in a matter of days and what I heard back from our team that was out there is that while they were, in one of these agencies, one of the competitors also had some product there and the agency couldn’t get it to work. So that’s again one of our advantages, this thing scales -- we have got in the 10s of 1000s of cameras, 100,000 in total, in the field we have 1000s, 1000s cameras online and our business processes continue to get more and more streamline so we can bring cameras online faster and easier for the customer and we believe of those competitive advantages. We have an opportunity to widen the goal from the position we’re at now and incidents like the one we heard about there with that agency struggling -- as new competitors grow, lots and lots of features and try to compete. This stuff is hard to do well. It takes really great engineers and a lot of work and a lot of rigor and a lot of folks trying to do this, we don’t see they have the resources and talent and time frankly to be able to do something competitive while the market is forming here.

Moving on to weapons business and sorry if I missed this, but you guys are obviously end of life in the X26 this year. Can you talk about the impact of that -- what that had on Q3 results if any and kind of what kind of impact it has going forward on the upgrade cycle for the next couple of quarters?

Certainly historically when we end of life the M26, it certainly helped customers, they were sort of waiting or on the fence for an upgrade to help to sort of drive adoption. It gave them one more data point to use with their city councils as they try to get capital money to buy new weapons. They would say look our weapons are sold, they are not supported by the manufacturing and we think that will be a useful fact for them to have and their argument about why they need to upgrade and certainly we think by end of life in X26, you know that could help to continue to drive the upgrade cycle. It's not to quantify exactly how much -- how big an impact it's having in any given quarter but certainly we know from sort of historically that it is useful and gives -- it forces customers to look at our new products. We think candidly the new smart weapon platform has some significant advantages over the legacy products and by no longer supporting legacy product it forces customers to take a look at the new products which hopefully will help drive the cycle as well to upgrade.

And then last one, maybe as you take a step back and kind of compare what's going on with the video segment now and think back to maybe what your expectations were like a year ago. What has changed? What's different from your initial thoughts? Whether it be accelerated adoption? Take rates, usage rates? I know the Ferguson event has probably had a pretty significant effect but just trying to get a sense on how things are ramping compared to your initial thoughts?

I think we very pleased with where we’re right now. I would say that couple of things that we find really encouraging, one is that 87% of the deals this quarter were multi-year deals that to me has just been amazing statistics. It shows confidence in our customers continue to execute, it shows confidence that the solution is something that they are going to need long term. This isn't a one year and we will figure out in a year if we really need it. They get it. I think our sales team has done a great job of helping our customers understand the complexities of trying to manage digital evidence on their own without a robust solution behind them. So I think the fact that we’re seeing 75% of the camera sold this quarter were online meaning they bought subscriptions to MSICOM [ph] and then 87% of those bought multi-year deals. I think we’re very encouraged by both of those statistics and we feel compared to our expectations I would say we’re very pleased and meeting or even exceeding our expectations at this point.

Yes I would add-in as well, look we’re feeling phenomenon right now. I mean five years ago when we started down this path, lot of people thought we were crazy, cops -- lot of people said cops are never going to wear cameras, big brother. I mean we had people use the overwhelming feedback was we will never put our data outside of the four walls of the agency in the cloud. We’re frankly -- lot of people thought we were kind of crazy and we went through some dark years there I mean this is hard to transfer the business, this has not been an easy transformation what we have built was intense from a capital perspective from an effort and engineering perspective and we went through some dark days, I say about two years ago we had folks in the company asking us, hey, is it time to shut this thing down? Is this thing ever going to scale? Well I think we have that answer now and the great news is when you can see what's coming when the rest of the world doesn’t see it yet that can set up for a great advantage and so what everybody thought was crazy five years ago is now accepted as inevitable and we’re well positioned. I would like to thank our shareholders, some of you guys have stuck with us through those dark days and through the years where we bounced around breakeven to get this done and I got to tell you it feels great right now to have the validation of the market and the validation of the customers and we’re running hard and we’re going to own this thing and we feel like, much like the TASER business, we created it from nothing and we’re…

Our next question comes from the line of Glenn Mattson with Ladenburg Thalmann. Your line is now open. Please proceed with your question.

So I guess keeping on that same thing, same theme, it's nice to see the uptick in new services by some of these other agencies like Salt Lake City and Birmingham, the fire in buildings departments in Miami, curious if those extended use cases are being brought up in other cities. But then also I think we have spoken in the past about next year 2015, you guys are starting to potentially release some new products down that EVIDENCE.com sales channel and was curious how that process is coming along but also is it customer feedback? Is it things that they are asking for and requesting that’s driving the new product development there or is it things that you guys think that the market needs that they don’t know they need yet. So any thoughts on that?

The introduction of sort of completely new products is slightly delayed. I would say we have made resourcing decisions, for example deploying in England with the London Met, they required some significant work to get that done because we couldn’t use Amazon Web Services long term we had to deploy a local provider that met certain requirements within the UK. So as we have looked at it and we have had to make some prioritization decisions where we have said, you know we got to win every big deal that’s coming across the table right now and so we have invested a little more heavily and we have redeployed some of our engineering resources on making sure -- so a number of our priorities win every big deal. And right behind that is we want to make every one of those customers ecstatic. We look at them now, the successful program that they are bragging about that it's going so well. And that requires a lot of support. I mean the reason we do that is two-fold, these guys all talk to each other that’s going to impact the next deal and then frankly that setting the stage for when we want to come in with our next product and services. Some of which are even just placed with incumbent [ph] systems they have got. Customers sat is typically very low at law enforcement agencies with their existing systems. We think our customer sat is like secret weapon that will enable us to come in with the next generation products as we expand out from our beach head [ph]. So I think we’re doing -- obviously we feel it's the right thing from a discipline perspective to make sure that we have the current business opportunity under control, stable scaling and working and not over-extend ourselves and introduce something else too soon if that means taking resources off of the opportunity at hand. Dan anything you would want to add on that?

No I think you hit that perfectly. That’s great. I think the only thing I would add is, you had a question about sort of digital evidence amount and examples like Salt Lake. I would say that’s definitely something our sales team reinforces with all the customers. We have engineered the system to be a digital evidence management solution, for all digital evidence not just our video. So having customers like Salt Lake, store other digital evidence in there I think makes them referenceable for other customers consider using our product for everything and having all their evidence in one place from a digital perspective. So I think that’s a one more value proposition we offer, we have got good workflow for in just of other products. And some of the partnership stuff we’re working on will certainly allow for other things to be loaded in the system and have all the digital evidence in one place.

One more thing I would like add, answering the second part of your question, which is are we developing things that customers are asking for? Or are we going to sneak upon them with some new things they don’t they need? We sort of learned our lesson as you will hear many years ago about trying to sneak up on our customers with things that we haven't gotten their feedback. We would always tend to do that, so you’re not going to see something come of the left field that it's just totally out of the blue that we hope law enforcement would like. The engineering team when acquired Familiar last year, they spent four months in the field on right along with cops and go on SWAT calls out and send them to dispatch centers. So it's not just even products, it's about engineers who are in the field with cops taking their feedback in what they need and those are the things we’re building. So it's a very customer driven approach that is not an internal engineering driven approach on all of our new products and services.

That’s why I think the X26p was a good example of how you guys have moved towards listening to the customers and what a success that product has been.

The X story is still my favorite TASER we ever made. I have one on my bed side, unfortunately I'm sort of alone in that perspective and you don’t want to have another one of those. So we’re going to make sure it's right for the customer and not right for us.

Quick from Dan, you mentioned the inventory rise due to some potential I guess new sales or kind of how you see the sales is going to plan out. I guess the inventory rise if it's mostly related to weapons would equate to a revenue number just looking at the year-over-year comparison, is there something to flat to slightly up in Q4 sequentially. I'm curious about how the policy is? I know it's a lot of book and ship business within the quarter, so what kind of look do you get ahead of times that gives you the confidence to build that inventory?

Yes. I mean I think one of the things for that makes it a little bit easier is we don’t have a proliferation of SKUs at so it makes a little easier to go heavier on inventory and not worry about ops lessons risk. So certainly as we look at the business especially as Rick indicated we’re making large investments to grow the international business. We expect that to grow faster than the U.S. business over the next few years and become a more meaningful part of the business and certainly the international business as you know tends to be a little bit lumpier, it tends to be punctuated by larger individual deals, so you need to keep a little bit more inventory in order to react and be able to satisfy that customer's demand when it happens. I think on the video side candidly the video business has been so strong, it's been hard to build inventory because the demand has been so strong. So we’re continuing to ramp up the supply chain and make sure that we continue to meet demand both now and in the future.

And last, real quick one, the comment at the end of the top line double digit growth, is that something -- is that a consistent language that you’ve always used or is that a part of your add to the script?

I think we certainly, I think we have felt that way and I think that’s something we talked about at our Analyst Day, a few months and we continue to make the investments to drive that double digit top line growth and we feel with the international business, the video business and a continued upgrade cycle we have a good growth engine and continue to deliver on that.

And our next question is a follow-up from the line of Greg McKinley. Your line is now open. Please proceed.

Just a couple of follow-up items, can you give us any color on your Telesales Group's progress and how that’s impacting U.S. performance?

Yes they are doing, they are just absolutely continue to do exceptionally well. This quarter we had $8 million of Telesales Deals in the quarter. So it continues to be a big contributor for us both in the top line as well as in gross margins because that’s all direct business. So that’s part of the shift and we have seen higher ASPs as well. And again the purpose of Telesales wasn’t necessarily, that’s more of a byproduct of taking more business direct, it's making sure we’re serving that smaller customer that’s typically being underserved by both us and our distributors and those customers are having a great experience with our Telesales.

And then at then Rick at the ICAP Show, you mentioned that you partnered with Aerovironment and iRobot and I thought there was a third company you mentioned but, can you tell me what those partnerships do or how you’re collaborating with them?

Yes, Aerovironment and iRobot both have devices you know, are autonomous vehicles, either aerial or ground based but they are used for a variety of things whether it's observation, trying to find missing people and something's bomb disposal unit etcetera and all those have video feeds on them that are typically used for real time situational awareness. We’re partnering with them so that those video feed can be fed into EVIDENCE.com and preserved for evidentiary use later. So obviously these incidents where these robots and drones are being used are pretty high risk incident. They are likely to end up in some sort of legal case after the fact and so we’re just making it seamless for our customers and this solves, yes it's a great add-on value for our customers there that they can take that video and rather than bringing it to a disk they can put it into EVIDENCE.com and enjoy all the chain of custody, and sharing and collaborative features that we have got. And the other one is Net Transcripts, they are a transcription company specializes in transcription for law enforcement. So this makes it easy for our customers to click the button and that’s their job to have it transcribed and delivered it back to the agencies so that they have a transcript. You will see a number of additional partnerships that we’re evaluating over the coming quarters and years. So we continue to build out additional functionality for our customers, but really want all their digital evidence in one place and that’s EVIDENCE.com.

And then I don’t know the degree to which you can comment on this for competitive purposes but you talk about extending EVIDENCE.com features and responding to other needs that agencies have that aren't being addressed yet. Can you give us some more granularity on helping us understand what are those needs and where do you see the bigger opportunities?

Not really, for competitive reasons and still we aren't ready to announce it up. We don’t want to put it out there and give our competitors a heads up which ways we’re going.

Okay and then last question, Dan, you had shared on this last quarter 75% of your cameras sold also included an EVIDENCE.com subscription. You’ve quantified camera sales in the past, can you give us a sense for how many licenses are out there either through what's supplied so far or perhaps included in the bookings numbers so we understand how many of those we can look for starting to generate revenue when they are deployed?

We’re not quite ready to disclose that. I would say that we have you can see from sort of the service revenue line that it is growing. We can certainly say it's above -- over 10,000 licenses at this point.

And with that I'm not showing any more phone questions at this time. I would like to turn the call back over to Mr. Rick Smith.

All right let's take a couple of questions from Twitter. I will take the first one here, will TASER ever be a dividend stock? The answer to that is we don’t know what the future holds. Certainly it's something that we do consider. We talk about the Board level every quarter about our strategy for our capital structure. As you’ve seen we have been pretty aggressive over the years with buybacks and we’re not shy about returning capital to the shareholders. We’re in a phase right now where we’re letting some capital accumulate just given the opportunities that is ahead of us and frankly the uncertainty -- you know things are moving fast in a target predict the future. So we’re letting the cash balances build up or a big year so that we make sure that we have the assets available to support our plans and if we see opportunities to jump on then we have got the capital available. Right, we have also shown investors that we’re disciplined about this. We remain very careful just because the cash is in the account, certainly we don’t feel like we need to go spend it but that’s something we will continue to evaluate and we will let you if we ever come to conclusion if we think dividend makes sense. At this point we think that might be a little too constraining, because when you start setting a dividend policy, right that’s forever. It creates a long term expectation and right now there was so much opportunity in front of us, I don’t think we’re prepare to constrain our capital usage. Dan?

Yes I have got a second Twitter question, asking it for capacity constraint and all in the next six months. It's a big question, currently we run one shift, four days a week. So you have always had the ability to add shifts on Friday and over the weekend and we have the ability to add a second shift which in fact will double our capacity. So we certainly have a plenty of capacity, we’re constrained at this point. The supply chain continues to ramp up to make sure we have got the raw materials to produce and the manufacturing team is working overtime at this point and certainly has the ability to add a second shift as we move forward. We just have to find the personnel to work the off-hours. But something we’ve done successfully in the past and certainly available to us as we go forward.

I guess I would wrap up with that, you know if we do give one of these real outsize international orders, short term there could always be an issue with trying to get stuff done in the quarter by the time you got to move supply chain along. But, we wouldn’t certainly over a multi-quarter basis, I don’t think we’re seeing anything from a capacity constraint at least on the hardware side. And we’re hiring software developers right now, so anybody who knows some great software developers, keep sending those in. That might be one area where you might say we’re constrained just in building out the team to continue to extend our lead. So with that we will go ahead and we will wrap up. We have been on for over an hour. I guess calls like this you want to just to let them keep going because we’re having a ball and really enjoying the results we had this quarter. Thank you again to our shareholders who have stuck with us over the years. We’re committed to doing great things here and serving our three stakeholders, our customers, our shareholders and our employees. And with that we’re looking forward to wrapping up the year and we will talk to you all in February on our next conference call. And we will see you at our shareholder meeting next May. Have a great day.

Thank you.