[Abrupt start] …particularly crowded earnings day particularly with the election being on Tuesday. So thank you so much for joining us today. Today we have available Axon's CEO, Rick Smith; President, Luke Larson; CFO, Jawad Ahsan; Chief Revenue Officer, Josh Isner; Chief Product Officer, Jeff Kunins. And we have a special guest today our VP and GM of the Federal Business, Richard Coleman. First, we're going to give prepared remarks and then we'll bring our analysts up onto gallery view for questions. I hope you've all had a chance to read our shareholder letter. We posted it to investor.axon.com and the remarks that we make today are meant to build upon the information in that robust letter. If for some reason we lose access to Zoom or Internet connectivity we'll make every effort to post our prepared remarks to investor.axon.com so you can read them. During this call, we will discuss our business outlook and make forward-looking statements. Any forward-looking statements made today are pursuant to and within the meaning of the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. These comments are based on our predictions and expectations as of today. They are not guarantees of future performance. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. These risks are discussed in our SEC filings Okay let's turn it over to Rick.

Thanks Andrea. I know everybody is really busy with earnings season. And you may have a lot of calls to go through. So I thought about how can I best encapsulate the quarter. Out over 1,000 people busting themselves, working so hard in the hardest environment I've ever seen. And then that team, they deserve that we spike the ball. I couldn't be more proud of what our team turned in. Now with that I also know some of you are working from home. We had the pleasure of meeting some of your kids. We want this to be the conference call that your kids want to come join. So at the end have them join you when you ask questions, and we'll send them some Axon Swag for warming up our call. I've got my daughter, Kyle who's learning about business. Say hi to everybody. So Kyle is going to be attending as well. She will be giving me pointers from the side as we go over our results. So thanks, Kyle. At the end we're also going to -- we're going to have a little bit of background bingo. You guys enjoyed it last time. So today we're going to play a little game, but we know you're busy. So let's get started, just hang out for the end and every kids join us. I cannot be more proud of what has happened with this company, how we've transformed and scaled in recent years. An idea that really started from a tragedy 27 years ago has had us put together platform and solutions that are at the center of today's national conversation around justice, equality and social reform. Our mission has been clear from day one. It's a privilege to be solving essential problems for our customers and…

Hi. Thanks, Rick. Really appreciate it. Now, I am thrilled to join you all for today's call. This quarter will mark my second year here at Axon, and I've never been more bullish on the opportunity we have in front of us in the federal market. Q3 2020 marks a historic moment for Axon as we've achieved a record $38 million in bookings up 400% year-over-year. Our success includes a number of new programs and contracts, many of which were first for Axon. I'll walk through five of these quickly to provide some color, but these are also in the shareholder letter as well. First, we established our first two programs of record with the federal government, including a $13 million U.S. Customs and Border Protection order for body cameras and digital evidence management. This is significant because, Customs and Border Protection is the largest law enforcement agency within the U.S., and if you're not familiar with the program of record, it's a key milestone that specifies an appropriations line in the U.S. discretionary budget. Second, we signed our first indefinite delivery, indefinite quantity or IDIQ contract with a federal agency directly. To be successful in the federal market and federal space, it's essential to establish contacts and contracts to get your solutions funded. And an IDIQ is a contract vehicle that does just that for us. Additionally, it gives the agency an established way to procure our solutions through an established vehicle. Third, we signed our first Officer Safety Plan for the federal agency. A lot of you are familiar with our OSP plans. It's a bundle that includes TASER 7, Axon Body three and all the software that goes along with it. And we're excited to take this popular bundle and introduce it to the federal law enforcement…

Awesome. Thank you, Richard. It's been just a real pleasure having you on our team and your impact has been remarkable as demonstrated this past quarter. I want to conclude my segment by thanking our employees. Look, we're all going a little stir crazy working from home in this wild turbulent 2020. And I just think about the mental toughness and commitment that people have summoned this year to work through it and deliver the kind of results this team is delivering. It's not lost on me that, we are in a fortunate position despite the fact that we're in the midst of a global pandemic, we've been blessed that we have superior talent across the organization, we have mission-critical products and we're finding new and increasing pathways to growth and a powerful financial model. And with that, I want to turn it over to our President, Luke Larson.

Thanks, Rick. There are so many great things to talk about from Axon Accelerate our user conference to our massive early success in the U.S. federal market that Richard talked about to the strength of the demand for our software services and our Officer Safety Plan subscription and the phenomenal adoption we're seeing. We detailed a lot of it in our shareholder letter. So to avoid being too repetitive, I just want to highlight just two of the many successes from this quarter. First, TASER. We're not just selling TASER devices anymore. The category is evolving from a book and ship hardware product to a subscription-based deescalation platform that includes cloud software and training. And we see this in the percentage of TASER devices sold on a subscription, which rose to a record 75% this quarter. This 75% reflects a surge in demand for TASER in the U.S. Internationally, we are still getting started. And so while subscription levels are lower than in the U.S., we are confident, we can also drive subscriptions abroad. Second, we launched Axon Respond, which is a giant leap in police communications technology. We are evolving real-time situational awareness beyond the radio. Going back two years, we spent more than 1000 hours studying what was wrong with 911 operations. So we could deliver a compelling solution to fix it. Rather than describe it, we're going to play the video that we showed at Axon Accelerate. Most of the technology you'll see in this video is in the market today with a few exceptions including fleet three with license plate reading which we are aiming to bring to market mid-next year. Doug can you play the video? [Video Presentation] Awesome. And one last shout out for me to all of our employees that helped deliver these record results. And with that I'll turn the call over to our Chief Financial Officer Jawad.

Thanks Luke. I'm also very proud of our employees for putting up another quarter of solid execution which drove outperformance across most of our metrics. Earlier this year, we shared our plans to invest in our channel product and support infrastructure as we look to scale the business to $1 billion in revenue and beyond. These investments yielded results ahead of our expectations as evidenced by our strength in outlook for 2020. We intend to continue these types of investments in 2021. Two areas in particular highlight how we think about calibrating our investments for growth in a dual track near and long strategy. With certain channel investments such as federal and international, we can start to unlock revenue relatively quickly in the near term. Meanwhile with other investments particularly in our software product categories such as records and dispatch we're bringing new products to market that will disrupt legacy incumbent providers over the long term. This combination of right-sized investments ensures growth over the near and long term and with growing diversification the particular product or channel that drives this growth will look different from quarter to quarter. Now let's turn to our outlook. For 2020, we believe we can deliver full year revenue of $630 million to $640 million. The out-performance versus our original 2020 revenue midpoint expectation of $620 million reflects strength across the business as well as growing customer diversification particularly in federal and international. As you see in our shareholder letter we're also tracking above plan on the bottom line and that's driven by revenue out-performance expense leverage in travel and event cost savings of about $12 million. In 2021, we expect to continue to build on our strong momentum. Given the rapid pace of growth we're seeing, we want to provide you with a…

Thank you, Jawad and team. Moderators, can you bring everybody up into gallery view? Let me know when that happens please.

We're all up in gallery view.

Great. Thank you. All right. We're going to take our first question from Keith Housum at Northcoast. Go ahead Keith, you're up. And the phrase of 2020 is you are on mute Keith.

All right. Can you hear me now? Sorry about that guys. Jawad, can you go in a little bit more detail and remind us about the investments that are going to be made in the channel the product and the infrastructure. I guess, particularly, I'm interested in some of the investments you're going to be making to grow the international business.

Yes, absolutely. So we made investments this year in new geographies that we had never been in before. And it was really on the heels of investments we made in the previous years in new markets like India and the Ukraine. We have seen very early -- like great results early on. I'm going to let Josh talk a little bit more about that. When we put boots on the ground, there's no substitute for that. And what we found is that by having folks there by establishing offices having employees, Axon employees in these new markets it leads to not only increase pipeline, but in many cases a return within the same year. And so we're doubling down on that strategy, the channel investments next year we're going to expand even more geographies. From a product standpoint we're continuing to invest very heavily in software. The Sprint for Justice initiative that Jeff led with his team this year is a great example of just the type of leverage that we could expect to see from the investments we've already made in our product and just a little bit of extra effort goes a long way. And then from the support infrastructure standpoint, we are in the process of getting ready to be $1 billion-plus revenue company and everything that comes along with it from an ERP implementation, which we're well underway in HRIS and other back-office support systems that we're putting in place to help the company scale.

Great. And if I can follow-up on that. In terms of the international expansion is -- are all the entire product portfolio going to be available internationally? So I guess what I'm getting at is the software been written or translatable into any language? Or are you going to be limited in terms of what you can offer where based on languages?

Ultimately, I think, we view any international customer as an opportunity to not only sell TASERs and body cams, but also move them to the cloud and Evidence.com. And for some markets right off the bat customers are adopting Evidence.com. For other markets they're adopting our on-premise solution named Commander first and then subsequently moving to Evidence.com over time. I think for us the most important thing for any international customer is to get one of our products in their hands. And it really doesn't necessarily matter to us which one they start with because we can really feel confident betting on ourselves that we'll be able to deploy more and more of our products with those same customers over time.

Okay. So language will not be a barrier to what country you can go with your product portfolio?

No.

Great. Thanks, guys. Great quarter.

Thank you.

Thanks Keith. All right. So we're going to take our next question from Will Power at Baird. Go ahead, Will.

Great. Yes. Thanks for taking question. I guess, I'll try to slip in two. Maybe the first for Richard or perhaps Rick whoever wants to take it. Really encouraging to see the progress at federal. I guess, I'd just love to get a little more color on what the sales cycles look like generally as you target federal, particularly, as you look at that Homeland Security contract the largest TASER deal in company's history. And I guess, I'd be curious how much more room there might be to go with somebody like Homeland Security? Is this just a starting point? Or are there things you could build off of from here?

Why don't you take that one Richard?

Absolutely. Yes, absolutely. The lead times for federal contracts can vary. Typically there's a two-year budgeting cycle. But that said, every single year federal customers are evaluating what the gaps are, what their needs are and their requirements. And so every single year a customer has the opportunity to leverage their funding for technology and/or capabilities that are relevant. And so we're seeing lead times as low as within a year as well as extending out to the two years that the budgeting cycle typically efforts itself. And then specifically for Customs and Border Protection, CBP they are the largest law enforcement agency across the U.S. So 40,000 law enforcement officers within Customs and Border Protection so we see this as a franchise program where we see nowhere but north and additional growth.

Okay. Great. And maybe a question for Jawad, it was great to see some initial thoughts on 2020. Maybe just help us out the key insights from your end to help what was your confidence in laying out that revenue guidance what were kind of the key inputs to provide that visibility at this point particularly given some of the ongoing questions with respect to municipal budgets and whatnot.

Yes. Of course, look, one of our core values as a company is transparency. We've got great relationships with our investors and our analysts and we've always prided ourselves on the level of information, and detail that we share in helping them model our business. One of the things that, we heard pretty consistently throughout 2020 was that after we pulled our guidance earlier this year it was a little difficult to model our business. We've got a lot of moving parts and increasing amount of complexity in the business. And as you point out, there's still a lot of uncertainty in the world. But the reality is that our business has been diversifying along two vectors. Who we sell to is rapidly expanding beyond law enforcement and where we sell is rapidly expanding beyond the U.S. So the fact is that our business is more resilient today than it's ever been. And so we wanted to share our view on how 2021 is lining up for us again in an effort to help folks model our business.

Okay. Thank you.

Thanks, Will. Next question from Erik Lapinski at Morgan Stanley. Go ahead, Erik.

Sorry, I think I was on mute. Congrats on the quarter. Thanks. Maybe just a quick one on kind of as you continue to ramp shipments of Body 3. Can you give us any context into just the attach rate for maybe some of the more LTE connected features and kind of the usage there? Is it going up pretty in line with what you would have expected? Is it may be improving better or worse?

Yes. Absolutely. I think we're very, very excited about where we're at right now with interest in live streaming and other connected features with a AB3. Without going too deep into the numbers, I would say, like we feel really good about the amount of adoption we've seen through 10 or 11 months here and certainly going into next year have a very strong pipeline of connected services. Whenever you launch a new product and really at any point in the year customers need some time to build in that ask into their budget. And so while this year a lot of our new cameras that were first time purchases included a lot of the connected services. Going into next year, I think a big point of focus for us in kind of year two of those budget cycles are now to be able to get all those upgraded cameras on those same connected plans. And our customers have been working with us and of course with their city councils and so forth to identify funding to add those feature sets on. And so we're really excited about kind of the runway we have to get hopefully one day every single AB3 onto our Respond or Respond Plus platforms.

Got it. Thank you.

And just one quick addition to that, as we talked about in the shareholder letter both from a sales perspective, but also just usage and engagement while it's still early days over 200 agencies have used Aware actively in the last 30 days with more than two dozen consistently using it every single week now. And we've seen just tremendous growth in the adoption of live streaming as it begins to roll out. We've seen it grow over 6x over the past six months.

Got it. That's awesome. Thanks. And then maybe just one other one on kind of the percentage of TASERs sold on a subscription going up. Is that starting to become more, I guess, being the highest rate you've seen. Was that some of that a factor of maybe a large order to being sold on subscription? Or like is that pacing to even the rate that you would expect kind of moving forward?

Ultimately, the majority of TASER 7s are on subscription plans the vast majority. And so essentially, the way I think about it is over time as the mix of T7s keeps going up relative to our other TASERs the more of that number will be driven up as well. So I certainly would expect although nothing is guaranteed that we would look for that number to keep growing unless there's like an outsized international order as a one-time purchase or an outsized order on X2 or X26P is a onetime purchase we certainly would expect that number to keep trending up.

Got it. Thank you.

And just to be clear to follow up there. It was also tied to the mix of domestic shipments in the quarter. So 75% is a great number and we're proud of it but it will fluctuate depending on domestic versus international. Okay. Our next question is going to be from Joe Osha at JMP Securities. Go ahead, Joe.

Okay. Am I unmuted? That's the first and most important question. Going back to some of the comments about next year I'm wondering if we could maybe get some insight into how that might break down in terms of TASER sales versus cloud. And then also I'm interested in whether computer-automated dispatch and records might be contributing meaningfully to that? Thanks.

Yes. We definitely have goals across all products including dispatch and records. And certainly we've seen a lot of really promising indicators in terms of interest and commitments this year that will translate into deployments and dollars next year in dispatch and records. And then on the TASER business I think as we look at next year we kind of try to set a goal for ourselves of how much we want the TASER business to grow year-over-year. And absolutely, we anticipate TASER growth in that number. But likewise we expect all segments to grow including software and sensors, cloud and so forth.

Could I perhaps, Jawad are you willing to put some numbers around that in terms of mix?

Not at this time, Joe. We gave directional guidance for how we're thinking about 2021 and we feel good about that guidance today but that's the extent of the detail we're going to get into.

Okay. Thank you.

You always got to try right? You got to try. I'm just checking to see who's logged in recently because we've had some folks logging in up. Let's take our next question from Jonathan Ho at William Blair. Go ahead, Jonathan.

Hi, good afternoon and congrats on the strong quarter. I just wanted to start off by circling back to the Fed opportunities. Does the IDIQ contract potentially give you a hunting license to go and maybe chase other agencies or subagencies down? And just wanted to get your thoughts around the GSA schedule as well.

Yes. Go ahead, Richard.

Absolutely. Yes. So an IDIQ contract it is kind of a hunting license. You can think of it as a contract vehicle that allows the customer -- the federal customer to buy off of a pre-agreed icing catalog from Axon. And so in particular this IDIQ has multiple -- is at the department level and there's multiple agencies within that department that can then follow on and purchase off of IDIQ.

Great. And then we've definitely seen some interest here in terms of the deescalation products. Can you maybe talk a little bit about whether that can potentially drive some additional bundling and just sort of the reception that you've seen from deescalation just given the current political environment? Thanks.

Yes sure. So in Q2, obviously with the lockdowns and so forth that was domestically probably the low point of the year in TASER sales. And Q3 we really roared back and I'm so proud of our entire global team, especially in this case our state and local team. And I think there is certainly a record interest in TASERs. We see that quarter-over-quarter here. And we expect that to continue to grow both in state and local where we see it more incrementally. And then federal and international where our hope is we see it more exponentially. And so across the board I think there is very strong demand for TASERs. I think you'll continue to see that throughout the year here and we're very excited at the opportunity to continue to be able to package our deescalation devices with our software and sensors, packages on the body cam, cloud side and on the record side and so forth.

Okay. Thanks, guys. We'll take our next question from Jeremy Hamblin at Craig-Hallum. Go ahead, Jeremy. You're on mute.

Can you hear me now? Sorry about that. So I wanted to just congratulations on the fantastic results. I wanted to get into the records business a little bit. And just get a sense of -- there's a little bit more embedded competition in that particular side of your business. And I wanted to get a sense for -- as you're getting in the initial ramp the timeframes to win meaningful share in that portion of your business. You have fantastic relationships now that have been built over a couple of decades that may make the sell easier, but I wanted to get a sense of how you're thinking about that business and whether or not the ramp that we saw that was kind of a long slog in cameras, do you think that this -- you can potentially gain share and adoption faster and record simply because of the extensive relationships you have today?

Absolutely, Jeremy. I think we've seen over the last 10 years certainly body cameras were a little slower out of the gate to be adopted. But now we've put ourselves in a market leadership position there. And certainly part of our strategy as we've talked about is around OSP 7 plus and packaging our record solutions with our body camera solutions. I'd say this about the competition like we have a lot of respect for all the different companies in the market. They're all great companies and well run and so forth. But at the same time like we've built our team and our channel and our product team and our company for moments like this where we can enter new markets and we can win in them. And so this year, we've seen very promising results and I certainly believe in our team and I think we're going to end up in a spot where we are the market leaders not only in records, but also in dispatch and every day we're waking up getting one step closer to that.

And if I could I wanted to ask one other question directed towards Jawad in thinking about 2021. In terms of -- you've seen pretty exceptional growth and steady growth now in the weapons side of the business. And I wanted to get a sense as we look forward into next year where you've continued to have mid-teens growth in that weapon segment. I think a lot of people had expected that to tamper. It seems as though you're as excited about that business today as you might have been a few years ago and maybe even more so. Is that something where you feel like that weapons portion of your business can continue to do double-digit growth?

Yes. It's a great way to say it Jeremy. I am more excited about our TASER business now than I ever have been in my time at Axon. Actually I've never felt better about the company overall. And obviously TASER is a big part of that. And we talked a little bit about in my prepared remarks about this like near and long strategy where in the near-term we can still see growth from TASER both domestically there's still life space. We talked about all the reasons why over the last couple of years. But now with federal and with international that's going to be an important growth vector for TASER. And then with these investments we're making in product with records and dispatch, we think that that's going to be at -- those are SaaS businesses our ARR is now top $200 million. So we're not necessarily small anymore, but that's still ramping very quickly. And as that revenue comes online over the next few years that's going to help two, three, four years out. Keeping our growth rate growing at an accelerated pace.

Yes. I've got to jump in here and say as well do not forget the TASER business. It is a really transformative and exciting business. Before this decade is out, we will have a weapon that is going to be neck-and-neck or even outperforming a 9-millimeter and stopping power. And I think we've got the opportunity to become the primary weapon of law enforcement officers around the world. And that message has been really positively received by law enforcement. When I released my book last year, we were nervous as to how that investment would resonate. But I can tell you especially in the environment we're in right now no officer wants to use legal force. And we just -- we've got a really good less lethal weapon system today, but we still have room to improve and I'm really excited about the things that are coming down the road. And just the opportunity even with TASER 7 just got approved in the U.K. I mean we're getting approved in new markets where our existing upgrades are going to be really opening a lot of revenue opportunity. And I don't see that coming out of scheme -- running out of a scheme any time soon.

I actually I wanted to jump back in as well one thing you haven't heard us talk a lot about I'm just as excited as Rick is talking about TASER. One area, we haven't talked a lot about in the past, but I think you're going to start hearing more from us Jeremy is the consumer business. So I'm just so part of our consumer team. We had a plan for the year -- for the full year in revenue and they hit that plan in the first seven months of the year. They're having a banner year. We're expecting big things from that business. We've got a couple of product launches in the horizon in the next year or two. So, that's another area that we're expecting to see some growth.

Fantastic, I love the goal. Thanks guys.

Thank you. Next question from Joshua Reilly at Needham. Go ahead, Joshua.

Hey, there. Thanks for taking my questions. So you just had your customer conference in August. What did you see in terms of demand and pipeline generation out of that event from being fully virtual versus historical in person events? And then, how does that compare to the increased customer interest generated from the social unrest over the summer?

So let me start, and then I'll pass over to Josh, who is here. I would say overall, being virtual the level of attendance I think we had something like 10,000 people sign-up, which is something like 4x or 5x in last year. Now not all of them showed up and the level of engagement probably wasn't as high, because we didn't have their undivided attention. But the feedback we got was people really enjoyed it. We set out VR headsets loaded with some of the content for at least a subset of the attendees. So I think given the challenges, people really responded well. Now we do see the value of in-person in the future. But this year, I think actually in terms of quantity of touch, it was actually broader than it's been before just maybe not as deep in terms of giving their time for three full days. Josh, do you want to add on anything?

Just to the questions about social unrest. Look like I want to be really conscious of how we talk about this. It's not a victory when there's the type of social unrest that there is today. And so, certainly like our team, I think we think about our sales process the exact same way every day, like we are going to cover the market well. We're going to talk about the value that our products provide across the board and we really, really believe in that value. And sometimes it takes an external factor for a customer to maybe be more motivated to buy it or whatever the case may be. But we really believe like hey we're just going to keep focusing on the things we can control, and we believe we're going to end up in a really positive place not only as a business but in terms of fulfilling our goals and missions in society. I think we're going to feel really good about that. And I want to kick it over to Luke, maybe just to talk a little more about Accelerate as well. I think he had something to say as well. Thanks.

Yes. Accelerate was a huge success in terms of being able to connect with the customers digitally which I think a year ago it would have been very tough to get the key decision-makers from major cities to invest in time via Zoom call or another format. And so that's been one of the silver linings of the pandemic is us being able to rapidly push people to these virtual-type engagements. And so we walked away being very, very pleased to Rick's point of being able to hit a larger number of customers, and showcasing all of the tools around deescalation transparency. And then, just finally to Josh's point on the social rest -- social unrest, we really are trying to solve and be part of the solution in these really difficult complex situations. And so our customers aren't looking to us as somebody that's coming to them out of the blue. We've invested in decades of relationships where they know the tools that we're creating are going to help them resolve these really difficult issues in the best possible outcome.

Okay, great. And then, just one follow-up question. Net revenue retention increased one point sequentially in the quarter. Does that imply that you're having ongoing success in upselling the OSP bundles? I know that's probably the case, but just maybe some color on that. And then, how should we think about the relative penetration for OSP at this point within the body cam customer base?

Yes. I'll take the first part of that question on net retention. That's exactly right. Our strategy has been geared towards selling more higher-value-added bundles like OSP 7 Plus. And as more customers adopt that then we should expect -- we will expect to see our net retention increase. And then for the second part of your question, I'm going to kick it over to Josh.

Okay. So, on the net revenue retention, I also just want to give a big shout out to our customer success or this is an order we invested and substantially this year to build this out and make sure our customers continue to have a great experience. And Lisa Krolikowski and her team have just done an awesome job ensuring that. And I think that's reflected in net revenue retention. Do you mind just reminding me of the second part of that question?

I was just about to -- sorry, did I just cut out there. The relative penetration for OSP plans within the body cam customer base.

Yes. So I think for us, like, with OSP right now, I think, we're seeing a lot of midsize and larger agencies start to show a lot of interest in it. And I think that's where we're having the most success. As we kind of took a holistic look at our pricing and packaging strategy going into next year, I think, you'll start to see us test OSP like offerings that are a little more tailored to specific segments. So in corrections, I think, we're very excited to offer an OSP package there that's more tailored to corrections. I think with inside sales that handle our smaller customers, we're going to be experimenting there as well with the same type of package that's a little more tailored for smaller agencies. So our goal is to have every customer buy a camera, a software license, a records license and a TASER at the same time. And I think we're on our way to that. And hopefully, with some of the adjustments and tailoring types of initiatives that we're undertaking right now, I think, we'll continue to see more and more positive signs there.

One thing, before we continue, Andrea, I'm going to go ahead and just take one moment and I'm going to share my screen. And I'm demonstrating with you guys a feedback tool I use with a lot of our customer interactions it's called Slido. And it is a way that I can take feedback from groups of customers, while I'm doing these calls. So I want to do the same thing with you. If you get out your smartphone and go to slido.com and enter the code Axon or just point your smartphone camera at the QR code, that will open up Slido for you. And there we're going to get some of your feedback and you can ask some questions there that I can come to at the end. And while we're doing that, Andrea, back to you to keep running with the questions.

Thanks, Rick. Thanks. All right. We're going to take our next question. Moderators, can you bring everyone on to gallery view again?

Yes. Can you stop sharing your screen there?

Did I break it? All right. Do I need to stop my screen share, Doug?

Yes, if you could.

Okay.

Thank you, Rick. Appreciate that. Okay. So next question from Charlie Anderson at Colliers. Charlie, you’re up.

Yes. Thanks for taking my questions and congrats on a really strong quarter. I wanted to go back to the consumer TASER commentary; that was really interesting. Sort of, curious what's happening there. Is that more push? Is that more pull, because it is finally in the same product, right? And I'm sort of curious too, if it's a sustainable trend, what that means to TASER gross margin and then also the cartridge business for TASER. And then, I've got a follow-up.

Yes. Great question, Charlie. It's a little bit of both. Earlier in the year we saw increased sales from the -- as a side effect of folks staying home and wanting more self-defense options. As you know, like, gun sales were up and TASER sales were up for similar reasons, as folks looked for self-defense options for home. We hired a new general manager for the consumer business. He started earlier this year. He's got a fantastic marketing background and he's been completely up-leveling our game. As you pointed out, it's the same products, but we're really stepping up our game from a marketing standpoint and we've been making a run-in, not only increasing sales with distributors, but especially with direct-to-consumer. And those results have yielded some pretty great returns early on. Next year, as I mentioned, we're looking at a couple of product launches that I think are going to get even more of a push. And we're focusing not only on the TASER form factor, but there are some other form factors that we think are very appealing to folks that don't necessarily want to fire a weapon, per se, but more of a TASER that's got a different form factor like we've had in the past that we've discontinued. So those types of things we think are going to be opening up new markets for us. And then, from a margin standpoint, they're actually going to be very helpful. The consumer business is at -- we haven't actually disclosed this publicly, but it's a very attractive margin. It's accretive to our law enforcement margins and that's true with the cartridges as well.

Okay, great. And then for my follow-up, we had a chance at some pretty significant police reform bills coming out of the federal government this year, didn't happen. I'm just sort of curious where you see attitudes trending as far as that's concerned, in terms of reform, both at the federal and at the state level, in terms of potential tailwinds to the business. Then NIBRS was obviously helpful on opening up opportunities in record, sort of, curious if there's anything else like that out there in terms of regulatory that can provide a tailwind for you guys over the next year or so? Thanks.

Let me take that one. A few weeks ago, I had gotten an e-mail from a Republican U.S. Congressmen, who would inform me that part of their platform on police reform was to promote body cameras for every officer in America. And that's coming through the Republicans. I think you would also see on the Democratic side of the aisle that we're -- there's a lot of support for police reform particularly around body cameras. But I'll tell you once we really get into the conversation people also very quickly understand the value of TASER weapons. I mean we saw the tragedy in Philadelphia a few weeks ago and the community there has risen up including the family of the deceased really pushing the agency, why didn't every office there have a TASER. Again we obviously don't like to see those sort of tragedies happening or try to leverage them. But we do have solutions that really matter and we think it's bipartisan. And I would tell you I just -- on a personal note, I've been pretty worn out by all the devices missed in the country, but the last 48 hours, I was expecting a lot more of it. And I'm feeling a lot more -- a lot less division right now. I think we may see a more productive coming together as we move into next year after the exhaustion of 2020 and I think on both sides of the aisle. We have a positive solution-oriented technology program that can be part of a police reform bill that police want that communities want and I think legislators can see the value of them. So I'm optimistic.

Yes. I would just add -- I would echo Rick's comments. I think this is really -- we're seeing now bipartisan support for reform that would include technologies for products like body cameras, as well as increased training. In June, Joe Biden called for $300 million to reinvigorate community policing. And so regardless of the outcome I think this is an area where kind of the pragmatic voice is going to win in terms of saying we actually need more training to reform police more funds going in there than to actually cut funds from there.

Okay guys. I think that's all of our questions. And I just want to give a quick second to make sure to see if we have any follow-ups. Does anybody have a follow-up? Do you want to raise your hand? No, we're feeling good. Okay so.

Andrea a couple have come in through the chat real quick. I don't know if you want to just touch on those about the sales of body cams used by correctional guards and police officers.

Go ahead Rick. Go ahead.

I think we're seeing some major correctional agencies and sheriff's offices are now starting to deploy these. In fact Josh you could talk -- you stood up a team to go after these adjacent markets. And I think we're seeing real reception right?

Yes. Absolutely Rick. I think this is a place where historically there hasn't necessarily been a lot of focus on it in terms of like individuals that that's really all they do day in and day out. And over the last two years we've built that team and I think it's already presenting pretty incredible returns. And I think once these representatives go out and talk to customers I think they're really parlaying the success to the similar use cases around the country within corrections. And we expect that to continue I think between corrections and some of our other adjacent markets of private security and eventually fire and EMS and so forth. We'll continue to see more and more momentum both on the TASER side and on the body cam side.

Right. And I think we already answered the other question that was in there.

Yes. There was another question that chat about please, but I feel like we really covered that both in our shareholder letter in our prepared remarks and in the Q&A. And the transcript will be posted online if you guys missed something. Okay. So now we're going to turn it over to Rick to close this out. And just wanted to say one of the things that's really been heartwarming is, we've heard from some of you on the buy side that you're watching our earnings calls with your kids and they're learning about what you do managing assets for a living. So in that spirit of camaraderie, Rick prepared a little something for the families out there tuning into earnings calls.

So you guys have already seen. In fact we've already had three people respond which I appreciate. I'm going to leave this up. The call is basically over. But if you get a chance go into Slido and check it out. It's been an invaluable tool. I get a lot of feedback from customers this way. And we're having some fun where if you can guess the majority of our backgrounds whether they're real or not what office it's from, we're going to send you some Swag. So give us your shirt size your email. And thanks and also give us your feedback. We want to know are you enjoying the format sometimes we get a little more informal. I figure you're probably going stir crazy like we are. So we're listening it up trying to make it kind of fun, knowing you've got a lot of work you're going to be working late in tonight. We hope you will look forward to our earnings call, not just for the great results, but because we're going to have all fun together. So thanks. It's good to see the country, I feel coming together. I have this optimism looking into the future. In general, it's been a rough year. And thanks for sticking with us. And again, to every Axon employee, I couldn't be more proud to be part of this team. I just love working with you all and look forward to reporting our next results in the New Year. So, thanks everybody.

Thank you. Bye.