Axon reports Q1 2024 revenue of $461 million, up 34% year over year, raises outlook

SCOTTSDALE, Ariz., May 6, 2024 — (PRNewswire) —  

  • Axon Cloud & Services revenue grows 52% to $176 million
  • Annual recurring revenue grows 50% to $825 million
  • Net income of $133 million supports non-GAAP net income of $89 million and Adjusted EBITDA of $109 million
  • Raises full year revenue outlook to a range of $1.94 billion to $1.99 billion, up from $1.88 billion to $1.94 billion

Fellow shareholders,

Axon is pleased to report a strong start to 2024 with another quarter of impressive financial performance supporting an improved outlook for FY 2024, and continued long-term innovation that we expect will fuel our growth for years to come. First quarter revenue growth of 34% marks our 9th consecutive quarter of growth above 25%, and we delivered improved profitability with first quarter net income margin of 28.9% and Adjusted EBITDA margin of 23.6%.

Axon Cloud & Services revenue of $176 million grew 52% year over year, more than doubling over the last two years. Our software revenue growth is driven by both adoption of new products from our existing customers and attracting new users to our ecosystem. Our net revenue retention remains a powerful driver at 122%, and we aim to sustain robust software growth over the longer term through disruptive product innovation. This includes recently announced significant new advancements leveraging artificial intelligence ("AI") and virtual reality ("VR") to enhance officer training and productivity, and our planned acquisition of Dedrone, which will help make our vision for Drone as a First Responder ("DFR") a reality.

Our integrated subscription plans drive value for our customers beyond what can be achieved through disparate point solutions and our software growth is also linked to record demand for our TASER and Sensors products. TASER revenue of $179 million grew 33% year over year propelled by demand for TASER 10. Sensors & Other revenue of $106 million grew 14% year over year driven by adoption of Axon Body 4.

Axon's consistent growth at increasing scale is a result of execution on our strategy to build the modern technology ecosystem for public safety and trusting partnership with our customers. Their feedback energizes our teams to work on the next innovations to help drive better outcomes, and we see tailwinds across our product portfolio now and in the future. Looking ahead, we aim to deliver improved financial performance and are increasing our revenue and Adjusted EBITDA expectations for the year. We are humbled to provide this update and share more detail, below.

Select Highlights

Axon Week 2024
In April, we hosted our ninth annual user conference, combining our long-running Axon Accelerate and second annual TASERCON into one main event — Axon Week. Our largest user conference to date welcomed over 1,400 customer attendees and featured 99 breakout sessions to demonstrate the Axon ecosystem and facilitate broader conversations about public safety. Our expanding user base was also on display, with strong attendance across emerging customer verticals for Axon. Over 20% of our customer attendees came from verticals outside of U.S. state and local law enforcement, including international, U.S. federal, justice, corrections and enterprise.

Axon Week has become one of the largest user conferences in public safety and is an exciting way to bring our customers together with our teams to share ideas, and showcase the full power of the Axon ecosystem. Each year, we also use this event to introduce and highlight new products and solution applications to our customers. Our announcements from Axon Week 2024 include advancements to our VR training portfolio, an improved mobile app, and Draft One, which we explore in greater detail next in this letter.

"Our philosophy across all of these things is simple: Saving Seconds Saves Lives." - Rick Smith, Axon Founder and CEO

Product Innovation Highlights

Draft One
Axon's latest AI-driven product, Draft One, is a revolutionary new software tool that drafts high-quality police report narratives in seconds based on auto-transcribed body-worn camera audio. Draft One leverages the advanced power of Generative AI and includes a range of critical safeguards, requiring every report to be reviewed and approved by a human officer, ensuring accuracy and accountability of the information before reports are submitted.

We believe Draft One is a valuable tool that will drive immediate productivity gains for our customers. Reporting is a critical component of good police work; however, it has become a significant part of the job that officers commonly refer to as "burdensome." Axon found that every week officers in the United States can spend about 40% of their time — or 15 hours per week — on what is essentially data entry. Additionally, prosecutors and defense attorneys have shared that they welcome the quality improvement of Draft One reports as they can help support and accelerate the judicial process.

"Draft One is the next evolution in report-writing; as significant as when law enforcement moved from the typewriter to the word processor."
— Captain Brian Gossard, Lafayette Indiana Police

"You come on this job wanting to make an impact. You don't come on this job wanting to write reports. So, this AI feature, I'm super excited about it."
— Chief Scott Galloway, Lafayette Indiana Police

"My experience using Draft One really blew me away. [...] A 25 to 30 minute long report...you hit the narrative button and it cranks something out in a few seconds."
— Officer Nathan Stoneking, Lafayette Indiana Police

"With over 27 years of experience in law enforcement, I have seen technology come and go, but Draft One is one of the most exciting innovations for law enforcement I have ever seen."
— Sergeant Robert Younger, Fort Collins Colorado Police Services

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