Mr. Smith, you may begin, is being recorded.
Thank you. Good morning, everyone. My name is Rick Smith, and I'm the founder, CEO, and a director of Axon Enterprise. Welcome to the twenty twenty Annual Meeting of Shareholders. If you're listening over the phone, please go to investor.axon.com, scroll down to Events and access the link so that you can see us on Zoom.
First, I'd like to start by explaining why I'm wearing a baseball hat at our shareholder meeting. Some of me some of you may have seen on my Twitter feed that my daughter gave me a home haircut during the COVID quarantine. And I originally had some humor planned for this morning, but given the tragic events happening this week, humor no longer feels appropriate. And so I'm wearing a hat, and we're going to, start by addressing the state of affairs with the tragic events of this week. So as I'm sure all of you know, earlier this week, a tragedy unfolded in Minneapolis.
It wasn't something invisible like a virus, but rather an event that was in public in broad daylight and captured on camera for all to see. The death of George Floyd has sparked pain, anger, and outrage that is being felt around the country. We would like to offer our sincere condolences to all those who loved George Floyd, and we empathize with the citizens and communities who are angry and acknowledge the pain and suffering that they're experiencing in the wake of this pandemic. I commend those that are showing true leadership by condemning the behavior we saw this week and want to share the words from a few police leaders I personally admire. Seattle police chief Carmen Best told her force, quote, we each have a right to go home at the end of every day, but we also have a responsibility to ensure that others enjoy that same right.
We must hold ourselves accountable if we are to maintain the trust of the community who grants us the privilege to serve them. And Tucson police chief Chris Magnus said that the video showed the, quote, indefensible use of force that good officers everywhere are appalled by. Conduct like this anywhere makes it difficult for police everywhere to build community trust. We know that our society faces major and deeply entrenched challenges. We're committed to listen and continue to learn how we at Axon can be a part of fixing what is broken.
We stand for protecting the truth and protecting lives, but we do believe everyone deserves to get homesick. Now turning to the formal portion of the meeting, I'd like to introduce our directors and executive officers who are attending the meeting today, starting with Michael Garnrider, the chairman of our board of directors. Could you say hi, Mike? Oh, let's see. We might not have them actually on the call, so I will just, read off their names.
Doctor. Richard Carmona, Julie Cullivan, Caitlin Kalanowski, Doctor. Mark Kroll, Doctor. Matt McGrady, and Adi Partovi. Our executive officers are present here on the Zoom with me today.
I'll ask you guys to say hello. First, our president, Luke Larson Chief Financial Officer, Juwada San Chief Product Officer, Jeff Cunnens.
Good morning.
And our Chief Revenue Officer, Josh Isner, is not on the call. He had another engagement, I believe, customer this morning. I would also like to introduce Tim Zingraf, partner with Grant Thornton, our independent registered public accounting firm. If you have any questions for our management team, you may submit them using the Q and A feature in the online virtual meeting at www.virtualshareholdermeeting.com/aaxn20twenty. I'm going to go ahead and copy and paste that link into the chat room that I'm going to send to all panelists and attendees since that is a mouthful.
And I'm also going to, at this point, do a quick screen share. We're also going to be using an informal q and a tool called Slido. So if you look at your screen now, you can go to the website slido.com, enter the code AAXN, our ticker symbol, and there you can there's a tool for you to ask questions. And I can also ask questions of you who are participating today. So right now I've got a poll up, and I would appreciate it just to get confirmation that some of our shareholders are able to use this tool.
If you could answer the question, where are you calling in from today? And I'm going to leave that open. And throughout the meeting, you can use the Q and A function to ask questions in Slido. That would be my preferred approach because then other attendees at the meeting can vote up those questions, and we know to take those questions where there's the greatest amount of interest. Now the other link, virtualshareholdermeeting.com/axon or aaxn2020 that I posted in the chat.
If there are formal questions about the matters of governance, and the issues that are being voted on today, I believe it is preferred that you use that formal virtual shareholder meeting link for those sorts of questions. For business related questions and more informal questions, please use Slido. It just helps us organize it, and I find it's a great tool for these online events. Alright. I see we have at least 18 people who've signed in coming in from Bainbridge Island, Scottsdale, San Francisco, and around the world.
K. With that, I'm gonna stop my screen share, and let's return back into the formal portions of the meeting. Again, slide o is open. At any point, you can start to ask questions there and review of questions of others. Today's meeting will be in two phases.
First, we will conduct the formal part of the meeting to consider each of the proposals listed in the notice of annual meeting stockholders dated 04/15/2020, and to conduct such other businesses may properly come before the meeting. The second part of the meeting will be a management presentation followed by a question and answer session. Isaiah Peele, our Corporate Secretary, will be reporting the minutes of this meeting, and Bobby Driscoll has been appointed to serve as the inspector of the election. He has signed the oath of office, which will be filed with the minutes of the meeting. I will now call on Isaiah Fields to establish that we have met the necessary corporate requirements to begin.
Isaiah?
Thank you, Rick. We have proof that notice of this meeting and related proxy materials was mailed or made available around 04/15/2020, to all shareholders of record as of the record date of April 3. Based on that, this meeting is duly called with timely proper end notice. As of 04/03/2020, the record date for the meeting, there were 59,824,261 shares outstanding. We have 55,338,131 shares present by person or proxy at this meeting, which is over 92% of the outstanding shares and constitutes a quorum permitting the transaction of business.
Each share entitles the holder to one vote on each matter which may come before the meeting. A list of registered stockholders entitled to vote is available for examination by stockholders. The polls for matters to be voted upon today are now open and will close immediately after I present the matters to be voted upon at this meeting. If you have not previously voted or you wish to change your vote, you should do so now online at www.virtualshareholdermeeting.com/aaxn2020. The first item of business is the election of directors as nominated by the Board.
The three nominees for election as Class B directors are Mark Kroll, Matthew McBrady, and Patrick Smith, who will each serve a regular three year term until our twenty twenty three annual meeting or until their respective successors are elected and qualified. The board recommends a vote for each of these nominees. The second item of business is the approval of an advisory resolution on our executive compensation. The board recommends a vote for this proposal. The third item of business is the ratification of the appointment of Grant Thornton LLP as Axon's independent registered public accounting firm for 2020.
The Board recommends a vote for this proposal. The fourth item of business is the approval of amendments to the company's Certificate of Incorporation to remove the supermajority vote requirements and replace with a majority vote requirement. The Board recommends a vote for this proposal. The fifth item of business is the shareholder proposal submitted by Mr. James McRitchie to elect each director annually.
It is my understanding that Mr. McRitchie is on the line to present this proposal. The Board recommends against the shareholder proposal. Mr. McRitchie, you may read your proposal and answer any questions presented.
Operator, please unmute his line.
Good morning. Thanks for your attention and for allowing us to all to practice social distancing during the COVID-nineteen pandemic. Broadridge, Zoom, Slido. I haven't seen any other companies using so many formats at once. I hope all of you and your loved ones are making it through these trying times.
I'm Jim McRitchie of corpgov.net, an Axon shareholder for many years. I'm delighted to be introducing an exciting good governance proposal to help increase the credibility and shareholder value of Axon simply by reorganizing the board of directors into one class. With all directors elected every year, we will have an increased accountability just as Axon products help everyone get home safely, declassified boards help ensure each of our directors is looking out for shareholders each and every year. Why wait three years to get feedback? At the 2019 meeting, I asked that our company move to a simple majority vote standard.
That proposal won almost 97%. By adopting proposals a and b, you will be taking another step towards greater accountability that will complement my proposal number five. Almost 90% of S and P 500 and Fortune 500 companies worth more than a trillion dollars have adopted annual elections for director since '19 or since 02/2012. Annual elections are widely viewed as a corporate governance best practice contributing to improved performance and increased company value. Last year and earlier this year, shareholder proposals to elect each director annually, otherwise known as declassifying the board, won large majority votes at National Fuel Gas, Farmer Brothers, Western Asset, BlackRock Credit, United Therapeutics, Knight Swift Transportation Holdings, Anthem, and Kellogg.
Please vote for proposal number five. Elect each director annually. Thank you for your attention, and please stay safe.
Thank you, Mr. McRitchie. At this time, we will now take questions that have been submitted via the virtual shareholder meeting platform. These questions are to address the formal matters being voted upon today. Attendees will have the opportunity to ask general business questions during the informal portion of the meeting using Slido at www.sli.do.
While we wait to see if any questions come in, I want to remind anyone who is listening in over the phone that you can go to investor.axon.com, scroll down to Events and access the link to see us live on Zoom. That will also allow you to watch the company presentation following the formal portion of today's meeting. I don't see any questions have come in at this point. So we do have one question that I believe would be more appropriate for the informal portion. And so a question came in: How do you expect COVID-nineteen to affect the company's business and performance both in the short term and the long term?
Rick, I'll defer to you, but we may want to move that toward the informal portion where we can also get input from other executives.
Yes. I'd say let's move that. Can somebody just copy and paste that just so we keep track of it into the Slido questions? Or we'll just have you reread it, and we'll get to that point, Jose.
Terrific. Thank you. With no other questions, that concludes the matters to be voted on as outlined in the notice of the annual meeting. In accordance with our bylaws, I hereby declare the polls for voting at our twenty twenty annual meeting closed. I've received a preliminary tabulation from our inspector of election.
And based on that tabulation, I am pleased to report that each of the three Class B director nominees were elected. Each of the management proposals were approved, and the shareholder proposal to remove the supermajority vote requirement was also approved. The final voting results of today's meeting will be reported on a Form eight ks within four business days. That concludes the formal business, and I now declare the formal portion of this meeting adjourned. If you wish to continue on our investor update, please join us via Zoom, which you can again find the link at investor.axon.com.
I will now turn the meeting over to Andrea James, who runs Axon's Investor Relations.
Thank you, Isaiah. Hello, everyone. Welcome to Axon's Annual Shareholder Presentation. While we miss being able to greet you in person at our headquarters in Scottsdale as is our annual custom, we're grateful to be able to present today using video conferencing. During this presentation, 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 and are not guarantees of future performance. All forward looking statements are subject to risks and uncertainties that could cause our actual results to differ materially. These risks are discussed in our SEC filings. Before we hear from Rick again, we're going to start with a video.
Drop the knife. Put him on the ground, buddy. No. No. We're not gonna we're not gonna kill you.
Please three ways in the ground with you for a kill. Come on.
Let me know you're still with me, honey.
There you go.
Her chest is moving.
Awesome. Thank you, Andrea. That that video reminds us all of why we do what we do. As always, our customers are on the front lines putting their lives on the line and on the line line and safe. We exist for them and for the communities they're sworn to protect.
We're a mission driven company, and our mission is to protect life. Welcome to our annual shareholder meeting business update. Some of you may have attended our last annual meeting a year ago in the Atrium at our Scottsdale headquarters. At this moment, that Atrium has become nearly unrecognizable as an extension of our factory which sits right behind it. We've taken over the space to promote safe social distancing.
We have an on-site nurse and staggered work schedules, and it is important that we continue to manufacture our mission critical products even during a global pandemic. Axon is adapting swiftly to the challenges of 2020, and we are overcoming every one of them one by one. This isn't the first time our company has faced adversity. Myself, our president, Luke Larson, our chief revenue officer, Josh Schisner, and many of our team were all together managing through the last perception from which we emerged far stronger. As you recall, in 02/2008, the financial crisis ripped through the world.
And at that exact moment, we decided to lean in and transform our entire business from being a simple TASER device manufacturing business into an integrated tech company, making wearables and cloud software. That transition was anything but easy, and we've had many difficult learning curves we had to overcome. But as competitors in the public safety space retreated in 02/2008, that is exactly when we advanced into new opportunities. And as a result, we clearly established ourselves as the market leader in cloud hosted digital evidence management, in cloud software in general, in our market, and camera sensors. In the past year, we've now shipped two major software only products that do not rely on parafarma.
Axon Records, which is now live or signed with in flight deployments at more than a dozen agencies and Axon Dispatch, which we just went live at our first customer in April, ahead of schedule. Today, Axon is stronger than ever. You may have heard on our earnings call earlier this month that we ended Q1 with nearly $400,000,000 in cash and equivalents, zero debt and an underlying business that generates strong cash flow and high margin recurring revenues. Our Q1 revenue grew 27% year over year, and while net income was affected by stock based compensation expense, our adjusted EBITDA more than doubled year over year to $30,000,000 reflecting a 20% margin. We have several moonshots in progress.
Before this decade is out, we will launch a taser weapon that will outperform a nine millimeter pistol in stopping power. We will continue to make policing transparent and effective, and we will extend our reach across the criminal justice system, making it both more fair and more efficient. We will continue to create great shareholder value for society and great value for you, our shareholders. In the meantime, we're going to continue to support our customers and be a stable and reliable partner in this storm. Now we want you to meet some of our employees who are going to give us an update on our Got You Covered campaign, where we committed more than $1,700,000 sourcing personal protective equipment, PPE, for first responders.
Our employees made this video on May 8, and thank you to everyone who supported this campaign.
Hi. I'm Bella, and this is Mike. And we're here to provide you an update on the Got You Covered campaign. Thank you guys so much for donating your time and money to the campaign. This has been incredible so far.
This Saturday, we're gonna ship our last PPE order. Mike, catch. After Saturday, we will have shipped to over 6,500 agencies from the largest departments all the way to the smallest. From local police to tribal to university police, from sheriff's department to state police, federal, correctional facilities, probation, patrol, fire, EMS, we didn't leave any first responders out. We have support agencies here in The US, but also abroad, Germany, UK, Spain, Australia, and Canada.
In the end, we will provide over 1,250,000 maps to first responders around the world. Pretty amazing. This has been an Axon wide effort, so we want to give a special thanks to those who went above and beyond to really help us help us get this done. It's a pretty long list, so we might have missed a few, but it was definitely a team effort. An effort like this, like the gotten you covered campaign, are really to make our company special and show our commitment and passion to protecting life and to protecting our first responders during the first frightening of time.
A final thanks to Rick, Luke, Josh Shiffner, Josh Golden, and Isaiah Jawad, and the rest of the I exec team for your support through this project. We couldn't have done it without you. And thank you, team Axon. We got you covered.
Thank you, team Axon, and thank you to our shareholders. Good morning. My name is Luke Larson, and I'm the President of Axon. I hope that video gives you a sense of the culture and spirit we have here at Axon, which is normally really high. This last week, though, like everyone, you know, we've been really in a state of, you know, despair and reflection as these events have occurred across the country.
And I think it's important to openly address that the pandemic is dramatically amplifying the deep inequities in our society and that there is a disproportionate burden of the impacts of COVID with unemployment, illness, and death among racial and ethnic minority groups. These dynamics are highlighted by the recent news events that have been brought to a head this week with the tragic death of George Floyd in Minneapolis. As you heard from Rick at the beginning, in the wake of these events that threaten to leave us with a sense of hopelessness and despair, we at Axon are striving to be beacons of hope and to serve as one. At Axon, we believe that while technology is no panacea, it certainly can make an outsized impact on creating a world where everyone gets home safe. We not only have the privilege to imagine how that world can and should be different, but we also have the capability to create and drive that change.
Our mission is to protect life is just as important now as it ever has been. Our strategic growth areas can be broken down into four key initiatives in support of that mission: de escalation, sensors, productivity and communications. Number one, de escalation. We aren't in just the business of selling taser devices. We are in the business of protecting life and equipping officers to de escalate in that moment.
Supporting public safety and minimizing use of force is a key component of Axon's mission to protect life. Those tools include cloud connected TASER devices as well as a suite of augmented reality and virtual reality training surfaces and empathy training for law enforcement officers. To obsolete the bullet, we intend not only to develop more effective taser devices over time but also drive training and adoption of best practices in modern policing. Number two, Sensors. Our industry leading digital evidence management software, Axon Evidence, supports our network of cloud connected cameras and sensors.
Axon Evidence is the world's largest cloud hosted repository of law enforcement video data and other types of electronic evidence. In September 2019, we began shipping Axon Body three, a camera with an LTE antenna and GPS chip, which supports real time awareness. Body cameras and the transparency and accountability they bring are becoming synonymous with best practices in modern policing, and we will continue to drive that change. Number three, productivity. Our productivity suite of tools reduce time spent on paperwork.
Axon Records takes a disruptive modern approach to displace leg legacy on prem records management system by putting body camera video at the heart of incident records. Axon Records includes Axon standards, a radically simpler approach to use of force reporting. Another software solution in this suite, Axon Performance, helps agencies ensure that officers are adhering to agency policies and provides analytics on the effectiveness of body worn camera programs. And Redaction Assistant enables agencies to redact videos in a fraction of the time using artificial intelligence. Number four, communications.
We are developing communication tools to support real time situational awareness through the sharing of information across various channels, including voice, messaging, location mapping, and intelligence and evidence sharing. Products include Axon Aware, which allows agencies to know the GPS location of their officers and what those officers are experiencing through live video streaming and more and Axon Dispatch, the emergency dispatch solution we are bringing to market this year. Finally, to support all of the above, another key initiative for us is hiring. We are doubling down to rapidly grow our engineering bench with far raising talent. In particular, our Chief Product Officer, Jeff Cunnens, who joined us in September from Amazon and whom you will hear from next, has been rapidly filling key senior tech leadership roles at the company, like our new SVP of AI, our new VP of digital evidence management, a new GM of Axon Air, and many more.
I couldn't be prouder that we're hiring at a record pace and continuing to accelerate, as always leaning in rather than holding back. Jeff, why don't you introduce yourself and talk about why you joined Axon?
Thanks so much, Luke.
I'm thrilled to be here. In my experience, one of the most critical things that makes a company successful is the culture, which, as I hope you can see from today's meeting, shines through at Axon. Rick and the entire team simply radiate with the bold audacity to invent amazing things on behalf of our customers and the communities they serve, paired with a healthy dose of empathy and humility. At this particular moment in history, the specter of violence and the threats to social justice around the world have created the need for millions of people to both feel more safe and be more safe. So it's an unprecedented honor for me and a privilege to be part of Axon.
We literally write code to save lives every single day. For a little context on who I am, first and foremost, I'm a builder. For the last twenty seven years, I've had the privilege and good fortune to work on software, services and devices in one form or another that have been used by hundreds of millions of people and powered multibillion dollar global businesses in a diverse range of contexts. I aspire and try to always be hands on, dive deep and customer obsessed, and I see that same passion and commitment everywhere at Axon. One of the most exciting things about Axon is our opportunity to create devices, cloud services, SaaS subscriptions and mobile apps that all work together to create a flywheel effect of customer loyalty and long term value.
That flywheel is great for customers, it's great for Axon, and it's great for the communities we all serve. For a little more perspective on why I joined Axon beyond the business on the opportunity itself, I mean, look, I loved Amazon. I still love Amazon. Very happy there for five point five years with zero intention of making a change. And in particular, I was thrilled to be part
that
in helping invent the future of cloud based assistance, especially having spent previously eight years of my life at Telmee Networks, one of the early pioneers in that space. But a member of Axon's Board was instrumental in introducing me to the company, and then three things happened in quick succession that convinced me I frankly had no choice but to join Axon in its mission to protect life and obsolete the bullet. First, there was a shooting just a few miles from my children's elementary school here in Seattle, and one of the teachers was shot. Thankfully, she survived, but it brought the reality of the world we're all living in much closer to home. Second, I attended a fundraiser with other Seattle tech leaders where the father of one of the Parkland, Florida shooting victims told the room that donating money is great, but he challenged each of us by asking, if
you really
really want to see impact on these issues, what are you personally going to do about it? And then third, literally that same day, I saw the announcement about Rick's upcoming book, The End of Killing. I ordered it on my Kindle, of course, and I got two chapters into the book and decided, all right, I just have no choice. I have to talk to them. So clearly, I'm a big believer in Axon's mission.
I'm honored to be here, and my first eight months at the company have done nothing but reaffirm my commitment to the opportunity ahead, and we are already making great progress. As just wonderful, as Rick mentioned, we're thrilled that more than a dozen agencies are live or signed and being actively deployed on Axon Records using one or more modules of the product. We are incredibly excited and confident in the trajectory of our investments in both Records and Dispatch. When you think of Records and Dispatch, there's two fundamental things that drive that excitement: one, building an unmatched product that customers love and two, the unmatched value and convenience of our OSP seven plus bundle pricing. Thanks to this, while it's absolutely still early days on the journey, I am confident that Axon will ultimately become the one market share leader in both records and dispatch.
And along the way, we will uplevel the buying criteria for these categories to be more about end to end agency productivity and real time operations. Thank you. Now I'd like to hand it over to our Chief Financial Officer, Jawad Assam.
Thanks, Jeff. The world has changed since our last annual meeting, and the challenges we face today are unprecedented. As I reflect on the first five months of 2020 and take stock of where we stand today, three words come to mind: pride, resilience and confidence. We have made no secret of our love for our customers, and I'm proud of the way we stepped up to source PPE for first responders in a nationwide campaign in partnership with the National Police Foundation. I'm proud of the way our employees contributed to that campaign.
I'm even more proud of the way that our employees adapted to our new reality, continuing to work cohesively and productively even with the distributed workforce. It's a testament to the internal tools, systems and support infrastructure we've worked hard to put into place. I'm also proud of our company's mission and that our products also address some of the largest and most deeply entrenched challenges facing society today. At this stage in our growth as an enterprise SaaS and connected device company, we've very purposefully chosen to be aggressive with our investments and conservative with our balance sheet. This strategy has brought us the resilience that will allow us to weather this storm and emerge stronger than ever.
Our investments in both product and channel are yielding exciting returns, and our liquidity position is exceptionally strong. We're also seeing three trends emerging that add to our resilience. First, the current crisis is fostering discussions about cloud software usage with agencies that wouldn't have previously considered it, and we're demonstrating the value and utility of Axon Citizen to agencies across the globe. Second, we're seeing more agencies move to Axon devices as standard issue rather than pooling or sharing devices. And third, we're seeing the federal government step in to bolster law enforcement budgets and committing stimulus to law and order spending, which may have benefits that outlast the crisis.
Our go to market model is increasingly resilient as we sell more products that agencies pay for out of their operating budgets rather than being treated as an unpredictable capital expense. And the majority of our revenue is tied to bundled recurring contracts. This was 71% in 2019. In our SaaS business, net revenue retention over the past six months has trended at about 120%. This has become an important metric for us in terms of how we look at the business.
The metric captures two key factors. First, our annual churn is almost known as our customers typically sign five- to ten year contracts, giving us more resilience in contracting than most other SaaS companies. And second, Axon retention rate captures that in any given year, some portion of our agency customers are upgrading their contracts to take advantage of all the new software tools we have to offer. Some major cities are committing to SaaS upgrades with Axon at 300% of their prior contracts, and that's again a testament to our resilience into the value proposition we offer our customers. These are uncertain times, and our customers and employees are being impacted in significant ways.
We're grateful to all of our employees around the world who continue to show incredible commitment to our mission, ingenuity and resolve in their execution. While we're facing unprecedented adversity, one thing is for sure, our best days are still ahead of us. And with that, I'd like to turn it back over to Rick to take us through Q and A.
Thank you, Juwad. First, there was a fairly straightforward question giving asking us to repeat the votes. So Isaiah, can you do that? And then we'll go into questions.
Yes. Thank you, Rick. So preliminary results are that we had 55,338,131 shares present by person or proxy at the meeting, which is over 92% of the outstanding shares. All proposals passed, and that includes Proposals 4A and 4B, which required a supermajority requirement to pass. And we will be issuing an eight ks in the next few days that will report the final results and the breakdown for each of the proposals and the number of votes that they received.
Great. Thank you. So I will take
this first
question Body cameras have shed light on officer abuse and unfair allegations against police. What other ways Axon Tech creates fairness and equal access to the justice system? Well, it's we can spend a lot of time talking about this. I mean, fundamentally, we can impact just about every aspect of the justice system.
In terms of fairness, simple things like using AI to redact out faces that makes it practical and cost effective for agencies to be able to release videos to the public while protecting the identities of the people in those videos. That was one of the first things we did with our AI team, And really, it was using AI to both protect privacy of individuals and to enable more transparency so that agencies, on a practical basis, could release those videos. And that enabled agencies like LAPD, which had, you know, previously had a policy of not releasing, videos to where now they have, one of the more transparent policies where they release, many videos, I think all videos related to critical use of force incidents, and I think our technology enabled some of that. We also have tools like Axon Citizen that allows citizens to directly submit evidence into a system at the police department so that we're tracking a chain of custody that those things don't fall through the cracks. We also enable police to be able to work together with various elements across criminal justice.
Historically, they have burned CDs or DVDs with digital evidence on it and manually walked that stuff around. Know, things get lost. In an inefficient system, there's lots of opportunities for personal bias to come into, well, if everything's inefficient, what cases do we pursue? When we make that all more efficient, you can begin to track and monitor both efficiencies and various metrics across the system. We've enabled things like at one major sheriff's department, there is DOJ oversight coming in.
This sheriff's department had a history of alleged abuses, and they created a system of oversight with an oversight board, I which believe includes groups like the ACLU and others. And they're actually using the Axon platform to create business processes that allow that oversight group to review body camera footage from within the agency, effectively enabling better oversight. And then finally, I'll say, we have our customers are now hosting over 100 petabytes, that's 100,000,000 gigabytes of data inevidence.com on the Axon cloud. And in those videos, there is tremendous information that could be unlocked. And just to talk about the topic of the day, I think we've all seen that video out of Minnesota that is just disturbing.
And one of the things that that I've heard from law enforcement leaders who've seen that is how troubling it is that while that officer's aggressive and abusive behavior was happening, other officers who were there did not intervene. And these law enforcement leaders have shared with me that that's one of the aspects of police culture they want to focus on changing. Well, we, as a technology partner, have begun using VR for empathy training, and we're going we will continue to extend that into other areas. And I'll tell you this is new, and we have not made our formal plans. But we view ourselves our role is to step in with police leadership and with groups like our AI Uphex Board and Police Oversight Groups to help understand how can we prevent this from happening again.
Maybe in all the videos, that behavior may have happened before, but it didn't get highlighted until somebody died. What if we could find those videos of those behaviors earlier and surface those for review or use them for training? I would imagine we could create some very powerful training to sort of highlight the aspect that you need to challenge each other. It's not okay to stand by when abusive things are happening. That feels like an area where, again, we have to work with the various law enforcement and civil liberties experts to get to the right policy answers, and we have to be respectful of what our role is.
Our role can then be to help take those best practices and implement them into customer experiences and training experiences that are highly effective and efficient and leverage our expertise to deliver that training so that we can help make agencies perform better and to identify these problems before they get to a level where there's tragic outcomes. And with that, let me transition to our next question. Jo Anne, I'm going to ask you to take this one. Is there a citizen focused product that complements the products Axon sells to first responders and police? And what might it be?
Yes. I'm very happy to get this question. We actually have two products that serve the consumer market. Our flagship consumer product is the TASER Pulse plus This is the same core technology that law enforcement uses in their TASERs. It's optimized for a self defense range of 15 feet, which is great for most defensive situations.
It's very comfortable to carry and use. It engages with a thirty second muscular override to give you time to escape if you ever need to use it and will replace your TASER Pulse plus free of charge if you ever do need to use it. It also has a built in laser to help you aim quickly. We've also integrated for the first time in the Pulse plus Bluetooth connectivity. It has we have a partnership we've announced with NoonLight so that if you ever have to fire your TASER, it automatically with through a connection through your phone, we'll automatically dial 911 and disclose your last known And so that's something that's our flagship product.
We also have a product called the StrikeLight, which is not exactly a TASER, but it combines a high intensity flashlight with a stun gun. And it's also very comfortable to carry and use. It's a very small form factor. It has a very loud stun arc. So if you're walking your dog, if you're out at night by yourself, it has the ability to scare away animals and potential attackers.
So those are our two consumer products. You can find them at buy.taser.com.
Great. Thanks, Jawad. This next question, Luke, we'll have you take this one. COVID has forced some courts to hold hearings and conduct business via Zoom. Is there an opportunity for Axon here?
Yeah. Traditionally, the court systems have been very much technology laggards. I I think right now you're seeing some experimentation just given the circumstances with the pandemic and social distancing. I think this is a fantastic opportunity to take a first principles look at how we, you know, interact with the courts. There's a lot of dynamics at play.
How do we make sure we have access to the correct stakeholders and public oversight? And so this isn't not something that we're directly working on today, but we do have products like case sharing and our digital evidence management ability to send information to district attorneys and prosecutors that I think will help us discover future unmet needs in systems like courts and justice.
Yeah. I would actually like to augment that. One of the areas we're working right now is using AI to help create transcripts of videos, which is critical in many cases. And I talked to one law enforcement customer. It's a smaller agency that had sent two homicides in a very short period of time.
And on a practical basis, their ability to get the prosecutor they have to move. They're governed by law. They have to move very quickly to get evidence to the prosecutor, and there's a lot of work to gather and transcribe all of the interviews and notes so it can be processed. And what they sent back to me was it was an absolute game changer, and they're using a non released beta early prototype of one of our AI systems for transcription. And they said even in its early phase, it was a game changer that enabled them to move at light speed to collect this data, organize it, get it to the prosecutor without having to wait for a team of human transcriptionists to go through and transcribe everything.
Even though our transcription is not yet human level perfect, it was good enough to really accelerate that process so the agency didn't become overwhelmed and potentially lose one of these cases by just missing binding deadlines. So I think that's a great example, and I what I've heard across the board is for all of the challenges that have come with COVID, it is indeed accelerating chains on a massive scale, and it's opening people's minds to new approaches. Six months ago, we heard it would be decades until the courts would accept digital evidence online. And in many cases, we hear that the courts don't have the systems to do this. And now what we're hearing is the courts need to find new ways of doing business, and it's really awesome that we have a system they can use where all they need is a browser, and they don't need to go buy servers and IT staff to build these systems themselves.
So we see lots of opportunities to continue to speed up the legal process, which is another question here was a bit of a follow-up. Let's see. Let me go to one of the questions that came in on the Broadridge. How do you expect COVID nineteen to affect the company's business and performance both in the short and the long term? Let me see.
Anybody else on the team wanna take this so it's not me speaking the whole time on the impacts of COVID?
Yeah. Sure. I'll take that one, Rick. And this is a message that we previously addressed on our last quarterly earnings call as well. We we are supporting first responders that are still you know, this week, you you see it in the news, they they're out and and they're not able to kinda take time off.
And so there's still very much a demand for our products. In in the last few months, I've received calls from major cities as well as rural agencies, you know, asking to get their product in. We also do expect to see, you know, some municipal funding will be affected for this. Fortunate for us, usually, first responders are considered mission critical. We also have seen, you know, in the news talks of, you know, federal funding that would go down to state and local.
For Axon, we also have been investing heavily over the last few years in adjacent markets like corrections, fire, EMS, and international. And as those businesses grow, we're very, very well positioned to, you know, continue to to, I think, not only survive in this environment and thrive. One of the, you know, areas where I think we can provide a lot of value is in our empathy and virtual reality training. And there's just a very, very, you know, strong demand for that. And that's something, again, where we were investing in that a few years ago.
And I think we will be set up to be able to provide that service for agencies as they work through this specific situation we've seen in the news the last week.
Great. While we're taking some of the questions from the other platform, one came in. What has the firm done with respect to ESG issues in the past year? And Andrea, would you like to take that one?
Sure. Thanks, Rick. For those of you who are listening who aren't familiar with the acronym, ESG stands for Environmental, Social and Governance. You'll hear that acronym a lot among our shareholder base as well as CSR, which stands for Corporate Social Responsibility. And we have a number of initiatives on ESG and CSR.
To really do the question justice, I would point you to our ESG disclosure that we disclosed in February. You go to investor.axon.com and click ESG addendum. And the reason why is because ESG is a very broad encompassing term. And ESG is as a mission driven company, this is why we exist. And it includes all kinds of things from all of the things we're doing from for social good in our mission to protect life, as well as diversity inclusion, sustainability issues, shareholder engagement, governance issues.
We have our board here today, and governance is hugely important to our board. So there's a lot we're doing on ESG. And so to really do the question justice, I would point you to that five page disclosure and ask you to check out all the great things we're doing.
Great. Next question, comes in. Let's have Jawad take this. He's talking about incentives. Incentives are really important.
Is the business model incentivized to ensure citizens are protected as high-tech penetrates government authorities?
Yes. I really like this question. I'd say that our entire business is really geared towards driving the adoption of ethical products, ethical technology for use in law enforcement. With respect to incentives specifically, a few years ago, all of our incentives that we were on from a bonus pool standpoint were all commercially focused. And we've morphed those over time to we have a number of metrics, and only a couple of those are financially related, and the rest of them are tied to how our customers are signing up for and not only signing up for but also using and engaging with our products.
So I'd say that from an incentive standpoint, we've absolutely dialed it into our company bonus pool. And beyond the incentives themselves, what I'd love to highlight is that our Board is constantly pushing us to think in terms of making sure that we're designing our products ethically. We have an AI ethics board, which is a first among tech companies that we're very proud of as well. And we're both our standard Board of Directors and our AI ethics board are they very much inform how we engage with our customers and also drive and deliver on a product road map.
One thing I would add as well there is the Ethics Board actually creates it's it's not a financial incentive per se, but it creates a strong incentive for the company in that the way we set up that ethics board, they are independent. They do not have governance control over the company's actions, and that was by design. Had we given them governance control, then we would have to frankly think about gerrymandering the membership of our own board to make sure that it would vote in a way that was maybe tilted towards law enforcement, when there were different perspectives. And the whole point of us having this ethics board was to hear voices outside of law enforcement. And so what we agreed on was that the board would be completely free to make public commentary and to criticize the company and to disagree with actions that we're taking.
Obviously, there's confidentiality until a product is released. There will respect confidentiality for commercial purposes. But once we release something, our ethics board will comment on it very publicly. And I can assure you that creates a very strong incentive for us. It would be more than embarrassing if we, our own ethics board, is in row with management where we're in some big disagreement about how we're doing things.
And where we believe that ends up is that will, at a minimum, force the company and management myself to make sure we deeply, deeply understand the concerns of the ethics board. And there may come a day I've been pleasantly surprised at how well we've been able to find solutions that reach consensus, but there may well come a day when we don't. And this process will at least set up massive incentives for us that if we are going to do something that is inconsistent with the recommendations of our own ethics board, we are going to have to have very well thought out, very clearly expressed and cogent responses as to why we came to a different conclusion. And ultimately, I think that is where productive discourse is valuable. Right?
When you get into a position where at a bare minimum, you have to deeply understand the other side of a position before you make your final decision. And I think we have set up, the relationship with our ethics board and our corporate board to ensure exactly that. In fact, I'll just end up last night, we introduced our ethics board and our corporate board in a social hour that extended into three hours last night. There was a very robust discussion about what's happening right now in the communities that are reacting to some of the recent tragedies in law enforcement, and that was a very productive, productive discussion. With that
Rick, I want Rick, thank you for that. One second. I just wanted to drop a link to the ethics board in the chat. So I would encourage anybody listening today to go and check out more about our ethics board. We're really proud of the thought leadership on this board.
I mean, incredible nationwide thought leaders on these specific topics of technology and policing. So I dropped the link in there in the chat. Please do go check it out, because we are really gathering feedback into our company from people who have very diverse and divergent views on on the products that we are building.
Okay. This is going to be our last question, and we're right at about time. So this question is for Jeff. What is the next evolution of the body camera? Do you see a wearable face camera as the next step?
Sure. Thanks, Rick, and thanks for that great question. We don't have anything specific to announce today. I don't comment on forward looking new device launches. But I'm excited to say, I think we are very much this is the early days, and we're at the very beginning of our journey on continuing to invest and deliver new capabilities in our hardware and the software that powers it.
And I think and plus, in addition to that, we're frankly still very early in the life cycle of our AV3 cameras that shipped towards the end of last year, which, as Luke talked about earlier, really viewed our very first entry into using our devices for real time operations and communications by building in the GPS chip and LTE connectivity, which allows the camera to go on being just a camera for capturing truth for use but also as a real time communication device. And we're very early in learning from how
all of
our customers use and deploy that at scale to inspire us. Similarly, on the car side of additional form factors and places, our already announced fleet three cameras, which will be a groundbreaking advancement for the in car side of how departments use cameras and vehicles, we'll also debut our new disruptively more affordable and effective ALPR technology. Extending beyond both of those, if you want to think about where these advancements are headed across both the form factors themselves, think about ways to keep driving enhancements to productivity and to real time operations and communications. All of the things we can do with physical form factor, the signals that those sensors can detect, the AI processing that we can do on those combined together to help drive efficiency, accountability, and transparency for our customers as they use our devices.
Great. Thanks, Jeff. And with that, I'd like to thank all of you for joining us today. I sincerely hope you, our shareholders, share the sense of pride and purpose and the responsibility that we feel to our society. We're building important products that are built with care to ensure we maximize their utility and minimize the risks of their abuse.
We're building a business that has grown from a garage to an industry leading enterprise that we've become today. And today is just a milestone on a longer journey where we will solve even bigger problems, creating even more value for all of our stakeholders. Thank you for being part of our mission. Stay safe, and have a great weekend.