Axon Enterprise, Inc. (AXON)
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AGM 2015

May 18, 2015

Rick Smith
CEO, Founder and Director, TASER International

I want to make sure I'm aligned with him on the. All right, thank you. Want to kick us off, or shall I get us started?

Luke Larson
President, TASER International

Actually, why don't you?

Rick Smith
CEO, Founder and Director, TASER International

All right. Good morning, everyone. Appreciate you coming down to join us today. My name is Rick Smith. I'm the CEO, the founder, and the director here at TASER International. It is my pleasure to welcome you all to our 2015 Annual Meeting of Stockholders. Before we begin the meeting, I want to introduce some of the company's directors and officers who are with us today. I'd encourage each to take a moment to meet them during one of the breaks or after the meeting. As I call your name, please stand. First, Michael Garnreiter is our chairman of the board of directors. Governor Judy Martz could not be here today. Next up is Dr. Richard Carmona and Hadi Partovi, Dr. Mark Kroll, General John Caldwell, and Bret Taylor.

The officers who are present today: Luke Larson, President of the company, Doug Klint, our General Counsel and Secretary, Dan Behrendt, our Chief Financial Officer, Marcus Womack, the General Manager of our Axon Group here in Seattle, Josh Isner. Where's Josh at?

We'll call him out when he comes back in. Glenn Hickman, our Vice President of Hardware Engineering, Jay Rice, our Vice President of Software Engineering here in Seattle, Shantanu Punukollu, our Vice President of Marketing, and Michael Gisch, our Vice President of Weapons Strategy. Josh is still not back in. All right. So we'll move on. I'd also like to introduce Scott Davison, a partner with Grant Thornton, the company's auditors. All right. Independently registered public accounting firm, that's the formality there. Scott's available to answer questions later in the meeting. So today's meeting is going to come in two phases. First, we'll conduct the formal part of the business, which is to consider each of the proposals listed in the notice of annual meeting of stockholders dated April 2nd, 2015, and to conduct such other business as may properly come before m eeting.

The second part of the meeting will be a presentation by management followed by a question-and-answer session. So first, we're going to get to the recording minutes and the inspector of election. So Doug Klint, our Corporate Secretary, will be recording the minutes of this meeting. Holly Jabo. Where's Holly at? There's Holly. She has been appointed to serve as the Inspector of Election for the meeting. So Holly, if you could please stand. She has signed the oath of office, which will be filed with the minutes of the meeting. Okay. So for the formal portion of the meeting, I'll now call on our Corporate Secretary, Doug Klint, to establish that we've met the necessary corporate requirements for the meeting to occur.

Doug Klint
General Counsel and Secretary, TASER International

Thanks, Rick. We have proved the notice of this meeting has been duly given and that the notice of annual meeting of stockholders, proxy statement, and proxy were mailed on or about April 2nd, 2015, to all stockholders of record as of the close of business on March 17th, 2015, our record date. The affidavit, together with copies of the notice, proxy statement, and proxy, will be filed with the minutes of the meeting. As of March 17th, 2015, the record date for the meeting, there were 53,351,511 shares outstanding. Today, we have 45,474,049 shares present by person or proxy at this meeting, which is over 85% of the outstanding shares and constitutes a quorum permitting the transaction of business today. Each share entitles a holder to one vote on each matter, which may come before the shareholder meeting.

A list of registered stockholders entitled to vote is available for examination by stockholders.

Rick Smith
CEO, Founder and Director, TASER International

Thank you, Doug. Since the quorum is present, I will now call the meeting to order. The items to be voted upon are as follows. 1, the election of 2 Class C directors of the company for a term of 3 years. 2, approval on a non-binding advisory basis of a resolution approving the company's executive compensation. And 3, ratifying the appointment of Grant Thornton LLP as the company's independent registered public accounting firm for 2015. Doug, would you please describe the voting procedures?

Doug Klint
General Counsel and Secretary, TASER International

We will be voting by proxy ballot on the agenda items described in the proxy statement previously sent to you. A plurality of the proxies have been returned, and the vote tally will be announced later in the meeting by the inspector of election. Rick will now review the proposals that will be voted on today.

Rick Smith
CEO, Founder and Director, TASER International

Okay. So the first item of business is the nomination of the election of 2 members of the board of directors. The board of directors is comprised of 8 directors. Under the company's bylaws, the directors are divided into 3 classes comprised as follows: 3 directors each of Class A and Class B, and 2 directors in Class C. Generally, 1 class is elected each year for a 3-year term. The 2 nominees for election as Class C directors are Dr. Richard Carmona and Bret Taylor, who will each serve a regular 3-year term until the annual meeting of stockholders in 2018 or until their respective successors are elected and qualified. The board of directors has nominated all incumbents for reelection. Our corporate secretary will now place the names of the nominees in nomination.

Doug Klint
General Counsel and Secretary, TASER International

The board of directors has nominated Dr. Richard Carmona and Bret Taylor to be elected as Class C directors to serve a regular three-year term until the annual meeting of stockholders in 2018 or until their respective successors are elected and qualified. The company's bylaws require that advance notice be given to the secretary of a stockholder's intent to nominate additional persons as directors of the company. No such notice has been received. Accordingly, nominations for Class C directors are now closed in accordance with the bylaws. The two nominees for director receiving the highest number of votes will be elected to the board of directors. The proxy solicited by management will be voted in favor of Dr. Richard Carmona and Bret Taylor.

Rick Smith
CEO, Founder and Director, TASER International

Okay. Proposal number two, an advisory vote on compensation of our named executive officers. That's the next item for approval. On the following advisory resolution: Resolved that the stockholders of TASER International, Inc. hereby approve the compensation paid to the company's named executive officers as disclosed in the compensation discussion and analysis and compensation tables and in the accompanying narrative disclosures set forth in the company's proxy statement. In accordance with the Dodd-Frank Act and related SEC rules, stockholders are being given the opportunity to vote on this advisory resolution regarding the compensation of our named executive officers. The company's executive compensation program is designed to allow us to attract and retain talent, link annual incentive bonuses to our financial results produced during the year, and link long-term compensation in the form of stock awards to company performance and enhancement of stockholder value.

For a comprehensive description of our executive compensation program, philosophy, and objectives, including the specific elements of executive compensation that comprised the program in 2014, please refer to the compensation discussion and analysis in the company's proxy statement. Because the vote on this proposal is advisory in nature, it will not affect any compensation already paid or awarded to our named executive officers and will not be binding on the board or the compensation committee. However, the compensation committee will consider the outcome of the vote when making future executive compensation decisions. The board of directors has recommended a vote for approval of the resolution approving the compensation of our named executive officers. Proposal 3 is the appointment of Grant Thornton. The next item of business is ratification of the appointment of Grant Thornton, LLP as the company's independent registered public accounting firm for 2015.

The board of directors has recommended the ratification of the appointment of Grant Thornton LLP as the company's independent registered public accounting firm for 2015. The proxy solicited by management will be voted in favor of ratification of Grant Thornton LLP as the company's independent registered public accounting firm for 2015. There being no other items to be brought before our stockholders for vote this meeting, I believe the voting would now be complete. So the inspector of elections has tabulated the votes, and Holly will now give us a report of the inspector of election. Holly.

Holly Jabo
Inspector of Elections, TASER International

All of the votes have been counted, and the two nominations for election as Class C directors each received the affirmative vote of a plurality of all of the votes cast on this proposal. Sorry about that. Dr. Richard Carmona and Bret Taylor have been duly elected as Class C directors to serve a regular three-year term until the annual meeting of stockholders in 2018 or until the respective successors are elected and qualified. With respect to the advisory vote on the compensation of our named executive officers, more than 95% of the shares voting on this proposal have voted for the resolution approving the compensation of the company's named executive officers.

With respect to ratifying the appointment of Grant Thornton LLP as the company's independent registered public accounting firm for 2015, more than 96% of the shares voting on this proposal have voted for their appointment. Based on these results, Grant Thornton LLP has been duly appointed as the company's independent registered public accounting firm for 2015.

Rick Smith
CEO, Founder and Director, TASER International

All right. I believe that concludes the formal portion of the meeting. The formal portion of the annual meeting of stockholders is now adjourned. We will move into the presentation phase where we'll speak a little more off-script about what's happening with your company and the plans for the future. So with that, let's see if we can bring up my presentation. We're going to do this presentation in three parts. I'm going to give a general overview about what, since this is the first time we've done this in Seattle. I'm going to talk about the company's mission, our purpose, and generally what it is that we're building and have built. Then I'm going to turn over to Luke Larson, our President, to talk about some changes coming in the year ahead.

Then Marcus Womack, the general manager of our Seattle operations and our Axon business unit, will talk about what we're doing here in Seattle. At its base, our mission is to protect life. We want to change the way people think about defending themselves in a world that can sometimes be violent. Or more succinctly, we want to make the bullet obsolete. This idea of people killing each other, to me, just strikes me as insane that we haven't done better from a technology perspective. I think we can. As you'll see from some of the renderings of our office, we're very much inspired by science fiction. We see visions of the future. It would seem bizarre for Captain Kirk to ever whip out and simply fire a bullet at someone because they have these more elegant solutions in the future.

We're on a mission to bring that to reality so that 50 or 100 years from now, we won't be sitting here talking about people getting gunned down by the thousands that happens today. Now, how do we do this? Well, we have sort of two core approaches to how we believe we can reduce violence in society. So if we think about the initial interactions, and here I'm going to focus, and the majority of our business today is in public safety and in law enforcement, the institutional use of force. So I'm going to focus mostly there, although we do have also a consumer element of the business. But let's talk about law enforcement. If we think about when police officers first interact with folks, it turns out that if you put a camera on an officer, we can actually use a camera as a weapon that changes behavior.

So according to a study out of Rialto, California at Cambridge University, officers that were actually wearing cameras saw 60% less likelihood they'd be involved in a violent incident. Now, if you read the report, this actually tells you on both sides of the camera, it changes behaviors. Police officers are more likely to be respectful. They're more likely to be professional and to avoid a situation escalating. And it turns out also people that are interacting with police are much less likely to act out or assault that officer. When we first got into the body camera business, we weren't necessarily expecting this dramatic change in behavior. So it's been something that was really a pleasant surprise to see. Now, why did we get into camera business in the first place? Of course, everybody knows us with our TASER brand for our core devices, which are less lethal weapons.

Weapons that are designed to accomplish incapacitating someone but separating out the idea of causing death or injury. So we use electricity to incapacitate. And of course, once we're in an incident, if it does escalate, using a TASER device dramatically reduces the risk of injury to everybody involved, both the police officers and the subjects they're dealing with. And then of course, if it does escalate after the fact, the largest economic investments that police agencies make aren't actually in the equipment the officers use. It's dealing with the legal aftermath of when these incidents occur. According to the best data sources we've seen, law enforcement spends around $2.5 billion a year mitigating complaints and cases that are filed against the agency. What we've similarly seen with these on-officer cameras, complaints go down almost 90%, partially because officers are probably behaving better.

In large sum also because there's a lot of false complaints that are filed against police officers. So we talk about sort of the interaction of these devices, whether it's the weapons, the cameras as protecting life here and protecting the truth about what happened. Obviously, we're all seeing what's happening now with everywhere from Baltimore to Ferguson to South Carolina where there's really a fractured relationship between police and the communities they serve. We believe that these technologies are a game changer by reducing the number of people getting injured and increasing transparency and trust between police and the public. But this is just the hardware piece. If you really look at what we're building and the reason we're here in Seattle is behind this, there's a whole ecosystem of capabilities required to make this work. We talk about ecosystem.

Sort of the greatest consumer example of building the power of an ecosystem is obviously what Apple has done with a number of discrete devices but that interact with a backend that gives the end user a seamless and easy ability to deploy this technology. So the technology sort of melts into the background and the consumer has this great experience using the hardware and the software where they don't have to go solve a bunch of technology problems. We're doing something very similar in the public safety space. I'm going to take you through a little bit today to sort of explain how this ecosystem works. So of course, I'll start in the kind of the upper left-hand corner here with our weapons. So the TASER devices that we make are actually fairly sophisticated computerized and software-enabled devices.

So this isn't just like a baton where it's just some physical instrument. Inside all of our TASER devices, we have a microprocessor and we have an oscilloscope that's effectively measuring how much electric charge we're delivering. So that on each of these devices now, we can actually chart and measure exactly how much dose is being delivered to someone of this electricity. This is a pretty significant development over the past decade where we're now able to very precisely measure and control the dosage of electricity. And of course, when we talk about the controversy of police using force, being able to justify exactly what happened, how much dosage was delivered, and then know that that was within the same levels we've controlled in our safety experiments is pretty important.

Now, these devices, in order to do things like calibration and charting and showing at the end a forensic report about how these weapons were used, requires a fair amount of software analytics. Well, we deploy that all today from the cloud with a solution we call Evidence.com. So these devices all connect into a cloud-hosted backend so that we can store this data. I'll give you one example of why we would do this. The California Highway Patrol has, I believe, about 4,000 or 5,000 TASERs out on the street. Historically, every time that it was used in use of force, they would have to take that device, go print out the logs, and then they'd save that across dozens of different locations around the state of California. So there was no centralized way for them to look at how their TASER devices were being used.

If there was ever a complaint about one of those, somebody would have to go find a printed log in a file somewhere. Well, that's pretty archaic. We can do that all today over the internet in the cloud with a service we call Evidence.com. So we can manage all those files for our customer, and they don't have to get into the IT business for managing their fleet of TASER devices. But of course, Evidence.com is much more powerful than just managing the TASER device logs. When we start talking about cameras, this is where data management gets to be a huge issue. If you put 250 cops on the street wearing cameras, within a few years, you may have 2 or 3 million videos. And again, I'll give you an example of California Highway Patrol. In this case, they've got around 8,000 total officers.

So you could be talking about tens of millions of videos. As of today, the CHP is storing all their videos that come from their in-car systems on DVDs, spread in dozens of locations around the state. So the logistics cost alone of having to manage all these discs, much less find anything if there's ever a complaint. And then you get into situations where, well, what if some of those videos need to be deleted because of your record retention policies and others need to be kept? It becomes practically impossible for someone to go in. You're not going to actually go in and pull all these DVDs and pull some videos off and throw the other ones away.

So the logistics becomes just this nightmare where at the end of the day, why aren't we just managing this over the internet the same way that consumers are managing their data? When I speak to law enforcement officers, I'll ask them, "When was the last time you burned a CD in your personal life?" And everybody sort of chuckles and says, "Yeah, it's been a while." And yet in public safety today, before Evidence.com, that's how most agencies are handling their data. It's all done on physical media. Well, now with these cameras that we've built and we've created paired applications that run on smartphone devices so that we can use the smartphone device to enter and tag information about these videos. And then at the end of the day, I'll skip all the we have a bunch of unique features about our cameras.

But really, where this gets interesting is our cameras connect with Evidence.com as cloud-hosted backend so that for our law enforcement customers, they have the same sort of usable experience that we have when you pull an iPhone out of the box and just plug it in. There's a couple setup steps, and it just runs. We don't have to go install a bunch of software and figure out how to set up servers and all that. It just works because we're connecting over the internet to the technology provider. We saw this as a very natural thing to do in public safety. If we're going to support 17,000 law enforcement agencies, it makes no sense to try and have all of them managing all of their own systems.

We can do this in a centralized way so that now when we roll out these cameras, the customer can focus on police work, not solving a bunch of technology problems. Now, when we start thinking about how do we get the information off of these cameras and into Evidence.com, today we primarily do that through a docking system. Now, you certainly could do this over some sort of wireless transfer, but it turns out most agencies don't want to make the investments in doing this in a wireless setup. And you do have to charge these cameras at the end of the shift. So the vast majority of agencies today are using our dock. So the dock is a charger to the user. It feels like a battery charging station.

So at the end of your shift, you pop your cameras into the dock, and the dock will recharge your batteries. But it also checks all of the data that's on your camera, encrypts it, uploads it to Evidence.com. Evidence.com does a whole bunch of validation checks before it then wipes the data off the camera. So there's a fair amount of sophisticated workflow happening. To the user, though, it's as simple as plugging in your phone to charge it. This is one of our largest competitive advantages because with other camera systems, you're either burning stuff to a disc, which is very manual, or an officer comes in at the end of the shift and has to sit at a computer and drag and drop files off of the camera and remember to name them. Okay, well, I had 10 videos today. Okay, what were they?

They're now matching it against their notes. All sorts of opportunity for error. We automate all that by using the mobile app when they're in the field. After they record something, they mark it. And at the end of the shift, they drop it into the dock and they're done. So this is creating this very seamless workflow. Again, sort of the analogy we use, it's a bit like iTunes for cops where it's just very simple, very low-lift technically for the end user, and we're giving them this seamless experience. Now, the next piece I want to talk about is what we call Evidence Sync. So by the way, you're probably getting the impression there's a lot of moving parts. To make something simple for the user requires a lot of technology and engineering on the backend.

So Evidence Sync is our computer program that runs on a laptop or a server for ingesting other types of information. So not everything fits in our dock. Certainly, there's our cameras. But there are some agencies as well that say maybe they're not going to use a dock for some reason. They want to be able to upload through a PC. Okay, we can do that as well with Evidence Sync. Now, we recently made an acquisition. Jim, go ahead and stand up real quick. It'll be interesting. Jim Weaver was the CEO of MediaSolv. MediaSolv was another company in the digital evidence management space that had really focused on the pieces that sit within law enforcement agencies' on-premise capabilities. MediaSolv really started out in the interview room space and then has built a whole bunch of integrations with other data.

So if we think about the other types of data that agencies will need to store and manage, there's information coming off of their vehicle systems, so in-car cameras. There's surveillance cameras. You have CCTV cameras all over the city. When an incident happens, you need to be able to pull data off of those and put that into your case management. There's still photos from things like crime scene cameras, etc., or mobile devices now. There's voice recorders. And then, of course, there's also interview rooms, which is a very important function. When you bring people in, typically by the time they're in an interview room, they're talking about a case of some importance, and that data needs to be handled.

So with our MediaSolv acquisition, we have a partner who's really solved a lot of these third-party integrations that can now upload that through the MediaSolv software, which will be blending and merging with our sync program so that now Evidence.com really becomes an extensible all-of-your-digital-evidence-in-one-place platform for a law enforcement agency, which, again, if you think about it, the average police department in the United States has around 20-40 officers. It's a relatively small entity. So for them to have to go and figure out how to do all this stuff is a big technology challenge. And we're just removing that for them by giving them this ecosystem that deploys from the cloud over the internet. Now, there's one other important piece. Once we think about we get things into Evidence.com, well, then where does it go?

Well, there's a whole workflow that starts from the police officer in the field recording something. That data has to be stored and saved, and then it's got to eventually show up maybe in an investigator's office or in a courtroom where it's got to be given to a defense attorney. Again, I hate to keep hammering the point, but today that all happens on discs in most locations. Information gets burned. And then because it's digital evidence, you can't just throw it in the mail. So police officers end up spending an inordinate amount of their time carrying discs around as delivery guys. Okay, take this disc to court now. It's got to be delivered. Somebody's got to sign for it. Makes no sense, in my mind, that that should all be consuming police officer resources. This is 2015. Let's move that business online.

We've been building tools where Evidence.com can link directly into prosecutors, district attorneys, or other neighboring police agencies. I've put some red dots around it, by the way. So the red is something to really highlight where we gained new capabilities with our MediaSolv acquisition. This was another area where MediaSolv was already working, and we already have things in the pipeline. This is a really exciting area of the business today where we have a number of district attorneys who are now starting to standardize on Evidence.com, saying, "This is how you get information to us. Don't send us discs anymore. Let's move this all online." And then we're also building a number of workflow tools to help around public disclosure, which is, frankly, here in Washington, one of the bigger issues.

So if you have agencies recording millions and millions of videos, well, the public has a right to see some of those videos and can submit Freedom of Information Act requests. Well, again, historically, if you've got millions of CDs or DVDs sitting around, it becomes an impossible task to respond to Freedom of Information Act requests, or at least massively expensive. So we're building the tool sets to enable our customers to be able to respond to these things. So we've already built what we call mass redaction. So if an agency has to disclose, let's say, thousands of videos, rather than spending all the time for people to manually go in and redact that video, by redaction, I mean, you've got to take out. This creates a real challenge for police, right?

Because they want to be responsive to the public, but they also have to respect the privacy of people that are in those videos. Some of those videos may have happened in people's homes. There may be things on there that are totally inappropriate to be shared. So in order to solve those problems, we've got to build redaction tools where stage one, that we already have today, we can allow an agency to take thousands of videos, blur them all, and strip the audio out so at least they can respond in a way where the public can see what happened. And then they can pick certain videos and say, "Okay, this one seems sort of interesting. I want to see more detail." Now, in that case, as of today, officers would have to sit and manually go through and redact.

Well, we're building automated redaction tools that are more intelligent than just the mass redaction, which I've already talked about. Just to give you one example here, this is a concept video of what we're working on with facial tracking technology. So an officer would be able to go in and say, "Okay, I need to blur these identities." And then the computer would do the heavy lifting of identifying where those faces are and blurring that out. Today, this is all done frame by frame. Officers without our system have to go in and go frame by frame, blurring faces with a block. Mark said one of the major PDs from the Army takes like eight hours to redact about a 20-minute video. So imagine if you had to potentially release 1,000 hours of video, you'd have an army of people doing redaction.

So ultimately, what we've built in this ecosystem is far from just storage. When people talk about Evidence.com sometimes, "Oh, yep, it's storage." Well, yes, we do store videos, but it's all of the ingestion, the workflow, the security, the user permissions and roles so you can control who can see what video, who can't see, and then tracking in an audit log everything that's ever been viewed by anyone who it's been released to, and then also creating the tools so that you can process this information in an intelligent way and then share it with neighboring agencies. So this is a pretty massive lift, which is why we're here in Seattle with a fast-growing team.

I think we're approaching 50 people in our Seattle office up from maybe 10, 18 months ago, building out all of the tools and infrastructure to make all of this happen in a seamless way for our customers. So at the end of the day, what we're building is a platform that enables our customers to deploy newer technology. When we survey law enforcement, police chiefs, I speak at conferences all the time. So sometimes I'll do a live poll where I'll ask this question, "Where do your officers have more advanced technology? As a police officer at work or as a consumer at home?" And overwhelmingly, like 90%+, they say they have more advanced technology as a consumer. In fact, the NYPD, the city of New York, just passed legislation at their city council banning typewriters from the NYPD.

NYPD had put in a $1 million budget line item to replace all of their fleet of typewriters. Of course, somebody found this sort of archaic. What are we doing with typewriters in this date and time? Well, the fact is that because law enforcement, we all see the TV shows 24 or science fiction, and we envision police have these great tools that none of us have ever seen. But the fact is, a police department is an agency of your local city government. They are not equipped to adapt to change very well, to adapt to changing technology landscapes. So what we've done is we're building a platform that allows them to bring in capabilities that don't require a ton of technical expertise so that they can take advantage of wearables, like for example, wearable cameras, mobile devices.

Smartphones are still less than 15%-20% of law enforcement officers have an agency-issued smartphone. So police are still not even really using mobile technology. We're building a series of apps that not only work with our cameras but also enable other sorts of mobile data collection. The explosion of audio and video sensors, so not just the wearable cameras, but whether it's surveillance cameras, whether it's consumer-generated video, obviously the smart weapons that we've built ourselves, third-party sensors of other types. You can imagine with these smartwatches, there are things coming out like heart rate sensors and other things which would be very interesting to be able to monitor. For example, if a law enforcement officer's in a situation where their heart rate skyrockets or goes to zero, those would be things that maybe someone back at dispatch would need to know about.

Well, all of this becomes much more plausible if you have a cloud-hosted solution. So every time an agency wants to deploy something, they don't have to go staff up with local people to build and run a new server with new capabilities in their own infrastructure. So the whole purpose of our platform is to enable our customers to very rapidly adapt to whatever new technology is coming down the pipe because we're providing sort of the backend so they don't have to solve these technical problems themselves. Again, at its core, we're handling everything from capture, transfer, managing all this information, retrieving it in a secure way, and enabling them to share it both within their agency and with other partner agencies. So at this point, post our MediaSolv acquisition, we're now at 24 of the major cities using our platform.

So there's an organization called the Major Cities Chiefs, and I believe it's the 65 largest cities in North America. We're rapidly approaching the halfway mark. Every major city in the past year and a half or so that's made a purchasing decision around body cameras is going on to our platform. We believe this is really important because at the end of the day, those major cities tend to be the drivers in their regions. For example, in Salt Lake City, when Salt Lake City decided to wear body cameras and they chose Evidence.com, 14 other cities around them all followed suit because they have task forces where you have agencies, multiple officers from different agencies working together. Well, it's a whole lot easier to share information if they're all on the same platform. That's why we're putting so much focus on the major cities.

We believe that will drive the overall market is going to follow where the big cities go. Now, in terms of timeline, from the MediaSolv integration that we just did, we'll be spending the summer integrating a bunch of these new capabilities. So certainly, body cameras are the topic du jour. This is the new capability that's being demanded by the public. It's coming up in presidential elections. We've got not only President Obama pushing for it, but now new presidential candidates for 2016 talking about body cameras as a political issue. So that's driving change, but there's a whole lot behind the scenes of other information we also need to help agencies in ingesting. So with that, I'm going to now turn over to Luke Larson to talk about the overall state of where we see things in 2015 and the year ahead.

Luke Larson
President, TASER International

Thanks, Rick. This is hanging on. Great. I could probably just project we've got some people tuning in on a webcast as well. What I'm going to talk about today is what's going on in 2015. This image here is the most recent cover of Time magazine. I think it very succinctly captures what's going on today. You feel a lot of tension. You can see here, this is actually a photo. A lot of people are wondering, "Is this from 1968?" It's not. It's actually from 2015. This is from this year's Baltimore riots. There's this kind of simmering distrust between communities and police. A lot of people are asking, "In the last 50 years, how have we not come further?" What this is leading to is a lot of people who say, "We need a different answer.

We need different solutions." One near-universal call to action is for police agencies to deploy body-worn cameras. As Rick just mentioned, Hillary Clinton in the 2016 presidential campaign has called for body cameras. Body cameras is something that I'm intimately knowledgeable of. I actually started my career at TASER as the first product manager for their video product, Axon Flex. What we're seeing is in this debate, people are saying, "We need a better way for our law enforcement to interact with communities." This is actually not the first time that presidents have called for technology to solve national crisis. Shortly after 1968, in 1970 timeframe, after the Kent State shooting, President Lyndon Johnson issued a Blue Ribbon Commission. In that, he requested for scientific minds to create a less lethal option.

Shortly after seeing this, a former NASA scientist who had went to the University of Chicago and studied under Enrico Fermi, Jack Cover, invented the TASER weapon. In 1974, he found that he could incapacitate people using electricity. This new technology kind of found moving notoriety in films like Total Recall, but it never really found product-market fit. In 1993, a young, idealistic University of Chicago MBA graduate, Rick Smith, our CEO and founder, whose friends were killed in a road rage incident, turned down offers to blue-chip investment firms and consulting. He had this crazy idea that we could use technology to save lives. Rick partnered with Jack Cover. For the next six years, they brought the technology called the TASER to market.

In about a six-year timeframe, 95% of, from about 2001 to 2007, 95% of agencies around the country adopted this technology. And it's been a massive revolution for law enforcement. If you talk with police officers, they say the single most impactful technology that they've deployed is the TASER device until we've deployed the body camera. So many of you are probably asking, "How did TASER get so well-positioned today to lead the market with the body cam movement? And what's next for you guys? How did you find yourself inside the tornado of this national demand for body cameras? And what are you doing next?" And we are a very mission-driven company. Anyone that invests in TASER or is thinking about investing in TASER, you should know what our driving force is. Our mission is to protect life and protect truth.

And that is something that we are really passionate about. And we get up every day thinking about. And our vision is in the next 50 years, we want to eliminate the bullet. And as Rick said, that is somewhat of a controversial subject today with the people really have a lot of strong opinions about guns and police use of force. We think as a company, we are in a unique position to bring these technologies to law enforcement. And our vision would be in the next 50 years, we've done it. We've introduced these new technologies, and people are no longer using bullets to kill people, especially in the arms of law enforcement. So what does this mean from a business opportunity? Like I said, we are very passionate about our mission. We are a mission-driven culture, but we're also not the Red Cross.

We are a public company, and we actually run a very successful business. This is the result of our work and not the cause. And I think the cause, the mission-driven purpose of TASER, is what allows us to attract the best people, create the best products, and ultimately have the biggest impact, reducing violence, reducing use of force incidents. But there's a huge economic opportunity here, and that is to give these officers that are in this very tumultuous situation the best tools. And so our vision is we want a camera, a TASER weapon, and a software seat with every police officer in the world. In the United States alone, there's roughly 800,000 officers. And we've introduced a couple of new programs, the Officer Safety Program and the Standard Issue Program, to help agencies get all of their officers using our equipment.

There's still a huge opportunity here. For example, in Ferguson, the officer in Ferguson was not carrying a TASER. In his grand jury testimonial, he said the reason he wasn't carrying a TASER is he wanted to carry additional magazines. We think in 2015, that's absolutely ludicrous that every officer in the country is not using something that's proven to be the most effective force option. We've got a huge opportunity to get these tools into the hands of every officer. Officer Safety Program, for $100 a month, the agency can buy what we're kind of calling a capability as a service. That's a seat on our software, Evidence.com program. That's Axon Camera, and that's a weapon. By doing this, there's a huge opportunity.

If we could get every officer paying $100 a month, that's just under $1 billion in recurring revenue each year. In addition to that, it's phenomenal in that once these people sign up, we increase the likelihood that we're going to get the next upgrade. So there's a huge, huge economic opportunity here. So how are we going to achieve this? And we've got a lot of really complex technology and engineering, and our job is to make that really simple for our customers. And we think there's a really easy playbook to do that. That's create the best products, have the best channel. Our professional sales team is phenomenal. And then really have great marketing that shows these guys the value of the products such that they understand what they're getting when they buy it. And TASER is a phenomenal brand.

If we ask 9 out of 10 people, they know the TASER brand. And our customers really have an affinity for the TASER brand. It's kind of the same affinity that people have with the Harley-Davidson brand. It's a very strong brand that evokes a lot of reactions when you talk about TASER. But what we found is when you say TASER, if I asked you, "What's your free association with the word TASER?" I bet my life anybody besides the TASER employees would say, "Well, TASER is this TASER weapon here." And that's something that we, over the last 5 and 6 years, we've kind of struggled with. Well, what is TASER and what does TASER mean? And we've benefited from great coverage in the news, great coverage in movies. But TASER has cemented it's the Q-tip of TASER devices. And that's a great asset for us.

But as we look to where do we go next, we think that that brand is somewhat limiting for our technology division. And so much like Microsoft across the road over in the East Bay, as much as Microsoft is a great brand, they created a new division called Xbox. And when you ask people at Microsoft, Marcus Womack, general manager, actually came from that division. When you ask people, "Why did you create Xbox?" It's because they needed a brand that people could look at and say, "Well, Xbox is gaming. Xbox is new. Xbox is cool." And that wasn't Microsoft. And we think we've got a similar dynamic with our officers, investors, people who want to recruit, the press. And so we're elevating our Axon brand, and that's going to be the brand for our entire technology division. I'm going to play a quick video to demonstrate this.

Speaker 14

We've all felt the shift from manual processes to automation, from creating things to creating ideas, from using force to using intelligence. We're leading that shift for public safety, and we're going to keep it that way. We are Axon. We solve big problems. We value the role of thinking. We apply technology in novel ways. The next shift will come, and we'll be ready.

Luke Larson
President, TASER International

So that's our new Axon brand, which previously Axon was the name of the camera. We're elevating the Axon brand to encompass all of our technologies other than the weapons. TASER, great brand, great name for the company. Using the Microsoft Xbox analogy, we're elevating the Axon brand, and that's going to be all of our non-weapon technologies. And our office here in Seattle is kind of our Axon headquarters. We've got all of our software developers based out of here. We also have our PR and some marketing resources. So how did TASER become so well-positioned to be inside the tornado of this national demand for body cameras, and what are we doing next? Well, we believe that what led us here was our focus on the mission to protect life and protect truth. And so that's going to be our guiding force.

Our hope is, in the 2065 Time magazine cover, there's a picture of some new technology that we can't even imagine yet. And they're saying, "50 years ago, we eradicated the use of violence in policing, and they used more effective force options." And we think the TASER technology that we're delivering today is the tip of that spear. And the Axon and Evidence.com products that we have are really at the tip of the spear in terms of using technology to provide transparency for law enforcement. So what are we doing next? Well, we're not going to talk too much about that, but we're just getting started. I do want to mention what's going on with some of the competition. And a few days ago, coincidentally, after we announced our acquisition of MediaSolv, we had a competitor, Panasonic, announce that they're launching a new camera.

Now, it's kind of questionable when the ship date is going to be. They said maybe June. We know from past experience, usually June, maybe a quarter or so is when we think they'll start shipping. The camera has HD. It integrates with their car system. So a couple of people prior to the meeting were asking me, "What do you think about Panasonic's new camera?" I think it's great. We love competition. Competition means we're in a market that is happening and there's a demand for. I'm also still very confident we've got the best solution. The two kind of killer features that I think they have: HD, which we found that HD is actually, when we were doing the research on our Axon Flex, we thought just delivering HD isn't the right answer.

You've got to deliver it in such a way that you can kind of downtranscode it and make the files manageable for the agency. So we actually stuck with VGA. And what we found, VGA is the same resolution you were watching movies in in the mid-1990s. And what we found is VGA is working great for them. So we don't know that that's that killer feature, to be honest. And then the other feature that they have is it integrates with their own car system. And that's a great feature. In the major cities, we've won a couple of deals where they've deployed Panasonic, most notably Charlotte. And the reason that they went with Evidence.com is because of our workflow. So it's not the camera. The camera is critical. We see massive benefits with the camera: reduction in use of force, reduction in complaints.

But the camera is just the tip of the iceberg. The value of what we're providing is what Rick was talking about with the ecosystem. And why we've seen 24 major agencies go with our solution is because of the value of that workflow. And if you talk with kind of our product managers, any of our sales guys, this is not new information. For the last year, we've been kind of echoing all of our competitive features across that workflow. So happy to talk with anyone on the break more about that. And with that, I'm going to turn it over to our General Manager of our Seattle office, Marcus Womack, who's been an incredible addition to the team and done a great job kind of building out the office. So here you go, Marcus.

Marcus Womack
General Manager, Axon and Evidence.com, TASER International

Thanks, Luke. Is this on? Hello?

All right. I'm Marcus Womack. I'm the general manager of the Axon and Evidence.com business team in Seattle. And I just want to say welcome to Seattle for all of you traveling here to the Tribal Meeting. It's a really unique opportunity for us to showcase some of the things we're doing here in Seattle, specifically related to Axon and Evidence.com. So I'm going to sort of take you through two key things. One is sort of how did we come about opening a Seattle office, and what are we doing to grow it, and how is that affecting the overall vision? And so to reflect back a little bit on what Luke said about the Axon brand, it's a really unique opportunity for us to create this new end-to-end experience about creating a preeminent technology company in law enforcement and public safety.

So to dive in a little bit, so when we went about deciding, "Well, where are we going to grow a tech hub?" We looked at four major cities. We looked at Austin, Los Angeles, the Bay Area , and then Seattle. We looked at all those places, and ultimately, we decided that Seattle was the place that we wanted to be. So.

So we touched down in Seattle mid-2013. And we sort of looked at Seattle and thought, "This is really a great place to be." So we had originally opened an office in Santa Barbara. And early on in 2010, we realized, "Oh, wow, this cloud thing is going to be really important." And we made the bet early on to take Evidence.com from on-prem or even host it in a data center and take it to the cloud. And then we realized, "Okay, now is the time to make the move." So in the middle of 2013, we actually moved to Seattle. So what's unique about Seattle? So in Seattle, we have developers. And I had the fortunate experience of spending my early career at Microsoft.

I think back to the day when I heard Steve Ballmer say, "Developers, developers, developers, developers." Some of you actually may have heard that. The Seattle area and the metro area is the top four in software developers. That is critical for us to achieve some of our goals. Seattle, with this plethora of engineers, and there's a great engineering school right next door in UW, offers a really plentiful resource of hiring great people, which is really, really, really important to us. But how did we get here? The question is, "Okay, it just didn't happen overnight." There we go. Building a strong talent pool in Seattle started in the 1980s and 1990s with Microsoft, Real, Amazon. From that point forward, it sort of sprung out these smaller companies.

So Google, Zillow, Expedia, Adobe, all sprung out of those early days of Microsoft and Amazon. And then from there came these other companies like Tableau, as well as some, here we go. I see you having, do I need to point at something? There we go. EMC, Isilon, PopCap. A lot of these small companies popped up and just sprung out of these larger organizations. Well, that's up through 2010. And if you just take the last 5 years, you'll see that you have things like Facebook, Hulu. Let's see. There's other companies here as well. I seem to be having trouble with the slides here still. Salesforce, Uber, Groupon, etc. All these companies just in the last 5 years have said, "Well, let's bring our offices to Seattle because there's plentiful talent." So the startup scene started kicking up. We now have accelerators.

We have the University of Washington really hitting a stride with all the talent that it's kicking out. So we in 2013 said, "Okay, where is the center of cloud computing?" You have Amazon. You have Azure at Microsoft. Everything we're doing in Evidence.com is about bringing a lot of the technology, specifically cloud, wearables, and mobile, bringing that to law enforcement. And Seattle is the epicenter when it comes to cloud, wearables, and mobile. So that was in the last five years. So in 2013, we touched down, and we know, "Okay, if we want to be a great place to actually host a company, that's where we want to bring in the Axon brand." And so when Luke talked a lot about Axon, I think what we see for Axon is a unique opportunity to create a brand that resonates with the community.

We want Axon to be the brand that creates trust between the community and law enforcement. There's no brand in the marketplace today that helps engender more trust in law enforcement, and we see that as the opportunity of Axon. Actually realizing that goal is all about hiring the best and brightest people. Just talking a little bit about our growth, so we grew from three people to 45 people in the last 20 months. That's a huge growth curve. We landed in the mid-2013 and have been hiring like mad, focusing on mostly engineering here in Seattle. We have our headquarters in Scottsdale, which is the core aspects of our business, including hardware engineering. In Seattle, we're focusing heavily on software engineering related to not just the cloud, but also firmware on our cameras.

Seattle is the place where we can pull people from all those core businesses. But the key thing is here, we got to compete hard for talent. So we have a new office that we're building. It's just right across the street. We're in South Lake Union, which is really sort of the epicenter of growth in Seattle. And so we have space for 100 people. So today we're at 45. We expect over the next 2-3 years, we'll grow to 100 people and primarily be an engineering office. So we're not stopping there. We're going to take and bring the TASER aesthetic to the Seattle office. Well, you might ask, "Well, so what is that?" So specifically, if you haven't seen our headquarters down in Scottsdale, we have an amazing building that really sort of has a portal-like experience.

You can see it from the 101 as you're driving down Scottsdale. And it's really sort of inspiring when you first walk into the building. And actually, when we first—I joined TASER about 18 months ago as part of the acquisition of my company. And when we went there for the first time, we were like, "Wow, these guys take design really seriously and care about the place that they work." And so you actually enter the building, and it looks like Star Wars meets Star Trek meets Men in Black. And there are these amazing catwalks throughout the building. And the realization is that space matters, and it makes a difference for people when they want to come to work every day and be inspired about what we do.

We're taking that design aesthetic, and we're launching and opening our office in about six weeks here just across the street. I want to take you through a couple of slides. We also have these great visuals over here. I really encourage you to come take a look at them. We think space, space matters, and creating a great place for people to do great work and to make a difference. It starts right away. When you go up to the top of the elevator in the 13th floor, you'll get the grand entrance, just like you would down in Scottsdale. We have these portal doors that enter you into a man trap, just like you would see if you were to go to the portal entry in Scottsdale.

So we want a feeling of when you go through this portal and you open up to the rest of the catwalks that you just sort of awe-inspired. And so we're taking a lot of those design aesthetics and bringing them to Seattle. Lots of open space, very, very clean lines, great places to do creative work. So open engineering spaces that are focused on collaboration and design war rooms that's focused on innovating on design. And I think the key thing is we w ant to create inspiring workspaces. So we're taking a page out of the book that we do in Scottsdale. We've named our conference rooms after great scientists like Edison and Franklin. And we're doing that very similarly in Seattle, but focusing on computer scientists and other aspects of public safety.

So we're naming our conference rooms after Susan Kare, who was one of the early icon creators for the Macintosh, a very, very well-known design lead; Grace Hopper, who created the first compiler; Stephanie Kwolek, who built Kevlar. And so we're taking that and bringing it into our space to sort of inspire the next generation of technology and public safety. So what we also don't have here is we have these great Matrix chairs. And those Matrix chairs, actually, if you haven't seen a picture of a Matrix chair, they take the screens and they lift them down right over. You have a chair that you sit in, and you're surrounded wall to wall in monitors. And so the bottom line is we want to create a great place to design software. And that software, traditionally in the enterprise world, has been a little bit clunky.

One of the things that you see from the design of the TASER building is we care. Design matters. We're going to hire product designers and engineers that are focused on consumerizing enterprise technology. Rick talked a little bit about this as creating the Apple of law enforcement. We think design matters in all the software that our customers use. It should be easy to work with your camera. Our mobile apps that interact with our cameras should work just like the mobile apps that you use on your iPhone or your Android phone. We want to create spaces that allow everybody to work collaboratively and come up with that sort of consumerization of IT software that's going to make a huge difference in the products that we deliver to market. We're building for the future.

Building for the future means bringing on great people and keeping the bar high. So our number one priority from the Seattle office is to make sure we hire great people. That allows us to accelerate the execution of our products. That's what we've been focused on for the next 18 months. As a leadership team, not only here in Seattle and Scottsdale, we spend a lot of time talking about how do we bring in the best talent. Actually, it's about the team and building a strong culture across the organization of innovation, which basically allows us to continue to execute on the space. We want to raise the bar. This is a picture right here of Javier Sotomayor from Cuba, who actually—he actually set the record in 1993 for the highest jump, which is 8 feet and a quarter inches.

And it hasn't yet actually been beaten. So our goal is to raise the bar and keep the talent bar really high and build a strong team. But how do we do that? And I think the question you're asking is, "Okay, you're just a sea of companies that now have come to Seattle, and what makes you different?" And I think the difference is our mission. And I think if I reflect back personally and talk to you a little bit about how, when TASER acquired MediaSolv back in 2013, why did we actually make the decision to come here? And I think the number one thing is the mission.

And I talked a lot to my kids about, "So you want to leave a place better than you found it." And I think when we saw the mission as a company, we said, "That's something that really resonated with us." So personally, I've got to work on some pretty amazing products throughout my career: number of music services, Xbox, early stages of the internet. And when we saw this opportunity, we had a number of options in front of us. And we saw the opportunity at TASER and were drawn in by really the opportunity to make a difference and to leave this world better than we found it. And I think that's the inspiration and that's the draw that's going to bring people in. So our goal is to protect life and protect truth and create transparency between the police and the community.

And so that's a unique opportunity. But it also—that's just sort of the tip of the iceberg. There's a whole layer of value proposition here. We couldn't ask for a better opportunity. We call it product-market fit in sort of the early phases of startup. So we have definitely product-market fit. And working at a company that actually has a product that's in growth, we call this a rocket ship because it is really a rocket ship right now. And so when we're recruiting people, we talk about, one, the growth of the company. You get to work in emerging technologies: wearable computing, cloud services, and mobile devices. Right now, law enforcement is 5-10 years behind from a technology perspective.

There's no cooler thing in the technology space but to be able to actually work in those three technologies, bring those together, and change the way public safety does their job. But more importantly, I think it's how TASER sort of operates at a cultural level as a company is that it's so highly entrepreneurial. So like I said, I've got the opportunity to work at Microsoft and a number of startups. And I could say that this company operates more like a startup, and it's highly entrepreneurial. We're nearly 25 years old, but Luke talked about us being in the eye of the tornado, and that couldn't be more than the truth, right? So we are highly entrepreneurial. It starts at an executive level of us encouraging the great decision-making, database decisions, and risk-taking from employees across the organization.

And that's perhaps one of the most exciting things about working here as just a team is that we empower people to make solid data-driven decisions and take big risks. Because big risks, you're not learning, and you're not failing forward fast enough if you're not taking big risks. So the bottom line is we have a unique value proposition, and that's really what we're excited. So all those things wrapped together really sort of create an opportunity for us to establish ourselves in Seattle as a preeminent law enforcement technology company and build that Axon brand that builds trust between the police and the community. Right now, there's no other brand in the marketplace that exists that can help establish that trust. And we think we're really well positioned. And it starts with hiring the best people.

So next up, I want to pass it on to the product team who's going to go ahead and do some Q&A about our products and do some interactive questions. So do you want to?

Speaker 14

Yeah. Do you have time for a couple of questions from the audience first, Phil?

Yeah. Certainly. So I think at this point, we want to take a pause with the management team. So I don't know if Luke and Mark, if you guys want to kind of stand up here with me. And we'll take some questions now. And then do we want to take a break before we go to product managers?

We'll take a break for the management team to leave and get back to your meetings and get set up. So we'll take probably a 2-minute break while that happens, and we'll go into a product management deep dive.

Perfect. Yeah. Our board meeting is also happening today, so we're not going to be able to hang out too long after the meeting here. At this point, let's go ahead and take any questions from any of the shareholders in the room.

Speaker 11

The acquisition, no.

The acquisition of MediaSolv, 11 people, $5 million revenue. What did they have that really attracted you to them?

Speaker 14

A couple of things. I had Jim Weaver, who's sitting in the back of the room. And I'm only partially joking. Jim's really done a great job building some relationships at some really key influential agencies. Probably the most important one is Philadelphia PD. So Philadelphia, Chief Ramsey at Philly PD is the chairman of President Obama's council or commission on 21st Century Policing. So it's a very influential agency. And MediaSolv has been doing a lot of work with Philadelphia already on their interview rooms, similarly with Washington, D.C., and Chicago, and Toronto, and Charlotte, and Louisville. So we kept running into MediaSolv and a number of our major customers, where some of them were already using MediaSolv's suite of products.

And some of our customers actually put us together and said, "Look, we want you to integrate these together so we have one seamless experience." And as we got to know each other in that process, we realized, "Wow, MediaSolv has built things that are very complementary to what TASER has." And so we thought this would be a way for us to really accelerate our footprint across the broader evidence ecosystem by adding all the third-party integrations where MediaSolv has done so well. So we'd say this is really much more of a strategic acquisition. Obviously, in the acquisition price, it wasn't something that was accretive to earnings or you weren't buying this just for sort of revenue and existing profits. We saw that this was a case where the sum of the parts is much greater. The whole is much greater than the individual parts.

I would add, so the challenge that a lot of law enforcement agencies face today is that there are silos of data that sit on-premise. MediaSolv has done a really fantastic job of really uniting those silos. We found ourselves sort of collaborating with Jim and his team and recognized that our goal is to build something greater than it's to build an end-to-end digital evidence management solution. Connecting that sort of on-prem sort of connector that brings all those silos together really extends our capabilities at a pace which we were able to do a lot faster.

Thank you. Any other questions?

Speaker 12

I'm curious about the monetizing of the back end of this, of the cloud. Do customers pay additional for the Evidence.com downloading such as if there's a murder case and we have to run through multiple prosecutors and that sort of stuff?

Speaker 14

So the model is a core subscription. So they pass a subscription anywhere from $15 a month, the low end, up to $99 a month if they go on the Officer Safety Plan. But we never charge them for accessing their own data. So in understanding we want to sell to our customers in a way that is most friendly to how they want to operate. And so this is one where our customers really value predictability. So they don't want variable charges. Particularly, one of the big, I'd say, myths we had to bust early on was customers were afraid. And I think we had some competitors out fanning the flame and said, "Oh, no, once you go on TASER, they're going to charge you to access your own data," which is never the case. So the way we position with the customer, it's their data.

We have no right, title, or interest in their data. This is not a business model where we're monetizing our customers' data. We're providing them a very valuable service. They pay us a monthly fee. They typically pay annually, but they can pay monthly if they want on a subscription model. And then what they get when they go up the service tiers are things like, on the upper end, so at the Axon Safety Plan, we replace their TASER device every five years. We replace their cameras. They're always getting new hardware refreshes. And things like unlimited storage. We found our customers really value predictability, and they'd rather sort of pay a little bit more and know that that's the only fee they're going to have to pay and take any of the risks off the table.

It turns out in government, I think the bigger challenge is for them personally, for people who are making buying decisions, is they don't want to get hit with bills they didn't see because of the way they budget. That creates major sort of operating issues for them. They need to have budget predictability. And so we really built our business model that way.

Speaker 12

What challenges are you having in the public sector as far as getting financing and competition for dollars?

Speaker 14

You want to take that one?

Yeah. So you've probably seen in the news, late last year, President Barack Obama said, "We're going to issue a grant to fund body cameras." He talked about a number roughly around $75 million. Then just recently, they issued as part of that, it was actually the first section, which was a $20 million grant from the DOJ. Now, $20 million sounds like a big number. You take $20 million divided by 18,000, that number gets a lot smaller. So what each agency across the country is dealing with today is how do we fund these programs? What we're seeing is actually a lot of different agencies are making this a funded priority. For example, in LAPD, LAPD has a nonprofit that raises funds to provide police officers equipment.

They went out to the donor community working with very high-profile individuals like Steven Spielberg and the owner of the Dodgers. They were able to raise funds, some of which the city council also matched. That's how LAPD funded their program. Another benefit that we're seeing through the funding is because these reduce civil litigation and complaints, a lot of agencies are saying, "Well, let's work with the city to see how is this going to lessen our risk profile so we can adopt this technology.

The city of Rialto, which we talked about a little bit through the study of Cambridge University, when you run their numbers, we're using their internal numbers based on their analysis of their legal cost savings between the money they saved from reduced complaints. Then they were able to redeploy two-thirds of their internal affairs staff who could go back out on patrol. They didn't need the internal affairs anymore because they didn't have all the complaints to look after. They saved over $7 for every $1 they spent on Axon and Evidence.com in the first year. A 7-to-1 return on investment is pretty awesome.

So that data is actually being used now by some other agencies in going to their risk management folks and saying, "Hey, look, rather than paying out on lawsuits, let's put some money into this technology stack." Then the other thing over there is just the political environment is it's making this a priority. So in L.A., when the mayor's office heard that they're looking at deploying some cameras, the mayor personally stepped in and said, "No, no, no. We're not going to deploy some cameras. We're going to deploy cameras to everybody." So actually, Bret and I were out for the press conference when the mayor called a press conference. And that day, the PD, gosh, wasn't actually 100% sure what the mayor was going to announce because it was moving so fast.

The mayor announced that they had the intention to give every officer a camera, 7,000+ cameras at LAPD and a TASER device that would go with every camera. That's a helpful political environment to be in. But normally, the agencies are asking for equipment, and they're sort of pushing against resistance from the city councils and other places. This is something where it's very politically attractive to be deploying cameras right now. We're seeing, in fact, the pressure come the other way from the political circles pushing agencies to accelerate and go faster. Any other questions? Great. I would just sort of wrap up. We talked about today with the Seattle. We spent some time on showing off some designs of our Seattle office.

Sometimes these investigators say, "Well, why are these guys up there telling me what their office is going to look like?" Well, at the end of the day, I think when you're building a great company, it comes down to getting great people. It's no secret that getting great people in Seattle, in fact, is hard. We're going nose to nose with Google and Amazon and Microsoft and Facebook. So we've got an office here. Apple's opening an office, and Dropbox. So we believe we have sort of this magical trifecta. We've got a compelling mission. We're winning engineers coming over because, frankly, they want to help. Everybody's watching what's happening in Ferguson, right? You can go work on a billing system or some other thing at a high-tech company. That's great.

But you can come with us and change the world, and we're going to make the world a safer place. And when you go and you're socializing with other people in the tech community, the things you can talk about are more compelling and more personally rewarding. So we think our mission is key. We think the environment that people work in is also key. People want to come in and feel inspired. And when that first impression helped us acquire these guys, I forget if they had some of the biggest names in tech. We're trying to buy them. And I think the combination of we do great stuff, we do it in an environment that's fun and creative, we're going to enjoy coming to work every day. And then the third piece is we're great people.

We've already got great people, and we want to keep we know that the more great people we get in, the more great people we'll attract to get this feedback loop. And software, it's all about people. That's right. That is your product. And so by getting the best, I think, we're getting the best people in public safety today. I don't think there's other folks that are getting the caliber of folks that we're attracting in the law enforcement sector. And we need to just keep taking that up. So we want to spend some time today. And what do we do? When we launch our office here, we'll be doing open houses, etc., to bring in the tech community to get inspired by what we do. So any closing comments from you guys before we wrap up today?

Speaker 12

No, I just want to say thank you, everybody, for coming. We appreciate your attendance and really value your support. So thank you very much.

Speaker 14

All right. So the board and management are going to punch out. And then some of our product managers, if you want to stay around, are going to take you through a little bit in more detail some of the products that we've got today. Well, those are all the questions that I had for you. So I think that's a good conclusion. Yeah, it's not like that's clear for me because I'm a tech person at any rate. And that's something I'm going to be looking forward to. I'm excited to see what the results are going to be. I'm going to be looking forward to seeing what the results are going to be. But I'm proud of the last few rounds of the trials. I'm proud of my 34 hours and my 36 hours. So I'm excited. I will wrap up the trial today. Okay.

Speaker 13

Yeah, no, I didn't see anything in my calendar. Yeah. Let me record this. Oh, hello.

Speaker 14

I'm sorry. Can you hear? I'm sorry. I'm sorry. I'm sorry for remembering. Radiant Light. How much is the radiant light?

I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry. Sorry. I didn't know. I didn't know. I'm sorry. I'm sorry. I'm sorry. I'm sorry. I'm sorry for the next year. Next year, what will be the latest about the events? And what about the next one? Can you give us a number of our co-counsel? What leads up to the either later next year? Well, can you say anything about the next year? Oh, I think we're about to start again. Can you please refuse?

Erin Curtis
Head of Investor Relations, TASER International

Think you're going to stay?

Speaker 13

If you're not sure, we're going to start again. If you want to refuse, you just say. Thank you.

Erin Curtis
Head of Investor Relations, TASER International

Great. So my name is Erin Curtis. I handle investor relations for TASER. I have spoken with several of you on the phone, and I'm sure I will speak with many more of you on the webcast after this. I'm going to go ahead and have each of our product managers that I have here introduce themselves and their background with the company and what products they handle today.

Kyle Martin
Video Solutions Product Manager, TASER International

Sure. Hi, everyone. My name is Kyle Martin. I'm the video solutions product manager with TASER International. I've been responsible for Axon Flex and Axon Body at various points in time. Now I'm focused on what comes next with video camera systems.

Abraham Alvarez
Product Manager, TASER International

Hi, everyone. Abraham Alvarez, Product Manager with Evidence.com. My areas of responsibility are Active Directory, groups, redaction, media tools, as well as the mobile apps that we currently have.

Alex Mersereau
Product Manager, TASER International

Alex Mersereau, product manager on Evidence.com as well. I also work on Evidence Sync and some of the integrations that we do with RMS and CAD systems. I focus a lot on sharing and how to bring prosecutors onto the platform, as well as some other parts of the Evidence.com piece.

Mike Gish
VP of Weapons Strategy, TASER International

My name is Mike Gish. I'm a Vice President of weapons strategy, and I focus primarily on the weapons part of the business.

Erin Curtis
Head of Investor Relations, TASER International

Great. Product management can mean different things in different companies. I wanted to get each of your thoughts on what does product management mean at TASER? What do you do?

Kyle Martin
Video Solutions Product Manager, TASER International

The way I envision it is, as a product manager, you are essentially the CEO of solving the problems that you've been sort of targeted at. So you're responsible for finding the right fit for the market, finding that solution, and then making sure that the marketing is there, that the sales strategy is there to ensure that it's successful and that agencies find it attractive and are able to access it and see its value.

Abraham Alvarez
Product Manager, TASER International

Yeah. I think it's really all about getting the right product at the right time and also being able to understand our customers. And not so much as to the feature requests that they're requesting, but really getting to the root of the problem, right? Really understanding what are the problems that they're currently facing and how do we solve those in a manner that perhaps they don't even realize can work best to their benefit. And so really understanding that product-market fit that you were talking about and really being able to get those products at the right time that solve the right problems is really the root of product management.

Kyle Martin
Video Solutions Product Manager, TASER International

When thinking about product management at TASER, I really think about prioritization of problems. There are a tremendous number of problems we could solve and can solve, but which should we solve? Really keeping track of what the right decision at the right time for a product is, is you could build a lot of different cameras. In the end, if we focus on durability, usability, really think about what an officer goes through each and every day and keep that first and foremost as we're the voice of the customer in the company. You can really make sure that you get to the right answer for our customers.

Alex Mersereau
Product Manager, TASER International

Yeah. Kyle touched on it. The key point is understanding the voice of the customer. We represent the voice of the customer for our customers. So when we talk about with a law enforcement agency, we're actually talking to the police officer, and we're actually out there asking them the hard questions. How do you use this? What do you want to see in this in the future? What's the biggest concern that you have about this product? How can we address that concern in the future? And that's the kind of things that we touch on on a regular basis with our customers. With TASER, especially on the weapon side, it's like the TASER actually defined its own market segment with the smart weapons. Before that, it was the X26. So they already have a most-loved platform.

So for us in product management, we're out there going back to them and saying, "Well, besides the thing that you absolutely love and you'd never give up, what would you like to see in it in the future?" Right? I want to get you to tell me what's the most important thing that you love about that and make sure that the new products have that in it, but also are more forward-facing, more future-ready.

Erin Curtis
Head of Investor Relations, TASER International

That's great. You all kind of touched on what my next point was going to be is, what is a specific example of how voice of the customer is represented in today's products? What customer inspired you the most to say, "Hey, I need this in my current-generation product"?

Kyle Martin
Video Solutions Product Manager, TASER International

Yeah, absolutely. So I think one of the key areas that jumps into my mind is with CAD and RMS integrations. So a few years ago, we were working with Mesa PD. They were doing a deployment. They were testing with about 60 cameras. And they said, "Our officers are spending a lot of time tagging videos, and they're not necessarily doing the greatest job at it. We're only getting them to tag about 80% of the videos. And so that means a lot of searching on the back end. How can you guys make this better for us?" And so we sat with them and went on the ride-alongs with their officers. And we're like, "Oh, yeah. How can we make the app faster or slicker? Or what can we put on the MDT?

If we put Sync on the MDT in their car, will that make it faster or slicker?" And through just really digging in and going through a day in the life with the agency, we had sort of this epiphany that all of that data is in another system of theirs. And why don't we just build a way to integrate with those systems that's going to map to other agencies so we can just automatically pull that data, automatically tag to the video. And the end-user experience is basically completely all behind the scenes to them. They just do the doc and go to workflow with the docs. And so it takes that pain from the customer. And then for the higher-ups in the agency, they're a lot happier because now they've got 99% of the videos have all the metadata that they need to tag them.

Abraham Alvarez
Product Manager, TASER International

Yeah. I think another good example is Evidence Mobile. So Evidence Mobile came out of us doing voice-to-the-customer meetings and really trying to understand from the camera side how to best ingest the evidence that they were recording in the field. And TASER ended up realizing that officers are going to use what's most convenient to them and that whether or not their policy actually allowed them to use their personal devices, a lot of officers are currently using their mobile phones to capture evidence in the field, whether that was pictures, photos, video, audio. And they really had no way to be able to manage this, right? There was no way for them to be able to send it to Evidence.com securely or to whatever evidence management system they were currently using.

Out of that came Evidence Mobile, which was a simple app that allowed officers to securely capture photographs, audio, and video and be able to add metadata such as category, case ID, and title and upload it securely to Evidence.com. That wasn't something that I think a product manager kind of thought up. It was something that came natively out of the field and out of the need of the customer that perhaps they didn't even realize they needed but solved a really big problem.

Kyle Martin
Video Solutions Product Manager, TASER International

I think my favorite moment where I realized that's a feature we really need that's essentially to law enforcement is we're doing alpha trials with prototypes for Axon Flex. This was a couple of years ago. Our officer is wearing the system. We turn the camera on. A light on the front of the device starts blinking, and there's a beep. So we're driving really fast. We're going about 80 miles an hour. I'm riding shotgun. I noticed that he has one hand on the wheel, and then the other hand, his right hand, is on the front of the device. He's picking up like this and trying to look down while going 80 miles an hour to make sure the camera's on.

The reality is they needed a way to tell the camera is on just by glancing without needing to manipulate the device in any way. It seemed like a little thing, but it's a simple light and a simple LED on the top of the device through a light pipe lets them check the status of the device, whether or not it's recording, without needing to spend time or really take their eyes off the road for more than half a second. I thought that was a simple thing, but something that really matters for law enforcement.

Mike Gish
VP of Weapons Strategy, TASER International

On the weapons side of the business, I can point to a whole lot of features that were actually developed by the customer. But then it gets really technical in detail and very specific on the weapons usage side. But what I like to really hear over and over again is that somebody comes back up to me after I've met them for the second time, having talked to them about the feature set that we're developing. And when they see the actual final product, they say, "Hey, that was what we talked about." And I said, "That's exactly right.

These things look the way they do, and they act the way they act because you told us that's the way you want them to act. The point of pride for all of us is we get that feedback from our customer base, and we put it into the product. So that when they get the product and they see it for the first time, they say, "Oh my gosh, you listened to me." That's the key to the whole product management perspective.

Kyle Martin
Video Solutions Product Manager, TASER International

One more thing on that subject. That's one of my favorite things about working on the Evidence.com team is how quickly we're able to move. The other systems that law enforcement is used to interacting with is all on-premise. And so you're on about a five-year upgrade cycle when they come in and they rev the entire set of servers and the application. And so to be on a conference call with them, talking through a problem and saying, "Hey, so would this fix that for you? Would this address this need?" And they get really excited. They're like, "Yeah, that's perfect." And then when we get to tell them that they'll be in the product in three weeks, their jaw just hits the table.

And so being able to deliver on the voice of the customer at a pace that is unparalleled in the industry because of the types of technology that we're deploying, for me, I feel sort of bad that we've got that much of an advantage over everybody else that can't quite keep up. So I think that's a big part of this, how quickly we're able to integrate this feedback into an actual solution that they can deploy at their agency.

Erin Curtis
Head of Investor Relations, TASER International

Okay. So with investors, we talk about our IACP conference a lot, how it generates a lot of pipeline. It's a big, exciting event, but they also have to model it in because we spend a lot of money because it's a great event that we get a lot of interesting voices of customer thoughts. Can you say how IACP influences your position throughout the remainder of the year? And can someone please explain the dinosaurs to the audience?

Abraham Alvarez
Product Manager, TASER International

Sure. So coming from sales, one of my rotations that I did from the LDP program, I spent three years in sales building out the West region. And IACP is our Super Bowl. I mean, that is where most of the pipeline for the entire year is coming. And there's really very few instances, if any, in the world where you can get the top decision-makers from the agencies in one location for a couple of days. And they're all there to learn about technology. They're all there to learn about law enforcement. And you have them all coming to you and being able to run into all these chiefs and decision-makers all in one central location. So from a sales perspective, it's absolutely invaluable. And it's definitely, as I mentioned, it's our Super Bowl. From a product management perspective, it's really extensible as well, right?

Because never do we get, again, in one location, all of the decision-makers and drivers of law enforcement to be able to bounce ideas from them and to be able to understand where they're currently dealing with their agencies, where are the biggest problems that they're currently trying to solve? What are some of the things that perhaps we haven't thought about that our product suite could solve for them in the future? And so having the ability to not only run into these people, but also be able to bounce ideas and understand from them as well as to gain insights is absolutely invaluable from a product management standpoint.

Kyle Martin
Video Solutions Product Manager, TASER International

Yeah. So I'll talk a little bit about the impact IACP has on my thought processes. And then I'll also explain the dinosaur. I think that's going to be my job. So at IACP, I think I met with chiefs of police or command staff members for agencies that cover about 40,000 to 45,000 officers. So I touched something like 5%-10% of the market in that one event and understand the kind of impact that I can have across a major segment of the market in an extremely short period of time. So in a matter of 3 days, touching that much of the market is a really exciting opportunity. And it lets you understand on a pretty big macro scale what the challenges of law enforcement are. So at a show like this, you don't just see what you're not just talking to your customers.

You're also seeing what the market's putting out and seeing sort of the way the winds and currents are shifting over time. It's a really exciting opportunity to better understand the law enforcement market and understand how you can impact massive chunks of those officers. For the dinosaur, TASER is a theme every year. We really think that if it's a Super Bowl, you better win. So the idea behind the dinosaurs, our theme this year was, "Don't be a dinosaur." The reality for law enforcement is that technology cycles are long. Municipal government is really complicated and challenging to be able to upgrade at an effective pace. Realistically, five years is optimistic. Those are the best agencies who have the best purchasing departments. The reality is a much longer cycle. It's a big challenge.

And so the theme of "Don't be a dinosaur" is don't get left in the stone age. Make sure that you are able to keep pace with the times and adopt technology that'll help your agency be safer and protect your communities. And so the big thing was kids love dinosaurs. And so generally, every officer that comes to an event like that has someone in their life that really wants a dinosaur. And so we give them out after they sit through a 15-minute presentation on our technology and our sort of thought processes for the future and really make sure that they understand where we're going, what we care about, and to remember, "Don't be a dinosaur.

Abraham Alvarez
Product Manager, TASER International

Yeah. It's one of the most popular events at IACP. You should see the lines. They wrap around the booth and just people waiting to have the opportunity to hear the 15-minute segment on all of our products and then be able to receive stuff handed to them. It's quite amazing.

Kyle Martin
Video Solutions Product Manager, TASER International

Yeah. I also think it's a really great example of the culture at TASER. So we take our mission very seriously. And what we're trying to do and the situations that our products are used in are incredibly serious. And they mean a lot to us. But the culture of the company is also one where you want to enjoy coming to work. You're happy to be working with the people you're working with. Rick's a really fun, energetic leader. And I think that the stuffed animals are a little more playful and sort of capture our culture a lot better than handing out pens or stress balls or something like that. So very distinctly TASER. And I think captures sort of the fun, more light side of where we like to enjoy ourselves and have a good time.

Erin Curtis
Head of Investor Relations, TASER International

I think that's a great starting point for my next question is, what do you enjoy most about being part of the TASER family and kind of talk about our culture? I think that's a great starting point for that.

Kyle Martin
Video Solutions Product Manager, TASER International

Mike's been a member of the longest, so.

Mike Gish
VP of Weapons Strategy, TASER International

I've been at TASER for over 10 years now. Protect life and protect truth is a noble mission. It helps retain employees, and it helps attract employees. I actually, on several interviews, I always mention to people, "Before you actually accept this job, make sure you think about our mission." Because when you join TASER, if you don't believe in the mission, it's going to be a really hard road for you to follow through in the company. If you actually believe in your mission, you'll wake up ready to do that. You won't wake up and go to bed at night thinking about it because it's that important. I mean, we're talking about human beings and officers out on the street. We literally mean what we say when we say we protect life and protect the truth.

That's one of the primary reasons that just keeps drawing me back in year after year. I'm certain with all of these gentlemen as well. That's why we get up in the morning. It's a noble mission. I want to do this. I want to change the world. I want to be part of that team. I think we do that pretty effectively at TASER.

Abraham Alvarez
Product Manager, TASER International

Yeah. For the next three of us, this is the only place we've worked. So we all came right out of school into the LDP program from Harvard. And I've got five years. Abhi's got six. Kyle's got four. It's hard to imagine an organization where you're, again, working on something that's so meaningful and that you can believe so much in, but also that has the entrepreneurial opportunities available to you and just the culture of, "Let's be agents of positive change." And I think it's not every company that you can be texting ideas and bouncing them off the CEO at 10:00 P.M. and things along those lines. So a lot of really close personal relationships and a lot of people that are very passionate and very capable that are working towards a common goal, I think, is what I like about it.

And like I said, we like to have fun. So that helps.

Yeah. I joined TASER as an LDP coming from an engineering background. And the main thing that drew me to TASER was, again, the ability to make a difference, right? It was a company that was big enough that I didn't really have to worry about it going out of business anytime soon. But it was small enough that I felt like I could actually make a really big impact in everything that I was doing. And the reason why I stayed here those six years is because every single year, it just seems like the opportunity to make a difference gets even bigger and bigger. And the culture is amazing. Everybody's really friendly. And again, we're all mission-driven, right? We all believe in the mission. We're all here to protect life and protect truth.

And we wake up every morning excited to go to work because we know that what we're going to be doing that day is really going to have a big impact with law enforcement and the world at large. And that's a really exciting place to be in and a really, really exciting thing to do.

Kyle Martin
Video Solutions Product Manager, TASER International

Just to clarify, the LDP is a leadership development program at TASER. So that is an acronym that was referenced a couple of times. Just wanted to let you know. So I think what I like most about working at TASER is the human impact. So conceptually, intellectually, you know that the products you build, you're trying to make a positive impact on the world. What I actually like is meeting the people that have used our products. And sometimes they're these massive men who are 6'6" and make me feel very small, even though I'm 6'2", who dwarf me. And I say I'm from TASER, and they shake my hand and give me a hug. And they tell me about the time that they used a TASER weapon and saved someone's life where they didn't know they had another. They weren't sure there was any other option.

They used their weapon, and otherwise, that person would have died. A member of the public. Saving a life and having that kind of positive impact on a person and hearing it and seeing it in their face, that makes you wake up every morning and say, "I can help them. I can make communities safer. I'm going to do whatever it takes to make that happen." So that's sort of why I think about when I'm thinking about why I work at TASER and why I like being part of the family.

Erin Curtis
Head of Investor Relations, TASER International

Thank you. So shifting gears a little bit, Luke talked during his presentation about competition. Clearly, Evidence.com and Axon brand has a lot more competition than we've faced in our traditional weapons business. Can you go a little bit deeper on maybe the Panasonic announcement that came out this week, pros and cons, and the tech stack?

Kyle Martin
Video Solutions Product Manager, TASER International

Sure. So I think thinking about competitors and TASER, it's a really interesting dynamic in that I made a joke a couple of years ago that hot dog vendors were going to have cameras at IACP because cameras are such a hot topic and such an important societal problem that they're trying to solve. And so everyone says, "Let's build a camera. Let's make a positive impact on the world." I think the big challenge for law enforcement is not necessarily the device itself, but thinking about how do you make it easiest for a police officer on a day-to-day basis to use a device like this. So you want to solve the problem. You can't just build a camera and drop it off at their doorstep and then hope it works out well.

You need to be able to support them over time and really make sure that the longevity of the device stands up to the rigors of law enforcement, thinking about sort of the end-to-end workflow from capturing on the street through uploading to Evidence.com or another system and then managing that evidence over time, sometimes five, 10, even 75 years in a couple of agencies that I've been at. How do you manage that well? And then how do you go take it all the way through the courtroom and conviction? How do you sort of take it from the sensor to the courtroom is the biggest challenge is that there's a tremendous amount of work and time built into the systems that they have today. And so the reality is they have video cameras in cars. But that workflow doesn't scale when thinking about body-worn video.

You really need to challenge the former assumptions that DVDs were an acceptable way to transfer evidence and that driving evidence around between different stations at an agency wasn't an acceptable sort of form of business. A little more detail about Panasonic. It's actually exciting to have a competitor in the space that really someone that comes back and says, "This is something that matters." I think that's a part that resonates with what Luke said. I think the challenge when thinking about this competitor is Panasonic's a big company, and they've built in-car systems. And so they integrate with their in-car systems. The challenge is today, Panasonic in-car systems is a silo of technology in a law enforcement agency. And we think there's real value. So by adding body-worn video, what they're doing is they're building their silo taller.

In the end, TASER's passionate about open technology and making sure that we're breaking down silos rather than building them. So it's really important to be able to not just manage your own evidence, but help an agency solve problems across the board. I think that was a start. Do we want to talk a little bit more on the camera itself?

Erin Curtis
Head of Investor Relations, TASER International

Maybe touch on some of the high points for that.

Kyle Martin
Video Solutions Product Manager, TASER International

Sure. So when the announcement came out and the picture came up on the web, we said, "Whoa, that looks a lot like ours." I think they've learned a lot from seeing us win 24 major agencies. And so I think they've taken a page out of our book in a lot of ways. And I think when thinking about the workflow, it's just really important to think about how do you manage evidence. And so something where they have a camera that captures an event, when thinking about how do you manage it over time, Evidence Mobile, the mobile application to connect to the device through Bluetooth, really matters a lot more than you might think. It's being able to view right there in the field from a mobile perspective, add information to the video, and be able to upload that information or that video to Evidence.com.

It means that they don't have to sit down at their MDT at the end of the day and type out that information or wait until after it uploads over Wi-Fi at the end of the day and shift and manage on the back end. HD video is also a really interesting challenge in that when thinking about deploying thousands of cameras and capturing an hour or two of video a day, the file size starts to get really tremendous. And so there's some real challenges around how does an agency scale a silo onsite to manage that amount of storage over time.

And so we see a lot of agencies say, "Being HD capable is interesting and important, but our biggest focus right now is on scaling technology over the next couple of years and really making sure that we capture the video we need, but can do it in a manageable and reasonable fashion without sort of dramatically scaling internal resources and support.

Erin Curtis
Head of Investor Relations, TASER International

I think that's great. Does either, sorry, Abe, or Kyle, or Mike, do you have any insights on how competition has influenced your work?

Abraham Alvarez
Product Manager, TASER International

I think we're in a pretty special area where we're basically first to market with a cloud system, right? And when we first tried to launch Evidence.com, everyone thought we were crazy, right? They were like, "Law enforcement works where they have to see the servers. The evidence has to sit in that room." And everybody thought we were out of our minds, but we knew that that was the future. We believed in that strongly, and we've been iterating on that for the last 7+ years. And so that really does give us a unique advantage where we, as Kyle mentioned, the cameras are really interesting. They're a critical part to getting us in the door. But it's really a little bit more about how do you manage not just the cameras, but all the sensors that agencies are dealing with, right?

There's going to be, there's already an explosion of sensors out in the consumer world, and that's only going to trickle down into the law enforcement world, right? And the big problem is how do you manage all of those, whether it's a camera, whether it's a smartwatch, whether you have a heart rate sensor, cadence sensor, etc.? How do you manage all that and present it in a meaningful way back to the agencies so that they can go ahead and take actionable items from that? And Evidence.com is very well positioned to be the market leader in that. And just because, not only because we're first to market, but again, because of our relentless drive to really understand the customer pain points and to be able to develop solutions that directly tackle those pain points. And so from a competitor standpoint, again, I think we're in a very unique situation.

I mean, we are—I think right now our biggest competitors from the evidence management space are mostly in-house systems that have either been custom developed from the agencies or they're just basically putting up a couple of servers and installing that. And there's a lot of difficulties and a lot of issues that come with those systems, right? As was mentioned earlier, usually it's a 5-10-year life cycle where those systems aren't updated for 5-10 years, right? I mean, they have to do all the planning upfront. They have to figure out how much data are we going to be using? How do I manage my security? In terms of sharing, for example, that's a really big problem that agencies are seeing where they're still burning things to disc, right?

I mean, nobody really shares evidence or pictures or videos today using disc, but that's kind of the status quo with law enforcement today. And for Evidence.com to be able to provide an easy way to share that evidence through links, secure links to not only internal people, but also to prosecutors and to do Freedom of Information Act requests to the public in general is a really huge differentiator where the agency doesn't have to spend the time downloading, burning to disc, and then driving or taking a courier to be able to deliver that evidence. It's really a big game changer.

Kyle Martin
Video Solutions Product Manager, TASER International

I think, as they mentioned, one of the areas for the digital evidence management side that we've had competition was they had these in-house systems. One of the reasons we were so excited about the MediaSolv acquisition is that we have a very—we're in thousands of agencies. We're very broad, and we have a very scalable product because of the way that it's built on the technology stack. MediaSolv and the agencies that they're in, you can sort of think of it as they went very deep in the agencies and that they had lots of different types of evidence for those agencies.

As we're looking to grow and continue to grow Evidence.com to be more than just a store of body-worn video because our workflows map perfectly to all the other types of evidence, having their experience on unifying all of the different technology stacks into one system, I think, is going to allow us to get miles ahead. I think that that's one of those areas where we had a competitor that was doing something that we wanted to get a lot better at, and we've now brought them onto the team. I think we're going to benefit a lot from it.

Mike Gish
VP of Weapons Strategy, TASER International

So on the weapons side of the business, the competition, as minimal as it may be, what scares me most about the competition on the weapons side is the safety and efficacy of their product. TASER as a weapon system is the most studied, less lethal tool in the world. It's without question. We have hundreds and hundreds of medical safety tests backing up the safety and efficacy of our product. It has to work, and it has to be safe. These are getting used on human beings. So whenever we have somebody or we hear somebody's in competition with a TASER on the weapons side, the first thing that comes to my mind is, "I would like to see the data to support the safety of their product." And I think that'd be a question that anybody should ask. Is this thing safe? Have you done tests?

Have you made sure that it's safe? And then the other one is quality. Is the company that's competing with TASER on the weapons side of the business strong enough financially to support the quality of the product? Because you remember our mission, protect life and protect truth. There is an officer out there who is depending on this weapon system to protect himself and also make sure that that subject falls on the ground, and we do that in the most safe, effective manner without causing actual injury or damage to the person or the officer themselves. That, to me, is what I'm more scared of, what they're not thinking about than what TASER has already thought about. We've already borne the burden of risk, and we've looked into every medical, everything we can to make sure that it's safe and effective. So that's what's for me.

Erin Curtis
Head of Investor Relations, TASER International

Those are great answers. Thank you. Since you have basically a big part of our product management team here, I did want to see if you guys had any specific questions for them about the products, competition, the market, what's next? No one? All right. I guess just, oh, go ahead. No, it's okay. Please.

Speaker 14

I want to know if Seattle will ever win a Super Bowl again?

Erin Curtis
Head of Investor Relations, TASER International

Very fair question. Who would like to take that?

Kyle Martin
Video Solutions Product Manager, TASER International

Well, I'm a Green Bay Packers fan, so my vote's no, but maybe one of these other guys.

Abraham Alvarez
Product Manager, TASER International

I think it's definitely yes.

Kyle Martin
Video Solutions Product Manager, TASER International

Let's hope. It's team desperate for it.

Erin Curtis
Head of Investor Relations, TASER International

So one last question to wrap up. What has been your favorite moment of being part of TASER so far?

Kyle Martin
Video Solutions Product Manager, TASER International

Someone else wants to start.

Abraham Alvarez
Product Manager, TASER International

I want to spot a little bit. So I think my favorite moment, wow, it's really coming. So I think my favorite moment was when we launched Axon Body. We were at IACP that year, and it was a really exciting time where people kept coming up and saying, "This is what we wanted. This is the right product for us." And it's a really great feeling as you spend all this time and effort getting to that endpoint where the product's ready to be sold and shared with the world and really seeing customers say, "This works. This is what we needed. This is what we wanted. Thank you." That launch around IACP and timing a couple of years ago was really exciting for me.

Mike Gish
VP of Weapons Strategy, TASER International

I have a really hard time picking a single moment. I mean, it's been amazing all these six years. Again, the reason why I'm still here is that TASER's amazing. We've had so many great moments at TASER. I think, to be honest, the most exciting part is really coming into work every day and understanding that what I'm doing today is going to have a really big impact on the customers that we're dealing with on a day-to-day basis. I think, to me, that's the most exciting part. Really, one of the happiest moments is being able to, as Kyle mentioned earlier, is to be able to see the impact that we're actually creating with our customers and being able to see that what we're actually building is actually solving the problems that they're having in the field.

That because of that, they're able to go ahead and save lives in a more efficient manner and be out more on patrol rather than having to deal with paperwork or having to do other things. So, to me, that's an invaluable thing that keeps me coming here every day.

Kyle Martin
Video Solutions Product Manager, TASER International

Yeah. I think everyone's kind of right that it's hard to nail it down to just one particular moment. But I think there's 2 that stand out in my mind. One was when I was actually doing an internship at TASER, and I found in the lobby, we have this book of letters that people have sent in. And I remember reading one of the letters, and it was from a mother who was sending a thank you to us because her son was in an interaction with law enforcement, and they were able to use a TASER to subdue him and get him the help that he needed.

She knew that if the officer basically told her, "It's a good thing that I had a TASER with me tonight, otherwise things would have gone much worse for your son." Just seeing that impact that it had on her life, I think planted the seed in my mind that I wanted to be a part of this team and a part of this company. Then years later, there was an incident in Florida where officers wanted to see a man's home, and they captured on video who was attacking his spouse with a knife. So they had to shoot him in order to get her out of there.

And basically, the chief of police said, "If we didn't have that video, I think we would be having another Ferguson here in this town." Because when I showed up on the scene, the entire neighborhood was out saying that my officers shot a man sleeping in bed. And so hearing him say the words, "This camera prevented something like what we saw in Missouri or what we've seen across the United States," was a moment that really hit home for me that we were delivering on sort of the promise that we were hoping to achieve, so.

Abraham Alvarez
Product Manager, TASER International

So as product managers, we travel quite a bit. And every time I walk through an airport and walk out, and there's a police officer standing there, he's part of the municipal airport patrol or something, and they have our gear on, it always reminds me. And I mean, this is pretty in every airport. Don't we see this? And we always look. Every TASER employee always looks. Do they have our gear on? And we always wonder, "What kind of gear is it? Is it the latest model, the X2 or the X26P or the X26?" And you just want to just look real quick and go. And I do this on a constant basis, and it's a great reminder. That's what we do, is we put our type of gear on officers so they can go home safe and be with their families.

The suspects cannot—we don't escalate the use of force to effect the arrest for the suspects. Every time, that's a great reminder for me.

Erin Curtis
Head of Investor Relations, TASER International

Fantastic answers. I want to thank you guys for sitting down and having kind of a fireside chat with me and for all those here in the room and on the webcast. I think this has been great information, so thank you. Thank you, everyone, for coming today. That concludes our presentation. I can always be reached at ir@taser.com. Again, my name is Erin Curtis, but thank you for joining us today.

Abraham Alvarez
Product Manager, TASER International

Thank you, Erin. Thanks, everybody, for asking questions.

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