Axon Enterprise, Inc. (NASDAQ:AAXN) Q2 2019 Earnings Conference Call Transcript

Aug 08, 2019 • 05:00 pm ET

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Axon Enterprise, Inc. (NASDAQ:AAXN) Q2 2019 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good afternoon. My name is Robert, and I will be your conference operator today. At this time, I'd like to welcome everyone to the Axon Q2 2019 Earnings Call. [Operator Instructions]

I will now turn the call over to Andrea James, VP of Investor Relations and Corporate Strategy. You may begin your conference.

Executive
Andrea James

Thank you, Robert. Hello, everyone. I'm Andrea James. Welcome to Axon's second quarter 2019 earnings conference call.

Here in the room in our Seattle R&D office, we have Axon CEO, Rick Smith; President, Luke Larson; and CFO, Jawad Ahsan. Our Chief Revenue Officer, Josh Isner, is also joining us remotely.

This call is being broadcast online and is available on the Investor Relations section of the Axon Enterprise website. You can find our reported results in our quarterly shareholder letter, which we have posted to investor.axon.com, and we have also filed with the SEC.

Today's call will include forward-looking statements including statements regarding our future expectations, beliefs, intentions or strategies including projections regarding revenue growth, profitability and product development. We intend that all forward-looking statements be subject to the safe harbor provided by the Private Securities Litigation Reform Act of 1995.

Axon's forward-looking information is based on current information and expectations. Our estimates and statements speak only as of the date on which they are made, are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict.

All forward-looking statements that are made on today's call are subject to risks and uncertainties that could cause our actual results to differ materially. These risks are discussed in greater detail in our Forms 10-K and 10-Q under the caption Risk Factors. You may find these filings as well as our other SEC filings at investor.axon.com or at sec.gov by searching under the AAXN ticker.

I hope you all had a chance to read our shareholder letter which you can find at investor.axon.com and management's remarks today are meant to build upon the information in that letter.

Please go ahead, Rick.

Executive
Rick Smith

Thanks, Andrea, and thank you, everybody, for joining us today. We're proud of the progress we're making in driving strength in our software business and we had a strong bookings quarter as our sales team really went out and sold the Officer Safety Plan 7 this quarter. There's a lot of positive momentum and underlying strength in the business. That said, the quarter did not meet our expectations. So I want to ensure everyone understands the puts and takes that affected our results.

As you all know, we've been working hard on ramping TASER 7 and all of the sub-assemblies associated with the program. We experienced a disruption in our supply chain when our battery component supplier on the TASER 7 was unable to meet our stringent quality standards as its scale. We have since worked closely with the supplier to help them scale and it is now producing at production volumes. Unfortunately, as a result, about $3 million worth of forecasted TASER