Okay. Hello, everyone. Thank you for joining our executive team for our First Quarter 2022 Earnings. I hope you had a chance to read our Shareholder Letter that we posted to investor.axon.com. The remarks we're going to make today build upon the information in that already robust letter. During this call, we will discuss our business outlook and make forward-looking statements. Any forward-looking statements made today are pursuant to and within the meaning of the Safe Harbor provision of the Private Securities Litigation Reform Act of 1995. These comments are based on our predictions and expectations as of today, are not guarantees of future performance. All forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially. These risks are discussed in our SEC filings. And before we go to Rick, we're going to play our quarterly video.

Great job on that video, Andrea and Angel. And hello, everybody. Thanks for joining us today for our quarterly conference call. As we look at what's happening in the world, never has it been more important to emphasize our values, our mission to protect life and protect truth, especially when life and truth are being egregiously clouded with wanton and reckless lethality with a real disregard for lives lost and where the truth is being distorted and disregarded by Russia in its invasion of Ukraine. As the scaled leader in our category, we are digging into our mission stronger than ever. We are energized about all the great things we're doing and the way our business is scaling. One of the things we highlighted in our Shareholder Letter is our moonshot goal, which is to cut fatal officer involved shootings in the United States by 50% over the next decade. We do not have to accept killing as a de facto part of human existence, not in war, not in policing, not in our homes. We look forward to sharing more with you as this year unfolds. I can tell you, I've been sharing with our customers about this goal, brainstorming how together we can combine product design, policies and training. Just like the energy in the room when we talk with our customers about this, everyone is excited to join forces and reduce killing. Last week, in conjunction with our CFO transition announcement, we raised our full-year revenue and adjusted EBITDA guidance. We're now expecting revenue to grow 25% at the midpoint. And this is on top of 27% revenue growth last year and 28% the year before that. What our growth is demonstrating is what happens when a company builds disruptive products that solve real-world problems and invests in R&D to stay in front as the innovation leader. We're seeing a lot of product successes and not just in TASER and body cameras, but in Fleet in-car cameras with automatic license plate reading and of course, with a growing suite of cloud software, tools and features. We'll be investing some of our expected revenue outperformance this year into new initiatives that will start driving revenue in 2023. One area where we're adding investment this year is international VR training. There's a broad global market for virtual reality training, and it's our fastest-growing new category in the U.S. And we want to stay in front globally by adding new languages and scenarios to accommodate international public safety customers. On a final note, we're welcoming my friend Jim Zito to the call as our interim CFO. As you may have seen this morning, there was a press release announcing Jawad's new role as President of Aira, an exciting new tech company here in Arizona. Jawad remains committed to a smooth transition of the CFO role. On behalf of the Board and the management team, I want to thank Jawad for his dedication and all the work over the last 5 years, helping Axon innovate and grow, and we wish him the best. We couldn't be more excited about Jim and our future. Jim has played a key role in building our world-class accounting and controllership organization, enhancing our internal controls over financial reporting and overseeing the implementation of stronger processes to drive operational rigor to improve Axon's financial results. As we embark on our CFO search, I'd like to share with you my philosophy on leadership transitions. Our next CFO inherits a culture of operational rigor and a very strong bench. I'm looking for a CFO who is energized about capital allocation discipline and who can marry that with understanding how to combine our societal value creation with shareholder value creation. Now I'd like to hand off to Luke who will take you through some of our operational highlights.

Thanks, Rick. You saw in the video we played at the start of the call that we are highly focused on attracting world-class talent, and we feel great about our ability to do so. And in the future, we expect to continue to do this with our mission-driven focus. There are lots of these world-class Axon teammates on this call today. Many are called in, and I want to give them a huge shout out and thanks for all the work that they've done to help us build a great company. Another key execution item for us has been on ensuring that our supply chain meets our ability to satisfy customer demand. The team has executed well on this front. We have a solid plan in place that has enabled us to meet goals, and production has increased in several areas in the first quarter. While we are cautiously monitoring China's latest COVID shutdown, we have visibility into our supply chain supporting our revenue guidance at the midpoint throughout the full year. And the issues we flagged the past 2 quarters that led to an outsized backlog are now beginning to return to more normalized levels. Also, I encourage you to check out some of our key product updates in the Shareholder Letter. Our R&D team is truly staying at the forefront of innovation in the public safety space. Axon Fleet 3 is proving to be a game changer for in-car cameras. To date, we have installed over 6,000 cameras. Fleet 3 transforms the traditional dash camera into one that can automatically scan plates across multiple lanes of traffic at closing speeds of up to 140 miles per hour, making it disruptively affordable for agencies to deploy our automatic license plate reading in their vehicle fleet. And we believe our ethical design framework to protect citizen privacy and data misuse is not only the right thing to do, but it's also a huge strategic advantage. You may have also seen our momentum with Records is starting to accelerate. We just had a major city launch in the Tucson region. That brings us to more than 25 agencies with nearly 11,000 sworn officers live on Axon Records, including 9 that are already using it to fully replace their legacy records management systems. We remain excited and confident in our long-term trajectory. Our short-term focus is on driving customer success, one deployment at a time. Speaking more broadly, we recognize that there is a growing sense of macroeconomic uncertainty. As we execute against our robust pipeline and look further into the future, we remain incredibly confident in Axon's long-term positioning. We have stellar teams across the organization. We are product and category leaders. Our customer relationships are strong and unrivaled. This is all underpinned by our enduring mission to protect life while continuing to accelerate the Axon growth flywheel across devices, workflow and intelligence and always with a long-term mindset. I'm proud that over the last 5 years, we've had a real focus on scaling a great business with operational rigor and financial discipline. These are areas where Jim Zito has been an instrumental leader. And as we build the future, we will maintain that rigor. Now I'm super excited to turn it over to Jim for his first earnings call.

Thanks, Luke. Hello, everyone. It's great to be joining you today, especially at a time when the business is demonstrating tremendous momentum. I'd like to share some of my background in the role I've played over the past nearly 5 years at Axon, building a strong culture of financial rigor and discipline that Rick spoke about. I joined the company in 2017 after previously serving as the Global Controller of GE Healthcare Digital, a nearly $2 billion global software company inside General Electric. I spent the first 8 years of my career as an auditor at PwC, and I've seen the insides of Fortune 500 companies and how they operate at scale. These experiences prepared me to have an impact at Axon from the moment I arrived. I have helped to build out our accounting and controllership organization, enhancing our internal controls and overseeing the implementation of stronger processes to drive operational rigor to improve our financial results. I've partnered with our SVP of FP&A, Arvind Bobra, and other cross-functional leaders across every part of our company to lead the creation of the internal culture necessary to enable our culture of rigor and discipline to succeed. You've seen that translate to our results. We've established an impressive track record of execution at scale coupled with cost discipline and strategic capital allocation. We remain confident in our ability to continue to deliver accelerating growth, profitability and cash flow. I'm energized by this opportunity to support the company as Interim CFO. This is a natural transition given my role over the past 5 years. I'm honored to lead our world-class finance team, and I've already hit the ground running. To touch upon a few themes related to the quarter. In February, we added adjusted free cash flow targets to how we talk about our financial strategy, and we've started to deliver already. In Q1, our operating cash flow of $44 million supported $32 million in adjusted free cash flow. We've raised our full-year revenue outlook to a range of $1.05 billion to $1.1 billion, reflecting 25% annual growth at the midpoint. And our upwardly revised adjusted EBITDA outlook reflects improved bottom line expectations as well as the opportunity to invest some of our revenue outperformance into new initiatives that can start contributing revenue quickly. And with that, we look forward to taking your questions.

Thank you, Jim and team. Can we bring everybody up into gallery view? There. And thanks analysts. I have you all in the queue. I see you putting your hands up. We will get to it. We'll take our first question from Jonathan Ho at William Blair.

I just wanted to start out with the guidance raise and maybe try to better understand what's giving you the confidence? What is it that you're seeing in the demand environment to raise the revenue guidance so much early in the year?

Yes. Thanks for the question, Jonathan. Ultimately, it's a few things. The first is we've got a really, really strong team that's doing great work around the globe across a lot of different products and a lot of different markets. And this diversified revenue strategy gives us a lot of different ways to achieve our goals. Now when we combine that with bookings from last year and years prior, which is a really good forward indicator of revenue and just the strong pipeline that we've built up through this year that we see a high probability of closing, I think it just gives us a lot of confidence across the board. So certainly proud of the way the team came out of the gate in Q1, and we hope that's the low point of the year moving forward.

Excellent. And then just in terms of some of your commentary around the supply chain, can you talk a little bit about what you're seeing, how you've been able to navigate the challenges? And just given some of the uncertainty around China, what again sort of underpins your confidence that the supply chain issues now persist?

Yes. Thanks, Jonathan. I would just reiterate, we're monitoring that situation, and we also have line of sight to the guidance that we’ve provided. We've been able to bring down the backlog, and we've got a diversified product portfolio. So if we do see a single issue, we can actively manage that and de-risk it. One key highlight, I would give our supply team a huge shout-out. And that when they go out and they're talking with our suppliers, our strategic plan and mission align with the type of orders that they want to fulfill. So what we're hearing is that they'll prioritize Axon because of our life-saving products over other companies that might not have as critical impact in the world. And we've just got a ton of confidence in the team and the results that we've delivered in the last 6 months and the outlook for the next 12 months.

Thanks, Jonathan. We'll take our next question from Sami Badri at Credit Suisse.

It's also my first conference call, so I appreciate the time. My first question is you've raised adjusted EBITDA for the year, but you did not increase free cash flow. So I kind of wanted to just get a little bit of an explanation around that given profitability stepping up? And the other piece is, it sounds like you guys are working on a lot of products with a good bit of demand in this demand backdrop environment. Is there a reason why you would reinvest a lot of the incremental cash flows into even more CapEx and build out an even bigger platform to service public safety?

Yes. Thanks, Sami. I can take the first one. So this is the first year we've added free cash flow guidance, and we've got a fairly wide range. I think the main driver of why we didn't update the free cash flow guidance is largely the revenue outperformance is going to be spread over most of the rest of the year, and there's typically a lag between that revenue over-delivery and sort of that translating into cash. So we could see some of that cash flow over-delivery slip into Q1 of next year.

Got it. That clarifies that part. My other question is about supply chain constraints. Did you incur any specific charges to expedite certain components and parts to ensure timely deliveries? Or have you generally been receiving prioritization from your suppliers due to the importance of the products you're shipping to public safety individuals?

Yes. Great question, Sami. So we actually have been paying some expedited fees to get our components in. But our business, again, is firing on all pistons where we've been able to expand some of our product gross margins that have offset those increases, and this is just an example where we feel really good about the overall mix of our business and the strength of our operations.

And welcome, Sami.

Okay. We'll take our next question from Eric Suppiger at JMP.

All right. A couple of things. First off, can you expand a little bit on the question earlier about the supply chain constraints? Have you done anything differently in terms of your inventory management or your purchase commitments? Have you been able to lock in agreements better than what you had before?

Yes. Great question, Erik. Most companies pre-COVID had a just-in-time manufacturing methodology. And Axon really never had that methodology because our products, we have a 5-year life on the TASERs and 2.5-year life on the cameras. And so we manage more to our business where oftentimes, we would have up to a quarter or 6 months of inventory based on demand and forecast and actually gave us a good buffer going into that downturn. Throughout the last 18 to 24 months, we've been proactively working with our suppliers to ensure that we can meet delivery for our customers. In some cases, we have bought up at-risk components to further that as well as looked at different supply chain strategies to make sure we can deliver for our customers.

Okay. In terms of supply constraints, are you experiencing improved deliveries now compared to 90 days ago? Let me rephrase that. You mentioned a $50 million deferred business. How much of that was realized in the quarter, and how confident are you that it will be realized in the first half?

Confidence is high. It falls in the first half. We did ship some of it in Q1, but we also couple that with really strong demand out of the gate as well. And so we'll continue to ship into Q2 here. And certainly, to answer your question, the outlook from suppliers is getting in terms of the commits into Q2 is getting more promising. So certainly, on track to clear the remainder of the backlog in the first half of the year while delivering another really strong revenue quarter in Q2.

Yes. That Q4 it was sort of a bit of an anomaly like higher-than-normal backlog that slipped into the first half of this year, I think we'll get back to more normalized levels of backlog sort of from here going forward.

Yes. Just to add some more color to your specific question around is our service from suppliers better today than it was 90 days ago. We would see Q3 probably the middle to end of Q3 last year is a real low watermark in terms of just not being able to get commitments and having to kind of manage that hand upstream. In the last 6 months, we've really worked with our suppliers to ensure we can get those commitments. And we feel just reiterating really good about the year outlook.

Okay. Then one last quick one. Jim Zito, are you one of the candidates for the CFO position? Or what is your status?

I have been heads down for the last week, focusing on executing for the quarter. And for us, it's business as usual. We close the books every 3 months. So we've got a great team focused on that. I think as the process plays out, it's certainly a very attractive position. The company is clicking on all cylinders. It's got a great mission in the world, and I'm confident that Rick and the Board and the team will consider some internal and external candidates, and it's an attractive place to be.

Let me add some color there, too. Yes, Jim and I have talked about this. In any senior position like this, we want to make sure we run a really rigorous process. And so we're going to want to make sure that we get a full raft of qualified external candidates as well as internal candidates. And then this gives us an opportunity for Jim to try the role on as well and see how he enjoys it compared to his role here as Controller. I would say, with very high confidence, there's a role for Jim on the team going forward, and it may be the CFO role. It may be returning to Controller. And we're just going to make sure that we've done a process that gets us to a level where we're really confident that we've got the right team and the right positions for the next decades.

We're going to take our next question from Scott Berg at Needham.

I got a couple here. I wanted to start with the cloud revenue growth in the quarter, up 47%. It's clearly seeing a lot of momentum over the last year. This is an area that's been growing in the, we'll call it, low to mid-30s for an extended period, but 47% is a nice movement upward. How should we think about the acceleration in the revenues in that business? Is it more driven by Evidence.com or the layering in of some of the customers that went live on Records or some of the VR training? My guess is it's a component of that, but I didn't know how you might break that up between those different product areas?

Yes. I think ultimately, we're adding a lot of new users every quarter onto our platform. And a lot of that is within just new body camera users that were an agency might have bought but not get started, but is now kind of going to full deployment. And so as we deploy more and more of those users, it certainly adds to service revenue with the same dynamic with Fleet right now. We really feel great about the trajectory of our in-car video business and certainly that's helping as well. And then some of our kind of up-and-coming offerings like some of the software add-ons as a result of selling more and more of our officer safety plan bundle, combined with VR licenses, there's a lot of factors that are all contributing to the growing service revenue. And I think the top line though is deploying more and more devices around the world that come with those licenses.

Yes, that's right. Just to add on there. And as Rick talked about earlier, we're incredibly gratified to be able to just keep building out our ecosystem and expanding on all of those vectors, right? So it's the combination of existing customers upping into our higher-value bundles and plans. And it's about customers even outside of those, adding à la carte add-ons for our diverse range of new products, both premium features on top of our classic products like Evidence.com as well as new things like VR and across the board and then doubling down on that the expansion into new market segments like federal and justice and the others and global expansion into other geographies. So across all 3 of those vectors, we're just seeing both new logos and existing ones growing their bet on the Axon ecosystem with our products.

Great. Helpful. And then from a follow-up perspective, a question I've actually received multiple times recently is product penetration or how to think about penetration rates on a couple of areas? I think we all understand TASER, at least domestically with the police workforce in the United States probably has a high penetration rate. But how to think about TASERs and body cameras on a more global basis, where are you in the penetration rates? And I feel like I was set up on this question because in a headline on my local newspaper very top right now is all Minnesota Trooper is now wearing body cameras. They're obviously Axon devices given they're tied in with TASERs. But how should we think about penetration rates, especially in the body camera side, given all the things that are happening around Justice and other areas today?

Yes. I think we have a very intentional strategy there, and we've had that same strategy for some time now, which is to really fortify what we would call the Tier 1 markets, the UK, Canada and Australia and try to become the market leader across both less lethal and body cameras. And I think the teams executed really well in that regard over the last few years such that we're able to expand our focus beyond that now into several other large markets around the world. And so now we're really focused on repeating that same mechanism in those markets, building up a sales force that's capable of selling both products, working with early customers and then kind of using that same land and expand approach to growing and becoming the market leader in those categories. And so I think we're doing this in a very calculated way to make sure that we can really be successful in every market we enter. And I'd include the federal government in the United States as part of that as well. And we continue to scale up teams that are capable of delivering those kinds of outcomes. So we feel like there's plenty of room to grow outside of the United States and in the federal government, and we'll continue to execute to fulfill that total addressable market as we go here.

Yes, building on that, even in our traditional categories like TASER and body cameras, our market penetration remains relatively low, indicating significant potential for growth. For instance, even with the existing presence in the body camera market, introducing new products can broaden the overall opportunity. One of our fastest-growing offerings is Respond, which involves live streaming and additional connected camera features related to the body camera. As customers who have previously purchased body cameras upgrade to this new feature, either through a bundle or individually, it demonstrates our ability to further develop the category, even when the fundamental market is already occupied.

Next question from Will Power at Baird.

I have a couple of questions. First, I want to follow up on the growth in cloud revenue, particularly in the Records business. It's great to see an increase with 25 agencies now using it, and 9 of them are approaching full replacement. I'm curious about what factors are driving this increase in adoption. Have any new features been added? How should we view the future trend? Can we expect to see a few more key Records customers added every couple of quarters? What helps maintain this momentum?

For those who have been following Axon for some time, I recall a couple of years ago when we introduced the Officer Safety Plan, which included Records as part of that bundle. Since then, several major cities, counties, and state police agencies have adopted this plan, with the option to activate Axon Records. Some agencies are starting with the initial module of Records, which focuses on standards, while others, like Tucson, are fully committing to the Records product and deploying it rapidly. We have a strong pipeline of customers ready to implement Records. We are continuing to invest in the necessary resources, including professional services and deployment personnel, to speed up the adoption of Records. It's exciting to note that we recently went live with Tucson, and the implementation went smoothly, allowing us to move on to the next customer without any significant issues. We anticipate more successful deployments in the Records product and have great confidence in our teams across product and services who are involved in this rollout. We are very enthusiastic about the future of Records.

Great to see some success there. Maybe just switching gears, a big focus everybody has been in Europe. I'd love to get your perspective on any kind of Ukraine-Russia exposure? I think you have a small customer in Ukraine, but I think it's pretty small. But more broadly, how are you seeing that conflict impact sales trends, appetite for our broader suite of products kind of across the continent growth?

I think in Ukraine, we do have a small TASER business there, and we'll see what the future holds. Certainly, obviously, a very tragic demand over there over the last couple of months here. I would say, across Europe at this point, the nice thing about our products is they have applicability every day regardless of kind of the state of current affairs. And so we continue to see strong demand, both in terms of the desire for more transparency across public safety and also an alternative to the bullet. And so I really believe that we're seeing a lot of really exciting growth indicators in some major European markets. I'm sure we'll talk more about those as time goes on here. But Europe and kind of the demand in Europe continues to grow in both product lines.

Okay. We'll take our next question from Keith Housum at Northcoast.

I'm not trying to get too far into the details here, but I kind of noticed like the TASER X2 and X26P. The volumes were down significantly, I guess, year-over-year. And obviously, they're very valuable. But I know you guys have plans for the next generation of the TASER device as well. So perhaps could you just provide color in terms of the plan for the TASER portfolio and where it's heading? Was it focused drawdown on the older products now or what not?

Yes. I think thing is largely just a shift in demand. The TASER 7 is really sort of hitting its stride. And now we do still have customers, particularly those that have really long approval timelines in international and federal spaces that might still be on some of our more legacy devices. But I'm pleased to see that I think we got it right with TASER 7, and it's really hitting the mark. And of course, our goal of next-generation systems is to continue to move the ball downfield towards making the bullet obsolete.

Great. I know you've been working on this. We observed a decline in the recurring payment base for the TASER Weapons, dropping to 45% from 54% last year. Was this mainly due to international sales this quarter, or is there another reason for the decrease in that trend?

Yes. That metric is largely dependent on the mix. So when we have kind of a number of international shipments that can bring that down. I'd say there's no change at all in terms of the momentum of service plans in the United States or in our Tier 1 markets. In fact, I believe every TASER that has been sold in the UK that is deployed right now is on a payment plan. And I think we're looking to repeat that in Canada and Australia as well. And so when we get some of these one-time large orders from markets outside of our Tier 1 markets, they're generally not on plans. Some of that's due to the risk of collectibility if we're working with a first-time distributor or a first-time customer. So there's a lot that goes into that, but I wouldn't say there's any developments that would give us less confidence in that metric over time.

Next up, Eric Lapinski, Morgan Stanley.

Maybe if we could just talk about Fleet for a second. I know you guys talked a lot about the early traction you're seeing there. I guess I'm curious, is that mostly coming from maybe customers that weren't already on-body cameras and have had in-car cameras? Are you seeing kind of a cross of using and deploying both? I tend to think like state police may be having gotten on-body cameras. So just wondering if the early interest in Fleet is more from that angle or it's on-body camera customers already?

We are very excited about Fleet in general. It serves as a great case study, showcasing how the initial product established its use case, and the subsequent versions have solidified our position among the market leaders, if not making us the leader in that sector. Customers in the state police often conduct most of their patrolling on highways, making Fleet a natural product line for their adoption. We're also seeing interest from cities and counties, where it acts as a supplemental tool to body cameras, which has been encouraging. Looking ahead, one of the most exciting aspects of Fleet is the potential for the adoption of additional software within the offering. ALPR, or license plate recognition, has quickly become one of our best-selling add-ons, as customers appreciate this extra capability at a significantly lower cost than they are accustomed to, allowing deployment in every vehicle, something they haven't historically done. We are certainly looking forward to what the future holds for Fleet and the additional revenue opportunities that come with the core system.

Yes. Let me address this as well. We secured deals for Fleet 1 and Fleet 2 because customers appreciated our body cameras and the accompanying software. They purchased our Fleet cameras primarily to integrate them with their body cameras. For Fleet 3, we are competing directly with the market and it stands out as the best in-car video system available. We have customers who have never used our body cameras purchasing it, and it is outperforming other systems, particularly in terms of ALPR performance. I must commend Jeff and his team for their outstanding work. The imaging design of these systems offers one optimized image for capturing three lanes in poor lighting conditions at high speeds while still maintaining ALPR capabilities, along with a second image focused on achieving the right resolution while balancing video size and performance. We now have what I believe to be the best body cameras, the best Fleet cameras, and undoubtedly the strongest software ecosystem. This is why the demand for Fleet 3 is exceeding our expectations, and the attach rate for ALPR is also better than anticipated.

Okay. I can't resist one really small build on that as well. Thank you for that great information on both. I think one of the things that speaks to why something like ALPR built into every single vehicle at a disruptively affordable price is a game changer for the mission impact too. Because if an agency only has a few cars with an old school expensive ALPR unit, then when they are going to get a hit on something it's going to be piecemeal few and far between where those vehicles happen to be any moment. But the immediacy of every vehicle, they're just driving down the road going to wherever they're going and instantly if a stolen car or whatever it is just happens to pass them 3 lanes over, boom, it alerts and they can action on that immediately because they're physically present right there. And that match of having every single vehicle have that capability because it's become disruptively affordable and effective is a perfect example of technology enabling the mission combined with the right business model for it.

I appreciate all the information. Can you explain the contract cycles for Fleet and the replacement cycles for that product compared to body cameras? Are they typically similar, like a 5-year contract with one or two shipments during that period? It would help us understand the differences in the actual hardware cycle.

For body cameras, our typical contract length was historically 5 years, but we're now seeing it extend to 10 years with some of our largest customers, which is very encouraging. This means that customers receive their initial cameras upfront, followed by a refresh of cameras every 2.5 years. In contrast, Fleet has a 5-year life cycle. This is beneficial for agencies, as reinstalling camera systems in vehicles is more complex than simply swapping body cameras. Therefore, there isn't a strong demand to speed up that cycle. So, we have a 2.5-year cycle for body cameras and a 5-year cycle for Fleet.

There's one other thing I feel compelled to add. It's not just the hardware. Our real secret lies in the mission mindset of our people. I know that can sound cliché, but I can tell you that we recently had a major state control switch from a competitor to Fleet. They invited me to celebrate the program manager who led the installation, which was Jenny, and she did a fantastic job. It's hard to overstate the importance of having passionate people. Jeff and his team received tremendous praise after a recent significant software launch. The chief called me and said they felt they could rely on us, that we were in the trenches with them. Nobody was saying it's not my job, and nobody was leaving at 5:00. We had people there past midnight helping bring that agency online. This is the intangible thing you'll never see in our financial statements. It's impossible to represent it there, but it’s likely our greatest competitive advantage—having passionate people who are dedicated to our mission.

Right. And last but certainly not least, Paul Chung at JPMorgan.

All right. So just on the commercial sector, can you kind of expand on the momentum that you're seeing across verticals? You mentioned some key wins there. Where are you seeing some of that momentum? And how is that market evolving? And how material can this be over time? I have a follow-up.

Let me start with an introduction before handing it over to Josh for further details. We have managed to address a very challenging use case: the critical interactions between police and the public that occur in challenging environments where failure is not an option. The videos generated from these interactions must be safeguarded to comply with federal and state evidence rules. The level of security and reliability we have established for this demanding area is now extending into less critical applications. As you can imagine, there is a significant opportunity to record various interactions globally, whether it's a delivery person making a drop-off or a paramedic attending to a patient. Currently, most of this documentation is done using pen and paper or typed on a computer. We believe that the video recording solutions we developed for law enforcement can now be applied to other areas to achieve significant efficiency improvements. By documenting human interactions more comprehensively, we can create a more complete record of events. Furthermore, we are developing tools to extract transcripts and gather metadata from these recordings, which can then be organized into more structured data formats. This capability could be beneficial for nearly any enterprise looking to document their interactions effectively. With that, I will pass it over to Josh for more specifics.

Yes. I agree with everything Rick said and our small kind of scrappy team working on this by Mike doing a really good job kind of finding our early customers. And just like in the public safety space, getting those early customers happily deployed leads to kind of more and more opportunity, and we're in that phase now. And we've already signed contracts with some really big names that are household names in terms of other vendors in the commercial space that are deploying our products and we really believe this is a big part of our future. I think we're, at this point, not making many product investments and seeing kind of still these companies adopt body cameras and the Evidence management software. And I think going into kind of our next round of planning, we will make some more investments to make this even more attractive to future customers outside of public safety, and we're really excited about where that road leads.

Yes. I know you started with the Arizona Diamondbacks, but can you work at a league level to expand across the whole country with different sports leagues? Is that part of your sales strategy as well?

We can, and we will, but that still represents a pretty small total addressable market in the grand scheme of things. I think we're focused on deploying with like Fortune 500 companies that see a need for this, whether it's last-mile delivery services or retail or other risk management opportunities. Whether it's in hospitality, there are some really kind of clear use cases where we're getting a lot of positive feedback on the use of cameras, and I think we're seeing it at kind of a macro level as well. In the UK, there was some coverage about the deployment of body cameras in retail, and we're seeing that same thing in the U.S. So we're excited about where this will lead.

And lastly, the consumer segment. So what's been the reception of the StrikeLight? Is it tracking your expectations? Are you seeing some momentum in consumer? Or will that kind of take some time for adoption there?

I can elaborate on that a bit. We have been intensifying our focus on our core business and preparing for its delivery. Our consumer business remains a relatively small segment of our overall operations. However, the demand for the StrikeLight 2 has been strong, and I believe I might be the top buyer, as I've been sharing it with friends and family and receiving positive feedback. That said, it might be a bit early to make definitive conclusions.

Yes, I would say we're proud of those products. They are nice refreshes, but they're not going to lead to explosive exponential growth. They will contribute to continued positive growth in the consumer segment. As we consider next-generation TASER technology, I think that's where we might start to see developments that break away from the historical demand patterns we've experienced. So stay tuned. I believe you'll see innovations introduced to our core market first as we aim to phase out the bullet. From there, we'll utilize some of the newer technology that I think could significantly increase consumer adoption.

Thank you. And Jeremy Hamblin from Craig Hallum has joined the call. No, no? Okay, good. I didn't mean to put you on the spot. Okay. Is there anyone who has a follow-up? Do you want to put a hand up? Give you a second here. Okay. We don't have anyone else in the queue. Thank you so much for joining us. Rick is going to close this out.

Awesome. Well, hey, we know it's been a rough environment out there for all of our investors. As I tell my team, we try not to focus to at all really on things that are outside of our control. I'm really proud of the results the team has continued to turn in despite all the challenges the world has thrown at us. And we see, obviously, for us to raise guidance in this environment took a fair amount of confidence for us to look across the business and have the confidence to come forth and share an increasing outlook when most of the world is pulling back. So I couldn't be prouder of the team, more thankful of our investors, and we're excited for the future. So we look forward to seeing some of you at ACCELERATE later this month and back on our earnings call a few months from now and the Shareholder Meeting, of course. We've got some busy times coming up. So thanks, everybody, and thanks again to our fantastic team for just continuing to deliver.