Okay..

All right. Great job, Angel and Andrea and our whole IR team. You guys just really did a nice job on that video. I hope our investors enjoyed it. So as you can see from our results, our teams are continuing to execute at the highest level. Perhaps the strongest growth indicator is record bookings of $0.5 billion in a single quarter.

As bookings eventually flow through to revenue, Axon has become a substantially larger business in the coming years. And the momentum is really strong, with sales contracts booked up to 70% year-to-date compared to last year, and we expect another record bookings quarter in Q4.

I'm proud of the results we're delivering in 2021 and even more energized by the opportunity in front of us. We've demonstrated our ability to scale the business and drive leverage in our model.

Now, we're expanding our growth story as we continue to introduce new products, selling to new customer market segments and ad sales channels across geographies. Today, we're addressing an even larger TAM. As you saw in the video, our current estimates point to a total addressable market of $52 billion.

With our top-line projected to reach at least $1 billion next year, you can see there's enormous white space that had. By way of example, in early October AXON had its largest ever presence at the Association of the United States Army's Annual Conference in Washington, DC.

This provided us with an opportunity to showcase our AXON transformative solutions for law enforcement position us to disrupt the U.S. defense market, giving us a seat at the table to begin influencing how the military responds towards to the future.

As I watched the helicopters evacuate our embassy in Kabul, it struck me that the United States has effectively not achieved durable, strategic success in our last 3 wars. And it's not for lack of sufficient lethality. Our military is the greatest fighting machine in the history of the world, with the most lethal and precise weapons.

Yet, the more we killed in Vietnam, the more we lost the hearts and minds of the very people we needed to win over. And the same phenomenon played out in Iraq and Afghanistan. We can no longer kill our way to success in modern conflicts.

And I believe the ability to capture bad actors will become ever more strategically valuable, and we intend to lead the way. As the world news is at a faster pace, Axon is remaining at the forefront of bringing transformative technologies to market. We're innovators at our core. You can see that when you look at our history.

We signed the incorporation papers for TASER at my dining room table 28 years ago. And since that time our mission has remained unchanged, but our organization has significantly evolved. And today, we have a broad ecosystem of public safety products.

We have continually found new ways to serve our customers from disruptive technologies and software, even when they met with initial resistance. We've always said extremely high bars for ourselves at Axon but we found that great challenges make us rise to meet them.

Earlier this month, we held our 6th Annual Axon Accelerate Conference right here in Phoenix, and it sure felt great to be back in person with all our customers and colleagues. The theme of this year's conference, and the topic of my opening keynote, was that change is inevitable and today, technology is moving at an exponential pace.

From virtual reality training to our drone program, Axon Air, to automatic license plate reader technology and transcription, we're unlocking the power of technology to reach our North Star of obsoleting the bullet and outperforming the 9-millimeter pistol and stopping power by 2030. Amid Accelerate, we introduced our next moonshot.

Together with our customers in public safety, within the next 10 years, we aim to cut officer-involved shootings by half. We believe we can accomplish this with new technologies, new training procedures, new policies, and even new regulations to guide the way. In fact, I used to accelerate as an opportunity to introduce a regulatory framework.

The 3 Laws of first respond to robotics to begin a critically important discussion of how we use robotics, not to kill each other, but specifically to avoid harming each other, with new ways to capture dangerous subjects.

Any decision that impacts the human subject for robot must be made by an authenticated human operator accepting legal and moreover responsibility. That are first proposed law, second, there should be no lethal force. De -escalation should be the primary goal in the minimal use of force to stop a threat.

And then the 3rd is that any institute of force deployed by a robotic system should be recorded in full audio video in all user data and reviewed by an independent oversight committee. I will be hosting a Reddit AMA in December to gather public input on these guidelines.

We're proud of our history of increasing mechanisms of control and accountability to ensure that powerful new technologies are used for good from the data logs and the TASER to the very existence of body cameras and our ethical product framework that we use to guide our ALPR development.

And now we are leading the way to set the regulatory framework years ahead of advanced non-lethal robotics technology. We're excited to continue to blaze new trails in our mission to end killing. We were fortunate to close out 3 days of robust, interactive dialogue at Accelerate with a keynote where I got to interview Former President George W. Bush.

He delivered an incredibly inspiring talk, expressing gratitude to public safety officers and calling for civility to all citizens, which is squarely aligned with our mission to protect life, capture truth, and accelerate justice.

And at the end of today's call, we're going to play for you a very powerful moment from Accelerate, so please stay tuned after the Q&A. And with that, I'm going to hand it over to Luke Larson, our President..

Thanks, Rick. Let me start by echoing your sentiment around Accelerate. We believe it all starts with creating a great experience for the customer, which means more than just listening. It's anticipating their needs by mapping technologies to insightful opportunities.

A level of customer engagement we saw this year is a testament to the transformative power of the public safety platform we build. We're obsessed with creating value in a unique way that no one else can by solving real problems with solutions people are willing to use.

Who is a phenomenal week learning from customers from all over the world I could not be more excited for the road ahead. Huge shout out to our marketing sales product teams and really all the employees that are icon and made such an impact on experience.

The business continues to grow at a fast pace, which means recruiting and fostering the best and most diverse talent is critical to our success. Our ability to retain top talent not only allows Axon to move increasingly closer to accomplishing our mission, but also allows us to establish new goals along the way.

To do this, we need to continue creating an organization that is future-proof, resilient to disruption, and at the forefront of innovation. We are currently hiring over 300 roles and we have embraced remote work as an opportunity to expand our talent pool, pooling from the best-in-class resources around the globe.

How our employees spend their lives matter, which is why we put a great deal of consideration into the culture we are creating and the values we want to embody as we build the future. This means we're doubling down on our Jet-I and learning development initiatives.

The teams we built, our unparalleled and it's incredible watching the collective hard work and dedication to our mission. We're laser-focused on how do we attract, retain, and develop the best talent. You know someone great that wants to make a great impact, send them our way. As we round out the year, we feel great about our product pipeline.

We're finishing 2021 with exceptional bookings, which includes $30 million of TASER 7 revenue that we expected to deliver in Q4, but it's now just shifting into the first half of 2022. This is the result of an industry-wide chip shortage that impacted our TASER 7 platform.

The supply chain conversation is universal right now, and while we are not immune, our teams are definitely navigating the situation. We have incredibly strong relationships and a long history with our supply chain partners who are invested in Axon's mission and are aligned in helping us meet our pipeline.

Teamwork is harder than it seems on the surface and as our Company's skilled globally, it requires a consistent commitment to operate as 1 team. We're proud of our supply chain team to have done a tremendous job helping us manage through the global supply chain prices.

While we've experienced some delays and the potential for interruption remains, we have line of sight to clearance in the first half of 2022 and continue to be confident in our ability to meet the needs of our customers and deliver on our annual revenue guidance, in spite of these challenges.

I want to reiterate, we have line of sight to clearing the backlog in the first half of the year. We feel great about our pipeline and hoping to what continues to be a dynamic environment. Now, I will turn the call over to Axon's Chief Financial Officer, Jawad..

Thanks, Luke. I also want to start by echoing the excitement over our Accelerate conference. Meeting with our customers, partners, and employees from around the world was super energizing. It reinforced for me that Axon sits squarely at the intersection of social justice and advanced technology with a mission that galvanizes all of our stakeholders.

These stakeholders include you, our investors. While we weren't able to offer an investor track at Accelerate this year, you've been top of mind for us. In light of feedback we received at our last proxy, we've been conducting a listening campaign to gather more specific feedback from our investors on our approach to governance in ESG.

The input we've received has been invaluable and we look forward to sharing the outcome of these discussions in the coming months. Now, over the past several years, you've seen us invest aggressively in R&D and channel expansion. We've deployed capital to strategic partnerships, putting an early stake in the ground on emerging technologies and trends.

These actions have enabled us to unlock transformative new products like VR and Respond new customer market segments like Federal and Justice, and new geographic regions worldwide.

Today, we're excited to share that as a result of our strategic planning and continued investments, we're projecting substantial runway for growth with a new and updated Total Addressable Market or TAM. Our new TAM is almost double the last one that we shared with you.

While our penetration in this new TAM is still relatively low, it's absolutely our intention to serve these markets with the investments we have in place, which will see us bring exciting new products to market over the next 18 to 24 months. There are two areas in particular I want to highlight.

First, federal, we had Richard Coleman to run our federal business in 2018, and he has since built a stellar team who's performance has exceeded our expectations. We now view the federal team for Axon as a $9 billion opportunity across taser devices, body-worn cameras, demos, and other software.

We count among our customers today, several of the branches of the federal government, including the Department of Justice, the Department of Homeland Security, Customs and Border Protection, and the Drug Enforcement Agency.

We've also been driving adoption of our new multi-jurisdictional sharing feature, which is enabling state and local agencies to seamlessly share evidence with U.S. attorneys.

To better serve federal customers who have sensitive law enforcement information, We've made an investment to ensure our software complies with the Civilian Fed Rate High and the Defense Impact Level 5 security standards.

At these security levels, we anticipate being able to offer a DEM solution to all 90+ federal law enforcement organization s across civilian and defense agencies. After a strong third quarter in which we added $35 million in new deals, we are on track to have another record year for federal bookings. Next, I want to briefly double-click on consumer.

Axon has, since its inception, always had a consumer business, but it's historically not been one that we've devoted meaningful R&D to.

With the ongoing development of our exciting new TASER device technology, we've committed to releasing a host of new personal safety devices over the next few years that will help advance our mission to truly obsolete the bullet. We also intend to begin offering personal safety solutions to mobile applications over this time frame.

In our shareholder letter, we highlighted a TASER device penetration is less than 25% in the U.S. and even lower globally, but that represents the professional user. The penetration in consumer is virtually 0 in an $11 billion market, which means we have a tremendous runway ahead in just a segment alone.

To be clear, we're still very early announcing consumer, but we have the alignment, the technology, the strategy, and most importantly, the mission to drive this growth. Now, before we open up the call to questions, I want to highlight 3 themes that we'd like you to take away this quarter.

1, we are significantly underpenetrated on our growing global TAM. 2, we're delivering against the rule of 40, investing for growth while achieving leverage. 3. Our year-to-date results and outlook for 2022 are a waypoint in towards building a much larger Company that is synonymous with public safety and protecting life.

As we look ahead to 2022, we're carrying a ton of momentum into the new year. Our 2022 revenue projection has strengthened to at least $1 billion on top of what we expect will be at least 25% year-over-year growth in 2021. We added a record $28 million in ARR this past quarter to bring our total ARR to $288 million.

We have an exciting runway ahead of us, and we look forward to sharing updates on our progress in the coming quarters. With that, Angel, let's move to questions..

Okay. Thanks, Jawad and team. And as Rick noted, as we move into Q&A, I would encourage you all to stay tuned. If we have the time, we have a special surprise for you at the end of today's call. Moderators, can you bring everyone up into gal review? Okay. Great. All right. Our first question comes from Josh Reilly at Needham. Go ahead, Josh..

All right. Thanks, guys. Nice job on the quarter here. Maybe we'll just start with the $30 million shipped in Q4 teams or revenue.

Would you expect all that to hit here in Q1 or will be more evenly spread out through the first half? And then what are the puts and takes on the timing of that revenue hitting?.

Thanks a lot for the question, Josh. I think at this point, we do see it hitting in both Q1 and Q2. And certainly, it's a challenging supply chain environment across the world right now and the team's doing a great job navigating through that.

And so, of course, we're hoping we can fulfill as much of that in Q1 as we can, but realistically it'll be across Q1 and Q2..

Okay, great. And then maybe just a follow-up on Fleet 3.

As that's launching here, is there going to be any impact to that production ramp given the semiconductor supply chain challenges? And then, is there going to be any initial impact to gross margin as a result of this ramp due to the Fleet 3 mix coming in as well?.

I let Jawad answer the second part of that question. But on Fleet 3, the demand has been very, very high, higher than we've ever seen for our in-car video products before. So we are shipping a record numbers of Fleet 3 as compared to Fleet 1 and Fleet 2 and we expect that to continue throughout next year.

We are oversubscribed for the product right now and I think that speaks more towards the demand than anything else but we do expect to shift large quantities relative to previous versions in Q1 and moving forward, I'm sorry the Q4 of this year and moving forward and Q1..

Then Josh, the question on gross margins, we're not expecting at this point any impact from Fleet on gross margins..

Awesome. Thanks, guys. I'll move on here..

Okay. Next question comes from analyst Jonathan Ho of William Blair. Go ahead, Jonathan..

Hi. Good afternoon and congratulations on another quarter of strong results.

As we look at your revised TAM estimates, can you talk about maybe why the decision now to sort of update the TAM and maybe what underpins some of these assumptions since it seems like the markets appear to be a lot larger than you previously thought?.

Yes, I'll start with that 1, John, and thanks for the question. So, we've been, as we talked about for the past few years, investing for growth beyond the TASER devices and body cameras, and we've given you flavors here and there of the markets that we're aiming towards the new products and segments.

And what we wanted to do is reflect accurately how the business is oriented today.

Our TAM has been expanding in the past few years, but that's also because the lens that we're looking at our business through has been widening as well, and things like VR, a bigger presence in federal, more of a focus on consumer; these investments are in-flight now, as I mentioned they're still very, very early inning s but its TAM release speaks more to our ambition.

We wanted to align how we're thinking about our TAM opportunity with how we're investing for growth today. And we wanted to make sure that you guys are thinking about the same way that we are..

Got it. And then when we look at this revised opportunity, what are the investments that you need to make to sort of unlock these additional markets? What are the most impactful ones, if you can just highlight that for us? Thank you..

Yes, the great thing about it is it's not a lot of incremental investment. The beauty of Axon business today is that the technology we have for TASER, for example, right? We've been investing in TASER for quite some time. We've talked a lot about the next-generation TASER technology, we're very excited about.

And that technology is going to be able to serve our domestic and international law enforcement markets, it's going to be able to serve our federal markets, correction, enterprise security; it's going to, in a large way be able to translate to consumer as well.

And so what we're really looking to do is gain leverage on the investments that we're already making. The same thing holds true with body camera and DEMS. You look at the body camera and DEMS product, it's really an enterprise solution that happens to be oriented towards law enforcement today and is geared towards law enforcement.

We think that there are other use cases for that technology, and there are new areas like VR training that we are making a new incremental investment. In that content, there the demand is extremely strong. And in drones, here, we're looking to partner a little bit more and find the right partners to help us get into those markets.

But what you should read into this is that we're not looking to really expand or to get too far ahead of our skis as far as investments into new technologies that's really driving leverage from the one that we have..

Fantastic. Thank you.

Okay. Next -- next question comes from analyst Brian Gesuale at Raymond James. Go ahead, Brian. We also have Astrid on the call. so Astrid, if you would prefer to ask the question, you can go ahead and do that as well. Maybe we'll give you both a second and we will go to Paul Chung from JPMorgan..

Hi. Thanks for taking my questions.

So just on your annual software contracts, what the customer is kind of what more of? How are you thinking about the dynamic between the new seats and increase in market share? And what are some of the upcoming features we should expect to kind of further drive that launch there?.

Paul, thanks for the question. I think the good news here is that the product team has done a fantastic job delivering several value-added feature sets over the last couple of years. And we're now seeing the market really start to value those. One of those is performance which measures how officers are complying with their agency policy.

There's updated redaction tools, there's a product called Standards, which is our first module of our records products. And ultimately, as we bundle the solutions together in our officer safety plan offerings, we're seeing more and more customers buy those offerings.

In fact, we've seen about double the number of licenses purchased this year, so far on that plan as last year and we only achieved through the year. The 2 to 3 quarters, I'd say so. There's a lot of runway ahead for customers to continue to adopt a lot of these feature sets that have been released.

And our focus is really through customer success as well as sales, making sure that we do a really good job showing for training of value that these new features have.

So that will be kind of our biggest focal point for our software sales team over the next few hours moving more and more customers into those offerings and we're certainly confident in our ability to do so..

Great. Then on the international front, you saw a very strong growth there, particularly in Europe, where you're seeing pockets of strength there in Europe and where we're seeing the most momentum, and then how the traction been in Asia, you called out that contract there in India; any comments there? Thank you..

Yes, absolutely. Thanks for the question. So those who have been with us a while will recall for a long time, we're really disciplined about proving our international strategy and what we call our tier 1 markets, the UK, Canada and Australia.

And we feel like, we've earned the right to expand beyond those markets now and we've hired out really talented teams in several markets around the world. In EMEA specifically, we're seeing exciting growth in the Netherlands, in Italy, in Spain, in Germany, in France.

In addition to India, where we look at this first contract with [Indiscernible] kind of the first indicator that our strategy there is working, and we're going to continue to build out a team there across 1 of the largest leasing markets in the world.

Another place we're really seeing a lot of success is Brazil, which 3 years or 4 years ago, we were barred from selling into and now, they are again buying both CWs and our video devices.

And so we've got to the point now where both our sales team has localized into some of these markets and our product team is doing a fantastic job supporting our customers in those markets to round out the edges and achieve that last mile of product market fit and it's really coming together nicely for our international business..

Okay, we are going to go back to Brian Gesuale from Raymond James. Good ahead Brian..

Yes. Thanks very much. You've had several really large wins here over the course of the year and some big deployments coming up with body cams as well as a lot of investments to make to continue to support that TAM mark opportunity out there.

Can you maybe talk about how we might see the margins, having flow over the next couple of quarters as you start to bring those customers live and continue to invest in the business?.

Yes, Brian, thanks for the question. I'll take that. So over the long term, I want to reiterate that we're driving the business towards 30% adjusted EBITDA margins, 70% gross margins.

Over the next couple of quarters, I guess the best way to think about it, when we start off year, we have a comprehensive list of investments that we want to make in product and channel, operational excellence, etc., and we set our revenue targets and then determine which of these investments that we're going to fund, as you might imagine, not everything gets above the line.

Now, everything gets a green light. As we over-deliver on revenue throughout the year, we unlocked funding for those items that were below the line because we do believe that we want to reinvest back in the business. We've got a tremendous opportunity to get after these new products, segments and channels, and so forth.

Had we not had $30 million of revenue pushed into 2022, our adjusted EBITDA margins in Q4, would have stayed roughly flat to where they were at the end of Q3.

But because we've been unlocking funding throughout the year for these new initiatives, we're now expecting to finish the year, at the EBITDA levels we've guided to, which translates to roughly 20% adjusted EBITDA margin for the full year. And then for next year, we're going to reset.

Now, in 2 things to note here, the first one is that, the new initiatives that we're funding, things like VR training and federal next-generation TASER, body camera, records and dispatch fleet we're super excited about.

For all these areas, demand is very strong, and just like we saw in 2021, you're going to see any over delivery fall right to the bottom line, you'll see margin tend to tick up. And the second thing note is that, we are in the budget process right now.

We're going to treat 2022 just like we've been treating prior years, which is we're going to make sure -- there are going to be things that are below the line. So the Q4 margin rate, even though it's going to be slightly lower, we're going to view that as an anomaly..

Great, I appreciate that. And then the ARR that you booked in the quarter, I think sequentially it's about as strong as I can remember. Any specific shoutouts to particular lines of software? I know the VR /AR stuff has been -- had a lot of momentum over the course of the last couple of quarters.

How might we think about some of that strength and what it might look like as we carry that momentum into '22?.

Let me take that release to begin with. We're seeing improving the attach rates on our premium services like Respond, which is the live streaming of body cameras.

And on our last call, we talked about how Charlottesville used that capability as they were taking down the controversial statues, to able to see world officers were and be able to tap into live video streams. There's also ALPR, of course, in Fleet. And Respond, as part of our new OSP 7+ premium, which is a plan that includes VR and transcription.

So I think we're also seeing an improvement in the attach rates in our highest premium plan in addition to those individual elements..

Yes, that's right. Actually, Brian, just to formalize, it is a record for us. It's the largest single quarter increase we've ever seen in the IR..

I thought so. Congratulations. I'll jump back in the queue, guys..

Okay. Our next question comes from Keith Housum at Northcoast. Good ahead Keith..

Good afternoon, guys. Congratulations on the quarter once again. Appreciate all the color on the TAM and the penetration.

As we look at your TASER weapons, they had a phenomenal quarter this quarter, can you provide a little color or context in terms of the percentage of weapons that are being sold as replacement or refresh versus really into new users?.

Thanks a lot for the question, Keith. Nice to see you again. Ultimately for us, I think there's 3 or 4 markets right now that, are adopting TASER. And the answer to your question, is really dependent on the market. For U.S.

state in local, ultimately, our motion there is more of an upgrade motion, where folks are -- the majority of the market is upgrading from a Legacy TASER to the new TASER 7.

Now, because we sell cameras and tasers in the same bundles now, we are seeing an uptick in that market in terms of first-time standard issue users, which is promising and we don't think can see -- continue to see that being low into the future.

And then in other markets like, international and federal and enterprise security, we're seeing more and more first-time TASER users --.

So in international, for example, we have a TASER First strategy where we really want to bet on ourselves to deliver a really fantastic customer experience to a customer we've never worked with before and then they'll adopt our TASERs.

And then, 1 year or 2 years later, once we put some equity into the bank there with those customers, we can go back and sell them additional products from our portfolio. And I think federal is a little bit of that as well, and then same with our private security channel.

So little bit of a mixed bag depending on the market, but definitely seeing high demand across all of those markets..

So if you had to aggregate all the numbers, would it be 70% is going to be refreshed, 30% new? Or is it vice versa? Can you ballpark that for me?.

I don't have it off the top of my head. I have keep them prior -- I want to avoid any estimate until I've got the data in front of me so we can come back to you with something like that in a future quarter..

Fair enough, I'll appreciate that.

Just as a follow-up on the supply chain, any chance of supply chain issues looks beyond is a dangerous weapons this quarter into body-worn cameras?.

So I'll take that one Keith, we feel really good about our pipeline. We've been working closely with all of our suppliers. We get to sign contract and committed deliverables into Q1 and Q2.

So at this time, in the first half of the year, we feel really confident we're going to We're going to get rid of the backlog on Tasers and keep the momentum going with our full product portfolio. Now, I would add the caveat, we are in the middle of a global supply chain crisis.

Our team has done a phenomenal job navigating that, and I think our supply chain strategy has proven that out over the last 2 years, and we feel really good about it..

I appreciate. Thank you..

Thanks, Keith. Our next question comes from Jeremy Hamblin at Craig-Hallum. Go ahead, Jeremy..

Him Todd. I'll add my congratulations. Let me first start with a question I think probably for Rick in product development team. So with this ambitious target to make the bullet obsolete by 2030. It's been a few years now since TASER 7.

How many iterations of the TASER products do you expect to roll out between now and then in that 8-year period in getting you to that capability where stopping power can match or exceed traditional hand gun?.

So I would say 2 or 3 product revs, between now and 2030 with [Indiscernible]. I don't know we would just to be really specific, I think by 2030 our goal is to outperform the 9 millimeter. And I think that's 2 or 3 product gens out..

Okay. And in terms of the investment in your R&D team that, needs to be made to achieve a goal like that.

Is that something that, you feel is going to accelerate from what it has been growing at over the last, let's say 4 or 5 years?.

No, not necessarily. The TASER developments are continuing to move along and that business, as it grows, is funding the R&D. I did also, at Accelerate, start to talk about robotics and part of this as well as being able to remove operators from harm's way and some of the most tie risk scenarios and to be able to incapacitate a target.

In addition to the handheld Tasers devices, we know our customers also like, if you have a guy in a barricade situation who is armed or I was just talking with a major police chief earlier about incidents like somebody with a gun standing on his porch; you don't want to get within 25 feet of them.

And so in those cases, being able to deploy a long range system, and ultimately, I've come to believe that, doing that through some sort of robotic is better than trying to develop some long-range rifle, will be part of the Net solution that it will take for us to cut police shootings in half.

We think part that better weapons that, a human can operate themselves. TASER 8, 9, 10. And then also new capabilities, where they might be able to engage particularly dangerous subjects from further distances or even outside of the building..

1. Staffing with new Patrol Officers, whether they're getting the personnel that they need. 2. The evolution with Axon as a partner, in how to potentially stretch the police force that's deployed in public domains a little bit better or more efficiently so that they can maintain their budgets.

What is -- Can you just enlighten us a little bit more about what you're hearing from police chiefs?.

Yeah.

I think one of the things we can do to best help them stretch their budget is to free officers from having these fairly expensive professionals spending a lot of time on data entry tasks and a lot of the work that we're doing, for example, in records may not read us directly on obsoleting the bullet, but it can read very directly on helping agencies leverage their staff.

I mean, effectively, we could double their productivity if officers didn't have to spend half their day sitting at a laptop, typing up records.

And we're doing a lot of work there on the back-office to connect all these sensors we have in the field all the way through, not just into reporting system in an agency, but now moving over into the justice system where you started to talk about how we're finding there's new efficiency needs for prosecutors in courts that are receiving the deluge of digital evidence that we're producing -- that our customers are now producing and handing off and that's creating new and other interesting areas where we can solve a lot of these efficiency problems that translate very directly into budgetary gains..

Are they getting adequate staffing or are they having to rely on you even more as a partner? Because in some cases it does sound like staffing has been a challenge to get.

I think there's a lot of people who feel like they've been, attacked maybe is an inappropriate word, publicly, and they are not looking to sign up for the job anymore but maybe an opportunity for Axon to again stretch those resources..

Yeah. We certainly arguing that recruiting is particularly challenging in this environment. I mean, I do think we're also seeing a shift in public sentiment. I mean, in Minneapolis, the bill to replace the police department did not pass.

I think we're starting to see a shift in our customers are starting to feel it as well where people are just realizing that law enforcement is a really a critical function and we need to have real solutions and that requires thoughtful investment.

Not defunding, but ultimately, as it is more challenging for them to higher than productivity tools do become even more important..

Thanks for the color. Well done. Best wishes..

Great questions. Thank you..

Okay, our next question comes from Eric Stampfel from Morgan Stanley. Go ahead, Eric..

Hi, team. Thanks. Maybe if we could go back to the adoption you are seeing with Records and Respond.

I guess just curious, are customers generally upgrading to those solutions as they're moving to higher value bundles with body camera contracts? Do you see that some customers actually have room in the budget to do that ahead of their existing contracts? Just anything on the cadence of adoption, understand it's still early for most customers..

Yes. Absolutely Eric. Thanks for the question. And ultimately, we believe our products work best together, right. And we believe that, a digital evidence will be at the heart of every police record. Certainly, we're already seeing that trend and we expect that to only continue and grow in the next 5 to 10 years.

And so, right now, most of our customers are buying Records in the same offering -- the OS [Indiscernible] of the officer 's safety plan offering and that strategy is serving us well. Right now, we're doing our best to balance more and more customers signing up for the Records products with nailing the experience for our first adopters.

And we're hearing more and more positive sentiment from our early customers in records to attribute to the hard work or product team is doing to deliver that experience.

And we really believe that stacking one customer onto the next than just doing that enough times to have a really positive early experience and records is what's going to lead to that significant adoption across the market later, and that's the mission we're focused on for now..

Thank you.

And then as we think about consumer and just as you're building out prospects for channels there, do you expect most of that to be in a direct model or are there opportunities to expand into store fronts, I guess just in how we think of the differences of sales model is the consumer opportunity really starts to ramp?.

Thanks Eric. I will take that and maybe turn it over to Rick for some additional color. So today, it's both. Today, we sell through distributors and direct-to-consumers and we certainly plan in the near term to leverage both of those models going forward.

We do think there's an opportunity for us to increase direct-to-consumer with some of the products we're developing. It's not only next-generation Taser but we're also in the process of developing mobile applications for personal safety, and those we're going to be going direct..

Thank you..

I'll just leave it at that. I don't want to telegraph too much what we're doing. We haven't announced in terms of products yet, but we're excited about what's coming..

Very excited..

All right. Our next question comes from Will Power right there. Go ahead, Will..

Okay, great. Yeah, congratulations on strong results. I want to come back to your record, whoever wants to take it. I know you made the comment on the record bookings up 70%.

I'd just love to get a little more color on the key drivers of components of that strength as it, is it dominated by any particular products, geographies you think about something between sensors, taser, international building is pretty broad based but any for the back drop on the drivers, that'd be great..

Let me hand over to Josh. he's just a little closer to the customers in terms of the actual order-flow. I'm feeling broad, general support from the customers. And 1 thing we're hearing is the fact all the stuff works very well together, they see us really being quite valuable.

Historically, police tax systems are sort of infamous for not playing well with other systems.

Josh, how would you answer that question?.

Ultimately, our bookings are a combination of several factors. I think in our core segments, the more and more officer safety plan adoption that we see drives bookings up because it is -- those are our highest ASP offerings. Now, in addition to that, we're seeing international grow very quickly and we're really, really excited about that.

We had -- we're on track for a record year in international by mid double-digit percentages, that's very encouraging to see. We're also seeing that same growth in some of our newer segments, such as the Justice segment had a record quarter, our Enterprise segment had a rough record quarter with private security sales growing.

And then, of course, new products are also contributing, both Axon Air, which is our drone offering, and VR. VR is our fastest adopted product ever, including the TASER X26.

And so, we're seeing just across -- it's the first quarter we've ever had where every single one of our sales teams exceeded their goal in Q3, and we're expecting that type of momentum to contribute -- or to continue across all segments and all products.

Very encouraging stuff and I think that, in his comments to start, we expect to even post a better results next quarter in terms of total bookings..

That's great. And then maybe just a question for Jawad, I know you all provided a revenue guidance or a target for next year. Maybe I missed this, but any framework for EBITDA margins for next year? I know you have longer-term 30% on target.

I know this year you've largely outperformed where you intended to be, you've got investments planned, there were some of the puts and takes we should think about as we put our models together for next year to be in the right sim code..

Yes, I appreciate the question, Will, you certainly nailed the party line. We are driving towards 30% margins long term and we're going to remain opportunistic about where to invest weeks are in the process of setting our budget for 2022.

We have not formerly guided to EBITDA dollars or margin for next year the way that we're thinking about it is, as I mentioned, we have a host of investments that we'd like to fund. Not everything is going to get funded and as we go throughout the year and hopefully surpass our revenue targets, we're going to unlock more funding.

The reason we're doing that is there's just so much opportunity in front of us and it's across a variety of categories. It's cross multiple products, multiple channels, multiple geographies, and I want to make sure that we're keeping our top-line growing and the way we do that is by investing, right? And not focusing on EBITDA.

So, what you can count on from us is we're going to stay disciplined, that's something that Rick and I rest the executive team are very much aligned on. That we want to drive leverage in the business overtime but we also are going to prioritize investing in getting after this TAM that we shared with you today..

Thank you..

Okay. And I think that's everybody, unless there are any follow-up questions. No? All right. Rick, over to you to close us out..

Okay. Well, again, thanks everybody for joining us and we look forward to updating you as we bring the year to a close next quarter. And I do want to close out by sharing a powerful moment that we shared with our customers at Accelerate where we missed having our investors this year.

We celebrated their sacrifice these past few years through the pandemic and widespread social challenges so with that, let's share the moment. Please stay on, folks, don't run to your next call. Take a moment to share this with us. Your investments make this possible..