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Axon Enterprise (NASDAQ:AAXN)
Q2 2020 Earnings Call
Aug 06, 2020, 5:00 p.m. ET

Contents:

  • Prepared Remarks
  • Questions and Answers
  • Call Participants

Prepared Remarks:


Operator

Hello, everyone. Welcome to Axon's second-quarter 2020 earnings conference webinar. I'm Andrea James, SVP of corporate strategy and investor relations. Thank you for joining us over Zoom.

We do appreciate that today is a particularly crowded earnings day and our thoughts are with those of you who are dealing with the tropical storm. Today, we have available Axon's CEO, Rick Smith; President Luke Larson, CFO Jawad Ahsan, Chief Revenue Officer Josh Isner, and Chief Product Officer Jeff Kunins. We feel great bringing you guys the whole team. First, we're going to give prepared remarks, and then, we'll bring our analysts on camera for questions.

[Operator instructions] I hope everyone has had a chance to read the shareholder letter, which we released after the market closed. You can find it investor.axon.com. Our remarks today are meant to build upon the information in that letter, which is very robust. If for some reason, there's an Internet outage beyond our control or we lose Zoom connectivity, we'll make every effort to post a copy of our prepared remarks to investor.axon.com this evening.

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. OK. Please go ahead, Rick.

Rick Smith -- Chief Executive Officer

Thank you, Andrea, and thank you, everyone, for joining us today. During our last quarterly update in May, one of the biggest issues we addressed was how we were managing our business through a pandemic. One quarter later, we have so much more to talk about because we've all watched thousands of people take to the street demanding -- holdings in public safety reform. Our company's reason to exist, our mission is for exactly moments like right now.

Protect life, we are on a mission to make energy weapons so safe and so effective that we make bullets obsolete. We preserve truth. Body cameras protect officers to bad claims and citizens from bad behavior, increasing transparency and reducing social conflict. We accelerate justice with advanced cloud software and AI that have potential to make the entire justice system more fair and more effective.

When you think of gun bans, social conflicts, an unfair justice system, most people don't think of these as technology problems, but it's political problems. We frame them there's problems where technology can play a transformative role. Now technology is no panacea yet and it cannot solve these problems for us. However, almost any problem can be solved faster and more effectively with the right technology tools to help people solve them.

So as we look at all the pain and anger today, we ask ourselves what can we do to help promote equity. Our super power is creating technology to address social problems that many others see as intractable. So we've added a fourth mission to inspire our work. Centering racial equity, inclusion, and diversity, which might make you wonder how can you build technology to promote equity? If you want to hear specific examples of how we are using technology to support this new mission, you'll have to wait and come join us at our conference Accelerate later this month.

We've made Axon can't change the policies and cultural norms in policing, but we can build the tech tools to help our customers do it. We're hearing consistent and emphatic calls for change from the most prominent leaders of law enforcement and we are excited to build the tools to help them. Back when we began investing in body cameras in 2008, we faced innumerable skeptics, but we knew that body cameras were the future. And body cameras started to gain traction after a wave of protests began in Ferguson, Missouri in 2014, which was really the birth of the Black Lives Matter movement.

At the time, we were delivering the right capabilities at the right time and our investments in cloud software made body cameras suddenly feasible and affordable for all agencies. We invested in body cameras when nobody believed they were possible, and as the investment community well knows, our core body camera and software business lost money from 2008 to 2019 when it began to turn to profit. Those 11 years of continuous investment in R&D to prove that the feasibility and sustainability of body cameras are now the foundation for our next leg of growth. In 2020, we're humbled to be developing solutions that once again find themselves relevant to a national conversation about policing.

We do not shy away from these hard discussions and we see the pain and the nuance behind demands to define police. This is really all about reforming and reshaping the justice system and these are issues that we engage with daily. They're not new to us. We invite input from a broad spectrum of voices.

We have the industry's most relevant and productive ethics board. With renewed calls from reform, we can leverage technology and policy changes to improve public safety. We believe that our product moment fit is why our pipeline continues to strengthen as communities see the power of our platform to drive positive change. And now with that, I'm going to turn it over to our president, Luke Larson.

Luke Larson -- President

Thanks, Rick. In a few weeks, on August 25th, as Rick mentioned, we'll be hosting our annual technology summit Axon Accelerate. Due to COVID, we've shifted this to a virtual event, which has allowed us to grow the event to reach a much bigger scale of our audience and customers. We're also able to offer a cutting-edge virtual reality track.

If you'd like to attend, go to axon.com and register. We're very excited to share some key customer updates and product announcements on how Axon can help officers and the communities they serve ensure everyone makes it home safe. Our strategic priorities in 2020 are to continue to execute in our core market while accelerating our path to market in new product categories. Our engineering and product teams are solving some of the most difficult problems at the intersection of the physical and digital worlds to advance our mission.

This is also a year where we have walked beside our customers in one of the most challenging environments they have ever faced. Our customer-facing teams have built amazing relationships with our customers, not by selling devices or software. But by becoming trusted advisors on how we can help customers with the important problems they are facing. We are helping them to source mission-critical technology amid greater public budget scrutiny helping them to access federal dollars where available and we aspire to be true partners to our customers.

We are emphasizing the mission-critical importance of our OSP 7+ offering, de-escalation, transparency, and productivity have never been more critical to police and community relations during this watershed moment and our offerings address these exact situations. This emphasis drove our Q2 results with revenue up 26% year over year. This is a strong performance in the context of one of the toughest macros we've faced, a global pandemic and massive economic uncertainty. Our strong results were also driven by a stellar quarter for international, up 80% year over year to $34 million.

This was on top of 38% international revenue growth in Q1. We are just getting started in large markets such as Brazil and India and three countries topped $1 million in revenue for the first time in the quarter; Indonesia, Panama, and Thailand. Turning to the bottom line. GAAP income was affected by stock-based compensation and tax expense.

Adjusted EBITDA was $28 million, reflecting a 20% margin, which showcases our cost discipline and some travel savings related to COVID. Turning to operations. You will see the inventory build on our balance sheet. This was very intentional.

We have adopted well -- we have adapted to an ongoing supply chain environment that we've never seen. Recall that last year, we diversified our supply chain and global manufacturing footprint due to tariffs and it turns out that those initiatives positioned us well to handle COVID-19. Even so, given the number of unforeseen challenges that could lay ahead and the fact that 2020 is full of curve balls, we've elevated our inventory build in the first half. This safety stock helps minimize shipping disruptions and also prepares us for some key Axon Body 3 shipments to major customers in Q3 and taser orders we are expected to fulfill in the back half of the year.

Currently, we expect Q3 inventory levels to remain about the same. And by the end of the year, they could come down by as much as 10%. And with that, I'll turn it over to our chief financial officer, Jawad.

Jawad Ahsan -- Chief Financial Officer

Thanks, Luke. Our second-quarter performance was a testament to our ability to deliver sharp execution in a challenging environment. Although demand remained robust, domestic customers were often baned with constraint, dealing with COVID-19, personnel outages, employee safety concerns, and caution about uncertain budgets. Even with these challenges, Q2 revenue was generally in line with our pre-pandemic expectations.

Domestic body camera bookings remained strong and our international expansion continues to accelerate. Our results in the quarter speak to our resilience as a company and the critical importance of our products and our customers' lives. A few years ago, we set out on a journey to transform into an enterprise software company that also sells devices and our performance this past quarter further solidifies that path. High-margin annual recurring revenue grew 42% to $183 million.

Software revenue was a record 30% of total sales and we sustained a SaaS net revenue retention of 119%. Turning to our -- our outlook. We're watching to see whether states shut down in the fall, which could bring renewed caution on budgeting. There is just enough outside of our control regarding COVID-19 that we did not reinstate formal full-year guidance.

We did provide a range that we are managing toward for Q3. There are two factors to keep in mind when considering our interim Q3 guidance. The first is that we made a strategic and intentional decision to prioritize growing our cloud user base and adding nodes to our network in the early days of our software and sensors business. As a result, we have contracts with strategically important agencies, both domestically and internationally, that have served as beachhead accounts, but come with a lower margin than average.

The second factor is that the majority of our multi-year contracts come with hardware refreshes at periodic intervals, which come at a lower margin than the SaaS portion of these contracts. The confluence of these two factors will conspire in Q3 to be a headwind on our gross margins, which we expect will normalize by Q4. Anticipating a question we often receive these days. We are not seeing changes in buying activity due to police defunding concerns.

In fact, we've seen some anecdotal acceleration of body camera buying decisions due to agencies wishing to provide transparency to their communities. We remain confident in our long-term multi-year outlook. We're privileged to be working on solutions to some of society's most entrenched challenges. We are just getting started in several new markets internationally and in several new software product lines.

Importantly, the addition of capital from our recent follow-on offering, further strengthen our balance sheet, and provides us with even greater flexibility to continue investing for growth. At quarter end, we had $675 million of cash and investments and zero debt. Before we move to Q&A, I'd like to share some insight with you as to how we view the company relative to the investments we're making and where we're headed. The first phase of the company's growth, let's call it, Axon 1.0, saw us establishing the taser business and building an unparalleled sales channel with law enforcement.

The second phase of our growth, Axon 2.0 saw us continuing to innovate with the introduction of smart devices, including body-worn and in-car cameras, which integrated seamlessly with our customer-focused cloud network. Now, we're entering the next phase of our growth, Axon 3.0, we're building a rapidly evolving public safety ecosystem with both connected devices in intuitive workflows powered by AI with the increasingly powerful Axon Cloud as our centerpiece. Our mission with this ecosystem is to protect life, capture truth, and accelerate justice. Now more than ever, society is driving toward these outcomes and Axon is uniquely positioned to partner with our customers and deliver on all three.

And with that, Andrea, let's move to questions.

Andrea James -- Senior Vice President of Corporate Strategy and Investor Relations

Thank you, Jawad and team. Thanks so much. Moderators, can we bring everyone up into gallery view? OK. Thank you.

We'll take our first question from James Faucette with Morgan Stanley. Go ahead, James.

James Faucette -- Morgan Stanley -- Analyst

Great. Thank you very much. I wanted to ask the team, Rick, Luke. Obviously, there's a lot of pressure on police departments, that at the very least, to improve efficiencies, etc.

Where are we now in terms of some of the software products like records, dispatch, etc. to really effectively reduce time that officers have to spend on paperwork, etc. And so, they can spend more time in the field and gain efficiencies that way? And how well are you being able to communicate the current capabilities to the customers?

Rick Smith -- Chief Executive Officer

Well, I would say the best answer to that question will be if you tune in to Accelerate. We have some pretty significant new announcements and we'll be showcasing some new capabilities that will have a big impact on efficiency. One of which, we've been in field trials that will go -- it's going into full release. And I can tell you that one agency in Canada was testing one of those capabilities said it was absolutely transformative.

They had two homicides happen in a short period of time, and for a small agency, this created tremendous -- tremendous levels of workload. And one of our new AI products actually help them handle two simultaneously. That they said without us, they would have been at risk actually potentially having those cases at risk of getting this qualified because they would not have been able to process all the paperwork and the interior data to meet the judicial deadlines. So stay tuned to Accelerate for more, but both records and dispatch are live in the field.

And we're now beginning to start really linking some of the AI capabilities to power the creation of the structured data in those systems from the unstructured data we capture with our body cameras.

James Faucette -- Morgan Stanley -- Analyst

Got it. And then as a follow-up, you mentioned Canada, but it was interesting, at least to us, to see the big jump in international revenue. Where are you and how should we be thinking about the ability that you have in other international markets to take the success of taser and take it over to body cameras and some of the other software products in those markets?

Rick Smith -- Chief Executive Officer

Josh, why don't you start answering that as the head of sales?

Josh Isner -- Chief Revenue Officer -- Analyst

Yeah. Thanks very much, James, for the question. Ultimately, I think we see a lot of similarities regarding where international is now versus where domestic was four or five years ago, and we're very much following the same playbook. We're going to be focused on fewer markets than the entire world and we're going to continue to build out a few markets at a time over the next few years.

I think the investments we made in our Tier 1 markets a couple of years ago, building really talented teams there, focusing on expanding both taser, and getting our early body camera and DEMS customers there are why you're starting to see the revenue results now. And as we continue to build bookings up internationally, we expect revenue to follow in future years. So our focus is to build very, very talented teams in the markets that we see as potential movers, and we'll start to introduce some of our newer products into those markets that are already showing great results. And as more and more markets kind of come up to speed, we'll introduce our newer and newer products as those markets become larger markets and deployments of body cameras and TASERS.

Andrea James -- Senior Vice President of Corporate Strategy and Investor Relations

Thanks, James. We'll take the next question from Keith Housum at Northcoast. Go ahead, Keith.

Keith Housum -- Northcoast Research -- Analyst

Thanks. Good afternoon, guys. Rick, in terms of the budget relief, which the government is considering, is there any impact to your guidance if budget relief is offered to the state and local agencies over the next several months?

Rick Smith -- Chief Executive Officer

Yeah. I think it'd just be pretty speculative for us to speculate on what might go in there. Obviously, if there's a lot of money, specifically, earmarked to state and local agencies. We suspect in this environment that it would end up being focused toward a lot of the transparency tools, things we're doing with body cameras, etc.

We've also seen a lot of interest in corrections growing around the TASER weapons because COVID-19 still remains a big issue, and particularly, in combined environments. So there is more focus on maintaining safe distances, you know, traditionally in corrections, if you have an inmate that decides that they're going to become resistant to following the procedures they have to, that has meant correctional officers suiting up and having to go hands on in a very close personal -- you're -- you know, covered in each other's sweat and other things you really worry about. So we're -- our plan does not account for any additional federal funding. If it comes in, I think there could be a little bit of upside, but I wouldn't -- I don't want to speculate too much.

Keith Housum -- Northcoast Research -- Analyst

Fair enough. Jawad, just a little bit of housekeeping here. In terms of the EBITDA margins for the next quarter, what's the impact of your large contracts on your EBITDA margins?

Jawad Ahsan -- Chief Financial Officer

Yeah. That was part of what we signaled with our Q3 guidance, Keith. We have some large international customers. We have a couple of international -- sorry, domestic customers that have -- we consider to be strategic beachhead accounts where their margins are lower on the camera contracts.

And as those customers get the refreshes on their contracts in the quarters that we ship, which Q3 happens to be one we're going to see lower margins, which is why we gave that specific guidance for Q3.

Keith Housum -- Northcoast Research -- Analyst

Right. But would it be fair to say the impact of those large shipments is going to be 2% on EBITDA margins. Is that fair assumption?

Jawad Ahsan -- Chief Financial Officer

Well, it's -- we are anticipating the EBITDA margins to be 12% on our Q3 revenues. We don't have formal guidance for the year. So I can't officially say what that impact is going to be.

Keith Housum -- Northcoast Research -- Analyst

All right. Fair enough. Thank you.

Andrea James -- Senior Vice President of Corporate Strategy and Investor Relations

Yeah, Keith. And if you dive into the segment commentary in the shareholder letter, we're even more specific on the gross margin thoughts by segment.

Keith Housum -- Northcoast Research -- Analyst

Great. Thank you.

Andrea James -- Senior Vice President of Corporate Strategy and Investor Relations

Uh-huh. We'll take our next question from Joe Osha with JMP. Go ahead, Joe.

Joe Osha -- JMP Securities -- Analyst

Hi, thank you for taking my question. One of the questions that's come up around this notion of police funding is the idea that some functions might be taken over by non-sworn officers. I'm wondering about how Axon sees the opportunity to address those types of uh -- those types of people? Thank you.

Rick Smith -- Chief Executive Officer

Yeah. Let me take that one on. So first of all, I had a really interesting call with a major city Police Chief where we were talking about the defunding phenomenon and what happened. And what he related to me was actually -- they did reassign portions of its budget to other portions of the city.

So basically, they just shifted some resources out of police to other city agencies. And then, its net budget was actually increased fairly significantly for body cameras and transparency tools. So in that respect, he was pleasantly surprised that the whole defunding discussion actually led for their agency to a better place, allow them to focus in on their core mission a bit more, reliance on partner agencies within the city to take a little more of the load, and it ultimately gave them a little more budget for tech. Now ultimately, you know, we'll see how this plays out in other agencies, but we believe that this idea that right now law enforcement, they're doing a lot of social services.

They're dealing with homeless people and mental health issues because you pick up the phone and you dial 911 for a lot of things that maybe don't need a cop. And so, as we think about our dispatch software, what a great time to be introducing a new cloud-based dispatch capability where we can, obviously, shift our road map and be looking at introducing new features. Things would allow agencies to perhaps integrate better with other city agencies that might not traditionally need dispatch or [Inaudible] type roads to use some of our communication tools in ways that would allow the dispatchers to dispatch non-sworn officers to different types of events. So we -- we tend to love change as an organization and times are changing rapidly here.

And we view that our DNA sets us up well to move quickly to new opportunities.

Jawad Ahsan -- Chief Financial Officer

That's right. And Joe, I think how we talked about when we last spoke, about when you think about something like dispatch and you think about something like Axon Aware and building geolocation and live streaming into our cameras, really being part of a bigger mission for agencies around real-time operations and broadening that lens. This is exactly the perfect scenario for which that is purpose built. And so even right out of the box, the integration of Axon Dispatch and Axon Aware, bringing together the ability to bring other kinds of resources into an incident in real-time is a capability that is just native to our cloud-born approach to all of these categories.

Joe Osha -- JMP Securities -- Analyst

Thank you. And just following on that, if I may. Is it possible perhaps that we might see an opportunity to deploy Axon Body alongside some of this new dispatch technology with non-sworn community officers or whatever we're going to call them?

Rick Smith -- Chief Executive Officer

Absolutely. You now, we're seeing also, not only the ability for non-sworn officers to be able to use cameras. But for sworn officers, be able to live stream with folks like mental health experts that can be helping them in real time, dealing with complex situations where those officers might need more expertise. But we actually think this could open up some litigation areas, particularly, if you have unarmed, non-sworn people, your ability to identify emerging dangers becomes even more important because you have to rapidly route armed officers to the scene to help out.

Joe Osha -- JMP Securities -- Analyst

Thank you.

Andrea James -- Senior Vice President of Corporate Strategy and Investor Relations

Great. Thanks so much, Joe. We'll take our next question from Scott Berg at Needham. Go ahead, Scott.

Scott Berg -- Needham and Company -- Analyst

Hey, everyone, congrats on a great quarter. Thanks for taking a couple of questions here. I guess, first, I don't know if this is a question for Luke or for Rick. But Rick, in your newsletter, you talked about OSP pipelines in particular very strong, including the components for RMS? Now you just signed a really large contract with Baltimore that includes records.

But I guess, what are you seeing on the records level out there, maybe from a demand perspective that would suggest those OSP 7 contracts with records will actually be implemented and utilized? Because that seems early given the commentary, but obviously, great if that's the case.

Rick Smith -- Chief Executive Officer

Sure. [Inaudible] Josh --

Jeff Kunins -- Chief Product Officer

I'll take that.

Rick Smith -- Chief Executive Officer

Or Jeff if you want to start off.

Jeff Kunins -- Chief Product Officer

Yeah. I'll go ahead and take that. So I love that question. And so again, like we talked about last quarter, we're thrilled that well more than a dozen agencies are already live signed or being actively deployed on records, you know, using one or more modules of the product, and we're incredibly confident of the trajectory.

As you've seen with the Baltimore announcement, both committed adoptions among OSP customers, as well as, continued interest in the pipeline beyond that, continue to accelerate well ahead of even our expectations. And I think the two key things at play there, like we talked about before, the first is the power of the bundle makes it an easy choice for them to take advantage of that benefit at a perceived value point that goes -- that goes hand-in-hand with what they're already paying for because it's effectively -- it's already included with the money that we've already committed to. And then second, is this key notion that we've talked about at Axon Standards, which is this use-of-force reporting module. And what's beautiful about Standards is that it just so happens in Records that every agency has to do use-of-force reporting, but they typically use a third-party module for it.

They don't actually use their historical RMS. But because Standards is built right into Axon Records, it's the perfect first experience that they can use it as an and rather than an or with their legacy RMS to begin getting value out of it right away with incredibly easy deployment. And then from there, decide when they're ready to migrate their entire RMS. And that's exactly what happened with Cincinnati and we're seeing that same pattern play out as we go forward because it's incredibly easy to deploy, it works side-by-side with what they've already got.

And then as they come to love it, whenever they're ready, they can quickly decide to adopt full Records for their entire RMS needs.

Jawad Ahsan -- Chief Financial Officer

Yeah. And specifically on the pipeline, I would say, you know, we are seeing more and more agencies interested in OSP 7+ and we're seeing some acceleration from the agencies that bought OSP 7+ last year in adopting our Standards module of records, as well as, a lot of the other key modules like reporting and so forth. So I'm very confident in our team to be able to convert some of those OSP 7+ opportunities into RMS deployments. We're very focused on and we're very focused on making sure that our customers are valuing and adopting all of the benefits in OSP 7+.

And this is a place where I think, certainly, the combination of having a very, very strong product organization with a very, very strong channel should lead to outsized results down the road.

Scott Berg -- Needham and Company -- Analyst

Super helpful. Thanks, guys. Then, I guess, just as a quick follow-up, Jawad. The company has posted four straight quarters of greater than 25% revenue growth, which is a nice acceleration from the 12-month period before that.

Your guidance calls for 15% revenue growth in the third quarter. Is that just some being conservative in the current lights and macroenvironment? Or are you seeing anything else that's maybe tempering that guidance just a little bit? Thank you.

Josh Isner -- Chief Revenue Officer -- Analyst

Yeah. I'll tag team. This is Josh with you, if that's all right. But we have a plan -- an operating plan for the year that had informed our guidance, and that's still pretty much informed as what we're managing to.

We outperformed in Q1 and Q2. We were very happy with the performance of our business and our sales team. The investments we've been making in international has been really paying off. Some of these new markets, new products, but we don't, obviously, bank on that.

And so, we feel it's prudent to stick relatively close to what our operating plan is, which is inform the 15% guidance.

Jeff Kunins -- Chief Product Officer

Yeah. Ultimately, there are going to be some quarters that have higher revenue growth rates than others and we feel good about full year. We feel good about kind of our long-term trajectory. But we do view this year as being back-half weighted compared to the front half, and it just might be an issue between what comes in, in Q3 and what comes in, in Q4 of our kind of large CW deal pipeline.

Andrea James -- Senior Vice President of Corporate Strategy and Investor Relations

Thanks, Team. And also in the back half, just on a comparables, the percentages are lower, but the nominal dollar's much higher is what Josh means on that. Thanks, Scott, for your questions. OK, we'll turn to Charlie Anderson at Dougherty.

Go ahead, Charlie.

Charlie Anderson -- Dougherty and Company -- Analyst

Thanks. So I wanted to ask about bookings. It was very interesting to see the the bookings transit very much reflects what we're seeing in the business in terms of international, strong, domestic, not as strong. I wonder, is that just a snapshot in time where, is that the way we should think about the trajectory of the business in terms of international continuing to put up the big performance in domestic, maybe trailing the performance on a year-over-year basis? And then secondly, you made a comment on bookings about the first few weeks of the quarter better than April.

I wonder if you could just layer in some context in terms of what that means from your standpoint and what's going on there? I got a follow-up.

Rick Smith -- Chief Executive Officer

Yeah. Thanks, Charlie. We've got a lot of domestic sales people and leaders on the call here that hopefully are motivated by that question and we certainly expect a great back half from our domestic and international teams. I think there was -- if you look back at it, we lost about half the Q2 due to the pandemic shutdown.

Everyone was trying to figure out how to conduct like City Council meetings and really conduct business on Zoom for the first time and that certainly slowed down some of our momentum in the first half of Q2. And then really in June, we lost about two weeks due to the kind of civil unrest and the events that followed the killing of George Floyd. So you know, I would look at Q2 more as just kind of a unique point in time due to some external factors that slowed us down a little domestically, but we have high expectations of our team and they're very motivated to turn that trend around in Q2 -- or I'm sorry, in Q2 -- or in Q3, both domestically and internationally.

Charlie Anderson -- Dougherty and Company -- Analyst

OK. Great. And then a question about the fleet product. You were -- there were some points in the shareholder letter about the importance of that product in the back half.

So I wonder, we can see what the run rate has been in the past few quarters of the existing product. I'm curious if you can maybe help us with expectations for how much of a contributor that is? Does it lift to a meaningfully higher level than we've seen historically? Just any context around that launch would be helpful. Thanks.

Rick Smith -- Chief Executive Officer

So I think from a bookings perspective, we do expect Fleet 3 to be a contributor in the back half of the year. I think there's still some question about shipping Fleet 3 and shipments, depending on how well the T&Es go, might end up in the front half of 2021, as opposed to the back half of 2020. We don't expect that to have much of an impact on revenue and bookings, like I said, given the fact that we'll be doing T&Es. It will contribute to bookings and we feel great about -- Fleet 2 has really stabilized in the last couple of quarters in terms of customer satisfaction and so forth.

And we're excited to build on that momentum as we launch Fleet 3, certainly, the ALPR and modular capabilities of Fleet 3, where we can do 360-degree recording around the car and so forth are things our customers are excited about. And we absolutely are confident that we're going to get a great customer reaction from this product and be followed by bookings and revenue associated with it.

Josh Isner -- Chief Revenue Officer -- Analyst

And just to add one clarifying comment there. So we're going to be in some pretty in-depth trials in the back half of this year, but we don't expect to be in full production ramp of Fleet 3 until 2021 and that's where we'll see the real growth contribution.

Jawad Ahsan -- Chief Financial Officer

And the key, you know, Josh mentioned this with Fleet 3, in addition to it being our best ever in-vehicle camera system, straight-up its a camera system that will also be the launch, as we've said before, of our approach are pretty disruptive and novel approach to the automatic license plate recognition. Category and mobile, where fundamentally -- it's different than the way it's done today in the market by being disruptively more affordable and better, more cost-effective for better performance and results, by making it a thing that departments can put in every single police vehicle as opposed to a small number of very expensive purpose-built cameras. And of course, no matter how good any one camera is that can only be in one place. And then, you combine that with it being built from the ground up with ethics and privacy in mind, and our strategic partnership with Flock Safety for a similar approach for fixed ALPR cameras.

We really think it's a watershed change in the way ALPR as a category will work.

Charlie Anderson -- Dougherty and Company -- Analyst

Great. Thank you so much.

Andrea James -- Senior Vice President of Corporate Strategy and Investor Relations

Thank you, Charlie. OK. We'll move to Mark Strouse from JP Morgan. Go ahead, Mark.

Mark Strouse -- J.P. Morgan -- Analyst

Hey, thanks, everybody. Thanks for taking our questions. Pretty impressive international growth the last couple of quarters. Just kind of curious, are you -- what trends you're seeing as far as those customers signing up for recurring payment plans? Or are these really just kind of one-off purchases?

Josh Isner -- Chief Revenue Officer -- Analyst

Hey, Mark. Great to see you again and thanks for the question. So ultimately, I think it's a combination of a few things. Certainly, as we open up new international markets, those first-time orders are probably not going to be on recurring payment plans.

That's due to our -- we want to make sure we have the ability to collect on all these plans. And when we enter markets for the first time, we'd like to see some payment history there first. So that -- those will be kind of one-time contributors to revenue and we expect those to continue from newer markets, as well as, markets making their second and third buys in their TASER programs. The teams have done an awesome job, especially in the U.K.

and in Canada, driving most of our new deals toward subscriptions. In the U.K., I believe almost every or every department is already on a TASER payment plan as opposed to one-time purchases. I think we'll see more of that in Australia over the next 12 months as T7 starts to get legs there and same in Canada. And so, I think in our more established international markets, we'll definitely see more recurring payments on CWs and video alike.

And then in our newer kind of first and second time buyer type markets, those will be driven by more one-time revenue transactions there as we shift those new weapons.

Mark Strouse -- J.P. Morgan -- Analyst

OK. Thanks, Josh. And then Rick, this is the highest cash balance that you've had in a long time, maybe ever. Can you just talk about your plans for that cash? I mean, obviously, there's a lot of organic investments that you've been talking about for the last several quarters, but how should we think about M&A? How important is that going to be going forward now with this cash truer than enough?

Rick Smith -- Chief Executive Officer

Yeah. Got it. I can't help but smile. I remember the days when we're struggling to pay the light bill and putting stuff on credit cards.

You know, we've got almost $700 million in cash. I would also say that historically, as you know, I'm a skeptic on M&A that I think I'm a Chicago school guy, markets are pretty efficient. M&A a lot of times it always drives up the price of the acquired, frequently to the detriment of the acquirer. And we still approach M&A from that position that it has to be unquestionably more valuable as a part of our ecosystem than as a stand-alone in order for an acquisition to make sense for all the headaches that come with integrating different companies.

That being said, I think we are in a unique position where we have built, and we now have this fairly ubiquitous cloud software and connected hardware and ecosystem, then make things like partnerships Flock Safety become pretty -- pretty powerful, as well as, we are really building out our M&A function. It's actually under Andrea James, who's doing a fantastic job. We've been building out a team beneath her. We get a ton of inbound inquiries and the vast majority of the time we say, no, because we are on a mission.

We've got a lot of focus, but we are starting to see -- there are things that will be interesting partnerships and there are some things that could be interesting acquisitions, and we have plenty of cash to have the flexibility to do it when it makes sense. But I just want to reassure you, we start from the position of no and that we have to overcome some pretty skeptical hurdles before we're going to spend the money, you, our shareholders gave us. We're going to treat it very carefully, as if it's the same money I was using to pay those light bills 25 years ago.

Mark Strouse -- J.P. Morgan -- Analyst

Good. Thank you.

Andrea James -- Senior Vice President of Corporate Strategy and Investor Relations

Thanks, Mark for the questions. Thanks, Rick. All right. We'll take our next question from Jeremy Hamblin with Craig-Hallum now.

Thanks, Jeremy. Go ahead.

Jeremy Hamblin -- Craig-Hallum Capital Group -- Analyst

Thanks, Andrea. So my question is actually a follow-up really on that that cash balance and what you potentially could do with it. You know, you've built some inventory here. You have some clients that may be strapped a little bit in the near-term on cash flow.

Do you use some of that cash to potentially do kind of TASER 60-type financing here, where we look to bridge the gap in the near term while there may be some budget crunch? And that's one of the uses of cash.

Jawad Ahsan -- Chief Financial Officer

Yeah. I'll start with this one. So one of the things I love about our cash balance and our position, our balance sheet is the optionality it provides us. And Jeremy, you've honed in on a couple of things that we've been able to do with that optionality.

One is of course, the inventory build. It was a material amount of cash in the quarter and we felt like it was the right thing to do. It positions us really well to be able to deliver the much-needed products to our customers in the back half of the year and beyond. And then on the payment plans, which you know, you touched upon, Josh first brought this up when the coronavirus really started becoming problematic for our customers.

There were concerns about budgets and we talked about, hey, look, we're signing up multi-year contracts with our customers. We have long-standing relationships with them. We're going to have relationships that -- with them that will extend far beyond the coronavirus, and so, we want to make sure that we're doing right by them. And it's easier for us to get flexible on payment terms to help bridge them to a time when they are no longer -- they don't have concerns about budget.

And so, when you have five, 10-year contracts, you can get creative and that's what we've done. It's been fairly -- on a smaller scale, it's been fairly negligible across the entire portfolio of contracts, but it is something that we've offered in select cases.

Josh Isner -- Chief Revenue Officer -- Analyst

Yeah. I would just nod to that and say, like, ultimately, while there have been some data points to suggest individual customers asking for kind of a rework of their accounts receivable. It hasn't been very widespread. I personally attribute this to the fact that we have customers that are paying for value that we are delivering across our product lines and we haven't seen any of these kind of asks like to push payments out multiple years or to not pay us for the -- anything for the next couple of years.

I think ultimately, our customers are seeing value in what we're delivering and we're very honored to continue to provide that value to this market, and only in very kind of edge cases have we had to entertain situations like that.

Jeremy Hamblin -- Craig-Hallum Capital Group -- Analyst

Great. And then just a follow-up question here on your progress on federal contracts. In terms of thinking about the negotiations in those contracts, the tenure of the contracts, are you seeing them extend longer when you're having discussions? It's still somewhat early in the ramp of that channel of business. Are they looking to start shorter contracts and see how it goes, and then -- and then, get into some longer deals? Just any color you can share on progression there?

Josh Isner -- Chief Revenue Officer -- Analyst

Sure thing. So a gentleman by the name of Richard Coleman has just done a fantastic job over the last couple of years, building up our federal pipeline. And for the first time, we are seeing customers willing to engage in multi-year engagements with us on both body cameras, but also on the TASER side. So we're very excited.

There are, you know -- it's not always easy to get federal customers to buy hardware in kind of annual phases as opposed to one-time purchases. So we're learning a little there and there is some of that, but other federal agencies are heavily engaged in these five-year plans for both weapons and video. Federal takes time, it's a slog, but for the first time in really 10 years here, I feel like we're starting to break through and crack the code of how to work with federal customers, and that's largely due to Richard's contributions. And hopefully, we start to see a lot of that growth materialize over the next couple of years here.

Jeremy Hamblin -- Craig-Hallum Capital Group -- Analyst

Thanks, guys. Good work. Good to be back on this one.

Andrea James -- Senior Vice President of Corporate Strategy and Investor Relations

Thanks, guys.

Jawad Ahsan -- Chief Financial Officer

Welcome back, Jeremy. Good to see you.

Andrea James -- Senior Vice President of Corporate Strategy and Investor Relations

I think we want to get through to at least, I think, four more analysts. So we'll keep this going here. Jonathan Ho from William Blair. Go ahead, Jonathan.

Jonathan Ho -- William Blair and Company -- Analyst

Can you hear me, OK? Great. So just relative to, I guess, the current budget environment, are you seeing traditional RFP processes perhaps start to stall? And could that maybe open up some more opportunities for you to disrupt the traditional, I guess, RFP-driven acquisition process for our RMS cat?

Josh Isner -- Chief Revenue Officer -- Analyst

Yeah. Great question, John. And I think ultimately, I haven't seen a huge change in procurement methods. I think some agencies still are issuing RFPs, others are issuing sole sources, and others are issuing more like cooperative procurements or piggy back -- piggy backing off of other contracts that are already in place.

And so, I'm not sure a ton has changed there. I think the big thing for us is to focus on OSP 7+ adoption because in that event, the customer is already essentially getting the opportunity to deploy our RMS in that bundle. And so, the more we drive up OSP 7+ procurements, the more agencies are exposed to kind of our enterprise software before they make a formal buying decision. And so, that's kind of how we're looking at things in terms of CAD and RMS.

And I think that strategy is paying off and we're seeing a lot of interest in those products via that purchasing mechanism. And certainly, every day that goes by, we're also getting closer to being ready to compete in RFPs for CAD and RMS to see Baltimore issued an RFI for RMS and we were victorious. So we're -- some competitors that we have a lot of respect for in this market. So we're excited about where this business is going.

Jonathan Ho -- William Blair and Company -- Analyst

Got it. And then just one for Jawad. In terms of the decision to increase inventory, can you maybe give us a little bit more color in terms of what types of components you had concerns around and maybe what risks you're seeing around the supply chain? Thank you.

Luke Larson -- President

Yeah. Maybe I'd lead off on that and then Jawad could add some additional context. So as we looked at really our kind of next six to 12 months based on our previous experience with really adjusting for tariffs, we wanted to make sure that we were going to be able to supply our customers with key products for two major upgrades, AB3, as well as, TASER 7. And so, we made the decision to add additional inventory to ensure that we would have product on hand for those in addition to making sure that we would have a good buffer for any potential supply chain disruptions due to COVID.

We also have a couple really, really big orders coming in Q3 that are kind of outside the context of our normal inventory build. I would let you know, the majority of that inventory is going into finished goods, which is something that me and Josh Isner feel really strongly about it. We can build it up into a finished product, we're going to find a home for it.

Jawad Ahsan -- Chief Financial Officer

Yeah. And the only other thing I'd add from a financial standpoint, this doesn't happen often. But there have been times when we've left revenue on the table at the end of the quarter because we didn't have inventory and that's not a great thing to have happened. And especially when you've got the flexibility with our balance sheet to be able to have a bit of an inventory buffer.

And so, you know, that's what we've committed to. And in addition to the factors that Luke mentioned, we never want to be in a position where we leave revenue on the table.

Andrea James -- Senior Vice President of Corporate Strategy and Investor Relations

Thanks, guys. We'll take a question now from will Will Power at Baird. Go ahead, Will.

Will Power -- Robert W. Baird & Co. -- Analyst

Hey, great. Thanks. You know, Rick, you suggested that it doesn't sound like you're seeing too much of a negative impact from some of the police defunding initiatives today. But I'm wondering if you could comment now that we're in the back half of the year on some of the early discussions with respect to municipal budgets, agency budgets as in -- for 2021.

What's your sense for their expectations and how that could potentially flow through [Inaudible]?

Rick Smith -- Chief Executive Officer

Yeah, I'm actually going to hand back to Josh because I think Josh is a little closer to the budgeting side of things. Josh, can you take that one?

Josh Isner -- Chief Revenue Officer -- Analyst

Yeah, sure. So I appreciate the question. I think there has been some reaction from some customers in this regard, right? Like, if you're a major city that relies heavily on tourism, then certainly, that's going to have an impact on how you think about budgeting for the next year. The good new -- the good news here, though, is that customers are viewing our products as mission-critical products.

Like the -- customers, there's no willingness to not outfit police with TASERS or body cams. And of course, computer-aided dispatch and RMS are also in that bucket. So I think there is some impact to budgets overall. But when you've kind of look at it in terms of, is there impact to the budgets that then impacts the products that customers buy from us, I'd say that's a lot less than the case.

Luke Larson -- President

Yeah. And I would just add another point there. I think if you look at our business, maybe, you know, 10 years ago or even eight years ago, we were really dependent on one core market, our domestic market with one core product. And today, we've got a lot of diversification, not only in our product lines, but also our geographical and even different market segments.

And so, as we see some puts and takes in different segments or products, we are seeing the evidence with international and some of these early other segments, we still feel really confident there.

Will Power -- Robert W. Baird & Co. -- Analyst

OK. No, that's good to hear. I guess, just as a quick follow-up question. Maybe circling back to international, given the strength you've had the last couple of quarters, any comments you can make with respect to pipeline from here? I'm guessing a lot of those deals you announced this quarter last when the pipeline prior to COVID, how much is COVID impacting your ability to sell there? And how does that -- what over the next several quarters?

Josh Isner -- Chief Revenue Officer -- Analyst

Yeah. Thanks a lot. So there is going to be some lumpiness in international quarter to quarter. But on a year-by-year basis, we still expect very encouraging double-digit growth out of our international revenue.

COVID, you know, it's impacted our ability to travel. But in most of our key markets now, we've got teams on the ground so it's not like folks are having to travel on planes region to region. We do have teams built out in a lot of key places and distributors supporting us in a lot of key places. So ultimately, the work that's gone into international started three,four years ago.

And so, the things that are impacting the quarter-to-quarter results, these are things that teams have been working on for quarters and quarters already. So I would expect there's going to be some lumpiness in revenue quarter to quarter internationally. But I do have a lot of confidence that we're trending in a very, very strong direction, both in terms of bookings and revenue, internationally.

Will Power -- Robert W. Baird & Co. -- Analyst

Great. Thank you.

Andrea James -- Senior Vice President of Corporate Strategy and Investor Relations

Thank you. Will, we were admiring your collection of phones in the background there. We'll take our next question from Brian Gesuale at Raymond James. Go ahead, Brian.

Brian Gesuale -- Raymond James -- Analyst

Thanks, Andrea. Just wanted to ask a question on the net retention rate, which was a really good metric of 119% of net dollars, can you maybe provide a little bit of color on how we might think of that between additional seats versus additional functionality that drives incremental ARPU? And how we might want to think about that mix as we move forward?

Jawad Ahsan -- Chief Financial Officer

Yeah. I'll -- I'll start with that one. So that's a metric that we wanted to introduce for some time now. It's something we've been tracking for a while and we felt confident that you have enough data and enough sort of a history there to be able to start to publish it, and we feel very confident that number will hopefully tick up over time.

It's a dollar retention. It's not a user retention and so as our -- as we sign more OSP 7, 7+ contracts, which are, of course, at a much higher ARPU, that number will start to tick up. We, at this point, don't disclose ARPU because there's a lot of noise in that number, certainly, between domestic and international. But even within domestic, we have different customers at different stages so we're not yet ready to disclose the ARPU number.

Does that help, Brian? Is that what you're looking for?

Brian Gesuale -- Raymond James -- Analyst

Yeah. That's perfect. Maybe just to follow-up a little bit. I wanted to just kind of revisit the gross margin kind of assumption for the third quarter and I know you're not going beyond that.

But how might we think about the duration of these headwinds that you mentioned? I'm sure they're not all on a similar rhythm, but how long do you think they lift over time?

Jawad Ahsan -- Chief Financial Officer

Yeah. Our expectation is that the one that we mentioned specifically for Q3 will be resolved within Q3. There may be a little bit of spillover into Q4, but it will be on the order of magnitude of a couple of weeks. It's not going to materially impact Q4.

And so at this point, our best sort of -- sort of outlook there is that it's going to be resolved within Q3. And then, there are other -- I wouldn't necessarily call them a headwind, but we're still working very hard to get our gross margins up in the hardware business. That's something that, you know, obviously, the more software we bring online, that business is printing at 80%-plus gross margin. So as more of our business shift to software, our gross margins will lift there naturally.

Brian Gesuale -- Raymond James -- Analyst

Thank you.

Andrea James -- Senior Vice President of Corporate Strategy and Investor Relations

Thanks, Brian. Andrew Uerkwitz with Oppenheimer, we'll take your question next.

Andrew Uerkwitz -- Oppenheimer and Company -- Analyst

Great. Thank you, guys. I appreciate the time. Could you help me understand that based on our research, many of your RMS wins are more similar to the module, similar to what I think Jeff mentioned with Baltimore with the use-of-force.

I assume the expectation is this will lead to kind of a rip and replace for the entire system. So one, am I thinking about this correctly? And then two, how does the accounting and pricing work over the life of a contract for a city that goes this route? And then lastly, kind of in that context, you know, Baltimore signed an OSP 7 contract a year ago. And then, they just recently announced that RMS module. Does that contract get reset? Does it get extended when something like that happens? Or does ASP go up at that point? Could you talk a little bit about the accounting and dynamics of when that happens? Thank you.

Luke Larson -- President

Sure. I'll lead up overall and then let the other guys chime in. So first, on the product point, we're -- like we said, we're seeing a great pipeline of both committed existing commitments, as well as, pipeline from here, both for full records deployment, meaning the full replace of their legacy RMS, as well as, Standard, which is that first module. And so for example, just Baltimore, since they've already made it public, that's a commitment to move to records in its entirety and to fully replace their legacy RMS and we're seeing -- we are ahead of our expectations on the pipeline there, as well as, of course, a larger number of the Standards ones.

So we're seeing success on both. And again, ultimately, our goal, and we're confident of this outcome, is that we are ultimately going to be on track to become the No. 1 in this category for full records and Standards is just a great part of the path to get there because it's such an easy first step for a given agency to take. And then, I'll let Jawad give more color.

But fundamentally, on the accounting, again, specifically with regard to OSB 7+, it is part of this overall primafit of the way the public safety buys this technology, where just like for a subscription service like that, where you are buying a thing that has many benefits to it. You are buying a thing that has many benefits to it regardless of whether and when you choose to adopt any given benefit.

Jawad Ahsan -- Chief Financial Officer

Yeah. And then as far as how the accounting works, the revenue recognition. So we allocate a portion of the overall bundle to records. And that portion we start recognizing once the customer has gone live and let me stop there.

Is that what you're looking for?

Andrew Uerkwitz -- Oppenheimer and Company -- Analyst

Yeah. I think so. And does the contract reset then? So like Baltimore signed for OSP 7s, were they paying $199 million a year ago? Or were they paying less than that? And then now that they're rolling out RMS, now they're moving up to that full price. And because they kick that in there, does that reset the contract where now it's five years from now as opposed to five years from a year ago?

Josh Isner -- Chief Revenue Officer -- Analyst

So there -- the price they paid last year is the same they paid this year with a couple of notable exceptions. The first of which is the professional services to deploy RMS is a separate contract. So once they're ready to deploy, they would pay us for the professional services. The second one is, they're going to add -- or they have added some more users because the OSP 7+ often covers sworn officers that are carrying body cam and TASERS.

But ultimately, they're going to need more users to administer a lot of the elements of an RMS system and see that data and work with reports and so forth. So we do expect some user uptick as agencies start to deploy RMS. The third one is, in Baltimore's case, actually did extend their contract as well to co-term with some of their other items they have with us and I think they extended out a couple of years as part of that. So those are all dynamics that we expect to see.

But I think the most important thing is we're betting on ourselves to be able to upsell additional new features outside of OSP 7+, two agencies that are deploying our RMS. So transcription is a great example of this and Baltimore paid us additional monies per user to deploy transcription as part of their RMS service. And so for us, I think we do envision some of these kind of value-added features on top of the OSP 7 deliverables as upsell opportunities as agencies deploy RMS.

Andrew Uerkwitz -- Oppenheimer and Company -- Analyst

Got it. Thank you guys so much. I appreciate that color.

Josh Isner -- Chief Revenue Officer -- Analyst

Love the foosball table as well.

Andrea James -- Senior Vice President of Corporate Strategy and Investor Relations

All right. And we're going to go a little over. Thanks, guys for your patience. We'll take our next question.

It might be our final question from Pavan Kumar from Northland.

Unknown speaker

Hi, guys. Can you hear me?

Josh Isner -- Chief Revenue Officer -- Analyst

Yes.

Unknown speaker

We can hear you. Can't see you, but we can hear you.

Yeah. I disabled my video because I was having some Internet connectivity issue. Thanks for taking my questions. Regarding R&D and SG&A spending as a percentage of revenue in second half in '21, which areas of products would get most focus?

Jawad Ahsan -- Chief Financial Officer

Yeah, I'll start with that. And Jeff, if you'd like to weigh in. So right now, the majority of our R&D is on -- is being spent on software. We're very excited about what we've got in the pipeline from a software standpoint.

As you saw quarter over quarter, our SG&A was actually flat and our R&D grew, and that was very much by design. Our R&D growth -- well based revenue growth this year. But you know, at some point, we have long-term targets that we've set of 30% on EBITDA and the way that we're going to get there is by allowing more of the revenue growth to fall to the bottom line. But overall, the investments we're making in R&D, we think, are going to help pay off over a long horizon and get our -- keep our revenue growth rate above 20%.

Unknown speaker

Great. Regarding competition, like who are the competitors we are seeing most on the Records deal?

Josh Isner -- Chief Revenue Officer -- Analyst

Sorry, the question was Records competition if heard you?

Unknown speaker

Yes, yes.

Josh Isner -- Chief Revenue Officer -- Analyst

OK. Yeah. I think there are some competitors that I was -- I would characterize as companies that have been in the records business for a long time. And a lot of them are incumbents and we have a lot of respect for those companies.

We certainly believe kind of our new innovative approach to records will lead to customer adoption in times away from some of those products just like we saw in Baltimore, and there are new entrants to the space as well. And ultimately, like the combination of our channel coupled with the amount of investment and talent we're bringing on on the product side, we think that we're really well-positioned for the long term. I think for the newer competitors, certainly, they have more constraints around channel and spend than we might, and for some of the incumbent competitors, they probably have a little more constraint around servicing existing customers as opposed to really innovating quickly. And so, we view ourselves as a really disruptive entrant into this market and we're very hopeful that we can become the market leader in due time.

Luke Larson -- President

Yeah, that's right. I mean I think, first, we always like to say that we obsess first and foremost, about our customers. We're happy to have our competitors obsessed about us, but we like to focus on the customer. But exactly, as Josh said, you know, overall, both the legacy providers, as well as, some of the new ones, Axon just has a pretty unique combination of assets that makes us different, both in the legacy incumbent and the newer start-ups.

Because the legacy incumbents are simply not cloud-first and born-cloud and you fundamentally can deliver the kinds of results that the departments of today and tomorrow need without being born in the cloud. And on the other hand, the newer start-ups simply don't have the network of sensors and signals that are connected into services. That can also do the same thing. We're really the only company that has that combination of both, which is why we're so excited about where we're ultimately going to deliver for customers in this category.

Unknown speaker

Great. Thank you.

Andrea James -- Senior Vice President of Corporate Strategy and Investor Relations

I think that's all of our questions. I'm just looking at all your screens here. OK, let's have Rick close this out.

Rick Smith -- Chief Executive Officer

All right. We're a little over. So let's keep it quick. Thank you, everybody, for joining us.

We're confident. We'll all look back on 2020 is the time that set in motion the next wave of policing reform and the next leg of growth for Axon. We hope you stay safe, healthy, sane during this period of continued disruption, and we look forward to updating you on our progress against our mission in November. And don't forget to come to Axon Accelerate in a couple of weeks, and you'll see a lot more detail on our product road map.

Thanks, and buh-bye.

Duration: 64 minutes

Call participants:

Rick Smith -- Chief Executive Officer

Luke Larson -- President

Jawad Ahsan -- Chief Financial Officer

Andrea James -- Senior Vice President of Corporate Strategy and Investor Relations

James Faucette -- Morgan Stanley -- Analyst

Josh Isner -- Chief Revenue Officer -- Analyst

Keith Housum -- Northcoast Research -- Analyst

Joe Osha -- JMP Securities -- Analyst

Scott Berg -- Needham and Company -- Analyst

Jeff Kunins -- Chief Product Officer

Charlie Anderson -- Dougherty and Company -- Analyst

Mark Strouse -- J.P. Morgan -- Analyst

Jeremy Hamblin -- Craig-Hallum Capital Group -- Analyst

Jonathan Ho -- William Blair and Company -- Analyst

Will Power -- Robert W. Baird & Co. -- Analyst

Brian Gesuale -- Raymond James -- Analyst

Andrew Uerkwitz -- Oppenheimer and Company -- Analyst

Unknown speaker

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