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Three new products could expand Axon Enterprise's lead in the body camera business.
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The last few years have seen Axon Enterprise, Inc. (AAXN +0.02%) transform itself from a taser-focused company to a body camera solutions company that also happens to sell tasers. That transformation has turned Axon into a growth stock with the potential to be a mainstay in law enforcement.
2018 will be a critical year for new product launches as Axon attempts to add value in the body camera market. Here are the key products to watch next year.
Image source: Axon Enterprise.
Axon has become the standard for body cameras in law enforcement, which it now plans to leverage to dominate the in-car video market as well. The company has been testing a new Axon Fleet product that will go in vehicles and connect videos to the Evidence.com platform that's been so successful for body cameras.
Fleet will be a key product because it's a line extension for Axon that will be additive for law enforcement. The company doesn't need to find new customers for Axon Fleet, it just needs to get existing customers to adopt the product, which would increase revenue and profit per customer.
Another additive product is Signal Sidearm, an attachment that automatically turns on a body camera when a sidearm is removed from its holster. The product will ensure that body cameras are on when they're supposed to be and take the burden of knowing when a situation will require a body camera off officers.
Signal Sidearm doesn't have the ongoing revenue potential of a body camera or Axon Fleet, which come with cloud services, but it's the kind of product enhancement that makes Axon's platform more valuable for law enforcement.
The product that could revolutionize how law enforcement does its work is Axon's upcoming records management system (RMS). This will allow Axon body cameras to be used easily for witness statements, paperwork automation, records sharing, and more. The idea is not only to make it easier to record information about an incident, but also to reduce paperwork that keeps officers out of the field.
If Axon's RMS is successful, it'll drive greater adoption of body cameras and other products and make it easy to justify the expense of Axon's products to law enforcement agencies. Long-term, this could be the most consequential product of the year.
Now that Axon is building a critical mass of customers with body cameras, it's time for it to complete the suite of products needed by law enforcement and start turning its sales into profits. 2018's product launches will go a long way to completing the product suite, which the sales force can leverage to expand revenue per customer. When combined with a slowdown R&D spending growth, we should see profitability increase from its very small base in 2018.
Long-term, Axon is building the kind of durable business investors should love. That's why I'm keeping a thumbs up CAPSCall on My CAPS page heading into 2018.