Axon Enterprise Sees Counter-Drone Business Skyrocket 300% as AI-Driven Draft One Product Reshapes Police Workflows
William Blair Growth Stock Conference, June 4, 2026
Axon Enterprise is witnessing explosive growth in its recently acquired counter-drone business while its flagship AI product is fundamentally transforming how police officers spend their time, according to company President Josh Isner at the William Blair Growth Stock Conference. The counter-drone technology from Dedrone, acquired in late 2024, grew 300% year-over-year in the first quarter of 2026, with total bookings already exceeding the acquisition price.
Counter-Drone Technology Emerges as Major Growth Driver
The counter-drone opportunity is materializing faster than expected across multiple customer segments, though in an unusual reversal for Axon, state and local government has been the slowest to adopt. Isner explained that the World Cup is serving as a critical catalyst, as host cities have received FAA waivers to not only detect but mitigate drones around stadiums. "The World Cup cities are the first cities that have been granted a waiver to be able to mitigate drones," Isner noted, adding that once these temporary installations prove themselves, cities will likely redeploy the equipment on fixed sites throughout their jurisdictions.
Each counter-drone system operates within a two to five kilometer radius, meaning cities need multiple installations for comprehensive coverage. The company is seeing particularly strong demand from international customers, federal agencies monitoring the border, and enterprise clients protecting data centers, warehouses, and logistics hubs. Isner characterized the geopolitical tailwinds as significant, pointing to how "drone warfare is a big part of how these conflicts are manifesting themselves" in Ukraine and the Middle East.
Draft One AI Tool Delivers Quantifiable Time Savings
The company's Draft One product is delivering measurable productivity gains that are reshaping police department economics. The AI tool listens to body camera audio and automatically generates draft police reports in real time. Before Draft One, officers spent 50% of their time writing reports, equivalent to 2.5 days per week. That figure has now dropped to 20%, giving every officer back 1.5 days per week for actual police work.
The time savings carry direct financial implications for cash-strapped departments. "Every police department on earth right now has headcount vacancy," Isner explained. "When you think about, oh, I might not have to hire as many police officers now because I've just picked up 1.5 days a week in my current police force, they can fund all these products through those headcount savings." Draft One is sold as part of the AI Era plan, which generated over $750 million in bookings last year and grew 140% year-over-year in the first quarter.
Next-Generation AI Products Expanding the Platform
Beyond Draft One, Axon is rapidly deploying additional AI capabilities that leverage its massive evidence repository, which now contains approximately 50 times the content of Netflix's library and makes Axon Microsoft Azure's largest customer. The company launched a real-time translator that identifies languages and provides two-way translation through the body camera, particularly valuable for the World Cup and border enforcement.
Axon Vision transforms existing CCTV cameras into intelligent detection systems that can identify a person lying motionless, physical altercations, or car break-ins and send real-time alerts. The newly launched Axon Gravity connects Evidence.com to all other systems in a police department, providing cross-dataset insights and serving as the foundation for custom AI workflows. Isner described the evolution as moving from "delivering point solutions" to "building custom AI workflows and experiences" on-site with customers.
Model Diversification Strategy Reduces AI Risk
Unlike many software companies relying on a single AI provider, Axon is pursuing aggressive diversification across multiple frontier models. "We don't ever want to be in a situation where something in a model changes that there's a lot of inherent bias in and all of a sudden, all of our recognition models in the field are affected by that, and that puts our brand or trust at risk," Isner stated. The company vets every publicly available model to maintain backup options and negotiates version control flexibility to test new releases before deployment. Different vendors are selected based on specific use cases, with simpler tasks like Draft One using lower-cost models while complex reasoning relies on more sophisticated options.
New Markets Remain Largely Untapped
While Axon has established dominance in U.S. state and local law enforcement, Isner was blunt about the opportunity ahead in new markets: "In our new markets, the game hasn't even started yet. We're still like in the national anthem of getting ready to run out on the field here." He noted that if international doesn't eventually exceed the U.S. business and enterprise doesn't exceed both, "we did something wrong." The total addressable market dynamics are striking. Italy's two police forces alone comprise one-third of all U.S. officers, while Walmart employs 2.4 million retail workers compared to one million police officers nationwide.
International bookings crossed $1 billion for the first time last year and continue growing rapidly. The company is increasingly leveraging system integrators in international and enterprise markets, a departure from its direct sales model in U.S. state and local. "We don't have the years of incumbency. We don't have all the relationships," Isner acknowledged, making partners more valuable in these newer segments.
TASER 10 Outpacing Previous Generation by 2x
The current TASER 10 device, which fires ten darts instead of two cartridges, has sold at twice the volume of TASER 7 over comparable time periods. The product is seeing strength across all geographies, not just the core U.S. market. Axon operates on a five-year product cycle for TASER devices, with the next generation expected in approximately 18 months.
The company's longer-term ambition is achieving 100% effectiveness to fully displace firearms, up from the current 85-90% rate. The primary barrier remains heavy clothing penetration. Axon is attacking this through a new dart design and, more innovatively, machine vision guidance that will use a camera on the TASER to identify low-resistance areas on suspects and direct darts accordingly. The computer vision technology is being developed first for SWAT drones before migrating to handheld TASERs.
911 and CAD Market Entry Gains Momentum
Axon's entry into the 911 space through the acquisitions of Prepared 911 and Carbyne is showing strong early traction. The company characterized 911 call centers as still relying on "antiquated on-premise technology" comparable to 1960s and 1970s switchboards. Prepared 911 provides an AI layer that works over existing infrastructure, offering transcription, language localization, and automated drone dispatch based on cell phone metadata. This allows departments to access modern capabilities without replacing core systems.
The strategy is to win customers with Prepared's AI tools, then eventually modernize underlying infrastructure with Carbyne's cloud-native call center platform. "This product line is growing very, very fast," Isner emphasized. The 911 market represents one of the categories where competition with Motorola, the voice communications market leader, is intensifying alongside body cameras and evidence management.
Financial Trajectory Remains Aggressive
The company is guiding to 25.5% EBITDA margins for 2026, up from 19% four years ago, with a target of 28% by 2028. Five-year bookings have grown 4.5x since 2022, providing visibility into continued revenue growth given bookings typically lead revenue recognition. Net revenue retention continues expanding as the company sells new products to existing customers. Axon has sustained 30% annual revenue growth for several years after seven years of 25% growth, an unusual trajectory for a company founded in 1993.
When asked about balancing profitability with growth, Isner was unequivocal: "If guns to our head, we had to choose, we'll take the growth. I think we can always solve for profitability if we're growing substantially. And it's way harder to figure out how to grow 30-plus-percent than to figure out how to cut costs." The backlog, which consists of unrecognized revenue from multiyear contracts, is growing 20-30% annually. Non-appropriation clauses exist in contracts to give municipalities flexibility, but Isner noted the company has never experienced a customer exercising this option.
The company maintains an AI Ethics Board comprising community activists and police skeptics who review every product quarterly and present to the Board of Directors annually. This approach has positioned Axon as "the responsible innovation company in public safety" at a time when competitors have stumbled on privacy issues. The Board's involvement in city council presentations has proven particularly valuable in securing approvals for sensitive technologies like facial recognition and automated surveillance.