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Taser and bodycam maker Axon announced Tuesday that it would acquire Prepared, an emergency communications platform.
Prepared, which says it currently serves 1,000 law enforcement agencies, will give Axon the ability to collect and synthesize audio, GPS, and other data from inbound emergency calls, streamlining the standard dispatch model with help from AI.
The companies didn’t disclose the value of the deal. A recent report by The Information said it was worth an estimated $800 million. It is expected to close in the fourth quarter.
“This was an important gap to fill to address all the needs of public safety,” said Andrew Sherman at TD Cowen, in line with Axon’s strategy of providing end-to-end support for law enforcement agencies.
The deal brings Axon closer to its complete transformation from a hardware provider into a software partner for public safety. Since 1993, the company has slowly expanded its products beyond Taser, its “less-lethal” stun gun, adding body cameras, and an evidence management platform.
In 2022, sales from its software and sensor segment first outpaced its Taser sales. Now, with Prepared, it can boast a range of law enforcement solutions from dispatch to resolution, and a broader suite of AI-enhanced capabilities.
“AI is reshaping public safety at an unprecedented pace,” said Axon CEO Rick Smith in a press release. “With Prepared, we’re harnessing that power to eliminate blind spots in the earliest moments of an emergency.”
The acquisition is part of a playbook of “reasonably-sized” purchases by Axon to “accelerate their product roadmap,” according to Sherman. Last year, it bought Dedrone, a drone defense startup. The company had tried to build its own dispatch-related product, Sherman said, but found it would not scale effectively, considering it would require essentially building its own call center. The Prepared acquisition gives Axon the capability without requiring the call center infrastructure.
On Wednesday, the day after the acquisition was announced, Axon’s stock closed 10% lower than it had the previous day. The decline is likely due to the cost of the deal, and investor concern about the company’s spending, according to analysis by Forbes. Similarly, after the Dedrone acquisition, Axon stock dropped 15 points, or 5%, over the previous day and only recovered after its following earnings report.
The drop is mild turbulence in a period of tremendous growth for Axon. Since the start of 2023, its market capitalization has more than tripled, and stock has risen over 300%. And there’s more room for growth, according to Sherman. The company – which counts as customers nearly every state and local law enforcement agency in the US – can sell existing customers its new product offerings. It can also sell existing products to a new customer base, as international demand for Taser and body cameras has begun to pick up.
“They’re just really innovative, and this is another example,” said Sherman. “They’re adding a new product that’s is going to help, hopefully, save lives, which is their ultimate goal.”
In its latest guidance, Axon raised projections for 2025 revenue to an estimated $2.65 billion to $2.73 billion. If 2025 revenue is in the middle of that range, it will have grown 29% year-over-year. Still, investors will be looking ahead to Axon’s next earnings report, to be released in early November.