Morgan Stanley update on $AXON Analyst named Meta says 🗣️ “Believe Wednesday move over done, but watching impact from Flock partnership deterioration. Shares traded 15%+ lower today following the publication of a cautious thesis regarding AXON's relationship with Flock Safety, and the potential impact to AXON's Fusus asset (acquired in Jan '24 for ~$240mm). While we don't have a large background in the company or partnership, Flock Safety provides fixed automated license plate recognition ('ALPR') cameras, as well as real- time crime center technology (RTCC) for enterprises and law enforcement that aggregates real time video and license plate reader technology. Per Flock's website, AXON will no longer support new mutual customers starting July 24, 2025. They may continue to support existing customers, but it's unclear to what degree.' Overall - we do not think that this announcement will be material to near term results, as AXON management has noted that Fusus is immaterial to FY24 growth. Additionally, given Axon was the one to terminate the relationship, we view it as more than likely that they have a workaround on the real-time video technology which they acquired from Fusus, though losing access to the ALPR technology from Flock does seem challenging in the near term to replace (acknowledging AXON does have some of these databases in house). As it relates to the TAM, AXON did note that Fusus expanded its TAM by ~$13bn to ~$63bn (subsequently increased to $77bn following Dedrone acquisition), with $7bn attributable to Enterprise, ~$3bn attributable to U.S. State & Local government, and ~$3bn to international government opportunity. Given Flock's breadth of customer base (>5k communities, across 42 states), this could weigh on growth prospects for Fusus over the short term if ALPR technology difficult to replace, but in the medium or long term see technology replaceable with assets acquired from Fusus and ongoing R&D. At the same time, AXON has also announced new retail/enterprise oriented partnerships in 2024 that could potentially act as an offset, adding Auror ('a pioneer in retail crime intelligence and incident management solutions) LiveView Technologies (a leading provider of mobile security units and security solutions'). Further, we think AXON's scale and customer base will continue to make the company an attractive partner for smaller scale peers looking to expand reach going forward.