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Axon invests $1.2 billion more in drone maker Skydio, lowers annual revenue growth forecast
Axon Enterprise will invest a further $1.2 billion in drone maker Skydio and become its exclusive distributor in the US and Canada. The move reflects rising demand for drones among police, emergency services and government agencies, while Axon’s weaker results and reduced growth outlook weighed on its shares.
The investment will raise Axon’s stake in Skydio to about 37 per cent, valuing Skydio at $5.2 billion before the deal. Axon reported adjusted third-quarter earnings of $1.72 a share, below analysts’ $1.88 estimate, and lowered its 2026 revenue growth forecast to about 30 per cent, citing the removal of three federal Dedrone deployments worth around $130 million. The transactions, a mix of cash and shares, are expected to close in late 2026 and early 2027.
In short
- Axon plans to invest another $1.2 billion in Skydio.
- Axon will become Skydio’s exclusive US and Canadian distributor.
- Axon cut its 2026 revenue growth forecast to about 30 per cent.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
The investment could help Axon meet growing demand for drones among police, emergency services and government agencies, while giving Skydio broader access to customers through an established distributor. A larger stake may also support a strategically important technology business and strengthen public agencies’ ability to respond to emergencies.
The case against
The deal commits Axon to a substantial investment as its earnings have missed expectations and its revenue growth outlook has weakened. The forecast cut linked to cancelled federal deployments highlights the risk of relying on government contracts, while the investment and exclusive distribution arrangement could concentrate resources and expose Axon to execution and valuation risks.