Axon Enterprise announced on November 5 an additional $1.2 billion investment in autonomous drone maker Skydio, a deal that will make Axon the exclusive distributor of Skydio products for public safety across the United States and Canada5,3.
The agreement values Skydio at $5.2 billion pre-money and will add approximately 20% to Axon Enterprise's fully diluted ownership, bringing its total stake to roughly 37% once the transaction closes1. Payment will consist of a mix of cash and Axon Enterprise stock, covering both primary capital for Skydio and purchases of shares from existing shareholders. The transactions are expected to close during Q4 2026 and Q1 2027.
AI-powered drones in public safety
Skydio develops autonomous AI-powered drones used by public safety agencies and military customers in the United States. The company serves more than 1,500 public safety customers, and more than 28 million Americans now live within two miles of a Skydio Drone as First Responder dock. At agencies deploying the Drone as First Responder program, priority response times have been reduced by as much as 65%, with drones arriving before officers on roughly 80% of dispatched calls. Axon Enterprise estimates the total addressable market for Drone as First Responder at approximately $13 billion in the U.S. and Canada.
"Within a decade, millions of drones will be working across America. Skydio is positioned to lead in every sector they touch," said Rick Smith, Founder and CEO of Axon Enterprise.
Skydio expects to generate approximately $1 billion in total bookings in its current fiscal year.
Axon Enterprise's earnings and guidance cut
The investment announcement coincided with a difficult earnings report. Axon Enterprise's adjusted third-quarter earnings came in at $1.72 per share, below the $1.88 per share that analysts surveyed by LSEG had expected. The company also lowered its forecast for annual revenue growth in 2026 to about 30%, citing the exclusion of three federal Dedrone deployments valued at a combined $130 million8. Axon Enterprise shares fell approximately 14–15% in after-hours trading following the results.
ANALYSIS The exclusive distribution agreement and rising ownership stake tie the two companies' fortunes together at a moment when Axon Enterprise is absorbing a near-term earnings miss and a guidance reduction.