Axon stock drops 10% as federal drone delays hit Q3, trigger $1.2B Skydio bet
What's the deal? Axon Enterprise shares fell nearly 10% in after-hours trading Thursday after the public-safety technology company missed third-quarter estimates and cut its full-year outlook. The stock dropped 9.84% to $344.90, near the bottom of its 52-week range of $339.23 to $665.07.
The numbers: Revenue hit a record $908.55 million, up 28% year-over-year, but fell short of the $937.59 million Street consensus. Adjusted earnings of $1.72 per share missed estimates of $1.88.
The company swung to a net profit of $57 million, or $0.68 per share, from a $2.2 million loss a year earlier. Software and Services revenue rose 43% to $437 million, and AI annual recurring revenue passed $100 million.
Why now? Three delayed federal Dedrone deployments drove the miss, with $30 million unrecognised in the quarter. Axon excluded $130 million in those deployments from guidance, lowering full-year revenue to a range of $3.610 billion to $3.630 billion, down from $3.670 billion to $3.725 billion.
Fourth-quarter guidance of $990 million to $1.01 billion also trailed the Street's $1.06 billion estimate.
What's the endgame? Axon announced an additional $1.2 billion investment in drone maker Skydio, lifting its stake to 37%. The deal makes Axon the exclusive distributor of Skydio for public safety in the US and Canada.
Deployed Skydio docks through Axon Air have more than doubled year-over-year, and Skydio expects bookings of $1 billion for the fiscal year. "We believe Skydio is positioned to lead in nearly every sector that flying robots touch," the company said.
What could go wrong? The bet lands as rivals including MotorolaDealroom has a profile for this one. Try Dealroom →-backed BRINC and Flock Safety push into drone response, and public adoption draws scrutiny over surveillance and local oversight. Axon is committing substantial capital while federal deal timing remains unpredictable.
The signal: Axon's underlying business is growing fast, but the quarter shows how much large federal contracts can sway near-term results. By doubling down on Skydio, Axon is betting that drones become central to policing — and that the "flying robots" market pays off before the timing risk does.
Read more: benzinga.com
Image credit: Generated with Gemini
