SCOTTSDALE, Ariz. — Axon Enterprise said on November 5 it will invest an additional $1.2 billion in drone maker Skydio at a $5.2 billion pre-money valuation, a deal that adds roughly 20 percentage points to Axon’s fully diluted ownership stake and makes Axon the exclusive distributor of Skydio drones to public safety agencies in the United States and Canada.
The investment, disclosed alongside Axon’s third-quarter earnings, is paid in a mix of cash and Axon stock and combines new capital into Skydio with purchases of shares from existing Skydio investors. Axon’s Q3 shareholder letter puts its resulting stake at 37%, and the transactions are expected to close across the fourth quarter of 2026 and the first quarter of 2027.
Why it matters: drones are starting to beat officers to the scene
Axon and Skydio have sold drones together since 2021 and added a “drone as first responder” (DFR) docked package — autonomous drones that launch from rooftop stations and fly to 911 calls — in 2024. The companies say more than 1,500 public safety customers now use Skydio drones and that over 28 million Americans live within two miles of a Skydio DFR dock. Where the program runs, Axon and Skydio say drones beat officers to the scene on roughly 80% of dispatched calls and cut priority response times by as much as 65%.
Axon estimates the U.S. and Canadian public-safety drone market at roughly $13 billion, with “thousands” of agencies still evaluating whether to adopt DFR. Locking in exclusive distribution rights to the segment’s largest U.S.-based drone manufacturer gives Axon first claim on that growth before rivals can build their own channel into police departments. Skydio, for its part, keeps the capital — and the freedom to keep selling to the military, utilities and other sectors the exclusivity does not touch.
Skydio expects about $1 billion in total bookings this fiscal year. Axon’s own Q3 revenue came in at $909 million, up 28% year over year, though the same shareholder letter flagged that roughly $130 million of expected Dedrone counter-drone revenue — a separate product line — has slipped out of 2026.
“Within a decade, millions of drones will be working across America. Skydio is positioned to lead in every sector they touch.”
Rick Smith, Founder and CEO, Axon EnterpriseAdam Bry, Skydio’s CEO, said Axon “has been an incredible partner in bringing our drones to public safety customers across the U.S.” and called Axon’s new role as exclusive channel for U.S. and Canadian public safety a natural extension of that relationship. Skydio, based in San Mateo, California, calls itself the largest U.S.-based drone manufacturer and says its drones are used by more than 4,000 agencies and organizations, including the armed forces of 32 allied nations.
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