Axon commits $1.2 billion to Skydio, becomes exclusive US and Canada public safety distributor

Axon announced a $1.2 billion investment in drone maker Skydio on Thursday and said it will become Skydio's exclusive distributor to public safety agencies in the United States and Canada. The pre-money valuation of Skydio in the deal is $5.2 billion.

Axon's filing with the US Securities and Exchange Commission indicates its fully diluted ownership of Skydio is expected to rise from about 15% to about 37% once all tranches close, DRONELIFE reported. The package is a mix of cash and Axon stock, and the company said it is subject to final transaction terms.

How the deal is structured

The investment combines new capital for Skydio with purchases of shares from existing Skydio shareholders. DroneXL, citing the filing, reported that about 60% of the total, roughly $720 million, is cash, and that only a first tranche of $254.9 million, which closed Thursday, was new money for Skydio. That tranche was paid half in cash and half in stock, DroneXL reported.

Axon said the rest of the deal is slated to be completed across the final three months of 2026 and the opening quarter of 2027, pending the usual closing conditions. DroneXL reported that the shares are non-voting and that Axon's chief financial officer, Brittany Bagley, said the company has neither control of Skydio nor the kind of influence that would require consolidating its results.

Drone as First Responder market

The partnership centers on Drone as First Responder (DFR) programs, in which a drone stationed in a dock launches automatically when an emergency call comes in and can reach the scene before ground units. Axon estimates the DFR market at about $13 billion in the US and Canada.

Skydio said it has more than 1,500 public safety customers and that more than 28 million Americans live within two miles of one of its DFR docks. Axon said that where agencies use Skydio DFR, the time to respond to top-priority calls has dropped by up to 65%, and drones get there ahead of officers in roughly 80% of the calls they fly. DRONELIFE noted these figures come from the companies and do not describe all DFR programs.

Skydio expects about $1 billion in total bookings in its current fiscal year, according to the announcement.

Executives' comments

“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 of Axon

Skydio CEO Adam Bry said the investment strengthens the company's ability to accelerate its technology roadmap and continue advancing autonomous flight across the industries it serves. DroneXL reported that when asked on an earnings call whether the deal leads to full ownership, Smith said the companies weighed other arrangements and chose this one for the moment. "We'll see what the future holds," he said.

DRONELIFE reported that the announcement is silent on what the arrangement means for Skydio's current distributors, integrators or customer contracts. Skydio can still sell into other markets such as defense and commercial uses, the outlet said.

The announcement followed Axon's third-quarter results, which showed record revenue of $909 million, up 28%. DroneXL reported that this was below analyst expectations of $934 million, that Axon cut its full-year outlook, and that its shares were down about 18% in Friday trading.