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Axon invests $1.2 billion in Skydio as software, AI and drone businesses accelerate

Axon reported third-quarter 2026 revenue of $909 million, up 28% year over year, with Software & Services revenue rising 43% to $437 million. AI annual recurring revenue passed $100 million, while total annual recurring revenue reached $1.8 billion. The company also announced an additional $1.2 billion investment in Skydio, increasing its fully diluted ownership to 37%, plus an exclusive public-safety distribution partnership in the United States and Canada. Axon expects full-year revenue growth of about 30%, although it removed roughly $130 million of expected 2026 revenue tied to delayed federal Dedrone deployments. The results therefore combine strong platform growth with execution risk in large government programs.