Investing
Axon (AXON) Stock Falls 15.5% on Guidance Cut, Skydio Deal
Axon stock falls 15.5% after Q3 2026 results, as a cut to full-year growth guidance and a $1.2 billion Skydio investment overshadow record $909M revenue.
Axon stock falls 15.5% in trading on Friday, 6 November 2026, the session after the company reported third-quarter results and announced a $1.2 billion investment in drone maker Skydio. Revenue hit a record $909 million, up 28% year over year, but Axon lowered its full-year growth outlook.
What Axon reported
| Metric | This period | A year earlier | Change |
|---|---|---|---|
| Revenue | $909M | $711M | +28% |
| Net income | $57M | -$2M loss | Swung to profit |
| Non-GAAP EPS | $1.72 | $1.24 | +39% |
| Gross margin | 56.7% | 60.1% | -340 bp |
| Free cash flow | -$19M | +$33M | Turned negative |
Non-GAAP EPS is profit per share excluding items such as stock-based pay. A basis point (bp) is one hundredth of a percentage point. Axon said margins fell on more counter-drone equipment, higher memory costs and new product categories, and that about $100 million spent building inventory pushed free cash flow negative.
Axon now expects full-year 2026 revenue of about $3.61 billion to $3.63 billion, roughly 30% growth, down from prior guidance of 32% to 34%. Guidance is the company's own forecast. The cut reflects three Federal Dedrone counter-drone deployments worth about $130 million that it no longer expects in 2026.
Why the stock fell 15.5%
The drop was nearly five times the size of a typical day's swing for Axon, a rare move. The guidance cut is the clearest new negative, alongside the Skydio deal. That is the largest single investment in Axon's history and raises its fully diluted stake to 37%. FACTS indicate investors read it as a sign of rising spending and dilution. Dilution means existing shareholders own a smaller slice of the company.
What to watch next
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When the delayed $130 million in Federal Dedrone deployments are recognised as revenue
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How the exclusive Skydio public safety distribution deal in the U.S. and Canada is booked
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Whether Software & Services growth, 43% to $437 million this quarter, holds up
FAQ
What is Axon's fourth-quarter 2026 guidance?
Axon expects fourth-quarter revenue of $990 million to $1.01 billion. It forecasts adjusted EBITDA of $245 million to $250 million. Adjusted EBITDA is earnings before interest, tax, depreciation and amortisation, minus some one-off items.
How much debt does Axon have?
As of 30 September 2026, Axon held $1.7 billion in cash and short-term investments against $2.9 billion of convertible and senior notes. That left net debt of $1.2 billion, up $182 million from the prior quarter.
Sources
This article is for information only and is not investment advice.