Axon Stock Plunges 18%: Delayed Drone Deals Hit Revenue

Axon Enterprise stock plunged about 18% on Friday, November 6, 2026, after the Taser and body-camera maker missed third-quarter estimates and cut its full-year revenue outlook, blaming delays in three federal counter-drone deployments worth about $130 million. Shares fell from a previous close of $382.56 to around $315 in midday trading, putting the stock on pace for its largest daily percentage decline since February 2025.

What happened

Axon reported third-quarter revenue of $908.6 million, up 28% from a year earlier and a record for the company, but below Wall Street estimates of about $934.3 million. Adjusted earnings came in at $1.72 a share, missing the FactSet consensus of $1.89. On a reported basis, Axon swung to net income of $57.0 million, or $0.68 a share, from a net loss of $2.2 million, or $0.03 a share, a year earlier.

The underlying business did not collapse. Software and services revenue grew 43%. The problem was timing: large federal hardware deals Axon counted on this year did not ship on schedule.

Why the stock is blowing up

The trigger was the guidance cut that came with the results. Axon lowered its full-year 2026 revenue forecast to between $3.61 billion and $3.63 billion, implying growth of about 30%, down from its earlier projection of 32% to 34%. Its fourth-quarter outlook of $990 million to $1.01 billion also came in below analyst expectations of roughly $1.07 billion.

Management tied the shortfall directly to three federal Dedrone counter-drone deployments totaling about $130 million. About $30 million had been expected in the third quarter and the remaining $100 million in the fourth quarter. None of that revenue is now expected in 2026. On the earnings call, executives said federal procurement is moving slower around funding and election cycles, and that some programs are taking longer to work through approvals and deployment steps than originally anticipated.

That combination — a miss, a lower outlook and no new timeline for the delayed revenue — sparked the sell-off. Barron's noted the shares are pacing their worst year since 2008, down about 43% in 2026.

The $1.2 billion Skydio bet

The same report contained Axon's biggest strategic move in years. The company is investing an additional $1.2 billion in drone maker Skydio, raising its fully diluted ownership stake to 37% and securing exclusive public-safety distribution rights for Skydio products in the United States and Canada. The transactions are expected to close in the fourth quarter of 2026 and the first quarter of 2027.

That puts Axon in an unusual position. It is doubling down on drones as a foundational technology for public safety at the exact moment delayed counter-drone contracts are hurting its numbers. Management argues the two stories are linked by timing rather than by weak demand: federal deals are getting larger and more hardware-heavy, so individual projects can move results from quarter to quarter. Going forward, Axon said large federal hardware deals will be included in guidance only when shipment timing is more certain — a more conservative approach that may reduce surprises, but also lowers the near-term forecast.

Key facts

• Stock move: Down about 17-18% on Friday to around $315-317, from a $382.56 previous close.
• Revenue: $908.6 million in Q3, up 28% year over year, versus about $934.3 million expected.
• Adjusted EPS: $1.72 a share, versus a $1.89 consensus estimate.
• Delayed deals: Three federal Dedrone deployments worth about $130 million — $30 million in Q3 and $100 million in Q4 — pushed out of 2026.
• New guidance: Full-year revenue of $3.61 billion to $3.63 billion, about 30% growth, down from 32% to 34%.
• Skydio: An additional $1.2 billion investment lifts Axon's stake to 37%, with exclusive U.S. and Canada public-safety distribution.

Sources: Barron's, Motley Fool earnings call transcript, StockStory, Quantli / RTTNews and 24/7 Wall St.

What's next

The next question is simple: does the delayed $130 million land in 2027, or slip further? Axon did not give a specific timeline for recognizing it. Investors will also watch whether the Skydio transactions close on schedule, and whether Axon's more conservative guidance style holds. Analysts, on average, still rate the stock Overweight with a FactSet price target well above Thursday's close — but Friday's reaction shows the market wants the federal revenue to actually arrive, not just be promised again.

This article reports what happened and why markets reacted. It is not financial advice.

FAQ

Why did Axon stock fall so much today?

Axon missed Q3 revenue and earnings estimates and cut its full-year outlook after three federal counter-drone deployments worth about $130 million were delayed out of 2026.

What were Axon's Q3 2026 results?

Revenue was $908.6 million, up 28% year over year, with adjusted earnings of $1.72 a share — both below Wall Street estimates — and reported net income of $57.0 million.

What is Axon's new full-year guidance?

Axon now expects 2026 revenue of $3.61 billion to $3.63 billion, or about 30% growth, down from its earlier 32% to 34% growth projection.

What is the Skydio deal?

Axon is investing an additional $1.2 billion in drone maker Skydio, raising its stake to 37% and gaining exclusive public-safety distribution rights in the U.S. and Canada.