Axon to acquire drone startup, reports strong year-over-year revenue growth
Axon Enterprise Inc. is off to a fast start in 2024.
The Scottsdale-based law enforcement technology company announced in its May 6 Q1 2024 earnings call that it plans to acquire drone defense startup Dedrone. For Axon, the move is in line with the company’s push to expand its presence in the drone as a first responder category.
“By combining Axon’s 30-year legacy of innovation with Dedrone’s cutting-edge airspace security solutions, we aim to revolutionize public safety once again,” said Axon Founder and CEO Rick Smith in a statement. “Together, we will accelerate our efforts in creating a more advanced end-to-end drone solution that enables the good drones to fly and helps ensure the bad ones don’t.”
The deal is expected to close in the second half of 2024.
Headquartered in Virginia, Dedrone works with military, government and commercial customers and has reportedly raised $127 million from investors including Axon, according to CNBC. Dedrone acquired Chandler-based startup Aerial Armor in 2023.
Axon makes Taser stun guns and other law enforcement industry products. Its clients consist of first responders, police officers, corrections and emergency medical services personnel. It has more than 4,000 employees worldwide with nearly 1,500 based in Arizona as of January.
Robotic security using drones, along with the rise in artificial intelligence, were big themes on the Q1 earnings call led by Smith. Axon reported quarterly revenue of $461 million, which was up 34% year over year and exceeded the company’s expectations.
Axon attributed that growth to Axon Cloud & Services and increasing demand for Taser and Sensors products.
When it released its Q4 2023 numbers, Axon was expecting revenue between $1.88 billion and $1.94 billion in 2024, driven by strong demand for its software and products, including Taser 10 and Axon Body 4. Analysts were predicting revenue of $1.88 billion in 2024, Barron’s reported.
The company’s shares opened at $312.82 on May 7, down from $327.64 at close on May 6.
Earnings call did not provide updates on future headquarters
Axon has plans to develop a north Scottsdale corporate campus containing multifamily, retail and restaurant components and a new hotel, but plans have stalled after the city planning commission tabled a rezoning case for the project on Feb. 14. A new date has not been set for the commission to hear the project.
Less than two weeks later during the Q4 2023 earnings call, Smith called out the city of Scottsdale for being a challenging environment to develop while suggesting that the company has started exploring other options for its headquarters.
The subject of Axon’s future headquarters was not discussed on its May 6 earnings call and little has been said publicly in recent weeks.
Axon did refer to investments in the new Scottsdale campus in a letter to shareholders but did not lay out a timeline for when it hopes to complete the campus.
The process for Axon to develop its new headquarters has been years in the works. In September 2020, Axon bought 74 acres at Loop 101 and Hayden Road in September 2020 at an Arizona State Land Department auction for $49.1 million, which was a month after Axon reached an agreement to keep its headquarters in Scottsdale.
The agreement put Axon on the clock to develop 250,000 square feet of commercial space and reach a payroll of $130 million within five years of buying the land.
Axon has been in front of Scottsdale’s Airport Advisory Commission, Planning Commission and City Council this year, looking to rezone 43 acres of a 74-acre parcel to allow residential use. In total, Axon looks to develop 1,975 multifamily residential units, a 425-key hotel and nearly 47,000 square feet for new restaurants and retail.
On the eastern end of its parcel, Axon can proceed with building a 400,000-square-foot office building that would serve as the company’s new global headquarters. Axon has not moved forward with pulling building permits for its office building.
At a Jan. 25 meeting with Scottsdale Planning Commission, Charles Huellmantel of Huellmantel & Affiliates — an attorney representing Axon in its rezoning case — said the company has outgrown its current headquarters at 17800 N. 85th Street and “can’t grow adequately without the housing” that it looks to develop alongside the headquarters.
The area around Axon’s land is exploding with major developments such as the Cavasson mixed-use campus, One Scottsdale, ASM America, Optima McDowell Mountain Village and Banner Health’s planned $400 million hospital campus.