Axon Announces Pricing of $1.0 Billion Offering of 0% Convertible Senior Notes Due 2031

Axon raises up to $1.15 billion via 0% convertible notes and uses capped calls to help limit potential share dilution.

Rhea-AI Summary

Axon (AXON) priced a $1.0 billion offering of 0% convertible senior notes due 2031, with settlement expected on September 18, 2026, subject to customary conditions.

Underwriters have an option to buy up to an additional $150.0 million of notes for over-allotments, which would increase net proceeds from about $986.0 million to about $1,134.3 million. The notes mature on September 15, 2031, bear no regular interest and are initially convertible at 1.5336 shares per $1,000 principal (conversion price about $652.06 per share). Holders have a repurchase option on March 20, 2031 and upon certain fundamental changes, while Axon can redeem from September 20, 2029 if share-price conditions are met or if less than 10% of the original issue remains.

Axon will spend about $99.9 million (or $114.9 million if the over-allotment is fully exercised) on capped call transactions, which are intended to reduce dilution, with an initial cap price of $1,049.94, 137.5% above the September 15, 2026 closing share price of $442.08.

Positive

• $1.0 billion 0% convertible notes provide substantial funding with no cash interest cost
• Net proceeds expected at about $986.0 million–$1,134.3 million for growth and general corporate purposes
• Initial conversion price of about $652.06 per share is above the last reported share price
• Capped call transactions costing about $99.9–$114.9 million are designed to reduce dilution from conversion
• Capped call cap price of $1,049.94 is 137.5% above the $442.08 reference share price

Negative

• Convertible structure introduces potential share dilution at an initial conversion rate of 1.5336 shares per $1,000
• Axon will spend about $99.9–$114.9 million of proceeds on capped call costs instead of operations or investment
• Hedging and unwinding of capped calls by option counterparties could cause share price and note price volatility

News Explained

Axon has priced, but not yet settled, notes whose proceeds may fund acquisitions and whose conversion can issue shares that dilute existing ownership.

The priced note financing is not yet settled: after the capped-call cost, Axon expects to direct the remaining net proceeds to general corporate purposes, including growth capital and possible acquisitions or investments.

Because the notes are convertible, holders may receive cash, shares, or both at Axon’s election; any shares issued on conversion would increase share count and reduce existing holders’ percentage ownership, absent offsetting changes.

The capped calls are intended to reduce potential dilution or excess cash payments, but that protection is subject to a cap.

Key Figures

Note principal: $1.0 billion Over-allotment option: $150.0 million Net proceeds: $986.0 million +5 more

Note principal

$1.0 billion

0% convertible senior notes due 2031

Over-allotment option

$150.0 million

Additional notes option for underwriters

Net proceeds

$986.0 million

Expected proceeds before over-allotment exercise

Net proceeds with option

$1,134.3 million

Expected proceeds if over-allotment is exercised in full

Capped call cost

$99.9 million

Planned use of net proceeds

Initial conversion price

$652.06 per share

Initial conversion terms

Maturity date

September 15, 2031

Notes mature unless earlier converted, redeemed or repurchased

Capped call cap price

$1,049.94

Initial cap price

Previous Offering Reports

1 past event · Latest: Sep 15

Same Type 1 event

1. Sep 15

   Convertible note offering

   24h Move

   -9.8%

   Proposed $1.0 billion 0% convertible notes with $150 million over-allotment option

24h Move is the share-price change in the day after each event; other market factors may also have contributed.

Key Terms

convertible senior notes, over-allotment option, capped call transactions, senior, unsecured obligations

4 terms

convertible senior notes financial

"priced its offering of $1.0 billion aggregate principal amount of 0% convertible senior notes"

Convertible senior notes are a type of loan that a company issues to investors, which can be turned into company shares later on. They are called "senior" because they are paid back before other debts if the company runs into trouble. This allows investors to earn interest like a loan but also have the chance to own part of the company if its value rises.

over-allotment option financial

"granted the underwriters of the Notes an option to purchase"

An over-allotment option is a special agreement that allows underwriters to sell more shares than initially planned if demand is high. Think of it like a retailer offering extra units of a popular product to meet additional customer interest. This option helps ensure the full sale is completed and can also give investors extra shares if they want more.

capped call transactions financial

"Axon has entered into privately negotiated capped call transactions"

Capped call transactions are agreements where investors buy options that give them the chance to benefit if a stock's price goes up, but with a limit on how much they can gain. This helps protect them from paying too much if the stock's price rises a lot, similar to having a maximum limit on a reward. They matter because they help investors manage risk while still allowing some upside potential.

senior, unsecured obligations financial

"The Notes will be senior, unsecured obligations of Axon"

Senior, unsecured obligations are loans or bonds that a company promises to repay before lower-ranked (subordinated) creditors but without specific collateral backing them. They matter to investors because they combine relatively higher priority in a company’s payment order with greater risk than secured debt, so they typically offer higher yields and influence how much money investors could recover if the company runs into financial trouble.

AI-generated analysis. How Rhea-AI works. Not financial advice.

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SCOTTSDALE, Ariz., Sept. 16, 2026 /PRNewswire/ -- Axon Enterprise, Inc. (Nasdaq: AXON) ("Axon") announced today that it has priced its offering of $1.0 billion aggregate principal amount of 0% convertible senior notes due 2031 (the "Notes"). Axon also granted the underwriters of the Notes an option to purchase for settlement within an 11-day period beginning on, and including, the first date on which the Notes are issued, up to an additional $150.0 million aggregate principal amount of Notes, solely to cover over-allotments, if any. The sale of the Notes to the underwriters is expected to settle on September 18, 2026, subject to customary closing conditions, and is expected to result in approximately $986.0 million in net proceeds to Axon (or approximately $1,134.3 million if the underwriters exercise their over-allotment option in full) after deducting the underwriters' discount and estimated offering expenses payable by Axon.

Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, RBC Capital Markets, LLC and Citigroup Global Markets Inc. are acting as joint lead book-running managers for the offering. Citizens JMP Securities, LLC, Needham & Company, LLC, Piper Sandler & Co. and Baird are acting as co-managers for the offering.

Use of Proceeds

Axon intends to use $99.9 million of the net proceeds of the offering of the Notes (or approximately $114.9 million if the underwriters exercise their over-allotment option for the Notes in full) to pay the cost of the capped call transactions described below. Axon expects to use the remaining net proceeds for general corporate purposes, which may include, among other things, providing capital to support Axon's growth and to acquire or invest in product lines, products, services or technologies, including through acquisitions of, or investments in, other businesses.

Additional Details of the Notes

The Notes will mature on September 15, 2031, unless earlier converted, redeemed or repurchased. The Notes will be senior, unsecured obligations of Axon and will not bear regular interest, and the principal amount of the Notes will not accrete.

The Notes may be converted at an initial conversion rate of 1.5336 shares of Axon's common stock per $1,000 principal amount of Notes (equivalent to an initial conversion price of approximately $652.06 per share of Axon's common stock). Prior to the close of business on the business day immediately preceding June 15, 2031, the Notes will be convertible at the option of the noteholders only upon the satisfaction of specified conditions and during certain periods. On or after June 15, 2031 until the close of business on the second scheduled trading day immediately preceding the maturity date, the noteholders may convert all or any portion of their Notes regardless of these conditions. Upon conversion, Axon will pay or deliver, as the case may be, cash, shares of Axon's common stock or a combination of cash and shares of Axon's common stock, at Axon's election.

If Axon undergoes certain corporate events that constitute a "fundamental change," then, subject to certain conditions and limited exceptions, holders may require Axon to repurchase for cash all or any portion of their Notes at a fundamental change repurchase price equal to 100% of the principal amount of the Notes to be repurchased, plus accrued and unpaid special interest, if any, to, but excluding, the fundamental change repurchase date. In addition, subject to certain conditions, noteholders may require Axon to repurchase their Notes on March 20, 2031 at a repurchase price equal to the principal amount of the Notes to be repurchased, plus accrued and unpaid special interest, if any (a "holder repurchase option"). Axon may elect to satisfy all or a portion of its obligation with respect to the principal amount of the repurchase price for the holder repurchase option by issuing or delivering shares of Axon's common stock in certain circumstances, up to a specified maximum number of shares, with the remainder (if any) of the repurchase price payable in cash, subject to and in accordance with the terms and conditions set forth in the indenture governing the Notes.

Except in the case of a cleanup redemption (as defined below), on or after September 20, 2029, and before the 31st scheduled trading day immediately before the maturity date, Axon may redeem for cash all or any portion of the Notes (subject to certain limitations), at Axon's option, if the last reported sale price of Axon's common stock has been at least 130% of the conversion price then in effect for at least 20 trading days (whether or not consecutive) during any 30 consecutive trading day period (including the last trading day of such period) ending on, and including, the trading day immediately preceding the date on which Axon provides notice of redemption, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus accrued and unpaid special interest, if any, to, but excluding, the redemption date. Axon may also redeem for cash all, but not less than all, of the Notes at any time before the 31^st scheduled trading day immediately before the maturity date if the principal amount of Notes outstanding at such time is less than 10% of the aggregate principal amount of the Notes initially issued under the indenture (including any additional Notes issued pursuant to the underwriters' over-allotment option) (a "cleanup redemption").

Capped Call Transactions

In connection with the pricing of the Notes, Axon has entered into privately negotiated capped call transactions with certain of the underwriters and/or their respective affiliates and other financial institutions (the "option counterparties"). The capped call transactions cover, subject to anti-dilution adjustments substantially similar to those applicable to the Notes, the number of shares of Axon's common stock initially underlying the Notes. If the underwriters exercise their over-allotment option, then Axon expects to enter into additional capped call transactions with the option counterparties. The capped call transactions are expected generally to reduce the potential dilution to Axon's common stock upon any conversion of the Notes and/or offset any potential cash payments Axon is required to make in excess of the principal amount of converted Notes, as the case may be, with such reduction and/or offset subject to a cap. The cap price of the capped call transactions will initially be $1,049.94, which represents a premium of 137.5% over the last reported sale price of Axon's common stock of $442.08 per share on The NASDAQ Stock Market LLC on September 15, 2026, and is subject to certain adjustments under the terms of the capped call transactions. The cap price of the capped call transactions and the premium payable were determined at the time of pricing of the offering.

Axon has been advised that, in connection with establishing their initial hedges of the capped call transactions, the option counterparties or their respective affiliates expect to enter into cash-settled over-the-counter derivative transactions with respect to Axon's common stock concurrently with, or shortly after, the pricing of the Notes and may unwind these cash-settled over-the-counter derivative transactions and purchase shares of Axon's common stock in open market transactions following the pricing of the Notes. This activity could increase (or reduce the size of any decrease in) the market price of Axon's common stock or the Notes at that time. In addition, the option counterparties or their respective affiliates may modify their hedge positions by entering into or unwinding various derivatives with respect to Axon's common stock and/or purchasing or selling shares of Axon's common stock or other securities issued by Axon in secondary market transactions following the pricing of the Notes and prior to the maturity of the Notes (and (x) are likely to do so during any observation period related to a conversion of the Notes, following any redemption of Notes by Axon or following any repurchase of Notes by Axon in connection with any fundamental change or holder repurchase option and (y) are likely to do so following any other repurchase of Notes by Axon,  if Axon elects to unwind a corresponding portion of the capped call transactions in connection with such repurchase). This activity could also cause or avoid an increase or a decrease in the market price of Axon's common stock or the Notes, which could affect a noteholder's ability to convert the Notes and, to the extent the activity occurs during any observation period related to a conversion of the Notes or repurchase observation period related to an exercise of the holder repurchase option, it could affect the number of shares of Axon's common stock and value of the consideration that a noteholder will receive upon conversion or optional repurchase of the Notes.

In addition, if any such capped call transaction fails to become effective, whether or not the offering of the Notes is completed, the option counterparty party thereto may unwind its hedge positions with respect to Axon's common stock, which could adversely affect the value of Axon's common stock and, if the Notes have been issued, the value of the Notes.

About Axon

Axon (Nasdaq: AXON) is the global leader in public safety technology, relentlessly innovating to protect more lives in more places. Founder-led since 1993, Axon began with a mission to reimagine conflict in law enforcement and has grown into a global company serving everyone who takes on the responsibility of public safety, enterprise security, and national security — from first responders and governments to companies, frontline workers, and communities. Our trusted network connects TASER energy devices, cameras and sensors including body-worn, fixed and in-car cameras, drones and robotics, digital evidence and records management, real-time operations, immersive training, productivity tools, and AI-driven capabilities and insights. Designed to work seamlessly together, these solutions create a connected picture of safety that helps protect people and places with greater speed, clarity, and accountability.

Non-Axon trademarks are property of their respective owners.

Axon, Axon 911, Axon Assistant, AI Era Plan, Axon Body, Axon Body Mini, Axon Ecosystem, Axon Evidence, Axon Fusus, Axon Auto-Transcribe, Dedrone, TASER, TASER 10, the Filled Bolt within Circle Logo and the Delta Logo are trademarks of Axon Enterprise, Inc., some of which are registered in the United States and other countries. All rights reserved.

Notice to Investors; Forward-Looking Statements

The offering is being made pursuant to an effective shelf registration statement on file with the Securities and Exchange Commission (the "SEC"). The offering will be made only by means of a prospectus supplement relating to the offering and an accompanying prospectus. An electronic copy of the prospectus supplement, together with the accompanying prospectus, is available on the SEC's website at www.sec.gov. Alternatively, copies of the prospectus supplement, together with the accompanying prospectus, can be obtained by contacting: Axon Enterprise, Inc., 17800 North 85th Street, Scottsdale, AZ 85255; Attention: Legal (telephone: (480) 905-2000). Alternatively, copies of the prospectus supplement, together with the accompanying prospectus, can be obtained by contacting: Goldman Sachs & Co. LLC, c/o Prospectus Department, 200 West Street, New York, NY 10282 by email at prospectus-ny@ny.email.gs.com, Morgan Stanley & Co. LLC, c/o Prospectus Department, 180 Varick Street, 2nd Floor, New York, NY 10014, by email at prospectus@morganstanley.com and J.P. Morgan Securities LLC, c/o Broadridge Financial Solutions, 1155 Long Island Avenue, Edgewood, NY 11717, by email at prospectus-eq_fi@jpmchase.com and postsalemanualrequests@broadridge.com.

This press release is for informational purposes only and is neither an offer to sell nor a solicitation of an offer to buy the Notes or any other security, and shall not constitute an offer to sell or a solicitation of an offer to buy, or a sale of, the Notes or any other security in any jurisdiction in which such offer, solicitation, or sale is unlawful. Information contained on, or that can be accessed through, Axon's website does not constitute part of the offering.

Forward-looking statements in this press release include, but are not limited to, statements regarding the completion of the offering, the timing of the closing, the intended use of proceeds and the effects of entering into the capped call transactions described above, as well as statements about Axon's future plans and goals, proposed products and services and related development efforts and activities; expectations about the market for Axon's current and future products and services, including statements related to Axon's user base and customer profiles. Words such as "may," "will," "should," "could," "would," "predict," "potential," "continue," "expect," "anticipate," "future," "intend," "plan," "believe," "estimate," and similar expressions, as well as statements in future tense, identify forward-looking statements. However, not all forward-looking statements contain these words.

Axon cannot guarantee that any forward-looking statement will be realized, although it believes it has been prudent in Axon's plans and assumptions. Achievement of future results is subject to risks, uncertainties and potentially inaccurate assumptions. The following important factors could cause actual results to differ materially from those in the forward-looking statements: Axon's exposure to cancellations of government contracts due to non-appropriation clauses, exercise of a cancellation clause or non-exercise of contractually optional periods; the ability of law enforcement agencies to obtain funding, including based on tax revenues; Axon's ability to design, introduce and sell new products, services or features; Axon's ability to defend against litigation and protect Axon's intellectual property, and the resulting costs of this activity; Axon's ability to win bids through the open bidding process for governmental agencies; Axon's ability to manage its supply chain and avoid production delays, shortages and impacts to expected gross margins; the impacts of inflation, macroeconomic conditions and global events; the impact of catastrophic events or public health emergencies; the impact of stock-based compensation expense, impairment expense and income tax expense on Axon's financial results; customer purchase behavior, including adoption of Axon's software as a service delivery model; negative media publicity or sentiment regarding Axon's products; the impact of various factors on gross margins; defects in, or misuse of, Axon's products; changes in the costs of product components and labor; loss of customer data, a breach of security or an extended outage, including by Axon's third-party cloud-based storage providers; exposure to international operational risks; delayed cash collections and possible credit losses due to Axon's subscription model; changes in government regulations in the United States and in foreign markets, especially related to the classification of Axon's products by the United States Bureau of Alcohol, Tobacco, Firearms and Explosives; Axon's ability to integrate acquired businesses; the impact of declines in the fair values or impairment of Axon's investments, including Axon's strategic investments; Axon's ability to attract and retain key personnel; litigation or inquiries and related time and costs; Axon's ability to remediate the material weakness in Axon's internal controls; and counter-party risks relating to cash balances held in excess of federally insured limits. Many events beyond Axon's control may determine whether results it anticipates will be achieved. Should known or unknown risks or uncertainties materialize, or should underlying assumptions prove inaccurate, actual results could differ materially from past results and those anticipated, estimated or projected. You should bear this in mind as you consider forward-looking statements. The Annual Report on Form 10-K that Axon filed with the Securities and Exchange Commission ("SEC") for the year ended December 31, 2025, lists various important factors that could cause actual results to differ materially from expected and historical results. These factors are intended as cautionary statements for investors within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and Section 27A of the Securities Act of 1933, as amended. Readers can find them under the heading "Risk Factors" in Axon's Annual Report on Form 10-K for the year ended December 31, 2025, and investors should refer to them. You should understand that it is not possible to predict or identify all such factors. Consequently, you should not consider any such list to be a complete set of all potential risks or uncertainties.

Except as required by law, Axon undertakes no obligation to publicly update forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosures Axon makes on related subjects in Axon's Form 8-K, 10‑Q and 10‑K reports to the SEC.

Media Contact:
Kate MacKinnon
Vice President, Communications
Press@Axon.com

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SOURCE Axon

FAQ

AI-generated questions and answers. How Rhea-AI works. Not financial advice.

How does Axon plan to use the net proceeds from this convertible notes offering?

Axon intends to use approximately $99.9 million of net proceeds (or about $114.9 million if the over-allotment option is fully exercised) to pay the cost of the capped call transactions. The remaining net proceeds are expected to be used for general corporate purposes, which the company said may include providing capital to support growth and acquiring or investing in product lines, products, services or technologies, including acquisitions or investments in other businesses.

What are the key conversion terms of Axon’s 0% convertible senior notes due 2031?

The notes are initially convertible at a rate of 1.5336 shares of Axon common stock per $1,000 principal amount, implying an initial conversion price of about $652.06 per share. Before the close of business on the business day immediately preceding June 15, 2031, holders may convert only if specified conditions are met and during certain periods. From June 15, 2031 until the second scheduled trading day before maturity, holders may convert their notes at any time. Upon conversion, Axon may deliver cash, shares, or a combination, at its election.

Under what circumstances can noteholders require Axon to repurchase the notes?

If Axon undergoes certain corporate events defined as a fundamental change, and subject to conditions and limited exceptions, holders may require Axon to repurchase all or any portion of their notes for cash at 100% of principal plus accrued and unpaid special interest, if any. In addition, holders have a repurchase option on March 20, 2031 at a price equal to the principal amount plus accrued and unpaid special interest, if any; Axon may satisfy all or part of the principal for this holder repurchase option in shares, up to a specified maximum number, with any remainder in cash.

When and how can Axon redeem the notes before maturity?

Except for a cleanup redemption, Axon may redeem for cash all or any portion of the notes, subject to certain limitations, on or after September 20, 2029 and before the 31st scheduled trading day immediately before maturity if Axon’s common stock has traded at least 130% of the then-effective conversion price for at least 20 trading days in any 30 consecutive trading day period ending on the trading day before redemption notice. The redemption price is 100% of principal plus accrued and unpaid special interest, if any. Axon may also conduct a cleanup redemption and redeem all (but not less than all) notes for cash if less than 10% of the aggregate principal amount initially issued (including any over-allotment notes) remains outstanding.

What are the capped call transactions and how might they affect Axon’s stock?

The capped call transactions are privately negotiated call option arrangements with certain underwriters and other financial institutions covering the number of Axon shares initially underlying the notes, subject to anti-dilution adjustments. They are expected to generally reduce potential dilution upon conversion of the notes and/or offset cash payments above principal, up to an initial cap price of $1,049.94 per share. Option counterparties or their affiliates may enter into, adjust, or unwind hedging transactions in Axon stock or related derivatives over the life of the notes, which could increase or decrease the market price of Axon’s common stock or the notes and could affect the number of shares or value received by noteholders upon conversion or repurchase.

How can investors obtain the prospectus supplement and accompanying prospectus for this offering?

The offering is being conducted under an effective shelf registration statement, and the prospectus supplement and accompanying prospectus are available electronically at the SEC’s website (www.sec.gov). Physical or emailed copies can be requested from Axon at its Scottsdale address (Attention: Legal, telephone (480) 905-2000), or from the lead underwriters’ prospectus departments at Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, and J.P. Morgan Securities LLC at the contact details provided in the announcement.