Axon closes $1.15B of 0% convertible notes due 2031 after full overallotment

Axon Enterprise, Inc. said that on September 18, 2026 it issued and sold $1.15 billion aggregate principal amount of 0% Convertible Senior Notes due 2031 — including $150.0 million from the underwriters' full over-allotment exercise — maturing September 15, 2031, convertible at an initial rate of 1.5336 shares per $1,000 principal (about $652.06 per share), and paired the sale with capped call transactions costing about $114.9 million at an initial $1,049.94 cap.

Axon closed a $1.15 billion zero-coupon convertible notes sale, pairing the full over-allotment exercise with capped-call hedges sized to the enlarged principal.

$1.15 billion of 0% notes due 2031

On September 18, 2026, Axon Enterprise, Inc. (Nasdaq: AXON) issued and sold $1.15 billion aggregate principal amount of 0% Convertible Senior Notes due 2031. That total includes $150.0 million sold after the underwriters fully exercised the over-allotment option attached to the September 15, 2026 underwriting agreement, which had covered a $1 billion base size. The notes were issued under a base indenture and a first supplemental indenture, each dated as of September 18, 2026, with U.S. Bank Trust Company, National Association as trustee.

The notes do not bear regular interest, and the principal amount does not accrete. They mature on September 15, 2031, unless earlier converted, redeemed, or repurchased. Axon may elect to pay special interest as the sole remedy for certain reporting defaults, payable semiannually on March 15 and September 15 if that remedy applies.

Conversion, settlement, and holder options

The initial conversion rate is 1.5336 shares of Axon common stock per $1,000 principal amount of notes, equal to 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, including a 130% trading-price trigger, a trading-price condition, a company call for redemption, or certain corporate events described in the indenture. From June 15, 2031 through the close of business on the second scheduled trading day immediately preceding maturity, holders may convert at any time. Upon conversion, Axon will settle in cash, shares of common stock, or a combination, at its election.

Holders may require Axon to repurchase notes for cash upon a fundamental change at 100% of principal plus accrued and unpaid special interest, if any, subject to limited exceptions. Separately, subject to conditions in the indenture, holders have a repurchase option around March 20, 2031 at principal plus accrued and unpaid special interest; Axon may elect to satisfy all or a portion of the principal component of that repurchase price in common stock up to a specified maximum, with any remainder in cash.

Company redemption and capped calls

Except for a cleanup redemption, Axon may redeem the notes for cash on or after September 20, 2029 and before the thirty-first scheduled trading day immediately before maturity if its common stock has traded at least 130% of the then-current conversion price for at least 20 trading days in a 30 consecutive trading-day period ending on the trading day before the redemption notice. A cleanup redemption lets Axon redeem all outstanding notes if less than 10% of the initially issued aggregate principal remains outstanding. Redemption prices equal 100% of principal plus accrued and unpaid special interest, if any.

Concurrently with pricing on September 15, 2026 and again on September 16, 2026 in connection with the full over-allotment exercise, Axon entered privately negotiated capped call transactions with certain financial institutions. The capped calls initially cover the shares underlying the notes and are intended to reduce potential dilution, or offset cash payments above principal on conversion, subject to a cap. The initial cap price is $1,049.94 per share — a 137.5% premium over the $442.08 last reported sale price of Axon common stock on September 15, 2026. The capped-call cost was approximately $114.9 million. The transactions are separate from the notes; noteholders have no rights under them.

Axon intends to use about $114.9 million of net proceeds to pay for those capped calls and the remainder for general corporate purposes, which may include growth capital and acquisitions or investments in product lines, products, services, or technologies.

Offering path and credit-agreement link

The notes offering was made under Axon's effective Form S-3 shelf (File No. 333-277559). A second amendment to Axon's December 15, 2022 credit agreement with JPMorgan Chase Bank, N.A. as administrative agent — previously disclosed in Axon's September 15, 2026 Form 8-K — became effective when the notes offering closed. The September 16 pricing press release is furnished under Item 7.01 and is not deemed filed for Exchange Act liability purposes.

Axon's Form 8-K covering the close lists Goldman Sachs & Co. LLC, Morgan Stanley & Co. LLC, J.P. Morgan Securities LLC, RBC Capital Markets, LLC, and Citigroup Global Markets Inc. as joint lead book-running managers in the furnished pricing release, with Citizens JMP Securities, LLC, Needham & Company, LLC, Piper Sandler & Co., and Baird as co-managers.