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

Offering Overview

Axon Enterprise, Inc. filed a preliminary prospectus supplement on Form 424B5 covering a registered underwritten offering of $1,000,000,000 aggregate principal amount of 0% Convertible Senior Notes due 2031. In addition, the underwriters have an 11-day option to purchase up to an additional $150,000,000 principal amount of notes solely to cover over-allotments.

Key Terms of the Notes

• Issuer: Axon Enterprise, Inc.
• Principal Amount: $1,000,000,000 ($1,150,000,000 if over-allotment is exercised in full).
• Coupon / Accretion: 0.00% regular interest; principal amount does not accrete.
• Maturity Date: September 15, 2031, unless earlier converted, redeemed, or repurchased.
• Initial Conversion Rate: 1.5336 shares of common stock per $1,000 principal amount of notes, representing an initial conversion price of approximately $652.06 per share (a ~47.5% premium over the reference price of $442.08 on September 15, 2026).
• Conversion Settlement: Cash, shares of common stock, or a combination thereof, at Axon's election.
• Redemption Rights: Notes may not be redeemed before September 20, 2029 (except for cleanup redemptions when <10% aggregate principal remains outstanding). On or after September 20, 2029, the notes may be redeemed at 100% of par if the common stock trades at or above 130% of the conversion price for at least 20 trading days in a 30-day window.
• Ranking: General senior unsecured obligations ranking pari passu with other senior unsecured debt.
• Gross Proceeds / Discounts: Underwriting discount is 1.15% ($11.50 million), yielding net proceeds of $988.50 million before offering expenses.

Related Financing Transactions

• Credit Agreement Amendment: Concurrently with the offering, Axon entered into a Second Amendment to its Credit Agreement (JPMorgan Chase Bank, N.A., as administrative agent). The amendment expands the existing revolving credit facility from $300 million to $500 million, provides an incremental accordion of $150 million, and extends the maturity profile up to five years.
• Capped Call Transactions: In connection with the pricing of the notes, Axon expects to enter into capped call transactions to mitigate potential economic dilution upon note conversion.