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

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.

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.

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 ...