Axon borrowed $1 billion free of interest, and owners pay at $652

Axon builds gear for police. That means stun guns, body cameras and the software that holds the footage. Its own filings call it a maker of weapons and police tools. [C6][C6] Note 11, Commitments and ContingenciesAs a manufacturer of weapons and other law enforcement tools used in high-risk field environments, we are often the subject of product liability litigation concerning the use of our products.Axon Enterprise, Inc. quarterly report on Form 10-Q for the period ended June 30, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1069183/000162828026053646/axon-20260630.htm

Sales are climbing fast. Axon took in $904 million in the three months to June 30, 2026. A year earlier the same months brought in $669 million. [C7][C7] Condensed Consolidated Statements of Operations and Comprehensive IncomeNet sales from products $ 506,553 $ 376,360 $ 959,374 $ 717,256 Net sales from services 397,836 292,178 752,360 554,915 Net sales 904,389 668,538 1,711,734 1,272,171Axon Enterprise, Inc. quarterly report on Form 10-Q for the period ended June 30, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1069183/000162828026053646/axon-20260630.htm

The company is not large in share count. There were 81,237,415 shares out on July 31, 2026. [C8][C8] Cover pageThe number of shares of the registrant’s common stock outstanding as of July 31, 2026 was 81,237,415 .Axon Enterprise, Inc. quarterly report on Form 10-Q for the period ended June 30, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1069183/000162828026053646/axon-20260630.htm

Here is the trade. Buyers hand Axon $1 billion today. Axon pays them nothing along the way. The debt comes due on September 15, 2031. [C1][C1] Pricing term sheet, coverPRICING TERM SHEET DATED SEPTEMBER 15, 2026 AXON ENTERPRISE, INC. $1,000,000,000 0% CONVERTIBLE SENIOR NOTES DUE 2031Axon Enterprise, Inc. pricing term sheet for $1.0 billion of 0% convertible senior notes due 2031, filed September 16, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1069183/000119312526392472/d162950dfwp.htm [C3][C3] Pricing term sheet, Maturity and interestMaturity: September 15, 2031, unless earlier converted, redeemed or repurchased. No Regular Interest; Special Interest: The Notes will not bear regular interest, and the principal amount of the Notes will not accrete.Axon Enterprise, Inc. pricing term sheet for $1.0 billion of 0% convertible senior notes due 2031, filed September 16, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1069183/000119312526392472/d162950dfwp.htm

What the buyers get instead is a claim on the stock. Each $1,000 of debt can turn into 1.5336 Axon shares. That works out to about $652.06 a share. [C2][C2] Pricing term sheet, conversion termsInitial Conversion Rate: 1.5336 shares of our common stock per $1,000 principal amount of Notes, subject to adjustment. Initial Conversion Price: Approximately $652.06 per share of our common stock, subject to adjustment. Conversion Premium: Approximately 47.5% above the Last Reported Sale Price of Our Common Stock on the Nasdaq on the Pricing Date.Axon Enterprise, Inc. pricing term sheet for $1.0 billion of 0% convertible senior notes due 2031, filed September 16, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1069183/000119312526392472/d162950dfwp.htm

The stock was $442.08 when the deal was priced. So the shares only appear if the price climbs about 47.5%. Below that, Axon just repays the cash. [C2][C2] Pricing term sheet, conversion termsInitial Conversion Rate: 1.5336 shares of our common stock per $1,000 principal amount of Notes, subject to adjustment. Initial Conversion Price: Approximately $652.06 per share of our common stock, subject to adjustment. Conversion Premium: Approximately 47.5% above the Last Reported Sale Price of Our Common Stock on the Nasdaq on the Pricing Date.Axon Enterprise, Inc. pricing term sheet for $1.0 billion of 0% convertible senior notes due 2031, filed September 16, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1069183/000119312526392472/d162950dfwp.htm [C4][C4] Pricing term sheet, pricing detailLast Reported Sale Price of Our Common Stock on the Nasdaq on the Pricing Date: $442.08 per share.Axon Enterprise, Inc. pricing term sheet for $1.0 billion of 0% convertible senior notes due 2031, filed September 16, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1069183/000119312526392472/d162950dfwp.htm

Axon can hand over cash, shares, or both. The choice is Axon's. That matters because cash is what keeps the share count down. [C9][C9] Pricing term sheet, Settlement MethodSettlement Method: Upon conversion of the Notes, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our electionAxon Enterprise, Inc. pricing term sheet for $1.0 billion of 0% convertible senior notes due 2031, filed September 16, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1069183/000119312526392472/d162950dfwp.htm

Axon also bought protection for its owners. It paid $99.9 million for a side deal with banks. That deal pushes the pain point up to $1,049.94 a share. [C10][C10] Pricing term sheet, Use of ProceedsWe estimate that the net proceeds from this offering will be approximately $986.0 million (or approximately $1,134.3 million if the underwriters exercise their over-allotment option in full), after deducting the underwriters’ discounts and commissions and estimated offering expenses payable by us.Axon Enterprise, Inc. pricing term sheet for $1.0 billion of 0% convertible senior notes due 2031, filed September 16, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1069183/000119312526392472/d162950dfwp.htm [C11][C11] Pricing term sheet, Cap PriceThe cap price of the capped call transactions will initially be $1,049.94, which represents a premium of 137.5% above the Last Reported Sale Price of Our Common Stock on the Nasdaq on the Pricing DateAxon Enterprise, Inc. pricing term sheet for $1.0 billion of 0% convertible senior notes due 2031, filed September 16, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1069183/000119312526392472/d162950dfwp.htm

After all fees, Axon keeps about $986.0 million. Banks can ask for another $150 million of notes. The rest of the cash is for general use, and Axon names buying other firms as one use. [C10][C10] Pricing term sheet, Use of ProceedsWe estimate that the net proceeds from this offering will be approximately $986.0 million (or approximately $1,134.3 million if the underwriters exercise their over-allotment option in full), after deducting the underwriters’ discounts and commissions and estimated offering expenses payable by us.Axon Enterprise, Inc. pricing term sheet for $1.0 billion of 0% convertible senior notes due 2031, filed September 16, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1069183/000119312526392472/d162950dfwp.htm [C12][C12] Pricing term sheet, Use of ProceedsWe intend to use $99.9 million of the net proceeds from this offering to pay the cost of the capped call transactions. We intend to use the remainder of the net proceeds of this offering for general corporate purposes, which may include, among other things, providing capital to support our growth and to acquire or invest in product lines, products, services or technologies, including through acquisitions of, or investments in, other businesses.Axon Enterprise, Inc. pricing term sheet for $1.0 billion of 0% convertible senior notes due 2031, filed September 16, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1069183/000119312526392472/d162950dfwp.htm

Axon has not said what the money is for. It lists growth and buying other firms as things it may do. It names no deal. [C12][C12] Pricing term sheet, Use of ProceedsWe intend to use $99.9 million of the net proceeds from this offering to pay the cost of the capped call transactions. We intend to use the remainder of the net proceeds of this offering for general corporate purposes, which may include, among other things, providing capital to support our growth and to acquire or invest in product lines, products, services or technologies, including through acquisitions of, or investments in, other businesses.Axon Enterprise, Inc. pricing term sheet for $1.0 billion of 0% convertible senior notes due 2031, filed September 16, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1069183/000119312526392472/d162950dfwp.htm

Whether owners get watered down is not settled. It turns on the share price over the next five years. Nobody in the filing predicts it. [C2][C2] Pricing term sheet, conversion termsInitial Conversion Rate: 1.5336 shares of our common stock per $1,000 principal amount of Notes, subject to adjustment. Initial Conversion Price: Approximately $652.06 per share of our common stock, subject to adjustment. Conversion Premium: Approximately 47.5% above the Last Reported Sale Price of Our Common Stock on the Nasdaq on the Pricing Date.Axon Enterprise, Inc. pricing term sheet for $1.0 billion of 0% convertible senior notes due 2031, filed September 16, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1069183/000119312526392472/d162950dfwp.htm [C3][C3] Pricing term sheet, Maturity and interestMaturity: September 15, 2031, unless earlier converted, redeemed or repurchased. No Regular Interest; Special Interest: The Notes will not bear regular interest, and the principal amount of the Notes will not accrete.Axon Enterprise, Inc. pricing term sheet for $1.0 billion of 0% convertible senior notes due 2031, filed September 16, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1069183/000119312526392472/d162950dfwp.htm

Axon can pay in cash instead of shares. The filing says the choice is Axon's and does not say what it plans. [C9][C9] Pricing term sheet, Settlement MethodSettlement Method: Upon conversion of the Notes, we will pay or deliver, as the case may be, cash, shares of our common stock or a combination of cash and shares of our common stock, at our electionAxon Enterprise, Inc. pricing term sheet for $1.0 billion of 0% convertible senior notes due 2031, filed September 16, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1069183/000119312526392472/d162950dfwp.htm

The extra $150 million is not sold yet. Banks hold a right to buy it and may not use it. [C10][C10] Pricing term sheet, Use of ProceedsWe estimate that the net proceeds from this offering will be approximately $986.0 million (or approximately $1,134.3 million if the underwriters exercise their over-allotment option in full), after deducting the underwriters’ discounts and commissions and estimated offering expenses payable by us.Axon Enterprise, Inc. pricing term sheet for $1.0 billion of 0% convertible senior notes due 2031, filed September 16, 2026Open exact filing on SEC EDGAR ↗https://www.sec.gov/Archives/edgar/data/1069183/000119312526392472/d162950dfwp.htm