Strategy Inc (MSTR) Q4 2025 Earnings Call Transcript

Kiri Jajodhya, Corporate Treasurer and Head of Investor Relations at Strategy. I will be your moderator for Strategy's 2025 fourth quarter earnings webinar. We will start the call with a 60 minutes presentation starting with Andrew Kang, followed by Fong Lee and then Michael Saylor. This will be followed by a 30 minutes interactive Q&A session with four Wall Street equity analysts and four Bitcoin analysts. Before we proceed, I will read the safe harbor statement. Some of the information we provide in this presentation regarding our future expectations, plans, and prospects may constitute forward-looking statements. Actual results may differ materially from these forward-looking statements due to various important factors, including fluctuations in the price of Bitcoin and the risk factors discussed in our current report on Form 8-K filed with the SEC on October 6, 2025, and under the caption, Risk Factors in Strategies' quarterly report on Form 10Q filed with the SEC on November 3rd, 2025, and the risks described in other filings that Strategies may make with the SEC from time to time. We assume no obligations to update these forward-looking statements with Speak only as of today. With that, I would like to turn the call over to Andrew Kang, the CFO of Strategies.

Thank you, Sharish. And thank you, everyone, for joining our call today. I'll start by touching on a few of our highlights for Q4, as well as for the full year 2025. We closed the year with 713,502 Bitcoin on our balance sheet, which represented approximately 3.4% of all Bitcoin that will ever exist. This reflects continued discipline around Bitcoin accumulation through the fourth quarter and further reinforces our position as the largest corporate holder of Bitcoin in the world. Also, during 2025, we successfully raised over $25 billion of total capital, funding growth across our treasury strategy and expanding our product ecosystem. We now have five listed preferred equity securities, which has broadened investor access across yield, duration, and risk profiles. Our execution throughout the year puts us in a position to enter 2026 with a stronger balance sheet, more access to liquidity, and upside when hopefully Bitcoin price rallies soon. Next slide. David, 2025 overall was a very important year with several strategic corporate events that I think strengthened our foundation as the world's leading Bitcoin treasury company. We adopted fair value accounting at the beginning of the year, which provided greater investor and market transparency of our Bitcoin holdings, which are now, as you know, marked to market each quarter. Second, Treasury and IRS guidance confirmed that unrealized Bitcoin gains would not be subject to additional corporate alternative minimum tax. We also received the first ever credit rating for a Bitcoin treasury company, which marked an important step, I think, in institutional recognition and setting the foundation for future progress. And lastly, in Q4, we established a $2.25 billion cash reserve, which provides over two and a half years of dividend coverage. This is an important enhancement to our overall risk management framework and supports our ability to meet our interest and dividend obligations through market cycles, like the one we are seeing today. And lastly, MSCI confirmed that digital asset treasury companies will remain eligible for inclusion in its global market indices, which we believe was the appropriate outcome. And I'll touch a little bit more about that later on in my presentation. Next slide. Next slide. Thank you. Turning to our Q4 financial results, we reported an operating loss of $17.4 billion and a net loss of $12.6 billion. These results were obviously driven by the quarter-end decline in Bitcoin's fair value under our mark-to-market accounting. Next slide. For the full year, we reported an operating loss of $5.4 billion and a net loss of $4.2 billion. We updated our target range for the full year 2025 precisely because our results are highly dependent on Bitcoin price and can move meaningfully based on market conditions. It's important to call out that our full year results were within our target guidance based on where Bitcoin price ended the year. And while accounting outcomes may fluctuate quarter to quarter, our long-term focus remains unchanged. We are committed to increasing Bitcoin per share and building durable shareholder value over the long term. next slide turning to our bitcoin kpi performance for the full year at the start of the year we established clear kpi targets tied to bitcoin for share growth while recognizing you know a ride wide range of possible bitcoin price outcomes under those conditions we delivered a btc yield of 22.8% for the year, beating the lower end of our target range, which was set at 22% to 26%. That translated into a total BTC gain of 101,873 Bitcoin and a BTC dollar gain of $8.9 billion, also beating the lower end of our target range. I think the key takeaway is that even with significant volatility in Bitcoin price, our strategy remained disciplined, and we executed against our KPIs of increasing Bitcoin per share and compounding shareholder value for the long term. Next slide. Since adopting Bitcoin as our treasury asset in 2020, we've consistently added Bitcoin per share each year. 2025 was yet another strong year in this regard, and building on the momentum of prior years and demonstrating our ability to add more bitcoin per share in both good markets and in challenging ones as well our focus remains unchanged as i mentioned before our goal is to systematically increase bitcoin per share over time regardless of near-term market cycles and continue to deliver durable btc value for our long-term investors next slide one more Thank you. Now, turning to the balance sheet, I'll start at the top here. Our digital assets increased from $23.9 billion at the end of 2024 to $58.9 billion at the end of 2025. This was due to a $17.9 billion increase in fair value at the beginning of the year balance, as well as the fair value of the bitcoin we added in 2025 as a result we ended the year with also 2.3 billion dollars in cash and cash equivalents of which as i mentioned earlier 2.25 billion dollars of that represents our usd cash reserve as at the end of 2025 we now carry also a 1.9 billion dollar deferred tax liability which just reflects the accounting difference between the market value and the cost basis of our bitcoin i'll remind everyone this is a balance sheet item it is not a cash tax obligation and it does change quarter to quarter with the price of bitcoin moving on oh can you go back please in terms of long-term debt we ended the year at 8.2 billion which takes into account a new convertible bond as well as an equitization of a prior convert which we executed both in early 2025. As we said before, we do not plan to issue any new convertible debt in the future and will focus on assessing strategic liability management opportunities to the extent market conditions make sense. And over time, we intend to reduce our leverage to further enhance our credit profile. We also added $6.9 billion of preferred equity diversifying our capital raising channels as a result total equity including both preferred and common rose to 51.1 billion dollars at the end of the year up from 22.8 billion dollars a year ago we added 6.9 billion dollars of preferreds through five distinct ipos as well as subsequent ATM activity and our common equity increased to $44.2 billion through our ATM. We deployed all of that capital in an accretive manner to acquire more Bitcoin. As I mentioned before, we delivered 22.8% BTC yield and we established the cash reserve. I'd say the year-over-year growth of our capital base strengthens our balance sheet and provides a more durable base to continue raising capital efficiently and acquiring more Bitcoin over the long term. All right. Thanks, Shreech. Next slide. At the end of Q3, sorry, at the end of Q4, sorry, at the end of Q3, the market value of our Bitcoin position was approximately $73.2 billion. That was based on a Bitcoin price of about $114,000. During Q4, Bitcoin, as we all know, experienced a price decline which drove the total unrealized fair value loss of 17.4 billion dollars look quarter to quarter moves like this can be sharp can also be unsettling but it's important to emphasize that our strategy is built for the long term it's built to withstand short-term price volatility even short-term extreme conditions like we're seeing today and importantly even in a volatile environment we continue to execute we purchased an additional 32 470 bitcoin in q4 for approximately 3.1 billion dollars next slide for the full year 2025 the market value of our bitcoin holdings increased by approximately 17 billion dollars from 41.8 billion at the end of 2024 to 58.9 billion at the end of 2025 and during the year we added approximately 225 000 bitcoin we also recognized an unrealized fair value loss of about 5.4 billion dollars across the year but we significantly expanded our bitcoin position right we increased our total holdings from $447,000 to $672,500 Bitcoin for the year. Next slide. Our total interest and dividend obligations are now $888 million, which is made up of about $35 million in interest on our converts. That represents an average cost of about 42 basis points. It's also made up of $713 million dollars in dividend obligations from our cumulative preferreds an additional 140 million dollars related to our non-cumulative preferreds you can see here at the bottom our cash reserve of 2.25 billion dollars which was established in q4 now provides over 2.5 years of interest and dividend coverage and it's an important and direct benefit to our debt and credit investors Next slide. And lastly, in October, MSCI opened the public comment period around the proposal that could have excluded companies whose digital asset holdings represented more than 50% of total assets. We felt it was important for us to be a voice on this matter, and we submitted formal written feedback to MSCI. We noted that this threshold would, in our opinion, be discriminatory towards digital assets. It's arbitrary. And in many ways, I think the proposal was unworkable and that it rested on a mischaracterization of strategy. As a result, MSCI determined not to implement their initial proposal. And as a result, we have not been excluded from MSCI's indices. I'd note strategy is an operating company. We have 30 plus years of history and software and tech. we have 1500 employees last year uh in 2025 we generated 477 million dollars in annual revenue and while our bitcoin holdings has grown significantly from a balance sheet perspective we are an operating company with a treasury balance sheet built upon a commodity and lastly look on a final note i just want to say thank you we appreciate the strong support we received from both active and passive retail and institutional investors, regulators and policymakers, all in support of our efforts on index inclusion. We thank you for that. I think there's still some more work to be done and we look forward to working with the industry in the coming year on that as well. So with that, I will turn over to Fong, our CEO.

Thank you. thanks andrew i first just want to acknowledge i understand the market conditions for today's call is challenging and the fact that we have thousands of people watching this is a testament to your intellect your curiosity and for many of you your conviction so thanks everyone for joining us today i also want to share look some of you bought bitcoin or mstr in the last year this is your first downturn my advice is to hold on remember the fundamentals that cause you to buy bitcoin it's because bitcoin is the digital transformation of capital or maybe it's because it's the hardest and most ethical form of money or because you believe in a non-sovereign sensor resistant store of value none of these fundamentals have changed they didn't changed in the last year. They haven't changed in the last 18 years. For the micro strategy shareholders and the strategy shareholders now, remember the fundamentals of why you bought into MSTR Common. Because we are levered and amplified Bitcoin, we're built to outperform Bitcoin over the long run. It could be because you see us as digital innovators. We invented the enterprise business intelligence software space in the 1990s and we invented digital treasury companies in 2020 or it's because you believe in the management team that's here today none of that's changed in the last year and for those of you have been with us on this journey since 2020 you've seen other periods of bitcoin and mstr downturns and you held on and you were rewarded for your conviction so thank you and perhaps i ask that you share your wisdom and your confidence with those who are newer to the community x is a great place to do this in person is a great place to do this and a great opportunity to get together in person next slide please is bitcoin for corporations uh we will have our sixth annual bitcoin for corporations in las vegas in three weeks february 23rd through 26th love to see you there it's a great place to get together and learn about bitcoin bitcoin treasury companies digital credit digital capital and digital money it's also a great place to see our software business in action and as andrew mentioned our software business constitutes 1500 employees and over 3 000 customers and they'll be there showcasing the transformation of intelligence and the intersection of AI and BI and I would like to note we had a great year last year in our software business we saw a big cloud transition as our revenue went from decline to increase to 3% and our cloud revenue went up 65% year over year so I invite you all to join us in Las vegas february 23rd 326. next slide take a step back this is our business we have been buying and holding bitcoin since the third quarter of 2020 every single quarter we now have 713 502 bitcoin with the total acquisition cost of 54 billion dollars and a 76 000 average bitcoin purchase price. Recognizing now that Bitcoin is below the average Bitcoin price, you might ask the question, what does that mean? It really doesn't mean anything, right? It doesn't mean that we have any issues servicing our debt or paying the dividends on our preferreds. We don't have any covenants or triggers that say when Bitcoin price goes below our average Bitcoin purchase price, that anything has to occur other than we continue with our strategy. Next slide. 25 as Andrew mentioned was a pretty big year for us in the capital markets as you see here in 2024 raised 22.6 billion dollars and we actually outstripped that number in 2025. the big change last year was we moved from convertible debt 6.2 billion dollars in 24 and 2 billion and 25 to 7 billion dollars of preferred we invented digital credit and we invented the preferred market which now other bitcoin treasury companies are moving into issuing perpetual preferreds we're pretty excited about this you'll see here we had five ipos the other thing i'll note here is that year to date 2026 in the face of a tougher bitcoin market we were able to in one month raise an additional 3.9 billion dollars of capital and for the most part buy bitcoin with that next slide So what do those big numbers mean? How do you think about that? In 2024, we were the largest U.S. issuer of equity in the entire country. Last year, 2025, we were once again the largest issuer of equity. We were 8% of the entire equity capital markets, 6% to the common equity market, and 33 percent of the preferred equity market. We are getting people to invest in our company through equity raises and preferred raises and turn that into Bitcoin, Bitcoin per share and Bitcoin yield to our shareholders. And we're doing it with the intersection of traditional finance with some of the largest banking partners in the world. Morgan Stanley, Barclays, Mollis, TD, Benchmark, ClearStreet have all been participants in these markets and they give us distribution out to wealth management and to retail and to institutions. So we've been very successful in the last year with continuing our strategy. You'll see here, in addition to getting folks to participate in our equity raises and our equity capital markets, we continue to add more and more research analysts. Here you can see price targets, and you can see they all have buy ratings on strategy. So let me talk about digital credit and what are we doing in digital credit and why digital credit is important. Next slide. First, I mentioned 2025 marked the launch of digital credit, and we launched five different instruments. We started with STRIKE, which is convertible digital credit, and it was really a gateway from convertible debt, which we no longer are issuing to a convertible preferred note we then launched strife which was our most senior of our instruments our first fixed perpetual digital credit instrument and after that we launched our most junior one stride and as you can see the size gets bigger and bigger with each one and then we launched uh the most important which was stretch which is two and a half billion dollars in our first digital credit instrument and then in november we went to the the Euro market and launched Stream, which is $717 million in US dollars. And the importance of this is accessing a European market and those who want Euro exposure. Our plan with Stream is to, over time, uplist it into a regulated retail accessible market. And we're excited to do that over the course of this year. Next slide. Here's the overview of digital credit. I think the most notable here is to look at as an example to the liquidity that we're experiencing in a stretch, $118 million traded a day over the last 30 days. As a comparison, typical U.S. base prefers trade a million dollars a day. So these are very liquid and very interesting instruments. The dividend at 11.25% and a tax equivalent basis 18%. And you also see the volatility here at 7%. So it's an instrument where we've been able to start to target a very finite price close to a hundred dollars and drive that volatility down to seven percent let's go to the next slide so what is 2025 the third quarter and the rest of 2026 been about it's really been about seasoning our digital credit and by seasoning I mean maturing the market and making the instrument more credit worthy so when after we launched stretch in July 25, there are a couple actions we took that made the credit more credit worthy and a better investment. First, and Andrew mentioned it, the CAMTI guidance was a big deal. This was a big change by Treasury and IRS acknowledging the importance of the digital asset ecosystem and that there should be no unrealized capital gains taxes on Bitcoin, period. The second thing is we got an S&P rating, a B minus issuer credit rating, which is a starting point for us to be able to access different types of investors in the credit market. November 4th, we got to what really was our target, was to get stretched to trade at par, $100 for the first time. $100 is important because it decreases the volatility of the instrument. It shows that we're able to do something that no other preferred instrument has done in its past, which is to target a specific price, and it allows us to raise more via our ATM. And then we added our US dollar reserve. At the same time, since we launched Stretch, we have added 105,732 Bitcoin to our balance sheet. That's about 16% more. These are all actions we took to make our digital credit stronger over time. Next slide. So what is Stretch, right? Why are we so enamored and excited about Stretch? Why did I say 2026 is the coming out party for Stretch? Stretch is one of the most attractive instruments and securities in the market today. It pays an 11% effective yield, 18% on a tax equivalent basis. We've paid monthly dividends on time, on schedule. And we have said that we expect the return of capital treatment for the next 10 years. We'll run our business to be able to give everybody tax-deferred earnings for the next 10 years. We're targeting a $100 price. the volatility seven percent has actually decreased recently to six percent and we have mechanisms above and below that price to keep the price stable uh it's quite a bit of a feat of financial engineering uh and it's extremely over collateralized after you take out all instruments that are senior to stretch we still have 5.6 x collateral overstretch uh and so it's it's an over collateralized instrument and then after that we've added 2.25 billion dollars of u.s dollar reserves so we have two to three years of dividend coverage i'd mentioned that liquidity of stretch is trading extremely well it's nasdaq listed it has a four letter ticker is easily accessible to folks it's now accessible on robin hood and square cash app and pretty much anywhere else that you can buy a security next slide so let's talk about our balance sheet i've seen a lot of questions. We get them from investors. We get them from shareholders. We get them from people on X. What's going on with strategy's balance sheet? Are you worried that when Bitcoin price drops that you are going to have issues with your convertible bonds? Are you going to have issues paying your dividends? Are you going to have to sell Bitcoin? The short answer is I'm not worried. We're not worried. And no, we're not having issues. What's the reason? One, we have a The BTC reserve is $60 billion, this was as of last Friday, now it's $45 billion. And our equity, our enterprise value still trades above our Bitcoin reserve. Our convertible debt, that's the notes that come due, our preferred equity doesn't come due, is at about 10% leverage for the latest Bitcoin price as of today. We still have about 13% leverage, so the $8.2 billion that come due is 13% leverage. how do you think about 13 leverage you know those who do not spend a lot of time in the debt world you might say wow 13 sounds like a lot let me show you how we compare 13 to the s p 500 universe next slide first thing is when you take your leverage you take out the cash that we have so our net debt is six billion dollars as i mentioned our net leverage is uh 10 and it's 13% were the most recent Bitcoin price. If you look on the bottom left-hand side, this is how we compare to the S&P 500 universe, right? We have 10%, currently 13% leverage. If you're a triple A rated, right, investment grade company, your bonds are trading as triple A rated, you have 23% leverage. If you're triple B rated high yield, you have 32% leverage. We have half the leverage of an investment-grade company, a third of the leverage of a high-yield company. How about looking at it by sector? Strategy at 13% looks like a tech company, which is low capital, low assets, high income. They're levered at about 15.7%. Compare us to asset-heavy, high-debt companies and industries, utilities or real estate. they're levered at 42 to 48 percent we are not a highly levered company next slide what about our convertible debt right not very highly levered so that's good but what happens when our convertible debt comes due over the next five or six years are we worried that we're not going to be able to pay back our convertibles uh no not really uh you see here the net debt six billion dollars compared to a bitcoin reserve of 59 billion dollars now 45 billion dollars in the extreme downside if we were to have a 90 decline in bitcoin price and the price was eight thousand dollars right which i still think is pretty hard to imagine that is the point at which our bitcoin reserve equals our net debt and we will not be able to then pay off of our convertibles using our bitcoin reserve and we'd either look at restructuring issuing additional equity issue issuing an additional debt and let me remind you this is over the course of the next five years all right so i'm not really worried at this point in time even with bitcoin drops that we're not going to be able to service our convertible debt all that said it's staggered over time we have put dates between 2027 and 2032 and our plan is to equitize that over time and if we're not able to equitize it we'll find different ways to restructure the debt next slide of course we have this bitcoin reserve and what does it really do for us it creates long-term durability that's why we've been building it up that's why we've added about 16 over the last nine months to our Bitcoin reserve, it gives us long-term durability to issue more credit, ultimately. And as we issue more credit, the dividends will rise. Our dividends, as Andrew explained, $888 million. We have 67 years of dividend coverage with our Bitcoin reserve. If Bitcoin goes up 1.5% a year, that's our breakeven ARR, we could just sell the incremental Bitcoin that we get, not that that's what we'll do, to pay our dividends. So we don't need a large increase in Bitcoin price to be able to service our dividends, primarily through stretch. Next slide. Our U.S. dollar reserve, which I'm very happy we put in place in Q4 and solidified in Q1, is $2.25 billion. That's 30 months of dividend coverage, two and a half years of dividend coverage. So if we were not able to raise capital, which we've shown that we've been able to do through equity issuances, we could sit here, do nothing, and pay off our dividends or satisfy our dividends over 30 months using this reserve. Next slide. And as I mentioned, since we took, since we received a B-minus stable outlook credit rating from S&P, we've taken a lot of positive actions to improve this, right? Well, you know, will the S&P increase it from B-minus? I think if they were to make an evaluation today, they likely would but they usually make evaluations every year or so uh you know they don't want to move fast in terms of what the credit rating is but we've added a u.s dollar reserve 2.25 billion dollars i'll remind you that the first 1.44 billion were raised in eight days uh the second is we've been able to maintain a robust access to capital to raise nine and a half billion dollars uh in three months and 72,300 bitcoins. So we've shown that we're highly liquid and able to access capital. And we paid dividends every single month, every single quarter since our credit rating. Next slide. So what are we going to do to make Stretch even better? In addition to improving the credit quality, we've been working with brokerages like Robinhood and Cash App to get Stretch and Prefers listed there. Robinhood, in fact, launched the first ever Prefers on their platform because of the demand and the liquidity that they saw in Stretch. We've been working with wire houses, wealth management, broker dealers, RIAs to help explain Stretch. We've integrated Stretch now into crypto. So just like you saw MSTR turn into MSTY, MSTU, et cetera, we're seeing buck and other coins like Saturn, Apex, APYX, and TradFi platforms starting to launch products on top of stretch and we expect over time stretch will be tokenized will integrate with etfs also all right we started we've been involved in industry conference leverage finance conferences teaching sessions and so we're telling everybody about stretch and we engaged in digital marketing you might have seen ads on x or youtube or wall street journal and of course we have strategy.com strategy app interviews and podcasts we want everyone to be aware of digital credit because So we think it's an amazing product for an end investor, and we think it helps build the strategy flywheel and the Bitcoin flywheel over time. Next slide. I do want to update a slight change to our stretch guidance. In the past, we've said that we're going to base our actions on stretch on a five-day VWAP at the end of the month. What we found is that stretch trades very interestingly around dates like our record date and our payment date. Our record date falls before the five days at the end of the month, and that's where we've seen people try to buy stretch through the beginning before the record date. So we thought the better view of stretch price is to look over the course of the entire month. So the VWAP range by which we'll look at the price of stretch and make determinations on what to do with our rate will be based on the entire month. So as an example, for January, if we were to have made that change in January, it would have been January 1st through January 31st. For February, it'll be February 1st through February 28th. Next slide. So, we talked about digital credit and the importance of digital credit is what it does for a digital equity. Digital credit amplifies our common equity. And, you know, I just looked at these numbers were as of last Friday. As of today, MSDR is up 48% since we started this strategy. Bitcoin's up 36% since we started this strategy, and we've outperformed the MAG7 Gold S&P 500. We're amplified Bitcoin designed to outperform Bitcoin, and our belief is Bitcoin will outperform every other asset class in the world over time. Next slide. how do we create amplified bitcoin how do we outperform bitcoin we produce bitcoin per share we increase bitcoin per share and which is the change of bitcoin per share is bitcoin yield and you look here over the course of the last six years we've increased bitcoin per share every single year that's why we outperform bitcoin if you buy one bitcoin at the beginning of the year you'll have one Bitcoin at the end of the year. If you buy one share of strategy at the beginning of the year, 2025, you would have had 23% more Bitcoin at the end of the year, 2025. We increase Bitcoin per share, and we call that increased Bitcoin yield. Next slide. So how do we think about this over the course of the next seven years? I showed you what we've done in the last six years. The way we're going to increase Bitcoin per share over the course of next six seven years is we are going to sell digital credit and what does digital credit do by selling digital credit we generate amplification by generating amplification we increase bitcoin per share by increasing bitcoin per share mstr common outperforms bitcoin it's a very simple formula and what are the inputs how much digital digital credit can we sell which is how much stretch can we sell? Here's an assumption that on a base of $60 billion of Bitcoin, if we can sell 10% of digital credit, which is $6 billion, this is what this might look like over time. And you say $6 billion, is that a lot or is that a little? Well, last year we sold $7 billion of digital credit and we raised over $25 billion in the equity capital market. So we think this is a fairly conservative assumption, $6 billion. This assumes a 10% dividend rate, which is where we are right now and that we're issuing equity to pay for the intro for the dividend or digital credit at 1.34x mnav right and so i'll call this a low scenario if we have this low scenario over the course of seven years we'll increase bitcoin per share 1.4x that's a five percent annual bitcoin yield next slide what if we can do a little bit better what if we can assume 16 percent of digital credit sales so not six billion dollars but 10 billion dollars what if the fed lowers interest rates or we're able to low interest rates on our digital credit down to nine percent and what if the view of this causes investors to believe we'll increase bitcoin per share and our mnav goes up and we have amplified bitcoin and mstr we're able to get to 1.75x mnav this scenario with the 30 assumption of 30 percent bitcoin arr gets us to a 2x increase in bitcoin per share over seven years which is a 10 annual btc yield next slide what does a more aggressive scenario look like maybe we can assume 20 digital credit sales we're able to drive the dividend rate down to 8 percent and our m nav goes up to 225 then we can increase bitcoin per share 2.5 times over seven years and a 14% annual Bitcoin yield. That's another scenario. And I'll go to the final slide in my section. Ultimately, this is the strategy of the company. We're going to issue digital credit through stretch. We're going to amplify the common equity because of it. It increases our Bitcoin per share and we outperform Bitcoin. What are the levers that we can play with? How much digital credit can we sell? How attractive can we make stretch? How well do we market it? How well do we distribute it? With higher demand, we can lower the cost of credit and we'll increase the MNAT. That's the thesis for the company and that's what we're excited to do and that's what we're going to focus on in 2026. So with that, I will pass it over to Michael.

Thank you, Fong. um i'm delighted to have you join us today um why don't we go to the next slide uh all of our strategy is based upon looking at the fundamentals and taking a 10-year view and so when you consider the fundamentals of digital capital you have to start with most important regulator in the entire world and that is the president of the united states We have a Bitcoin president, and he's intent upon making America the Bitcoin superpower, the crypto capital of the world, and the leader in digital assets. I don't think you can underestimate the importance of having support for the industry and digital capital at the very top of the political structure. now equally important if we look at the cabinet that's been put in place on the next slide you see the entire government is now embrace bitcoin and when i say embrace bitcoin what i mean is uh 18 months ago there was one person in the government that had an awareness of it and was skeptical to neutral or grudgingly accepting of it and everyone else in government was either negatively inclined or they were ignorant of it. And now there are 12 individuals I'd want to highlight here. J.D. Vance, the vice president, Scott Besant, the treasury secretary, Paul Atkins, the head of the SEC. Number four, Kevin Warsh, who is the Fed chair nominee, who understands digital assets, understands the use case of Bitcoin. This is a tremendous move forward for us a big fundamental shift that now you can look at the head of the sec the head of the treasury and the head of the fed as all appreciating the pivotal role of digital assets and the growth of the country and the economy and if you go to the second uh the second line right you see the head of intelligence the head of the small business administration the head of federal housing the head of health and human services all all bitcoin believers and then michael selig the CFTC chairman, David Sachs, who's doing a wonderful job, Howard Lutnick, commerce secretary, and even Kash Patel. So if you consider that we went from one neutral to a Bitcoin president and 12 positive constructive, this is a great fundamentals for us. And I don't think we can lose sight of this because everything that follows in the marketplace is very much influenced by the political structure of the world. On the next slide, Capitol Hill has embraced Bitcoin. We've got bipartisan consensus that the United States should embrace digital assets, should embrace digital capital, should be a leader. That is not a debate. No one's saying that there's one party in favor of digital capital, another party against it. That's a big deal. So although the political process is complicated. The fact that we have moved from an asset which was a scary speculative thing and may be illegitimate to a legitimate asset that most reasoned politicians and regulators and policymakers believe they need to move constructively forward with. Let's go to the next slide big banks are embracing bitcoin uh roll the clock back uh 18 months and this harvey ball diagram is pretty much blank mostly blank and so when you actually look at the top financial institutions and you ask the question do they allow ibit trading well there's an avalanche of support there that's flipped in 12 months the second question is do they offer credit against IBIT. That's a big deal. 12 months ago, it was almost impossible to get a loan or a margin loan against IBIT. Now there are many banks coming into space. Would they let you trade BTC? Now you have banks that are announcing support for that. You have banks announcing support to custody BTC. And you have banks announcing intent to offer credit against BTC. Again, this is an extraordinary sea change. We cannot underestimate the value. I think that the fundamentals of the industry are driven by the banks creating credit. One bank can create as much credit as all the Bitcoin miners can create in Bitcoin in a year. So each bank that turns on Bitcoin back credit lines might be the equivalent of another halving for the network.

Let's go to the next slide.

TradFi and fintech have embraced Bitcoin. If you look at the number of accounts with BTC trading asset, there's a pretty clear bullish trend here, both across crypto native exchanges, fintechs and neobanks, and the brokerages and banks and the wealth management channel. Those are large numbers. Fundamentally, we're going from an asset class that no one could buy if they wanted to, to an asset class where everyone is competing to facilitate access and exposure.

The next slide.

This is the ETF trend. ETFs are embracing Bitcoin. 125 ETFs or ETPs launched. 1.4 million Bitcoin held in them. A very consistent trend up and to the right. Next. And this is the corporate trend. It was nothing in 2019. We were the first serious player. We were lonely for a bit. Then we went to 33. Then we were 64 in 2024. And now we're 194. This is clearly explosive growth. And there's a signal here. next. The public markets are embracing Bitcoin. Look at these IPOs that have taken place this year. Bullish, Circle, Gemini, BitGo, Kraken that's coming. And then Coinbase Block and Robinhood have all been included in the S&P 500. So I see this as a very bullish indicator and a fundamental improvement in the structure of the industry. The concern du jour is quantum computers, and many people ask, do quantum computers represent a threat to Bitcoin? I would note that the quantum computing concern and quantum FUD is just the latest in a long litany and a parade of horrible FUD that has been taking place since the beginning of Bitcoin, there was functionality FUD. Bitcoin's not functional enough, so it will fail if it needs smart contracts. And then people thought it was a Ponzi, and then they thought it was too volatile, and then they thought, well, there was a bug in it, and maybe it'll be 51% attacked, maybe the Chinese controlled too much of it, and then there was the Chinese shut it down. It was the opposite of the China FUD. It was the China non-embrace. And then we had all manner of block size wards and bandwidth flood. And then there was it uses electricity FUD. And then there was the wealth concentration FUD. And then, of course, then there was another crypto will be better. What I would say is whenever dealing with each of these concerns, we have to take them We have to consider them. But we have to remember two things. One, the two words on the back of the Hitchhiker's Guide to the Galaxy, don't panic. Most important, two words, more important than everything in the encyclopedia or the Hitchhiker's Guide to the Galaxy. The second observation, the Hippocratic Oath, do no harm. And so whenever you're faced with a challenge in any system or any network, you have to make sure you don't panic. you're not railroaded into doing something foolish or destructive. And you also can't do something that causes harm. You don't want an iatrogenic intervention where the cure is worse than the disease. So our position on quantum computing, one, we think it's probably 10 or more years away before there's a threat. That is the consensus. It's a promising technology, but it's still nations. Many industries, including finance and defense, are dependent upon traditional cryptography. They face the same risks. There's a significant global investment going into building quantum-resistant protocols, not just in the Bitcoin community, across all communities. The Bitcoin community in specific is engaged on research and development in these efforts. there's good work that's taking place if bitcoin requires an upgrade there will be global consensus right now there isn't global consensus that existing cryptographic libraries are at risk and to to stampede into a hypothetical fix before there is consensus would introduce new attack surfaces and new complexity and new failure modes that don't currently exist it's it's very similar to over vaccinating uh you know when it's like well there's a there's a 0.001 chance that the kid might get a disease uh so we're going to vaccinate them just in case but of course three percent of the people that get the vaccine have side effects right and so so it's very important that we don't over insure over vaccinate over treat over worry it's a famous president united United States, he said, if you see 10 problems driving down the road, nine of them will probably drive themselves into a ditch before they get to you. So the one thing you can't do is you can't buy 100 expensive insurance policies that cost collectively 100% of all your operating income to insure against something which is 2% likely to happen. That's why you have to be very thoughtful about addressing these risks, and you have to address them at the right time, not too soon, not too late, because too soon, you probably don't have the right technology, and you're over-insuring. Too late, right? You accept the risk that you shouldn't. That's why consensus is very important. Bitcoin will be stronger if and when that quantum upgrade takes place, right uh and so bitcoin is upgradable and bitcoin can be upgraded to be stronger and we of course are optimists and we believe we believe that uh the human race will uh accept challenges and will upgrade uh to meet those challenges and do it in a rational fashion and uh and bitcoin has a history of meeting challenges in a rational fashion such that it is stronger and you can see all those examples uh last but probably most important on this slide uh strategy we are going to initiate a bitcoin security program that coordinates with the global cyber security community the global crypto security community and the global bitcoin security committee in order to help and contribute to consensus and solutions to address the quantum computing threat, as well as any other emergent security threats that evolve. We think it's reasonable and appropriate for us to do this, given our large responsibility as a Bitcoin holder. but we want to do it in a very responsible fashion and we want to make sure that we coordinate with the global cyber crypto and bitcoin security community because there are a lot of very very brilliant minds here there's a lot of good work being done and and uh it's likely that consensus will form and solutions will form uh at the right time in a responsible fashion so So that's our view on quantum. Next slide. Digital credit. Our company exists to, we structure and we secure Bitcoin, right? We're a digital credit issuer. If you look at this chart, what you can see is that the native volatility or the natural volatility of Bitcoin is about 45. You know, for a 45 vol asset to draw down 45% shouldn't shock anybody, right? And I note that Bitcoin looks like it's drawn down about 45% since its all-time high four months ago. So a 45% drawdown on a 45 vol asset is probably to be expected, just like an 80% drawdown when it was an 80 vol asset. On the other hand, what you can see pretty clearly is that strategy has stripped that volatility off of BTC was strike, which was 32%, stride 27%, strife 24%, and stretch down to 7%. So we are stripping the volatility off of Bitcoin and there is conservation of energy and conservation of volatility. And so the volatility that we strip off of the credit instruments accrues to the common equity. And so that's why MSTR is 63 vol. But it's not really a complicated piece of engineering. It is just, it is very pure financial engineering. There's a group of people that want low vol, you know, principal protected instruments that are credit instruments. And there are other people that want high vol, high performance.

Next slide.

Right. Think of us as a digital credit vehicle. Our job, we are thrusting forward. We are actually moving through space through issuing digital credit, right? Digital credit is the product. Bitcoin is the backing collateral. The secret or the most important thing for us to do is to build the vehicle in the most robust, fault tolerant way that we can, the most scalable way we can. You could think of it as a Bitcoin battery and then a US dollar battery. And we have lots of options. We have options to run on the US dollar reserve. We have the option to sell equity. We have the option to sell Bitcoin. We have the option to sell Bitcoin derivatives. And we keep our options open so that we can do the best thing for all of our stakeholders our common stock shareholders we want to do the right thing for the mstr common stock shareholders we want to do the right thing for the credit holders of the digital credit instruments and we want to do the right thing for the bitcoin community and we believe that if we're rational and thoughtful then we get a good outcome which is btc positive mstr positive strc positive next slide companies exist to convert capital into cash flows in essence you have capital investors and you have credit investors the credit investor wants ten thousand dollars a month forever and the capital investor gets a million dollars of real estate with no cash flows for the next 30 years and maybe they'll get more than 10 a year maybe they'll get 20, 30% a year performance. But it's pretty straightforward that the world's built on capital. The world runs on credit. BTC is digital capital. STRC is digital credit. It takes an operating company to transform capital into credit. If we were a real estate development company, we could take $50 billion of capital, buy a bunch of land in New York City, build a bunch of buildings market the buildings rent the buildings and generate cash flows that's a that's a way to do this but you take on all sorts of liability all sorts of counterparty risk operating risk it takes a lot of time you have property taxes employment taxes income taxes usage taxes etc that's that's the 20th century way to actually create credit from capital we've taken a much faster route we would just take the money buy bitcoin and just issue the credit and we skip all the intermediate steps that makes us extremely technically efficient it makes us extremely economically efficient it makes us extremely tax efficient next slide at the core what are we doing right we're transforming that capital into credit we're We're taking BTC and we're converting it into a currency, whether it's a U.S. dollar or a euro. We're stripping the risk by over collateralizing it, right? If you have $5 of Bitcoin, right, and it falls by 80%, then you've got $1 of Bitcoin. But when you have $1 of STRC backed by $5 of Bitcoin and it falls by 80%, you've still got $1 of STRC backed by $1 of Bitcoin. so we're uh we're stripping or reducing the risk by the btc rating uh and then we're also taking other actions to reduce risk right we're an operating company we can raise capital we can sell equity we can refinance we can strip risk by taking a two-year obligation or a 10-year obligation and stretching it out to a 20-year obligation so operating companies can do these things. We're also damping the volatility. We damp the volatility by building the collateral, by building the US dollar value, by adjusting the dividends, by adjusting the ATM programs, by adjusting our capital markets behavior. And we adjust these things minutely every minute, maybe even every second. We have programs to adjust all of our activities so as to damp volatility and we're very engaged and we are very focused on it of course and then we distill the yield from the capital asset in order to create a fixed income yield rate and of course we're compressing the duration instead of telling you to wait 10 years in order to get a 30 return turn, we're giving the 18-year-old cash flow this month and every month. So 10 years of duration is 120 months. We're converting 120 months into one month duration. And so when people say, what does the company do? The company transforms digital capital into digital credits. Are these things valuable? Of course, they're valuable. There's a $300 trillion market for credit. It's extraordinarily valuable. And the key is for us to create the best credit in the world and to create the best credit you can using digital capital. Let's go to the next slide. How do we benchmark ourselves against the other credit alternatives? Well, the bank accounts might give you 40 basis points. The money markets are giving you 360 basis points. Taxable. Insurance companies don't pay tax and endowments don't pay tax, but actual real people, families do, private companies do, public companies pay tax. The world's full of people that have to pay tax. And so 360 basis points of money markets works out to might be only 180 basis points if you live in New York or california after tax so clearly what we have here is a yield starved environment the base rate and the risk-free rate is 360 basis points taxable and that means that all the conventional credit instruments are pegged to that like mortgage-backed securities investment grade bonds junk bonds they all trade at very small premiums or spreads over that risk-free rate. And STRC is paying 11.3% at par, 11.25% at par. And so you can see here that it's three times more on a pre-tax basis. But on a tax equivalent basis, it's like a bank account in Miami that pays you 18%. It would be much more. It'd be like a bank account that pays you 22% or 23% in New York City or San Francisco. So we think we've been able to create a very compelling credit instrument versus other credit instruments. It's just two to four times better. And let's go to the next slide. we don't just benchmark ourselves against other credit instruments. We also benchmark ourselves against all the other non-US dollar currencies. What you can see here is the US dollar has got a 370 basis point risk-free rate, but the Korean won, the Canadian currency, the Euro, Singapore dollars, Japanese yen, Swiss francs, they're much weaker. Fundamentally, you can think of the stretch rate as the risk-free rate in the Bitcoin ecosystem. It's like the Bitcoin rate short end of the yield curve. So we are working to define the yield curve. If you're willing to accept no guarantee of yield and 10-year duration, then you get the Bitcoin rate, which is right now 35%, 40%. We expect Bitcoin to be 30% over time. But if you want go to the short end of the yield curve to the one month and then 11.3 percent right is the rate um we think that this is uh creates just a very compelling opportunity clearly uh we believe the killer app of digital capital is digital credit and um you know oftentimes people joke you know it takes a hundred hours to understand bitcoin maybe it takes a thousand hours to become a bitcoin maximalist um it only takes 10 seconds to understand stretch stretches 11.25 percent dividend yield paid monthly that's it right it's a 10 it's a 10 second idea let's go to the next slide okay here's an actual um four month snapshot and this is an interesting comparison stretch versus Bitcoin. What's the difference between credit and capital? Well, in the last four months, Bitcoin has traded down 30% through the 1st of February, stretches up 1%. And so it doesn't take a rocket scientist to look at this chart. If you're a retiree, if you're a corporate treasurer, if you're a fixed income investor, if you're any kind of investor and you look at these two charts, if you're crypto curious, or you think you might like Bitcoin, you look at this and you think, well, I like it, but I just can't stand the ball. You can see why. Do you want 30% drawdown and no dividends? Or do you want a 1% price appreciation and 5.3% paid dividends with an ongoing 11.25% dividend rate? And with the company that's making a commitment to stabilize that price, to target 100 and do whatever it takes, including raise the dividend. So we believe that what we're doing is expanding the market. We're bringing new capital, new forms of investors into the digital asset space. And we're creating sort of a gateway product or an on-ramp to digital assets and digital capital by way of STRC. and of course we're still very early on this is like you know the first five months of seasoning of strc we think that after 12 months we'll have a better picture and clearly you know in some cases with credit instruments people have to see it uh for two three four years before they actually want to buy it so we think that strc is going to continue to say season continue to harden continue to stabilize, continue to build AUM, build liquidity, and we will continue to make progress on volatility over the coming two, three, four years. So it's a very straightforward exercise on our part. This is the flagship product of the company, right? At this point, everything we're doing in the capital structure is to improve the liquidity decrease the volatility increase the AUM increase the credit worthiness decrease the risk improve the standing of stretch right and and you can you can extrapolate what that might mean with everything else that we do going forward let's go to the next slide here's a picture of that volatility right we started with a higher ball we're working it down um we do things like create the usd reserve we adjust the dividend rate we do no harm we don't sell it if it's not at our target i mean all of these things are active decisions every day every minute of the day next and we're pleased that we are building the AUM. It is scaling. It's not going to be a straight line up and to the right. We're going to have good months. We're going to have great weeks. We're going to have bad weeks. We're going to have bad months. That's okay. We're in this for the long term. By the way, the long term means four years is the short number, 10 years is the target number, seven years is the middle. right so as fong pointed out you know we're looking out seven years thinking well we can if we do what we're doing we can double bitcoin per share over seven years if we if we execute well and then we're looking at this over that seven year time frame and thinking about how we actually make this into a truly great the greatest credit instrument in the world next slide fong had alluded to the fact that it's much more liquid you know i think stretch traded something like nearly 300 million dollars today or you know a huge number right uh and uh it's trading consistently above a hundred million that's unheard of you know a lot of people list perhaps over the counter they trade a hundred thousand a day and then they publicly listen to trade a million a day so these things in the first 12 months are already off the charts by a factor of 100 more. And Fong noted, but we didn't dwell on it, we were 33% of the preferred stock issuance last year. We are transforming the preferred equity markets. We're digitally transforming them. Just like we revolutionized and shook up the convertible bond market until we were the largest convertible bond issuer, we're now shaking up the preferred equity market and becoming the largest preferred equity issuer is because we're putting an innovative asset together with an innovative security together with innovative business strategy and the way we manage our ATMs, the way we manage our company. Next. This is a chart we're very proud of. Even though Bitcoin has struggled, if you look at the Bitcoin price, we've been increasing the BTC rating of stretch even as the bitcoin price has been falling right so we're increasing the collateralization of this we're decreasing the risk of this and we're doing it through through programmatic uh thoughtful risk management on our balance sheet next slide um bitcoin is a 43 ARR 45 vol asset, you know, digital credit, you know, stretches 11.25%, seven vol. It might jump up to 10 vol sometimes. Maybe we get it down to five vol, four vol, three vol, two vol. I don't know where we'll get it, but it seems like it's going to be single digits. And then the third layer is digital money. Our view for that is less than one vol, one vol, zero vol digital money. You know, can we actually create something that pays 6% to 8% that's got zero vol? We can't do it ourself. We won't do it. But we welcome partnerships with other companies, with ETFs, with TradFi projects, with banks, with crypto token projects. I mean, a lot of other people can use stretch and they can step it down. They can make it 80% stretch, 20% cash. People are going to step stretch down. They're going to lever it down. They're going to lever it up. They're going to mix it. they're going to actively put in management and volatility buffers and liquidity buffers and put it in various regulatory containers um next slide right you can you can deliver uh digital money as coin like a savings coin uh you can deliver it as a fund a private fund or a public fund an etf or you can deliver it as as an account on a crypto exchange or a bank um we welcome all those partnerships um our view with with stretch is we're going to market it uh to the general public we're going to market it to credit investors we're going to market it to to enterprises we're going to market it to corporate treasurers and corporate cfos right we're going to offer you two to four times more than your existing treasury strategy and and uh we're going to we're going to also work uh these oem relationships in order to build great partnerships so people can create insanely good digital money products based on our digital credit. Next slide. Quick review of illustrative models. We're looking out seven years. And so, you know, one model is we target 5% BTC yield and we increase Bitcoin per share by 1.4 over the seven years. The mid case is we target 10% BTC yield. Let's go to that slide. Yeah, 10% BTC yield. In that case, we'll double Bitcoin per share over seven years. And the high end would be a higher yield than we 2.5X Bitcoin per share. What is our objective? Our objective is to double your Bitcoin per share, right? Over seven years, right? I mean, I would be disappointed if we don't double Bitcoin per share over a seven-year timeframe. This chart actually shows how the amplification works in practice. By selling digital credit, we create an amplification. So if Bitcoin ARR was 10%, we could achieve a 12% to 19% ARR. If Bitcoin was a 30% ARR, we could achieve a 36% to 45% if we execute on our strategy. So clearly, the equity is for vol junkies and performance junkies. They want to outperform. This is how we believe you can best outperform Bitcoin in the most responsible fashion while doing the most good for the world. And for the other end of the spectrum, for the credit investors that can't stand the ball they want principal protection and low ball and no currency risk and they want uh and they want clear yield and they want tax efficient treatment well then they have digital credit and stretch specifically let's let's go to the next slide so i would end with this thought right bitcoin is digital capital we believe in it we will continue to advocate for it And for the pure capital investor, you should buy it. Stretch is digital credit. If you don't know what you want, but you believe in digital assets and you believe in digital capital, you probably want stretch. It's 11.25% dividend paid monthly, tax deferred. If you're a corporate treasurer, if you're a retiree, if you've got money that you need three months from now to pay your kids tuition but you want to invest it in more than two percent after tax well then stretch is an option for you right so stretch clearly is is the flagship product and uh if you believe in the future of digital credit and you want to invest in the company that is making it possible then you would buy our equity and uh and if you do that you should probably have a seven-year time horizon because we're long-term thinkers. Every day is not going to be a great day, every week, every month. If our thesis is wrong for a hundred years, the equity won't work and we'll run out of money to pay the dividends at some point in a hundred years. If our thesis doesn't work for 10 years straight, if that doesn't work, then the credit will pay we'll get paid the dividends will get paid the equity won't be a great investment for you but you know if we actually execute and if over the next seven to ten years things work out fine the company is is well managed well collateralized and responsibly structured so that we can stand difficult months difficult quarters even difficult years or two or three year cycles at a time. We've done it before and we're prepared to do it going forward. So with that, thank you. And I think I'll pass over the floor to open Q&A.

Thank you, Michael. We are now going to proceed to the interactive live Q&A section of our webinar. I would like to welcome all our Q&A guests and invite them to come on video. We look forward to hearing your questions. We will go one at a time and I will call your names and you can direct your questions to the management team. So for the first question, I would like to invite Lance Vitenza, our research analyst from TD.

Thank you all for taking the questions and for the call. My question is, since the beginning of the year, I can count three weeks over which your Bitcoin acquisitions have generated negative, slightly negative, but negative Bitcoin yield. Now, I'm all in favor of buying Bitcoin even when times are tough, but shouldn't the goal be to increase Bitcoin per share at all times rather than just increasing the total amount of Bitcoin that you own? And maybe you could just talk about the strategy or the thinking that went into those three particular weeks and what that could mean going forward.

Yeah, we agree with you. We don't aim to reproduce those weeks. The times that we've actually done dilutive transactions on a Bitcoin per share basis were, if you go back to the crypto winter when we had to recapitalize some toxic debt on our balance sheet, we took out debt, either it was like asset-backed loans or senior debt that had EBITDA covenants that we felt were crippling the company's growth prospects. And so we didn't do it uh enthusiastically but we did it because over the 10-year time frame we knew we needed to remove those toxic elements to our balance sheet if you look at these three weeks when we took actions that were somewhat diluted they all were generally associated with building up the u.s dollar reserve and we did that in response to analysis and feedback from the market and and some reflexive concerns that we wouldn't be able to pay the dividend if the equity capital markets closed us. So we wanted to get ahead of that and address the credit quality. So the reason we did it, the short answer is we do it to improve the credit worthiness of the company. And if we felt that there was a credit problem, we would do it. Right now, we feel that we've built the US dollar reserve to the level where we don't have a credit problem. We're good for the next few years. We don't have any of those other forms of debt, the senior debt or the asset-backed lending. So the balance sheet is in much better shape today. Going forward, we wouldn't electively or programmatically issue equity to buy Bitcoin if it was going to decrease Bitcoin per share. right where we're we don't think that's a good idea we would only we would only take those actions when we feel like it's essential to defend the credit of the company because if people lose confidence in the credit then that will ripple into losing confidence in the equity and then losing confidence in the business model in general so so it's a practical consideration uh but uh i don't think i don't think we expect to see anything uh of that magnitude going forward because the first 2.25 billion dollars of u.s dollar reserve was a big move and just if i could just get a follow-up question regarding that 2.5 billion dollar cash reserve um could you in theory could you use that if you chose could you use that to redeem the billion dollars of converts that are putable in september of 27 yeah we could we can use it for any corporate purpose we can use it to pay dividends we could use it to meet um a credit obligation we could use it

to pay interest on a loan we could use it for whatever thank you great thank you lance for the next question i would like to invite tom lee from funstrad and bitmine uh hi uh thank you everybody uh really useful presentation i took a ton of notes um but i want to ask you a two-part question i apologize it's two parts um on slide 53 you talked about quantum vulnerability of bitcoin and uh and i apologize i know it's getting a little nerdy but i know a lot of people have questions about quantum vulnerability because of course bitcoin could upgrade its network But I know there's three types of wallets that remain quantum vulnerable. You know, one is Satoshi, because he used a pay to public key, you know, a really old wallet. And then anyone who's sent Bitcoin reveals their public key. And then, as you know, the taproot wallets actually are somewhat quantum vulnerable. So I think that's like 25 or 30 percent of all Bitcoin wallets out there. So the part one question is, I know MicroStrategy is a security expert, you have so much experience in security, could you give us some idea of how Bitcoin and the core developers might think about addressing the quantum vulnerable wallets? But the second part is that's really a small part of the story because there's only 4.4 million wallets that have even $10,000 worth of Bitcoin, which means whereas there's almost a billion accounts globally that have $10,000 of stocks, bonds, or cash, meaning the world hasn't really adopted Bitcoin yet. And so, you know, as you think about the rest of this year, could you give us like what you think are some milestones or roadmaps that further drive Bitcoin adoption, which in turn help the price of Bitcoin?

So with regard to the first, the quantum question, I don't think it's appropriate for us to advocate a particular solution or particular approach, nor a particular time frame. I think that our role is to support all of the various communities and facilitate the evolution of consensus about what should be done, how it should be done, when it should be done. And I think that if you accelerate those and pressurize those processes, you end up solving a bunch of problems that don't exist in a way that maybe are iatrogenic. so um we don't have a particular set of uh of policy points that we wish to advocate right now nor do i think it's really responsible or appropriate for us to do that um i think that uh i think that that will be emergent uh you know exactly what should be done when by the way it's not it's not clear anything should be done ever it's quite it's quite possible we'll actually pop out you remember you know the world was going to you know end in climate change death you know 26 years ago when 26 years went by and none of those things happened we were going to run you know bitcoin was going to boil the ocean and use all the energy on earth as late as 2018 and that never happened so it's possible that whatever happens in the quantum domain will actually improve the security of the bitcoin network inadvertently before we have to even discuss the protocol change so i i don't think there's any particular policies uh to be advocating right now other than to support all the various communities and facilitate consensus at the right time to do the right things um the second topic is is really what are the catalysts for uh for bitcoin price to improve. Look, I think the fundamental catalysts are regulatory support. We have the most constructive set of financial regulators in the history of the industry right now. The head of the Fed, the head of the Treasury, the head of the CFTC, the head of the SEC, and the White House has a digital assets czar, right? Those five things are massive bull flags. They're all very positive. And generally, you would expect that something good will come probably out of the CFTC or the SEC as they are constructive about facilitating financial companies to innovate in the digital asset space, right? I would have been skeptical about that two years ago, but I think for you to be skeptical about their support for digital innovation today would be ignoring all the words from everybody in those positions. And I think that the second catalyst will be banking adoption, the formation of the banking credit networks. as as uh the large banks and as as companies like schwab they start to allow you to trade bitcoin custody crypt bitcoin borrow against bitcoin um they're going to legitimize the asset and they're going to decrease the volatility of the asset they're going to improve the uh usefulness of the asset. You're aware of the announcement of the BlackRock Bitcoin volatility income fund that came like about a week ago where they said they were going to sell volatility or generate income. And a lot of people that speculate that will decrease the volatility of Bitcoin and put a more stable floor into the asset. So I think the actions by big finance, the actions by the big banks and the actions by the financial regulators are the fundamentals i mean those are the fundamental things and if you were to light a candle and pray you know to the gods of the crypto sphere you know you would say i want pro-digital assets regulators i want pro-digital assets banks and i want pro-digital assets financial innovations like blackrock's bringing the market like like we're bringing to the market right you know like strc but fundamentally the industry is going to move forward because of enlightened regulation uh engaged thoughtful banking and then innovative finance and that's what we're doing and that's what we see right now great thank you michael thank you tom for the next question i would like to invite Pete Christiansen from Citi.

Thank you. Good evening.

Michael, I want to talk about events of the last week. On Friday, the president presented his nominee for next Fed chair, which exacerbated volatility across a number of asset classes, including Bitcoin. The good news is Kevin Warsh is on the tape, noting that Bitcoin is the new gold. So that's good. But I guess my question is, how would strategy's capital allocation framework, possibly if it would change, if the next Fed share is perceived to be less independent, perhaps maybe more tolerant of fiscal dominance. That may raise Bitcoin prices short term, but longer term, it may introduce increased rate volatility, which may be a challenge on the funding side. I'm just curious if you have any perspectives on how that might change the capital allocation framework for strategy.

Thank you. We try to be very reactive to market signals. So for example, when our equity trades weak, we don't sell it. When our credit instruments are trading weak and when the cost of credit is too high, we don't sell them. The most obvious is STRC. If it trades below 100, we don't sell it. In periods where the marketplace loses confidence in our particular credit instruments, we simply wait. And in periods when the MNAB of the equity explodes to three or three and a half, we might sell a billion dollars a day. So when the capital markets are enthusiastic about either the equity or the credit, we react to them. And it's above our pay grade to set financial policy. it's even above our pay grade to interpret the financial policy. Sometimes the macro economy has one set of numbers and you would think it's good for Bitcoin, but it's bad for Bitcoin. Or another time you would say, well, if they do this, that should be good for us and it's not good for us. And then other times it's the opposite. I think the nice thing about our business is we have the option to do nothing. And we have a set of disciplined capital markets programs. They've moved from being discrete, where it's like, well, we got to do a deal this quarter. What's the deal we're going to do in Q3? And we've moved from discrete 144A capital markets programs to continuous atm type programs and with the atms you know if if the market thinks you know that uh the cost of capital on an instrument like strf should be 11 well we just don't want to sell it so we think it ought to go to eight percent so when you know when the market takes STRF to 140, or whatever the price it is that we think is fair, then we will be open to issuing more. And when the market is bearish on those instruments, we don't. And the good thing about the business is, if you think Bitcoin is going to fill in a number 30% a year, then our option is just do nothing. And we're a company that's a $45, $50 billion company growing 30% a year. So that's our default. If you think Bitcoin's only going to grow 10% or 20% a year, our default is we just do nothing and we grow at the rate of Bitcoin and we're okay with that. And then if we think that there's something very accretive that's going to be good for the shareholders then we will participate and we can participate you know in size a million a day a hundred million a day a billion a day you know and and the truth is you know pete sometimes we get up in the morning and we said we basically set up our programs and and we think well nothing's going to happen today and then five minutes before the market closes a lot of stuff happens like it can literally change in 60 seconds and and again that's that's uh beyond you know our control we can't control how the markets will interpret all these things what we can do is set up a rational set of credit structures so that we only issue credit when we think it's in the best interest of the company and we only issue equity when it's in the best interest of the company.

Thank you, Michael. Fair and helpful comments.

Thank you, Pete. For the next question, I would like to invite Lynn Alden from Lynn Alden Investment Strategy.

Thank you for the opportunity. Given the popularity of STRC, my question is focused on that. The company established that USD reserve, which I think shored up the confidence of these products and make them more attractive. Right now, the USD reserve is on the website 30 months of coverage compared to the dividends of the preferreds. The other preferreds are fixed dividends. STRC is a variable dividend, which introduces some degree of uncertainty around how many months of coverage there are for the total amount of dividends payable. Do you have any kind of views on what you think is an appropriate minimum reserve relative to months of dividend coverage or do you have a kind of a maximum that you'd be willing to pay on a dividend for strc and then a related question is we are seeing some kind of early financial products that are out in the market that are looking to potentially leverage strc given the the goal of low volatility and high yield, are you monitoring the space for leverage built on top of that as it could contribute to spikes of volatility should there be an issue in the market? And do you have any, would you encourage that kind of thing or would you dissuade leverage from building on top of that increasingly kind of popular product?

I can start, Lynn. Thanks for the question. First, we said that we targeted two to three years of dividend coverage with our U.S. dollar reserve. So we wouldn't want it to go below two years. I think three years would be pretty high. And as far as whether we think there's a cap to the stretch rate, you know, we're pretty early on and we're sort of trying to understand what happens every single month at the end of the month. And that's why we have our guidance that we have, right? It's at 11 and a quarter. Could we take it to 12 potentially? but it's going to be a function of how do we keep the price within a tight range right around that $100 and also a function of what happens to interest rates in general but I don't think we have a cap right now we're just going to have to see how this instrument plays out over time so that's the answer on a stretch overall and your second question remind me the second question around uh we're seeing kind of early um products potentially looking to lever it up for for um other customers do you do you perceive issues in that are you monitoring it uh would you encourage or dissuade uh that type of activity i think anytime people create products on top of stretch right there's some products that we've seen like buck that have been issued that are they're not lever products but they're actually reducing the volatility down to about zero and they're actually showing daily accruals as opposed to monthly accruals. So I think those are positive. I think the extent people are going to build leveraged products, one, we can't really, you know, we're not going to stop them. And I think it leverage adds liquidity, adds a certain extent interest in stretch, and we'll see how it plays out over time. But I don't necessarily think that's a bad thing.

Thank you for the clarifications.

Okay. So we can move on to the next question. For that, I would like to invite Mark Palmer from Benchmark.

Thank you. A couple of questions. First of all, we have seen over the last year a tremendous number of new digital asset treasury companies formed, many of them focused on accumulating Bitcoin, others on accumulating other crypto tokens. What is your take on uh how this industry is likely to evolve in terms of the number of players whether there's going to be a shakeout um if there is a shakeout will there be consolidation and most importantly uh what could this all mean for strategy uh as it unfolds are there opportunities uh for the company to take advantage of that dynamic?

Yeah, I think every business has to have an operating model that works, that adds value if it's going to grow and prosper. So one model is just to provide Bitcoin exposure if people in the country in question can't get it any other way. There are a lot of people in the UK that bought our stock for four years because they just couldn't buy Bitcoin any other way. Right. So if there's a value proposition, you know, in Brazil or in, you know, in France or wherever, then maybe just you can be a simple a simple Bitcoin holder. I think I think another value proposition is to issue digital credit. And you can see that Strive and and MetaPlanet have both pursued digital credit. If you're good at it, you know, by the way, you can do digital credit and not be good at it. Right. If you take on debt, you can't pay back. Right. then that that doesn't help the company that hurts the company but if you're good at digital credit that could be another case you know a third a third would be anything that uses capital right so if these companies you know if they want to generate bitcoin yield they're going to have to find some way uh to generate a benefit from the capital right you could underwrite insurance You could support trading or derivatives trading by posting it as collateral. You can engage in derivatives trading. You could literally become a public company with a lot of capital that trades in the digital derivatives market, posting your Bitcoin as the collateral to take the trade and sell the volatility. It's a different business model. What do I think? I think there's thousands of companies to get launched, many don't succeed. Some will fail. Some get launched doing one thing and then they evolve into something different. Like look at our company, we evolved. In fact, you could argue that the most successful companies evolved through two, three, four stages in their life cycle. I mean, Apple didn't start out as a phone company for sure. And I think Elon, maybe he ends up being a robot company and not a car company at Tesla. So I think that the winners will evolve and they'll find a niche. And I think that the ones that don't evolve, if you're just a holding company, holding Bitcoin, not doing anything with it, might you get bought up? Yeah, you might get bought. And would that be good for you? You're a lot better off if you have something people want to buy. For example, Sears had a future because they had a lot of real estate that somebody wanted to own. And if they didn't own the real estate, it would have been a much worse situation for them. So I think that you're going to see all sorts of examples now. And presumably thousands and thousands of companies get launched and they all do different things. And we're very embryonic early on, like in the first year or two years, 50 years from now, right? I mean, the debate will be who's the best Bitcoin backed insurance company, right? But 20, 30, 40 years from now, and that company doesn't even exist right now. But on the other hand, what about us? Are there opportunities for us? Well, they were an opportunity for Strive. Strive did the deal with similar, and they closed it quickly, and they were able to build their capital base pretty rapidly. So we see examples of that. There probably will be some mergers and acquisitions of other companies in various space that they put together their various assets in a synergistic way. Our business is laser-like, monomaniacally focused on one thing right now. We want to make Stretch, S-T-R-C, the premier credit instrument in the digital world, the best digital credit in the world and maybe the best credit in the world. If we can create a product that trades with less than five vol, that pays you 10% dividend with a stable $100 value, and we pay a rock dividend, the question is, who would want that? It's like, everybody would want that. I mean, why wouldn't you want it? What's the demand for that? It's infinite. Like, so effect, if stretch works, it's the ideal product. And the company that can create treasury credit based on digital capital has the ideal business model. And so we generally won't get distracted, right? The number one risk for us is a dilutive distraction, right? Everything else on our capital structure that undermines the credit of stretch, you know, is a question mark, So you have to be thinking about that. And then anything we might do that looks complicated or risky or different, anything that introduces a question in the mind of the stretch investor, can we pay the dividend? That's going to be deemed negative. Anything that introduces a question in the equity investor's mind, can you outperform Bitcoin? So generally, we're pretty skeptical on acquisitions because they take a long time and then you might acquire something that you didn't want that you have to divest. And then everybody wants to talk about how and why and how long it takes. And so I don't think, I wouldn't say it's not a good strategy for other companies and other investors. There are other companies and other investors for which it's a great opportunity for them and they can make a lot of money and they will pursue it and God bless them. For us, we believe we've stumbled upon maybe the most promising product, STRC. After 20 capital markets transactions and all sorts of credit instruments, we think we found the best one for us and for the credit investor. And we think we found a great business model, the treasury company. If you can generate return of capital dividends scalably and scale up the issuance of treasury credit you've got maybe one of the most efficient business models in the world and one of the most compelling products in the world so we don't want to do anything that would dilute that focus undermine the credit of the balance sheet or distract the management team from what we see is a a once in a lifetime opportunity thank you great thank you for the next question, I would like to invite Larry Leppard from

Equity Management Associates.

Yeah, hi, thanks. Thanks for having me on guys. First off, two great things in my view came out of the call. One, the whole guidance on the STRC rate. I mean, that's that's brilliant. Really love it. And it's going to help people like me who are buying STRC, you know, as kind of, you know, a solid retirement type of asset to understand where it's going. And I have a question related to that, but I'd like to put it to the end. The second thing that I thought was really important was the notion that we're going to upgrade, you're going to upgrade and play a leadership role in the technical direction I think that's fabulous and a great way of addressing all the FUD around quantum, which I think is probably scared off a few of the bigger institutions who are looking at it and kind of saying, hey, who controls this whole thing? Just back to first principles, I want to just kind of run through how I look at this and see if you as a management team agree. I'm a value investor. I look for asymmetry. And in my view, right now, MicroStrategy is the most asymmetric value investment in the world. And most people don't understand it. And it's kind of stunning to me. My partner, David Foley and I, we did a model. We've done several models and we've looked at it and said, you know, if Bitcoin stays at $50,000 for four or five years, you can't break this company. It's unbreakable. I mean, the dilution we calculate the dilution would maybe be 15 or 20%. So the downside case here in our view is really covered, you know, as a result of the fact that the debt's unsecured and the interest rate on it is very, very low. Some of it's convertible, as we all know, and the preferred is really equity. So to me, you know, you've got an unbelievable situation. I think a lot of people listening to this call are kind of wondering, hey, what's going on with the stock price? What's going on with Bitcoin? My view on that is just that what's going on with Bitcoin is liquidity is really tight. And, you know, this is what's going to drive a big print at some time relatively soon. And it's also what's driving the stock market down. And Bitcoin has always been kind of a leading indicator of where, you know, how much liquidity is out there. And so, you know, things are tight right now. And you see it, you know, gold's getting hit, silver's getting hit, all of a sudden money assets are getting hit. But we know the debasement trade is alive and well because gold and silver had just been on a tear. And this reminds me very much of 2020 when gold and silver led first and bitcoin followed harder you know bitcoin went up 6x in october of 2020 after gold had gone up 45 percent you know when pal pivoted and then covid came along so you know to me what's going to happen here is this thing is going to be you know a two bagger five bagger ten bagger and most people don't really understand it and i you know the reason that's the case is kind of said where he said you know commodities are very very hard business to invest in because they have long cycles. And the average investor, you know, who's being marked quarter to quarter, month to month, year to year, can't show long time preference. He didn't use those words, but he was essentially saying the same thing, which is Saifedean's point. And, you know, if you have the long time preference, you realize this is a commodity that has a fixed supply. You know, the, you know, the asymmetry, it's just, it's absolutely blowing my mind. So So I just want to say congrats for all you're doing. And I think it's a no-brainer that this is going to be a standing upside investment. I do have one specific question related to the Stretch product, and that is this. You're going to adjust it. Okay, so maybe you have to adjust it in a while to get more people to buy it. At some point, this is going to be a fabulous product. Everybody's going to want it. And if you kind of set the price at $100, could it ever adjust down? I mean, I'm buying it and I'll probably gift it to my kids because the tax basis will be zero and I'll never sell it. Could you think about setting a lower boundary on the yield? You know, I mean, 11%, that's attractive. Nine, eight, seven, those are all attractive.

If it got so attractive that the yield on it started to go down to five, four, three, two, one, you know, that would be, I mean, if people looking at buying it thinking long, long term might wonder, is there is there a boundary below which this thing can fall and we'd be better we'd be more comfortable buying it if we knew there was such a boundary on the yield yeah i can go ahead fong i can start larry and and we agree with all your points i think there's a a significant misunderstanding of the leverage on the balance sheet and how we're going to service our convertible debt over time and and these ideas that if you know bitcoin price goes below our cost basis that becomes an issue and as i stated you know become needs to go down to eight thousand dollars a coin and sit there for five years up until 2032 before we really have a problem uh being able to satisfy the convertible note so so thank you for pointing that out on on the on on the rate on stretch right uh right now you know technically the bottom of the rate would be so far but uh we think of the fact that we we get capital from stretch we put it into bitcoin and bitcoin is going to go up on average 30 percent a year so anything that we pay less than call it 20 is accretive to our shareholders so i don't think it's something where you should sit there and think that we're going to drive it down to sofa right if if stretch price goes to 100 and sits at 100 we might take it down a couple percentage points but i don't think you know and obviously it depends on where silver goes But I don't think it's something that someone should think we're going to pull the rug out from under folks and drive it down to one.

Yeah, I think stating that publicly to, you know, people who are buying stretch should be important just so people understand. And if you were to say something along the lines of we're not going to let it go below seven or something, because it's going to get to be really popular at some point in time. And those of us who are buying it are buying it with multi-decade timeframes, right?

ED HARRISON Yeah. Another point to make is we can't lower the rate more than 25 basis points a month. We're always going to be very incremental. We would only lower the rate when in such a way that we thought it would stay in that zone of 99 to 101. We want to keep it targeted 100 so you know yeah you might you might five years from now find out that the rational credit spreads that the market assigns us are 300 basis points instead of 600 and and that people would like to buy this thing at 400 basis points over so far maybe but we would very gradually get there and we would still expect strc to be trading around 100 and so we're not we're we're not looking to do anything that is jarring to the price we want it we want the price to be stable as a practical matter the reason that we would lower the dividend rate would be we had such an avalanche of demand we had too much demand and people want to buy infinite and we don't want to sell infinite because we'll drive the btc rating of strc down right like like if hypothetically someone said i want to buy a hundred billion dollars of strc tomorrow you can see how we don't want to sell it because right because then that reflexive and that would undermine the credit quality and that would increase the volatility and that you know that kind of works against everything so luckily for us you know and practically that's not going to happen right like yeah they say you know it's good that we have time because otherwise everything would would take place at the same time right all at once all at once we don't want stuff to happen all at once so it will happen progressively we'll be very thoughtful about it our goal is always for it to be extremely compelling to to attract trap attract capital and at the point where we feel like we've got too much capital it would be a circumstance larry where where uh there was massive success of strc and bitcoin was lagging and an MSTR equity premium was lagging. And it's that weird situation where it's hard for the company to increase its collateral base in order to back the credit. And then we would say, we have too much demand for the credit, so we need to click it down. But if there's over demand for the credit, it would still be pegged at 100. And we take it down 25 basis points. And so we're going to responsibly manage this so as to minimize volatility, maximize stability. And in all likelihood, it's going to be excessively compelling in terms of dividend rate for quite a while. Because even though you believe in Bitcoin as collateral and I believe in Bitcoin as collateral, we've got a lot of work to do with credit rating agencies and the Basel rules and traditional finance establishment before they recognize it as being good collateral. And as long as they don't, then that means that probably the spreads are going to stay pretty compelling.

Thank you very much. Really appreciate it.

Thank you. For the next question, can we have Andrew Hart from BTIG?

Hey, thanks for taking my question. So it'd be great to hear some examples of some of the doors that have been open since strategy got a credit rating back in the fall. You know, I think it's open, potentially open doors to pension funds, insurance companies, and other really large institutional investors. And, you know, Michael, before we got on this webcast, you said something like times today that we're seeing with Bitcoin is when people are looking for insight and leadership. So I guess who better to ask, right, what is your expectation for conversations with these new potential investors with these really large pools of capital? If you could also shed some light on how the conversations to date, since you've gotten that credit rating, have evolved. Thanks.

Sorry, go ahead, Andrew.

I was going to start and please jump in. Look, Andrew, thank you for the question. I think the process with the rating agencies was an excellent process. I think we've noted that we've had a credit rating in the past. It was more based on the legacy business. This is the first time a Bitcoin treasury company with a framework specific to that was rated by a major credit agency. I think overall, the reaction has been what we had expected. There is now a public profile that investors can look to. It is opening up, I think, interest. I think it's still early, though. I think a lot of us that have been in these types of markets know that the credit rating agencies take time to develop. I think we noted earlier in the presentation that we believe we've made strides since the relaunch of the rating that will continue to make progress. I think there's more to do in that sense. And it sort of created a little bit of a floor, so to speak, because everything we do here will be incrementally increasing the capital base. It'll increase our ability to strengthen our balance sheet. And so I think in the long run, it may take longer than it would take, you know, a near term action. But I think that there's possible upside. I think that will continue to drive more in large institutional demand. And to answer your question, I think that the reaction from the investor base has been net positive. And certainly the cash reserve has added on to that as well.

Thanks, Andrew.

Thank you. Do you want to cover it's the second question or just general Bitcoin?

Just restate the question again.

I was wondering how the conversations you've had with these really large pools, really large investors have come along. And then, you know, before we got on, you said times like this is when people are looking for insight and leadership. And so as you continue to have those conversations with people that are new to Bitcoin, you know, what do you tell them in a day like today?

I think we've got an unprecedented number of invitations to financial conferences and meetings with investors in general. And I think that the amount of interest in this topic explodes. And when the volatility explodes, the engagement explodes. What I would tell them is the same. We've said for a while, Bitcoin's capital investment, your time horizon needs to be minimal four years. I would actually say, look at the simple moving 200-week average, the 200-week simple moving average, or the four-year average. I would invest with a four-year DCA, you know, dollar cost averaging type approach if you're going to invest in Bitcoin. And you really want to have the intent to hold the asset for a decade. And if you can't wait a decade with no cash flow, and if you can't stand the volatility, then I would say you ought to buy the credit. If you believe in digital assets or digital capital, you believe in Bitcoin, but you can't stand to wait for a decade and take the vol, you should buy the credit and just take the 11% tax deferred with much, much less volatility and with someone else stomaching the pain for you. And so I think it's kind of simple, right? You either don't believe in Bitcoin at all, and then you don't want the credit or the capital, or you believe in Bitcoin as a maxi, and you want the equity because you want 2x bitcoin or you want bitcoin as uh you know as sovereign censorship resistant long-term store of value to give to your great grandkids you know who may be living in a country you don't even live in right now and you want to self-custody then you buy the bitcoin or you just think all this stuff looks really good but you need the money back in September, then you think about the credit, right? And specifically the treasury credit, because the other credit instruments are too complicated. So I would say we're really at this point pitching the treasury credit as the first step in a Bitcoin journey for a traditional or conventional investor who believes in digital assets. Thank you, Michael. And we're pitching it to a lot of people. We're talking to a lot, right? So there's a lot of conversations. And if anything, right, the volatility right here is the kind of the reason why you might want to have a product like STRC. If you're wondering, what's the justification? Well, just look at the two charts next to each other and then you figure out why you might want the credit instrument.

Great. And for the last question here, I would like to invite Dan Hillary from Buck.

Hi, Sharish. Thanks for having me on, guys. So my question is as follows. The de-equitization of the convertible notes has seemed to be a bit of a headwind for the cost of capital across all the preferred equities.

And if MSTR continues to trade below the convertible note conversion price, how many months before the put date would you guys consider refinancing or retiring the converts at a discount in order to lower the cost of capital across all the digital credit instruments you know dan we went through this in 2022 during bitcoin winter and our converts were at some point in time trading at 35 uh uh you know for each and and we means 35 cents or 40 cents on the dollar 35 cents on the dollar and and you know we had considered whether it made sense to you know call to to buy some of those back and and it never really made a lot of sense especially if you live in a world where you think bitcoin price is going to go up um so the converts aren't really this big overhang for us and and as i mentioned you'd need bitcoin price to go down to eight thousand dollars and sit there for five six years before it really becomes a problem so it's not really something that we think about a lot of whether we're going to buy back any of the converts or if we're going to do something early with them right now yeah i would say a year before we have a put event or a year before we have a redemption event we certainly look at it we look and we look at the statistical likelihood of anything and then we evaluate whether or not it makes sense to refinance or hedge or mitigate anything and if we were to do

it we would want to do it six months before the event took place so but but you know right now we're still far out of that window and it's not clear there's any event the last time i you know i looked at one of our our puts you know it was the one that was coming due earliest the the bond was already above par and so there is no risk to it so when we get to a certainly when When you're more than one year out, it's all hypothetical worrying about something that's unlikely to ever happen. When you get to one year out, you have to consider whether there's a risk and then we're certainly not going to wait till one month before we deal with the risk. We wouldn't wait till the last few weeks or the last few months. We would probably do it with a few quarters buffer at the latest, which means we start thinking about a year before.

That answers my question.

Thank you, everyone. this concludes the Q&A portion of the webinar I would like to thank all the guests for the questions and all the attendees for tuning in live we had over 3,000 people join us live on zoom webinar over 4,000 people on YouTube livestream and over 180,000 views on X livestream so this should be one of the most viewed earnings call in our history. So appreciate all your interest and curiosity and thank you. I would like to now turn the call over to Pham for final closing remarks.

Look, I want to echo everyone's thoughts. Thank you for the analysts for joining us. Thank you for everybody for dialing into the call and listening. And thanks for those who are joining us online. I invite you all to join us in Las Vegas, February 23rd, 25th at Strategy World and Bitcoin for Corporations. And if we don't see you there, we'll see you again in three months in our next earnings call.

Thanks.