MSTR 8-K
Strategy Inc (MSTR)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
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Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
Securities registered pursuant to Section 12(b) of the Act:
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Trading |
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. |
Results of Operations and Financial Condition. |
On May 1, 2025, MicroStrategy Incorporated d/b/a Strategy (the “Company”) issued a press release announcing the Company’s financial results for the quarter ended March 31, 2025. A copy of this press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.
The information disclosed pursuant to Item 2.02 in this Current Report on Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.
Item 9.01. |
Financial Statements and Exhibits. |
(d) Exhibits
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Exhibit |
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Description |
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99.1 |
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104 |
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Cover Page Interactive Data File (embedded within the Inline XBRL document). |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
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MicroStrategy Incorporated |
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(Registrant) |
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Date: |
May 1, 2025 |
By: |
/s/ Andrew Kang |
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Andrew Kang |
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Senior Executive Vice President & Chief Financial Officer |
Exhibit 99.1
Contact:
Strategy
Shirish Jajodia
Corporate Treasurer
Strategy Announces First Quarter 2025 Financial Results
TYSONS CORNER, Va., May 1, 2025 - MicroStrategy® Incorporated d/b/a Strategy™ (Nasdaq: MSTR/STRK/STRF) (“Strategy” or the “Company”), the largest corporate holder of bitcoin and the world’s first Bitcoin Treasury Company, today announced financial results for the three-month period ended March 31, 2025 (the first quarter of its 2025 fiscal year).
“We successfully executed our record $21 billion common stock ATM, adding 301,335 BTC to our balance sheet while simultaneously achieving a 50% increase in MSTR share price during the same period. In Q1, we also broadened our capital base with two of the most successful preferred stock IPOs in a decade. Our capital markets strategy continues to grow our Bitcoin holdings while delivering superior shareholder value. With over 70 public companies worldwide now adopting a Bitcoin treasury standard, we are proud to be at the forefront in pioneering this space.” said Phong Le, President and Chief Executive Officer.
“We are thrilled to report a strong start to the year with a year-to-date “BTC Yield” of 13.7%, achieving over 90% of our 2025 target in just the first four months of the year. Our year-to-date “BTC $ Gain” of $5.8 billion also meets 58% of our annual target, demonstrating the effectiveness of our Bitcoin strategy. With the strong momentum in the market and our successful execution of our treasury operations thus far this year, we are increasing our 2025 “BTC Yield” target to 25% and our 2025 “BTC $ Gain” target to $15 billion. Also in Q1, we adopted the long-awaited fair value accounting for our Bitcoin holdings, which resulted in a significant $12.7 billion uplift in the beginning balance of retained earnings. And despite recognizing an unrealized loss in Q1 due to a quarter-end Bitcoin price of $82,445, the current approximate $97,300 Bitcoin price would imply a fair value gain of roughly $8.0 billion thus far in Q2.” said Andrew Kang, Chief Financial Officer.
Bitcoin Treasury Highlights
Q1 2025 Software Business Highlights
Other Q1 Financial Highlights
The tables provided at the end of this press release include a reconciliation of the most directly comparable financial measures prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) to non-GAAP financial measures for the three months ended March 31, 2025 and 2024. An explanation of non-GAAP financial measures is also included under the heading “Non-GAAP Financial Measures” below. Additional non-GAAP financial measures are included in Strategy’s “Q1 2025 Earnings Presentation,” which will be available under the “Events and Presentations” section of Strategy’s investor relations website at https://www.strategy.com/investor-relations.
Strategy Dashboard
Strategy’s dashboard can be found on its website at strategy.com, which can be used as a disclosure channel to provide broad, non-exclusionary distribution of information regarding the Company to the public. Some of the information distributed through the website dashboard may be considered material information. The website dashboard will include information regarding market data for our securities and bitcoin, BTC Yield, BTC Gain and BTC $ Gain KPIs, bitcoin purchases, bitcoin holdings, capital markets activity, and other related information. Investors and others are encouraged to regularly review the information that the Company makes public via the website dashboard.
Conference Call
Strategy will be discussing its first quarter 2025 financial results on a live Video Webinar today beginning at approximately 5:00 p.m. ET. The live Video Webinar and accompanying presentation materials will be available under the “Events and Presentations” section of Strategy’s investor relations website at https://www.strategy.com/investor-relations. Log-in instructions will be available after registering for the event. An archived replay of the event will be available beginning approximately two hours after the call concludes.
About Strategy
MicroStrategy Incorporated d/b/a Strategy (Nasdaq: MSTR/STRK/STRF) is the world's first and largest Bitcoin Treasury Company. We are a publicly traded company that has adopted Bitcoin as our primary treasury reserve asset. By using proceeds from equity and debt financings, as well as cash flows from our operations, we strategically accumulate Bitcoin and advocate for its role as digital capital.
Our treasury strategy is designed to provide investors varying degrees of economic exposure to Bitcoin by offering a range of securities, including equity and fixed-income instruments. In addition, we provide industry-leading AI-powered enterprise analytics software, advancing our vision of Intelligence Everywhere. We leverage our development capabilities to explore innovation in Bitcoin applications, integrating analytics expertise with our commitment to digital asset growth. We believe our combination of operational excellence, strategic Bitcoin reserve, and focus on technological innovation positions us as a leader in both the digital asset and enterprise analytics sectors, offering a unique opportunity for long-term value creation.
Strategy, MicroStrategy, and Intelligence Everywhere are either trademarks or registered trademarks of MicroStrategy Incorporated in the United States and certain other countries. Other product and company names mentioned herein may be the trademarks of their respective owners.
Non-GAAP Financial Measures
Strategy is providing supplemental financial measures for (i) non-GAAP loss from operations that excludes the impact of share-based compensation expense, and (ii) non-GAAP net loss attributable to common stockholders and non-GAAP diluted loss per common share that exclude the impacts of share-based compensation expense, interest expense arising from the amortization of debt issuance costs related to Strategy’s long-term debt, gains and losses on debt extinguishment, if any, and related income tax effects. These supplemental financial measures are not measurements of financial performance under GAAP and, as a result, these supplemental financial measures may not be comparable to similarly titled measures of other companies. Management uses these non-GAAP financial measures internally to help understand, manage, and evaluate business performance and to help make operating decisions.
Strategy believes that these non-GAAP financial measures are also useful to investors and analysts in comparing its performance across reporting periods on a consistent basis. The first supplemental financial measure excludes a significant non-cash expense that Strategy believes is not reflective of its general business performance, and for which the accounting requires management judgment and the resulting share-based compensation expense could vary significantly in comparison to other companies. The second set of supplemental financial measures excludes the impacts of (i) share-based compensation expense, (ii) non-cash interest expense arising from the amortization of debt issuance costs related to Strategy’s long-term debt, (iii) gains and losses on debt extinguishment, if any, and (iv) related income tax effects. Strategy believes the use of these non-GAAP financial measures can also facilitate comparison of Strategy’s operating results to those of its competitors.
Important Information About KPIs
BTC Yield is a key performance indicator (“KPI”) that represents the percentage change, during a period, of the ratio between the Company’s bitcoin holdings and its Assumed Diluted Shares Outstanding, where:
BTC Gain is a KPI that represents the number of bitcoins held by the Company at the beginning of a period multiplied by the BTC Yield for such period.
BTC $ Gain is a KPI that represents the dollar value of the BTC Gain calculated by multiplying the BTC Gain by the market price of bitcoin. For determining BTC $ Gain QTD and YTD, unless otherwise specified, the Company uses the current market price of bitcoin. For determining BTC $ Gain for a past fiscal year or other past period, the Company uses the market price of bitcoin as of 4:00pm ET as reported on the Coinbase exchange on the last day of the applicable period. The Company uses these market prices of bitcoin for this calculation solely for the purpose of facilitating this illustrative calculation.
The Company uses BTC Yield, BTC Gain and BTC $ Gain as KPIs to help assess the performance of its strategy of acquiring bitcoin in a manner the Company believes is accretive to shareholders. The Company believes these KPIs can be used to supplement an
investor’s understanding of the Company’s decision regarding the manner in which it funds the purchase of bitcoin and the value created in a period by:
When the Company uses these KPIs, management takes into account the various limitations of these metrics, including that they
BTC Yield, BTC Gain and BTC $ Gain are not, and should not be understood as, operating performance measures or financial or liquidity measures. Specifically:
The trading price of the Company’s class A common stock is informed by numerous factors in addition to the amount of bitcoins the Company holds and number of actual or potential shares of its class A common stock outstanding, and as a result, the market value of the Company’s securities may trade at a discount or a premium relative to the market value of the bitcoin the Company holds, and neither BTC Yield, BTC Gain nor BTC $ Gain are indicative or predictive of the trading price of the Company’s securities.
As noted above, these KPIs are narrow in their purpose and are used by management to assist it in assessing whether the Company is raising and deploying capital in a manner accretive to shareholders solely as it pertains to its bitcoin holdings.
In calculating these KPIs, the Company does not consider the source of capital used for the acquisition of its bitcoin. Specifically, the Company notes it has acquired bitcoin using proceeds from the offerings of
The use of the proceeds from such offerings to purchase bitcoin has the effect of increasing the BTC Yield, BTC Gain and BTC $ Gain, while also increasing the Company’s indebtedness and senior claims of holders of instruments other than class A common stock with respect to dividends and to the Company’s assets, including its bitcoin, in a manner that is not reflected in these metrics.
If any of the Company’s convertible notes mature or are redeemed without being converted into common stock, or if the Company elects to redeem or repurchase its non-convertible instruments, the Company may be required to sell shares of its class A common stock or bitcoin to generate sufficient cash proceeds to satisfy those obligations, either of which would have the effect of decreasing BTC Yield, BTC Gain and BTC $ Gain, and adjustments for such decreases are not contemplated by the assumptions made in calculating these metrics. Accordingly, these metrics might overstate or understate the accretive nature of the Company’s use of capital to buy bitcoin because not all bitcoin is purchased using proceeds of issuances of class A common stock, and not all proceeds from issuances of class A common stock are used to purchase bitcoin.
In addition, we are required to pay dividends with respect to our Perpetual Strike Preferred Stock and Perpetual Strife Preferred Stock in perpetuity. We could pay these dividends with cash or, in the case of Perpetual Strike Preferred Stock, by issuing shares of class A common stock. If we issue shares of class A common stock in lieu of paying dividends in cash, or if we issue shares of class A common stock for cash to fund the payment of cash dividends, then we would experience an increase in our Assumed Diluted Shares Outstanding without a corresponding increase in our bitcoin holdings, resulting in a decrease in BTC Yield, BTC Gain and BTC $ Gain for the period in which such sales of bitcoin or issuance of shares of class A common stock occurred.
The Company has historically not paid any dividends on its shares of class A common stock, and by presenting these KPIs the Company makes no suggestion that it intends to do so in the future. Ownership of the Company’s securities, including its class A common stock and preferred stock, does not represent an ownership interest in the bitcoin the Company holds.
The Company determines its KPI targets based on its history and future goals. The Company’s ability to achieve positive BTC Yield, BTC Gain, or BTC $ Gain may depend on a variety of factors, including its ability to generate cash from operations in excess of its fixed charges and other expenses, as well as factors outside of its control, such as the price of bitcoin, and the availability of debt and equity financing on favorable terms. Past performance is not indicative of future results.
Investors should rely on the financial statements and other disclosures contained in the Company’s SEC filings. These KPIs are merely supplements, not a substitute. They should be used only by sophisticated investors who understand their limited purpose and many limitations.
Forward-Looking Statements
This press release may include statements that may constitute “forward-looking statements,” including estimates of future business prospects or financial results, our targets relating to our BTC Yield, BTC Gain and BTC $ Gain KPIs, and statements containing the words “believe,” “estimate,” “project,” “expect,” “will,” or similar expressions. Forward-looking statements inherently involve risks and uncertainties that could cause actual results of MicroStrategy Incorporated and its subsidiaries (collectively, the “Company”) to differ materially from the forward-looking statements. Factors that could contribute to such differences include: fluctuations in the market price of bitcoin and any associated unrealized gains or losses on digital assets that the Company may record in its financial statements as a result of a change in the market price of bitcoin from the value at which the Company’s bitcoins are carried on its balance sheet; the availability of debt and equity financing on favorable terms; gains or losses on any sales of bitcoins; changes in the accounting treatment relating to the Company’s bitcoin holdings; changes in securities laws or other laws or regulations, or the adoption of new laws or regulations, relating to bitcoin that adversely affect the price of bitcoin or the Company’s ability to transact in or own bitcoin; the impact of the availability of spot exchange traded products and other investment vehicles for bitcoin and other digital assets; a decrease in liquidity in the markets in which bitcoin is traded; security breaches, cyberattacks, unauthorized access, loss of private keys, fraud or other circumstances or events that result in the loss of the Company’s bitcoins; impacts to the price and rate of adoption of bitcoin associated with financial difficulties and bankruptcies of various participants in the digital asset industry; the level and terms of the Company’s substantial indebtedness and its ability to service such debt; the extent and timing of market acceptance of the Company’s new product offerings; continued acceptance of the Company’s other products in the marketplace; the Company’s ability to recognize revenue or deferred revenue through delivery of products or satisfactory performance of services; the timing of significant orders; delays in or the inability of the Company to develop or ship new products; customers continuing to shift from a product license model to a cloud subscription model, which may delay the Company’s ability to recognize revenue; fluctuations in tax benefits or provisions; changes in the market price of bitcoin as of period-end and their effect on our deferred tax assets, related valuation allowance, and tax expense; other potentially adverse tax consequences, including the potential taxation of unrealized gains on our bitcoin holdings; competitive factors; general economic conditions, including levels of inflation and interest rates; currency fluctuations; and other risks detailed in the Company’s registration statements and periodic and current reports filed with the Securities and Exchange Commission (“SEC”). The Company undertakes no obligation to update these forward-looking statements for revisions or changes after the date of this release.
MICROSTRATEGY INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
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Three Months Ended |
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March 31, |
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2025 |
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2024 |
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(unaudited) |
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(unaudited) |
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Revenues: |
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Product licenses |
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$ |
7,270 |
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$ |
12,938 |
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Subscription services |
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37,103 |
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22,966 |
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Total product licenses and subscription services |
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44,373 |
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35,904 |
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Product support |
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52,529 |
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62,685 |
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Other services |
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14,164 |
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16,657 |
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Total revenues |
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111,066 |
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115,246 |
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Cost of revenues: |
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Product licenses |
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964 |
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567 |
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Subscription services |
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14,429 |
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8,604 |
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Total product licenses and subscription services |
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15,393 |
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9,171 |
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Product support |
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7,354 |
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8,547 |
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Other services |
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11,224 |
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12,297 |
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Total cost of revenues |
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33,971 |
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30,015 |
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Gross profit |
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77,095 |
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85,231 |
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Operating expenses: |
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Sales and marketing |
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27,532 |
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33,451 |
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Research and development |
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24,423 |
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29,183 |
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General and administrative |
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40,547 |
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34,666 |
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Unrealized loss on digital assets |
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5,906,005 |
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0 |
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Digital asset impairment losses |
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0 |
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191,633 |
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Total operating expenses |
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5,998,507 |
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288,933 |
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Loss from operations |
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(5,921,412 |
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(203,702 |
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Interest expense, net |
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(17,106 |
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(11,881 |
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Other (expense) income, net |
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(3,936 |
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1,696 |
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Loss before income taxes |
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(5,942,454 |
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(213,887 |
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Benefit from income taxes |
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(1,725,084 |
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(160,769 |
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Net loss |
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(4,217,370 |
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(53,118 |
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Dividends on preferred stock |
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(10,648 |
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0 |
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Net loss attributable to common stockholders of Strategy |
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$ |
(4,228,018 |
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$ |
(53,118 |
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Basic loss per common share (1) |
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$ |
(16.49 |
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$ |
(0.31 |
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Weighted average common shares outstanding - Basic |
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256,473 |
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171,942 |
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Diluted loss per common share (1) |
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$ |
(16.49 |
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$ |
(0.31 |
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Weighted average common shares outstanding - Diluted |
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256,473 |
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171,942 |
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(1) Basic and fully diluted loss per common share for class A and class B common stock are the same.
MICROSTRATEGY INCORPORATED
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
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March 31, |
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December 31, |
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2025 |
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2024* |
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(unaudited) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
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$ |
60,298 |
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$ |
38,117 |
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Restricted cash |
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1,960 |
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1,780 |
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Accounts receivable, net |
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104,585 |
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181,203 |
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Prepaid expenses and other current assets |
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36,769 |
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31,224 |
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Total current assets |
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203,612 |
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252,324 |
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Digital assets |
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43,546,079 |
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23,909,373 |
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Property and equipment, net |
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28,335 |
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26,327 |
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Right-of-use assets |
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53,070 |
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54,560 |
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Deposits and other assets |
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83,261 |
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75,794 |
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Deferred tax assets, net |
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5,403 |
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1,525,307 |
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Total assets |
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$ |
43,919,760 |
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$ |
25,843,685 |
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Liabilities, Mezzanine Equity and Stockholders' Equity |
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Current liabilities: |
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Accounts payable, accrued expenses, and operating lease liabilities |
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$ |
53,716 |
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$ |
52,982 |
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Accrued compensation and employee benefits |
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32,785 |
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58,362 |
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Accrued interest |
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5,970 |
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5,549 |
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Current portion of long-term debt, net |
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525 |
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517 |
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Deferred revenue and advance payments |
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215,693 |
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237,974 |
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Total current liabilities |
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308,689 |
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355,384 |
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Long-term debt, net |
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8,140,156 |
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7,191,158 |
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Deferred revenue and advance payments |
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3,981 |
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4,970 |
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Operating lease liabilities |
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53,691 |
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56,403 |
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Other long-term liabilities |
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4,439 |
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5,379 |
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Deferred tax liabilities |
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1,883,071 |
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|
407 |
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Total liabilities |
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10,394,027 |
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7,613,701 |
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Mezzanine Equity |
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8.00% Series A Perpetual Strike Preferred Stock, $0.001 par value; 269,800 shares authorized, 7,650 shares issued and outstanding at March, 31, 2025 |
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593,624 |
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0 |
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10.00% Series A Perpetual Strife Preferred Stock, $0.001 par value; 8,500 shares authorized, issued and outstanding at March 31, 2025 |
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710,873 |
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0 |
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Total mezzanine equity |
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1,304,497 |
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0 |
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Stockholders’ Equity |
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Preferred stock undesignated, $0.001 par value; 726,700 and 5,000 shares authorized, no shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively |
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0 |
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0 |
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Class A common stock, $0.001 par value; 10,330,000 and 330,000 shares authorized, 246,537 and 226,138 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively |
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247 |
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226 |
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Class B common stock, $0.001 par value; 165,000 shares authorized, 19,640 shares issued and outstanding at March 31, 2025 and December 31, 2024, respectively |
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20 |
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20 |
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Additional paid-in capital |
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25,881,089 |
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20,411,998 |
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Accumulated other comprehensive loss |
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(11,967 |
) |
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(15,384 |
) |
Retained earnings (accumulated deficit) |
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6,351,847 |
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(2,166,876 |
) |
Total stockholders’ equity |
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32,221,236 |
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|
|
18,229,984 |
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Total liabilities, mezzanine equity and stockholders' equity |
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$ |
43,919,760 |
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|
$ |
25,843,685 |
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* Derived from audited financial statements.
MICROSTRATEGY INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
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Three Months Ended |
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March 31, |
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|||||
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2025 |
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2024 |
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(unaudited) |
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(unaudited) |
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Net cash (used in) provided by operating activities |
|
$ |
(2,389 |
) |
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$ |
28,587 |
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Net cash used in investing activities |
|
|
(7,670,400 |
) |
|
|
(1,640,854 |
) |
Net cash provided by financing activities |
|
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7,694,305 |
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1,648,400 |
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Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash |
|
|
845 |
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|
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(1,078 |
) |
Net increase in cash, cash equivalents, and restricted cash |
|
|
22,361 |
|
|
|
35,055 |
|
Cash, cash equivalents, and restricted cash, beginning of period |
|
|
39,897 |
|
|
|
48,673 |
|
Cash, cash equivalents, and restricted cash, end of period |
|
$ |
62,258 |
|
|
$ |
83,728 |
|
MICROSTRATEGY INCORPORATED
DIGITAL ASSETS – ADDITIONAL INFORMATION
ROLLFORWARD OF BITCOIN HOLDINGS
(unaudited)
|
|
Source of Capital Used to Purchase Bitcoin |
|
Digital Asset Original Cost Basis |
|
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Digital Asset Impairment Losses |
|
|
Digital Asset Carrying Value |
|
|
Approximate Number of Bitcoins Held |
|
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Approximate Average Purchase Price Per Bitcoin |
|
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Balance at December 31, 2023 |
|
|
|
$ |
5,895,489 |
|
|
$ |
(2,269,013 |
) |
|
$ |
3,626,476 |
|
|
|
189,150 |
|
|
$ |
31,168 |
|
Digital asset purchases |
|
(a) |
|
|
1,639,309 |
|
|
|
|
|
|
1,639,309 |
|
|
|
25,128 |
|
|
|
65,238 |
|
|
Digital asset impairment losses |
|
|
|
|
|
|
|
(191,633 |
) |
|
|
(191,633 |
) |
|
|
|
|
|
|
|||
Balance at March 31, 2024 |
|
|
|
$ |
7,534,798 |
|
|
$ |
(2,460,646 |
) |
|
$ |
5,074,152 |
|
|
|
214,278 |
|
|
$ |
35,164 |
|
Digital asset purchases |
|
(b) |
|
|
793,828 |
|
|
|
|
|
|
793,828 |
|
|
|
12,053 |
|
|
|
65,861 |
|
|
Digital asset impairment losses |
|
|
|
|
|
|
|
(180,090 |
) |
|
|
(180,090 |
) |
|
|
|
|
|
|
|||
Balance at June 30, 2024 |
|
|
|
$ |
8,328,626 |
|
|
$ |
(2,640,736 |
) |
|
$ |
5,687,890 |
|
|
|
226,331 |
|
|
$ |
36,798 |
|
Digital asset purchases |
|
(c) |
|
|
1,575,073 |
|
|
|
|
|
|
1,575,073 |
|
|
|
25,889 |
|
|
|
60,839 |
|
|
Digital asset impairment losses |
|
|
|
|
|
|
|
(412,084 |
) |
|
|
(412,084 |
) |
|
|
|
|
|
|
|||
Balance at September 30, 2024 |
|
|
|
$ |
9,903,699 |
|
|
$ |
(3,052,820 |
) |
|
$ |
6,850,879 |
|
|
|
252,220 |
|
|
$ |
39,266 |
|
Digital asset purchases |
|
(d) |
|
|
18,064,549 |
|
|
|
|
|
|
18,064,549 |
|
|
|
195,250 |
|
|
|
92,520 |
|
|
Digital asset impairment losses |
|
|
|
|
|
|
|
(1,006,055 |
) |
|
|
(1,006,055 |
) |
|
|
|
|
|
|
|||
Balance at December 31, 2024 |
|
|
|
$ |
27,968,248 |
|
|
$ |
(4,058,875 |
) |
|
$ |
23,909,373 |
|
|
|
447,470 |
|
|
$ |
62,503 |
|
Cumulative effect upon adoption of ASU 2023-08 |
|
|
|
|
|
|
|
4,058,875 |
|
|
|
17,881,048 |
|
|
|
|
|
|
|
|||
Balance immediately following adoption of ASU 2023-08 |
|
|
|
$ |
27,968,248 |
|
|
$ |
0 |
|
|
$ |
41,790,421 |
|
|
|
447,470 |
|
|
$ |
62,503 |
|
Digital asset purchases |
|
(e) |
|
|
7,661,663 |
|
|
|
|
|
|
7,661,663 |
|
|
|
80,715 |
|
|
|
94,922 |
|
|
Unrealized loss on digital assets |
|
|
|
|
|
|
|
|
|
|
(5,906,005 |
) |
|
|
|
|
|
|
||||
Balance at March 31, 2025 |
|
|
|
$ |
35,629,911 |
|
|
$ |
0 |
|
|
$ |
43,546,079 |
|
|
|
528,185 |
|
|
$ |
67,457 |
|
Excess Cash refers to cash in excess of the minimum Cash Assets that the Company is required to hold under its Treasury Reserve Policy, which may include cash generated by operating activities and cash from the proceeds of financing activities. Cash Assets refers to cash and cash equivalents and short-term investments.
MICROSTRATEGY INCORPORATED
DIGITAL ASSETS – ADDITIONAL INFORMATION
MARKET VALUE OF BITCOIN HOLDINGS
(unaudited)
|
|
Approximate Number of Bitcoins Held at End of Quarter |
|
|
Lowest Market Price Per Bitcoin During Quarter (a) |
|
|
Market Value of Bitcoin Held at End of Quarter Using Lowest Market Price (in thousands) (b) |
|
|
Highest Market Price Per Bitcoin During Quarter (c) |
|
|
Market Value of Bitcoin Held at End of Quarter Using Highest Market Price (in thousands) (d) |
|
|
Market Price Per Bitcoin at End of Quarter (e) |
|
|
Market Value of Bitcoin Held at End of Quarter Using Ending Market Price (in thousands) (f) |
|
|||||||
December 31, 2023 |
|
|
189,150 |
|
|
$ |
26,521.32 |
|
|
$ |
5,016,508 |
|
|
$ |
45,000.00 |
|
|
$ |
8,511,750 |
|
|
$ |
42,531.41 |
|
|
$ |
8,044,816 |
|
March 31, 2024 |
|
|
214,278 |
|
|
$ |
38,501.00 |
|
|
$ |
8,249,917 |
|
|
$ |
73,835.57 |
|
|
$ |
15,821,338 |
|
|
$ |
71,028.14 |
|
|
$ |
15,219,768 |
|
June 30, 2024 |
|
|
226,331 |
|
|
$ |
56,500.00 |
|
|
$ |
12,787,702 |
|
|
$ |
72,777.00 |
|
|
$ |
16,471,691 |
|
|
$ |
61,926.69 |
|
|
$ |
14,015,930 |
|
September 30, 2024 |
|
|
252,220 |
|
|
$ |
49,050.01 |
|
|
$ |
12,371,394 |
|
|
$ |
70,000.00 |
|
|
$ |
17,655,400 |
|
|
$ |
63,462.97 |
|
|
$ |
16,006,630 |
|
December 31, 2024 |
|
|
447,470 |
|
|
$ |
58,863.90 |
|
|
$ |
26,339,829 |
|
|
$ |
108,388.88 |
|
|
$ |
48,500,772 |
|
|
$ |
93,390.21 |
|
|
$ |
41,789,317 |
|
March 31, 2025 |
|
|
528,185 |
|
|
$ |
76,555.00 |
|
|
$ |
40,435,222 |
|
|
$ |
109,358.01 |
|
|
$ |
57,761,287 |
|
|
$ |
82,444.71 |
|
|
$ |
43,546,079 |
|
The amounts reported as “Market Value” in the above table represent only a mathematical calculation consisting of the price for one bitcoin reported on the Coinbase exchange (the Company’s principal market for bitcoin) in each scenario defined above multiplied by the number of bitcoins held by the Company at the end of the applicable period. Bitcoin and bitcoin markets may be subject to manipulation and the spot price of bitcoin may be subject to fraud and manipulation. Accordingly, the Market Value amounts reported above may not accurately represent fair market value, and the actual fair market value of the Company’s bitcoin may be different from such amounts and such deviation may be material. Moreover, (i) the bitcoin market historically has been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign currencies markets, relative anonymity, a developing regulatory landscape, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various other risks that are, or may be, inherent in its entirely electronic, virtual form and decentralized network and (ii) the Company may not be able to sell its bitcoins at the Market Value amounts indicated above, at the market price as reported on the Coinbase exchange (its principal market) on the date of sale, or at all.
MICROSTRATEGY INCORPORATED
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
LOSS FROM OPERATIONS
(in thousands)
(unaudited)
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Reconciliation of non-GAAP loss from operations: |
|
|
|
|
|
|
||
Loss from operations |
|
$ |
(5,921,412 |
) |
|
$ |
(203,702 |
) |
Share-based compensation expense |
|
|
11,819 |
|
|
|
17,791 |
|
Non-GAAP loss from operations |
|
$ |
(5,909,593 |
) |
|
$ |
(185,911 |
) |
MICROSTRATEGY INCORPORATED
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS AND DILUTED LOSS PER COMMON SHARE
(in thousands, except per share data)
(unaudited)
|
|
Three Months Ended |
|
|||||
|
|
March 31, |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Reconciliation of non-GAAP net loss attributable to common stockholders of Strategy: |
|
|
|
|
|
|
||
Net loss attributable to common stockholders of Strategy |
|
$ |
(4,228,018 |
) |
|
$ |
(53,118 |
) |
Share-based compensation expense |
|
|
11,819 |
|
|
|
17,791 |
|
Interest expense arising from amortization of debt issuance costs |
|
|
6,048 |
|
|
|
2,557 |
|
Income tax effects (1) |
|
|
(28,232 |
) |
|
|
(109,238 |
) |
Non-GAAP net loss attributable to common stockholders of Strategy |
|
$ |
(4,238,383 |
) |
|
$ |
(142,008 |
) |
|
|
|
|
|
|
|
||
Reconciliation of non-GAAP diluted loss per common share (2): |
|
|
|
|
|
|
||
Diluted loss per common share |
|
$ |
(16.49 |
) |
|
$ |
(0.31 |
) |
Share-based compensation expense (per diluted common share) |
|
|
0.05 |
|
|
|
0.10 |
|
Interest expense arising from amortization of debt issuance costs (per diluted common share) |
|
|
0.02 |
|
|
|
0.01 |
|
Income tax effects (per diluted common share) |
|
|
(0.11 |
) |
|
|
(0.63 |
) |
Non-GAAP diluted loss per common share |
|
$ |
(16.53 |
) |
|
$ |
(0.83 |
) |
MICROSTRATEGY INCORPORATED
DEFERRED REVENUE DETAIL
(in thousands)
|
|
March 31, |
|
|
December 31, |
|
|
March 31, |
|
|||
|
|
2025 |
|
|
2024* |
|
|
2024 |
|
|||
|
|
(unaudited) |
|
|
|
|
|
(unaudited) |
|
|||
Current: |
|
|
|
|
|
|
|
|
|
|||
Deferred product licenses revenue |
|
$ |
794 |
|
|
$ |
1,777 |
|
|
$ |
2,879 |
|
Deferred subscription services revenue |
|
|
94,488 |
|
|
|
107,119 |
|
|
|
60,280 |
|
Deferred product support revenue |
|
|
116,975 |
|
|
|
124,684 |
|
|
|
148,078 |
|
Deferred other services revenue |
|
|
3,436 |
|
|
|
4,394 |
|
|
|
4,718 |
|
Total current deferred revenue and advance payments |
|
$ |
215,693 |
|
|
$ |
237,974 |
|
|
$ |
215,955 |
|
|
|
|
|
|
|
|
|
|
|
|||
Non-current: |
|
|
|
|
|
|
|
|
|
|||
Deferred product licenses revenue |
|
$ |
153 |
|
|
$ |
174 |
|
|
$ |
0 |
|
Deferred subscription services revenue |
|
|
1,393 |
|
|
|
2,263 |
|
|
|
1,992 |
|
Deferred product support revenue |
|
|
2,143 |
|
|
|
2,111 |
|
|
|
4,094 |
|
Deferred other services revenue |
|
|
292 |
|
|
|
422 |
|
|
|
400 |
|
Total non-current deferred revenue and advance payments |
|
$ |
3,981 |
|
|
$ |
4,970 |
|
|
$ |
6,486 |
|
|
|
|
|
|
|
|
|
|
|
|||
Total current and non-current: |
|
|
|
|
|
|
|
|
|
|||
Deferred product licenses revenue |
|
$ |
947 |
|
|
$ |
1,951 |
|
|
$ |
2,879 |
|
Deferred subscription services revenue |
|
|
95,881 |
|
|
|
109,382 |
|
|
|
62,272 |
|
Deferred product support revenue |
|
|
119,118 |
|
|
|
126,795 |
|
|
|
152,172 |
|
Deferred other services revenue |
|
|
3,728 |
|
|
|
4,816 |
|
|
|
5,118 |
|
Total current and non-current deferred revenue and advance payments |
|
$ |
219,674 |
|
|
$ |
242,944 |
|
|
$ |
222,441 |
|
* Derived from audited financial statements.
MICROSTRATEGY INCORPORATED
SEGMENT INFORMATION
(in thousands, unaudited)
The Company has one reportable operating segment, the “Software Business,” which is engaged in the design, development, marketing, and sales of the Company’s enterprise analytics software platform through cloud subscriptions and licensing arrangements and related services (i.e., product support, consulting and education). The “Corporate & Other” category presented in the following tables is not considered an operating segment. It consists primarily of costs and expenses related to executing the Company’s bitcoin strategy and includes the impairment charges and other third-party costs associated with the Company’s bitcoin holdings, net interest expense primarily related to long-term debt obligations (the net proceeds of which were primarily used to purchase bitcoin), and income tax effects generated from the Company’s bitcoin holdings and related debt issuances.
Beginning in 2025, the Company has dedicated certain corporate personnel to its bitcoin strategy, including both individuals fully dedicated to the initiative and others with responsibilities apportioned in part to support the strategy. These personnel and related costs, including related Share-based compensation expense are included within the “Corporate resources” and the “Share-based compensation expense” segment expense line items to better align with their activities and utilization. There were no other significant changes in the Company’s expense allocation methodology that affect period over period comparison during the first quarter of 2025.
The Company’s chief operating decision maker (“CODM”), is the Company’s Chief Executive Officer, who manages the entity on a consolidated basis. The CODM uses “net income (loss)” to assess the profitability of the software business by comparing actual to budgeted results on a monthly basis. In doing so, he focuses on “controllable costs” across main functions of the Software Business and will allocate personnel and budget accordingly to maximize potential profitability. The CODM also uses “net income (loss)” to understand the impact from income taxes and debt-related items for general tax and liquidity planning purposes.
The following tables present (for each of the Software Business segment and Corporate & Other category, and on a consolidated basis) the Company’s revenues and significant expenses regularly provided to the CODM, reconciled to net (loss) income (in thousands) for each of the periods presented. Total segment assets (in thousands) provided to the CODM are also disclosed in the tables below for each period presented.
|
|
Three Months Ended March 31, 2025 |
|
|||||||||
|
|
Software Business |
|
|
Corporate & Other |
|
|
Total Consolidated |
|
|||
Total revenues |
|
$ |
111,066 |
|
|
$ |
0 |
|
|
$ |
111,066 |
|
Significant expenses (1) |
|
|
|
|
|
|
|
|
|
|||
Controllable |
|
|
|
|
|
|
|
|
|
|||
Sales and marketing |
|
|
(23,648 |
) |
|
|
0 |
|
|
|
(23,648 |
) |
Maintenance |
|
|
(6,764 |
) |
|
|
0 |
|
|
|
(6,764 |
) |
Consulting |
|
|
(11,614 |
) |
|
|
0 |
|
|
|
(11,614 |
) |
Cloud |
|
|
(14,558 |
) |
|
|
0 |
|
|
|
(14,558 |
) |
Technology |
|
|
(24,702 |
) |
|
|
0 |
|
|
|
(24,702 |
) |
Corporate resources |
|
|
(18,090 |
) |
|
|
(8,280 |
) |
|
|
(26,370 |
) |
Non-Controllable |
|
|
|
|
|
|
|
|
|
|||
Unrealized loss on digital assets |
|
|
0 |
|
|
|
(5,906,005 |
) |
|
|
(5,906,005 |
) |
Digital asset custody fees |
|
|
0 |
|
|
|
(4,122 |
) |
|
|
(4,122 |
) |
Share-based compensation expense |
|
|
(8,662 |
) |
|
|
(3,157 |
) |
|
|
(11,819 |
) |
Payroll taxes on equity award exercises and vestings |
|
|
(2,041 |
) |
|
|
(31 |
) |
|
|
(2,072 |
) |
Other segment items (2) |
|
|
(4,740 |
) |
|
|
0 |
|
|
|
(4,740 |
) |
Interest income (expense), net (3) |
|
|
98 |
|
|
|
(17,204 |
) |
|
|
(17,106 |
) |
Income tax benefit (4) |
|
|
22,048 |
|
|
|
1,703,036 |
|
|
|
1,725,084 |
|
Net income (loss) |
|
$ |
18,393 |
|
|
$ |
(4,235,763 |
) |
|
$ |
(4,217,370 |
) |
Total assets, as of March 31, 2025 (5) |
|
$ |
373,681 |
|
|
$ |
43,546,079 |
|
|
$ |
43,919,760 |
|
|
|
Three Months Ended March 31, 2024 |
|
|||||||||
|
|
Software Business |
|
|
Corporate & Other |
|
|
Total Consolidated |
|
|||
Total revenues |
|
$ |
115,246 |
|
|
$ |
0 |
|
|
$ |
115,246 |
|
Significant expenses (1) |
|
|
|
|
|
|
|
|
|
|||
Controllable |
|
|
|
|
|
|
|
|
|
|||
Sales and marketing |
|
|
(23,145 |
) |
|
|
0 |
|
|
|
(23,145 |
) |
Maintenance |
|
|
(7,535 |
) |
|
|
0 |
|
|
|
(7,535 |
) |
Consulting |
|
|
(14,464 |
) |
|
|
0 |
|
|
|
(14,464 |
) |
Cloud |
|
|
(8,608 |
) |
|
|
0 |
|
|
|
(8,608 |
) |
Technology |
|
|
(26,877 |
) |
|
|
0 |
|
|
|
(26,877 |
) |
Corporate resources |
|
|
(21,220 |
) |
|
|
(548 |
) |
|
|
(21,768 |
) |
Non-Controllable |
|
|
|
|
|
|
|
|
|
|||
Impairment losses on digital assets |
|
|
0 |
|
|
|
(191,633 |
) |
|
|
(191,633 |
) |
Digital asset custody fees |
|
|
0 |
|
|
|
(753 |
) |
|
|
(753 |
) |
Share-based compensation expense |
|
|
(17,543 |
) |
|
|
(248 |
) |
|
|
(17,791 |
) |
Payroll taxes on equity award exercises and vestings |
|
|
(7,526 |
) |
|
|
0 |
|
|
|
(7,526 |
) |
Other segment items (2) |
|
|
2,849 |
|
|
|
0 |
|
|
|
2,849 |
|
Interest expense, net (3) |
|
|
0 |
|
|
|
(11,881 |
) |
|
|
(11,881 |
) |
Income tax benefit (4) |
|
|
101,798 |
|
|
|
58,970 |
|
|
|
160,768 |
|
Net income (loss) |
|
$ |
92,975 |
|
|
$ |
(146,093 |
) |
|
$ |
(53,118 |
) |
Total assets, as of March 31, 2024 (5) |
|
$ |
551,846 |
|
|
$ |
5,799,693 |
|
|
$ |
6,351,539 |
|