Strategy Inc 8-K, filed Feb 6, 2024
Strategy Inc (MSTR)
About this 8-K
Strategy Inc filed this 8-K on February 6, 2024.
Items reported
- Item 2.02: Financial results
- Item 9.01: Financial statements and exhibits
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
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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(Former Name or Former Address, if Changed Since Last Report)
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 February 6, 2024, MicroStrategy Incorporated (the “Company”) issued a press release announcing the Company’s financial results for the quarter ended December 31, 2023. 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: |
February 6, 2024 |
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:
MicroStrategy Incorporated
Shirish Jajodia
Investor Relations
ir@microstrategy.com
MicroStrategy Announces
Fourth Quarter 2023 Financial Results; Now Holds 190,000 BTC
TYSONS CORNER, Va., February 6, 2024 - MicroStrategy® Incorporated (Nasdaq: MSTR) (“MicroStrategy” or the “Company”), the largest corporate holder of bitcoin and the largest independent publicly-traded business intelligence company, today announced financial results for the three-month period ended December 31, 2023 (the fourth quarter of its 2023 fiscal year).
“2023 was an extraordinary year for MicroStrategy as we strategically raised capital to significantly increase our bitcoin holdings, and continued to innovate, including by developing and launching MicroStrategy AI, our first to market AI-based BI tool. We achieved double-digit subscription services revenue growth for both the fourth quarter and full year, demonstrating our ongoing commitment to transition our business to the cloud. We believe that the combination of our operating structure, bitcoin strategy, and focus on technology innovation provides a unique opportunity for value creation for our shareholders,” said Phong Le, President and Chief Executive Officer, MicroStrategy.
“We acquired 31,755 additional bitcoins since the end of the third quarter, marking the largest quarterly bitcoin holding increase in the last 3 years and the 13th consecutive quarter of adding more bitcoin on our balance sheet. We benefited from the significant increase in bitcoin prices in Q4 and we also continued to leverage our strategic capital markets activities and cash on hand to accumulate more bitcoin and accrete incremental value for our shareholders. It is through our unique bitcoin strategy and solid track record that we now hold 190,000 bitcoins at an aggregate purchase price of $31,224,” said Andrew Kang, Chief Financial Officer, MicroStrategy.
Fourth Quarter 2023 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 and twelve months ended December 31, 2023 and 2022. 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 MicroStrategy’s “Q4 2023 Earnings Presentation,” which will be available under the “Events and Presentations” section of MicroStrategy’s investor relations website at https://www.microstrategy.com/en/investor-relations.
Non-GAAP Financial Measures
MicroStrategy is providing supplemental financial measures for (i) non-GAAP loss from operations that excludes the impact of share-based compensation expense, (ii) non-GAAP net income (loss) and non-GAAP diluted earnings (loss) per share that exclude the impacts of share-based compensation expense, interest expense arising from the amortization of debt issuance costs related to MicroStrategy’s long-term debt, gain on debt extinguishment, and related income tax effects, and (iii) non-GAAP constant currency revenues that exclude certain foreign currency exchange rate fluctuations. 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.
MicroStrategy 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 MicroStrategy 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 MicroStrategy’s long-term debt, (iii) a gain on debt extinguishment, and (iv) related income tax effects. The third set of supplemental financial measures excludes changes resulting from certain fluctuations in foreign currency exchange rates so that results may be compared to the same period in the prior year on a non-GAAP constant currency basis. MicroStrategy believes the use of these non-GAAP financial measures can also facilitate comparison of MicroStrategy’s operating results to those of its competitors.
Conference Call
MicroStrategy will be discussing its fourth quarter 2023 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 MicroStrategy’s investor relations website at https://www.microstrategy.com/en/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 MicroStrategy Incorporated
MicroStrategy (Nasdaq: MSTR) considers itself the world’s first Bitcoin development company. We are a publicly-traded operating company committed to the continued development of the bitcoin network through our activities in the financial markets, advocacy and technology innovation. As an operating business, we are able to use cashflows as well as proceeds from equity and debt financings to accumulate bitcoin, which serves as our primary treasury reserve asset. We also develop and provide industry-leading AI-powered enterprise analytics software that promotes our vision of Intelligence Everywhere, and are using our software development capabilities
to develop bitcoin applications. We believe that the combination of our operating structure, bitcoin strategy and focus on technology innovation provides a unique opportunity for value creation. For more information about MicroStrategy, visit www.microstrategy.com.
MicroStrategy, MicroStrategy AI, Intelligence Everywhere, Intelligent Enterprise, and MicroStrategy Library 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.
This press release may include statements that may constitute “forward-looking statements,” including estimates of future business prospects or financial results 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 impairment charges that the Company may incur as a result of a decrease in the market price of bitcoin below the value at which the Company’s bitcoins are carried on its balance sheet; 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; 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 and related valuation allowance; other potentially adverse tax consequences; competitive factors; general economic conditions, including levels of inflation and interest rates; currency fluctuations; and other risks detailed in MicroStrategy’s registration statements and periodic 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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Twelve Months Ended |
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December 31, |
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December 31, |
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2023 |
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2022 |
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2023 |
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2022* |
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(unaudited) |
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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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$ |
18,372 |
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$ |
27,570 |
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$ |
75,351 |
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$ |
86,498 |
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Subscription services |
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21,517 |
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17,470 |
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81,179 |
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60,746 |
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Total product licenses and subscription services |
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39,889 |
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45,040 |
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156,530 |
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147,244 |
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Product support |
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65,466 |
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66,839 |
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263,888 |
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266,521 |
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Other services |
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19,129 |
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20,675 |
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75,843 |
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85,499 |
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Total revenues |
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124,484 |
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132,554 |
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496,261 |
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499,264 |
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Cost of revenues |
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Product licenses |
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609 |
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358 |
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1,929 |
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1,672 |
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Subscription services |
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8,676 |
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7,467 |
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31,776 |
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24,770 |
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Total product licenses and subscription services |
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9,285 |
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7,825 |
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33,705 |
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26,442 |
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Product support |
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5,319 |
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5,722 |
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22,434 |
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21,264 |
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Other services |
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13,617 |
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13,176 |
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53,805 |
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55,283 |
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Total cost of revenues |
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28,221 |
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26,723 |
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109,944 |
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102,989 |
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Gross profit |
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96,263 |
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105,831 |
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386,317 |
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396,275 |
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Operating expenses |
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Sales and marketing |
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40,299 |
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41,371 |
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149,671 |
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146,882 |
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Research and development |
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30,158 |
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31,617 |
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120,530 |
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127,428 |
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General and administrative |
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29,353 |
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28,930 |
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115,312 |
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111,421 |
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Digital asset impairment losses (gains on sale), net |
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39,238 |
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197,630 |
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115,851 |
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1,286,286 |
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Total operating expenses |
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139,048 |
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299,548 |
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501,364 |
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1,672,017 |
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Loss from operations |
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(42,785 |
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(193,717 |
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(115,047 |
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(1,275,742 |
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Interest expense, net |
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(11,929 |
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(14,837 |
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(48,960 |
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(53,136 |
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Gain on debt extinguishment |
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0 |
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0 |
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44,686 |
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0 |
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Other (expense) income, net |
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(5,930 |
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(5,829 |
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(5,204 |
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6,413 |
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Loss before income taxes |
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(60,644 |
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(214,383 |
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(124,525 |
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(1,322,465 |
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(Benefit from) provision for income taxes |
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(149,770 |
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35,286 |
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(553,646 |
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147,332 |
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Net income (loss) |
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$ |
89,126 |
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$ |
(249,669 |
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$ |
429,121 |
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$ |
(1,469,797 |
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Basic earnings (loss) per share (1): |
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$ |
5.81 |
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$ |
(21.93 |
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$ |
31.39 |
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$ |
(129.83 |
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Weighted average shares outstanding used in computing basic earnings (loss) per share |
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15,336 |
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11,386 |
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13,671 |
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11,321 |
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Diluted earnings (loss) per share (1): |
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$ |
4.96 |
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$ |
(21.93 |
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$ |
26.42 |
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$ |
(129.83 |
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Weighted average shares outstanding used in computing diluted earnings (loss) per share |
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18,376 |
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11,386 |
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16,566 |
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11,321 |
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(1) Basic and fully diluted earnings (loss) per share for class A and class B common stock are the same.
* Derived from audited financial statements.
MICROSTRATEGY INCORPORATED
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
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December 31, |
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December 31, |
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2023 |
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2022* |
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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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$ |
46,817 |
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$ |
43,835 |
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Restricted cash |
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1,856 |
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7,033 |
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Accounts receivable, net |
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183,815 |
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189,280 |
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Prepaid expenses and other current assets |
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35,407 |
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24,418 |
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Total current assets |
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267,895 |
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264,566 |
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Digital assets |
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3,626,476 |
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1,840,028 |
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Property and equipment, net |
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28,941 |
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32,311 |
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Right-of-use assets |
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57,343 |
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61,299 |
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Deposits and other assets |
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24,300 |
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23,916 |
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Deferred tax assets, net |
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757,573 |
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188,152 |
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Total assets |
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$ |
4,762,528 |
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$ |
2,410,272 |
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Liabilities and Stockholders’ Equity (Deficit) |
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Current liabilities: |
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Accounts payable, accrued expenses, and operating lease liabilities |
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$ |
43,090 |
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$ |
42,976 |
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Accrued compensation and employee benefits |
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50,045 |
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53,716 |
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Accrued interest |
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1,493 |
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2,829 |
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Current portion of long-term debt, net |
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483 |
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454 |
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Deferred revenue and advance payments |
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228,162 |
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217,428 |
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Total current liabilities |
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323,273 |
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317,403 |
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Long-term debt, net |
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2,182,108 |
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2,378,560 |
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Deferred revenue and advance payments |
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8,524 |
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12,763 |
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Operating lease liabilities |
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61,086 |
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67,344 |
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Other long-term liabilities |
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22,208 |
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17,124 |
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Deferred tax liabilities |
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357 |
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|
198 |
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Total liabilities |
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2,597,556 |
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2,793,392 |
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Stockholders’ Equity (Deficit) |
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Preferred stock undesignated, $0.001 par value; 5,000 shares authorized; no shares issued or outstanding |
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0 |
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0 |
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Class A common stock, $0.001 par value; 330,000 shares authorized; 23,588 shares issued and 14,904 shares outstanding, and 18,269 shares issued and 9,585 shares outstanding, respectively |
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24 |
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18 |
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Class B convertible common stock, $0.001 par value; 165,000 shares authorized; 1,964 shares issued and outstanding, and 1,964 shares issued and outstanding, respectively |
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2 |
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2 |
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Additional paid-in capital |
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3,957,728 |
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1,841,120 |
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Treasury stock, at cost; 8,684 shares and 8,684 shares, respectively |
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(782,104 |
) |
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(782,104 |
) |
Accumulated other comprehensive loss |
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(11,444 |
) |
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(13,801 |
) |
Accumulated deficit |
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(999,234 |
) |
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(1,428,355 |
) |
Total stockholders’ equity (deficit) |
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2,164,972 |
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(383,120 |
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Total liabilities and stockholders’ equity (deficit) |
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$ |
4,762,528 |
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$ |
2,410,272 |
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* Derived from audited financial statements.
MICROSTRATEGY INCORPORATED
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(in thousands)
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Twelve Months Ended |
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December 31, |
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2023 |
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2022* |
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(unaudited) |
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Net cash provided by operating activities |
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$ |
12,712 |
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$ |
3,211 |
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Net cash used in investing activities |
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(1,905,237 |
) |
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(278,590 |
) |
Net cash provided by financing activities |
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|
1,889,886 |
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|
265,188 |
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Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash |
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|
444 |
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|
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(3,375 |
) |
Net decrease in cash, cash equivalents, and restricted cash |
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|
(2,195 |
) |
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|
(13,566 |
) |
Cash, cash equivalents, and restricted cash, beginning of year |
|
|
50,868 |
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|
64,434 |
|
Cash, cash equivalents, and restricted cash, end of year |
|
$ |
48,673 |
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|
$ |
50,868 |
|
* Derived from audited financial statements.
MICROSTRATEGY INCORPORATED
REVENUE AND COST OF REVENUE DETAIL
(in thousands)
|
|
Three Months Ended |
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Twelve Months Ended |
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December 31, |
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December 31, |
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2023 |
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2022 |
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|
2023 |
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2022* |
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(unaudited) |
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|
(unaudited) |
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|
(unaudited) |
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Revenues |
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Product licenses and subscription services: |
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Product licenses |
|
$ |
18,372 |
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|
$ |
27,570 |
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|
$ |
75,351 |
|
|
$ |
86,498 |
|
Subscription services |
|
|
21,517 |
|
|
|
17,470 |
|
|
|
81,179 |
|
|
|
60,746 |
|
Total product licenses and subscription services |
|
|
39,889 |
|
|
|
45,040 |
|
|
|
156,530 |
|
|
|
147,244 |
|
Product support |
|
|
65,466 |
|
|
|
66,839 |
|
|
|
263,888 |
|
|
|
266,521 |
|
Other services: |
|
|
|
|
|
|
|
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|
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Consulting |
|
|
18,082 |
|
|
|
19,591 |
|
|
|
72,075 |
|
|
|
80,844 |
|
Education |
|
|
1,047 |
|
|
|
1,084 |
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|
|
3,768 |
|
|
|
4,655 |
|
Total other services |
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|
19,129 |
|
|
|
20,675 |
|
|
|
75,843 |
|
|
|
85,499 |
|
Total revenues |
|
|
124,484 |
|
|
|
132,554 |
|
|
|
496,261 |
|
|
|
499,264 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Cost of revenues |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Product licenses and subscription services: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Product licenses |
|
|
609 |
|
|
|
358 |
|
|
|
1,929 |
|
|
|
1,672 |
|
Subscription services |
|
|
8,676 |
|
|
|
7,467 |
|
|
|
31,776 |
|
|
|
24,770 |
|
Total product licenses and subscription services |
|
|
9,285 |
|
|
|
7,825 |
|
|
|
33,705 |
|
|
|
26,442 |
|
Product support |
|
|
5,319 |
|
|
|
5,722 |
|
|
|
22,434 |
|
|
|
21,264 |
|
Other services: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Consulting |
|
|
12,985 |
|
|
|
12,416 |
|
|
|
51,311 |
|
|
|
50,820 |
|
Education |
|
|
632 |
|
|
|
760 |
|
|
|
2,494 |
|
|
|
4,463 |
|
Total other services |
|
|
13,617 |
|
|
|
13,176 |
|
|
|
53,805 |
|
|
|
55,283 |
|
Total cost of revenues |
|
|
28,221 |
|
|
|
26,723 |
|
|
|
109,944 |
|
|
|
102,989 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Gross profit |
|
$ |
96,263 |
|
|
$ |
105,831 |
|
|
$ |
386,317 |
|
|
$ |
396,275 |
|
* Derived from audited financial statements.
MICROSTRATEGY INCORPORATED
DIGITAL ASSETS – ADDITIONAL INFORMATION
ROLLFORWARD OF BITCOIN HOLDINGS
(unaudited)
|
|
Source of Capital Used to Purchase Bitcoin |
|
Digital Asset Original Cost Basis |
|
|
Digital Asset Impairment Losses |
|
|
Digital Asset Carrying Value |
|
|
Approximate Number of |
|
|
Approximate Average Purchase or Sale Price Per Bitcoin |
|
|||||
Balance at December 31, 2021 |
|
|
|
$ |
3,751,529 |
|
|
$ |
(901,319 |
) |
|
$ |
2,850,210 |
|
|
|
124,391 |
|
|
$ |
30,159 |
|
Digital asset purchases |
|
(a) |
|
|
215,500 |
|
|
|
|
|
|
215,500 |
|
|
|
4,827 |
|
|
|
44,645 |
|
|
Digital asset impairment losses |
|
|
|
|
|
|
|
(170,091 |
) |
|
|
(170,091 |
) |
|
|
|
|
|
|
|||
Balance at March 31, 2022 |
|
|
|
$ |
3,967,029 |
|
|
$ |
(1,071,410 |
) |
|
$ |
2,895,619 |
|
|
|
129,218 |
|
|
$ |
30,700 |
|
Digital asset purchases |
|
(b) |
|
|
10,000 |
|
|
|
|
|
|
10,000 |
|
|
|
481 |
|
|
|
20,790 |
|
|
Digital asset impairment losses |
|
|
|
|
|
|
|
(917,838 |
) |
|
|
(917,838 |
) |
|
|
|
|
|
|
|||
Balance at June 30, 2022 |
|
|
|
$ |
3,977,029 |
|
|
$ |
(1,989,248 |
) |
|
$ |
1,987,781 |
|
|
|
129,699 |
|
|
$ |
30,664 |
|
Digital asset purchases |
|
(c) |
|
|
5,978 |
|
|
|
|
|
|
5,978 |
|
|
|
301 |
|
|
|
19,860 |
|
|
Digital asset impairment losses |
|
|
|
|
|
|
|
(727 |
) |
|
|
(727 |
) |
|
|
|
|
|
|
|||
Balance at September 30, 2022 |
|
|
|
$ |
3,983,007 |
|
|
$ |
(1,989,975 |
) |
|
$ |
1,993,032 |
|
|
|
130,000 |
|
|
$ |
30,639 |
|
Digital asset purchases |
|
(d) |
|
|
56,443 |
|
|
|
|
|
|
56,443 |
|
|
|
3,204 |
|
|
|
17,616 |
|
|
Digital asset impairment losses |
|
|
|
|
|
|
|
(198,557 |
) |
|
|
(198,557 |
) |
|
|
|
|
|
|
|||
Digital asset sales ** |
|
|
|
|
(46,260 |
) |
|
|
35,370 |
|
|
|
(10,890 |
) |
|
|
(704 |
) |
|
|
16,786 |
|
Balance at December 31, 2022 |
|
|
|
$ |
3,993,190 |
|
|
$ |
(2,153,162 |
) |
|
$ |
1,840,028 |
|
|
|
132,500 |
|
|
$ |
30,137 |
|
Digital asset purchases |
|
(e) |
|
|
179,275 |
|
|
|
|
|
|
179,275 |
|
|
|
7,500 |
|
|
|
23,903 |
|
|
Digital asset impairment losses |
|
|
|
|
|
|
|
(18,911 |
) |
|
|
(18,911 |
) |
|
|
|
|
|
|
|||
Balance at March 31, 2023 |
|
|
|
$ |
4,172,465 |
|
|
$ |
(2,172,073 |
) |
|
$ |
2,000,392 |
|
|
|
140,000 |
|
|
$ |
29,803 |
|
Digital asset purchases |
|
(f) |
|
|
347,003 |
|
|
|
|
|
|
347,003 |
|
|
|
12,333 |
|
|
|
28,136 |
|
|
Digital asset impairment losses |
|
|
|
|
|
|
|
(24,143 |
) |
|
|
(24,143 |
) |
|
|
|
|
|
|
|||
Balance at June 30, 2023 |
|
|
|
$ |
4,519,468 |
|
|
$ |
(2,196,216 |
) |
|
$ |
2,323,252 |
|
|
|
152,333 |
|
|
$ |
29,668 |
|
Digital asset purchases |
|
(g) |
|
|
161,681 |
|
|
|
|
|
|
161,681 |
|
|
|
5,912 |
|
|
|
27,348 |
|
|
Digital asset impairment losses |
|
|
|
|
|
|
|
(33,559 |
) |
|
|
(33,559 |
) |
|
|
|
|
|
|
|||
Balance at September 30, 2023 |
|
|
|
$ |
4,681,149 |
|
|
$ |
(2,229,775 |
) |
|
$ |
2,451,374 |
|
|
|
158,245 |
|
|
$ |
29,582 |
|
Digital asset purchases |
|
(h) |
|
|
1,214,340 |
|
|
|
|
|
|
1,214,340 |
|
|
|
30,905 |
|
|
|
39,293 |
|
|
Digital asset impairment losses |
|
|
|
|
|
|
|
(39,238 |
) |
|
|
(39,238 |
) |
|
|
|
|
|
|
|||
Balance at December 31, 2023 |
|
|
|
$ |
5,895,489 |
|
|
$ |
(2,269,013 |
) |
|
$ |
3,626,476 |
|
|
|
189,150 |
|
|
$ |
31,168 |
|
* MicroStrategy owns and has purchased bitcoins both directly and indirectly through its wholly-owned subsidiary, MacroStrategy. References to MicroStrategy below refer to MicroStrategy and its subsidiaries on a consolidated basis.
** In the fourth quarter of 2022, MicroStrategy sold approximately 704 bitcoins having an original cost basis of $46.3 million and cumulative digital asset impairment losses of $35.4 million, resulting in a carrying value of $10.9 million at the time of sale. The approximately 704 bitcoins were sold for cash proceeds of $11.8 million, net of fees and expenses, resulting in gains on sale of $0.9 million.
Excess Cash refers to cash in excess of the minimum Cash Assets that MicroStrategy 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, 2021 |
|
|
124,391 |
|
|
$ |
42,333.00 |
|
|
$ |
5,265,844 |
|
|
$ |
69,000.00 |
|
|
$ |
8,582,979 |
|
|
$ |
45,879.97 |
|
|
$ |
5,707,055 |
|
March 31, 2022 |
|
|
129,218 |
|
|
$ |
32,933.33 |
|
|
$ |
4,255,579 |
|
|
$ |
48,240.00 |
|
|
$ |
6,233,476 |
|
|
$ |
45,602.79 |
|
|
$ |
5,892,701 |
|
June 30, 2022 |
|
|
129,699 |
|
|
$ |
17,567.45 |
|
|
$ |
2,278,481 |
|
|
$ |
47,469.40 |
|
|
$ |
6,156,734 |
|
|
$ |
18,895.02 |
|
|
$ |
2,450,665 |
|
September 30, 2022 |
|
|
130,000 |
|
|
$ |
18,153.13 |
|
|
$ |
2,359,907 |
|
|
$ |
25,214.57 |
|
|
$ |
3,277,894 |
|
|
$ |
19,480.51 |
|
|
$ |
2,532,466 |
|
December 31, 2022 |
|
|
132,500 |
|
|
$ |
15,460.00 |
|
|
$ |
2,048,450 |
|
|
$ |
21,478.80 |
|
|
$ |
2,845,941 |
|
|
$ |
16,556.32 |
|
|
$ |
2,193,712 |
|
March 31, 2023 |
|
|
140,000 |
|
|
$ |
16,490.00 |
|
|
$ |
2,308,600 |
|
|
$ |
29,190.04 |
|
|
$ |
4,086,606 |
|
|
$ |
28,468.44 |
|
|
$ |
3,985,582 |
|
June 30, 2023 |
|
|
152,333 |
|
|
$ |
24,750.00 |
|
|
$ |
3,770,242 |
|
|
$ |
31,443.67 |
|
|
$ |
4,789,909 |
|
|
$ |
30,361.51 |
|
|
$ |
4,625,060 |
|
September 30, 2023 |
|
|
158,245 |
|
|
$ |
24,900.00 |
|
|
$ |
3,940,301 |
|
|
$ |
31,862.21 |
|
|
$ |
5,042,035 |
|
|
$ |
27,030.47 |
|
|
$ |
4,277,437 |
|
December 31, 2023 |
|
|
189,150 |
|
|
$ |
26,521.32 |
|
|
$ |
5,016,508 |
|
|
$ |
45,000.00 |
|
|
$ |
8,511,750 |
|
|
$ |
42,531.41 |
|
|
$ |
8,044,816 |
|
* MicroStrategy owns and has purchased bitcoins both directly and indirectly through its wholly-owned subsidiary, MacroStrategy. References to MicroStrategy below refer to MicroStrategy and its subsidiaries on a consolidated basis.
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 (MicroStrategy’s principal market for bitcoin) in each scenario defined above multiplied by the number of bitcoins held by MicroStrategy 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 MicroStrategy’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) MicroStrategy 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)
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
||||||||||
|
|
December 31, |
|
|
December 31, |
|
||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
||||
Reconciliation of non-GAAP loss from operations: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss from operations |
|
$ |
(42,785 |
) |
|
$ |
(193,717 |
) |
|
$ |
(115,047 |
) |
|
$ |
(1,275,742 |
) |
Share-based compensation expense |
|
|
19,716 |
|
|
|
17,032 |
|
|
|
69,571 |
|
|
|
63,619 |
|
Non-GAAP loss from operations |
|
$ |
(23,069 |
) |
|
$ |
(176,685 |
) |
|
$ |
(45,476 |
) |
|
$ |
(1,212,123 |
) |
MICROSTRATEGY INCORPORATED
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
NET INCOME (LOSS) AND DILUTED EARNINGS (LOSS) PER SHARE
(in thousands, except per share data)
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
||||||||||
|
|
December 31, |
|
|
December 31, |
|
||||||||||
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
||||
Reconciliation of non-GAAP net income (loss): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Net income (loss) |
|
$ |
89,126 |
|
|
$ |
(249,669 |
) |
|
$ |
429,121 |
|
|
$ |
(1,469,797 |
) |
Share-based compensation expense |
|
|
19,716 |
|
|
|
17,032 |
|
|
|
69,571 |
|
|
|
63,619 |
|
Interest expense arising from amortization of debt issuance costs |
|
|
2,209 |
|
|
|
2,204 |
|
|
|
8,808 |
|
|
|
8,694 |
|
Gain on debt extinguishment |
|
|
0 |
|
|
|
0 |
|
|
|
(44,686 |
) |
|
|
0 |
|
Income tax effects (1) |
|
|
(8,600 |
) |
|
|
(3,064 |
) |
|
|
(6,062 |
) |
|
|
(13,250 |
) |
Non-GAAP net income (loss) |
|
$ |
102,451 |
|
|
$ |
(233,497 |
) |
|
$ |
456,752 |
|
|
$ |
(1,410,734 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Reconciliation of non-GAAP diluted earnings (loss) per share (2): |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Diluted earnings (loss) per share |
|
$ |
4.96 |
|
|
$ |
(21.93 |
) |
|
$ |
26.42 |
|
|
$ |
(129.83 |
) |
Share-based compensation expense (per diluted share) |
|
|
1.07 |
|
|
|
1.50 |
|
|
|
4.20 |
|
|
|
5.62 |
|
Interest expense arising from amortization of debt issuance costs (per diluted share) (3) |
|
|
0.02 |
|
|
|
0.19 |
|
|
|
0.10 |
|
|
|
0.77 |
|
Gain on debt extinguishment (per diluted share) |
|
|
0.00 |
|
|
|
0.00 |
|
|
|
(2.70 |
) |
|
|
0.00 |
|
Income tax effects (per diluted share) (3) |
|
|
(0.43 |
) |
|
|
(0.27 |
) |
|
|
(0.24 |
) |
|
|
(1.17 |
) |
Non-GAAP diluted earnings (loss) per share |
|
$ |
5.62 |
|
|
$ |
(20.51 |
) |
|
$ |
27.78 |
|
|
$ |
(124.61 |
) |
MICROSTRATEGY INCORPORATED
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
CONSTANT CURRENCY
(in thousands)
|
|
Three Months Ended December 31, |
|
|||||||||||||||||||||
|
|
(unaudited) |
|
|||||||||||||||||||||
|
|
GAAP |
|
|
Foreign |
|
|
Non-GAAP |
|
|
GAAP |
|
|
GAAP % |
|
|
Non-GAAP |
|
||||||
|
|
2023 |
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2023 |
|
||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Product licenses |
|
$ |
18,372 |
|
|
$ |
427 |
|
|
$ |
17,945 |
|
|
$ |
27,570 |
|
|
|
-33.4 |
% |
|
|
-34.9 |
% |
Subscription services |
|
|
21,517 |
|
|
|
303 |
|
|
|
21,214 |
|
|
|
17,470 |
|
|
|
23.2 |
% |
|
|
21.4 |
% |
Total product licenses and subscription services |
|
|
39,889 |
|
|
|
730 |
|
|
|
39,159 |
|
|
|
45,040 |
|
|
|
-11.4 |
% |
|
|
-13.1 |
% |
Product support |
|
|
65,466 |
|
|
|
1,137 |
|
|
|
64,329 |
|
|
|
66,839 |
|
|
|
-2.1 |
% |
|
|
-3.8 |
% |
Other services |
|
|
19,129 |
|
|
|
388 |
|
|
|
18,741 |
|
|
|
20,675 |
|
|
|
-7.5 |
% |
|
|
-9.4 |
% |
Total revenues |
|
|
124,484 |
|
|
|
2,255 |
|
|
|
122,229 |
|
|
|
132,554 |
|
|
|
-6.1 |
% |
|
|
-7.8 |
% |
|
|
Twelve Months Ended December 31, |
|
|||||||||||||||||||||
|
|
(unaudited) |
|
|||||||||||||||||||||
|
|
GAAP |
|
|
Foreign |
|
|
Non-GAAP |
|
|
GAAP |
|
|
GAAP % |
|
|
Non-GAAP |
|
||||||
|
|
2023 |
|
|
2023 |
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2023 |
|
||||||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
Product licenses |
|
$ |
75,351 |
|
|
$ |
300 |
|
|
$ |
75,051 |
|
|
$ |
86,498 |
|
|
|
-12.9 |
% |
|
|
-13.2 |
% |
Subscription services |
|
|
81,179 |
|
|
|
296 |
|
|
|
80,883 |
|
|
|
60,746 |
|
|
|
33.6 |
% |
|
|
33.1 |
% |
Total product licenses and subscription services |
|
|
156,530 |
|
|
|
596 |
|
|
|
155,934 |
|
|
|
147,244 |
|
|
|
6.3 |
% |
|
|
5.9 |
% |
Product support |
|
|
263,888 |
|
|
|
1,514 |
|
|
|
262,374 |
|
|
|
266,521 |
|
|
|
-1.0 |
% |
|
|
-1.6 |
% |
Other services |
|
|
75,843 |
|
|
|
186 |
|
|
|
75,657 |
|
|
|
85,499 |
|
|
|
-11.3 |
% |
|
|
-11.5 |
% |
Total revenues |
|
|
496,261 |
|
|
|
2,296 |
|
|
|
493,965 |
|
|
|
499,264 |
|
|
|
-0.6 |
% |
|
|
-1.1 |
% |
MICROSTRATEGY INCORPORATED
DEFERRED REVENUE DETAIL
(in thousands)
|
|
December 31, |
|
|
December 31, |
|
||
|
|
2023 |
|
|
2022* |
|
||
|
|
(unaudited) |
|
|
|
|
||
Current: |
|
|
|
|
|
|
||
Deferred product licenses revenue |
|
$ |
3,579 |
|
|
$ |
2,825 |
|
Deferred subscription services revenue |
|
|
65,512 |
|
|
|
51,861 |
|
Deferred product support revenue |
|
|
152,012 |
|
|
|
155,366 |
|
Deferred other services revenue |
|
|
7,059 |
|
|
|
7,376 |
|
Total current deferred revenue and advance payments |
|
$ |
228,162 |
|
|
$ |
217,428 |
|
|
|
|
|
|
|
|
||
Non-current: |
|
|
|
|
|
|
||
Deferred product licenses revenue |
|
$ |
0 |
|
|
$ |
2,742 |
|
Deferred subscription services revenue |
|
|
3,097 |
|
|
|
3,030 |
|
Deferred product support revenue |
|
|
4,984 |
|
|
|
6,387 |
|
Deferred other services revenue |
|
|
443 |
|
|
|
604 |
|
Total non-current deferred revenue and advance payments |
|
$ |
8,524 |
|
|
$ |
12,763 |
|
|
|
|
|
|
|
|
||
Total current and non-current: |
|
|
|
|
|
|
||
Deferred product licenses revenue |
|
$ |
3,579 |
|
|
$ |
5,567 |
|
Deferred subscription services revenue |
|
|
68,609 |
|
|
|
54,891 |
|
Deferred product support revenue |
|
|
156,996 |
|
|
|
161,753 |
|
Deferred other services revenue |
|
|
7,502 |
|
|
|
7,980 |
|
Total current and non-current deferred revenue and advance payments |
|
$ |
236,686 |
|
|
$ |
230,191 |
|
* Derived from audited financial statements.