Exhibit 99.1 Contact: Strategy Shirish Jajodia Corporate Treasurer ir@strategy.com Strategy Announces Fourth Quarter 2025 Financial Results; Holds 713,502 BTC Bitcoin Highlights (as of February 1, 2026) 713,502 bitcoin holdings at a total cost of $54.26 billion, or $76,052 per bitcoin 22.8% BTC Yield achieved in FY2025 Capital Markets Highlights Largest US equity issuer in FY2025, representing ~8% of total US equity issuance $25.3 billion raised in FY2025 Five IPOs of preferred stock completed in FY2025, ra ...

Strategy (NASDAQ: MSTR) purchased 22,305 bitcoin for approximately $2.13 billion in cash between January 12 and January 19, 2026. The acquisition bumped Strategy’s bitcoin treasury above the 700,000 milestone, bringing the company’s total cryptocurrency holdings to 709,715 bitcoin as of Tuesday Strategy raised funds for the double billion dollar purchase by issuing a mix of common and preferred stock, and the company paid an average price of approximately $95,284 per bitcoin for the haul. As of Tuesday, ...

Bitcoin Holdings and Strategy - The company held approximately 641,167 bitcoins as of October 30, 2025, with an aggregate market value of $68.28 billion based on a market price of $106,490 per bitcoin[186]. - The total bitcoin holdings increased from 447,470 bitcoins at December 31, 2024, to 640,031 bitcoins by September 30, 2025, reflecting a growth of 43%[179]. - The company reported unrealized gains on digital assets of $3.89 billion for the three months ended September 30, 2025, and $12.03 billion for the nine months ended September 30, 2025[182]. - The company purchased bitcoin using $4.37 billion from common stock sales, $1.99 billion from convertible notes, and $710 million from initial public offerings in the first quarter of 2025[179]. - The average purchase price per bitcoin increased from $62,503 at December 31, 2024, to $73,983 at September 30, 2025[184]. - The company’s strategy involves capital raising through debt and equity to fund bitcoin acquisitions, with no specific target for total bitcoin holdings[171]. - The company’s bitcoin strategy includes potential periodic sales for corporate purposes and tax benefits, alongside exploring income-generating strategies using bitcoin holdings[172]. - The company acquired 42,705 bitcoin during the three months ended September 30, 2025, increasing total holdings to 640,031 bitcoin, compared to 25,889 bitcoin in the same period of 2024[204]. - For the nine months ended September 30, 2025, the company acquired 192,561 bitcoin, increasing total holdings to 640,031 bitcoin, compared to 63,070 bitcoin in the same period of 2024[207]. - The market price of bitcoin increased from $63,463 as of September 30, 2024, to $114,378 as of September 30, 2025, contributing to the increase in BTC $ Gain[207]. - As of September 30, 2025, the company had deferred tax liabilities of approximately $7.43 billion related to unrealized gains on bitcoin holdings[223]. - The company held approximately 640,031 bitcoins with a carrying value of $73.21 billion as of September 30, 2025[282]. Financial Performance - Total revenues for the three months ended September 30, 2025, increased by 10.9% to $128.7 million compared to $116.1 million in the same period of 2024[213]. - Subscription services revenues rose by 65.4% to $46.0 million for the three months ended September 30, 2025, compared to $27.8 million in the same period of 2024[213]. - Product support revenues decreased by 16.2% to $51.1 million for the three months ended September 30, 2025, compared to $61.0 million in the same period of 2024[213]. - Gross profit for the three months ended September 30, 2025, was $90.7 million, an increase of 11.0% from $81.7 million in the same period of 2024[213]. - The company recorded a provision for income taxes of $3.35 billion on a pretax income of $11.93 billion for the nine months ended September 30, 2025, resulting in an effective tax rate of 28.0%[222]. - The company achieved BTC Gain of 31,058 and 115,956 for the three and nine months ended September 30, 2025, respectively, compared to 11,535 and 33,657 in the prior year[207]. - BTC $ Gain was approximately $3.552 billion and $13.263 billion for the three and nine months ended September 30, 2025, respectively, compared to approximately $732.0 million and $2.136 billion in the prior year[207]. - The company reported a $9.1 billion increase in net income for the nine months ended September 30, 2025, despite a $13.4 million increase in changes in operating assets and liabilities[255]. Capital Raising and Expenses - The company sold 5,712,041 shares of Class A common stock in the three months ended September 30, 2025, generating net proceeds of $2,199,360 thousand[194]. - The total net proceeds from all equity offerings for the nine months ended September 30, 2025, amounted to $17,633,587 thousand[194]. - The company has issued a total of $1,984,852 thousand in net proceeds from its 2030B Convertible Notes during the nine months ended September 30, 2025[199]. - Approximately $5.1 billion was raised from capital markets activity during the three months ended September 30, 2025, with $2.3 billion from STRK ATM and Common Stock ATMs, increasing Assumed Diluted Shares Outstanding by 5.8 million to approximately 320.0 million[205]. - The company announced a capital plan to raise $84 billion in the medium-to-long term, including $42 billion of equity capital and $42 billion of fixed-income instruments[242]. - The company has long-term debt obligations totaling $8.24 billion, with semi-annual coupon interest payments of $17.3 million due for outstanding convertible notes[251]. - Net cash used in operating activities for the nine months ended September 30, 2025, was $(45,612) thousand, a 27.7% increase from $(35,708) thousand in the same period of 2024[254]. - Net cash used in investing activities increased by 384.1% to $(19,417,576) thousand for the nine months ended September 30, 2025, compared to $(4,010,904) thousand in 2024[254]. - Net cash provided by financing activities rose by 381.4% to $19,476,842 thousand for the nine months ended September 30, 2025, compared to $4,046,067 thousand in the prior year[254]. - Net cash provided by financing activities increased by $15.4 billion for the nine months ended September 30, 2025, primarily due to a $10.6 billion increase in net proceeds from the sale of class A common stock[258]. Market and Risk Factors - The company is exposed to market risks including fluctuations in bitcoin prices, foreign currency, and interest rates, which could materially affect actual results[281]. - Bitcoin has traded between $60,000 and $120,000 in the 12 months preceding September 30, 2025, indicating high volatility[282]. - A 10% adverse change in foreign currency exchange rates would have decreased reported cash and cash equivalents by 4.4% as of September 30, 2025[286]. - If average exchange rates had changed unfavorably by 10%, revenues for the nine months ended September 30, 2025 would have decreased by 3.8%[286]. - The company does not believe its interest rate risk exposure via STRC Stock is material as of October 30, 2025[288]. Dividends and Shareholder Returns - Total dividends paid for the three months ended September 30, 2025, amounted to $139.8 million, with no dividends paid during the same period in 2024[249]. - The board of directors increased the monthly regular dividend rate on STRC Stock from 10.00% to 10.25%, effective October 1, 2025, with a cash dividend of $0.854166667 per share payable on October 31, 2025[252]. - The regular dividend rate on STRC Stock was increased from 10.25% to 10.50% per annum effective November 1, 2025[287]. - An increase of 0.50% in the regular dividend rate on STRC Stock would result in an additional monthly dividend accrual of approximately $1.2 million[288]. Employee and Operational Metrics - The total employee headcount as of September 30, 2025, was 1,546, an increase from 1,534 as of December 31, 2024[229]. - The transition from on-premise perpetual licenses to cloud subscriptions is expected to continue impacting revenue recognition and cash flows, with product license revenues declining[211]. - Deferred revenue and advance payments represent amounts received before services are transferred, with revenue recognized in the period control is transferred to the customer[211]. - Total deferred revenue and advance payments decreased by $38.9 million as of September 30, 2025, compared to December 31, 2024, primarily due to decreased deferred product support revenue[225].

Financial Performance - Strategy reported a net income of $2.8 billion and diluted EPS of $8.42 for Q3 2025, marking significant positive earnings for the second consecutive quarter[4]. - Operating income for Q3 2025 was $3.9 billion, compared to an operating loss of $432.6 million in Q3 2024[12]. - Strategy's full-year guidance includes operating income of $34 billion and net income of $24 billion, based on a projected bitcoin price of $150,000 by year-end[18]. - Total revenues for the three months ended September 30, 2025, were $128.7 million, a 10.3% increase compared to $116.1 million for the same period in 2024[51]. - Net income for the three months ended September 30, 2025, was $2.8 million, compared to a net loss of $340.2 million for the same period in 2024[51]. - The company reported a gross profit of $90.7 million for the three months ended September 30, 2025, representing a gross margin of 70.5%[51]. - Basic earnings per share for the three months ended September 30, 2025, were $9.30, compared to a loss of $1.72 per share for the same period in 2024[51]. Bitcoin Holdings and Strategy - The company increased its bitcoin holdings to 640,808 bitcoins, with a total cost of $47.44 billion, averaging $74,032 per bitcoin[6]. - Year-to-date, Strategy achieved a BTC Yield of 26% and a BTC $ Gain of $12.9 billion, reaffirming a full-year target of $20 billion BTC $ Gain[4][6]. - Strategy Inc. is the world's first and largest Bitcoin Treasury Company, adopting Bitcoin as its primary treasury reserve asset[31]. - The company uses Bitcoin Per Share (BPS) as a key performance indicator, representing the ratio of Bitcoin holdings to Assumed Diluted Shares Outstanding, expressed in Satoshis[33]. - BTC Yield measures the percentage change in BPS over a period, helping assess the company's strategy of acquiring Bitcoin in an accretive manner[34]. - The market value of Bitcoin holdings is calculated by multiplying the current market price of Bitcoin by the total number of Bitcoins held, referred to as Bitcoin NAV[48]. - The company acknowledges the volatility and risks associated with Bitcoin markets, which may affect the actual fair market value of its holdings[62]. Capital and Liquidity - The company has raised $20 billion year-to-date through its capital markets platform, positioning itself as a dominant credit issuer globally[3]. - As of September 30, 2025, cash and cash equivalents stood at $54.3 million, up from $38.1 million at the end of 2024[12]. - The company experienced a net cash used in operating activities of $45.6 million for the nine months ended September 30, 2025, compared to $35.7 million for the same period in 2024[55]. - Total liabilities increased to $15.5 billion as of September 30, 2025, from $7.6 billion as of December 31, 2024[53]. Dividend Policy - The STRC dividend rate was increased to 10.50% for November 2025, reflecting a structured approach to dividend adjustments[3][14]. - The company plans to adjust dividends for its STRC Stock based on future operating income and net income projections[50]. Digital Assets and Market Value - Digital assets held by the company increased significantly to $73.2 billion as of September 30, 2025, compared to $23.9 billion as of December 31, 2024[53]. - The cumulative effect upon adoption of ASU 2023-08 resulted in a carrying value increase to $41,790,421,000 immediately following the adoption[57]. - In Q1 2025, the company purchased Bitcoin using $4.37 billion from class A common stock offerings and other sources, totaling $7.66 billion in digital asset purchases[58]. - By March 31, 2025, the market value of Bitcoin held increased to approximately $43,546,079,000, with 528,185 Bitcoins held[61]. - In Q2 2025, Bitcoin purchases amounted to $6.77 billion, funded by $5.19 billion from class A common stock offerings and other sources[58]. - The market value of Bitcoin held at the end of Q2 2025 was approximately $64,362,798,000, with 597,325 Bitcoins held[61]. - In Q3 2025, the company purchased Bitcoin for $4.95 billion, utilizing $2.07 billion from class A common stock offerings and other sources[59]. - As of September 30, 2025, the company held 640,031 Bitcoins with a market value of approximately $73,205,725,000[61]. - The unrealized gain on digital assets reached $14,047,514,000 by March 31, 2025, reflecting significant market fluctuations[57]. Risks and Market Considerations - The company has historically not paid dividends on its Class A common stock, and ownership of its securities does not represent an ownership interest in the Bitcoin held[44]. - The company's ability to maintain BPS or achieve positive BTC Yield, BTC Gain, or BTC $ Gain may depend on various factors, including Bitcoin price fluctuations[45]. - The trading price of the company's Class A common stock can deviate significantly from the market value of its Bitcoin holdings[37]. - The company may experience increases in Assumed Diluted Shares Outstanding without corresponding increases in Bitcoin holdings, affecting BPS and other KPIs negatively[43]. - The company encourages investors to regularly review information provided on its strategy dashboard for insights into market prices and key performance metrics[29].

Bitcoin Holdings and Strategy - As of June 30, 2025, the company held approximately 597,325 bitcoins, with an aggregate purchase price of $42.40 billion and an average purchase price of approximately $70,982 per bitcoin [188]. - The company purchased bitcoin using $5.19 billion from sales under its at-the-market offering program for class A common stock in the second quarter of 2025 [187]. - The company’s bitcoin strategy includes issuing debt or equity securities to fund bitcoin purchases, with no specific target for the amount of bitcoin to hold [179]. - The company’s treasury reserve assets consist of cash assets exceeding working capital requirements and bitcoin as the primary reserve asset [181]. - The company held approximately 597,325 bitcoins, valued at $73.42 billion based on market price, indicating significant liquidity potential [240]. - The company does not anticipate needing to sell bitcoin to meet short-term liquidity needs but may do so as part of treasury management operations [263]. - The company incurred additional costs related to bitcoin advocacy and custodial fees as part of its ongoing bitcoin strategy [266]. Financial Performance - Total revenues for Q2 2025 were $114.5 million, a slight increase of 2.3% compared to $111.4 million in Q2 2024 [197]. - Subscription services revenues increased by 69.5% to $40.8 million in Q2 2025 from $24.1 million in Q2 2024, driven by conversions to cloud-based subscriptions [206]. - Product licenses revenues decreased by 22.7% to $7.2 million in Q2 2025 from $9.3 million in Q2 2024, attributed to a decline in deal volume and size [205]. - Product support revenues fell by 15.6% to $52.1 million in Q2 2025 from $61.7 million in Q2 2024, reflecting a decrease in both domestic and international markets [207]. - Gross profit for the first half of 2025 was $155.8 million, down from $165.7 million in the same period of 2024 [197]. - Operating expenses for the first half of 2025 totaled $7.95 million, significantly reduced from $569.7 million in the first half of 2024 due to changes in accounting for digital assets [197]. - Non-GAAP income from operations for Q2 2025 was $14,047,732, compared to a loss of $179,653 in Q2 2024, reflecting a significant recovery [285]. - Non-GAAP net income attributable to common stockholders for Q2 2025 was $9,946,587, up from a loss of $136,058 in Q2 2024 [287]. Cash Flow and Financing Activities - Net cash used in operating activities increased by 809.4% to $(37,302) thousand for the six months ended June 30, 2025, compared to $5,258 thousand in the same period of 2024 [265]. - Net cash used in investing activities rose by 493.6% to $(14,457,699) thousand, primarily due to a $12.00 billion increase in bitcoin purchases [267]. - Net cash provided by financing activities increased by 491.6% to $14,504,460 thousand, driven by a $9.51 billion increase in net proceeds from the sale of class A common stock [268]. - The company issued 7,300,000 shares of STRK Stock on February 5, 2025, raising approximately $563.2 million in net proceeds for general corporate purposes, including bitcoin acquisition [246]. - The company issued 28,011,111 shares of STRC Stock on July 29, 2025, raising approximately $2.47 billion in net proceeds for general corporate purposes [250]. - Total net proceeds from at-the-market equity offerings reached $5,858,518 thousand for the three months ended June 30, 2025 [282]. Tax and Liabilities - The provision for income taxes for the six months ended June 30, 2025, was $2.26 billion on a pretax income of $8.06 billion, resulting in an effective tax rate of 28.0% [228]. - The company had deferred tax liabilities of approximately $6.31 billion related to unrealized gains on bitcoin holdings as of June 30, 2025 [229]. Market and Economic Risks - The company anticipates continued significant exposure to market price changes in bitcoin, foreign currency fluctuations, and interest rate risk [288]. - A 10% adverse change in foreign currency exchange rates would have decreased reported cash and cash equivalents by 5.2% as of June 30, 2025 [293]. - If average exchange rates had changed unfavorably by 10%, revenues for the six months ended June 30, 2025 would have decreased by 3.8% [293]. - The company is exposed to interest rate risk through its STRC Stock, which has a variable dividend rate initially set at 9.00% per annum [294]. - An increase of 0.50% in the regular dividend rate on STRC Stock would result in an additional monthly dividend accrual of approximately $1.2 million [295]. Employee and Operational Changes - The company had a total of 1,512 employees as of June 30, 2025, a decrease from 1,839 employees a year earlier [200]. - Share-based compensation expense decreased by $4.9 million in Q2 2025 compared to Q2 2024, primarily due to forfeitures and vesting of stock awards [201]. - Research and development expenses decreased by $6.2 million (20.6%) and $11.0 million (18.5%) for the three and six months ended June 30, 2025, respectively, compared to the same periods in the prior year [219][220]. - Sales and marketing expenses decreased by $6.5 million (9.6%) for the six months ended June 30, 2025, compared to the same period in the prior year [218]. - General and administrative expenses increased by $6.3 million (8.8%) for the six months ended June 30, 2025, compared to the same period in the prior year [221].

Exhibit 99.1 Contact: Strategy Shirish Jajodia Corporate Treasurer ir@strategy.com Strategy Announces Second Quarter 2025 Financial Results; Record Net Income of $10.0 Billion and EPS of $32.60 Earnings Highlights Bitcoin Highlights FY2025 Earnings Guidance TYSONS CORNER, Va., July 31, 2025 - MicroStrategy ®Incorporated d/b/a Strategy™ (Nasdaq: MSTR/STRK/STRF/STRD/STRC) ("Strategy" or the "Company"), the largest corporate holder of bitcoin and the world's first Bitcoin Treasury Company, today announces fina ...

Group 1 - Strategy increased its Bitcoin holdings by acquiring 4,980 BTC, totaling approximately $531.9 million [1] - The funding for this acquisition came from the sale of its Class A common stock (MSTR), convertible preferred stock (STRK), and perpetual preferred stock (STRF) through an ATM (at-the-market) offering [1]

Core Insights - Seeking Alpha welcomes Aaron Brown as a new contributing analyst, emphasizing the platform's commitment to diverse investment ideas and community engagement [1] - Aaron Brown is a corporate attorney specializing in M&A transactions, with a keen interest in the intersection of law and financial markets, and a passion for long-term investing and new technologies [2] Company and Industry Summary - The article highlights the importance of thoughtful analysis in investment decisions, reflecting the broader community's engagement with emerging legal and financial topics [2] - The contributions from analysts like Aaron Brown are aimed at providing insights that can help investors navigate complex market dynamics [2]

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(unaudited)) Unaudited Q1 2025 statements reflect a significant net loss, primarily from a $5.91 billion unrealized loss on digital assets, with total assets surging to $43.9 billion [Consolidated Balance Sheets](index=3&type=section&id=Consolidated%20Balance%20Sheets) Consolidated Balance Sheet Highlights (in thousands of USD) | Account | March 31, 2025 | December 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Cash and cash equivalents | $60,298 | $38,117 | +58.2% | | Digital assets | $43,546,079 | $23,909,373 | +82.1% | | **Total assets** | **$43,919,760** | **$25,843,685** | **+69.9%** | | Long-term debt, net | $8,140,156 | $7,191,158 | +13.2% | | Total liabilities | $10,394,027 | $7,613,701 | +36.5% | | Total mezzanine equity | $1,304,497 | $0 | N/A | | Retained earnings (deficit) | $6,351,847 | ($2,166,876) | N/A | | **Total stockholders' equity** | **$32,221,236** | **$18,229,984** | **+76.8%** | - The significant increase in **Digital Assets** is due to both additional purchases and the adoption of **ASU 2023-08**, which requires measurement at fair value. The company also issued **$1.3 billion** in new perpetual preferred stock, classified as **Mezzanine Equity**[8](index=8&type=chunk)[24](index=24&type=chunk) [Consolidated Statements of Operations](index=4&type=section&id=Consolidated%20Statements%20of%20Operations) Consolidated Statements of Operations Highlights (in thousands of USD, except per share data) | Account | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | YoY Change | | :--- | :--- | :--- | :--- | | Total revenues | $111,066 | $115,246 | -3.6% | | Gross profit | $77,095 | $85,231 | -9.5% | | Unrealized loss on digital assets | ($5,906,005) | $0 | N/A | | Digital asset impairment losses | $0 | ($191,633) | N/A | | Loss from operations | ($5,921,412) | ($203,702) | +2807.4% | | Net loss | ($4,217,370) | ($53,118) | +7838.6% | | Net loss attributable to common stockholders | ($4,228,018) | ($53,118) | +7858.8% | | Basic loss per common share | ($16.49) | ($0.31) | +5219.4% | - The massive **net loss** in Q1 2025 was primarily driven by a **$5.91 billion unrealized loss** on digital assets, a new line item resulting from the adoption of accounting standard **ASU 2023-08** This replaced the previous digital asset impairment model[10](index=10&type=chunk)[24](index=24&type=chunk) - **Total revenues slightly decreased**, with a **61.6% increase in Subscription services revenue** ($37.1 million vs $23.0 million) being offset by a **43.8% decline in Product licenses revenue** ($7.3 million vs $12.9 million) and a **16.2% decline in Product support revenue** ($52.5 million vs $62.7 million), reflecting the ongoing shift to cloud-based offerings[10](index=10&type=chunk)[208](index=208&type=chunk)[210](index=210&type=chunk) [Consolidated Statements of Cash Flows](index=7&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows) Consolidated Statements of Cash Flows Highlights (in thousands of USD) | Category | Three Months Ended Mar 31, 2025 | Three Months Ended Mar 31, 2024 | Change | | :--- | :--- | :--- | :--- | | Net cash (used in) provided by operating activities | ($2,389) | $28,587 | ($30,976) | | Net cash used in investing activities | ($7,670,400) | ($1,640,854) | ($6,029,546) | | Net cash provided by financing activities | $7,694,305 | $1,648,400 | $6,045,905 | - Investing activities were dominated by **$7.66 billion in digital asset purchases** These purchases were funded by **$7.69 billion in net cash from financing activities**, which included proceeds from new convertible notes (**$2.0 billion**), preferred stock offerings (**$1.34 billion**), and common stock offerings (**$4.41 billion**)[18](index=18&type=chunk) [Notes to Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Consolidated%20Financial%20Statements) Notes detail ASU 2023-08 adoption, fair value accounting for digital assets, a $12.75 billion retained earnings adjustment, and capital raises - Effective January 1, 2025, the company adopted **ASU 2023-08**, requiring bitcoin holdings to be measured at **fair value** with changes recognized in net income This resulted in a cumulative-effect adjustment increasing the opening balance of retained earnings by **$12.75 billion**[24](index=24&type=chunk)[25](index=25&type=chunk) Digital Asset Holdings | Metric | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Approximate number of bitcoins held | 528,185 | 447,470 | | Digital asset carrying value (in thousands of USD) | $43,546,079 | $23,909,373 | - In Q1 2025, the company issued **$2.0 billion** of 0% Convertible Senior Notes due 2030 (2030B Notes) Additionally, all **$1.05 billion** of the 0% Convertible Senior Notes due 2027 were redeemed or converted into **7,373,528 shares** of class A common stock[49](index=49&type=chunk)[51](index=51&type=chunk)[64](index=64&type=chunk) - The company issued two new series of perpetual preferred stock in Q1 2025: 8.00% Series A Perpetual Strike Preferred Stock (STRK) and 10.00% Series A Perpetual Strife Preferred Stock (STRF), raising combined net proceeds of approximately **$1.27 billion**[112](index=112&type=chunk)[113](index=113&type=chunk)[127](index=127&type=chunk) - Subsequent to quarter end, through May 2, 2025, the company purchased an additional **27,265 bitcoins** for **$2.45 billion** and raised approximately **$2.46 billion** from its at-the-market equity offerings[171](index=171&type=chunk)[172](index=172&type=chunk)[175](index=175&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses its dual strategy of bitcoin accumulation and enterprise software, reporting a $4.22 billion net loss in Q1 2025 due to fair value accounting, and relying on financing for future obligations - The company's primary business strategy is to use proceeds from equity and debt financings, as well as cash from operations, to strategically **accumulate Bitcoin as its primary treasury reserve asset**[179](index=179&type=chunk)[181](index=181&type=chunk) Bitcoin Holdings Roll-Forward | Date | Approximate Bitcoins Held | Average Purchase Price Per Bitcoin (USD) | | :--- | :--- | :--- | | Dec 31, 2024 | 447,470 | $62,503 | | Mar 31, 2025 | 528,185 | $67,457 | | May 2, 2025 | 555,450 | $68,550 | - Management states that cash and cash equivalents from operations are **not expected to be sufficient** to satisfy obligations over the next twelve months They anticipate **relying on equity or debt financing** to meet these obligations[250](index=250&type=chunk) - The adoption of **ASU 2023-08** is expected to **increase the volatility of financial results** due to the requirement to recognize fair value changes of bitcoin in net income each period[224](index=224&type=chunk)[332](index=332&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=50&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) Primary market risks include bitcoin price volatility, which significantly impacts earnings, and foreign currency fluctuations due to substantial international revenues - The company's primary market risk is the **price volatility of bitcoin** As of March 31, 2025, it held approximately **528,185 bitcoins** with a carrying value of **$43.5 billion**[278](index=278&type=chunk)[279](index=279&type=chunk) - The company is exposed to **foreign currency risk**, as international revenues accounted for **42.9% of total revenues** for the three months ended March 31, 2025[280](index=280&type=chunk) [Item 4. Controls and Procedures](index=50&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting - The Chief Executive Officer and Chief Financial Officer concluded that the company's disclosure controls and procedures were **effective** as of the end of the period covered by the report[284](index=284&type=chunk) - There were **no changes in internal control over financial reporting** during the quarter that materially affected, or are reasonably likely to materially affect, these controls[285](index=285&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=51&type=section&id=Item%201.%20Legal%20Proceedings) The company is involved in various legal proceedings, but management does not expect a material adverse effect on its financial position or results - The company states that it does not expect the resolution of its various legal proceedings to have a **material adverse effect** on its financial condition or results[287](index=287&type=chunk) [Item 1A. Risk Factors](index=51&type=section&id=Item%201A.%20Risk%20Factors) Key risks include bitcoin price volatility, potential CAMT liabilities, custody risks, regulatory uncertainty, competition from ETPs, substantial indebtedness, and reliance on capital markets - A primary risk is the **high volatility of bitcoin** The adoption of **ASU 2023-08**, requiring fair value accounting, is expected to **significantly increase the volatility of reported earnings**[317](index=317&type=chunk)[332](index=332&type=chunk) - The company may become subject to the **15% Corporate Alternative Minimum Tax (CAMT)** starting in 2026 due to unrealized gains on its bitcoin holdings, which could result in a **material cash tax obligation**[298](index=298&type=chunk)[301](index=301&type=chunk) - The company's enterprise analytics software business is **not expected to generate sufficient cash flow** to satisfy its financial obligations (including debt service and preferred stock dividends) over the next twelve months, creating a **reliance on capital markets**[296](index=296&type=chunk) - The recent approval and trading of **spot bitcoin ETPs** may **adversely affect the market price of the company's stock**, as investors may view ETPs as a more direct or preferable way to gain exposure to bitcoin[333](index=333&type=chunk)[334](index=334&type=chunk)[335](index=335&type=chunk) - As of March 31, 2025, the company had **$8.22 billion in outstanding indebtedness**, which could **limit its ability to raise additional capital** and places it at a competitive disadvantage compared to less leveraged companies[471](index=471&type=chunk)[473](index=473&type=chunk) [Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities](index=79&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%2C%20Use%20of%20Proceeds%2C%20and%20Issuer%20Purchases%20of%20Equity%20Securities) In Q1 2025, 7,373,528 shares of class A common stock were issued to settle $1.05 billion in 2027 Convertible Notes, exempt from registration - In Q1 2025, **7,373,528 shares** of class A common stock were issued upon the conversion of **$1.05 billion** of the 2027 Convertible Notes The issuance was **exempt from registration under Section 3(a)(9) of the Securities Act**[483](index=483&type=chunk) [Item 5. Other Information](index=80&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2025 - **No directors or officers adopted or terminated a Rule 10b5-1 trading plan** during the quarter ended March 31, 2025[485](index=485&type=chunk) [Item 6. Exhibits](index=80&type=section&id=Item%206.%20Exhibits) This section indexes all exhibits filed with the Form 10-Q, including corporate governance, debt indentures, preferred stock designations, and sales agreements

Financial Performance - Total revenues for Q1 2025 were $111.1 million, a 3.6% decrease year-over-year compared to Q1 2024[16] - The Company reported total revenues of $111,066,000 for the three months ended March 31, 2025, compared to $115,246,000 for the same period in 2024, reflecting a decrease of approximately 3.4%[35] - The gross profit for the three months ended March 31, 2025, was $77,095,000, down from $85,231,000 in the prior year, indicating a decline of about 9.5%[35] - The Company incurred a net loss of $4,217,370,000 for the three months ended March 31, 2025, compared to a net loss of $53,118,000 for the same period in 2024, representing a significant increase in losses[35] - Basic loss per common share for the three months ended March 31, 2025, was $(16.49), compared to $(0.31) for the same period in 2024, indicating a substantial increase in loss per share[35] - The non-GAAP loss from operations for the three months ended March 31, 2025, was $(5,909,593), compared to $(185,911) for the same period in 2024, indicating a significant increase in losses[51] - The net loss attributable to common stockholders for the three months ended March 31, 2025, was $(4,228,018), compared to $(53,118) in 2024, reflecting an increase in losses of approximately 7,873%[53] - The diluted loss per common share for the three months ended March 31, 2025, was $(16.49), compared to $(0.31) in 2024, marking a substantial increase in loss per share[53] Digital Assets and Bitcoin Strategy - The Company achieved a "BTC Yield" of 13.7% year-to-date, surpassing the full year 2025 target of 15%[6] - "BTC $ Gain" for Q1 2025 was $4.1 billion, contributing to a year-to-date total of $5.8 billion, meeting 58% of the annual target[7] - Bitcoin holdings totaled 553,555 BTC with a total cost of $37.90 billion, averaging $68,459 per bitcoin as of April 28, 2025[6] - The Company recorded an unrealized loss of $5.9 billion on digital assets in Q1 2025 due to the adoption of fair value accounting[9] - The Company is increasing its 2025 "BTC Yield" target from 15% to 25% and "BTC $ Gain" target from $10 billion to $15 billion[6] - The Company purchased $7.66 billion in Bitcoin during Q1 2025, utilizing proceeds from various financing activities[44] - The market value of Bitcoin holdings increased to approximately $40.44 billion as of March 31, 2025, compared to $26.34 billion at the end of 2024[47] - The average purchase price per Bitcoin held increased to $67,457 as of March 31, 2025, from $58,863.90 at the end of 2024[47] Operating Expenses and Financial Position - Operating expenses for Q1 2025 were approximately $6.0 billion, a 1,976.1% increase year-over-year, primarily due to unrealized losses[16] - The Company’s total operating expenses for the three months ended March 31, 2025, were $5,998,507,000, compared to $288,933,000 in the prior year, showing a dramatic rise in expenses[35] - Total assets increased to $43.92 billion as of March 31, 2025, compared to $25.84 billion on December 31, 2024, representing a growth of 70%[37] - Digital assets held by the company reached $43.55 billion, up from $23.91 billion at the end of 2024, marking an increase of 82%[37] - Total liabilities rose to $10.39 billion as of March 31, 2025, compared to $7.61 billion at the end of 2024, reflecting a 37% increase[37] - Stockholders' equity increased to $32.22 billion as of March 31, 2025, up from $18.23 billion at the end of 2024, indicating a growth of 77%[37] Cash Flow and Investments - Cash and cash equivalents as of March 31, 2025, were $60.3 million, an increase of $22.2 million from December 31, 2024[16] - Net cash used in operating activities was $(2.39) million for the three months ended March 31, 2025, compared to $28.59 million provided in the same period of 2024[39] - The company reported a net cash outflow from investing activities of $(7.67) billion in Q1 2025, significantly higher than $(1.64) billion in Q1 2024[39] - Cash, cash equivalents, and restricted cash at the end of the period totaled $62.26 million, down from $83.73 million a year earlier[39] Strategic Focus and Future Outlook - The Company’s strategy includes using BTC Yield, BTC Gain, and BTC $ Gain as KPIs to assess the performance of its bitcoin acquisition strategy, although these metrics have limitations and do not reflect traditional financial performance measures[24] - The Company has not paid any dividends on its class A common stock historically and does not indicate any intention to do so in the future[30] - Forward-looking statements indicate that the Company’s ability to achieve positive BTC Yield, BTC Gain, or BTC $ Gain may depend on various factors, including market conditions and operational cash generation[31] - The Company has dedicated certain corporate personnel to its bitcoin strategy, reflecting a strategic focus on enhancing its digital asset management[58] - The Chief Operating Decision Maker (CODM) uses net income (loss) to assess the profitability of the software business, indicating a focus on controllable costs for future budgeting[59]