MicroStrategy(MSTR) - 2024 Q4 - Annual Results

Bitcoin Holdings and Strategy - Strategy holds 471,107 BTC, with a carrying value of $23.909 billion as of December 31, 2024[1][10] - The company acquired 218,887 bitcoins for $20.5 billion in Q4 2024, marking the largest quarterly increase in bitcoin holdings[3] - The company revised its annual BTC Yield target to a minimum of 15% for 2025, down from 74.3% achieved in FY 2024[6][7] - Strategy aims for an annual BTC $ Gain target of $10 billion for 2025, with a BTC Gain of 140,538 for FY 2024[6][7] - The average purchase price per Bitcoin held increased to $62,503 by December 31, 2024, compared to $31,168 at the end of 2023[43] - The company purchased Bitcoin worth $15.09 billion in the fourth quarter of 2024, significantly higher than previous quarters, indicating aggressive accumulation strategy[45] - MicroStrategy's total bitcoins held increased from 132,500 at the end of December 2022 to 447,470 by December 31, 2024, reflecting a growth of approximately 237%[47] Financial Performance - Total revenues for Q4 2024 were $120.7 million, a 3.0% decrease year-over-year, while subscription services revenues increased by 48.4% to $31.9 million[10] - The company reported a net loss of $1.17 billion for the twelve months ended December 31, 2024, compared to a net income of $429.1 million for the same period in 2023[36] - Basic loss per share for the three months ended December 31, 2024, was $(3.03), compared to earnings of $0.58 per share for the same period in 2023[36] - The company's total operating expenses for the twelve months ended December 31, 2024, were $2.19 billion, compared to $501.4 million for the same period in 2023[36] - The net income for the three months ended December 31, 2024, was a loss of $670,810, compared to a net income of $89,126 in the same period of 2023[61] - Total expenses for the year ended December 31, 2024, were $2,316,434, compared to $611,308 in 2023, indicating a substantial increase in costs[62] - The loss from operations for the year ended December 31, 2024, was $1,852,978, compared to a loss of $115,047 in 2023[62] Asset and Liability Changes - Total assets increased significantly to $25.84 billion in 2024 from $4.76 billion in 2023, representing a growth of approximately 442%[39] - Digital assets surged to $23.91 billion in 2024, up from $3.63 billion in 2023, marking an increase of about 558%[39] - Total liabilities increased to $7.61 billion in 2024 from $2.60 billion in 2023, an increase of approximately 193%[39] - Stockholders' equity rose to $18.23 billion in 2024, up from $2.16 billion in 2023, representing an increase of about 743%[39] Cash Flow and Financing Activities - Cash and cash equivalents decreased to $38.1 million as of December 31, 2024, down from $46.8 million a year earlier[17] - Net cash used in operating activities was $(53.03) million in 2024, compared to $12.71 million in 2023, indicating a decline in operational cash flow[41] - Net cash used in investing activities rose dramatically to $(22.09) billion in 2024 from $(1.91) billion in 2023, reflecting increased investment in digital assets[41] - The company provided $22.13 billion in financing activities in 2024, a substantial increase from $1.89 billion in 2023, highlighting strong capital raising efforts[41] Impairment and Market Volatility - Operating expenses surged to $1.103 billion, a 693.2% increase year-over-year, primarily due to impairment losses on digital assets of $1.006 billion[9] - Digital asset impairment losses for the three months ended December 31, 2024, were $1.01 billion, significantly higher than $39.2 million for the same period in 2023[36] - Digital asset impairment losses totaled $(4.06) billion in 2024, reflecting the volatility in the cryptocurrency market[43] Stock and Shareholder Information - The company issued 42,308,443 shares of class A common stock for net proceeds of approximately $15.1 billion during Q4 2024[10] - Strategy completed a 10-for-1 stock split on August 7, 2024, retroactively adjusting prior period share information[4] - The company has not paid any dividends on its class A common stock historically and does not intend to do so in the future[30] Market Conditions and Future Outlook - The company's ability to achieve positive BTC Yield, BTC Gain, or BTC $ Gain may depend on various factors, including the price of bitcoin and the availability of financing[31] - Forward-looking statements indicate that actual results may differ materially due to risks such as fluctuations in bitcoin prices and changes in regulations[33] Revenue Segmentation - Total product licenses and subscription services revenue for the twelve months ended December 31, 2024, was $155,343, a slight decrease of 0.8% from $156,530 in 2023[62] - Deferred subscription services revenue increased significantly to $107,119 in 2024 from $65,512 in 2023[58] - Subscription services revenue increased by 48.4% to $31,930 for the three months ended December 31, 2024, compared to $21,517 in the same period of 2023[61]