Bitcoin Holdings and Acquisitions - As of June 30, 2024, the company held approximately 226,331 bitcoins, with a market value of $3.134 billion based on a bitcoin price of $61,926.69[138] - The company has accumulated a total of approximately $8.328 billion in digital assets, with an average purchase price of $36,798 per bitcoin as of June 30, 2024[145] - The total bitcoin holdings increased from 132,500 bitcoins at the end of 2022 to 226,331 bitcoins by June 30, 2024[140] - As of August 5, 2024, the company held approximately 226,500 bitcoins acquired at an aggregate purchase price of $8.340 billion, with a market price of $53,469.63 per bitcoin[149] - The company plans to continue acquiring bitcoin using cash flows from operations and proceeds from equity and debt financings, with no specific target for total bitcoin holdings[137] - The company emphasizes the importance of digital asset management and has strategies in place for potential sales of bitcoin for corporate purposes[137] - As of June 30, 2024, the company held approximately 226,331 bitcoins, with 175,721 being unencumbered[199] Financial Performance - Total revenues for the three months ended June 30, 2024, were $111,442, a decrease of 7.9% compared to $120,400 in the same period of 2023[156] - Gross profit for the three months ended June 30, 2024, was $80,507, down from $93,279 in the same period of 2023, reflecting a decrease of 13.7%[156] - Loss from operations for the three months ended June 30, 2024, was $(200,274), compared to a loss of $(26,708) in the same period of 2023[156] - Non-GAAP loss from operations for Q2 2024 was $179,653, compared to a loss of $11,214 in Q2 2023, reflecting a significant increase in operational losses[216] - Non-GAAP net loss for Q2 2024 was $136,058, a decrease from a net income of $36,929 in Q2 2023, indicating a substantial decline in profitability[217] - Non-GAAP diluted loss per share for Q2 2024 was $7.62, compared to earnings of $2.35 per share in Q2 2023, highlighting a drastic drop in earnings performance[217] Revenue Breakdown - Subscription services revenues increased by 21.1% to $24,080 for the three months ended June 30, 2024, compared to $19,878 in the same period of 2023[162] - Product licenses revenues decreased by 40.2% to $9,286 for the three months ended June 30, 2024, compared to $15,522 in the same period of 2023[162] - Product support revenues decreased by 6.6% to $61,740 for the three months ended June 30, 2024, compared to $66,081 in the same period of 2023[164] - Total consulting revenues fell by 13.2% to $15,604,000 for the three months ended June 30, 2024, down from $17,980,000 in the prior year[165] - Subscription services revenues for Q2 2024 increased by 21.1% year-over-year, reaching $24,205, up from $19,878 in Q2 2023[218] - Product licenses revenues for Q2 2024 decreased by 40.2% year-over-year, totaling $9,306, down from $15,522 in Q2 2023[218] - International revenues accounted for 42.8% of total revenues for the three months ended June 30, 2024, compared to 40.7% in the same period last year[223] Expenses and Impairments - Digital asset impairment losses for the three months ended June 30, 2024, were $180.1 million, representing 64.1% of operating expenses, compared to $24.1 million or 20.1% in the same period of 2023[148] - Total operating expenses for the three months ended June 30, 2024, were $280,781, significantly higher than $119,987 in the same period of 2023, primarily due to digital asset impairment losses[156] - Share-based compensation expense increased to $20,621 for the three months ended June 30, 2024, compared to $15,494 in the same period of 2023, reflecting a rise of 33.7%[158] - General and administrative expenses increased by 25.3% to $36,129,000 for the three months ended June 30, 2024, compared to $28,830,000 in the same period of 2023[178] - The company incurred an impairment loss of $371.7 million on its bitcoin holdings during the six months ended June 30, 2024[222] Cash Flow and Financing Activities - The company reported a net cash provided by operating activities of $5.258 million for the six months ended June 30, 2024, a decrease of 72.2% compared to $18.925 million in the same period of 2023[201] - Net cash used in investing activities increased by 361.8% to $(2.435 billion) for the six months ended June 30, 2024, primarily due to a $1.907 billion increase in bitcoin purchases[203] - Net cash provided by financing activities increased by 366.2% to $2.452 billion for the six months ended June 30, 2024, driven by a $2.162 billion increase in long-term debt proceeds[204] - The company filed a prospectus for a new at-the-market equity offering program with an aggregate offering price of up to $2.0 billion[193] - The company reported total net proceeds of $137.152 million from shares sold under at-the-market equity offering programs for the six months ended June 30, 2024[213] Future Expectations and Strategic Initiatives - The company expects subscription services revenues to continue to grow in future periods as it promotes its cloud offerings to new and existing customers[163] - The company expects to recognize approximately $242.4 million of the remaining performance obligation over the next 12 months as of June 30, 2024[190] - The company does not anticipate needing to sell bitcoins within the next twelve months to meet working capital and interest payment obligations[199] - The company expects to continue facing significant recurring expenses related to share-based compensation and interest expense from long-term debt[215]
MicroStrategy Inc Series A Pfd(STRK) - 2024 Q2 - Quarterly Report