MicroStrategy(MSTR)2025-05-05 20:07Bitcoin Holdings and Strategy - As of March 31, 2025, the company held approximately 528,185 bitcoins, with an aggregate purchase price of $35.63 billion and an average purchase price of approximately $67,457 per bitcoin [191][194]. - The company has accumulated a total of approximately 447,470 bitcoins by December 31, 2024, with a carrying value of $23.91 billion [187]. - The company intends to fund further bitcoin acquisitions primarily through issuances of common stock and various fixed-income instruments [181]. - The company’s treasury reserve assets consist of cash and cash equivalents exceeding working capital requirements and bitcoin as the primary reserve asset [184]. - The company’s strategy includes advocacy and educational activities regarding Bitcoin as a digital capital asset [183]. - The company reported unrealized loss on digital assets for the three months ended March 31, 2025, was $5.906 billion, representing 98.5% of the company's operating expenses [193]. - The company incurred additional bitcoin advocacy costs and custodial fees as part of its bitcoin strategy, impacting cash from operations [257]. - The company is exposed to significant market price risk due to its bitcoin holdings, which are highly volatile [279]. Financial Performance - Total revenues for the three months ended March 31, 2025, were $111.1 million, a decrease of 3.8% compared to $115.2 million in the same period of 2024 [200]. - Product licenses revenues decreased by 43.8% to $7.3 million in Q1 2025 from $12.9 million in Q1 2024, primarily due to a decrease in deal volume and size [208]. - Subscription services revenues increased by 61.6% to $37.1 million in Q1 2025, up from $23.0 million in Q1 2024, driven by conversions to cloud-based subscriptions [209]. - Product support revenues decreased by 16.2% to $52.5 million in Q1 2025 from $62.7 million in Q1 2024, attributed to customers transitioning to subscription services [210]. - Other services revenues fell by 15.0% to $14.2 million in Q1 2025, down from $16.7 million in Q1 2024, with consulting revenues decreasing by 13.4% [212]. - Operating expenses for Q1 2025 totaled $5.998 billion, significantly higher than $288.9 million in Q1 2024, primarily due to unrealized losses on digital assets [200]. - The company reported a loss from operations of $5.9 billion for Q1 2025, compared to a loss of $203.7 million in Q1 2024 [200]. - Non-GAAP loss from operations for the three months ended March 31, 2025, was $(5,909,593) thousand, compared to $(185,911) thousand in the same period of 2024 [274]. - Non-GAAP net loss attributable to common stockholders for Q1 2025 was $4.238 billion, compared to a loss of $142 million in Q1 2024 [277]. - Non-GAAP diluted loss per common share for Q1 2025 was $16.53, significantly higher than $0.83 in Q1 2024 [277]. Employee and Compensation Information - As of March 31, 2025, the company had 1,483 employees, a decrease from 1,851 employees a year earlier [203]. - Share-based compensation expense decreased to $11.8 million in Q1 2025 from $17.8 million in Q1 2024, mainly due to forfeitures of stock awards [204]. - Share-based compensation expense for Q1 2025 was $11.819 million, down from $17.791 million in Q1 2024 [277]. Cash Flow and Financing Activities - Net cash used in operating activities was $(2,389) thousand for the three months ended March 31, 2025, compared to $28,587 thousand in the same period of 2024, representing a change of 108.4% [256]. - Net cash used in investing activities increased by $6.030 billion for the three months ended March 31, 2025, primarily due to a $6.022 billion increase in purchases of bitcoins [258]. - Net cash provided by financing activities increased by $6.046 billion for the three months ended March 31, 2025, primarily due to a $4.263 billion increase in net proceeds from the sale of class A common stock [260]. - The company issued 12,624,595 shares of class A common stock under at-the-market equity offerings, generating total net proceeds of $4,399,205 thousand for the three months ended March 31, 2025 [271]. - The company received approximately $563.2 million in net proceeds from the issuance of 7,300,000 shares of Perpetual Strike Preferred Stock on February 5, 2025 [243]. - The company anticipates that cash and cash equivalents as of March 31, 2025, will not be sufficient to meet short-term liquidity needs, and may seek equity or debt financing [250]. - Long-term cash requirements include obligations related to long-term debt and payment of dividends on preferred stock, which are expected to exceed available cash [251]. - 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 [255]. Revenue Recognition and Deferred Revenue - As of March 31, 2025, total current and non-current deferred revenue and advance payments amounted to $219.674 million, a decrease of $23.3 million from $242.944 million on December 31, 2024 [234]. - The company expects to recognize approximately $275.8 million of the remaining performance obligation over the next 12 months, which totals $442.8 million as of March 31, 2025 [235]. Market and Currency Risks - The market price of one bitcoin on May 2, 2025, was reported at $96,972, indicating significant market volatility [194]. - A 10% adverse change in foreign currency exchange rates would have decreased reported cash and cash equivalents by 3.3% as of March 31, 2025 [283]. - If average exchange rates had changed unfavorably by 10%, revenues for Q1 2025 would have decreased by 3.8% [283]. - The company attempts to minimize foreign currency risk by converting excess foreign currency to U.S. dollar-denominated cash [282]. Tax and Interest Expenses - The effective tax rate for the three months ended March 31, 2025, was 29.0% on a pretax loss of $5.94 billion, compared to 75.2% on a pretax loss of $213.9 million in the same period of 2024 [229]. - Interest expense, net increased by $5.2 million to $17.11 million for the three months ended March 31, 2025, compared to $11.88 million in the prior year [225]. - Interest payments for the three months ended March 31, 2025, amounted to $8.2 million, compared to no interest payments in the same period of 2024 [263]. - Interest expense from amortization of debt issuance costs increased to $6.048 million in Q1 2025 from $2.557 million in Q1 2024 [277].