MicroStrategy(US:MSTR)2025-07-31 20:15Financial Performance - Strategy reported a record net income of $10.0 billion and diluted EPS of $32.60 for Q2 2025[1]. - Operating income for Q2 2025 was approximately $14.03 billion, a 7,106.4% increase year-over-year, driven by an unrealized gain on digital assets[10]. - Total revenues for Q2 2025 were $114.5 million, a 2.7% increase year-over-year, with subscription services revenues rising by 69.5%[10]. - The company reported a net income of $10.0 million for Q2 2025, compared to a net loss of $102.6 million in Q2 2024, and a net income of $5.8 million for the first half of 2025, compared to a loss of $155.7 million in the same period last year[52]. - For Q2 2025, MicroStrategy reported a non-GAAP income from operations of approximately $14.05 billion, compared to a loss of $200.27 million in Q2 2024[65]. - The net income attributable to common stockholders for Q2 2025 was approximately $9.97 billion, a significant increase from a loss of $102.56 million in Q2 2024[66]. - Total revenues for the Software Business segment in Q2 2025 were $114,488,000, an increase from $111,442,000 in Q2 2024, representing a growth of approximately 2.3%[73][74]. Bitcoin Holdings and Strategy - The company expanded its bitcoin holdings to 628,791 bitcoins, with a total cost of $46.07 billion, averaging $73,277 per bitcoin year-to-date[5]. - The company has adopted Bitcoin as its primary treasury reserve asset, strategically accumulating Bitcoin through equity and debt financings, as well as cash flows from operations[27]. - The company measures its Bitcoin holdings at fair value as of the end of a reported period, recognizing gains or losses in net income[39]. - The company believes its combination of operational excellence and strategic Bitcoin reserve positions it as a leader in both digital assets and enterprise analytics sectors[27]. - The company anticipates potential fluctuations in bitcoin prices, which could significantly impact future operating income and net income projections[50]. - The market value of Bitcoin held at the end of Q2 2025 was approximately $64.36 billion, with 597,325 Bitcoins held[61]. - The average purchase price per Bitcoin increased from $36,798 as of June 30, 2024, to $70,982 as of June 30, 2025[57][61]. Revenue and Expenses - Total current deferred revenue and advance payments as of June 30, 2025, amounted to $218,448,000, compared to $242,944,000 as of December 31, 2024, indicating a decrease of about 10.1%[69]. - Deferred subscription services revenue for Q2 2025 was $111,564,000, up from $109,382,000 in Q2 2024, showing a growth of approximately 2.0%[69]. - Operating expenses for Q2 2025 totaled $13.9 billion, primarily due to unrealized losses, compared to $280.8 million in Q2 2024[52]. - Share-based compensation expense for Q2 2025 was $15,742,000, down from $20,621,000 in Q2 2024, indicating a reduction of approximately 23.5%[73][74]. Capital and Financing - The company raised over $10 billion through its ATM programs and IPOs, enhancing its capital markets platform[2]. - Financing activities generated $14.5 billion in cash for the first half of 2025, compared to $2.5 billion in the same period of 2024[56]. - The company plans to utilize mNAV thresholds to guide its common stock issuance for bitcoin purchases, enhancing its capital strategy[22]. Market and Economic Conditions - The company experienced a significant unrealized loss on digital assets of $14.0 billion in Q2 2025, compared to no unrealized loss in Q2 2024[52]. - The company has historically not paid any dividends on its Class A common stock, and there is no indication of future dividend payments[45]. - The company anticipates no change in the dividend rate if the stock price remains between $99.00 and $100.99, with potential minor adjustments based on market conditions[31]. Key Performance Indicators - Key performance indicators (KPIs) include Bitcoin Per Share (BPS), BTC Yield, BTC Gain, and BTC $ Gain, which help assess the performance of the company's Bitcoin acquisition strategy[33][35]. - The company's Bitcoin NAV is calculated by multiplying the current market price of Bitcoin by the total number of Bitcoins held, though it is not equivalent to traditional net asset value metrics[49]. Corporate Governance and Management - The Chief Operating Decision Maker (CODM) focuses on "net income (loss)" to assess profitability and manage controllable costs within the Software Business segment[71]. - The Company has dedicated resources to its bitcoin strategy starting in 2025, impacting corporate expenses and aligning with its digital asset activities[70].