MicroStrategy(MSTR) - 2025 Q3 - Quarterly Results

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, net income of $24 billion, and diluted EPS of $80 per share, based on a projected bitcoin price of $150,000 at year-end[4][18]. - Total revenues for the three months ended September 30, 2025, were $128.7 million, an increase of 10.3% compared to $116.1 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]. - The company’s basic earnings per share for the three months ended September 30, 2025, was $9.30, compared to a loss of $1.72 per share in the same period of 2024[51]. - 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 in the same period of 2024[55]. Bitcoin Holdings and Investments - 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]. - The company has built over $71 billion of collateral, positioning itself as a leading issuer of digital credit[5]. - The company reported an unrealized gain on digital assets of $(3.9) billion for the three months ended September 30, 2025, indicating significant volatility in the digital asset market[51]. - The cumulative unrealized gain on digital assets reached $14,047,514,000 by June 30, 2025[58]. - The company reported an unrealized loss of $5,906,005,000 on digital assets as of March 31, 2025[57]. - As of December 31, 2024, the company held 447,470 bitcoins with a carrying value of $23,909,373,000 and an average purchase price of $62,503 per bitcoin[57]. - The company purchased $7.66 billion worth of bitcoin in Q1 2025, utilizing proceeds from various stock offerings[57]. - By March 31, 2025, the number of bitcoins held increased to 528,185, with a market value of $43,546,079,000[61]. - In Q2 2025, the company purchased an additional $6.77 billion in bitcoin, bringing total holdings to 597,325 bitcoins by June 30, 2025[58]. - The market value of bitcoin held at the end of Q2 2025 was $64,362,798,000, with an average purchase price of $70,982 per bitcoin[61]. - In Q3 2025, the company acquired $4.95 billion in bitcoin, increasing total holdings to 640,031 bitcoins by September 30, 2025[59]. - The market value of bitcoin held at the end of Q3 2025 was $73,205,725,000, with an average purchase price of $73,983 per bitcoin[61]. Revenue Streams and Dividends - Strategy's subscription services revenues increased by 65.4% year-over-year to $46 million in Q3 2025[12]. - Subscription services revenue reached $46.0 million for the three months ended September 30, 2025, up 65.2% from $27.8 million in the prior year[51]. - Strategy announced a 25 basis points increase in the STRC dividend rate to 10.50% for November 2025[3]. - The company plans to adjust dividends for its STRC Stock based on future operating income and net income projections[50]. Key Performance Indicators - 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, while BTC Gain represents the number of Bitcoins held multiplied by the BTC Yield[34]. - The dollar value of BTC Gain, referred to as BTC $ Gain, is calculated by multiplying BTC Gain by the market price of Bitcoin[35]. - The company has adopted ASU 2023-08, requiring it to measure Bitcoin at fair value, recognizing gains or losses in net income[39]. - The company's ability to maintain BPS or achieve positive BTC Yield, BTC Gain, or BTC $ Gain may depend on external factors such as Bitcoin price fluctuations[45]. - Enterprise Value is calculated as the sum of market capitalization of common stock, outstanding indebtedness, and perpetual preferred stock, minus cash balance[47]. - Bitcoin NAV is defined as the market value of Bitcoin holdings, calculated by multiplying the current market price by the total number of Bitcoins held[48]. Market Risks and Volatility - The company highlighted the volatility and risks associated with bitcoin markets, including potential manipulation and liquidity issues[62]. - The company encourages investors to regularly review information disclosed on its website dashboard, including market prices and KPI metrics[29].