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 and net income of $24 billion, based on a projected bitcoin price of $150,000 by year-end[18]. - Total revenues for the three months ended September 30, 2025, were $128.7 million, a 10.3% increase compared to $116.1 million for the same period in 2024[51]. - Net income for the three months ended September 30, 2025, was $2.8 million, compared to a net loss of $340.2 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]. - Basic earnings per share for the three months ended September 30, 2025, were $9.30, compared to a loss of $1.72 per share for the same period in 2024[51]. Bitcoin Holdings and Strategy - 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]. - Strategy Inc. is the world's first and largest Bitcoin Treasury Company, adopting Bitcoin as its primary treasury reserve asset[31]. - 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, helping assess the company's strategy of acquiring Bitcoin in an accretive manner[34]. - The market value of Bitcoin holdings is calculated by multiplying the current market price of Bitcoin by the total number of Bitcoins held, referred to as Bitcoin NAV[48]. - The company acknowledges the volatility and risks associated with Bitcoin markets, which may affect the actual fair market value of its holdings[62]. Capital and Liquidity - The company has raised $20 billion year-to-date through its capital markets platform, positioning itself as a dominant credit issuer globally[3]. - As of September 30, 2025, cash and cash equivalents stood at $54.3 million, up from $38.1 million at the end of 2024[12]. - 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 for the same period in 2024[55]. - Total liabilities increased to $15.5 billion as of September 30, 2025, from $7.6 billion as of December 31, 2024[53]. Dividend Policy - The STRC dividend rate was increased to 10.50% for November 2025, reflecting a structured approach to dividend adjustments[3][14]. - The company plans to adjust dividends for its STRC Stock based on future operating income and net income projections[50]. Digital Assets and Market Value - Digital assets held by the company increased significantly to $73.2 billion as of September 30, 2025, compared to $23.9 billion as of December 31, 2024[53]. - The cumulative effect upon adoption of ASU 2023-08 resulted in a carrying value increase to $41,790,421,000 immediately following the adoption[57]. - In Q1 2025, the company purchased Bitcoin using $4.37 billion from class A common stock offerings and other sources, totaling $7.66 billion in digital asset purchases[58]. - By March 31, 2025, the market value of Bitcoin held increased to approximately $43,546,079,000, with 528,185 Bitcoins held[61]. - In Q2 2025, Bitcoin purchases amounted to $6.77 billion, funded by $5.19 billion from class A common stock offerings and other sources[58]. - The market value of Bitcoin held at the end of Q2 2025 was approximately $64,362,798,000, with 597,325 Bitcoins held[61]. - In Q3 2025, the company purchased Bitcoin for $4.95 billion, utilizing $2.07 billion from class A common stock offerings and other sources[59]. - As of September 30, 2025, the company held 640,031 Bitcoins with a market value of approximately $73,205,725,000[61]. - The unrealized gain on digital assets reached $14,047,514,000 by March 31, 2025, reflecting significant market fluctuations[57]. Risks and Market Considerations - The company has historically not paid dividends on its Class A common stock, and ownership of its securities does not represent an ownership interest in the Bitcoin held[44]. - The company's ability to maintain BPS or achieve positive BTC Yield, BTC Gain, or BTC $ Gain may depend on various factors, including Bitcoin price fluctuations[45]. - The trading price of the company's Class A common stock can deviate significantly from the market value of its Bitcoin holdings[37]. - The company may experience increases in Assumed Diluted Shares Outstanding without corresponding increases in Bitcoin holdings, affecting BPS and other KPIs negatively[43]. - The company encourages investors to regularly review information provided on its strategy dashboard for insights into market prices and key performance metrics[29].
MicroStrategy Inc Series A Pfd(STRK) - 2025 Q3 - Quarterly Results