MicroStrategy(US:MSTR)2025-11-03 21:12Bitcoin Holdings and Strategy - The company held approximately 641,167 bitcoins as of October 30, 2025, with an aggregate market value of $68.28 billion based on a market price of $106,490 per bitcoin[186]. - The total bitcoin holdings increased from 447,470 bitcoins at December 31, 2024, to 640,031 bitcoins by September 30, 2025, reflecting a growth of 43%[179]. - The company purchased bitcoin using $4.37 billion from common stock sales, $1.99 billion from convertible notes, and $710 million from initial public offerings in the first quarter of 2025[179]. - The company’s treasury strategy involves accumulating bitcoin as a primary reserve asset, with no specific target for the amount to hold[171]. - The company plans to fund further bitcoin acquisitions primarily through issuances of common stock and various fixed-income instruments[171]. - The company aims to increase its Bitcoin holdings faster than the Assumed Diluted Shares Outstanding to enhance shareholder value[201]. - The company acquired 42,705 bitcoin in Q3 2025, raising total holdings to 640,031 bitcoin, compared to 25,889 bitcoin acquired in Q3 2024[204]. - The company expects changes in bitcoin market value to materially impact financial results due to its substantial bitcoin holdings[210]. - The company plans to continue pursuing its bitcoin strategy, incurring additional costs related to bitcoin advocacy and custodial fees[255]. - Total Bitcoin Holdings increased from 226,331 BTC as of June 30, 2024, to 640,031 BTC by September 30, 2025, representing a growth of 182%[265]. - Bitcoin Price increased from $61,927 on June 30, 2024, to $114,378 by September 30, 2025, reflecting an increase of 84.5%[265]. - The company has adopted ASU 2023-08, requiring measurement of bitcoin at fair value, which may lead to unrealized gains or losses not reflected in traditional KPIs[273]. Financial Performance - Unrealized gains on digital assets for the three months ended September 30, 2025, amounted to $3.89 billion, while for the nine months, it was $12.03 billion[182]. - The unrealized loss on digital assets was reported at $5.91 billion as of June 30, 2025[179]. - Total revenues for the three months ended September 30, 2025, increased by 10.9% to $128.7 million compared to $116.1 million in the same period of 2024[213]. - Subscription services revenues rose by 65.4% to $46.0 million for the three months ended September 30, 2025, compared to $27.8 million in 2024[213]. - Gross profit for the three months ended September 30, 2025, was $90.7 million, an increase of 11.0% from $81.7 million in the same period of 2024[213]. - The company recorded an unrealized loss on digital assets of $(3.9) billion for the three months ended September 30, 2025, compared to no unrealized gains in 2024[214]. - The provision for income taxes for the nine months ended September 30, 2025, was $3.35 billion on a pretax income of $11.93 billion, resulting in an effective tax rate of 28.0%[222]. - BTC Gain for the three months ended September 30, 2025, was $31,058, representing a 169% increase from the previous year[202]. - BTC Gain for the nine months ended September 30, 2025, was 115,956 BTC, translating to a BTC $ Gain of $13,263 million[267]. Capital and Financing Activities - Total net proceeds from equity offerings for the nine months ended September 30, 2025, amounted to $17,633,587, a significant increase from $1,242,293 in the same period of 2024[194]. - The company issued 1,881,542 shares of STRF Stock in the three months ended September 30, 2025, generating net proceeds of $217,434,000[197]. - Approximately $5.1 billion was raised from capital markets in Q3 2025, with $2.3 billion from STRK ATM and Common Stock ATMs, increasing Assumed Diluted Shares Outstanding by 5.8 million to approximately 320.0 million[205]. - For the nine months ended September 30, 2025, the company raised approximately $19.7 billion from capital markets, resulting in an increase of 38.3 million shares in Assumed Diluted Shares Outstanding[207]. - 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[242]. - The company has long-term debt obligations totaling $8.24 billion, with semi-annual coupon interest payments of $17.3 million due for outstanding convertible notes[251]. Operating Expenses and Cash Flow - Total operating expenses for the three months ended September 30, 2025, were $(3.8) billion, compared to $4.0 million in 2024, indicating a significant increase in expenses[213]. - Net cash used in operating activities for the nine months ended September 30, 2025, was $(45,612) thousand, a 27.7% increase from $(35,708) thousand in the same period of 2024[254]. - Net cash used in investing activities increased by 384.1% to $(19,417,576) thousand for the nine months ended September 30, 2025, primarily due to a $15.4 billion increase in bitcoin purchases[254][257]. - Net cash provided by financing activities rose by 381.4% to $19,476,842 thousand for the nine months ended September 30, 2025, driven by a $10.6 billion increase in net proceeds from the sale of class A common stock[254][258]. - Cash and cash equivalents as of September 30, 2025, totaled $54.3 million, with $17.8 million held by U.S. entities and $36.5 million by non-U.S. entities[232]. - Cash, cash equivalents, and restricted cash at the end of the period increased by 16.6% to $56,200 thousand from $48,205 thousand in the prior year[254]. Market Risks and Currency Exposure - The company is exposed to market risks including fluctuations in bitcoin prices, foreign currency, and interest rates[281]. - A 10% adverse change in foreign currency exchange rates would have decreased reported cash and cash equivalents by 4.4% as of September 30, 2025[286]. - If average exchange rates had changed unfavorably by 10%, revenues for the nine months ended September 30, 2025 would have decreased by 3.8%[286]. - The company attempts to minimize foreign currency risk by converting excess foreign currency to U.S. dollar-denominated cash[285]. - The interest rate risk exposure via STRC Stock is not considered material as of October 30, 2025[288]. Dividends and Shareholder Returns - Total dividends paid for the three months ended September 30, 2025, amounted to $139.8 million, with no dividends paid during the same period in 2024[249]. - The board of directors increased the monthly regular dividend rate on STRC Stock from 10.00% to 10.25%, effective October 1, 2025, with a cash dividend of $0.854166667 per share payable on October 31, 2025[252]. - The regular dividend rate on STRC Stock was increased from 10.25% to 10.50% per annum effective November 1, 2025[287]. - An increase of 0.50% in the regular dividend rate on STRC Stock would result in an additional monthly dividend accrual of approximately $1.2 million[288]. - The company has not historically paid dividends on Class A common stock and does not intend to do so in the future[278].