Strategy Q4 Earnings Miss Estimates, Revenues Increase Y/Y

Core Insights - Strategy (MSTR) reported a significant fourth-quarter 2025 loss of $42.93 per share, which is much wider than the previous year's loss of $3.03, primarily due to fair-value accounting adjustments on bitcoin rather than operational issues [1][7] - The company's revenues reached $123 million, exceeding the Zacks Consensus Estimate by 2.83%, and showed a year-over-year increase of 1.9% [1][7] Revenue Breakdown - In Q4 2025, product licenses and subscription services revenues rose by 26.3% year over year to $59.6 million, making up 48.5% of total revenues, with subscription services increasing by 62.1% to $51.8 million, while product licenses fell by 48.5% to $7.9 million [2] - Product Support and Other Services revenues decreased by 16.9% and 1.8%, respectively [2] Profitability Metrics - Gross profit declined by 6% year over year to $81.3 million, with gross margin decreasing by 560 basis points to 66.1% [2] - The company reported an operating loss of $17.4 billion, significantly higher than the $1.0 billion loss in the same quarter last year, primarily due to a $17.4 billion unrealized loss on digital asset holdings [3][7] Bitcoin Holdings - Strategy is the largest bitcoin treasury company globally, holding 713,502 bitcoins at a total cost of $54 billion, averaging $76,000 per bitcoin [4] - The bitcoin yield was 23.1% year to date, with a gain of 101,873 bitcoins generating approximately $8.9 billion in value for the full year 2025 [4] Balance Sheet Overview - As of December 31, 2025, cash and cash equivalents stood at $2.3 billion, a significant increase from $54.3 million as of September 30, 2025 [5] - The market value of the company's digital assets was approximately $59.75 billion, reflecting an average market price of $83,740 per bitcoin as of January 30, 2026 [5] Fundraising Activities - In the reported quarter, MSTR raised approximately $5.6 billion, with an additional $3.9 billion raised between January 1, 2026, and February 1, 2026, through various ATM programs [6]