MicroStrategy(US:MSTR)2022-08-02 23:33Financial Data and Key Metrics Changes - GAAP revenues for Q2 2022 were $122 million, down 3% year-over-year, but increased 2% on a constant currency basis [70] - Total software license revenues were $34 million, up 5% year-over-year, or up 8% on a constant currency basis [70] - Cloud subscription service revenues increased by 36% year-over-year, or 40% on a constant currency basis [71] - Total non-GAAP operating loss in Q2 2022 was $903 million, which includes a Bitcoin impairment charge of $918 million [81] Business Line Data and Key Metrics Changes - Subscription revenue increased by 40% year-over-year on a constant currency basis, with current subscription billings growing by 51% year-over-year [53] - Total product license revenues decreased by 9% year-over-year, reflecting the transition to cloud services [71] - Other services revenues, largely from consulting, were $21.4 million, a decrease of 2% year-over-year but an increase of 4% on a constant currency basis [72] Market Data and Key Metrics Changes - The company has successfully raised $2.4 billion in debt and $1 billion in equity over the past two years, expanding its enterprise valuation from approximately $666 million to $5.6 billion [19] - The company holds approximately 129,699 Bitcoins, acquired for a total cost of $4 billion, averaging $30,664 per Bitcoin [65] Company Strategy and Development Direction - The company operates two corporate strategies: growing its enterprise analytics business and acquiring Bitcoin [7] - The transition to cloud-based intelligent services is expected to accelerate, with a focus on increasing brand awareness and customer relationships [34] - The company plans to continue growing its Bitcoin holdings through acquisitions financed by cash flows, debt, and equity [35] Management's Comments on Operating Environment and Future Outlook - Management acknowledges challenges from high inflation, weakening foreign currencies, and geopolitical issues but remains optimistic about growth in cloud services [51] - The company believes that Bitcoin will benefit from ongoing regulatory clarity and increased institutional interest [28] - Management sees Bitcoin's volatility as a competitive advantage, attracting interest and capital [98] Other Important Information - The company has appointed Andrew Kang as Chief Financial Officer and Phong Le as President and CEO, with a focus on enhancing corporate strategy and operations [43][44] - The company plans to launch MicroStrategy Cloud for government, which will have FedRAMP authorization [59] Q&A Session Summary Question: Is the CEO succession a recent development? - The CEO succession has been carefully considered and planned for many years, with a focus on developing leadership from within [91] Question: What changes do you plan to make as a CEO? - The transition is seen as business-as-usual, with no significant changes planned, allowing for clearer roles within the organization [92] Question: Do you anticipate any further capital markets activity? - The company will continue to evaluate access to capital markets in a prudent manner, focusing on opportunities that are most accretive [93][94] Question: What is the growth outlook for the software business in the second half of the year? - The company expects to face more macroeconomic challenges but remains optimistic about growth, particularly in cloud services [95][96] Question: Has Bitcoin price volatility impacted your view on your Bitcoin strategy? - Management views Bitcoin volatility as a competitive advantage, increasing interest and visibility for the company [98][100] Question: How should investors evaluate the new executive work structure? - The new structure is expected to enhance operational efficiency and allow for a stronger focus on corporate strategy and Bitcoin advocacy [110][111]