MSTR MicroStrategy Inc

 

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported): August 01, 2024

 

 

MICROSTRATEGY INCORPORATED

(Exact name of Registrant as Specified in Its Charter)

 

 

Delaware			0-24435	51-0323571
(State or Other Jurisdiction of Incorporation)			(Commission File Number)	(IRS Employer Identification No.)
1850 Towers Crescent Plaza
Tysons Corner, Virginia				22182
(Address of Principal Executive Offices)				(Zip Code)

 

Registrant’s Telephone Number, Including Area Code: 703 848-8600

 

(Former Name or Former Address, if Changed Since Last Report)

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Trading Symbol(s)		Name of each exchange on which registered
Class A common stock, par value $0.001 per share		MSTR		The Nasdaq Global Select Market

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§ 230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§ 240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

 

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Item 2.02.	Results of Operations and Financial Condition.

On August 1, 2024, MicroStrategy Incorporated (the “Company”) issued a press release announcing the Company’s financial results for the quarter ended June 30, 2024. A copy of this press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

 

The information disclosed pursuant to Item 2.02 in this Current Report on Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

Item 9.01.	Financial Statements and Exhibits.

(d) Exhibits

Exhibit No.		Description
99.1		Press release, dated August 1, 2024, regarding the Company’s financial results for the quarter ended June 30, 2024.
104		Cover Page Interactive Data File (embedded within the Inline XBRL document).

 

 

 

 

 

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

			MicroStrategy Incorporated
			(Registrant)
Date:	August 1, 2024	By:	/s/ Andrew Kang
			Andrew Kang
			Senior Executive Vice President & Chief Financial Officer

 

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Exhibit 99.1

 

Contact:

MicroStrategy Incorporated

Shirish Jajodia

Investor Relations

ir@microstrategy.com

MicroStrategy Announces

Second Quarter 2024 Financial Results;

Now Holds 226,500 BTC

 

TYSONS CORNER, Va., August 1, 2024 - MicroStrategy® Incorporated (Nasdaq: MSTR) (“MicroStrategy” or the “Company”), the largest corporate holder of bitcoin and the world’s first bitcoin development company, today announced financial results for the three-month period ended June 30, 2024 (the second quarter of its 2024 fiscal year).

“After yet another successful quarter for our bitcoin strategy, MicroStrategy today holds 226,500 bitcoins reflecting a current market value 70% higher than our cost basis. We remain laser focused on our Bitcoin development strategy and intend to continue to achieve positive “BTC Yield,” which is a new KPI that we are introducing, targeting 4-8% annually, over each of the next three years. On the adoption front, we are extremely optimistic with the improved understanding of bitcoin and the increasing support for the ecosystem from bipartisan politicians and institutions on display at the Bitcoin 2024 Conference in Nashville. We also continue to see increased global adoption of our cloud-powered BI and AI software, achieving another quarter of strong double-digit growth in both subscription revenue and subscription billings,” said Phong Le, President and Chief Executive Officer, MicroStrategy.

“In Q2, we successfully raised an additional $800 million through our offering of 2.25% convertible senior notes due 2032 and called for redemption our $650 million convertible senior notes due 2025. Since the beginning of Q2, we grew our bitcoin holdings by adding 12,222 bitcoins through proceeds from our capital markets activities and excess cash. Additionally, we announced a 10-for-1 stock split earlier this month. We continue to closely manage our equity capital, and are filing a registration statement for a new $2 billion at-the-market equity offering program. Through our use of intelligent leverage, we have again achieved a “BTC Yield” of 12.2% year-to-date, which we believe demonstrates significant bitcoin accretion to shareholders,” said Andrew Kang, Chief Financial Officer, MicroStrategy.

The Company previously announced that its board of directors had declared a 10-for-1 stock split of the Company’s class A common stock and class B common stock. The stock split will be effected by means of a stock dividend to the holders of record of the Company’s class A common stock and class B common stock as of the close of business on August 1, 2024, the record date for the dividend. The dividend is expected to be distributed after the close of trading on August 7, 2024. Trading is expected to commence on a split-adjusted basis at market open on August 8, 2024. All information contained herein is presented on a pre-split basis.

Second Quarter 2024 Financial Highlights

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The tables provided at the end of this press release include a reconciliation of the most directly comparable financial measures prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) to non-GAAP financial measures for the three and six months ended June 30, 2024 and 2023. An explanation of non-GAAP financial measures is also included under the heading “Non-GAAP Financial Measures” below. Additional non-GAAP financial measures are included in MicroStrategy’s “Q2 2024 Earnings Presentation,” which will be available under the “Events and Presentations” section of MicroStrategy’s investor relations website at https://www.microstrategy.com/en/investor-relations.

Non-GAAP Financial Measures

MicroStrategy is providing supplemental financial measures for (i) non-GAAP loss from operations that excludes the impact of share-based compensation expense, (ii) non-GAAP net (loss) income and non-GAAP diluted (loss) earnings per share that exclude the impacts of share-based compensation expense, interest expense arising from the amortization of debt issuance costs related to MicroStrategy’s long-term debt, gain on debt extinguishment, and related income tax effects, and (iii) non-GAAP constant currency revenues that exclude certain foreign currency exchange rate fluctuations. These supplemental financial measures are not measurements of financial performance under GAAP and, as a result, these supplemental financial measures may not be comparable to similarly titled measures of other companies. Management uses these non-GAAP financial measures internally to help understand, manage, and evaluate business performance and to help make operating decisions.

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MicroStrategy believes that these non-GAAP financial measures are also useful to investors and analysts in comparing its performance across reporting periods on a consistent basis. The first supplemental financial measure excludes a significant non-cash expense that MicroStrategy believes is not reflective of its general business performance, and for which the accounting requires management judgment and the resulting share-based compensation expense could vary significantly in comparison to other companies. The second set of supplemental financial measures excludes the impacts of (i) share-based compensation expense, (ii) non-cash interest expense arising from the amortization of debt issuance costs related to MicroStrategy’s long-term debt, (iii) a gain on debt extinguishment, and (iv) related income tax effects. The third set of supplemental financial measures excludes changes resulting from certain fluctuations in foreign currency exchange rates so that results may be compared to the same period in the prior year on a non-GAAP constant currency basis. MicroStrategy believes the use of these non-GAAP financial measures can also facilitate comparison of MicroStrategy’s operating results to those of its competitors.

Important Information about BTC Yield KPI

BTC Yield is a key performance indicator (“KPI”) that represents the % change period-to-period of the ratio between the Company’s bitcoin holdings and its Assumed Diluted Shares Outstanding. Assumed Diluted Shares Outstanding refers to the aggregate of the Company’s actual shares of common stock outstanding as of the end of each period plus all additional shares that would result from the assumed conversion of all outstanding convertible notes, exercise of all outstanding stock option awards, and settlement of all outstanding restricted stock units and performance stock units. Assumed Diluted Shares Outstanding is not calculated using the treasury method and does not take into account any vesting conditions (in the case of equity awards), the exercise price of any stock option awards or any contractual conditions limiting convertibility of convertible debt instruments.

The Company uses BTC Yield as a KPI to help assess the performance of its strategy of acquiring bitcoin in a manner the Company believes is accretive to shareholders. The Company believes this KPI can be used to supplement an investor’s understanding of its decision to fund the purchase of bitcoin by issuing additional shares of its common stock or instruments convertible to common stock. When the Company uses this KPI, management also takes into account the various limitations of this metric, including that it does not take into account debt and other liabilities and claims on company assets that would be senior to common equity and that it assumes that all indebtedness will be refinanced or, in the case of the Company’s senior convertible debt instruments, converted into shares of common stock in accordance with their respective terms.

Additionally, this KPI is not, and should not be understood as, an operating performance measure or a financial or liquidity measure. In particular, BTC Yield is not equivalent to “yield” in the traditional financial context. It is not a measure of the return on investment the Company’s shareholders may have achieved historically or can achieve in the future by purchasing stock of the Company, or a measure of income generated by the Company’s operations or its bitcoin holdings, return on investment on its bitcoin holdings, or any other similar financial measure of the performance of its business or assets.

The trading price of the Company’s class A common stock is informed by numerous factors in addition to the amount of bitcoins the Company holds and number of actual or potential shares of its stock outstanding, and as a result, the market value of the Company’s shares may trade at a discount or a premium relative to the market value of the bitcoin the Company holds, and BTC Yield is not indicative nor predictive of the trading price of the Company’s shares of class A common stock.

As noted above, this KPI is narrow in its purpose and is used by management to assist it in assessing whether the Company is using equity capital in a manner accretive to shareholders solely as it pertains to its bitcoin holdings.

In calculating this KPI, the Company does not take into account the source of capital used for the acquisition of its bitcoin. The Company notes in particular, it has acquired bitcoin using proceeds from the offerings of its 6.125% Senior Secured Notes due 2028 (the “Senior Secured Notes”) as well as convertible senior notes, which currently are not exercisable or have conversion prices above the current trading prices of the Class A common stock, each of which would have the effect of increasing the BTC Yield without taking into account the corresponding debt. Conversely, if any of the Company’s convertible senior notes mature or are redeemed without being converted into common stock or the Company needs cash to repay the Senior Secured Notes, the Company may be required to sell shares in quantities greater than the shares such notes are convertible into or generate cash proceeds from the sale of bitcoin, either of which would have the effect of decreasing the BTC Yield due to changes in the Company’s bitcoin holdings and shares in ways that were not contemplated by the assumptions in calculating BTC Yield. Accordingly, this metric might overstate or understate the accretive nature of the Company’s use of equity capital to buy bitcoin because not all bitcoin may be acquired using proceeds of equity offerings and not all issuances of equity may involve the acquisition of bitcoin.

The Company determines its KPI targets based on its history and future goals. The Company’s ability to achieve positive BTC Yield may depend on a variety of factors, including its ability to generate cash from operations in excess of its fixed charges and other expenses, as well as factors outside of its control, such as the availability of debt and equity financing on favorable terms. Past performance is not indicative of future results.

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The Company has historically not paid any dividends on its shares of common stock, and by presenting this KPI the Company makes no suggestion that it intends to do so in the future. Ownership of common stock does not represent an ownership interest in the bitcoin the Company holds.

Investors should rely on the financial statements and other disclosures contained in the Company’s SEC filings. This KPI is merely a supplement, not a substitute. It should be used only by sophisticated investors who understand its limited purpose and many limitations.

Conference Call

 

MicroStrategy will be discussing its second quarter 2024 financial results on a live Video Webinar today beginning at approximately 5:00 p.m. ET. The live Video Webinar and accompanying presentation materials will be available under the “Events and Presentations” section of MicroStrategy’s investor relations website at https://www.microstrategy.com/en/investor-relations. Log-in instructions will be available after registering for the event. An archived replay of the event will be available beginning approximately two hours after the call concludes.

About MicroStrategy Incorporated

MicroStrategy (Nasdaq: MSTR) considers itself the world’s first Bitcoin development company. We are a publicly-traded operating company committed to the continued development of the Bitcoin network through our activities in the financial markets, advocacy and technology innovation. As an operating business, we are able to use cashflows as well as proceeds from equity and debt financings to accumulate bitcoin, which serves as our primary treasury reserve asset. We also develop and provide industry-leading AI-powered enterprise analytics software that promotes our vision of Intelligence Everywhere, and are using our software development capabilities to develop bitcoin applications. We believe that the combination of our operating structure, bitcoin strategy and focus on technology innovation provides a unique opportunity for value creation. For more information about MicroStrategy, visit www.microstrategy.com.

MicroStrategy, MicroStrategy AI, Intelligence Everywhere, Intelligent Enterprise, and MicroStrategy Library are either trademarks or registered trademarks of MicroStrategy Incorporated in the United States and certain other countries. Other product and company names mentioned herein may be the trademarks of their respective owners.

This press release may include statements that may constitute “forward-looking statements,” including estimates of future business prospects or financial results, our targets relating to our BTC Yield, and statements containing the words “believe,” “estimate,” “project,” “expect,” “will,” or similar expressions. Forward-looking statements inherently involve risks and uncertainties that could cause actual results of MicroStrategy Incorporated and its subsidiaries (collectively, the “Company”) to differ materially from the forward-looking statements. Factors that could contribute to such differences include: fluctuations in the market price of bitcoin and any associated impairment charges that the Company may incur as a result of a decrease in the market price of bitcoin below the value at which the Company’s bitcoins are carried on its balance sheet; the availability of debt and equity financing on favorable terms; gains or losses on any sales of bitcoins; changes in the accounting treatment relating to the Company’s bitcoin holdings; changes in securities laws or other laws or regulations, or the adoption of new laws or regulations, relating to bitcoin that adversely affect the price of bitcoin or the Company’s ability to transact in or own bitcoin; the impact of the availability of spot exchange traded products for bitcoin and other digital assets; a decrease in liquidity in the markets in which bitcoin is traded; security breaches, cyberattacks, unauthorized access, loss of private keys, fraud or other circumstances or events that result in the loss of the Company’s bitcoins; impacts to the price and rate of adoption of bitcoin associated with financial difficulties and bankruptcies of various participants in the digital asset industry; the level and terms of the Company’s substantial indebtedness and its ability to service such debt; the extent and timing of market acceptance of the Company’s new product offerings; continued acceptance of the Company’s other products in the marketplace; the Company’s ability to recognize revenue or deferred revenue through delivery of products or satisfactory performance of services; the timing of significant orders; delays in or the inability of the Company to develop or ship new products; customers continuing to shift from a product license model to a cloud subscription model, which may delay the Company’s ability to recognize revenue; fluctuations in tax benefits or provisions; changes in the market price of bitcoin as of period-end and their effect on our deferred tax assets and related valuation allowance; other potentially adverse tax consequences; competitive factors; general economic conditions, including levels of inflation and interest rates; currency fluctuations; and other risks detailed in MicroStrategy’s registration statements and periodic reports filed with the Securities and Exchange Commission (“SEC”). The Company undertakes no obligation to update these forward-looking statements for revisions or changes after the date of this release.

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MICROSTRATEGY INCORPORATED

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

 

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2024				2023				2024				2023
		(unaudited)				(unaudited)				(unaudited)				(unaudited)
Revenues:
Product licenses		$	9,286			$	15,522			$	22,224			$	32,934
Subscription services			24,080				19,878				47,046				38,688
Total product licenses and subscription services			33,366				35,400				69,270				71,622
Product support			61,740				66,081				124,425				131,562
Other services			16,336				18,919				32,993				39,131
Total revenues			111,442				120,400				226,688				242,315
Cost of revenues:
Product licenses			794				444				1,361				978
Subscription services			9,560				7,216				18,164				15,072
Total product licenses and subscription services			10,354				7,660				19,525				16,050
Product support			8,193				5,816				16,740				11,584
Other services			12,388				13,645				24,685				27,428
Total cost of revenues			30,935				27,121				60,950				55,062
Gross profit			80,507				93,279				165,738				187,253
Operating expenses:
Sales and marketing			34,251				37,660				67,702				73,766
Research and development			30,311				29,354				59,494				60,712
General and administrative			36,129				28,830				70,795				56,736
Digital asset impairment losses			180,090				24,143				371,723				43,054
Total operating expenses			280,781				119,987				569,714				234,268
Loss from operations			(200,274	)			(26,708	)			(403,976	)			(47,015	)
Interest expense, net			(15,466	)			(11,095	)			(27,347	)			(26,025	)
Gain on debt extinguishment			0				0				0				44,686
Other income (expense), net			694				(250	)			2,390				(1,693	)
Loss before income taxes			(215,046	)			(38,053	)			(428,933	)			(30,047	)
Benefit from income taxes			(112,487	)			(60,296	)			(273,256	)			(513,483	)
Net (loss) income		$	(102,559	)		$	22,243			$	(155,677	)		$	483,436
Basic (loss) earnings per share (1)		$	(5.74	)		$	1.68			$	(8.88	)		$	41.18
Weighted average shares outstanding used in computing basic (loss) earnings per share			17,861				13,247				17,533				11,739
Diluted (loss) earnings per share (1)		$	(5.74	)		$	1.52			$	(8.88	)		$	33.56
Weighted average shares outstanding used in computing diluted (loss) earnings per share			17,861				16,095				17,533				14,534

 

(1) Basic and fully diluted (loss) earnings per share for class A and class B common stock are the same.

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MICROSTRATEGY INCORPORATED

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

 

		June 30,				December 31,
		2024				2023*
		(unaudited)
Assets
Current assets
Cash and cash equivalents		$	66,923			$	46,817
Restricted cash			1,878				1,856
Accounts receivable, net			112,234				183,815
Prepaid expenses and other current assets			27,234				35,407
Total current assets			208,269				267,895
Digital assets			5,687,890				3,626,476
Property and equipment, net			28,332				28,941
Right-of-use assets			53,591				57,343
Deposits and other assets			43,449				24,300
Deferred tax assets, net			1,031,542				757,573
Total Assets		$	7,053,073			$	4,762,528
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable, accrued expenses, and operating lease liabilities		$	44,188			$	43,090
Accrued compensation and employee benefits			46,853				50,045
Accrued interest			5,066				1,493
Current portion of long-term debt, net			145,119				483
Deferred revenue and advance payments			204,837				228,162
Total current liabilities			446,063				323,273
Long-term debt, net			3,703,381				2,182,108
Deferred revenue and advance payments			5,964				8,524
Operating lease liabilities			56,544				61,086
Other long-term liabilities			5,965				22,208
Deferred tax liabilities			357				357
Total liabilities			4,218,274				2,597,556
Stockholders’ Equity
Preferred stock undesignated, $0.001 par value; 5,000 shares authorized; no shares issued or outstanding			0				0
Class A common stock, $0.001 par value; 330,000 shares authorized; 25,787 shares issued and 17,103 shares outstanding, and 23,588 shares issued and 14,904 shares outstanding, respectively			26				24
Class B convertible common stock, $0.001 par value; 165,000 shares authorized; 1,964 shares issued and outstanding, and 1,964 shares issued and outstanding, respectively			2				2
Additional paid-in capital			4,785,336				3,957,728
Treasury stock, at cost; 8,684 shares and 8,684 shares, respectively			(782,104	)			(782,104	)
Accumulated other comprehensive loss			(13,550	)			(11,444	)
Accumulated deficit			(1,154,911	)			(999,234	)
Total Stockholders’ Equity			2,834,799				2,164,972
Total Liabilities and Stockholders’ Equity		$	7,053,073			$	4,762,528

 

* Derived from audited financial statements.

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MICROSTRATEGY INCORPORATED

CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS

(in thousands)

 

		Six Months Ended
		June 30,
		2024				2023
		(unaudited)				(unaudited)
Net cash provided by operating activities		$	5,258			$	18,925
Net cash used in investing activities			(2,435,405	)			(527,416	)
Net cash provided by financing activities			2,451,831				525,911
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash			(1,556	)			(235	)
Net increase in cash, cash equivalents, and restricted cash			20,128				17,185
Cash, cash equivalents, and restricted cash, beginning of period			48,673				50,868
Cash, cash equivalents, and restricted cash, end of period		$	68,801			$	68,053

 

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MICROSTRATEGY INCORPORATED

DIGITAL ASSETS – ADDITIONAL INFORMATION

ROLLFORWARD OF BITCOIN HOLDINGS

(unaudited)

 

		Source of Capital Used to Purchase Bitcoin		Digital Asset Original Cost Basis (in thousands)				Digital Asset Impairment Losses (in thousands)				Digital Asset Carrying Value (in thousands)				Approximate Number of Bitcoins Held *				Approximate Average Purchase Price Per Bitcoin
Balance at December 31, 2022				$	3,993,190			$	(2,153,162	)		$	1,840,028				132,500			$	30,137
Digital asset purchases		(a)			179,275								179,275				7,500				23,903
Digital asset impairment losses									(18,911	)			(18,911	)
Balance at March 31, 2023				$	4,172,465			$	(2,172,073	)		$	2,000,392				140,000			$	29,803
Digital asset purchases		(b)			347,003								347,003				12,333				28,136
Digital asset impairment losses									(24,143	)			(24,143	)
Balance at June 30, 2023				$	4,519,468			$	(2,196,216	)		$	2,323,252				152,333			$	29,668
Digital asset purchases		(c)			161,681								161,681				5,912				27,348
Digital asset impairment losses									(33,559	)			(33,559	)
Balance at September 30, 2023				$	4,681,149			$	(2,229,775	)		$	2,451,374				158,245			$	29,582
Digital asset purchases		(d)			1,214,340								1,214,340				30,905				39,293
Digital asset impairment losses									(39,238	)			(39,238	)
Balance at December 31, 2023				$	5,895,489			$	(2,269,013	)		$	3,626,476				189,150			$	31,168
Digital asset purchases		(e)			1,639,309								1,639,309				25,128				65,238
Digital asset impairment losses									(191,633	)			(191,633	)
Balance at March 31, 2024				$	7,534,798			$	(2,460,646	)		$	5,074,152				214,278			$	35,164
Digital asset purchases		(f)			793,828								793,828				12,053				65,861
Digital asset impairment losses									(180,090	)			(180,090	)
Balance at June 30, 2024				$	8,328,626			$	(2,640,736	)		$	5,687,890				226,331			$	36,798

 

* MicroStrategy owns and has purchased bitcoins both directly and indirectly through its wholly-owned subsidiary, MacroStrategy. References to MicroStrategy below refer to MicroStrategy and its subsidiaries on a consolidated basis.

 

 

Excess Cash refers to cash in excess of the minimum Cash Assets that MicroStrategy is required to hold under its Treasury Reserve Policy, which may include cash generated by operating activities and cash from the proceeds of financing activities. Cash Assets refers to cash and cash equivalents and short-term investments.

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MICROSTRATEGY INCORPORATED

DIGITAL ASSETS – ADDITIONAL INFORMATION

MARKET VALUE OF BITCOIN HOLDINGS

(unaudited)

 

		Approximate Number of Bitcoins Held at End of Quarter *				Lowest Market Price Per Bitcoin During Quarter (a)				Market Value of Bitcoin Held at End of Quarter Using Lowest Market Price (in thousands) (b)				Highest Market Price Per Bitcoin During Quarter (c)				Market Value of Bitcoin Held at End of Quarter Using Highest Market Price (in thousands) (d)				Market Price Per Bitcoin at End of Quarter (e)				Market Value of Bitcoin Held at End of Quarter Using Ending Market Price (in thousands) (f)
December 31, 2022			132,500			$	15,460.00			$	2,048,450			$	21,478.80			$	2,845,941			$	16,556.32			$	2,193,712
March 31, 2023			140,000			$	16,490.00			$	2,308,600			$	29,190.04			$	4,086,606			$	28,468.44			$	3,985,582
June 30, 2023			152,333			$	24,750.00			$	3,770,242			$	31,443.67			$	4,789,909			$	30,361.51			$	4,625,060
September 30, 2023			158,245			$	24,900.00			$	3,940,301			$	31,862.21			$	5,042,035			$	27,030.47			$	4,277,437
December 31, 2023			189,150			$	26,521.32			$	5,016,508			$	45,000.00			$	8,511,750			$	42,531.41			$	8,044,816
March 31, 2024			214,278			$	38,501.00			$	8,249,917			$	73,835.57			$	15,821,338			$	71,028.14			$	15,219,768
June 30, 2024			226,331			$	56,500.00			$	12,787,702			$	72,777.00			$	16,471,691			$	61,926.69			$	14,015,930

 

* MicroStrategy owns and has purchased bitcoins both directly and indirectly through its wholly-owned subsidiary, MacroStrategy. References to MicroStrategy below refer to MicroStrategy and its subsidiaries on a consolidated basis.

 

 

The amounts reported as “Market Value” in the above table represent only a mathematical calculation consisting of the price for one bitcoin reported on the Coinbase exchange (MicroStrategy’s principal market for bitcoin) in each scenario defined above multiplied by the number of bitcoins held by MicroStrategy at the end of the applicable period. Bitcoin and bitcoin markets may be subject to manipulation and the spot price of bitcoin may be subject to fraud and manipulation. Accordingly, the Market Value amounts reported above may not accurately represent fair market value, and the actual fair market value of MicroStrategy’s bitcoin may be different from such amounts and such deviation may be material. Moreover, (i) the bitcoin market historically has been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign currencies markets, relative anonymity, a developing regulatory landscape, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various other risks that are, or may be, inherent in its entirely electronic, virtual form and decentralized network and (ii) MicroStrategy may not be able to sell its bitcoins at the Market Value amounts indicated above, at the market price as reported on the Coinbase exchange (its principal market) on the date of sale, or at all.

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MICROSTRATEGY INCORPORATED

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

LOSS FROM OPERATIONS

(in thousands)

 

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2024				2023				2024				2023
		(unaudited)				(unaudited)				(unaudited)				(unaudited)
Reconciliation of non-GAAP loss from operations:
Loss from operations		$	(200,274	)		$	(26,708	)		$	(403,976	)		$	(47,015	)
Share-based compensation expense			20,621				15,494				38,412				33,049
Non-GAAP loss from operations		$	(179,653	)		$	(11,214	)		$	(365,564	)		$	(13,966	)

 

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MICROSTRATEGY INCORPORATED

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

NET (LOSS) INCOME AND DILUTED (LOSS) EARNINGS PER SHARE

(in thousands, except per share data)

 

		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2024				2023				2024				2023
		(unaudited)				(unaudited)				(unaudited)				(unaudited)
Reconciliation of non-GAAP net (loss) income:
Net (loss) income		$	(102,559	)		$	22,243			$	(155,677	)		$	483,436
Share-based compensation expense			20,621				15,494				38,412				33,049
Interest expense arising from amortization of debt issuance costs			3,842				2,190				6,399				4,400
Gain on debt extinguishment			0				0				0				(44,686	)
Income tax effects (1)			(57,962	)			(2,998	)			(167,200	)			5,768
Non-GAAP net (loss) income		$	(136,058	)		$	36,929			$	(278,066	)		$	481,967
Reconciliation of non-GAAP diluted (loss) earnings per share (2):
Diluted (loss) earnings per share		$	(5.74	)		$	1.52			$	(8.88	)		$	33.56
Share-based compensation expense (per diluted share)			1.15				0.96				2.19				2.27
Interest expense arising from amortization of debt issuance costs (per diluted share) (3)			0.22				0.03				0.37				0.06
Gain on debt extinguishment (per diluted share)			0.00				0.00				0.00				(3.07	)
Income tax effects (per diluted share) (3)			(3.25	)			(0.16	)			(9.54	)			0.46
Non-GAAP diluted (loss) earnings per share		$	(7.62	)		$	2.35			$	(15.86	)		$	33.28

 

 

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MICROSTRATEGY INCORPORATED

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

CONSTANT CURRENCY

(in thousands)

 

		Three Months Ended
		June 30,
		(unaudited)
		GAAP				Foreign Currency Exchange Rate Impact (1)				Non-GAAP Constant Currency (2)				GAAP				GAAP % Change				Non-GAAP Constant Currency % Change (3)
		2024				2024				2024				2023				2024				2024
Revenues
Product licenses		$	9,286			$	(20	)		$	9,306			$	15,522				-40.2	%			-40.0	%
Subscription services			24,080				(125	)			24,205				19,878				21.1	%			21.8	%
Total product licenses and subscription services			33,366				(145	)			33,511				35,400				-5.7	%			-5.3	%
Product support			61,740				(364	)			62,104				66,081				-6.6	%			-6.0	%
Other services			16,336				(146	)			16,482				18,919				-13.7	%			-12.9	%
Total revenues			111,442				(655	)			112,097				120,400				-7.4	%			-6.9	%

 

		Six Months Ended
		June 30,
		(unaudited)
		GAAP				Foreign Currency Exchange Rate Impact (1)				Non-GAAP Constant Currency (2)				GAAP				GAAP % Change				Non-GAAP Constant Currency % Change (3)
		2024				2024				2024				2023				2024				2024
Revenues
Product licenses		$	22,224			$	(102	)		$	22,326			$	32,934				-32.5	%			-32.2	%
Subscription services			47,046				(39	)			47,085				38,688				21.6	%			21.7	%
Total product licenses and subscription services			69,270				(141	)			69,411				71,622				-3.3	%			-3.1	%
Product support			124,425				(120	)			124,545				131,562				-5.4	%			-5.3	%
Other services			32,993				(88	)			33,081				39,131				-15.7	%			-15.5	%
Total revenues			226,688				(349	)			227,037				242,315				-6.4	%			-6.3	%

 

 

 

 

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MICROSTRATEGY INCORPORATED

DEFERRED REVENUE DETAIL

(in thousands)

 

		June 30,				December 31,				June 30,
		2024				2023*				2023
		(unaudited)								(unaudited)
Current:										
Deferred product licenses revenue		$	4,200			$	3,579			$	974
Deferred subscription services revenue			69,566				65,512				49,898
Deferred product support revenue			127,170				152,012				141,605
Deferred other services revenue			3,901				7,059				3,340
Total current deferred revenue and advance payments		$	204,837			$	228,162			$	195,817

Non-current:
Deferred product licenses revenue		$	0			$	0			$	2,493
Deferred subscription services revenue			1,623				3,097				2,888
Deferred product support revenue			3,974				4,984				5,340
Deferred other services revenue			367				443				523
Total non-current deferred revenue and advance payments		$	5,964			$	8,524			$	11,244

Total current and non-current:
Deferred product licenses revenue		$	4,200			$	3,579			$	3,467
Deferred subscription services revenue			71,189				68,609				52,786
Deferred product support revenue			131,144				156,996				146,945
Deferred other services revenue			4,268				7,502				3,863
Total current and non-current deferred revenue and advance payments		$	210,801			$	236,686			$	207,061

 

* Derived from audited financial statements.

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MICROSTRATEGY INCORPORATED

SEGMENT INFORMATION

(in thousands, unaudited)

 

		Three Months Ended June 30, 2024												Three Months Ended June 30, 2023
		Software Business				Corporate & Other				Total Consolidated				Software Business				Corporate & Other				Total Consolidated
Total revenues		$	111,442							$	111,442			$	120,400							$	120,400
Total cost of revenues			30,935								30,935				27,121								27,121
Gross profit		$	80,507							$	80,507			$	93,279							$	93,279
Total operating expenses			99,236				181,545				280,781				95,521				24,466				119,987
Loss from operations		$	(18,729	)		$	(181,545	)		$	(200,274	)		$	(2,242	)		$	(24,466	)		$	(26,708	)

 

		Six Months Ended June 30, 2024												Six Months Ended June 30, 2023
		Software Business				Corporate & Other				Total Consolidated				Software Business				Corporate & Other				Total Consolidated
Total revenues		$	226,688							$	226,688			$	242,315							$	242,315
Total cost of revenues			60,950								60,950				55,062								55,062
Gross profit		$	165,738							$	165,738			$	187,253							$	187,253
Total operating expenses			195,359				374,355				569,714				190,008				44,260				234,268
Loss from operations		$	(29,621	)		$	(374,355	)		$	(403,976	)		$	(2,755	)		$	(44,260	)		$	(47,015	)

 

MicroStrategy manages its business in one reportable operating segment which is engaged in the design, development, marketing, and sales of its software platform through licensing arrangements and cloud subscriptions and related services. Beginning in 2024, MicroStrategy has broken out a Corporate & Other category, which is not considered an operating segment, and includes the impairment charges and other third-party costs associated with its digital asset holdings.

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v3.24.2.u1

Document And Entity Information	Aug. 01, 2024
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Aug. 01, 2024
Entity Registrant Name	MicroStrategy Inc
Entity Central Index Key	0001050446
Entity Emerging Growth Company	false
Entity File Number	0-24435
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	51-0323571
Entity Address, Address Line One	1850 Towers Crescent Plaza
Entity Address, City or Town	Tysons Corner
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	22182
City Area Code	703
Local Phone Number	848-8600
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Class A common stock, par value $0.001 per share
Trading Symbol	MSTR
Security Exchange Name	NASDAQ

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