MicroStrategy Announces Third Quarter 2023 Financial Results
- 6,067 bitcoins acquired since the end of Q2 for $167.0 million, or $27,531 per bitcoin
- 158,400 bitcoin holdings at a total cost of $4.69 billion, or $29,586 per bitcoin, as of October 31, 2023
- Total Revenues of $129.5 million, up 3% year-over-year
- Software Licenses Revenues of $45.0 million, up 16% year-over-year
- Subscription Services Revenues of $21.0 million, up 28% year-over-year
TYSONS CORNER, Va.–(BUSINESS WIRE)–MicroStrategy® Incorporated (Nasdaq: MSTR) (“MicroStrategy” or the “Company”), the largest independent publicly-traded business intelligence company, today announced financial results for the three-month period ended September 30, 2023 (the third quarter of its 2023 fiscal year).
“The business intelligence industry stands at the forefront of innovation with the integration of AI-capabilities, and MicroStrategy was first-to-market with our inaugural MicroStrategy AI software released in the third quarter, which leverages Microsoft Azure OpenAI. Total revenue also grew in the third quarter off the continued growth in cloud as well as a strong quarter in product license revenues. We believe MicroStrategy is well situated to capitalize on both the tailwinds in bitcoin and growth in our BI business,” said Phong Le, President and Chief Executive Officer, MicroStrategy.
“We further increased our total bitcoin holdings to 158,400 bitcoins, adding 6,067 bitcoins since the end of the second quarter. Our commitment to acquire and hold bitcoin remains strong, especially with the promising backdrop of potential increased institutional adoption. And while we continue to grow our strong balance sheet, our Q3 operating results and growth in total revenues reflect the resiliency of our software business and establish a solid foundation to capitalize on AI in BI,” said Andrew Kang, Chief Financial Officer, MicroStrategy.
Third Quarter 2023 Financial Highlights
- Revenues: Total revenues for the third quarter of 2023 were $129.5 million, a 3.3% increase, or a 1.1% increase on a non-GAAP constant currency basis, compared to the third quarter of 2022. Product licenses and subscription services revenues for the third quarter of 2023 were $45.0 million, a 16.3% increase, or a 14.3% increase on a non-GAAP constant currency basis, compared to the third quarter of 2022. Product support revenues for the third quarter of 2023 were $66.9 million, a 1.3% increase, or a 1.0% decrease on a non-GAAP constant currency basis, compared to the third quarter of 2022. Other services revenues for the third quarter of 2023 were $17.6 million, a 14.9% decrease, or a 17.0% decrease on a non-GAAP constant currency basis, compared to the third quarter of 2022.
- Gross Profit: Gross profit for the third quarter of 2023 was $102.8 million, representing a 79.4% gross margin, compared to a gross profit of $100.0 million, representing a gross margin of 79.8%, for the third quarter of 2022.
- Operating Expenses: Operating expenses for the third quarter of 2023 were $128.0 million, a 36.3% increase compared to the third quarter of 2022. Operating expenses include impairment losses on the Company’s digital assets, which were $33.6 million during the third quarter of 2023, compared to $0.7 million in the third quarter of 2022.
- (Loss) Income from Operations and Net Loss: Loss from operations for the third quarter of 2023 was $25.2 million, compared to income from operations of $6.1 million for the third quarter of 2022. Net loss for the third quarter of 2023 was $143.4 million, or $10.09 per share on a diluted basis, as compared to a net loss of $27.1 million, or $2.39 per share on a diluted basis, for the third quarter of 2022. Digital asset impairment losses of $33.6 million and $0.7 million for the third quarter of 2023 and 2022, respectively, were reflected in these amounts. Provision for income taxes of $109.6 million and $24.0 million for the third quarter of 2023 and 2022, respectively, were reflected in net loss, principally reflecting changes in the valuation allowance on the Company’s deferred tax asset related to the impairment on its bitcoin holdings.
- Cash and Cash Equivalents: As of September 30, 2023, the Company had cash and cash equivalents of $45.0 million, as compared to $43.8 million as of December 31, 2022, an increase of $1.2 million.
- Digital Assets: As of September 30, 2023, the carrying value of the Company’s digital assets (comprised of approximately 158,245 bitcoins) was $2.451 billion, which reflects cumulative impairment losses of $2.230 billion since acquisition and an average carrying amount per bitcoin of approximately $15,491. As of September 30, 2023, the original cost basis and market value of the Company’s bitcoin were $4.681 billion and $4.277 billion, respectively, which reflects an average cost per bitcoin of approximately $29,582 and a market price per bitcoin of $27,030.47, respectively.
- Sales Agreement: On August 1, 2023, MicroStrategy entered into a Sales Agreement (the “August 2023 Sales Agreement”) with Cowen and Company, LLC, Canaccord Genuity LLC, and Berenberg Capital Markets LLC, as agents (collectively, the “August 2023 Sales Agents”), pursuant to which MicroStrategy may issue and sell shares of its class A common stock having an aggregate offering price of up to $750.0 million from time to time through the August 2023 Sales Agents. During the three months ended September 30, 2023, the Company issued and sold 403,362 shares of its class A common stock under the August 2023 Sales Agreement for aggregate net proceeds (less sales commissions and expenses) of approximately $147.2 million. As of September 30, 2023, approximately $602.1 million of the Company’s class A common stock remained available for issuance and sale pursuant to the August 2023 Sales Agreement.
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 nine months ended September 30, 2023 and 2022. 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 “Q3 2023 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) income 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.
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.
Conference Call
MicroStrategy will be discussing its third quarter 2023 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) is the largest independent publicly-traded analytics and business intelligence company. The MicroStrategy analytics platform is consistently rated as the best in enterprise analytics and is used by many of the world’s most admired brands in the Fortune Global 500. We pursue two corporate strategies: (1) acquire and hold bitcoin, which we view as a dependable store of value supported by a robust, public, open-source architecture untethered to sovereign monetary policy and (2) grow our enterprise analytics software business to promote our vision of Intelligence Everywhere. For more information about MicroStrategy, visit www.microstrategy.com.
MicroStrategy, 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 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; 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; 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 shifting 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 and 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.
|
MICROSTRATEGY INCORPORATED |
||||||||||||||||
|
CONSOLIDATED STATEMENTS OF OPERATIONS |
||||||||||||||||
|
(in thousands, except per share data) |
||||||||||||||||
|
|
||||||||||||||||
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
|
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
||||
|
Revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Product licenses |
|
$ |
24,045 |
|
|
$ |
22,286 |
|
|
$ |
56,979 |
|
|
$ |
58,928 |
|
|
Subscription services |
|
|
20,974 |
|
|
|
16,414 |
|
|
|
59,662 |
|
|
|
43,276 |
|
|
Total product licenses and subscription services |
|
|
45,019 |
|
|
|
38,700 |
|
|
|
116,641 |
|
|
|
102,204 |
|
|
Product support |
|
|
66,860 |
|
|
|
66,010 |
|
|
|
198,422 |
|
|
|
199,682 |
|
|
Other services |
|
|
17,583 |
|
|
|
20,650 |
|
|
|
56,714 |
|
|
|
64,824 |
|
|
Total revenues |
|
|
129,462 |
|
|
|
125,360 |
|
|
|
371,777 |
|
|
|
366,710 |
|
|
Cost of revenues: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Product licenses |
|
|
342 |
|
|
|
406 |
|
|
|
1,320 |
|
|
|
1,314 |
|
|
Subscription services |
|
|
8,028 |
|
|
|
6,395 |
|
|
|
23,100 |
|
|
|
17,303 |
|
|
Total product licenses and subscription services |
|
|
8,370 |
|
|
|
6,801 |
|
|
|
24,420 |
|
|
|
18,617 |
|
|
Product support |
|
|
5,531 |
|
|
|
5,224 |
|
|
|
17,115 |
|
|
|
15,542 |
|
|
Other services |
|
|
12,760 |
|
|
|
13,360 |
|
|
|
40,188 |
|
|
|
42,107 |
|
|
Total cost of revenues |
|
|
26,661 |
|
|
|
25,385 |
|
|
|
81,723 |
|
|
|
76,266 |
|
|
Gross profit |
|
|
102,801 |
|
|
|
99,975 |
|
|
|
290,054 |
|
|
|
290,444 |
|
|
Operating expenses: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Sales and marketing |
|
|
35,606 |
|
|
|
35,409 |
|
|
|
109,372 |
|
|
|
105,511 |
|
|
Research and development |
|
|
29,660 |
|
|
|
30,498 |
|
|
|
90,372 |
|
|
|
95,811 |
|
|
General and administrative |
|
|
29,223 |
|
|
|
27,283 |
|
|
|
85,959 |
|
|
|
82,491 |
|
|
Digital asset impairment losses |
|
|
33,559 |
|
|
|
727 |
|
|
|
76,613 |
|
|
|
1,088,656 |
|
|
Total operating expenses |
|
|
128,048 |
|
|
|
93,917 |
|
|
|
362,316 |
|
|
|
1,372,469 |
|
|
(Loss) income from operations |
|
|
(25,247 |
) |
|
|
6,058 |
|
|
|
(72,262 |
) |
|
|
(1,082,025 |
) |
|
Interest expense, net |
|
|
(11,006 |
) |
|
|
(14,073 |
) |
|
|
(37,031 |
) |
|
|
(38,299 |
) |
|
Gain on debt extinguishment |
|
|
0 |
|
|
|
0 |
|
|
|
44,686 |
|
|
|
0 |
|
|
Other income, net |
|
|
2,419 |
|
|
|
4,897 |
|
|
|
726 |
|
|
|
12,242 |
|
|
Loss before income taxes |
|
|
(33,834 |
) |
|
|
(3,118 |
) |
|
|
(63,881 |
) |
|
|
(1,108,082 |
) |
|
Provision for (benefit from) income taxes |
|
|
109,607 |
|
|
|
23,961 |
|
|
|
(403,876 |
) |
|
|
112,046 |
|
|
Net (loss) income |
|
$ |
(143,441 |
) |
|
$ |
(27,079 |
) |
|
$ |
339,995 |
|
|
$ |
(1,220,128 |
) |
|
Basic (loss) earnings per share (1) |
|
$ |
(10.09 |
) |
|
$ |
(2.39 |
) |
|
$ |
29.15 |
|
|
$ |
(107.99 |
) |
|
Weighted average shares outstanding used in computing basic (loss) earnings per share |
|
|
14,221 |
|
|
|
11,308 |
|
|
|
11,665 |
|
|
|
11,299 |
|
|
Diluted (loss) earnings per share (1) |
|
$ |
(10.09 |
) |
|
$ |
(2.39 |
) |
|
$ |
23.87 |
|
|
$ |
(107.99 |
) |
|
Weighted average shares outstanding used in computing diluted (loss) earnings per share |
|
|
14,221 |
|
|
|
11,308 |
|
|
|
14,512 |
|
|
|
11,299 |
|
|
(1) |
Basic and fully diluted (loss) earnings per share for class A and class B common stock are the same. |
|
MICROSTRATEGY INCORPORATED |
||||||||
|
CONSOLIDATED BALANCE SHEETS |
||||||||
|
(in thousands, except per share data) |
||||||||
|
|
||||||||
|
|
|
September 30, |
|
|
December 31, |
|
||
|
|
|
2023 |
|
|
2022* |
|
||
|
|
|
(unaudited) |
|
|
|
|
||
|
Assets |
|
|
|
|
|
|
||
|
Current assets |
|
|
|
|
|
|
||
|
Cash and cash equivalents |
|
$ |
45,009 |
|
|
$ |
43,835 |
|
|
Restricted cash |
|
|
1,865 |
|
|
|
7,033 |
|
|
Accounts receivable, net |
|
|
128,650 |
|
|
|
189,280 |
|
|
Prepaid expenses and other current assets |
|
|
24,041 |
|
|
|
24,418 |
|
|
Total current assets |
|
|
199,565 |
|
|
|
264,566 |
|
|
|
|
|
|
|
|
|
||
|
Digital assets |
|
|
2,451,374 |
|
|
|
1,840,028 |
|
|
Property and equipment, net |
|
|
30,192 |
|
|
|
32,311 |
|
|
Right-of-use assets |
|
|
54,542 |
|
|
|
61,299 |
|
|
Deposits and other assets |
|
|
24,156 |
|
|
|
23,916 |
|
|
Deferred tax assets, net |
|
|
614,112 |
|
|
|
188,152 |
|
|
Total Assets |
|
$ |
3,373,941 |
|
|
$ |
2,410,272 |
|
|
|
|
|
|
|
|
|
||
|
Liabilities and Stockholders’ Equity (Deficit) |
|
|
|
|
|
|
||
|
Current liabilities |
|
|
|
|
|
|
||
|
Accounts payable, accrued expenses, and operating lease liabilities |
|
$ |
34,306 |
|
|
$ |
42,976 |
|
|
Accrued compensation and employee benefits |
|
|
43,405 |
|
|
|
53,716 |
|
|
Accrued interest |
|
|
10,368 |
|
|
|
2,829 |
|
|
Current portion of long-term debt, net |
|
|
475 |
|
|
|
454 |
|
|
Deferred revenue and advance payments |
|
|
179,167 |
|
|
|
217,428 |
|
|
Total current liabilities |
|
|
267,721 |
|
|
|
317,403 |
|
|
|
|
|
|
|
|
|
||
|
Long-term debt, net |
|
|
2,180,038 |
|
|
|
2,378,560 |
|
|
Deferred revenue and advance payments |
|
|
7,638 |
|
|
|
12,763 |
|
|
Operating lease liabilities |
|
|
59,720 |
|
|
|
67,344 |
|
|
Other long-term liabilities |
|
|
18,231 |
|
|
|
17,124 |
|
|
Deferred tax liabilities |
|
|
198 |
|
|
|
198 |
|
|
Total liabilities |
|
|
2,533,546 |
|
|
|
2,793,392 |
|
|
|
|
|
|
|
|
|
||
|
Stockholders’ Equity (Deficit) |
|
|
|
|
|
|
||
|
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; 21,227 shares issued and 12,543 shares outstanding, and 18,269 shares issued and 9,585 shares outstanding, respectively |
|
|
21 |
|
|
|
18 |
|
|
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 |
|
|
2,726,191 |
|
|
|
1,841,120 |
|
|
Treasury stock, at cost; 8,684 shares and 8,684 shares, respectively |
|
|
(782,104 |
) |
|
|
(782,104 |
) |
|
Accumulated other comprehensive loss |
|
|
(15,355 |
) |
|
|
(13,801 |
) |
|
Accumulated deficit |
|
|
(1,088,360 |
) |
|
|
(1,428,355 |
) |
|
Total Stockholders’ Equity (Deficit) |
|
|
840,395 |
|
|
|
(383,120 |
) |
|
Total Liabilities and Stockholders’ Equity (Deficit) |
|
$ |
3,373,941 |
|
|
$ |
2,410,272 |
|
|
* Derived from audited financial statements. |
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|
MICROSTRATEGY INCORPORATED |
||||||||
|
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS |
||||||||
|
(in thousands) |
||||||||
|
|
|
|
|
|||||
|
|
|
Nine Months Ended |
|
|||||
|
|
|
September 30, |
|
|||||
|
|
|
2023 |
|
|
2022 |
|
||
|
|
|
(unaudited) |
|
|
(unaudited) |
|
||
|
Net cash provided by operating activities |
|
$ |
11,528 |
|
|
$ |
21,409 |
|
|
Net cash used in investing activities |
|
|
(690,550 |
) |
|
|
(233,329 |
) |
|
Net cash provided by financing activities |
|
|
676,025 |
|
|
|
220,051 |
|
|
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash |
|
|
(997 |
) |
|
|
(5,597 |
) |
|
Net (decrease) increase in cash, cash equivalents, and restricted cash |
|
|
(3,994 |
) |
|
|
2,534 |
|
|
Cash, cash equivalents, and restricted cash, beginning of period |
|
|
50,868 |
|
|
|
64,434 |
|
|
Cash, cash equivalents, and restricted cash, end of period |
|
$ |
46,874 |
|
|
$ |
66,968 |
|
|
MICROSTRATEGY INCORPORATED |
||||||||||||||||
|
REVENUE AND COST OF REVENUE DETAIL |
||||||||||||||||
|
(in thousands) |
||||||||||||||||
|
|
|
|
|
|
|
|
||||||||||
|
|
|
Three Months Ended |
|
|
Nine Months Ended |
|
||||||||||
|
|
|
September 30, |
|
|
September 30, |
|
||||||||||
|
|
|
2023 |
|
|
2022 |
|
|
2023 |
|
|
2022 |
|
||||
|
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
||||
|
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Product licenses and subscription services: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Product licenses |
|
$ |
24,045 |
|
|
$ |
22,286 |
|
|
$ |
56,979 |
|
|
$ |
58,928 |
|
|
Subscription services |
|
|
20,974 |
|
|
|
16,414 |
|
|
|
59,662 |
|
|
|
43,276 |
|
|
Total product licenses and subscription services |
|
|
45,019 |
|
|
|
38,700 |
|
|
|
116,641 |
|
|
|
102,204 |
|
|
Product support |
|
|
66,860 |
|
|
|
66,010 |
|
|
|
198,422 |
|
|
|
199,682 |
|
|
Other services: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Consulting |
|
|
16,676 |
|
|
|
19,545 |
|
|
|
53,993 |
|
|
|
61,253 |
|
|
Education |
|
|
907 |
|
|
|
1,105 |
|
|
|
2,721 |
|
|
|
3,571 |
|
|
Total other services |
|
|
17,583 |
|
|
|
20,650 |
|
|
|
56,714 |
|
|
|
64,824 |
|
|
Total revenues |
|
|
129,462 |
|
|
|
125,360 |
|
|
|
371,777 |
|
|
|
366,710 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Cost of revenues |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Product licenses and subscription services: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Product licenses |
|
|
342 |
|
|
|
406 |
|
|
|
1,320 |
|
|
|
1,314 |
|
|
Subscription services |
|
|
8,028 |
|
|
|
6,395 |
|
|
|
23,100 |
|
|
|
17,303 |
|
|
Total product licenses and subscription services |
|
|
8,370 |
|
|
|
6,801 |
|
|
|
24,420 |
|
|
|
18,617 |
|
|
Product support |
|
|
5,531 |
|
|
|
5,224 |
|
|
|
17,115 |
|
|
|
15,542 |
|
|
Other services: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Consulting |
|
|
12,134 |
|
|
|
12,267 |
|
|
|
38,326 |
|
|
|
38,404 |
|
|
Education |
|
|
626 |
|
|
|
1,093 |
|
|
|
1,862 |
|
|
|
3,703 |
|
|
Total other services |
|
|
12,760 |
|
|
|
13,360 |
|
|
|
40,188 |
|
|
|
42,107 |
|
|
Total cost of revenues |
|
|
26,661 |
|
|
|
25,385 |
|
|
|
81,723 |
|
|
|
76,266 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
|
Gross profit |
|
$ |
102,801 |
|
|
$ |
99,975 |
|
|
$ |
290,054 |
|
|
$ |
290,444 |
|
|
MICROSTRATEGY INCORPORATED |
||||||||||||||||||||||
|
DIGITAL ASSETS – ADDITIONAL INFORMATION |
||||||||||||||||||||||
|
ROLLFORWARD OF BITCOIN HOLDINGS |
||||||||||||||||||||||
|
(unaudited) |
||||||||||||||||||||||
|
|
||||||||||||||||||||||
|
|
|
Source of Capital |
|
Digital Asset |
|
|
Digital Asset |
|
|
Digital Asset |
|
|
Approximate |
|
|
Approximate |
|
|||||
|
Balance at December 31, 2021 |
|
|
|
$ |
3,751,529 |
|
|
$ |
(901,319 |
) |
|
$ |
2,850,210 |
|
|
|
124,391 |
|
|
$ |
30,159 |
|
|
Digital asset purchases |
|
(a) |
|
|
215,500 |
|
|
|
|
|
|
215,500 |
|
|
|
4,827 |
|
|
|
44,645 |
|
|
|
Digital asset impairment losses |
|
|
|
|
|
|
|
(170,091 |
) |
|
|
(170,091 |
) |
|
|
|
|
|
|
|||
|
Balance at March 31, 2022 |
|
|
|
$ |
3,967,029 |
|
|
$ |
(1,071,410 |
) |
|
$ |
2,895,619 |
|
|
|
129,218 |
|
|
$ |
30,700 |
|
|
Digital asset purchases |
|
(b) |
|
|
10,000 |
|
|
|
|
|
|
10,000 |
|
|
|
481 |
|
|
|
20,790 |
|
|
|
Digital asset impairment losses |
|
|
|
|
|
|
|
(917,838 |
) |
|
|
(917,838 |
) |
|
|
|
|
|
|
|||
|
Balance at June 30, 2022 |
|
|
|
$ |
3,977,029 |
|
|
$ |
(1,989,248 |
) |
|
$ |
1,987,781 |
|
|
|
129,699 |
|
|
$ |
30,664 |
|
|
Digital asset purchases |
|
(c) |
|
|
5,978 |
|
|
|
|
|
|
5,978 |
|
|
|
301 |
|
|
|
19,860 |
|
|
|
Digital asset impairment losses |
|
|
|
|
|
|
|
(727 |
) |
|
|
(727 |
) |
|
|
|
|
|
|
|||
|
Balance at September 30, 2022 |
|
|
|
$ |
3,983,007 |
|
|
$ |
(1,989,975 |
) |
|
$ |
1,993,032 |
|
|
|
130,000 |
|
|
$ |
30,639 |
|
|
Digital asset purchases |
|
(d) |
|
|
56,443 |
|
|
|
|
|
|
56,443 |
|
|
|
3,204 |
|
|
|
17,616 |
|
|
|
Digital asset impairment losses |
|
|
|
|
|
|
|
(198,557 |
) |
|
|
(198,557 |
) |
|
|
|
|
|
|
|||
|
Digital asset sales ** |
|
|
|
|
(46,260 |
) |
|
|
35,370 |
|
|
|
(10,890 |
) |
|
|
(704 |
) |
|
|
16,786 |
|
|
Balance at December 31, 2022 |
|
|
|
$ |
3,993,190 |
|
|
$ |
(2,153,162 |
) |
|
$ |
1,840,028 |
|
|
|
132,500 |
|
|
$ |
30,137 |
|
|
Digital asset purchases |
|
(e) |
|
|
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 |
|
(f) |
|
|
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 |
|
(g) |
|
|
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 |
|
|
* |
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. |
|
|
** |
In the fourth quarter of 2022, MicroStrategy sold approximately 704 bitcoins having an original cost basis of $46.3 million and cumulative digital asset impairment losses of $35.4 million, resulting in a carrying value of $10.9 million at the time of sale. The approximately 704 bitcoins were sold for cash proceeds of $11.8 million, net of fees and expenses, resulting in gains on sale of $0.9 million. |
|
|
|
|
|
|
(a) |
In the first quarter of 2022, MicroStrategy purchased bitcoin using $190.5 million of the net proceeds from the issuance of the 2025 Secured Term Loan and Excess Cash. |
|
|
(b) |
In the second quarter of 2022, MicroStrategy purchased bitcoin using Excess Cash. |
|
|
(c) |
In the third quarter of 2022, MicroStrategy purchased bitcoin using Excess Cash. |
|
|
(d) |
In the fourth quarter of 2022, MicroStrategy purchased bitcoin using $44.6 million of the net proceeds from its sale of class A common stock under its at-the-market offering program, and $11.8 million in proceeds from sales of bitcoin. |
|
|
(e) |
In the first quarter of 2023, MicroStrategy purchased bitcoin using $179.3 million of the net proceeds from its sale of class A common stock under its at-the-market offering program. |
|
|
(f) |
In the second quarter of 2023, MicroStrategy purchased bitcoin using $336.9 million of the net proceeds from its sale of class A common stock under its at-the-market offering program, and Excess Cash. |
|
|
(g) |
In the third quarter of 2023, MicroStrategy purchased bitcoin using $147.3 million of the net proceeds from its sale of class A common stock under its at-the-market offering program, and Excess Cash. |
Contacts
MicroStrategy Incorporated
Shirish Jajodia
Investor Relations
ir@microstrategy.com
(703) 848-8600
