MicroStrategy® Incorporated (“Strategy” or the “Company”), the largest corporate holder of bitcoin and the world’s first Bitcoin Treasury Company, today announced financial results for the three-month period ended December 31, 2024 (the fourth quarter of its 2024 fiscal year).
“Earlier today, we announced that we are now Strategy, a new name that powerfully and succinctly conveys the universal and global appeal of our company. Strategy is at the cutting edge of innovation, championing the two most transformative technologies of the 21st century: Bitcoin and AI. We have completed $20 billion of our $42 billion capital plan, significantly ahead of our initial timelines, while leading the digital transformation of capital in the financial markets. Looking ahead to the rest of 2025, we are well-positioned to further enhance shareholder value by leveraging the strong support from institutional and retail investors for our strategic plan,” said Phong Le, President and Chief Executive Officer.
“The fourth quarter of 2024 marked our largest ever increase in quarterly bitcoin holdings, culminating in the acquisition of 218,887 bitcoins acquired for $20.5 billion, since the end of Q3. We carried this strong momentum forward into Q1, raising an additional $584 million through the launch and upsize of the inaugural STRK convertible preferred offering which was supported by both institutional and retail investors. 2025 will take our evolution further with the introduction of the BTC $ Gain KPI and when we adopt fair value accounting for our bitcoin holdings with our Q1 results, transforming our financial results and bringing more transparency to the value generation and profitability of our treasury operations,” said Andrew Kang, Chief Financial Officer.
On August 7, 2024, Strategy completed a 10-for-1 stock split of the Company’s class A and class B common stock. All prior period share and per share information presented herein has been retroactively adjusted to reflect the stock split.
Bitcoin Treasury Highlights
- “BTC Yield” KPI: For the full year 2024, the Company’s BTC Yield was 74.3%. The Company is revising its 2025 target to achieve an annual BTC Yield of more than 15%. BTC Yield is a key performance indicator (“KPI”) that the Company uses to help assess the performance of its strategy of acquiring bitcoin in a manner the Company believes is accretive to shareholders. See “Important Information about BTC Yield, BTC Gain and BTC $ Gain KPIs” in this press release for the definition of BTC Yield and how it is calculated.
- “BTC Gain” and “BTC $ Gain” KPIs: For the full year 2024, the Company’s BTC Gain was 140,538. The Company’s 2025 target is achievement of an annual BTC $ Gain of $10 billion. BTC Gain and BTC $ Gain are KPIs that the Company uses to assess the performance of its strategy of acquiring bitcoin in a manner the Company believes is accretive to shareholders. See “Important Information about BTC Yield, BTC Gain and BTC $ Gain KPIs” in this press release for definitions of BTC Gain and BTC $ Gain and how these metrics are calculated.
- Digital Assets: As of December 31, 2024, the carrying value of Strategy’s digital assets (comprised of approximately 447,470 bitcoins) was $23.909 billion. As of December 31, 2024, the original cost basis and market value of the Company’s bitcoin were $27.968 billion and $41.789 billion, respectively, which reflects an average cost per bitcoin of approximately $62,503 and a market price per bitcoin of $93,390, respectively. On January 1, 2025, we adopted ASU 2023-08. ASU 2023-08 requires us to measure our bitcoin holdings at fair value in our statement of financial position, with gains and losses from change in the fair value of our bitcoin recognized in net income each reporting period. As a result of our adoption of ASU 2023-08, as of January 1, 2025, we are required to apply a cumulative-effect net increase to the opening balance of our retained earnings of $12.745 billion.
- At-the-Market Equity Offering Program: During the three months ended December 31, 2024, the Company issued and sold 42,308,443 shares of its class A common stock for aggregate net proceeds of approximately $15.1 billion. Between January 1, 2025 and February 2, 2025, the Company issued and sold an additional 6,487,654 shares of its class A common stock for aggregate net proceeds of approximately $2.4 billion. As of February 2, 2025, approximately $4.3 billion of the Company’s class A common stock remained available for issuance and sale pursuant to its current at-the-market equity offering program.
- Issuance of 2029 Convertible Notes: In November 2024, the Company issued $3.0 billion aggregate principal amount of 0% Convertible Senior Notes due 2029 (the “2029 Convertible Notes”) with an initial conversion price of $672.40 per share of class A common stock, for net proceeds of approximately $2.97 billion, after deducting the initial purchasers’ discounts and commissions and estimated offering expenses.
- Issuance of Perpetual Strike Preferred Stock: In January 2025, the Company issued 7,300,000 shares of 8.00% Series A Perpetual Strike Preferred Stock (the “perpetual strike preferred stock”), at a public offering price of $80.00 per share for net proceeds of approximately $563.4 million, after deducting the underwriting discounts and commissions and estimated offering expenses. The perpetual strike preferred stock has a liquidation preference of $100 per share and accumulates cumulative dividends on the liquidation preference at a fixed rate of 8.00% per annum.
- Redemption and Conversions of 2027 Convertible Notes: On January 24, 2025, the Company announced that it delivered a notice of redemption (the “Redemption Notice”) to the trustee of its 0.0% Convertible Senior Notes due 2027 (the “2027 Convertible Notes”) for redemption of all $1.05 billion in aggregate principal amount of the 2027 Convertible Notes then outstanding on February 24, 2025 (the “Redemption Date”). As a result of the delivery of the Redemption Notice, at any time prior to 5:00 p.m., New York City time, on February 20, 2025, the 2027 Notes are convertible, at the option of the holders of the 2027 Notes, at the applicable conversion rate of 7.0234 shares of the Company’s class A common stock per $1,000 principal amount (reflecting a conversion price of $142.38 per share).
- In the event that any holder delivers a conversion notice as provided in the indenture related to the 2027 Notes, the Company has elected to satisfy its conversion obligation with respect to each $1,000 principal amount of 2027 Notes by delivering solely shares of its class A common stock, together with cash in lieu of any fractional shares.
- Increase in Authorized Class A Common Stock and Preferred Stock. In January 2025, the Company’s stockholders approved an amendment to the Company’s Certificate of Incorporation increasing the number of authorized shares of class A common Stock from 330,000,000 to 10,330,000,000 and the number of authorized shares of preferred stock from 5,000,000 to 1,005,000,000.
Q4 2024 Software Business Highlights
- Revenues:
- Total revenues were $120.7 million, a 3.0% decrease year-over-year.
- Subscription Services Revenues were $31.9 million, a 48.4% increase year-over-year.
- Product licenses and subscription services revenues were $47.2 million, a 18.3% increase year-over-year.
- Product support revenues were $58.4 million, an 10.8% decrease year-over-year.
- Other services revenues were $15.1 million, an 20.8% decrease year-over-year.
- Gross Profit: Gross profit was $86.5 million, representing a 71.7% gross margin, compared to $96.3 million, representing a gross margin of 77.3%, for the fourth quarter of 2023.
Other Q4 Financial Highlights
- Operating Expenses: Operating expenses were $1.103 billion, a 693.2% increase year-over-year. Operating expenses include impairment losses on Strategy’s digital assets, which were $1.006 billion, compared to $39.2 million in the fourth quarter of 2023.
- Loss from Operations and Net (Loss) Income: Loss from operations was $1.016 billion, compared to $42.8 million for the fourth quarter of 2023. Net loss was $670.8 million, or $3.03 per share on a diluted basis, as compared to net income of $89.1 million, or $0.50 per share on a diluted basis, for the fourth quarter of 2023.
- Cash and Cash Equivalents: As of December 31, 2024, Strategy had cash and cash equivalents of $38.1 million, as compared to $46.8 million as of December 31, 2023, a decrease of $8.7 million.
