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MicroStrategy Announces Third Quarter 2023 Financial Results

Business Wire   Nov 01, 2023 23:01
  • 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.

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
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
(Disposed) *

 

 

Approximate
Average
Purchase or
Sale Price Per
Bitcoin

 

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


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