MicroStrategy Q2 2024 Financial Results

MicroStrategy Incorporated, the largest corporate holder of bitcoin and the world’s first bitcoin development company, has released its financial results for the second quarter of 2024. The company continues to focus on its bitcoin strategy and has introduced a new key performance indicator, "BTC Yield," to measure the performance of its bitcoin holdings relative to its equity capital.

Financial Highlights

For the three-month period ended June 30, 2024, MicroStrategy reported a net loss of $102.6 million, or $5.74 per share on a diluted basis, compared to a net income of $22.2 million, or $1.52 per share on a diluted basis, for the same period in 2023. The company’s total revenues were $111.4 million, a 7.4% decrease compared to the second quarter of 2023. Subscription services revenues, however, saw a 21.1% increase year-over-year, reaching $24.1 million.

Business and Operational Highlights

MicroStrategy's bitcoin holdings have grown significantly, with the company now holding 226,500 bitcoins at a total cost of $8.3 billion. The company acquired 12,222 bitcoins since the beginning of Q2 for $805.2 million, or $65,882 per bitcoin. The carrying value of the company’s digital assets as of June 30, 2024, was $5.688 billion, reflecting cumulative impairment losses of $2.641 billion since acquisition.

In terms of operational performance, the company achieved a "BTC Yield" of 12.2% year-to-date and is targeting an annual BTC Yield of 4-8% from 2025-2027. Additionally, the company saw strong growth in its cloud-powered BI and AI software, with subscription services revenues up 21% year-over-year.

Strategic Initiatives and Corporate Developments

MicroStrategy announced a 10-for-1 stock split effective August 7, 2024. The company also raised $800 million through the offering of 2.25% convertible senior notes due 2032 and called for redemption of its $650 million convertible senior notes due 2025. Furthermore, MicroStrategy is filing a registration statement for a new $2 billion at-the-market equity offering program.

Management's Perspective

Phong Le, President and CEO of MicroStrategy, expressed optimism about the company's bitcoin strategy and the increasing support for the bitcoin ecosystem. He highlighted the company's focus on achieving positive BTC Yield and the strong growth in subscription revenue and billings. Andrew Kang, CFO, emphasized the company's intelligent leverage and the significant bitcoin accretion to shareholders demonstrated by the 12.2% BTC Yield year-to-date.

Future Outlook

MicroStrategy is targeting an annual BTC Yield of 4-8% from 2025-2027. The company remains committed to its bitcoin development strategy and expects to continue achieving positive BTC Yield over the next three years. The company also anticipates continued growth in its cloud-powered BI and AI software.

SEC Filing: MICROSTRATEGY Inc [ MSTR ] - 8-K - Aug. 01, 2024