01—Abstract
Summary
Summary of the 10-Q filed August 3, 2026. Cited figures are marked; the original filing is the authoritative source.
Strategy Inc reported a net loss of $8.22 billiona for the three months ended June 30, 2026 and a net loss of $20.76 billion for the six months, compared with net income of $10.02 billion and $5.80 billion in the prior-year periods.
The swing is driven by an unrealized loss on digital assets of $8.32 billionb in the quarter and $22.77 billion year to date, reflecting a decline in bitcoin's market price. Total revenues were $122.4 million for the quarter, up from $114.5 million, and the Software segment remains the only source of revenue. Bitcoin holdings rose to approximately 846,000 bitcoins at June 30, 2026, with a fair value of $49.67 billion against a cost basis of $63.94 billion, and the company recorded a full valuation allowance on its domestic net deferred tax assets.
The balance sheet shifted meaningfully during the period. Preferred stock in mezzanine equity rose to $14.44 billionc, driven largely by STRC Stock sales under the ATM program, and preferred dividends paid for the six months totaled $629.2 million. The company repurchased $1.50 billion principal of its 2029 Convertible Notes for $1.38 billion, recognizing a gain on extinguishment of $113.9 million, and total debt principal stood at about $6.75 billion.
The company established a USD Reserve of $2.40 billiond at June 30, 2026, which it states covers about 16 months of expected annual preferred dividends and interest of approximately $1.76 billion. On June 29, 2026, the board authorized a Digital Credit Capital Framework, including repurchase programs of up to $1.0 billion each for preferred stock and class A common stock and a BTC Monetization Program. Subsequent to June 30, 2026, the company sold approximately 2,225 bitcoins for gross proceeds of about $135.2 million and repurchased 288,930 shares of STRC Stock for $25.0 million.
As of July 24, 2026, it held approximately 843,775 bitcoins with a market value of $54.14 billion. The filing states that the company does not expect its software operations to generate sufficient cash to meet its short-term or long-term liquidity needs, so it depends on the USD Reserve, bitcoin sales, and ATM issuances. It also reports a new Bitcoin reportable segment, effective the second quarter of 2026, with prior periods recast.
02—Key points
Key Highlights
- Net loss of $8.22 billion for Q2 2026 versus net income of $10.02 billion in Q2 2025, driven by an $8.32 billion unrealized loss on digital assets.
- Total revenues of $122.4 million for Q2 2026, up from $114.5 million, all generated by the Software segment.
- Bitcoin holdings of approximately 846,000 coins at June 30, 2026, with fair value of $49.67 billion against a cost basis of $63.94 billion.
- Preferred stock in mezzanine equity increased to $14.44 billion, reflecting STRC Stock ATM sales; cash dividends paid on preferred stock were $629.2 million for the six months.
- Repurchased $1.50 billion principal of 2029 Convertible Notes for $1.38 billion, recognizing a $113.9 million gain on debt extinguishment.
- USD Reserve of $2.40 billion at June 30, 2026, described as covering about 16 months of expected preferred dividends and interest; up to $1.0 billion repurchase programs authorized for both preferred stock and class A common stock.
- Subsequent events: about 2,225 bitcoins sold for $135.2 million gross proceeds and 288,930 STRC shares repurchased for $25.0 million through July 24, 2026.
03—Questions
Frequently Asked Questions
Why did the company report a large net loss this quarter after a profit in the prior-year quarter?
The company recognized an unrealized loss on digital assets of $8.32 billion in the three months ended June 30, 2026, reflecting the decline in bitcoin's market price. In the prior-year quarter it recognized an unrealized gain of $14.05 billion. Operating results excluding this item were not the primary driver of the change.
How much bitcoin does the company hold, and what is it worth?
As of June 30, 2026 the company held approximately 846,000 bitcoins with a fair value of $49.67 billion and a cost basis of $63.94 billion. As of July 24, 2026 it held approximately 843,775 bitcoins with an aggregate market value of $54.14 billion at a price of $64,164 per bitcoin.
How is the company funding preferred dividends and interest?
The company maintains a USD Reserve of $2.40 billion at June 30, 2026, which it intends to support preferred dividends and interest expense. It states that software operations do not generate enough cash for these obligations, so it expects to use USD Reserve cash, bitcoin sales, ATM proceeds from common and preferred stock, and additional financings.
What changed with the convertible notes during the quarter?
The company repurchased and canceled $1.50 billion principal of its 2029 Convertible Notes on May 19, 2026 for $1.38 billion in cash, recognizing a gain on debt extinguishment of about $113.9 million. Total outstanding principal of its convertible notes was $6.71 billion at June 30, 2026, and none of the notes were convertible during the six months ended June 30, 2026.
What is the new Bitcoin segment and why was it introduced?
Beginning in the second quarter of 2026, the company reports two segments, Software and Bitcoin. The Bitcoin segment covers bitcoin treasury operations, previously reported as a non-operating Corporate and Other category. Prior periods were recast to conform to the new presentation, and the company states the change provides greater visibility into its software business separate from its bitcoin treasury activities.
04—Continue