What is the company's bitcoin position and how is it carried on the balance sheet?

As of June 30, 2024, the company held approximately 226,331 bitcoins with a carrying value of $5.688 billion, after cumulative impairment losses of $2.641 billion. The original cost basis was $8.329 billion and the market value was $14.016 billion, based on a market price of $61,926.69 per bitcoin. The filing states holdings were 226,500 bitcoins at a total cost of $8.3 billion as of July 31, 2024.

What is BTC Yield and what targets did the company set for it?

BTC Yield is a key performance indicator the company defines as the period-to-period percentage change in the ratio of its bitcoin holdings to its Assumed Diluted Shares Outstanding. The company reported a year-to-date 2024 BTC Yield of 12.2% and is targeting an annual BTC Yield of 4-8% from 2025 through 2027. The filing states that the KPI is not a measure of investment return and is not predictive of the stock price.

How is the company financing its bitcoin purchases and managing its debt?

In June 2024 the company issued $800.0 million of 2.250% convertible senior notes due 2032 with an initial conversion price of $2,043.32 per share of class A common stock. It also called all $650.0 million of its 0.750% convertible notes due 2025 for redemption on July 15, 2024, and holders of substantially all of those notes converted into class A shares beforehand. The company said it is filing a registration statement for a new $2 billion at-the-market equity offering program.

What is the stock split and when does it take effect?

The board declared a 10-for-1 stock split of the class A and class B common stock, effected as a stock dividend to holders of record as of the close of business on August 1, 2024. The dividend is expected to be distributed after the close of trading on August 7, 2024, with split-adjusted trading expected to begin at market open on August 8, 2024. All information in the press release is presented on a pre-split basis.

Strategy 8-K: Earnings & Results

Q: How did MicroStrategy's revenue and profitability perform in the second quarter of 2024?

Total revenues were $111.4 million, down 7.4% from $120.4 million a year earlier, with Subscription Services revenues up 21.1% to $24.1 million. The company reported a net loss of $102.6 million, or $5.74 per diluted share, compared with net income of $22.2 million, or $1.52 per diluted share, in Q2 2023. The swing was driven largely by $180.1 million of digital asset impairment losses.

01—Abstract

Summary

Summary of the 8-K filed August 1, 2024. Cited figures are marked; the original filing is the authoritative source.

MicroStrategy Incorporated reported its second quarter 2024 results for the three months ended June 30, 2024, in a press release furnished as Exhibit 99.1.

Total revenues were $111.4 million^a, down 7.4% year-over-year, while Subscription Services revenues rose 21.1% to $24.1 million. The company posted a loss from operations of $200.3 million and a net loss of $102.6 million, or $5.74 per diluted share, compared with net income of $22.2 million, or $1.52 per diluted share, in the prior-year quarter. Digital asset impairment losses of $180.1 million were the main driver of the operating loss.

The company's bitcoin position was 226,331 bitcoins at June 30, 2024, with a carrying value of $5.688 billion^b after cumulative impairment losses of $2.641 billion, against an original cost basis of $8.329 billion and a June 30 market value of $14.016 billion. The filing states that as of July 31, 2024, holdings were 226,500 bitcoins at a total cost of $8.3 billion. Management introduced "BTC Yield" as a key performance indicator, reporting 12.2% year-to-date and targeting 4-8% annually from 2025 to 2027.

In June 2024 the company issued $800.0 million^c of 2.250% convertible senior notes due 2032, and it called its $650.0 million 0.750% convertible notes due 2025 for redemption. The press release also announces a 10-for-1 forward stock split, with the dividend distributed after the close of trading on August 7, 2024 and split-adjusted trading expected from August 8, 2024.

All figures in the release are presented on a pre-split basis. The company states it is filing a registration statement for a new $2 billion^d at-the-market equity offering program.

02—Key points

Key Highlights

Total revenues were $111.4 million for Q2 2024, a 7.4% decrease from $120.4 million in Q2 2023; Subscription Services revenues rose 21.1% to $24.1 million.
Net loss was $102.6 million, or $5.74 per diluted share, versus net income of $22.2 million, or $1.52 per diluted share, a year earlier.
Digital asset impairment losses were $180.1 million in Q2 2024, compared with $24.1 million in Q2 2023, driving a loss from operations of $200.3 million.
Bitcoin holdings reached 226,331 bitcoins at June 30, 2024 (226,500 as of July 31, 2024), with a carrying value of $5.688 billion and a market value of $14.016 billion at June 30.
BTC Yield, a new KPI, was 12.2% year-to-date 2024, with a stated target of 4-8% annually from 2025 to 2027.
The company issued $800.0 million of 2.250% convertible senior notes due 2032 and called its $650.0 million 2025 convertible notes for redemption, with substantially all holders converting into class A common stock.
A 10-for-1 forward stock split was announced, with the dividend distributed after the close of trading on August 7, 2024; a new $2 billion at-the-market equity program registration statement is being filed.

03—Questions

Frequently Asked Questions

How did MicroStrategy's revenue and profitability perform in the second quarter of 2024?
Total revenues were $111.4 million, down 7.4% from $120.4 million a year earlier, with Subscription Services revenues up 21.1% to $24.1 million. The company reported a net loss of $102.6 million, or $5.74 per diluted share, compared with net income of $22.2 million, or $1.52 per diluted share, in Q2 2023. The swing was driven largely by $180.1 million of digital asset impairment losses.
What is the company's bitcoin position and how is it carried on the balance sheet?
As of June 30, 2024, the company held approximately 226,331 bitcoins with a carrying value of $5.688 billion, after cumulative impairment losses of $2.641 billion. The original cost basis was $8.329 billion and the market value was $14.016 billion, based on a market price of $61,926.69 per bitcoin. The filing states holdings were 226,500 bitcoins at a total cost of $8.3 billion as of July 31, 2024.
What is BTC Yield and what targets did the company set for it?
BTC Yield is a key performance indicator the company defines as the period-to-period percentage change in the ratio of its bitcoin holdings to its Assumed Diluted Shares Outstanding. The company reported a year-to-date 2024 BTC Yield of 12.2% and is targeting an annual BTC Yield of 4-8% from 2025 through 2027. The filing states that the KPI is not a measure of investment return and is not predictive of the stock price.
How is the company financing its bitcoin purchases and managing its debt?
In June 2024 the company issued $800.0 million of 2.250% convertible senior notes due 2032 with an initial conversion price of $2,043.32 per share of class A common stock. It also called all $650.0 million of its 0.750% convertible notes due 2025 for redemption on July 15, 2024, and holders of substantially all of those notes converted into class A shares beforehand. The company said it is filing a registration statement for a new $2 billion at-the-market equity offering program.
What is the stock split and when does it take effect?
The board declared a 10-for-1 stock split of the class A and class B common stock, effected as a stock dividend to holders of record as of the close of business on August 1, 2024. The dividend is expected to be distributed after the close of trading on August 7, 2024, with split-adjusted trading expected to begin at market open on August 8, 2024. All information in the press release is presented on a pre-split basis.

04—Continue

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