01—Abstract
Summary
Summary of the 8-K filed October 30, 2024. Cited figures are marked; the original filing is the authoritative source.
MicroStrategy Incorporated reported results for the quarter ended September 30, 2024 in a press release attached as Exhibit 99.1.
Total revenues were $116.1 milliona, down 10.3% year-over-year, while operating expenses rose to $514.3 million, driven by digital asset impairment losses of $412.1 million. Net loss was $340.2 million, or $1.72 per diluted share, compared with a net loss of $143.4 million, or $1.01 per diluted share, in the third quarter of 2023. Cash and cash equivalents were $46.3 million at September 30, 2024.
The company held approximately 252,220 bitcoins at quarter-end, with a carrying value of $6.851 billionb, an original cost basis of $9.904 billion, and a market value of $16.007 billion at a market price of $63,463 per bitcoin. The company reported a year-to-date BTC Yield of 17.8%, a 5.1% BTC Yield for Q3 2024, and revised its annual BTC Yield target for 2025 through 2027 to 6% to 10%. BTC Yield is a company-defined KPI that the release describes as not a measure of operating performance, liquidity, or return on investment.
The company also announced a "21/21 Plan" to raise $42 billionc over three years, comprised of a new at-the-market equity offering program of up to $21 billion and a target of raising $21 billion through fixed-income securities. During the quarter it issued $1.010 billion of 0.625% Convertible Senior Notes due 2028 and redeemed all $500 million of its 6.125% Senior Secured Notes due 2028.
02—Key points
Key Highlights
- Q3 2024 total revenues were $116.1 million, a 10.3% decrease year-over-year; software subscription services revenue rose 32.5% to $27.8 million.
- Digital asset impairment losses of $412.1 million drove operating expenses to $514.3 million and a loss from operations of $432.6 million.
- Net loss was $340.2 million, or $1.72 per diluted share, versus a net loss of $143.4 million, or $1.01 per diluted share, in Q3 2023.
- The company holds approximately 252,220 bitcoins with a carrying value of $6.851 billion and a market value of $16.007 billion as of September 30, 2024.
- Year-to-date BTC Yield is 17.8%, with a 5.1% BTC Yield achieved in Q3 2024; the annual BTC Yield target for 2025 through 2027 was revised to 6% to 10%.
- Announced a "21/21 Plan" targeting $42 billion of capital over three years: up to $21 billion via a new at-the-market equity program and $21 billion via fixed-income securities.
- Issued $1.010 billion of 0.625% Convertible Senior Notes due 2028 and redeemed all $500 million of 6.125% Senior Secured Notes due 2028.
03—Questions
Frequently Asked Questions
How did MicroStrategy perform financially in the third quarter of 2024?
Total revenues were $116.1 million, down 10.3% year-over-year. Loss from operations was $432.6 million and net loss was $340.2 million, or $1.72 per diluted share, compared with a net loss of $143.4 million, or $1.01 per diluted share, in Q3 2023. The release attributes the larger loss mainly to $412.1 million of digital asset impairment losses.
What is the value of the company's bitcoin holdings?
As of September 30, 2024, the company held approximately 252,220 bitcoins with a carrying value of $6.851 billion, an original cost basis of $9.904 billion, and a market value of $16.007 billion, based on a market price of $63,463 per bitcoin. The average cost per bitcoin was approximately $39,266.
What is the 21/21 Plan?
The 21/21 Plan is a strategic goal of raising $42 billion over three years, comprised of $21 billion of equity and $21 billion of fixed-income securities. The company plans to use the proceeds to buy more bitcoin as a treasury reserve asset. The release announced a new at-the-market equity offering program of up to $21 billion.
What is BTC Yield and what targets did the company set?
BTC Yield is a key performance indicator representing the period-to-period percentage change in the ratio of the company's bitcoin holdings to its Assumed Diluted Shares Outstanding. The year-to-date 2024 BTC Yield is 17.8%, and the company revised its long-term target to an annual BTC Yield of 6% to 10% for 2025 through 2027. The release states that BTC Yield is not a measure of operating performance, liquidity, or return on investment, and is not indicative of the stock's trading price.
What debt activity occurred during the quarter?
In September 2024 the company issued $1.010 billion of 0.625% Convertible Senior Notes due 2028 with an initial conversion price of $183.19 per share of class A common stock. On September 26, 2024, it redeemed all $500 million of its 6.125% Senior Secured Notes due 2028 at 103.063% of principal, plus accrued interest. Long-term debt, net was $4.212 billion at September 30, 2024.
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