What drove the large Q4 2025 net loss?

The filing attributes the $12.4 billion net loss primarily to an unrealized loss on digital assets of $17.4 billion recorded under fair value accounting, the fourth quarterly period in which the company has applied this method. Software revenues and operating expenses were comparatively small by contrast.

How does the new STRC dividend framework work?

The company plans to evaluate STRC dividend rates monthly based on the stock's VWAP for the month. A VWAP below $95.00 would prompt a recommended increase of at least 50 basis points; $95.00 to $98.99 would prompt an increase of at least 25 basis points; $99.00 to $100.99 would generally mean no change; and $101.00 or above would prompt a 25 basis point or larger decrease, and/or a follow-on STRC offering. All changes require board approval, and the company may change or suspend the framework at any time.

What is the USD Reserve and how is it funded?

The USD Reserve is a $2.25 billion reserve, as of February 1, 2026, that provides approximately 2.5 years of coverage for preferred stock dividends and debt interest. It was funded using proceeds from sales of class A common stock under the Common Stock ATM Program. The company intends to maintain it at a level sufficient for two to three years of such payments, subject to its sole discretion.

Are distributions on the company's preferred stock taxable to shareholders?

The filing states that 100% of distributions paid in calendar year 2025 on preferred equity instruments were treated as a nontaxable return of capital to the extent of a shareholder's tax basis, as reported on Forms 8937. The company believes it has no accumulated earnings and profits and expects this treatment to continue for ten years or more. Shareholders should consult their own tax advisors.

What capital did the company raise in FY2025 and early 2026?

The company reported $25.3 billion raised in FY2025, making it the largest US equity issuer in that year, representing approximately 8% of total US equity issuance. Between January 1 and February 1, 2026, it received approximately $3.9 billion in aggregate gross proceeds across its common and preferred stock at-the-market programs. As of February 1, 2026, approximately $8.1 billion remained available under the Common Stock ATM Program.

Strategy 8-K: Earnings & Results & Regulation FD

01—Abstract

Summary

Summary of the 8-K filed February 5, 2026. Cited figures are marked; the original filing is the authoritative source.

Strategy Inc (Nasdaq: MSTR) reported fourth-quarter and full-year 2025 results on February 5, 2026, with a net loss of $12.4 billion^a ($42.93 per diluted share) for the quarter, driven by an unrealized loss on digital assets of $17.4 billion.

For the full year, the company reported a net loss of $3.85 billion^b and a loss from operations of $5.44 billion. The company held 713,502 bitcoin as of February 1, 2026, with an original cost basis of $54.26 billion and a market value of $59.75 billion at a market price of approximately $83,740 as of January 30, 2026. Management highlighted $25.3 billion of capital raised in FY2025, a 22.8% BTC Yield for the year, and the establishment of a $2.25 billion USD Reserve providing approximately 2.5 years of dividend and interest coverage.

The company's software business generated Q4 2025 total revenues of $123.0 million^c, essentially flat year-over-year at a 1.9% increase, with gross profit of $81.3 million. Cash and cash equivalents rose to $2.3 billion as of December 31, 2025, reflecting the USD Reserve funding. Preferred dividends on the company's perpetual preferred stock were $183.3 million in the quarter and $381.4 million for the full year.

The filing also announced an update to the dividend adjustment framework for the Variable Rate Perpetual Stretch Preferred Stock (STRC). Under the framework, the company would recommend dividend rate increases if STRC's monthly volume-weighted average price falls below $99.00 and decreases if it rises to $101.00^d or above, subject to board approval and the company's sole discretion. The STRC dividend rate was 11.25% for February 2026.

02—Key points

Key Highlights

Q4 2025 net loss of $12.4 billion, or $42.93 per diluted share, versus a net loss of $670.8 million ($3.03 per share) in Q4 2024, driven by a $17.4 billion unrealized loss on digital assets
Holdings of 713,502 bitcoin as of February 1, 2026, at an original cost basis of $54.26 billion (average $76,052 per bitcoin) and a market value of $59.75 billion
Capital raised of $25.3 billion in FY2025, including five preferred stock IPOs raising $5.5 billion in gross proceeds; approximately $3.9 billion raised between January 1 and February 1, 2026
Established a $2.25 billion USD Reserve, funded from Common Stock ATM proceeds, providing approximately 2.5 years of dividend and interest coverage with a stated intention to maintain two to three years
STRC dividend adjustment framework updated to use monthly VWAP thresholds ($95.00, $99.00, $101.00) to guide recommended rate changes, subject to board approval and sole discretion of the company
STRC aggregate stated amount of $3.4 billion with a current dividend rate of 11.25%; cumulative STRC distributions paid of $413 million
Software segment Q4 2025 total revenues of $123.0 million, up 1.9% year-over-year, with gross margin of 66.1% compared with 71.7% a year earlier

03—Questions

Frequently Asked Questions

What drove the large Q4 2025 net loss?
The filing attributes the $12.4 billion net loss primarily to an unrealized loss on digital assets of $17.4 billion recorded under fair value accounting, the fourth quarterly period in which the company has applied this method. Software revenues and operating expenses were comparatively small by contrast.
How does the new STRC dividend framework work?
The company plans to evaluate STRC dividend rates monthly based on the stock's VWAP for the month. A VWAP below $95.00 would prompt a recommended increase of at least 50 basis points; $95.00 to $98.99 would prompt an increase of at least 25 basis points; $99.00 to $100.99 would generally mean no change; and $101.00 or above would prompt a 25 basis point or larger decrease, and/or a follow-on STRC offering. All changes require board approval, and the company may change or suspend the framework at any time.
What is the USD Reserve and how is it funded?
The USD Reserve is a $2.25 billion reserve, as of February 1, 2026, that provides approximately 2.5 years of coverage for preferred stock dividends and debt interest. It was funded using proceeds from sales of class A common stock under the Common Stock ATM Program. The company intends to maintain it at a level sufficient for two to three years of such payments, subject to its sole discretion.
Are distributions on the company's preferred stock taxable to shareholders?
The filing states that 100% of distributions paid in calendar year 2025 on preferred equity instruments were treated as a nontaxable return of capital to the extent of a shareholder's tax basis, as reported on Forms 8937. The company believes it has no accumulated earnings and profits and expects this treatment to continue for ten years or more. Shareholders should consult their own tax advisors.
What capital did the company raise in FY2025 and early 2026?
The company reported $25.3 billion raised in FY2025, making it the largest US equity issuer in that year, representing approximately 8% of total US equity issuance. Between January 1 and February 1, 2026, it received approximately $3.9 billion in aggregate gross proceeds across its common and preferred stock at-the-market programs. As of February 1, 2026, approximately $8.1 billion remained available under the Common Stock ATM Program.

04—Continue

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