01—Abstract
Summary
Summary of the 8-K filed May 5, 2026. Cited figures are marked; the original filing is the authoritative source.
Strategy Inc (Nasdaq: MSTR) reported its financial results for the first quarter of 2026, ended March 31, 2026, in a press release furnished as Exhibit 99.1 under Item 2.02.
The company posted a net loss of $12.54 billiona, or $38.25 per diluted common share, driven primarily by an unrealized loss on digital assets of $14.46 billion. Total revenues were $124.3 million, up from $111.1 million a year earlier, and gross profit was $83.4 million. Cash and cash equivalents stood at $2.21 billion at March 31, 2026, compared with $2.30 billion at December 31, 2025.
The company's bitcoin holdings were approximately 818,334 bitcoins as of May 3, 2026, with an original cost basis of $61.81 billionb and a market value of $64.14 billion, based on a market price of approximately $78,374 per bitcoin as of May 1, 2026. Management highlighted the growth of its STRC Digital Credit instrument, which raised $5.58 billion year to date through May 3, 2026, and reported a year-to-date BTC Yield of 9.4%. The company also disclosed that it has proposed a shareholder vote to move STRC dividends to a semi-monthly schedule, and that it expects distributions on its preferred equity to be treated as non-taxable return of capital for the foreseeable future.
Investors should note that the company's results are heavily influenced by fair value accounting for bitcoin under ASU 2023-08, so reported net income and loss move with bitcoin prices rather than operating performance. The filing also states that the company's KPIs, including BTC Yield, are supplemental measures and not substitutes for financial statements, and that the company changed its method for calculating interim-period BTC Yield, BTC Gain and BTC $ Gain effective January 1, 2026.
02—Key points
Key Highlights
- Net loss of $12.54 billion, or $38.25 per diluted share, for Q1 2026, versus a net loss of $4.22 billion, or $16.49 per diluted share, in Q1 2025.
- Unrealized loss on digital assets of $14.46 billion in Q1 2026 drove an operating loss of $14.47 billion.
- Total revenues rose to $124.3 million from $111.1 million year over year, with gross profit of $83.4 million.
- Holdings of approximately 818,334 bitcoins as of May 3, 2026, with a market value of $64.14 billion versus an original cost basis of $61.81 billion.
- STRC raised $5.58 billion year to date, and the company reported a 9.4% year-to-date BTC Yield and $11.68 billion raised year to date.
- Preferred stock dividends rose to $229.5 million in Q1 2026 from $10.6 million in Q1 2025; the company has paid $692.5 million in cumulative preferred dividends to date.
- Company expects preferred distributions to be treated as non-taxable return of capital for the foreseeable future, and has proposed a vote to move STRC dividends to a semi-monthly schedule.
03—Questions
Frequently Asked Questions
Why did Strategy report a large net loss in the first quarter of 2026?
The net loss of $12.54 billion was driven mainly by an unrealized loss on digital assets of $14.46 billion, which the company records under its fair value accounting for bitcoin (ASU 2023-08). This is a non-cash mark-to-market effect tied to the bitcoin price, not a cash operating expense.
How much bitcoin does Strategy hold and what is it worth?
As of May 3, 2026, the company held approximately 818,334 bitcoins, with an original cost basis of $61.81 billion and a market value of $64.14 billion, based on a market price of approximately $78,374 per bitcoin as of May 1, 2026.
What is STRC and how has it performed?
STRC is the company's Digital Credit instrument. The filing states that STRC raised $5.58 billion year to date as of May 3, 2026, and that the STRC dividend rate rose from 11.00% in January to 11.50% in March, April and May 2026. The company has also proposed a shareholder vote to move STRC dividends to a semi-monthly schedule.
Will the company's preferred dividends be taxed?
The company states that it believes it will have no accumulated earnings and profits for U.S. federal income tax purposes and does not expect to generate current E&P, so it expects distributions on its preferred equity to be treated as non-taxable return of capital for the foreseeable future. The filing advises shareholders to consult their own tax advisors, as individual circumstances vary and the company's E&P expectations may change.
Are the company's BTC Yield and related KPIs a measure of investment return?
No. The filing states that BTC Yield, BTC Gain and BTC $ Gain are supplemental KPIs that are not financial performance, valuation or liquidity measures, and are not indicators of the stock's trading price. Effective January 1, 2026, the company also changed how it calculates these KPIs for interim periods, so the figures are not directly comparable to previously reported amounts.
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