Strategy (MSTR) Q2 2024 earnings summary

Executive summary

• Ended Q2 2024 with 226,500 bitcoins, up 12,222 since Q2 start, at a total cost of $8.3B and market value of $15B as of July 31, 2024.

• Maintains position as the largest corporate holder of Bitcoin globally.

• Introduced BTC Yield as a KPI, achieving 12.2% year-to-date 2024 and targeting 4%-8% annually for 2025-2027.

• Announced a 10-for-1 stock split effective August 2024.

• Raised $800M via 2032 convertible notes, called $650M of 2025 convertible notes, and announced a $2B ATM equity program.

Financial highlights

• Q2 2024 total revenues were $111.4M, down 7% year-over-year, with subscription services revenue up 21% to $24.1M.

• Non-GAAP subscription billings rose 45% to $41.3M in Q2.

• Gross profit was $80.5M (72.2% margin), down from $93.3M (77.5%) in Q2 2023.

• Operating loss was $200.3M in Q2 2024, mainly due to $180.1M in digital asset impairment losses.

• Net loss was $102.6M ($5.74/share diluted) in Q2 2024.

Outlook and guidance

• Expects continued decline in product license and support revenues, offset by growth in subscription services.

• Anticipates total revenues to begin growing again in 12-18 months as cloud transition matures.

• Targets annual BTC Yield of 4%-8% for 2025-2027.

• Plans to continue accumulating bitcoin using excess cash and capital raises.

• Anticipates increased volatility in future results due to adoption of fair value accounting for bitcoin in 2025.