Strategy (MSTR) Q2 2024 earnings summary

Executive summary

• Ended Q2 2024 as the largest corporate holder of Bitcoin, with 226,500 BTC valued at $15B as of July 31, 2024, following a strategy of leveraging cash, equity, and debt for accumulation.

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

• Net loss for Q2 2024 was $102.6M, driven by $180.1M in digital asset impairment losses.

• Raised $800M through 2032 convertible notes, called $650M of 2025 notes, and announced a 10-for-1 stock split and $2B ATM equity program.

• Software business remains the core revenue generator, with a strategic shift to cloud and AI integration.

Financial highlights

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

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

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

• Non-GAAP operating income from software business: $1.9M; non-cash stock-based compensation expense: $20.6M.

• Cash and cash equivalents at June 30, 2024: $66.9M.

Outlook and guidance

• Targets annual BTC Yield of 4%-8% for 2025-2027, with year-to-date BTC Yield at 12.2%.

• Expects short-term revenue declines due to cloud migration, but anticipates long-term growth in recurring subscription revenues.

• Plans to continue accumulating bitcoin using excess cash and capital raises, with no set target for holdings.

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