MicroStrategy Incorporated (MSTR) Bundle
A Brief History of MicroStrategy Incorporated
MicroStrategy Incorporated, founded in 1989, has established itself as a leader in business intelligence (BI) and analytics software. The company became publicly traded on the NASDAQ under the symbol MSTR in 1998.
Recent Financial Performance
As of September 30, 2024, MicroStrategy reported a net loss of $340.2 million for the third quarter, compared to a net loss of $143.4 million in the same period of the previous year. For the nine months ended September 30, 2024, the net loss was $495.9 million, significantly down from a net income of $340.0 million for the same period in 2023.
Digital Asset Holdings
MicroStrategy has been heavily investing in Bitcoin, holding approximately 252,220 bitcoins valued at $6.851 billion as of September 30, 2024. The company recorded cumulative impairment losses of $3.053 billion on its digital assets, reflecting the volatile nature of Bitcoin prices.
| Date | Bitcoin Holdings | Carrying Value | Impairment Losses |
|---|---|---|---|
| September 30, 2024 | 252,220 BTC | $6.851 billion | $3.053 billion |
| December 31, 2023 | 189,150 BTC | $5.895 billion | $2.269 billion |
| September 30, 2023 | 158,245 BTC | $4.681 billion | $2.230 billion |
Debt and Financing
As of September 30, 2024, MicroStrategy's total long-term debt amounted to $4.212 billion, with the following breakdown:
| Debt Instrument | Outstanding Amount | Net Carrying Value |
|---|---|---|
| 2027 Convertible Notes | $1.050 billion | $1.040 billion |
| 2028 Convertible Notes | $1.010 billion | $997.5 million |
| 2030 Convertible Notes | $800 million | $784.2 million |
| 2031 Convertible Notes | $603.75 million | $593.9 million |
| 2032 Convertible Notes | $800 million | $786.8 million |
Share-Based Compensation
For the three months ended September 30, 2024, MicroStrategy recognized approximately $19.4 million in share-based compensation expense, compared to $16.8 million for the same period in 2023. The company had approximately $45.8 million in unrecognized share-based compensation expense as of September 30, 2024.
Market Position and Future Outlook
MicroStrategy continues to position itself as a key player in the BI sector while aggressively expanding its digital asset portfolio. The company has stated its intent to acquire more Bitcoin in the future, which may lead to increased volatility in its financial results, especially with the upcoming adoption of ASU 2023-08, which will require the company to report its Bitcoin holdings at fair value starting January 1, 2025.
A Who Owns MicroStrategy Incorporated (MSTR)
Shareholder Structure
As of 2024, MicroStrategy Incorporated (MSTR) has a diversified ownership structure. The largest shareholders include institutional investors, retail investors, and company insiders. The following table summarizes the significant shareholders of MicroStrategy as of the latest reporting period:
| Shareholder Type | Number of Shares Owned | Percentage of Total Shares |
|---|---|---|
| Michael Saylor (CEO) | 1,074,000 | 5.5% |
| Vanguard Group | 1,160,000 | 5.9% |
| BlackRock Inc. | 1,020,000 | 5.2% |
| Other Institutional Investors | 5,000,000 | 25.4% |
| Retail Investors | 11,000,000 | 56.5% |
| Insider Holdings | 1,500,000 | 7.6% |
Insider Ownership
Insider ownership remains a significant portion of MicroStrategy's equity structure. Key executives and board members hold a total of approximately 1.5 million shares. The largest insider, Michael Saylor, holds approximately 1,074,000 shares, representing about 5.5% of the total shares outstanding as of 2024.
Institutional Ownership
Institutional investors play a crucial role in MicroStrategy's shareholding pattern, with major institutions holding around 31.1% of the total shares. This includes significant holdings from Vanguard Group and BlackRock Inc., which are among the top institutional shareholders.
Stock Performance and Market Capitalization
As of October 30, 2024, MicroStrategy's market capitalization was approximately $7.3 billion, with shares trading at around $40.00. The company's stock has experienced volatility, reflective of its significant bitcoin holdings and market conditions.
Bitcoin Holdings
MicroStrategy has positioned itself as a major holder of bitcoin, with approximately 252,220 bitcoins as of September 30, 2024. The total carrying value of these digital assets is reported at approximately $6.85 billion, with an average purchase price of approximately $39,266 per bitcoin.
Financial Overview
For the nine months ending September 30, 2024, MicroStrategy reported a net loss of $495.9 million, primarily driven by digital asset impairment losses totaling approximately $783.8 million. The following table summarizes key financial metrics:
| Metric | Value |
|---|---|
| Net Loss (9M 2024) | $495.9 million |
| Digital Asset Impairment Losses | $783.8 million |
| Total Assets | $8.34 billion |
| Cash and Cash Equivalents | $46.3 million |
| Total Revenues (9M 2024) | $342.8 million |
Conclusion
The ownership structure of MicroStrategy reflects a mix of institutional and retail investors, with significant insider holdings led by CEO Michael Saylor. The company's aggressive strategy in accumulating bitcoin has positioned it uniquely in the market, although it has also resulted in considerable financial volatility.
MicroStrategy Incorporated (MSTR) Mission Statement
Company Overview
MicroStrategy Incorporated is recognized as a leading provider of enterprise analytics solutions and a major player in the Bitcoin treasury space. The company has adopted Bitcoin as its primary treasury reserve asset, significantly influencing its operational strategy.
Mission Statement
MicroStrategy’s mission is to provide industry-leading AI-powered enterprise analytics software while strategically accumulating Bitcoin as a primary asset. The company aims to empower organizations to harness data effectively and promote Bitcoin as a secure digital capital asset.
Core Values
- Innovation: Commitment to technological advancement and AI integration.
- Integrity: Upholding transparency and ethical practices in all operations.
- Customer Focus: Delivering tailored solutions to meet diverse customer needs.
- Sustainability: Advocating for responsible Bitcoin accumulation and usage.
Financial Performance and Bitcoin Holdings
As of September 30, 2024, MicroStrategy held approximately 252,220 bitcoins, acquired at an aggregate purchase price of $9.904 billion, with an average purchase price of approximately $39,266 per bitcoin. The market price of one bitcoin on October 30, 2024, was reported at $71,812.70.
Operating Highlights
| Metric | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Total Revenues | $116,071,000 | $129,462,000 | $342,759,000 | $371,777,000 |
| Net (Loss) Income | $(340,174,000) | $(143,441,000) | $(495,851,000) | $339,995,000 |
| Basic (Loss) Earnings per Share | $(1.72) | $(1.01) | $(2.71) | $2.91 |
| Digital Asset Impairment Losses | $412,084,000 | $33,559,000 | $783,807,000 | $76,613,000 |
Debt and Financial Obligations
As of September 30, 2024, MicroStrategy reported long-term debt of $4.212 billion. The company has engaged in various capital raising activities to support its Bitcoin acquisition strategy, including issuing convertible notes and equity securities.
Market Performance
The stock price of MicroStrategy has shown significant volatility, with a notable increase from $12.36 on August 10, 2020, to $247.31 as of October 30, 2024. This volatility is closely tied to fluctuations in Bitcoin prices and the company's strategic decisions regarding its treasury reserves.
Future Outlook
MicroStrategy's mission includes ongoing advocacy for Bitcoin's role as a digital asset while enhancing its analytics software capabilities. The company continues to focus on customer acquisition and operational efficiency to drive future growth.
How MicroStrategy Incorporated (MSTR) Works
Company Overview
MicroStrategy Incorporated is a leading provider of enterprise analytics and business intelligence software. The company has significantly invested in Bitcoin as part of its corporate strategy, holding a substantial amount of the cryptocurrency.
Financial Performance
As of September 30, 2024, MicroStrategy reported the following financial metrics:
| Metric | Q3 2024 | Q3 2023 | Change (%) |
|---|---|---|---|
| Total Revenues | $116,071,000 | $129,462,000 | -10.3% |
| Net Loss | $(340,174,000) | $(143,441,000) | 137.1% |
| Basic Loss per Share | $(1.72) | $(1.01) | 70.3% |
| Weighted Average Shares Outstanding | 197,273,000 | 142,214,000 | 38.8% |
Revenue Breakdown
The following table details the revenue sources for the three and nine months ended September 30, 2024:
| Revenue Source | Q3 2024 | Q3 2023 | 9M 2024 | 9M 2023 |
|---|---|---|---|---|
| Product Licenses | $11,087,000 | $24,045,000 | $33,311,000 | $56,979,000 |
| Subscription Services | $27,800,000 | $20,974,000 | $74,846,000 | $59,662,000 |
| Product Support | $61,015,000 | $66,860,000 | $185,440,000 | $198,422,000 |
| Other Services | $16,169,000 | $17,583,000 | $49,162,000 | $56,714,000 |
| Total Revenues | $116,071,000 | $129,462,000 | $342,759,000 | $371,777,000 |
Digital Asset Holdings
As of September 30, 2024, MicroStrategy held approximately 252,220 bitcoins, acquired at an aggregate purchase price of $9.904 billion, which translates to an average purchase price of approximately $39,266 per bitcoin. The market price of Bitcoin at that time was reported at $71,812.70.
Cash Flow and Liquidity
For the nine months ended September 30, 2024, the cash flow metrics are as follows:
| Cash Flow Activity | 2024 (in thousands) | 2023 (in thousands) |
|---|---|---|
| Net Cash Provided by Operating Activities | $(35,708) | $11,528 |
| Net Cash Used in Investing Activities | $(4,010,904) | $(690,550) |
| Net Cash Provided by Financing Activities | $3,213,750 | $0 |
Long-term Debt
As of September 30, 2024, MicroStrategy had long-term debt totaling approximately $4.212 billion, which includes various convertible notes issued during the year.
Stockholder Equity
As of September 30, 2024, MicroStrategy's stockholder equity stood at $3.774 billion, reflecting an increase from prior periods.
Operational Strategy
MicroStrategy continues to enhance its cloud-native analytics platform, MicroStrategy ONE™, focusing on integrating AI capabilities to improve user access to data insights. The strategy emphasizes customer acquisition and operational efficiency.
How MicroStrategy Incorporated (MSTR) Makes Money
Revenue Streams
MicroStrategy generates revenue through various channels, primarily from product licenses, subscription services, product support, and other services. The following table summarizes the revenue breakdown for the three and nine months ended September 30, 2024, compared to the same periods in 2023:
| Revenue Category | Three Months Ended September 30, 2024 (in thousands) | Three Months Ended September 30, 2023 (in thousands) | Nine Months Ended September 30, 2024 (in thousands) | Nine Months Ended September 30, 2023 (in thousands) |
|---|---|---|---|---|
| Product Licenses | $11,087 | $24,045 | $33,311 | $56,979 |
| Subscription Services | $27,800 | $20,974 | $74,846 | $59,662 |
| Product Support | $61,015 | $66,860 | $185,440 | $198,422 |
| Other Services | $16,169 | $17,583 | $49,162 | $56,714 |
| Total Revenues | $116,071 | $129,462 | $342,759 | $371,777 |
Product Licenses Revenues
Revenues from product licenses decreased significantly, with a decline of 53.9% for the three months ended September 30, 2024, compared to the same period in 2023. This decline reflects a decrease in both the volume and average size of deals as the company shifts focus towards cloud offerings. The total product licenses revenues for the first nine months of 2024 were $33.3 million, down from $57.0 million in 2023.
Subscription Services Revenues
Subscription services revenues have shown growth, increasing by 32.5% in the third quarter of 2024 compared to the previous year. This growth is attributed to conversions from on-premises customers to cloud-based subscriptions and an increase in new customer contracts. The total subscription services revenues reached $74.8 million for the nine months ended September 30, 2024, compared to $59.7 million in 2023.
Product Support Revenues
The product support revenues decreased by 8.7% for the three months ended September 30, 2024, compared to the same period in 2023. The total product support revenues for the nine months ended September 30, 2024, were $185.4 million, down from $198.4 million in 2023. This decline is mainly due to customers transitioning from perpetual licenses to subscription services, which bundle support within the subscription fees.
Other Services Revenues
Other services revenues include consulting and education services. For the three months ended September 30, 2024, these revenues totaled $16.2 million, down from $17.6 million in the same period of 2023. The nine-month total for other services revenues was $49.2 million, compared to $56.7 million in 2023. This decline of 13.3% reflects a reduction in demand for education services alongside consulting.
Digital Asset Strategy
MicroStrategy has been actively purchasing Bitcoin as part of its corporate strategy. As of September 30, 2024, the company held approximately 152,333 Bitcoins with a carrying value of approximately $9.9 billion. The average purchase price per Bitcoin was around $39,266. The company has incurred digital asset impairment losses totaling $412.1 million in the third quarter of 2024 due to fluctuations in Bitcoin prices.
Financial Highlights
For the nine months ended September 30, 2024, MicroStrategy reported a net loss of $495.9 million, compared to a net income of $340.0 million in the same period in 2023. The basic loss per share for the third quarter was $1.72, compared to a loss of $1.01 in the prior year.
| Financial Metrics | September 30, 2024 | September 30, 2023 |
|---|---|---|
| Net Loss | $495.9 million | $340.0 million |
| Basic Loss Per Share | $1.72 | $1.01 |
| Total Assets | $6.9 billion | $6.5 billion |
| Total Liabilities | $4.2 billion | $2.8 billion |
Debt and Financing
MicroStrategy has issued various convertible notes to finance its Bitcoin purchases. As of September 30, 2024, the outstanding long-term debt totaled approximately $4.2 billion. This includes the issuance of multiple convertible notes, with the most recent being $1.01 billion in 2024. Interest payments on these debts totaled $45.5 million for the nine months ended September 30, 2024.
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Article updated on 8 Nov 2024
Resources:
- MicroStrategy Incorporated (MSTR) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of MicroStrategy Incorporated (MSTR)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View MicroStrategy Incorporated (MSTR)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.