MicroStrategy Incorporated (Nasdaq: MSTR), which claims to be the largest corporate holder of bitcoin and the largest independent publicly-traded business intelligence company, announced financial results for the three-month period ended March 31, 2024 (the first quarter of its 2024 fiscal year).
While Bitcoin is off its all time high of over $70K, it is still elevated versus prices seen in the last couple of years.
Phong Le, President and Chief Executive Officer, MicroStrategy said:
“As the world’s first Bitcoin Development Company, MicroStrategy is committed to the continued development of the bitcoin network through our activities in the financial markets, advocacy and technology innovation. It is through our unique bitcoin strategy and solid track record as an operating company that we now hold 214,400 bitcoins at an average purchase price of $35,180 per bitcoin. In the first quarter, our subscription services revenues and subscription billings both grew again at double-digit growth rates reflecting the continued successful transition of our software business to a cloud-native platform. We are very pleased with the continued global adoption of our cloud platform.”
Andrew Kang, Chief Financial Officer, MicroStrategy said:
“In the first quarter we raised over $1.5 billion by executing again on our capital markets strategy including two successful convertible debt offerings. We acquired 25,250 additional bitcoins since the end of the fourth quarter, our 14th consecutive quarter of adding more bitcoin to our balance sheet. We believe that the combination of our operating structure, bitcoin strategy, and focus on technology innovation provides a unique opportunity for value creation for our shareholders. Year to date, the price of bitcoin appreciated significantly, spurred notably by the approval of the spot bitcoin exchange traded products which has increased institutional demand and resulted in further regulatory clarity.”
First Quarter 2024 Financial Highlights
- Revenues: Total revenues for the first quarter of 2024 were $115.2 million, a 5.5% decrease, or a 5.7% decrease on a non-GAAP constant currency basis, compared to the first quarter of 2023.
- Gross Profit: Gross profit for the first quarter of 2024 was $85.2 million, representing a 74.0% gross margin, compared to a gross profit of $94.0 million, representing a gross margin of 77.1%, for the first quarter of 2023.
- Digital Assets: As of March 31, 2024, the carrying value of the Company’s digital assets (comprised of approximately 214,278 bitcoins) was $5.074 billion, which reflects cumulative impairment losses of $2.461 billion since acquisition and an average carrying amount per bitcoin of approximately $23,680. As of March 31, 2024, the original cost basis and market value of the Company’s bitcoin were $7.535 billion and $15.220 billion, respectively, which reflects an average cost per bitcoin of approximately $35,164 and a market price per bitcoin of $71,028.14, respectively.
As covered, MicroStrategy considers itself “the world’s first Bitcoin development company. We are a publicly-traded operating company committed to the continued development of the bitcoin network through our activities in the financial markets, advocacy and technology innovation.”
As an operating business, they are able to “use cashflows as well as proceeds from equity and debt financings to accumulate bitcoin, which serves as our primary treasury reserve asset.”
They also develop and “provide AI-powered enterprise analytics software that promotes our vision of Intelligence Everywhere, and are using their software development capabilities to develop bitcoin applications.”
They believe that the combination of their “operating structure, bitcoin strategy and focus on technology innovation provides a unique opportunity for value creation.”