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MicroStrategy Announces First Quarter 2024 Financial Results; Now Holds 214,400 BTC

MicroStrategy® Incorporated (Nasdaq: MSTR) (“MicroStrategy” or the “Company”), the largest corporate holder of bitcoin and the largest independent publicly-traded business intelligence company, today announced financial results for the three-month period ended March 31, 2024 (the first quarter of its 2024 fiscal year).

“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,” said Phong Le, President and Chief Executive Officer, MicroStrategy.

“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,” said Andrew Kang, Chief Financial Officer, MicroStrategy.

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. Product licenses and subscription services revenues for the first quarter of 2024 were $35.9 million, a 0.9% decrease, or a 0.9% decrease on a non-GAAP constant currency basis, compared to the first quarter of 2023. Product support revenues for the first quarter of 2024 were $62.7 million, a 4.3% decrease, or a 4.6% decrease on a non-GAAP constant currency basis, compared to the first quarter of 2023. Other services revenues for the first quarter of 2024 were $16.7 million, a 17.6% decrease, or a 17.9% 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.

Operating Expenses: Operating expenses for the first quarter of 2024 were $288.9 million, a 152.8% increase compared to the first quarter of 2023. Operating expenses include impairment losses on the Company’s digital assets, which were $191.6 million during the first quarter of 2024, compared to $18.9 million in the first quarter of 2023.

Loss from Operations and Net (Loss) Income: Loss from operations for the first quarter of 2024 was $203.7 million, compared to a loss from operations of $20.3 million for the first quarter of 2023. Net loss for the first quarter of 2024 was $53.1 million, or $3.09 per share on a diluted basis, as compared to a net income $461.2 million, or $31.79 per share on a diluted basis, for the first quarter of 2023. Digital asset impairment losses of $191.6 million and $18.9 million for the first quarter of 2024 and 2023, respectively, were reflected in these amounts. Benefit from income taxes of $160.8 million and $453.2 million for the first quarter of 2024 and 2023, respectively, were reflected in net (loss) income, principally reflecting income tax effects from share-based compensation and our bitcoin holdings.

In March 2024, the Company issued $603.8 million aggregate principal amount of 0.875% Convertible Senior Notes due 2031 (the “2031 Convertible Notes”). The 2031 Convertible Notes are senior unsecured obligations of the Company and bear interest at a fixed rate of 0.875% per annum, payable semiannually in arrears on March 15 and September 15 of each year, beginning on September 15, 2024. Holders of the 2031 Convertible Notes may receive additional interest under specified circumstances as outlined in the indenture for the 2031 Convertible Notes. The 2031 Convertible Notes are convertible into shares of MicroStrategy’s class A common stock at an initial conversion price of $2,327.21 per share. The 2031 Convertible Notes will mature on March 15, 2031, unless earlier converted, redeemed, or repurchased in accordance with their terms. The holders of the 2031 Convertible Notes have the right to require the Company to repurchase for cash all or any portion of their 2031 Convertible Notes on September 15, 2028 at a repurchase price equal to 100% of the principal amount of the 2031 Convertible Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the repurchase date. The total net proceeds from the 2031 Convertible Notes offering, after deducting initial purchaser discounts and issuance costs, were approximately $592.3 million.


Sources: Yahoo Finance


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