MicroStrategy Inc, a provider of enterprise analytics and mobility software, reported its financial results for the second quarter of 2024. The company, known for its significant bitcoin holdings, continues to focus on its Bitcoin development strategy.
Performance Overview
MicroStrategy Inc reported total revenues of $111.4 million for Q2 2024, a 7.4% decrease compared to the same period last year. This figure fell short of the analyst estimate of $122.60 million. The company also reported a net loss of $102.6 million, or $5.74 per share, significantly missing the estimated earnings per share of -$0.11.
Key Financial Metrics
| Metric | Q2 2024 | Q2 2023 |
|---|---|---|
| Total Revenues | $111.4 million | $120.4 million |
| Gross Profit | $80.5 million | $93.3 million |
| Net (Loss) Income | $(102.6) million | $22.2 million |
| Cash and Cash Equivalents | $66.9 million | $46.8 million (Dec 31, 2023) |
Bitcoin Holdings and Strategy
MicroStrategy Inc continues to expand its bitcoin holdings, now totaling 226,500 bitcoins acquired at an aggregate cost of $8.3 billion. The company introduced a new key performance indicator (KPI) called "BTC Yield," which measures the percentage change in the ratio between the company's bitcoin holdings and its assumed diluted shares outstanding. Year-to-date, the BTC Yield stands at 12.2%, with a target of 4-8% annually from 2025 to 2027.
"After yet another successful quarter for our bitcoin strategy, MicroStrategy today holds 226,500 bitcoins reflecting a current market value 70% higher than our cost basis. We remain laser focused on our Bitcoin development strategy and intend to continue to achieve positive 'BTC Yield,'" said Phong Le, President and Chief Executive Officer, MicroStrategy.
Financial Achievements and Challenges
Despite the decline in total revenues, MicroStrategy Inc saw a 21% year-over-year increase in subscription services revenues, reaching $24.1 million. However, the company faced significant challenges, including a 134% increase in operating expenses, primarily due to digital asset impairment losses of $180.1 million.
Income Statement Highlights
MicroStrategy Inc reported a gross profit of $80.5 million, representing a 72.2% gross margin, down from 77.5% in Q2 2023. Operating expenses surged to $280.8 million, leading to a loss from operations of $200.3 million. The net loss for the quarter was $102.6 million, compared to a net income of $22.2 million in the same period last year.
Balance Sheet and Cash Flow
As of June 30, 2024, MicroStrategy Inc had cash and cash equivalents of $66.9 million, an increase of $20.1 million from December 31, 2023. The company's total assets stood at $7.05 billion, with digital assets accounting for $5.69 billion.
Conclusion
MicroStrategy Inc's Q2 2024 financial results highlight the company's ongoing commitment to its Bitcoin strategy, despite facing revenue declines and increased operating expenses. The introduction of the BTC Yield KPI underscores the company's focus on leveraging its bitcoin holdings to drive shareholder value. Investors and analysts will be closely monitoring the company's performance in the coming quarters, particularly its ability to achieve its BTC Yield targets and manage its operating expenses.
Explore the complete 8-K earnings release (here) from MicroStrategy Inc for further details.
