Strategy (MSTR) Q3 2026: $5.4B Stock Sale, Only $588M for Bitcoin

Strategy (MSTR) reported third-quarter 2026 results on October 29, 2026, through an 8-K press release and an earnings call, and the quarter delivered record profit while bitcoin per share fell by roughly a tenth [1][2]. Four questions framed the quarter: whether the STRC preferred stock could resume issuance, who pays preferred dividends and interest, whether common stock sales still add bitcoin per share, and whether the software shift to cloud subscriptions offsets lost support revenue. STRC raised nothing, part of the dividend bill was paid by selling bitcoin, and software revenue dipped year over year. Strategy used common equity to build a sturdier credit structure, and the cost was a lower bitcoin count per share.

Strategy, formerly MicroStrategy, is the largest corporate holder of bitcoin and also sells enterprise analytics software [3]. The company raises money by selling common and preferred stock and buys bitcoin with it; the holdings are carried at fair value, so reported profit moves mainly with the bitcoin price. Software is its only source of revenue [1].

Q3 2026: equity sales mostly did not buy bitcoin, and bitcoin per share fell

Strategy sold a large amount of common stock in the third quarter, but its bitcoin holdings barely grew. Net proceeds from the MSTR at-the-market (ATM) program were $5.408 billion, and only $588.1 million of that bought 7,218 bitcoin. The company also sold 5,552 bitcoin, ending the quarter with 847,666, just 0.2% more than at June 30, while its common shares rose 13.6% [1].

BTC Yield, the company's measure of the change in bitcoin per share, turned negative. Year-to-date BTC Yield was −3.7% as of October 25, compared with +8.1% for the first half, and bitcoin per share fell from 210,824 sats at June 30 to about 187,700 sats on October 23 [1][2]. Strategy did not disclose a stand-alone third-quarter figure; subtracting the first-half result from the year-to-date figure implies roughly −11.8 percentage points.

The record profit came from the bitcoin price and says nothing about bitcoin per share. Bitcoin rose from about $58,700 to about $83,600 during the quarter, producing a $20.912 billion gain on digital assets, in line with the company's October 5 preannouncement [1][2]. Management said future bitcoin purchases will rely mainly on issuing preferred stock, while common stock sales will mainly fund dividends and interest [2].

STRC raised no capital, and Strategy paid to buy it back

STRC provided no money for bitcoin purchases in the third quarter. It raised $5.465 billion in the second quarter, but issuance was zero in the third quarter and from October 1 to October 23 [1]. Strategy has repurchased about $2.04 billion of STRC year to date at an average price of $97.39, including $204.9 million in the week of October 19-25 [1][4].

The buybacks and related steps brought STRC back to near its $100 stated amount. The dividend rate stayed at 12.00%, STRC closed at $99.99 on October 29, and shareholders approved daily dividends starting November 1 with no change in total dividends [1][2][5]. The price recovery happened while the company was buying, so it is not yet possible to separate outside demand from company support.

Some dividends were paid by selling bitcoin, and USD reserves grew

Bitcoin sales funded part of the third quarter's fixed charges. Of roughly $348.6 million in sale proceeds, $239.9 million paid preferred dividends, about 57% of the quarter's preferred dividends, and $108.6 million repurchased STRC [1]. The company has not sold bitcoin since August 10 [4].

Most of the equity proceeds went into dollar assets. Cash and short-term investments were about $5.91 billion at September 30, up from about $2.45 billion at June 30, and the USD Reserve stood at $4.83 billion on October 25, covering about 3.4 years of dividends and interest [1]. That coverage is far above the 12-month minimum, but it was refilled by diluting common shareholders.

Software: subscription growth, while a license decline pulled total revenue lower

Software revenue fell 2.5% year over year to $125.4 million, mainly because product license revenue declined from $17.4 million to $3.8 million [1]. Subscription revenue grew 49.2% to $68.6 million and product support revenue fell 26.3%, so the subscription gain still exceeded the support decline by about $9.2 million, and gross margin was 71% [1]. The support decline was steeper than in the second quarter, and before on-premises support ends at the end of 2026 the company has not disclosed how much of it reflects migration versus customer loss.

Conclusion

The third quarter interrupted the cycle in which preferred stock funds bitcoin purchases and raises bitcoin per share. Common equity paid for refilling reserves, repurchasing STRC and part of the dividends, which made the credit structure sturdier but lowered bitcoin per share; reported profit depended entirely on the bitcoin price, and software gross profit of $89.6 million falls far short of covering fixed charges [1]. The fourth-quarter tests are whether STRC resumes net issuance near its stated amount, whether the company avoids bitcoin sales for a full quarter, and whether BTC Yield turns positive. The 10-Q has not yet been filed, so the stand-alone quarterly BTC Yield and the tax expense still need confirmation; the chief financial officer leaves on November 5 [1].

Sources

1. [1] MSTR 8-K filed 2026-10-29 Exhibit 99.1 (Q3 2026 results press release) · 2026-10-29 · 8-K · https://www.sec.gov/Archives/edgar/data/1050446/000105044626000047/mstr-20261029x8kxex9912.htm
2. [2] MSTR earnings call 2026-10-29 (Q3 2026) transcript · 2026-10-29 · earnings-call · https://www.strategy.com/investor-relations
3. [3] MSTR 10-K filed 2026-02-19 · Item 1 business overview and bitcoin strategy · 2026-02-19 · 10-K · https://www.sec.gov/Archives/edgar/data/1050446/000105044626000020/mstr-20251231.htm
4. [4] MSTR 8-K filed 2026-10-26 · weekly ATM, STRC repurchases and USD Reserve (Oct 19-25) · 2026-10-26 · 8-K · https://www.sec.gov/Archives/edgar/data/1050446/000119312526431146/mstr-20261026.htm
5. [5] MSTR 8-K filed 2026-10-29 · special meeting results and daily dividend amendments (Items 3.03/5.03/5.07/8.01) · 2026-10-29 · 8-K · https://www.sec.gov/Archives/edgar/data/1050446/000119312526437776/mstr-20261028.htm