Strategy Inc Q2 FY2025 earnings call

Bitcoin Holdings and Market Position

• Bitcoin holdings 628,791, accounting for 3% of total Bitcoin supply, leading in Bitcoin Treasury Company space. Market cap over $112 billion, 96th largest public company in US.

Capital Raising

• Year-to-date raised $18.3 billion via 4 listed preferred equity offerings, accounting for 81% of last year's total.

Financial Performance

• Q2 '25 GAAP operating income $14B, net income $10B, EPS $32.60; first half operating income $8.1B, net income $5.7B, EPS $19.43. BTC yield year-to-date 25%, BTC gain 111,894 Bitcoin, BTC $ gain $13.2B.

Bitcoin per Share (BPS)

• Year-to-date BPS $39,716, cumulative as of end of July 198,543. Positive growth in BTC yield contributes to BPS outperformance.

Balance Sheet and Accounting

• Added Bitcoin every quarter since 2020, 100% unencumbered. Adopted FASB fair value accounting, improving balance sheet transparency and shareholder equity. Q2 recognized $14B unrealized fair value gain on Bitcoin holdings.

Financial Products and Business

• Offered various Bitcoin-backed financial products like Strike, Strife, Stride, Stretch. Utilize digital intelligence to create innovative fixed income securities. MSTR structured to outperform Bitcoin via intelligent leverage.

Through July 29, Strategy's Bitcoin holdings were 628,791, accounting for 3% of all Bitcoin ever in existence. Market cap eclipsed over $112 billion. Year-to-date, $18.3 billion in capital raised, accounting for 81% of last year's total. Q2 '25 GAAP operating income $14 billion, net income $10 billion, EPS $32.60; first half GAAP operating income $8.1 billion, net income $5.7 billion, EPS $19.43. Bitcoin per share (BPS) year-to-date $39,716, cumulative as of end of July 198,543. BTC yield year-to-date 25%, BTC gain 111,894 Bitcoin, BTC $ gain $13.2 billion. Held over $74 billion of Bitcoin, 100% unencumbered. Under FASB fair value accounting, Jan 1 adjustment $17.9 billion, June 30 total digital assets value over $64 billion, stockholders' equity $47.5 billion.

BTC and GAAP Guidance

• BTC yield year-to-date 25%, target full year. GAAP operating income target $34B, net income $24B, EPS $80 by end of 2025.

Equity Issuance Strategy

• More disciplined use of MicroStrategy ATM. Below 1.0x mNAV consider repurchasing shares; 2.5x mNAV as borrower setting for issuing ATM; 2.5x - 4x mNAV opportunistically issue to acquire Bitcoin; above 4x mNAV more aggressively issue.

Stretch Credit Guidance

• Monthly end adjust rate based on 5-day VWAP: below $95 recommend rate increase, $95 - $99 slight increase, $99 - $101 no action, above $101 recommend rate decrease or issue SNAP.

Price Volatility Risk

• Bitcoin price may differ significantly from assumed end-year price, causing actual results to vary from guidance.

Non-GAAP Measures Risk

• Non-GAAP financial measures' reconciliations needed, with risk of actual results differing from expectations.

Market Dynamics Risk

• Financial product issuance and capital raising affected by market conditions, potential for adverse market movements.