MicroStrategy Incorporated 10.00% Series A Perpetual Strife Preferred Stock Q1 FY2025 earnings call

Phong Le announced Strategy World 2025 in Orlando, May 5 - 8. Strategy is largest corporate holder of Bitcoin, acquired more Bitcoin in Q1. Made significant capital market progress with $6.6B net proceeds from ATM equity offering, $2B from convertible note offering, $1.4B from preferred stock strike. Introduced 42-42 capital plan. Andrew Kang discussed software and Bitcoin financials. Michael Saylor provided strategic review of Bitcoin treasury strategy, including BTC models, credit metrics, and called on investors to engage credit rating agencies for rating MSTR instruments.

Software: Q1 total software revenues ~$111M, down 3.6% y-o-y. Cloud subscription services revenues up 62% y-o-y, now ~33% of total revenues; subscription billings up 38% to $24.5M. Cost of revenues up 13% due to higher cloud hosting costs. Bitcoin: As of April 28, holding 553,555 bitcoins with total market value $52B. Acquired 106,085 bitcoins in first 4 months of 2025 at total purchase cost $9.9B.

Raised BTC yield target from 15% to 25% and BTC dollar gain target from $10B to $15B. Filed for new $21B ATM program under 42-42 plan, 32% complete with ~$57B additional capital to raise by end of 2027.

Actual results may differ from forward-looking statements due to various factors including risk factors in recent 10-Q and 8-K filings. Market volatility and Bitcoin price changes impact Bitcoin holdings and financial results. Credit rating agencies not fully embracing Bitcoin-related instruments affect security pricing and accessibility.

Q: Now that you have adopted the fair value accounting, how do you feel about the big swings in earnings as a result of the bitcoin price volatility?

A: Fair value accounting is more transparent, old accounting was a barrier. We're unfazed by downswings, believe long-term bitcoin price will rise.

Q: What are your thoughts on the recent MSTR playbook adoptions from other companies? And how does the company plan to sustain its leading role?

A: It's a virtuous cycle. More companies adopting bitcoin standard is beneficial. U.S. market can absorb many companies, more companies joining accelerates bitcoin standard transition.

Q: Can you please update us on the pace of capital raises under the 42 plan? -- and how you're thinking about striking the right balance between equity capital and the fixed income capital going forward? And how do you think about the impact of dilution from another $21 billion equity?

A: We have conviction in capital raises. BTC KPIs show capital raises via ATM at >1x NAV are accretive. Fixed income market needs to mature. As NAV rises, yield curve flattens, equity issuance looks like fixed income.