MicroStrategy Incorporated 10.00% Series A Perpetual Strife Preferred Stock Q2 FY2025 earnings call

Andrew Kang: Key highlights from Q2 and YTD, EPS results, Bitcoin per share, BTC Yield and Gain. Michael Saylor: Macro-overview of Bitcoin universe, supportive White House, Wall Street embracing Bitcoin, public companies capitalizing on Bitcoin, financial products and business, amplifying Bitcoin with leverage. Phong Le: Capital plan, guidance for 2025, comparables to MSTR, valuing MSTR, BTC principles.

Bitcoin holdings were 628,791, accounting for 3% of all Bitcoin ever in existence. Market cap eclipsed over $112 billion. Launched 4 listed preferred equity offerings, raised $18.3 billion year-to-date. Q2 '25 had record $14 billion GAAP operating income, $10 billion net income, fully diluted EPS $32.60. First half had $8.1 billion operating income, $5.7 billion net income, EPS $19.43. Bitcoin per share year-to-date $39,716. BTC Yield 25% year-to-date, BTC $ Gain $13.2 billion so far. Balance sheet: added Bitcoin every quarter since 2020, 100% unencumbered, held over $74 billion Bitcoin, fair value of digital assets over $64 billion as of June 30, total stockholders' equity $47.5 billion. Convertible instruments: $8.2 billion notional debt, market value over $12.3 billion, all but 2 in the money. Preferred equity outstandings $6.3 billion, perpetual.

BTC guidance: assumed $150,000 BTC price end of 2025, BTC yield 30%, BTC $ Gain $20 billion. GAAP guidance: $34 billion operating income, $24 billion net income, EPS $80 by end of 2025. Equity guidance: disciplined about issuing MicroStrategy ATM based on mNAV, below 1.0x mNAV consider repurchasing shares, 2.5x mNAV and up to 4x mNAV opportunistically issue equity, above 4x mNAV actively issue to acquire Bitcoin. Stretch credit guidance: end of every month propose rate structure for next month based on 5-day VWAP.

Forward-looking statements may differ from actual results due to factors like risk factors in quarterly and current reports with the SEC. Risk that Bitcoin price at end of year may differ from assumed target price, causing actual results to vary from guidance and hypothetical models. Non-GAAP financial measures require reconciliations available in earnings release and presentation appendix.

Q: At some point, does concentration of Bitcoin holdings at a single corporation impede adoption?

A: Michael Saylor thinks accelerating institutional adoption, no specific number, 3% now, harder to acquire more, price would move up.

Q: Worried about plethora of public Bitcoin Treasury Companies?

A: Phong Le doesn't think so, more companies create knowledge, additive, not close in size.

Q: Stress testing for midterm BTC ratings?

A: Michael Saylor thinks structure robust, equitizing preferreds makes it antifragile, survived 80% drawdown before.

Q: Effectiveness of preferreds in crab market?

A: Michael Saylor says educating market, credit undervalued, direction of travel is market getting more comfortable with Bitcoin-backed credit.

Q: Next area of improvement for regulators?

A: Michael Saylor says clarify digital assets taxonomy, tokenize security, commodity, asset class dynamics.

Q: Feedback on offerings and future offerings?

A: Andrew Kang says growing demand on IPOs, expect more interest, focus on preferred equity segment, potential international deployments and building Bitcoin treasury yield curve.

Q: Overcoming education burden?

A: Michael Saylor says product important, package and build distribution, upload content, outreach to credit rating agencies.

Q: Proof of reserves?

A: Michael Saylor says studying, considering transparency but need to do it responsibly without security issues, Phong Le says focusing on product innovation now but open to improving transparency