Latest news from Microstrategy, one of the largest publicly traded independent business intelligence companies, as it has released its financial results for the second quarter of 2023, including its holdings in Bitcoin.
Indeed, the company reported significant growth in its Bitcoin holdings, breakthrough product innovation, and consistent financial performance despite macroeconomic challenges.
MicroStrategy is renowned for its pioneering work in business intelligence, and this quarter’s announcement highlighted its commitment to innovation and forward-looking strategies.
Highlights include the introduction of the MicroStrategy ONE platform and a significant increase in its Bitcoin holdings.
Summary
The news: from the MicroStrategy ONE platform to rising Bitcoin holdings
“Our new MicroStrategy ONE platform is the most important product innovation in our company’s history because it represents a fundamental shift in our industry to harness the power of business intelligence and artificial intelligence together to improve the way organizations do business.”
said Phong Le, president and chief executive officer of MicroStrategy.
The MicroStrategy ONE platform marks a revolutionary step toward integrating business intelligence and artificial intelligence to empower organizations with more efficient, data-driven decision making.
The introduction of the platform is expected to create new opportunities for companies and contribute to MicroStrategy’s long-term growth.
Stable financial performance
Despite continuing macroeconomic headwinds, MicroStrategy reported total revenues of $120.4 million in the second quarter of 2023, down slightly from the same period in 2022.
The company demonstrated strength in its enterprise cloud platform with recurring revenue growth, demonstrating the reliability and robustness of its offerings.
Revenues from product licensing and subscription services for the second quarter of 2023 stood at $35.4 million, registering a 3.7% increase over the same period last year.
Product support revenues, on the other hand, declined slightly by 0.7% on both a GAAP and non-GAAP basis in constant currency. Other services revenues declined 11.6%, or 10.9% on a non-GAAP basis in constant currency, compared to the second quarter of 2022.
Operating expenses for the second quarter of 2023 decreased significantly by 88.2% compared to the second quarter of 2022. This reduction was mainly due to a decrease in impairment losses on the company’s digital assets, which totaled $24.1 million in the second quarter of 2023, compared to $917.8 million in the second quarter of 2022.
As a result, the operating loss for the second quarter of 2023 was $26.7 million, a significant improvement over the loss of $918.1 million reported in the same period of 2022.
MicroStrategy’s net income for the second quarter of 2023 was $22.2 million, or $1.52 per share on a diluted basis, compared to the net loss of $1.062 billion, or $94.01 per share on a diluted basis, in the second quarter of 2022.
Bitcoin holdings
One of the highlights of MicroStrategy’s financial report was the significant increase in its Bitcoin holdings. As of 31 July 2023, the company held as many as 152,800 Bitcoin, with the addition of 12,333 Bitcoin in the second quarter.
This addition marked the largest increase in a single quarter since the second quarter of 2021. The increase in Bitcoin holdings demonstrates MicroStrategy’s continued confidence in the cryptocurrency as a store of value and potential hedge against inflation.
MicroStrategy has efficiently raised capital through its equity program at-the-market and used cash from operations to increase its Bitcoin holdings.
The company has made strategic moves against a promising backdrop of growing institutional interest in cryptocurrencies, advances in accounting transparency, and continued regulatory clarity for Bitcoin.
As of 30 June 30 2023, the book value of MicroStrategy’s digital assets, consisting mainly of Bitcoin, was $2.323 billion. This value reflected cumulative impairment losses of $2.196 billion since the acquisition, with an average book value per Bitcoin of about $15,251.
However, the original cost basis and market value of the company’s Bitcoin holdings were reported to be $4.519 billion and $4.625 billion, respectively, indicating an average cost per Bitcoin of about $29,668 and a market price per Bitcoin of $30,361.51.
The sales contract and financial measures of the Microstrategy company
During the three months ended on 30 June 2023, MicroStrategy entered into a sales agreement with Cowen and Company, LLC, and Canaccord Genuity LLC as agents.
Under this agreement, the company issued and sold 1,079,170 shares of Class A common stock for total net proceeds of approximately $333.5 million.
MicroStrategy also provided additional financial measures, including loss from non-GAAP operations, non-GAAP net income (loss), and non-GAAP diluted earnings (loss) per share.
These measures exclude the impact of certain non-cash expenses, such as share-based compensation expenses, interest expense from amortization of debt issuance costs, gain on extinguishment of debt, and related income tax effects.
The company believes that these non-GAAP measures provide a better understanding of corporate performance and facilitate comparisons with other companies in the industry.
Conclusions
MicroStrategy’s second quarter financial results demonstrate the company’s dedication to innovation and its strategic approach to managing digital assets, particularly its significant Bitcoin holdings.
The introduction of the MicroStrategy ONE platform represents a breakthrough in business intelligence, opening up new possibilities for data-driven decision making.
As the company continues to navigate the evolving landscape of cryptocurrencies and business intelligence, its strong financial results and increased Bitcoin holdings position it well for future growth and success.
