MicroStrategy Q2 2023: Bitcoin Holdings Surge

MicroStrategy Q2 2023: Bitcoin Holdings Surge

MicroStrategy® Incorporated (Nasdaq: MSTR) has released its financial results for the second quarter of its 2023 fiscal year, which ended on June 30, 2023. The company, recognized as the largest independent publicly-traded business intelligence enterprise, reported several key developments and financial figures.

MicroStrategy's bitcoin holdings continue to grow significantly. The company acquired 12,800 bitcoins during Q1 at a cost of $361.4 million, with an average price of $28,233 per bitcoin. As of July 31, 2023, the company holds a total of 152,800 bitcoins, acquired for a cumulative cost of $4.53 billion, translating to an average price of $29,672 per bitcoin. This strategic move is occurring against the backdrop of growing institutional interest, transparency progress, and regulatory clarity in the realm of bitcoin.

The company's total revenues for Q2 2023 amounted to $120.4 million, showcasing a minor year-over-year decrease of 1%. Notably, the revenues remained flat at a constant currency level, signifying resilience despite prevailing macroeconomic challenges. 

Of the total revenue, Software Licenses Revenues contributed $35.4 million, indicating a 4% increase YoY, or 7% growth at a constant currency basis. Subscription Services Revenues experienced a substantial surge, rising by 42% YoY, or 44% in constant currency terms, to reach $19.9 million.

MicroStrategy's Chief Executive Officer, Phong Le, emphasized the transformative impact of the new MicroStrategy ONE platform, underscoring the integration of business intelligence and artificial intelligence to revolutionize business operations. The platform's success was evident through the growth in recurring revenue during the quarter.

In terms of financial highlights, gross profit for Q2 2023 stood at $93.3 million, accounting for a gross margin of 77.5%. This marks a slight decrease from the gross profit of $96.9 million and a gross margin of 79.4% reported for Q2 2022. Operating expenses saw a notable 88.2% reduction in Q2 2023 compared to the same period in the previous year.

Loss from operations for Q2 2023 totaled $26.7 million, a significant improvement from the $918.1 million loss reported in Q2 2022. Net income for Q2 2023 amounted to $22.2 million, or $1.52 per diluted share. This contrasts with a net loss of $1.062 billion, or $94.01 per share on a diluted basis, reported for Q2 2022.

The company's cash and cash equivalents experienced an increase of $22.1 million, rising to $66.0 million as of June 30, 2023, from $43.8 million on December 31, 2022. Additionally, MicroStrategy's digital assets, predominantly composed of bitcoins, were valued at $2.323 billion as of June 30, 2023.

These results reflect MicroStrategy's continued pursuit of growth and innovation in the realm of business intelligence and digital assets, further solidifying its position as a pioneering force in the industry.

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