Strategy Inc · NASDAQ:MSTR

Strategy — MicroStrategy — Investor Day (November 2020)

67 slides from Strategy's investor day presentation, Nov 16, 2020

Slide 2: Safe Harbor Statement
Safe Harbor Statement Forward-Looking Statements Some of the information we provide in this presentation regarding our future expectations, plans, and prospects may constitute forward-looking statements. Actual results may differ materially from these forward- looking statements due to various impor
Slide 3: Presenters
Presenters Michael Saylor Phong Le Tim Lang Hugh Owen Chairman and President and Chief Technology Officer Chief Marketing Officer Chief Executive Officer Chief Financial Officer Intelligence Everywhere Copyright © 2020 MicroStrategy Incorporated. All Rights Reserved. 3
Slide 4: Agenda
Agenda Introduction Phong Le, President and CFO Company Vision Michael J. Saylor, Chairman and CEO Product Update and Shift to Cloud Timothy Lang, CTO Demand Generation and Productive Growth Hugh Owen, CMO Finance and Growth Phong Le, President and CFO Q&A Intelligence Everywhere Copyright © 2020 Mi
Slide 5: Company Vision
Company Vision Michael J. Saylor, Chairman and CEO
Slide 6: Any sufficiently advanced technology is indistinguishable from magic
Any sufficiently advanced technology is indistinguishable from magic. - Arthur C. Clarke Intelligence Everywhere Copyright © 2020 MicroStrategy Incorporated. All Rights Reserved. 6
Slide 7: MicroStrategy has a rich history of 30+ Years of Innovation
MicroStrategy has a rich history of 30+ Years of Innovation 1993 1999 2003 2008 2014 2017 2019 2020 Industry’s first World’s first First to release a BI reporting and MicroStrategy Enhanced Introduced SaaS relational OLAP web-based BI and fully integrated dashboard available available on cloud suppo
Slide 8: Our Company is Now Stronger than Ever
Our Company is Now Stronger than Ever Company Customers Financials MicroStrategy is the largest Diverse, blue chip customer Profitability at scale with $470mm+ independent publicly-traded base with 4,000+ customers revenue and ~80% gross margin business intelligence company with across 27 countries
Slide 9: We have Pivoted with Speed and Agility to the Virtual Wave
We have Pivoted with Speed and Agility to the Virtual Wave Quickly pivoted to customer focus post-Covid in Q2 20 with free education, free upgrades, and on-demand services like Expert.now Rebuilt go-to-market with virtual marketing events, revamped video-first website, video customer meetings, and r
Slide 10: Our New Capital Strategy is Already Showing Returns
Our New Capital Strategy is Already Showing Returns Putting our capital structure to work – focus on buying MSTR stock and bitcoin, both have appreciated since we announced strategy Bitcoin is our primary treasury reserve asset, excess capital > $50M will be put into bitcoin, subject to market condi
Slide 11: We have an Experienced and Visionary Management Team
We have an Experienced and Visionary Management Team Michael J. Saylor Phong Le Timothy Lang Hugh Owen W. Ming Shao Chairman and CEO President and CFO SEVP and CTO Chief Marketing Officer SEVP and General Counsel 30+ years at MicroStrategy 5+ years at MicroStrategy 6+ years at MicroStrategy 20+ year
Slide 12: Product Update and Shift to Cloud
Product Update and Shift to Cloud Timothy Lang, Chief Technology Officer
Slide 13: Modern Analytics
Modern Analytics Bring data to people, processes, and things HyperIntelligence MicroStrategy Library™ Dossier Insights automatically delivered to users Personalized analytics catalog Personalized dashboards Planned for MicroStrategy 2021™ • New Mac and Windows app to consume dossiers quickly • Rich-
Slide 14: The MicroStrategy HyperIntelligence Product Suite
The MicroStrategy HyperIntelligence Product Suite Answers at your fingertips - whether you’re on the web, a mobile device, or your favorite app HyperWeb™ HyperMobile™ HyperOffice™ Seamlessly inject intelligence Put intelligence in the palm of your Bring answers to your favorite directly onto words i
Slide 16: Hyper SDK
Hyper SDK ™ Extension-free embedding into your application with just a few lines of Javascript Intelligence Everywhere Copyright © 2020 MicroStrategy Incorporated. All Rights Reserved. 16
Slide 17: Hyper SDK
Hyper SDK Extension-free embedding into your application with just a few lines of Javascript Intelligence Everywhere Copyright © 2020 MicroStrategy Incorporated. All Rights Reserved. 17
Slide 21: MicroStrategy App with Global Search, Embedded HyperIntelligence
MicroStrategy App with Global Search, Embedded HyperIntelligence Intelligence Everywhere Copyright © 2020 MicroStrategy Incorporated. All Rights Reserved. 21
Slide 22: Open Architecture
Open Architecture Embrace and augment popular tools and technologies Federated Analytics Comprehensive set of SDKs Deploy without compromise Connectors that bring consistency and Embed, customize, and extend into Fully-featured, optimized for your governance to popular analytics tools applications a
Slide 23: MicroStrategy for Business Users – Excel 365
MicroStrategy for Business Users – Excel 365 Intelligence Everywhere MicroStrategy Confidential Copyright – Incorporated. © 2020 MicroStrategy For Gartner Analyst All Rights Reserved. Use Only 23
Slide 24: MicroStrategy for Business Users
MicroStrategy for Business Users Enhanced connectors for Power BI and Tableau Intelligence Everywhere Copyright © 2020 MicroStrategy Incorporated. All Rights Reserved. 24
Slide 25: MicroStrategy for Data Scientists
MicroStrategy for Data Scientists Trusted Data Intelligence applications Data Scientist AI Enriched Data Intelligence Everywhere Copyright © 2020 MicroStrategy Incorporated. All Rights Reserved. 25
Slide 26: MicroStrategy for Data Scientists
MicroStrategy for Data Scientists Enable data science on trusted data with open tooling Jupyter Notebook and RStudio Python and R libraries • Low-code experience for connecting to MicroStrategy, • Programmatic access to MicroStrategy to query finding relevant data, and creating new datasets existing
Slide 27: Enterprise Grade
Enterprise Grade Trusted answers with sub-second response at enterprise scale Single version of the truth Mitigate compliance risk Scale to many Bring data consistency and trust to Enable self-service while enforcing data Scale with high performance. users and applications with the protections under
Slide 28: Expanding Enterprise Performance and Scalability
Expanding Enterprise Performance and Scalability Across the Platform Scalability Performance Gateway Optimizations • Publish 2x larger cubes and host 2x • Intelligence Server on Windows 10% • SAP S4/HANA Data Import Gateway up to more data on existing hardware with faster across the board 3x faster
Slide 29: Connecting to Data
Connecting to Data Across the Platform Optimized for the Cloud Modern Simple New Cloud Object Storage gateways: OAuth authentication New OOTB Drivers: • Amazon AWS S3 • OAuth support for Snowflake and Google • Snowflake, Teradata, SAP HANA BigQuery • Microsoft Azure Data Lake Storage Connectivity Wi
Slide 30: Product Strategy
Product Strategy Reinvent the Customer Experience Expand to New Audiences Invent Turn-key departmental offerings HyperIntelligence, Open Semantic Graph Hyper.Now. Intel.Now Consumer User Experience + Simple pricing Dossier. Library. Collaboration. Geospatial $10/user/month Modernize Tooling Workstat
Slide 32: New Features for .Now
New Features for .Now Reduce Adoption Friction Deepen Capabilities Simplify Administration • Free 90 Day Trial • Derived metrics in HyperIntelligence cards • Enterprise security with OpenID Connect • Launch an environment in four clicks • Use local data (Excel, CSV, Dropbox, • Automatic upgrades inc
Slide 33: MicroStrategy Roadmap
MicroStrategy Roadmap Future plans are subject to change Consumer-grade experiences Embrace and augment popular tools Trusted answers with for every role and popular devices and technologies sub-second response at enterprise scale MicroStrategy 2021 – Dec 2020 • All new MicroStrategy app for viewing
Slide 34: MicroStrategy 2021 and Cloud offerings
MicroStrategy 2021 and Cloud offerings Supporting Customer adoption and sales growth HyperIntelligence Cloud Embedded • Most rapidly adopted solution in the • COVID is acting as a catalyst, driving IT • Technology partners are choosing history of MicroStrategy organizations to re-evaluate and plot a
Slide 35: Demand Generation / Productive Growth
Demand Generation / Productive Growth Hugh Owen, Chief Marketing Officer
Slide 36: Generate Demand and Accelerate Growth
Generate Demand and Accelerate Growth 1 Exploit Analytics Market and Cloud Growth 2 Publish High Quality Sharable Content 3 Accelerate Website Traffic 4 Exhibit Products via Video-first Website 5 Integrate Support, Education, Community, and Product 6 Create Registrations via Free Trials 7 Convert Tr
Slide 37: 1. Exploit Analytics Market and Cloud Growth
1. Exploit Analytics Market and Cloud Growth BI Market Growth (Constant Currency) 2019-2024 Revenue ($M) with Growth (%) FY 19 FY 20 FY 21 FY 22 FY 23 FY 24 Source: IDC, Worldwide End-User Query, Reporting, and Analysis Software Forecast Update, 2020–2024, #US46880220 Intelligence Everywhere Copyrig
Slide 38: 2. Publish High Quality Sharable Content
2. Publish High Quality Sharable Content Customer Successes Stories Practical Advice and Expertise Real-world stories on how organizations solve problems and overcome MicroStrategy Experts sharing valuable and practical information to challenges using MicroStrategy’s products and services. help pros
Slide 39: 3. Accelerate Website Traffic
3. Accelerate Website Traffic Digital advertising campaigns that are video-first and intent-based Advertising: Hyper for Teams Advertising: Hyper for Lines of Business Video-first placement via YouTube and Google targeted at Video-first placement via YouTube and Google targeted at LOB senior analyst
Slide 40: 4. Exhibit Products via Video-first Website
4. Exhibit Products via Video-first Website Personalized, categorized, modular, and familiar Intelligence Everywhere Copyright © 2020 MicroStrategy Incorporated. All Rights Reserved. 40
Slide 41: 5. Integrate Support, Education, Community, and Product
5. Integrate Support, Education, Community, and Product Start a Demo the Class Product Apply for Trial the a Job Product Intelligence Everywhere Copyright © 2020 MicroStrategy Incorporated. All Rights Reserved. 41
Slide 42: 6. Create Registrations via Free Trials
6. Create Registrations via Free Trials Hyper.Now / Intel.Now 90 Day Free Trial Architect Pass / Expert.Now 30 Day Free Trial Start Trial Start Trial Connect data Take Courses Build Cards Use Expert.Now Share Cards Upgrade Trial Upgrade Trial Intelligence Everywhere Copyright © 2020 MicroStrategy In
Slide 43: 7. Convert Trials by Delivering Value and Removing Barriers
7. Convert Trials by Delivering Value and Removing Barriers Hyper.Now Intel.Now Every application, instantly smarter and faster. Modern BI for every user, on popular devices. Create, view, share, and embed cards. Create, view, share, and embed dossiers. HyperIntelligence for Web, Mobile, and Office.
Slide 44: 8. Drive Productivity with Digital Go-to-Market
8. Drive Productivity with Digital Go-to-Market Virtual Conference Then Now Product Keynotes In-person events Digital events (more events, 8+ more reach)of Shows Channels Driving Flying Hoteling Zooming (lower costs, no waiting) Customer Stories Wet signatures Electronic signatures (speedPartner clo
Slide 45: 9. Increase Customer Value Via Expansion, SaaS, and Cloud
9. Increase Customer Value Via Expansion, SaaS, and Cloud From To Experimental Enterprise Grade (security, trust, economies of scale) Teams Departmental (unify, certify, material impact) Departmental Company-wide (break siloes, single version of truth) On-prem Cloud (reduce costs, increase impact) P
Slide 46: Generate Demand and Accelerate Growth
Generate Demand and Accelerate Growth 1 Exploit Analytics Market and Cloud Growth 2 Generate and Publish High Quality Sharable Content 3 Capture Attention And Drive Traffic to Website 4 Exhibit Our Products and Services Via Video-first Website 5 Integrate Support, Education, Community, and Product 6
Slide 47: President and CFO Update
President and CFO Update Phong Le, President and CFO
Slide 48: MicroStrategy is Well-Positioned for Growth
MicroStrategy is Well-Positioned for Growth 1 Largest independent publicly-traded BI company, leading enterprise analytics platform 2 Diversified blue-chip customer base with ~95% renewal rates 3 Healthy revenue profile: 65%+ recurring, 90%+ gross margin in license and support 4 Strong growth driver
Slide 49: 1. We are the Top BI Company with the Top Product
1. We are the Top BI Company with the Top Product Top-rated by Gartner Leader on the Forrester Wave Product of service scores for Agile, centralized BI The Forrester Wave™: Enterprise BI Platforms (Client- provisioning managed)–Q3 2019 MicroStrategy HQ: Tysons Corner, VA MicroStrategy 4.34 NASDAQ: M
Slide 50: 2. We Have A Diverse, Loyal Blue-Chip Customer Base
2. We Have A Diverse, Loyal Blue-Chip Customer Base Recurring Revenue Distribution by Industry* 2% Top account recurring revenue as 11% Top 10 accounts recurring Technology Other 7% Apparel 9% % of total revenue as % of total 9% Banking 22 yrs $3M+ Retail 17% 11% Average lifetime of top Average ARR
Slide 51: 2. Top Global Bank Modernizes Financial Centers
2. Top 5 Global Bank Modernizes Financial Centers Goals MicroStrategy Products Benefits • Shift from financial center ✓ Consistent reporting across 5,000+ manager corkboard reporting to financial centers real-time financial center results HyperIntelligence and forecast ✓ More time to analyze and mak
Slide 52: 2. North American Home Improvement Retailer Improves Customer Service
2. North American Home Improvement Retailer Improves Customer Service and Employee Productivity Goals MicroStrategy Products Benefits • Provide comprehensive data ✓ Enhanced mobile product, fully analytics / visualizations with a integrated with handheld mobile simple interface Mobile device/scanner
Slide 53: 2. Leading Global Cybersecurity Company Embeds MicroStrategy
2. Leading Global Cybersecurity Company Provides Deep Real- Time Insights to Customers by Embedding MicroStrategy Goals MicroStrategy Products Benefits • Provide customers with near real-time ✓ Superior build vs. buy decision, visibility into firewall utilization, enabling allows software company tr
Slide 54: 3. Revenue Profile is Attractive: 65%+ Recurring Revenue, 90%+ Gross Margins
3. Revenue Profile is Attractive: 65%+ Recurring Revenue, 90%+ Gross Margins Revenue by Type ($M) Gross Margin by Revenue Type 98% 97% 93% 94% 92% $115 $93 $88 $87 $87 95% 94% 93% 90% 91% $83 $89 $84 $77 $77 $31 $32 $30 $29 $32 82% 81% 80% 80% 79% 58% 58% $285 $289 $296 $292 $287 54% 48% 50% FY 16 F
Slide 55: 4. Hyper, Cloud, and Embedded Intelligence Products Will Drive Future Revenue
4. Hyper, Cloud, and Embedded Intelligence Products Will Drive Future Revenue HyperIntelligence Cloud Embedded • Most rapidly adopted solution in the • COVID is acting as a catalyst, driving IT • Technology partners are choosing history of MicroStrategy organizations to re-evaluate and plot a MicroS
Slide 56: 4. Transition to Cloud is Well Underway
4. Transition to Cloud is Well Underway – Subscription Billings is Key Performance Indicator License purchase shift Customer migrations New SAAS Improved from on-prem to Cloud from on-prem to Cloud offerings: Hyper.now subscription billings and Intel.now Current Subscription Billings ($M) • Purchasi
Slide 57: 4. For New License Purchases, Break-Even Point is About 3 Years for Cloud
4. For New License Purchases, Break-Even Point is About 3 Years for Cloud Compared to Perpetual Illustrative New Cloud vs. On-prem Comparison Financials Cloud Growth Factors • Multiple drivers impacting shift to BI in cloud: 1) macro factors including work Cumulative Revenue ($M) $2.4 from home, foc
Slide 58: 4. For Existing Customers, Conversion to Cloud Results in 30-60% Revenue Uplift
4. For Existing Customers, Conversion From Perpetual to Cloud Results in 30-60% Revenue Uplift Illustrative Comparison Financials ($M) Cloud Conversion Factors • Existing customers moving to cloud to 1) reduce fixed costs, 2) Revenue Incremental Gross Margin upgrade software regularly and seamlessly
Slide 59: 5. Cost Structure Has Undergone Significant Optimization
5. Cost Structure Has Undergone Significant Optimization in the Last Year, With More Room for Improvement FY 18 FY FY FY 19 19 19 FY 20 Actual ($M) Actual ($M) Run Rate* ($M) $79 $81 $74 $99 $107 $103 $202 $189 $144 *Run Rate = Q1-Q3 20 Actuals and Q3 20 as a proxy for Q4 20 Costs are non-GAAP G&A,
Slide 60: 6. We Have A Proven History of Free Cash Flow Generation
6. We Have A Proven History of Free Cash Flow Generation 35% Free Cash Flow (non-GAAP; $M) 28% 30% 25% 21% 20% 15% 15% $146 10% 10% $108 6% $74 5% 1% $29 $35 $4 0% FY 15 Actual FY 16 Actual FY 17 Actual FY 18 Actual FY 19 Actual FY 20 TTM* Prioritize Invest for Prioritize profitability profitability
Slide 61: 7. Unique Balance Sheet Strategy Uses Bitcoin
7. Unique Balance Sheet Strategy Uses Bitcoin to Provide Asymmetric Upside and Energize New Investors Bitcoin Value ($M) Treasury strategy • Invest up to $250M in share repurchases • Utilize bitcoin as primary treasury reserve asset • $50M needed to run day-to-day business $621 $425 $381 Bitcoin val
Slide 62: 8. Q3 2020 Was the Best Quarter in a Decade
8. Q3 2020 Was the Best Quarter in a Decade Highest Q3 product license Highest Q3 total revenue Strong adoption of cloud revenue since 2016, up 56% since 2016, up 6% offering, 87% increase in year-over-year year-over-year subscription billings* year-over-year Product Lic. Revenue ($M) Total Revenue
Slide 63: 9. Our Growth Strategy Seeks to Bring Material Growth
9. Our Growth Strategy Seeks to Bring Material Growth in Revenue, Profitability, and Enterprise Value 2019 2020 2021 EV Long-Term Actual TTM* Projections Multiples** Opportunity Revenue Negative Flat Growing 2.4X >10% growth Revenue multiple Revenue growth Operating 15X >25% Income $9M $50M $60-90M
Slide 64: We Are Excited About Our Future
We Are Excited About the Our Future 1 Largest independent publicly-traded BI company, leading enterprise analytics platform 2 Diversified blue-chip customer base with ~95% renewal rates 3 Healthy revenue profile: 65%+ recurring, 90%+ gross margin in license and support 4 Strong growth drivers → high
Slide 65: Appendix
| Appendix
Slide 66: Non-GAAP Reconciliations
Investor Day Non-GAAP Reconciliations ($M) Reconciliation of GAAP to Non-GAAP Income (loss) from Operations FY 18 FY 19 FY 20 TTM^ Revenue $498 $486 $483 Cost of Revenues $99 $100 $95 Operating Expenses $394 $387 $392 Income (loss) from Operations $4 $(1) $(4) Operating Margin % 1% 0% -1% Stock-Base
Slide 67: Non-GAAP Reconciliations
Investor Day Non-GAAP Reconciliations ($M) Reconciliation of Subscription Services Revenues to Current Subscription Billings Q3 18 Q4 18 Q1 19 Q2 19 Q3 19 Q4 19 Q1 20 Q2 20 Q3 20 Current deferred subscription services revenue $11.7 $13.5 $15.6 $15.4 $12.8 $16.6 $16.6 $17.9 $19.5 Subscription service

MicroStrategy — Investor Day (November 2020) on 6ix

Strategy — MicroStrategy — Investor Day (November 2020)

Slide 1: Investor Day

Slide 2: Safe Harbor Statement

Slide 3: Presenters

Slide 4: Agenda

Slide 5: Company Vision

Slide 6: Any sufficiently advanced technology is indistinguishable from magic

Slide 7: MicroStrategy has a rich history of 30+ Years of Innovation

Slide 8: Our Company is Now Stronger than Ever

Slide 9: We have Pivoted with Speed and Agility to the Virtual Wave

Slide 10: Our New Capital Strategy is Already Showing Returns

Slide 11: We have an Experienced and Visionary Management Team

Slide 12: Product Update and Shift to Cloud

Slide 13: Modern Analytics

Slide 14: The MicroStrategy HyperIntelligence Product Suite

Slide 15: HyperVision

Slide 16: Hyper SDK

Slide 17: Hyper SDK

Slide 18: HyperIntelligence Authoring

Slide 19: Dossier Authoring

Slide 20: Copyright © 2020 MicroStrategy Incorporated. All Rights Reserved.

Slide 21: MicroStrategy App with Global Search, Embedded HyperIntelligence

Slide 22: Open Architecture

Slide 23: MicroStrategy for Business Users – Excel 365

Slide 24: MicroStrategy for Business Users

Slide 25: MicroStrategy for Data Scientists

Slide 26: MicroStrategy for Data Scientists

Slide 27: Enterprise Grade

Slide 28: Expanding Enterprise Performance and Scalability

Slide 29: Connecting to Data

Slide 30: Product Strategy

Slide 31: Hyper.Now Demo

Slide 32: New Features for .Now

Slide 33: MicroStrategy Roadmap

Slide 34: MicroStrategy 2021 and Cloud offerings

Slide 35: Demand Generation / Productive Growth

Slide 36: Generate Demand and Accelerate Growth

Slide 37: 1. Exploit Analytics Market and Cloud Growth

Slide 38: 2. Publish High Quality Sharable Content

Slide 39: 3. Accelerate Website Traffic

Slide 40: 4. Exhibit Products via Video-first Website

Slide 41: 5. Integrate Support, Education, Community, and Product

Slide 42: 6. Create Registrations via Free Trials

Slide 43: 7. Convert Trials by Delivering Value and Removing Barriers

Slide 44: 8. Drive Productivity with Digital Go-to-Market

Slide 45: 9. Increase Customer Value Via Expansion, SaaS, and Cloud

Slide 46: Generate Demand and Accelerate Growth

Slide 47: President and CFO Update

Slide 48: MicroStrategy is Well-Positioned for Growth

Slide 49: 1. We are the Top BI Company with the Top Product

Slide 50: 2. We Have A Diverse, Loyal Blue-Chip Customer Base

Slide 51: 2. Top Global Bank Modernizes Financial Centers

Slide 52: 2. North American Home Improvement Retailer Improves Customer Service

Slide 53: 2. Leading Global Cybersecurity Company Embeds MicroStrategy

Slide 54: 3. Revenue Profile is Attractive: 65%+ Recurring Revenue, 90%+ Gross Margins

Slide 55: 4. Hyper, Cloud, and Embedded Intelligence Products Will Drive Future Revenue

Slide 56: 4. Transition to Cloud is Well Underway

Slide 57: 4. For New License Purchases, Break-Even Point is About 3 Years for Cloud

Slide 58: 4. For Existing Customers, Conversion to Cloud Results in 30-60% Revenue Uplift

Slide 59: 5. Cost Structure Has Undergone Significant Optimization

Slide 60: 6. We Have A Proven History of Free Cash Flow Generation

Slide 61: 7. Unique Balance Sheet Strategy Uses Bitcoin

Slide 62: 8. Q3 2020 Was the Best Quarter in a Decade

Slide 63: 9. Our Growth Strategy Seeks to Bring Material Growth

Slide 64: We Are Excited About Our Future

Slide 65: Appendix

Slide 66: Non-GAAP Reconciliations

Slide 67: Non-GAAP Reconciliations