Slide 1: Q3 2022 Financial Results
Q3 2022 Financial Results November 1, 2022 Copyright © 2022 MicroStrategy Incorporated. All Rights Reserved.
Slide 2: Safe Harbor Statement
MicroStrategy Q3 2022 Earnings Call 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-look
Slide 3: Operational Results
Operational Results Phong Le, President & Chief Executive Officer Copyright © 2022 MicroStrategy Incorporated. All Rights Reserved.
Slide 4: Financial Highlights
Q3 2022 Financial Highlights $125.4M $16.4M Total Revenues, a decrease of 2% Subscription Services Revenues, an YoY, or an increase of 4% on a increase of 51% YoY, or 59% on a constant currency basis constant currency basis $38.7M $14.4M Total Software Licenses Revenues(1), Current Subscription Bill
Slide 5: MicroStrategy Differentiators and Focus on Innovation
Q3 2022 MicroStrategy Differentiators and Focus on Innovation Enterprise Analytics Multi-Cloud • Drive business transformation through modern • Provide leading enterprise cloud analytics product and analytics tools and techniques services • Replace and consolidate departmental and legacy BI • Contin
Slide 6: Growth with Our Leading Managed Cloud Service
Q3 2022 Growth with Our Leading Managed Cloud Service On-Prem Migrations & Footprint Expansion NEW MicroStrategy Cloud for Government • Growth by migrating on-prem customers, expanding • Growth with our new managed solution for the footprints of existing cloud customers, and federal sector, the firs
Slide 7: WORLD 2023
WORLD 2023 Back in Person How to Attend • Registration Opens November 8 • Early Bird Rate $995 (through 2022) • microstrategy.com/world23 Focus • Transformation, Innovation, Modernization • Bitcoin for Corporations Agenda • Keynote Addresses • Sessions & Workshops • Partner Exhibits & Demos • Educat
Slide 8: Bitcoin Highlights
Q3 2022 Bitcoin Highlights • In Q3, we purchased ~301 Approximate Number of Bitcoins Held at End of Quarter bitcoins for $6 million at an average purchase price of 129,218 129,699 130,000 ~$19,860 per bitcoin, net of 124,391 fees and expenses 114,042 105,085 • As of September 30, 2022, the 91,326 Co
Slide 9: Financial Results
Financial Results Andrew Kang, Senior Executive VP & Chief Financial Officer Copyright © 2022 MicroStrategy Incorporated. All Rights Reserved.
Slide 10: Revenue Components
Q3 2022 Revenue Components ($ in Millions) Total Revenues Total Software Licenses Revenues(1) Subscription Services Revenues Q3 2022: -2% YOY Q3 2022: +5% YOY Q3 2022: +51% YOY Constant FX: +4% YOY Constant FX: +11% YOY Constant FX: +59% YOY $134.5 $128.0 $119.3 $122.1 $125.4 $44.4 $36.7 $38.7 $34.1
Slide 11: Billings Components
Q3 2022 Billings Components ($ in Millions) Current Software Licenses Billings(1) Current Subscription Billings(1) $55.6 $39.9 $35.6 $36.4 $24.3 $28.1 $20.1 $14.4 $11.4 $8.0 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 (1) Please refer to the Appendix for a reconciliation of Total Sof
Slide 12: Cost Structure and Drivers
Q3 2022 Cost Structure and Drivers ($ in Millions) Non-GAAP Expenses By Type Cost of Revenues Higher cloud customer hosting fees and personnel costs Total: $165 Total: $102 Sales & Marketing Higher net capitalized commission costs $65 R&D Wage inflation and higher headcount investing in innovation a
Slide 13: Non-GAAP Operating Income (Loss)
Q3 2022 Non-GAAP Operating Income (Loss) ($ in Millions) • Q3 2022 non-GAAP operating income was $23 million or 18% margin • Non-cash digital asset impairment charge was $0.7 million Non-GAAP Operating Income (Loss) Digital Asset Impairment Charges $918 $425 $194 $147 $170 $44 $4 $26 $65 $23 $1 ($18
Slide 14: Bitcoin Holdings Carrying Value vs. Market Value
Q3 2022 Bitcoin Holdings Carrying Value vs. Market Value ($ in Millions) Carrying Value Market Value $7,000 $5,707 $5,893 $6,000 $5,352 $4,965 $5,000 $3,653 $4,000 $3,000 $2,451 $2,532 $2,850 $2,896 $2,000 $2,056 $2,406 $1,947 $2,051 $1,988 $1,993 $1,000 $410 $1,054 $0 $381 Q3 2020 Q4 2020 Q1 2021 Q
Slide 15: Solid Capital Structure Framework
Solid Capital Structure Framework • Software business not correlated to market volatility of bitcoin • Sufficient liquidity through operating cash flows to service the debt • $500M at-the-market (“ATM”) equity offering program outstanding; no shares issued under the program to date Amount at Annual
Slide 16: Current Bitcoin Holdings
Q3 2022 Current Bitcoin Holdings 130,000 65% 85,059 MacroStrategy: Unencumbered MacroStrategy: Collateralized MicroStrategy: Collateralized 30,051 35% 14,890 As of September 30, 2022 16
Slide 17: Strategy & Bitcoin
Strategy & Bitcoin Michael Saylor, Executive Chairman Copyright © 2022 MicroStrategy Incorporated. All Rights Reserved.
Slide 18: MicroStrategy Outperformance Since Adoption of Bitcoin Strategy
MicroStrategy Outperformance Since Adoption of Bitcoin Strategy 116% Key Assets and Indices Big Tech Stocks Enterprise Software Stocks 72% 42% 36% 27% 15% 11% 14% 0% -19% -22% -18% -33% -35% -40% -40% -65% Stock performance since August 10, 2020, when MicroStrategy adopted its bitcoin strategy. Sour
Slide 19: Appendix
Appendix Copyright © 2022 MicroStrategy Incorporated. All Rights Reserved.
Slide 20: Balance Sheet – Principal Debt Maturities
Balance Sheet – Principal Debt Maturities (1) ($ in Millions) Expected Bitcoin Halving $1,050 (mid-2024)(3) $855 $205 $500 $650 $0 $0 $0 $0 2022 2023 2024 2025 2026 2027 2028 1) Bitcoin-Collateralized Loan 0.000% Senior 6.125% Senior Instrument 2) 0.750% Senior Convertible Secured Notes Convertible
Slide 21: Non-GAAP reconciliations: income from operations
MicroStrategy Q3 2022 Earnings Call Non-GAAP reconciliations ($ in millions) Reconciliation of GAAP to non-GAAP income (loss) from operations Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Revenues $122.9 $125.4 $128.0 $134.5 $119.3 $122.1 $125.4 Cost of Revenues $22.5 $23.0 $22.3 $24.0 $25.7 $25.2 $25.4
Slide 22: Non-GAAP reconciliations: software licenses billings
MicroStrategy Q3 2022 Earnings Call Non-GAAP reconciliations ($ in millions) Reconciliation of total software licenses revenues to current software licenses billings Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 Current Deferred Product Licenses Revenues $0.2 $0.5 $2.3 $1.0 $1.1 $0.8 $0.4 Current Deferr
Slide 23: Non-GAAP reconciliations: operating expenses
MicroStrategy Q3 2022 Earnings Call Non-GAAP reconciliations ($ in millions) Reconciliation of non-GAAP operating expenses Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q3 22 GAAP Operating Expenses $283.5 $516.6 $155.3 $248.0 $263.6 $1,015.0 $93.9 Share-Based Compensation (1) $7.4 $10.6 $11.5 $12.2 $13.4 $14
Slide 24: Non-GAAP reconciliations: total expenses
MicroStrategy Q3 2022 Earnings Call Non-GAAP reconciliations ($ in millions) Reconciliation of total non-GAAP expenses Q3 21 Q3 22 GAAP Expenses Cost of Revenues $22.3 $25.4 Sales & Marketing $38.2 $35.4 Research & Development $28.2 $30.5 General & Administrative $23.8 $27.3 Digital Asset Impairment