Slide 1: Q1 2024 Financial Results
Q1 2024 Financial Results April 29, 2024 Copyright © 2024 MicroStrategy Incorporated. All Rights Reserved.
Slide 2: Safe Harbor Statement
MicroStrategy Q1 2024 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 © 2024 MicroStrategy Incorporated. All Rights Reserved.
Slide 4: MicroStrategy World 2024
MicroStrategy World 2024 April 29 – May 2 | Las Vegas, NV 4
Slide 5: Business Highlights Q1 2024
Business Highlights Q1 2024 Bitcoin Holdings Subscription Services Revenues 214,400 $23.0M Acquired for a total cost of $7.54 billion, or increase of 22% YoY $35,180 per bitcoin as of April 26, 2024 • Acquired 25,250 bitcoin since the end of 2023 • First to market with AI + BI platform integration f
Slide 6: Grow AI and Cloud
Grow AI and Cloud Multi-cloud | Cloud-native | Marketplace MicroStrategy AI MicroStrategy Cloud • First to market in AI/BI cloud offering • Focus on customer migration & new • Microsoft Azure OpenAI partnership business growth • Auto: SQL, Dashboard, Answers, Expert • Accelerate subscription revenue
Slide 7: Bitcoin Development Company
Bitcoin Development Company MicroStrategy’s unique value proposition Bitcoin Development Company Bitcoin and Software Development 1 Bitcoin Holdings Excess Cash 2 Cash Equity Debt $825M total excess cash $3.6B in senior secured and $3.2B of equity issued on balance sheet invested convertible debt ou
Slide 8: Q1 2024 Value Creation from Bitcoin Activities
Q1 2024 Value Creation from Bitcoin Activities Unique to MSTR ($ in Millions) 12/31/2023 BTC Price Capital Raised BTC Price 3/31/2024 BTC Holdings Appreciation + Excess Cash Appreciation BTC Holdings Market Value (Prior Holdings) (Q1/24 Purchases) (Q1/24 Purchases) Market Value BTC Count 189,150 Add
Slide 9: MicroStrategy Bitcoin Net Asset Value
MicroStrategy Bitcoin Net Asset Value Hypothetical scenarios in which bitcoin price increases – Illustrative Bitcoin Forward Price $64,000 $100,000 $150,000 $250,000 Spot Bitcoin Price - 56% 135% 290% MSTR (Current Leverage) - 75% 180% 395% MSTR (Incremental $0.5B Leverage) - 78% 190% 410% MSTR (Inc
Slide 10: Financial Results
Financial Results Andrew Kang, Senior Executive VP & Chief Financial Officer Copyright © 2024 MicroStrategy Incorporated. All Rights Reserved.
Slide 11: Revenue and Billings
Revenue and Billings Q1 2024 ($ in Millions) Total Revenues Subscription Services Revenues Non-GAAP Subscription Billings(1) Q1 2024 +22% YOY increase Q1 2024 +30% YOY increase $115.2M Q1 2024 Total Revenues $41.3 $23.0 5% YoY decrease $21.0 $21.5 $19.9 $18.8 15% 11% $23.1 $16.8 $17.7 20% $13.7 54%
Slide 12: Cost Structure and Operating Income
Cost Structure and Operating Income • MicroStrategy continues to operate under one reportable segment. Beginning in Q1 2024, we updated our quarterly reporting to differentiate operating results between the Software Business and Corporate & Other(1) • Loss from operations from software business for
Slide 13: Growth in Bitcoin Holdings
Growth in Bitcoin Holdings MicroStrategy has acquired additional bitcoin in every quarter since Q3 2020 Bitcoin Holdings (in ‘000s) 214.3 214.4 • 214,400 bitcoins(1) held on balance sheet, acquired for a total cost of 189.2 $7.54 billion, or $35,180 per bitcoin 158.2 152.3 140.0 • Year to date 2024
Slide 14: Impact of Intelligent Leverage
Impact of Intelligent Leverage Bitcoin count increase at a faster pace than basic share count increase 214,278 17,647 16,868 189,150 12/31/2023 3/31/2024 12/31/2023 3/31/2024 (1) Total Bitcoin Total Basic Sharecount (in '000s) (1) Adjusted diluted shares outstanding increased 4.8% from 20.763M on 12
Slide 15: Bitcoin Holdings Carrying Value vs. Market Value
Bitcoin Holdings Carrying Value vs. Market Value • Aggregate cost of $7.5 billion and current market value of $13.7 billion • Carrying value of $5.1 billion, net of ~$2.5 billion in cumulative impairment charges ($ in Billions) Carrying Value Market Value $16.0 $15.2 $13.7 $14.0 $12.0 $10.0 $8.0 $8.
Slide 16: Strong Capital Structure
Strong Capital Structure • Weighted average annual fixed interest rate of 1.3%, or approximately $46M annualized fixed interest expense Amount at Annual Interest Annualized Interest Principal Instruments Maturity(1) Issuance ($M) Rate (%) Expense ($M) Debt Senior Secured Notes Jun 2028 $500 6.125% $
Slide 17: Principal Debt Maturities
Principal Debt Maturities (1) • Total $3.6B debt outstanding at weighted average annual fixed interest rate of 1.3%, ~$46M annualized fixed interest expense - $650M - $1,050M $500M - $800M $604M 2024 2025 2026 2027 2028 2029 2030 2031 0.750% Senior 0.000% Senior 0.625% Senior 0.875% Senior 6.125% Se
Slide 18: Strategy & Bitcoin
Strategy & Bitcoin Michael Saylor, Executive Chairman Copyright © 2024 MicroStrategy Incorporated. All Rights Reserved.
Slide 19: MicroStrategy Outperformance Since Adoption of Bitcoin Strategy
MicroStrategy Outperformance Since Adoption of Bitcoin Strategy Key Assets and Indices Big Tech Stocks Enterprise Software Stocks 937% 435% 132% 113% 95% 52% 45% 69% 50% 15% 16% 39% 38% 17% 14% -3% -21% Stock performance since August 10, 2020, when MicroStrategy adopted its bitcoin strategy. Source:
Slide 20: We are Still Early to Bitcoin
We are Still Early to Bitcoin Bitcoin: $1T Cars & Collectibles Total global asset value: $900T Gold Art Equities $16T $18T $6T $115T Real Estate Bonds Money $330T $300T $120T Source: Bloomberg, FactSet, https://companiesmarketcap.com/gold/marketcap. 20
Slide 21: Bitcoin 2024 Halving Supply Shock
Bitcoin 2024 Halving Supply Shock Highest Stock to Flow Ratio in the World 2,600 What if an investor with unlimited capital announced a program to acquire 450 BTC daily at the market price for the next four years and hold the asset forever? BTC Halving Impact Daily Next 4 Years At Bitcoin Price ($M)
Slide 22: MicroStrategy – Bitcoin Development Company
MicroStrategy – Bitcoin Development Company Unique value proposition versus Spot Bitcoin ETPs MicroStrategy Spot Bitcoin ETPs Operating company Trust company 1 Company Structure Active control over capital structure Limited control over capital structure No management fee Non-zero management fee Abi
Slide 23: Appendix
Appendix Copyright © 2024 MicroStrategy Incorporated. All Rights Reserved.
Slide 24: Current Bitcoin Holdings
Current Bitcoin Holdings 82% of our total bitcoin holdings are unencumbered as of April 26, 2024 214,400 190,000 175,721 82% 91% 173,069 38,679 18% 9% 16,931 As of February 5, 2024 As of April 26, 2024 MicroStrategy: Restricted MacroStrategy: Unrestricted 24
Slide 25: Capital Markets Activities to Acquire More Bitcoin
Capital Markets Activities to Acquire More Bitcoin Strong track record of accretive capital allocation strategy Capital Markets Activity ~$3.6B ~$3.2B ~165K Proceeds from Corporate Debt Proceeds from Equity Bitcoins Purchased with Debt & Equity Capital Raised for Bitcoin Purchases (Gross Proceeds in
Slide 26: Use of Excess Cash to Acquire More Bitcoin
Use of Excess Cash to Acquire More Bitcoin Incremental bitcoin accretion per share through purchases using excess cash ($ in Millions) Operations Historical accumulated cash ~$825M ~49K Total Excess Cash Bitcoins Purchased with $490 Invested Excess Cash $136 $120 $41 $38 2020 2021 2022 2023 2024 YTD
Slide 27: Non-GAAP Reconciliations ($ in Millions)
Non-GAAP Reconciliations ($ in Millions) Q1 2024 Reconciliation of GAAP to non-GAAP income (loss) from operations Reconciliation of subscription services revenues to non-GAAP subscription billings 27
Slide 28: Non-GAAP Reconciliations ($ in Millions)
Non-GAAP Reconciliations ($ in Millions) Q1 2024 Reconciliation of non-GAAP operating expenses (1) Reconciliation of total non-GAAP expenses (1) Share-Based Compensation shown reflects the amounts recorded to Sales & Marketing, Research & Development, and General & Administrative only. 28
Slide 29: Non-GAAP Reconciliations ($ in Millions)
Non-GAAP Reconciliations ($ in Millions) Q1 2024 Reconciliation of total non-GAAP expenses 29
Slide 30: Basic and Adjusted Diluted Shares Outstanding Calculation
Basic and Adjusted Diluted Shares Outstanding Calculation (1) (2) (1) Basic Shares Outstanding reflects the actual Class A and Class B common stock outstanding as of the dates presented. (2) Adjusted Diluted Shares Outstanding reflects the maximum potential impact from conversion of our 2025, 2027,
Slide 31: Additional Information
Additional Information MicroStrategy is not an exchange traded product (“ETP”) or an exchange-traded fund (“ETF”) registered under the Investment Company Act of 1940, as amended, is not subject to the same rules and regulations as an ETP or an ETF, and does not operate as an ETP or ETF. In particula