Slide 1: Q2 2024 Financial Results
Q2 2024 Financial Results August 1, 2024 Copyright © 2024 MicroStrategy Incorporated. All Rights Reserved.
Slide 2: Safe Harbor Statement
MicroStrategy Q2 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: Business Results
Business Results Phong Le, President & Chief Executive Officer Copyright © 2024 MicroStrategy Incorporated. All Rights Reserved.
Slide 4: 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 $836M total excess cash $3.8B in senior secured and $3.2B of equity issued on balance sheet invested convertible debt ou
Slide 5: Bitcoin Highlights
Bitcoin Highlights Q2 2024 Bitcoin Holdings • Acquired 12,222 bitcoin since the end of Q1 2024 for $805M at average price of $65,882 226,500 • Current market value of bitcoin holdings ~$15B Acquired for a total cost of $8.34 billion, or • Largest corporate holder of bitcoin in the world $36,821 per
Slide 6: Impact of Intelligent Leverage
Impact of Intelligent Leverage Bitcoin count increased at a faster pace than assumed diluted share count 226,331 21,766 22,166 214,278 20,763 189,150 12/31/2023 3/31/2024 6/30/2024 12/31/2023 3/31/2024 6/30/2024 (1) Total Bitcoin Assumed Diluted Shares Outstanding (in '000s) (1) Please refer to the
Slide 7: BTC Yield KPI Historical
BTC Yield KPI Historical BTC Yield is the % change period-to-period of the ratio between Bitcoin Holdings and Assumed Diluted Shares Outstanding ₿TC Yield % 47.3% 8.1% 7.3% 3.7% 1.8% 2021 2022 2023 Q1 24 Q2 24 Note: “BTC Yield” is a KPI (key performance indicator) that represents the % change period
Slide 8: BTC Yield KPI Long Term Target
BTC Yield KPI Long Term Target BTC Yield is the % change period-to-period of the ratio between Bitcoin Holdings and Assumed Diluted Shares Outstanding ₿TC Yield % 12.2% 4-8% 4-8% 4-8% 7.3% 1.8% 2022 2023 2024 YTD 2025E 2026E 2027E Note: “BTC Yield” is a KPI (key performance indicator) defined in the
Slide 9: Software Highlights
Software Highlights Multi-cloud | Cloud-native | Marketplace Subscription Services Revenues MicroStrategy AI $24.1M • First to market in AI/BI cloud offering • Microsoft Azure OpenAI partnership increase of 21% YoY • Auto: SQL, Dashboard, Answers, Expert • First to market with AI + BI platform integ
Slide 10: Financial Results
Financial Results Andrew Kang, Senior Executive VP & Chief Financial Officer Copyright © 2024 MicroStrategy Incorporated. All Rights Reserved.
Slide 11: Revenue and Billings
Revenue and Billings Q2 2024 ($ in Millions) Total Revenues Non-GAAP Subscription Billings(1) Subscription Services Revenues Q2 2024 +45% YOY increase Q2 2024 +21% YOY increase $111.4M Q2 2024 Total Revenues $41.3 $24.1 7% YoY decrease $23.0 $21.0 $21.5 $33.4 $19.9 15% 8% $23.1 $16.8 $17.7 22% 55% P
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 Strategic Treasury Reserve
Growth in Bitcoin Strategic Treasury Reserve MicroStrategy has acquired additional bitcoin in every quarter since Q3 2020 Bitcoin Holdings (in ‘000s) 226.3 226.5 • 226,500 bitcoins(1) held on balance 214.3 sheet, acquired for a total cost of $8.34 billion, or $36,821 per bitcoin 189.2 158.2 • During
Slide 14: Bitcoin Holdings Market Value vs. Carrying Value
Bitcoin Holdings Market Value vs. Carrying Value • Current market value of $14.7 billion and aggregate cost of $8.3 billion • Carrying value of $5.7 billion, net of ~$2.6 billion in cumulative impairment charges ($ in Billions) Carrying Value Market Value $16.0 $15.2 $14.7 $14.0 $14.0 $12.0 $10.0 $8
Slide 15: Capital Structure & Intelligent Leverage
Capital Structure & Intelligent Leverage • Issued $800M convertible senior notes due 2032 • Called $650M convertible senior notes due 2025 through conversion to common stock • Generated a BTC Yield of 12.2% year-to-date • Announced a 10:1 stock split of MicroStrategy’s class A common stock and class
Slide 16: Principal Debt Maturities
Principal Debt Maturities (1) • Total $3.8B debt outstanding at weighted average annual fixed interest rate of 1.6% $1,050M $800M $800M $604M $500M (2) (2) (2) (2) 2024 2025 2026 2027 2028 2029 2030 2031 2032 0.000% 6.125% 0.625% 0.875% 2.250% Senior Senior Senior Senior Senior Instrument Convertibl
Slide 17: Strategy & Bitcoin
Strategy & Bitcoin Michael Saylor, Executive Chairman Copyright © 2024 MicroStrategy Incorporated. All Rights Reserved.
Slide 18: Bitcoin Conference 2024
Bitcoin Conference 2024 Nashville, TN 18
Slide 19: We are Still Early to Bitcoin
We are Still Early to Bitcoin Bitcoin: $1.3T Cars & Collectibles Total global asset value: $900T Gold Art Equities $16T $18T $6T $115T Real Estate Bonds Money $330T $300T $120T 19
Slide 20: MicroStrategy Outperformance Since Adoption of Bitcoin Strategy
MicroStrategy Outperformance Since Adoption of Bitcoin Strategy Key Assets and Indices Big Tech Stocks 1206% 948% 442% 145% 131% 64% 101% 97% 81% 60% 30% 19% 19% -1% -18% Stock performance since August 10, 2020, when MicroStrategy adopted its bitcoin strategy. Source: FactSet as of 4:00pm Eastern Ti
Slide 21: MicroStrategy – Bitcoin Development Company
MicroStrategy – Bitcoin Development Company Unique value proposition versus Spot Bitcoin ETPs MicroStrategy Spot Bitcoin ETPs Operating company Trust company 1 Company Structure Active control over capital structure Limited control over capital structure No management fee Non-zero management fee Abi
Slide 22: BTC Yield KPI Long Term Target
BTC Yield KPI Long Term Target BTC Yield is the % change period-to-period of the ratio between Bitcoin Holdings and Assumed Diluted Shares Outstanding ₿TC Yield % 12.2% 4-8% 4-8% 4-8% 7.3% 1.8% 2022 2023 2024 YTD 2025E 2026E 2027E Note: “BTC Yield” is a KPI (key performance indicator) defined in the
Slide 23: Appendix
Appendix Copyright © 2024 MicroStrategy Incorporated. All Rights Reserved.
Slide 24: Current Bitcoin Holdings
Current Bitcoin Holdings 78% of our total bitcoin holdings are unencumbered as of July 31, 2024 226,500 214,400 190,000 175,721 78% 175,721 91% 173,069 38,679 50,779 22% 9% 16,931 As of February 5, 2024 As of April 26, 2024 As of July 31, 2024 MicroStrategy: Restricted MacroStrategy: Unrestricted 24
Slide 25: Non-GAAP Reconciliations ($ in Millions)
Non-GAAP Reconciliations ($ in Millions) Q2 2024 Reconciliation of GAAP to non-GAAP income (loss) from operations Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 Revenues $125.4 $132.6 $121.9 $120.4 $129.5 $124.5 $115.2 $111.4 Cost of Revenues $25.4 $26.7 $27.9 $27.1 $26.7 $28.2 $30.0 $30.9 Operatin
Slide 26: Non-GAAP Reconciliations ($ in Millions)
Non-GAAP Reconciliations ($ in Millions) Q2 2024 Reconciliation of non-GAAP operating expenses Q3 22 Q4 22 Q1 23 Q2 23 Q3 23 Q4 23 Q1 24 Q2 24 GAAP Operating Expenses $93.9 $299.5 $114.3 $120.0 $128.0 $139.0 $288.9 $280.8 (1) Share-Based Compensation $15.8 $15.9 $16.5 $14.4 $15.6 $18.5 $16.4 $18.9 N
Slide 27: Non-GAAP Reconciliations ($ in Millions)
Non-GAAP Reconciliations ($ in Millions) Q2 2024 Reconciliation of total non-GAAP expenses Q2 23 Q2 24 GAAP Expenses Cost of Revenues $27.1 $30.9 Sales & Marketing $37.7 $34.3 Research & Development $29.4 $30.3 General & Administrative $28.8 $36.1 Digital Asset Impairment Losses, Net of Gains on Sal
Slide 28: Basic and Assumed Diluted Shares Outstanding Calculation
Basic and Assumed Diluted Shares Outstanding Calculation 6/30/2020 12/31/2020 12/31/2021 12/31/2022 12/31/2023 3/31/2024 6/30/2024 7/31/2024 Total Bitcoin Holdings - 70,470 124,391 132,500 189,150 214,278 226,331 226,500 Shares Outstanding (in '000s) Class A 7,651 7,623 9,322 9,585 14,904 15,683 17,
Slide 29: Important Information About BTC Yield KPI
Important Information About BTC Yield KPI BTC Yield is a key performance indicator (“KPI”) that represents the % change period-to-period of the ratio between our bitcoin holdings and our Assumed Diluted Shares Outstanding. Assumed Diluted Shares Outstanding refers to the aggregate of our actual shar
Slide 30: 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