Slide 1: Q2 2022 Financial Results
Q2 2022 Financial Results August 2, 2022 Copyright © 2022 MicroStrategy Incorporated. All Rights Reserved.
Slide 2: Safe Harbor Statement
MicroStrategy Q2 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: Presenters and Agenda
Presenters and Agenda Shirish Jajodia Head of Investor Relations & Treasury INTRODUCTION Michael Saylor Chairman & Chief Executive Officer STRATEGIC REVIEW AND EXECUTIVE TRANSITION Phong Le President OPERATIONAL RESULTS: Q2 2022 Andrew Kang SEVP & Chief Financial Officer FINANCIAL RESULTS: Q2 2022 3
Slide 4: Strategic Review
Strategic Review Presented by Michael Saylor, Chairman & Chief Executive Officer Copyright © 2022 MicroStrategy Incorporated. All Rights Reserved.
Slide 5: MicroStrategy Corporate Strategies
MicroStrategy Corporate Strategies Business Analytics Bitcoin Who are we: MicroStrategy is the largest independent Who are we: MicroStrategy is the largest publicly-traded publicly-traded business intelligence company with the corporate holder of bitcoin in the world and the first public leading ent
Slide 6: MicroStrategy Stock Price Outperformance Since Adoption of Bitcoin Strategy
Q2 2022 MicroStrategy Stock Price Outperformance Since Adoption of Bitcoin Strategy Percent change of stock price from August 10, 2020 to August 1, 2022 Key Assets and Indices Big Tech Stocks 123% 94% 54% 43% 34% 23% 13% -13% -14% -14% -29% -39% -53% MSTR BTC S&P Nasdaq Gold Bond Silver GOOG AAPL MS
Slide 7: We Believe it is Still Early; MicroStrategy has a Long-Term Time Horizon
Q2 2022 We Believe it is Still Early; MicroStrategy has a Long-Term Time Horizon Bitcoin is still a very small fraction of world assets $325+ $300+ (USD Trillions) Market Value $110+ $36 $11 $0.4 $1.1 $1.1 Bitcoin Digital Silver Gold S&P 500 Global Equities Global Global Real Assets Mined Mined Mark
Slide 8: MicroStrategy Executive Transition
MicroStrategy Executive Transition As of March 31, 2022 Effective as of August 8, 2022 Michael Saylor Michael Saylor Chairman & Chief Executive Officer Executive Chairman Phong Le Phong Le President & Chief Financial Officer President & Chief Executive Officer Andrew Kang Senior Executive VP & Chief
Slide 9: Operational Results
Operational Results Presented by Phong Le, President Copyright © 2022 MicroStrategy Incorporated. All Rights Reserved.
Slide 10: Financial Highlights
Q2 2022 Financial Highlights $122.1M $14.0M Total Revenues, a decrease of 3% Subscription Services Revenues, an YoY, or an increase of 2% on a increase of 36% YoY, or 40% on a constant currency basis constant currency basis $34.1M $20.1M Total Software Licenses Revenues(1), Current Subscription Bill
Slide 11: MicroStrategy Ranked #1 in the Enterprise Analytics Use Case
Q2 2022 MicroStrategy Ranked #1 in the Enterprise Analytics Use Case 1 Enterprise Analytics Gartner Critical Capabilities • Be the best modern, open, solution for enterprise analytics #1 in Enterprise Analytics • Replace and consolidate departmental and legacy BI use cases 2 Embedded Analytics • Dev
Slide 12: Growth with Our Leading Managed Cloud Service
Q2 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 federal sector, the footprints of existing cloud customers, and onboardi
Slide 13: Bitcoin Highlights
Q2 2022 Bitcoin Highlights • In Q2, we purchased ~481 bitcoins Approximate Number of Bitcoins Held at End of Quarter for $10 million at an average purchase price of ~$20,790 per bitcoin, net of fees and expenses 129,218 129,699 124,391 • As of June 30, 2022, the Company 114,042 holds 129,699 bitcoin
Slide 14: Financial Results
Financial Results Presented by Andrew Kang, Senior Executive VP & Chief Financial Officer Copyright © 2022 MicroStrategy Incorporated. All Rights Reserved.
Slide 15: Revenue Components
Q2 2022 Revenue Components ($ in Millions) Total Revenues Total Software Licenses Revenues(1) Subscription Services Revenues Q2 2022: -3% YOY Q2 2022: +5% YOY Q2 2022: +36% YOY Constant FX: +2% YOY Constant FX: +8% YOY Constant FX: +40% YOY $134.5 $125.4 $128.0 $119.3 $122.1 $44.4 $36.7 $32.5 $34.1
Slide 16: Billings Components
Q2 2022 Billings Components ($ in Millions) Current Software Licenses Billings Current Subscription Billings(1) $55.6 $39.9 $35.6 $35.8 $28.1 $24.3 $20.1 $13.3 $11.4 $8.0 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 (1) Please refer to the Appendix for a reconciliation of Total Softwa
Slide 17: Cost Structure and Drivers
Q2 2022 Cost Structure and Drivers ($ in Millions) Non-GAAP Expenses By Type Total: $529 Total: $1,025 Q2 2022 vs. Q2 2021 Drivers Cost of Revenues $918 Increased cloud customer hosting fees and personnel costs S&M Decreased personnel costs and increase in capitalized commissions R&D $425 Increased
Slide 18: Non-GAAP Operating Income (Loss)
Q2 2022 Non-GAAP Operating Income (Loss) ($ in Millions) Non-GAAP Operating Income (Loss) Digital Asset Impairment Charges $918 $425 $194 $147 $170 $44 $65 $4 $26 ($18) ($37) ($175) ($124) ($156) ($403) ($903) Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 • Q2 2022 non-GAAP operating loss was $903
Slide 19: Bitcoin Value
Q2 2022 Bitcoin Value ($ in Millions) Carrying Value Market Value $7,000 $5,893 $6,000 $5,707 $5,352 $4,965 $5,000 $4,000 $3,653 $3,000 $2,850 $2,896 $2,451 $2,000 $2,056 $2,406 $1,947 $2,051 $1,988 $1,000 $410 $1,054 $0 $381 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Q4 2021 Q1 2022 Q2 2022 • Aggregat
Slide 20: Solid Capital Structure Framework
Solid Capital Structure Framework • Core business is insulated from near-term market volatility of bitcoin prices • Sufficient liquidity through cash flows generated at software business to cover the interest expenses Amount at Annual Interest Annual Interest Instrument Maturity Issuance ($M) Rate (
Slide 21: Current Bitcoin Holdings
Q2 2022 Current Bitcoin Holdings 129,699 66% 85,059 MacroStrategy: Unencumbered MacroStrategy: Pledged MicroStrategy: Pledged 30,051 34% 14,589 As of June 30, 2022 21
Slide 22: 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 $0 2022 2023 2024 2025 2026 2027 2028 1) Bitcoin-Backed Term Loan 0.000% Senior 6.125% Senior Instrument 2) 0.750% Senior Convertible Convertible Notes Secured Not
Slide 23: Appendix
Appendix Copyright © 2022 MicroStrategy Incorporated. All Rights Reserved.
Slide 24: Non-GAAP reconciliations: GAAP to non-GAAP income from operations
MicroStrategy Q2 2022 Earnings Call Non-GAAP reconciliations ($ in millions) Reconciliation of GAAP to non-GAAP income (loss) from operations Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 Revenues $122.9 $125.4 $128.0 $134.5 $119.3 $122.1 Cost of Revenues $22.5 $23.0 $22.3 $24.0 $25.7 $25.2 Operating Expenses
Slide 25: Non-GAAP reconciliations: software licenses billings
MicroStrategy Q2 2022 Earnings Call Non-GAAP reconciliations ($ 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 Current Deferred Product Licenses Revenues $0.2 $0.5 $2.3 $1.0 $1.1 $0.8 Current Deferred Subscrip
Slide 26: Non-GAAP reconciliations: operating expenses
MicroStrategy Q2 2022 Earnings Call Non-GAAP reconciliations ($ in millions) Reconciliation of non-GAAP operating expenses Q1 21 Q2 21 Q3 21 Q4 21 Q1 22 Q2 22 GAAP Operating Expenses $283.5 $516.6 $155.3 $248.0 $263.6 $1,015.0 Share-Based Compensation (1) $7.4 $10.6 $11.5 $12.2 $13.4 $14.2 Non-GAAP
Slide 27: Non-GAAP reconciliations: total non-GAAP expenses
MicroStrategy Q2 2022 Earnings Call Non-GAAP reconciliations ($ in millions) Reconciliation of total non-GAAP expenses Q2 21 Q2 22 GAAP Expenses Cost of Revenues $23.0 $25.2 Sales & Marketing $40.3 $36.9 Research & Development $28.5 $31.8 General & Administrative $22.9 $28.5 Digital Asset Impairment