Slide 1: Q1 2023 Financial Results
Q1 2023 Financial Results May 1, 2023 Copyright © 2022 MicroStrategy Incorporated. All Rights Reserved.
Slide 2: Safe Harbor Statement
MicroStrategy Q1 2023 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: MicroStrategy World 2023
MicroStrategy World 2023 May 1-4 | Orlando, Florida Business Intelligence Bitcoin for Corporations May 1-4 May 3 Key Speakers • Michael Rihani, Block / Cash App • Tom Jessop & Dave Gray, Fidelity • Michael Saylor, MicroStrategy • [Who customer keynotes – Hilton, Amica, Pfizer, Lightning for Corporat
Slide 5: Financial Highlights
Financial Highlights Q1 2023 $121.9M $18.8M Total Revenues, an increase of 2% Subscription Services Revenues, an YoY, or an increase of 6% on a increase of 46% YoY, or 52% on a constant currency basis constant currency basis $36.2M $13.7M Total Software Licenses Revenues(1), Non-GAAP Current Subscri
Slide 6: Bitcoin Holdings Evolution
Bitcoin Holdings Evolution • In Q1, we increased our Approximate Number of Bitcoins Held at End of Quarter holdings by ~7,500 bitcoins for a net aggregate purchase 140,000 amount of $179 million or 129,218 129,699 130,000 132,500 124,391 ~$23,903 per bitcoin, inclusive 114,042 of fees and expenses 1
Slide 7: Bitcoin Price Evolution
Bitcoin Price Evolution • Bitcoin is volatile and has Bitcoin Price ($) fluctuated over the quarters $70,000 $60,000 • MicroStrategy principles $58,601 $50,000 $45,880 $45,603 • High conviction $43,535 • Long-term focused $40,000 $34,763 $30,700 $30,664 $30,639 $30,137 $29,803 $29,350 $29,181 • Risk
Slide 8: Introducing…
Introducing… Embedded analytics is one of the four core pillars of BUILD VIEW FOCUS MANAGE DEPLOY DOSSIER LIBRARY HYPER WORKSTATION MULTI-CLOUD SELF-SERVICE BUSINESS REPORTING ADVANCED APPS EMBEDDED ANALYTICS Get answers from Run your business Fully personalize Integrate analytics your data quickly
Slide 9: Innovation in Business Intelligence
Innovation in Business Intelligence MicroStrategy is investing in developing on its core BI capabilities to deliver analytics that is east, fast, and powerful Empowered Self-Service Productivity Data Personalization Governed Authoring: Create using Native PowerPoint Plug-in: Import and Data privacy:
Slide 10: Innovation in Augmented Analytics
Innovation in Augmented Analytics MicroStrategy is investing in developing on its Augmented Analytics to help users perform their existing workflows more quickly, resulting in increased output, improved efficiency, and better data insights Augmented Authoring Pervasive Analysis Guided Discovery Smar
Slide 11: Innovation in Artificial Intelligence
Innovation in Artificial Intelligence MicroStrategy is investing in developing on its Artificial Intelligence (AI) capabilities to assist enterprises in harnessing the potential of new AI engines for their corporate data AI Powered Productivity Generative AI Interactivity & Insights SQL Scribe: Gene
Slide 12: Innovation in Bitcoin
Innovation in Bitcoin MicroStrategy Lightning Platform MicroStrategy is developing new software and products that utilize the Lightning network to address enterprise-specific use cases. Experience in enterprise software to create plug-and-play solutions for new ecommerce use-cases and to tackle mode
Slide 13: Financial Results
Financial Results Andrew Kang, Senior Executive VP & Chief Financial Officer Copyright © 2022 MicroStrategy Incorporated. All Rights Reserved.
Slide 14: Revenue Components
Revenue Components Q1 2023 ($ in Millions) Total Revenues Total Software Licenses Revenues(1) Subscription Services Revenues Q1 2023: +2% YOY Q1 2023: +23% YOY Q1 2023: +46% YOY Constant FX: +6% YOY Constant FX: +29% YOY Constant FX: +52% YOY $18.8 $132.6 $17.5 $45.0 $16.4 $119.3 $122.1 $125.4 $121.
Slide 15: Non-GAAP Billings Components
Non-GAAP Billings Components (1) Q1 2023 ($ in Millions) Current Software Licenses Billings Current Subscription Billings Q1 2023: +2% YOY Q1 2023: +19% YOY $61.0 $31.1 $39.9 $36.4 $20.1 $28.1 $28.7 $14.4 $13.7 $11.4 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 (1) Please refer to the
Slide 16: Cost Structure and Drivers
Cost Structure and Drivers Q1 2023 • Non-GAAP cost of revenues higher YoY primarily due to higher total cost of cloud hosting • Non-cash digital asset impairment charge was significantly lower due to higher Bitcoin price as of March 31, 2023 • Overall foreign exchange (Fx) impacts favorable in Q1 No
Slide 17: Non-GAAP Operating Income (Loss)
Non-GAAP Operating Income (Loss) Q1 2023 ($ in Millions) • Non-GAAP operating loss was $3 million • Non-cash digital asset impairment charge was $19 million (1) Non-GAAP Operating Income (Loss) Digital Asset Impairment Charges $918 $425 $194 $147 $170 $198 $44 $4 $26 $65 $23 $1 $19 ($18) ($37) ($3)
Slide 18: Bitcoin Holdings Carrying Value vs. Market Value
Bitcoin Holdings Carrying Value vs. Market Value ($ in Millions) Carrying Value Market Value $7,000 $5,893 $6,000 $5,707 $5,352 $4,965 $5,000 $4,109 $3,653 $3,986 $4,000 $3,000 $2,451 $2,532 $2,850 $2,896 $2,194 $2,056 $2,406 $2,000 $1,947 $2,051 $1,988 $1,993 $2,000 $2,000 $1,840 $1,000 $410 $1,054
Slide 19: Strong Capital Structure
Strong Capital Structure • Debt reduced by $205M through repayment of bitcoin-backed loan at 22% discount, realizing $45M gain on debt extinguishment • Weighted average annual interest rate of 1.6%, compared to 2.1% at the end of Q4 2022 • Initiated new at-the-market (“ATM”) equity offering program
Slide 20: Balance Sheet – Principal Debt Maturities
Balance Sheet – Principal Debt Maturities (1) ($ in Millions) Expected Bitcoin Halving (Q2 2024)(2) $1,050 Repaid $205M loan $205 in March 2023 $500 $650 $0 $0 $0 2023 2024 2025 2026 2027 2028 0.750% Senior 0.000% Senior 6.125% Senior Instrument Convertible Convertible Secured Notes Notes Notes Matu
Slide 21: Current Bitcoin Holdings
Current Bitcoin Holdings Q1 2023 • Bitcoin held as collateral under the $205M bitcoin-back loan was released when repaid in Q1 • 89% of our total bitcoin holdings are unencumbered as of March 31, 2023 140,000 132,500 63% 82,991 125,110 89% 34,619 37% 14,890 14,890 11% As of December 31, 2022 As of M
Slide 22: 2023 Focus
2023 Focus Positive Sustained Continued Growth and Increase in Acquire and Transition to Preserving Subscription Hold Bitcoin Cloud Margins Billings 22
Slide 23: Strategy & Bitcoin
Strategy & Bitcoin Michael Saylor, Executive Chairman Copyright © 2022 MicroStrategy Incorporated. All Rights Reserved.
Slide 24: MicroStrategy Outperformance Since Adoption of Bitcoin Strategy
MicroStrategy Outperformance Since Adoption of Bitcoin Strategy Key Assets and Indices Big Tech Stocks Enterprise Software Stocks 166% 143% 72% 51% 48% 45% 24% 11% 4% 1% -2% -11% -16% -9% -15% -32% -33% Stock performance since August 10, 2020, when MicroStrategy adopted its bitcoin strategy. Source:
Slide 25: Appendix
Appendix Copyright © 2022 MicroStrategy Incorporated. All Rights Reserved.
Slide 26: Non-GAAP reconciliations: income from operations
MicroStrategy Q1 2023 Earnings Call Non-GAAP reconciliations ($ in millions) Reconciliation of GAAP to non-GAAP income (loss) from operations 26
Slide 27: Non-GAAP reconciliations: billings
MicroStrategy Q1 2023 Earnings Call Non-GAAP reconciliations ($ in millions) Reconciliation of total software licenses revenues to current software licenses billings (1) Reconciliation of subscription services revenues to non-GAAP current subscription billings (1) Total Software Licenses Revenues is
Slide 28: Non-GAAP reconciliations: operating expenses
MicroStrategy Q1 2023 Earnings Call Non-GAAP reconciliations ($ in millions) 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 & Admini
Slide 29: Non-GAAP reconciliations: total expenses
MicroStrategy Q1 2023 Earnings Call Non-GAAP reconciliations ($ in millions) Reconciliation of total non-GAAP expenses 29