MicroStrategy Reports $12.7B Q1 Loss Amid Bitcoin Strategy, Saylor Highlights $5B Gain

MicroStrategy, now rebranded as Strategy, reported a net loss attributable to common stockholders of $12.77 billion, or $38.25 per diluted share, for the first quarter of 2024. The loss was driven primarily by a $14.46 billion unrealized loss on digital assets under fair-value accounting, despite an 11.9% year-over-year revenue increase to $124.3 million.

Bitcoin Accounting Dominates Q1 Results

The company’s traditional earnings were overshadowed by Bitcoin’s market volatility, highlighting the central tension in Strategy’s business model. While the company’s software revenue grew, the unrealized loss on its Bitcoin holdings reshaped its bottom line. Revenue from software rose to $124.3 million from $111.1 million in the same period last year, but the operating loss totaled $14.47 billion, nearly entirely due to the digital asset write-down.

Saylor’s Preferred Bitcoin Metrics Show Gains

Despite the massive loss, CEO Michael Saylor emphasized Strategy’s internal Bitcoin performance metrics, which he argues better reflect the company’s long-term strategy. These metrics include:

• BTC Yield: 9.4% year-to-date, measuring the change in Bitcoin holdings per diluted share.
• BTC Gain: A $4.97 billion unrealized gain, representing the dollar-denominated increase in Bitcoin exposure.
• Bitcoin Holdings Increase: Strategy added 63,410 BTC year-to-date, bringing its total to 818,334 BTC as of May 3, 2024.

Saylor’s metrics focus narrowly on whether the company is increasing Bitcoin exposure per share, regardless of broader financial health. This approach contrasts with traditional measures like net income, cash flow, or dividend sustainability.

Bitcoin Purchases Continued Amid Market Drawdown

Strategy’s strategy remained intact even as Bitcoin’s price declined in Q1. The company continued purchasing Bitcoin, ending the quarter with a total of 818,334 BTC. As of May 1, 2024, the holdings had a market value of $64.14 billion at a Bitcoin price of $78,374. The average purchase price was $75,537 per coin, leaving the position modestly above cost.

"Strategy’s capital markets strategy is still producing incremental Bitcoin exposure for shareholders." — Michael Saylor

Key Takeaways

• Strategy’s Q1 2024 net loss: $12.77 billion.
• Revenue growth: 11.9% YoY to $124.3 million.
• Unrealized Bitcoin loss: $14.46 billion.
• Bitcoin holdings: 818,334 BTC as of May 3, 2024.
• Market value of holdings: $64.14 billion at $78,374 per BTC.
• BTC Yield: 9.4% year-to-date.