MicroStrategy Third-Quarter Earnings Report Falls Short of Expectations – Here’s What You Need to Know

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Source: A video screenshot, Youtube/Bitcoin Magazine

Bitcoin (BTC) bull Michael Saylor’s company MicroStrategy delivered earnings that fell short of expectations on Tuesday, despite relatively stable bitcoin prices during the quarter.

According to the earnings report, MicroStrategy’s quarterly result fell short of the market’s expectations, with earnings falling 2.1% for the quarter to a total of $125.4m. The expectation was that MicroStrategy would post quarterly earnings of $127.58.

MicroStrategy quarterly earnings. Source: TradingView

Despite the disappointing earnings, shares of MicroStrategy rose by 1.09% in after-hours trading on Tuesday to $260. The slight gain followed a loss of 3.85% for the day during regular market hours yesterday.

Year-to-date, MicroStrategy shares are now down close to 54%.

MicroStrategy stock year-to-date. Source: Google

MicroStrategy’s massive holding of bitcoin has put pressure on the firm’s bottom line this year, after a downturn in the bitcoin market has pushed the price of the cryptocurrency down from around $46,000 at the beginning of the year to just over $20,000 as of today.

Over the course of the third quarter, however, the price of bitcoin has moved less, and instead stabilized in the $18,000 to $25,000 range.

“We incurred a minimal bitcoin impairment charge as bitcoin prices were stable during the third quarter,” MicroStrategy’s chief financial officer Andrew Kang said in yesterday’s earnings report. He added that the firm acquired 301 additional bitcoins for the quarter, and remains “the world’s largest publicly traded corporate owner of bitcoin.”

At the same time, comments from the company’s new CEO, Phong Le, made it clear that MicroStrategy’s original business intelligence products are still popular in the marketplace.

“For the third quarter, MicroStrategy achieved strong 51% growth year-over-year in subscription services revenues, record growth year-over-year in current subscription billings, and total revenue growth year-over-year on a constant currency basis,” Le said.

Notably, the CEO also pointed to a third quarter renewal rate of 95% for its software platform “despite the ongoing macroeconomic headwinds.”

Phong Le took over as CEO of MicroStrategy in August this year, giving co-founder and former CEO Michael Saylor more time to focus on the firm’s “bitcoin strategy and related bitcoin advocacy and education initiatives.”

As of September, when MicroStrategy announced its last bitcoin purchase, the company held 130,000 BTC, worth around $2.66bn at today’s price of $20,440 per bitcoin.



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