Strategy Reports $2.8B Q3 Profit With 640K Bitcoin Holdings

TLDR

• Strategy reported third quarter profits of $2.8 billion with diluted earnings of $8.42 per common share.
• MSTR shares rose more than 3% in after-hours trading to approximately $262 following the earnings announcement.
• The company now holds over 640,000 Bitcoin worth roughly $68 billion at current market prices.
• Strategy remains the world’s largest corporate holder of Bitcoin among publicly traded companies.
• The firm spent $43 million to purchase 390 Bitcoin last week in its largest recent acquisition.

Strategy posted $2.8 billion in third-quarter profits as the company maintained its Bitcoin accumulation approach. The Tysons Corner firm reported diluted earnings of $8.42 per common share on Thursday. MSTR shares climbed over 3% in after-hours trading to approximately $262.

The company announced its financial results following the market close on Thursday. The strategy has focused on Bitcoin treasury operations since the company pivoted from software in 2020. MSTR shares have surged more than 1,400% since the strategic shift began.

Strategy Maintains Bitcoin Holdings Despite Market Volatility

The firm now holds over 640,000 Bitcoin worth roughly $68 billion at current prices. Strategy remains the world’s largest corporate holder of Bitcoin among publicly traded companies. More than 200 firms have adopted similar treasury strategies, according to bitcointreasuries.net. 

Strategy spent $43 million to acquire 390 Bitcoin last week in its largest recent purchase. The company announced this transaction through a press release on Monday. Bitcoin’s price rose 6% during the third quarter, following a 30% increase in the previous quarter.

The cryptocurrency finished Q3 above $114,000 but dropped below $107,000 on Thursday. MSTR shares closed regular trading above $257 before gaining in extended hours. The stock remains below Wall Street Journal consensus estimates of $551.53.

Company Adjusts Capital Raising Approach

Strategy has not issued common shares since around September 29 when it bought Bitcoin. The company previously raised capital by selling shares at a premium to its holdings. Strategy disclosed it raised $128 million at that time and held extra cash.

Recent Bitcoin purchases have been smaller than previous transactions this year. The firm made consecutive purchases of 196 BTC, 219 BTC, and finally 390 BTC. Strategy has historically used share issuances as its primary funding source for acquisitions.

MSTR shares declined more than 7% during regular Thursday trading hours. The stock price has been falling steadily over the past three months. Strategy reaffirmed its full-year guidance for $24 billion in net income.

Software Revenue and Future Projections

The company generated $128 million in software business revenues during the quarter. Strategy reported $114.5 million in second-quarter revenue, representing a 3% annual increase. The firm produced a record $10 billion in net income last quarter.

Strategy projects diluted earnings per share of $80 for the full year. This guidance assumes Bitcoin will reach $150,000 by year’s end. Company leadership expressed confidence in Bitcoin’s price trajectory during recent media appearances.

Chairman Michael Saylor told CNBC on Wednesday that he expects prices to reach $150,000. Saylor said he believes Bitcoin will “grind up” to that level by December. More than 90% of Myriad prediction market respondents said they would not sell Bitcoin.

Strategy continues operating from its Virginia headquarters while managing its treasury operations. The company pioneered the corporate Bitcoin treasury strategy among publicly traded firms. MSTR shares have experienced both gains and declines throughout recent trading periods.

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