TYSONS CORNER, Va.--(BUSINESS WIRE)--MicroStrategy® Incorporated (Nasdaq: MSTR) (“MicroStrategy” or the “Company”), the largest independent publicly-traded business intelligence company, today announced financial results for the three-month period ended December 31, 2022 (the fourth quarter of its 2022 fiscal year).
“In 2022, MicroStrategy achieved total revenue growth on a constant currency basis for the fourth quarter as well as the full year on the strength of our cloud business. In the fourth quarter, current subscription billings grew at a double-digit growth rate for the eleventh straight quarter. The stickiness of our products and the long-standing tenure of our top customers is a testament to the resiliency of our business, despite ongoing macroeconomic headwinds,” said Phong Le, President and Chief Executive Officer, MicroStrategy.
“I am pleased to report we again increased our bitcoin holdings this past quarter to a total of 132,500 bitcoins. Our corporate strategy and conviction in acquiring, holding, and growing our bitcoin position for the long term remains unchanged. And while we encountered macroeconomic and foreign currency headwinds in 2022, we continue to shift to higher quality, recurring revenues as we grow and scale our cloud business. We remain intentional and precise in prioritizing costs, focusing on areas that drive revenue growth while preserving margins,” said Andrew Kang, Chief Financial Officer, MicroStrategy.
Fourth Quarter 2022 Financial Highlights
- Revenues: Total revenues for the fourth quarter of 2022 were $132.6 million, a 1.5% decrease, or a 4.1% increase on a non-GAAP constant currency basis, compared to the fourth quarter of 2021. Product licenses and subscription services revenues for the fourth quarter of 2022 were $45.0 million, a 1.5% increase, or an 8.5% increase on a non-GAAP constant currency basis, compared to the fourth quarter of 2021. Product support revenues for the fourth quarter of 2022 were $66.8 million, a 3.3% decrease, or a 1.0% increase on a non-GAAP constant currency basis, compared to the fourth quarter of 2021. Other services revenues for the fourth quarter of 2022 were $20.7 million, a 1.4% decrease, or a 5.0% increase on a non-GAAP constant currency basis, compared to the fourth quarter of 2021.
- Gross Profit: Gross profit for the fourth quarter of 2022 was $105.8 million, representing a 79.8% gross margin, compared to a gross profit of $110.5 million, representing a gross margin of 82.2%, for the fourth quarter of 2021.
- Operating Expenses: Operating expenses for the fourth quarter of 2022 were $299.5 million, a 20.8% increase compared to the fourth quarter of 2021. Operating expenses include impairment losses, net of gains on sale, on MicroStrategy’s digital assets, which were $197.6 million during the fourth quarter of 2022, compared to $146.6 million in the fourth quarter of 2021.
- Loss from Operations and Net Loss: Loss from operations for the fourth quarter of 2022 was $193.7 million, compared to $137.5 million for the fourth quarter of 2021. Net loss for the fourth quarter of 2022 was $249.7 million, or $21.93 per share on a diluted basis, as compared to $90.0 million, or $8.43 per share on a diluted basis, for the fourth quarter of 2021. Digital asset impairment losses, net of gains on sale, of $197.6 million and $146.6 million for the fourth quarter of 2022 and 2021, respectively, were reflected in these amounts.
- Cash and Cash Equivalents: As of December 31, 2022, MicroStrategy had cash and cash equivalents of $43.8 million, as compared to $63.4 million as of December 31, 2021, a decrease of $19.5 million.
- Digital Assets: As of December 31, 2022, the carrying value of MicroStrategy’s digital assets (comprised of approximately 132,500 bitcoins) was $1.840 billion, which reflects cumulative impairment losses of $2.153 billion since acquisition and an average carrying amount per bitcoin of approximately $13,887. As of December 31, 2022, the original cost basis and market value of MicroStrategy’s bitcoin were $3.993 billion and $2.194 billion, respectively, which reflects an average cost per bitcoin of approximately $30,137 and a market price per bitcoin of $16,556.32, respectively. MicroStrategy sold approximately 704 bitcoins for cash proceeds of $11.8 million, net of fees and expenses, resulting in gains on sale of $0.9 million in the fourth quarter of 2022. Additional information on MicroStrategy’s digital asset holdings is included in the “Digital Assets – Additional Information” tables at the end of this press release.
- Sales Agreement: On September 9, 2022, MicroStrategy entered into a Sales Agreement (the “2022 Sales Agreement”) with Cowen and Company LLC and BTIG, LLC, as agents (collectively, the “2022 Sales Agents”), pursuant to which MicroStrategy may issue and sell shares of its class A common stock having an aggregate offering price of up to $500.0 million from time to time through the 2022 Sales Agents. During the three and twelve months ended December 31, 2022, the Company issued and sold 218,575 shares of its class A common stock under the 2022 Sales Agreement, at an average gross price per share of approximately $213.16, for aggregate net proceeds (less $0.4 million in sales commissions and expenses) of approximately $46.2 million. As of December 31, 2022, approximately $453.4 million of the Company’s class A common stock remained available for issuance and sale pursuant to the 2022 Sales Agreement.
The tables provided at the end of this press release include a reconciliation of the most directly comparable financial measures prepared in accordance with generally accepted accounting principles in the United States (“GAAP”) to non-GAAP financial measures for the three and twelve months ended December 31, 2022 and 2021. An explanation of non-GAAP financial measures is also included under the heading “Non-GAAP Financial Measures” below. Additional non-GAAP financial measures are included in MicroStrategy’s “Q4 2022 Earnings Presentation,” which will be available under the “Events and Presentations” section of MicroStrategy’s investor relations website at https://www.microstrategy.com/en/investor-relations.
Non-GAAP Financial Measures
MicroStrategy is providing supplemental financial measures for (i) non-GAAP loss from operations that excludes the impact of share-based compensation expense, (ii) non-GAAP net loss and non-GAAP diluted loss per share that exclude the impacts of share-based compensation expense, interest expense arising from the amortization of debt issuance costs related to MicroStrategy’s long-term debt, and related income tax effects, and (iii) non-GAAP constant currency revenues that exclude foreign currency exchange rate fluctuations. These supplemental financial measures are not measurements of financial performance under GAAP and, as a result, these supplemental financial measures may not be comparable to similarly titled measures of other companies. Management uses these non-GAAP financial measures internally to help understand, manage, and evaluate business performance and to help make operating decisions.
MicroStrategy believes that these non-GAAP financial measures are also useful to investors and analysts in comparing its performance across reporting periods on a consistent basis. The first supplemental financial measure excludes a significant non-cash expense that MicroStrategy believes is not reflective of its general business performance, and for which the accounting requires management judgment and the resulting share-based compensation expense could vary significantly in comparison to other companies. The second set of supplemental financial measures excludes the impacts of (i) share-based compensation expense, (ii) non-cash interest expense arising from the amortization of debt issuance costs related to MicroStrategy’s long-term debt, and (iii) related income tax effects. The third set of supplemental financial measures excludes changes resulting from fluctuations in foreign currency exchange rates so that results may be compared to the same period in the prior year on a non-GAAP constant currency basis. MicroStrategy believes the use of these non-GAAP financial measures can also facilitate comparison of MicroStrategy’s operating results to those of its competitors.
Conference Call
MicroStrategy will be discussing its fourth quarter 2022 financial results on a live Video Webinar today beginning at approximately 5:00 p.m. ET. The live Video Webinar and accompanying presentation materials will be available under the “Events and Presentations” section of MicroStrategy’s investor relations website at https://www.microstrategy.com/en/investor-relations. Log-in instructions will be available after registering for the event. An archived replay of the event will be available beginning approximately two hours after the call concludes.
About MicroStrategy Incorporated
MicroStrategy (Nasdaq: MSTR) is the largest independent publicly-traded analytics and business intelligence company. The MicroStrategy analytics platform is consistently rated as the best in enterprise analytics and is used by many of the world’s most admired brands in the Fortune Global 500. We pursue two corporate strategies: (1) acquire and hold bitcoin, which we view as a dependable store of value supported by a robust, public, open-source architecture untethered to sovereign monetary policy and (2) grow our enterprise analytics software business to promote our vision of Intelligence Everywhere. For more information about MicroStrategy, visit www.microstrategy.com.
MicroStrategy, Intelligent Enterprise, and MicroStrategy Library are either trademarks or registered trademarks of MicroStrategy Incorporated in the United States and certain other countries. Other product and company names mentioned herein may be the trademarks of their respective owners.
This press release may include statements that may constitute “forward-looking statements,” including estimates of future business prospects or financial results and statements containing the words “believe,” “estimate,” “project,” “expect,” “will,” or similar expressions. Forward-looking statements inherently involve risks and uncertainties that could cause actual results of MicroStrategy Incorporated and its subsidiaries (collectively, the “Company”) to differ materially from the forward-looking statements. Factors that could contribute to such differences include: fluctuations in the market price of bitcoin and any associated impairment charges that the Company may incur as a result of a decrease in the market price of bitcoin below the value at which the Company’s bitcoins are carried on its balance sheet; gains or losses on any sales of bitcoins; changes in the accounting treatment relating to the Company’s bitcoin holdings; changes in securities laws or other laws or regulations, or the adoption of new laws or regulations, relating to bitcoin that adversely affect the price of bitcoin or the Company’s ability to transact in or own bitcoin; a decrease in liquidity in the markets in which bitcoin is traded; security breaches, cyberattacks, unauthorized access, loss of private keys, fraud or other circumstances or events that result in the loss of the Company’s bitcoins; impacts to the price and rate of adoption of bitcoin associated with financial difficulties and bankruptcies of various participants in the digital asset industry; the level and terms of the Company’s substantial indebtedness and its ability to service such debt; the extent and timing of market acceptance of the Company’s new product offerings; continued acceptance of the Company’s other products in the marketplace; the Company’s ability to recognize revenue or deferred revenue through delivery of products or satisfactory performance of services; the timing of significant orders; delays in or the inability of the Company to develop or ship new products; customers shifting from a product license model to a cloud subscription model, which may delay the Company’s ability to recognize revenue; fluctuations in tax benefits or provisions; competitive factors; general economic conditions, including high levels of inflation and increased interest rates; currency fluctuations; and other risks detailed in MicroStrategy’s registration statements and periodic reports filed with the Securities and Exchange Commission (“SEC”). The Company undertakes no obligation to update these forward-looking statements for revisions or changes after the date of this release.
MICROSTRATEGY INCORPORATED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) |
||||||||||||||||
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
||||||||||
|
|
December 31, |
|
|
December 31, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021* |
|
||||
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
|
|
|
|
|||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product licenses |
|
$ |
27,570 |
|
|
$ |
32,543 |
|
|
$ |
86,498 |
|
|
$ |
101,804 |
|
Subscription services |
|
|
17,470 |
|
|
|
11,848 |
|
|
|
60,746 |
|
|
|
43,069 |
|
Total product licenses and subscription services |
|
|
45,040 |
|
|
|
44,391 |
|
|
|
147,244 |
|
|
|
144,873 |
|
Product support |
|
|
66,839 |
|
|
|
69,146 |
|
|
|
266,521 |
|
|
|
281,209 |
|
Other services |
|
|
20,675 |
|
|
|
20,978 |
|
|
|
85,499 |
|
|
|
84,680 |
|
Total revenues |
|
|
132,554 |
|
|
|
134,515 |
|
|
|
499,264 |
|
|
|
510,762 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product licenses |
|
|
358 |
|
|
|
431 |
|
|
|
1,672 |
|
|
|
1,721 |
|
Subscription services |
|
|
7,467 |
|
|
|
5,181 |
|
|
|
24,770 |
|
|
|
16,901 |
|
Total product licenses and subscription services |
|
|
7,825 |
|
|
|
5,612 |
|
|
|
26,442 |
|
|
|
18,622 |
|
Product support |
|
|
5,722 |
|
|
|
4,901 |
|
|
|
21,264 |
|
|
|
19,254 |
|
Other services |
|
|
13,176 |
|
|
|
13,490 |
|
|
|
55,283 |
|
|
|
54,033 |
|
Total cost of revenues |
|
|
26,723 |
|
|
|
24,003 |
|
|
|
102,989 |
|
|
|
91,909 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
|
105,831 |
|
|
|
110,512 |
|
|
|
396,275 |
|
|
|
418,853 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and marketing |
|
|
41,371 |
|
|
|
43,413 |
|
|
|
146,882 |
|
|
|
160,141 |
|
Research and development |
|
|
31,617 |
|
|
|
30,875 |
|
|
|
127,428 |
|
|
|
117,117 |
|
General and administrative |
|
|
28,930 |
|
|
|
27,104 |
|
|
|
111,421 |
|
|
|
95,501 |
|
Digital asset impairment losses (gains on sale), net |
|
|
197,630 |
|
|
|
146,587 |
|
|
|
1,286,286 |
|
|
|
830,621 |
|
Total operating expenses |
|
|
299,548 |
|
|
|
247,979 |
|
|
|
1,672,017 |
|
|
|
1,203,380 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss from operations |
|
|
(193,717 |
) |
|
|
(137,467 |
) |
|
|
(1,275,742 |
) |
|
|
(784,527 |
) |
Interest expense, net |
|
|
(14,837 |
) |
|
|
(11,629 |
) |
|
|
(53,136 |
) |
|
|
(29,149 |
) |
Other (expense) income, net |
|
|
(5,829 |
) |
|
|
656 |
|
|
|
6,413 |
|
|
|
2,287 |
|
Loss before income taxes |
|
|
(214,383 |
) |
|
|
(148,440 |
) |
|
|
(1,322,465 |
) |
|
|
(811,389 |
) |
Provision for (benefit from) income taxes |
|
|
35,286 |
|
|
|
(58,463 |
) |
|
|
147,332 |
|
|
|
(275,909 |
) |
Net loss |
|
$ |
(249,669 |
) |
|
$ |
(89,977 |
) |
|
$ |
(1,469,797 |
) |
|
$ |
(535,480 |
) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic loss per share (1): |
|
$ |
(21.93 |
) |
|
$ |
(8.43 |
) |
|
$ |
(129.83 |
) |
|
$ |
(53.44 |
) |
Weighted average shares outstanding used in computing basic loss per share |
|
|
11,386 |
|
|
|
10,679 |
|
|
|
11,321 |
|
|
|
10,020 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted loss per share (1): |
|
$ |
(21.93 |
) |
|
$ |
(8.43 |
) |
|
$ |
(129.83 |
) |
|
$ |
(53.44 |
) |
Weighted average shares outstanding used in computing diluted loss per share |
|
|
11,386 |
|
|
|
10,679 |
|
|
|
11,321 |
|
|
|
10,020 |
|
(1) |
Basic and fully diluted loss per share for class A and class B common stock are the same. |
|
|
||
| * Derived from audited financial statements. | ||
MICROSTRATEGY INCORPORATED CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) |
||||||||
|
|
December 31, |
|
|
December 31, |
|
||
|
|
2022 |
|
|
2021* |
|
||
|
|
(unaudited) |
|
|
|
|
|
|
Assets |
|
|
|
|
|
|
|
|
Current assets |
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
$ |
43,835 |
|
|
$ |
63,356 |
|
Restricted cash |
|
|
7,033 |
|
|
|
1,078 |
|
Accounts receivable, net |
|
|
189,280 |
|
|
|
189,280 |
|
Prepaid expenses and other current assets |
|
|
24,418 |
|
|
|
14,251 |
|
Total current assets |
|
|
264,566 |
|
|
|
267,965 |
|
|
|
|
|
|
|
|
|
|
Digital assets |
|
|
1,840,028 |
|
|
|
2,850,210 |
|
Property and equipment, net |
|
|
32,311 |
|
|
|
36,587 |
|
Right-of-use assets |
|
|
61,299 |
|
|
|
66,760 |
|
Deposits and other assets |
|
|
23,916 |
|
|
|
15,820 |
|
Deferred tax assets, net |
|
|
188,152 |
|
|
|
319,782 |
|
Total assets |
|
$ |
2,410,272 |
|
|
$ |
3,557,124 |
|
|
|
|
|
|
|
|
|
|
Liabilities and Stockholders’ (Deficit) Equity |
|
|
|
|
|
|
|
|
Current liabilities |
|
|
|
|
|
|
|
|
Accounts payable, accrued expenses, and operating lease liabilities |
|
$ |
42,976 |
|
|
$ |
46,084 |
|
Accrued compensation and employee benefits |
|
|
53,716 |
|
|
|
54,548 |
|
Accrued interest |
|
|
2,829 |
|
|
|
1,493 |
|
Current portion of long-term debt, net |
|
|
454 |
|
|
|
0 |
|
Deferred revenue and advance payments |
|
|
217,428 |
|
|
|
209,860 |
|
Total current liabilities |
|
|
317,403 |
|
|
|
311,985 |
|
|
|
|
|
|
|
|
|
|
Long-term debt, net |
|
|
2,378,560 |
|
|
|
2,155,151 |
|
Deferred revenue and advance payments |
|
|
12,763 |
|
|
|
8,089 |
|
Operating lease liabilities |
|
|
67,344 |
|
|
|
76,608 |
|
Other long-term liabilities |
|
|
17,124 |
|
|
|
26,224 |
|
Deferred tax liabilities |
|
|
198 |
|
|
|
109 |
|
Total liabilities |
|
|
2,793,392 |
|
|
|
2,578,166 |
|
|
|
|
|
|
|
|
|
|
Stockholders’ (Deficit) Equity |
|
|
|
|
|
|
|
|
Preferred stock undesignated, $0.001 par value; 5,000 shares authorized; no shares issued or outstanding |
|
|
0 |
|
|
|
0 |
|
Class A common stock, $0.001 par value; 330,000 shares authorized; 18,269 shares issued and 9,585 shares outstanding, and 18,006 shares issued and 9,322 shares outstanding, respectively |
|
|
18 |
|
|
|
18 |
|
Class B convertible common stock, $0.001 par value; 165,000 shares authorized; 1,964 shares issued and outstanding, and 1,964 shares issued and outstanding, respectively |
|
|
2 |
|
|
|
2 |
|
Additional paid-in capital |
|
|
1,841,120 |
|
|
|
1,727,143 |
|
Treasury stock, at cost; 8,684 shares and 8,684 shares, respectively |
|
|
(782,104 |
) |
|
|
(782,104 |
) |
Accumulated other comprehensive loss |
|
|
(13,801 |
) |
|
|
(7,543 |
) |
(Accumulated deficit) retained earnings |
|
|
(1,428,355 |
) |
|
|
41,442 |
|
Total stockholders’ (deficit) equity |
|
|
(383,120 |
) |
|
|
978,958 |
|
Total liabilities and stockholders’ (deficit) equity |
|
$ |
2,410,272 |
|
|
$ |
3,557,124 |
|
* Derived from audited financial statements. |
||||||||
MICROSTRATEGY INCORPORATED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS (in thousands) |
||||||||
|
|
Twelve Months Ended |
|
|||||
|
|
December 31, |
|
|||||
|
|
2022 |
|
|
2021* |
|
||
|
|
(unaudited) |
|
|
|
|
|
|
Net cash provided by operating activities |
|
$ |
3,211 |
|
|
$ |
93,833 |
|
Net cash used in investing activities |
|
|
(278,590 |
) |
|
|
(2,629,235 |
) |
Net cash provided by financing activities |
|
|
265,188 |
|
|
|
2,541,685 |
|
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash |
|
|
(3,375 |
) |
|
|
(2,608 |
) |
Net (decrease) increase in cash, cash equivalents, and restricted cash |
|
|
(13,566 |
) |
|
|
3,675 |
|
Cash, cash equivalents, and restricted cash, beginning of year |
|
|
64,434 |
|
|
|
60,759 |
|
Cash, cash equivalents, and restricted cash, end of year |
|
$ |
50,868 |
|
|
$ |
64,434 |
|
* Derived from audited financial statements. |
||||||||
MICROSTRATEGY INCORPORATED REVENUE AND COST OF REVENUE DETAIL (in thousands) |
||||||||||||||||
|
|
Three Months Ended |
|
|
Twelve Months Ended |
|
||||||||||
|
|
December 31, |
|
|
December 31, |
|
||||||||||
|
|
2022 |
|
|
2021 |
|
|
2022 |
|
|
2021* |
|
||||
|
|
(unaudited) |
|
|
(unaudited) |
|
|
(unaudited) |
|
|
|
|
|
|||
Revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product licenses and subscription services: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product licenses |
|
$ |
27,570 |
|
|
$ |
32,543 |
|
|
$ |
86,498 |
|
|
$ |
101,804 |
|
Subscription services |
|
|
17,470 |
|
|
|
11,848 |
|
|
|
60,746 |
|
|
|
43,069 |
|
Total product licenses and subscription services |
|
|
45,040 |
|
|
|
44,391 |
|
|
|
147,244 |
|
|
|
144,873 |
|
Product support |
|
|
66,839 |
|
|
|
69,146 |
|
|
|
266,521 |
|
|
|
281,209 |
|
Other services: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consulting |
|
|
19,591 |
|
|
|
19,661 |
|
|
|
80,844 |
|
|
|
79,732 |
|
Education |
|
|
1,084 |
|
|
|
1,317 |
|
|
|
4,655 |
|
|
|
4,948 |
|
Total other services |
|
|
20,675 |
|
|
|
20,978 |
|
|
|
85,499 |
|
|
|
84,680 |
|
Total revenues |
|
|
132,554 |
|
|
|
134,515 |
|
|
|
499,264 |
|
|
|
510,762 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cost of revenues |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product licenses and subscription services: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Product licenses |
|
|
358 |
|
|
|
431 |
|
|
|
1,672 |
|
|
|
1,721 |
|
Subscription services |
|
|
7,467 |
|
|
|
5,181 |
|
|
|
24,770 |
|
|
|
16,901 |
|
Total product licenses and subscription services |
|
|
7,825 |
|
|
|
5,612 |
|
|
|
26,442 |
|
|
|
18,622 |
|
Product support |
|
|
5,722 |
|
|
|
4,901 |
|
|
|
21,264 |
|
|
|
19,254 |
|
Other services: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consulting |
|
|
12,416 |
|
|
|
12,258 |
|
|
|
50,820 |
|
|
|
48,773 |
|
Education |
|
|
760 |
|
|
|
1,232 |
|
|
|
4,463 |
|
|
|
5,260 |
|
Total other services |
|
|
13,176 |
|
|
|
13,490 |
|
|
|
55,283 |
|
|
|
54,033 |
|
Total cost of revenues |
|
|
26,723 |
|
|
|
24,003 |
|
|
|
102,989 |
|
|
|
91,909 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit |
|
$ |
105,831 |
|
|
$ |
110,512 |
|
|
$ |
396,275 |
|
|
$ |
418,853 |
|
* Derived from audited financial statements. |
||||||||||||||||
MICROSTRATEGY INCORPORATED DIGITAL ASSETS – ADDITIONAL INFORMATION ROLLFORWARD OF BITCOIN HOLDINGS (unaudited) |
||||||||||||||||||||||
|
|
Source of
|
|
Digital Asset
|
|
|
Digital Asset
|
|
|
Digital Asset
|
|
|
Approximate
|
|
|
Approximate
|
|
|||||
Balance at December 31, 2020 |
|
|
|
$ |
1,125,000 |
|
|
$ |
(70,698 |
) |
|
$ |
1,054,302 |
|
|
|
70,469 |
|
|
$ |
15,964 |
|
Digital asset purchases |
|
(a) |
|
|
1,086,375 |
|
|
|
|
|
|
|
1,086,375 |
|
|
|
20,857 |
|
|
|
52,087 |
|
Digital asset impairment losses |
|
|
|
|
|
|
|
|
(194,095 |
) |
|
|
(194,095 |
) |
|
|
|
|
|
|
|
|
Balance at March 31, 2021 |
|
|
|
$ |
2,211,375 |
|
|
$ |
(264,793 |
) |
|
$ |
1,946,582 |
|
|
|
91,326 |
|
|
$ |
24,214 |
|
Digital asset purchases |
|
(b) |
|
|
529,231 |
|
|
|
|
|
|
|
529,231 |
|
|
|
13,759 |
|
|
|
38,464 |
|
Digital asset impairment losses |
|
|
|
|
|
|
|
|
(424,774 |
) |
|
|
(424,774 |
) |
|
|
|
|
|
|
|
|
Balance at June 30, 2021 |
|
|
|
$ |
2,740,606 |
|
|
$ |
(689,567 |
) |
|
$ |
2,051,039 |
|
|
|
105,085 |
|
|
$ |
26,080 |
|
Digital asset purchases |
|
(c) |
|
|
419,865 |
|
|
|
|
|
|
|
419,865 |
|
|
|
8,957 |
|
|
|
46,876 |
|
Digital asset impairment losses |
|
|
|
|
|
|
|
|
(65,165 |
) |
|
|
(65,165 |
) |
|
|
|
|
|
|
|
|
Balance at September 30, 2021 |
|
|
|
$ |
3,160,471 |
|
|
$ |
(754,732 |
) |
|
$ |
2,405,739 |
|
|
|
114,042 |
|
|
$ |
27,713 |
|
Digital asset purchases |
|
(d) |
|
|
591,058 |
|
|
|
|
|
|
|
591,058 |
|
|
|
10,349 |
|
|
|
57,113 |
|
Digital asset impairment losses |
|
|
|
|
|
|
|
|
(146,587 |
) |
|
|
(146,587 |
) |
|
|
|
|
|
|
|
|
Balance at December 31, 2021 |
|
|
|
$ |
3,751,529 |
|
|
$ |
(901,319 |
) |
|
$ |
2,850,210 |
|
|
|
124,391 |
|
|
$ |
30,159 |
|
Digital asset purchases |
|
(e) |
|
|
215,500 |
|
|
|
|
|
|
|
215,500 |
|
|
|
4,827 |
|
|
|
44,645 |
|
Digital asset impairment losses |
|
|
|
|
|
|
|
|
(170,091 |
) |
|
|
(170,091 |
) |
|
|
|
|
|
|
|
|
Balance at March 31, 2022 |
|
|
|
$ |
3,967,029 |
|
|
$ |
(1,071,410 |
) |
|
$ |
2,895,619 |
|
|
|
129,218 |
|
|
$ |
30,700 |
|
Digital asset purchases |
|
(f) |
|
|
10,000 |
|
|
|
|
|
|
|
10,000 |
|
|
|
481 |
|
|
|
20,790 |
|
Digital asset impairment losses |
|
|
|
|
|
|
|
|
(917,838 |
) |
|
|
(917,838 |
) |
|
|
|
|
|
|
|
|
Balance at June 30, 2022 |
|
|
|
$ |
3,977,029 |
|
|
$ |
(1,989,248 |
) |
|
$ |
1,987,781 |
|
|
|
129,699 |
|
|
$ |
30,664 |
|
Digital asset purchases |
|
(g) |
|
|
5,978 |
|
|
|
|
|
|
|
5,978 |
|
|
|
301 |
|
|
|
19,860 |
|
Digital asset impairment losses |
|
|
|
|
|
|
|
|
(727 |
) |
|
|
(727 |
) |
|
|
|
|
|
|
|
|
Balance at September 30, 2022 |
|
|
|
$ |
3,983,007 |
|
|
$ |
(1,989,975 |
) |
|
$ |
1,993,032 |
|
|
|
130,000 |
|
|
$ |
30,639 |
|
Digital asset purchases |
|
(h) |
|
|
56,443 |
|
|
|
|
|
|
|
56,443 |
|
|
|
3,204 |
|
|
|
17,616 |
|
Digital asset impairment losses |
|
|
|
|
|
|
|
|
(198,557 |
) |
|
|
(198,557 |
) |
|
|
|
|
|
|
|
|
Digital asset sales ** |
|
|
|
|
(46,260 |
) |
|
|
35,370 |
|
|
|
(10,890 |
) |
|
|
(704 |
) |
|
|
16,786 |
|
Balance at December 31, 2022 |
|
|
|
$ |
3,993,190 |
|
|
$ |
(2,153,162 |
) |
|
$ |
1,840,028 |
|
|
|
132,500 |
|
|
$ |
30,137 |
|
| * MicroStrategy owns and has purchased bitcoins both directly and indirectly through its wholly-owned subsidiary, MacroStrategy. References to MicroStrategy below refer to MicroStrategy and its subsidiaries on a consolidated basis. | ||
| ** In the fourth quarter of 2022, MicroStrategy sold approximately 704 bitcoins having an original cost basis of $46.3 million and cumulative digital asset impairment losses of $35.4 million, resulting in a carrying value of $10.9 million at the time of sale. The approximately 704 bitcoins were sold for cash proceeds of $11.8 million, net of fees and expenses, resulting in gains on sale of $0.9 million. | ||
|
||
| (a) | In the first quarter of 2021, MicroStrategy purchased bitcoin using $1.026 billion in net proceeds from its issuance of its 0% Convertible Senior Notes due 2027 (together with the 0.750% Convertible Senior Notes due 2025, the “Convertible Notes”) and Excess Cash. |
|
| (b) | In the second quarter of 2021, MicroStrategy purchased bitcoin using $487.2 million in net proceeds from its issuance of its 6.125% Senior Secured Notes due 2028 and Excess Cash. |
|
| (c) | In the third quarter of 2021, MicroStrategy purchased bitcoin using $399.5 million in net proceeds from its sale of 555,179 shares of class A common stock offered under an Open Market Sale Agreement (the “Open Market Sale Agreement”) with Jefferies LLC, as agent, and Excess Cash. |
|
| (d) | In the fourth quarter of 2021, MicroStrategy purchased bitcoin using $591.0 million in net proceeds from its sale of 858,588 shares of class A common stock offered under the Open Market Sale Agreement and Excess Cash. |
|
| (e) | In the first quarter of 2022, MicroStrategy purchased bitcoin using $190.5 million of the net proceeds from the issuance of the 2025 Secured Term Loan and Excess Cash. |
|
| (f) | In the second quarter of 2022, MicroStrategy purchased bitcoin using Excess Cash. |
|
| (g) | In the third quarter of 2022, MicroStrategy purchased bitcoin using Excess Cash. |
|
| (h) | In the fourth quarter of 2022, MicroStrategy purchased bitcoin using $44.6 million of the net proceeds from its sale of class A common stock offered under the Sales Agreement and $11.8 million in proceeds from sales of bitcoin. |
|
|
||
| Excess Cash refers to cash in excess of the minimum Cash Assets that MicroStrategy is required to hold under its Treasury Reserve Policy, which may include cash generated by operating activities and cash from the proceeds of financing activities. Cash Assets refers to cash and cash equivalents and short-term investments. | ||
Contacts
MicroStrategy Incorporated
Shirish Jajodia
Investor Relations
ir@microstrategy.com
(703) 848-8600
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