Strategy (NASDAQ:MSTR) Releases Earnings Results, Misses Estimates By $22.26 EPS

Strategy (NASDAQ:MSTR) announced its earnings results on Thursday. The software maker reported ($24.45) earnings per share (EPS) for the quarter, missing the consensus estimate of ($2.19) by ($22.26), FiscalAI reports. Strategy had a negative net margin of 6,102.95% and a negative return on equity of 68.55%. The company had revenue of $122.37 million for the quarter, compared to analysts’ expectations of $122.90 million. During the same period in the previous year, the firm earned $32.52 EPS. The firm’s quarterly revenue was up 6.9% on a year-over-year basis.

Here are the key takeaways from Strategy’s conference call:

• Bitcoin holdings expanded significantly: Strategy held approximately 843,775 Bitcoin, acquired 83,901 during Q2, and increased Bitcoin per share by about 5% sequentially and 6% year over year.
• The company raised approximately $17 billion year to date, reduced long-term debt from $8.2 billion to $6.7 billion, and grew its cash and short-term investment reserve to $3.75 billion, providing more than two years of dividend and interest coverage.
• Q2 results were heavily affected by Bitcoin’s quarter-end price, producing an $8.6 billion net loss and negative EPS of $24.45, although management said the post-quarter recovery would imply an estimated $5.2 billion fair-value gain.
• STRC, Strategy’s flagship preferred security, was trading around $89.50 versus the company’s $99–$100 target, following a sharp June decline that management attributed to the withdrawal of leveraged credit lines and forced selling dynamics.
• Management plans to prioritize restoring STRC to par through a larger dollar reserve, potential buybacks, Bitcoin monetization, and careful dividend management, while remaining focused on consolidating its credit products rather than launching additional instruments.

Strategy Stock Performance

Shares of NASDAQ MSTR traded down $4.46 during mid-day trading on Friday, reaching $93.28. 20,621,843 shares of the company’s stock were exchanged, compared to its average volume of 15,092,008. The firm has a market capitalization of $32.69 billion, a price-to-earnings ratio of -0.96 and a beta of 3.54. Strategy has a 52 week low of $81.81 and a 52 week high of $414.36. The company has a debt-to-equity ratio of 0.22, a current ratio of 6.05 and a quick ratio of 6.05. The firm has a 50-day moving average price of $110.34 and a two-hundred day moving average price of $135.03.

Trending Headlines about Strategy

Here are the key news stories impacting Strategy this week:

• Positive Sentiment: Strategy’s Bitcoin holdings increased to approximately 843,775 BTC, up about 25% year to date. The company also reported a $3.75 billion U.S. dollar reserve, intended to cover more than two years of preferred dividends and interest, reducing the risk of forced Bitcoin sales. Strategy posts Q2 loss and reserve details
• Positive Sentiment: The reported $8.22 billion loss was driven primarily by an $8.32 billion unrealized Bitcoin fair-value loss, making it largely noncash. Revenue rose 6.9% year over year to about $122.4 million, while subscription-services revenue reportedly grew sharply. BTIG reaffirmed a Buy rating and assigned a $250 price target, reflecting optimism about Bitcoin-per-share growth and Strategy’s treasury model. Strategy financials
• Neutral Sentiment: Management has authorized a $1 billion repurchase program for STRC preferred shares and bought back approximately $25 million at a discount. The move could support STRC’s price and preserve access to capital, but it diverts funds from additional Bitcoin purchases.
• Negative Sentiment: Michael Saylor indicated that Strategy could sell Bitcoin to support STRC if necessary. That possibility, combined with roughly $14.4 billion of preferred equity and investor criticism that the financing structure prioritizes preferred holders over MSTR common shareholders, heightened concerns about dilution, liquidity and downside exposure. Saylor discusses potential Bitcoin sales
• Negative Sentiment: Bitcoin’s retreat below approximately $64,000 pressured MSTR and other crypto-related stocks, reinforcing concerns that further cryptocurrency declines could produce additional accounting losses and weaken the value of Strategy’s Bitcoin-backed financing strategy. Crypto-linked stocks sell off

Insider Activity at Strategy

In other news, CAO Jeanine Montgomery sold 354 shares of the business’s stock in a transaction that occurred on Tuesday, June 9th. The shares were sold at an average price of $123.84, for a total value of $43,839.36. Following the sale, the chief accounting officer owned 11,209 shares of the company’s stock, valued at $1,388,122.56. The trade was a 3.06% decrease in their ownership of the stock. The transaction was disclosed in a document filed with the SEC, which is available at the SEC website. The sale was made to cover tax withholding obligations related to the vesting of equity awards. Also, CEO Phong Le acquired 11,000 shares of the company’s stock in a transaction that occurred on Monday, June 22nd. The shares were bought at an average cost of $90.80 per share, for a total transaction of $998,800.00. Following the acquisition, the chief executive officer directly owned 11,000 shares in the company, valued at $998,800. This represents a ? increase in their position. Additional details regarding this purchase are available in the official SEC disclosure. In the last ninety days, insiders acquired 11,166 shares of company stock worth $1,014,265 and sold 181,422 shares worth $23,144,128. Company insiders own 6.49% of the company’s stock.

Institutional Trading of Strategy

Hedge funds have recently made changes to their positions in the stock. Amundi lifted its holdings in shares of Strategy by 373.7% in the 4th quarter. Amundi now owns 4,790,702 shares of the software maker’s stock worth $727,947,000 after acquiring an additional 3,779,340 shares during the last quarter. Quadrature Capital Ltd purchased a new position in Strategy in the 4th quarter worth $114,915,000. Renaissance Technologies LLC raised its position in Strategy by 324.1% in the 4th quarter. Renaissance Technologies LLC now owns 957,332 shares of the software maker’s stock worth $137,112,000 after purchasing an additional 731,602 shares during the period. State Street Corp lifted its stake in Strategy by 9.2% in the third quarter. State Street Corp now owns 5,989,048 shares of the software maker’s stock worth $1,929,731,000 after purchasing an additional 504,479 shares during the last quarter. Finally, Van ECK Associates Corp boosted its position in Strategy by 128.2% during the fourth quarter. Van ECK Associates Corp now owns 466,709 shares of the software maker’s stock valued at $70,917,000 after buying an additional 262,203 shares during the period. 59.84% of the stock is owned by institutional investors.

Analyst Upgrades and Downgrades

A number of equities analysts have issued reports on MSTR shares. Mizuho cut their price objective on shares of Strategy from $265.00 to $213.00 and set an “outperform” rating on the stock in a report on Tuesday, July 7th. Credit Suisse Group set a $250.00 target price on shares of Strategy in a report on Tuesday, June 30th. HC Wainwright restated a “buy” rating on shares of Strategy in a report on Friday. Cantor Fitzgerald reaffirmed an “overweight” rating on shares of Strategy in a research report on Thursday, July 23rd. Finally, Weiss Ratings reiterated a “hold (c)” rating on shares of Strategy in a research note on Wednesday, June 24th. Two analysts have rated the stock with a Strong Buy rating, twelve have issued a Buy rating and four have issued a Hold rating to the company. According to MarketBeat, the company presently has a consensus rating of “Moderate Buy” and an average target price of $257.88.

Strategy Company Profile

Strategy, formerly known as MicroStrategy, Incorporated (NASDAQ: MSTR) is a global provider of enterprise analytics and mobility software. The company’s flagship platform offers business intelligence, data discovery, and advanced visualizations that enable organizations to analyze large volumes of data and deliver actionable insights. In addition to traditional on-premises deployments, Strategy provides a range of cloud-based services and managed offerings that allow customers to leverage the power of its analytics tools without managing complex infrastructure.

Founded in 1989 by Michael J.