A Closer Look
MicroStrategy's second-quarter financial results, released on Thursday, revealed a mixed bag of performance. While the company's bitcoin holdings continue to show significant value, its core business faced challenges.
Losses: MicroStrategy reported a quarterly loss of $5.74 per share, significantly exceeding the analyst consensus estimate of a loss of 11 cents.
Quarterly revenue came in at $111.4 million, falling short of the analyst consensus estimate of $122.6 million by 9.14%. This also represents a 7.48% decrease compared to the same period last year.
As of June 30th, the carrying value of MicroStrategy's digital assets, primarily comprised of approximately 226,331 bitcoins, stood at $5.688 billion. However, the company has accumulated $2.6 billion in cumulative impairment losses since acquiring these bitcoins, resulting in an average carrying amount per Bitcoin of approximately $25,131.
Despite the impairment losses, MicroStrategy reported a year-to-date bitcoin yield of 12.2%. The company has introduced "BTC Yield" as a key performance indicator (KPI) to assess the performance of its bitcoin acquisition strategy, aiming for an annual yield of 4-8% over the next three years.
MicroStrategy's President and CEO, Phong Le, expressed optimism about the company's bitcoin strategy, highlighting the current market value of their holdings as 70% higher than their cost basis. Le also emphasized their continued focus on developing their bitcoin strategy and achieving positive "BTC Yield."
Furthermore, Le expressed optimism about the increasing understanding and adoption of bitcoin, citing the support from bipartisan politicians and institutions witnessed at the recent Bitcoin 2024 Conference in Nashville. He also highlighted the continued global adoption of their cloud-powered BI and AI software, which achieved strong double-digit growth in both subscription revenue and subscription billings during the quarter.
Following the release of the financial results, MicroStrategy shares experienced a slight increase of 0.78% in after-hours trading, reaching $1,523.63 at the time of publication.