MicroStrategy’s Q1 Profit Soars Amid Strong Bitcoin Conviction

Key Points:

• MicroStrategy posts Q1 profit thanks to Bitcoin investment strategy with a profit of $94M, up 2.2% from last year.
• The firm now holds 140K BTC, which were collectively purchased at an average cost of about $29,803.
• The firm’s conviction in its Bitcoin investment strategy remains strong.

Business intelligence platform MicroStrategy has reiterated its commitment to its Bitcoin investment strategy after turning its first quarterly profit since 2020.

This quarter, they managed to make a profit of $94 million, which is a significant improvement from the previous year. The majority of this profit was due to a one-time income tax benefit of $453.2 million, and the firm also managed to cash in $121.9 million in revenue. Despite this, CEO Phong Lee emphasized that the core business of MicroStrategy is not impacted by short-term price fluctuations in BTC.

In their statement, Lee also explained that MicroStrategy’s “conviction” in its Bitcoin investment strategy is as “strong” as ever and that they will remain disciplined on costs while investing in growth. The company has a dual strategy of growing its business intelligence software business and acquiring Bitcoin for the future, and they plan to continue executing this strategy. Saylor, who serves as MicroStrategy’s chairman, attributed the successful quarter to sharp execution in the firm’s core business model and its Bitcoin investment thesis, which he described as the “right strategy.”

The Bitcoin advocate predicted that investors will soon exit their positions on crypto assets that are “under the microscope in the regulatory environment,” which in turn will “flow into Bitcoin.” He also added that “acquiring and holding Bitcoin in a prudent fashion is a pretty good way to outperform the market.”

MicroStrategy chief financial officer Andrew Kang added that the firm also managed to reduce its leverage by repaying its $161 million Bitcoin-backed loan from the now-collapsed Silverage Bank. “By retiring the debt, we also released all of the Bitcoin that were pledged as collateral securing the loan. This was an important and strategic transaction for us and our liability management goals,” Kang said.

According to previous SEC filings, the business intelligence firm bought 7,500 BTC in Q1 across two purchases on March 23 and April 5 for a total of $179 million. The firm now holds 140,000 BTC, which were collectively purchased at an average cost of about $29,803.

The firm’s turn to profit comes as BTC managed to rise 72% over the first quarter to about $28,300. MicroStrategy remains committed to its Bitcoin investment strategy, and it will be interesting to see how they continue to execute this strategy going forward.

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