MicroStrategy Bitcoin Holdings Soared In Q1 Despite A Revenue Slump

Key Points:

• MicroStrategy’s revenue dipped 5% to $115.2 million in Q1, while it bought 25,250 Bitcoins for $1.65 billion.
• Opting against fair value accounting, MicroStrategy Bitcoin holdings valued at $5.1 billion, resulting in a $53 million loss.
• Founder Saylor announced the April Bitcoin purchase, bringing total holdings to 214,400, valued at $7.54 billion, amid a stock price surge and operational optimism.

MicroStrategy’s first-quarter earnings report for 2024, released on Monday, unveiled insights into the company’s financial performance and its ongoing Bitcoin acquisitions.

MicroStrategy Bitcoin Holdings Rise Amid Revenue Declines

The report disclosed that MicroStrategy’s revenue for the first quarter amounted to $115.2 million, marking a 5% year-on-year decline. Notably, the company continued its trend of Bitcoin acquisitions, purchasing 25,250 Bitcoins for $1.65 billion, with an average price of $65,232. This bolstered MicroStrategy Bitcoin holdings to 214,278 by the end of March.

Despite expectations of adopting fair value accounting for Bitcoin, MicroStrategy maintained its valuation based on the old standard, pegging its holdings at $5.1 billion rather than the market’s closing price of $15.2 billion.

Founder Michael Saylor later revealed via Twitter that MicroStrategy acquired an additional 122 Bitcoins in April, bringing MicroStrategy Bitcoin holdings to 214,400, valued at $7.54 billion.

Bitcoin Acquisition Still Enhanced Amidst Financial Challenges

Saylor’s revenue from the sale of MicroStrategy shares reached approximately $400 million from January to last week, doubling the stock’s value to around $1,290. However, despite the surge in cryptocurrency, the company reported a $53 million loss in the first quarter, largely due to adjustments in MicroStrategy Bitcoin holdings.

MicroStrategy’s operating expenses surged by 152.8% to $288.9 million, with a gross profit of $85.2 million and a margin of 74.0%, down from 77.1% a year ago.

Despite financial challenges, MicroStrategy remains optimistic about its operational strategy and cloud service integration. Additionally, the recent approval of spot Bitcoin exchange-traded products signals potential institutional demand for cryptocurrencies, further strengthening the company’s outlook.