Q4 2024 MicroStrategy Inc Earnings Call

Operator: Welcome to Zoom. Enter your meeting ID, followed by pound.

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Operator: Enter your participant ID followed by you have joined the meeting as an attendee and will be and your company's name when submitting the question Now, I'll walk you through the agenda for today's call.

Enter your participant I D. Followed by you have joined the meeting as an attendee and will be in your company's name when submitting your questions.

Now I'll walk you through the agenda for today's call.

Phong Le: First, Phong Le will cover the business highlights for the fourth quarter and full year of 2024.

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Lee will cover the business highlights for the fourth quarter and full year of 'twenty 'twenty four.

Andrew Kang: Second, Andrew Kang will cover the financial results for the fourth quarter and full year of 2024.

Speaker Change: Second Andrew Ken will cover the financial results for the fourth quarter and full year. After 124, and then finally, Michael Saylor, They provide a strategic review.

Michael Saylor: And then finally, Michael Saylor will provide a strategic review. and discuss the recent Bitcoin market updates.

And discuss the recent mcquain market updates and lastly, we will open up to Q&A.

Operator: And lastly, we will open up to Q&A.

Phong Le: With that, I will turn the call over to Phong Le, President and CEO of Strategy. Thank you, Shirish. Hello, everyone.

Speaker Change: That I.

Lee: I will turn the call over to default Lee.

Speaker Change: President and CEO on strategy.

Speaker Change: Uh huh.

Speaker Change: Thank you <unk> Hello, everyone.

Phong Le: I'd like to welcome you all to today's webinar and our first ever earnings call as strategy. MicroStrategy Incorporated today announced it is now doing business in strategy. The MicroStrategy name and logo date back to our incorporation more than three decades ago in 1989. At that time, we positioned ourselves at the forefront of the microcomputer revolution. The term micro symbolized precision, and our focus on harnessing the power of computing to create business intelligence that changed how companies operate. There have, of course, been significant changes since then, both in the technology industry and to our strategy. Technology is now ubiquitous and our business strategy and value to our customers is no longer limited to technology.

Speaker Change: Like to welcome you all to today's webinar in our first ever earnings call as strategy.

Speaker Change: Microstrategy incorporated today announced that is now doing business and strategy.

Speaker Change: The Microstrategy name and logo pay back to our incorporation of more than three decades ago and 1989.

Speaker Change: At that time, we positioned ourselves at the forefront of the microcomputer resolution.

Speaker Change: Our micros in belies precision and our focus on harnessing the power of computing to create business intelligence it changed how companies operate.

Speaker Change: There have of course been significant changes since then both in the technology industry and to our strategy.

Speaker Change: Technologies, now ubiquitous and our business strategy and value to our customers is no longer limited to technology.

Phong Le: Today, the company is excited to announce its rebrand, a strategy. for the following reason.

Speaker Change: Today. The company is excited to announce this rebrand our strategy.

Speaker Change: For the following reasons.

Phong Le: One simplicity, strategy is a single word, easy to remember, and has 40% fewer letters than MicroStrategy. Continuity. So strategy is the second half of MicroStrategy's historical brand name. It would represent an evolution, but not a complete change or break from our past. And three, ambition. The new name would also reflect our ambition to keep pushing boundaries. For example, we are no longer longer confined to the past. We're focused on the big picture, driving new innovations in digital capital, and business intelligence.

Speaker Change: One simplicity strategies, a single word easy to remember.

Speaker Change: It has 40% fewer letters than microstrategy.

Speaker Change: Continuity.

Speaker Change: Our strategy is the second half of micro strategies historical brand name. It would represented evolution, but not a complete change or break from our past.

Speaker Change: And three ambition the new name would also reflect our ambition to keep pushing boundaries. For example, we are no longer longer confined to the past.

Speaker Change: We're focused on the big picture driving new innovations in digital capital and business intelligence.

Phong Le: So today, Strategy is the world's first and largest Bitcoin treasury company, the largest independent publicly traded business intelligence company, and also a NASDAQ 100 stock. The brand simplification is a natural evolution of the company, reflecting our focus and broad appeal. The new logo includes a stylized B, signifying the company's Bitcoin strategy and our unique position as a Bitcoin treasury company. and our new brand's primary color is now orange. represents energy, intelligence, and Bitcoin.

Speaker Change: So today strategy is the world's first and largest bitcoin Treasury company.

Speaker Change: The largest independent publicly traded business intelligence company and also a NASDAQ100 stock.

Speaker Change: The brand simplifications that natural evolution of the company, reflecting our focus and broad appeal.

Speaker Change: The new logo includes a stylized b signifying the company's bitcoin strategy.

Speaker Change: And our unique position as a bitcoin Treasury company.

Speaker Change: And our new brands primary color is now orange, which represents energy intelligence and bitcoin.

Phong Le: Alongside our rebranding, we're excited to launch the official strategy merchandise. a reflection of our commitment to our passionate retail shareholders who take pride in being part of our journey. Just as sports fans probably represent their favorite teams, our shareholders and employees and customers want to showcase their support for Bitcoin and for us. Our store will feature curated collection of strategy apparel, accessories and gear designed for those who share our vision. You can now visit the store at store.strategy.com. We welcome your feedback and look forward to seeing our community represent strategy with pride.

Speaker Change: Alongside our rebranding we're excited to launch the official strategy merchandise store, a reflection of our commitment to our passionate retail shareholders, who take pride in being part of our journey.

Speaker Change: Just the sports fans probably represent their favorite teams.

Speaker Change: Our shareholders and employees and customers want to showcase their support for bitcoin and for us.

Speaker Change: Our store will feature a curated collection of strategy apparel accessories and year designed for those who share our vision our vision.

Speaker Change: You cannot visit the store and store Dot strategy Dot com.

Speaker Change: We welcome your feedback and look forward to seeing our community represent strategy with pride.

Phong Le: Next, I'm also excited to share that we launched a new website, strategy.com. As you can see in this slide includes a live tracker of various metrics and market data, including share price, performance, market cap, Bitcoin count, trading volume, options, open interest and more. We believe such a disclosure will provide more transparency and consistency and real time information to our investors and stakeholders. Investors can see both real time data and historical information such as past Bitcoin purchases in one simple, accessible place. We have many investors and analysts aggregating this information on their own, and we thank them for their fastidious work.

Speaker Change: Next I'm also excited to share that we launched a new website strategy dot com.

Speaker Change: As you can see on this slide includes alive trucker, various metrics and market data, including share price performance market cap Bitcoin count trading volume options open interest and more wood.

Speaker Change: We believe such a disclosure will provide more transparency and consistency and real time information to our investors and stakeholders.

Speaker Change: Investors can see both real time data and historical information such as past bitcoin purchases in one simple <unk>.

Speaker Change: Accessible place.

Speaker Change: With many investors and analysts aggregating this information on their own and we thank them for their fastidious works now we can provide this information trusted and governed all in one place.

Phong Le: Now we can provide this information, trusted and governed, all in one place.

Phong Le: Finally, we've relaunched our software website too. MicroStrategy Software. We continue to be at the forefront of innovation and AI powered business intelligence. We're also progressing rapidly with our cloud transition with a truly cloud native open multi-cloud approach. These are highlighted at our new software window.

Speaker Change: Finally, we relaunched our software website to stir.

Speaker Change: Strategy software Dotcom, we continue to be at the forefront of innovation and AI powered business intelligence. We're also progressing rapidly with our cloud transition with a truly cloud native open multi cloud approach. These are highlighted at our new software website.

Phong Le: To celebrate our new brand, learn more about our innovations in AI, cloud, and business intelligence, spend time with our software customers, and meet folks on the forefront of Bitcoin for corporations. I invite you all to join us at Strategy World 2025 in Orlando, Florida. go to our websites to register for this event. And I look forward to seeing many of you in Orlando.

To celebrate our new brands.

Speaker Change: Learn more about our innovations in AI cloud and business intelligence spend time with our software customers and meet folks on the forefront of bitcoin for corporations I invite you all to join US at strategy World 2025 in Orlando, Florida.

Speaker Change: Go to our website to register for this event and I look forward to seeing many of you in Orlando.

Phong Le: And if a brand launch was not enough, many of you know we've had a very busy quarter since our last earnings call. Here are some highlights. One, we continue to see momentum in migrating existing customers and adding new prospects to our managed cloud platform. In Q4 2024, we saw a 50% year-over-year increase in current subscription billings and a 48% year-over-year increase in subscription services revenue.

Speaker Change: And if a brand launch was not enough. Many of you know we've had a very busy quarter since our last earnings call.

Speaker Change: Here are some highlights.

Speaker Change: One we continue to see momentum in migrating existing customers and adding new prospects to our managed cloud platform.

Speaker Change: Q4, 2024, we saw a 50% year over year increase in current subscription billings and a 48% year over year increase in subscription services revenues.

Phong Le: Second, we've adopted FASB's Fair Value Accounting Standard for our Bitcoin holdings, and this accounting change will be reflected in our Q1 2025 funding. This will lead to a large one-time cumulative effect net increase the opening balance of our retained earnings of $12.75 billion in Q1, as our Bitcoin holdings will be revalued from the current carrying value to the market value. We're proud to have contributed to the corporate initiative advocating for the revision of prior reporting standards that categorize Bitcoin as an indefinite lived intangible asset. 3.

Speaker Change: Second we've adopted Fasb's fair value accounting standard for a bitcoin holdings and this accounting change will be reflected in our Q1 2025 financials.

Speaker Change: This will lead to a large one time cumulative effect net increase the opening balance of our retained earnings of $12 $75 billion in Q1, as our Bitcoin holdings will be revalued from the current carrying value to the market values. We.

Speaker Change: We're proud to have contributed to the corporate initiative advocating for the revision of prior reporting standards are categorized bitcoin as an indefinite lived intangible asset.

Phong Le: In December 2024, Strategy was officially included in the NASDAQ-100 Index. As a result, investors in QQQ and other NASDAQ 100 index funds will receive exposure to our Bitcoin strategy. According to some estimates, ETFs tracking the Nasdaq 100 have more than $550 billion in assets under management. We view this as an important milestone in the institutional adoption of Bitcoin, and we're proud to be part of the NASDAQ.

Speaker Change: Three in December of 2024 strategy was officially included in the NASDAQ100 index as a result of investors in <unk> and other NASDAQ100 index funds will receive exposure to a bitcoin strategy.

Speaker Change: According to some estimates ETF tracking the NASDAQ100 have more than 500 or $50 billion in assets under management.

Speaker Change: We view this as an important milestone in the institutional adoption of bitcoin and we're proud to be part of the NASDAQ100.

Phong Le: In December, we welcome three new members to our board of directors, Brian Brooks, Jane Dietz, and Greg Winiarski. This expansion increases our board from six to nine members and reinforces our commitment to the highest standards of corporate governance. Each of these distinguished leaders brings a wealth of invaluable experience and expertise in digital assets, capital markets, and regulatory.

Speaker Change: In December we welcomed three new members to our board of Directors, Bryan Brooks, Jane Dietz, and Greg when he our ski.

Speaker Change: This expansion increases our board from six to nine members and reinforces our commitment to the highest standards of corporate governance.

Speaker Change: Each of these distinguished leaders brings a wealth of invaluable experience and expertise in digital assets capital markets, a regulatory barriers and we believe they will make significant contributions to our strategy as a bitcoin Treasury company.

Phong Le: and we believe they will make significant contributions to our strategy as a Bitcoin treasury company, further strengthening our strategic vision and over Lastly, we conducted a special shareholder meeting in January, where our shareholders voted to increase the authorized Class A common stock to 10.33 billion shares and preferred stock to 1.005 billion shares respectively. The expanded share count will support the execution of our strategy to raise capital opportunistically and effectively through both equity and fixed income securities to purchase Bitcoin in a manner that we believe is advantageous and accretive to our shareholders under the prevailing market conditions.

Speaker Change: This strengthening strengthening our strategic vision and oversight.

Speaker Change: Lastly, we conducted a special shareholder meeting in January where our shareholders voted to increase the authorized class a common stock to 10.33 billion shares and preferred stock to 1.005 billion shares respectively.

Speaker Change: The expanded share count will support the execution of our strategy to raise capital Opportunistically and effectively through both equity and fixed income securities to purchase bitcoin in a manner that we believe has advantages and accretive to our shareholders under the prevailing market conditions.

Phong Le: Moving on to the Bitcoin highlights for 2024. Strategy remains the largest corporate holder of Bitcoin in the world, now holding 471,107 Bitcoins, with a total Bitcoin market value of $46 billion as of February. In the full year of 2024, we acquired an additional 258,320 Bitcoin for a total purchase cost of $22.1 billion at an average price of $85,447. In 2024, the price of Bitcoin appreciated, spurred notably by the approval of spot Bitcoin exchange traded products, or ETP. Additionally, the pro crypto stance of the new administration led by President Trump has drawn considerable institutional attention to the asset class.

Speaker Change: Moving on to the Bitcoin highlights for 2024 strategy remains the largest corporate holder of bitcoin and the world now holding 471107, <expletive> coins with a total bitcoin market value of $46 billion as of February 2nd.

Speaker Change: And the full year 2020 four we acquired an additional 258320 bitcoin for a total purchase costs of $22 $1 billion.

Speaker Change: At an average price of $85447.

Speaker Change: In 2020 for the price of Bitcoin appreciate it spurred notably by the approval of spot Bitcoin exchange traded products or Etp's. Additionally.

Speaker Change: Additionally, the pro crypto stance of the New administration led by President Trump is drawing considerable institutional attention to the asset class.

Phong Le: We believe the introduction and initial success of the Bitcoin ETPs evidence the growing maturation of Bitcoin as an institution grade asset class, with broader regulatory recognition and institutional adoption.

Speaker Change: We believe the introduction and initial success of the Spa Bitcoin etp's evidenced the growing maturation of bitcoin as an institution grade asset class with broader regulatory recognition and institutional adoption.

Phong Le: On the capital markets front, we made significant progress towards the advancement of our Bitcoin strategy. We announced our 2121 plan and the key three earnings call in November to target raising $21 billion of equity and $21 billion from fixed income securities between 2025 and 2027. We have made progress under our 2121 plan much faster than originally anticipated, with rapid and responsible growth in our capital raising given favorable market dynamics. In the full year 2024 and quarter to date in Q1 2025, we raised $18.8 billion net proceeds through our at the market or ATM equity offering program, and raised $6.2 billion through the issuance of five different tranches of convertible notes.

Speaker Change: On the capital markets front, we made significant progress towards the advancement of our bitcoin strategy we.

Speaker Change: We announced our 'twenty one 'twenty one plan into the Q3 earnings call in November to target raising $21 billion of equity and $21 billion from fixed income securities between 2025 and 2027.

Speaker Change: We have made progress under our 'twenty, one 'twenty one plan much faster than originally anticipated with rapid and responsible growth and our capital raising given favorable market dynamics.

Speaker Change: In the full year 2024 and quarter to date in Q1, 2025, we raised $18 $8 billion net proceeds through our aftermarket or ATM equity offering program.

Speaker Change: And raised $6.2 billion through the issuance of five different tranches of convertible notes.

Phong Le: This makes Strategy the largest issuer of convertible bonds in a single calendar year in the last decade. We also raised $584 million gross proceeds by issuing Strike, a preferred perpetual stock. last week after filling after filing a shelf registry. We expect to continue issuing innovative fixed income securities and seek to enable our common stock to outperform Bitcoin via intelligent leverage. To manage our overall leverage intelligently and maintain a healthy and robust balance sheet, we redeemed our $500 million Senior Secured Notes due 2028 and called our $650 million Convertible Notes due 2025 and $1.05 billion Convertible Notes due 2027.

Speaker Change: This makes strategy the largest issuer of convertible bonds and a single calendar year in the last decade.

Speaker Change: We also raised $584 million gross proceeds by issuing strike a preferred perpetual stock.

Speaker Change: Last week after filling after filing a shelf registration.

Speaker Change: We expect to continue issuing innovative fixed income securities and seek to enable our common stock to outperform bitcoin via intelligent leverage.

Speaker Change: To manage our overall leverage intelligently and maintain a healthy and robust balance sheet, we redeemed our $500 million of senior secured notes due 2028.

Speaker Change: Called our $650 million convertible notes due 2025, and 1.05 billion convertible notes due 2027.

Phong Le: All of our Bitcoin serving as collateral securing our 2028 senior secured notes was released. As illustrated on this slide, our new capital structure includes the issuance of convertible preferred equity for investors seeking lower volatility and less We believe that our new Perpetual Strike Preferred Stock, or STRK, is a complementary addition to our convertible bonds and any future fixed debt instruments we might have. Strategy's unique position allowed us to introduce Strike, which is a form of convertible preferred stock with an embedded perpetual call option on MicroStrategy, our common stock, which has substantial exposure to Bitcoin. It's important to note that Bitcoin itself is one of the most volatile and historically high performing commodities available.

Speaker Change: All of our bitcoin, serving as collateral securing our 2028 senior secured notes was released.

Speaker Change: As illustrated on this slide our new capital structure includes the issuance of convertible preferred equity for investors seeking lower volatility and leverage we believe that our new perpetual strike preferred stock or S. T. R. K is a complementary addition to our convertible bonds and any future fixed debt.

Speaker Change: That's where my head.

Speaker Change: Strategies unique position allowed us to introduce strike, which is a form of convertible preferred stock with an embedded perpetual perpetual call option on the micro strategy, our common stock, which has substantial exposure to bitcoin.

Speaker Change: It's important to note that bitcoin itself as one of the most volatile and historically high performing commodities available.

Phong Le: We created a preferred security convertible into highly liquid equity, which in turn is issued by a company that holds significant amounts of Bitcoin, a volatile and liquid commodity. To our knowledge, strike is the first preferred equity or convertible preferred equity issued by a company with significant Bitcoin exposure.

Speaker Change: We created a preferred security convertible into hi, Lee liquid equity, which in turn is issued by a company that whole significant amounts of bitcoin.

Speaker Change: Volatile and liquid commodity to our knowledge stripe as the first preferred equity convertible preferred equity issued by the company with significant bitcoin exposure.

Phong Le: It's ticker symbol STRK is the second publicly traded ticker for strategy. while Strategy aims to issue leveraged equity through which our investors gain exposure to Bitcoin. STRK Strike offers an 8% fixed coupon and a perpetual uncapped call option and a publicly traded security. His overall capital structure is quite unique and designed to broaden our invest The primary objective of introducing STRIKE was to access an investor base that is interested in investing in securities with exposure to Bitcoin. But they want lower sensitivity to Bitcoin's volatility and performance, both on the upside and downside. We recognize that those investing in MSTR Class A common stock typically seek higher volatility and leverage.

Speaker Change: Its ticker symbol S. T. R. K is the second publicly traded ticker for strategy.

Speaker Change: Our strategy aims to issue leveraged equity through which our investors gain exposure to bitcoin S.

Speaker Change: S. T. R. K strike offers an 8% fixed coupon and a perpetual uncap call option and a publicly traded security.

Speaker Change: Its overall capital structure is quite unique and designed to broaden our investor base. The primary objective of introducing strike was the access an investor base that is interested in investing in securities with exposure to bitcoin.

Speaker Change: But then once the lower sensitivity the bitcoin volatility and performance both on the upside and downside.

Speaker Change: We recognize that those investing in M. S. T. R class a common stock typically seek higher volatility in leverage but we also saw an opportunity to attract a new class of investors interested in reduce volatility and leverage youre still wanting bitcoin exposure.

Phong Le: But we also saw an opportunity to attract a new class of investors interested in reduced volatility and leverage, yet still wanting Bitcoin exposure.

Phong Le: As reflected in the snapshot of our capital markets activity, 2024 was a milestone year for strategy, with over $22 billion raised to fuel our Bitcoin strategy. The pace of our capital raising and Bitcoin acquisitions significantly accelerated in Q4 2024, during which we raised $15 billion through equity issuances and $3 billion via convertible debt in just under two months. To put the scale of last quarter's activities in perspective, prior to last quarter, we had raised $10 billion over 17 quarters since adopting Bitcoin as our Treasury Reserve asset in August 2020. This remarkable ramp up is not only a testament to Bitcoin's broader adoption and price appreciation, but also to support our diverse investor base, who recognize our ability to execute our Bitcoin strategy with laser focus.

Speaker Change: As reflected in the snapshot of our capital markets activity 2024 was a milestone year for strategy with over $22 billion raised to feel our bitcoin strategy the.

Speaker Change: The pace of our capital raising and Bitcoin acquisition significantly accelerated in Q4, 2024 during which we raised $15 billion through equity issuances of $3 billion via a convertible debt and just under two months.

To put the scale of last quarter's activities in perspective prior to last quarter, we had raised $10 billion over 17 quarters since adopting bitcoin as our Treasurer reserve assay in August 2020.

Speaker Change: This remarkable ramp up is not only a testament to bitcoins broader adoption and price depreciation, but also to support our diverse investor base, who recognize our ability to execute our bitcoin strategy with laser focus.

Andrew Kang: Andrew will provide further details on our capital markets and Bitcoin purchasing.

Speaker Change: Andrew will provide further details on our capital markets and bitcoin purchase activity.

Phong Le: Last quarter, we developed a new descriptor for what we are, which is the world's first and largest Bitcoin treasury. The acronym being coincidentally, BTC. We continue to focus on acquiring more Bitcoin through our capital market activities, and we believe that the value proposition of the company centers increasingly on our Bitcoin treasury strength. We're a publicly traded company that has adopted Bitcoin as our primary treasury reserve. By using proceeds from equity and debt financings, as well as cash flows from our operations, we strategically accumulate Bitcoin and advocate for its role as digital capital. Our treasury strategy is designed to provide investors varying degrees of economic exposure to Bitcoin by offering a range of securities, including equity and fixed income.

Speaker Change: Last quarter, we developed a new descriptor for what we are which is the world's first and largest bitcoin Treasury company the acronym being coincidentally BTC.

Speaker Change: We'll continue to focus on acquiring more bitcoin through our capital market activities and we believe that the value proposition of the company sent around sent centers increasingly on our bitcoin Treasury strategy.

Speaker Change: We're a publicly traded company that has adopted bitcoiners or primary Treasury reserve asset.

Speaker Change: By using proceeds from equity and debt financings as well as cash flows from our operations, we strategically accumulate bitcoin and advocate for his role as digital capital.

Speaker Change: Our treasury strategy is designed to provide investors varying degrees of economic exposure to bitcoin by offering a range of securities, including equity and fixed income instruments.

Phong Le: In addition, we provide industry leading AI powered enterprise analytics software, advancing our vision of intelligence every We leverage our development capabilities to explore innovation and Bitcoin applications and integrating analytics experience with our commitment to digital assets. We believe our combination of operational excellence, our strategic Bitcoin reserve, and our focus on technological and innovation positions as a leader in both the digital asset and enterprise analytics.

Speaker Change: In addition, we provide industry, leading AI powered enterprise analytics software advancing our vision of intelligence everywhere.

Speaker Change: We leverage our development capabilities to explore innovation in bitcoin applications.

Speaker Change: And integrating analytics experience with our commitment to digital asset growth.

Speaker Change: We believe our combination of operational excellence a.

Speaker Change: Our strategic corn reserve and our focus on technological innovation position us as a leader in both the digital asset and enterprise analytics sectors offering a unique opportunity for long term value creation.

Phong Le: offering a unique opportunity for long term value.

Phong Le: Since our adoption of our Bitcoin strategy, we've used three primary mechanisms to acquire more Bitcoin. One fixed income securities, we've issued $8.6 billion of total debt, which $6.2 billion in principal amount of convertible debt is outstanding, and an attractive blended cost of debt fixed as 0.56% annual. We also raised $584 million in gross proceeds through Perpetual Preferred Stock and we will continue seeking to innovate with other fixed income securities offers. Common Stock Issuance. We've issued $21.7 billion in shares of Class A common stock in a manner that we believe to be accretive to existing shareholders.

Speaker Change: Since our adoption of a bitcoin strategy, we've used three primary mechanisms to acquire more bitcoin.

Speaker Change: One fixed income securities we've issued $8 6 billion of total debt of which $6 2 billion in principal amount of convertible debt is outstanding and an attractive blended cost of debt fixed at 0.56% annually.

Speaker Change: We also raised $584 million in gross proceeds through perpetual preferred stock and we will continue seeking to innovate with other fixed income securities offerings.

Speaker Change: Common stock issuances.

Speaker Change: Issued $21 $7 billion in shares of class a common stock in a manner that we believe to be accretive to existing shareholders.

Phong Le: and Cash Flow from Operators. Since August 2020, we've used $836 million of total cash generated by our software operations to purchase Bitcoin. These three capital market levers have allowed us to raise $31 billion of capital and deploy intelligent leverage to increase our Bitcoin holdings in a manner that we believe has created tremendous shareholder value.

Speaker Change: And cash flow from operations since August 2020, we used $836 million of total cash generated by our software operations to purchase bitcoin.

Speaker Change: These three capital market levers have allowed us to raise $31 billion of capital and deploy intelligent leverage to increase our bitcoin holdings in a manner that we believe has created tremendous shareholder value.

Phong Le: Last quarter, we introduced our 2121 Capital Raising Plan targeting $42 billion in capital. Split equally between equity and fixed income over three years. Since then supportive macro conditions led us to accelerate the execution of our capital raising. We've already raised 80% of our $21 billion equity target and 17% of our fixed income target while accumulating significant Bitcoin holdings. In 2025, we are shifting our focus more to fixed income issuances, including convertible notes, preferred stock, and other securities designed to provide leverage that benefits our shareholders. As mentioned in the past, our long term leverage target is 20 to 30% of our Bitcoin holding value.

Speaker Change: Okay.

Speaker Change: Last quarter, we introduced our 'twenty, one 'twenty, one capital raising plan targeting $42 billion in capital split equally between equity and fixed income over three years.

Speaker Change: Citizen supportive macro conditions led us to accelerate the execution of our capital raising plan.

Speaker Change: We've all or we've already raised 80% of our $21 billion equity target and 17% of our fixed income target, while accumulating significant bitcoin holdings.

Speaker Change: In 2025, we are shifting our focus more to fixed incomes issuances, including convertible notes preferred stock and other securities designed to provide leverage that benefits our shareholders.

Speaker Change: As mentioned in the past our long term leverage target is 20% to 30% of our bitcoin holding value.

Phong Le: We remain flexible and will continue to adapt swiftly to market conditions.

Speaker Change: We remain flexible and we'll continue to adapt swiftly to market conditions.

Andrew Kang: Now I'll turn the call over to Andrew to discuss our financials for the quarter in further detail.

Speaker Change: Now I'll turn the call over to Andrew to discuss our financials for the quarter in further detail.

Andrew Kang: Thank you, Phong. I'll begin with a review of the software results. then go into further detail on our Bitcoin strategy and those results. On slide 16, you can see in Q4, total software revenues were approximately $121 million, down 3% year-over-year. Full year 2024, total revenues were approximately $464 million, down 7% year-over-year. We fully anticipated product license revenues along with support revenues to decrease in Q4. And our revenue trend continues to reflect the ongoing successful transition of our software business from on premise to cloud. Turning to the cloud results, Q4 subscription services revenues increased 48% year over year, and now make up approximately 20% of total revenues.

Speaker Change: Thank you song.

Andrew Ken: I'll begin with a review of the software results.

Andrew Ken: Then go into further detail on our bitcoin strategy and those results.

Andrew Ken: On Slide 16, you can see in Q4 total software revenues were approximately $121 million down 3% year over year full.

Andrew Ken: Full year 2024, total revenues were approximately $464 million down 7% year year over year.

Andrew Ken: We fully anticipated product license revenues, along with support revenues to decrease in Q4, and our revenue trend continues to reflect the ongoing successful transition of our software business from on premise to cloud.

Andrew Ken: Turning to the cloud results Q4 subscription services revenues increased 48% year over year and now make up approximately 20% of total revenues.

Andrew Kang: Full year 2024 subscription services revenues were approximately $106.7 million, reflecting an increase of 32% year over year. The growth in subscription services revenues is a result of the growth in our subscription billings, which also grew by 57% in Q4 to approximately $65 million, our fourth straight year of quarterly double digit growth. The strong growth in our subs billings was again driven by both existing customer migrations to the cloud, as well as new customer wins in Q4. And our customer renewal rates continue to remain elevated, consistent with prior quarters. We continue to see growth and demand for our cloud platform and Q4 was the strongest quarter of customer migrations to cloud to date.

Andrew Ken: Full year 2024 subscription services revenues were approximately $106 $7 million, reflecting an increase of 32% year over year.

Andrew Ken: The growth in subscription services revenues as a result of the growth in our subscription billings, which also grew by 57% in Q4 to approximately $65 million, our fourth straight year of quarterly double digit growth.

Andrew Ken: The strong growth in our subs billings was again driven by both existing customer migrations to the cloud as well as new customer wins in Q4, and our customer renewal rates continue to remain elevated consistent with prior quarters.

Andrew Ken: We continue to see growth in demand for our cloud platform in Q4 was the strongest quarter of customer migrations to cloud today.

Andrew Kang: The decrease in product license revenues and support revenues will be offset by growth in subscription services revenue. We expect this trend will continue in 2025 in the short term, but in the long run, cloud subscription services revenues should offset this shift as we fully transition our business to the cloud. Cost of revenues were approximately $34 million, up 21% compared to Q4 of last year, and approximately $130 million for the full year, up 18% year over year. The increase was driven primarily by higher cloud hosting costs, which we expect to continue in future periods as a direct result of our growing cloud business.

Andrew Ken: The decrease in product license revenues and support revenues will be offset by growth in subscription services revenues. We expect this trend will continue in 2025 in the short term, but in the long run cloud subscription services revenues should offset this shift as we fully transition our business to the cloud.

Andrew Ken: Cost of revenues were approximately $34 million up 21% compared to Q4 of last year and approximately $130 million for the full year up 18% year over year in.

Andrew Ken: The increase was driven primarily by higher cloud hosting costs, which we expect to continue in future periods as a direct result of our growing cloud business.

Andrew Kang: Operating expenses for the software business were approximately $94 million, down 6% compared to Q4 of last year. And full year OPEX was approximately $396 million, which was up 2% year over year.

Andrew Ken: Operating expenses for the software business were approximately $94 million down 6% compared to Q4 of last year and full year Opex was approximately $396 million, which was up 2% year over year.

Andrew Kang: And lastly, digital asset impairment charges in Q4 were approximately $1 billion and approximately $1.8 billion for the full year. I am happy to announce that Q4 will be the last quarter where we will recognize an impairment charge on our Bitcoin holdings as we move to fair value accounting in Q1. Now turning to our Bitcoin strategy, Q4 was the most successful quarter of adding Bitcoin on our balance sheet since the adoption of our Bitcoin strategic reserve. We acquired 218,887 bitcoins from the beginning of the fourth quarter till now for approximately $20.5 billion at an average price of $93,600 per bitcoin.

Andrew Ken: And lastly, digital asset impairment charges in Q4 were approximately $1 billion and approximately $1 8 billion for the full year I am happy to announce that Q4 will be the last quarter, where we will recognize an impairment charge on our bitcoin holdings as we move to fair value accounting in Q1.

Andrew Ken: Okay.

Andrew Ken: Now turning to our Bitcoin strategy Q4 was the most successful quarter of adding bitcoin on our balance sheet since the adoption of our bitcoin strategic reserve.

Andrew Ken: We acquired 218887 declines from the beginning of the fourth quarter till now for approximately $25 billion at an average price of 93600 perfect coin.

Andrew Kang: As of January 24, the company held a total of 471,107 bitcoins acquired for an aggregate cost of $30.4 billion or approximately $64,511 per bit Strategy has added Bitcoin to our balance sheet in every single quarter since August 2020, across 50 plus announcements, and 100% of our Bitcoin holdings remain fully unencumbered. As of February 2, 2025, the market value of our Bitcoin holdings was $46.1 billion, purchased at an aggregate cost of $30.4 billion, and an average Bitcoin purchase price of $64,511. Beginning with our Q1 2025 reported results, we will reflect the impact of the new FASB fair value accounting rule for our Bitcoin holdings as part of net income.

Andrew Ken: As of January 24, the company held a total of 471107 bitcoins acquired for an aggregate cost of <unk>.

Andrew Ken: $34 billion or approximately $64511 per bitcoin.

Andrew Ken: Strategy is added big corn to our balance sheet and in every single quarter. Since August 2020 across 50, plus announcements and a 100% of our bitcoin holdings remain fully unencumbered.

Andrew Ken: As of February 2025, the market value of our Bitcoin Holdings was 41 $46 1 billion.

And an aggregate cost of $30 4 billion.

Andrew Ken: And in average bitcoin purchase price of $64511.

Andrew Ken: Beginning with our Q1 2025 reported results will reflect the impact of the new Fabs will be fair value accounting rule for a bitcoin holdings as part of net income.

Andrew Kang: As a result of the change in accounting rule on January 1, 2025, we recognize a positive cumulative adjustment to the opening balance of our retained earnings of approximately $12.7 billion, which was in large part due to the significant difference between the higher market value of our Bitcoin compared to the carrying value of the Bitcoin on our balance sheet as of December 31. We will remeasure the fair value of our Bitcoin holdings on the last day of the first quarter and any difference in the price of Bitcoin at the end of the first quarter compared to the ending price on December 31st will be recognized as income or loss as part of our GAAP reported net income.

Andrew Ken: As a result of the change in accounting rule on January one 2025, we recognize a positive cumulative adjustment to the opening balance of our retained earnings of approximately $12 7 billion.

Andrew Ken: Which was in large part due to the significant difference between the higher market value of our bitcoin and compared to the carrying value of the bitcoin on our balance sheet as of December 31.

Andrew Ken: We will re measure the fair value of our Big point holdings on the last day of the first quarter and any difference in the price of bitcoin at the end of the first quarter compared to the ending price on December 31 will be recognized as income or loss as part of our GAAP reported net income.

Andrew Kang: Since establishing the record $21 billion Common Equity ATM program on October 30 of last year. which was in fact the largest in capital markets history, we have issued new shares swiftly, yet extremely prudently while adapting to the strong market condition. This chart illustrates the weekly breakdown for the average daily shares issued via our ATM compared to the overall average daily trading volume for each of those weeks. You'll note that while we have sold 1.6, I'm sorry, $16.7 billion of common equity since announcing our new ATM program, that activity accounted for only a very modest 2.9% of the total average daily trading volume of MSCR for the entire period.

Andrew Ken: Since establishing the record $21 billion common equity ATM program on October 30th of last year.

Andrew Ken: In fact, the largest and capital markets history, we have issued new shares swiftly yet extremely prudently, while adapting to the strong market conditions.

Andrew Ken: This chart illustrates the weekly breakdown for the average daily shares issued via our ATM compared to the overall average daily trading volume for each of those weeks.

Andrew Ken: You'll note that while we have sold $1 six I'm, sorry, $16 $7 billion of common equity since announcing our new ATM program.

Andrew Ken: That activity accounted for only a very modest two 9% of the total average daily trading volume of MCR for the entire period.

Andrew Kang: We continuously monitor Bitcoin price, MSTR share price, as well as overall trading volumes in a programmatic and disciplined manner to sell shares through our ATM and execute sales in a manner we believe that does not impact the overall market price of MSTR.

Andrew Ken: We continuously monitor bitcoin price MST, our share price as well as the overall trading volumes in our programmatic and disciplined manner to sell shares through our ATM and execute sales in a manner. We believe that does not impact the overall market price of MTR.

Andrew Ken: Okay.

Andrew Kang: Now, turning to our treasury operations, we had one of our most impactful quarters from a capital markets execution perspective. In Q4, we issued a new $3 billion convertible note in November, which was upsized and well-received by the market. The notes due December 2029 had a 0% coupon and 55% conversion premium, reflecting a conversion price of approximately $672 per share. As in the past, the net proceeds from the new convert were used to acquire additional Bitcoin. In Q1, we called for the redemption of our $1.05 billion dollar 2027 convertible. As the notes were substantially in the money, we expect most holders will elect to convert their notes into shares or a class A common stock on or prior to the redemption day.

Andrew Ken: Now turning to our Treasury operations, we had one of our most impactful quarters from a capital markets execution perspective.

Andrew Ken: In Q4, we issued a new $3 billion of convertible note in November which was upsized and well received by the market.

Andrew Ken: The notes due December 2029 had a zero percent coupon and 55% conversion premium, reflecting a conversion price of approximately $672 per share.

Andrew Ken: As in the past the net proceeds from the new convert were used to acquire additional bitcoin.

Andrew Ken: In Q1, we called for the redemption of our 1.05 billion dollar 2027 convertible notes.

Andrew Ken: Notes were substantially in the money, we expect most holders will elect to convert their notes into shares of our class a common stock on or prior to the redemption date.

Andrew Kang: We believe this creates capacity for additional intelligent leverage for our balance sheet in the form of new fixed income instruments. After the redemption of our 2027 convertible nodes, our nearest debt maturity is now more than three years away and not until late 2028. And the remainder of our scheduled debt maturities are evenly spread over several years out to 2032 with a weighted average scheduled debt maturity of approximately five years. Under our current capital structure, we now have $6.2 billion of unsecured convertible debt outstanding, with a blended interest rate of approximately 0.56%, with staggered stated maturities beginning in December 2028 through June 2032.

Andrew Ken: We believe this creates capacity for additional intelligent leverage for our balance sheet in the form of new fixed income instruments.

Andrew Ken: After the redemption of our 2027 convertible notes our nearest debt maturity is now more than three years away and not until late 2028.

Andrew Ken: And the remainder of our scheduled debt maturities are evenly spread over several years out to 2032 with a weighted average scheduled debt maturity of approximately five years.

Andrew Ken: Under our current capital structure, we now have $6 $2 billion of unsecured convertible debt outstanding with a blended interest rate of approximately 0.56% with staggered stated maturities beginning in December 2028 through June 2032.

Andrew Kang: Last quarter, we filed a $21 billion equity at the market program, which was the single largest ATM program ever filed in the US. As of February 2, we issued $16.7 billion of common equity under this program, and approximately $4.3 billion of capacity remains available under the shelf. This slide outlines the key terms of strike our new newly issued perpetual convertible preferred stock. We successfully successfully raised $584 million in gross proceeds through the issuance of 7.3 million shares at an offering price of $80 per share. We expect that the security will be listed on NASDAQ under the ticker STRK beginning on February 6.

Andrew Ken: Last quarter, we filed a $21 billion equity at the market program, which was the single largest ATM program ever filed in the U S.

Andrew Ken: As of February 2nd we issued $16 $7 billion of common equity under this program.

Andrew Ken: Approximately $4 3 billion of capacity remains available under the Shah.

Andrew Ken: Okay.

Andrew Ken: This slide outlines the key terms of stroke are new newly issued perpetual convertible preferred stock.

Andrew Ken: We successively successfully raised $584 million in gross proceeds through the issuance of seven 3 million shares at an offering price of $80 per share.

Andrew Ken: We expect that the security will be listed on NASDAQ under the ticker S. T RK beginning on February six.

Andrew Kang: Looking ahead, we have the flexibility to explore an ATM shelf registration for issuing additional strike shares similar to our common stock ATM program. Strike represents the next step in the evolution of our capital structure, expanding the range of investment opportunities for investors with varying risk profiles. And it complements our equity and existing convertible bonds, offering exposure to Bitcoin through MSTR with lower volatility and leverage. We continue to maintain significant debt coverage with $47 billion in Bitcoin holdings against just $3 billion in out-of-the-money convertible debt, or approximately 15 times coverage.

Andrew Ken: Looking ahead, we have the flexibility to explore and ATM shelf registration for issuing additional strike shares similar to our common stock ATM program strike.

Andrew Ken: Strike represents the next step in the evolution of our capital structure and expanding the range of investment opportunities for investors with bearing risk profiles and it complements our equity and existing convertible bonds offering exposure to bitcoin through MCR with lower volatility on leverage.

Andrew Ken: We continue to maintain significant debt coverage with $47 billion in Big point holdings against just $3 billion and out of the money convertible debt or approximately 15 times coverage.

Andrew Kang: We're back. We have been asked how we evaluate our leverage targets. We measure leverage risk not against our Bitcoin cost basis, but rather our debt coverage ratio, which remains exceptionally strong. Our current leverage ratio remains below our long term target range of 20 to 30%, which we provide capacity to expand our capital structure prudently and based on market conditions. In 2025, our focus will be on opportunities to raise additional fixed income securities, while preserving flexibility to raise equity and maintaining a healthy debt coverage ratio. Similarly, we believe we have substantial coverage to meet the dividend obligations for our strike shareholders.

Andrew Ken: We have that.

Andrew Ken: We have been asked how we evaluate our leverage targets, we measure leverage risk not against our bitcoin cost basis, but rather our debt coverage ratio, which remains exceptionally strong.

Andrew Ken: Our current leverage ratio remains below our long term target range of 20% to 30%, which we provide capacity to expand our capital structure prudently and based on market conditions.

Andrew Ken: In 2025, our focus will be on opportunities to raise additional fixed income securities, while preserving flexibility to raise equity and maintaining a healthy debt coverage ratio.

Andrew Ken: Okay.

Andrew Ken: Similarly, we believe we have substantial coverage to meet the dividend obligations for a strike shareholders.

Andrew Kang: The 8% fixed dividend on 7.3 million Stripe shares results in an annual cash need of approximately $58 million. Even if netting out the $3 billion and out of the money converts, our Bitcoin holdings leaves us with $44 billion of coverage, more than enough to cover strike dividends if needed. This slide illustrates our approach to intelligent leverage and the mechanisms available to increase or decrease Our outstanding debt and preferred stock together account for approximately 8% of our market cap and approximately approximately 15% of our Bitcoin asset value. Currently, we are below our long term leverage target of 20 to 30%.

Andrew Ken: The 8% fixed dividend on $7 3 million strike shares results in an annual cash need of approximately $58 million.

Even if netting out the $3 billion and out of the money converts or Bitcoin holdings leaves us with $44 billion of coverage.

Andrew Ken: More than enough to cover strike dividends if needed.

Andrew Ken: This slide illustrates our approach to intelligent leverage and the mechanisms available to increase or decrease it.

Andrew Ken: Our outstanding debt and preferred stock together account for approximately 8% of our market cap and approximately approximately 15% of our bitcoin asset value.

Andrew Ken: Currently we are below our long term leverage target of 20%, 30% and we believe we have capacity to lever up by issuing new convertible debt or fixed income securities.

Andrew Kang: And we believe we have capacity to lever up by issuing new convertible debt or fixed income securities. Conversely, deleveraging can occur through debt repayment or conversion to equity, issuing common equity, as well as if Bitcoin price appreciates, which naturally lowers leverage as the market value of our holdings increase. Our leverage ratio declined in Q4 2024 and quarter to date in Q1 2025 due to the combination of these D leveraging factors. As we strategically increase our leverage ratio in 2025, we expect enhanced benefits for common shareholders through a higher BTC yield and elevated volatility, both of which drive long term value.

Andrew Ken: Conversely, deleveraging can occur through debt repayment or conversion to equity issuing common equity as well as a big corn price appreciates, which naturally lowers leverage as the market value of our holdings increase.

Andrew Ken: Our leverage ratio declined in Q4, 2024 and quarter to date in Q1 2025 due to the combination of these deleveraging factors.

Andrew Ken: As we strategically increased our leverage ratio in 2025, we expect enhanced benefits for our common shareholders through a higher BTC and.

Andrew Ken: And elevated volatility both of which drive long term value.

Andrew Kang: Today we are introducing two new KPIs, BTC Gain and BTC Dollar Gain. BTC gain is defined as the number of bitcoins held by the company at the beginning of a period, multiplied by the BTC yield for the same period. This metric quantifies in Bitcoin terms our BTC yield for the quarter. For the full year 2024, our BTC gain was 140,538 Bitcoin. calculated by multiplying the 74.3% BTC yield to our starting balance of 189,150 Bitcoin. Taking the year-end Bitcoin price of $93,400, our BTC dollar gain for 2024 would be calculated as $13.1 billion. It is worth noting that the BTC gain and BTC dollar gain metrics are not gained in the traditional financial context.

Andrew Ken: Today, we are introducing two new kpis BTC gain in BTC dollar getting.

Andrew Ken: BTC gain is defined as the number of big coins held by the company at the beginning of a period multiplied by the BTC yield for the same period.

Andrew Ken: This metric quantified and bitcoin terms, our BTC yields for the quarter.

Andrew Ken: For the full year 2024, our BTC gain was 140538 bitcoins calculated.

Andrew Ken: Calculated by multiplying the 74, 3% BTC yield to our starting balance of 189150 bitcoin.

Andrew Ken: Taking the yearend bitcoin price of 93004 hundred our BTC dollar again for 2024 will be calculated at 13 $1 billion.

Andrew Ken: It is worth noting that the BTC gain in BTC dollar gained metrics are not gained in the traditional financial context. They are also not measures of return on investment or measures of income generated generated by our treasury operations or Bitcoin holdings.

Andrew Kang: They're also not measures of return on investment or measures of income generated generated by our treasury operations or Bitcoin holding. and BTC dollar gain does not represent the fair value gain on our Bitcoin holding. Our BTC yield in 2024 of 74.3% surpassed the annual BTC yield in all of the previous years, as well as our initial target of six to 10% this year. We can't predict the price of Bitcoin, nor can we predict broader equity and debt capital market conditions. However, we are confident that our Bitcoin treasury strategy will continue to generate value and are revising our targets for 2025 to achieve a minimum of 15% BTC yield and a $10 billion BTC dollar gain for 2025.

Andrew Ken: In BDC dollar gain does not represent the fair value gain on our big Horn Holdings.

Andrew Ken: Our BTC yield in 2024 of 74, 3% surpassed the annual BTC yield and all of the previous years as well as our initial target of 6% to 10% this year.

Andrew Ken: We can't predict the price of bitcoin, nor can we predict broader equity and debt capital market conditions. However, we are confident that our bitcoin treasury strategy will continue to generate value and are revising our targets for 2025 to achieve a minimum of 15% BTC yield and a one.

Andrew Ken: A $10 billion BTC dollar gain for 2025.

Andrew Kang: We will continue to consider the full spectrum of financing options and explore creative capital markets, transactions and untapped pools of capital to execute this strategy effectively and prudently. We plan to remain disciplined in the use of both the ATM and other capital raising alternatives, doing so in a way to achieve our BTC yield and BTC dollar gain target.

Andrew Ken: We will continue to consider the full spectrum of financing options and explore accretive capital markets transactions and untapped pools of capital to execute this strategy effectively and prudently.

Andrew Ken: We plan to remain disciplined in the use of both the ATM and other capital raising alternatives doing so in a way to achieve our BTC yield in BTC dollar getting targets.

Operator: Thank you again for your time today and for your continued support of strategy.

Thank you again for your time today and for your continued support of strategy I'll now turn the call over to Michael for his remarks.

Michael Saylor: I'll now turn the call over to Michael for his remarks. Thank you. I appreciate the opportunity to address you all today. I'd like to talk about development so far. Why don't we start with the last 12 months in the Bitcoin marketplace. I think starting from January of 2024, with the approval of the spot Bitcoin ETFs, we had an excellent year of institutional adoption. I would say Wall Street adoption of those ETFs has been extraordinary. There's now something on the range of $140 billion of capital that's flowed into the spot Bitcoin ETFs around the world. We saw this transition to fair value accounting in 2024.

Andrew Ken: Okay.

Andrew Ken: Okay.

Andrew Ken: Thank you.

Andrew Ken: I appreciate the opportunity to address you all today.

Andrew Ken: I'd like to talk about.

Andrew Ken: About <unk> development so far.

Andrew Ken: Why don't we start with the last 12 months and the bitcoin marketplace.

Andrew Ken: I think starting from January of 2024, with the approval of the spot corn, Etfs, where we had an excellent year of institutional adoption.

Andrew Ken: I would say wall Street adoption of those Etfs has been extraordinary theres now something on the range of $140 billion of capital Thats flowed into the spa the coin Etfs around the world.

Andrew Ken: We saw this transition of fair value accounting in 2024, we've got a bitcoin president we've got appropriate client confidence.

Michael Saylor: We've got a Bitcoin president. We've got a pro-Bitcoin cabinet. We've seen an end to the war on crypto. We've got 250 plus pro-crypto legislators in Congress. We've seen the repeal of SOB 121, which had an effect of preventing banks from being able to consider banking Bitcoin. We've got a lot of enthusiasm around the strategic Bitcoin Reserve Act. And we've seen a dramatic increase in Bitcoin standard companies, companies like Mara, like Riot, like similar, like MetaPlanet, like Kohler are all beginning to adopt Bitcoin as a Treasury Reserve asset. and there's just been a consistent increase in Bitcoin awareness throughout mainstream media and throughout the traditional investor community over the last 12 months.

Andrew Ken: We've seen an end to the war on crypto.

Got 250, plus pro crypto legislators and Congress.

Andrew Ken: We've seen a repeal of SAB 121 with Chad.

Andrew Ken: Unaffected, preventing banks from being able to consider banking bitcoin.

Andrew Ken: We've got a lot of enthusiasm around the <unk>.

Andrew Ken: Strategic Bitcoin Reserve Act.

Andrew Ken: And we.

Andrew Ken: We've seen in a dramatic increase in bitcoin standard companies companies like Meera like riot like similar like Mount a planet like color are all beginning to adopt their corners of Treasury reserve asset.

Andrew Ken: And there's just been a consistent increase in bitcoin awareness throughout mainstream media.

Andrew Ken: And throughout the traditional invest investor community over the last 12 months.

Michael Saylor: Next slide.

Andrew Ken: Next slide.

Andrew Ken: Hum.

Michael Saylor: I want to say a few words about our strategy rebrand. We have become a global brand. People recognize strategy in South America, in Europe, in Asia, all across the world, all across the US. And so this is a very logical development. Strategy is easier to say, easier to spell, easier to find, easier to remember. I've been 30 years in the business. And I can't tell you how many times I've heard someone refer to micro strategies, and, and get the plural wrong and spell it wrong. And I think that this particular instantiation and elegant evolution of our brand is going to allow us to reach a much broader group of customers, investors and partners.

Andrew Ken: I wanted to say a few words about our strategy rebrand.

Andrew Ken: We have become a global brand.

Andrew Ken: People recognize strategy in South America, and in Europe and Asia.

Andrew Ken: All across the world all across the U S and so this is a very logical development strategy is easier to say easier to spell easier to find easier to remember.

Andrew Ken: I've been 30 years in the business and I can't tell you how many times I've heard someone refer to micro strategies.

Andrew Ken: And.

Andrew Ken: And get the pleural wrong and spell it wrong and I think that.

This particular.

Andrew Ken: Instantiation and elegant.

And evolution of our brand.

Andrew Ken: Is going to allow us to reach a much broader group of customers investors and partners and I also think it.

Michael Saylor: And I also think it ties our identity much more closely to Bitcoin and all of the positive aspects of the Bitcoin network in the world. And so I think this is going to be very, very helpful for us in communication. Next slide. SIREN WAILING You know, our performance is driven by Bitcoin. And as you can see, since we adopted Bitcoin as our primary Treasury Reserve asset, We've been able to generate annualized performance of approximately 110% a year, which is really extraordinary in the history of the capital markets. Over that time period, bonds are minus 5%, gold and real estate between 6% and 8% ARR.

Andrew Ken: Ties our identity much more closely to bitcoin and all of the positive aspects of the bitcoin network in the world.

Andrew Ken: So I think this is going to be very very helpful for us in communication.

Andrew Ken: Next slide.

Andrew Ken:

Andrew Ken: You know our our performance is driven by bitcoin and as you can see since we adopted decline as our primary Treasury reserve asset.

We've been able to generate annualized performance of approximately 110% a year.

Andrew Ken: Which is really extraordinary in the history of the capital markets.

Over that time period bonds, or minus 5% gold and real estate between six and 8% IRR.

Michael Saylor: The hurdle rate really is the S&P index, which is about 14%. And if you want to beat it, you pick the top seven companies, the Magnuson Seven, you can almost double it, you get 29%. Bitcoin has outperformed that by a factor of two. And of course, we've been able to outperform Bitcoin by intelligently levering Bitcoin. Next. This slide just illustrates that one of the results is that MicroStrategy has outperformed every stock in the S&P 500. So this is as of February 4th, yesterday, my birthday. It's a nice birthday present. We continually benchmark ourselves against every copy of the S&P 500 every single day.

Andrew Ken: The hurdle rate really is the S&P index, which is about 14%.

Andrew Ken: If you want to beat it or you pick the top seven companies. The magnificent seven you can almost double it to 29%.

Speaker Change: Cohen has outperformed that by a factor of two and of course, we've been able to outperform bitcoin by intelligently levering bitcoin.

Andrew Ken: Max.

Andrew Ken:

Andrew Ken: This slide just illustrates that one of the results is that Microstrategy has outperformed every stock in the S&P 500.

Andrew Ken: So.

Andrew Ken: This is as of February four yesterday my birthday, it's a nice birthday present.

Andrew Ken: We continually benchmark ourselves.

Andrew Ken: Against every company in the S&P 500 every single day, and we're always considering those but but as you can see it's not close we're dramatically outperforming the strategy of every other company in the S&P 500, with our bitcoin strategy.

Michael Saylor: And we're always considering this. But as you can see, it's not close. We're dramatically outperforming the strategy of every other company in the S&P 500 with our Bitcoin strategy. Next slide. Here, you can see. At the end of the day, if you just bought Bitcoin, you would outperform 99% of the S&P 500. So, Bitcoin as pure digital capital is a very, very compelling investment idea. The Magnificent Seven is outperforming 94% of the S&P 500, and of course, the index is outperforming 62%. And the message here really is many, many companies are struggling to outperform the index.

Andrew Ken: Next one.

Andrew Ken: Here you can see.

Andrew Ken: At the end of the day.

Andrew Ken: If you just bought decline you would outperform 99% of the S&P 500, so bitcoin as pure digital capital is a very very compelling investment idea.

Andrew Ken: Magnificent seven is outperforming 94% of the S&P 500 and of course, the indexes outperforming 62%.

The message here really is many many companies are struggling to outperform the index.

Michael Saylor: And it's time to consider a Bitcoin strategy. Well, as you know, the secret, of course, to that strategy isn't just performance. It's also the volatility. Volatility is a measure of energy. And as you can see, strategy is the most volatile stock out of the S&P 500 universe. So we don't hide from it. We're quite proud of it. We engineer the business in order to stay volatile. The wisdom is to strip volatility from a publicly traded company. Strip it from the balance sheet. Strip it from the P&L. MicroStrategy has embraced volatility. And not only do we pursue it with Bitcoin, but we pursue it with our leverage strategies to actually get a volatility that's greater than the native Bitcoin volatility.

Andrew Ken: And it's time to consider a bitcoin strategy.

Andrew Ken: Next.

Andrew Ken: Well as you know the secret of course.

Andrew Ken: To that strategy as interest performance, it's also the volatility volatility.

Andrew Ken: Volatility is a measure of energy and as you can see strategy is the most volatile stock out of the S&P 500 universe. So we don't hide from it we're quite proud of it we engineer the business in order to stay volatile.

Speaker Change: Conventional wisdom is to strip volatility from a publicly traded company strip it from the balance sheet strip it from the P&L.

Speaker Change: Microstrategy is embrace volatility and and not only do we pursue it with decline, but we pursue it with our leverage strategies to actually get a volatility that's greater than the native bitcoin volatility.

Michael Saylor: There's a result of that volatility, and the result is liquidity and optionality. As you can see here, we have the largest open options interest of any company in the S&P 500 universe as a measure of market cap. And you can see we're number two in liquidity as a measure of or divided by market cap. So we've established a fairly intense capital structure. It's fast money. It's hot money. And it's that way by design. One of the results is we have the largest deepest options pool in in the Bitcoin universe. And you can see that our options are trading by a factor of more than five.

Speaker Change: There is a result of that volatility and the result is liquidity and Optionality as you can see here.

Speaker Change: We have the largest open auctions interest of any company in the S&P 500 universe as a measure of market cap.

Speaker Change: And you can see we're number two in liquidity as a measure of our divided by market cap. So.

Speaker Change: We've established a fairly intense capital structure, it's fast money, it's hot money and and it's that way by design.

Speaker Change: Next.

Speaker Change: One of the results is we have the largest deepest options pool and and the Bitcoin universe and you can see that our options are trading by a factor of more than five.

Michael Saylor: versus IBIT, and we'll continue to pursue this strategy. We think this gives us an advantage. Next.

Speaker Change: Versus I bet.

Speaker Change: And and we will continue to pursue the strategy. We think this gives us an advantage.

Speaker Change: Our next.

Michael Saylor: That optionality and that volatility, of course, is a benefit in the convertible bond market. You can see here that the blended performance of our convertible bonds is 75% versus Bitcoin's performance of 64% during the same time frame. So our convertible bonds are unique if you wanted to get Bitcoin exposure, but you wanted to get the credit assurances of a bond and or the volatility characteristics of a bond, MicroStrategy is unique. We were the largest convertible bond issuer in 2024. We think we have an advantage in this market because we have one of the great use of proceeds for a convertible bond.

Speaker Change: That optionality and that volatility of course is a benefit in the convertible bond market you can see here that the blended performance of our convertible bonds of 75% versus bitcoins performance of 64% during the same timeframe.

Speaker Change: So our convertible bonds are unique if you wanted to to get their client exposure, but you wanted to get the credit assurances of a bond.

Speaker Change: <unk> the volatility characteristics of a bar on micro strategy is unique we were the largest convertible bond issuer in 2024, we think we think we have an advantage in this market because we have one of the great use of proceeds for our convertible bond so youre going to issue a convertible bond you want high.

Michael Saylor: If you're going to issue a convertible bond, you want high volatility in order to issue the bond, but you want to take the use of proceeds and reinvest it in a high volatility asset, which is what Bitcoin is. And so by issuing a bond and issuing very volatile securities and then buying back a volatile commodity, we're able to maintain a scalable business and continue to go back to the market over and over again. Next. And so on, on the margin, you can see MicroStrategy is outperforming all major assets, all major asset classes and the S&P.

Speaker Change: Volatility.

Speaker Change: In order to issue the bond, but you want to take the abuse of proceeds and reinvest it in a high volatility asset which is what their client is and so.

Speaker Change: By by issuing a bond and issuing very volatile securities and then buying back of volatile commodity we're able.

Speaker Change: To maintain them.

Speaker Change: Maintain a scalable business and continue to go back to the market over and over again.

Speaker Change: Next.

Speaker Change: And so on on the margin you can see micro strategies outperforming all major asset saw all major asset classes and the S&P.

Michael Saylor: And, and We're so enthusiastic about this, we've decided that we would go ahead and memorialize this and create a strategy.com website. And if you go to our strategy.com website, you'll see you're able to actually track MicroStrategy's performance against the Magnificent Seven, against these asset classes every single day in real time. And so our goal is to help educate the investment community so they actually understand both the characteristics of Bitcoin and the characteristics of MicroStrategy versus all the other investment options in that investment universe. Next. You'll see on the strategy.com website a dashboard, and you'll see all sorts of interesting KPIs that are being maintained in real time.

Speaker Change: And.

Speaker Change: And.

Speaker Change: We're so enthusiastic about this we've decided that we would go ahead memorialize this.

Speaker Change: And create a strategy dot com website, and if you go to our strategy of Dotcom website, Youll see youre able to actually track micro strategies performance against the magnificent seven against these asset classes every single day and real time.

Speaker Change: So so our goal is to help educate the investment community. So they actually understand both the characteristics of decline and the characteristics of micro strategy versus all the other investment options in that investment universe.

Speaker Change: Next.

Speaker Change: Youll see on the strategy of Dot Com website a dashboard.

Speaker Change: And you'll see all sorts of interesting kpis that are that are being maintained in real time right. You can see here is a snapshot is is we've got an annualized return of 110% over the year versus 59% for bitcoin you can see our options market is five six axis Vegas the next law.

Michael Saylor: What you can see here as a snapshot is we've got an annualized return of 110% over the year versus 59% for Bitcoin. You can see our options market is 5.6x as big as the next largest Bitcoin options market. We will continue to track metrics that aren't always easy for people to get, like daily trading volume, or daily trading volume as percentage of market cap, or give you every single day real-time performance of our convertible bonds versus Bitcoin, and our implied volatilities and our historic volatilities. I'm really enthusiastic to see what people think of this. The website, it's tailor-made.

Speaker Change: Just a bitcoin options market.

Speaker Change: We will continue to track metrics that aren't always easy for people to get like daily trading volume or daily trading volume as a percentage of market cap or give you every single day real time performance of our convertible bonds versus bitcoin.

Speaker Change: And and our implied Volatilities in our historic Volatilities and so I'm really enthusiastic to see to see what people think of this the website.

Speaker Change: It's kind of.

Speaker Change: Tailor made.

Michael Saylor: and another way which is you can you can very easily snapshot the website and you can create graphics and snapshot them and share them and or use them in your analysis. And we think this is kind of a first I'm not really aware of another public operating company that published a live website with so many different interesting investment analytics looking at at the universe of investment assets.

Speaker Change: And another way, which is you can you can very easily snapshot the website and you can create graphics and snapshot them and share them and use them in your analysis.

Speaker Change: And we think.

Speaker Change: This is kind of a first I'm not really aware of another public operating company that published alive website with so many different interesting investment analytics looking at at the universe of investment assets.

Speaker Change: Next.

Michael Saylor: Looking forward to 2025. There's a set of catalysts that I think are bullish. I think all of the focus on constructing a digital assets framework that's taking place at the SEC and in the Senate and in the House and within the administration, I think this is a great thing for Bitcoin and the entire crypto asset class in general. I think there'll be a lot of enhancements to Bitcoin ETFs, the in kind create redemptions. I think you'll see you'll see a deeper, richer options market for a lot more spot ETFs. I think you'll I think you'll see other ETFs coming along that give people the ability to take on different types of Bitcoin exposure.

Speaker Change: Looking forward to 2025, there's a set of catalysts that I think are bullish.

Speaker Change: I think.

Speaker Change: All of the focus on constructing a digital assets framework, that's taking place at the SEC.

Speaker Change: And in the Senate and the house and with them within the administration I think this is a great thing for bitcoin and the entire crypto asset class in general.

Speaker Change: I think there'll be a lot of enhancements to bitcoin Etfs the unkind create redemptions.

Speaker Change: You'll see.

Speaker Change: You'll see a deeper richer options market for a lot more spotty Etf's I think yours, I think youll see other etfs coming along.

Speaker Change: That give people the ability to take on different types of bitcoin exposure.

Michael Saylor: I think All those are good things for the asset. I think you'll see a continued move toward more banking support for Bitcoin. The repeal of SAB 121 opened that door, but I think we'll see more and more support from a supportive set of regulators. And as the banks start to take a fresh look at supporting Bitcoin, it's going to be good for the asset class. We'll continue to see more corporate adoption of Bitcoin every month. We hear about another company that's adopting Bitcoin as a treasury asset. And of course, the existing companies like MetaPlanet, like Semler, like Mera are intensifying their Bitcoin acquisitions and their Bitcoin financing and capital markets related activities.

Speaker Change: I think.

Speaker Change: All of those are good things for the asset.

Speaker Change: I think you'll see a continued move toward more banking support for bitcoin.

Speaker Change: And their appeal of SAB 121, open that door, but I think we'll see more and more support from a supportive set of regulators and as the bank start to take a fresh look at supporting bitcoin is going to be good for the asset class.

Speaker Change: We will continue to see more corporate adoption of Bitcoin every month, we hear about another company, that's adopting bitcoin as a treasury asset and of course the existing companies.

Speaker Change: Like like matter of planet like similar like Meera are intensifying their a bitcoin acquisitions and their bitcoin financing and capital markets related activities. This is only going to be good for bitcoin the network in bitcoin the asset class.

Michael Saylor: This is only going to be good for Bitcoin, the network and Bitcoin, the asset class. We also see good signs of institutional adoption. It's becoming more normal. We're seeing people talk about 1% to 3% allocations of a portfolio to Bitcoin. We're seeing Bitcoin pop up as an agenda item in more and more mainstream investor conferences. I'm being invited to lots and lots of mainstream investor conferences. And a year ago, two years ago, this wasn't so common. But what's clear is that Bitcoin is on the radar of global investors and mainstream institutional investors. And everyone's starting to think they need to form an opinion, they need to get up to speed on this, and they need to figure out what their strategy is going to be.

Speaker Change: We also see.

Speaker Change: Good signs of institutional adoption, it's becoming more normal we're seeing people talk about 1% to 3% allocations of our portfolio to bitcoin.

Speaker Change: Seeing bitcoin pop up has an agenda item and more and more mainstream investor conferences, I'm being invited to lots and lots of mainstream investor conferences and in a year ago. Two years ago. This wasn't so common but what's clear is the bitcoin is on the radar of global investors and mainstream.

Speaker Change: <unk> institutional investors and everyone's starting to starting to think they need to form an opinion they need to get they need to get up to speed on this we needed to figure out what their strategy is going to be.

Michael Saylor: Bitcoin global adoption is accelerating. The events of November 5th created a supportive political regime in the United States, but the regulators in Europe, in Singapore, in the Middle East, in South America, even in Hong Kong and China, they all look to the regulators in Washington, D.C. to take their cue. There's a wave of political support which is spreading around the globe for Bitcoin. All of these things are going to be positive catalysts for awareness, adoption, investment in the coming 12 months. Next.

Speaker Change: So bitcoin global adoption is accelerating.

Speaker Change: The events of November 5th created a supportive political regime in the United States, but but the regulators in Europe, and Singapore, and the Middle East and South America, even in Hong Kong and China. They all look to the regulators in Washington D C to take their cue.

Speaker Change: And so there is a wave of political support which is which is spreading around the globe for bitcoin. All of these things are going to be positive catalyst for awareness.

Speaker Change: The option investments in the coming 12 months.

Speaker Change: Next.

Michael Saylor: Source strategy. With regard to MSTR, we want that to be the high leverage, high volatility equity in the Bitcoin ecosystem. And we will continue to pursue intelligent leverage via our convertible bond strategies, via our preferred stock strategies, via opportunistic capital markets strategies in order to generate that leverage and that performance for the Bitcoin Maxi investors. Our convertible debt strategy will continue. We will, as we have done, selectively refinance various debt instruments when they're no longer providing effective leverage for our common stock shareholders and when they're no longer interesting for the convertible debt investors. We'll replace them with new issuance of convertible debt.

Speaker Change: So our strategy.

Speaker Change: With regard to M. S. T. R. We want that to be the high leverage high volatility equity and bitcoin ecosystem and we will continue to pursue intelligent leverage via our convertible bond strategies via our preferred stock strategies via <unk>.

Speaker Change: The opportunistic capital markets strategies.

Speaker Change: Strategies in order to generate that leverage and outperformance for for the Bitcoin Maxine Masters.

Speaker Change: Our convertible debt strategy will continue we will.

Speaker Change: As we have done selectively refinance.

Speaker Change: Various debt instruments, when they are no longer providing effective leverage for our common stock shareholders and where there are no longer interesting for the convertible debt investors.

Speaker Change: He will replace them with a new <unk>.

Speaker Change: New issuance of convertible debt.

Michael Saylor: And we think there's a lot of opportunity for us to refinance our existing convertible debt and to expand our convertible debt structure in order to create intelligent leverage. We've got a very good partnership with a convertible bond market and and we look forward to continuing it with them.

Speaker Change: We think there's a lot of opportunity for us to refinance our existing convertible debt and to expand our convertible debt structure in order to create intelligent leverage we've got a very good partnership with the convertible bond market and we look forward to continuing it with them.

Speaker Change:

Michael Saylor: The third area, STRIKE, is the convertible preferred stock market. There are people that want large fixed income, large dividends. And so STRIKE is an 8% dividend yield. They wouldn't get that need met by a convertible bond. And so this draws in those that are interested in that income. If you wanted to put an instrument that generated consistent income into a retirement account or into a tax deferred account, then this is something very interesting. There's a large pool of investors that have fixed income funds and they need to invest in fixed income instruments. There are other investors that are invested in preferred stocks.

Speaker Change: The third area a strike.

Speaker Change: Is a is the convertible preferred stock market.

Speaker Change: There are people that one large fixed income large dividends and so strike as an 8% dividend yield.

Speaker Change: I wouldn't get that need met by our convertible bond and so this draws in those that are interested in that income.

Speaker Change: If you wanted to deploy an instrument that they generated.

Speaker Change: Consistent income into a retirement account or into a tax deferred account. Then this is something very interesting.

Speaker Change: There's a large pool of investors out of fixed income funds and they need to invest in fixed income instruments.

Speaker Change: There are other investors that are invested in preferred stocks.

Michael Saylor: There are other investors that are interested in Bitcoin upside, but they would like some principal or downside protection. And there are some that, you know, if we look at volatility, Bitcoin is a 50 to 60 vol asset, and MicroStrategy is targeting higher, an 80 or a 90 vol. And on the other hand, there are... There's a large pool of investors that invest in QQQ and SPY, and they're around 15 vol, 15 to 20 vol. And so between 15 vol and 60 vol, that's a big, big area where if you can create an instrument that has more volatility than, say, a typical preferred stock or a typical diversified portfolio of high-yield bonds, then that's going to appeal to a new class of investors.

Speaker Change: There are other investors that are interested in bitcoin upside, but they would like some principal or or downside protection.

Speaker Change: And there are some that that if we look at our volatility bitcoin as a 50 to 60 volt.

Speaker Change: I've said and micro strategy as targeting higher 80 or 90 ball.

Speaker Change: And.

Speaker Change: On the other.

Speaker Change: There's a large pool of investors that invest in Q2, two and S. P Y and there are around 15 vole 15 to 20 volt and so between 15 ball and 60 ball, that's a big Big area, where if you can create an instrument that.

Speaker Change: Has more evolved volatility than say, a typical preferred stock or a typical diversified portfolio of high yield bonds. Then that's going to appeal to a new class of investors. There are a lot of investors that want that kind of volatility. They may not want the extreme leverage of micro strategy they might not even want the raw.

Michael Saylor: There are a lot of investors that want that kind of volatility. They may not want the extreme leverage of MicroStrategy. They might not even want the raw, unvarnished volatility of an IBIT or a BTC, but strike appeals to a new group, a different return profile, a different volatility profile. And yet, strike is very special because it's perpetual. Dividend, right, like It'll continue. It's we're not going to call it right. So the idea of a perpetual dividend is very interesting. And the other thing is, it's a perpetual call option or perpetual conversion option. So for very long range investors that are either looking for the perpetual dividend, right, or the perpetual conversion, right, this is just a totally new part of the market.

Speaker Change: Unvarnished volatility have an iPad or BTC.

Speaker Change: Strike Appeals to a new group of different performed a return profile of different volatility profile and yet.

Speaker Change: Strike is very special because it's perpetual.

Speaker Change: Dividend right like.

Speaker Change: It will continue it's not going.

Speaker Change: Call. It right. So the idea of a perpetual dividend is very interesting.

Speaker Change: And the other thing is it's a perpetual call option or perpetual conversion option.

Speaker Change: So for very long range investors that are either looking for the perpetual dividend right or the perpetual conversion rate. This is just a totally new part of the market.

Michael Saylor: We're enthusiastic to see what happens. It creates tremendous optionality for us. And of course, at the bottom of this chart, you can imagine we have not issued a fixed coupon instrument recently. We did have a fixed bond, the 28 note was a fixed coupon corporate bond, but we repaid that. But looking forward, we think that there's probably a spot in our capital structure where we could just issue a fixed coupon type preferred without a conversion rate, and that would be even a fourth class of investors. So we will continue to be very thoughtful and strategic about this.

Speaker Change: We're enthusiastic to see what happens that creates tremendous optionality for us.

Speaker Change: And of course at the at the bottom of this chart you can imagine we have not issued a fixed coupon instrument recently, we did have a fixed bond. The 28 now when I say, a fixed coupon corporate bond, but we repaid that.

Speaker Change: But looking forward, we think that theres, probably a spot in our capital structure, where you could just just issuer.

Speaker Change: Our fixed coupon type preferred without a conversion right and that would be even a fourth class of investors. So we will continue to be very thoughtful.

Speaker Change: And strategic about this I mean, sometimes people wonder.

Michael Saylor: I mean, sometimes people wonder, they're like, well, why do you choose to issue equity instead of a convert? Well, if we don't like the premium that the equity is fetching, we don't issue much. And if we like the premium, we like the liquidity, we would issue more. So if we stop issuing for some reason, probably the reason is we just don't think it's that accretive for our shareholders. And at any given time, whether or not the best thing for the shareholders is equity issuance or convertible debt issuance or preferred stock issuance or repayment or refinancing, it's really a function of the capital markets, and it's a function of all of the intelligent leverage ratios and the BTC yield that we can generate and the BTC gain that we can generate for a certain amount of capital we might raise.

Speaker Change: And I'm like well why do you choose to issue equity instead of a convertible if we don't like the premium that the equity is fashion, we don't issue much and if we like the premium we like the liquidity we would issue more so so if we stopped issuing.

Speaker Change: For some reason the probably the reason is we just don't think it's that accretive for our shareholders and at any given time.

Speaker Change: Whether or not the best thing for the shareholders as equity issuance or convertible debt issuance or preferred stock issuance or repayment or refinancing, it's really a function of the capital markets in and it's a function of of all of the intelligent leverage ratios and the BTC yield that we can generate in the <unk>.

Speaker Change: BTC gain that we can generate for a certain amount of capital we might raise and we have very sophisticated models. We calculate this every minute of the day right now not every day every minute of the day, sometimes every second of the day. So we're very thoughtful and we're very considerate about this and I think.

Michael Saylor: And we have very sophisticated models. We calculate this every minute of the day, not every day, every minute of the day, sometimes every second of the day. So we're very thoughtful, and we're very considerate about this. And I think the most important thing for us is we keep our options open, and we develop a variety of different options for capital raising. Our view is that strike is actually accretive, and it's a benefit to Bitcoin. It's a benefit to MSTR. It's a benefit to the convertible bonds. And it's a benefit to strike shareholders themselves. So think of a, you know, a quad reflexive type strategy.

Speaker Change: The most important thing for US is we keep our options open and we develop a variety of different options for capital raising our view is that strike is actually accretive and it's a benefit to bitcoin.

Speaker Change: It's a benefit to M. S. T R. It's a benefit to the convertible bonds.

Speaker Change: And it's a benefit to strike <unk>.

Speaker Change: Shareholders themselves, so think of a quad reflexive.

Michael Saylor: Everything we're doing is with the thought of the impact on every other part of the capital structure, and the entire Bitcoin ecosystem. And, and we will continue to be very thoughtful on how we pursue this.

Speaker Change: <unk> type strategy everything we're doing is with the thought of the impact on every other part of the capital structure and the entire bitcoin ecosystem and and we will continue to be very thoughtful in how we pursue this next.

Michael Saylor: Next. A snapshot of our capital structure. As of yesterday, we had a bit more than $100 billion in equity market cap. And so we've got a $94 billion equity market cushion over our fixed income liabilities. And of course, you could see about a $39 billion Bitcoin cushion over our fixed income liabilities. So we've got a very strong capital structure. We've led with equity in order to create a very, very strong cushion. But that puts us in a great position to lever up and to continue to raise capital and take a leadership role in this marketplace.

Speaker Change: A snapshot of our capital structure.

As of yesterday, we had a bit more than a $100 billion in equity market cap and so we've got a 94 billion dollar equity market question over or are fixed income liabilities.

Speaker Change: And of course, you can see about a $39 billion.

Speaker Change: Bitcoin question over our fixed income liabilities. So we've got a very strong capital structure.

Speaker Change: We've led with equity in order to create a very very strong question.

Speaker Change: But that puts us in a great position to lever up.

Speaker Change: And to continue to raise capital and take a leadership role in this marketplace.

Speaker Change: Our next.

Speaker Change: Yeah.

Michael Saylor: A few words about BTC yield and BTC gain. First of all, we had a target of six to 10% for BTC yield. At this point, we believe for the 2025 calendar year, we can set that target to 15%. So we're adjusting the target up. And What is BTC yield, right? BTC yield is our accretion of Bitcoin per share. If we were a spot ETF there would be no BTC yield. Um, if we were to sell equity, at the net asset value at a 0% premium to the underlying Bitcoin, there would be no BTC yield. If we were to sell equity at a discount to our net asset value, there would be a negative BTC yield.

Speaker Change: A few words about our BTC yield.

Speaker Change: And BTC gain.

Speaker Change: First of all.

Speaker Change: We had a target of 6% to 10% for BTC yield at this point, we believe for the 2025 calendar year, we can set that target to 15%.

Speaker Change: So we're adjusting the target up.

Speaker Change: And.

Speaker Change: What is BTC yield right BTC yield is is our accretion of bitcoin per share.

Speaker Change: If we were a spot ETF.

Speaker Change: There would be no BTC yield.

Speaker Change: If we were to sell equity.

Speaker Change: Sure.

Speaker Change: At the net asset value at a zero percent premium to the underlying decline there would be no BTC yield if we were to sell equity at a discount to our net asset value there will be a negative BTC yield so when we're generating BTC yield it's because we're engaged in what we.

Michael Saylor: So when we're generating BTC yield, it's because we're engaged in what we believe are accretive capital markets transactions. If we're selling the equity at 150% premium to the underlying assets, it's a much larger yield. If it's a 250% premium, it would be even larger on a given capital basis. As a general rule, the fixed income instruments have a much higher premium to underlying assets than does the straight equity. And so if we're issuing a convertible bond at a high premium, then for a given amount of capital we raise, the BTC yield would be higher. People wonder what's the significance of BTC yield?

Speaker Change: Believe our accretive capital markets transactions.

Speaker Change: If we're selling the equity at 150% premium to the underlying assets itself. It's a much larger yield of its a 250% premium it would be even larger on a given capital basis.

Speaker Change: As a general rule the.

Speaker Change: The fixed income instruments have a much higher premium to underlying assets than does the straight equity.

Speaker Change: And so you know if we're issuing a convertible bond at a high premium than than for a given amount of capital we raise the BTC or would be higher.

Speaker Change: <unk>.

Speaker Change: People wonder, what's the significance of BTC yield well.

Michael Saylor: Well, if you think of it, It's not the investment gain from just holding the Bitcoin, if we just hold $50 billion of Bitcoin and it goes up 20% next year, there's a $10 billion type investment gain. That's the same gain that an ETF would have. However, when we issue $20 billion worth of new capital, or new securities, and we do it in effective 100% premium to the underlying assets, half of that is an accretion. And so that's like a $10 billion BTC gain, or it's $10 billion divided by the amount of Bitcoin we have by 50.

Speaker Change:

Speaker Change: If you think of it it's it's it's not the investment gain from just holding the bitcoin. If we just hold $50 billion of bitcoin and it goes up 20% next year Theres, a $10 billion type investment gain that's the same game that an ETF or an half however.

Speaker Change: When we issue $20 billion worth of new capital or New Securities and we do it in an effective 100% premium to the underlying assets half of that is in accretion and so that's like a $10 billion BTC gain or its.

Speaker Change: $10 billion divided by the amount of bitcoin, we have by 50% that would look like a 20% type BTC yield so the more intelligently we operate the treasury operations.

Michael Saylor: So that would look like a 20% type BTC yield. So the more intelligently we operate the treasury operations, and the more creatively we do that, the higher that BTC yield will be. And so you could think of BTC yield as a percentage measure of the value that we're creating for the shareholders from intelligent treasury operations. And people talk about and they wonder about the premium to underlying assets and what's merited. Well, I would say, figure out what multiple you want to put on the business and then take that multiple, multiply it by the BTC yield, take a multiple times 15%.

Speaker Change: And the more Accretively, we do that the higher the BTC will be and so you could think of BTC yield as a percentage measure of the value that we're creating for the shareholders from intelligent treasury operations and.

Speaker Change: People talk about and they wonder about the the premium to underlying assets and what's merited well I would say figure out what multiple you want to put on the business and then take that multiple multiply it by the BTC yield multiple take a multiple times 15%.

Michael Saylor: That's actually a reasonable target for the premium that the company ought to get over and above its underlying assets. If you believe in a 10 multiple, you multiply 10 times 15% and have 150% premium. If you had a lower multiple, if you thought we would only do this once and never again, you would multiply 1 times 15% and say they're going to get a 15% BTC once and never again. But of course, that multiple could be anything and we leave it to our investors to decide what the multiple should be. But the right way to think about BTC yield is a multiple of BTC yield is the premium that a Bitcoin treasury company should get over and above its underlying Bitcoin assets.

Speaker Change: That's actually a reasonable target for the premium that ought to set on time that the company ought to get over and above its underlying assets. Maybe if you believe in a 10 multiple you multiply 10 times, 15% and have 150% premium if you're at a lower multiple if he thought we would only do this once and never again.

Speaker Change: You would multiply one times, 15% say, they're going to get a 15% BTC a once and never again.

Speaker Change: Of course that multiple could be anything and we leave it to our investors to sign what the multiple should be but.

Speaker Change: But the right way to think about BTC yield as a multiple of BTC yield is is the premium that a bitcoin treasury company should get over and above its underlying bitcoin assets.

Michael Saylor: Why? Because if we just stopped engaging in treasury operations, if all we did was become a holding company, and we didn't do any more capital raise ever, then we're just watching the Bitcoin go up or go down based upon the underlying Bitcoin performance, which is just like an ETF. And so that's BTC yield for you. Some people have a hard time with that, which is why we've introduced BTC gain. BTC gain, I think of as the amount of Bitcoin we captured in a non-dilutive fashion. If we actually are engaging capital markets activities at a premium, we're selling $100 million worth of equity back by 50 million of Bitcoin, we've captured a $50 million gain.

Speaker Change: Why because if we just stopped engaging and treasury operations of all we did was become a holding company and we didn't do any more capital raise ever.

Speaker Change: Then we're just watching the bitcoin.

Speaker Change: It could go up or go down based upon the underlying bitcoin performance, which is just like an ETF and so that's BTC yield for you.

Speaker Change: Some people have a hard time with that which is why we've introduced BTC gain.

Speaker Change: BTC gain I think of as the amount of bitcoin, we captured in a non dilutive fashion right. If we if we actually are engaging capital markets activities at a premium.

Speaker Change: We're selling a $100 million worth of equity back by $50 million of Bitcoin, we've captured a $50 million gain right. That's the way we think of it if we sold $100 million of equity backed by a 100 million of bitcoin, we'd be capturing a zero dollar BTC game and if we were stupid enough to sell.

Michael Saylor: That's the way we think of it. If we sold $100 million of equity back by 100 million of Bitcoin, we'd be capturing a $0 BTC gain. And if we were stupid enough to sell $100 million of equity back by 200 million of Bitcoin, we would actually generate $100 million BTC loss. So obviously, we won't be doing that. But the power of BTC gain is, it's a way to quantify the shareholder value creation of the treasury operation in BTC terms, every quarter, or on a deal by deal basis, or on a year by year basis. And you can see here, our target is to generate $10 billion worth of BTC dollar gains in the 2025 calendar year.

Speaker Change: $100 million of equity backed by 200 million a bit quiet, we would actually generate $100 million BTC loss. So obviously, we won't be doing that.

Speaker Change: But the power of a BTC gain is it's a way to quantify.

Speaker Change: The shareholder value creation of the Treasury operation and BTC terms every quarter or on a deal by deal basis or on a year by year basis.

Speaker Change: And you can see here are our target is to generate $10 billion worth of BTC dollar gains and the 2025 calendar year.

Michael Saylor: If we didn't engage in treasury operations. That would be zero. If we engaged in neutral treasury operations with no accretion, no dilution, that would still be zero. We would expand our capital base, but we wouldn't generate a BTC gain. So BTC gain is that measure of value creation doesn't go through the P&L. You know, you won't see it as an investment gain. It really is due to intelligent Bitcoin acquisition activities. But we have introduced this in order to make it easier for shareholders to understand the business. So if you're wondering, well, how do I think about the business?

Speaker Change: If if we didnt engage in treasury operations now.

That would be zero, if we engage in.

Speaker Change: And neutral Treasury operations with no accretion no dilution that would still be zero, we would expand our capital base, but we wouldn't generate a BTC Gabe so BTC gain is that measure of value creation.

Speaker Change: Doesn't go through the P&L.

Now you won't see it as an investment gain it really is due to intelligent bitcoin acquisition activities, but we have introduced this in order to make it easier for shareholders to understand the business. So if you're wondering well how do I think about the business I think.

Michael Saylor: I think the Bitcoin treasury operation, if it's able to create $10 billion of BTC gains, it's worth a multiple of that. And of course, you can put the multiple on the operation, whatever you want. It could be 10, it could be 20, it could be 30, it could be one, it's up to you. But take that multiple, multiply it by BTC dollar gain, that's what we think the operation is worth. Then you can go ahead and add the Bitcoin treasury to it. And that gets you to a value for the enterprise. So with that, we've created these two simple ideas.

Speaker Change: The bitcoin Treasury operation, if it's able to create $10 billion of BTC gains it's worth a multiple of that and of course, you can put the multiple on the operation.

Speaker Change: Whatever you want could be 10, it could be 'twenty could be 30 could be one stop to you.

Speaker Change: But take that multiple multiplied by BTC dollar gain that's what we think the operation is worse than you can go ahead and add the bitcoin treasury to it.

Speaker Change: And and that gets you to a value for the enterprise.

Speaker Change: So with that we've created these two simple ideas our target of the management team is to generate $10 billion of BTC gains this year and our target is to generate 15% BTC yield this year through our treasury operations.

Michael Saylor: Our target of the management team is to generate $10 billion of BTC gains this year. And our target is to generate 15% BTC yield this year through our treasury operations.

Operator: And next Unknown Speaker I think I would just like to thank everybody for your support.

Speaker Change: And the next.

Speaker Change: I think.

Speaker Change: I would just like to thank everybody for your support.

Shirish Jajodia: And at this point, I'd like to pass the floor to Shirish for some questions from the audience. Great. Thank you, Michael. We are going to jump into the questions now. And the first question is for Andrew. This is about the strike deal.

Speaker Change: And at this point I'd like to pass the floor to <unk> for some questions from the audience.

Speaker Change: Great.

Michael Saylor: Thank you Michael.

Speaker Change: Okay.

Speaker Change: We are going to jump into the questions now.

Speaker Change: And the first question is for Andrew.

Speaker Change: This is about the strike deal say.

Andrew Kang: Say the question is like congrats on the successful capital raise through strike convertible preferred and The question is, could you please elaborate on the flexibility for the strike dividend to be paid out in cash or in common stock? And how do you plan to fund the dividends going forward? Sure. Thanks for the question. I guess, first off, it's worth just saying again, we believe strike is an extremely accretive tool to raise capital. And yet today, it's just a pretty small part of our tool chest, so to speak, compared to our ATM and our converts. I guess in terms of meeting the obligations, you know, we will not need to rely solely on cash from operations.

Speaker Change: Question is congrats on the successful capital raise to a strike and workable PREPA and <unk>.

Speaker Change: The question is could you. Please elaborate on the flexibility for the strike dividend can be paid out.

Speaker Change: In cash or in common stock and how do you plan to fund the dividends going forward.

Speaker Change: Sure.

Speaker Change: For the question I guess first off.

Speaker Change: So we're just saying again, we believe.

Speaker Change: The strike is an extremely accretive tool to raise capital.

Speaker Change: And yet today, it's just.

Speaker Change: Pretty small.

Speaker Change: Part of our tool chest, so to speak compared to our ATM and our converts.

Speaker Change: I guess in terms of meeting the obligations.

Speaker Change: We will not need to rely solely on cash from operations.

Andrew Kang: We will use all of our capital sources to pay these dividends, including primarily the ATM. Um, I guess it's worth noting to look, we raised over $20 billion in capital $20 billion in capital since the beginning of Q4. You really need to compare that to the 14 ish million dollars in you know, the quarterly dividend payments for strike. So it's just you know, our ability to raise capital relative to the obligation on strike is, you know, you know, immense compared to what we need to pay. So look, I think we have lots of capacity and lots of flexibility to cover dividends.

Speaker Change: We will use all of our capital sources to pay these dividends, including primarily the ATM.

Speaker Change: I guess.

Speaker Change: It's worth noting too look we raised.

Speaker Change: Over $20 billion in capital $20 billion in capital since the beginning.

Speaker Change: Or Q4.

Speaker Change: Need to compare that to the 14 ish million dollars.

In the quarterly dividend payments for strikes.

Speaker Change: Our ability to raise capital relative to the obligation on strike.

Speaker Change: As you know.

Speaker Change: And that's compared to what we need to pay.

Speaker Change: So look I think we have.

Speaker Change: Lots of capacity and lots of flexibility to cover the dividends and I also think that our ability to raise capital in the future should increase as.

Andrew Kang: And I also think that our ability to raise capital in the future should increase as well as our market cap continues to increase. So overall, you know, I think we are very comfortable in our ability to pay these in perpetuity.

Speaker Change: As well as our market cap continues to increase.

Speaker Change: Overall, I think we are very comfortable in our ability to pay these in perpetuity.

Operator: Thank you, Andrew.

Andrew Ken: Thank you Andrew.

Michael Saylor: We are actually over the allocated time for this call, so we will take one final question for Michael. And that is regarding the tax issue. So what are the company's latest thoughts on the taxes on unrealized capital gains? And what steps are being taken to mitigate this risk? And what are the implications if this tax issue becomes effective at some point in the future?

Andrew Ken: Yeah actually over the allocated time for this call so Peter to take one final question for Michael.

Peter: And that is regarding.

Peter: The tax issue. So what are the company's latest thoughts on the taxes on unrealized capital gains and what steps are being taken to mitigate this risk and what are the implications.

Peter: This tax issue becomes.

Peter: Effective at some point in the future.

Michael Saylor: Good question. We've been in dialogue with the IRS on this matter. And we're also in dialogue with members of the cabinet and with supporters on Capitol Hill and the Senate and the House. We don't think that there's any broad base support for the idea of an unrealized capital gains tax on crypto assets for large corporate holders. So we don't expect over time that this will come to much. But having said all that, in the event that there was an unrealized capital gains tax on corporate holders, we see this as second order impact. It shouldn't affect our convertible bond strategy, our fixed income strategy, our equity strategies.

Speaker Change: Good question.

Speaker Change: We've been in dialogue with the IRS on this matter and we're also in dialogue with members of the cabinet and with our supporters on Capitol Hill, and the Senate and the house.

Speaker Change: We don't think that there's any there's any broad based support for the idea of an unrealized capital gains tax on crypto assets.

Speaker Change: For large corporate holders. So we don't expect over time that.

Speaker Change: This will come to much.

Speaker Change: But having said all of that in the event that there was an unrealized capital gains tax on corporate holders, we see it as a second order impact that it shouldnt affect our our convertible bond strategy, our fixed income strategy, our equity strategies it would be a new sensor it would somewhat slowdown or.

Michael Saylor: It would be a nuisance and it would somewhat slow down our growth rate. But at the end of the day, we're arbitraging equity and debt capital markets where the cost of capital is 5% to 15% and the volatilities are 5% to 15% against Bitcoin with performance of 60%, 60 vol. And so whether or not we're arbitraging 60 versus 10 or 55 versus 10 or 52 versus 10 doesn't really much change the business strategy, might just slightly slow down our growth rate. And we remain confident that we'll manage this issue.

Speaker Change: Growth rate, but it isn't of the day, we're arbitraging.

Speaker Change: Equity and debt capital markets, where the cost of capital is 5% to 15% and the Volatilities were five to 15 again spec coin with performance of 60% 60 ball and so whether or not we're arbitraging 60 versus 10 or 55 versus.

Speaker Change: 10, or 52 versus 10 doesn't really much changed the business strategy might just slightly slowed down our growth rate and we remain confident.

That will manage this issue.

Operator: Great. Thank you, Michael. So thank you everyone for your questions. Hopefully we addressed a lot of those over the course of the call today.

Yeah.

Speaker Change: Great.

Speaker Change: Thank you Michael.

Speaker Change: So thank you everyone for your questions hopefully, we addressed a lot of dose or the course of the call today.

Operator: This concludes the Q&A portion of the webinar. We would like to thank the 10,000 plus unique attendees that joined our call live today.

Speaker Change: This concludes the Q&A portion of the webinar, we would like to thank Dan and causing plus unique attendees that joined our call live today.

Phong Le: And I will now turn the call over to Phong for our closing remarks. Thank you, Shirish. I want to thank everyone who joined us today. And as always, we really do appreciate all of your support. Hopefully you're as excited as we are about our enterprise software strategy, our Bitcoin strategy, and our strategy in general. We look forward to seeing you again in 12 weeks. And hopefully we'll see a lot of you in Orlando at Strategy World 2025 in early May. Thanks, and have a good evening. Goodbye.

Speaker Change: And I will not turn the call over to fall for closing remarks.

Speaker Change: <unk> I want to thank everyone.

Speaker Change: Who joined US today and as always we really do appreciate all of your support.

Speaker Change: Hopefully you're as excited as we are about our enterprise software strategy or a bitcoin strategy and our strategy in general.

Speaker Change: We look forward to seeing you again in 12 weeks and hopefully we will see a lot of you in Orlando at strategy World 2025, and early May.

Speaker Change: Thanks have a good evening.

Speaker Change: Okay.

Speaker Change: Goodbye.