Q4 2025 Strategy Inc Earnings Call

February 5, 2026

Speaker #2: We will get started in a moment. Hello everyone, and good evening. I'm Shirish Jajodia, Corporate Treasurer and Head of Investor Relations at Strategy. I will be your moderator for Strategy's 2025 fourth-quarter earnings webinar.

Phong Le: We will get started in a moment. Hello everyone, and good evening. I'm Shirish Jajodia, Corporate Treasurer and Head of Investor Relations at Strategy. I will be your moderator for Strategy's Q4 2025 earnings webinar. We will start the call with a 60-minute presentation starting with Andrew Kang, followed by Phong Le, and then Michael Saylor. This will be followed by a 30-minute interactive Q&A session with four Wall Street equity analysts and four Bitcoin analysts. Before we proceed, I will read the Safe Harbor statement. Some of the information we provide in this presentation regarding our future expectations, plans, and prospects may constitute forward-looking statements.

Shirish Jajodia: We will get started in a moment. Hello everyone, and good evening. I'm Shirish Jajodia, Corporate Treasurer and Head of Investor Relations at Strategy. I will be your moderator for Strategy's Q4 2025 earnings webinar. We will start the call with a 60-minute presentation starting with Andrew Kang, followed by Phong Le, and then Michael Saylor. This will be followed by a 30-minute interactive Q&A session with four Wall Street equity analysts and four Bitcoin analysts. Before we proceed, I will read the Safe Harbor statement. Some of the information we provide in this presentation regarding our future expectations, plans, and prospects may constitute forward-looking statements.

Speaker #2: call with a 60-minute We will start the presentation starting with Andrew Kang, followed by Phong Lee, and then Michael Saylor. This will be followed by a 30-minute interactive Q&A session with four Wall Street equity analysts and four Bitcoin analysts.

Speaker #2: Before we proceed, I will read the safe harbor statement. Some of the information we provide in this presentation regarding our future expectations plans and prospects may constitute forward-looking statements.

Speaker #2: Actual results may differ materially from these forward-looking statements due to various important factors, including fluctuations in the price of Bitcoin, and the risk factors discussed in our current report on Form 8K, filed with the SEC on October 6, 2025, and under the captioned risk factors in Strategy's quarterly report on Form 10Q, filed with the SEC on November 3, 2025.

Phong Le: Actual results may differ materially from these forward-looking statements due to various important factors, including fluctuations in the price of Bitcoin and the risk factors discussed in our current report on Form 8-K filed with the SEC on 6 October 2025, and under the caption "Risk Factors" in Strategy's quarterly report on Form 10-Q filed with the SEC on 3 November 2025, and the risks described in other filings that Strategy may make with the SEC from time to time. We assume no obligations to update these forward-looking statements which speak only as of today. With that, I would like to turn the call over to Andrew Kang, the CFO of Strategy.

Q4 2025 Strategy Inc Earnings Call

Request a DemoDemo

MSTR

MicroStrategy

Earnings

Q4 2025 Strategy Inc Earnings Call

MSTR

Thursday, February 5th, 2026 at 10:00 PM

Transcript

No Transcript Available

No transcript data is available for this event yet. Transcripts typically become available shortly after an earnings call ends.

Want AI-powered analysis? Try AllMind AI →

Andrew Kang: Our execution throughout the year puts us in a position to enter 2026 with a stronger balance sheet, more access to liquidity, and upside when, hopefully, Bitcoin price rallies soon. Next slide. 2025 overall was a very important year with several strategic corporate events that I think strengthened our foundation as the world's leading Bitcoin treasury company. We adopted fair value accounting at the beginning of the year, which provided greater investor and market transparency of our Bitcoin holdings, which are now, as you know, marked to market each quarter. Second, Treasury and IRS guidance confirmed that unrealized Bitcoin gains would not be subject to additional corporate alternative minimum tax. We also received the first-ever credit rating for a Bitcoin treasury company, which marked an important step, I think, in institutional recognition and setting the foundation for future progress.

Andrew Kang: Lastly, in Q4, we established a $2.25 billion cash reserve, which provides over 2.5 years of dividend coverage. This is an important enhancement to our overall risk management framework and supports our ability to meet our interest and dividend obligations through market cycles like the one we are seeing today. Lastly, MSCI confirmed that digital asset treasury companies will remain eligible for inclusion in its global market indices, which we believe was the appropriate outcome, and I'll touch a little bit more about that later on in my presentation. Next slide. Next slide. Thank you. Turning to our Q4 financial results, we reported an operating loss of $17.4 billion and a net loss of $12.6 billion. These results were obviously driven by the quarter-end decline in Bitcoin's fair value under our mark-to-market accounting. Next slide.

Andrew Kang: For the full year, we reported an operating loss of $5.4 billion and a net loss of $4.2 billion. We updated our target range for the full year 2025 precisely because our results are highly dependent on Bitcoin price and can move meaningfully based on market conditions. It's important to call out that our full year results were within our target guidance based on where Bitcoin price ended the year. While accounting outcomes may fluctuate quarter to quarter, our long-term focus remains unchanged. We are committed to increasing Bitcoin per share and building durable shareholder value over the long term. Next slide. Turning to our Bitcoin KPI performance for the full year, at the start of the year, we established clear KPI targets tied to Bitcoin per share growth while recognizing a wide range of possible Bitcoin price outcomes.

Andrew Kang: As we said before, we do not plan to issue any new convertible debt in the future, and we'll focus on assessing strategic liability management opportunities to the extent market conditions make sense. Over time, we intend to reduce our leverage to further enhance our credit profile. We also added $6.9 billion of preferred equity, diversifying our capital raising channels. As a result, total equity, including both preferred and common, rose to $51.1 billion at the end of the year, up from $22.8 billion a year ago. We added $6.9 billion of preferreds through five distinct IPOs, as well as subsequent ATM activity, and our common equity increased to $44.2 billion through our ATM. We deployed all of that capital in an accretive manner to acquire more Bitcoin. As I mentioned before, we delivered 22.8% BTC yield, and we established the cash reserve.

Andrew Kang: I'd say the year-over-year growth of our capital base strengthens our balance sheet and provides a more durable base to continue raising capital efficiently and acquiring more Bitcoin over the long term. All right. Thanks, Shirish. Next slide. At the end of Q3, sorry, at the end of Q4, sorry, at the end of Q3, the market value of our Bitcoin position was approximately $73.2 billion. That was based on a Bitcoin price of about $114,000. During Q4, Bitcoin, as we all know, experienced a price decline, which drove the total unrealized fair value loss of $17.4 billion. Look, quarter-to-quarter moves like this can be sharp, can also be unsettling, but it's important to emphasize that our strategy is built for the long term. It's built to withstand short-term price volatility, even short-term extreme conditions like we're seeing today.

Andrew Kang: Importantly, even in a volatile environment, we continue to execute. We purchased an additional 32,470 Bitcoin in Q4 for approximately $3.1 billion. Next slide. For the full year 2025, the market value of our Bitcoin holdings increased by approximately $17 billion from $41.8 billion at the end of 2024 to $58.9 billion at the end of 2025. During the year, we added approximately 225,000 Bitcoin. We also recognized an unrealized fair value loss of about $5.4 billion across the year, but we significantly expanded our Bitcoin position, right? We increased our total holdings from 447,000 to 672,500 Bitcoin for the year. Next slide. Our total interest and dividend obligations are now $888 million, which is made up of about $35 million in interest on our converts. That represents an average cost of about 42 basis points.

Andrew Kang: And in many ways, I think the proposal was unworkable and that it rested on a mischaracterization of Strategy. As a result, MSCI determined not to implement their initial proposal, and as a result, we have not been excluded from MSCI's indices. I'd note Strategy is an operating company. We have 30-plus years of history in software and tech. We have 1,500 employees. Last year, in 2025, we generated $477 million in annual revenue. And while our Bitcoin holdings have grown significantly from a balance sheet perspective, we are an operating company with a treasury balance sheet built upon a commodity. And lastly, look, on a final note, I just want to say thank you. We appreciate the strong support we receive from both active and passive retail and institutional investors, regulators, and policymakers, all in support of our efforts on index inclusion. We thank you for that.

Phong Le: Thanks, Andrew. I first just want to acknowledge, I understand the market conditions for today's call are challenging, and the fact that we have thousands of people watching this is a testament to your intellect, your curiosity, and for many of you, your conviction. So thanks, everyone, for joining us today. I also want to share. Look, some of you bought Bitcoin or MSTR in the last year. This is your first downturn. My advice is to hold on. Remember the fundamentals that cause you to buy Bitcoin. It's because Bitcoin is the digital transformation of capital, or maybe it's because it's the hardest and most ethical form of money, or because you believe in a non-sovereign, censor-resistant store of value. None of these fundamentals have changed. They didn't change in the last year. They haven't changed in the last 18 years.

Phong Le: For the MicroStrategy shareholders and the Strategy shareholders now, remember the fundamentals of why you bought into MSTR Common because we are a levered and amplified Bitcoin. We're built to outperform Bitcoin over the long run. It could be because you see us as digital innovators. We invented the enterprise business intelligence software space in the 1990s, and we invented digital treasury companies in 2020. Or it's because you believe in the management team that's here today. None of that's changed in the last year. And for those of you who have been with us on this journey since 2020, you've seen other periods of Bitcoin and MSTR downturns, and you held on, and you were rewarded for your conviction. So thank you. And perhaps I ask that you share your wisdom and your confidence with those who are newer to the community.

Phong Le: So some of the largest banking partners in the world, Morgan Stanley, Barclays, Moelis, TD, Benchmark, Clearstreet, have all been participants in these markets, and they give us distribution out to wealth management, to retail, and to institutions. So we've been very successful in the last year with continuing our strategy. Next slide. You'll see here, in addition to getting folks to participate in our equity raises in our equity capital markets, we continue to add more and more research analysts. Here you can see price targets, and you can see they all have buy ratings on Strategy. Next slide. So let me talk about digital credit and what are we doing in digital credit and why digital credit is important. Next slide. First, I mentioned 2025 marked the launch of digital credit, and we launched 5 different instruments.

Phong Le: STRETCH is one of the most attractive instruments and securities in the market today. It pays an 11% effective yield, 18% on a tax equivalent basis. We've paid monthly dividends on time, on schedule. We have said that we expect the return of capital treatment for the next 10 years. We'll run our business to be able to give everybody tax-deferred earnings for the next 10 years. We're targeting a $100 price. The volatility is 7%. It's actually decreased recently to 6%. We have mechanisms above and below that price to keep the price stable. It's quite a bit of feats of financial engineering. It's extremely over-collateralized. After you take out all instruments that are senior to STRETCH, we still have 5.6x collateral over STRETCH. So it's an over-collateralized instrument. Then after that, we've added $2.25 billion of US dollar reserves.

Phong Le: So we have 2 to 3 years of dividend coverage. I'd mentioned the liquidity of STRETCH is trading extremely well. It's Nasdaq listed. It has a four-letter ticker. It's easily accessible to folks. It's now accessible on Robinhood and Square Cash App and pretty much anywhere else that you can buy it securely. Next slide. So let's talk about our balance sheet. I've seen a lot of questions. We get them from investors. We get them from shareholders. We get them from people on X. What's going on with Strategy's balance sheet? Are you worried that when Bitcoin price drops, that you are going to have issues with your convertible bonds? Are you going to have issues paying your dividends? Are you going to have to sell Bitcoin? The short answer is, I'm not worried. We're not worried. And no, we're not having issues. What's the reason?

Phong Le: As I mentioned, our net leverage is 10%, and it's 13% with the most recent Bitcoin price. If you look on the bottom left-hand side, this is how we compare to the S&P 500 universe, right? We have 10%, currently 13% leverage. If you're a AAA-rated, right, investment-grade company, your bonds are trading as AAA-rated. You have 23% leverage. If you're AAB-rated, high yield, you have 32% leverage. We have half the leverage of an investment-grade company, a third of the leverage of a high-yield company. How about looking at it by sector? Strategy at 13%. It looks like a tech company, which is low capital, low assets, high income, right? They're levered at about 15.7%. Compare us to asset-heavy, high-debt companies and industries, utilities or real estate. They're levered at 42 to 48%. We are not a highly levered company. Next slide. What about our convertible debt, right?

Phong Le: So I'm not really worried at this point in time, even with Bitcoin drops, that we're not going to be able to service our convertible debt. All that said, it's staggered over time. We have due dates between 2027 and 2032. Our plan is to equitize that over time. And if we're not able to equitize it, we'll find different ways to restructure the debt. Next slide. Of course, we have this Bitcoin reserve. And what does it really do for us? It creates long-term durability. That's why we've been building it up. That's why we've added about 16% over the last nine months to our Bitcoin reserve. It gives us long-term durability to issue more credit, ultimately. And as we issue more credit, the dividends will rise. Our dividends, as Andrew explained, $888 million. We have 67 years of dividend coverage with our Bitcoin reserve.

Phong Le: So what are we going to do to make STRETCH even better? In addition to improving the credit quality, we've been working with brokerages like Robinhood and Cash App to get STRETCH and PREFERS listed there. Robinhood, in fact, launched the first-ever PREFERS on their platform because of the demand and the liquidity that they saw in STRETCH. We've been working with Wirehouses, Wealth Management, Broker Dealers, RIAs to help explain STRETCH. We've integrated STRETCH now into crypto. So just like you saw MSTR turn into MSTY, MSTU, etc., we're seeing Buck and other coins like Saturn, APYX, and TradFi platforms starting to launch products on top of STRETCH. And we expect over time, STRETCH will be tokenized. We'll integrate with ETFs also, right? We've been involved in industry conferences, leveraged finance conferences, teach-in sessions. And so we're telling everybody about STRETCH. And we've engaged in digital marketing.

Phong Le: And we call that increased Bitcoin yield. Next slide. So how do we think about this over the course of the next seven years? I showed you what we've done in the last six years. The way we're going to increase Bitcoin per share over the course of the next seven years is we are going to sell digital credit. And what does digital credit do? By selling digital credit, we generate amplification. By generating amplification, we increase Bitcoin per share. By increasing Bitcoin per share, MSTR common outperforms Bitcoin. It's a very simple formula. And what are the inputs? How much digital credit can we sell, which is how much STRETCH can we sell? Here's an assumption that on a base of $60 billion of Bitcoin, if we can sell 10% of digital credit, which is $6 billion, this is what this might look like over time.

Michael Saylor: Thank you, Phong. I'm delighted to have you join us today. Why don't we go to the next slide? All of our strategy is based upon looking at the fundamentals and taking a 10-year view. So when you consider the fundamentals of digital capital, you have to start with the most important regulator in the entire world. That is the President of the United States. We have a Bitcoin President. He's intent upon making America the Bitcoin superpower, the crypto capital of the world, and the leader in digital assets. I don't think you can underestimate the importance of having support for the industry and digital capital at the very top of the political structure. Now, equally important, if we look at the cabinet that's been put in place on the next slide, you see the entire government is now embraced Bitcoin.

Michael Saylor: I don't think we can lose sight of this because everything that follows in the marketplace is very much influenced by the political structure of the world. On the next slide, Capitol Hill has embraced Bitcoin. We've got bipartisan consensus that the United States should embrace digital assets, should embrace digital capital, should be a leader. That is not a debate. No one's saying that there's one party in favor of digital capital and another party against it. That's a big deal. So although the political process is complicated, the fact that we have moved from an asset which was a scary speculative thing and may be illegitimate to a legitimate asset that most reasoned politicians and regulators and policymakers believe they need to move constructively forward with. Let's go to the next slide. Big banks are embracing Bitcoin. Roll the clock back 18 months.

Michael Saylor: This Harvey Ball diagram is pretty much blank, mostly blank. So when you actually look at the top financial institutions and you ask the question, do they allow IBIT trading? Well, there's an avalanche of support there. That's flipped in 12 months. The second question is, do they offer credit against IBIT? That's a big deal. 12 months ago, it was almost impossible to get a loan or a margin loan against IBIT. Now, there are many banks coming into space. Would they let you trade BTC? Now you have banks that are announcing support for that. You have banks announcing support to custody BTC. And you have banks announcing intent to offer credit against BTC. Again, this is an extraordinary sea change. We cannot underestimate the value. I think that the fundamentals of the industry are driven by the banks creating credit.

Michael Saylor: One bank can create as much credit as all the Bitcoin miners can create in Bitcoin in a year. So each bank that turns on Bitcoin-backed credit lines might be the equivalent of another halving for the network. Let's go to the next slide. TradFi and fintech have embraced Bitcoin. If you look at the number of accounts of BTC trading asset, there's a pretty clear bullish trend here, both across crypto-native exchanges, fintechs, and neobanks, and the brokerages, banks, and the wealth management channel. Those are large numbers. Fundamentally, we're going from an asset class that no one could buy if they wanted to to an asset class where everyone is competing to facilitate access and exposure. The next slide. This is the ETF trend. ETFs are embracing Bitcoin. 125 ETFs or ETPs launched. 1.4 million BTC held in them.

Michael Saylor: And then, of course, then there was another crypto will be better. What I would say is whenever dealing with each of these concerns, we have to take them seriously. We have to consider them. But we have to remember two things. One, the two words on the back of the Hitchhiker's Guide to the Galaxy. Don't panic. Most important two words, more important than everything in the encyclopedia or the Hitchhiker's Guide to the Galaxy. The second observation, the Hippocratic Oath. Do no harm. And so whenever you're faced with a challenge in any system or any network, you have to make sure you don't panic. You're not railroaded into doing something foolish or destructive. And you also can't do something that causes harm. You don't want an iatrogenic intervention where the cure is worse than the disease. So our position on quantum computing.

Michael Saylor: One, we think it's probably 10 or more years away before there's a threat. That is the consensus. It's a promising technology, but it's still nascent. Many industries, including finance and defense, are dependent upon traditional cryptography. They face the same risks. There's a significant global investment going into building quantum-resistant protocols. Not just in the Bitcoin community, across all communities. The Bitcoin community in specific is engaged on research and development in these efforts. There's good work that's taking place. If Bitcoin requires an upgrade, there will be global consensus. Right now, there isn't global consensus that existing cryptographic libraries are at risk. And to stampede into a hypothetical fix before there is consensus would introduce new attack surfaces and new complexity and new failure modes that don't currently exist. It's very similar to over-vaccinating.

Michael Saylor: You know, when it's like, well, there's a 0.001% chance that the kid might get a disease. So we're going to vaccinate them just in case. But of course, 3% of the people that get the vaccine have side effects. Right? And so it's very important that we don't over-ensure, over-vaccinate, over-treat, over-worry. It's the famous president of the United States. He said, if you see 10 problems driving down the road, 9 of them will probably drive themselves into a ditch before they get to you. So the one thing you can't do is you can't buy 100 expensive insurance policies that cost collectively 100% of all your operating income to insure against something which is 2% likely to happen. That's why you have to be very thoughtful about addressing these risks. And you have to address them at the right time, not too soon, not too late.

Michael Saylor: But because too soon, you probably don't have the right technology and you're over-ensuring. Too late, right? You accept the risk that you shouldn't. That's why consensus is very important. Bitcoin will be stronger if and when that quantum upgrade takes place. Right? And so Bitcoin is upgradable. And Bitcoin can be upgraded to be stronger. And we, of course, are optimists. And we believe we believe that the human race will accept challenges and will upgrade to meet those challenges and do it in a rational fashion. And Bitcoin has a history of meeting challenges in a rational fashion such that it is stronger. And you can see all those examples. Last, but probably most important on this slide, Strategy, we are going to initiate a Bitcoin security program that coordinates with the global cybersecurity community, the global crypto security community, and the global Bitcoin Security Committee.

Michael Saylor: And so that's why MSTR 63 vol. But it's not really a complicated piece of engineering. It is just very pure financial engineering. There is a group of people that want low vol, you know, principal protected instruments that are credit instruments. And there are other people that want high vol, high performance. Next slide. Right. Think of us as a digital credit vehicle. Our job, we are thrusting forward. We are actually moving through space through issuing digital credit, right? Digital credit is the product. Bitcoin is the backing collateral. The secret or the most important thing for us to do is to build the vehicle in the most robust, fault-tolerant way that we can, the most scalable way we can. You could think of it as a Bitcoin battery and then a US dollar battery. And we have lots of options.

Michael Saylor: We have options to run on the US dollar reserve. We have the option to sell equity. We have the option to sell Bitcoin. We have the option to sell Bitcoin derivatives. We keep our options open so that we can do the best thing for all of our stakeholders. Our common stock shareholders, we want to do the right thing for the MSTR common stock shareholders. We want to do the right thing for the credit holders of the digital credit instruments. We want to do the right thing for the Bitcoin community. We believe that if we're rational and thoughtful, then we get a good outcome, which is BTC positive, MSTR positive, STRC positive. Next slide. Companies exist to convert capital into cash flows. In essence, you have capital investors and you have credit investors. The credit investor wants $10,000 a month forever.

Michael Saylor: But when you have a dollar of STRC backed by $5 of Bitcoin and it falls by 80%, you still got a dollar of STRC backed by $1 of Bitcoin. So we're stripping or reducing the risk by the BTC rating. And then we're also taking other actions to reduce risk, right? We're an operating company. We can raise capital. We can sell equity. We can refinance. We can strip risk by taking a 2-year obligation or a 10-year obligation and stretching it out to a 20-year obligation. So operating companies can do these things. We're also damping the volatility. We damp the volatility by building the collateral, by building the US dollar value, by adjusting the dividends, by adjusting the ATM programs, by adjusting our capital markets behavior. And we adjust these things minutely every minute. Maybe even every second, right?

Michael Saylor: And the key is for us to create the best credit in the world, and to create the best credit you can using digital capital. Let's go to the next slide. How do we benchmark ourselves against the other credit alternatives? Well, you know, the bank accounts might give you 40 basis points. The money markets are giving you 360 basis points. Taxable. You know, insurance companies don't pay tax, and endowments don't pay tax, but actual real people, families do, private companies do, public companies pay tax. The world's full of people that have to pay tax. And so 360 basis points of money markets, you know, works out to might be only 180 basis points if you live in New York or California after tax. So clearly, what we have here is a yield-starved environment. The base rate and the risk-free rate is 360 basis points taxable.

Michael Saylor: We think that this creates just a very compelling opportunity. Clearly, we believe the killer app of digital capital is digital credit. And you know, oftentimes people joke, you know, it takes 100 hours to understand Bitcoin. Maybe it takes 1,000 hours to become a Bitcoin maximalist. It only takes 10 seconds to understand STRETCH. STRETCH is 11.25% dividend yield. Paid monthly. That's it, right? It's a 10-second idea. Let's go to the next slide. Okay. Here's an actual four-month snapshot. And this is an interesting comparison, STRETCH versus Bitcoin. What's the difference between credit and capital? Well, in the last four months, Bitcoin has traded down 30% through the 1st of February. STRETCH is up 1%. And so it doesn't take a rocket scientist to look at this chart. If you're a retiree, if you're a corporate treasurer.

Michael Saylor: If you're a fixed income investor, if you're any kind of investor and you look at these two charts, if you're crypto curious or you think you might like Bitcoin, you look at this and you think, well, I like it, but I just can't stand the vol. And you can see why. Do you want 30% drawdown and no dividends, or do you want a 1% price appreciation and 5.3% paid dividends? With an ongoing 11.25% dividend rate. And with the company that's making a commitment to stabilize that price, to target 100 and do whatever it takes, including raise the dividend. So we believe that what we're doing is expanding the market. We're bringing new capital, new forms of investors into the digital asset space. And we're creating sort of a gateway product or an on-ramp to digital assets and digital capital by way of STRC.

Michael Saylor: Of course, we're still very early on. This is like, you know, the first five months of seasoning of STRC. We think that after 12 months, we'll have a better picture. Clearly, you know, in some cases with credit instruments, people have to see it for two, three, four years before they actually want to buy it. So we think that STRC is going to continue to season, continue to harden, continue to stabilize, continue to build AUM. Build liquidity. We will continue to make progress on volatility. You know, over the coming two, three, four years. So it's a very straightforward exercise on our part. This is the flagship product of the company, right? At this point, everything we're doing in the capital structure is to improve the liquidity. Decrease the volatility, increase the AUM. Increase the creditworthiness, decrease the risk. Improve the standing of STRETCH.

Michael Saylor: This is how we believe you can best outperform Bitcoin in the most responsible fashion while doing the most good for the world. For the other in the spectrum, for the credit investors that can't stand the vol, they want principal protection and low vol and no currency risk, and they want to and they want clear yield and they want tax-efficient treatment. Well, then they have digital credit and Stretch specifically. Let's go to the next slide. So I would end with this thought, right? Bitcoin is digital capital. We believe in it. We will continue to advocate for it and for the pure capital investor. You should buy it. Stretch is digital credit. If you don't know what you want, but you believe in digital assets and you believe in digital capital, you probably want Stretch. It's 11.25% dividend paid monthly, tax deferred.

Michael Saylor: You remember, you know, the world was going to, you know, end in climate change, death, you know, 26 years ago, and 26 years went by and none of those things happened. We were going to, you know, Bitcoin was going to boil the ocean and use all the energy on Earth as late as 2018, and that never happened. So it's possible that whatever happens in the quantum domain will actually improve the security of the Bitcoin network inadvertently before we have to even discuss a protocol change. So I don't think there's any particular policies to be advocating right now other than to support all the various communities and facilitate consensus at the right time to do the right things. The second topic is really what are the catalysts for Bitcoin price to improve? Look, I think the fundamental catalysts are regulatory support.

Michael Saylor: We have the most constructive set of financial regulators in the history of the industry right now. The head of the Fed, the head of the Treasury, the head of the CFTC, the head of the SEC, and the White House has a digital assets czar, right? Those five things are massive bull flags. They're all very positive, and generally, you would expect that something good will come probably out of the CFTC or the SEC as they are constructive about facilitating financial companies to innovate in the digital asset space, right? I would have been skeptical about that two years ago. But I think for you to be skeptical about their support for digital innovation today would be ignoring all the words from everybody in those positions. I think that the second catalyst will be banking adoption, the formation of the banking credit networks.

Michael Saylor: And if you were to light a candle and pray, you know, to the gods of the cryptosphere, you know, you would say, I want pro-digital assets regulators, I want pro-digital assets banks, and I want pro-digital assets financial innovations like BlackRock's bringing to the market, like we're bringing to the market, right? You know, like STRC. Fundamentally, the industry is going to move forward because of enlightened regulation, engaged, thoughtful banking, and then innovative finance. And that's what we're doing and that's what we see right now. Great. Thank you, Michael. Thank you, Tom. For the next question, I would like to invite Pete Christiansen from Citigroup. Thank you. Good evening. Michael, I want to talk about events of the last week. On Friday, the president presented his nominee for next Fed chair, which exacerbated volatility across a number of asset classes, including Bitcoin.

Michael Saylor: The good news is Kevin Warsh is on the tape noting that Bitcoin is the new gold. So that's good. But I guess my question is, how would Strategy's capital allocation framework, possibly if it would change, if the next Fed chair is perceived to be less independent, perhaps maybe more tolerant of fiscal dominance, that may raise Bitcoin prices short term, but longer term, it may introduce increased rate volatility, which may be a challenge on the funding side. I'm just curious if you have any perspectives on how that might change the capital allocation framework for Strategy. Thank you. We try to be very reactive to market signals. So for example, when our equity trades weak, we don't sell it. When our credit instruments are trading weak, when the cost of credit is too high, we don't sell them. You know, the most obvious is STRC.

Michael Saylor: You know, and the truth is, you know, Pete, sometimes we get up in the morning and we basically set up our programs and we think, well, nothing's going to happen today. And then five minutes before the market closes, a lot of stuff happens. Like, it can literally change in 60 seconds. And again, that's beyond, you know, our control. We can't control how the markets will interpret all these things. What we can do is set up a rational set of credit structures so that we only issue credit when we think it's in the best interest of the company, and we only issue equity when it's in the best interest of the company. Thank you, Michael. Fair and helpful comments. Thank you, Pete. For the next question, I would like to invite Lynn Alden from Lynn Alden Investment Strategy. Thank you for the opportunity.

Michael Saylor: The second question was around we're seeing kind of early products potentially looking to lever it up for other customers. Do you perceive issues in that? Are you monitoring it? Would you encourage or dissuade that type of activity? I think anytime people create products on top of STRETCH, right? There's some products that we've seen like Buck that have been issued that are they're not levered products, but they're actually reducing the volatility down to about zero. And they're actually showing daily accruals as opposed to monthly accruals. So I think those are positive. I think the extent people are going to build levered products, one, we can't release, you know we're not going to stop them. And I think leverage adds liquidity, adds to a certain extent interest in STRETCH. And we'll see how it plays out over time. But I don't necessarily think that's a bad thing.

Michael Saylor: If you take on debt you can't pay back, right? Then that doesn't help the company. That hurts the company. But if you're good at digital credit, that could be another case. You know, a third would be anything that uses capital, right? So if these companies, you know, if they want to generate Bitcoin yield, they're going to have to find some way to generate a benefit from the capital, right? You could underwrite insurance. You could support trading or derivatives trading by posting it as collateral. You could engage in derivatives trading, right? You could literally become a, you know, a public company with a lot of capital that trades in the digital derivatives market, you know, posting your Bitcoin as the collateral to take the trade and sell the volatility. It's a different business model. What do I think?

Michael Saylor: I think there's thousands of companies to get launched. Many don't succeed. Some will fail. Some get launched doing one thing and then they evolve into something different. Like look at our company. We evolved, you know? In fact, you could argue that the most successful companies evolve through two, three, four stages in their life cycle. I mean, Apple didn't start out as a phone company for sure. And I think Elon, maybe he ends up being a robot company and not a car company, right? At Tesla. So I think that I think that the winners will evolve and they'll find a niche. And I think that the ones that don't evolve, if you're just a holding company holding Bitcoin, not doing anything with it, you know, might you get bought up? Yeah, you might get you might get bought. And would that be good for you?

Michael Saylor: Well, you know, they were an opportunity for STRIFE. STRIFE did the deal with similar, and they closed it quickly, and they were able to build their capital base pretty rapidly. So that's, you know, we see examples of that. There probably will be some mergers and acquisitions of other companies in various spaces that they put together their various assets in a synergistic way. Our business is laser-like, monomaniacally focused on one thing right now. We want to make STRETCH, STRC, the premier credit instrument in the digital world, the best digital credit in the world, and maybe the best credit in the world. If we can create a product that trades with less than, you know, five vol, that pays you 10% dividend with a stable, you know, $100 value and we pay a ROC dividend, the question is who would want that?

Michael Saylor: You know, anything that introduces a question in the equity investor's mind, can you outperform Bitcoin? So generally, we're pretty skeptical on acquisitions because they take a long time, and then you might acquire something that you didn't want that you have to divest, and then everybody wants to talk about how and why and how long it takes. And so I don't think I wouldn't say it's not a good strategy for other companies and other investors. There are other companies and other investors for which it's a great opportunity for them, and they can make a lot of money, and they will pursue it and God bless them. For us, we believe we've stumbled upon maybe the most promising product, STRC. You know, after 20 capital markets transactions and all sorts of credit instruments, we think we found the best one for us and for the credit investor.

Michael Saylor: And this reminds me very much of 2020 when gold and silver led first and Bitcoin followed harder. You know, Bitcoin went up 6x in October of 2020 after gold had gone up 45%, you know, when Paul pivoted and then COVID came along. So, you know, to me, what's going to happen here is this thing is going to be, you know, a 2-bagger, 5-bagger, and 10-bagger, and most people don't really understand it. And I, you know, the reason that's the case is kind of what he said, where he said, you know, commodities are a very, very hard business to invest in because they have long cycles. And the average investor, you know, who's being marked quarter to quarter, month to month, year to year, can't show long-time preference. He didn't use those words, but he was essentially saying the same thing, which is Saifedeen's point.

Michael Saylor: You know, I think it's opened potentially open doors to pension funds, insurance companies, and other really large institutional investors. And you know, Michael, before we got on this webcast, you said something like times today that we're seeing with Bitcoin is when people are looking for insight and leadership. So I guess who better to ask, right? What is your expectation for conversations with these new potential investors, with these really large pools of capital? If you could also shed some light on how the conversations to date since you've gotten that credit rating have evolved. Thanks. Yeah, I've covered. Sorry, go ahead, Andrew. I was going to start and Phong, please jump in. Look, Andrew, thank you for the question. I think the process with the rating agencies was an excellent process. I think we've noted that, you know, we've had a credit rating in the past.

Michael Saylor: Or you just think all this stuff looks really good, but you need the money back in September. Then you think about the credit, right? And specifically the treasury credit, because the other credit instruments are too complicated. So I would say we're really at this point pitching the credit, treasury credit as the first step in a Bitcoin journey for a traditional or conventional investor who believes in digital assets. Thank you, Michael. And we're pitching it to a lot of people. Like we're talking to a lot, right? So there's a lot of conversations. And if anything, right, the volatility right here is the kind of reason why you might want to have a product like STRC. If you're wondering what's the justification, well, just look at the two charts next to each other and you figure out why you might want the credit instrument. Great.

AllMind AI

AllMind AI

Q4 2025 Strategy Inc Earnings Call

Event Details

MicroStrategy

Q4 2025 Strategy Inc Earnings Call

Open Event Documents

Search Transcript

MicroStrategy

Q4 2025 Strategy Inc Earnings Call

Transcript

No Transcript Available