Strategy Reports Q2 Earnings
On Thursday after the market closed, American Bitcoin financial company Strategy announced its Q2 financial results, with total revenue of $114.5 million, a year-over-year increase of 2.7%. Operating profit was approximately $14.03 billion, soaring 7,106% compared to the same period last year, which included about $14 billion in unrealized gains from digital assets. Net profit reached $10.02 billion, with diluted earnings per share of $32.60, whereas the same period last year reported a loss of $0.57 per share.
Benefiting from Bitcoin’s price reaching an all-time high, the company’s 25% annual Bitcoin yield target has been achieved ahead of schedule, with dollar-denominated earnings also exceeding $13 billion.
Strategy’s Chief Financial Officer Andrew Kang stated:
This is the second time the company has adopted fair value accounting standards in its financial report. If calculated according to the accounting model applicable before January 1, 2025, Strategy should have recognized a digital asset impairment loss of $180 million in Q2 2024.
As of July 30, Strategy held a total of 628,791 Bitcoins, with a total cost of $46.07 billion, and an average purchase price of $73,277. Simultaneously with the earnings announcement, Strategy submitted a special stock issuance plan for up to $4.2 billion in STRC and stated that it would use the raised funds to further increase its Bitcoin holdings.
The company has also raised its annual BTC yield and “Bitcoin dollar revenue” targets to 30% and $20 billion, respectively.
Strategy’s Chairman Michael Saylor stated:
STRC will accumulate and distribute dividends at a par value of $100 per share, based on a floating interest rate. STRC joins the existing three perpetual special stocks of Strategy, which have no expiration date but will provide fixed dividend payments as long as the company continues to operate.
Strategy’s stock price (ticker: MSTR) closed at $401.86 on Thursday, and after the earnings report was released, although the stock price briefly rose by 2.81% in after-hours trading, it subsequently retreated to close at $396.20.
TD Cowen analysts noted earlier this week that over the next decade, Strategy could potentially increase its holdings by more than 17,000 Bitcoins without diluting common equity. This estimate even considers the number of common shares the company may need to issue to pay cash dividends on floating rate special stocks.