MicroStrategy® (Nasdaq: MSTR), the largest independent
publicly-traded business intelligence company, today announced
financial results for the three-month period ended June 30, 2021
(the second quarter of its 2021 fiscal year).
“MicroStrategy continued its
strong 2021 by delivering an outstanding operational performance
across the board and completing another successful capital raise to
expand our digital asset holdings. We had one of our best
operational quarters in our software business in years, highlighted
by 13% revenue growth. Our success in the market is being driven by
the investments we have made and the broad adoption of our
innovative MicroStrategy platform,” said Michael J. Saylor, CEO,
MicroStrategy Incorporated.
“We continue to be pleased by
the results of the implementation of our digital asset strategy.
Our latest capital raise allowed us to expand our digital holdings,
which now exceed 105,000 bitcoins. Going forward, we intend to
continue to deploy additional capital into our digital asset
strategy.”
Second Quarter 2021 Financial Highlights
- Revenues: Total revenues for the second quarter of 2021
were $125.4 million, a 13.4% increase, or a 10.1% increase on a
non-GAAP constant currency basis, compared to the second quarter of
2020. Product licenses and subscription services revenues for the
second quarter of 2021 were $32.5 million, a 42.3% increase, or a
40.5% increase on a non-GAAP constant currency basis, compared to
the second quarter of 2020. Product support revenues for the second
quarter of 2021 were $71.0 million, a 1.4% increase, or a 2.1%
decrease on a non-GAAP constant currency basis, compared to the
second quarter of 2020. Other services revenues for the second
quarter of 2021 were $21.8 million, a 23.3% increase, or a 19.0%
increase on a non-GAAP constant currency basis, compared to the
second quarter of 2020.
- Gross Profit: Gross profit for the second quarter of
2021 was $102.3 million, representing an 81.6% gross margin,
compared to a gross margin of 78.3% in the second quarter of
2020.
- Operating Expenses: Operating expenses for the second
quarter of 2021 were $516.6 million, a 543.6% increase compared to
the second quarter of 2020. Beginning in the third quarter of 2020,
operating expenses included impairment losses on MicroStrategy’s
digital assets, which were $424.8 million during the second quarter
of 2021.
- (Loss) Income from Operations: Loss from operations for
the second quarter of 2021 was $414.2 million versus income from
operations of $6.3 million for the second quarter of 2020. Non-GAAP
income from operations, which excludes share-based compensation
expense and impairment losses and gains on sale from intangible
assets, which include digital assets, was $21.6 million for the
second quarter of 2021 versus $8.6 million for the second quarter
of 2020.
- Net (Loss) Income: Net loss for the second quarter of
2021 was $299.3 million, or $30.71 per share on a diluted basis, as
compared to net income of $3.4 million, or $0.35 per share on a
diluted basis, for the second quarter of 2020. Non-GAAP net income,
which excludes share-based compensation expense, impairment losses
and gains on sale from intangible assets, which include digital
assets, interest expense arising from the amortization of debt
issuance costs, and related income tax effects, was $16.7 million,
or $1.72 per share on a non-GAAP diluted basis, for the second
quarter of 2021, as compared to non-GAAP net income of $5.9
million, or $0.60 per share on a non-GAAP diluted basis, for the
second quarter of 2020.
- Cash and Cash Equivalents: As of June 30, 2021,
MicroStrategy had cash and cash equivalents of $56.4 million, as
compared to $59.7 million as of December 31, 2020, a decrease of
$3.3 million.
- Digital Assets: As of June 30, 2021, the carrying value
of MicroStrategy’s digital assets (comprised of approximately
105,085 bitcoins) was $2.051 billion, which reflects cumulative
impairment losses of $689.6 million since acquisition and an
average carrying amount per bitcoin of approximately $19,518. As of
June 30, 2021, the non-GAAP digital asset cost basis and non-GAAP
calculation of the market value of MicroStrategy's bitcoin were
$2.741 billion and $3.653 billion, respectively, which reflects an
average cost per bitcoin of approximately $26,080 and a market
price per bitcoin of $34,763.47. MacroStrategy LLC, a subsidiary of
MicroStrategy, holds approximately 92,079 of the bitcoins.
- Senior Secured Notes: In June 2021, MicroStrategy issued
$500.0 million aggregate principal amount of 6.125% Senior Secured
Notes due 2028 (the “2028 Secured Notes”). The 2028 Secured Notes
are unconditionally guaranteed, jointly and severally, on a senior
secured basis by MicroStrategy Services Corporation, a wholly owned
subsidiary of MicroStrategy and certain subsidiaries of
MicroStrategy that may be formed or acquired on or after June 14,
2021. The 2028 Secured Notes bear interest at a fixed rate of
6.125% per annum, payable semiannually in arrears on June 15 and
December 15 of each year, beginning on December 15, 2021. The 2028
Secured Notes have a stated maturity date of June 15, 2028, unless
earlier redeemed or repurchased in accordance with their terms and
subject to a springing maturity date of September 15, 2025 or
November 16, 2026 under certain circumstances. The 2028 Secured
Notes contain various customary covenants, including limitations
with respect to indebtedness, liens, payment of dividends,
investments, disposition of assets, mergers and acquisitions, and
transactions with affiliates. The total net proceeds from the 2028
Secured Notes offering, after deducting initial purchaser discounts
and issuance costs, were approximately $487.2 million. As of June
30, 2021, the carrying value of the 2028 Secured Notes was $487.3
million, net of unamortized issuance costs, and was classified as a
long-term liability in the “Long-term debt, net” line item in
MicroStrategy’s Consolidated Balance Sheet.
The tables at the end of this
press release include a reconciliation of GAAP to non-GAAP
financial measures for the three and six months ended June 30, 2021
and 2020. An explanation of non-GAAP financial measures is also
included under the heading “Non-GAAP Financial Measures” below.
Additional non-GAAP financial measures are included in
MicroStrategy’s “Q2 2021 Earnings Presentation,” which will be
available under the “Events and Presentations” section of
MicroStrategy’s investor relations website at
https://www.microstrategy.com/en/investor-relations.
MicroStrategy uses its
Intelligent Enterprise™ platform across the enterprise and has
created an interactive dossier with quarterly financial performance
data. Anyone can access the MSTR Financials dossier
via a web browser, or by
downloading the MicroStrategy Library™ app on an iOS or Android
device. To download the native apps, visit MicroStrategy
Library for iOS or
MicroStrategy Library for Android.
CFO Search
With MicroStrategy’s
management team focusing on two corporate strategies – growing its
enterprise analytics software business and acquiring and holding
bitcoin – and with the increase in its public profile and
operational complexity, MicroStrategy plans to engage in a search
for a Chief Financial Officer to complement the management team and
allow Phong Le to focus on his role as President, running the
day-to-day business of MicroStrategy.
Non-GAAP Financial Measures
MicroStrategy is providing
supplemental financial measures for (i) non-GAAP income from
operations that excludes the impact of share-based compensation
expense and impairment losses and gains on sale from intangible
assets, which include its digital assets, (ii) non-GAAP net income
and non-GAAP diluted earnings per share that exclude the impact of
share-based compensation expense, impairment losses and gains on
sale from intangible assets, which include its digital assets,
interest expense arising from the amortization of debt issuance
costs related to MicroStrategy’s long-term debt, and related income
tax effects, (iii) non-GAAP digital asset cost basis as reported
excluding cumulative impairment losses and a non-GAAP calculation
of market value of MicroStrategy’s bitcoin holdings based on the
market price of one bitcoin in its principal market at 4:00 p.m.
Eastern Time on the last day of each period (see below for a more
detailed explanation of the calculation and limitations applicable
to this market value metric), and (iv) non-GAAP constant currency
revenues that exclude foreign currency exchange rate fluctuations.
These supplemental financial measures are not measurements of
financial performance under generally accepted accounting
principles in the United States (“GAAP”) and, as a result, these
supplemental financial measures may not be comparable to similarly
titled measures of other companies. Management uses these non-GAAP
financial measures internally to help understand, manage, and
evaluate business performance and to help make operating
decisions.
MicroStrategy believes that
these non-GAAP financial measures are also useful to investors and
analysts in comparing its performance across reporting periods on a
consistent basis. The first supplemental financial measure excludes
(i) a significant non-cash expense that MicroStrategy believes is
not reflective of its general business performance, and for which
the accounting requires management judgment and the resulting
share-based compensation expense could vary significantly in
comparison to other companies and (ii) significant impairment
losses and gains on sale from intangible assets, which include
MicroStrategy’s bitcoin. The second set of supplemental financial
measures excludes the impact of (i) share-based compensation
expense, (ii) impairment losses and gains on sale from intangible
assets, which include MicroStrategy’s bitcoin, (iii) non-cash
interest expense arising from the amortization of debt issuance
costs related to MicroStrategy’s long-term debt, and (iv) related
income tax effects. The third set of supplemental financial
measures provides MicroStrategy’s digital asset balances, as
reported excluding non-cash cumulative impairment losses and
discloses a non-GAAP calculation of market value of its bitcoin
holdings based on the market price of one bitcoin in its principal
market at 4:00 p.m. Eastern Time on the last day of each period
(see below for a more detailed explanation of the calculation and
limitations applicable to this market value metric). MicroStrategy
believes this is useful to investors and analysts in comparing the
value of its bitcoin holdings. The fourth set of supplemental
financial measures excludes changes resulting from fluctuations in
foreign currency exchange rates so that results may be compared to
the same period in the prior year on a non-GAAP constant currency
basis. MicroStrategy believes the use of these non-GAAP financial
measures can also facilitate comparison of MicroStrategy’s
operating results to those of its competitors.
Conference Call
MicroStrategy will be discussing its second quarter 2021
financial results on a live Video Webinar today beginning at
approximately 5:00 p.m. EDT. The live Video Webinar and
accompanying presentation materials will be available under the
“Events and Presentations” section of MicroStrategy’s investor
relations website at
https://www.microstrategy.com/en/investor-relations. Log-in
instructions will be available after registering for the event. An
archived replay of the event will be available beginning
approximately two hours after the call concludes.
About MicroStrategy Incorporated
MicroStrategy (Nasdaq: MSTR) is the largest independent
publicly-traded analytics and business intelligence company. The
MicroStrategy analytics platform is consistently rated as the best
in enterprise analytics and is used by many of the world’s most
admired brands in the Fortune Global 500. We pursue two corporate
strategies: (1) grow our enterprise analytics software business to
promote our vision of Intelligence Everywhere and (2) acquire and
hold bitcoin, which we view as a dependable store of value
supported by a robust, public, open-source architecture untethered
to sovereign monetary policy. For more information about
MicroStrategy, visit www.microstrategy.com.
MicroStrategy, Intelligent
Enterprise, and MicroStrategy Library are either trademarks or
registered trademarks of MicroStrategy Incorporated in the United
States and certain other countries. Other product and company names
mentioned herein may be the trademarks of their respective
owners.
This press release may include
statements that may constitute “forward-looking statements,”
including estimates of future business prospects or financial
results and statements containing the words “believe,” “estimate,”
“project,” “expect,” or similar expressions. Forward-looking
statements inherently involve risks and uncertainties that could
cause actual results of MicroStrategy Incorporated and its
subsidiaries (collectively, the “Company”) to differ materially
from the forward-looking statements. Factors that could contribute
to such differences include: the market price of bitcoin and any
associated impairment charges that the Company may incur as a
result of a decrease in the market price below the value at which
the Company’s bitcoins are carried on its balance sheet; gains or
losses on sales of bitcoins that the Company would incur upon any
sale of its bitcoins; changes in the accounting treatment of the
Company’s bitcoin holdings; changes in securities laws or other
laws or regulations relating to bitcoin that could adversely affect
the price of bitcoin or the Company’s ability to own bitcoin; a
decrease in liquidity in the markets in which bitcoins are traded;
security breaches, cyberattacks, unauthorized access, loss of
private keys, or fraud that results in the Company’s loss of its
bitcoins; the level and terms of the Company’s substantial
indebtedness and its ability to service such debt; the extent and
timing of market acceptance of the Company’s new offerings;
continued acceptance of the Company’s other products in the
marketplace; the Company’s ability to recognize revenue or deferred
revenue through delivery of products or satisfactory performance of
services; the timing of significant orders; delays in or the
inability of the Company to develop or ship new products; customers
shifting from a product license model to a cloud subscription
model, which may delay the Company’s ability to recognize revenue;
fluctuations in tax benefits or provisions; impacts of the COVID-19
pandemic; competitive factors; general economic conditions;
currency fluctuations; and other risks detailed in MicroStrategy’s
registration statements and periodic reports filed with the
Securities and Exchange Commission. The Company undertakes no
obligation to update these forward-looking statements for revisions
or changes after the date of this release.
MSTR-F
MICROSTRATEGY
INCORPORATED
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except per
share data)
Three Months Ended
Six Months Ended
June 30,
June 30,
2021
2020
2021
2020
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Revenues
Product licenses
$
22,151
$
14,816
$
43,431
$
27,400
Subscription services
10,342
8,021
20,368
15,989
Total product licenses and
subscription services
32,493
22,837
63,799
43,389
Product support
71,027
70,038
141,676
141,196
Other services
21,831
17,709
42,778
37,423
Total revenues
125,351
110,584
248,253
222,008
Cost of revenues
Product licenses
419
514
907
1,184
Subscription services
3,810
3,792
7,438
7,856
Total product licenses and
subscription services
4,229
4,306
8,345
9,040
Product support
4,862
6,837
9,674
13,555
Other services
13,947
12,846
27,568
25,939
Total cost of revenues
23,038
23,989
45,587
48,534
Gross profit
102,313
86,595
202,666
173,474
Operating expenses
Sales and marketing
40,321
34,951
78,519
74,469
Research and development
28,548
25,867
58,031
51,968
General and administrative
22,917
19,449
44,646
40,781
Digital asset impairment
losses
424,774
0
618,869
0
Total operating
expenses
516,560
80,267
800,065
167,218
(Loss) income from
operations
(414,247
)
6,328
(597,399
)
6,256
Interest (expense) income,
net
(4,401
)
563
(6,797
)
2,418
Other (expense) income, net
(897
)
(1,995
)
367
(1,561
)
(Loss) income before income
taxes
(419,545
)
4,896
(603,829
)
7,113
(Benefit from) provision for
income taxes
(120,198
)
1,509
(194,462
)
3,069
Net (loss) income
$
(299,347
)
$
3,387
$
(409,367
)
$
4,044
Basic (loss) earnings per
share (1):
$
(30.71
)
$
0.35
$
(42.22
)
$
0.41
Weighted average shares
outstanding used in computing basic (loss) earnings per share
9,746
9,739
9,697
9,858
Diluted (loss) earnings per
share (1):
$
(30.71
)
$
0.35
$
(42.22
)
$
0.41
Weighted average shares
outstanding used in computing diluted (loss) earnings per share
9,746
9,741
9,697
9,886
(1)
Basic and fully diluted (loss) earnings
per share for class A and class B common stock are the same.
MICROSTRATEGY
INCORPORATED
CONSOLIDATED BALANCE
SHEETS
(in thousands, except per
share data)
June 30,
December 31,
2021
2020*
(unaudited)
Assets
Current assets
Cash and cash equivalents
$
56,399
$
59,675
Restricted cash
1,205
1,084
Accounts receivable, net
131,516
197,461
Prepaid expenses and other
current assets
19,338
14,400
Total current assets
208,458
272,620
Digital assets
2,051,039
1,054,302
Property and equipment, net
39,659
42,975
Right-of-use assets
70,340
73,597
Deposits and other assets
15,756
15,615
Deferred tax assets, net
239,107
6,503
Total Assets
$
2,624,359
$
1,465,612
Liabilities and Stockholders’
Equity
Current liabilities
Accounts payable, accrued
expenses, and operating lease liabilities
$
41,236
$
45,119
Accrued compensation and employee
benefits
50,944
49,249
Deferred revenue and advance
payments
182,818
191,250
Total current liabilities
274,998
285,618
Long-term debt, net
2,150,927
486,366
Deferred revenue and advance
payments
7,262
14,662
Operating lease liabilities
80,900
84,328
Other long-term liabilities
31,040
33,382
Deferred tax liabilities
1,813
8,211
Total Liabilities
2,546,940
912,567
Stockholders’ Equity
Preferred stock undesignated,
$0.001 par value; 5,000 shares authorized; no shares issued or
outstanding
0
0
Class A common stock, $0.001 par
value; 330,000 shares authorized; 16,468 shares issued and 7,784
shares outstanding, and 16,307 shares issued and 7,623 shares
outstanding, respectively
16
16
Class B convertible common stock,
$0.001 par value; 165,000 shares authorized; 1,964 shares issued
and outstanding, and 1,964 shares issued and outstanding,
respectively
2
2
Additional paid-in capital
697,274
763,051
Treasury stock, at cost; 8,684
shares and 8,684 shares, respectively
(782,104
)
(782,104
)
Accumulated other comprehensive
loss
(5,324
)
(3,885
)
Retained earnings
167,555
575,965
Total Stockholders’
Equity
77,419
553,045
Total Liabilities and
Stockholders’ Equity
$
2,624,359
$
1,465,612
*
Derived from audited financial
statements.
MICROSTRATEGY
INCORPORATED
CONSOLIDATED STATEMENTS OF
CASH FLOWS
(in thousands)
Six Months Ended
June 30,
2021
2020
(unaudited)
(unaudited)
Operating activities:
Net (loss) income
$
(409,367
)
$
4,044
Adjustments to reconcile net
(loss) income to net cash provided by operating activities:
Depreciation and amortization
5,997
5,828
Reduction in carrying amount of
right-of-use assets
4,204
4,085
Credit losses and sales
allowances
365
990
Deferred taxes
(197,383
)
273
Share-based compensation
expense
18,807
5,337
Digital asset impairment
losses
618,869
0
Amortization of issuance costs on
long-term debt
2,977
0
Changes in operating assets and
liabilities:
Accounts receivable
11,197
21,022
Prepaid expenses and other
current assets
(4,080
)
(493
)
Deposits and other assets
(1,071
)
195
Accounts payable and accrued
expenses
(7,633
)
(1,823
)
Accrued compensation and employee
benefits
1,368
(8,708
)
Deferred revenue and advance
payments
37,825
347
Operating lease liabilities
(5,147
)
(4,662
)
Other long-term liabilities
(253
)
86
Net cash provided by operating
activities
76,675
26,521
Investing activities:
Purchases of digital assets
(1,615,606
)
0
Proceeds from redemption of
short-term investments
0
10,000
Purchases of property and
equipment
(1,342
)
(1,162
)
Purchases of short-term
investments
0
(9,928
)
Net cash used in investing
activities
(1,616,948
)
(1,090
)
Financing activities:
Proceeds from convertible senior
notes
1,050,000
0
Issuance costs paid for
convertible senior notes
(24,742
)
0
Proceeds from senior secured
notes
500,000
0
Issuance costs paid for senior
secured notes
(11,269
)
0
Proceeds from sale of class A
common stock under exercise of employee stock options
24,098
1,902
Purchases of treasury stock
0
(61,875
)
Net cash provided by (used in)
financing activities
1,538,087
(59,973
)
Effect of foreign exchange
rate changes on cash, cash equivalents, and restricted cash
(969
)
(1,154
)
Net decrease in cash, cash
equivalents, and restricted cash
(3,155
)
(35,696
)
Cash, cash equivalents, and
restricted cash, beginning of period
60,759
457,816
Cash, cash equivalents, and
restricted cash, end of period
$
57,604
$
422,120
MICROSTRATEGY
INCORPORATED
REVENUE AND COST OF REVENUE
DETAIL
(in thousands)
Three Months Ended
Six Months Ended
June 30,
June 30,
2021
2020
2021
2020
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Revenues
Product licenses and subscription
services:
Product licenses
$
22,151
$
14,816
$
43,431
$
27,400
Subscription services
10,342
8,021
20,368
15,989
Total product licenses and
subscription services
32,493
22,837
63,799
43,389
Product support
71,027
70,038
141,676
141,196
Other services:
Consulting
20,622
16,578
40,333
35,019
Education
1,209
1,131
2,445
2,404
Total other services
21,831
17,709
42,778
37,423
Total revenues
125,351
110,584
248,253
222,008
Cost of revenues
Product licenses and subscription
services:
Product licenses
419
514
907
1,184
Subscription services
3,810
3,792
7,438
7,856
Total product licenses and
subscription services
4,229
4,306
8,345
9,040
Product support
4,862
6,837
9,674
13,555
Other services:
Consulting
12,438
10,168
24,770
21,596
Education
1,509
2,678
2,798
4,343
Total other services
13,947
12,846
27,568
25,939
Total cost of revenues
23,038
23,989
45,587
48,534
Gross profit
$
102,313
$
86,595
$
202,666
$
173,474
MICROSTRATEGY
INCORPORATED
RECONCILIATION OF GAAP TO
NON-GAAP MEASURES
INCOME FROM OPERATIONS
(in thousands)
Three Months Ended
Six Months Ended
June 30,
June 30,
2021
2020
2021
2020
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Reconciliation of non-GAAP
income from operations:
(Loss) income from operations
$
(414,247
)
$
6,328
$
(597,399
)
$
6,256
Share-based compensation
expense
11,096
2,226
18,807
5,337
Digital asset impairment
losses
424,774
0
618,869
0
Non-GAAP income from
operations
$
21,623
$
8,554
$
40,277
$
11,593
MICROSTRATEGY
INCORPORATED
RECONCILIATION OF GAAP TO
NON-GAAP MEASURES
NET (LOSS) INCOME AND (LOSS)
EARNINGS PER SHARE
(in thousands, except per
share data)
Three Months Ended
Six Months Ended
June 30,
June 30,
2021
2020
2021
2020
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Reconciliation of non-GAAP net
income:
Net (loss) income
$
(299,347
)
$
3,387
$
(409,367
)
$
4,044
Share-based compensation
expense
11,096
2,226
18,807
5,337
Digital asset impairment
losses
424,774
0
618,869
0
Interest expense arising from
amortization of debt issuance costs
1,805
0
2,977
0
Income tax effects (1)
(121,587
)
274
(199,671
)
436
Non-GAAP net income
$
16,741
$
5,887
$
31,615
$
9,817
Reconciliation of non-GAAP
diluted earnings per share:
Diluted (loss) earnings per
share
$
(30.71
)
$
0.35
$
(42.22
)
$
0.41
Share-based compensation expense
(per diluted share)
1.14
0.22
1.94
0.54
Digital asset impairment losses
(per diluted share)
43.58
0.00
63.82
0.00
Interest expense arising from
amortization of debt issuance costs (per diluted share)
0.19
0.00
0.31
0.00
Income tax effects (per diluted
share)
(12.48
)
0.03
(20.59
)
0.04
Non-GAAP diluted earnings per
share
$
1.72
$
0.60
$
3.26
$
0.99
(1)
Income tax effects reflect the net tax
effects of stock-based compensation expense, digital asset
impairment losses, and interest expense for amortization of debt
issuance costs.
MICROSTRATEGY
INCORPORATED
RECONCILIATION OF GAAP TO
NON-GAAP MEASURES
DIGITAL ASSET HOLDINGS
As Reported
Market Value
Digital Asset Carrying Value
(in thousands)
Add Back: Digital Asset
Impairment Losses (in thousands)
Digital Asset Original Cost
Basis (in thousands)
Approximate Number of Bitcoins
Held
Market Price Per
Bitcoin
Market Value of Bitcoin Held
(in thousands)
Reconciliation of digital
asset cost basis:
Balance at June 30,
2020
$
0
$
0
$
0
0
n/a
n/a
Digital asset purchases
425,000
425,000
38,250
Digital asset impairment
losses
(44,242
)
44,242
Balance at September 30,
2020
$
380,758
$
44,242
$
425,000
38,250
$
10,706.00
$
409,505
Digital asset purchases
700,000
700,000
32,219
Digital asset impairment
losses
(26,456
)
26,456
Balance at December 31,
2020
$
1,054,302
$
70,698
$
1,125,000
70,469
$
29,181.00
$
2,056,356
Digital asset purchases
1,086,375
1,086,375
20,857
Digital asset impairment
losses
(194,095
)
194,095
Balance at March 31,
2021
$
1,946,582
$
264,793
$
2,211,375
91,326
$
58,601.28
$
5,351,820
Digital asset purchases
529,231
529,231
13,759
Digital asset impairment
losses
(424,774
)
424,774
Balance at June 30,
2021
$
2,051,039
$
689,567
$
2,740,606
105,085
$
34,763.47
$
3,653,119
The amounts reported as “Market Value” in the above table
represent only a mathematical calculation consisting of the price
for one bitcoin reported in MicroStrategy’s principal market at
4:00 p.m. Eastern Time on the last day of each period multiplied by
the number of bitcoins held by MicroStrategy at the end of the
applicable period. The Securities and Exchange Commission has
previously made findings that there has not been a demonstration
that (i) bitcoin and bitcoin markets are inherently resistant to
manipulation or that the spot price of bitcoin may not be subject
to fraud and manipulation; and (ii) adequate surveillance-sharing
agreements with bitcoin-related markets are in place, as
bitcoin-related markets are either not significant, not regulated,
or both. Accordingly, the Market Value amounts reported below may
not accurately represent fair market value, and the actual fair
market value of MicroStrategy’s bitcoin may be different from such
amounts and such deviation may be material. Moreover, (i) the
bitcoin market historically has been characterized by significant
volatility in price, limited liquidity and trading volumes compared
to sovereign currencies markets, relative anonymity, a developing
regulatory landscape, potential susceptibility to market abuse and
manipulation, and various other risks that are, or may be, inherent
in its entirely electronic, virtual form and decentralized network
and (ii) MicroStrategy may not be able to sell its bitcoins at the
“Market Value” indicated below, at the market price as reported in
its principal market on the date of sale, or at all.
MICROSTRATEGY
INCORPORATED
RECONCILIATION OF GAAP TO
NON-GAAP MEASURES
CONSTANT CURRENCY
(in thousands)
Three Months Ended
June 30,
(unaudited)
GAAP
Foreign Currency Exchange Rate
Impact (1)
Non-GAAP Constant Currency
(2)
GAAP
GAAP % Change
Non-GAAP Constant Currency %
Change (3)
2021
2021
2021
2020
2021
2021
Revenues
Product licenses
$
22,151
$
132
$
22,019
$
14,816
49.5
%
48.6
%
Subscription services
10,342
264
10,078
8,021
28.9
%
25.6
%
Total product licenses and subscription
services
32,493
396
32,097
22,837
42.3
%
40.5
%
Product support
71,027
2,425
68,602
70,038
1.4
%
-2.1
%
Other services
21,831
763
21,068
17,709
23.3
%
19.0
%
Total revenues
125,351
3,584
121,767
110,584
13.4
%
10.1
%
Six Months Ended
June 30,
(unaudited)
GAAP
Foreign Currency Exchange Rate
Impact (1)
Non-GAAP Constant Currency
(2)
GAAP
GAAP % Change
Non-GAAP Constant Currency %
Change (3)
2021
2021
2021
2020
2021
2021
Revenues
Product licenses
$
43,431
$
457
$
42,974
$
27,400
58.5
%
56.8
%
Subscription services
20,368
454
19,914
15,989
27.4
%
24.5
%
Total product licenses and subscription
services
63,799
911
62,888
43,389
47.0
%
44.9
%
Product support
141,676
4,342
137,334
141,196
0.3
%
-2.7
%
Other services
42,778
1,381
41,397
37,423
14.3
%
10.6
%
Total revenues
248,253
6,634
241,619
222,008
11.8
%
8.8
%
(1)
The “Foreign Currency Exchange Rate
Impact” reflects the estimated impact of fluctuations in foreign
currency exchange rates on international revenues. It shows the
increase (decrease) in international revenues from the same period
in the prior year, based on comparisons to the prior year quarterly
average foreign currency exchange rates. The term “international”
refers to operations outside of the United States and Canada.
(2)
The “Non-GAAP Constant Currency” reflects
the current period GAAP amount, less the Foreign Currency Exchange
Rate Impact.
(3)
The “Non-GAAP Constant Currency % Change”
reflects the percentage change between the current period Non-GAAP
Constant Currency amount and the GAAP amount for the same period in
the prior year.
MICROSTRATEGY
INCORPORATED
DEFERRED REVENUE
DETAIL
(in thousands)
June 30,
December 31,
June 30,
2021
2020*
2020
(unaudited)
(unaudited)
Current:
Deferred product licenses
revenue
$
544
$
1,495
$
100
Deferred subscription services
revenue
25,916
26,258
17,934
Deferred product support
revenue
150,963
156,216
142,543
Deferred other services
revenue
5,395
7,281
7,066
Total current deferred revenue and advance
payments
$
182,818
$
191,250
$
167,643
Non-current:
Deferred product licenses revenue
$
76
$
139
$
168
Deferred subscription services revenue
712
8,758
90
Deferred product support revenue
5,920
5,055
5,152
Deferred other services revenue
554
710
500
Total non-current deferred revenue and
advance payments
$
7,262
$
14,662
$
5,910
Total current and non-current:
Deferred product licenses revenue
$
620
$
1,634
$
268
Deferred subscription services revenue
26,628
35,016
18,024
Deferred product support revenue
156,883
161,271
147,695
Deferred other services revenue
5,949
7,991
7,566
Total current and non-current deferred
revenue and advance payments
$
190,080
$
205,912
$
173,553
*
Derived from audited financial
statements.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20210729005899/en/
MicroStrategy Incorporated Investor Relations
ir@microstrategy.com (703) 848-8600
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