MicroStrategy® Incorporated (Nasdaq: MSTR)
(“MicroStrategy” or the “Company”), the largest independent
publicly-traded business intelligence company, today announced
financial results for the three-month period ended December 31,
2022 (the fourth quarter of its 2022 fiscal year).
“In 2022, MicroStrategy achieved total revenue growth on a
constant currency basis for the fourth quarter as well as the full
year on the strength of our cloud business. In the fourth quarter,
current subscription billings grew at a double-digit growth rate
for the eleventh straight quarter. The stickiness of our products
and the long-standing tenure of our top customers is a testament to
the resiliency of our business, despite ongoing macroeconomic
headwinds,” said Phong Le, President and Chief Executive Officer,
MicroStrategy.
“I am pleased to report we again increased our bitcoin holdings
this past quarter to a total of 132,500 bitcoins. Our corporate
strategy and conviction in acquiring, holding, and growing our
bitcoin position for the long term remains unchanged. And while we
encountered macroeconomic and foreign currency headwinds in 2022,
we continue to shift to higher quality, recurring revenues as we
grow and scale our cloud business. We remain intentional and
precise in prioritizing costs, focusing on areas that drive revenue
growth while preserving margins,” said Andrew Kang, Chief Financial
Officer, MicroStrategy.
Fourth Quarter 2022 Financial Highlights
- Revenues: Total revenues for the fourth quarter of 2022
were $132.6 million, a 1.5% decrease, or a 4.1% increase on a
non-GAAP constant currency basis, compared to the fourth quarter of
2021. Product licenses and subscription services revenues for the
fourth quarter of 2022 were $45.0 million, a 1.5% increase, or an
8.5% increase on a non-GAAP constant currency basis, compared to
the fourth quarter of 2021. Product support revenues for the fourth
quarter of 2022 were $66.8 million, a 3.3% decrease, or a 1.0%
increase on a non-GAAP constant currency basis, compared to the
fourth quarter of 2021. Other services revenues for the fourth
quarter of 2022 were $20.7 million, a 1.4% decrease, or a 5.0%
increase on a non-GAAP constant currency basis, compared to the
fourth quarter of 2021.
- Gross Profit: Gross profit for the fourth quarter of
2022 was $105.8 million, representing a 79.8% gross margin,
compared to a gross profit of $110.5 million, representing a gross
margin of 82.2%, for the fourth quarter of 2021.
- Operating Expenses: Operating expenses for the fourth
quarter of 2022 were $299.5 million, a 20.8% increase compared to
the fourth quarter of 2021. Operating expenses include impairment
losses, net of gains on sale, on MicroStrategy’s digital assets,
which were $197.6 million during the fourth quarter of 2022,
compared to $146.6 million in the fourth quarter of 2021.
- Loss from Operations and Net Loss: Loss from operations
for the fourth quarter of 2022 was $193.7 million, compared to
$137.5 million for the fourth quarter of 2021. Net loss for the
fourth quarter of 2022 was $249.7 million, or $21.93 per share on a
diluted basis, as compared to $90.0 million, or $8.43 per share on
a diluted basis, for the fourth quarter of 2021. Digital asset
impairment losses, net of gains on sale, of $197.6 million and
$146.6 million for the fourth quarter of 2022 and 2021,
respectively, were reflected in these amounts.
- Cash and Cash Equivalents: As of December 31, 2022,
MicroStrategy had cash and cash equivalents of $43.8 million, as
compared to $63.4 million as of December 31, 2021, a decrease of
$19.5 million.
- Digital Assets: As of December 31, 2022, the carrying
value of MicroStrategy’s digital assets (comprised of approximately
132,500 bitcoins) was $1.840 billion, which reflects cumulative
impairment losses of $2.153 billion since acquisition and an
average carrying amount per bitcoin of approximately $13,887. As of
December 31, 2022, the original cost basis and market value of
MicroStrategy’s bitcoin were $3.993 billion and $2.194 billion,
respectively, which reflects an average cost per bitcoin of
approximately $30,137 and a market price per bitcoin of $16,556.32,
respectively. MicroStrategy sold approximately 704 bitcoins for
cash proceeds of $11.8 million, net of fees and expenses, resulting
in gains on sale of $0.9 million in the fourth quarter of 2022.
Additional information on MicroStrategy’s digital asset holdings is
included in the “Digital Assets – Additional Information” tables at
the end of this press release.
- Sales Agreement: On September 9, 2022, MicroStrategy
entered into a Sales Agreement (the “2022 Sales Agreement”) with
Cowen and Company LLC and BTIG, LLC, as agents (collectively, the
“2022 Sales Agents”), pursuant to which MicroStrategy may issue and
sell shares of its class A common stock having an aggregate
offering price of up to $500.0 million from time to time through
the 2022 Sales Agents. During the three and twelve months ended
December 31, 2022, the Company issued and sold 218,575 shares of
its class A common stock under the 2022 Sales Agreement, at an
average gross price per share of approximately $213.16, for
aggregate net proceeds (less $0.4 million in sales commissions and
expenses) of approximately $46.2 million. As of December 31, 2022,
approximately $453.4 million of the Company’s class A common stock
remained available for issuance and sale pursuant to the 2022 Sales
Agreement.
The tables provided at the end of this press release include a
reconciliation of the most directly comparable financial measures
prepared in accordance with generally accepted accounting
principles in the United States (“GAAP”) to non-GAAP financial
measures for the three and twelve months ended December 31, 2022
and 2021. 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 “Q4 2022 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.
Non-GAAP Financial Measures
MicroStrategy is providing supplemental financial measures for
(i) non-GAAP loss from operations that excludes the impact of
share-based compensation expense, (ii) non-GAAP net loss and
non-GAAP diluted loss per share that exclude the impacts of
share-based compensation expense, interest expense arising from the
amortization of debt issuance costs related to MicroStrategy’s
long-term debt, and related income tax effects, and (iii) non-GAAP
constant currency revenues that exclude foreign currency exchange
rate fluctuations. These supplemental financial measures are not
measurements of financial performance under 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 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. The second set of supplemental financial measures
excludes the impacts of (i) share-based compensation expense, (ii)
non-cash interest expense arising from the amortization of debt
issuance costs related to MicroStrategy’s long-term debt, and (iii)
related income tax effects. The third 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 fourth quarter 2022
financial results on a live Video Webinar today beginning at
approximately 5:00 p.m. ET. 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) 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
and (2) grow our enterprise analytics software business to promote
our vision of Intelligence Everywhere. 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,” “will,” 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: fluctuations in 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 of bitcoin below the value
at which the Company’s bitcoins are carried on its balance sheet;
gains or losses on any sales of bitcoins; changes in the accounting
treatment relating to the Company’s bitcoin holdings; changes in
securities laws or other laws or regulations, or the adoption of
new laws or regulations, relating to bitcoin that adversely affect
the price of bitcoin or the Company’s ability to transact in or own
bitcoin; a decrease in liquidity in the markets in which bitcoin is
traded; security breaches, cyberattacks, unauthorized access, loss
of private keys, fraud or other circumstances or events that result
in the loss of the Company’s bitcoins; impacts to the price and
rate of adoption of bitcoin associated with financial difficulties
and bankruptcies of various participants in the digital asset
industry; 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 product 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; competitive factors;
general economic conditions, including high levels of inflation and
increased interest rates; currency fluctuations; and other risks
detailed in MicroStrategy’s registration statements and periodic
reports filed with the Securities and Exchange Commission (“SEC”).
The Company undertakes no obligation to update these
forward-looking statements for revisions or changes after the date
of this release.
MICROSTRATEGY
INCORPORATED
CONSOLIDATED STATEMENTS OF
OPERATIONS
(in thousands, except per
share data)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2022
2021
2022
2021*
(unaudited)
(unaudited)
(unaudited)
Revenues
Product licenses
$
27,570
$
32,543
$
86,498
$
101,804
Subscription services
17,470
11,848
60,746
43,069
Total product licenses and subscription
services
45,040
44,391
147,244
144,873
Product support
66,839
69,146
266,521
281,209
Other services
20,675
20,978
85,499
84,680
Total revenues
132,554
134,515
499,264
510,762
Cost of revenues
Product licenses
358
431
1,672
1,721
Subscription services
7,467
5,181
24,770
16,901
Total product licenses and subscription
services
7,825
5,612
26,442
18,622
Product support
5,722
4,901
21,264
19,254
Other services
13,176
13,490
55,283
54,033
Total cost of revenues
26,723
24,003
102,989
91,909
Gross profit
105,831
110,512
396,275
418,853
Operating expenses
Sales and marketing
41,371
43,413
146,882
160,141
Research and development
31,617
30,875
127,428
117,117
General and administrative
28,930
27,104
111,421
95,501
Digital asset impairment losses (gains on
sale), net
197,630
146,587
1,286,286
830,621
Total operating expenses
299,548
247,979
1,672,017
1,203,380
Loss from operations
(193,717
)
(137,467
)
(1,275,742
)
(784,527
)
Interest expense, net
(14,837
)
(11,629
)
(53,136
)
(29,149
)
Other (expense) income, net
(5,829
)
656
6,413
2,287
Loss before income taxes
(214,383
)
(148,440
)
(1,322,465
)
(811,389
)
Provision for (benefit from) income
taxes
35,286
(58,463
)
147,332
(275,909
)
Net loss
$
(249,669
)
$
(89,977
)
$
(1,469,797
)
$
(535,480
)
Basic loss per share (1):
$
(21.93
)
$
(8.43
)
$
(129.83
)
$
(53.44
)
Weighted average shares outstanding used
in computing basic loss per share
11,386
10,679
11,321
10,020
Diluted loss per share (1):
$
(21.93
)
$
(8.43
)
$
(129.83
)
$
(53.44
)
Weighted average shares outstanding used
in computing diluted loss per share
11,386
10,679
11,321
10,020
(1)
Basic and fully diluted loss per share for
class A and class B common stock are the same.
* Derived from audited financial statements.
MICROSTRATEGY
INCORPORATED
CONSOLIDATED BALANCE
SHEETS
(in thousands, except per
share data)
December 31,
December 31,
2022
2021*
(unaudited)
Assets
Current assets
Cash and cash equivalents
$
43,835
$
63,356
Restricted cash
7,033
1,078
Accounts receivable, net
189,280
189,280
Prepaid expenses and other current
assets
24,418
14,251
Total current assets
264,566
267,965
Digital assets
1,840,028
2,850,210
Property and equipment, net
32,311
36,587
Right-of-use assets
61,299
66,760
Deposits and other assets
23,916
15,820
Deferred tax assets, net
188,152
319,782
Total assets
$
2,410,272
$
3,557,124
Liabilities and Stockholders’ (Deficit)
Equity
Current liabilities
Accounts payable, accrued expenses, and
operating lease liabilities
$
42,976
$
46,084
Accrued compensation and employee
benefits
53,716
54,548
Accrued interest
2,829
1,493
Current portion of long-term debt, net
454
0
Deferred revenue and advance payments
217,428
209,860
Total current liabilities
317,403
311,985
Long-term debt, net
2,378,560
2,155,151
Deferred revenue and advance payments
12,763
8,089
Operating lease liabilities
67,344
76,608
Other long-term liabilities
17,124
26,224
Deferred tax liabilities
198
109
Total liabilities
2,793,392
2,578,166
Stockholders’ (Deficit) 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; 18,269 shares issued and 9,585 shares
outstanding, and 18,006 shares issued and 9,322 shares outstanding,
respectively
18
18
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
1,841,120
1,727,143
Treasury stock, at cost; 8,684 shares and
8,684 shares, respectively
(782,104
)
(782,104
)
Accumulated other comprehensive loss
(13,801
)
(7,543
)
(Accumulated deficit) retained
earnings
(1,428,355
)
41,442
Total stockholders’ (deficit)
equity
(383,120
)
978,958
Total liabilities and stockholders’
(deficit) equity
$
2,410,272
$
3,557,124
* Derived from audited financial
statements.
MICROSTRATEGY
INCORPORATED
CONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS
(in thousands)
Twelve Months Ended
December 31,
2022
2021*
(unaudited)
Net cash provided by operating
activities
$
3,211
$
93,833
Net cash used in investing activities
(278,590
)
(2,629,235
)
Net cash provided by financing
activities
265,188
2,541,685
Effect of foreign exchange rate changes on
cash, cash equivalents, and restricted cash
(3,375
)
(2,608
)
Net (decrease) increase in cash, cash
equivalents, and restricted cash
(13,566
)
3,675
Cash, cash equivalents, and restricted
cash, beginning of year
64,434
60,759
Cash, cash equivalents, and restricted
cash, end of year
$
50,868
$
64,434
* Derived from audited financial
statements.
MICROSTRATEGY
INCORPORATED
REVENUE AND COST OF REVENUE
DETAIL
(in thousands)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2022
2021
2022
2021*
(unaudited)
(unaudited)
(unaudited)
Revenues
Product licenses and subscription
services:
Product licenses
$
27,570
$
32,543
$
86,498
$
101,804
Subscription services
17,470
11,848
60,746
43,069
Total product licenses and subscription
services
45,040
44,391
147,244
144,873
Product support
66,839
69,146
266,521
281,209
Other services:
Consulting
19,591
19,661
80,844
79,732
Education
1,084
1,317
4,655
4,948
Total other services
20,675
20,978
85,499
84,680
Total revenues
132,554
134,515
499,264
510,762
Cost of revenues
Product licenses and subscription
services:
Product licenses
358
431
1,672
1,721
Subscription services
7,467
5,181
24,770
16,901
Total product licenses and subscription
services
7,825
5,612
26,442
18,622
Product support
5,722
4,901
21,264
19,254
Other services:
Consulting
12,416
12,258
50,820
48,773
Education
760
1,232
4,463
5,260
Total other services
13,176
13,490
55,283
54,033
Total cost of revenues
26,723
24,003
102,989
91,909
Gross profit
$
105,831
$
110,512
$
396,275
$
418,853
* Derived from audited financial
statements.
MICROSTRATEGY
INCORPORATED
DIGITAL ASSETS – ADDITIONAL
INFORMATION
ROLLFORWARD OF BITCOIN
HOLDINGS
(unaudited)
Source of Capital Used to
Purchase Bitcoin
Digital Asset Original Cost
Basis (in thousands)
Digital Asset Impairment
Losses (in thousands)
Digital Asset Carrying
Value (in thousands)
Approximate Number of
Bitcoins Held (Disposed) *
Approximate Average Purchase
or Sale Price Per Bitcoin
Balance at December 31, 2020
$
1,125,000
$
(70,698
)
$
1,054,302
70,469
$
15,964
Digital asset purchases
(a)
1,086,375
1,086,375
20,857
52,087
Digital asset impairment losses
(194,095
)
(194,095
)
Balance at March 31, 2021
$
2,211,375
$
(264,793
)
$
1,946,582
91,326
$
24,214
Digital asset purchases
(b)
529,231
529,231
13,759
38,464
Digital asset impairment losses
(424,774
)
(424,774
)
Balance at June 30, 2021
$
2,740,606
$
(689,567
)
$
2,051,039
105,085
$
26,080
Digital asset purchases
(c)
419,865
419,865
8,957
46,876
Digital asset impairment losses
(65,165
)
(65,165
)
Balance at September 30, 2021
$
3,160,471
$
(754,732
)
$
2,405,739
114,042
$
27,713
Digital asset purchases
(d)
591,058
591,058
10,349
57,113
Digital asset impairment losses
(146,587
)
(146,587
)
Balance at December 31, 2021
$
3,751,529
$
(901,319
)
$
2,850,210
124,391
$
30,159
Digital asset purchases
(e)
215,500
215,500
4,827
44,645
Digital asset impairment losses
(170,091
)
(170,091
)
Balance at March 31, 2022
$
3,967,029
$
(1,071,410
)
$
2,895,619
129,218
$
30,700
Digital asset purchases
(f)
10,000
10,000
481
20,790
Digital asset impairment losses
(917,838
)
(917,838
)
Balance at June 30, 2022
$
3,977,029
$
(1,989,248
)
$
1,987,781
129,699
$
30,664
Digital asset purchases
(g)
5,978
5,978
301
19,860
Digital asset impairment losses
(727
)
(727
)
Balance at September 30, 2022
$
3,983,007
$
(1,989,975
)
$
1,993,032
130,000
$
30,639
Digital asset purchases
(h)
56,443
56,443
3,204
17,616
Digital asset impairment losses
(198,557
)
(198,557
)
Digital asset sales **
(46,260
)
35,370
(10,890
)
(704
)
16,786
Balance at December 31, 2022
$
3,993,190
$
(2,153,162
)
$
1,840,028
132,500
$
30,137
* MicroStrategy owns and has purchased bitcoins both directly and
indirectly through its wholly-owned subsidiary, MacroStrategy.
References to MicroStrategy below refer to MicroStrategy and its
subsidiaries on a consolidated basis. ** In the fourth quarter of
2022, MicroStrategy sold approximately 704 bitcoins having an
original cost basis of $46.3 million and cumulative digital asset
impairment losses of $35.4 million, resulting in a carrying value
of $10.9 million at the time of sale. The approximately 704
bitcoins were sold for cash proceeds of $11.8 million, net of fees
and expenses, resulting in gains on sale of $0.9 million.
(a)
In the first quarter of 2021,
MicroStrategy purchased bitcoin using $1.026 billion in net
proceeds from its issuance of its 0% Convertible Senior Notes due
2027 (together with the 0.750% Convertible Senior Notes due 2025,
the “Convertible Notes”) and Excess Cash.
(b)
In the second quarter of 2021,
MicroStrategy purchased bitcoin using $487.2 million in net
proceeds from its issuance of its 6.125% Senior Secured Notes due
2028 and Excess Cash.
(c)
In the third quarter of 2021,
MicroStrategy purchased bitcoin using $399.5 million in net
proceeds from its sale of 555,179 shares of class A common stock
offered under an Open Market Sale Agreement (the “Open Market Sale
Agreement”) with Jefferies LLC, as agent, and Excess Cash.
(d)
In the fourth quarter of 2021,
MicroStrategy purchased bitcoin using $591.0 million in net
proceeds from its sale of 858,588 shares of class A common stock
offered under the Open Market Sale Agreement and Excess Cash.
(e)
In the first quarter of 2022,
MicroStrategy purchased bitcoin using $190.5 million of the net
proceeds from the issuance of the 2025 Secured Term Loan and Excess
Cash.
(f)
In the second quarter of 2022,
MicroStrategy purchased bitcoin using Excess Cash.
(g)
In the third quarter of 2022,
MicroStrategy purchased bitcoin using Excess Cash.
(h)
In the fourth quarter of 2022,
MicroStrategy purchased bitcoin using $44.6 million of the net
proceeds from its sale of class A common stock offered under the
Sales Agreement and $11.8 million in proceeds from sales of
bitcoin.
Excess Cash refers to cash in excess of the minimum Cash Assets
that MicroStrategy is required to hold under its Treasury Reserve
Policy, which may include cash generated by operating activities
and cash from the proceeds of financing activities. Cash Assets
refers to cash and cash equivalents and short-term investments.
MICROSTRATEGY
INCORPORATED
DIGITAL ASSETS – ADDITIONAL
INFORMATION
MARKET VALUE OF BITCOIN
HOLDINGS
(unaudited)
Approximate
Number of Bitcoins Held at End
of Quarter *
Lowest Market Price Per
Bitcoin During Quarter (a)
Market Value of Bitcoin Held
at End of Quarter Using Lowest Market Price (in thousands)
(b)
Highest Market Price Per
Bitcoin During Quarter (c)
Market Value of Bitcoin Held
at End of Quarter Using Highest Market Price (in thousands)
(d)
Market Price Per Bitcoin at
End of Quarter (e)
Market Value of Bitcoin Held
at End of Quarter Using Ending Market Price (in thousands)
(f)
December 31, 2020
70,469
$
10,363.76
$
730,324
$
29,321.90
$
2,066,285
$
29,181.00
$
2,056,356
March 31, 2021
91,326
$
27,678.00
$
2,527,721
$
61,788.45
$
5,642,892
$
58,601.28
$
5,351,820
June 30, 2021
105,085
$
28,800.00
$
3,026,448
$
64,899.00
$
6,819,911
$
34,763.47
$
3,653,119
September 30, 2021
114,042
$
29,301.56
$
3,341,609
$
52,944.96
$
6,037,949
$
43,534.56
$
4,964,768
December 31, 2021
124,391
$
42,333.00
$
5,265,844
$
69,000.00
$
8,582,979
$
45,879.97
$
5,707,055
March 31, 2022
129,218
$
32,933.33
$
4,255,579
$
48,240.00
$
6,233,476
$
45,602.79
$
5,892,701
June 30, 2022
129,699
$
17,567.45
$
2,278,481
$
47,469.40
$
6,156,734
$
18,895.02
$
2,450,665
September 30, 2022
130,000
$
18,153.13
$
2,359,907
$
25,214.57
$
3,277,894
$
19,480.51
$
2,532,466
December 31, 2022
132,500
$
15,460.00
$
2,048,450
$
21,478.80
$
2,845,941
$
16,556.32
$
2,193,712
* MicroStrategy owns and has purchased bitcoins both directly and
indirectly through its wholly-owned subsidiary, MacroStrategy.
References to MicroStrategy below refer to MicroStrategy and its
subsidiaries on a consolidated basis.
(a)
The "Lowest Market Price Per Bitcoin
During Quarter" represents the lowest market price for one bitcoin
reported on the Coinbase exchange during the respective quarter,
without regard to when MicroStrategy purchased any of its
bitcoin.
(b)
The "Market Value of Bitcoin Held at End
of Quarter Using Lowest Market Price" represents a mathematical
calculation consisting of the lowest market price for one bitcoin
reported on the Coinbase exchange during the respective quarter
multiplied by the number of bitcoins held by MicroStrategy at the
end of the applicable period.
(c)
The "Highest Market Price Per Bitcoin
During Quarter" represents the highest market price for one bitcoin
reported on the Coinbase exchange during the respective quarter,
without regard to when MicroStrategy purchased any of its
bitcoin.
(d)
The "Market Value of Bitcoin Held at End
of Quarter Using Highest Market Price" represents a mathematical
calculation consisting of the highest market price for one bitcoin
reported on the Coinbase exchange during the respective quarter
multiplied by the number of bitcoins held by MicroStrategy at the
end of the applicable period.
(e)
The "Market Price Per Bitcoin at End of
Quarter" represents the market price of one bitcoin on the Coinbase
exchange at 4:00 p.m. Eastern Time on the last day of the
respective quarter.
(f)
The "Market Value of Bitcoin Held at End
of Quarter Using Ending Market Price" represents a mathematical
calculation consisting of the market price of one bitcoin on the
Coinbase exchange at 4:00 p.m. Eastern Time on the last day of the
respective quarter multiplied by the number of bitcoins held by
MicroStrategy at the end of the applicable period.
The amounts reported as “Market Value” in the above table represent
only a mathematical calculation consisting of the price for one
bitcoin reported on the Coinbase exchange (MicroStrategy’s
principal market for bitcoin) in each scenario defined above
multiplied by the number of bitcoins held by MicroStrategy at the
end of the applicable period. The SEC has previously stated 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 above 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 amounts
indicated above, at the market price as reported on the Coinbase
exchange (its principal market) on the date of sale, or at all.
MICROSTRATEGY
INCORPORATED
RECONCILIATION OF GAAP TO
NON-GAAP MEASURES
LOSS FROM OPERATIONS
(in thousands)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2022
2021
2022
2021
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Reconciliation of non-GAAP loss from
operations:
Loss from operations
$
(193,717
)
$
(137,467
)
$
(1,275,742
)
$
(784,527
)
Share-based compensation expense
17,032
13,153
63,619
44,126
Non-GAAP loss from operations
$
(176,685
)
$
(124,314
)
$
(1,212,123
)
$
(740,401
)
MICROSTRATEGY
INCORPORATED
RECONCILIATION OF GAAP TO
NON-GAAP MEASURES
NET LOSS AND DILUTED LOSS PER
SHARE
(in thousands, except per
share data)
Three Months Ended
Twelve Months Ended
December 31,
December 31,
2022
2021
2022
2021
(unaudited)
(unaudited)
(unaudited)
(unaudited)
Reconciliation of non-GAAP net
loss:
Net loss
$
(249,669
)
$
(89,977
)
$
(1,469,797
)
$
(535,480
)
Share-based compensation expense
17,032
13,153
63,619
44,126
Interest expense arising from amortization
of debt issuance costs
2,204
2,117
8,694
7,201
Income tax effects (1)
(3,064
)
(15,099
)
(13,250
)
(47,976
)
Non-GAAP net loss
$
(233,497
)
$
(89,806
)
$
(1,410,734
)
$
(532,129
)
Reconciliation of non-GAAP diluted loss
per share (2):
Diluted loss per share
$
(21.93
)
$
(8.43
)
$
(129.83
)
$
(53.44
)
Share-based compensation expense (per
diluted share)
1.50
1.23
5.62
4.40
Interest expense arising from amortization
of debt issuance costs (per diluted share)
0.19
0.20
0.77
0.72
Income tax effects (per diluted share)
(0.27
)
(1.41
)
(1.17
)
(4.79
)
Non-GAAP diluted loss per share
$
(20.51
)
$
(8.41
)
$
(124.61
)
$
(53.11
)
(1)
Income tax effects reflect the net tax
effects of share-based compensation expense, which includes tax
benefits and expenses on exercises of stock options and vesting of
share-settled restricted stock units, and interest expense for
amortization of debt issuance costs.
(2)
For reconciliation purposes, the non-GAAP
diluted earnings (loss) per share calculations use the same
weighted average shares outstanding as that used in the GAAP
diluted earnings (loss) per share calculations for the same period.
For example, in periods of GAAP net loss, otherwise dilutive
potential shares of common stock from MicroStrategy’s share-based
compensation arrangements and Convertible Notes are excluded from
the GAAP diluted loss per share calculation as they would be
antidilutive, and therefore are also excluded from the non-GAAP
diluted earnings or loss per share calculation.
MICROSTRATEGY
INCORPORATED
RECONCILIATION OF GAAP TO
NON-GAAP MEASURES
CONSTANT CURRENCY
(in thousands)
Three Months Ended
December 31,
(unaudited)
GAAP
Foreign Currency
Exchange Rate Impact (1)
Non-GAAP
Constant
Currency (2)
GAAP
GAAP % Change
Non-GAAP Constant
Currency % Change (3)
2022
2022
2022
2021
2022
2022
Revenues
Product licenses
$
27,570
$
(2,303
)
$
29,873
$
32,543
-15.3
%
-8.2
%
Subscription services
17,470
(815
)
18,285
11,848
47.5
%
54.3
%
Total product licenses and subscription
services
45,040
(3,118
)
48,158
44,391
1.5
%
8.5
%
Product support
66,839
(3,023
)
69,862
69,146
-3.3
%
1.0
%
Other services
20,675
(1,349
)
22,024
20,978
-1.4
%
5.0
%
Total revenues
132,554
(7,490
)
140,044
134,515
-1.5
%
4.1
%
Twelve Months Ended
December 31,
(unaudited)
GAAP
Foreign Currency
Exchange Rate Impact (1)
Non-GAAP Constant
Currency (2)
GAAP
GAAP % Change
Non-GAAP Constant
Currency % Change (3)
2022
2022
2022
2021
2022
2022
Revenues
Product licenses
$
86,498
$
(4,618
)
$
91,116
$
101,804
-15.0
%
-10.5
%
Subscription services
60,746
(2,331
)
63,077
43,069
41.0
%
46.5
%
Total product licenses and subscription
services
147,244
(6,949
)
154,193
144,873
1.6
%
6.4
%
Product support
266,521
(11,570
)
278,091
281,209
-5.2
%
-1.1
%
Other services
85,499
(5,263
)
90,762
84,680
1.0
%
7.2
%
Total revenues
499,264
(23,782
)
523,046
510,762
-2.3
%
2.4
%
(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)
December 31,
December 31,
2022
2021*
(unaudited)
Current:
Deferred product licenses revenue
$
2,825
$
993
Deferred subscription services revenue
51,861
35,589
Deferred product support revenue
155,366
166,477
Deferred other services revenue
7,376
6,801
Total current deferred revenue and advance
payments
$
217,428
$
209,860
Non-current:
Deferred product licenses revenue
$
2,742
$
68
Deferred subscription services revenue
3,030
1,064
Deferred product support revenue
6,387
6,203
Deferred other services revenue
604
754
Total non-current deferred revenue and
advance payments
$
12,763
$
8,089
Total current and non-current:
Deferred product licenses revenue
$
5,567
$
1,061
Deferred subscription services revenue
54,891
36,653
Deferred product support revenue
161,753
172,680
Deferred other services revenue
7,980
7,555
Total current and non-current deferred
revenue and advance payments
$
230,191
$
217,949
* Derived from audited financial
statements.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230202005306/en/
MicroStrategy Incorporated Shirish Jajodia Investor Relations
ir@microstrategy.com (703) 848-8600
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