What factors drove MSTR's earnings miss in Q3 2024?

MicroStrategy Incorporated (MSTR) experienced a notable earnings miss in Q3 2024, with a reported loss of $340.2 million, or $1.72 per share, compared to a net loss of $143.4 million, or $1.01 per share, in the same quarter last year. The factors contributing to this earnings miss include: 1. **Revenue Decline**: Total revenues decreased by 10.3% year-over-year, amounting to $116.1 million, falling short of analyst estimates of $122.66 million. This decline was primarily driven by a decrease in product licenses and product support revenues. 2. **Operating Expenses Increase**: Operating expenses surged by 301.6% year-over-year, reaching $514.3 million, largely due to significant digital asset impairment losses amounting to $412.1 million. This increase in expenses disproportionately strained the company's profitability, contributing to the earnings shortfall. 3. **Gross Profit Decrease**: Despite achieving a gross profit of $81.7 million with a gross margin of 70.4%, this figure was a decline from $102.8 million and a gross margin of 79.4% in Q3 2023. The reduction in gross profit further underscored the challenges faced by the company during the quarter. In summary, MicroStrategy's Q3 2024 earnings miss was primarily driven by a combination of revenue decline, increased operating expenses, and a decrease in gross profit. These factors, collectively, significantly impacted the company's financial performance during the quarter. |code|Ticker|Name|Date|Business Composition|Revenue By Business|market_code| |---|---|---|---|---|---|---| |MSTR|MSTR.O|Microstrategy|20240101-2024|Other Services|4.9162E7|185| |MSTR|MSTR.O|Microstrategy|20240101-2024|Other Services|3.2993E7|185| |MSTR|MSTR.O|Microstrategy|20240101-2024|Other Services|1.6657E7|185| |MSTR|MSTR.O|Microstrategy|20240101-2024|Product Support|6.2685E7|185| |MSTR|MSTR.O|Microstrategy|20240101-2024|Product Licenses and Subscription Services|3.5904E7|185| |MSTR|MSTR.O|Microstrategy|20240101-2024|Other Services|1.6657E7|185| |code|Ticker|Name|Date|Total Revenue YoY|Total Revenue|market_code| |---|---|---|---|---|---|---| |MSTR|MSTR.O|Microstrategy|2023 Q4|-6.0880848559832215|1.24484E8|185| |MSTR|MSTR.O|Microstrategy|2024 Q1|-5.470204650781282|1.15246E8|185| |MSTR|MSTR.O|Microstrategy|2024 Q2|-7.440199335548173|1.11442E8|185| |MSTR|MSTR.O|Microstrategy|2024 Q3|-10.343575721061006|1.16071E8|185| |code|Ticker|Name|Date|Net Profit Margin YoY|Net Profit Margin|market_code| |---|---|---|---|---|---|---| |MSTR|MSTR.O|Microstrategy|2023 Q4|129.37260332881894|86.4708|185| |MSTR|MSTR.O|Microstrategy|2024 Q1|-112.18401937558058|-46.091|185| |MSTR|MSTR.O|Microstrategy|2024 Q2|-134.42209884049356|-68.6746|185| |MSTR|MSTR.O|Microstrategy|2024 Q3|-258.18758180583546|-144.6646|185| |code|Ticker|Name|Date|Net Income YoY|Net Income|market_code| |---|---|---|---|---|---|---| |MSTR|MSTR.O|Microstrategy|2023 Q4|135.69766370674773|8.9126E7|185| |MSTR|MSTR.O|Microstrategy|2024 Q1|-111.51752086436697|-5.3118E7|185| |MSTR|MSTR.O|Microstrategy|2024 Q2|-561.0843860989975|-1.02559E8|185| |MSTR|MSTR.O|Microstrategy|2024 Q3|-137.15255749750767|-3.40174E8|185| |code|Ticker|Name|Date|Estimate EPS YoY|Estimate Revenue YoY|market_code| |---|---|---|---|---|---|---| |MSTR|MSTR.O|Microstrategy|20231231|523.0769230769231|1.1954618137516182|185| |MSTR|MSTR.O|Microstrategy|20240331|125.78125|2.2513440860215055|185| |MSTR|MSTR.O|Microstrategy|20240630|-254.92957746478874|-2.929532858273951|185| |MSTR|MSTR.O|Microstrategy|20240930|-116.21621621621621|-3.90093369203988|185|