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MicroStrategy (MSTR) Q3 Earnings call transcript Oct 30, 2024

AInvestFriday, Nov 1, 2024 2:11 am ET
1min read

MicroStrategy, a leading business intelligence company, held its third-quarter earnings call for 2024, highlighting significant achievements and strategic plans for the future. The call, led by President and CEO Phong Le, provided insights into the company's focus on bitcoin and its software business.

Bitcoin Highlights and Strategic Capital Plan

MicroStrategy has solidified its position as the largest corporate holder of bitcoin, with 252,220 bitcoins and a total market value of $18 billion. The company's strategic acquisition of 25,889 bitcoins for $1.6 billion underscores its commitment to the digital asset. In the near term, MicroStrategy is planning to raise $42 billion of capital, comprised of $21 billion of equity and $21 billion of fixed income capital, primarily for the purpose of acquiring bitcoin. This ambitious plan, outlined in a prospectus supplement for a new $21 billion ATM program, is the largest ATM program filed in the history of capital markets.

Software Business Performance and Outlook

The software business segment also saw notable growth, with non-GAAP subscription billings increasing by 93% in Q3 to $32.4 million. The strong performance was driven by both existing customer migrations to the cloud and new customer wins. The company's objective remains to increase cloud revenue by migrating customers to the cloud while maintaining profitability.

Capital Markets Execution and Treasury Operations

MicroStrategy's capital markets execution was highlighted by the successful execution of two convertible note financings and the issuance of $1.1 billion worth of common equity under its ATM program. The company's strategy of utilizing intelligent leverage to increase its bitcoin holdings efficiently was a key factor in its capital market success.

Future Outlook and Strategic Vision

Looking ahead, MicroStrategy is positioned to leverage its bitcoin treasury strategy and software business to drive growth and value creation for its shareholders. The company's strategic capital plan, centered around bitcoin acquisition and innovative fixed income securities, is a testament to its confidence in the digital asset and its ability to execute on its vision.

In conclusion, MicroStrategy's Q3 earnings call highlighted the company's strategic focus on bitcoin and its software business, with a clear vision for future growth and value creation. The company's ambitious capital market plans, driven by its bitcoin treasury strategy, underscore its commitment to capitalizing on the potential of digital assets and its position as a leader in the digital economy.

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