STRF · MicroStrategy Incorporated

Strategy Inc's Q1 2026 results reflect heavy reliance on its Bitcoin treasury strategy amid volatile crypto markets. The massive $14.47 billion operating loss was almost entirely driven by a $14.46 billion unrealized loss on digital assets, up from $5.91 billion in Q1 2025, highlighting bitcoin price sensitivity on the income statement. Despite this, core software operations showed resilience with revenues up 11.9% year-over-year to $124.3 million and gross profit of $83.4 million at a 67.1% margin, slightly down from 69.4% prior year. Net loss widened to $12.54 billion or $38.25 per diluted share from $4.22 billion or $16.49 last year. Balance sheet remains liquid with $2.21 billion in cash as of March 31, 2026, down modestly from $2.30 billion at year-end. Bitcoin holdings expanded to 818,334 BTC by May 3 (cost basis $61.81B, market value $64.14B at ~$78,374/BTC), achieving 9.4% YTD BTC Yield and $4.97B BTC $ Gain, fueled by $11.68B raised YTD including $5.58B from STRC preferred stock. Management emphasized STRC's success with $8.5B outstanding, low 3% volatility, $375M daily volume, and 2.53 Sharpe ratio, positioning it as the largest preferred stock globally. Cumulative dividends reached $692.5M across 23 distributions, with expectations of return-of-capital tax treatment due to no anticipated E&P. Proposed semi-monthly STRC dividends aim to boost liquidity. Executives like Phong Le, Andrew Kang, and Michael Saylor underscored bitcoin adoption, Digital Credit dominance, and BTC accretion via BPS metrics. Investors should monitor bitcoin price fluctuations, capital raises, and dividend sustainability via the Strategy Dashboard at www.strategy.com.