MicroStrategy Inc, a leading institutional holder of Bitcoin, announced its return to profitability in the second quarter of the year. Despite this news, the company’s shares experienced a 2.0% decline after hours.

Continued Bitcoin Acquisition

In Q2, MicroStrategy added an additional 12,333 Bitcoin to its holdings, marking the highest quarterly acquisition in the past two years. Currently, the company holds a total of 152,800 BTC on its balance sheet, amounting to approximately $4.4 billion.

The company also reduced its impairment charge related to its crypto holdings in the second quarter to $24.1 million. This is a significant decrease from the nearly billion-dollar impairment charge in the previous year. Andrew Kang, MicroStrategy’s Chief Financial Officer, mentioned in the press release:

“We continued to increase bitcoins and did so against the promising backdrop of increasing institutional interest and ongoing regulatory clarity.”

The price of Bitcoin has seen an 80% increase this year.

Exceeding Q2 Earnings Estimates

MicroStrategy reported earnings of $22.2 million for the second quarter, equivalent to $2.35 per share (adjusted), with $120.4 million in revenue. While this represents a 1.0% decline year-over-year, it surpasses analysts’ expectations of $1.64 per share and $126 million in revenue. CEO Phong Le commented:

“Growth in our recurring revenue this quarter illustrated the strength of our enterprise cloud platform, despite ongoing macroeconomic headwinds.”

This news comes shortly after TD Cowen analyst Lance Vitanza named MicroStrategy the top choice for institutional investors seeking exposure to Bitcoin. Vitanza predicts a potential upside for the software stock, with a target price of $520, a 21% premium from its current price.

Summary

MicroStrategy, a prominent institutional holder of Bitcoin, announced its return to profitability for the second quarter of the year. The company continued to acquire Bitcoin, adding 12,333 BTC to its holdings in Q2, bringing its total to 152,800 BTC worth approximately $4.4 billion. MicroStrategy also reported earnings of $22.2 million, surpassing analysts’ estimates, and reducing its impairment charge related to its crypto holdings. The company’s shares experienced a slight decline after the announcement.

FAQs

What is MicroStrategy?

MicroStrategy is a business intelligence company known for its extensive holdings of Bitcoin.

How much Bitcoin does MicroStrategy currently hold?

MicroStrategy currently holds 152,800 BTC on its balance sheet.

How much revenue did MicroStrategy generate in Q2?

MicroStrategy generated $120.4 million in revenue for the second quarter of the year.

How did MicroStrategy perform compared to analysts’ expectations?

MicroStrategy surpassed analysts’ estimates, reporting earnings of $2.35 per share, compared to an expected $1.64 per share.