Strategy Inc.
08/03/2026 | Press release | Distributed by Public on 08/03/2026 14:50
Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Information
This Quarterly Report on Form 10-Q (this "Quarterly Report") contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). For this purpose, any statements contained herein that are not statements of historical fact, including without limitation, certain statements regarding industry prospects and our results of operations or financial position, may be deemed to be forward-looking statements. Without limiting the foregoing, the words "believes," "anticipates," "plans," "expects," and similar expressions are intended to identify forward-looking statements. The important factors discussed under Part II, "Item 1A. Risk Factors" of this Quarterly Report, which are incorporated by reference herein, among others, could cause actual results to differ materially from those indicated by forward-looking statements made herein and presented elsewhere by management from time to time. Such forward-looking statements represent management's current expectations and are inherently uncertain. Investors are warned that actual results may differ from management's expectations.
Business Overview
Strategy is the world's first and largest Bitcoin Treasury Company. We pursue financial innovation strategies designed to generate value from our bitcoin holdings, including by developing and issuing novel fixed-income instruments that provide investors varying degrees of economic exposure to bitcoin. In addition, we are an industry leader in AI-powered enterprise analytics software, advancing our vision of Intelligence Everywhere™. We believe our combination of active bitcoin-focused capital management and a scaled operating software business positions us for long-term value creation across both digital asset and enterprise analytics markets.
Segment Reporting
Beginning with the second quarter of 2026, we have realigned our financial reporting to present our operations as two reportable segments: our Software segment and our Bitcoin segment. In prior periods, we reported a single reportable operating segment, our Software segment (previously referred to as the "Software Business"), and presented the bitcoin-related activities now comprising our Bitcoin segment within a non-operating "Corporate & Other" category. We made this change to provide users of our financial statements with greater visibility into the activities of our software business distinct from our bitcoin treasury operations. See Note 13, Segment Information, to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report for additional information regarding our reportable segments. The discussion that follows presents a consolidated overview of our results of operations, liquidity, and capital resources, followed by a separate discussion of the results of each of our reportable segments.
Bitcoin Strategy
We believe that bitcoin is a financial and technological innovation and represents a compelling long-term treasury reserve asset due to its scarcity, durability, and global liquidity. Through our bitcoin treasury operations, we execute on our bitcoin acquisition, capital markets and capital management strategies, which are designed to enable us to accumulate bitcoin in a manner we believe to be accretive to our shareholders in the long term and to generate value from our bitcoin holdings.
Under our Treasury Reserve Policy, our treasury reserve assets consist of:
•cash and cash equivalents and short-term investments ("Cash Assets") in excess of working capital requirements; and
•bitcoin, which serves as the primary treasury reserve asset on an ongoing basis, subject to market conditions and anticipated needs of the business for Cash Assets.
In addition to and in conjunction with our Treasury Reserve Policy, we pursue a corporate strategy of acquiring and holding bitcoin, including with the proceeds of capital raising transactions. Our capital markets strategy generally involves issuing preferred securities, which we collectively refer to as "digital credit," and class A common stock through at-the-market equity offering programs ("ATMs") when we deem advantageous.
As part of our capital management strategy, we maintain a U.S. dollar reserve (the "USD Reserve") intended to support the payment of dividends on our Preferred Stock and interest expense on our outstanding indebtedness. In June 2026, our board of directors approved a formal policy governing the USD Reserve and adopted a broader capital management framework, which we refer to as our "Digital Credit Capital Framework," consisting of a board-approved USD Reserve policy, a revised STRC dividend rate policy, a repurchase program for our Preferred Stock, a repurchase program for our class A common stock, and a BTC monetization program, as discussed in further detail under "Liquidity and Capital Resources-Digital Credit Capital Framework" below. Our capital management strategy also contemplates that we may (i) enter into additional capital raising transactions that are secured, directly or indirectly, by our assets, including bitcoin, (ii)
pursue strategies intended to generate income streams or otherwise generate funds using our bitcoin holdings, and (iii) periodically sell bitcoin for general corporate purposes, such as satisfying liquidity needs and financial obligations.
"Preferred Stock" refers to, collectively, our STRF Stock, STRC Stock, STRE Stock, STRK Stock and STRD Stock.
We view our bitcoin holdings as long-term holdings and plan to continue to accumulate bitcoin over the long term. We have not established a specific target amount of bitcoin to hold and actively evaluate market conditions, financing opportunities, liquidity needs, and capital structure considerations on an ongoing basis.
We are not registered as an investment company under the Investment Company Act of 1940, as amended, and stockholders do not have the protections associated with ownership of shares in a registered investment company, nor the protections afforded by the Commodity Exchange Act of 1936.
Our Enterprise Analytics Software Strategy
Strategy is a pioneer in AI-powered solutions delivering a comprehensive portfolio of software and services that addresses a wide spectrum of enterprise data challenges. We provide solutions designed to transform complex, fragmented data environments into unified, reliable ecosystems that drive insight and action across organizations worldwide. Our vision is to drive growth and competitive advantage for our customers by delivering Intelligence Everywhere™.
Our cloud-native analytics platform, is used by enterprises across a wide range of industries to deliver business intelligence and analytics solutions. It delivers visualization, reporting, and embedded analytics capabilities across retail, banking, technology, manufacturing, insurance, consulting, healthcare, telecommunications, and the public sector. Complementing this, Strategy Mosaic™ is a universal data layer that enables organizations to achieve a single source of truth across their data. It provides enterprises with consistent definitions and governance across data sources, regardless of where that data resides or which tools access it. AI-powered data modeling hastens data product creation, while Mosaic's intelligent architecture promotes accelerated performance for all workloads.
Integral to the Strategy portfolio are generative AI capabilities that are designed to automate and accelerate the deployment of AI-enabled applications across the enterprise. By making advanced analytics accessible through conversational AI, we provide non-technical users with timely, actionable insights for decision-making.
Bitcoin Activity and Holdings
Bitcoin Acquisition Activity
The following table presents a roll-forward of our bitcoin holdings, including additional information related to our bitcoin purchases, bitcoin sales, and unrealized gain or loss on digital assets within the respective periods:
|
Digital Asset Original Cost Basis (in thousands) |
Digital Asset Carrying Value (in thousands) |
Approximate Number of Bitcoins Held |
Approximate
Average
Purchase or Sale Price
Per Bitcoin
|
|||||||||||||||||||||||
| Balance at January 1, 2025 (after adoption of ASU 2023-08) | $ | 27,968,248 | $ | 41,790,421 | 447,470 | $ | 62,503 | |||||||||||||||||||
| Digital asset purchases | (a) | 7,661,663 | 7,661,663 | 80,715 | 94,922 | |||||||||||||||||||||
|
Unrealized loss on digital assets
|
- | (5,906,005) | - | - | ||||||||||||||||||||||
| Balance at March 31, 2025 | $ | 35,629,911 | $ | 43,546,079 | 528,185 | $ | 67,457 | |||||||||||||||||||
| Digital asset purchases | (b) | 6,769,205 | 6,769,205 | 69,140 | 97,906 | |||||||||||||||||||||
|
Unrealized gain on digital assets
|
- | 14,047,514 | - | - | ||||||||||||||||||||||
| Balance at June 30, 2025 | $ | 42,399,116 | $ | 64,362,798 | 597,325 | $ | 70,982 | |||||||||||||||||||
| Balance at January 1, 2026 | $ | 50,435,331 | $ | 58,854,028 | 672,500 | $ | 74,997 | |||||||||||||||||||
| Digital asset purchases |
(c)
|
7,251,126 | 7,251,126 | 89,599 | 80,929 | |||||||||||||||||||||
|
Unrealized loss on digital assets
|
- | (14,455,479) | - | - | ||||||||||||||||||||||
| Balance at March 31, 2026 | $ | 57,686,457 | $ | 51,649,675 | 762,099 | $ | 75,694 | |||||||||||||||||||
| Digital asset purchases |
(d)
|
6,420,975 | 6,420,975 | 85,296 | 75,279 | |||||||||||||||||||||
|
Digital asset sales
|
(e)
|
(168,126) | (83,205) | (1,395) | 59,663 | |||||||||||||||||||||
|
Unrealized loss on digital assets
|
- | (8,315,365) | - | - | ||||||||||||||||||||||
|
Balance at June 30, 2026
|
(f)
|
$ | 63,939,306 | $ | 49,672,080 | 846,000 | $ | 75,578 | ||||||||||||||||||
(a)In the first quarter of 2025, we purchased bitcoin using $4.37 billion of the net proceeds from ATM sales of class A common stock, $1.99 billion of the net proceeds from our issuance of the 2030B Convertible Notes, $593.7 million of the aggregate net proceeds from the initial public offering and ATM sales of STRK Stock, and $710.0 million of the net proceeds from the initial public offering of STRF Stock.
(b)In the second quarter of 2025, we purchased bitcoin using $5.19 billion of the net proceeds from ATM sales of class A common stock, $979.7 million of the net proceeds from our initial public offering of STRD Stock, $163.0 million of the net proceeds from ATM sales of STRF Stock, and $438.0 million of the net proceeds from ATM sales of STRK Stock.
(c)In the first quarter of 2026, we purchased bitcoin using $2.06 billion of the net proceeds from ATM sales of STRC Stock, $3.3 million of the net proceeds from ATM sales of STRK Stock and $5.19 billion of the net proceeds from ATM sales of class A common stock.
(d)In the second quarter of 2026, we purchased bitcoin using $5.46 billion of the net proceeds from ATM sales of STRC Stock, and $0.96 billion of the net proceeds from ATM sales of class A common stock.
(e)The proceeds from the sales were used to fund dividend payments on Preferred Stock.
(f)$75,578 presented in the Approximate Average Purchase or Sale Price Per Bitcoin column represents the average price we paid for the bitcoin we held as of June 30, 2026.
Our unrealized loss on digital assets for the three and six months ended June 30, 2026 amounted to $8.32 billion and $22.77 billion, respectively.
Bitcoin Holdings
The following table shows the approximate number of bitcoins held at the end of each respective period, as well as market value calculations of our bitcoin holdings based on the lowest, highest, and ending market prices (rounded to the nearest dollar) of one bitcoin on the Coinbase exchange (our principal market for bitcoin) for each respective quarter, as further defined below:
|
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) |
||||||||||||||||||||||||||||||||||||||
| March 31, 2025 | 528,185 | $ | 76,555 | $ | 40,435,222 | $ | 109,358 | $ | 57,761,287 | $ | 82,445 | $ | 43,546,079 | |||||||||||||||||||||||||||||||
| June 30, 2025 | 597,325 | $ | 74,421 | $ | 44,453,357 | $ | 112,000 | $ | 66,900,427 | $ | 107,752 | $ | 64,362,798 | |||||||||||||||||||||||||||||||
| December 31, 2025 | 672,500 | $ | 74,421 | $ | 50,047,916 | $ | 126,296 | $ | 84,934,064 | $ | 87,515 | $ | 58,854,028 | |||||||||||||||||||||||||||||||
| March 31, 2026 | 762,099 | $ | 60,001 | $ | 45,726,702 | $ | 97,964 | $ | 74,657,977 | $ | 67,773 | $ | 51,649,675 | |||||||||||||||||||||||||||||||
| June 30, 2026 | 846,000 | $ | 58,000 | $ | 49,068,002 | $ | 76,306 | $ | 64,554,692 | $ | 58,714 | $ | 49,672,080 | |||||||||||||||||||||||||||||||
(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 we purchased any of our 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 we held 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 we purchased any of our 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 we held 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 we held at the end of the applicable period.
The amounts reported as "Market Value" in the above table represent a mathematical calculation consisting of the price for one bitcoin reported on the Coinbase exchange (our principal market for bitcoin) in each scenario defined above multiplied by the number of bitcoins held by us at the end of the applicable period. Bitcoin and bitcoin markets may be subject to manipulation and the spot price of bitcoin may be subject to fraud and manipulation. Accordingly, the Market Value amounts reported above may not accurately represent fair market value at any given point, and the actual fair market value of our 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, compliance and internal control failures at exchanges, and various other risks that are, or may be, inherent in its entirely electronic, virtual form and decentralized network and (ii) we may not be able to sell our bitcoins at the Market Value amounts indicated above, at the market price as reported on the Coinbase exchange (our principal market for bitcoin) on the date of sale, or at all. The Market Value amount based on the market price of one bitcoin at the end of the applicable period is determined on the same basis as the fair value of our bitcoin recognized in our unaudited consolidated financial statements. See Note 3, Digital Assets, to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
As of July 24, 2026, we held approximately 843,775 bitcoins, which had an aggregate market value of $54.14 billion, based on the market price of $64,164 of one bitcoin as reported on the Coinbase exchange at 4:00 p.m. Eastern Time on July 24, 2026.
Overview of Custodial Arrangements
We hold substantially all of our bitcoin in custody accounts with U.S.-based custodians that have demonstrated records of regulatory compliance and information security. Our current custodians are Anchorage Digital Bank N.A. ("Anchorage"), Coinbase Custody Trust Company, LLC ("Coinbase"), and Fidelity Digital Assets, NA (f/k/a Fidelity Digital Asset Services, LLC) ("Fidelity"). The primary counterparty risk we are exposed to with respect to our bitcoin relates to these custodians' performance of their obligations under our custody arrangements.
We custody our bitcoin across multiple custodians to diversify our exposure to any single custodian. Our custodial services contracts do not restrict our ability to reallocate bitcoin among custodians, and our bitcoin holdings may be concentrated with a single custodian from time to time. Given the significant amount of bitcoin we hold, we continually evaluate and seek to engage additional digital asset custodians to further diversify custody risk. We may also, in the future, discontinue or change the use of one or more third-party custodians or utilize alternative custody arrangements, including self-custody. For a discussion of risks relating to the custody of our bitcoin, see Part II, Item 1A. Risk Factors "-Risks Related to Our Bitcoin Strategy and Holdings-Our bitcoin strategy exposes us to various risks, including risks associated with bitcoin", "-We face risks relating to the custody of our bitcoin, including the loss or destruction of private keys required to access our bitcoin and cyberattacks or other data loss relating to our bitcoin" and "-Our bitcoin strategy exposes us to risk of non-performance by counterparties."
As of July 24, 2026, our bitcoin is held with the following custodians:
| Custodian | Number of Bitcoin Custodied (1) | Bitcoin Custodied (%) | ||||||||||||
| Coinbase Custody Trust Company, LLC | 350,471 | 41.5 | % | |||||||||||
| Anchorage Digital Bank N.A. | 325,689 | 38.6 | % | |||||||||||
| Fidelity Digital Assets, NA (f/k/a Fidelity Digital Asset Services, LLC) | 167,615 | 19.9 | % | |||||||||||
| Total | 843,775 | 100.0 | % | |||||||||||
| (1) Amounts shown are rounded to the nearest bitcoin | ||||||||||||||
To our knowledge, none of our third-party custodians have appointed sub-custodians to hold any of our bitcoin, and none of our custodians are related parties of the Company.
Capital Markets Activity
Equity Offerings
Consistent with our Digital Credit Capital Framework, we use the vast majority of our cash, including cash generated from capital raising transactions, to acquire bitcoin, pay for dividends on our Preferred Stock and interest expense on our Convertible Notes and fund our USD Reserve. We fund our purchases of bitcoin primarily from proceeds of our offerings of our class A common stock and Preferred Stock instruments. We have also previously used proceeds from offerings of
convertible notes and senior secured notes, and a loan secured by bitcoin, to purchase bitcoin, and we may incur additional indebtedness in the future, including for the purpose of purchasing bitcoin.
The following table sets forth total shares sold and total net proceeds received from shares sold under our initial public and ATMs for the periods indicated. For the three and six months ended June 30, 2026, the amounts presented reflect only shares sold under our ATMs. For the three and six months ended June 30, 2025, the amounts include shares sold under both our initial public offerings and ATMs.
|
Three Months Ended June 30,
|
Six Months Ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Number of shares sold: | ||||||||||||||||||||||||||
| STRF Stock | - | 1,566,750 | - | 10,066,750 | ||||||||||||||||||||||
| STRC Stock | 54,648,192 | - | 75,307,642 | - | ||||||||||||||||||||||
| STRK Stock | - | 4,551,460 | 38,796 | 12,201,367 | ||||||||||||||||||||||
| STRD Stock | - | 11,764,700 | - | 11,764,700 | ||||||||||||||||||||||
| Class A common stock | 24,986,776 | 14,225,620 | 58,455,506 | 26,850,215 | ||||||||||||||||||||||
| Net proceeds received from shares sold (in thousands): (1) | ||||||||||||||||||||||||||
| STRF Stock | $ | - | $ | 163,168 | $ | - | $ | 874,041 | ||||||||||||||||||
| STRC Stock | 5,455,658 | - | 7,518,335 | - | ||||||||||||||||||||||
| STRK Stock | - | 446,770 | 2,968 | 1,040,394 | ||||||||||||||||||||||
| STRD Stock | - | 979,486 | - | 979,486 | ||||||||||||||||||||||
| Class A common stock | 2,943,342 | 5,248,692 | 8,235,553 | 9,647,897 | ||||||||||||||||||||||
| Total | $ | 8,399,000 | $ | 6,838,116 | $ | 15,756,856 | $ | 12,541,818 | ||||||||||||||||||
| Issuance cost adjustments related to STRF, STRK and STRD Stock ATMs (in thousands): | 259 | - | (45) | - | ||||||||||||||||||||||
(1)Includes shares sold and net proceeds received from shares sold under our initial public offerings of our Preferred Stock and ATMs of our class A common stock and certain series of our Preferred Stock for the periods indicated. See Note 10, Redeemable Preferred Stock, to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report for additional information on the initial public offerings of our Preferred Stock.
The following table sets forth total shares sold and total net proceeds (net of sales commissions and expenses) received from shares sold under our ATMs for the periods indicated:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||||||
| Number of shares sold pursuant to at-the-market offerings: | ||||||||||||||||||||||||||
| STRF Stock ATMs | - | 1,566,750 | - | 1,566,750 | ||||||||||||||||||||||
| STRC Stock ATMs | 54,648,192 | - | 75,307,642 | - | ||||||||||||||||||||||
| STRK Stock ATMs | - | 4,551,460 | 38,796 | 4,901,367 | ||||||||||||||||||||||
| STRD Stock ATMs | - | - | - | - | ||||||||||||||||||||||
| Class A common stock ATMs | 24,986,776 | 14,225,620 | 58,455,506 | 26,850,215 | ||||||||||||||||||||||
| Net proceeds received from shares sold pursuant to at-the-market offerings (in thousands): | ||||||||||||||||||||||||||
| STRF Stock ATMs | $ | - | $ | 163,034 | $ | - | $ | 163,034 | ||||||||||||||||||
| STRC Stock ATMs | 5,455,658 | - | 7,518,335 | - | ||||||||||||||||||||||
| STRK Stock ATMs | - | 446,792 | 2,968 | 477,190 | ||||||||||||||||||||||
| STRD Stock ATMs | - | - | - | - | ||||||||||||||||||||||
| Class A common stock ATMs | 2,943,342 | 5,248,692 | 8,235,553 | 9,647,897 | ||||||||||||||||||||||
| Total | $ | 8,399,000 | $ | 5,858,518 | $ | 15,756,856 | $ | 10,288,121 | ||||||||||||||||||
| Issuance cost adjustments related to STRF, STRK and STRD Stock ATMs (in thousands): | $ | 259 | $ | - | $ | (45) | $ | - | ||||||||||||||||||
As of June 30, 2026, we had the following capacities available for issuance and sale under our ATM:
| (in millions) | Available for Issuance and Sale (1) | |||||||
| STRF Stock | $ | 1,619.3 | ||||||
| STRC Stock | $ | 17,510.8 | ||||||
| STRK Stock | $ | 2,100.0 | ||||||
| STRD Stock | $ | 4,014.8 | ||||||
| Class A Common Stock | $ | 24,257.5 | ||||||
(1) On March 23, 2026, we announced a new $21.0 billion offering of MSTR Stock (the "MSTR Increase"). The MSTR Stock amount available for issuance reflects the aggregate remaining capacity of both the current offering as of June 30, 2026 and the MSTR Increase. Sales under the MSTR Increase may begin once capacity under the existing offering is substantially depleted.
From July 1, 2026 to July 24, 2026, we sold 13.0 million additional shares of class A common stock under our ATM for total net proceeds (net of sales commissions and expenses) of approximately $1.27 billion. These amounts include sales made during this period that were pending settlement as of July 24, 2026. From July 1, 2026 to July 24, 2026, we repurchased 288,930 shares of STRC Stock under our share repurchase program, for an aggregate purchase price of $25.0 million.
See Note 10, Redeemable Preferred Stock and Note 12, At-the-Market Offerings, to the Notes to Consolidated Financial Statements contained in Part I, Item 1 of this Quarterly Report, for additional information.
Debt Offerings and Repurchases
During the three and six months ended June 30, 2026, we did not complete any new debt offerings. During the first quarter of 2025, we received net proceeds of approximately $1.98 billion from the issuance of our 2030B Convertible Notes. We used the net proceeds from this offering for general corporate purposes, including the acquisition of bitcoin and for working capital. In addition, in June 2025, we entered into a loan agreement that provides for aggregate borrowings of up to $31.1 million, available in multiple tranches, and bearing interest, with respect to each tranche, at a variable rate equal to the one-year Secured Overnight Financing Rate plus 4.24%.
During the three months ended June 30, 2026, we repurchased $1.50 billion aggregate principal amount of our 0% Convertible Senior Notes due 2029 in privately negotiated transactions, for an aggregate cash repurchase price of $1.38 billion. The repurchased notes were canceled.
For additional information on our Convertible Notes, see Note 6, Long-term Debt, to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report.
Bitcoin KPIs
The Company seeks to acquire bitcoin in a manner it believes to be accretive to common stockholders. To assess achievement of this strategy, the Company monitors and reviews the following Key Performance Indicators ("KPIs"):
•Bitcoin Per Share (in Sats) ("BPS (in Sats)") represents the ratio between the Company's gross bitcoin holdings and its Assumed Diluted Shares Outstanding, expressed in terms of "Satoshis" or "Sats", where:
◦"Assumed Diluted Shares Outstanding" refers to the aggregate of the Company's Basic Shares Outstanding as of the dates presented plus all additional shares that would result from the assumed conversion of all outstanding convertible notes and convertible preferred stock, exercise of all outstanding stock option awards, and settlement of all outstanding restricted stock units and performance stock units as of such dates. Assumed Diluted Shares Outstanding is not calculated using the treasury method, incorporates approximate forfeitures of awards in the current period which may be subject to future adjustment and does not take into account any vesting conditions (in the case of equity awards), the exercise price of any stock option awards or any contractual conditions limiting convertibility of convertible debt instruments.
◦"Basic Shares Outstanding" reflects the actual class A common stock and class B common stock outstanding as of the dates presented. For purposes of this calculation, outstanding shares of such stock are deemed to include shares, if any, that (A) were sold under at-the-market equity offering programs, or (B) were issued pursuant to (i) options that had been exercised, (ii) restricted stock units that have vested or (iii) conversion requests received with respect to convertible securities, but which in each case were pending issuance as of the dates presented.
◦A "Satoshi" or a "Sat" is one one-hundred-millionth of one bitcoin, currently the smallest indivisible unit of a bitcoin.
•BTC Yield represents the percentage change in BPS (in Sats) from the beginning of a period to the end of a period.
•BTC Gain represents the gross number of bitcoins held by the Company at the beginning of a period multiplied by the BTC Yield for such period.
•BTC $ Gain represents the dollar value of the BTC Gain calculated by multiplying the BTC Gain by the market price of bitcoin as reported on the Coinbase exchange as of the applicable measurement time.
The Company uses BPS (in Sats), BTC Yield, BTC Gain and BTC $ Gain as KPIs to help assess the performance of its strategy of acquiring bitcoin in a manner it believes to be accretive to shareholders. The Company also believes these KPIs can supplement investors' understanding of how the Company chooses to fund bitcoin purchases and the value created in a period:
•BPS (in Sats) measures the ratio of the Company's gross bitcoin holdings to Assumed Diluted Shares Outstanding, which provides management and investors a baseline with which to assess the Company's achievement of its strategy of acquiring bitcoin in an accretive manner over a given period. When evaluating a capital raise transaction, the Company reviews this metric and considers the impact such transaction will have on this ratio on a pro forma basis. This metric forms the baseline for the Company's BTC Yield, BTC Gain and BTC $ Gain KPIs, which present changes in BPS (in Sats) from the beginning of a period to the end of the period in different formats.
•BTC Yield measures the percentage change in BPS (in Sats) from the beginning of a period to the end of a period, which helps management and investors assess how the Company's achievement of its strategy of acquiring bitcoin in an accretive manner varies across periods. The Company uses BTC Yield to evaluate whether its capital markets activity and bitcoin acquisition strategy has resulted in gross per-share accretion (or dilution) on an Assumed Diluted Shares Outstanding basis over an applicable period, and to compare the impact of its strategy across periods. While issuances of STRF Stock, STRC Stock, STRE Stock and STRD Stock do not increase our Assumed Diluted Shares Outstanding, these securities, as well as STRK Stock and our Outstanding Convertible Notes, rank senior to our class A common stock, and would entitle their holders to claims on our assets (including bitcoin) senior to those of holders of our common stock if we were to liquidate; as a result, additional bitcoin acquired using the proceeds from the sale of such instruments may not accrete to common shareholders.
•BTC Gain hypothetically expresses the percentage change reflected in the BTC Yield metric as if it reflected an increase in the amount of bitcoin held at the end of the applicable period as compared to the beginning of such period, which provides management and investors with visibility into the absolute change in the Company's bitcoin holdings resulting from the Company's BTC Yield. The Company uses BTC Gain to measure the accretive or dilutive impact of the change in BPS (in Sats) over an applicable period in absolute terms relative to the Company's bitcoin holdings. This metric can be particularly helpful when comparing the execution of the Company's capital markets strategy across periods, as BTC Yield may be lower when the Company's bitcoin asset base is larger, but result in the same BTC Gain. For example, a 10% BTC Yield with a starting amount of 100,000 bitcoin will result in 10,000 BTC Gain, which is the same BTC Gain that would result from 5% BTC Yield with a starting amount of 200,000 bitcoin.
•BTC $ Gain further expresses the percentage change reflected in the BTC Yield metric as an illustrative dollar value by multiplying that bitcoin-denominated change by the market price of bitcoin at the end of the applicable period as described above. The Company refers to this metric for illustrative purposes to consider the magnitude of the Company's BTC Gain for an applicable period with reference to the market price of bitcoin as of the end of an applicable period.
When the Company presents these KPIs for any period (a "measurement period") that is a subdivision of a longer specified period (the "reference period"), (i) BTC Yield is calculated as the BTC Yield for the period from the beginning of the reference period to the end of the measurement period, less the BTC Yield for the period from the beginning of the reference period to the beginning of the measurement period, (ii) BTC Gain is calculated using the BTC Yield for the measurement period and the Company's bitcoin holdings at the beginning of the reference period rather than at the beginning of the measurement period, and (iii) BTC $ Gain is calculated by multiplying such revised BTC Gain by the market price of bitcoin at the end of the measurement period. When the Company presents these metrics for an interim period within a fiscal year (e.g., a monthly, quarterly, or quarter-to-date period), then the reference period is that fiscal year, unless stated otherwise.
For example, if BPS (in Sats) is 100 at the beginning of a fiscal year (the reference period), 110 at the end of the first quarter and 125 at the end of the second quarter, the BTC Yield for the second quarter (the applicable measurement period) is calculated as (125/100 − 1) less (110/100 − 1), or 15%-reflecting the 15-point BPS (in Sats) increase from 110 to 125 expressed against the reference period starting BPS (in Sats) of 100. The sum of the first quarter BTC Yield (10%) and the second quarter BTC Yield (15%) equals the year-to-date BTC Yield of 25% (125/100 − 1). See "Important Information about KPIs" for additional information.
The following table presents our bitcoin holdings, our Assumed Diluted Shares Outstanding, our BPS (in Sats), and the price of bitcoin, each as of June 30, 2026 and 2025, as well as the changes in each between the periods shown:
|
As of June 30, 2026
|
Change |
As of March 31, 2026
|
As of June 30, 2025
|
Change |
As of March 31, 2025
|
|||||||||||||||||||||||||||||||||
| Number of Bitcoin Held | 846,000 | 83,901 | 762,099 | 597,325 | 69,140 | 528,185 | ||||||||||||||||||||||||||||||||
| Assumed Diluted Shares Outstanding (in thousands) | 401,283 | 22,449 | 378,834 | 314,216 | 14,564 | 299,652 | ||||||||||||||||||||||||||||||||
| BPS (in Sats) | 210,824 | 9,654 | 201,170 | 190,100 | 13,834 | 176,266 | ||||||||||||||||||||||||||||||||
| Bitcoin Price ($) | $ | 58,714 | $ | (9,059) | $ | 67,773 | $ | 107,752 | $ | 25,307 | $ | 82,445 | ||||||||||||||||||||||||||
|
As of June 30, 2026
|
Change |
As of December 31, 2025
|
As of June 30, 2025
|
Change | As of December 31, 2024 | |||||||||||||||||||||||||||||||||
| Number of Bitcoin Held | 846,000 | 173,500 | 672,500 | 597,325 | 149,855 | 447,470 | ||||||||||||||||||||||||||||||||
| Assumed Diluted Shares Outstanding (in thousands) | 401,283 | 56,386 | 344,897 | 314,216 | 32,481 | 281,735 | ||||||||||||||||||||||||||||||||
| BPS (in Sats) | 210,824 | 15,838 | 194,986 | 190,100 | 31,274 | 158,826 | ||||||||||||||||||||||||||||||||
| Bitcoin Price ($) | $ | 58,714 | $ | (28,801) | $ | 87,515 | $ | 107,752 | $ | 14,362 | $ | 93,390 | ||||||||||||||||||||||||||
The following tables present our BTC Yield, BTC Gain, and BTC $ Gain for the three and six months ended June 30, 2026 and 2025:
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Change | 2026 | 2025 | Change | ||||||||||||||||||||||||||||||||||||
| BTC Yield | 5.0 | % | 8.7 | % | (3.7) | % | (1) | 8.1 | % | 19.7 | % | (11.6) | % | (1) | |||||||||||||||||||||||||||
| BTC Gain | 37,733 | 46,008 | (18.0) | % | 54,625 | 88,109 | (38.0) | % | |||||||||||||||||||||||||||||||||
| BTC $ Gain (in millions, except percentages) | $ | 2,215 | $ | 4,957 | (55.3) | % | $ | 3,207 | $ | 9,494 | (66.2) | % | |||||||||||||||||||||||||||||
(1) Represents the absolute change between the periods presented.
•BTC Yield: We achieved BTC Yield of 5.0% and 8.1% for the three and six months ended June 30, 2026, respectively, as compared to 8.7% and 19.7% during the same periods in the prior year. These decreases were primarily due to (i) a substantially larger bitcoin balance as of March 31, 2026 and December 31, 2025 compared to the corresponding prior-year dates, which increased the numerator in the BPS (in Sats) calculation and made higher BTC Yield percentages more difficult to achieve, (ii) our class A common stock trading at a lower premium relative to the value of our underlying bitcoin holdings during the three and six months ended June 30, 2026 as compared to same periods from prior year, which reduced the BTC Yield attributable to class A common stock issuances used to purchase bitcoin, (iii) an increase in sales of our class A common stock for purposes other than purchasing bitcoin in the current periods, including for funding the USD Reserve and paying for dividends on our Preferred Stock and interest expense on our Convertible Notes, and (iv) sales of 1,395 bitcoins during the three months ended June 30, 2026. These factors were partially offset by increased sales of Preferred Stock during the three and sixth months ended June 30, 2026, which netted proceeds of $5.46 billion and $7.52 billion, respectively, which we used to purchase 72,408 and 100,438 bitcoins, respectively, during these periods, as compared to sales of Preferred Stock during the three and six months ended June 30, 2025, which netted proceeds of $1.61 billion and $2.95 billion, respectively, and corresponding purchases of 15,212 and 29,661 bitcoin, respectively.
◦Three months ended June 30:
▪Bitcoin Activity: During the three months ended June 30, 2026, we acquired 85,296 bitcoin and sold approximately 1,395 bitcoin, increasing our holdings on a net basis to approximately 846,000 bitcoin, as compared to 69,140 bitcoin acquired and none sold during the three months ended June 30, 2025. These purchases during the three months ended June 30, 2026 were
funded primarily with net proceeds from issuances of STRC Stock and class A common stock. The purchases during the three months ended June 30, 2025 were funded primarily with net proceeds from issuances of class A common stock, STRK Stock and STRF Stock.
▪Assumed Diluted Shares Outstanding: During the three months ended June 30, 2026, we issued approximately 24.7 million shares of class A common stock under our ATM for aggregate net proceeds of approximately $2.94 billion, and our repurchase of $1.50 billion aggregate principal amount of our 2029 Convertible Notes led to a decrease in the number of Assumed Diluted Shares Outstanding by approximately 2.2 million, which, collectively, increased our Assumed Diluted Shares Outstanding by approximately 22.4 million shares, to approximately 401.3 million as of June 30, 2026. Issuances of STRC Stock during this period did not increase our Assumed Diluted Shares Outstanding because shares of STRC Stock are not convertible into shares of class A common Stock. Of those net proceeds from the sale of our class A common stock, approximately $1.65 billion was used to fund the USD Reserve, approximately $317.0 million was used to pay dividends on our Preferred Stock, and approximately $9.0 million was used to pay interest on our Convertible Notes, with the remaining net proceeds used primarily to acquire bitcoin. Because a portion of the proceeds from sales of class A common stock under our ATM was used to pay dividends and interest rather than acquire bitcoin, those sales increased Assumed Diluted Shares Outstanding (the denominator of BPS (in Sats)) without a corresponding increase in our bitcoin holdings. As a result, the issuances reduced, or offset increases in, BTC Yield for the period. By comparison, during the three months ended June 30, 2025, we issued approximately 14.2 million shares of class A common stock and 4.6 million shares of STRK Stock (which is convertible to common stock on a 1 for 10 basis) under our ATM for aggregate net proceeds of approximately $5.7 billion, increasing our Assumed Diluted Shares Outstanding by approximately 14.6 million shares, to approximately 314.2 million as of June 30, 2025. Of the net proceeds from those class A common stock issuances and STRK issuances, approximately $49.1 million was used to pay dividends on our Preferred Stock and $9.0 million was used to pay interest on our Convertible Notes, with the remaining net proceeds used primarily to acquire bitcoin.
◦Six months ended June 30:
▪Bitcoin Activity: During the six months ended June 30, 2026, we acquired 174,895 bitcoin and sold approximately 1,395 bitcoin, increasing our holdings on a net basis to approximately 846,000 bitcoin, as compared to 149,855 bitcoin acquired and none sold during the six months ended June 30, 2025. These purchases during the six months ended June 30, 2026 were funded primarily with net proceeds from issuances of STRC Stock and class A common stock and STRK Stock. The purchases during the six months ended June 30, 2025 were funded primarily with net proceeds from issuances of class A common stock, STRK Stock and STRF Stock.
▪Assumed Diluted Shares Outstanding: During the six months ended June 30, 2026, we issued approximately 58.5 million shares of class A common stock under our ATM for aggregate net proceeds of approximately $8.24 billion, and our repurchase of $1.50 billion aggregate principal amount of our 2029 Convertible Notes led to a decrease in the number of Assumed Diluted Shares Outstanding by approximately 2.2 million, which, collectively, increased our Assumed Diluted Shares Outstanding by approximately 56.4 million shares, to approximately 401.3 million as of June 30, 2026. Issuances of STRC Stock during this period did not increase our Assumed Diluted Shares Outstanding because shares of STRC Stock are not convertible into shares of class A common Stock. Of those net proceeds from the sale of our class A common stock, approximately $1.52 billion was used to fund the USD Reserve, approximately $546.0 million was used to pay dividends on our Preferred Stock, and approximately $17.3 million was used to pay interest on our Convertible Notes, with the remaining net proceeds used primarily to acquire bitcoin. Because a portion of the proceeds from sales of class A common stock under our ATM was used to pay dividends and interest rather than acquire bitcoin, those sales increased Assumed Diluted Shares Outstanding (the denominator of BPS (in Sats)) without a corresponding increase in our bitcoin holdings. As a result, the issuances reduced, or offset increases in, BTC Yield for the period. By comparison, during the six months ended June 30, 2025, we issued approximately 26.9 million shares of class A common stock and 12.2 million shares of STRK Stock (which is convertible to common stock on a 1 for 10 basis) under our ATM for aggregate net proceeds of approximately $10.69 billion, and issued the 2030B
Convertible Notes for aggregate net proceeds of approximately $1.98 billion, collectively increasing our Assumed Diluted Shares Outstanding by approximately 32.5 million shares, to approximately 314.2 million as of June 30, 2025. Of the net proceeds from those class A common stock issuances and STRK issuances, approximately $58.1 million was used to pay dividends on our Preferred Stock and $17.2 million was used to pay interest on our Convertible Notes, with the remaining net proceeds used primarily to acquire bitcoin.
•BTC Gain: We achieved BTC Gain of 37,733 and 54,625 for the three and six months ended June 30, 2026, respectively, as compared to 46,008 and 88,109 during the same periods in the prior year, as applicable, primarily due to a decrease in our BTC Yield for the three and six months ended June 30, 2026, as compared to the same periods in the prior year, as set forth above, partially offset by an increase in our bitcoin holdings as of the beginning of 2026 compared to the beginning of 2025 (as of December 31, 2025 and 2024, we held 672,500 and 447,470 bitcoin, respectively).
•BTC $ Gain: We achieved BTC $ Gain of approximately $2.22 billion and $3.21 billion for the three and six months ended June 30, 2026, respectively, as compared to approximately $4.96 billion and $9.49 billion during the same periods in the prior year, primarily due to a decrease in bitcoin price to $58,714 as of June 30, 2026 from $107,752 as of June 30, 2025, as well as a decrease in BTC Gain compared to the same periods in the prior year, as set forth above.
See "Important Information about KPIs" below for additional information about these KPIs, including their purposes and limitations and for the calculation of Assumed Diluted Shares Outstanding.
Factors Impacting Results
We believe the following key factors have previously had, and may continue to have, material impacts to our financial results and liquidity, and our ability to achieve our business objectives:
•Bitcoin:
◦Financial results. Bitcoin is a highly volatile asset that has traded below $60,000 per bitcoin and above $120,000 per bitcoin on the Coinbase exchange (our principal market for bitcoin) in the 12 months preceding June 30, 2026. Although we continue to initially record our bitcoin purchases at cost, upon adoption of ASU 2023-08 on January 1, 2025, any subsequent increases or decreases in fair market value are recognized as incurred in the Consolidated Statements of Operations, and the fair value of our bitcoin is reflected within the Consolidated Balance Sheets each reporting period-end. Due to the volatility of bitcoin, and our substantial holdings of bitcoin, changes in the fair market value of bitcoin have materially impacted, and we expect will continue to materially impact, our results.
◦Bitcoin risks. Bitcoin is a digital asset, which is a novel asset class that is subject to significant legal, commercial, regulatory and technical uncertainty.
▪No cash flows: Holding bitcoin does not generate any cash flows and involves custodial fees and other costs.
▪Volatility: The price of bitcoin has historically experienced significant price volatility, and a significant decrease in the price of bitcoin would adversely affect our financial condition and results of operations.
▪Counterparty, cybersecurity and custody risks: Our strategy of acquiring and holding bitcoin exposes us to counterparty risks with respect to the custody of our bitcoin, cybersecurity risks, and other risks inherent to holding a digital asset. In particular, we are subject to the risk that, if our private keys with respect to our digital assets are lost or destroyed or other similar circumstances or events occur, we may lose some or all of our digital assets, which could materially adversely affect our financial condition and results of operations.
▪Legal and regulatory uncertainty: Due to the continuing evolution of the legal and regulatory framework governing bitcoin and those who own, hold, or transact in bitcoin, we face the risk that legislative and regulatory bodies in the U.S. and other jurisdictions may adopt new legislation, regulations, or guidance affecting bitcoin, digital assets, and market participants. Any such developments could have a material impact on bitcoin (including its price, liquidity, and utility), the digital asset markets generally, and us.
•Capital management:
◦Source of capital. We rely substantially on the availability of equity and debt capital markets to fund our preferred stock dividend payments, interest expense, and other financial obligations as well as to maintain the USD Reserve at current levels. We may also sell bitcoin pursuant to our board-authorized bitcoin monetization program to satisfy these obligations. As such, we are subject to risks relating to the availability of capital to us on favorable terms or at all, as well as our ability to sell bitcoin at attractive prices.
◦Preferred stock dividend payments. Our outstanding Preferred Stock creates recurring and potentially variable cash obligations that can reduce funds available for operations, product investment, and debt service. In addition, any deferred dividends on certain of our Preferred Stock would accrue and compound, including at increasing rates in the case of STRF Stock, which could increase future cash outlays, while STRC Stock's board-set variable rate can change monthly, introducing additional uncertainty to our expected dividend payments.
◦Interest on our USD Reserve. Cash equivalents held in our USD Reserve are generally invested in money market funds and other interest-bearing instruments. Interest income is affected by prevailing market interest rates and may decline in a falling-rate environment or increase in a rising-rate environment. Interest income is also affected by the size of our USD Reserve: to the extent we reduce the USD Reserve or increase it to scale with our interest and dividend obligations, the amount of interest income we earn would generally proportionately decrease or increase, respectively. Variations in interest rates and the size of our USD Reserve could materially impact our financial results.
•Tax:
◦Deferred taxes. Since adopting ASU 2023-08, we are no longer required to account for our bitcoin under a cost-less-impairment accounting model and no longer record deferred tax assets related to bitcoin impairment losses. Instead, we establish a deferred tax liability if the fair market value of bitcoin at the reporting date exceeds the average cost basis of our bitcoin holdings at such reporting date, and subsequent increases or decreases in the fair market value of bitcoin increase or decrease the deferred tax liability. If the fair market value of our bitcoin as of the end of any reporting period is below its average cost basis as of the end of the prior period, the deferred tax liability with respect to unrealized gains, if any, would be reversed, a deferred tax asset for the unrealized loss would be recorded, and we would be required to establish a valuation allowance against our U.S. federal and state deferred tax assets. As of June 30, 2026, the market value of bitcoin had declined to the point where the cost basis of our bitcoin holdings exceeded their fair market value. During the six months ended June 30, 2026, the deferred tax liability recognized as of December 31, 2025 was reversed, a deferred tax asset related to unrealized losses on bitcoin holdings was recorded, and a full valuation allowance on all of our domestic net deferred tax assets was established. As of June 30, 2026, the market value of bitcoin has remained below our cost basis, and we remain in a net deferred tax asset position; however, due to the full valuation allowance on all our domestic net deferred tax assets, no net deferred tax benefit is reflected in our financial statements. See Note 8, Income Taxes, to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report for additional information.
◦Legal and regulatory developments.
▪CAMT: On September 30, 2025, the Department of Treasury (the "Treasury") and the Internal Revenue Service (the "IRS") issued interim guidance ("Interim Guidance") which, in relevant part, clarifies that a corporation may disregard unrealized gains and losses on its digital asset holdings when computing average annual adjusted financial statement income ("AFSI") for purposes of determining whether it is subject to the 15% corporate alternative minimum tax ("CAMT") under the Inflation Reduction Act of 2022 (the "IRA"). The Treasury and IRS intend to issue revised proposed regulations similar to this Interim Guidance. As previously disclosed, pursuant to the Interim Guidance, we plan to exclude our unrealized gains and losses on our bitcoin holdings from the calculation of our AFSI for purposes of determining whether we are subject to CAMT. As a result, we do not expect to become subject to CAMT due to unrealized gains on our bitcoin holdings, if any.
▪OBBBA: On July 4, 2025, the One Big Beautiful Bill Act was enacted in the U.S., introducing several changes to corporate taxation. These changes include modifications to capitalization of research and development expenses, limitations on deductions for interest expense, accelerated fixed
asset depreciation, and adjustments to the international tax framework. The legislation did not have a material impact to our income tax expense or effective tax rate for the three or six months ended June 30, 2026.
•Software:
◦On-premise to cloud subscription. During the three and six months ended June 30, 2026, we continued to migrate existing customers from on-premise perpetual licenses to cloud-based subscription offerings. This transition has resulted, and is expected to continue to result, in changes to payment patterns and revenue recognition, with a shift from upfront recognition to ratable recognition over the contract term, which has affected and may continue to affect our reported revenue, operating results, and cash flows. For the three and six months ended June 30, 2026, we experienced growth in cloud subscription services revenue of $22.0 million and $43.8 million, respectively, partially offset by declines in product license revenue and related product support revenue of $15.3 million and $25.5 million in the aggregate, respectively. We expect product license revenue and related product support revenue to continue to decline in future periods, as we no longer actively market new perpetual licenses or associated product support offerings.
◦Deferred revenue and advance payments. Deferred revenue and advance payments represent amounts received or due from our customers before we transfer our software or services to the customer. For multi-year service contract arrangements, we generally invoice no more than one year in advance of services and record deferred revenue only for invoiced amounts. Revenue is subsequently recognized in the period(s) in which control of the software or services is transferred to the customer. The portions of multi-year contracts that will be invoiced in the future are not presented on the Consolidated Balance Sheets in "Accounts receivable, net" and "Deferred revenue and advance payments" and instead are included in the remaining performance obligation disclosure below.
See Part II, Item 1A of this Quarterly Report for information regarding risks relating to our bitcoin holdings and strategy, bitcoin generally, our securities and capital markets activities, our software business and operations, and other important risk factors, the materialization of any of which could materially impact our results and liquidity.
Results of Operations
We began presenting Software and Bitcoin as two reportable operating segments in the second quarter of 2026 and the discussion below addresses both our consolidated results and, where useful to explain material drivers, segment-level results. See Note 13, Segment Information, to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report.
Consolidated Overview
The following table sets forth our revenue and net income (loss) by reportable segment for the periods indicated:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | Change | 2026 | 2025 | Change | |||||||||||||||||||||||||||||
| Revenue | |||||||||||||||||||||||||||||||||||
| Software | $ | 122,368 | $ | 114,488 | $ | 7,880 | $ | 246,668 | $ | 225,554 | $ | 21,114 | |||||||||||||||||||||||
| Bitcoin | - | - | - | - | - | - | |||||||||||||||||||||||||||||
| Total revenues | $ | 122,368 | $ | 114,488 | $ | 7,880 | $ | 246,668 | $ | 225,554 | $ | 21,114 | |||||||||||||||||||||||
| Net (loss) income | |||||||||||||||||||||||||||||||||||
| Software | $ | 3,709 | $ | 30,439 | $ | (26,730) | $ | (485,714) | $ | 48,567 | $ | (534,281) | |||||||||||||||||||||||
| Bitcoin | (8,223,337) | 9,990,407 | (18,213,744) | (20,276,584) | 5,754,909 | (26,031,493) | |||||||||||||||||||||||||||||
| Total net (loss) income | $ | (8,219,628) | $ | 10,020,846 | $ | (18,240,474) | $ | (20,762,298) | $ | 5,803,476 | $ | (26,565,774) | |||||||||||||||||||||||
Total revenues were $122.4 million and $246.7 million for the three and six months ended June 30, 2026, respectively, compared to $114.5 million and $225.6 million for the same periods in the prior year. All of our revenues in each period presented were generated by our Software segment. For a discussion of the drivers of the changes in our revenues, see "Software Segment" below.
We recognized a net loss of $8.22 billion and $20.76 billion for the three and six months ended June 30, 2026, respectively, compared to net income of $10.02 billion and $5.80 billion for the same periods in the prior year. The unfavorable change
was primarily attributable to unrealized losses on digital assets resulting from the volatility and decline in the market price of bitcoin during the 2026 periods, compared to unrealized gains on digital assets recognized during the comparable periods in the prior year.
Bitcoin Segment
The following table sets forth the results of operations of our Bitcoin segment for the periods indicated:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | Change | 2026 | 2025 | Change | |||||||||||||||||||||||||||||
| Total revenues | $ | - | $ | - | $ | - | $ | - | $ | - | $ | - | |||||||||||||||||||||||
| Significant expenses | |||||||||||||||||||||||||||||||||||
| Controllable | |||||||||||||||||||||||||||||||||||
| Sales and marketing | (136) | (1,696) | 1,560 | (962) | (1,696) | 734 | |||||||||||||||||||||||||||||
| General and administrative | (11,641) | (4,424) | (7,217) | (20,509) | (12,128) | (8,381) | |||||||||||||||||||||||||||||
| Total controllable expenses | (11,777) | (6,120) | (5,657) | (21,471) | (13,824) | (7,647) | |||||||||||||||||||||||||||||
| Non-Controllable | |||||||||||||||||||||||||||||||||||
| Unrealized (loss) gain on digital assets | (8,315,365) | 14,047,514 | (22,362,879) | (22,770,844) | 8,141,509 | (30,912,353) | |||||||||||||||||||||||||||||
| Digital asset custody fees | (4,242) | (4,881) | 639 | (8,149) | (9,003) | 854 | |||||||||||||||||||||||||||||
| Share-based compensation expense | (4,668) | (3,199) | (1,469) | (8,559) | (6,356) | (2,203) | |||||||||||||||||||||||||||||
| Payroll taxes on equity award exercises and vestings | (298) | (65) | (233) | (500) | (96) | (404) | |||||||||||||||||||||||||||||
| Total non-controllable expenses | (8,324,573) | 14,039,369 | (22,363,942) | (22,788,052) | 8,126,054 | (30,914,106) | |||||||||||||||||||||||||||||
| Total significant expenses | (8,336,350) | 14,033,249 | (22,369,599) | (22,809,523) | 8,112,230 | (30,921,753) | |||||||||||||||||||||||||||||
| Other segment items | 428 | - | 428 | 982 | - | 982 | |||||||||||||||||||||||||||||
| Interest income (expense), net | (1,331) | (17,973) | 16,642 | 401 | (35,177) | 35,578 | |||||||||||||||||||||||||||||
| Gain on debt extinguishment | 113,916 | - | 113,916 | 113,916 | - | 113,916 | |||||||||||||||||||||||||||||
| Income tax benefit (expense) | - | (4,024,869) | 4,024,869 | 2,417,640 | (2,322,144) | 4,739,784 | |||||||||||||||||||||||||||||
| Net (loss) income | $ | (8,223,337) | $ | 9,990,407 | $ | (18,213,744) | $ | (20,276,584) | $ | 5,754,909 | $ | (26,031,493) | |||||||||||||||||||||||
Our Bitcoin segment had net loss of $8.22 billion and $20.28 billion for the three and six months ended June 30, 2026, respectively. Segment net loss increased by $18.21 billion and $26.03 billion for the three and six months ended June 30, 2026, respectively, as compared to the same periods in the prior year, primarily due to unrealized losses on digital assets resulting from the volatility and decrease in the market price of bitcoin during the period, as compared to unrealized gains on digital assets recognized in the prior year.
We recognized an unrealized loss on digital assets of approximately $8.32 billion and $22.77 billion for the three and six months ended June 30, 2026, respectively. We recognized an unrealized gain on digital assets of approximately $14.05 billion and $8.14 billion for the three and six months ended June 30, 2025, respectively. Due to the volatility of bitcoin, and
our substantial holdings of bitcoin, we expect changes in the fair market value of bitcoin to materially impact our results in future periods.
Software Segment
The following table sets forth the results of operations of our Software segment for the periods indicated:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | Change | 2026 | 2025 | Change | |||||||||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||||||||||||||
| Product licenses | $ | 3,667 | $ | 7,177 | $ | (3,510) | $ | 9,168 | $ | 14,447 | $ | (5,279) | |||||||||||||||||||||||
| Subscription services | 62,858 | 40,824 | 22,034 | 121,737 | 77,927 | 43,810 | |||||||||||||||||||||||||||||
| Product support | 40,245 | 52,081 | (11,836) | 84,435 | 104,610 | (20,175) | |||||||||||||||||||||||||||||
| Other services | 15,598 | 14,406 | 1,192 | 31,328 | 28,570 | 2,758 | |||||||||||||||||||||||||||||
| Total revenues | 122,368 | 114,488 | 7,880 | 246,668 | 225,554 | 21,114 | |||||||||||||||||||||||||||||
| Significant expenses | |||||||||||||||||||||||||||||||||||
| Controllable | |||||||||||||||||||||||||||||||||||
| Sales and marketing | (29,265) | (26,236) | (3,029) | (60,563) | (49,884) | (10,679) | |||||||||||||||||||||||||||||
| Maintenance | (5,429) | (6,970) | 1,541 | (11,570) | (13,734) | 2,164 | |||||||||||||||||||||||||||||
| Consulting | (11,876) | (12,096) | 220 | (23,158) | (23,710) | 552 | |||||||||||||||||||||||||||||
| Cloud | (23,071) | (16,043) | (7,028) | (45,622) | (30,601) | (15,021) | |||||||||||||||||||||||||||||
| Technology | (21,245) | (21,597) | 352 | (44,304) | (46,299) | 1,995 | |||||||||||||||||||||||||||||
| General and administrative | (14,185) | (16,406) | 2,221 | (29,998) | (35,072) | 5,074 | |||||||||||||||||||||||||||||
| Total controllable expenses | (105,071) | (99,348) | (5,723) | (215,215) | (199,300) | (15,915) | |||||||||||||||||||||||||||||
| Non-Controllable | |||||||||||||||||||||||||||||||||||
| Share-based compensation expense | (9,600) | (12,543) | 2,943 | (18,882) | (21,205) | 2,323 | |||||||||||||||||||||||||||||
| Payroll taxes on equity award exercises and vestings | (1,097) | (2,620) | 1,523 | (1,557) | (4,661) | 3,104 | |||||||||||||||||||||||||||||
| Total non-controllable expenses | (10,697) | (15,163) | 4,466 | (20,439) | (25,866) | 5,427 | |||||||||||||||||||||||||||||
| Total significant expenses | (115,768) | (114,511) | (1,257) | (235,654) | (225,166) | (10,488) | |||||||||||||||||||||||||||||
| Other segment items | (1,414) | (9,507) | 8,093 | (512) | (14,247) | 13,735 | |||||||||||||||||||||||||||||
| Interest income (expense), net | 81 | 76 | 5 | 173 | 174 | (1) | |||||||||||||||||||||||||||||
| Income tax benefit (expense) | (1,558) | 39,893 | (41,451) | (496,389) | 62,252 | (558,641) | |||||||||||||||||||||||||||||
| Net income (loss) | $ | 3,709 | $ | 30,439 | $ | (26,730) | $ | (485,714) | $ | 48,567 | $ | (534,281) | |||||||||||||||||||||||
Our Software segment had net income of $3.7 million and net loss of $485.7 million for the three and six months ended June 30, 2026 respectively, representing a decrease of $26.7 million and $534.3 million as compared to the same periods in the prior year. The following discussion presents the components of our Software segment results of operations.
Revenues
Total Software segment revenues were $122.4 million and $246.7 million for the three and six months ended June 30, 2026, respectively, an increase of $7.9 million and $21.1 million as compared to the same periods in the prior year. The increases were primarily driven by growth in subscription services revenues, partially offset by declines in product support revenues, in each case reflecting the continued migration of our on-premises customers to our Cloud subscription services offerings. Changes in product licenses revenues and other services revenues were not significant in either period. See the following discussion of the drivers of the changes in subscription services and product support revenues.
•Subscription services revenues. Subscription services revenues are derived from our Cloud subscription service and are recognized ratably over the service period in the contract. Subscription services revenues increased by $22.0 million and $43.8 million for the three and six months ended June 30, 2026, respectively, as compared to the same periods in the prior year, primarily due to conversions to cloud-based subscriptions from existing on-premises customers, a net increase in the use of subscription services by existing customers, and sales contracts with new customers.
•Product support revenues. Product support revenues are derived from providing technical software support and software updates and upgrades to customers. Product support revenues are recognized ratably over the term of the contract, which is generally one year. Product support revenues decreased by $11.8 million and $20.2 million for the three and six months ended June 30, 2026, respectively, as compared to the same periods
in the prior year, primarily due to existing customers converting from on-premises product licenses with support contracts to our Cloud subscription services offerings and non-renewals of existing support contracts.
Expenses
Total significant expenses were $115.8 million and $235.7 million for the three and six months ended June 30, 2026, respectively, an increase of $1.3 million and $10.5 million as compared to the same periods in the prior year. Controllable expenses increased by $5.7 million and $15.9 million, primarily driven by higher sales and marketing, and cloud and maintenance expenses, while non-controllable expenses decreased by $4.5 million and $5.4 million. See the following discussion of the drivers of the changes in sales and marketing and cloud and maintenance expenses.
•Sales and marketing expenses. Sales and marketing expenses consist of personnel costs, commissions, and costs related to office facilities, travel, advertising, public relations programs, and promotional events, such as trade shows, seminars, and technical conferences. Sales and marketing expenses increased by $3.0 million and $10.7 million for the three and six months ended June 30, 2026, respectively, as compared to the same periods in the prior year, primarily reflecting higher commission expense in connection with increased sales activity, as well as higher personnel and recruiting costs and higher spending on promotional events.
•Cloud and Maintenance expenses. Cloud and Maintenance expenses consist primarily of personnel and related overhead costs associated with providing product support and cloud subscription services, as well as cloud hosting infrastructure costs. Cloud and Maintenance expenses increased by $5.5 million and $12.9 million for the three and six months ended June 30, 2026, respectively, primarily driven by increased cloud infrastructure costs.
Deferred Revenue and Advance Payments
Deferred revenue and advance payments represent amounts received or due from our customers in advance of our transferring our software or services to the customer. In the case of multi-year service contract arrangements, we generally do not invoice more than one year in advance of services and do not record deferred revenue for amounts that have not been invoiced. Revenue is subsequently recognized in the period(s) in which control of the software or services is transferred to the customer.
Total deferred revenue and advance payments. Total deferred revenue and advance payments decreased by $51.5 million as of June 30, 2026, compared to December 31, 2025, primarily due to a decrease in deferred subscriptions services revenue and product support revenue due to the timing of renewals and increased conversions from on-premises to subscription services contracts. Total deferred revenue and advance payments increased $7.7 million as of June 30, 2026 compared to June 30, 2025, primarily due to (i) an increase in deferred revenue from new subscription services contracts, partially offset by (ii) a decrease in deferred product support revenue from existing customers migrating from on-premises to subscription services contracts.
Current deferred revenue and advance payments decreased by $49.2 million and increased by $8.6 million as of June 30, 2026, compared to December 31, 2025, and June 30, 2025, respectively. Non-current deferred revenue and advance payments decreased by $2.2 million and decreased by $0.9 million as of June 30, 2026, compared to December 31, 2025 and June 30, 2025, respectively.
Remaining performance obligation. Our remaining performance obligation represents contracted future revenue, including deferred revenue, advance payments, and non-cancellable billable amounts that will be invoiced and recognized in future periods. As of June 30, 2026, our remaining performance obligation was $546.9 million of which approximately $320.1 million is expected to be recognized as revenue over the next 12 months. The timing of revenue recognition may vary depending on our satisfaction of related performance obligations, and the amount of deferred revenue, advance payments, and remaining performance obligations at any date may not be indicative of future revenues.
Consolidated Items
The following items are discussed on a consolidated basis.
Interest Income (Expense) Impacts
Interest income (expense), net, primarily relates to the contractual interest expense and amortization of issuance costs related to our long-term debt arrangements, as offset by interest income earned on interest-bearing cash equivalents and short-term investments. The following table sets forth interest expense, net for the periods indicated:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| (in thousands) | 2026 | 2025 | 2026 | 2025 | |||||||||||||||||||
| Interest (income) expense, net: | |||||||||||||||||||||||
| 2027 Convertible Notes | $ | - | $ | - | $ | - | $ | 401 | |||||||||||||||
| 2028 Convertible Notes | 2,636 | 2,625 | 5,269 | 5,247 | |||||||||||||||||||
| 2029 Convertible Notes | 1,409 | 1,819 | 3,231 | 3,637 | |||||||||||||||||||
| 2030A Convertible Notes | 2,245 | 2,233 | 4,486 | 4,463 | |||||||||||||||||||
| 2030B Convertible Notes | 1,253 | 1,249 | 2,504 | 1,762 | |||||||||||||||||||
| 2031 Convertible Notes | 1,941 | 1,934 | 3,881 | 3,866 | |||||||||||||||||||
| 2032 Convertible Notes | 5,190 | 5,171 | 10,375 | 10,339 | |||||||||||||||||||
| Other interest (income) expense, net | (13,424) | 2,866 | (30,320) | 5,288 | |||||||||||||||||||
| Total interest (income) expense, net | $ | 1,250 | $ | 17,897 | $ | (574) | $ | 35,003 | |||||||||||||||
Other Income (Expense), Net
For the three and six months ended June 30, 2026, other income, net, of $0.2 million and $3.3 million was comprised primarily of foreign currency transaction net gains. For the three and six months ended June 30, 2025, other expense net, of $8.3 million and $12.2 million was comprised primarily of foreign currency transaction net losses.
Income Taxes
We recorded a benefit from income taxes of $1.92 billion on a pretax loss of $22.68 billion that resulted in an effective tax rate of 8.5% for the six months ended June 30, 2026, as compared to a provision for income taxes of $2.26 billion on a pretax income of $8.06 billion that resulted in an effective tax rate of 28.0% for the six months ended June 30, 2025. During the six months ended June 30, 2026, our benefit from income taxes primarily related to (i) the tax effect of the unrealized loss on digital assets as offset by (ii) the establishment of a full valuation allowance on domestic net deferred tax assets. During the six months ended June 30, 2025, our provision for income taxes primarily related to the tax effect of the unrealized gain on digital assets.
As of June 30, 2026, the fair market value of bitcoin has remained below our cost basis, resulting in us maintaining a full valuation allowance on all of our domestic net deferred tax assets. For the six months ended June 30, 2026 we recorded (i) a reversal of deferred tax liability of $2.42 billion on the unrealized gain on bitcoin holdings that existed as of December 31, 2025, (ii) a deferred tax asset for the unrealized loss on bitcoin holdings of $4.12 billion, and (iii) a deferred tax asset for the capital loss from the sale of bitcoin holdings of $24.4 million. These deferred tax assets were offset in full by a valuation allowance against all domestic net deferred tax assets of $4.60 billion that, in our present estimation, more likely than not will not be realized. If, in future periods, the fair market value of our bitcoin holdings increases and exceeds the cost basis of our bitcoin holdings, the deferred tax asset with respect to unrealized loss would be reversed and the valuation allowance on domestic net deferred tax assets could be released. We will continue to regularly assess the realizability of deferred tax assets.
Our effective tax rate may fluctuate due to changes in our domestic and foreign earnings and losses, material discrete tax items, or a combination of these factors resulting from transactions or events.
See "Factors Impacting Results - Tax" for a discussion of tax factors which have had, and may continue to have, a significant impact on our results.
Employees
As of June 30, 2026, we had a total of 1,539 employees, of whom 444 were based in the United States and 1,095 were based internationally.
Liquidity and Capital Resources
We manage our liquidity and capital resources on a consolidated basis across both of our reportable segments. Our Software segment generates the recurring operating cash flows that fund our day-to-day operations, while our capital markets activities, our bitcoin holdings, and our USD Reserve are the principal sources of capital supporting our Bitcoin
segment and preferred stock dividend payments and our indebtedness obligations. Accordingly, the following discussion of liquidity and capital resources is presented on a consolidated basis.
Liquidity
Sources of Liquidity
We evaluate all available sources of liquidity and determine which source or combination of sources to use based on our liquidity needs, market conditions, and our subjective assessment of the relative attractiveness of available alternatives, including our equity securities, debt securities, cash reserves, bitcoin and accounts receivable.
Our sources of liquidity include:
•Cash and cash equivalents and short-term investments: Cash and cash equivalents and short-term investments may include holdings in bank demand deposits, money market instruments, certificates of deposit, and U.S. Treasury securities. As of June 30, 2026 and December 31, 2025, the amount of cash and cash equivalents and short-term investments held by our U.S. entities was $2.40 billion and $2.25 billion, respectively, and by our non-U.S. entities was $51.4 million and $50.0 million, respectively. We earn a significant amount of our revenues outside the United States. We did not repatriate any foreign earnings and profits during the three and six months ended June 30, 2026 and 2025. Integral to our cash and cash equivalents and short-term investments is our USD Reserve. See "Availability of the USD Reserve" below for additional information.
•Bitcoin: As of June 30, 2026 and December 31, 2025, we held approximately 846,000 and 672,500 bitcoins, respectively, all of which were unencumbered as of such dates. From July 1 through July 24, 2026, we sold approximately 2,225 bitcoin for aggregate gross proceeds of approximately $135.2 million, at an average sale price of $60,773 per bitcoin, net of fees and expenses. The sales were made to fund payment of dividends on preferred stock and to replenish the portion of the USD Reserve used for this purpose. As of July 24, 2026, we held approximately 843,775 bitcoins, which had an aggregate market value of $54.14 billion (based on the market price of $64,164 of one bitcoin as reported on the Coinbase exchange as of July 24, 2026, 4:00 p.m. Eastern Time). Our bitcoin holdings are less liquid than our existing cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents. See "Availability of Bitcoin for Liquidity" below.
•Accounts receivable: The primary sources of cash provided by operating activities are cash collections of our accounts receivable from customers following the sales and renewals of our product licenses, subscription services and product support, as well as consulting and education services. As of June 30, 2026 and December 31, 2025, our accounts receivable, net of allowance for credit losses was $123.8 million and $205.7 million, respectively. See "Cash Flows" below for a discussion of our accounts receivable.
In addition to the foregoing, also available as a source of liquidity are our ATMs, under which we may from time to time through the Agents issue and sell shares of STRF Stock, STRC Stock, STRK Stock, STRD Stock, class A common stock and any additional series of preferred stock as may be designated by the Company from time to time in the future. See "Capital Markets Activity" above for additional information regarding our ATM, including our activity for the three and six months ended June 30, 2026 and 2025 and the period from July 1, 2026 to July 24, 2026, as well as our ATM capacities as of June 30, 2026. We intend to use proceeds from sales of our securities under our ATM to acquire bitcoin in a manner we believe to be accretive to our class A common stockholders. We may also use proceeds from sales of our securities to fund liquidity needs, including dividends on our Preferred Stock or for other corporate purposes if we determine doing so is more favorable than utilizing our other sources of liquidity for such purposes.
Liquidity Needs
As of June 30, 2026, our short-term and long-term liquidity needs include the following:
•Short-term Liquidity. Our short-term liquidity needs include working capital requirements, anticipated capital expenditures, expected dividend payments on our STRF Stock, STRC Stock, STRE Stock, and STRD Stock, expected dividend payments on our STRK Stock to the extent that we do not pay such dividends in the form of shares of our class A common stock, near-term payments due prior to and upon delivery of our new corporate aircraft, interest payments on our Outstanding Convertible Notes, various purchase agreements primarily related to third-party cloud hosting services and third-party software supporting our products, marketing, and operations and contractual obligations due within the next twelve months.
•Long-Term Liquidity. Beyond the next 12 months, our long-term cash needs are primarily for obligations related to our long-term debt and for expected dividend payments on our Preferred Stock. We also have long-
term cash requirements for needs related to our operating leases and various purchase agreements primarily related to third-party cloud hosting services and third-party software supporting our products, marketing, and operations.
For further details regarding certain of our short-term and long-term liquidity needs, see "Contractual and Other Obligations" below.
Maturities and Holder Repurchase Rights.
The Convertible Notes have scheduled maturity dates and become subject to holder put option rights as follows:
| Convertible Notes |
Outstanding Principal Amount as of June 30, 2026 (in thousands)
|
Maturity Date | Put Option Date (1) | |||||||||||||||||
| 2028 Convertible Notes | $ | 1,010,000 | September 15, 2028 | September 15, 2027 | ||||||||||||||||
| 2029 Convertible Notes | $ | 1,500,000 | December 1, 2029 | June 1, 2028 | ||||||||||||||||
| 2030A Convertible Notes | $ | 800,000 | March 15, 2030 | September 15, 2028 | ||||||||||||||||
| 2030B Convertible Notes | $ | 2,000,000 | March 1, 2030 | March 1, 2028 | ||||||||||||||||
| 2031 Convertible Notes | $ | 603,659 | March 15, 2031 | September 15, 2028 | ||||||||||||||||
| 2032 Convertible Notes | $ | 800,000 | June 15, 2032 | June 15, 2029 | ||||||||||||||||
(1)Holders of the Convertible Notes may require us to repurchase for cash all or a portion of the Convertible Notes at 100% of principal plus accrued and unpaid interest on the dates indicated.
Conversion of Convertible Notes. If the conditional conversion features of the Convertible Notes are triggered and holders of our Convertible Notes elect to convert their Convertible Notes, we may elect to settle the conversions of such Convertible Notes in shares of our class A common stock, or a combination of cash and shares of class A common stock, rather than in all cash, which may enable us to reduce the amount of our cash obligations under the Convertible Notes. None of our Convertible Notes were convertible at the option of holders during the three and six months ended June 30, 2026.
Satisfying Liquidity Needs
We do not expect cash and cash equivalents generated by our software operations to be sufficient to satisfy our short-term or long-term liquidity needs. However, we expect to be able to satisfy such needs through one or more available sources, including cash and cash equivalents we hold in the USD Reserve, proceeds from the sale of bitcoin, proceeds from sales of our class A common stock and preferred stock under our ATM and proceeds from additional equity or debt financings.
We expect to determine which source of liquidity or combination of sources of liquidity to use from time to time based on our liquidity needs and our subjective assessment of the relative attractiveness of available alternatives, including market conditions, the trading prices and liquidity of our class A common stock and Preferred Stock, the market price and liquidity of bitcoin, the availability and cost of debt financing, availability of our cash reserves, dilution, tax considerations, timing, execution considerations, and other factors we consider relevant.
We may sell bitcoin to satisfy our short-term or long-term liquidity needs, and we may do so even when other sources of liquidity are available to us, if we determine that selling bitcoin is more favorable than utilizing those other sources of liquidity. See "Availability of Bitcoin for Liquidity" below.
Availability of the USD Reserve for Liquidity
In December 2025, we established the USD Reserve, a cash reserve intended to support the payment of dividends on our preferred stock and interest on our outstanding indebtedness. In June 2026, our board of directors approved a formal policy governing the USD Reserve. Under that policy, the USD Reserve may be used only to support the payment of preferred stock dividends and interest expense on our outstanding indebtedness, and any other use requires board authorization. The policy also requires us to maintain a minimum USD Reserve equal to at least 12 months of our current expected annual preferred stock dividend payments and interest expense, and any reduction below that level requires board authorization.
As of June 30, 2026 and July 24, 2026, we held $2.40 billion and $3.75 billion, respectively, in cash and cash equivalents, and short-term investments in our USD Reserve. The $3.75 billion held as of July 24, 2026 includes expected cash proceeds from shares sold under our ATMs that had not yet settled as of such date. As of June 30, 2026 and July 24, 2026, our current expected annual preferred stock dividend payments and interest expense were approximately $1.76 billion, in aggregate (in the case of each of our series of Preferred Stocks, assuming declaration of dividends by our board of directors
or a duly authorized committee thereof, and in the case of STRC Stock, assuming a dividend rate of 12.00% per annum), and our USD Reserve represented approximately 16 months and 26 months, respectively, of such expected payments.
We intend to maintain the board-required total preferred stock dividend and interest expense liquidity coverage for the USD Reserve through a combination of sales under our ATMs and through sales of bitcoin under the board-authorized BTC Monetization Program, as described below. To date, we have funded our USD Reserve by using the proceeds of the sale of class A common stock under our ATM and sales of bitcoin. We may in the future use other sources of liquidity, including proceeds from sales of preferred stock under our ATM or from further sales of bitcoin (including under our BTC Monetization Program described below), to fund our USD Reserve. Our ability to maintain the USD Reserve at current levels is subject to market conditions and other factors outside of our control, including our ability to obtain equity financing in a timely manner, on favorable terms, or at all, and the availability of our bitcoin as a source of liquidity. See "Risks Related to Our Business in General - A significant decrease in the fair market value of our bitcoin holdings could adversely affect our ability to satisfy our financial obligations or liquidity needs" in Part II, Item 1A, Risk Factors of this Quarterly Report for additional information.
The USD Reserve is maintained within our general treasury and cash management framework and, except for cash in transit, is held in a segregated account or accounts. The USD Reserve is not subject to any contractual mandate or lien requiring that it be maintained for the payment of dividends or interest, or for any other specified purpose. However, the USD Reserve is subject to the board-approved policy described above, which restricts its permitted uses and requires us to maintain a minimum balance, and requires board authorization for any use outside those permitted purposes, or any reduction below that minimum balance. Subject to that policy, we may increase, reduce, adjust, or reallocate amounts designated as part of the USD Reserve from time to time based on market conditions, liquidity needs, risk considerations, and other factors. To optimize our cash management, subject to board approval, we may also deploy assets designated as part of the USD Reserve into USD-denominated and/or USD-referenced assets, including instruments that do not constitute cash or cash equivalents or short-term investments in U.S. government securities.
Digital Credit Capital Framework
On June 29, 2026, we announced that our board of directors adopted a capital management framework, which we refer to as our "Digital Credit Capital Framework," designed to strengthen our Preferred Stocks, enhance liquidity, preserve long-term bitcoin exposure, and support long-term value creation for our stockholders. The framework consists of five principal components: (i) a board-approved USD Reserve policy; (ii) a revised STRC dividend rate policy; (iii) a Preferred Stock repurchase program; (iv) a class A common stock repurchase program; and (v) a BTC Monetization Program. The USD Reserve policy is described above under "-Availability of the USD Reserve for Liquidity." The remaining components are summarized below.
STRC Dividend Rate Policy
As part of the framework, we announced a revised dividend rate policy for our STRC Stock. Going forward, we intend to evaluate the STRC dividend rate monthly based on a range of factors, including STRC trading levels, market yields, credit spreads, the price and volatility of bitcoin, USD Reserve coverage, capital market conditions, and our overall capital structure. Dividend rate adjustments are one of several tools available to us to encourage STRC to trade near its targeted range of $99-$100. We may also respond to market conditions through USD Reserve management, BTC monetization, repurchases of STRC Stock, and other capital allocation actions. We will not necessarily increase the STRC dividend rate solely because STRC trades below its $100 per share stated amount, and management does not intend to recommend to our board of directors a change from the current 12.00% per annum dividend rate for STRC Stock until STRC Stock demonstrates sustained trading at or near its $100 stated amount. The trading price of STRC Stock may vary, including significantly, from its targeted range of $99-$100 per share, and we cannot assure that STRC Stock will trade in that range or at any particular price. STRC dividends and applicable dividend rate changes remain subject to declaration by our board of directors or an authorized committee and are not guaranteed. See "-Preferred Stock" below for additional information regarding STRC dividends declared for periods following June 30, 2026. Our current policy is also not to issue STRC Stock at prices below its $100 stated amount per share. The policies described above reflect our current intent only and may be changed or discontinued at any time without notice.
Preferred Stock Repurchase Program
We established a repurchase program for up to $1.0 billion aggregate purchase price of our outstanding STRC Stock, STRF Stock, STRD Stock, and STRK Stock. We currently expect STRC Stock to be the initial priority under the program if management determines that repurchases are accretive and would strengthen our capital structure. Repurchases may be made from time to time through open-market purchases, block trades, privately negotiated transactions, tender offers, exchange offers, or other legally permissible means, depending on market conditions, trading prices, liquidity, applicable legal requirements, and other factors. The authorization does not obligate us to acquire any particular amount of securities,
has no fixed expiration date, and may be modified, suspended, or terminated at any time. We may use cash proceeds from sales of class A common stock and our preferred stock under our ATM or from the sale of bitcoin to fund repurchases; under our board-approved USD Reserve policy, our USD Reserve is intended to support the payment of dividends on our preferred stock and interest expense on our outstanding indebtedness and any use of these amounts would require further authorization by our board of directors. From July 1, 2026 through July 24, 2026, we repurchased 288,930 shares of STRC Stock for an aggregate purchase price of approximately $25.0 million, at an average price of approximately $86.52 per share, in open-market transactions, and as of July 24, 2026, approximately $975 million remained available under this program. We expect to fund repurchases of STRC Stock from sources other than the USD Reserve, which may include proceeds from further sales of class A common stock under our ATM and, depending on market conditions, sales of bitcoin. The timing, amount, and manner of any future repurchases of STRC Stock will depend on market conditions, the price and liquidity of STRC Stock, applicable legal requirements, available capital, and other considerations, and we are not obligated to repurchase any minimum number or dollar amount of STRC Stock.
Class A Common Stock Repurchase Program
We also established a repurchase program for up to $1.0 billion aggregate purchase price of our class A common stock. Repurchases may be made from time to time through open-market purchases, block trades, privately negotiated transactions, accelerated share repurchase transactions, or other legally permissible means, depending on market conditions, trading prices, liquidity, applicable legal requirements, and other factors. The authorization does not obligate us to acquire any particular amount of class A common stock, has no fixed expiration date, and may be modified, suspended, or terminated at any time. Repurchases of class A common stock can be funded in the same manner, and subject to the same limitations, as repurchases of our preferred stock, as described above.
BTC Monetization Program
Our board of directors authorized a BTC monetization program (the "BTC Monetization Program") under which we may sell bitcoin from time to time for three primary purposes: (i) to generate up to $1.25 billion of proceeds to fund the USD Reserve; (ii) to fund preferred stock dividends and interest expense as they become payable, or to replenish the USD Reserve after such payments, when management determines that doing so is more advantageous than issuing class A common stock or pursuing other capital markets transactions; and (iii) to fund repurchases of Preferred Stock or class A common stock, including related taxes, fees, and transaction expenses, under the repurchase programs described above. Any bitcoin monetization outside these purposes or in excess of these authorizations would require further board authorization. The BTC Monetization Program has no fixed expiration date, may be modified, suspended, or terminated at any time, and does not obligate us to sell any bitcoin, fund any dividend payment or interest expense through sales of bitcoin, or repurchase any securities. Any bitcoin sales will be subject to market conditions, liquidity needs, tax and accounting considerations, applicable legal requirements, and management's assessment of long-term shareholder value. Repurchases of our Preferred Stock and class A common stock, if any, under these programs may be subject to the 1% excise tax on certain net stock repurchases (that is, repurchases in excess of issuances) imposed under the IRA.
The repurchase programs and the BTC Monetization Program became effective upon their authorization and do not obligate us to repurchase any securities or to sell any bitcoin. As of July 24, 2026, we had not repurchased any shares of class A common stock under the class A common stock repurchase program, and we had not sold any bitcoin under the $1.25 billion USD Reserve-building component of the BTC Monetization Program. As of July 24, 2026, we had repurchased 288,930 shares of STRC Stock under the Preferred Stock repurchase program for an aggregate purchase price of $25.0 million.
Availability of Bitcoin for Liquidity
Our bitcoin holdings are less liquid than our cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents.
The bitcoin market historically has been characterized by significant volatility in its price, limited liquidity and trading volumes compared to sovereign currency markets, relative anonymity, a developing regulatory landscape, susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various other risks inherent in its entirely electronic, virtual form and decentralized network. During times of instability in the bitcoin market, we may not be able to sell our bitcoins at reasonable prices or at all. In addition, upon sale of our bitcoin, we may incur additional taxes related to any realized gains or we may incur capital losses as to which the tax deduction may be limited. See "Risks Related to Our Bitcoin Strategy and Holdings-Our bitcoin holdings are less liquid than our existing cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents" in Part II, Item 1A, Risk Factors in this Quarterly Report for additional information.
Availability of Equity and Debt Financing for Liquidity
Our ability to obtain equity and debt financing is subject to market conditions and other factors outside of our control, and we may not be able to obtain equity or debt financing in a timely manner, on favorable terms, or at all. See "Risks Related to Our Business in General- A significant decrease in the fair market value of our bitcoin holdings could adversely affect our ability to satisfy our financial obligations or liquidity needs" in Part II, Item 1A, Risk Factors of this Quarterly Report for additional information.
Our ability to issue preferred stock and obtain debt financing, on terms we consider favorable, or at all, may also be affected in part by our corporate credit rating. On October 27, 2025, S&P Global Ratings assigned us a corporate credit rating of B-. S&P Global Ratings affirmed this rating in December 2025 following our establishment of the USD Reserve. This credit rating is not a recommendation by the rating agency to buy, sell, or hold our securities, is subject to revision or withdrawal at any time by the rating agency and should be evaluated independently of any other credit rating we may receive.
S&P Global Ratings and other credit rating agencies review their ratings periodically, and there is no guarantee our current corporate credit rating will remain the same as described above. If our corporate credit rating were to be lowered, or if we were to be assigned lower corporate credit ratings by other rating agencies, or if any of our securities were to be assigned lower credit ratings, our ability to access the preferred stock and debt markets, our cost of funds, and other terms for new issuances of preferred stock or debt could be adversely impacted.
Capital Markets Transactions
Initial Public Offerings of Preferred Stock
We did not complete any initial public offerings of preferred stock during the three and six months ended June 30, 2026. We completed the initial public offerings of our STRF Stock, STRK Stock, and STRD Stock during the three and six months ended June 30, 2025. See "Capital Markets Activity" for additional information about our initial public offerings of preferred stock activity for the three and six months ended June 30, 2025. The net proceeds from these offerings were used for general corporate purposes, including the acquisition of bitcoin and for working capital.
At-the-Market Offerings
See "Capital Markets Activity" for additional information about our ATM activity for the three and six months ended June 30, 2026 and 2025 and the period from July 1, 2026 to July 24, 2026, as well as our ATM capacities as of June 30, 2026.
Debt Offerings and Repurchases
During the three and six months ended June 30, 2026, we did not complete any new debt offerings. During the three months ended June 30, 2026, we completed a repurchase of $1.50 billion aggregate principal amount of our 2029 Convertible Notes for $1.38 billion in cash, representing an approximate 8% discount to par. The repurchase reduced the aggregate principal amount of our 2029 Notes outstanding by $1.50 billion and resulted in a gain on debt extinguishment of approximately $113.9 million. The repurchase was funded with cash reserves.
During the first quarter of 2025, we completed a $2.00 billion private offering of our 2030B Convertible Notes, generating net proceeds of approximately $1.98 billion after $15.1 million of issuance costs. We used the net proceeds from this offering for general corporate purposes, including the acquisition of bitcoin and for working capital. See Note 6, Long-term Debt, to the Notes to Consolidated Financial Statements contained in Part I, Item 1 of this Quarterly Report for additional information.
Contractual and Other Obligations
Our material contractual obligations and cash requirements as of June 30, 2026 consist of:
•principal and interest payments related to our long-term debt, which includes:
◦principal due upon maturity of our long-term debt instruments in the aggregate of $6.75 billion;
◦$17.3 million in aggregate coupon interest due each semi-annual period for the Outstanding Convertible Notes; and
◦$0.3 million due monthly in principal and interest related to our other long-term secured debt.
•payments under various purchase agreements, primarily related to third-party cloud hosting services and third-party software supporting our products, marketing, and operations, and a new corporate aircraft;
•rent payments under noncancellable operating leases;
•declared regular dividends, if any, on our Preferred Stock (in each case, to the extent declared by our board of directors or a duly authorized committee thereof). For additional information about our Preferred Stock
outstanding as of June 30, 2026 and the dividends declared and paid during the three and six months ended June 30, 2026, see "Preferred Stock" below.
•ongoing personnel-related expenditures and vendor payments.
See Note 6, Long-term Debt and Note 10, Redeemable Preferred Stock, to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report, as well as "Liquidity and Capital Resources" above, for additional information.
Preferred Stock
The following table sets forth the outstanding shares, notional values, and dividend rates for the Preferred Stock as of June 30, 2026:
| Preferred Stock |
Shares Outstanding
(in thousands)
|
Notional Value
(in thousands)
|
Dividend Rate | |||||||||||||||||
| STRF Stock | 12,840 | $ | 1,283,969 | 10.00% | ||||||||||||||||
| STRC Stock | 104,895 | $ | 10,489,471 | 11.50% | ||||||||||||||||
| STRE Stock | 7,750 | € | 775,000 | 10.00% | ||||||||||||||||
| STRK Stock | 14,021 | $ | 1,402,074 | 8.00% | ||||||||||||||||
| STRD Stock | 14,024 | $ | 1,402,422 | 10.00% | ||||||||||||||||
See "Capital Markets Transactions - Debt Offerings and Repurchases" above for information regarding our repurchase of STRC Stock from July 1, 2026 to July 24, 2026. After giving effect to the repurchase of STRC Stock, as of July 24, 2026, there were approximately 104.6 million shares of STRC Stock outstanding having a total aggregate notional value of $10.46 billion.
See Note 10, Redeemable Preferred Stock, to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report for additional information about the terms of our Preferred Stock.
The following table sets forth the aggregate cash dividends paid for the three and six months ended June 30, 2026 and 2025:
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||||||||
| Cash Dividends Paid (in thousands) | 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||||
| STRF Stock | $ | 32,099 | $ | 25,522 | $ | 64,198 | $ | 25,522 | ||||||||||||||||||
| STRC Stock | $ | 282,864 | - | $ | 394,295 | - | ||||||||||||||||||||
| STRE Stock (1) | $ | 22,136 | - | $ | 44,478 | - | ||||||||||||||||||||
| STRK Stock | $ | 28,041 | $ | 23,432 | $ | 56,083 | $ | 32,620 | ||||||||||||||||||
| STRD Stock | $ | 35,061 | - | $ | 70,121 | - | ||||||||||||||||||||
| Total Cash Dividends Paid | $ | 400,201 | $ | 48,954 | $ | 629,175 | $ | 58,142 | ||||||||||||||||||
(1) Reflects the Euro to USD exchange rate in effect at the time of the applicable STRE Stock dividend payment.
Our board of directors and stockholders approved an amendment and restatement to the certificate of designations of our STRC Stock to provide for scheduled dividend payments twice a month, instead of once. This amendment became effective at 12:01 a.m., New York City time, on June 30, 2026. The foregoing description of the STRC Stock amendment is qualified in its entirety by reference to the full text of the amended and restated certificate of designations of our STRC Stock included as Exhibit 3.9 to this Quarterly Report and incorporated herein by reference.
On June 29, 2026, we announced that we will increase the regular dividend rate per annum on our STRC Stock to 12.00%, effective for semi-monthly periods with record dates on or after July 1, 2026. This adjustment has no effect on any previously declared but unpaid dividends on STRC Stock. On June 28, 2026, our board of directors declared semi-monthly cash dividends on STRC Stock of $0.50 per share (representing a per annum dividend rate of 12.00%) payable on July 31, 2026 to stockholders of record as of 5:00 p.m., New York City time, on July 15, 2026, and payable on August 15, 2026 to stockholders of record as of 5:00 p.m., New York City time, on July 31, 2026. As of June 29, 2026, we expected that the dividends payable on July 31, 2026 and August 15, 2026 would be characterized as non-taxable returns of capital to the extent of a stockholder's tax basis in its STRC Stock for U.S. federal income tax purposes. See "Liquidity and Capital
Resources-Digital Credit Capital Framework" above for additional information regarding the revised STRC dividend policy and our related capital management programs.
See "Capital Markets Activity" and "Liquidity and Capital Resources - Liquidity" above for additional information on our equity issuances and repurchases from July 1, 2026 to July 24, 2026. Other than such repurchases of STRC stock, changes in the dividend rate for STRC Stock, and associated changes in our dividend obligations, there have been no changes to our material contractual obligations and cash requirements since June 30, 2026.
Cash Flows
The following table sets forth a summary of our cash flows (in thousands) and related percentage changes for the periods indicated:
| Six Months Ended June 30, | |||||||||||||||||
| 2026 | 2025 | % change | |||||||||||||||
| (in thousands) | (unaudited) | (unaudited) | |||||||||||||||
| Net cash provided by (used in) operating activities | $ | 9,850 | $ | (37,302) | (126.4) | % | |||||||||||
| Net cash used in investing activities | (14,366,115) | (14,457,699) | (0.6) | % | |||||||||||||
| Net cash provided by financing activities | 13,769,567 | 14,504,460 | (5.1) | % | |||||||||||||
| Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash | (2,961) | 2,776 | (206.7) | % | |||||||||||||
| Net (decrease) increase in cash, cash equivalents, and restricted cash | (589,659) | 12,235 | (4919.4) | % | |||||||||||||
| Cash, cash equivalents, and restricted cash, beginning of period | 2,303,343 | 39,897 | 5673.2 | % | |||||||||||||
| Cash, cash equivalents, and restricted cash, end of period | $ | 1,713,684 | $ | 52,132 | 3187.2 | % | |||||||||||
Net cash provided by (used in) operating activities. The primary sources of cash provided by operating activities are cash collections of our accounts receivable from customers following the sales and renewals of our product licenses, subscription services, product support, consulting and education services and interest income earned on the USD Reserve. Our primary uses of cash in operating activities are for personnel-related expenditures for software development, personnel-related expenditures for providing consulting, education, and subscription services, and for sales and marketing costs, general and administrative costs, interest expense related to our long-term debt arrangements, and income taxes. Non-cash items to further reconcile net income (loss) to net cash (used in) provided by operating activities consist primarily of depreciation and amortization, reduction in the carrying amount of operating lease right-of-use assets, deferred taxes, release of liabilities for unrecognized tax benefits, share-based compensation expense, unrealized loss or gain on digital assets, gain on extinguishment of debt, and the amortization of the issuance costs on our long-term debt.
Net cash provided by operating activities increased by $47.2 million for the six months ended June 30, 2026, as compared to the same period in the prior year. This increase was primarily driven by a $34.4 million increase in interest income (expense), net, mainly attributable to interest earned on the USD Reserve, and a $9.2 million decrease in cash paid for income taxes. This improvement in operating cash flow did not have a meaningful impact on net loss, which increased by $26.57 billion as compared to the same period in the prior year, primarily as a result of a significant increase in non-cash unrealized loss on digital assets.
Net cash used in investing activities. Net cash used in investing activities was $14.37 billion for the six months ended June 30, 2026, compared to $14.46 billion for the same period in the prior year, a decrease of $91.6 million. While the total amount of cash used in investing activities was relatively consistent period over period, the composition of our investing activities was different between the two periods. During the six months ended June 30, 2026, purchases of digital assets decreased by $758.8 million as compared to the prior year period, and we received $41.0 million of proceeds from sales of digital assets while we had no sales of digital assets during the six months ended June 30, 2025. In addition, during the six months ended June 30, 2026, we purchased $831.8 million of short-term investments and received $99.4 million of proceeds from sales of short-term investments while we had no short-term investment activity during the six months ended June 30, 2025. We did not make any advance deposits on purchases of property and equipment during the six months ended June 30, 2026, as compared to $22.0 million of such deposits made during the prior year period.
During the six months ended June 30, 2026, we purchased $13.67 billion of bitcoin using net proceeds from the sale of STRC Stock, STRK Stock, and class A common stock under our ATM, while during the six months ended June 30, 2025, we purchased $14.43 billion of bitcoin using net proceeds from the issuances of our 2030B Convertible Notes, the initial public offerings of our STRF Stock and STRK Stock, and ATM sales of STRK Stock and class A common stock. The decrease in aggregate purchase price was also caused by a decrease in average cost per bitcoin acquired, partially offset by an increase in total bitcoin acquired, as compared to the prior quarterly period.
Net cash provided by financing activities. The changes in cash provided by financing activities primarily relate to the sale of class A common stock and preferred stock under our ATMs, additional offerings (such as initial public offerings) of new or existing preferred stock, dividends paid on our preferred stock, the exercise or vesting of certain awards under the 2013 Stock Incentive Plan (as amended, the "2013 Equity Plan"), and the 2023 Equity Incentive Plan (as amended, the "2023 Equity Plan," and, together with the 2013 Equity Plan, the "Stock Incentive Plans"), and the sales of class A common stock under the 2021 Employee Stock Purchase Plan.
Net cash provided by financing activities was $13.77 billion for the six months ended June 30, 2026, compared to $14.50 billion for the same period in the prior year, a decrease of $0.73 billion. During the six months ended June 30, 2026, we did not complete any new long-term debt offerings and accordingly received no proceeds from convertible senior notes, as compared to $2.00 billion of proceeds from convertible senior notes during the six months ended June 30, 2025. In addition, we repurchased $1.50 billion in aggregate principal amount of our 2029 Convertible Notes for approximately $1.38 billion in cash during the six months ended June 30, 2026, whereas there were no principal repayments or repurchases of convertible notes in the prior-year period. Net cash provided by financing activities also reflected changes in our class A common stock, Preferred Stock and dividend payments. Net proceeds from the sales of Preferred Stock under our ATM increased by $4.63 billion as compared to the prior-year period. This increase primarily reflects the sale of STRC under the ATM during 2026, which contributed to an increase in dividends paid on our Preferred Stock of $571.0 million over the same period. Net proceeds from ATM sales of class A common stock decreased by $1.41 billion compared to the prior-year period.
Long-term Debt
The terms of each of our long-term debt instruments and the interest payments we have made and are obligated to make on our long-term debt instruments are discussed more fully in Note 6, Long-term Debt, to the Consolidated Financial Statements included in this Quarterly Report.
We or our affiliates may, at any time and from time to time, seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise. Such repurchases or exchanges, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. We may also seek to prepay our outstanding indebtedness. The amounts involved in any such repurchase or prepayment may be material. We could seek to fund any such debt repurchases or prepayments using proceeds from equity offerings that we may choose to undertake from time to time.
Critical Accounting Estimates
Our discussion and analysis of our financial condition and results of operations are based on our Consolidated Financial Statements, which have been prepared in accordance with GAAP. The preparation of our Consolidated Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and equity, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results and outcomes could differ from these estimates and assumptions.
Critical accounting estimates are those that involve a high degree of estimation uncertainty and have had, or are reasonably likely to have, a material impact on our financial condition or results of operations. Although the application of our accounting policies requires the use of estimates and judgments, as of the date of this Quarterly Report, we have concluded that none of our accounting estimates meet the definition of critical accounting estimates.
Important Information about KPIs
The following table presents total bitcoin holding, basic shares outstanding, Assumed Diluted Shares Outstanding, Bitcoin per basic shares outstanding (in Sats), BPS (in Sats), and bitcoin price for the periods as indicated.
| 2026 | 2025 | |||||||||||||||||||||||||||||||||||||
| 12/31/2025 |
3/31/2026(1)
|
6/30/2026 | 12/31/2024 | 3/31/2025 | 6/30/2025 | |||||||||||||||||||||||||||||||||
| Total Bitcoin Holdings | 672,500 | 762,099 | 846,000 | 447,470 | 528,185 | 597,325 | ||||||||||||||||||||||||||||||||
| Shares Outstanding (in thousands) | ||||||||||||||||||||||||||||||||||||||
| Class A Common Stock | 292,422 | 326,582 | 351,963 | 226,138 | 246,537 | 261,318 | ||||||||||||||||||||||||||||||||
| Class B Common Stock | 19,640 | 19,640 | 19,640 | 19,640 | 19,640 | 19,640 | ||||||||||||||||||||||||||||||||
| Basic Shares Outstanding | 312,062 | 346,222 | 371,603 | 245,778 | 266,177 | 280,958 | ||||||||||||||||||||||||||||||||
| 2027 Convertible Notes, convertible at $143.25 | - | - | - | 7,330 | - | - | ||||||||||||||||||||||||||||||||
| 2028 Convertible Notes, convertible at $183.19 | 5,513 | 5,513 | 5,513 | 5,513 | 5,513 | 5,513 | ||||||||||||||||||||||||||||||||
| 2029 Convertible Notes, convertible at $672.40 | 4,462 | 4,462 | 2,231 | 4,462 | 4,462 | 4,462 | ||||||||||||||||||||||||||||||||
| 2030A Convertible Notes, convertible at $149.77 | 5,342 | 5,342 | 5,342 | 5,342 | 5,342 | 5,342 | ||||||||||||||||||||||||||||||||
| 2030B Convertible Notes, convertible at $433.43 | 4,614 | 4,614 | 4,614 | - | 4,614 | 4,614 | ||||||||||||||||||||||||||||||||
| 2031 Convertible Notes, convertible at $232.72 | 2,594 | 2,594 | 2,594 | 2,594 | 2,594 | 2,594 | ||||||||||||||||||||||||||||||||
| 2032 Convertible Notes, convertible at $204.33 | 3,915 | 3,915 | 3,915 | 3,915 | 3,915 | 3,915 | ||||||||||||||||||||||||||||||||
| STRK Stock, convertible at $1,000.00 | 1,398 | 1,402 | 1,402 | - | 765 | 1,220 | ||||||||||||||||||||||||||||||||
| Equity Incentive Awards | 4,997 | 4,770 | 4,069 | 6,801 | 6,270 | 5,598 | ||||||||||||||||||||||||||||||||
| Assumed Diluted Shares Outstanding (in thousands) | 344,897 | 378,834 | 401,283 | 281,735 | 299,652 | 314,216 | ||||||||||||||||||||||||||||||||
|
Bitcoin Per Basic Share Outstanding (in Sats)
|
215,502 | 220,118 | 227,662 | 182,063 | 198,434 | 212,603 | ||||||||||||||||||||||||||||||||
|
Bitcoin Per Assumed Diluted Share Outstanding (BPS) (in Sats)
|
194,986 | 201,170 | 210,824 | 158,826 | 176,266 | 190,100 | ||||||||||||||||||||||||||||||||
| Bitcoin Price | $ | 87,515 | $ | 67,773 | $ | 58,714 | $ | 93,390 | $ | 82,445 | $ | 107,752 | ||||||||||||||||||||||||||
(1) Includes shares sold but not yet settled as of March 31, 2026.
Bitcoin Per Share (in Sats) or BPS in (Sats) represents the ratio between the Company's gross bitcoin holdings and its Assumed Diluted Shares Outstanding, expressed in terms of "Satoshis" or "Sats", where:
•"Assumed Diluted Shares Outstanding" refers to the aggregate of our Basic Shares Outstanding as of the dates presented plus all additional shares that would result from the assumed conversion of all outstanding convertible notes and convertible preferred stock, exercise of all outstanding stock option awards, and settlement of all outstanding restricted stock units and performance stock units as of such dates. Assumed Diluted Shares Outstanding is not calculated using the treasury method, incorporates approximate forfeitures of awards in the current period which may be subject to future adjustment and does not take into account any
vesting conditions (in the case of equity awards), the exercise price of any stock option awards or any contractual conditions limiting convertibility of convertible debt instruments.
•"Basic Shares Outstanding" reflects the actual class A common stock and class B common stock outstanding as of the dates presented. For purposes of this calculation, outstanding shares of such stock are deemed to include shares, if any, that (A) were sold under ATMs, or (B) were issued pursuant to (i) options that had been exercised, (ii) restricted stock units that have vested or (iii) conversion requests received with respect to convertible securities, but which in each case were pending issuance as of the dates presented.
•A "Satoshi" or a "Sat" is one one-hundred-millionth of one bitcoin, currently the smallest indivisible unit of a bitcoin.
|
Three Months Ended June 30,
|
Six Months Ended June 30,
|
||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | Change | 2026 | 2025 | Change | ||||||||||||||||||||||||||||||||||||
| BTC Yield | 5.0 | % | 8.7 | % | (3.7) | % | (1) | 8.1 | % | 19.7 | % | (11.6) | % | (1) | |||||||||||||||||||||||||||
| BTC Gain | 37,733 | 46,008 | (18.0) | % | 54,625 | 88,109 | (38.0) | % | |||||||||||||||||||||||||||||||||
| BTC $ Gain (in millions, except percentages) | $ | 2,215 | $ | 4,957 | (55.3) | % | $ | 3,207 | $ | 9,494 | (66.2) | % | |||||||||||||||||||||||||||||
(1) Represents the absolute change between the periods presented.
BTC Yield represents the percentage change in BPS (in Sats) from the beginning of a period to the end of a period.
BTC Gain represents the gross number of bitcoins held by the Company at the beginning of a period multiplied by the BTC Yield for such period.
BTC $ Gain represents the dollar value of the BTC Gain calculated by multiplying the BTC Gain by the market price of bitcoin as reported on the Coinbase exchange as of the applicable measurement time.
For determining BTC $ Gain quarter to date and year to date, unless otherwise specified, the Company uses the current market price of bitcoin as reported on the Coinbase exchange as of the applicable measurement time. For determining BTC $ Gain for a past fiscal year or other past period, the Company uses the market price of bitcoin as of 4:00pm ET as reported on the Coinbase exchange on the last day of the applicable period, unless stated otherwise. The Company uses these market prices of bitcoin for these calculations solely for the purpose of facilitating these illustrative calculations.
The Company uses BPS (in Sats), BTC Yield, BTC Gain and BTC $ Gain as KPIs to help assess the performance of its strategy of acquiring bitcoin in a manner it believes to be accretive to shareholders. The Company also believes these KPIs can supplement investors' understanding of how the Company chooses to fund bitcoin purchases and the value created in a period:
•BPS (in Sats) measures the ratio of the Company's gross bitcoin holdings to Assumed Diluted Shares Outstanding, which provides management and investors a baseline with which to assess the Company's achievement of its strategy of acquiring bitcoin in an accretive manner over a given period. When evaluating a capital raise transaction, the Company reviews this metric and considers the impact such transaction will have on this ratio on a pro forma basis. This metric forms the baseline for the Company's BTC Yield, BTC Gain and BTC $ Gain KPIs, which present changes in BPS (in Sats) from the beginning of a period to the end of the period in different formats.
•BTC Yield measures the percentage change in BPS (in Sats) from the beginning of a period to the end of a period, which helps management and investors assess how the Company's achievement of its strategy of acquiring bitcoin in an accretive manner varies across periods. The Company uses BTC Yield to evaluate whether its capital markets activity and bitcoin acquisition strategy has resulted in gross per-share accretion (or dilution) on an Assumed Diluted Shares Outstanding basis over an applicable period, and to compare the impact of its strategy across periods.
•BTC Gain hypothetically expresses the percentage change reflected in the BTC Yield metric as if it reflected an increase in the amount of bitcoin held at the end of the applicable period as compared to the beginning of such period, which provides management and investors with visibility into the absolute change in the Company's bitcoin holdings resulting from the Company's BTC Yield. The Company uses BTC Gain to measure the accretive or dilutive impact of the change in BPS (in Sats) over an applicable period in absolute terms relative to the Company's bitcoin holdings. This metric can be particularly helpful when comparing the execution of the Company's capital markets strategy across periods, as BTC Yield may be lower when the Company's bitcoin asset base is larger, but result in the same BTC Gain. For example, a 10% BTC Yield with a starting amount of 100,000 bitcoin will result in 10,000 BTC Gain, which is the same BTC Gain that would result from 5% BTC Yield with a starting amount of 200,000 bitcoin.
•BTC $ Gain further expresses the percentage change reflected in the BTC Yield metric as an illustrative dollar value by multiplying that bitcoin-denominated change by the market price of bitcoin at the end of the applicable period as described above. The Company refers to this metric for illustrative purposes to consider the magnitude of the Company's BTC Gain for an applicable period with reference to the market price of bitcoin as of the end of an applicable period.
When the Company presents these KPIs for any period (a "measurement period") that is a subdivision of a longer specified period (the "reference period"), (i) BTC Yield is calculated as the BTC Yield for the period from the beginning of the reference period to the end of the measurement period, less the BTC Yield for the period from the beginning of the reference period to the beginning of the measurement period, (ii) BTC Gain is calculated using the BTC Yield for the measurement period and the Company's bitcoin holdings at the beginning of the reference period rather than at the beginning of the measurement period, and (iii) BTC $ Gain is calculated by multiplying such revised BTC Gain by the market price of bitcoin at the end of the measurement period. When the Company presents these metrics for an interim period within a fiscal year (e.g., a monthly, quarterly, or quarter-to-date period), then the reference period is that fiscal year, unless stated otherwise.
For example, if BPS (in Sats) is 100 at the beginning of a fiscal year (the reference period), 110 at the end of the first quarter and 125 at the end of the second quarter, the BTC Yield for the second quarter (the applicable measurement period) is calculated as (125/100 − 1) less (110/100 − 1), or 15%-reflecting the 15-point BPS (in Sats) increase from 110 to 125 expressed against the reference period starting BPS (in Sats) of 100. The sum of the first quarter BTC Yield (10%) and the second quarter BTC Yield (15%) equals the year-to-date BTC Yield of 25% (125/100 − 1).
When management uses these metrics, management takes into account the various limitations of these metrics. With respect to BPS (in Sats), BTC Yield, BTC Gain and BTC $ Gain, these include that they:
•do not take into account that the Company's assets, including its bitcoin, are subject to (i) all of the Company's existing and future liabilities, including its debt, and (ii) the preferential rights of the Company's preferred stockholders to dividends and the Company's assets in a liquidation, and that all such claims rank senior to those of the Company's common equity; therefore holders of such excluded instruments may have claims on the Company's assets (including bitcoin) senior to those of holders of common stock in the event of the Company's liquidation, and as a result the additional bitcoin acquired using proceeds from the sale of such instruments may not accrete to common stockholders; and
•assume that all indebtedness will be refinanced or, in the case of the Company's senior convertible debt instruments and convertible preferred stock, converted into shares of class A common stock in accordance with their respective terms.
Different assumptions would produce materially different results, and these KPIs may overstate or understate the Company's bitcoin after accounting for senior claims (net of the Company's USD Reserve).
BPS (in Sats), BTC Yield, BTC Gain and BTC $ Gain are not, and should not be understood as, financial performance, valuation or liquidity measures. Specifically:
•BPS (in Sats) does not represent (i) the ability of the Company to satisfy the Company's financial obligations, or (ii) the Company's book value per share.
•BTC Yield is not equivalent to "yield" in the traditional financial context. It is not a measure of the return on investment the Company's shareholders may have achieved historically or can achieve in the future by purchasing stock of the Company, or a measure of income generated by the Company's operations or its bitcoin holdings, return on investment on its bitcoin holdings, or any other similar financial measure of the performance of its business or assets.
•BTC Gain and BTC $ Gain are not equivalent to "gain" in the traditional financial context. They also are not measures of the return on investment the Company's shareholders may have achieved historically or can achieve in the future by purchasing stock of the Company, or measures of income generated by the Company's operations or its bitcoin holdings, return on investment on its bitcoin holdings, or any other similar financial measure of the performance of its business or assets. It should also be understood that BTC $ Gain does not represent a fair value gain of the Company's bitcoin holdings, and BTC $ Gain may be positive during periods when the Company has incurred fair value losses on its bitcoin holdings.
The trading price of the Company's class A common stock is informed by numerous factors in addition to the Company's bitcoin holdings and its actual or potential shares of common stock outstanding, and as a result, the trading price of the Company's securities can deviate significantly from the fair market value of the Company's bitcoin, and none of BPS (in Sats), BTC Yield, BTC Gain or BTC $ Gain are indicative or predictive of the trading price of the Company's securities.
Investors should rely on the financial statements and other disclosures contained in the Company's SEC filings. In particular, the Company has adopted Accounting Standards Update No. 2023-08, Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets ("ASU 2023-08"), which requires that the Company measure its bitcoin at fair value in its statement of financial position as of the end of a reported period, and recognize unrealized gains and losses from changes in the fair value in net income (loss) for the reported period. As a result, the Company may incur unrealized gain or loss on digital assets based on changes in the market price of bitcoin during a period, which would not be reflected in BPS (in Sats), BTC Yield, BTC Gain or BTC $ Gain. For example, if the Company increases its bitcoin holdings relative to Assumed Diluted Shares Outstanding during a reported period, the Company would achieve increased BPS (in Sats) and positive BTC Yield, BTC Gain and BTC $ Gain even if the Company reports significant unrealized loss on digital assets for the period. Similarly, if the Company increases Assumed Diluted Shares Outstanding at a faster rate than its bitcoin holdings, then the Company would experience decreased BPS (in Sats) and negative BTC Yield, BTC Gain, and BTC $ Gain, even if the Company reports significant unrealized gain on digital assets for the period.
As noted above, these KPIs are narrow in their purpose and are used by management to assist it in assessing whether the Company is raising and deploying capital in a manner accretive to shareholders solely as it pertains to its bitcoin holdings. References to a transaction, or to the Company's capital deployment, being "accretive" or "dilutive" refer only to the effect on the specified KPI under the stated assumptions, and do not mean that the transaction is accretive or dilutive to the Company's earnings, cash flow, book value, enterprise value, intrinsic value, or the trading price of the Company's securities.
In calculating BPS (in Sats), BTC Yield, BTC Gain, and BTC $ Gain, the Company does not consider the source of capital used for the acquisition of its bitcoin. When the Company purchases bitcoin using proceeds from offerings of non-convertible notes or non-convertible preferred stock, or convertible notes or preferred stock that carry conversion prices above the current trading price of the Company's common stock or conversion rights that are not then exercisable, such transactions have the effect of increasing the BPS (in Sats), BTC Yield, BTC Gain and BTC $ Gain, while also increasing the Company's indebtedness and senior claims of holders of instruments other than class A common stock with respect to dividends and to the Company's assets, including its bitcoin, if the Company were to liquidate, in a manner that is not reflected in these metrics.
If any of the Company's convertible notes mature or are redeemed without being converted into common stock, or if the Company elects to redeem or repurchase its non-convertible instruments, the Company may be required to sell shares of its class A common stock or bitcoin to generate sufficient cash proceeds to satisfy those obligations, either of which would have the effect of decreasing BPS (in Sats), BTC Yield, BTC Gain and BTC $ Gain, and adjustments for such decreases are not contemplated by the assumptions made in calculating these metrics. Accordingly, these metrics might overstate or understate the accretive nature of the Company's use of capital to buy bitcoin because not all bitcoin is purchased using proceeds from issuances of class A common stock, instruments that are convertible into class A common stock may be forfeited or repaid with funds other than from the sale of class A common stock in the period in question rather than being exercised for or converted into class A common stock and not all proceeds from issuances of class A common stock are used to purchase bitcoin.
In addition, the Company is required to pay dividends with respect to its perpetual preferred stock in perpetuity. The Company could pay these dividends with cash or, in the case of STRK, by issuing shares of class A common stock. The Company has issued shares of class A common stock and certain classes of its preferred stock for cash to fund the payment of cash dividends, and the Company may in the future issue shares of class A common stock in lieu of paying dividends on STRK. As a result, the Company has experienced, and may experience in the future, increases in Assumed Diluted Shares Outstanding without corresponding increases in its bitcoin holdings, resulting in decreases in BPS (in Sats), BTC Yield, BTC Gain and BTC $ Gain for the applicable periods.
The Company has historically not paid any dividends on its shares of class A common stock, and by presenting these KPIs the Company makes no suggestion that it intends to do so in the future. Ownership of the Company's securities, including its class A common stock and preferred stock, does not represent an ownership interest in, or a redemption right with respect to, the bitcoin the Company holds.
The Company determines its KPI targets based on its history and future goals. The Company's ability to maintain any given level of BPS (in Sats), or achieve positive BTC Yield, BTC Gain, or BTC $ Gain may depend on a variety of factors, including factors outside of its control, such as the price of bitcoin, and the availability of debt and equity financing on favorable terms. Past performance is not indicative of future results.
These KPIs are merely supplements, not substitutes to the financial statements and other disclosures contained in the Company's SEC filings. They should be used only by sophisticated investors who understand their limited purpose and many limitations.
Change in Method of Calculating KPIs for Interim Periods
Effective January 1, 2026, we changed the method by which we calculate BTC Yield, BTC Gain and BTC $ Gain when presenting such KPIs for any period that is a subdivision of a longer specified period (the "Methodology Change"), and such KPI metrics for such periods are therefore not directly comparable to those previously reported.
Nature of the Change. Under the prior methodology, BTC Yield used BPS at the beginning of the Measurement Period as the denominator, and BTC Gain used bitcoin holdings at the beginning of the Measurement Period as the multiplier. Under the updated methodology described above, BTC Yield uses BPS at the beginning of the reference period as the denominator, reduced by the BTC Yield for the period from the beginning of the reference period to the beginning of the Measurement Period, with BTC Gain and BTC $ Gain calculated consistently therewith.
Reason for the Change. The change improves comparability of KPI metrics across Measurement Periods within a reference period. Because each Measurement Period's BTC Yield now reflects our per-share bitcoin accretion against a consistent baseline - BPS at the beginning of the reference period - BTC Yields for all Measurement Periods within a reference period are additive and sum to the BTC Yield for the reference period, providing investors with a more intuitive view of period-to-period execution of our bitcoin strategy.
Effect on Previously Reported Figures. The effect of the Methodology Change on KPI figures from a prior period will be presented when such period next appears as a period-over-period comparative period. Annual KPI figures, year-to-date KPI figures, as well as KPI figures for the three and six months ended June 30, 2026 and 2025, are unaffected.
Other Differences Relevant to Understanding Our Performance. Investors should note: (i) when BPS is increasing, the updated methodology will generally produce higher BTC Yield figures for subsequent Measurement Periods within a reference period, because the denominator does not reset to reflect per-share gains from earlier Measurement Periods in the reference period; and conversely, when BPS is declining, it may produce lower (more negative) figures for later Measurement Periods; (ii) BTC Yields under the updated methodology sum to reference period BTC Yield, whereas they did not under the prior methodology; and (iii) BTC $ Gain, because it applies each Measurement Period-end bitcoin price rather than reference period-end price, will not arithmetically sum to reference period BTC $ Gain.
Strategy Inc. published this content on August 03, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on August 03, 2026 at 20:51 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]