MicroStrategy Assumes Its Final (Bitcoin) Form

Bitcoin holding company MicroStrategy ($MSTR) filed its 2024 annual report today, which gives us as reasonable an excuse as any to look at the former software company’s financial disclosures and see what happens when you transmogrify yourself into a bitcoin mainstay.

For those who haven’t paid attention to MicroStrategy's journey until now (oh, how we envy you), once upon a time the company had been a developer of business analytics software. In 2020, however, CEO Michael Saylor boldly announced that from then forward, MicroStrategy’s main line of business would be buying and holding bitcoin. That August, the company dropped $248.9 million to buy 21,454 bitcoin.

MicroStrategy has kept on that path ever since, issuing bonds and then using the cash to buy ever more bitcoin. Those holdings have also increased in value on a per BTC basis, including an astonishing price run that began immediately after the 2024 election and continues to this day.

The result is Figure 1, below, which charts out MicroStrategy’s total assets by bitcoin holdings and all other assets. 

Yowza, that’s a lot of value. For comparison purposes, MicroStrategy’s total bitcoin holdings were worth $6.85 billion at the end of September 2024 — and then soared another $17.06 billion in the fourth quarter of 2024 alone, to end the year with a total value of $23.91 billion.

Tucked within the MicroStrategy 10-K you can see where all that increase in value came from. The company includes a “Digital Assets” footnote which discloses the number of bitcoins held at the end of each period and their assessed value. See Figure 2, below.

 

As you can see, MicroStrategy does sometimes sell bitcoin, but only rarely. That made us wonder: how do they pay the bills while buying all those bitcoin? So we also looked at the company’s Segments footnote to see whether that rump business of selling software still turns enough profit to keep the lights on.

Answer: yes, MicroStrategy’s operating business still does turn a respectable profit. The company includes a somewhat off-beat income report in the Segment footnote, where you can see the operating unit’s performance pulled out from the bitcoin holdings. See Figure 3, below.

MicroStrategy had $463.4 million in operating revenue in 2024, which ultimately had net income of $175 million. Those numbers, however, are overshadowed by the digital assets division, which includes a $1.79 billion impairment charge; when you add both divisions together for one consolidated net income number, the profit from the operating division gets lost in the gloom.

An important point here is that if you only look at the primary income statement, you won’t see that net income from the operating side. You’ll see the $463.4 million revenue number at the top, and the $1.16 billion net loss at the bottom, but you’d need to do your own arithmetic to back out the $1.79 billion impairment charge and understand that the operating side did quite decently in 2024. 

Or you could just use Calcbench and dig into the footnotes with our Disclosures & Footnotes tool, because we always have your back — and the data you need.