MicroStrategy (MSTR) Reports Losses in Q1 After Digital Asset Impairment Hit

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As a researcher with a background in finance and experience following the technology sector, I find MicroStrategy’s first-quarter 2024 financial results disheartening. The digital impairment loss the company experienced led to a significant decline in revenues and a swing to losses.

In the first quarter of 2024, financial heavyweight MicroStrategy (MSTR) announced unfavorable results that fell short of market expectations. An unexpected digital impairment loss led to this outcome and caused the company to report losses instead of profits during this period. These findings provide a clearer perspective on the crypto industry and potential challenges facing companies within it.

MicroStrategy Sees A Revenue Drop

As an analyst, I would express this information as follows: In Q1 2024, MicroStrategy’s total revenues amounted to $115.2 million, marking a 5.5% decrease in comparison to the same quarter last year. On a non-GAAP constant currency basis, this decline was slightly larger at 5.7%. The revenue stream from product licenses and subscription services accounted for $35.9 million during Q1 2024, representing a 0.9% decrease from Q1 2023 or an identical decrease on a non-GAAP constant currency basis.

In the first quarter of 2024, operating expenses rose significantly from the previous year, amounting to $288.9 million – a 152.8% increase compared to the $113.6 million spent in the same period of 2023.

MicroStrategy Swings to Losses

As an analyst, I would rephrase the given information as follows: In the first quarter of 2024, MicroStrategy incurred a significant operational loss amounting to $203.7 million, contrasting the modest operational income of $20.3 million recorded during the same period the previous year. The net loss for the first quarter of 2024 was $53.1 million, which translated into a loss per share of $3.09 on a diluted basis. This represents a drastic shift from the impressive net income of $461.2 million or $31.79 per share on a diluted basis that MicroStrategy reported during the first quarter of 2023.

As an analyst, I would rephrase the given information as follows: In the first quarters of 2024 and 2023, our digital asset impairment losses amounted to $191.6 million and $18.9 million, respectively. Moreover, our net income was significantly influenced by tax implications arising from share-based compensation. Specifically, we experienced a tax benefit of $160.8 million in Q1 2024 and a substantial benefit of $453.2 million in Q1 2023.

MicroStrategy Reveals BTC Holdings

Michael Saylor of MicroStrategy announced that the company now owns a total of 214,400 Bitcoins following their latest acquisition. The average price paid for each Bitcoin was approximately $35,180. MicroStrategy first disclosed this purchase in March, having bought 9,245 Bitcoins previously, bringing their total holdings to 214,246. An additional purchase of an undisclosed number of Bitcoins raised the total to 214,278. In April, MicroStrategy bought only 122 more Bitcoins with this current position.

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2024-04-30 03:59