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MSTR Q3 Earnings Beat Estimates on Bitcoin Gains Despite Revenue Miss
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Key Takeaways
Strategy's Q3 EPS soared 431.5% to $44.75, beating the consensus estimate of $21.50.
A $20.91 billion gain on digital assets drove operating income higher, lifting net income to $19.53 billion.
Strategy's bitcoin holdings reached 848,517, while USD Assets climbed to $5.07 billion as of Oct. 25.
Strategy Inc. (MSTR - Free Report) reported third-quarter 2026 earnings of $44.75 per share, surpassing the Zacks Consensus Estimate of $21.50. The figure soared 431.5% from $8.42 a year earlier, largely reflecting a sharp increase in gains on its bitcoin holdings.
Total revenues declined 2.5% year over year to $125.43 million, missing the consensus estimate of $130.40 million. Despite weaker software sales overall, subscription services revenues grew 49.2%. Strategy's bitcoin holdings reached 848,517 as of Oct. 25, 2026.
MSTR's Digital Asset Gains Drive Operating Income
Operating income reached $20.91 billion, up from $3.89 billion in the prior-year quarter. The results included a $20.91 billion gain on digital assets compared with $3.89 billion a year earlier, reflecting changes in the fair value of Strategy's bitcoin.
Net income rose to $19.53 billion from $2.79 billion. Net income attributable to common stockholders totaled $19.12 billion compared with $2.65 billion a year ago. Because digital assets are marked to market, fluctuations in bitcoin prices can substantially affect reported profitability.
Strategy's Software Revenue Mix Remains Uneven
Subscription services revenues increased to $68.59 million from $45.97 million. However, product license revenues plunged 78% year over year to $3.83 million from $17.37 million.
Product support revenues decreased 26.3% to $37.68 million from $51.12 million, weighing on overall sales. Other services revenues increased 7.7% to $15.33 million. The contrasting trends highlight the growing contribution of subscriptions alongside declines in traditional product categories.
MSTR's Gross Margin Improves Despite Lower Sales
Gross profit declined 1.2% year over year to $89.63 million compared with $90.68 million a year ago. However, the gross margin improved to 71.5% from 70.5%. Total cost of revenues fell 5.8% to $35.79 million from $38.01 million.
Sales and marketing expenses increased 7.9% to $32.27 million, while research and development costs grew 6.5% to $24.06 million. General and administrative expenses, in contrast, fell 5.9% to $35.91 million.
Strategy Continues to Expand Bitcoin Holdings
Strategy held 847,666 bitcoins at September-end compared with 846,000 at June-end. During the quarter, it purchased 7,218 bitcoins for $588.09 million and sold 5,552 bitcoins. Proceeds from the sales helped fund preferred dividends and STRC stock repurchases.
As of Oct. 25, its holdings had increased to 848,517 bitcoins, up 26% year to date. Those holdings carried an original cost of $64.02 billion and a market value of $68.90 billion, based on the Oct. 23 bitcoin price of $81,200. However, BTC Yield, which measures bitcoin changes held per assumed share, was negative 3.7% year to date.
MSTR Raises Funds and Builds Its Dollar Reserves
Strategy generated $5.41 billion in net proceeds through its at-the-market common stock offering during the third quarter. Year-to-date capital raised totaled $21.23 billion as of Oct. 25. The company also received $58.7 million in additional ATM proceeds from Oct. 1 through Oct. 23.
Cash and cash equivalents reached $2.50 billion at September-end compared with $1.71 billion at June-end. Short-term investments rose to $3.40 billion from $736.1 million. By Oct. 25, Strategy reported $5.07 billion in USD Assets, providing approximately 3.4 years of coverage for preferred dividends and debt interest.
We now look forward to the earnings releases of other companies from the financial miscellaneous services industry, like Chime Financial, Inc. (CHYM - Free Report) , slated to report on Nov. 4, and IREN Limited (IREN - Free Report) , on Nov. 5.
The Zacks Consensus Estimate for Chime Financial, Inc.’s third-quarter 2026 EPS is pegged at 9 cents, implying a significant year-over-year increase. CHYM currently sports a Zacks Rank #1.
The consensus estimate for IREN’s third-quarter 2026 EPS is pegged at negative 46 cents, calling for a 35.3% year-over-year decline. IREN currently carries a Zacks Rank #3.
View the Zacks #1 Rank List
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MSTR Q3 Earnings Beat Estimates on Bitcoin Gains Despite Revenue Miss
Key Takeaways
Strategy Inc. (MSTR - Free Report) reported third-quarter 2026 earnings of $44.75 per share, surpassing the Zacks Consensus Estimate of $21.50. The figure soared 431.5% from $8.42 a year earlier, largely reflecting a sharp increase in gains on its bitcoin holdings.
Total revenues declined 2.5% year over year to $125.43 million, missing the consensus estimate of $130.40 million. Despite weaker software sales overall, subscription services revenues grew 49.2%. Strategy's bitcoin holdings reached 848,517 as of Oct. 25, 2026.
MSTR's Digital Asset Gains Drive Operating Income
Operating income reached $20.91 billion, up from $3.89 billion in the prior-year quarter. The results included a $20.91 billion gain on digital assets compared with $3.89 billion a year earlier, reflecting changes in the fair value of Strategy's bitcoin.
Net income rose to $19.53 billion from $2.79 billion. Net income attributable to common stockholders totaled $19.12 billion compared with $2.65 billion a year ago. Because digital assets are marked to market, fluctuations in bitcoin prices can substantially affect reported profitability.
Strategy's Software Revenue Mix Remains Uneven
Subscription services revenues increased to $68.59 million from $45.97 million. However, product license revenues plunged 78% year over year to $3.83 million from $17.37 million.
Product support revenues decreased 26.3% to $37.68 million from $51.12 million, weighing on overall sales. Other services revenues increased 7.7% to $15.33 million. The contrasting trends highlight the growing contribution of subscriptions alongside declines in traditional product categories.
MSTR's Gross Margin Improves Despite Lower Sales
Gross profit declined 1.2% year over year to $89.63 million compared with $90.68 million a year ago. However, the gross margin improved to 71.5% from 70.5%. Total cost of revenues fell 5.8% to $35.79 million from $38.01 million.
Sales and marketing expenses increased 7.9% to $32.27 million, while research and development costs grew 6.5% to $24.06 million. General and administrative expenses, in contrast, fell 5.9% to $35.91 million.
Strategy Continues to Expand Bitcoin Holdings
Strategy held 847,666 bitcoins at September-end compared with 846,000 at June-end. During the quarter, it purchased 7,218 bitcoins for $588.09 million and sold 5,552 bitcoins. Proceeds from the sales helped fund preferred dividends and STRC stock repurchases.
As of Oct. 25, its holdings had increased to 848,517 bitcoins, up 26% year to date. Those holdings carried an original cost of $64.02 billion and a market value of $68.90 billion, based on the Oct. 23 bitcoin price of $81,200. However, BTC Yield, which measures bitcoin changes held per assumed share, was negative 3.7% year to date.
MSTR Raises Funds and Builds Its Dollar Reserves
Strategy generated $5.41 billion in net proceeds through its at-the-market common stock offering during the third quarter. Year-to-date capital raised totaled $21.23 billion as of Oct. 25. The company also received $58.7 million in additional ATM proceeds from Oct. 1 through Oct. 23.
Cash and cash equivalents reached $2.50 billion at September-end compared with $1.71 billion at June-end. Short-term investments rose to $3.40 billion from $736.1 million. By Oct. 25, Strategy reported $5.07 billion in USD Assets, providing approximately 3.4 years of coverage for preferred dividends and debt interest.
Currently, MSTR carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Strategy Inc Price, Consensus and EPS Surprise
Strategy Inc price-consensus-eps-surprise-chart | Strategy Inc Quote
Upcoming Earnings Releases
We now look forward to the earnings releases of other companies from the financial miscellaneous services industry, like Chime Financial, Inc. (CHYM - Free Report) , slated to report on Nov. 4, and IREN Limited (IREN - Free Report) , on Nov. 5.
The Zacks Consensus Estimate for Chime Financial, Inc.’s third-quarter 2026 EPS is pegged at 9 cents, implying a significant year-over-year increase. CHYM currently sports a Zacks Rank #1.
The consensus estimate for IREN’s third-quarter 2026 EPS is pegged at negative 46 cents, calling for a 35.3% year-over-year decline. IREN currently carries a Zacks Rank #3.