Yahoo Finance MicroStrategy Inc (MSTR) Q1 2024 Earnings Call Transcript Highlights: Strategic Bitcoin ...
Total Bitcoin Holdings: 214,400 bitcoins, market value of $14 billion.
Bitcoin Acquisitions: Acquired additional 25,250 bitcoins at an average price of $65,232.
Subscription Services Revenue: $23 million, up 22% year-over-year.
Total Revenue: $115.2 million, down 5% year-over-year.
Product License Revenue: $12.9 million, down 26% year-over-year.
Non-GAAP Subscription Billings: Grew 30% to $17.7 million.
Bitcoin Impairment Charges: $192 million for the quarter.
Net Proceeds from Convertible Notes: Used to acquire additional bitcoins.
Unrestricted Cash and Cash Equivalents: Grew to $81.3 million.
Release Date: April 29, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Q & A Highlights
Q: Can you elaborate on the Company's new positioning as the bitcoin development company? Are there any new developments you would like to highlight? A: (Phong Le - President and CEO) - We've extensively discussed our role as a bitcoin development company. Specifically, we're focusing on bitcoin security developments, which will be shared in detail at the upcoming Bitcoin for Corporations event. Our ongoing experiments and advocacy efforts in bitcoin development are key aspects of our strategy.
Q: MicroStrategy's equity premium to Bitcoin holdings has expanded significantly over the past few months. How do you think about this premium and what do you attribute it to? A: (Michael Saylor - Executive Chairman) - The premium is justified by our strategic use of leverage and our low cost of capital. Our ability to issue equity at a premium and manage convertible issuances effectively enhances our financial structure, allowing us to leverage future corporate opportunities and justify a higher premium.
Q: Has the plan to exercise MicroStrategy stock options under Michael Saylor's 10b5-1 plan completed? Can you provide further details on the executed plan and the thought process behind the stock sales? A: (Andrew Kang - Senior Executive VP & CFO) - The plan, which was disclosed in our Q3 filing last year, involved the sale of 5,000 shares daily from January to April at market prices, completing on April 25. These sales were part of a programmatic approach to manage expiring options from 2014.
Q: Can you please elaborate on the progress of converting software clients from license to cloud, and the AI-related partnerships? A: (Phong Le - President and CEO) - We are aggressively working with major hyperscalers like Microsoft, AWS, and Google Cloud to transition customers to the cloud. AI capabilities, which are only available in the cloud, provide additional impetus for this transition, though it may temporarily disrupt product license revenue.
Q: How does MicroStrategy manage the balance between leveraging Bitcoin and maintaining a healthy financial structure? A: (Michael Saylor - Executive Chairman) - Our strategy involves a balanced approach using cash flows, equity, and debt. The ability to raise capital through various means, including convertible debt, allows us to maintain a low cost of capital and leverage opportunities to enhance shareholder value.
Q: What are the implications of the recent Bitcoin halving on MicroStrategy's strategy? A: (Michael Saylor - Executive Chairman) - The halving significantly reduces the daily Bitcoin supply from miners, enhancing Bitcoin's scarcity and value. This event supports our bullish outlook on Bitcoin and its role in our strategic financial management.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
This article first appeared on GuruFocus.
