10-K – 2026-02-19 – mstr-20251231.htm

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 to be 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 from the beginning of a period to the end of the period.
• BTC Gain represents the number of bitcoins held by us at the beginning of a period multiplied by the BTC Yield for the period.
• BTC $ Gain represents the dollar value of the BTC Gain calculated by multiplying the BTC Gain by the market price of bitcoin. For determining BTC $ Gain on a quarter-to-date or year-to-date basis, unless otherwise specified, we use the current market price of bitcoin. For determining BTC $ Gain for a past fiscal year or other past period, we use the market price of bitcoin as of 4:00pm ET as reported on the Coinbase exchange on the last day of the applicable period. We use these market prices of bitcoin for this calculation solely for the purpose of facilitating this illustrative calculation.
The following table presents our bitcoin holdings, our Assumed Diluted Shares Outstanding, our BPS, and the price of bitcoin, each as of December 31, 2025, 2024 and 2023, as well as the changes in each between the periods shown:

As of December 31, 2025 Change (#) As of December 31, 2024 Change(#) As of December 31, 2023
Number of Bitcoin Held 672,500 225,030 447,470 258,320 189,150
Assumed Diluted Shares Outstanding (in thousands) 344,897 63,162 281,735 74,099 207,636
BPS (in Sats) 194,986 36,160 158,826 67,730 91,097
Bitcoin Price ($) $ 87,515  $ (5,875) $ 93,390  $ 50,859  $ 42,531 

The following tables present our BTC Yield, BTC Gain, and BTC $ Gain for the years ended December 31, 2024 and 2025:

Year Ended December 31,
2025 2024 % Change
BTC Yield 22.8 % 74.3 % (51.5 %) (1)
BTC Gain 101,873  140,631  (27.6) %
BTC $ Gain (in millions, except percentage) $ 8,915  $ 13,134  (32.1) %

(1) Represents the absolute change between the periods presented.
• BTC Yield: We achieved BTC Yield of 22.8% for the year ended December 31, 2025, as compared to 74.3% in the prior year, primarily due to a decrease in the total number of bitcoin acquired, a change in mix of dilutive versus non-dilutive capital markets activity and an overall increase in dilutive issuances of class A common stock to fund our liquidity needs, including payments of dividends on our Preferred Stock and interest on our Convertible Notes, to establish the USD Reserve, and for other purposes other than the acquisition of bitcoin, compared to the prior year, partially offset by an increase in non-dilutive issuances of preferred stock to purchase bitcoin compared to the prior year.
◦ We acquired 225,030 bitcoin (increasing our total holdings to 672,500) during the year ended December 31, 2025, compared to 258,320 bitcoin acquired (increasing our total holdings to 447,470) during the year ended December 31, 2024. Of the approximately $25.15 billion in net proceeds we raised from capital markets activity during the year ended December 31, 2025, approximately $19.46 billion was attributable to issuances under the STRK Stock and class A common stock under our ATMs, the issuance of the 2030B Convertible Notes and the initial public offering of STRK Stock, which resulted in an increase of
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approximately 63.2 million shares in Assumed Diluted Shares Outstanding (bringing our total Assumed Diluted Shares Outstanding to approximately 344.9 million as of December 31, 2025), while approximately $5.69 billion was attributable to issuances of STRF Stock, STRC Stock, and STRD Stock under our ATMs and the initial public offerings of STRF Stock, STRC Stock STRE Stock, and STRD Stock, which did not increase our Assumed Diluted Shares Outstanding. Further, we used proceeds from the issuance of class A common stock under our ATMs to pay dividends on our Preferred Stock and interest on our Convertible Notes, to establish our USD Reserve and for other general corporate purposes, each of which increased Assumed Diluted Shares Outstanding without a corresponding increase to our bitcoin holdings during the year ended December 31, 2025. See “Liquidity and Capital Resources ” for additional information. 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 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. In comparison, the $22.5 billion we raised from capital markets activity during the year ended December 31, 2024 was primarily attributable to issuances of class A common stock under our ATMs and of our 2028 Convertible Notes, 2029 Convertible Notes, 2030A Convertible Notes, 2031 Convertible Notes and 2032 Convertible Notes, which resulted in an increase of approximately 74.1 million shares in Assumed Diluted Shares Outstanding (bringing our total Assumed Diluted Shares Outstanding to approximately 281.7 million Assumed Diluted Shares Outstanding as of December 31, 2024). This was partially offset by our issuances of class A common stock under our ATMs to pay interest on our Convertible Notes and use of approximately $523.9 million of the proceeds from our offering of our 2028 Convertible Notes to repay the principal amount plus accrued and unpaid interest on our 6.125% Senior Secured Notes due 2028, each of which increased our Assumed Diluted Shares Outstanding without a corresponding increase to our bitcoin holdings during the year ended December 31, 2024.
• BTC Gain: We achieved BTC Gain of 101,873 for the year ended December 31, 2025, as compared to 140,631 during the prior year, as applicable, primarily due to a decrease in our BTC Yield for the year ended December 31, 2025, as compared to the prior year, as set forth above, partially offset by an increase in our bitcoin holdings as of the beginning of 2025 compared to the beginning of 2024 (as of December 31, 2023 and 2024, we held 189,150 and 447,470 bitcoin, respectively).
• BTC $ Gain: We achieved BTC $ Gain of approximately $8.92 billion for the year ended December 31, 2025, as compared to approximately $13.13 billion during December 31, 2024, primarily due to an decrease in bitcoin price to $87,515 as of December 31, 2025 from $93,390 as of December 31, 2024, as well as a decrease in BTC Gain compared to the same period 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 $65,000 per bitcoin and above $120,000 per bitcoin on the Coinbase exchange (our principal market for bitcoin) in the 12 months preceding the date of this Annual Report. 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. Holding bitcoin does not generate any cash flows and involves custodial fees and other costs. Additionally, 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. Our strategy of acquiring and holding bitcoin also exposes us to counterparty risks with respect to the custody of our bitcoin, cybersecurity risks, and other risks inherent
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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.
• Capital management:
◦ Source of capital. We rely substantially on the availability of equity and debt capital markets to fund our preferred stock dividend obligations, interest expense, and other financial obligations as well as to maintain the USD Reserve at targeted levels. As such, we are subject to risks relating to the availability of capital to us on favorable terms or at all.
◦ Preferred stock dividend obligations. 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 dividend expense.
◦ 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 tax liability. Since adopting ASU 2023-08, we are no longer required to account for our bitcoin under a cost-less-impairment accounting model and we no longer record a deferred tax asset related to bitcoin impairment losses. Instead, we establish a deferred tax liability if the fair market value of bitcoin at the reporting date is greater than the average cost basis of our bitcoin holdings at such reporting date, and any subsequent increases or decreases in the fair market value of bitcoin will increase or decrease the deferred tax liability. As of December 31, 2025, the cost basis of the bitcoin we held was less than its fair value. However, as of the date of this report, the fair market value of our bitcoin is less than the average cost basis of our bitcoin. If the fair market value of our bitcoin as of the end of any future period is below our 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 and a deferred tax asset for the unrealized loss would be recorded and we would be required to establish a valuation allowance against all of our US federal and state deferred tax assets.
◦ Legal and regulatory developments.
▪ CAMT: On September 30, 2025, the Treasury and the IRS issued the Interim Guidance which, in relevant part, clarifies that a corporation may disregard unrealized gains and losses on its digital asset holdings when computing AFSI for purposes of determining whether it is subject to the 15% CAMT under 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 no longer 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 year ended December 31, 2025.
• Software business:
◦ On-premise to cloud subscription. During the year ended December 31, 2025, we continued to migrate existing customers from on-premise perpetual licenses to cloud-based subscription offerings. This transition
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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 year ended December 31, 2025, we experienced growth in cloud subscription services revenue of $68.9 million, partially offset by declines in product license revenue and related product support revenue of $48.5 million in the aggregate. 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 Item 1A., Risk Factors, of Part I of this Annual Report for information regarding the risks relating to our bitcoin holdings and strategy, bitcoin generally, our securities and capital markets activities, our operations, and other important risk factors, the materialization of any of which could materially impact our results and liquidity.

Results of Operations
The following table sets forth certain operating highlights (in thousands) for the years ended December 31, 2025 and 2024:

Years Ended December 31,

2025
2024
% Change
Revenues:
Product licenses $ 39,674  $ 48,567  (18.3) %
Subscription services 175,657  106,776  64.5  %
Total product licenses and subscription services 215,331  155,343  38.6  %
Product support 204,225  243,805  (16.2) %
Other services 57,677  64,308  (10.3) %
Total revenues 477,233  463,456  —   3.0  %
Cost of revenues:
Product licenses 3,956  3,060  29.3  %
Subscription services 72,956  42,440  71.9  %
Total product licenses and subscription services 76,912  45,500  69.0  %
Product support 28,592  33,289  (14.1) %
Other services 43,913  50,679  (13.4) %
Total cost of revenues 149,417  129,468  15.4  %
Gross profit 327,816  333,988  (1.8) %
Operating expenses:
Sales and marketing 122,956  138,081  (11.0) %
Research and development 93,860  118,486  (20.8) %
General and administrative 151,909  140,537  8.1  %
Unrealized loss on digital assets 5,403,476  —  n/a
Digital asset impairment losses —  1,789,862  n/a
Total operating expenses 5,772,201  2,186,966  NM
Loss from operations
$ (5,444,385) $ (1,852,978) NM

For the results of operations we have included the respective percentage of changes, unless greater than 100% or less than (100)%, in which case we have denoted such changes as not meaningful (NM).
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Unrealized losses associated with digital assets and digital asset impairment losses
The following table sets forth the unrealized losses on our digital assets for the year ended December 31, 2025 and impairment losses on our digital assets for the year ended December 31, 2024 (in thousands):

Year Ended December 31, %
Change
2025
2024

Unrealized losses on digital assets
$5,403,476 — n/a
Digital asset impairment losses — $1,789,862 n/a

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 value are recognized as incurred in the Consolidated Statements of Operations, and the fair market value of our bitcoin is reflected within the Consolidated Balance Sheets each reporting period-end.
We recognized an unrealized loss on digital assets of approximately $5.4 billion for the year ended December 31, 2025, primarily due to a decrease in the fair market value of our bitcoin during the year ended December 31, 2025. 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.
We did not sell any of our digital assets during the years ended December 31, 2025 and 2024.

Revenues
• Product licenses revenues. Product license revenues are derived from fees earned for licensing our business intelligence software to customers on a term or perpetual basis, for installation either on-premises or in a customer-managed public cloud environment. Product license revenue is recognized at the point when control to the license is transferred to the customer. Product license revenues decreased by $8.9 million for the year ended December 31, 2025, as compared to the same period in the prior year, primarily due to increased migration to our cloud subscription services offerings.
• 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 $68.9 million for the year ended December 31, 2025 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 $39.6 million for the year ended December 31, 2025, 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.
• Other services revenues: Other services revenues are derived from providing consulting services and training and education services. Revenue from consulting services and certain education services is recognized over time as the services are delivered, and revenue from annual education subscriptions is recognized on a straight-line basis over the contract period. Other services revenues decreased by $6.6 million for the year ended December 31, 2025, as compared to the same periods in the prior year, primarily due to lower demand for consulting and training services.
Cost of Revenues
• Cost of Revenues. Cost of revenues increased by $19.9 million for the year ended December 31, 2025, as compared to the same period in the prior year, primarily due to a $32.5 million increase in subscription services cost of revenues driven by higher cloud service fees and related infrastructure costs associated with customer environments hosted in our cloud environment, as well as a $1.9 million increase in billable subcontractor expenses. These increases were partially offset by a $16.4 million decrease in personnel-related costs reflecting headcount reductions.
Operating 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 decreased by $15.1 million for the year
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ended December 31, 2025, as compared to the same period in the prior year primarily due to a decrease in personnel costs primarily attributable to a decrease in average staffing levels and forfeiture of certain equity incentive awards, partially offset by an increase in commissions.
• Research and development expenses. Research and development expenses consist of the personnel costs for our software engineering personnel and related overhead costs. Research and development expenses decreased by $24.6 million for the year ended December 31, 2025, as compared to the same periods in the prior year, primarily due to a decrease in personnel costs primarily attributable to a decrease in average staffing levels and forfeiture of certain equity incentive awards, partially offset by increased cloud-hosting costs used for internal development and testing.
• General and administrative expenses. General and administrative expenses consist of personnel and related overhead costs, and other costs of our executive, finance, human resources, information systems, and administrative departments, as well as third-party consulting, legal, and other professional fees, and third-party costs associated with our digital asset holdings. General and administrative expenses increased by $11.4 million for the year ended December 31, 2025, as compared to the same period in the prior year, primarily due to higher bitcoin custody fees, advocacy expenses, and public filing costs, partially offset by a reduction in personnel costs and decreased legal fees.

Interest Expense, Net
Interest 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 held in our USD Reserve. The following table sets forth interest expense, net (in thousands) for the periods indicated:

Year Ended December 31,
2025
2024

Interest expense, net:
2025 Convertible Notes $ —  $ 3,865 
2027 Convertible Notes 401  4,046 
2028 Convertible Notes 10,505  2,939 
2029 Convertible Notes 7,279  787 
2030A Convertible Notes 8,937  7,241 
2030B Convertible Notes 4,263  — 
2031 Convertible Notes 7,739  6,063 
2032 Convertible Notes 20,696  11,067 
2028 Secured Notes —  23,915 
Other interest expense, net
5,148  2,018 
Total interest expense, net $ 64,968  $ 61,941 

Other (Expense) Income, Net
Other expense, net, of $16.6 million in 2025 was comprised primarily of foreign currency transaction net losses. Other income, net of $3.5 million in 2024 was comprised primarily of foreign currency transaction net gains.

Income Taxes
We recorded a benefit from income taxes of $1.68 billion on a pretax loss of $5.53 billion that resulted in an effective tax rate of 30.4% for the year ended December 31, 2025, as compared to a benefit from income taxes of $767.7 million on a pre-tax loss of $1.93 billion that resulted in an effective tax rate of 39.7% for the year ended December 31, 2024. During the year ended December 31, 2025, our provision for income taxes primarily related to (i) the tax effect of the unrealized loss on digital assets and (ii) a tax benefit related to share-based compensation (including the income tax effects of exercises of stock options and vesting of share-settled restricted stock units). During the year ended December 31, 2024, our benefit from income taxes primarily related to (i) a tax benefit from an increase in our deferred tax asset related to the impairment on our bitcoin holdings and (ii) a tax benefit related to share-based compensation (including the income tax effects of exercises of stock options and vesting of share-settled restricted stock units).
As of December 31, 2025, we had a valuation allowance of $0.5 million primarily related to our deferred tax assets related to foreign tax credits in certain jurisdiction. As of December 31, 2025, we had deferred tax liabilities with respect to the unrealized gain on our bitcoin holdings of approximately $2.42 billion. Our deferred tax liabilities are partially offset by
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deferred tax assets, such as net operating losses and capitalized research and development costs. As of December 31, 2025, the cost basis of the bitcoin we held was less than its fair market value. However, as of the date of this report, the cost basis of the bitcoin we hold exceeds its fair market value. If the fair market value of bitcoin declines as of the end of any future period from the end of the prior period, our deferred tax liability with respect to the unrealized gain on our bitcoin holdings will decrease, and we may be required to establish additional valuation allowances against our deferred tax assets. If the fair market value of bitcoin declines to the point where the cost basis of the bitcoin the Company holds exceeds its fair market value, the deferred tax liability with respect to the unrealized gains would be reversed and a deferred tax asset for the unrealized loss would be recorded and we would be required to establish a valuation allowance against all of our US federal and state deferred tax assets. Such increases in valuation allowances could materially and adversely affect net income in periods in which such charges are incurred. We routinely consider actions necessary to preserve or utilize tax attributes. 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 for a discussion of tax factors which have had, and may continue to have, a significant impact on our results.

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 increased by $34.6 million as of December 31, 2025, compared to December 31, 2024, primarily due to (i) an increase in deferred subscription services revenue from new subscription service contracts with existing on-premises customer and new customers, partially offset by (ii) a decrease in deferred product support revenue due to on-premises customers converting to subscription services contracts and timing of product support renewals.
Current deferred revenue and advance payments increased by $34.1 million as of December 31, 2025, compared to December 31, 2024. Non-current deferred revenue and advance payments increased by $0.5 million as of December 31, 2025, compared to December 31, 2024.
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 December 31, 2025, our remaining performance obligation was $588.0 million of which approximately $344.2 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.

Liquidity and Capital Resources

Liquidity
Principal and Potential Sources of Liquidity
Our principal sources of liquidity include:
• Cash and cash equivalents: Cash and cash equivalents may include holdings in bank demand deposits, money market instruments, certificates of deposit, and U.S. Treasury securities. As of December 31, 2025 and 2024, the amount of cash and cash equivalents held by our U.S. entities was $2.25 billion and $8.8 million, respectively, and by our non-U.S. entities was $50.0 million and $29.3 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 years ended December 31, 2025 and 2024. Integral to our cash and cash equivalents is our USD Reserve. As of February 13, 2026 and December 31, 2025, the balance of the USD Reserve was $2.25 billion. See “Availability of the USD Reserve” below for additional information.
• 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 services. As of December 31, 2025 and, 2024, our accounts receivable, net of allowance for credit losses was $205.8 million and $181.2 million, respectively. See “Cash Flows” below for a discussion of our accounts receivables.
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Our potential sources of liquidity include:
• Bitcoin: As of December 31, 2025 and 2024, we held approximately 672,500 and 447,470 bitcoins, respectively, all of which were unencumbered. As of February 13, 2026, we held approximately 717,131 bitcoins, all of which were unencumbered, and which had an aggregate fair market value of $49.29 billion as of February 13, 2026 (based on the market price of $68,734 of one bitcoin as reported on the Coinbase exchange as of February 13, 2026, 4:00 p.m. Eastern Time). As discussed further below, although we do not anticipate needing to use our bitcoin to meet our liquidity needs in the next twelve months, we believe our substantial bitcoin holdings can serve as a source of liquidity, if necessary. See “Availability of Bitcoin for Liquidity” below.
• ATM Offerings: As of December 31, 2025 and February 13, 2026, we had the following capacities of the following securities available for issuance and sale under our ATM programs (in millions):

December 31, 2025 February 13, 2026
STRF Stock $ 1,619.3  $ 1,619.3 
STRC Stock $ 4,042.4  $ 3,542.8 
STRK Stock $ 20,335.0  $ 20,331.6 
STRD Stock $ 4,014.8  $ 4,014.8 
Class A common stock $ 11,502.8  $ 7,883.7 

Short-term and Long-term Liquidity Needs
As of December 31, 2025, 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, dividend obligations 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, dividend obligations on our STRF Stock, STRC Stock, and STRE Stock, regular dividends on our STRD Stock, interest payments on our Convertible Notes 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 payment of dividend obligations on our Preferred Stock. We also have long-term cash requirements for needs related to our operating leases, delivery of our new corporate aircraft, and our 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 December 31, 2025 (in thousands)  Maturity Date Put Option Date (1)
2028 Convertible Notes $ 1,010,000  September 15, 2028 September 15, 2027
2029 Convertible Notes $ 3,000,000  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,
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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 are convertible at the option of holders during the three months ending March 31, 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 use cash proceeds from sales of our class A common stock under our ATM, cash we hold in the USD Reserve and cash proceeds from additional equity or debt financings (including, but not limited to, ATMs of our STRC Stock, STRK Stock, or STRD Stock, as applicable) to meet our short-term liquidity needs. Although the establishment of the USD Reserve is intended to reduce the likelihood that we will sell bitcoin to meet our short-term liquidity needs and we do not anticipate needing to use our bitcoin to do so, if and to the extent it should become necessary, we would seek to use proceeds from the sale of our bitcoin to meet such needs. Additionally, we would seek to satisfy our long-term liquidity needs, including our debt and dividend obligations, through various means that we expect to be available to us, such as cash we hold in our USD Reserve, refinancing our debt or generating cash from other sources, which may include proceeds from equity or debt financings or the sale of our bitcoin.
Availability of the USD Reserve for Liquidity
In December 2025, we established the USD Reserve, a management-designated portion of our liquidity intended to support the payment of dividends on our preferred stock and interest on our outstanding indebtedness. As of December 31, 2025, and February 13, 2026, we held $2.25 billion in our USD Reserve, held in cash and cash equivalents. To date, we have funded our USD Reserve by using the proceeds of the sale of class A common stock under our ATM. Our ability to maintain the USD Reserve at target levels is subject to market conditions and other factors outside of our control, including obtaining equity 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 I, Item 1A, “Risk Factors” of this Annual Report for additional information.
The USD Reserve is maintained within our general treasury and cash management framework and is not held in a segregated account or subject to any contractual, board-approved, or other mandate requiring that it be maintained for the payment of dividends or interest, or for any other specified purpose. We may, in our sole and absolute discretion, increase, reduce, eliminate, 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. The designation of assets as part of the USD Reserve does not create any lien, security interest, or other priority right in favor of any holder of our securities or indebtedness. To optimize our cash management, 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.
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 I, Item 1A, “Risk Factors” of this Annual 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.
Availability of Bitcoin for Liquidity
We do not believe we will need to sell or engage in other transactions with respect to any of our bitcoins within the next twelve months to meet our liquidity needs, although we may from time to time sell or engage in other transactions with respect to our bitcoins as part of treasury management operations, as noted above. The bitcoin market historically has been characterized by significant volatility in its price, limited liquidity and trading volumes compared to sovereign currencies markets, relative anonymity, a developing regulatory landscape, susceptibility to market abuse and manipulation,
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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. As a result, our bitcoins 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 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 I, Item 1A, “Risk Factors” of this Annual Report for additional information.
Capital Plan
In May 2025, we announced a capital plan to raise $84 billion in the medium-to-long term, including $42 billion of equity capital and $42 billion of fixed-income instruments, including debt, convertible notes and preferred stock. This capital plan reflects an increase from our capital plan initially announced in October 2024 to raise $42 billion in aggregate, and includes capital raised through the original plan.

Capital Markets Transactions
Initial Public Offerings of Preferred Stock
We completed five initial public offerings of Preferred Stock during the year ended December 31, 2025. In connection with each offering, we have filed certificates of designations with the Secretary of State of Delaware designating the aggregate shares issued of, and establishing the terms of, each preferred stock instrument:

Date Shares Sold Net Proceeds (millions) (1)

STRF Stock March 25, 2025 8,500,000 $ 710.9 
STRC Stock July 29, 2025 28,011,111 $ 2,473.8 
STRE Stock November 13, 2025 7,750,000 € 608.7  (2)
STRK Stock February 5, 2025 7,300,000 $ 563.2 
STRD Stock June 10, 2025 11,764,700 $ 979.5 

(1) After deducting the underwriting discounts and commissions and our offering expenses.
(2) Approximately $707.1 million U.S. dollars (based upon the Euro to U.S. dollar exchange rate of €1.00/$1.16).

All net proceeds from these offerings were used for general corporate purposes, including the acquisition of bitcoin and for working capital.
At-the-Market Offerings
As noted above, we sold shares of STRF Stock, STRC Stock, STRK Stock, STRD Stock and class A common stock from time to time pursuant to our ATMs during 2025 and our class A common stock from time to time pursuant to our ATMs during 2024. See “Capital Markets Activity” for additional information about our ATM activity for the years ended December 31, 2025 and 2024 and "Liquidity and Capital Resources - Liquidity" for our ATM capacity as of February 13, 2026.
Debt Offerings
During the fiscal year ended December 31, 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. During the year ended December 31, 2024, we received approximately $6.13 billion in aggregate net proceeds from the issuances of our 2028 Convertible Notes, 2029 Convertible Notes, 2030A Convertible Notes, 2031 Convertible Notes, and 2032 Convertible Notes. We principally used the net proceeds from these Convertible Notes to acquire bitcoin, and we used a portion of the net proceeds from the 2028 Convertible Notes to redeem our 6.125% Senior Secured Notes due 2028.
See "Capital Markets Activity" above and Note 8, Long-term Debt to the Notes to Consolidated Financial Statements contained in Part II, Item 8 of this of this Annual Report for additional information.
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Contractual and Other Obligations
Our material contractual obligations and cash requirements as of December 31, 2025 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 $8.25 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 dividends declared and paid during the year ended December 31, 2025, and the dividends payable in the future as and if declared, see “Dividends” below.
• Ongoing personnel-related expenditures and vendor payments.
The above items are explained in further detail in Note 8, Long-term Debt and Note 12, Redeemable Preferred Stock, to the Consolidated Financial Statements as well as under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” included in this Annual Report.
Dividends
The following table sets forth the aggregate dividends paid for the year ended December 31, 2025 (in thousands):

Year Ended December 31, 2025
STRF Stock $ 86,803 
STRC Stock 122,071 
STRE Stock (1)
12,002 
STRK Stock 87,795 
STRD Stock 72,696 
Total $ 381,367 

(1) Reflects the Euro to USD exchange rate then in effect at the time of the applicable STRE Stock dividend payment.
We did not pay any dividends on our capital stock during the year ended December 31, 2025.
On December 31, 2025, we announced that our board of directors increased the monthly regular dividend rate per annum on STRC Stock from 10.75% to 11.00% effective for monthly periods commencing on or after January 1, 2026 and declared a monthly cash dividend of $0.916666667 per share payable on STRC Stock on January 31, 2026 to stockholders of record as of 5:00 p.m., New York City time, on January 15, 2026. For a discussion of the dividends paid and payable on, and other rights of the STRF Stock, STRC Stock, STRE Stock, STRK Stock, and STRD Stock, see Note 12, Redeemable Preferred Stock, and Note 18, Subsequent Events, to the Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report.
Our 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), which, based on the number of shares of Preferred Stock outstanding as of February 13, 2026 (except as set forth below), would include:
• $32.1 million dividends payable each quarterly period on our STRF Stock;
• $32.4 million dividends payable each monthly period on our STRC Stock (assuming the current dividend rate of 11.25% remains unchanged);
• $23.0 million dividends payable each quarterly period on our STRE Stock (which is the Euro to U.S. dollar exchange rate displayed on the Bloomberg page “BFIX” as of 12:30 P.M. (New York City time) on February 13, 2026);
• $28.0 million dividends payable each quarterly period on our STRK Stock; and
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• $35.1 million dividends payable each quarterly period on our STRD Stock.
Other than additional issuances of Preferred Stock and associated increases in the required dividends on our STRF Stock, STRC Stock, and STRK Stock, and the regular dividends on our STRD Stock, all of which are described more fully above, there have been no changes to our material contractual obligations and cash requirements since December 31, 2025.

Cash Flows
The following table sets forth a summary of our cash flows (in thousands) and related percentage changes for the periods indicated:

2025 2024 % change
Net cash used in operating activities $ (67,241) $ (53,032) 26.8 %
Net cash used in investing activities (22,512,295) (22,086,237) 1.9 %
Net cash provided by financing activities 24,843,527  22,132,641  12.2 %
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash (544) (2,148) -74.7 %
Net increase (decrease) in cash, cash equivalents, and restricted cash 2,263,447  (8,776) -25891.3 %
Cash, cash equivalents, and restricted cash, beginning of period 39,897  48,673  -18.0 %
Cash, cash equivalents, and restricted cash, end of period $ 2,303,344  $ 39,897  5673.2 %

Net cash used in operating activities. The primary sources of cash used 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. 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, digital asset impairment losses, and amortization of the issuance costs on our long-term debt.
Net cash used in operating activities increased $14.2 million for the year ended December 31, 2025, as compared to the same period in the prior year, mainly due to a $2.68 billion increase in net loss and a $13.1 million increase from changes in operating assets and liabilities, offset by a $2.68 billion increase in non-cash items (principally related to unrealized losses on digital assets). In particular, our cash from operations has been negatively impacted by our continued transition of customers to subscription services offerings, which has resulted in (i) reduced cash collections due to invoicing over multiple years, (ii) increased commissions and (iii) increased costs of our cloud infrastructure to support increased usage. We have also incurred additional bitcoin advocacy costs, custodial fees and personnel costs as we continue to pursue our bitcoin strategy. Our interest payments for the year ended December 31, 2025 have increased compared to the same period in the prior year primarily due to the issuance of the 2028 Convertible Notes.
Net cash used in investing activities. The changes in net cash used in investing activities primarily relate to purchases of digital assets, advance deposits on a new corporate aircraft, and expenditures on property and equipment. Net cash used in investing activities increased $426.1 million for the year ended December 31, 2025, as compared to the same period in the prior year, primarily due to a $394.3 million increase in purchases of bitcoins and a $26.5 million deposit on a new corporate aircraft. During the year ended December 31, 2025, we purchased $22.47 billion of bitcoin using net proceeds from the issuances of our 2030B Convertible Notes; net proceeds from the initial public offerings of our STRF Stock, STRC Stock, STRE Stock, STRK Stock and STRD Stock; and net proceeds from the sale of STRF Stock, STRC Stock, STRK Stock, STRD Stock and class A common stock under our ATMs, respectively; while during the year ended December 31, 2024, we purchased $22.07 billion of bitcoin using net proceeds from the issuances of our 2028 Convertible Notes, 2029 Convertible Notes, 2030A Convertible Notes, 2031 Convertible Notes, and 2032 Convertible Notes, net proceeds from the class A common stock ATMs, and Excess Cash. “Excess Cash” refers to cash in excess of the minimum Cash Assets that we are required to hold under our Treasury Reserve Policy, which may include cash generated by operating activities and cash from the proceeds of financing activities.
Net cash provided by financing activities. The changes in cash provided by financing activities primarily relate to the issuance and subsequent repayment of long-term debt; the sale of class A common stock under our ATMs; the sale of STRF Stock, STRC Stock, STRK Stock and STRD Stock under our ATMs; dividends paid on our STRF Stock, STRC Stock, STRE Stock, STRK Stock and STRD Stock, net proceeds from the initial public offerings of our STRF Stock, STRC Stock, STRE Stock, STRK Stock, and STRD 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
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the 2021 Employee Stock Purchase Plan. Net cash provided by financing activities increased $2.71 billion for the year ended December 31, 2025, as compared to the same period in the prior year, primarily due to (i) $6.92 billion in aggregate net proceeds from the initial public offerings of our STRF Stock, STRC Stock, STRE Stock, STRK Stock, STRD Stock, and sales of STRF Stock, STRC Stock, STRK Stock and STRD Stock under our ATMs, respectively during the year ended December 31, 2025, partially offset by (ii) a $83.0 million decrease in net proceeds from our sale of class A common stock under our class A common stock ATMs and (iii) a $4.15 billion decrease in long-term debt proceeds, net of issuance costs, during the year ended December 31, 2025, as compared to the same period in the prior year; (iv) a $142.1 million decrease in proceeds from the exercise of stock options under the Stock Incentive Plans in the year ended December 31, 2025, as compared to the same period in the prior year and (v) $381.4 million in dividends paid on our Preferred Stock during the year ended December 31, 2025.

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 8, Long-term Debt, to the Consolidated Financial Statements included in this Annual 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 offering programs 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 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. On August 7, 2024, we completed a 10-for-1 stock split of our class A and class B common stock. See Note 2(a), Summary of Significant Accounting Policies, to the Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report, for further information. As a result of the stock split, all applicable share and per share information presented within the
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calculation of our KPIs in this Annual Report have been retroactively adjusted to reflect the stock split for all periods presented.

As of December 31
2025 2024 2023
Total Bitcoin Holdings 672,500  447,470  189,150 

Shares Outstanding (in thousands)
Class A Common Stock 292,422  226,138  149,041 
Class B Common Stock 19,640  19,640  19,640 
Basic Shares Outstanding 312,062  245,778  168,681 

2025 Convertible Notes, convertible at $39.80 —  —  16,330 
2027 Convertible Notes, convertible at $143.25 —  7,330  7,330 
2028 Convertible Notes, convertible at $183.19 5,513  5,513  — 
2029 Convertible Notes, convertible at $672.40 4,462  4,462  — 
2030A Convertible Notes, convertible at $149.77 5,342  5,342  — 
2030B Convertible Notes, convertible at $433.43 4,614 
2031 Convertible Notes, convertible at $232.72 2,594  2,594  — 
2032 Convertible Notes, convertible at $204.33 3,915  3,915  — 
STRK Stock, convertible at $1,000.00 1,398  —  — 
Options Outstanding 3,662  4,956  12,936 
Restricted Stock Units and Performance Stock Units Unvested 1,335  1,845  2,359 
Assumed Diluted Shares Outstanding (in thousands) 344,897  281,735  207,636 

Bitcoin Per Basic Shares Outstanding (in Sats) 215,502  182,063  112,135 

Bitcoin Per Assumed Diluted Shares Outstanding Share (BPS) (in Sats) 194,986  158,826  91,097 

Bitcoin Price $ 87,515  $ 93,390  $ 42,531 

Bitcoin Per Share (in Sats), or BPS, is a KPI that represents the ratio between our bitcoin holdings and 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 to be 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.
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Year Ended December 31,
2025 2024 % Change
BTC Yield 22.8 % 74.3 % (51.5 %) (1)
BTC Gain 101,873  140,631  (27.6) %
BTC $ Gain (in millions, except percentage) $ 8,915  $ 13,134  (32.1) %

(1) Represents the absolute change between the periods presented.
BTC Yield is a KPI that represents the percentage change in BPS from the beginning of a period to the end of a period.
BTC Gain is a KPI that represents the number of bitcoins held by us at the beginning of a period multiplied by the BTC Yield for such period.
BTC $ Gain is a KPI that represents the dollar value of the BTC Gain calculated by multiplying the BTC Gain by the market price of bitcoin. For determining BTC $ Gain quarter to date or year to date, unless otherwise specified, we use the current market price of bitcoin. For determining BTC $ Gain for a past fiscal year or other past period, we use the market price of bitcoin as of 4:00pm ET as reported on the Coinbase exchange on the last day of the applicable period. We use these market prices of bitcoin for this calculation solely for the purpose of facilitating this illustrative calculation.
We use BPS, BTC Yield, BTC Gain and BTC $ Gain as KPIs to help assess the performance of our strategy of acquiring bitcoin in a manner we believe is accretive to shareholders. We also believe these KPIs can supplement investors’ understanding of how we choose to fund bitcoin purchases and the value created in a period:
• BPS measures the ratio of our bitcoin holdings to Assumed Diluted Shares Outstanding, which provides management and investors a baseline with which to assess our achievement of our strategy of acquiring bitcoin in an accretive manner over a given period. When evaluating a capital raise transaction, we review this metric and consider the impact such transaction will have on this ratio on a pro forma basis. This metric forms the baseline for our BTC Yield, BTC Gain and BTC $ Gain KPIs, which present changes in BPS from the beginning of a period to the end of the period in different formats, and which we review to assess the performance of our strategy of acquiring bitcoin in a manner we believe to be accretive to shareholders.
• BTC Yield measures the percentage change in BPS from the beginning of a period to the end of a period, which helps management and investors assess how our achievement of our strategy of acquiring bitcoin in an accretive manner varies across periods. We use BTC Yield to evaluate whether our capital markets activity and bitcoin acquisition strategy 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 our 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 our bitcoin holdings resulting from our BTC Yield. We use BTC Gain to measure the accretive or dilutive impact of the change in BPS over an applicable period in absolute terms relative to our bitcoin holdings. This metric can be particularly helpful when comparing the execution of our capital markets strategy across periods, as BTC Yield may be lower when our 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. We refer to this metric for illustrative purposes to consider the magnitude of our BTC Gain for an applicable period with reference to the market price of bitcoin as of the end of an applicable period.
When we use these KPIs, management takes into account the various limitations of these metrics, including that:
• the KPIs do not take into account that our assets, including our bitcoin, are subject to (i) all of our existing and future liabilities, including our debt, and (ii) the preferential rights of our preferred stockholders to dividends and our assets in a liquidation, and that all such claims rank to senior to those of our common equity; therefore holders of such excluded instruments may have claims on our assets (including bitcoin) senior to those of holders of common stock in the event of our liquidation, and as a result the additional bitcoin acquired using proceeds from the sale of such instruments may not accrete to common stockholders; and
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• the KPIs assume that all indebtedness will be refinanced or, in the case of our senior convertible debt instruments and convertible preferred stock, converted into shares of class A common stock in accordance with their respective terms.
BPS, BTC Yield, BTC Gain and BTC $ Gain are not, and should not be understood as, financial performance, valuation or liquidity measures. Specifically:
• BPS does not represent (i) our ability to satisfy our financial obligations, or (ii) our book value per share. Ownership of a share of our common stock does not represent an ownership interest in the bitcoin held by us.
• BTC Yield is not equivalent to “yield” in the traditional financial context. It is not a measure of the return on investment our shareholders may have achieved historically or can achieve in the future by purchasing our stock, or a measure of income generated by our operations or our bitcoin holdings, return on investment on our bitcoin holdings, or any other similar financial measure of the performance of our 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 our shareholders may have achieved historically or can achieve in the future by purchasing our stock, or measures of income generated by our operations or our bitcoin holdings, return on investment on our bitcoin holdings, or any other similar financial measure of the performance of our business or assets. It should also be understood that BTC $ Gain does not represent a fair value gain of our bitcoin holdings, and BTC $ Gain may be positive during periods when we have incurred fair value losses on our bitcoin holdings.
The trading price of our class A common stock is informed by numerous factors in addition to our bitcoin holdings and our actual or potential shares of class A common stock outstanding, and as a result, the trading price of our securities can deviate significantly from the fair market value of our bitcoin, and none of BPS, BTC Yield, BTC Gain or BTC $ Gain are indicative or predictive of the trading price of our securities.
Investors should rely on the financial statements and other disclosures contained in our SEC filings. In particular, we have 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 we measure our bitcoin at fair value in our statement of financial position as of the end of a reported period, and recognize gains losses from changes in the fair value in net income for the reported period. As a result, we 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, BTC Yield, BTC Gain or BTC $ Gain. For example, if we increase our bitcoin holdings relative to Assumed Diluted Shares Outstanding during a reported period, we would achieve increased BPS and positive BTC Yield, BTC Gain and BTC $ Gain even if we report significant unrealized loss on digital assets for the period. Similarly, if we increase Assumed Diluted Shares Outstanding at a faster rate than our bitcoin holdings, then we would experience decreased BPS and negative BTC Yield, BTC Gain, and BTC $ Gain, even if we report 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 we are raising and deploying capital in a manner accretive to shareholders solely as it pertains to our bitcoin holdings.
In calculating these KPIs, we do not consider the source of capital used for the acquisition of our bitcoin. When we purchase 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 our common stock or conversion rights that are not then exercisable, such transactions have the effect of increasing the BPS, BTC Yield, BTC Gain and BTC $ Gain, while also increasing our indebtedness and senior claims of holders of instruments other than class A common stock with respect to dividends and to our assets, including our bitcoin, if we were to liquidate, in a manner that is not reflected in these metrics.
If any of our convertible notes mature or are redeemed without being converted into common stock, or if we elect to redeem or repurchase our non-convertible instruments, we may be required to sell shares of our 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, 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 our use of capital to buy bitcoin because not all bitcoin is purchased using proceeds of 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, we are required to pay dividends with respect to our perpetual preferred stock in perpetuity. We could pay these dividends with cash or, in the case of STRK Stock, by issuing shares of class A common stock. We have issued shares of class A common stock for cash to fund the payment of cash dividends, and we may in the future issue shares of
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class A common stock in lieu of paying dividends on STRK Stock. As a result, we have experienced, and may experience in the future, increases in Assumed Diluted Shares Outstanding without corresponding increases in our bitcoin holdings, resulting in decreases in BPS, BTC Yield, BTC Gain and BTC $ Gain for the applicable periods.  
We have historically not paid any dividends on our shares of class A common stock, and by presenting these KPIs we make no suggestion that we intend to do so in the future. Ownership of our securities, including our class A common stock and preferred stock, does not represent an ownership interest in, or a redemption right with respect to, the bitcoin we hold.  
We determine our KPI targets based on our history and future goals. Our ability to maintain any given level of BPS, or achieve positive BTC Yield, BTC Gain, or BTC $ Gain may depend on a variety of factors, including factors outside of our 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 our SEC filings. They should be used only by sophisticated investors who understand their limited purpose and many limitations. 

Recent Accounting Standards
See Note 3, Recent Accounting Standards, to the Consolidated Financial Statements contained in Part II, Item 8 of this Annual Report for further information.

Item 7A.    Quantitative and Qualitative Disclosures About Market Risk
The following discussion about our market risk exposures involves forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements.
We are exposed to the impact of market price changes in bitcoin, foreign currency fluctuations and interest rate risks.
Market Price Risk of Bitcoin. We have used a significant portion of our cash, including cash generated from capital raising transactions, to acquire bitcoin. As discussed in Note 2(g), Summary of Significant Accounting Policies – Digital Assets, to the Consolidated Financial Statements, we account for our bitcoin as indefinite-lived intangible assets. 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 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. As of December 31, 2025, we held approximately 672,500 bitcoins with a carrying value of $58.85 billion on our Consolidated Balance Sheet. Bitcoin is a highly volatile asset that has traded below $80,000 per bitcoin and above $120,000 per bitcoin in our principal market in the 12 months preceding December 31, 2025. A significant decrease in the price of bitcoin would have a material adverse effect on our earnings.
Foreign Currency Risk. We conduct a significant portion of our business in currencies other than the U.S. dollar, the currency in which we report our Consolidated Financial Statements. International revenues accounted for 43.0%, 44.0%, and 42.7% of our total revenues for the years ended December 31, 2025, 2024, and 2023, respectively. We anticipate that international revenues will continue to account for a significant portion of our total revenues. The functional currency of each of our foreign subsidiaries is generally the local currency.
Assets and liabilities of our foreign subsidiaries are translated into U.S. dollars at exchange rates in effect as of the applicable Balance Sheet date and any resulting translation adjustments are included as an adjustment to stockholders’ equity. Revenues and expenses generated from these subsidiaries are translated at average monthly exchange rates during the quarter in which the transactions occur. Transaction gains and losses arising from transactions denominated in a currency other than the functional currency of the entity involved are included in the results of operations.
Additionally, absent limited circumstances, regular dividends and other payments on STRE Stock are paid in Euros. Because we expect to convert U.S. dollar cash balances into Euros to make regular dividends and other payments on the STRE Stock, our ability to make such payments depends on prevailing currency exchange rates, which have historically been volatile.
As a result of transacting in multiple currencies and reporting our Consolidated Financial Statements in U.S. dollars, our operating results may be adversely impacted by currency exchange rate fluctuations in the future.
We cannot predict the effect of exchange rate fluctuations upon our future results. We attempt to minimize our foreign currency risk by converting our excess foreign currency held in foreign jurisdictions to U.S. dollar-denominated cash and investment accounts.
As of December 31, 2025, a 10% adverse change in foreign currency exchange rates versus the U.S. dollar would have decreased our aggregate reported cash and cash equivalents by less than 1%. If average exchange rates during the year ended December 31, 2025 had changed unfavorably by 10%, our revenues for the year ended December 31, 2025 would
81

have decreased by 3.8%. During the year ended December 31, 2025, our revenues were not significantly impacted by changes in weighted average exchange rates, as compared to the prior year.
Interest Rate Risk . We are exposed to changes in interest rates primarily via our STRC Stock and assets held within our USD Reserve.
Our STRC Stock accumulates cumulative dividends, which we refer to in this Item 7A Quantitative and Qualitative Disclosures About Market Risk as “regular dividends”, at a variable dividend rate, which was initially set at 9.00% per annum. However, we have the right, in our sole and absolute discretion, to adjust the regular dividend rate applicable to subsequent regular dividend periods, subject to certain restrictions, including restrictions on the maximum reduction of the dividend rate and a requirement to declare a dividend equal to at least the monthly SOFR per annum rate . Our current intention (which is subject to change in our sole and absolute discretion) is to adjust the monthly regular dividend rate per annum in such manner as we believe is necessary to cause STRC Stock to trade at prices at or close to its stated amount of $100 per share. We have increased regular dividends on STRC Stock, most recently from 11.00% per annum to 11.25% per annum for the monthly period commencing on or after February 1, 2026.
As of December 31, 2025, if we determined to increase the regular dividend rate on our STRC Stock by 50 basis points, STRC Stock’s monthly dividend accrual would increase by approximately $1.2 million. We do not believe our interest rate risk exposure via STRC Stock is material as of December 31, 2025.
As of December 31, 2025, we had cash and cash equivalents of approximately $2.3 billion. Integral to our cash and cash equivalents is our USD Reserve, which is primarily invested in money market funds to earn interest income on short-term cash balances. Interest earned on such funds fluctuates with prevailing interest rates. As of December 31, 2025, the balance of our USD Reserve was $2.25 billion. Based on the foregoing, we do not believe that a hypothetical 50 basis point adverse change in interest rates would materially impact our results of operations as of December 31, 2025.

Item 8.    Financial Statements and Supplementary Data
Our Consolidated Financial Statements, together with the related notes and the associated Reports of Independent Registered Public Accounting Firm, are set forth on the pages indicated in Item 15.

Item 9.    Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
None.

Item 9A.    Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Annual Report. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their control objectives. Based on the evaluation of our disclosure controls and procedures as of the end of the period covered by this Annual Report, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.
Management’s Report on Internal Control Over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers and effected by the Company’s Board of Directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Such internal control includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.
82

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that the control may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Under the oversight of our Chief Executive Officer and Chief Financial Officer, our management conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2025 based on the criteria set forth in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on its assessment, management has determined that, as of December 31, 2025, our internal control over financial reporting is effective based on those criteria.
Our independent registered public accounting firm, KPMG LLP, which audited the Consolidated Financial Statements included in this Annual Report, has issued an attestation report on our internal control over financial reporting. This report is included in the Reports of Independent Registered Public Accounting Firm in “Item 15. Exhibits, Financial Statement Schedules.”
Changes in Internal Control Over Financial Reporting
No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the three months ended December 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B.    Other Information
Annual Discretionary Cash Bonus Targets for Certain Executive Officers
On February 18, 2026, the Company’s Compensation Committee established an annual discretionary cash bonus target for 2026 for the following executive officers of the Company in the amounts set forth opposite their names:

Phong Le $ 1,300,000 
Andrew Kang $ 600,000 
Thomas C. Chow $ 450,000 

Awards pursuant to the foregoing discretionary cash bonus target will be determined by the Company’s Compensation Committee based on its subjective evaluation of the performance of each of the executive officers in the context of general economic and industry conditions and the Company’s performance and achievement of its operational objectives during the year.
Rule 10b5-1 Information
On December, 5, 2025 , Thomas C. Chow , our Executive Vice President, General Counsel and Secretary , entered into a Rule 10b5-1 trading arrangement (as defined in Item 408 of Regulation S-K) intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act.
This Rule 10b5-1 trading arrangement is intended to qualify as an “eligible sell-to-cover transaction” (as described in Rule 10b5-1(c)(1)(ii)(D)(3) under the Exchange Act). This sell-to-cover arrangement applies to restricted stock units and performance stock units that have been granted or may be granted in the future to Mr. Chow (other than those that (a) by their terms require the Company to withhold shares for tax withholding obligations in connection with vesting and settlement or (b) from which the Company elects to withhold shares to satisfy tax withholding obligations in connection with vesting and settlement), and provide for the automatic sale of a number of shares of class A common stock as is necessary to cover tax withholding obligations incurred in connection with the vesting or settlement of such awards, with the proceeds of the sale delivered to the Company in satisfaction of the applicable withholding obligation.
This arrangement will remain in effect indefinitely until terminated by Mr. Chow. The total number of shares of class A common stock that may be sold pursuant to this instruction is not determinable, and will vary based on the extent to which vesting conditions are satisfied, the market price of the Company’s class A common stock at the time of settlement, applicable tax rates and the potential future grant of additional equity awards subject to such arrangement.
Except as set forth above, none of our directors or officers (as defined in Rule 16a-1(f) promulgated under the Exchange Act) adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as defined in Item 408 of Regulation S-K) during the fourth quarter of 2025.

Item 9C.    Disclosure Regarding Foreign Jurisdictions that Prevent Inspections
None.
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PART III

Item 10.    Directors, Executive Officers and Corporate Governance
The information required by this Item is incorporated herein by reference to the information provided under the headings “Executive Officers of the Company,” “Election of Directors – Nominees,” and “Corporate Governance and the Board of Directors and its Committees” in our definitive proxy statement for the 2026 Annual Meeting of Stockholders to be filed with the SEC not later than 120 days after the fiscal year ended December 31, 2025 (the “2026 Proxy Statement”).

Item 11.    Executive Compensation
The information required by this Item (other than the information required by Item 402(v) of Regulation S-K) is incorporated herein by reference to the information provided under the headings “Executive and Director Compensation,” “Compensation Committee Report,” and “Corporate Governance and the Board of Directors and its Committees – Compensation Committee” in the 2026 Proxy Statement.

Item 12.    Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
The information required by this Item is incorporated herein by reference to the information provided under the headings “Security Ownership of Certain Beneficial Owners and Management” and “Executive and Director Compensation – Equity Compensation Plan Information” in the 2026 Proxy Statement.

Item 13.    Certain Relationships and Related Transactions, and Director Independence
The information required by this Item is incorporated herein by reference to the information provided under the heading “Corporate Governance and the Board of Directors and its Committees” in the 2026 Proxy Statement.

Item 14.    Principal Accountant Fees and Services
The information required by this Item is incorporated herein by reference to the information provided under the heading “Independent Registered Public Accounting Firm Fees and Services” in the 2026 Proxy Statement.
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PART IV

Item 15.    Exhibits, Financial Statement Schedules
(a) The following documents are filed as part of this Annual Report:

1. Consolidated Financial Statements
Page
Reports of Independent Registered Public Accounting Firm
86

Consolidated Financial Statements:

Balance Sheets
89

Statements of Operations
90

Statements of Comprehensive (Loss) Income
91

Statements of Mezzanine Equity and Stockholders’ Equity
92

Statements of Cash Flows
93

Notes to Consolidated Financial Statements
94

2. Exhibits
137

3. Consolidated Financial Statement Schedule

Schedule II - Valuation and Qualifying Accounts
142

(b) Exhibits
We hereby file as part of this Annual Report the exhibits listed in the Index to Exhibits.
(c) Financial Statement Schedule
The following financial statement schedule is filed herewith:
Schedule II—Valuation and Qualifying Accounts
All other items included in an Annual Report on Form 10‑K are omitted because they are not applicable or the answers thereto are none.

Item 16.    Form 10-K Summary
None.
85

Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
Strategy Inc (formerly MicroStrategy Incorporated):

Opinion on Internal Control Over Financial Reporting
We have audited Strategy Inc (formerly MicroStrategy Incorporated) and subsidiaries (the Company) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive (loss) income, mezzanine equity and stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes and financial statement schedule, Schedule II, Valuation and Qualifying Accounts, (collectively, the consolidated financial statements), and our report dated February 19, 2026 expressed an unqualified opinion on those consolidated financial statements.
Basis for Opinion
The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.
Definition and Limitations of Internal Control Over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ KPMG LLP

McLean, Virginia
February 19, 2026
86

Report of Independent Registered Public Accounting Firm
To the Stockholders and Board of Directors
Strategy Inc (formerly MicroStrategy Incorporated):

Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Strategy Inc (formerly MicroStrategy Incorporated) and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive (loss) income, mezzanine equity and stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes and financial statement schedule, Schedule II, Valuation and Qualifying Accounts, (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 19, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.
Change in Accounting Principle
As discussed in Note 2(g) to the consolidated financial statements, the Company has changed its method of accounting for digital assets that are qualifying indefinite-lived intangible assets to fair value in the consolidated balance sheet, with changes in fair value recognized in the consolidated statement of operations as of January 1, 2025 due to the adoption of Accounting Standards Update No. 2023-08, Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
Critical Audit Matter
The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.
Evaluation of audit evidence pertaining to the existence and control of the digital assets
As discussed in Notes 2(g) and 4 to the consolidated financial statements, the Company accounts for its digital assets as indefinite-lived intangible assets. The digital assets are recorded at fair value as of December 31, 2025, with changes in fair value recognized in the consolidated statement of operations. As of December 31, 2025, the carrying value of the Company’s digital assets was $58.85 billion.
87

We identified the evaluation of audit evidence pertaining to the existence of the digital assets and whether the Company controls the digital assets as a critical audit matter. Especially subjective auditor judgement was involved in determining the nature and extent of evidence required to assess the existence of the digital assets and whether the Company controls the digital assets, as control over the digital assets is provided through private cryptographic keys stored using third-party custodial services at multiple locations that are geographically dispersed. In addition, information technology (IT) professionals with specialized skills and knowledge in blockchain technology were needed to assist in the evaluation of the sufficiency of certain audit procedures.
The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the digital assets process, including a control over the comparison of the Company’s records of digital assets held to the custodial records. We involved IT professionals with specialized skills and knowledge in blockchain technology, who assisted in evaluating certain internal controls over the digital assets process performed at the custodial locations, related specifically to the generation of the private cryptographic keys, the storing of these keys, and the reconciliation of digital assets per the custodial service ledgers to the public blockchain. We obtained confirmation of the Company’s digital assets in custody as of December 31, 2025 and compared the total digital assets confirmed to the Company’s record of digital asset holdings. We also compared the Company’s record of digital asset transactions to the records on the public blockchain using a software audit tool. We applied auditor judgement in determining the nature and extent of audit evidence required, especially related to assessing the existence of the digital assets and whether the Company controls the digital assets. We evaluated the sufficiency and appropriateness of audit evidence obtained by assessing the results of procedures performed over the digital assets.

/s/ KPMG LLP
We have served as the Company’s auditor since 2013.
McLean, Virginia
February 19, 2026
88

STRATEGY INC
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)

December 31,
2025 December 31,
2024
Assets
Current assets:
Cash and cash equivalents $ 2,301,470   $ 38,117  
Restricted cash 1,873   1,780  
Accounts receivable, net 205,748   181,203  
Prepaid expenses and other current assets 55,046   31,224  
Total current assets 2,564,137   252,324  
Digital assets 58,854,028   23,909,373  
Property and equipment, net 28,858   26,327  
Right-of-use assets 46,975   54,560  
Deposits and other assets 142,577   75,794  
Deferred tax assets 4,507   1,525,307  
Total assets $ 61,641,082   $ 25,843,685  
Liabilities, Mezzanine Equity, and Stockholders' Equity
Current liabilities:
Accounts payable, accrued expenses, and operating lease liabilities $ 50,335   $ 52,982  
Accrued compensation and employee benefits 69,986   58,362  
Accrued interest 5,619   5,549  
Preferred dividends payable 27,121   —  
Current portion of long-term debt, net 31,313   517  
Deferred revenue and advance payments 272,118   237,974  
Total current liabilities 456,492   355,384  
Long-term debt, net 8,158,842   7,191,158  
Deferred revenue and advance payments 5,451   4,970  
Operating lease liabilities 46,135   56,403  
Other long-term liabilities 4,736   5,379  
Deferred tax liabilities 1,926,454   407  
Total liabilities 10,598,110   7,613,701  
Commitments and Contingencies
Mezzanine Equity
10.00 % Series A Perpetual Strife Preferred Stock, $ 0.001 par value; 33,200 shares authorized, 12,840 shares issued and outstanding at December 31, 2025; redemption value and liquidation preference of $ 1,363,151 at December 31, 2025
1,191,128   —  
Variable Rate Series A Perpetual Stretch Preferred Stock,$ 0.001 par value; 70,435 shares authorized, 29,587 shares issued and outstanding at December 31, 2025; redemption value and liquidation preference of $ 2,958,706 at December 31, 2025
2,631,281   —  
10.00 % Series A Perpetual Stream Preferred Stock, $ 0.001 par value; 7,750 shares authorized, 7,750 shares issued and outstanding at December 31, 2025; redemption value and liquidation preference of $ 909,850 at December 31, 2025
707,069   —  
8.00 % Series A Perpetual Strike Preferred Stock, $ 0.001 par value; 269,800 shares authorized, 13,982 shares issued and outstanding at December 31, 2025; redemption value and liquidation preference of $ 1,398,195 at December 31, 2025
1,226,553   —  
10.00 % Series A Perpetual Stride Preferred Stock, $ 0.001 par value; 61,176 shares authorized, 14,024 shares issued and outstanding at December 31, 2025; redemption value and liquidation preference of $ 1,402,422 at December 31, 2025
1,163,483   —  
Total mezzanine equity 6,919,514   —  
Stockholders’ Equity
Preferred stock undesignated, $ 0.001 par value; 562,639 and 5,000 shares authorized, no shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively
—   —  
Class A common stock, $ 0.001 par value; 10,330,000 and 330,000 shares authorized, 292,422 and 226,138 shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively
292   226  
Class B common stock, $ 0.001 par value; 165,000 shares authorized, 19,640 shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively
20   20  
Additional paid-in capital 37,806,554   20,411,998  
Accumulated other comprehensive loss ( 5,171 ) ( 15,384 )
Retained earnings (accumulated deficit) 6,321,763   ( 2,166,876 )
Total stockholders’ equity 44,123,458   18,229,984  
Total liabilities, mezzanine equity, and stockholders' equity $ 61,641,082   $ 25,843,685  

The accompanying notes are an integral part of these Consolidated Financial Statements.
89

STRATEGY INC
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)

Years Ended December 31,
2025 2024 2023
Revenues:
Product licenses $ 39,674   $ 48,567   $ 75,351  
Subscription services 175,657   106,776   81,179  
Total product licenses and subscription services 215,331   155,343   156,530  
Product support 204,225   243,805   263,888  
Other services 57,677   64,308   75,843  
Total revenues 477,233   463,456   496,261  
Cost of revenues:
Product licenses 3,956   3,060   1,929  
Subscription services 72,956   42,440   31,776  
Total product licenses and subscription services 76,912   45,500   33,705  
Product support 28,592   33,289   22,434  
Other services 43,913   50,679   53,805  
Total cost of revenues 149,417   129,468   109,944  
Gross profit 327,816   333,988   386,317  
Operating expenses:
Sales and marketing 122,956   138,081   149,671  
Research and development 93,860   118,486   120,530  
General and administrative 151,909   140,537   115,312  
Unrealized loss on digital assets 5,403,476   —   —  
Digital asset impairment losses —   1,789,862   115,851  
Total operating expenses 5,772,201   2,186,966   501,364  
Loss from operations ( 5,444,385 ) ( 1,852,978 ) ( 115,047 )
Interest expense, net ( 64,968 ) ( 61,941 ) ( 48,960 )
(Loss) gain on debt extinguishment —   ( 22,933 ) 44,686  
Other (expense) income, net ( 16,601 ) 3,506   ( 5,204 )
Loss before income taxes ( 5,525,954 ) ( 1,934,346 ) ( 124,525 )
Benefit from income taxes ( 1,677,802 ) ( 767,685 ) ( 553,646 )
Net (loss) income ( 3,848,152 ) ( 1,166,661 ) 429,121  
Dividends on preferred stock ( 381,367 ) —   —  
Net (loss) income attributable to common stockholders of Strategy ( 4,229,519 ) ( 1,166,661 ) 429,121  
Basic (loss) earnings per share (1) $ ( 15.23 ) $ ( 6.06 ) $ 3.14  
Weighted average common shares outstanding - Basic 277,660   192,549   136,706  
Diluted (loss) earnings per share (1) $ ( 15.23 ) $ ( 6.06 ) $ 2.64  
Weighted average common shares outstanding - Diluted 277,660   192,549   165,662  

(1) For the years ended December 31, 2025 and 2024, basic and fully diluted (loss) earnings per share for class A and class B common stock are the same.
The accompanying notes are an integral part of these Consolidated Financial Statements.
90

STRATEGY INC
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(in thousands)

Year Ended December 31,
2025 2024 2023
Net (loss) income $ ( 3,848,152 ) $ ( 1,166,661 ) $ 429,121  
Other comprehensive income (loss), net of applicable taxes:
Foreign currency translation adjustment 10,213   ( 3,940 ) 2,357  
Total other comprehensive income (loss) 10,213   ( 3,940 ) 2,357  
Comprehensive (loss) income $ ( 3,837,939 ) $ ( 1,170,601 ) $ 431,478  

The accompanying notes are an integral part of these Consolidated Financial Statements.
91

STRATEGY INC
CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY
(in thousands)

Mezzanine Equity Stockholders' Equity
Perpetual Preferred
Stock Class A Common Stock Class B Convertible
Common Stock Treasury Stock
Shares Amount Total
Stockholders
' Equity Shares Amount Shares Amount Additional Paid-
in Capital Shares Amount Accumulated
Other
Comprehensive
Income (Loss) Retained
Earnings
(Accumulated
Deficit)
Balance at January 1, 2023 — $ —  $ ( 383,120 ) 104,532 $ 18   19,640 $ 2   $ 1,841,120   $ ( 8,684 ) $ ( 782,104 ) $ ( 13,801 ) $ ( 1,428,355 )
Net income — —  429,121   — —  — —  —  —  —  —  429,121  
Other comprehensive income — —  2,357   — —  — —  —  —  —  2,357   — 
Issuance of class A common stock upon exercise of stock options — —  30,519   1,756 1   — —  30,518   —  —  —  — 
Issuance of class A common stock under employee stock purchase plan — —  3,955   198 —  — —  3,955   —  —  —  — 
Issuance of class A common stock upon vesting of restricted stock units, net of withholding taxes — —  ( 4,344 ) 260 —  — —  ( 4,344 ) —  —  —  — 
Issuance of class A common stock under public offerings, net of issuance costs — —  2,020,089   50,979 5   — —  2,020,084   —  —  —  — 
Share-based compensation expense — —  66,395   — —  — —  66,395   —  —  —  — 
Balance at December 31, 2023 — $ —  $ 2,164,972   157,725 $ 24   19,640 $ 2   $ 3,957,728   $ ( 8,684 ) $ ( 782,104 ) $ ( 11,444 ) $ ( 999,234 )
Net loss — —  ( 1,166,661 ) — —  — —  —  —  —  —  ( 1,166,661 )
Other comprehensive loss — —  ( 3,940 ) — —  — —  —  —  —  ( 3,940 ) — 
Par value adjustment for class A and B common stock issued upon stock split — —  —   — 157   — 18   ( 175 ) —  —  —  — 
Retirement of treasury stock — —  —   ( 8,684 ) ( 9 ) — —  ( 781,114 ) 8,684   782,104   —  ( 981 )
Issuance of class A common stock upon exercise of stock options — —  184,287   7,826 2   — —  184,285   —  —  —  — 
Issuance of class A common stock under employee stock purchase plan — —  4,304   94 —  — —  4,304   —  —  —  — 
Issuance of class A common stock upon vesting of restricted stock units, net of withholding taxes — —  ( 2,207 ) 545 —  — —  ( 2,207 ) —  —  —  — 
Issuance of class A common stock under public offerings, net of issuance costs — —  16,329,857   52,309 50   — —  16,329,807   —  —  —  — 
Issuance of class A common stock upon conversions of convertible senior notes — —  645,164   16,323 2   — —  645,162   —  —  —  — 
Share-based compensation expense — —  74,208   — —  — —  74,208   —  —  —  — 
Balance at December 31, 2024 — $ —   $ 18,229,984   226,138 $ 226   19,640 $ 20   $ 20,411,998   $ —   $ —   $ ( 15,384 ) $ ( 2,166,876 )
Opening balance adjustment due to the adoption of ASU 2023-08, net of tax — —  12,746,378   — —  — —  —  —  —  —  12,746,378  
Other — —  ( 1,098 ) — —  — —  —  —  —  —  ( 1,098 )
Net income — —  ( 3,848,152 ) — —  — —  —  —  —  —  ( 3,848,152 )
Preferred stock cash dividends declared — —  ( 408,489 ) — —  — —  —  —  —  —  ( 408,489 )
Other comprehensive income — —  10,213   — —  — —  —  —  —  10,213   — 
Issuance of class A common stock upon exercise of stock options — —  42,154   1,121 —  — —  42,154   —  —  —  — 
Issuance of class A common stock under employee stock purchase plan — —  5,435   39 —  — —  5,435   —  —  —  — 
Issuance of class A common stock upon vesting of restricted stock units, net of withholding taxes — —  —   418 —  — —  —  —  —  —  — 
Issuance of class A common stock under public offerings, net of issuance costs — —  16,247,607   57,332 58   — —  16,247,549   —  —  —  — 
Issuance of class A common stock upon conversions of convertible senior notes — —  1,045,222   7,374 8   — —  1,045,214   —  —  —  — 
Share-based compensation expense — —  54,204   — —  — —  54,204   —  —  —  — 
Issuance of Series A Perpetual Strike Preferred Stock 13,982 1,226,553   —  — —  — —  —  —  —  —  — 
Issuance of Series A Perpetual Strife Preferred Stock 12,840 1,191,128   —  — —  — —  —  —  —  —  — 
Issuance of Series A Perpetual Stride Preferred Stock 14,024 1,163,483   —  — —  — —  —  —  —  —  — 
Issuance of Series A Perpetual Stretch Preferred Stock 29,587 2,631,281   —  — —  — —  —  —  —  —  — 
Issuance of Series A Perpetual Stream Preferred Stock 7,750 707,069   —  — —  — —  —  —  —  —  — 
Balance at December 31, 2025 78,183 $ 6,919,514   $ 44,123,458   292,422 $ 292   19,640 $ 20   $ 37,806,554   $ —  $ —  $ ( 5,171 ) $ 6,321,763  

The accompanying notes are an integral part of these Consolidated Financial Statements.
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STRATEGY INC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)

Year Ended December 31,
2025 2024 2023

Operating activities:
Net income (loss) $ ( 3,848,152 ) $ ( 1,166,661 ) $ 429,121  
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Depreciation and amortization 25,517   17,808   14,527  
Reduction in carrying amount of right-of-use assets 9,068   8,475   8,643  
Deferred taxes ( 1,684,220 ) ( 775,851 ) ( 569,455 )
Share-based compensation expense 53,369   77,124   69,571  
Unrealized loss on digital assets 5,403,476   —   —  
Digital asset impairment losses —   1,789,862   115,851  
Amortization of issuance costs on long-term debt 25,410   15,336   8,808  
Other 3,484   —   —  
Loss (gain) on debt extinguishment —   22,933   ( 44,686 )
Changes in operating assets and liabilities:
Accounts receivable 20,406   6,337   11,694  
Prepaid expenses and other current assets ( 28,892 ) 3,804   ( 11,358 )
Deposits and other assets 10,980   ( 10,668 ) ( 632 )
Accounts payable and accrued expenses 6,561   1,141   ( 634 )
Accrued compensation and employee benefits ( 46,593 ) ( 34,563 ) ( 12,000 )
Accrued interest 70   4,193   ( 1,336 )
Deferred revenue and advance payments ( 7,966 ) 1,049   2,362  
Operating lease liabilities ( 10,662 ) ( 10,510 ) ( 10,218 )
Other long-term liabilities 903   ( 2,841 ) 2,454  
Net cash provided by (used in) operating activities ( 67,241 ) ( 53,032 ) 12,712  
Investing activities:
Purchases of digital assets ( 22,467,083 ) ( 22,072,759 ) ( 1,902,299 )
Advance deposits on purchases of property and equipment ( 37,000 ) ( 10,500 ) —  
Purchases of property and equipment ( 8,212 ) ( 2,978 ) ( 2,938 )
Net cash used in investing activities ( 22,512,295 ) ( 22,086,237 ) ( 1,905,237 )
Financing activities:
Proceeds from convertible senior notes 2,000,000   6,213,750   —  
Issuance costs paid for convertible senior notes ( 15,178 ) ( 81,033 ) —  
Payments to settle conversions and redemption of convertible senior notes ( 143 ) ( 398 ) —  
Repayments of secured debt and third-party extinguishment costs —   ( 515,414 ) ( 160,033 )
Proceeds from other long-term secured debt, net of lender fees 31,000   —   —  
Principal payments of other long-term secured debt ( 569 ) ( 539 ) ( 513 )
Proceeds from sale of preferred stock under public offerings 7,036,110   —   —  
Issuance costs paid related to sale of preferred stock under public offerings ( 120,802 ) —   —  
Dividends paid on preferred stock ( 381,367 ) —   —  
Proceeds from sale of common stock under public offerings 16,271,959   16,363,023   2,029,214  
Issuance costs paid related to sale of common stock under public offerings ( 25,072 ) ( 33,166 ) ( 9,141 )
Proceeds from exercise of stock options 42,154   184,287   30,518  
Proceeds from sales under employee stock purchase plan 5,435   4,304   3,955  
Payment of withholding tax on vesting of restricted stock units —   ( 2,173 ) ( 4,114 )
Net cash provided by financing activities 24,843,527   22,132,641   1,889,886  
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash ( 544 ) ( 2,148 ) 444  
Net increase (decrease) in cash, cash equivalents, and restricted cash 2,263,447   ( 8,776 ) ( 2,195 )
Cash, cash equivalents, and restricted cash, beginning of period 39,897   48,673   50,868  
Cash, cash equivalents, and restricted cash, end of period $ 2,303,344   $ 39,897   $ 48,673  

Supplemental disclosure of cash flow information:
Cash paid during the year for interest $ 46,525   $ 44,571   $ 41,229  
Cash paid during the year for income taxes, net of tax refunds $ 13,132   $ 1,059   $ 30,318  

The accompanying notes are an integral part of these Consolidated Financial Statements.
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STRATEGY INC
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(1) Organization
Strategy Inc (“Strategy,” or the “Company”) is the world's first and largest Bitcoin Treasury Company. Strategy pursues financial innovation strategies designed to generate value from its bitcoin holdings, including by developing and issuing novel fixed-income instruments that provide investors varying degrees of economic exposure to bitcoin. In addition, the Company is an industry leader in AI-powered enterprise analytics software, advancing its vision of Intelligence Everywhere™. Strategy believes its combination of active bitcoin-focused capital management and a scaled operating software business positions the Company for long-term value creation across both digital asset and enterprise analytics markets.

(2) Summary of Significant Accounting Policies
(a) Basis of Presentation
On August 11, 2025, the Company filed with the Secretary of State of the State of Delaware an amendment to its Second Restated Certificate of Incorporation (as amended and supplemented to date, its “Certificate of Incorporation”), to effect a change of its name from “MicroStrategy Incorporated” to “Strategy Inc”.
On July 11, 2024, the Company announced a 10 -for-1 stock split of the Company’s class A common stock and class B common stock. The stock split was effected by means of a stock dividend to the holders of record of the Company’s class A common stock and class B common stock as of the close of business on August 1, 2024, the record date for the dividend. Shares held in treasury by the Company were not impacted by the stock split. The dividend was distributed after the close of trading on August 7, 2024 and trading commenced on a split-adjusted basis at market open on August 8, 2024. As a result of the stock split, all applicable share, per share, and equity award information has been retroactively adjusted in the Consolidated Financial Statements and Notes to Consolidated Financial Statements to reflect the stock split for all periods presented.
In the opinion of management, all adjustments necessary for a fair statement of financial position and results of operations have been included. All such adjustments are of a normal recurring nature, unless otherwise disclosed.
The accompanying Consolidated Financial Statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation.
(b) Use of Estimates
The preparation of the Consolidated Financial Statements, in conformity with GAAP, requires management to make estimates and judgments that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to revenue recognition, allowance for doubtful accounts, investments, fixed assets, digital assets, leases, debt, share-based compensation, income taxes, including the carrying value of deferred tax assets, and litigation and contingencies, including liabilities that the Company deems not probable of assertion.
The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets, liabilities, and equity that are not readily apparent from other sources. Actual results and outcomes could differ from these estimates and assumptions.
(c) Fair Value Measurements
The Company measures certain assets and liabilities at fair value on a recurring or nonrecurring basis. Fair value is defined as the price that is expected to be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company uses a three-level hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques. The three levels of the fair value hierarchy are described below:
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Level 1: Quoted (unadjusted) prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities.

Level 2: Inputs other than quoted prices that are either directly or indirectly observable, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

Level 3: Inputs that are generally unobservable, supported by little or no market activity, and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability.

The categorization of an asset or liability within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The valuation techniques used by the Company when measuring fair value maximize the use of observable inputs and minimize the use of unobservable inputs.
The Company also estimates the fair value of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses, and accrued compensation and employee benefits. The Company considers the carrying value of these instruments in the Consolidated Financial Statements to approximate fair value due to their short maturities.
(d) Cash and Cash Equivalents and Restricted Cash
Cash equivalents may include bank demand deposits, money market instruments, certificates of deposit, U.S. Treasury securities, and equivalent funds. The Company generally considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Restricted cash consists of cash balances restricted in use by contractual obligations with third parties.
(e) Credit Losses on Accounts Receivable
The Company maintains an allowance for credit losses on its accounts receivable balances, which represents its best estimate of current expected credit losses over the contractual life of the accounts receivable. When evaluating the adequacy of its allowance for credit losses each reporting period, the Company analyzes accounts receivable balances with similar risk characteristics on a collective basis, considering factors such as the aging of receivable balances, payment terms, geographic location, historical loss experience, current information, and future expectations. Each reporting period, the Company reassesses whether any accounts receivable no longer share similar risk characteristics and should instead be evaluated as part of another pool or on an individual basis. Changes to the allowance for credit losses are adjusted through credit loss expense, which is presented within “General and administrative” operating expenses in the Consolidated Statements of Operations.
(f) Concentrations of Credit Risk
Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, and accounts receivable. The Company places its cash equivalents with high credit-quality financial institutions to maintain safety and liquidity.
The Company sells its offerings to various companies across several industries throughout the world in the ordinary course of business. The Company routinely assesses the financial strength of its customers and maintains allowances for anticipated losses. As of December 31, 2025 and 2024, no individual customer accounted for 10% or more of net accounts receivable, and for the years ended December 31, 2025, 2024, and 2023, no individual customer accounted for 10% or more of revenue.
(g) Digital Assets
In December 2023, the Financial Accounting Standards Board (“FASB”) issued 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”). ASU 2023-08 requires in-scope crypto assets (including the Company's bitcoin holdings) to be measured at fair value in the statement of financial position, with gains and losses from changes in the fair value of such crypto assets recognized in net income each reporting period. ASU 2023-08 also requires certain interim and annual disclosures for crypto assets within the scope of the standard. The Company adopted this guidance effective January 1, 2025 on a prospective basis, with a cumulative-effect adjustment to the opening balance of retained earnings. Prior periods were not restated. As a result, the Company’s financial results for the year ended December 31, 2025 are not directly comparable to the financial results for earlier periods. See Note 4, Digital Assets, to the Consolidated Financial Statements, for further information.

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The adoption of ASU 2023-08 resulted in the following impacts as of January 1, 2025:

Consolidated Balance Sheet December 31, 2024 As Reported Effect of the Adoption of ASU 2023-08 January 1, 2025 As Adjusted
Digital assets
$ 23,909,373   $ 17,881,048   $ 41,790,421  
Deferred tax assets
1,525,307   ( 1,165,605 ) 359,702  
Deferred tax liabilities
407   3,969,065   3,969,472  
(Accumulated deficit) retained earnings
$ ( 2,166,876 ) $ 12,746,378   $ 10,579,502  

Although the Company continues to initially record its bitcoin purchases at cost, subsequent to the Company’s adoption of ASU 2023-08 on January 1, 2025, any increases or decreases in fair value are recognized as incurred in the Company's Consolidated Statements of Operations, and the fair value of the Company’s bitcoin is reflected within the Company's Consolidated Balance Sheets at each reporting period-end. As a result of the adoption of ASU 2023-08, the Company no longer accounts for its bitcoin under a cost-less-impairment accounting model and no longer establishes a deferred tax asset related to bitcoin impairment losses. Instead, the Company establishes a deferred tax liability if the fair market value of bitcoin at the reporting date is greater than the average cost basis of the Company’s bitcoin holdings at such reporting date, and any subsequent increases or decreases in the fair market value of bitcoin increases or decreases the deferred tax liability. If the fair market value of bitcoin declines to the point where the Company's cost basis in bitcoin exceeds the fair market value, the deferred tax liability with respect to the unrealized gains reverses and a deferred tax asset for the unrealized loss would be recorded and the Company may be required to establish a valuation allowance against all of the Company's US federal and state deferred tax assets. In determining the gain (loss) to be recognized upon sale, the Company calculates the difference between the sales price and carrying value of the specific bitcoin sold immediately prior to sale.

(h) Property and Equipment
Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, as follows: three years for computer equipment and purchased software; five years for office equipment; 10 years for office furniture; and 19 years for the Company’s corporate aircraft, which has an estimated salvage value of 21 %. Leasehold improvements are amortized using the straight-line method over the estimated useful lives of the improvements or the term of the lease, whichever is shorter. The Company periodically evaluates the appropriateness of the estimated useful lives and salvage value of all property and equipment. Any change in the estimated useful life or salvage value is treated as a change in estimate and accounted for prospectively in the period of change.
Expenditures for maintenance and repairs are charged to expense as incurred. When assets are retired or sold, the capitalized cost and related accumulated depreciation are removed from the property and equipment accounts and any resulting gain or loss is recognized in the results of operations.
Eligible internal-use software development costs are capitalized subsequent to the completion of the preliminary project stage. Such costs include external direct material and service costs, employee payroll, and payroll-related costs. After all substantial testing and deployment is completed and the software is ready for its intended use, capitalization ceases and internal-use software development costs are then amortized using the straight-line method over the estimated useful life of the software, generally three years .
The Company reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying value of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted cash flows to the recorded value of the asset. If an asset is impaired, the asset is written down by the amount by which the carrying value of the asset exceeds the related fair value of the asset.
(i) Leases
A lease is a contract, or part of a contract, that conveys the right to both (i) obtain economic benefits from and (ii) direct the use of an identified asset for a period of time in exchange for consideration. The Company evaluates its contracts to determine if they contain a lease and classifies any lease components identified as an operating or finance lease. For each lease component, the Company recognizes a right-of-use (“ROU”) asset and a lease liability. ROU assets and lease liabilities are presented separately for operating and finance leases; however, the Company currently has no material finance leases. The Company’s operating leases are primarily related to office space in the United States and foreign locations.
In a contract that contains a lease, a component is an item or activity that transfers a good or service to the lessee. Such contracts may be comprised of lease components, non-lease components, and elements that are not components. Each lease component represents a lessee’s right to use an underlying asset in the contract if the lessee can benefit from the right of
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use of the asset either on its own or together with other readily available resources and if the right of use is neither highly dependent nor highly interrelated with other rights of use. Non-lease components include items such as common area maintenance and utilities provided by the lessor. The Company has elected the practical expedient to not separate lease components from non-lease components for office space. For each lease within this asset class, the non-lease components and related lease components are accounted for as a single lease component. Items or activities that do not transfer goods or services to the lessee, such as administrative tasks to set up the contract and reimbursement or payment of lessor costs, are not components of the contract and therefore no contract consideration is allocated to such items or activities.
Consideration in the contract is comprised of any fixed payments and variable payments that depend on an index or rate. Payments in the Company’s operating lease arrangements are typically comprised of base office rent and parking fees. Costs related to the Company’s non-lease components, as described above, are generally variable and do not depend on an index or rate and are therefore excluded from the contract consideration allocated to the lease components. The Company’s operating lease arrangements generally do not contain any payments related to items or activities that are not components.
Operating lease liabilities are initially and subsequently measured at the present value of unpaid lease payments, discounted at the discount rate of the lease. Operating lease ROU assets are initially measured as the sum of the initial lease liability, any initial direct costs incurred, and any prepaid lease payments, less any lease incentives received. The ROU asset is amortized over the term of the lease. The amortization of operating lease ROU assets is included in “Reduction in carrying amount of right-of-use assets” within the operating activities section of the Consolidated Statements of Cash Flows. A single lease expense is recorded within operating expenses in the Consolidated Statements of Operations on a straight-line basis over the lease term. Variable lease payments that are not included in the measurement of the lease liability are recognized in the period when the obligations for those payments are incurred. In the Company’s lease agreements, these variable payments typically include certain taxes, utilities, and maintenance costs, and other fees.
The Company uses its incremental borrowing rate as the discount rate for all of its leases, as the rate implicit in the lease is not readily determinable in any of its lease contracts. In order to estimate a collateralized borrowing rate curve, the Company first estimates a synthetic credit rating and then applies modeling methodologies to an unsecured borrowing rate curve. In determining the incremental borrowing rate of each lease, the Company uses a centralized treasury approach and considers the currency of the contract, the economic environment in which the lease exists, and the term of the lease.
The Company does not recognize lease liabilities or ROU assets for any short-term leases with a non-cancellable lease term of 12 months or less. Instead, the lease payments for these short-term leases are expensed on a straight-line basis over the lease term, and any variable payments are recognized in the period when the obligations for those payments are incurred. The Company believes that, using this methodology, the expense recorded reasonably reflects the Company’s short-term lease commitments.
(j) Software Development Costs
The Company did not capitalize any software development costs during the years ended December 31, 2025, 2024, and 2023. Due to the pace of the Company's software development efforts and frequency of its software releases, the Company’s software development costs are expensed as incurred within “Research and development” in the Consolidated Statements of Operations.
(k) Loss Contingencies and Legal Costs
The Company accrues loss contingencies that are believed to be probable and can be reasonably estimated. As events evolve during the administration and litigation process and additional information becomes known, the Company reassesses its estimates related to loss contingencies. Legal costs are expensed in the period in which the costs are incurred.
(l) Deferred Revenue and Advance Payments
Deferred revenue and advance payments are contract liabilities that represent amounts received or due from customers in advance of the Company transferring its software or services to the customer under an enforceable contract. Revenue is subsequently recognized in the period(s) in which control of the software or services is transferred to the customer. Deferred revenue is comprised of deferred product licenses and subscription services, product support, and other services revenue based on the transaction price allocated to the specific performance obligation in the contract with the customer, and presented as either current or non-current in the Consolidated Balance Sheets, depending on whether the software or services are expected to be transferred to the customer within the next year.
(m) Debt Arrangements
As discussed in Note 8, Long-term Debt, to the Consolidated Financial Statements, the Company has issued convertible senior notes and senior secured notes, and entered into secured term loan agreements in recent years. The embedded
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conversion features in each of the convertible notes are indexed to the Company’s class A common stock and meet the criteria for classification in stockholders’ equity, and therefore derivative accounting does not apply. The Company records the aggregate principal amount of each of its debt instruments as a liability on its Consolidated Balance Sheets, offset by the issuance costs associated with each instrument. The issuance costs are amortized to interest expense using the effective interest method over the expected term of each debt instrument.
(n) Redeemable Preferred Stock
As of December 31, 2025, the following series of preferred stock of the Company were outstanding: (i) 10.00 % Series A Perpetual Strife Preferred Stock (“STRF Stock”), (ii) Variable Rate Series A Perpetual Stretch Preferred Stock (“STRC Stock”), (iii) 10.00 % Series A Perpetual Stream Preferred Stock ("STRE Stock"), (iv) 8.00 % Series A Perpetual Strike Preferred Stock (“STRK Stock”), and (v) 10.00 % Series A Perpetual Stride Preferred Stock (“STRD Stock”). In these Notes to Consolidated Financial Statements, STRF Stock, STRC Stock, STRE Stock, STRK Stock and STRD Stock are collectively referred to as “Preferred Stock.” In accordance with Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity, each series of Preferred Stock outstanding as of December 31, 2025 is classified within mezzanine equity, as certain events that could cause shares of each such series of Preferred Stock to become redeemable are not solely within the control of the Company. In each case, the carrying values of the shares are initially recognized based on proceeds received, net of issuance costs, and are not accreted to their redemption value unless it becomes probable that the shares will become redeemable. Refer to Note 12, Redeemable Preferred Stock, for further discussion.
(o) Revenue Recognition
The Company recognizes revenue using the five-step model:
(i) Identifying the contract(s) with a customer,
(ii) Identifying the performance obligation(s),
(iii) Determining the transaction price,
(iv) Allocating the transaction price to the performance obligations in the contract, and
(v) Recognizing revenue when, or as, the Company satisfies a performance obligation.
The Company has elected to exclude taxes assessed by government authorities in determining the transaction price, and therefore revenue is recognized net of taxes collected from customers. The Company enters into non-cancellable nonrefundable orders with customers and does not have a history of granting returns or refunds and therefore does not have a reserve for future returns.
Performance Obligations and Timing of Revenue Recognition
The Company primarily sells software and services that fall into the categories discussed below. Each category contains one or more performance obligations that are either (i) capable of being distinct (i.e., the customer can benefit from the software or service on its own or together with readily available resources, including those purchased separately from the Company) and distinct within the context of the contract (i.e., separately identifiable from other promises in the contract) or (ii) a series of distinct services that are substantially the same and have the same pattern of transfer to the customer. Aside from the Company’s term and perpetual product licenses, which are delivered at a point in time, the majority of the Company’s services are delivered over time.
On- Premises Product Licenses
The Company sells different types of business intelligence software licenses licensed on a term or perpetual basis for installation on premises by the customer; however, as of January 2025, Strategy on-premises product licenses have entered an end-of-support cycle, with full support for such licenses ending December 31, 2026. Although product licenses are sold with product support, the software is fully functional at the outset of the arrangement and is considered a distinct performance obligation. Revenue from product license sales is recognized when control of the license is transferred to the customer, which is the later of delivery or commencement of the license term.

Cloud Services Subscriptions
The Company also sells access to its software through fully managed cloud environments for commercial or government use, wherein customers access the software through a cloud environment that the Company manages on behalf of the customer. Cloud subscriptions are regularly sold on a standalone basis and include technical support, monitoring, backups, updates, and quarterly service reviews. Cloud subscriptions are generally considered a single performance obligation. Additionally, customers with existing on-premises software licenses may convert their installations to the Company's fully
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managed cloud environment, on or around the time such on-premises licenses are typically terminated and replaced by a new subscription to the Company's cloud service. At conversion, an analysis is performed for each contract to determine whether any revenue adjustments are necessary given that the contract modifications revoke previously transferred rights to perpetual on-premise software. Such revenue adjustments were not material for the years ended December 31, 2025, 2024, and 2023. Revenue related to cloud subscriptions is recognized on a straight-line basis over the contract period, which is the period over which the customer has continuous access to the software and services.
Product Support
In all on-premises product license transactions and cloud service subscription transactions, customers receive technical support, either purchased separately or as an included component. Customers may also purchase a premium product support package for a fixed annual fee. All such current support includes both technical support and when-and-if-available software upgrades, which are treated as a single performance obligation as they are considered a series of distinct services that are substantially the same and have the same duration and measure of progress. Revenue from product support is recognized on a straight-line basis over the contract period, which is the period over which the customer has continuous access to product support.
See Note 16, Segment Information, to the Consolidated Financial Statements for information regarding total revenues by geographic region.
Estimates and Judgments
The Company makes estimates and judgments to allocate the transaction price based on an observable or estimated Standalone Selling Prices (“SSP”). The Company also makes estimates and judgments with respect to capitalizing incremental costs to obtain a customer contract and determining the subsequent amortization period. These estimates and judgments are discussed further below.
Determining the Transaction Price
The Company does not adjust the transaction price for significant financing components where the time period between cash payment and performance is one year or less. However, there are circumstances where the timing between cash payment and performance may exceed one year. These circumstances generally involve prepaid multi-year license, product support and subscription services arrangements where the customer determines when the service is utilized. In these circumstances, the Company has determined no significant financing component exists because the customer controls when to utilize the service and because there are significant business purposes behind the timing difference between payment and performance (e.g., ensuring collectability in the case of subscription services).
Allocating the Transaction Price Based on Standalone Selling Prices (SSP)
The Company allocates the transaction price to each performance obligation in a contract based on its relative SSP, which is the price, or estimated price, of the software or service when sold on a standalone basis at contract inception. When SSP is not directly observable, the Company estimates SSP. The selling price of both subscription services and product licenses is highly variable. The Company estimates SSP using a residual approach after first determining the SSP of any other services included in the arrangement. SSP for standard product support is established as a percentage of the stated net license fee, consistent with normal pricing practices and historical standalone renewals at similar percentages. The Company routinely analyzes its SSP and concluded its methodology results in a reasonable allocation of the transaction price.
(p) Incremental Costs to Obtain Customer Contracts
The Company capitalizes costs incurred to obtain a contract with a customer when they are deemed incremental to obtaining the contract and expected to be recoverable. Capitalizable costs are generally limited to sales incentives paid to the Company’s sales team. The Company capitalizes the amounts related to new product support, cloud subscription, and term license contracts. Costs capitalized are amortized over a period of time that is consistent with the pattern of transfer to the customer, which the Company has determined is generally three years and includes consideration for contract length, anticipated renewals, product life cycle, and customer behavior. The Company amortizes the cost over this period on a straight-line basis for product support and subscription service components, and at point(s) in time coinciding with delivery of the license component of term license contracts. The Company has elected the practical expedient to expense capitalizable costs as incurred where the amortization period would be one year or less, which includes those amounts earned on perpetual license, consulting, and education contracts, and renewals of product support, cloud subscription, and term license contracts, if applicable.
As of December 31, 2025 and 2024, capitalized costs to obtain customer contracts, net of accumulated amortization, were $ 79.3 million and $ 48.3 million, respectively, and are presented within “Deposits and other assets” in the Consolidated
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Balance Sheets. During the years ended December 31, 2025, 2024, and 2023, amortization expenses related to these capitalized costs were $ 24.6 million, $ 12.3 million, and $ 8.1 million, respectively, and are reflected within “Sales and marketing” in the Consolidated Statements of Operations.
(q) Share-based Compensation
The Company maintains 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”). As of May 2023, no new awards will be granted under the 2013 Equity Plan, though awards previously granted under the 2013 Equity Plan remain outstanding in accordance with their terms. Under the Stock Incentive Plans, the Company’s employees, officers, directors, and other eligible participants may be (with respect to the 2023 Equity Plan) and have been (with respect to both the 2023 Equity Plan and the 2013 Equity Plan) awarded various types of share-based compensation, including options to purchase shares of the Company’s class A common stock, restricted stock units, and other stock-based awards. Additionally, under the 2023 Equity Plan, awards may be and have been granted that are subject to the achievement of one or more performance measures established by the Company’s Board of Directors (the "Board") or a duly authorized committee thereof. In January 2025, the Company’s stockholders approved an amendment to the 2023 Equity Plan (the “2024 Plan Amendment”) that had been previously adopted by the Board in December 2024, subject to stockholder approval. The 2024 Plan Amendment amended the 2023 Equity Plan to provide that, beginning on December 20, 2024, each non-employee director who is newly appointed to the Board shall automatically receive, upon the date of such director’s initial appointment to the Board, equity awards having an aggregate fair value equal to $ 2,000,000 , one-half of which ($ 1,000,000 ) will consist of non-statutory stock options and one-half of which ($ 1,000,000 ) will consist of restricted stock units, with each award vesting annually in equal installments over four years . During 2021, the Company adopted and the Company’s stockholders approved the 2021 Employee Stock Purchase Plan (the “2021 ESPP”), under which eligible employees of the Company and certain of its subsidiaries may be provided with opportunities to purchase shares of the Company’s class A common stock.
For options and other stock-based awards, the share-based compensation expense is based on the fair value of the awards on the date of grant, as estimated using the Black-Scholes valuation model. For restricted stock units, the share-based compensation expense is based on the fair value of the Company’s class A common stock on the date of grant. The fair value of liability-classified awards (e.g., the other stock-based awards and cash-settled restricted stock units) is remeasured at each reporting date. For performance stock units subject to a market condition, the Company uses a Monte Carlo simulation model to determine the grant date fair value. For the 2021 ESPP, the share-based compensation expense is based on the grant date fair value, which consists of the intrinsic value of any purchase discount and the fair value of the look-back provision using the Black-Scholes valuation model.
The Company recognizes share-based compensation expense for service-conditioned awards granted under the Stock Incentive Plans and the 2021 ESPP on a straight-line basis over the requisite service period (generally, the vesting period for service-conditioned awards under the Stock Incentive Plans and the offering period under the 2021 ESPP). The Company recognizes share-based compensation expense for market-conditioned performance stock units granted under the 2023 Equity Plan ratably over the performance period using an accelerated attribution cost recognition method. Share-based compensation expense is recorded in cost of revenues or operating expense line items in the Consolidated Statements of Operations corresponding to the respective participant’s role or function.
See Note 11, Share-based Compensation, to the Consolidated Financial Statements for further information regarding the Stock Incentive Plans, the 2021 ESPP, related share-based compensation expense, and assumptions used in determining fair value.
(r) Income Taxes
The Company is subject to federal, state, and local income taxes in the United States and a number of foreign countries. The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and deferred tax liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines deferred tax assets and deferred tax liabilities on the basis of differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which differences are expected to reverse. The effect of a change in the tax rates on deferred tax assets and deferred tax liabilities is recognized in income in the period that includes the enactment date.
For deferred tax assets, management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. The Company provides a valuation allowance to reduce deferred tax assets to the amount more-likely-than-not to be realized.
For uncertain income tax positions, the Company uses a more-likely-than-not recognition threshold based on the technical merits of the income tax position taken. Income tax positions that meet the more-likely-than-not recognition threshold are
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measured in order to determine the tax benefit recognized in the financial statements. The Company recognizes accrued interest related to unrecognized tax benefits as part of income tax expense. Penalties, if incurred, are recognized as a component of income tax expense.
In December 2023, the FASB issued Accounting Standards Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires enhanced disclosures surrounding income taxes, particularly related to rate reconciliation and income taxes paid information. In particular, on an annual basis, companies are required to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. Companies are also required to disclose, on an annual basis, the amount of income taxes paid, disaggregated by federal, state, and foreign taxes, and also disaggregated by individual jurisdictions above a quantitative threshold. The Company adopted ASU 2023-09 prospectively for its annual period ended December 31, 2025. The adoption of ASU 2023-09 did not have a material effect on the Company’s Consolidated Financial Statements or Notes to the Financial Statements. For further information, see Note 10, Income Taxes.
(s) Basic and Diluted Earnings (Loss) Per Share
Basic earnings (loss) per share is determined by dividing the net income (loss) attributable to common stockholders by the weighted average number of shares of common stock, including shares of class A common stock and class B common stock, outstanding during the period. Diluted earnings (loss) per share is determined by dividing the net income (loss) attributable to common stockholders by the weighted average number of shares of common stock and potential shares of common stock outstanding during the period. The impact from potential shares of common stock on the diluted earnings per share calculation are included when dilutive. Potential shares of common stock consisting of class A common stock issuable upon the exercise of outstanding employee stock options, the vesting of restricted stock units and performance stock units considered probable of achievement, and in connection with the 2021 ESPP, are computed using the treasury stock method. Potential shares of class A common stock issuable upon conversion of the Company’s convertible senior notes are computed using the if-converted method. In computing diluted earnings per share, the Company first calculates the earnings per incremental share (“EPIS”) for each class of potential shares of common stock and ranks the classes from the most dilutive (i.e., lowest EPIS) to the least dilutive (i.e., highest EPIS). Basic earnings per share is then adjusted for the effect of each class of shares, in sequence and cumulatively, until a particular class no longer produces further dilution.
The Company has two classes of common stock: class A common stock and class B common stock. Holders of class A common stock generally have the same rights, including rights to dividends, as holders of class B common stock, except that holders of class A common stock have one vote per share while holders of class B common stock have ten votes per share. Each share of class B common stock is convertible at any time, at the option of the holder, into one share of class A common stock. As such, basic and fully diluted earnings per share for class A common stock and for class B common stock are the same. The Company has never declared or paid any cash dividends on either class A or class B common stock.
As of December 31, 2025, the Company had five series of preferred stock outstanding: STRF Stock, STRC Stock, STRE Stock, STRK Stock and STRD Stock. Only STRK Stock is convertible into the Company’s class A common stock and, therefore, is the only series of Preferred Stock that impacts diluted earnings per common share. Each share of STRK Stock is convertible at any time, at the option of the holder, into 0.1 shares of class A common stock. None of the Company's other series of outstanding Preferred Stock are convertible into any class of the Company's common stock and therefore do not impact the Company's diluted earnings per common share. Refer to Note 12, Redeemable Preferred Stock, Redeemable Preferred Stock, to the Consolidated Financial Statements, for additional information on the dividend, voting, and other rights of the Company's outstanding preferred stock.
The impact from potential shares of common stock on the diluted earnings per common share calculation are included when dilutive. Potential shares of class A common stock issuable upon the exercise of outstanding stock options, the vesting of restricted stock units and performance stock units considered probable of achievement, and in connection with the 2021 ESPP are computed using the treasury stock method. Potential shares of class A common stock issuable upon conversion of the Convertible Notes and upon conversion of the STRK Stock are computed using the if-converted method.
See Note 13, Basic and Diluted Earnings (Loss) per Common Share, to the Consolidated Financial Statements for further information regarding the calculation of Basic and Diluted earnings (loss) per share.
(t) Foreign Currency Translation
The functional currency of the Company’s international operations is generally the local currency. Accordingly, such assets and liabilities of international subsidiaries are translated using exchange rates in effect at the end of the period, and revenue and expenses are translated using average monthly exchange rates for the period in which the transactions occur. The related translation adjustments are reported in “Accumulated other comprehensive loss” in stockholders’ equity. In general, upon complete or substantially complete liquidation of an investment in an international subsidiary, the amount of accumulated translation adjustments attributable to that subsidiary is reclassified from stockholders’ equity to the
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consolidated statements of operations. Transaction gains and losses arising from transactions denominated in a currency other than the functional currency of the entity involved are included in the results of operations.
As of December 31, 2025, 2024, and 2023, the cumulative foreign currency translation adjustments were $ 5.2 million, $ 15.4 million, and $ 11.4 million, respectively. No taxes were recognized on the temporary differences resulting from foreign currency translation adjustments for the years ended December 31, 2025, 2024, and 2023.
Transaction gains and losses arising from transactions denominated in foreign currencies resulted in a net loss of $ 16.8 million in 2025, net gain of $ 2.9 million in 2024, and net loss of $ 5.6 million in 2023, respectively, and are included in “Other (expense) income, net” in the Consolidated Statements of Operations.

(3) Recent Accounting Standards
In November 2024, the FASB issued Accounting Standards Update No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”). ASU 2024-03 requires specified information about certain costs and expenses be disclosed in the notes to the financial statements, including the expense caption on the face of the income statement in which they are disclosed, in addition to a qualitative description of remaining amounts not separately disaggregated. Entities will also be required to disclose their definition of “selling expenses” and the total amount in each annual period. The standard is effective for the Company for annual periods beginning January 1, 2027 and for interim periods beginning January 1, 2028, with updates applied either prospectively or retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its disclosures.
In September 2025, the FASB issued Accounting Standards Update No. 2025-06, Intangibles: Goodwill and Other‒Internal-Use Software: Targeted Improvements to the Accounting for Internal-Use Software (Subtopic 350-40) (ASU 2025-06) to modernize the accounting for software costs under Subtopic 350-40, Intangibles‒Goodwill and Other‒Internal-Use Software (referred to as “internal-use software”). Upon adoption, the Company will be required to account for internal-use software under the updated capitalization criteria. The standard is effective for our interim and annual 2028 periods, with early adoption permitted. The standard can be applied either prospectively, retrospectively, or under a modified transition approach. The Company is currently evaluating the impact of this guidance.

(4) Digital Assets
The Company accounts for its digital assets, which are comprised solely of bitcoin, as indefinite-lived intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other and ASU 2023-08. The Company’s digital assets are initially recorded at cost. Subsequent to the Company’s adoption of ASU 2023-08 on January 1, 2025, bitcoin assets are measured at fair value as of each reporting period. The Company determines the fair value of its bitcoin in accordance with ASC 820, Fair Value Measurement, based on quoted (unadjusted) prices on the Coinbase exchange, the active exchange that the Company has determined is its principal market for bitcoin (Level 1 inputs). Changes in fair value are recognized as incurred in the Company's Consolidated Statements of Operations, within “Unrealized loss on digital assets”, within operating expenses in the Company’s Consolidated Statement of Operations. Prior to the adoption of ASU 2023-08, the Company’s digital assets were initially recorded at cost, and subsequently measured at cost, net of any impairment losses incurred since acquisition. Impairment losses were recognized as “Digital asset impairment losses” in the Company’s Consolidated Statement of Operations in the period in which the impairment occurred. Gains (if any) were not recorded until realized upon sale, at which point they were presented net of any impairment losses in the Company’s Consolidated Statements of Operations.
The following table presents a reconciliation of the opening and closing balances of the Company’s digital assets, including purchases and unrealized gains or losses as calculated after the adoption of ASU 2023-08 on January 1, 2025, and digital asset impairment losses as calculated prior to the adoption of ASU 2023-08 (in thousands, except number of bitcoins) for the periods indicated.

Digital Asset Carrying Value (in thousands)
Approximate Number of Bitcoins Held

Balance at December 31, 2022 (before the adoption of ASU 2023-08) $ 1,840,028   132,500
Digital asset purchases 1,902,299   56,650
Digital asset impairment losses ( 115,851 ) n/a

Balance at December 31, 2023 (before the adoption of ASU 2023-08) $ 3,626,476   189,150  
Digital asset purchases 22,072,759   258,320
Digital asset impairment losses ( 1,789,862 ) n/a

Balance at December 31, 2024 (before the adoption of ASU 2023-08) $ 23,909,373   447,470
Cumulative effect upon adoption of ASU 2023-08 17,881,048   n/a

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Digital asset purchases 22,467,083   225,030
Unrealized loss on digital assets (1) ( 5,403,476 ) n/a

Balance at December 31, 2025 $ 58,854,028   672,500  

(1) Unrealized loss on digital assets is included in Unrealized loss on digital assets on the Consolidated Statements of Operations.
The Company did not sell any of its bitcoins during the years ended December 31, 2025, 2024, or 2023.
The following table summarizes the Company’s digital asset holdings (in thousands, except number of bitcoins), as of the dates indicated.

December 31

2025 2024 2023
Digital asset cost basis $ 50,435,331   $ 27,968,248   $ 5,895,489  
Digital asset fair value $ 58,854,028   n/a n/a
Cumulative digital asset impairment losses n/a $ 4,058,875   $ 2,269,013  

The carrying value on the Company’s Consolidated Balance Sheet at each period-end prior to the adoption of ASC 2023-08 represented the lowest fair value (based on Level 1 inputs in the fair value hierarchy) of the bitcoin at any time since their acquisition. Therefore, these fair value measurements were made during the period from their acquisition through December 31, 2024.
From time to time, the Company’s execution partners may extend short-term trade credits to the Company and to MacroStrategy LLC (“MacroStrategy”), a wholly-owned subsidiary of the Company, to purchase bitcoin in advance of using cash funds in the respective trading accounts. Previously, the Company also made bitcoin purchases on a delayed settlement basis. Trade credits and delayed settlement payments, as applicable, are due and payable after the bitcoin purchases are completed. In 2025 and 2024, certain bitcoin of the Company and MacroStrategy were subject to a first priority security interest and lien in order to secure payments owed by the Company or MacroStrategy with respect to these arrangements. While trade credits or delayed settlements are outstanding, the Company may incur interest fees and be required to maintain minimum balances in its trading and custody accounts with such execution partners. As of December 31, 2025 and 2024, the Company had no outstanding trade credits payable or delayed settlement obligations.
The vast majority of the Company’s assets are concentrated in its bitcoin holdings. Bitcoin is a digital asset, which is a novel asset class that is subject to significant legal, commercial, regulatory and technical uncertainty. Holding bitcoin does not generate any cash flows and involves custodial fees and other costs. Additionally, the price of bitcoin has historically experienced significant price volatility, and a significant decrease in the price of bitcoin would adversely affect the Company’s financial condition and results of operations. The Company’s strategy of acquiring and holding bitcoin also exposes it to counterparty risks with respect to the custody of its bitcoin, cybersecurity risks, and other risks inherent to holding a digital asset. In particular, the Company is subject to the risk that, if its private keys with respect to its digital assets are lost or destroyed or other similar circumstances or events occur, the Company may lose some or all of its digital assets, which could materially adversely affect the Company’s financial condition and results of operations.

(5) Contract Balances
The Company invoices its customers in accordance with billing schedules established in each contract. The Company’s rights to consideration from customers are presented separately in the Company’s Consolidated Balance Sheets depending on whether those rights are conditional or unconditional.
The Company presents unconditional rights to consideration from customers within “Accounts receivable, net” in its Consolidated Balance Sheets. All of the Company’s contracts are generally non-cancellable and/or non-refundable, and therefore an unconditional right generally exists when the customer is billed or amounts are billable per the contract.
Accounts receivable (in thousands) consisted of the following, as of:

December 31,
2025 2024
Billed and billable $ 209,094   $ 183,391  
Less: allowance for credit losses ( 3,346 ) ( 2,188 )
Accounts receivable, net $ 205,748   $ 181,203  

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Changes in the allowance for credit losses were not material for the year ended December 31, 2025.
Rights to consideration that are subject to a condition other than the passage of time are considered contract assets until they are expected to become unconditional and transfer to accounts receivable. Current contract assets included in “Prepaid expenses and other current assets” in the Consolidated Balance Sheets consisted of $ 9.7 million and $ 2.6 million, as of December 31, 2025 and 2024, respectively, related primarily to performance obligations or services being rendered in advance of future invoicing associated with multi-year contracts. These true-up adjustments are generally not material. Non-current contract assets included in “Deposits and other assets” in the Consolidated Balance Sheets consisted of $ 4.7 million and $ 6.8 million, as of December 31, 2025 and 2024, respectively, related to performance obligations or services being rendered in advance of future invoicing associated with multi-year contracts. During the years ended December 31, 2025, 2024, and 2023, there were no significant impairments to the Company’s contract assets, nor were there any significant changes in the timing of the Company’s contract assets being reclassified to accounts receivable.
Contract liabilities are amounts received or due from customers in advance of the Company transferring the software or services to the customer and presented as "Deferred revenue and advance payments" in the Consolidated Balance Sheets. In the case of multi-year service contract arrangements, the Company generally does not invoice more than one year in advance of services and does 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.
The Company’s “Accounts receivable, net” and “Deferred revenue and advance payments” balances in the Consolidated Balance Sheets include unpaid amounts related to contracts under which the Company has an enforceable right to invoice the customer for non-cancellable and/or non-refundable software and services. Changes in accounts receivable and changes in deferred revenue and advance payments are presented net of these unpaid amounts in “Operating activities” in the Consolidated Statements of Cash Flows.
Deferred revenue and advance payments (in thousands) from customers consisted of the following, as of:

December 31,
2025 2024
Current:
Deferred product licenses revenue $ 3,053   $ 1,777  
Deferred subscription services revenue 165,971   107,119  
Deferred product support revenue 98,607   124,684  
Deferred other services revenue 4,487   4,394  
Total current deferred revenue and advance payments $ 272,118   $ 237,974  

Non-current:
Deferred product licenses revenue $ 91   $ 174  
Deferred subscription services revenue 3,308   2,263  
Deferred product support revenue 1,362   2,111  
Deferred other services revenue 690   422  
Total non-current deferred revenue and advance payments $ 5,451   $ 4,970  

During the years ended December 31, 2025, 2024, and 2023, the Company recognized revenues of $ 242.9 million, $ 225.4 million, and $ 215.9 million, respectively, from amounts included in the total deferred revenue and advance payments balances at the beginning of the respective year. For the years ended December 31, 2025, 2024, and 2023, there were no significant changes in the timing of revenue recognition on the Company’s deferred balances.
The Company’s remaining performance obligation represents all future revenue under contract and includes deferred revenue and advance payments and billable non-cancelable amounts that will be invoiced and recognized as revenue in future periods. The remaining performance obligation excludes contracts that are billed in arrears, such as certain time and materials contracts. The portions of multi-year contracts that will be invoiced in the future are not presented on the balance sheet within accounts receivable and deferred revenues and are instead included in the following remaining performance obligation disclosure. As of December 31, 2025, the Company had an aggregate transaction price of $ 588.0 million allocated to the remaining performance obligation related to subscription services, product support, product licenses, and other services contracts. The Company expects to recognize $ 344.2 million within the next 12 months and the remainder thereafter.
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(6) Property and Equipment
Property and equipment (in thousands) consisted of the following, as of:

December 31,
2025 2024
Corporate aircraft and related equipment $ 48,996   $ 48,645  
Computer equipment and purchased software 47,679   61,828  
Furniture and equipment 11,942   9,708  
Leasehold improvements 31,989   29,547  
Internally developed software 5,969   9,917  
Property and equipment, gross 146,575   159,645  
Less: accumulated depreciation and amortization ( 117,717 ) ( 133,318 )
Property and equipment, net $ 28,858   $ 26,327  

Depreciation and amortization expenses related to property and equipment were $ 5.8 million, $ 5.6 million, and $ 6.4 million for the years ended December 31, 2025, 2024, and 2023, respectively.

(7) Leases
The Company leases office space in the United States and foreign locations under operating lease agreements. Office space is the Company’s only material underlying asset class under operating lease agreements. The Company has no material finance leases.
Under the Company’s office space lease agreements, fixed payments and variable payments that depend on an index or rate are typically comprised of base rent and parking fees. Additionally, under these agreements the Company is generally responsible for certain variable payments that typically include certain taxes, utilities and maintenance costs, and other fees. These variable lease payments are generally based on the Company’s occupation or usage percentages and are subject to adjustments by the lessor.
The Company’s ROU asset and total lease liability balances were $ 47.0 million and $ 57.4 million, respectively, as of December 31, 2025, and $ 54.6 million and $ 66.8 million, respectively, as of December 31, 2024. The Company’s most significant lease is for its corporate headquarters in Northern Virginia. The ROU asset and total lease liability balances related to the Company’s corporate headquarters lease were $ 37.1 million and $ 46.8 million, respectively, as of December 31, 2025, and $ 42.8 million and $ 54.6 million, respectively, as of December 31, 2024. The lease agreement for the Company’s corporate headquarters location is set to expire in December 2030, with an option for the Company to extend the term for an additional five or 10 consecutive years. The Company is currently not reasonably certain it will exercise this renewal option and therefore has not included the renewal option in the lease term. Several of the Company’s remaining leases contain options for renewal or options to terminate all or a portion of the leased space. The Company continually assesses the likelihood of exercising these options and recognizes an option as part of its ROU assets and lease liabilities if and when it is reasonably certain that it will exercise the option.
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The following table presents the Company’s total lease cost and other lease details for the periods indicated (in thousands, except years and discount rates):

Years Ended December 31,
2025 2024 2023
Lease cost:
Operating lease cost $ 12,574   $ 12,577   $ 13,081  
Short-term lease cost 721   619   579  
Variable lease cost 439   632   783  
Total lease cost $ 13,734   $ 13,828   $ 14,443  
Other information:
Cash paid for amounts included in the measurement of operating lease liabilities $ 14,434   $ 14,525   $ 9,862  
ROU assets obtained in exchange for new operating lease liabilities $ 1,110   $ 6,032   $ 6,183  
Weighted average remaining lease term in years – operating leases 4.9 5.8 6.6
Weighted average discount rate – operating leases 6.0   % 6.0   % 6.0   %

The following table presents the maturities of the Company’s operating lease liabilities as of December 31, 2025 (in thousands):

For the year ended December 31,
2026 $ 15,093  
2027 14,293  
2028 13,815  
2029 12,942  
2030 8,097  
Thereafter 1,442  
Total lease payments 65,682  
Less: imputed interest ( 8,240 )
Total $ 57,442  

Reported as:
Current operating lease liabilities $ 11,307  
Non-current operating lease liabilities 46,135  
Total $ 57,442  

(8) Long-term Debt
The net carrying value of the Company’s outstanding debt (in thousands) consisted of the following as of:
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December 31,
2025 2024
2027 Convertible Notes $ —   $ 1,041,352  
2028 Convertible Notes 1,002,736   998,543  
2029 Convertible Notes 2,982,316   2,975,037  
2030A Convertible Notes 789,109   785,172  
2030B Convertible Notes 1,989,115   —  
2031 Convertible Notes 596,843   594,476  
2032 Convertible Notes 790,113   787,417  
Other long-term secured debt 39,923   9,678  
Total $ 8,190,155   $ 7,191,675  
Reported as:
Current portion of long-term debt, net 31,313   517  
Long-term debt, net 8,158,842   7,191,158  
Total $ 8,190,155   $ 7,191,675  

Convertible Senior Notes
As of December 31, 2025, the following convertible notes were outstanding (the “Outstanding Convertible Notes”):
• $ 1.01 billion aggregate principal amount of 0.625 % Convertible Senior Notes due 2028 (the “2028 Convertible Notes”);
• $ 3.00 billion aggregate principal amount of 0 % Convertible Senior Notes due 2029 (the “2029 Convertible Notes”);
• $ 800.0 million aggregate principal amount of 0.625 % Convertible Senior Notes due 2030 (the “2030A Convertible Notes”);
• $ 2.00 billion aggregate principal amount of 0 % Convertible Senior Notes due 2030 (the “2030B Convertible Notes”);
• $ 603.7 million aggregate principal amount of 0.875 % Convertible Senior Notes due 2031 (the “2031 Convertible Notes”); and
• $ 800.0 million aggregate principal amount of 2.25 % Convertible Senior Notes due 2032 (the “2032 Convertible Notes”).
Additionally, the Company also previously issued, in February 2021, $ 1.05  billion aggregate principal amount of 0 % Convertible Senior Notes due 2027 (the “2027 Convertible Notes”, and together with the Outstanding Convertible Notes, the “Convertible Notes”). All of the 2027 Convertible Notes were redeemed or converted into the Company’s class A common stock during the first quarter of 2025.
Each of the Convertible Notes were issued in a private offering. The Outstanding Convertible Notes are, and the 2027 Convertible Notes were, senior unsecured obligations of the Company ranking senior in right of payment to any of the Company’s indebtedness expressly subordinated in right of payment to the Convertible Notes; equal in right of payment to any of the Company’s unsecured indebtedness not so subordinated; effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries. The following table summarizes the key terms of each of the Convertible Notes (principal at inception, net proceeds, and issuance costs are each reported in thousands). The summaries below are qualified in their entirety by the full text of the applicable indenture:
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2027 Convertible Notes 2028 Convertible Notes 2029 Convertible Notes 2030A Convertible Notes 2030B Convertible Notes 2031 Convertible Notes 2032 Convertible Notes
Issuance Date February 2021 September 2024 November 2024 March 2024 February 2025 March 2024 June 2024
Maturity Date (1) February 15, 2027 September 15, 2028 December 1, 2029 March 15, 2030 March 1, 2030 March 15, 2031 June 15, 2032
Principal at Inception $ 1,050,000   $ 1,010,000   $ 3,000,000   $ 800,000   $ 2,000,000   $ 603,750   $ 800,000  
Stated Interest Rate (2) 0.000 % 0.625   % 0.000 % 0.625   % 0.000   % 0.875   % 2.250   %
Interest Payment Dates (3) February 15 & August 15
March 15 & September 15
June 1 & December 1
March 15 & September 15
March 1 & September 1 March 15 & September 15
June 15 & December 15