FULLTEXT DEL 1 AV 2
10-Q – 2025-11-03 – mstr-20250930.htm
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0001050446 srt:MinimumMember us-gaap:EmployeeStockOptionMember 2025-01-01 2025-09-30 iso4217:USD xbrli:shares xbrli:pure mstr:Days iso4217:BRL mstr:Bitcoin mstr:Customer xbrli:shares mstr:Segment mstr:Country iso4217:USD UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended September 30, 2025 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 001-42509 STRATEGY INC (Exact name of registrant as specified in its charter) Delaware (State or other jurisdiction of incorporation or organization) 51-0323571 (I.R.S. Employer Identification Number) 1850 Towers Crescent Plaza , Tysons Corner , VA (Address of Principal Executive Offices) 22182 (Zip Code) ( 703 ) 848-8600 (Registrant’s telephone number, including area code) MicroStrategy Incorporated (Former name, former address and former fiscal year, if changed since last report) Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Trading Symbol Name of Each Exchange on which Registered 10.00% Series A Perpetual Strife Preferred Stock, $0.001 par value per share STRF The Nasdaq Global Select Market Variable Rate Series A Perpetual Stretch Preferred Stock, $0.001 par value per share STRC The Nasdaq Global Select Market 8.00% Series A Perpetual Strike Preferred Stock, $0.001 par value per share STRK The Nasdaq Global Select Market 10.00% Series A Perpetual Stride Preferred Stock, $0.001 par value per share STRD The Nasdaq Global Select Market Class A common stock, $0.001 par value per share MSTR The Nasdaq Global Select Market Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒ As of October 30, 2025, the registrant had 267,713,485 and 19,640,250 shares of class A common stock and class B common stock outstanding, respectively. STRATEGY INC FORM 10-Q TABLE OF CONTENTS Page PART I. FINANCIAL INFORMATION 1 Item 1. Financial Statements (unaudited) 1 Consolidated Balance Sheets as of September 30, 2025 and December 31, 2024 1 Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2025 and 2024 2 Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2025 and 2024 3 Consolidated Statements of Mezzanine Equity and Stockholders’ Equity for the Three and Nine Months Ended September 30, 2025 4 Consolidated Statements of Mezzanine Equity and Stockholders’ Equity for the Three and Nine Months Ended September 30, 2024 6 Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2025 and 2024 7 Notes to Consolidated Financial Statements 8 Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations 36 Item 3. Quantitative and Qualitative Disclosures About Market Risk 58 Item 4. Controls and Procedures 59 PART II. OTHER INFORMATION 60 Item 1. Legal Proceedings 60 Item 1A. Risk Factors 60 Item 2. Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities 60 Item 5. Other Information 61 Item 6. Exhibits 62 PART I - FINANCI AL INFORMATION Item 1. Financi al Statements STRATEGY INC CONSOLIDATED B ALANCE SHEETS (in thousands, except per share data) September 30, December 31, 2025 2024 (unaudited) Assets Current assets: Cash and cash equivalents $ 54,285 $ 38,117 Restricted cash 1,915 1,780 Accounts receivable, net 113,406 181,203 Prepaid expenses and other current assets 44,345 31,224 Total current assets 213,951 252,324 Digital assets 73,205,725 23,909,373 Property and equipment, net 29,949 26,327 Right-of-use assets 49,236 54,560 Deposits and other assets 114,342 75,794 Deferred tax assets, net 5,835 1,525,307 Total assets $ 73,619,038 $ 25,843,685 Liabilities, Mezzanine Equity and Stockholders' Equity Current liabilities: Accounts payable, accrued expenses, and operating lease liabilities $ 48,723 $ 52,982 Accrued compensation and employee benefits 44,514 58,362 Accrued interest 29,896 5,549 Current portion of long-term debt, net 316 517 Deferred revenue and advance payments 200,641 237,974 Total current liabilities 324,090 355,384 Long-term debt, net 8,173,587 7,191,158 Deferred revenue and advance payments 3,450 4,970 Operating lease liabilities 48,162 56,403 Other long-term liabilities 4,790 5,379 Deferred tax liabilities 6,947,911 407 Total liabilities 15,501,990 7,613,701 Commitments and Contingencies Mezzanine Equity 10.00 % Series A Perpetual Strife Preferred Stock, $ 0.001 par value; 33,200 shares authorized , 11,948 shares issued and outstanding at September 30, 2025; redemption value and liquidation preference of $ 1,332,115 at September 30, 2025 1,091,342 0 Variable Rate Series A Perpetual Stretch Preferred stock, $ 0.001 par value; 70,435 shares authorized , 28,011 shares issued and outstanding at September 30, 2025; redemption value and liquidation preference of $ 2,801,111 at September 30, 2025 2,473,800 0 8.00 % Series A Perpetual Strike Preferred Stock, $ 0.001 par value; 269,800 shares authorized , 13,606 shares issued and outstanding at September 30, 2025; redemption value and liquidation preference of $ 1,360,587 at September 30, 2025 1,193,240 0 10.00 % Series A Perpetual Stride Preferred Stock, $ 0.001 par value; 61,176 shares authorized , 12,322 shares issued and outstanding at September 30, 2025; redemption value and liquidation preference of $ 1,232,214 at September 30, 2025 1,027,948 0 Total mezzanine equity 5,786,330 0 Stockholders’ Equity Preferred stock undesignated, $ 0.001 par value; 570,389 and 5,000 shares authorized, no shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively 0 0 Class A common stock, $ 0.001 par value; 10,330,000 and 330,000 shares authorized, 267,468 and 226,138 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively 267 226 Class B common stock, $ 0.001 par value; 165,000 shares authorized, 19,640 shares issued and outstanding at September 30, 2025 and December 31, 2024, respectively 20 20 Additional paid-in capital 33,390,487 20,411,998 Accumulated other comprehensive loss ( 5,113 ) ( 15,384 ) Retained earnings (accumulated deficit) 18,945,057 ( 2,166,876 ) Total stockholders’ equity 52,330,718 18,229,984 Total liabilities, mezzanine equity and stockholders' equity $ 73,619,038 $ 25,843,685 The accompanying notes are an integral part of these Consolidated Financial Statements. 1 STRATEGY INC CONSOLIDATED STATEM ENTS OF OPERATIONS (in thousands, except per share data) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 (unaudited) (unaudited) (unaudited) (unaudited) Revenues: Product licenses $ 17,373 $ 11,087 $ 31,820 $ 33,311 Subscription services 45,972 27,800 123,899 74,846 Total product licenses and subscription services 63,345 38,887 155,719 108,157 Product support 51,118 61,015 155,728 185,440 Other services 14,228 16,169 42,798 49,162 Total revenues 128,691 116,071 354,245 342,759 Cost of revenues: Product licenses 632 769 2,765 2,130 Subscription services 19,594 11,454 49,929 29,618 Total product licenses and subscription services 20,226 12,223 52,694 31,748 Product support 7,157 8,572 21,802 25,312 Other services 10,630 13,554 33,238 38,239 Total cost of revenues 38,013 34,349 107,734 95,299 Gross profit 90,678 81,722 246,511 247,460 Operating expenses: Sales and marketing 29,908 35,414 91,131 103,116 Research and development 22,602 33,301 71,096 92,795 General and administrative 38,173 33,505 115,220 104,300 Unrealized gain on digital assets ( 3,890,847 ) 0 ( 12,032,356 ) 0 Digital asset impairment losses 0 412,084 0 783,807 Total operating expenses ( 3,800,164 ) 514,304 ( 11,754,909 ) 1,084,018 Income (loss) from operations 3,890,842 ( 432,582 ) 12,001,420 ( 836,558 ) Interest expense, net ( 18,890 ) ( 18,129 ) ( 53,893 ) ( 45,476 ) Loss on debt extinguishment 0 ( 22,933 ) 0 ( 22,933 ) Other (expense) income, net ( 716 ) ( 5,034 ) ( 12,923 ) ( 2,644 ) Income (loss) before income taxes 3,871,236 ( 478,678 ) 11,934,604 ( 907,611 ) Provision for (benefit from) income taxes 1,086,212 ( 138,504 ) 3,346,104 ( 411,760 ) Net income (loss) 2,785,024 ( 340,174 ) $ 8,588,500 $ ( 495,851 ) Dividends on preferred stock ( 139,898 ) 0 ( 198,040 ) 0 Net income (loss) attributable to common stockholders of Strategy $ 2,645,126 $ ( 340,174 ) $ 8,390,460 $ ( 495,851 ) Basic earnings (loss) per common share (1) $ 9.30 $ ( 1.72 ) $ 30.83 $ ( 2.71 ) Weighted average common shares outstanding - Basic 284,376 197,273 272,143 182,695 Diluted earnings (loss) per common share (1) $ 8.42 $ ( 1.72 ) $ 27.71 $ ( 2.71 ) Weighted average common shares outstanding - Diluted 315,393 197,273 303,986 182,695 (1) Basic and fully diluted earnings per common share for class A and class B common stock are the same. The accompanying notes are an integral part of these Consolidated Financial Statements. 2 STRATEGY INC CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (in thousands) Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 (unaudited) (unaudited) (unaudited) (unaudited) Net income (loss) $ 2,785,024 $ ( 340,174 ) $ 8,588,500 $ ( 495,851 ) Other comprehensive income (loss), net of applicable taxes: Foreign currency translation adjustment ( 93 ) 3,970 10,271 1,864 Total other comprehensive income (loss) ( 93 ) 3,970 10,271 1,864 Comprehensive income (loss) $ 2,784,931 $ ( 336,204 ) $ 8,598,771 $ ( 493,987 ) The accompanying notes are an integral part of these Consolidated Financial Statements. 3 STRATEGY INC CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2025 (in thousands, unaudited) Mezzanine Equity Stockholders' Equity Perpetual Total Class A Class B Convertible Additional Accumulated Other Retained Earnings Preferred Stock Stockholders' Common Stock Common Stock Paid-in Comprehensive (Accumulated Shares Amount Equity Shares Amount Shares Amount Capital Loss Deficit) Balance at January 1, 2025 0 $ 0 $ 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 0 0 12,746,378 0 0 0 0 0 0 12,746,378 Other 0 0 ( 1,097 ) 0 0 0 0 0 0 ( 1,097 ) Net loss 0 0 ( 4,217,370 ) 0 0 0 0 0 0 ( 4,217,370 ) Other comprehensive income 0 0 3,417 0 0 0 0 0 3,417 0 Preferred stock cash dividends declared 0 0 ( 9,188 ) 0 0 0 0 0 0 ( 9,188 ) Issuance of class A common stock upon exercise of stock options 0 0 9,418 271 0 0 0 9,418 0 0 Issuance of class A common stock under employee stock purchase plan 0 0 2,703 26 0 0 0 2,703 0 0 Issuance of class A common stock upon vesting of restricted stock units, net of withholding taxes 0 0 0 104 0 0 0 0 0 0 Issuance of class A common stock under public offerings, net of issuance costs 0 0 4,399,205 12,625 13 0 0 4,399,192 0 0 Issuance of class A common stock upon conversions of convertible senior notes 0 0 1,045,132 7,373 8 0 0 1,045,124 0 0 Share-based compensation expense 0 0 12,654 0 0 0 0 12,654 0 0 Issuance of Series A Perpetual Strike Preferred Stock 7,650 593,624 0 0 0 0 0 0 0 0 Issuance of Series A Perpetual Strife Preferred Stock 8,500 710,873 0 0 0 0 0 0 0 0 Balance at March 31, 2025 16,150 $ 1,304,497 $ 32,221,236 246,537 $ 247 19,640 $ 20 $ 25,881,089 $ ( 11,967 ) $ 6,351,847 Net income 0 0 10,020,846 0 0 0 0 0 0 10,020,846 Other comprehensive income 0 0 6,947 0 0 0 0 0 6,947 0 Preferred stock cash dividends declared 0 0 ( 48,954 ) 0 0 0 0 0 0 ( 48,954 ) Issuance of class A common stock upon exercise of stock options 0 0 12,451 325 0 0 0 12,451 0 0 Issuance of class A common stock upon vesting of restricted stock units, net of withholding taxes 0 0 0 230 0 0 0 0 0 0 Issuance of class A common stock under public offerings, net of issuance costs 0 0 5,248,692 14,225 14 0 0 5,248,678 0 0 Issuance of class A common stock upon conversions of convertible senior notes 0 0 84 1 0 0 0 84 0 0 Share-based compensation expense 0 0 15,742 0 0 0 0 15,742 0 0 Issuance of Series A Perpetual Strike Preferred Stock 4,551 446,770 0 0 0 0 0 0 0 0 Issuance of Series A Perpetual Strife Preferred Stock 1,567 163,168 0 0 0 0 0 0 0 0 Issuance of Series A Perpetual Stride Preferred Stock 11,765 979,486 0 0 0 0 0 0 0 0 Balance at June 30, 2025 34,033 $ 2,893,921 $ 47,477,044 261,318 $ 261 19,640 $ 20 $ 31,158,044 $ ( 5,020 ) $ 16,323,739 Net income 0 0 2,785,024 0 0 0 0 0 0 2,785,024 Other comprehensive income 0 0 ( 93 ) 0 0 0 0 0 ( 93 ) 0 Preferred stock cash dividends declared 0 0 ( 163,706 ) 0 0 0 0 0 0 ( 163,706 ) Issuance of class A common stock upon exercise of stock options 0 0 14,870 389 0 0 0 14,870 0 0 Issuance of class A common stock under employee stock purchase plan 0 0 2,732 13 0 0 0 2,732 0 0 Issuance of class A common stock upon vesting of restricted stock units, net of withholding taxes 0 0 0 36 0 0 0 0 0 0 Issuance of class A common stock under public offerings, net of issuance costs 0 0 2,199,360 5,712 6 0 0 2,199,354 0 0 Issuance of class A common stock upon conversions of convertible senior notes 0 0 4 0 0 0 0 4 0 0 Share-based compensation expense 0 0 15,483 0 0 0 0 15,483 0 0 Issuance of Series A Perpetual Strike Preferred Stock 1,404 152,846 0 0 0 0 0 0 0 0 Issuance of Series A Perpetual Strife Preferred Stock 1,882 217,301 0 0 0 0 0 0 0 0 Issuance of Series A Perpetual Stride Preferred Stock 557 48,462 0 0 0 0 0 0 0 0 Issuance of Series A Perpetual Stretch Preferred Stock 28,011 2,473,800 0 0 0 0 0 0 0 0 Balance at September 30, 2025 65,887 $ 5,786,330 $ 52,330,718 267,468 $ 267 19,640 $ 20 $ 33,390,487 $ ( 5,113 ) $ 18,945,057 4 The accompanying notes are an integral part of these Consolidated Financial Statements. 5 STRATEGY INC CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 (in thousands, unaudited) Mezzanine Equity Stockholders' Equity Perpetual Total Class A Class B Convertible Additional Accumulated Other Retained Earnings Preferred Stock Stockholders' Common Stock Common Stock Paid-in Treasury Stock Comprehensive (Accumulated Shares Amount Equity Shares Amount Shares Amount Capital Shares Amount Loss Deficit) Balance at January 1, 2024 0 $ 0 $ 2,164,972 157,725 $ 24 19,640 $ 2 $ 3,957,728 ( 8,684 ) $ ( 782,104 ) $ ( 11,444 ) $ ( 999,234 ) Net loss 0 0 ( 53,118 ) 0 0 0 0 0 0 0 0 ( 53,118 ) Other comprehensive loss 0 0 ( 1,725 ) 0 0 0 0 0 0 0 ( 1,725 ) 0 Issuance of class A common stock upon exercise of stock options 0 0 136,088 5,731 0 0 0 136,088 0 0 0 0 Issuance of class A common stock under employee stock purchase plan 0 0 2,071 69 0 0 0 2,071 0 0 0 0 Issuance of class A common stock upon vesting of restricted stock units, net of withholding taxes 0 0 ( 1,273 ) 39 0 0 0 ( 1,273 ) 0 0 0 0 Issuance of class A common stock under public offerings, net of issuance costs 0 0 137,152 1,952 0 0 0 137,152 0 0 0 0 Share-based compensation expense 0 0 15,938 0 0 0 0 15,938 0 0 0 0 Balance at March 31, 2024 0 $ 0 $ 2,400,105 165,516 $ 24 19,640 $ 2 $ 4,247,704 ( 8,684 ) $ ( 782,104 ) $ ( 13,169 ) $ ( 1,052,352 ) Net loss 0 0 ( 102,559 ) 0 0 0 0 0 0 0 0 ( 102,559 ) Other comprehensive loss 0 0 ( 381 ) 0 0 0 0 0 0 0 ( 381 ) 0 Issuance of class A common stock upon exercise of stock options 0 0 17,261 1,215 0 0 0 17,261 0 0 0 0 Issuance of class A common stock upon vesting of restricted stock units, net of withholding taxes 0 0 ( 932 ) 311 0 0 0 ( 932 ) 0 0 0 0 Issuance of class A common stock upon conversions of convertible senior notes 0 0 500,815 12,672 2 0 0 500,813 0 0 0 0 Share-based compensation expense 0 0 20,490 0 0 0 0 20,490 0 0 0 0 Balance at June 30, 2024 0 $ 0 $ 2,834,799 179,714 $ 26 19,640 $ 2 $ 4,785,336 ( 8,684 ) $ ( 782,104.0 ) $ ( 13,550 ) $ ( 1,154,911 ) Net loss 0 0 ( 340,174 ) 0 0 0 0 0 0 0 0 ( 340,174 ) Other comprehensive loss 0 0 3,970 0 0 0 0 0 0 0 3,970 0 Par value adjustment for class A and B common stock issued upon stock split 0 0 0 0 157 0 18 ( 175 ) 0 0 0 0 Issuance of class A common stock upon exercise of stock options 0 0 4,192 193 1 0 0 4,191 0 0 0 0 Issuance of class A common stock under employee stock purchase plan 0 0 2,233 25 0 0 0 2,233 0 0 0 0 Issuance of class A common stock upon vesting of restricted stock units, net of withholding taxes 0 0 ( 1 ) 53 0 0 0 ( 1 ) 0 0 0 0 Issuance of class A common stock under public offerings, net of issuance costs 0 0 1,105,141 8,048 8 0 0 1,105,133 0 0 0 0 Issuance of class A common stock upon conversions of convertible senior notes 0 0 144,349 3,651 0 0 0 144,349 0 0 0 0 Share-based compensation expense 0 0 19,140 0 0 0 0 19,140 0 0 0 0 Balance at September 30, 2024 0 $ 0 $ 3,773,649 191,684 $ 192 19,640 $ 20 $ 6,060,206 ( 8,684 ) $ ( 782,104.0 ) $ ( 9,580 ) $ ( 1,495,085 ) The accompanying notes are an integral part of these Consolidated Financial Statements. 6 STRATEGY INC CONSOLIDATED STATEM ENTS OF CASH FLOWS (in thousands) Nine Months Ended September 30, 2025 2024 (unaudited) (unaudited) Operating activities: Net income (loss) $ 8,588,500 $ ( 495,851 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 19,888 12,679 Reduction in carrying amount of right-of-use assets 6,796 6,228 Deferred taxes 3,336,445 ( 420,038 ) Share-based compensation expense 43,044 57,789 Unrealized gain on digital assets ( 12,032,356 ) 0 Digital asset impairment losses 0 783,807 Amortization of issuance costs on long-term debt 18,911 10,231 Loss on debt extinguishment 0 22,933 Changes in operating assets and liabilities: Accounts receivable 24,324 27,636 Prepaid expenses and other current assets ( 19,129 ) 4,868 Deposits and other assets 1,720 ( 6,748 ) Accounts payable and accrued expenses 6,709 ( 8,318 ) Accrued compensation and employee benefits ( 40,399 ) ( 26,383 ) Accrued interest 421 4,444 Deferred revenue and advance payments 7,027 3,484 Operating lease liabilities ( 8,001 ) ( 7,832 ) Other long-term liabilities 488 ( 4,637 ) Net cash used in operating activities ( 45,612 ) ( 35,708 ) Investing activities: Purchases of digital assets ( 19,382,948 ) ( 4,008,210 ) Advance deposits on purchases of property and equipment ( 27,000 ) 0 Purchases of property and equipment ( 7,628 ) ( 2,694 ) Net cash used in investing activities ( 19,417,576 ) ( 4,010,904 ) Financing activities: Proceeds from convertible senior notes 2,000,000 3,213,750 Issuance costs paid for convertible senior notes ( 15,057 ) ( 53,524 ) Payments to settle conversions and redemption of convertible senior notes ( 143 ) ( 398 ) Repayments of secured debt and third-party extinguishment costs 0 ( 515,325 ) Proceeds from other long-term secured debt, net of lender fees 21,000 0 Principal payments of other long-term secured debt ( 423 ) ( 401 ) Proceeds from sale of preferred stock under public offerings 5,888,450 0 Issuance costs paid related to sale of preferred stock under public offerings ( 106,859 ) 0 Dividends paid on preferred stock ( 197,922 ) 0 Proceeds from sale of common stock under public offerings 11,865,945 1,246,478 Issuance costs paid related to sale of common stock under public offerings ( 20,323 ) ( 4,185 ) Proceeds from exercise of stock options 36,739 157,541 Proceeds from sales under employee stock purchase plan 5,435 4,304 Payment of withholding tax on vesting of restricted stock units 0 ( 2,173 ) Net cash provided by financing activities 19,476,842 4,046,067 Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash 2,649 77 Net increase (decrease) in cash, cash equivalents, and restricted cash 16,303 ( 468 ) Cash, cash equivalents, and restricted cash, beginning of period 39,897 48,673 Cash, cash equivalents, and restricted cash, end of period $ 56,200 $ 48,205 The accompanying notes are an integral part of these Consolidated Financial Statements. 7 STRATEGY INC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited) (1) Summary of Significant Accounting Policies (a) Basis of Presentation The accompanying Consolidated Financial Statements of Strategy Inc (“Strategy,” or the “Company”) are unaudited. 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”. 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. Interim results are not necessarily indicative of results for a full year. 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. The Consolidated Financial Statements and Notes to Consolidated Financial Statements are presented as required by the United States Securities and Exchange Commission (“SEC”) and do not contain certain information included in the Company’s annual financial statements and notes. These financial statements should be read in conjunction with the Company’s audited financial statements and the notes thereto filed with the SEC in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. There have been no significant changes in the Company’s accounting policies since December 31, 2024, except as discussed below in (b) Digital Assets related to ASU 2023-08. 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) 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 three and nine months ended September 30, 2025 are not directly comparable to the financial results for earlier periods. See Note 3, Digital Assets, to the Consolidated Financial Statements, for further information. The adoption of ASU 2023-08 resulted in the following impacts as of January 1, 2025: December 31, 2024 Effect of the Adoption January 1, 2025 Consolidated Balance Sheet As Reported of ASU 2023-08 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 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 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 market value of bitcoin increases or decreases the deferred 8 tax liability. 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. The U.S. enacted the Inflation Reduction Act of 2022 (“IRA”) in August 2022. Among other things, unless an exemption by statute or regulation applies, a provision of the IRA would impose a 15 % corporate alternative minimum tax (“CAMT”) on a corporation with respect to an initial tax year and subsequent tax years, if the average annual adjusted financial statement income (“AFSI”) for any consecutive three-tax-year period preceding the initial tax year exceeds $ 1 billion. On September 12, 2024, the Department of the Treasury (the “Treasury”) and the Internal Revenue Service (the “IRS”) issued proposed regulations with respect to the application of the CAMT. Following the Company’s adoption of ASU 2023-08, the Company previously disclosed that, given the magnitude of the unrealized gain on its digital assets as of June 30, 2025, the Company expected that it would become subject to CAMT in the tax years beginning in 2026 and beyond. On September 30, 2025, the Treasury and the IRS issued interim guidance (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. Pursuant to the Interim Guidance, the Company plans to exclude its unrealized gains and losses on its bitcoin holdings from the calculation of its AFSI for purposes of determining whether it is subject to CAMT. As a result, the Company no longer expects to become subject to CAMT due to unrealized gains on its bitcoin holdings. (c) Redeemable Preferred Stock As of September 30, 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) 8.00% Series A Perpetual Strike Preferred Stock (“STRK Stock”), and (iv) 10.00% Series A Perpetual Stride Preferred Stock (“STRD Stock”). In these Notes to Consolidated Financial Statements, STRF Stock, STRC 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 September 30, 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 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 9, Redeemable Preferred Stock and Note 14, Subsequent Events for further discussion. (d) Segment Reporting The Company has adopted ASU 2023-07 Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”) for the year ended December 31, 2024, and for interim periods beginning January 1, 2025 as reflected in Note 12, Segment Information , to the Consolidated Financial Statements, including retroactive application to all prior periods presented. Refer to Note 3, Recent Accounting Pronouncements in the Company’s financial statements as of and for the year ended December 31, 2024 for further discussion. (2) Recent Accounting Standards Income Taxes 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 will be required to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. Companies will also be 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 standard is effective for the Company for ann ual periods beginning January 1, 2025 on a prospective basis, with retrospective application permitted for all prior periods presented. The Company will adopt ASU 2023-09 for the annual period ending December 31, 2025 and is currently evaluating the impact of this guidance on its disclosures. (3) 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 gain on digital assets”, within operating expenses in the Company’s Consolidated Statement of Operations. 9 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 summarizes the Company’s digital asset holdings (in thousands, except number of bitcoins), as of: September 30, December 31, 2025 2024 Approximate number of bitcoins held 640,031 447,470 Digital asset carrying value $ 73,205,725 $ 23,909,373 Cumulative digital asset impairment losses n/a $ 4,058,875 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. The following table summarizes the Company’s digital asset purchases, unrealized losses (gains) on digital assets 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. The Company did no t sell any of its bitcoins during the three or nine months ended September 30, 2025 or 2024, respectively. Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Approximate number of bitcoins purchased 42,706 25,889 192,561 63,070 Digital asset purchases $ 4,952,080 $ 1,575,073 $ 19,382,948 $ 4,008,210 Unrealized gain on digital assets $ ( 3,890,847 ) n/a $ ( 12,032,356 ) n/a Digital asset impairment losses n/a $ 412,084 n/a $ 783,807 From time to time, the Company’s execution partners may extend short-term credits to the Company to purchase bitcoin in advance of using cash funds in the Company’s trading account. Trade credits are due and payable after the bitcoin purchases are completed. In 2025, certain bitcoin of the Company and MacroStrategy LLC (“MacroStrategy”), a wholly-owned subsidiary of the Company, and in 2024, certain bitcoin of MacroStrategy, were subject to a first priority security interest and lien in order to secure payments owed by the Company with respect to these arrangements. While trade credits 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 September 30, 2025, the Company had no outstanding trade credits payable. 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. (4) 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. 10 Accounts receivable (in thousands) consisted of the following, as of: September 30, December 31, 2025 2024 Billed and billable $ 115,863 $ 183,391 Less: allowance for credit losses ( 2,457 ) ( 2,188 ) Accounts receivable, net $ 113,406 $ 181,203 Changes in the allowance for credit losses were not material for the three and nine months ended September 30, 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 consi sted of $ 4.7 million and $ 2.6 million, as of September 30, 2025 and December 31, 2024, respectively, related to performance obligations or services being rendered in advance of future invoicing associated with multi-year contracts and accrued sales and usage-based royalty revenue. In royalty-based arrangements, consideration is not billed or billable until the royalty reporting is received, generally in the subsequent quarter, at which time the contract asset transfers to accounts receivable and a true-up adjustment is recorded to revenue. 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 $ 11.1 million and $ 6.8 million, as of September 30, 2025 and December 31, 2024, respectively, related to performance obligations or services being rendered in advance of future invoicing associated with multi-year contracts. During the three and nine months ended September 30, 2025 and 2024 , 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. 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 contract liabilities are presented as either current or non-current “Deferred revenue and advance payments” in the Consolidated Balance Sheets, depending on whether the software or services are expected to be transferred to the customer within the next year. 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: September 30, December 31, 2025 2024 Current: Deferred product licenses revenue $ 1,429 $ 1,777 Deferred subscription services revenue 109,763 107,119 Deferred product support revenue 86,962 124,684 Deferred other services revenue 2,487 4,394 Total current deferred revenue and advance payments $ 200,641 $ 237,974 Non-current: Deferred product licenses revenue $ 111 $ 174 Deferred subscription services revenue 656 2,263 Deferred product support revenue 2,655 2,111 Deferred other services revenue 28 422 Total non-current deferred revenue and advance payments $ 3,450 $ 4,970 During the three and nine months ended September 30, 2025, the Company recognized revenues of $ 52.2 million and $ 209.0 million, respectively, from amounts included in the total deferred revenue and advance payments balances at the beginning of 2025. During the three and nine months ended September 30, 2024 , the Company recognized revenues of $ 50.2 million and $ 195.2 million, respectively, from amounts included in the total deferred revenue and advance payments balances at the beginning of 2024. For the three and nine months ended September 30, 2025 and 2024, there were no significant changes in the timing of revenue recognition on the Company’s deferred balances. 11 The Company’s remaining performance obligation represents all future revenue under contract and includes deferred revenue and advance payments and billable non-cancellable 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 obligations disclosure. As of September 30, 2025 , the Company had an aggregate transaction price of $ 462.4 million allocated to the remaining performance obligation related to subscription services, product support, product licenses, and other services contracts. The Company expects to recognize $ 280.0 million within the next 12 months and the remainder thereafter . (5) Long-term Debt The net carrying value of the Company’s outstanding debt (in thousands) consisted of the following, as of: September 30, 2025 December 31, 2024 2027 Convertible Notes $ 0 $ 1,041,352 2028 Convertible Notes 1,001,683 998,543 2029 Convertible Notes 2,980,495 2,975,037 2030A Convertible Notes 788,121 785,172 2030B Convertible Notes 1,987,864 0 2031 Convertible Notes 596,228 594,476 2032 Convertible Notes 789,433 787,417 Other long-term secured debt 30,079 9,678 Total $ 8,173,903 $ 7,191,675 Reported as: Current portion of long-term debt, net 316 517 Long-term debt, net 8,173,587 7,191,158 Total $ 8,173,903 $ 7,191,675 Convertible Senior Notes As of September 30, 2025, the following convertible notes were outstanding (the “Outstanding Convertible Notes”): • $ 1.0 billion aggregate principal amount of 0.625 % Convertible Senior Notes due 2028 (the “2028 Convertible Notes”); • $ 3.0 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”); • $ 2.0 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, the $ 1.050 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): 12 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 Net Proceeds $ 1,025,830 $ 997,375 $ 2,974,250 $ 782,000 $ 1,984,852 $ 592,567 $ 786,000 Issuance Costs (4) $ 24,170 $ 12,625 $ 25,750 $ 18,000 $ 15,148 $ 11,183 $ 14,000 Effective Interest Rate (4) 0.39 % 1.05 % 0.24 % 1.14 % 0.25 % 1.30 % 2.63 % Date of Holder Put Option (5) n/a September 15, 2027 June 1, 2028 September 15, 2028 March 1, 2028 September 15, 2028 June 15, 2029 Initial Conversion Rate (6) 6.981 5.4589 1.4872 6.677 2.3072 4.297 4.894 Initial Conversion Price (7) $ 143.25 $ 183.19 $ 672.40 $ 149.77 $ 433.43 $ 232.72 $ 204.33 Convertible at any time after the following date (8) (9) January 24, 2025 March 15, 2028 June 1, 2029 September 15, 2029 December 3, 2029 September 15, 2030 December 15, 2031 Not redeemable by the Company prior to the following date (10) February 20, 2024 December 20, 2027 December 4, 2026 March 22, 2027 March 5, 2027 March 22, 2028 June 20, 2029 Redemption Date (11) February 24, 2025 n/a n/a n/a n/a n/a n/a (1) “Maturity Date” is the stated maturity date under each applicable indenture governing such notes, unless earlier converted, redeemed, or repurchased in accordance with their terms. (2) Holders may receive additional or special interest under specified circumstances as outlined under each applicable indenture governing the Convertible Notes. (3) The 2029 Convertible Notes and the 2030B Convertible Notes do not bear regular interest. Additionally, the 2027 Convertible Notes did not bear regular interest prior to their redemption. (4) “Issuance Costs” reflect the customary offering expenses associated with each of the Convertible Notes. The Company accounts for these issuance costs as a reduction to the principal amount of the respective Convertible Notes and amortizes the issuance costs to interest expense from the respective debt issuance dates through the earlier of the “Maturity Date” or the “Date of Holder Put Option,” if applicable, at the “Effective Interest Rate” stated in the table. (5) “Date of Holder Put Option” represents the respective dates upon which holders of the 2028 Convertible Notes, 2029 Convertible Notes, 2030A Convertible Notes, 2030B Convertible Notes, 2031 Convertible Notes, and 2032 Convertible Notes each have a noncontingent right to require the Company to repurchase for cash all or any portion of their respective notes at a repurchase price equal to 100 % of the principal amount of such notes to be repurchased, plus any accrued and unpaid interest to, but excluding the repurchase date. (6) The “Initial Conversion Rate” is stated in shares of the Company’s class A common stock per $ 1,000 principal amount. The conversion rates are subject to customary anti-dilution adjustments. In addition, following certain events that may occur prior to the respective maturity dates or if the Company delivers a notice of redemption, the Company will increase the conversion rate for a holder who elects to convert its respective Convertible Notes in connection with such corporate event or notice of redemption, as the case may be, in certain circumstances as provided in each indenture governing the respective Convertible Notes. (7) The “Initial Conversion Price” is stated in dollars per share of the Company’s class A common stock. (8) On or after the stated dates until the close of business on the second scheduled trading day immediately preceding the respective maturity dates, holders may convert the Convertible Notes at any time. Upon conversion of the Convertible Notes, the Company will pay or deliver, as the case may be, cash, shares of the Company’s class A common stock, or a combination of cash and shares of class A common stock, at the Company’s election. For the 2027 Convertible Notes, the date presented is the date on which the Company delivered its notice of full redemption of the 2027 Convertible Notes, which resulted in the 2027 Convertible Notes being convertible 13 at any time thereafter until 5:00pm New York City time, on February 20, 2025. See below under “Conversions and Redemption of Convertible Notes” for further information. (9) Prior to the respective dates, the Convertible Notes are convertible only under the following circumstances: i. during any calendar quarter (and only during such calendar quarter) commencing after the calendar quarter ended on June 30, 2024 for the 2030A Convertible Notes and 2031 Convertible Notes, on September 30, 2024 for the 2032 Convertible Notes, on December 31, 2024 for the 2028 Convertible Notes, on Ma rch 31, 2025 for the 2029 Convertible Notes, or on June 30, 2025 for the 2030B Convertible Notes , if the last reported sale price of the Company’s class A common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the conversion price of the respective Convertible Notes on each applicable trading day; ii. during the five business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” (as defined under each applicable indenture governing the respective Convertible Notes) per $ 1,000 principal amount of the respective Convertible Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company’s class A common stock and the applicable conversion rate on each such trading day; iii. (a) in the case of the 2028 Convertible Notes, 2029 Convertible Notes, 2030A Convertible Notes, 2031 Convertible Notes and 2032 Convertible Notes, the Company calls any or all of such Convertible Notes for redemption, then a holder may surrender all or any part of such of its Convertible Notes as called for redemption for conversion at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; and (b) in the case of the 2030B Convertible Notes, the Company calls any 2030B Convertible Notes for redemption, then the holders of such 2030B Convertible Note may convert such 2030B Convertible Notes at any time before the close of business on the second business day immediately before the related redemption date; and iv. upon occurrence of specified corporate events as described in each applicable indenture governing the respective Convertible Notes. (10) The Company may redeem for cash all or a portion of the Outstanding Convertible Notes at its option, on or after the stated dates, if the last reported sale price of the Company’s class A common stock has been at least 130 % of the conversion price of the respective Convertible Notes then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides a notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption. The redemption price will be equal to 100 % of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. See below “Conversions and Redemption of Convertible Notes” subsection for information regarding the Company’s redemption of the 2027 Convertible Notes. (11) “Redemption Date” for the 2027 Convertible Notes is the date on which the Company redeemed all outstanding 2027 Convertible Notes. If the Company undergoes a “fundamental change,” as defined in the respective indentures governing the Convertible Notes prior to maturity, subject to certain conditions, holders may require the Company to repurchase for cash all or any portion of their respective Convertible Notes at a fundamental change repurchase price equal to 100 % of the principal amount of the respective Convertible Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The respective indentures governing the Convertible Notes contain customary terms and covenants, including that upon certain events of default occurring and continuing, either the applicable trustee of the respective Convertible Notes or the holders of at least 25 % in principal amount outstanding of the respective Convertible Notes may declare 100 % of the principal of, and accrued and unpaid interest, if any, on, all the respective Convertible Notes to be due and payable. Although the Convertible Notes contain embedded conversion features, the Company accounts for the Convertible Notes in their entirety as a liability because the conversion features are indexed to the Company’s class A common stock and meet the criteria for classification in stockholders’ equity and therefore do not qualify for separate derivative accounting. Conversions and Redemption of Convertible Notes On January 24, 2025, the Company delivered a notice of full redemption to the trustee of the Company’s 2027 Convertible Notes for the redemption of all $ 1.05 billion in aggregate principal amount of the 2027 Convertible Notes then outstanding on February 24, 2025 (the “2027 Redemption Date”), at a redemption price equal to 100 % of the principal amount of the 2027 Convertible Notes to be redeemed, plus accrued and unpaid special interest, if any, to but excluding the 2027 Redemption Date, unless earlier converted. The Company elected to satisfy its conversion obligation with respect to the 2027 Convertible Notes by delivering solely shares of its class A common stock, together with cash in lieu of any fractional shares. Holders of the 2027 Convertible Notes requested to convert $ 1.050 billion in principal amount of the 2027 Convertible Notes for which the Company issued 7,373,528 shares of the Company’s class A common stock 14 and paid a nominal amount of cash in lieu of fraction shares upon settlement of such conversion requests, in accordance with the terms and provisions of the indenture governing the 2027 Convertible Notes. During the three months ended March 31, 2025, the Company received from certain holders of the 2031 Convertible Notes requests to convert an immaterial principal amount of the 2031 Convertible Notes, which the Company settled in shares of class A common stock and cash in accordance with the terms and provisions of the indenture governing the 2031 Convertible Notes. The settlement was effected during the three months ended June 30, 2025. During the three months ended June 30, 2025, the Company did not receive any requests to convert any Outstanding Convertible Notes. During the three months ended September 30, 2025, the Company received a request to convert an immaterial principal amount of the 2031 Convertible Notes, which the Company settled in shares of class A common stock with fractional shares paid in cash during the three months ending December 31, 2025, in accordance with the terms and provisions of the indenture governing the 2031 Convertible Notes. During the three months ended June 30, 2024, the Company settled conversion requests in respect of $ 504.4 million in principal amount of the Company’s 0.750 % Convertible Senior Notes due 2025 (the “2025 Convertible Notes”) resulting in the issuance of 12,672,400 shares of the Company’s class A common stock and payment of a nominal amount of cash in lieu of fractional shares in accordance with the terms and provisions of the indenture governing the 2025 Convertible Notes, and settled conversion requests in respect of $ 145.3 million in principal amount of the 2025 Convertible Notes during July 2024, resulting in the issuance of 3,650,650 shares of the Company’s class A common stock and payment of a nominal amount of cash in lieu of fractional shares, in each case in accordance with the terms and provisions of the indenture governing the 2025 Convertible Notes. There were no outstanding 2025 Convertible Notes as of September 30, 2025 or December 31, 2024. Collective Convertible Notes Disclosures As of September 30, 2025, the maximum number of shares into which the Outstanding Convertible Notes could have been potentially converted if the conversion features were triggered at the conversion rates then in effect based on the Outstanding Convertible Notes then outstanding on such date was: • 2028 Convertible Notes: 5,513,489 shares of class A common stock; • 2029 Convertible Notes: 4,461,600 shares of class A common stock; • 2030A Convertible Notes: 5,341,600 shares of class A common stock; • 2030B Convertible Notes: 4,614,400 shares of class A common stock; • 2031 Convertible Notes: 2,593,931 shares of class A common stock; and • 2032 Convertible Notes: 3,915,200 shares of class A common stock. The 2028 Convertible Notes, 2030A Convertible Notes, 2031 Convertible Notes and 2032 Convertible Notes were convertible at the option of the holders during the three months ended September 30, 2025. See “Conversions and Redemption of Convertible Notes” above for additional information. The Outstanding Convertible Notes may be convertible in future periods if one or more of the conversion conditions are satisfied during future measurement periods. As of September 30, 2025 , the last reported sale price of the Company’s class A common stock for at least 20 trading days during the 30 consecutive trading days ended on, and including, September 30, 2025 was greater than or equal to 130 % of the conversion price of each of the 2028 Convertible Notes, 2030A Convertible Notes, 2031 Convertible Notes and 2032 Convertible Notes on each applicable trading day. Therefore, the 2028 Convertible Notes, 2030A Convertible Notes, 2031 Convertible Notes and 2032 Convertible Notes are convertible at the option of the holders of the respective Convertible Notes during the fourth quarter of 2025. As of September 30, 2025, and December 31, 2024, the net carrying value of the Convertible Notes was classified as a long-term liability in the “Long-term debt, net” line item in the Company’s Consolidated Balance Sheets. The following table presents the net carrying value and fair value of the Company’s Convertible Notes as of September 30, 2025 and December 31, 2024 (in thousands): 15 September 30, 2025 Outstanding Unamortized Net Carrying Fair Value Principal Amount Issuance Costs Value Amount Leveling 2028 Convertible Notes $ 1,010,000 $ ( 8,317 ) $ 1,001,683 $ 1,920,212 Level 2 2029 Convertible Notes 3,000,000 ( 19,505 ) 2,980,495 2,707,500 Level 2 2030A Convertible Notes 800,000 ( 11,879 ) 788,121 1,783,280 Level 2 2030B Convertible Notes 2,000,000 ( 12,136 ) 1,987,864 2,091,400 Level 2 2031 Convertible Notes 603,661 ( 7,433 ) 596,228 948,412 Level 2 2032 Convertible Notes 800,000 ( 10,567 ) 789,433 1,425,200 Level 2 Total $ 8,213,661 $ ( 69,837 ) $ 8,143,824 $ 10,876,004 December 31, 2024 Outstanding Unamortized Net Carrying Fair Value Principal Amount Issuance Costs Value Amount Leveling 2027 Convertible Notes $ 1,050,000 $ ( 8,648 ) $ 1,041,352 $ 2,134,125 Level 2 2028 Convertible Notes 1,010,000 ( 11,457 ) 998,543 1,927,828 Level 2 2029 Convertible Notes 3,000,000 ( 24,963 ) 2,975,037 2,447,682 Level 2 2030A Convertible Notes 800,000 ( 14,828 ) 785,172 1,657,323 Level 2 2031 Convertible Notes 603,750 ( 9,274 ) 594,476 877,559 Level 2 2032 Convertible Notes 800,000 ( 12,583 ) 787,417 1,324,602 Level 2 Total $ 7,263,750 $ ( 81,753 ) $ 7,181,997 $ 10,369,119 The fair value of the Convertible Notes is determined using observable market data other than quoted prices, specifically the last traded price at the end of the reporting period of identical instruments in the over-the-counter market (Level 2). For the three and nine months ended September 30, 2025 and 2024 interest expense related to the Convertible Notes was as follows (in thousands): Three Months Ended September 30, 2025 Nine Months Ended September 30, 2025 Contractual Amortization of Contractual Amortization of Interest Expense Issuance Costs Total Interest Expense Issuance Costs Total 2027 Convertible Notes $ 0 $ 0 $ 0 $ 0 $ 401 $ 401 2028 Convertible Notes 1,578 1,049 2,627 4,734 3,140 7,874 2029 Convertible Notes 0 1,820 1,820 0 5,457 5,457 2030A Convertible Notes 1,250 986 2,236 3,750 2,949 6,699 2030B Convertible Notes 0 1,250 1,250 0 3,012 3,012 2031 Convertible Notes 1,321 615 1,936 3,962 1,840 5,802 2032 Convertible Notes 4,500 676 5,176 13,500 2,016 15,516 Total $ 8,649 $ 6,396 $ 15,045 $ 25,946 $ 18,815 $ 44,761 Three Months Ended September 30, 2024 Nine Months Ended September 30, 2024 Contractual Amortization of Contractual Amortization of Interest Expense Issuance Costs Total Interest Expense Issuance Costs Total 2025 Convertible Notes $ 23 $ 15 $ 38 $ 2,371 $ 1,494 $ 3,865 2027 Convertible Notes 0 1,012 1,012 0 3,033 3,033 2028 Convertible Notes 193 127 320 193 127 320 2030A Convertible Notes 1,250 974 2,224 2,819 2,194 5,013 2031 Convertible Notes 1,321 608 1,929 2,833 1,300 4,133 2032 Convertible Notes 4,500 659 5,159 5,150 754 5,904 Total $ 7,287 $ 3,395 $ 10,682 $ 13,366 $ 8,902 $ 22,268 For the three and nine months ended September 30, 2025 , the Company paid $ 8.3 million and $ 25.5 million, respectively, in interest related to the Convertible Notes. For the three and nine months ended September 30, 2024, the Company paid $ 5.2 million and $ 7.6 16 million, respectively, in interest related to the Convertible Notes. The Company has not paid any additional interest or special interest related to the Convertible Notes to date. Senior Secured Notes On June 14, 2021, the Company issued $ 500.0 million aggregate principal amount of 6.125 % Senior Secured Notes due 2028 (“2028 Secured Notes”) in a private offering. The 2028 Secured Notes bore interest at a fixed rate of 6.125 % per annum, payable semiannually in arrears on June 15 and December 15 of each year, beginning on December 15, 2021 . T he Company redeemed all of the 2028 Secured Notes on September 26, 2024 at a redemption price equal to 103.063 % of the principal amount of the 2028 Secured Notes, plus accrued and unpaid interest to, but excluding, September 26, 2024 (the “Redemption Price”). The Redemption Price consisted of a $ 515.3 million payment to redeem the full $ 500.0 million outstanding principal amount of the 2028 Secured Notes as of September 26, 2024 and an $ 8.6 million payment for accrued unpaid interest on the 2028 Secured Notes to but excluding September 26, 2024. The Company also incurred $ 0.1 million in third party fees in connection with the redemption of the 2028 Secured Notes. The net carrying value of the 2028 Secured Notes as of September 26, 2024, immediately prior to their redemption, was $ 492.5 million, which resulted in a $ 22.9 million loss on debt extinguishment recognized in the Company’s Consolidated Statement of Operations in the third quarter of 2024. For additional information about the 2028 Secured Notes, see Note 8 to the Company’s Consolidated Financial Statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Other long-term secured debt In June 2022, the Company, through a wholly-owned subsidiary, entered into a secured term loan agreement in the amount of $ 11.1 million, bearing interest at an annual rate of 5.2 %, and maturing in June 2027 . The loan is secured by certain non-bitcoin assets of the Company that are not otherwise serving as collateral for any of the Company’s other indebtedness. In June 2025, the Company entered into a loan agreement that provides for aggregate borrowings of up to $ 31.1 million, available in multiple tranches, to fund a capital asset purchase. Amounts outstanding under the loan bear interest, with respect to each tranche, at a variable rate equal to the one-year Secured Overnight Financing Rate plus 4.24 %. The loan is secured by non-bitcoin assets that do not and will not otherwise serve as collateral for any of the Company’s other indebtedness. The loan will mature in 2026. After monthly payments made under the terms of these other long-term secured debt agreements, the other long-term secured debt had an aggregate net carrying value of $ 30.1 million and $ 9.7 million as of September 30, 2025 and December 31, 2024, respectively, and an aggregate outstanding principal balance of $ 30.5 million and $ 9.8 million as of September 30, 2025 and December 31, 2024, respectively. As of September 30, 2025 and December 31, 2024, $ 0.3 million and $ 0.5 million of the respective net carrying values were short-term and were presented in “Current portion of long-term debt, net” in the Consolidated Balance Sheets. Maturities The following table shows the maturities of the Company’s debt instruments outstanding as of September 30, 2025 (in thousands). The principal payments related to the 2028 Convertible Notes, 2029 Convertible Notes, 2030A Convertible Notes, 2030B Convertible Notes, 2031 Convertible Notes, and 2032 Convertible Notes are included in the table below as if the holders exercised their right to require the Company to repurchase all of the respective convertible notes on their respective Date of Holder Put Option. Payments due by period ended September 30, 2028 Convertible Notes 2029 Convertible Notes 2030A Convertible Notes 2030B Convertible Notes 2031 Convertible Notes 2032 Convertible Notes Other long-term secured debt Total 2026 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 592 $ 592 2027 1,010,000 0 0 0 0 0 29,870 1,039,870 2028 0 3,000,000 800,000 2,000,000 603,661 0 0 6,403,661 2029 0 0 0 0 0 800,000 0 800,000 2030 0 0 0 0 0 0 0 0 Thereafter 0 0 0 0 0 0 0 0 Total $ 1,010,000 $ 3,000,000 $ 800,000 $ 2,000,000 $ 603,661 $ 800,000 $ 30,462 $ 8,244,123 17 (6) Commitments and Contingencies (a) Commitments From time to time, the Company enters into certain types of contracts that require it to indemnify parties against third-party claims. These contracts primarily relate to agreements under which the Company assumes indemnity obligations for intellectual property infringement or death, bodily harm, or damage to tangible personal property due to the Company’s personnel's gross negligence or willful misconduct in providing contracted services, as well as other obligations from time to time depending on arrangements negotiated with customers and other third parties. The conditions of these obligations vary. Thus, the overall maximum amount of the Company’s indemnification obligations cannot be reasonably estimated. Historically, the Company has not been obligated to make significant payments for these obligations and does not currently expect to incur any material obligations in the future. Accordingly, the Company has not recorded an indemnification liability on its Consolidated Balance Sheets as of September 30, 2025 or December 31, 2024. (b) Contingencies Brazil Matter Following an internal review initiated in 2018, the Company disclosed its belief that its Brazilian subsidiary failed or likely failed to comply with local procurement regulations in conducting business with certain Brazilian government entities. In 2020 the Company learned that the Brazilian Federal Police were investigating alleged corruption and procurement fraud involving certain government officials, including a transaction that was part of the basis of the Company’s previously reported failure or likely failure of its Brazilian subsidiary to comply with local procurement regulations. To the best of the Company’s knowledge, this investigation was concluded in 2023. Neither employees of the Company’s Brazilian subsidiary nor the subsidiary itself were targets of the Federal Police investigation. The Company’s Brazilian subsidiary voluntarily disclosed information from its 2018 internal review to Brazil’s General Superintendence of the Administrative Council for Economic Defense (“SG/CADE”), the Federal Comptroller General (“CGU”), and the Office of the Comptroller General of the State of São Paulo (“CGE-SP”). Following this voluntary disclosure and cooperation with these agencies, the Company’s Brazilian subsidiary signed leniency agreements with the SG/CADE in September 2020, with the CGU and the Federal General Attorney’s Office (“AGU”) in July 2024, and with the CGE-SP and the Office of the Attorney General of the State of São Paulo (“PGE-SP”) in April 2025. In 2023, the SG/CADE launched a public administrative proceeding to investigate potentially anticompetitive conduct by various entities and individuals in Brazil based in part on the information voluntarily disclosed by the Company’s Brazilian subsidiary, which is also one of the defendants in the proceeding. If at the end of the proceeding, SG/CADE’s Tribunal confirms that the Brazilian subsidiary’s obligations under the leniency agreement it signed with SG/CADE have been fulfilled, the Brazilian subsidiary will receive full immunity from fines. Pursuant to its leniency agreement with the CGU and the AGU, the Brazilian subsidiary (i) paid approximately BRL 6.16 million (equivalent to approximately $ 1.1 million) in July 2024, (ii) agreed to certain undertakings regarding its compliance program, and (iii) has been granted immunity from debarment and other sanctions. As a result of this leniency agreement, the CGU dismissed its pending administrative action against the Brazilian subsidiary over alleged procurement violations. Pursuant to its leniency agreement with the CGE-SP and PGE-SP, the Brazilian subsidiary (i) paid approximately BRL 2.38 million (equivalent to approximately $ 406,000 ) in April 2025, and (ii) has been granted immunity from debarment and other sanctions. The Company’s Brazilian subsidiary continues to cooperate with requests from government authorities related to the above matters. As of September 30, 2025, the Company remained unable to reasonably estimate a range of loss beyond the 2024 third quarter payment and April 2025 payment described above. Shareholder and Derivative Actions • Hamza Securities Action . On May 16, 2025, Anas Hamza filed a purported class action lawsuit in the U.S. District Court for the Eastern District of Virginia against the Company, Michael J. Saylor, Phong Q. Le, and Andrew Kang, alleging violations of Section 10(b) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 10b-5 thereunder, and Section 20(a) of the Exchange Act. Plaintiff Hamza purported to assert claims on behalf of a class of investors, for a period running from April 30, 2024 to April 4, 2025, alleging that the named defendants made false and/or misleading statements with respect to and/or failed to disclose information with respect to the anticipated profitability of the Company’s bitcoin-focused investment strategy and treasury operations, and the various risks associated with bitcoin’s volatility and the magnitude of the losses the Company could recognize following its adoption of ASU 2023-08. The complaint sought unspecified damages to the class, interest, attorneys’ fees, costs, and other relief. On August 28, 2025, the parties jointly stipulated to the voluntary dismissal of the action. On August 29, 2025, the court endorsed the stipulation, ordering dismissal of the case. 18 • Parmar Derivative Action . On June 19, 2025, Abhey Parmar filed a shareholder derivative lawsuit in the U.S. District Court for the Eastern District of Virginia against the Company’s officers and/or directors Michael J. Saylor, Phong Q. Le, Stephen X. Graham, Andrew Kang, Jarrod M. Patten, Carl J. Rickertsen, and former director Leslie J. Rechan, and against the Company as nominal defendant. Plaintiff Parmar purported to assert claims on behalf of the Company against the individual defendants for breaches of fiduciary duties, unjust enrichment, abuse of control, gross mismanagement, waste, and contribution. The complaint made claims based on factual allegations similar to those asserted in the Hamza securities action described above, namely that the individual defendants caused or allowed the Company to make false or misleading disclosures or omissions, and failed to correct such false or misleading disclosures or omissions, concerning the risks and financial impact associated with the Company’s adoption of ASU 2023-08, the risks associated with bitcoin’s volatility, and the profitability of the Company’s bitcoin-driven strategy and treasury operations. The complaint also alleged the individual defendants caused the Company to fail to maintain adequate internal controls, and that Messrs. Le, Kang, Graham, and Rechan allegedly engaged in insider selling because they sold shares of the Company’s stock at various times from April 30, 2024 to April 4, 2025. The complaint sought damages against the individual defendants on behalf of the Company, the imposition of certain corporate governance and internal procedures changes by the Company, restitution from the individual defendants, attorneys’ fees, costs, and other relief. This action was consolidated with the Chen derivative action and then voluntarily dismissed, as described below. • Chen Derivative Action. On June 25, 2025, Zhenqiu Chen filed a shareholder derivative lawsuit in the U.S. District Court for the Eastern District of Virginia against the Company’s officers and/or directors Michael J. Saylor, Phong Q. Le, Andrew Kang, Brian P. Brooks, Jane A. Dietze, Jarrod M. Patten, Stephen X. Graham, Carl J. Rickertsen, Gregg J. Winiarski, and former director Leslie J. Rechan, and against the Company as nominal defendant. Plaintiff Chen purported to assert claims on behalf of the Company against the individual defendants for breaches of fiduciary duties, aiding and abetting breaches of fiduciary duties, unjust enrichment, waste, and contribution. The complaint made claims based on factual allegations similar to those asserted in the Hamza securities action and the Parmar derivative action described above, namely that the individual defendants caused or allowed the Company to make false or misleading disclosures or omissions, and failed to correct such false or misleading disclosures or omissions, concerning the risks and financial impact associated with the Company’s adoption of ASU 2023-08, the risks associated with bitcoin’s volatility, and the profitability of the Company’s bitcoin-driven strategy and treasury operations. The complaint also alleged the individual defendants caused the Company to fail to maintain adequate internal controls, and that Messrs. Le, Kang, Graham, and Rechan allegedly engaged in insider selling because they sold shares of the Company’s stock at various times from April 30, 2024 to April 4, 2025. The complaint sought money damages against the individual defendants, imposition of a constructive trust on damages allegedly caused and benefits allegedly received by the individual defendants as a result of their disputed conduct, punitive damages, attorneys’ fees, costs, and other relief. On August 4, 2025 this action was consolidated with the Parmar derivative action described above. On September 9, 2025, the parties jointly stipulated to the voluntary dismissal of the action. On September 10, 2025, the court endorsed the stipulation, ordering dismissal of the consolidated derivative cases. • Dodge Class Action . On July 21, 2025, David Dodge filed a purported class action lawsuit in the Court of Chancery of the State of Delaware against the Company and the Company’s board of directors alleging violations of the Delaware General Corporation Law (the “DGCL”), and asserting a claim against the Company’s board of directors for breach of fiduciary duty in connection with the purported DGCL violation. Plaintiff Dodge purports to assert claims on behalf of himself and similarly situated holders of the Company’s common stock alleging that pursuant to Section 242 of the DGCL (“Section 242”), the holders of the Company’s common stock were entitled to vote on the STRK Amendment (as defined in Note 9, Redeemable Preferred Stock) the Company filed on July 7, 2025 with the Secretary of State of the State of Delaware. Refer to Note 9, Redeemable Preferred Stock, for additional information on the STRK Amendment. Plaintiff Dodge seeks, among other things, an order (i) finding, determining and declaring that the Company violated Section 242; (ii) finding, determining and declaring that the board of directors has breached its fiduciary duties; (iii) deeming the STRK Amendment ineffective and requiring that the Company file a certificate of correction with the Delaware Secretary of State invalidating the STRK Amendment; (iv) awarding unspecified damages to Plaintiff Dodge and the class, including interest; (v) awarding attorneys’ fees and costs; and (vi) granting other relief. At this time, the Company cannot predict the outcome or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in this matter. Various Legal Proceedings and Contingent Liabilities The Company is also involved in various legal proceedings arising in the normal course of business. Although the outcomes of these legal proceedings are inherently difficult to predict, management does not expect the resolution of these legal proceedings to have a material adverse effect on the Company’s financial position, results of operations, or cash flows. The Company has contingent liabilities that, in management’s judgment, are not probable of assertion. If such unasserted contingent liabilities were to be asserted, or become probable of assertion, the Company may be required to record significant expenses and liabilities in the period in which these liabilities are asserted or become probable of assertion. 19 (7) Income Taxes The Company computes its year-to-date provision for (benefit from) income taxes by applying the estimated annual effective tax rate to year-to-date pretax income or loss and adjusts the provision for (benefit from) income taxes for discrete tax items recorded in the period. The estimated effective tax rate is subject to fluctuation based on the level and mix of earnings and losses by tax jurisdiction, foreign tax rate differentials, and the relative impact of permanent book to tax differences. Each quarter, a cumulative adjustment is recorded for any fluctuations in the estimated annual effective tax rate as compared to the prior quarter. As a result of these factors, and due to potential changes in the Company’s period-to-period results, fluctuations in the Company’s effective tax rate and respective tax provisions or benefits may occur. For the nine months ended September 30, 2025, the Company recorded a provision for income tax of $ 3.35 billion on a pretax income of $ 11.93 billion, which resulted in an effective tax rate of 28.0 %. For the nine months ended September 30, 2024, the Company recorded a benefit from income taxes of $ 411.8 million on a pretax loss of $ 907.6 million, which resulted in an effective tax rate of 45.4 %. During the nine months ended September 30, 2025, the Company’s income taxes primarily related to the tax effect of the unrealized gain on digital assets. During the nine months ended September 30, 2024, the Company’s benefit from income taxes primarily related to (i) 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) and (ii) a tax benefit from an increase in the Company’s deferred tax asset related to the impairment on its bitcoin holdings. As of September 30, 2025, the Company had a valuation allowance of $ 0.5 million primarily related to the Company’s deferred tax assets related to foreign tax credits in certain jurisdictions that, in the Company’s present estimation, more likely than not will not be realized. As of September 30, 2025, the Company had deferred tax liabilities with respect to the unrealized gain on its bitcoin holdings of approximately $ 7.43 billion. The Company’s deferred tax liabilities are partially offset by deferred tax assets, such as net operating losses and capitalized research and development costs. If the market value of bitcoin declines in future periods, the Company’s deferred tax liability with respect to the unrealized gain on its bitcoin holdings will decrease, and the Company may be required to establish additional valuation allowances against its deferred tax assets . The Company will continue to regularly assess the realizability of deferred tax assets. The Company records liabilities related to its uncertain tax positions. As of September 30, 2025, the Company had gross unrecognized income tax benefits, including accrued interest, of $ 10.5 million, of which $ 3.1 million was recorded in “Other long-term liabilities” and $ 7.4 million was recorded in “Deferred tax liabilities” in the Company’s Consolidated Balance Sheet. As of December 31, 2024, the Company had gross unrecognized income tax benefits of $ 10.2 million, including accrued interest, $ 2.9 million of which was recorded in “Other long-term liabilities” and $ 7.3 million of which was recorded in “Deferred tax assets, net” in the Company’s Consolidated Balance Sheet. During the second quarter of 2025, the Company was notified that it was selected for examination by the IRS for its 2022 federal income tax return. 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 on the Company’s income tax expense or effective tax rate for the quarter ended September 30, 2025 and the Company does not expect it will have a material impact on the Company’s 2025 financial statements. (8) Share-based Compensation Stock Incentive Plans Prior to its expiration, the Company maintained the 2013 Stock Incentive Plan (as amended, the “2013 Equity Plan”), under which the Company’s employees, officers, and directors were 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. In May 2023 , the 2013 Equity Plan expired and no new awards may be granted under the 2013 Equity Plan, although awards previously granted under the 2013 Equity Plan will continue to remain outstanding in accordance with their terms. The Company maintains the 2023 Equity Incentive Plan (as amended, the “2023 Equity Plan”) under which the Company’s employees, officers, directors, and other eligible participants may be awarded various types of share-based compensation, including options to purchase shares of the Company’s class A common stock, restricted stock units, performance stock units, and other stock-based awards. An aggregate of up to 19,327,030 shares of the Company’s class A common stock were authorized for issuance under the 2023 Equity Plan. As of September 30, 2025, there were 2,914,040 shares of class A common stock reserved and available for future issuance under the 2023 Equity Plan. The 2013 Equity Plan and the 2023 Equity Plan together are referred to herein as the “Stock Incentive Plans.” Stock option awards As of September 30, 2025, there were options to purchase 3,756,959 shares of class A common stock outstanding under the Stock Incentive Plans. The following table summarizes the Company’s stock option activity (in thousands, except per share data and years) for the nine 20 months ended September 30, 2025: Stock Options Outstanding Weighted Average Aggregate Weighted Average Exercise Price Intrinsic Remaining Contractual Shares Per Share Value Term (Years) Balance as of January 1, 2025 4,956 $ 38.56 Granted 54 $ 301.19 Exercised ( 1,016 ) $ 36.84 $ 331,793 Forfeited/Expired ( 238 ) $ 45.81 Balance as of September 30, 2025 3,757 $ 42.36 Exercisable as of September 30, 2025 2,780 $ 38.26 $ 789,282 5.5 Expected to vest as of September 30, 2025 977 $ 54.05 $ 262,887 7.1 Total 3,757 $ 42.36 $ 1,052,169 5.9 Stock options outstanding as of September 30, 2025 are comprised of the following range of exercise prices per share (in thousands, except per share data and years): Stock Options Outstanding at September 30, 2025 Weighted Average Weighted Average Exercise Price Remaining Contractual Range of Exercise Prices per Share Shares Per Share Term (Years) $ 12.45 - $ 20.00 988 $ 15.53 4.3 $ 20.01 - $ 30.00 868 $ 24.48 7.1 $ 30.01 - $ 40.00 15 $ 30.16 7.7 $ 40.01 - $ 50.00 1,005 $ 41.11 6.3 $ 50.01 - $ 70.00 748 $ 69.12 5.4 $ 70.01 - $ 220.00 74 $ 159.65 8.5 $ 220.01 - $ 300.00 41 $ 261.29 9.4 $ 300.01 - $ 364.20 11 $ 364.20 9.2 $ 364.21 and over 7 $ 371.27 9.7 Total 3,757 $ 42.36 5.9 An aggregate of 1,311,010 stock options with an aggregate grant date fair value of $ 36.8 million vested during the nine months ended September 30, 2025 . An aggregate of 1,609,650 stock options with an aggregate grant date fair value of $ 40.2 million vested during the nine months ended September 30, 2024 . The weighted average grant date fair value of stock option awards using the Black-Scholes valuation model was $ 301.19 and $ 111.23 for each share subject to a stock option granted during the nine months ended September 30, 2025 and 2024, respectively, based on the following assumptions: Nine Months Ended September 30, 2025 2024 Expected term of awards in years 5.5 - 6.3 5.5 - 6.3 Expected volatility 83.8 % - 91.5 % 75.1 % - 82.8 % Risk-free interest rate 3.9 % - 4.4 % 4.2 % - 4.5 % Expected dividend yield 0.0 % 0.0 % For the three and nine months ended September 30, 2025 , the Company recognized approximately $ 5.1 million and $ 16.9 million, respectively, in share-based compensation expense from stock options granted under the Stock Incentive Plans. For the three and nine months ended September 30, 2024, the Company recognized approximately $ 9.9 million and $ 30.0 million, respectively, in share-based compensation expense from stock options granted under the Stock Incentive Plans. As of September 30, 2025, there was approximately $ 25.2 million of total unrecognized share-based compensation expense related to unvested stock options, which the Company expects to recognize over a weighted average vesting period of approximately 2.3 years. 21 Share-settled restricted stock units As of September 30, 2025, there were 809,449 share-settled restricted stock units outstanding under the Stock Incentive Plans. The following table summarizes the Company’s share-settled restricted stock unit activity (in thousands) for the periods indicated: Share-Settled Restricted Stock Units Outstanding Aggregate Units Intrinsic Value Balance as of January 1, 2025 1,231 Granted 149 Vested ( 371 ) $ 133,619 Forfeited ( 200 ) Balance as of September 30, 2025 809 Expected to vest as of September 30, 2025 809 $ 260,813 During the nine months ended September 30, 2025, 370,421 share-settled restricted stock units vested having an aggregate grant date fair value of $ 20.5 million. During the nine months ended September 30, 2024 , 427,990 share-settled restricted stock units having an aggregate grant date fair value of $ 15.0 million vested, and 25,060 shares were withheld to satisfy tax obligations, resulting in 402,930 issued shares. The weighted average grant date fair value of share-settled restricted stock units granted during the nine months ended September 30, 2025 and 2024 was $ 286.65 a nd $ 144.88 , respectively, based on the fair value of the Company’s class A common stock. For the three and nine months ended September 30, 2025, the Company recognized approximately $ 6.7 million and $ 19.0 million, respectively, in share-based compensation expense from share-settled restricted stock units granted under the Stock Incentive Plans. For the three and nine months ended September 30, 2024, the Company recognized approximately $ 6.2 million and $ 18.3 million, respectively, in share-based compensation expense from share-settled restricted stock units granted under the Stock Incentive Plans. As of September 30, 2025 , there was approximately $ 66.5 million of total unrecognized share-based compensation expense related to unvested share-settled restricted stock units, which the Company expects to recognize over a weighted average vesting period of approximately 2.9 years. Share-settled performance stock units As of September 30, 2025, there were 279,264 performance stock units outstanding under the 2023 Equity Plan. The following table summarizes the Company’s performance stock unit activity (in thousands) for the periods indicated: Share-Settled Performance Stock Units Outstanding Aggregate Units Intrinsic Value Balance as of January 1, 2025 307 Granted 24 Vested 0 $ 0 Forfeited ( 52 ) Balance as of September 30, 2025 279 Expected to vest as of September 30, 2025 279 $ 179,963 The weighted average grant date fair value of performance stock units using the Monte-Carlo simulation model was $ 445.66 and $ 307.13 for each performance stock unit granted during the nine months ended September 30, 2025 and 2024, respectively, based on the following assumptions: Nine Months Ended September 30, 2025 2024 Expected term of awards in years 3.0 3.0 Expected volatility 99.2 % 92.7 % Risk-free interest rate 3.9 % 4.4 % Expected dividend yield 0.0 % 0.0 % No performance stock units vested during the nine months ended September 30, 2025 and 2024. For the three and nine months ended September 30, 2025 , the Company recognized approximately $ 3.0 million and $ 6.4 million, respectively, in share-based compensation expense from performance stock units granted under the 2023 Equity Plan. For the three and nine months ended September 30, 2024, the Company recognized approximately $ 2.4 million and $ 5.9 million, respectively, in share-based compensation expense from performance stock units granted under the 2023 Equity Plan. As of September 30, 2025, there was approximately $ 18.9 million of total unrecognized 22 share-based compensation expense related to unvested performance stock units, which the Company expects to recognize over a weighted average vesting period of approximately 1.9 years. Other stock-based awards and cash-settled restricted stock units From time to time the Company has granted “other stock-based awards” and “cash-settled restricted stock units” under the 2013 Equity Plan. Other stock-based awards are similar to stock options, and cash-settled restricted stock units are similar to the Company’s share-settled restricted stock units, except in each case these awards are settled in cash only and not in shares of the Company’s class A common stock. Due to their required cash settlement feature, these awards are classified as liabilities in the Company’s Consolidated Balance Sheets and the fair value of the awards is remeasured each quarterly reporting period. For the three and nine months ended September 30, 2025, the Company recognized zero expense and a reduction of approximately $ 1.1 million, respectively, in share-based compensation expense from other stock-based awards and cash-settled restricted stock units. For the three and nine months ended September 30, 2024 , the Company recognized approximately $ 0.3 million and $ 2.2 million, respectively, in share-based compensation expense from other stock-based awards and cash-settled restricted stock units. As of September 30, 2025, there were no other stock-based awards or cash-settled restricted stock units outstanding and there was no unrecognized share-based compensation expense. 2021 ESPP The Company also maintains the 2021 Employee Stock Purchase Plan (the “2021 ESPP”). The purpose of the 2021 ESPP is to provide eligible employees of the Company and certain of its subsidiaries with opportunities to purchase shares of the Company’s class A common stock in 6-month offering periods commencing on each March 1 and September 1. An aggregate of 1,000,000 shares of the Company’s class A common stock has been authorized for issuance under the 2021 ESPP. During the nine months ended September 30, 2025, 38,806 shares of class A common stock were issued in connection with the 2021 ESPP. As of September 30, 2025, 463,596 shares of the Company’s class A common stock remained available for issuance under the 2021 ESPP. For the three and nine months ended September 30, 2025, the Company recognized approximately $ 0.7 million and $ 1.9 million, respectively, in share-based compensation expense related to the 2021 ESPP. For the three and nine months ended September 30, 2024, the Company recognized approximately $ 0.6 million and $ 1.4 million, respectively, in share-based compensation expense related to the 2021 ESPP. As of September 30, 2025, there was approximately $ 1.5 million of total unrecognized share-based compensation expense related to the 2021 ESPP, which the Company expects to recognize over a period of approximately 0.4 years. (9) Redeemable Preferred Stock The STRF Stock, STRC Stock, STRK Stock and STRD Stock discussed in this note below are classified within mezzanine equity, as certain events that could cause such shares to become redeemable are not solely within the control of the Company. Issuances of the Preferred Stock are recognized based on proceeds received, net of issuance costs and are not accreted to its redemption value unless it is probable that the Preferred Stock will become redeemable. The Company has evaluated the probability of a redemption in connection with a Fundamental Change (defined below). Based on current facts and circumstances and the Company’s current and projected capital structure, management has determined that the occurrence of a Fundamental Change is remote. Accordingly, the Company concluded that accretion to the redemption value of the Preferred Stock is not required as of the reporting date. On July 7, 2025, the Company filed a certificate of amendment (the “STRK Amendment”) with the Secretary of State of the State of Delaware to the STRK Stock certificate of designations so that, together with other conforming changes, the STRK Stock has a liquidation preference that is initially $ 100 per share; provided, however, that, effective immediately after the close of business on each business day on or after July 7, 2025 (and, on or after July 7, 2025, if applicable, during the course of a business day on which any sale transaction to be settled by the issuance of STRK Stock is executed, from the exact time of the first such sale transaction during such business day until the close of business of such business day), the liquidation preference per share of STRK Stock will be adjusted to be the greatest of (i) the stated amount of $ 100 per share of STRK Stock; (ii) in the case of any business day on or after July 7, 2025 with respect to which Strategy has, on such business day or any business day during the ten trading day period preceding such business day, executed any sale transaction to be settled by the issuance of STRK Stock, an amount equal to the Last Reported Sale Price (as defined in the STRK Stock certificate of designations) per share of STRK Stock on the trading day immediately before such business day; and (iii) the arithmetic average of the Last Reported Sale Prices per share of STRK Stock for each trading day of the ten consecutive trading days immediately preceding such business day; provided that, for purposes of the definition of liquidation preference, the execution of the STRK Amendment will be treated as an execution of a sale transaction settled by the issuance of STRK Stock. See Note 6, Commitments and Contingencies. The Company intends to seek common stockholder ratification of the STRK Amendment. Until such ratification has been completed, investors should treat the STRK Amendment as being subject to ratification. 23 The following table summarizes the key terms and provisions of each series of Preferred Stock, and information relating to each series of Preferred Stock as of September 30, 2025. The summaries below are qualified in their entirety by the full text of the applicable certificate of designations. STRF Stock STRC Stock STRK Stock STRD Stock Trading Symbol on NASDAQ STRF STRC STRK STRD Initial Issuance Date March 25, 2025 July 29, 2025 February 5, 2025 June 10, 2025 Initial Shares Issued 8,500,000 28,011,111 7,300,000 11,764,700 Initial Public Offering Price $ 85.00 per share $ 90.00 per share $ 80.00 per share $ 85.00 per share Initial Net Proceeds (in thousands) $ 710,873 $ 2,473,800 $ 563,226 $ 979,486 Initial Issuance Costs (in thousands) $ 11,627 $ 47,200 $ 20,774 $ 20,514 Shares Issued as of September 30, 2025 11,948,292 28,011,111 13,605,866 12,322,141 Par Value Per Share $ 0.001 $ 0.001 $ 0.001 $ 0.001 Liquidation Preference Per Share as of September 30, 2025 (1) $ 111.49 $ 100.00 $ 100.00 $ 100.00 Stated Amount $ 100.00 $ 100.00 n/a $ 100.00 Dividend Rate Per Annum as of September 30, 2025 (2) 10 % 10 % 8 % 10 % Cumulative Dividends Yes Yes Yes No Dividend Payment Method Cash Cash Cash, class A common stock, or a combination of both Cash Conversion Privilege None None Convertible to class A common stock at any time None Initial Conversion Rate n/a n/a 0.1 shares of class A common stock per share of STRK Stock n/a Redemption Rights (3) Yes Yes Yes Yes Repurchase Rights (4) Yes, upon a fundamental change Yes, upon a fundamental change Yes, upon a fundamental change Yes, upon a fundamental change Board Rights (5) Yes No Yes No (1) The liquidation preference per share of STRF Stock, STRC Stock and STRD Stock generally approximates to the greater of the trading price per share of the applicable series of Preferred Stock or $ 100 as set forth in the applicable certificate of designations. As of September 30, 2025, the liquidation preference per share of STRK Stock was $ 100.00 . See Note 6, Commitments and Contingencies – Contingencies - Shareholder and Derivative Actions - Dodge Class Action for additional information. (2) Shares of STRC Stock accumulate cumulative dividends at a variable rate per annum on the stated amount thereof. The monthly regular dividend rate per annum on STRC Stock for the month ended September 30, 2025 was 10.00 %. On September 30, 2025, the Company increased the monthly regular dividend rate per annum on STRC Stock from 10.00 % to 10.25 % effective for monthly periods commencing on or after October 1, 2025. See Note 14, Subsequent Events, for additional information. (3) As set forth in the applicable certificate of designations, upon the occurrence of certain events, the Company will have the right, at its election, to redeem all, and not less than all, of the applicable series of Preferred Stock for cash at a redemption price calculated in accordance with the applicable certificate of designations. The Company also has the right, to redeem (subject to certain limitations set forth in the STRC Stock certificate of designations) all or any whole number of issued and outstanding shares of STRC Stock at any time, and from time to time, on any redemption date, at a cash redemption price per share of $ 101 (or such higher amount as may be chosen in the Company’s sole discretion), plus accumulated and unpaid regular dividends, if any, thereon to, and including, the redemption date . (4) If a “Fundamental Change” (as defined in the applicable certificate of designations) occurs, then (subject to a limited exception in the case of STRK Stock), holders of each series of Preferred Stock will have the right to require the Company to repurchase 24 some or all of their shares of the applicable series of Preferred Stock for cash at a repurchase price calculated in accordance with the applicable certificate of designations.