FULLTEXT DEL 1 AV 3
10-Q – 2026-05-06 – mstr-20260331.htm
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 2026
OR
o 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)
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 x No o
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 x No o
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
x Accelerated filer o
Non-accelerated filer o Smaller reporting company o
Emerging growth company o
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. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
As of April 26, 2026, the registrant had 330,807,622 and 19,640,250 shares of class A common stock and class B common stock outstanding, respectively.
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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 March 31 , 202 6 and December 31, 202 5
1
Consolidated Statements of Operations for the Three Months Ended March 3 1 , 202 6 and 202 5
2
Consolidated Statements of Comprehensive Loss for the Three Months Ended March 3 1 , 202 6 and 202 5
3
Consolidated Statements of Mezzanine Equity and Stockholders’ Equity for the Three Months Ended M arch 3 1 , 202 6 and 2025
4
Consolidated Statements of Cash Flows for the Three Months Ended March 3 1 , 202 6 and 20 2 5
6
Notes to Consolidated Financial Statements
7
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
28
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
50
Item 4.
Controls and Procedures
51
PART II.
OTHER INFORMATION
52
Item 1.
Legal Proceedings
52
Item 1A.
Risk Factors
52
Item 2.
Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities
88
Item 5.
Other Information
88
Item 6.
Exhibits
89
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PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
STRATEGY INC
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
March 31,
2026 December 31,
2025
(unaudited)
Assets
Current assets:
Cash and cash equivalents $ 2,207,219 $ 2,301,470
Restricted cash 2,026 1,873
Accounts receivable, net 122,257 205,748
Prepaid expenses and other current assets 59,722 55,046
Total current assets 2,391,224 2,564,137
Digital assets 51,649,675 58,854,028
Property and equipment, net 28,275 28,858
Right-of-use assets 58,270 46,975
Deposits and other assets 136,263 142,577
Deferred tax assets 5,043 4,507
Total assets $ 54,268,750 $ 61,641,082
Liabilities, Mezzanine Equity and Stockholders' Equity
Current liabilities:
Accounts payable, accrued expenses, and operating lease liabilities $ 44,660 $ 50,335
Accrued compensation and employee benefits 33,654 69,986
Accrued interest 5,970 5,619
Preferred dividends payable 48,153 27,121
Current portion of long-term debt, net 31,402 31,313
Deferred revenue and advance payments 231,218 272,118
Total current liabilities 395,057 456,492
Long-term debt, net 8,165,122 8,158,842
Deferred revenue and advance payments 5,224 5,451
Operating lease liabilities 60,861 46,135
Other long-term liabilities 4,822 4,736
Deferred tax liabilities 1,379 1,926,454
Total liabilities 8,632,465 10,598,110
Commitments and Contingencies
Mezzanine Equity
Series A Perpetual Preferred Stock,$ 0.001 par value; 424,953 and 442,361 shares authorized; 98,881 and 78,183 issued and outstanding at March 31, 2026 and December 31, 2025, respectively; redemption value and liquidation preference of $ 10,004,676 and $ 8,032,324 at March 31, 2026 and December 31, 2025, respectively
8,984,928 6,919,514
Stockholders’ Equity
Preferred stock undesignated, $ 0.001 par value; 580,047 and 562,639 shares authorized, no shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively
— —
Class A common stock, $ 0.001 par value; 10,330,000 and 10,330,000 shares authorized, 326,286 and 292,422 shares issued and outstanding at March 31, 2026 and December 31, 2025, respectively
326 292
Class B common stock, $ 0.001 par value; 165,000 shares authorized, 19,640 shares issued and outstanding at both March 31, 2026 and December 31, 2025
20 20
Additional paid-in capital 43,130,389 37,806,554
Accumulated other comprehensive loss ( 7,913 ) ( 5,171 )
(Accumulated deficit) retained earnings ( 6,471,465 ) 6,321,763
Total stockholders’ equity 36,651,357 44,123,458
Total liabilities, mezzanine equity and stockholders' equity $ 54,268,750 $ 61,641,082
The accompanying notes are an integral part of these Consolidated Financial Statements.
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STRATEGY INC
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended March 31,
2026 2025
(unaudited) (unaudited)
Revenues:
Product licenses $ 5,501 $ 7,270
Subscription services 58,879 37,103
Total product licenses and subscription services 64,380 44,373
Product support 44,190 52,529
Other services 15,730 14,164
Total revenues 124,300 111,066
Cost of revenues:
Product licenses 1,196 964
Subscription services 22,471 14,429
Total product licenses and subscription services 23,667 15,393
Product support 6,187 7,354
Other services 11,092 11,224
Total cost of revenues 40,946 33,971
Gross profit 83,354 77,095
Operating expenses:
Sales and marketing 36,272 27,532
Research and development 24,665 24,423
General and administrative 37,357 40,547
Unrealized loss on digital assets 14,455,479 5,906,005
Total operating expenses 14,553,773 5,998,507
Loss from operations ( 14,470,419 ) ( 5,921,412 )
Interest income (expense), net 1,824 ( 17,106 )
Other income (expense), net 3,116 ( 3,936 )
Loss before income taxes ( 14,465,479 ) ( 5,942,454 )
Benefit from income taxes ( 1,922,809 ) ( 1,725,084 )
Net loss ( 12,542,670 ) ( 4,217,370 )
Dividends on preferred stock ( 229,527 ) ( 10,648 )
Net loss attributable to common stockholders of Strategy $ ( 12,772,197 ) $ ( 4,228,018 )
Basic loss per common share (1) $ ( 38.25 ) $ ( 16.49 )
Weighted average common shares outstanding - Basic 333,913 256,473
Diluted loss per common share (1) $ ( 38.25 ) $ ( 16.49 )
Weighted average common shares outstanding - Diluted 333,913 256,473
(1) Basic and fully diluted loss 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
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STRATEGY INC
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(in thousands)
Three Months Ended
March 31,
2026 2025
(unaudited) (unaudited)
Net loss $ ( 12,542,670 ) $ ( 4,217,370 )
Other comprehensive (loss) income, net of applicable taxes:
Foreign currency translation adjustment ( 2,742 ) 3,417
Total other comprehensive (loss) income ( 2,742 ) 3,417
Comprehensive loss $ ( 12,545,412 ) $ ( 4,213,953 )
The accompanying notes are an integral part of these Consolidated Financial Statements.
3
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STRATEGY INC
CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY
(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
Capital Comprehensive (Accumulated
Deficit)
Shares Amount Equity Shares Amount Shares Amount Loss
Balance at January 1, 2025 — $ — $ 30,976,362 226,138 $ 226 19,640 $ 20 $ 20,411,998 $ ( 15,384 ) $ 10,579,502
Net loss — — ( 4,217,370 ) — — — — — — ( 4,217,370 )
Other — — ( 1,097 ) — — — — — — ( 1,097 )
Other comprehensive income — — 3,417 — — — — — 3,417 —
Preferred stock cash dividends declared — — ( 9,188 ) — — — — — — ( 9,188 )
Issuance of class A common stock under stock incentive plans — — 12,121 401 — — — 12,121 — —
Issuance of class A common stock under public offerings, net of issuance costs — — 4,399,205 12,625 13 — — 4,399,192 — —
Issuance of class A common stock upon conversions of convertible senior notes — — 1,045,132 7,373 8 — — 1,045,124 — —
Share-based compensation expense — — 12,654 — — — — 12,654 — —
Issuance of preferred stock 16,150 1,304,497 — — — — — — — —
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
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STRATEGY INC
CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY
(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
Capital Comprehensive (Accumulated
Deficit)
Shares Amount Equity Shares Amount Shares Amount Loss
Balance at January 1, 2026 78,183 $ 6,919,514 $ 44,123,458 292,422 $ 292 19,640 $ 20 $ 37,806,554 $ ( 5,171 ) $ 6,321,763
Net loss — — ( 12,542,670 ) — — — — — — ( 12,542,670 )
Other comprehensive income — — ( 2,742 ) — — — — — ( 2,742 ) —
Preferred stock cash dividends declared — — ( 250,558 ) — — — — — — ( 250,558 )
Issuance of class A common stock under stock incentive plans — — 18,484 395 — — — 18,484 — —
Issuance of class A common stock under public offerings, net of issuance costs — — 5,292,212 33,469 34 — — 5,292,178 — —
Share-based compensation expense — — 13,173 — — — — 13,173 — —
Issuance of preferred stock 20,698 2,065,414 — — — — — — — —
Balance at March 31, 2026 98,881 $ 8,984,928 $ 36,651,357 326,286 $ 326 19,640 $ 20 $ 43,130,389 $ ( 7,913 ) $ ( 6,471,465 )
The accompanying notes are an integral part of these Consolidated Financial Statements.
5
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STRATEGY INC
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Three Months Ended
March 31,
2026 2025
(unaudited) (unaudited)
Operating activities:
Net loss $ ( 12,542,670 ) $ ( 4,217,370 )
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization 8,785 6,575
Reduction in carrying amount of right-of-use assets 1,527 2,240
Deferred taxes ( 1,925,628 ) ( 1,728,363 )
Share-based compensation expense 13,173 11,819
Unrealized loss on digital assets 14,455,479 5,906,005
Amortization of issuance costs on long-term debt 6,516 6,048
Other 492 —
Changes in operating assets and liabilities:
Accounts receivable 1,206 10,542
Prepaid expenses and other current assets ( 5,982 ) ( 7,835 )
Deposits and other assets 428 ( 1,519 )
Accounts payable and accrued expenses ( 802 ) ( 1,431 )
Accrued compensation and employee benefits ( 38,027 ) ( 30,385 )
Accrued interest 351 421
Deferred revenue and advance payments 41,958 43,289
Operating lease liabilities and long-term liabilities ( 2,817 ) ( 2,425 )
Net cash provided by (used in) operating activities 13,989 ( 2,389 )
Investing activities:
Purchases of digital assets ( 7,251,126 ) ( 7,661,663 )
Advance deposits on purchases of property and equipment — ( 6,000 )
Purchases of property and equipment ( 952 ) ( 2,737 )
Net cash used in investing activities ( 7,252,078 ) ( 7,670,400 )
Financing activities:
Proceeds from sale of common stock under public offerings 5,298,581 4,407,093
Issuance costs paid related to sale of common stock under public offerings ( 6,369 ) ( 7,129 )
Proceeds from sale of preferred stock under public offerings 2,069,957 1,336,938
Issuance costs paid related to sale of preferred stock under public offerings ( 4,543 ) ( 31,113 )
Dividends paid on preferred stock ( 229,527 ) ( 9,188 )
Proceeds from exercise of stock options 15,438 9,418
Proceeds from sales under employee stock purchase plan 3,046 2,703
Other financing outflows ( 149 ) ( 141 )
Proceeds from convertible senior notes — 2,000,000
Issuance costs paid for convertible senior notes — ( 14,133 )
Payments to settle conversions and redemption of convertible senior notes — ( 143 )
Net cash provided by financing activities 7,146,434 7,694,305
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash ( 2,443 ) 845
Net (decrease) increase in cash, cash equivalents, and restricted cash ( 94,098 ) 22,361
Cash, cash equivalents, and restricted cash, beginning of period 2,303,343 39,897
Cash, cash equivalents, and restricted cash, end of period $ 2,209,245 $ 62,258
The accompanying notes are an integral part of these Consolidated Financial Statements.
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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.
The Consolidated Financial Statements and Notes to Consolidated Financial Statements are presented as required by the rules and regulations of the United States Securities and Exchange Commission (“SEC”) for interim reporting 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 fiscal year ended December 31, 2025. There have been no significant changes in the Company’s accounting policies since December 31, 2025.
Certain prior period amounts have been reclassified and aggregated to conform to the current period presentation. These changes did not have a material impact on the Company’s Consolidated Financial Statements and no underlying accounting policies or measurement bases have changed.
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.
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
The Company initially records its bitcoin purchases at cost and 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 Sheet each reporting period-end. The Company establishes a deferred tax liability when the fair value of bitcoin at the reporting date exceeds the average cost basis of the Company’s bitcoin holdings at that date. Subsequent increases or decreases in the fair value of bitcoin result in corresponding increases or decreases to the deferred tax liability. If the fair value of bitcoin declines below the Company’s cost basis, the deferred tax liability related to unrealized gains is reversed, and a deferred tax asset is recognized for the resulting unrealized loss. The Company evaluates the realizability of deferred tax assets each reporting period and records a valuation allowance against its U.S. federal and state deferred tax assets when it is more likely than not that some or all of the deferred tax assets will not be realized.
(c) Redeemable Preferred Stock
As of March 31, 2026, the following series of preferred stock of the Company were outstanding:
• 10.00 % Series A Perpetual Strife Preferred Stock (“STRF Stock”);
• Variable Rate Series A Perpetual Stretch Preferred Stock (“STRC Stock”);
• 10.00 % Series A Perpetual Stream Preferred Stock ("STRE Stock");
• 8.00 % Series A Perpetual Strike Preferred Stock (“STRK Stock”); and
• 10.00 % Series A Perpetual Stride Preferred Stock (“STRD Stock”).
In these Notes to Consolidated Financial Statements, STRF Stock, STRC Stock, STRE Stock, STRK Stock and STRD Stock are collectively referred to as “Preferred Stock.” In accordance with Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity , each series of Preferred Stock outstanding as of March 31, 2026 is classified within mezzanine equity, as certain events that could cause shares of each such series of Preferred Stock to become redeemable are not solely within the control of the Company. In each case, the carrying values of the shares are initially recognized based on proceeds received, net of issuance costs, and are not accreted to their redemption value unless it becomes probable that the shares will become redeemable. Refer to Note 9, Redeemable Preferred Stock for further discussion.
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(2) Recent Accounting Standards
The following Accounting Standards Updates (“ASU”) were issued by the FASB but have not yet been adopted:
In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40), which requires further disaggregation of specific expense captions in the notes to consolidated financial statements. The guidance is effective for the Company’s 2027 annual and 2028 interim periods, with early adoption permitted. The Company is currently evaluating the impact of this standard on its disclosures and does not expect the adoption to have a material impact on its consolidated financial statements.
In September 2025, the FASB issued ASU No. 2025-06, Intangibles: Goodwill and Other‒Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software (ASU 2025-06). Upon adoption, the Company will be required to account for internal-use software under the updated capitalization criteria. The standard is effective for the Company's interim and annual 2028 periods, with early adoption permitted. The standard can be applied either prospectively, retrospectively, or under a modified transition approach. The Company is currently evaluating the impact of this standard on its consolidated financial statements as well as its method of adoption.
(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 (loss) on digital assets”, within operating expenses in the Company’s Consolidated Statement of Operations.
The following table summarizes the Company’s digital asset holdings as of:
(in thousands, except number of bitcoins) March 31,
2026 December 31,
2025
Approximate number of bitcoins held 762,099 672,500
Digital asset cost basis $ 57,686,457 $ 50,435,331
Digital asset fair value $ 51,649,675 $ 58,854,028
The following table summarizes the Company’s digital asset purchases and unrealized losses on digital assets as calculated after the adoption of ASU 2023-08 on January 1, 2025 for the periods indicated. The Company did not sell any of its bitcoins during the three months ended March 31, 2026 or 2025, respectively.
Three Months Ended March 31,
(in thousands, except number of bitcoins) 2026 2025
Approximate number of bitcoins purchased 89,599 80,715
Digital asset purchases $ 7,251,126 $ 7,661,663
Unrealized loss on digital assets $ 14,455,479 $ 5,906,005
From time to time, the Company’s execution partners may extend short-term trade credits to the Company and to MacroStrategy LLC (“MacroStrategy”), a wholly-owned subsidiary of the Company, to purchase bitcoin in advance of using cash funds in their respective trading accounts. Trade credits are due and payable after the bitcoin purchases are completed. During the three months ended March 31, 2026 and 2025, certain bitcoin of the Company and MacroStrategy were subject to a first priority security interest and lien in order to secure payments owed by the Company or MacroStrategy with respect to these arrangements. While trade credits are outstanding, the Company and MacroStrategy may incur interest fees and be required to maintain minimum balances in its trading and custody accounts with such execution partners. As of March 31, 2026, neither the Company nor MacroStrategy had any 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
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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.
Accounts receivable consisted of the following, as of:
(in thousands) March 31,
2026 December 31,
2025
Billed and billable $ 125,327 $ 209,094
Less: allowance for credit losses ( 3,070 ) ( 3,346 )
Accounts receivable, net $ 122,257 $ 205,748
Changes in the allowance for credit losses were not material for the three months ended March 31, 2026.
Rights to consideration that are subject to a condition other than the passage of time are considered contract assets until they are expected to become unconditional and transfer to accounts receivable. Current contract assets included in “Prepaid expenses and other current assets” in the Consolidated Balance Sheets consisted of $ 11.8 million and $ 9.7 million, as of March 31, 2026 and December 31, 2025, respectively, related to performance obligations or services being rendered in advance of future invoicing associated with multi-year contracts. Non-current contract assets included in “Deposits and other assets” in the Consolidated Balance Sheets consisted of $ 6.9 million and $ 4.7 million, as of March 31, 2026 and December 31, 2025, respectively, related to performance obligations or services being rendered in advance of future invoicing associated with multi-year contracts. During the three months ended March 31, 2026 and 2025, there were no significant impairments to the Company’s contract assets, nor were there any significant changes in the timing of the Company’s contract assets being reclassified to accounts receivable.
Contract liabilities are amounts received or due from customers in advance of the Company transferring the software or services to the customer and presented as "Deferred revenue and advance payments" in the Consolidated Balance Sheets. In the case of multi-year service contract arrangements, the Company generally does not invoice more than one year in advance of services and does not record deferred revenue for amounts that have not been invoiced. Revenue is subsequently recognized in the period(s) in which control of the software or services is transferred to the customer.
The Company’s “Accounts receivable, net” and “Deferred revenue and advance payments” balances in the Consolidated Balance Sheets include unpaid amounts related to contracts under which the Company has an enforceable right to invoice the customer for non-cancellable and/or non-refundable software and services. Changes in accounts receivable and changes in deferred revenue and advance payments are presented net of these unpaid amounts in “Operating activities” in the Consolidated Statements of Cash Flows.
During the three months ended March 31, 2026 and 2025, the Company recognized revenues of $ 96.7 million and $ 85.4 million, respectively, from amounts included in the total deferred revenue and advance payments balances at the beginning of the respective year. For the three months ended March 31, 2026 and 2025, there were no significant changes in the timing of revenue recognition on the Company’s deferred balances.
The Company’s remaining performance obligation represents all future revenue under contract and includes deferred revenue and advance payments and billable non-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 March 31, 2026, the Company had an aggregate transaction price of $ 577.7 million allocated to the remaining performance obligation related to subscription services, product support, product licenses, and other services contracts. The Company expects to recognize $ 334.7 million within the next 12 months and the remainder thereafter.
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(5) Long-term Debt
The net carrying value of the Company’s outstanding debt consisted of the following, as of:
(in thousands) March 31, 2026 December 31, 2025
2028 Convertible Notes $ 1,003,791 $ 1,002,736
2029 Convertible Notes 2,984,138 2,982,316
2030A Convertible Notes 790,101 789,109
2030B Convertible Notes 1,990,366 1,989,115
2031 Convertible Notes 597,462 596,843
2032 Convertible Notes 790,798 790,113
Other long-term secured debt 39,868 39,923
Total $ 8,196,524 $ 8,190,155
Reported as:
Current portion of long-term debt, net 31,402 31,313
Long-term debt, net 8,165,122 8,158,842
Total $ 8,196,524 $ 8,190,155
Convertible Senior Notes
As of March 31, 2026, the following convertible notes were outstanding (the “Outstanding Convertible Notes”):
• $ 1.01 billion aggregate principal amount of 0.625 % Convertible Senior Notes due 2028 (the “2028 Convertible Notes”);
• $ 3.00 billion aggregate principal amount of 0 % Convertible Senior Notes due 2029 (the “2029 Convertible Notes”);
• $ 800.0 million aggregate principal amount of 0.625 % Convertible Senior Notes due 2030 (the “2030A Convertible Notes”);
• $ 2.00 billion aggregate principal amount of 0 % Convertible Senior Notes due 2030 (the “2030B Convertible Notes”);
• $ 603.7 million aggregate principal amount of 0.875 % Convertible Senior Notes due 2031 (the “2031 Convertible Notes”); and
• $ 800.0 million aggregate principal amount of 2.25 % Convertible Senior Notes due 2032 (the “2032 Convertible Notes”).
Additionally, the Company also previously issued, in February 2021, $ 1.05 billion aggregate principal amount of 0 % Convertible Senior Notes due 2027 (the “2027 Convertible Notes”, and together with the Outstanding Convertible Notes, the “Convertible Notes”). All of the 2027 Convertible Notes were redeemed or converted into the Company’s class A common stock during the three months ended March 31, 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.
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The following table summarizes the key terms of each of the Convertible Notes (principal at inception, net proceeds, and issuance costs are each reported in thousands). The summaries below are qualified in their entirety by the full text of the applicable indenture governing the respective Convertible Notes:
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) 6.98 5.46 1.49 6.68 2.31 4.30 4.89
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) "Interest Payment Date" represent the dates on which regular interest is payable on the 2028 Convertible Notes, 2030A Convertible Notes, 2031 Convertible Notes and 2032 Convertible Notes under the applicable indenture. Since the 2029 Convertible Notes and the 2030B Convertible Notes do not bear, and the 2027 Convertible Notes prior to their redemption did not bear, regular interest, "Interest Payment Dates" for such notes represent the dates on which special interest and/or additional interest, if any, is payable under the applicable indenture.
(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 Outstanding 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
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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 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) 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.
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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
During the three months ended March 31, 2025, the full $ 1.05 billion aggregate principal amount of the 2027 Convertible Notes were converted or redeemed. Upon settlement of the notes that were converted, the Company issued 7,373,528 shares of its class A common stock and paid a nominal amount of cash in lieu of fractional shares. 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.
During three months ended March 31, 2026, the Outstanding Convertible Notes were not convertible and the Company did not receive any conversion requests.
Collective Convertible Notes Disclosures
As of March 31, 2026, 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: 2,593,923 shares of class A common stock; and
• 2032 Convertible Notes: 3,915,200 shares of class A common stock.
None of the Outstanding Convertible Notes were convertible at the option of the holders during the three months ended March 31, 2026. See "Conversions and Redemptions of Convertible Notes" above for additional information about conversions during the three months ended March 31, 2025.
The Outstanding Convertible Notes may be convertible in future periods if one or more of the conversion conditions are satisfied during future measurement periods. See "Convertible Senior Notes" above for additional information. None of the Company's Outstanding Convertible Notes are convertible at the option of the holders of the respective Convertible Notes during the three months ended June 30, 2026.
As of March 31, 2026, and December 31, 2025, the net carrying value of the Outstanding 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 Outstanding Convertible Notes as of March 31, 2026 and December 31, 2025:
March 31, 2026
Outstanding
Principal Amount Unamortized
Issuance Costs Net Carrying
Value Fair Value
(in thousands) Amount Leveling
2028 Convertible Notes $ 1,010,000 $ ( 6,209 ) $ 1,003,791 $ 1,111,909 Level 2
2029 Convertible Notes 3,000,000 ( 15,862 ) 2,984,138 2,516,940 Level 2
2030A Convertible Notes 800,000 ( 9,899 ) 790,101 925,656 Level 2
2030B Convertible Notes 2,000,000 ( 9,634 ) 1,990,366 1,745,920 Level 2
2031 Convertible Notes 603,659 ( 6,197 ) 597,462 583,340 Level 2
2032 Convertible Notes 800,000 ( 9,202 ) 790,798 804,624 Level 2
Total $ 8,213,659 $ ( 57,003 ) $ 8,156,656 $ 7,688,389
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December 31, 2025
Outstanding
Principal Amount Unamortized
Issuance Costs Net Carrying
Value Fair Value
(in thousands) Amount Leveling
2028 Convertible Notes $ 1,010,000 $ ( 7,264 ) $ 1,002,736 $ 1,214,525 Level 2
2029 Convertible Notes 3,000,000 ( 17,684 ) 2,982,316 2,468,832 Level 2
2030A Convertible Notes 800,000 ( 10,891 ) 789,109 1,014,071 Level 2
2030B Convertible Notes 2,000,000 ( 10,885 ) 1,989,115 1,728,262 Level 2
2031 Convertible Notes 603,659 ( 6,816 ) 596,843 621,950 Level 2
2032 Convertible Notes 800,000 ( 9,887 ) 790,113 892,562 Level 2
Total $ 8,213,659 $ ( 63,427 ) $ 8,150,232 $ 7,940,202
The fair value of the Outstanding 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 months ended March 31, 2026 and 2025 interest expense related to the Convertible Notes was as follows:
Three Months Ended March 31, 2026 Three Months Ended March 31, 2025
(in thousands) Contractual
Interest Expense Amortization of
Issuance Costs Total Contractual
Interest Expense Amortization of
Issuance Costs Total
2027 Convertible Notes $ — $ — $ — $ — $ 401 $ 401
2028 Convertible Notes 1,578 1,055 2,633 1,578 1,044 2,622
2029 Convertible Notes — 1,822 1,822 — 1,818 1,818
2030A Convertible Notes 1,250 991 2,241 1,250 980 2,230
2030B Convertible Notes — 1,251 1,251 — 513 513
2031 Convertible Notes 1,321 619 1,940 1,321 611 1,932
2032 Convertible Notes 4,500 685 5,185 4,500 668 5,168
Total $ 8,649 $ 6,423 $ 15,072 $ 8,649 $ 6,035 $ 14,684
For the three months ended March 31, 2026 and 2025, the Company paid $ 8.3 million and $ 8.2 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.
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 $ 39.9 million as of both March 31, 2026 and December 31, 2025, respectively, and an aggregate outstanding principal balance of $ 40.2 million and $ 40.3 million as of March 31, 2026 and December 31, 2025. As of March 31, 2026 and December 31, 2025, $ 31.4 million and $ 31.3 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 March 31, 2026. The principal payments related to the Outstanding Convertible Notes are included in the table below as if the holders exercised
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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 ending March 31,
(in thousands) 2028
Convertible
Notes 2029
Convertible
Notes 2030A
Convertible
Notes 2030B
Convertible
Notes 2031
Convertible
Notes 2032
Convertible
Notes Other long-
term secured
debt Total
2027 $ — $ — $ — $ — $ — $ — $ 31,716 $ 31,716
2028 1,010,000 — — 2,000,000 — — 8,477 3,018,477
2029 — 3,000,000 800,000 — 603,659 — — 4,403,659
2030 — — — — — 800,000 — 800,000
Total $ 1,010,000 $ 3,000,000 $ 800,000 $ 2,000,000 $ 603,659 $ 800,000 $ 40,193 $ 8,253,852
(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 March 31, 2026 or December 31, 2025.
(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. In February 2026, SG/CADE issued its final Technical Opinion in the proceeding. SG/CADE recommended, among other things, that leniency be confirmed for the Company’s Brazilian subsidiary and no fines be imposed against it. The case will now be referred to CADE’s Tribunal. If, after its review, the 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 6.2 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 2.4 million (equivalent to approximately $ 0.4 million) in April 2025, and (ii) has been granted immunity from debarment and other sanctions.
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The Company’s Brazilian subsidiary continues to cooperate with requests from government authorities related to the above matters. As of March 31, 2026, the Company remained unable to reasonably estimate a range of loss beyond the payments described above.
Shareholder Action
On July 21, 2025, David Dodge (“Plaintiff”) 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 purported 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 sought, among other things, an order (i) finding, determining and declaring that the Company violated Section 242; (ii) finding, determining and declaring that the Company's 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 and the class, including interest; (v) awarding attorneys’ fees and costs; and (vi) granting other relief. On March 12, 2026, counsel for the parties entered into and filed with the Court of Chancery a Stipulation and [Proposed] Order Dismissing the Action as Moot (the “Stipulation”) (brackets in original), which provided for the dismissal of the action as moot with prejudice as to Plaintiff and without prejudice as to any claims belonging to any other actual or potential members of the putative class, and that the Company would pay Plaintiff's attorneys' fees and expenses in the amount of $ 550,000 . Under the Stipulation, the Company agreed to, among other things, seek stockholder approval of a proposal to ratify the STRK Amendment pursuant to Section 204 of the DGCL at the Company's 2026 annual meeting of stockholders. On March 27, 2026, the Court of Chancery approved the Stipulation in all respects material to the Company and dismissed the case. The Court did not pass, and will not pass, judgment on any entitlement to attorneys’ fees or the amount thereof.
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.
(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 ordinary 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, the relative impact of permanent book to tax differences and the impact of any valuation allowances. 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 three months ended March 31, 2026, the Company recorded a provision for income tax benefit of $ 1.92 billion on a pretax loss of $ 14.47 billion, which resulted in an effective tax rate of 13.3 %. For the three months ended March 31, 2025, the Company recorded a benefit from income taxes of $ 1.73 billion on a pretax loss of $ 5.94 billion, which resulted in an effective tax rate of 29.0 %. During the three months ended March 31, 2026, the Company’s benefit from income taxes primarily related to (i) the tax effect of the unrealized losses on digital assets as offset by (ii) the establishment of a full valuation allowance on domestic net deferred tax assets. During the three months ended March 31, 2025, the Company’s benefit from income taxes primarily related to the tax effect of the unrealized loss on digital assets.
As of March 31, 2026, the fair market value of bitcoin declined to the point where the cost basis of the bitcoin holdings exceeded their fair market value, requiring the Company to (i) reverse the deferred tax liability of $ 2.42 billion on the unrealized gain on bitcoin holdings that existed as of December 31, 2025, (ii) record a deferred tax asset for the unrealized loss on bitcoin holdings of $ 1.73 billion, and (iii) establish a valuation allowance against all domestic net deferred tax assets of $ 2.23 billion that, in the Company’s present estimation, more likely than not will not be realized. If, in future
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periods, the fair market value of bitcoin increases and exceeds the cost basis of the Company's bitcoin holdings, the deferred tax asset with respect to unrealized loss would be reversed and the valuation allowance on domestic net deferred tax assets could be released. 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 March 31, 2026, the Company had gross unrecognized income tax benefits, including accrued interest, of $ 13.2 million, of which $ 3.1 million was recorded in “Other long-term liabilities” and $ 10.1 million was recorded in “Deferred tax assets” in the Company’s Consolidated Balance Sheet. As of December 31, 2025, the Company had gross unrecognized income tax benefits of $ 13.4 million, including accrued interest, $ 3.0 million of which was recorded in “Other long-term liabilities” and $ 10.4 million of which was recorded in “Deferred tax liability” in the Company’s Consolidated Balance Sheet.
(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. On January 21, 2025, the Company's stockholders approved an amendment to the 2023 Equity Plan (the “2024 Plan Amendment”). The 2024 Plan Amendment amended the 2023 Equity Plan to provide that, beginning on December 20, 2024, each non-employee director who is newly appointed to the Company's board of directors shall automatically receive, upon the date of such director’s initial appointment to the Company's board of directors, equity awards having an aggregate fair value equal to $ 2,000,000 , one-half of which ($ 1,000,000 ) will consist of a non-statutory stock option and one-half of which ($ 1,000,000 ) will consist of restricted stock units, with each award vesting annually in equal installments over four years .
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 March 31, 2026, there were 2,751,074 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 March 31, 2026, there were options to purchase 3,314,993 shares of class A common stock outstanding under the Stock Incentive Plans. The following table summarizes the Company’s stock option activity for the three months ended March 31, 2026:
Stock Options Outstanding
(in thousands, except per share data and years) Shares Weighted Average
Exercise Price
Per Share Aggregate
Intrinsic
Value Weighted Average
Remaining Contractual
Term (Years)
Balance as of January 1, 2026 3,535 $ 42.63
Granted 59 $ 150.28
Exercised ( 277 ) $ 55.60 $ 28,532
Forfeited/Expired ( 2 ) $ 159.93
Balance as of March 31, 2026 3,315 $ 43.42
Exercisable as of March 31, 2026 2,827 $ 37.76 $ 249,075 5.1
Expected to vest as of March 31, 2026 488 $ 76.19 $ 34,318 7.4
Total 3,315 $ 43.42 $ 283,393 5.4
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Stock options outstanding as of March 31, 2026 are comprised of the following range of exercise prices per share:
Stock Options Outstanding
(in thousands, except per share data and years)
Range of Exercise Prices per Share
Shares Weighted Average
Exercise Price
Per Share Weighted Average
Remaining Contractual
Term (Years)
$ 12.45 - $ 20.00
857 $ 15.22 3.4
$ 20.01 - $ 30.00
868 $ 24.48 6.6
$ 30.01 - $ 40.00
15 $ 30.16 7.2
$ 40.01 - $ 50.00
853 $ 41.23 5.8
$ 50.01 - $ 70.00
535 $ 69.12 4.9
$ 70.01 - $ 220.00
133 $ 156.89 9.0
$ 220.01 - $ 300.00
36 $ 261.38 8.9
$ 300.01 - $ 364.20
11 $ 364.20 8.7
$ 364.21 and over
7 $ 371.27 9.2
Total 3,315 $ 43.42 5.4
An aggregate of 362,693 stock options with an aggregate grant date fair value of $ 11.1 million vested during the three months ended March 31, 2026. An aggregate of 958,570 stock options with an aggregate grant date fair value of $ 30.2 million vested during the three months ended March 31, 2025. The weighted average grant date fair value of stock option awards using the Black-Scholes valuation model was $ 150.28 and $ 221.70 for each share subject to a stock option granted during the three months ended March 31, 2026 and 2025, respectively, based on the following assumptions:
Three Months Ended
March 31,
2026 2025
Expected term of awards in years 6.25
6.25
Expected volatility 89.4 %
83.8 % - 84.9 %
Risk-free interest rate 3.9 %
4.1 % - 4.4 %
Expected dividend yield 0.0 % 0.0 %
For the three months ended March 31, 2026 and 2025, the Company recognized approximately $ 3.7 million and $ 6.6 million, respectively, in share-based compensation expense from stock options granted under the Stock Incentive Plans. As of March 31, 2026, there was approximately $ 22.5 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 2.9 years.
Share-settled restricted stock units
As of March 31, 2026, there were 870,307 share-settled restricted stock units outstanding under the Stock Incentive Plans. The following table summarizes the Company’s share-settled restricted stock unit activity for the periods indicated:
Share-Settled Restricted Stock Units Outstanding
(in thousands) Units Aggregate
Intrinsic Value
Balance as of January 1, 2026 731
Granted 255
Vested ( 91 ) $ 12,337
Forfeited ( 25 )
Balance as of March 31, 2026 870
Expected to vest as of March 31, 2026 870 $ 108,614
During the year ended December 31, 2025, and all interim periods presented, the Company used a sell-to-cover method, under which all vested shares are issued and a portion is sold in the open market to satisfy employee payroll tax obligations. During the three months ended March 31, 2026, 90,769 share-settled restricted stock units having an aggregate
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grant date fair value of $ 14.3 million vested, resulting in the issuance of 90,769 shares of class A common stock; of these issued shares, 32,515 shares were sold in the open market to satisfy employee payroll tax withholding obligations. During the three months ended March 31, 2025, 104,170 share-settled restricted stock units having an aggregate grant date fair value of $ 11.4 million vested, resulting in the issuance of 104,170 shares of class A common stock; of these issued shares 35,704 shares were sold in the open market to satisfy employee payroll tax withholding obligations. The weighted average grant date fair value of share-settled restricted stock units granted during the three months ended March 31, 2026 and 2025 was $ 149.63 and $ 272.08 , respectively, based on the fair value of the Company’s class A common stock.
For the three months ended March 31, 2026, and 2025, the Company recognized approximately $ 6.1 million and $ 5.2 million, respectively, in share-based compensation expense from share-settled restricted stock units granted under the Stock Incentive Plans. As of March 31, 2026, there was approximately $ 89.3 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 3.2 years.
Share-settled performance stock units
As of March 31, 2026, there were 290,489 performance stock units outstanding under the 2023 Equity Plan. The following table summarizes the Company’s performance stock unit activity for the periods indicated:
Share-Settled Performance Stock Units Outstanding
(in thousands) Units Aggregate
Intrinsic Value
Balance as of January 1, 2026 239
Granted 51
Vested —
Forfeited —
Balance as of March 31, 2026 290
Expected to vest as of March 31, 2026 290 $ 53,672
The weighted average grant date fair value of performance stock units using the Monte-Carlo simulation model was $ 267.03 and $ 445.66 for each performance stock unit granted during the three months ended March 31, 2026 and 2025, respectively, based on the following assumptions:
Three Months Ended
March 31,
2026 2025
Expected term of awards in years 3.0 3.0
Expected volatility 87.2 % 99.2 %
Risk-free interest rate 3.7 % 3.9 %
Expected dividend yield 0.0 % 0.0 %
No performance stock units vested during the three months ended March 31, 2026 and 2025. For the three months ended March 31, 2026, and 2025, the Company recognized approximately $ 2.7 million and $ 0.7 million, respectively, in share-based compensation expense from performance stock units granted under the 2023 Equity Plan. As of March 31, 2026, there was approximately $ 24.8 million of total unrecognized share-based compensation expense related to unvested performance stock units, which the Company expects to recognize over a weighted average vesting period of approximately 2.3 years.
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 three months ended March 31, 2026, 27,679 shares of class A common stock were issued in connection with the 2021 ESPP. As of March 31, 2026, 435,917 shares of the Company’s class A common stock remained available for issuance under the 2021 ESPP.
For the three months ended March 31, 2026 and 2025, the Company recognized approximately $ 0.7 million and $ 0.4 million, respectively, in share-based compensation expense related to the 2021 ESPP. As of March 31, 2026, there was
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approximately $ 0.7 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, STRE 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, for additional information. Until the STRK Amendment's ratification has been completed, investors should treat the STRK Amendment as being subject to ratification.
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 March 31, 2026. The summaries below are qualified in their entirety by the full text of the applicable certificate of designations.
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STRF Stock STRC Stock STRE Stock STRK Stock STRD Stock
Trading Symbol STRF STRC STRE STRK STRD
Stock Exchange NASDAQ NASDAQ Luxembourg Stock Exchange NASDAQ NASDAQ
Initial Issuance Date March 25, 2025 July 29, 2025 November 13, 2025 February 5, 2025 June 10, 2025
Initial Shares Issued 8,500,000 28,011,111 7,750,000 7,300,000 11,764,700
Initial Public Offering Price per share $ 85.00 $ 90.00 € 80.00 $ 80.00 $ 85.00
Initial Net Proceeds (in thousands) $ 710,873 $ 2,473,800 € 608,734 $ 563,226 $ 979,486
Initial Issuance Costs (in thousands) $ 11,627 $ 47,200 € 11,266 $ 20,774 $ 20,514
Shares Issued as of March 31, 2026 12,839,689 50,246,513 7,750,000 14,020,744 14,024,221
Par Value Per Share $ 0.001 $ 0.001 € 0.001 $ 0.001 $ 0.001
Liquidation Preference Per Share as of March 31, 2026 (1) $ 100.00 $ 100.00 € 100.00 $ 100.00 $ 100.00
Aggregate Liquidation Preference as of March 31, 2026 (1) (in thousands) $ 1,283,969 $ 5,024,651 $ 891,560 $ 1,402,074 $ 1,402,422
Stated Amount $ 100.00 $ 100.00 € 100.00 n/a $ 100.00
Dividend Rate Per Annum as of March 31, 2026 (2) 10 % 11.50 % 10 % 8 % 10 %
Cumulative Dividends Yes Yes Yes Yes No
Dividend Payment Method Cash Cash Cash Cash, class A common stock, or a combination of both Cash
Conversion Privilege None None None Convertible to class A common stock at any time None
Initial Conversion Rate n/a 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 Yes
Repurchase Rights (4) Yes, upon a fundamental change 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 No Yes No
(1) The liquidation preference per share of STRF Stock, STRC Stock, STRE Stock and STRD Stock generally approximates to the greater of the trading price per share of the applicable series of Preferred Stock or $ 100 (or, in the case of STRE Stock, € 100 ) as set forth in the applicable certificate of designations. As of March 31, 2026, the liquidation preference per share of STRK Stock was $ 100 . See Note 6, Commitments and Contingencies – Contingencies - Shareholder Action, for additional information.
(2) Shares of STRC Stock accumulate cumulative dividends at a variable rate per annum on the stated amount thereof. The Company has the right, at its sole and absolute discretion, to adjust the regular dividend rate applicable to a regular dividend period in the manner set forth in the STRC Stock certificate of designations. The monthly regular dividend rate per annum on STRC Stock for the month ended March 31, 2026 was 11.50 %.
(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 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.
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(5) Holders of STRC Stock, STRE Stock and STRD Stock do not have the right to elect any directors to the Company’s board of directors upon non-payment of regular dividends. However, with respect to STRK Stock and STRF Stock, if (in each case, subject to the applicable certificate of designations) less than the full amount of accumulated and unpaid regular dividends on the applicable series of Preferred Stock have been declared and paid by the following regular dividend payment date in respect of each of (i) four or more consecutive regular dividend payment dates; and (ii) eight or more consecutive regular dividend payment dates, then, in each case, subject to certain limitations, the authorized number of the Company’s directors will automatically increase by one (or the Company will vacate the office of one of its directors) and the holders of the applicable series of Preferred Stock, voting together as a single class with the holders of each class or series of “Voting Parity Stock” (as defined in the applicable certificate of designations) with similar voting rights that are then exercisable, will have the right to elect one director to fill such directorship at the Company’s next annual meeting of stockholders (or, if earlier, at a special meeting of the Company’s stockholders called for such purpose). If, thereafter, all accumulated and unpaid regular dividends on the outstanding shares of the applicable series of Preferred Stock have been paid in full, then this right will terminate. Upon the termination of such right with respect to the applicable series of Preferred Stock and all other outstanding Voting Parity Stock, if any, the term of office of each person then serving as a director pursuant to this right will immediately and automatically terminate (and, if the authorized number of the Company’s directors was increased by one or two , as applicable, in connection with such election, then the authorized number of the Company’s directors will automatically decrease by one or two , as applicable).
At-the-Market Offerings of Preferred Stock
The Company is party to a sales agreement (as amended and supplemented to date, the “Omnibus Sales Agreement”) with TD Securities (USA) LLC, The Benchmark Company, LLC, StoneX Financial Inc., A.G.P./Alliance Global Partners, Barclays Capital Inc., BTIG, LLC, Canaccord Genuity LLC, Cantor Fitzgerald & Co., Clear Street LLC, Compass Point Research & Trading, LLC, H.C. Wainwright & Co., LLC, Keefe, Bruyette & Woods, Inc., Maxim Group LLC, Mizuho Securities USA LLC, Moelis & Company LLC, Morgan Stanley & Co. LLC, Santander US Capital Markets LLC, SG Americas Securities, LLC, and TCBI Securities, Inc., doing business as Texas Capital Securities, as sales agents (each an “Agent” and collectively, the “Agents”), pursuant to which the Company may from time to time through the Agents issue and sell shares of STRF Stock, STRC Stock, STRK Stock, STRD Stock, class A common stock and any additional series of preferred stock as may be designated by the Company from time to time in the future.
Refer to Note 11, At-the-Market Offerings – Preferred Stock ATM Offerings, for additional information regarding the Company’s at-the-market equity offering programs ("ATMs") with respect to certain of our Preferred Stock.
Dividends on Preferred Stock
As of March 31, 2026, dividends on the Company's Preferred Stock are payable when, as and if declared by the Company's board of directors, out of funds legally available for their payment:
• in the case of STRF Stock, STRE Stock, STRK Stock, and STRD Stock, quarterly in arrears on March 31, June 30, September 30 and December 31 of each year; and
• in the case of STRC Stock, monthly in arrears.
During the three months ended March 31, 2026 and March 31, 2025, the Company declared and paid the following dividends:
Three Months Ended March 31,
Cash Dividends Paid (in thousands) 2026 2025
STRF Stock $ 32,099 $ —
STRC Stock 111,431 —
STRE Stock (1) 22,895 —
STRK Stock 28,041 9,188
STRD Stock 35,061 —
Total Cash Dividends Paid $ 229,527 $ 9,188
(1) Reflects the Euro to USD exchange rate in effect at the time of the applicable STRE Stock dividend payment.
(10) Basic and Diluted Loss per Common Share
Basic loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average common stock outstanding during the respective period. Net loss attributable to common stockholders is computed by deducting the dividends declared related to the current financial reporting period.
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The Company has two classes of common stock: class A common stock and class B common stock. Holders of class A common stock generally have the same rights, including rights to dividends, as holders of class B common stock, except that holders of class A common stock have one vote per share while holders of class B common stock have ten votes per share. Each share of class B common stock is convertible at any time, at the option of the holder, into one share of class A common stock. As such, basic and fully diluted earnings per common share for class A common stock and for class B common stock are the same. The Company has never declared or paid any cash dividends on either class A or class B common stock.
As of March 31, 2026, the Company had five series of Preferred Stock outstanding: STRF Stock, STRC Stock, STRE Stock, STRK Stock, and STRD Stock. Only STRK Stock is convertible into the Company’s class A common stock and, therefore, is the only series of Preferred Stock that impacts diluted earnings per common share. Each share of the STRK Stock is convertible at any time, at the option of the holder, into 0.1 shares of class A common stock. Refer to Note 9, Redeemable Preferred Stock, to the Consolidated Financial Statements, for additional information on the dividend, voting, and other rights of the Company's outstanding Preferred Stock.
The impact from potential shares of common stock on the diluted earnings per common share calculation are included when dilutive. Potential shares of class A common stock issuable upon the exercise of outstanding stock options, the vesting of restricted stock units and performance stock units considered probable of achievement, and in connection with the 2021 ESPP are computed using the treasury stock method. Potential shares of class A common stock issuable upon conversion of the Convertible Notes and upon conversion of the STRK Stock are computed using the if-converted method. In computing diluted earnings per common share, the Company first calculates the earnings per incremental share (“EPIS”) for each class of potential shares of common stock and ranks the classes from the most dilutive (i.e., lowest EPIS) to the least dilutive (i.e., highest EPIS). Basic earnings per common share is then adjusted for the effect of each class of shares, in sequence and cumulatively, until a particular class no longer produces further dilution.
The following table sets forth the computation of basic and diluted loss per common share for the periods indicated:
Three Months Ended March 31,
(in thousands, except per share data) 2026 2025
Numerator - Basic and Diluted:
Net loss $ ( 12,542,670 ) $ ( 4,217,370 )
Dividends on preferred stock ( 229,527 ) ( 10,648 )
Net loss attributable to common stockholders of Strategy $ ( 12,772,197 ) $ ( 4,228,018 )
Denominator - Basic and Diluted:
Weighted average common shares of class A common stock 314,273 236,833
Weighted average common shares of class B common stock 19,640 19,640
Total weighted average shares of common stock outstanding 333,913 256,473
Loss per common share:
Basic loss per share (1) $ ( 38.25 ) $ ( 16.49 )
Diluted loss per share (1) $ ( 38.25 ) $ ( 16.49 )
(1) Basic and fully diluted loss per common share for class A and class B common stock are the same.
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For the three months ended March 31, 2026 and 2025, the following weighted average shares of potential class A common stock were excluded from the diluted loss per common share calculation because their impact would have been anti-dilutive.
Three Months Ended March 31,
(in thousands) 2026 2025
Stock options 3,356 4,770
Restricted stock units 745 1,181
Performance stock units 486 590
Employee stock purchase plan 5 4
Convertible preferred stock 1,401 450
2027 Convertible Notes — 2,977
2028 Convertible Notes 5,513 5,513
2029 Convertible Notes 4,462 4,462
2030A Convertible Notes 5,342 5,342
2030B Convertible Notes 4,614 2,000
2031 Convertible Notes 2,594 2,594
2032 Convertible Notes 3,915 3,915
Total 32,433 33,798
(11) At-the-Market Offerings
From time to time, the Company has entered into sales agreements with agents pursuant to which the Company could issue and sell shares of certain series of its Preferred Stock and class A common stock through ATMs. Pursuant to these agreements, the Company agreed to pay the sales agents commissions for their services in acting as agents with respect to the sale of shares through the at-the-market equity offering programs and also agreed to provide the sales agents with reimbursement for certain incurred expenses and customary indemnification and contribution rights.
As of March 31, 2026, the Company is party to the Omnibus Sales Agreement, pursuant to which the Company may from time to time through the Agents issue and sell shares of STRF Stock, STRC Stock, STRK Stock, STRD Stock, class A common stock and any additional series of preferred stock as may be designated by the Company from time to time in the future.
The following table sets forth total shares sold and net proceeds (net of sales commissions and expenses) received from shares sold under the Company's ATMs for the three months ended March 31, 2026 and 2025.
Three Months Ended March 31,
2026 2025
Number of shares sold pursuant to at-the-market offerings:
STRF Stock ATMs — —
STRC Stock ATMs 20,659,450 —
STRK Stock ATMs 38,796 349,907
STRD Stock ATMs — —
Class A common stock ATMs 33,468,730 12,624,595
Net proceeds received from shares sold pursuant to at-the-market offerings (in thousands):
STRF Stock ATMs $ — $ —
STRC Stock ATMs 2,062,677 —
STRK Stock ATMs 2,968 30,398
STRD Stock ATMs — —
Class A common stock ATMs 5,292,212 4,399,205
Total $ 7,357,857 $ 4,429,603
Issuance cost adjustments related to STRF and STRD Stock ATMs (in thousands): $ ( 303 ) $ —
The sales commissions and expenses related to sales of class A common stock described above are considered direct and
incremental costs and are charged against “Additional paid-in capital” on the Consolidated Balance Sheet in the period in
which the corresponding shares are issued and sold.
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(12) Segment Information
The Company has one reportable operating segment, the “Software Business,” which is engaged in the design, development, marketing, and sales of the Company’s enterprise analytics software platform through cloud subscriptions and licensing arrangements and related services (i.e., product support, consulting and education). The “Corporate & Other” category presented in the following tables is not considered an operating segment. It consists primarily of costs and expenses related to executing the Company’s bitcoin strategy and includes the unrealized losses, and other third-party costs associated with the Company’s bitcoin holdings, net interest expense primarily related to long-term debt obligations (the net proceeds of which were primarily used to purchase bitcoin), and income tax effects generated from the Company’s bitcoin holdings and related debt issuances. Beginning in 2025, the Company has dedicated certain corporate resources to its bitcoin strategy. These costs, including related share-based compensation expense, are included within the “Corporate resources” and the “Share-based compensation expense” segment expense line items to better align with their activities and utilization.
The Company’s chief operating decision maker (“CODM”), is the Company’s Chief Executive Officer, who manages the entity on a consolidated basis. The CODM uses “net income (loss)” to assess the profitability of the software business by comparing actual to budgeted results on a monthly basis. In doing so, he focuses on “controllable costs” across main functions of the Software Business and allocates personnel and budget accordingly to maximize potential profitability. The CODM also uses “net income (loss)” to understand the impact from income taxes and debt-related items for general tax and liquidity planning purposes.
The following tables present (for each of the Software Business segment and Corporate & Other category, and on a consolidated basis) the Company’s revenues and significant expenses regularly provided to the CODM, reconciled to net income (loss) for each of the periods presented.
Three Months Ended March 31, 2026
(in thousands) Software Business Corporate & Other (6) Total Consolidated
Total revenues $ 124,300 $ — $ 124,300
Significant expenses (1)
Controllable
Sales and marketing ( 31,298 ) — ( 31,298 )
Maintenance ( 6,141 ) — ( 6,141 )
Consulting ( 11,282 ) — ( 11,282 )
Cloud ( 22,552 ) — ( 22,552 )
Technology ( 23,059 ) — ( 23,059 )
Corporate resources ( 15,813 ) ( 9,693 ) ( 25,506 )
Non-Controllable
Unrealized loss on digital assets — ( 14,455,479 ) ( 14,455,479 )
Digital asset custody fees — ( 3,908 ) ( 3,908 )
Share-based compensation expense ( 9,282 ) ( 3,891 ) ( 13,173 )
Payroll taxes on equity award exercises and vestings ( 460 ) ( 202 ) ( 662 )
Other segment items (2) 902 555 1,457
Interest income, net (3) 92 1,732 1,824
Income tax benefit (expense) (4) ( 494,830 ) 2,417,639 1,922,809
Net loss $ ( 489,423 ) $ ( 12,053,247 ) $ ( 12,542,670 )
Total assets, as of March 31, 2026 (5) $ 476,051 $ 53,792,699 $ 54,268,750
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Three Months Ended March 31, 2025
(in thousands) Software Business Corporate & Other (6) Total Consolidated
Total revenues $ 111,066 $ — $ 111,066
Significant expenses (1)
Controllable
Sales and marketing ( 23,648 ) — ( 23,648 )
Maintenance ( 6,764 ) — ( 6,764 )
Consulting ( 11,614 ) — ( 11,614 )
Cloud ( 14,558 ) — ( 14,558 )
Technology ( 24,702 ) — ( 24,702 )
Corporate resources ( 18,666 ) ( 7,704 ) ( 26,370 )
Non-Controllable
Unrealized loss on digital assets — ( 5,906,005 ) ( 5,906,005 )
Digital asset custody fees — ( 4,122 ) ( 4,122 )
Share-based compensation expense ( 8,662 ) ( 3,157 ) ( 11,819 )
Payroll taxes on equity award exercises and vestings ( 2,041 ) ( 31 ) ( 2,072 )
Other segment items (2) ( 4,740 ) — ( 4,740 )
Interest income (expense), net (3) 98 ( 17,204 ) ( 17,106 )
Income tax benefit (4) 22,359 1,702,725 1,725,084
Net income (loss) $ 18,128 $ ( 4,235,498 ) $ ( 4,217,370 )
Total assets, as of March 31, 2025 (5) $ 373,681 $ 43,546,079 $ 43,919,760
(1) Significant expenses regularly provided to the CODM include both: (i) costs that the CODM considers to be “controllable”, for which the Company can manage future expense via the budgeting process (e.g. salaries, commissions, travel and entertainment expenses, third party-service provider fees, etc.), and that support each specific function of the Software Business (i.e. sales and marketing, maintenance, consulting, cloud, technology, and corporate resources) and (ii) costs that the CODM considers to be “non-controllable”, for which future expenses are primarily outside the Company’s control, such as unrealized gain or loss on digital assets, custody fees, share-based compensation expense, and employer payroll taxes related to the exercise or vesting of certain awards under the Stock Incentive Plans.
(2) Other segment items for the Software Business are primarily related to foreign currency transaction gains and losses, costs supporting the Company’s education function, one-time corporate initiatives, and certain expenses that are not easily allocable to specific functions. Other segment items for the Corporate & Other category are primarily related to third-party consulting and advisory fees.
(3) Interest income, net for the three months ended March 31, 2026 is substantially related to interest income on the Company's U.S. dollar reserve (the "USD Reserve"), established in December 2025, partially offset by interest expense on the Company’s long-term debt arrangements, the proceeds from which were primarily used to purchase bitcoin. For the three months ended March 31, 2025, Interest expense, net amounts primarily reflect interest expense on such debt.
(4) Income tax effects allocated to the Corporate & Other category related solely to transactions involving the Company’s bitcoin or debt, including unrealized gains or losses on digital assets, interest expense, share-based compensation expense, corporate resources (including personnel costs), and other third-party expenses. These income tax effects also reflect the establishment and release of valuation allowances against deferred tax assets, primarily related to unrealized losses on digital assets, based on the Company’s assessment of the realizability of such deferred tax assets each reporting period. Income tax effects allocated to the Software Business category primarily relate to the tax benefit of share-based compensation for employees and also reflect the impact of the establishment and release of valuation allowances against deferred tax assets.
(5) Segment assets allocated to the Corporate & Other category as of March 31, 2026 include the Company’s digital assets and the USD Reserve, while segment assets as of March 31, 2025 included only the Company's digital assets.
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(6) Certain personnel costs for employees involved in the Company’s bitcoin strategy are allocated and reported within Corporate resources in the Corporate & Other category. Non‑Controllable costs include bitcoin fair value adjustments, bitcoin custody fees, and stock‑based compensation.
Depreciation and amortization are included in net income (loss), but are not regularly reported to the CODM. All remaining depreciation and amortization is related to the Software Business, and separately presented in the Company’s Consolidated Statements of Cash Flows. Significant non-cash items include unrealized gain or loss on digital assets and share-based compensation and are presented in the table above and in the Company’s Consolidated Statements of Operations and/or Statements of Cash Flows. The Company does not regularly report capital expenditures on long-lived assets to the CODM.
The following table presents total revenues and long-lived assets according to geographic region. Long-lived assets are comprised of right-of-use assets and property and equipment, net. The Corporate & Other category disclosed above is included within the U.S. region.
Geographic regions: (in thousands) U.S. EMEA Other Regions Consolidated
Total revenues
Three months ended March 31, 2026 $ 69,276 $ 44,213 $ 10,811 $ 124,300
Three months ended March 31, 2025 $ 63,460 $ 37,882 $ 9,724 $ 111,066
Long-lived assets
As of March 31, 2026 $ 77,216 $ 2,626 $ 6,703 $ 86,545
As of December 31, 2025 $ 66,022 $ 2,908 $ 6,903 $ 75,833
The EMEA region includes operations in Europe, the Middle East, and Africa. The other regions include all other foreign countries, generally comprising Latin America, the Asia Pacific region, and Canada. For the three months ended March 31, 2026 and 2025, Germany accounted for 10% or more of total consolidated revenues.
For the three months ended March 31, 2026 and 2025, no individual customer accounted for 10% or more of total consolidated revenues.
(13) Related Party Transactions
Saylor Indemnification Agreements
Commencing in June 2021, Michael J. Saylor, the Company’s Chairman of the Board and Executive Chairman, provided indemnification coverage to the Company’s directors and officers (“D&Os”) through a series of indemnification agreements. These agreements were initially executed for applicable periods in which the Company determined not to obtain commercial D&O insurance policies and later to cover claims not insured under the Company’s commercial D&O liability policies. The Company determined that having indemnity coverage from Mr. Saylor was in the best interest of the Company.
In June 2023, the Company bound new commercial D&O liability insurance policies (the “2023 Commercial Policies”) providing $ 40 million in aggregate coverage for a one-year term, but those policies excluded (i) claims previously noticed to and accepted by an earlier D&O insurer, (ii) claims related to acts or omissions giving rise to such claims, and demands, investigations, suits or other proceedings entered against an insured prior to June 24, 2022, and (iii) future interrelated wrongful acts (collectively, the “Excluded Claims”). Concurrently, the Company entered into a new indemnification agreement with Mr. Saylor (the “2023 Tail Agreement”), pursuant to which he agreed to cover the Excluded Claims for $ 157,000 for an initial one-year term, with options to extend for additional one-year periods. The Company elected to extend the 2023 Tail Agreement for an additional one-year term in June 2024 and paid Mr. Saylor $ 157,000 for that coverage period.
In June 2025, the Company bound new commercial D&O liability insurance policies (the “2025 Commercial Policies”) providing $ 120 million in aggregate coverage for a one-year term. The Company has determined that the 2025 Commercial Policies provide sufficient coverage and, accordingly, the 2023 Tail Agreement was not extended beyond its June 2025 expiration.
(14) Subsequent Events
Bitcoin Holdings
As of April 26, 2026, the Company held approximately 818,334 bitcoins with an aggregate fair market value of $ 64.04 billion (based on the market price of $ 78,258 of one bitcoin as reported on the Coinbase exchange as of April 26, 2026, 4:00 p.m. Eastern Time).
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Forward-Looking Information
This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). For this purpose, any statements contained herein that are not statements of historical fact, including without limitation, certain statements regarding industry prospects and our results of operations or financial position, may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” and similar expressions are intended to identify forward-looking statements. The important factors discussed under Part II, "Item 1A. Risk Factors” of this Quarterly Report, which are incorporated by reference herein, among others, could cause actual results to differ materially from those indicated by forward-looking statements made herein and presented elsewhere by management from time to time. Such forward-looking statements represent management’s current expectations and are inherently uncertain. Investors are warned that actual results may differ from management’s expectations.
Business Overview
Strategy is the world's first and largest Bitcoin Treasury Company. We pursue financial innovation strategies designed to generate value from our bitcoin holdings, including by developing and issuing novel fixed-income instruments that provide investors varying degrees of economic exposure to bitcoin. In addition, we are an industry leader in AI-powered enterprise analytics software, advancing our vision of Intelligence Everywhere™. We believe our combination of active bitcoin-focused capital management and a scaled operating software business positions us for long-term value creation across both digital asset and enterprise analytics markets.
Bitcoin Strategy
We believe that bitcoin is a financial and technological innovation and represents a compelling long-term treasury reserve asset due to its scarcity, durability, and global liquidity. Through our bitcoin treasury operations, we execute on our bitcoin acquisition, capital markets and capital management strategies, which are designed to enable us to accumulate bitcoin in a manner we believe to be accretive to our shareholders in the long term and to generate value from our bitcoin holdings.
Under our Treasury Reserve Policy, our treasury reserve assets consist of:
• cash and cash equivalents and short-term investments (“Cash Assets”) in excess of working capital requirements; and
• bitcoin, which serves as the primary treasury reserve asset on an ongoing basis, subject to market conditions and anticipated needs of the business for Cash Assets.
In addition to and in conjunction with our Treasury Reserve Policy, we pursue a corporate strategy of acquiring and holding bitcoin, including with the proceeds of capital raising transactions. Our capital markets strategy generally involves issuing class A common stock and preferred securities, which we collectively refer to as “digital credit,” through at-the-market equity offering programs (“ATMs”) when we deem advantageous.
As part of our capital management strategy, we maintain a U.S. dollar reserve (the "USD Reserve"), which is a management-designated portion of our liquidity intended to support the payment of dividends on our Preferred Stock and interest on our outstanding indebtedness. Our capital management strategy also contemplates that we may (i) enter into additional capital raising transactions that are secured, directly or indirectly, by our assets, including bitcoin, (ii) pursue strategies intended to generate income streams or otherwise generate funds using our bitcoin holdings; and (iii) periodically sell bitcoin for general corporate purposes, such as satisfying liquidity needs and financial obligations.
"Preferred Stock" refers to, collectively, our STRF Stock, STRC Stock, STRE Stock, STRK Stock and STRD Stock.
We view our bitcoin holdings as long-term holdings and expect to continue to accumulate bitcoin. We have not established a specific target amount of bitcoin to hold and actively evaluate market conditions, financing opportunities, liquidity needs, and capital structure considerations on an ongoing basis.
We are not registered as an investment company under the Investment Company Act of 1940, as amended, and stockholders do not have the protections associated with ownership of shares in a registered investment company, nor the protections afforded by the Commodity Exchange Act of 1936.
Our Enterprise Analytics Software Strategy
Strategy is a pioneer in AI-powered solutions delivering a comprehensive portfolio of software and services that addresses a wide spectrum of enterprise data challenges. We provide solutions designed to transform complex, fragmented data
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environments into unified, reliable ecosystems that drive insight and action across organizations worldwide. Our vision is to drive growth and competitive advantage for our customers by delivering Intelligence Everywhere™.
Strategy One™, our cloud-native analytics platform, is used by enterprises across a wide range of industries to deliver business intelligence and analytics solutions. It delivers visualization, reporting, and embedded analytics capabilities across retail, banking, technology, manufacturing, insurance, consulting, healthcare, telecommunications, and the public sector. Complementing this, Strategy Mosaic™ is a universal data layer that enables organizations to achieve a single source of truth across their data. It provides enterprises with consistent definitions and governance across data sources, regardless of where that data resides or which tools access it. AI-powered data modeling hastens data product creation, while Mosaic’s intelligent architecture promotes accelerated performance for all workloads.
Integral to the Strategy portfolio are generative AI capabilities that are designed to automate and accelerate the deployment of AI-enabled applications across the enterprise. By making advanced analytics accessible through conversational AI, we provide non-technical users with timely, actionable insights for decision-making .
Bitcoin Activity and Holdings
Bitcoin Acquisition Activity
The following table presents a roll-forward of our bitcoin holdings, including additional information related to our bitcoin purchases, bitcoin sales (if any), and unrealized gain or loss on digital assets within the respective periods:
Source of
Capital Used
to Purchase
Bitcoin Digital Asset
Original Cost
Basis
(in thousands) Digital Asset
Carrying Value
(in thousands) Approximate
Number of
Bitcoins Held Approximate
Average
Purchase Price
Per Bitcoin
Balance at January 1, 2025 (after adoption of ASU 2023-08) $ 27,968,248 $ 41,790,421 447,470 $ 62,503
Digital asset purchases (a) 7,661,663 7,661,663 80,715 94,922
Unrealized loss on digital assets — (5,906,005) — —
Balance at March 31, 2025 $ 35,629,911 $ 43,546,079 528,185 $ 67,457
Balance at January 1, 2026 $ 50,435,331 $ 58,854,028 672,500 $ 74,997
Digital asset purchases (b) 7,251,126 7,251,126 89,599 80,929
Unrealized loss on digital assets — (14,455,479) — —
Balance at March 31, 2026 $ 57,686,457 $ 51,649,675 762,099 $ 75,694
(a) In the first quarter of 2025, we purchased bitcoin using $4.37 billion of the net proceeds from ATM sales of class A common stock, $1.99 billion of the net proceeds from our issuance of the 2030B Convertible Notes, $593.7 million of the aggregate net proceeds from the initial public offering and ATM sales of STRK Stock, and $710.0 million of the net proceeds from the initial public offering of STRF Stock.
(b) In the first quarter of 2026, we purchased bitcoin using $2.06 billion of the net proceeds from ATM sales of STRC Stock, $3.3 million of the net proceeds from ATM sales of STRK Stock and $5.19 billion of the net proceeds from ATM sales of class A common stock.
Our unrealized loss on digital assets for the three months ended March 31, 2026 and 2025 amounted to $14.46 billion and $5.91 billion, respectively, partially offset by $2.42 billion and $1.69 billion in deferred tax benefit respectively. See “Results of Operations – Bitcoin Impacts” additional information.
Bitcoin Holdings
The following table shows the approximate number of bitcoins held at the end of each respective period, as well as market value calculations of our bitcoin holdings based on the lowest, highest, and ending market prices (rounded to the nearest
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dollar) of one bitcoin on the Coinbase exchange (our principal market for bitcoin) for each respective quarter, as further defined below:
Approximate
Number of
Bitcoins
Held at
End of
Quarter Lowest
Market Price
Per Bitcoin
During
Quarter (a) Market Value of Bitcoin Held at End of
Quarter Using Lowest Market Price (in thousands) (b) Highest
Market Price
Per Bitcoin
During
Quarter (c) Market Value
of Bitcoin
Held at End
of Quarter
Using Highest
Market Price
(in
thousands)
(d) Market Price
Per Bitcoin at
End of
Quarter (e) Market Value
of Bitcoin Held
at End of
Quarter Using
Ending Market
Price (in
thousands) (f)
March 31, 2025 528,185 $ 76,555 $ 40,435,222 $ 109,358 $ 57,761,287 $ 82,445 $ 43,546,079
December 31, 2025 672,500 $ 74,421 $ 50,047,916 $ 126,296 $ 84,934,064 $ 87,515 $ 58,854,028
March 31, 2026 762,099 $ 60,001 $ 45,726,702 $ 97,964 $ 74,657,977 $ 67,773 $ 51,649,675
(a) The "Lowest Market Price Per Bitcoin During Quarter" represents the lowest market price for one bitcoin reported on the Coinbase exchange during the respective quarter, without regard to when we purchased any of our bitcoin.
(b) The "Market Value of Bitcoin Held at End of Quarter Using Lowest Market Price" represents a mathematical calculation consisting of the lowest market price for one bitcoin reported on the Coinbase exchange during the respective quarter multiplied by the number of bitcoins we held at the end of the applicable period.
(c) The "Highest Market Price Per Bitcoin During Quarter" represents the highest market price for one bitcoin reported on the Coinbase exchange during the respective quarter, without regard to when we purchased any of our bitcoin.
(d) The "Market Value of Bitcoin Held at End of Quarter Using Highest Market Price" represents a mathematical calculation consisting of the highest market price for one bitcoin reported on the Coinbase exchange during the respective quarter multiplied by the number of bitcoins we held at the end of the applicable period.
(e) The "Market Price Per Bitcoin at End of Quarter" represents the market price of one bitcoin on the Coinbase exchange at 4:00 p.m. Eastern Time on the last day of the respective quarter.
(f) The "Market Value of Bitcoin Held at End of Quarter Using Ending Market Price" represents a mathematical calculation consisting of the market price of one bitcoin on the Coinbase exchange at 4:00 p.m. Eastern Time on the last day of the respective quarter multiplied by the number of bitcoins we held at the end of the applicable period.
The amounts reported as “Market Value” in the above table represent only a mathematical calculation consisting of the price for one bitcoin reported on the Coinbase exchange (our principal market for bitcoin) in each scenario defined above multiplied by the number of bitcoins held by us at the end of the applicable period. Bitcoin and bitcoin markets may be subject to manipulation and the spot price of bitcoin may be subject to fraud and manipulation. Accordingly, the Market Value amounts reported above may not accurately represent fair market value, and the actual fair market value of our bitcoin may be different from such amounts and such deviation may be material. Moreover, (i) the bitcoin market historically has been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign currencies markets, relative anonymity, a developing regulatory landscape, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various other risks that are, or may be, inherent in its entirely electronic, virtual form and decentralized network and (ii) we may not be able to sell our bitcoins at the Market Value amounts indicated above, at the market price as reported on the Coinbase exchange (our principal market for bitcoin) on the date of sale, or at all.
As of April 26, 2026, we held approximately 818,334 bitcoins, which had an aggregate market value of $64.04 billion as of April 26, 2026 (based on the market price of $78,258 of one bitcoin as reported on the Coinbase exchange as of April 26, 2026, 4:00 p.m. Eastern Time).
Overview of Custodial Arrangements
We hold substantially all of our bitcoin in custody accounts with U.S.-based custodians that have demonstrated records of regulatory compliance and information security. Our current custodians are Anchorage Digital Bank N.A. (“Anchorage”), Coinbase Custody Trust Company, LLC (“Coinbase”), and Fidelity Digital Assets, NA (f/k/a Fidelity Digital Asset Services, LLC) (“Fidelity”). The primary counterparty risk we are exposed to with respect to our bitcoin relates to these custodians’ performance of their obligations under our custody arrangements.
We custody our bitcoin across multiple custodians to diversify our exposure to any single custodian. Our custodial services contracts do not restrict our ability to reallocate bitcoin among custodians, and our bitcoin holdings may be concentrated with a single custodian from time to time. Given the significant amount of bitcoin we hold, we continually evaluate and
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seek to engage additional digital asset custodians to further diversify custody risk. We may also, in the future, discontinue or change the use of one or more third-party custodians or utilize alternative custody arrangements, including self-custody. For a discussion of risks relating to the custody of our bitcoin, see Part II, Item 1A. Risk Factors "—Risks Related to Our Bitcoin Strategy and Holdings—Our bitcoin strategy exposes us to various risks, including risks associated with bitcoin", "—We face risks relating to the custody of our bitcoin, including the loss or destruction of private keys required to access our bitcoin and cyberattacks or other data loss relating to our bitcoin" and "—Our bitcoin strategy exposes us to risk of non-performance by counterparties."
As of April 26, 2026, our bitcoin is held with the following custodians:
Custodian Number of Bitcoin Custodied (1) Bitcoin Custodied (%)
Coinbase Custody Trust Company, LLC 336,800 41 %
Anchorage Digital Bank N.A. 313,919 38 %
Fidelity Digital Assets, NA (f/k/a Fidelity Digital Asset Services, LLC) 167,615 21 %
Total 818,334 100 %
(1) Amounts shown are rounded to the nearest bitcoin
To our knowledge, none of our third-party custodians have appointed sub-custodians to hold any of our bitcoin, and none of our custodians are related parties of the Company.
Capital Markets Activity
Equity Offerings
Consistent with our Treasury Reserve Policy and bitcoin strategy, we use the vast majority of our cash, including cash generated from capital raising transactions, to acquire bitcoin. We fund our purchases of bitcoin primarily from proceeds of our offerings of our class A common stock and Preferred Stock instruments. We have also previously used proceeds from offerings of convertible notes and senior secured notes, and a loan secured by bitcoin, to purchase bitcoin, and we may incur additional indebtedness in the future, including for the purpose of purchasing bitcoin.
The following table sets forth total shares sold and total net proceeds received from shares sold under our initial public and at-the-market offerings for the periods indicated. For the three months ended March 31, 2026, the amounts presented reflect only shares sold under our at-the-market offerings. For the three months ended March 31, 2025, the amounts include shares sold under both our initial public offerings and ATMs.
Three Months Ended March 31,
2026 2025
Number of shares sold:
STRF Stock — 8,500,000
STRC Stock 20,659,450 —
STRK Stock 38,796 7,649,907
STRD Stock — —
Class A common stock 33,468,730 12,624,595
Net proceeds received from shares sold (in thousands): (1)
STRF Stock $ — $ 710,873
STRC Stock 2,062,677 —
STRK Stock 2,968 593,624
STRD Stock — —
Class A common stock 5,292,212 4,399,205
Total $ 7,357,857 $ 5,703,702
Issuance cost adjustments related to STRF and STRD ATMs (in thousands): $ (303) $ —
(1) Includes shares sold and net proceeds received from shares sold under our initial public offerings of our Preferred Stock and ATMs of our class A common stock and certain series of our Preferred Stock for the periods indicated. See Note 9, Redeemable Preferred Stock, to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report for additional information on the initial public offerings of our Preferred Stock.
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The following table sets forth total shares sold and total net proceeds (net of sales commissions and expenses) received from shares sold under our ATMs for the periods indicated:
Three Months Ended March 31,
2026 2025
Number of shares sold pursuant to at-the-market offerings:
STRF Stock ATMs — —
STRC Stock ATMs 20,659,450 —
STRK Stock ATMs 38,796 349,907
STRD Stock ATMs — —
Class A common stock ATMs 33,468,730 12,624,595
Net proceeds received from shares sold pursuant to at-the-market offerings (in thousands):
STRF Stock ATMs $ — $ —
STRC Stock ATMs 2,062,677 —
STRK Stock ATMs 2,968 30,398
STRD Stock ATMs — —
Class A common stock ATMs 5,292,212 4,399,205
Total $ 7,357,857 $ 4,429,603
Issuance cost adjustments related to STRF and STRD Stock ATMs (in thousands): $ (303) $ —
As of March 31, 2026, we had the following capacities available for issuance and sale under our ATM:
(in millions) Available for Issuance and Sale (2)
STRF Stock $ 1,619.3
STRC Stock (1) $ 22,748.2
STRK Stock $ 2,100.0
STRD Stock $ 4,014.8
Class A Common Stock (1) $ 27,168.2
(1) Excludes proceeds from shares sold during the period but not yet settled as of March 31, 2026.
(2) On March 23, 2026, we announced the following updates to our ATM: (i) a new $21.0 billion offering of STRC Stock (the “STRC Increase”), (ii) a new $21.0 billion offering of MSTR Stock (the “MSTR Increase”), (iii) the termination of our prior offering of STRK Stock and (iv) a new $2.1 billion offering of STRK Stock. The STRC Stock and MSTR Stock amounts reflect the aggregate remaining capacity of such securities as of March 31, 2026 under the then-existing offering and the respective increases. Sales under the STRC Increase and MSTR Increase begin once capacity under the then-existing offerings is substantially depleted.
From April 1, 2026 to April 26, 2026, we issued and sold 35.1 million additional shares of STRC Stock and 4.5 million additional shares of class A common stock under our ATM for total net proceeds (net of sales commissions and expenses) of approximately $4.24 billion.
See Note 9, Redeemable Preferred Stock and Note 11, At-the-Market Offerings, to the Notes to Consolidated Financial Statements contained in Part I, Item 1 of this Quarterly Report, for additional information.
Debt Offerings
During the three months ended March 31, 2026, we did not complete any new debt offerings. During the three months ended March 31, 2025, we received net proceeds of approximately $1.98 billion from the issuance of our 2030B Convertible Notes. We used the net proceeds from this offering for general corporate purposes, including the acquisition of bitcoin and for working capital.
For additional information on our Convertible Notes, see Note 5, Long-term Debt, to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report.
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Bitcoin KPIs
We seek to increase BPS (defined below) by growing our bitcoin holdings faster than Assumed Diluted Shares Outstanding (defined below) through a combination of bitcoin acquisitions and disciplined use of equity and credit markets. To assess achievement of this strategy, we monitor and review the following Key Performance Indicators ("KPIs"):
• Bitcoin Per Share (in Sats) ("BPS") is a KPI that represents the ratio between our bitcoin holdings and Assumed Diluted Shares Outstanding, expressed in terms of "Satoshis" or "Sats", where:
◦ “Assumed Diluted Shares Outstanding” refers to the aggregate of our Basic Shares Outstanding as of the dates presented plus all additional shares that would result from the assumed conversion of all outstanding convertible notes and convertible preferred stock, exercise of all outstanding stock option awards, and settlement of all outstanding restricted stock units and performance stock units as of such dates. Assumed Diluted Shares Outstanding is not calculated using the treasury method, incorporates approximate forfeitures of awards in the current period which may be subject to future adjustment and does not take into account any vesting conditions (in the case of equity awards), the exercise price of any stock option awards or any contractual conditions limiting convertibility of convertible debt instruments.
◦ “Basic Shares Outstanding” reflects the actual class A common stock and class B common stock outstanding as of the dates presented. For purposes of this calculation, outstanding shares of such stock are deemed to include shares, if any, that (A) were sold under ATMs, or (B) were to be issued pursuant to (i) options that had been exercised, (ii) restricted stock units that have vested or (iii) conversion requests received with respect to convertible securities, but which in each case were pending issuance as of the dates presented.
◦ A “Satoshi” or a “Sat” is one one-hundred-millionth of one bitcoin, currently the smallest indivisible unit of a bitcoin.
• BTC Yield is a KPI that represents the percentage change in BPS from the beginning of a period to the end of the period.
• BTC Gain is a KPI that represents the number of bitcoins held by us at the beginning of a period multiplied by the BTC Yield for the period.
• BTC $ Gain is a KPI that represents the dollar value of the BTC Gain calculated by multiplying the BTC Gain by the market price of bitcoin. For determining BTC $ Gain on a quarter-to-date or year-to-date basis, unless otherwise specified, we use the current market price of bitcoin. For determining BTC $ Gain for a past fiscal year or other past period, we use the market price of bitcoin as of 4:00pm ET as reported on the Coinbase exchange on the last day of the applicable period. We use these market prices of bitcoin for this calculation solely for the purpose of facilitating this illustrative calculation.
When we present these KPIs for any period (a "Measurement Period") that is a subdivision of a longer specified period (the "reference period"), (i) BTC Yield is calculated as the BTC Yield for the period from the beginning of the reference period to the end of the Measurement Period, less the BTC Yield for the period from the beginning of the reference period to the beginning of the Measurement Period, (ii) BTC Gain is calculated using the BTC Yield for the Measurement Period and our bitcoin holdings at the beginning of the reference period rather than at the beginning of the Measurement Period, and (iii) BTC $ Gain is calculated by multiplying such revised BTC Gain by the market price of bitcoin at the end of the Measurement Period. When we present these metrics for an interim period within a fiscal year (e.g., a monthly, quarterly, or quarter-to-date period), then the reference period is that fiscal year, unless stated otherwise.
For example, if BPS is 100 at the beginning of a fiscal year (the reference period), 110 at the end of the first quarter and 125 at the end of the second quarter, the BTC Yield for the second quarter (the Measurement Period) is calculated as (125/100 − 1) less (110/100 − 1), or 15%—reflecting the 15-point BPS increase from 110 to 125 expressed against the reference period starting BPS of 100. The sum of the first quarter BTC Yield (10%) and the second quarter BTC Yield (15%) equals the year-to-date BTC Yield of 25% (125/100 − 1). See "Important Information about KPIs" for additional information.
The following table presents our bitcoin holdings, our Assumed Diluted Shares Outstanding, our BPS, and the price of bitcoin, each as of March 31, 2026 and 2025, as well as the changes in each between the periods shown:
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As of March 31, 2026 Change As of December 31, 2025
Number of Bitcoin Held 762,099 89,599 672,500
Assumed Diluted Shares Outstanding (in thousands) 378,834 33,937 344,897
BPS (in Sats) 201,170 6,184 194,986
Bitcoin Price ($) $ 67,773 $ (19,742) $ 87,515
As of March 31, 2025 Change As of December 31, 2024
Number of Bitcoin Held 528,185 80,715 447,470
Assumed Diluted Shares Outstanding (in thousands) 299,652 17,917 281,735
BPS (in Sats) 176,266 17,440 158,826
Bitcoin Price ($) $ 82,445 $ (10,945) $ 93,390
The following tables present our BTC Yield, BTC Gain, and BTC $ Gain for the three months ended March 31, 2026 and 2025:
Three Months Ended March 31,
2026 2025 Change
BTC Yield 3.2 % 11.0 % (7.8) % (1)
BTC Gain 21,329 49,132 (56.6) %
BTC $ Gain (in millions, except percentages) $ 1,446 $ 4,051 (64.3) %
(1) Represents the absolute change between the periods presented.
• BTC Yield: We achieved BTC Yield of 3.2% for the three months ended March 31, 2026, as compared to 11.0% during the same period in the prior year. This decrease was primarily due to (i) a substantially larger bitcoin balance as of December 31, 2025 compared to December 31, 2024, which increased the denominator in the BTC Yield calculation and made higher yield percentages more difficult to achieve and (ii) our class A common stock trading at a lower premium relative to the value of our underlying bitcoin holdings during the three months ended March 31, 2026 as compared to prior year period, which reduced the BTC Yield attributable to class A common stock issuances used to purchase bitcoin. Such factors were partially offset by a change in mix of dilutive versus non-dilutive issuances to acquire bitcoin compared to the prior year period and an increase in total bitcoin acquired during the quarter compared to the prior year period.
◦ We acquired 89,599 bitcoin (increasing our total holdings to 762,099) during the three months ended March 31, 2026, compared to 80,715 bitcoin acquired (increasing our total holdings to 528,185) during the three months ended March 31, 2025. Of the approximately $7.36 billion in net proceeds we raised from capital markets activity during the three months ended March 31, 2026, approximately $5.30 billion was attributable to issuances of class A common stock and STRK Stock under our ATM, which resulted in an increase of approximately 33.8 million shares in Assumed Diluted Shares Outstanding (bringing our total Assumed Diluted Shares Outstanding to approximately 378.8 million as of March 31, 2026), while approximately $2.06 billion was attributable to issuances of the STRC Stock under our ATM, which did not increase our Assumed Diluted Shares Outstanding. In comparison, the $7.69 billion in net proceeds we raised from capital markets activity during the three months ended March 31, 2025, was primarily attributable to approximately $4.40 billion from issuances of class A common stock under our then-existing class A common stock ATM, $563.2 million from the initial public offering of the STRK Stock, $30.4 million from the issuances of STRK Stock under our then-existing STRK Stock ATM, and $1.98 billion of net proceeds from the issuance of our 2030B Convertible Notes, which resulted in an increase of approximately 18.0 million shares in Assumed Diluted Shares Outstanding (bringing our total Assumed Diluted Shares Outstanding to approximately 299.7 million as of March 31, 2025), while approximately $710.9 million was attributable to the initial public offering of STRF Stock and which did not increase our Assumed Diluted Shares Outstanding. Further, we used proceeds from the issuance of class A common stock under our ATM to pay $220.3 million and $17.4 million of dividends on our Preferred Stock and interest on our Convertible Notes, collectively, during the three months ended March 31, 2026 and 2025, respectively. Such issuances increased Assumed Diluted Shares Outstanding without a corresponding increase to our bitcoin holdings, thereby offsetting BTC Yield in such period. See “Liquidity and Capital Resources” for additional information. While issuances of STRF Stock, STRC Stock, STRE Stock and STRD Stock do not increase our Assumed Diluted Shares Outstanding, these securities, as well as STRK Stock and our Outstanding Convertible Notes, rank senior to our class
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A common stock, and would entitle their holders to claims on our assets (including bitcoin) senior to those of holders of our common stock if we were to liquidate; as a result, additional bitcoin acquired using the proceeds from the sale of such instruments may not accrete to common shareholders.
• BTC Gain: We achieved BTC Gain of 21,329 for the three months ended March 31, 2026, as compared to 49,132 during the same period in the prior year, as applicable, primarily due to a decrease in our BTC Yield for the three months ended March 31, 2026, as compared to the same period in the prior year, as set forth above, partially offset by an increase in our bitcoin holdings as of the beginning of 2026 compared to the beginning of 2025 (as of December 31, 2025 and 2024, we held 672,500 and 447,470 bitcoin, respectively).
• BTC $ Gain : We achieved BTC $ Gain of approximately $1.45 billion for the three months ended March 31, 2026, as compared to approximately $4.05 billion during the same period in the prior year, primarily due to a decrease in bitcoin price to $67,773 as of March 31, 2026 from $82,445 as of March 31, 2025, as well as a decrease in BTC Gain compared to the same period in the prior year, as set forth above.
See “Important Information about KPIs” below for additional information about these KPIs, including their purposes and limitations and for the calculation of Assumed Diluted Shares Outstanding.
Factors Impacting Results
We believe the following key factors have previously had, and may continue to have, material impacts to our financial results and liquidity, and our ability to achieve our business objectives:
• Bitcoin:
◦ Financial results. Bitcoin is a highly volatile asset that has traded below $65,000 per bitcoin and above $120,000 per bitcoin on the Coinbase exchange (our principal market for bitcoin) in the 12 months preceding March 31, 2026. Although we continue to initially record our bitcoin purchases at cost, upon adoption of ASU 2023-08 on January 1, 2025, any subsequent increases or decreases in fair market value are recognized as incurred in the Consolidated Statements of Operations, and the fair value of our bitcoin is reflected within the Consolidated Balance Sheets each reporting period-end. Due to the volatility of bitcoin, and our substantial holdings of bitcoin, changes in the fair market value of bitcoin have materially impacted, and we expect will continue to materially impact, our results.
◦ Bitcoin risks. Bitcoin is a digital asset, which is a novel asset class that is subject to significant legal, commercial, regulatory and technical uncertainty. Holding bitcoin does not generate any cash flows and involves custodial fees and other costs. Additionally, the price of bitcoin has historically experienced significant price volatility, and a significant decrease in the price of bitcoin would adversely affect our financial condition and results of operations. Our strategy of acquiring and holding bitcoin also exposes us to counterparty risks with respect to the custody of our bitcoin, cybersecurity risks, and other risks inherent to holding a digital asset. In particular, we are subject to the risk that, if our private keys with respect to our digital assets are lost or destroyed or other similar circumstances or events occur, we may lose some or all of our digital assets, which could materially adversely affect our financial condition and results of operations.
• Capital management:
◦ Source of capital. We rely substantially on the availability of equity and debt capital markets to fund our preferred stock dividend obligations, interest expense, and other financial obligations as well as to maintain the USD Reserve at current levels. As such, we are subject to risks relating to the availability of capital to us on favorable terms or at all.
◦ Preferred stock dividend obligations. Our outstanding Preferred Stock creates recurring and potentially variable cash obligations that can reduce funds available for operations, product investment, and debt service. In addition, any deferred dividends on certain of our Preferred Stock would accrue and compound, including at increasing rates in the case of STRF Stock, which could increase future cash outlays, while STRC Stock’s board-set variable rate can change monthly, introducing additional uncertainty to our dividend expense.
◦ Interest on our USD Reserve. Cash equivalents held in our USD Reserve are generally invested in money market funds and other interest-bearing instruments. Interest income is affected by prevailing market interest rates and may decline in a falling-rate environment or increase in a rising-rate environment. Interest income is also affected by the size of our USD Reserve: to the extent we reduce the USD Reserve or
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increase it to scale with our interest and dividend obligations, the amount of interest income we earn would generally proportionately decrease or increase, respectively. Variations in interest rates and the size of our USD Reserve could materially impact our financial results.
• Tax:
◦ Deferred taxes . Since adopting ASU 2023-08, we are no longer required to account for our bitcoin under a cost-less-impairment accounting model and no longer record deferred tax assets related to bitcoin impairment losses. Instead, we establish a deferred tax liability if the fair market value of bitcoin at the reporting date exceeds the average cost basis of our bitcoin holdings at such reporting date, and subsequent increases or decreases in the fair market value of bitcoin increase or decrease the deferred tax liability. If the fair market value of our bitcoin as of the end of any reporting period is below its average cost basis as of the end of the prior period, the deferred tax liability with respect to unrealized gains, if any, would be reversed, a deferred tax asset for the unrealized loss would be recorded, and we would be required to establish a valuation allowance against our U.S. federal and state deferred tax assets. As of March 31, 2026, the market value of bitcoin had declined to the point where the cost basis of our bitcoin holdings exceeded their fair market value. During the three months ended March 31, 2026, the deferred tax liability recognized as of December 31, 2025 was reversed, a deferred tax asset related to unrealized losses on bitcoin holdings was recorded, and a full valuation allowance on all of our domestic net deferred tax assets was established. See Note 7, Income Taxes, to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report for additional information.
◦ Legal and regulatory developments.
▪ CAMT: On September 30, 2025, the Department of Treasury (the "Treasury") and the Internal Revenue Service (the "IRS") issued interim guidance ("Interim Guidance") which, in relevant part, clarifies that a corporation may disregard unrealized gains and losses on its digital asset holdings when computing average annual adjusted financial statement income ("AFSI") for purposes of determining whether it is subject to the 15% corporate alternative minimum tax ("CAMT") under the Inflation Reduction Act of 2022 (the "IRA"). The Treasury and IRS intend to issue revised proposed regulations similar to this Interim Guidance. As previously disclosed, pursuant to the Interim Guidance, we plan to exclude our unrealized gains and losses on our bitcoin holdings from the calculation of our AFSI for purposes of determining whether we are subject to CAMT. As a result, we do not expect to become subject to CAMT due to unrealized gains on our bitcoin holdings, if any.
▪ OBBBA: On July 4, 2025, the One Big Beautiful Bill Act was enacted in the U.S., introducing several changes to corporate taxation. These changes include modifications to capitalization of research and development expenses, limitations on deductions for interest expense, accelerated fixed asset depreciation, and adjustments to the international tax framework. The legislation did not have a material impact to our income tax expense or effective tax rate for the three months ended March 31, 2026.
• Software business:
◦ On-premise to cloud subscription. During the three months ended March 31, 2026, we continued to migrate existing customers from on-premise perpetual licenses to cloud-based subscription offerings. This transition has resulted, and is expected to continue to result, in changes to payment patterns and revenue recognition, with a shift from upfront recognition to ratable recognition over the contract term, which has affected and may continue to affect our reported revenue, operating results, and cash flows. For the three months ended March 31, 2026, we experienced growth in cloud subscription services revenue of $21.8 million, partially offset by declines in product license revenue and related product support revenue of $10.1 million in the aggregate. We expect product license revenue and related product support revenue to continue to decline in future periods, as we no longer actively market new perpetual licenses or associated product support offerings.
◦ Deferred revenue and advance payments. Deferred revenue and advance payments represent amounts received or due from our customers before we transfer our software or services to the customer. For multi-year service contract arrangements, we generally invoice no more than one year in advance of services and record deferred revenue only for invoiced amounts. Revenue is subsequently recognized in the period(s) in which control of the software or services is transferred to the customer. The portions of multi-year contracts that will be invoiced in the future are not presented on the Consolidated Balance Sheets in “Accounts
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receivable, net” and “Deferred revenue and advance payments” and instead are included in the remaining performance obligation disclosure below.
See Part II, Item 1A of this Quarterly Report for information regarding risks relating to our bitcoin holdings and strategy, bitcoin generally, our securities and capital markets activities, our software business and operations, and other important risk factors, the materialization of any of which could materially impact our results and liquidity.
Results of Operations
The following table sets forth certain operating highlights for the three months ended March 31, 2026 and 2025:
Three Months Ended
March 31,
(in thousands)
2026
2025
% Change
Revenues:
Product licenses $ 5,501 $ 7,270 (24.3) %
Subscription services 58,879 37,103 58.7 %
Total product licenses and subscription services 64,380 44,373 45.1 %
Product support 44,190 52,529 (15.9) %
Other services 15,730 14,164 11.1 %
Total revenues 124,300 111,066 11.9 %
Cost of revenues:
Product licenses 1,196 964 24.1 %
Subscription services 22,471 14,429 55.7 %
Total product licenses and subscription services 23,667 15,393 53.8 %
Product support 6,187 7,354 (15.9) %
Other services 11,092 11,224 (1.2) %
Total cost of revenues 40,946 33,971 20.5 %
Gross profit 83,354 77,095 8.1 %
Operating expenses:
Sales and marketing 36,272 27,532 31.7 %
Research and development 24,665 24,423 1.0 %
General and administrative 37,357 40,547 (7.9) %
Unrealized loss on digital assets 14,455,479 5,906,005 144.8 %
Total operating expenses 14,553,773 5,998,507 142.6 %
Loss from operations $ (14,470,419) $ (5,921,412) 144.4 %
Unrealized losses associated with digital assets
We recognized an unrealized loss on digital assets of approximately $14.46 billion and $5.91 billion for the three months ended March 31, 2026 and 2025, respectively, primarily due to a decrease in the fair market value of our bitcoin. Due to the volatility of bitcoin, and our substantial holdings of bitcoin, we expect changes in the fair market value of bitcoin to materially impact our results.
We did not sell any of our digital assets during the three months ended March 31, 2026 and 2025.
Software Business Impacts
Revenues
• Product licenses revenues. Product license revenues are derived from fees earned for licensing our business intelligence software to customers on a term or perpetual basis for installation on-premises. Product license revenue is recognized at the point when control to the license is transferred to the customer. Product license revenues decreased by $1.8 million for the three months ended March 31, 2026, as compared to the same period in the prior year, primarily due to increased migration to our cloud subscription services offerings.
• Subscription services revenue s. Subscription services revenues are derived from our Cloud subscription service and are recognized ratably over the service period in the contract. Subscription services revenues
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increased by $21.8 million for the three months ended March 31, 2026, as compared to the same period in the prior year, primarily due to conversions to cloud-based subscriptions from existing on-premises customers, a net increase in the use of subscription services by existing customers, and sales contracts with new customers.
• Product support revenues. Product support revenues are derived from providing technical software support and software updates and upgrades to customers. Product support revenues are recognized ratably over the term of the contract, which is generally one year. Product support revenues decreased by $8.3 million for the three months ended March 31, 2026, as compared to the same period in the prior year, primarily due to existing customers converting from on-premises product licenses with support contracts to our Cloud subscription services offerings and non-renewals of existing support contracts.
• Other services revenues. Other services revenues are derived from providing consulting services and training and education services. Revenue from consulting services and certain education services is recognized over time as the services are delivered, and revenue from annual education subscriptions is recognized on a straight-line basis over the contract period. Other services revenues increased by $1.6 million for the three months ended March 31, 2026, as compared to the same period in the prior year, primarily due to higher demand for consulting services.
Costs of Revenue
• Cost of Revenues . Cost of revenues increased by $7.0 million for the three months ended March 31, 2026, as compared to the same period in the prior year, driven primarily by an increase in subscription services cost of revenues due to higher cloud‑hosting costs from increased customer and internal usage.
Operating Expenses
• Sales and marketing expenses . Sales and marketing expenses consist of personnel costs, commissions, and costs related to office facilities, travel, advertising, public relations programs, and promotional events, such as trade shows, seminars, and technical conferences. Sales and marketing expenses increased by $8.7 million for the three months ended March 31, 2026, as compared to the same period in the prior year, primarily driven by increased commission expense, as well as higher promotional event costs associated with the timing of our annual Strategy World conference, which occurred in the first quarter of 2026 as compared to the second quarter of 2025.
• Research and development expenses . Research and development expenses consist of the personnel costs for our software engineering personnel and related overhead costs. Research and development expenses increased by $0.2 million for the three months ended March 31, 2026, as compared to the same period in the prior year, reflecting higher cloud-hosting costs for internal development and testing, partially offset by lower personnel costs attributable to a shift in the geographic mix of our workforce.
• General and administrative expenses. General and administrative expenses consist of personnel and related overhead costs, and other costs of our executive, finance, human resources, information systems, and administrative departments, as well as third-party consulting, legal, and other professional fees, and third-party costs associated with our digital asset holdings. General and administrative expenses decreased by $3.2 million for the three months ended March 31, 2026, as compared to the same period in the prior year, primarily due to decreases in bitcoin advocacy costs for the current quarter, costs related to our special meeting of shareholders held in first quarter 2025 and share-based compensation expense, offset by increased professional fees.
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Interest Income (Expense) Impacts
Interest income (expense), net, primarily relates to the contractual interest expense and amortization of issuance costs related to our long-term debt arrangements, as offset by interest income earned on interest-bearing cash equivalents held in our USD Reserve. The following table sets forth interest expense, net for the periods indicated:
Three Months Ended
March 31
(in thousands) 2026 2025
Interest expense, net:
2027 Convertible Notes $ — $ 401
2028 Convertible Notes 2,633 2,622
2029 Convertible Notes 1,822 1,818
2030A Convertible Notes 2,241 2,230
2030B Convertible Notes 1,251 513
2031 Convertible Notes 1,940 1,932
2032 Convertible Notes 5,185 5,168
Other interest (income) expense, net (16,896) 2,422
Total interest (income) expense, net $ (1,824) $ 17,106
Other Income (Expense), Net
For the three months ended March 31, 2026, other income, net, of $3.1 million was comprised primarily of foreign currency transaction net gains. For the three months ended March 31, 2025, other expense net, of $3.9 million was comprised primarily of foreign currency transaction net losses.
Income Taxes
We recorded a benefit from income taxes of $1.92 billion on a pretax loss of $14.47 billion that resulted in an effective tax rate of 13.3% for the three months ended March 31, 2026, as compared to a benefit from income taxes of $1.73 billion on a pretax loss of $5.94 billion that resulted in an effective tax rate of 29.0% for the three months ended March 31, 2025. During the three months ended March 31, 2026, our provision for income taxes primarily related to (i) the tax effect of the unrealized losses on digital assets as offset by (ii) the establishment of a full valuation allowance on domestic net deferred tax assets. During the three months ended March 31, 2025, our benefit from income taxes primarily related to the tax effect of the unrealized loss on digital assets.
As of March 31, 2026, the market value of bitcoin had declined to the point where the cost basis of bitcoin holdings exceeded their fair market value, requiring us to (i) reverse the deferred tax liability of $2.42 billion on the unrealized gain on bitcoin holdings that existed as of December 31, 2025, (ii) record a deferred tax asset for the unrealized loss on bitcoin holdings of $1.73 billion, and (iii) establish a valuation allowance against all domestic net deferred tax assets of $2.23 billion that, in our present estimation, more likely than not will not be realized. If, in future periods, the fair market value of our bitcoin holdings increases and exceeds the cost basis of our bitcoin holdings, the deferred tax asset with respect to unrealized loss would be reversed and the valuation allowance on domestic net deferred tax assets could be released. We will continue to regularly assess the realizability of deferred tax assets.
Our effective tax rate may fluctuate due to changes in our domestic and foreign earnings and losses, material discrete tax items, or a combination of these factors resulting from transactions or events.
See “Factors Impacting Results – Tax” for a discussion of tax factors which have had, and may continue to have, a significant impact on our results.
Deferred Revenue and Advance Payments
Deferred revenue and advance payments represent amounts received or due from our customers in advance of our transferring our software or services to the customer. In the case of multi-year service contract arrangements, we generally do not invoice more than one year in advance of services and do not record deferred revenue for amounts that have not been invoiced. Revenue is subsequently recognized in the period(s) in which control of the software or services is transferred to the customer.
Total deferred revenue and advance payments. Total deferred revenue and advance payments decreased by $41.1 million as of March 31, 2026, compared to December 31, 2025, primarily due to a decrease in deferred subscriptions services
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revenue and product support revenue due to the timing of renewals and increased conversions from on-premises to subscription services contracts. Total deferred revenue and advance payments increased $16.8 million as of March 31, 2026 compared to March 31, 2025, primarily due to (i) an increase in deferred revenue from new subscription services contracts, partially offset by (ii) a decrease in deferred product support revenue from existing customers migrating from on-premises to subscription services contracts.
Current deferred revenue and advance payments decreased by $40.9 million and increased by $15.5 million as of March 31, 2026, compared to December 31, 2025, and March 31, 2025, respectively. Non-current deferred revenue and advance payments decreased by $0.2 million and increased by $1.2 million as of March 31, 2026, compared to December 31, 2025 and March 31, 2025, respectively.
Remaining performance obligation . Our remaining performance obligation represents contracted future revenue, including deferred revenue, advance payments, and non-cancellable billable amounts that will be invoiced and recognized in future periods. As of March 31, 2026, our remaining performance obligation was $577.7 million of which approximately $334.7 million is expected to be recognized as revenue over the next 12 months. The timing of revenue recognition may vary depending on our satisfaction of related performance obligations, and the amount of deferred revenue, advance payments, and remaining performance obligations at any date may not be indicative of future revenues.
Employees
As of March 31, 2026, we had a total of 1,511 employees, of whom 428 were based in the United States and 1,083 were based internationally.
Liquidity and Capital Resources
Liquidity
Sources of Liquidity
We evaluate all available sources of liquidity and determine which source or combination of sources to use based on our liquidity needs, market conditions, and our subjective assessment of the relative attractiveness of available alternatives, including our equity securities, debt securities, cash reserves, bitcoin and accounts receivable.
Our sources of liquidity include:
• Cash and cash equivalents : Cash and cash equivalents may include holdings in bank demand deposits, money market instruments, certificates of deposit, and U.S. Treasury securities. As of March 31, 2026 and December 31, 2025, the amount of cash and cash equivalents held by our U.S. entities was $2.16 billion and $2.25 billion, respectively, and by our non-U.S. entities was $45.4 million and $50.0 million, respectively. We earn a significant amount of our revenues outside the United States. We did not repatriate any foreign earnings and profits during the three months ended March 31, 2026 and 2025. Integral to our cash and cash equivalents is our USD Reserve. See “Availability of the USD Reserve” below for additional information.
• Bitcoin: As of March 31, 2026 and December 31, 2025, we held approximately 762,099 and 672,500 bitcoins, respectively, all of which were unencumbered as of such dates. As of April 26, 2026, we held approximately 818,334 bitcoins, which had an aggregate market value of $64.04 billion (based on the market price of $78,258 of one bitcoin as reported on the Coinbase exchange as of April 26, 2026, 4:00 p.m. Eastern Time). Our bitcoin holdings are less liquid than our existing cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents. See “Availability of Bitcoin for Liquidity” below.
• Accounts receivable: The primary sources of cash provided by operating activities are cash collections of our accounts receivable from customers following the sales and renewals of our product licenses, subscription services and product support, as well as consulting and education services. As of March 31, 2026 and December 31, 2025, our accounts receivable, net of allowance for credit losses was $122.3 million and $205.7 million, respectively. See “Cash Flows” below for a discussion of our accounts receivable.
In addition to the foregoing, also available as a source of liquidity is our ATM, under which we may from time to time through the Agents issue and sell shares of STRF Stock, STRC Stock, STRK Stock, STRD Stock, class A common stock and any additional series of preferred stock as may be designated by the Company from time to time in the future. See "Capital Markets Activity" above for additional information regarding our ATM, including our activity for the three months ended March 31, 2026 and 2025 and the period from April 1, 2026 to April 26, 2026, as well as our ATM capacities as of March 31, 2026. We intend to use proceeds from sales of our securities under our ATM to acquire bitcoin in a manner we believe to be accretive to our class A common stockholders. We may also use proceeds from sales of our
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securities to fund liquidity needs, including dividends on our Preferred Stock or for other corporate purposes if we determine doing so is more favorable than utilizing our other sources of liquidity for such purposes.
Liquidity Needs
As of March 31, 2026, our short-term and long-term liquidity needs include the following:
• Short-term Liquidity. Our short-term liquidity needs include working capital requirements, anticipated capital expenditures, dividend obligations on our STRF Stock, STRC Stock, and STRE Stock, dividend obligations on our STRK Stock to the extent that we do not pay such dividends in the form of shares of our class A common stock, regular dividends on our STRD Stock, near-term payments due prior to and upon delivery of our new corporate aircraft, interest payments on our Outstanding Convertible Notes, various purchase agreements primarily related to third-party cloud hosting services and third-party software supporting our products, marketing, and operations and contractual obligations due within the next twelve months.
• Long-Term Liquidity. Beyond the next 12 months, our long-term cash needs are primarily for obligations related to our long-term debt and for payment of dividend obligations on our Preferred Stock. We also have long-term cash requirements for needs related to our operating leases and various purchase agreements primarily related to third-party cloud hosting services and third-party software supporting our products, marketing, and operations.
For further details regarding certain of our short-term and long-term liquidity needs, see “Contractual and Other Obligations” below.
Maturities and Holder Repurchase Rights .
The Convertible Notes have scheduled maturity dates and become subject to holder put option rights as follows:
Convertible Notes Outstanding Principal Amount as of March 31, 2026 (in thousands)
Maturity Date Put Option Date (1)
2028 Convertible Notes $ 1,010,000 September 15, 2028 September 15, 2027
2029 Convertible Notes $ 3,000,000 December 1, 2029 June 1, 2028
2030A Convertible Notes $ 800,000 March 15, 2030 September 15, 2028
2030B Convertible Notes $ 2,000,000 March 1, 2030 March 1, 2028
2031 Convertible Notes $ 603,659 March 15, 2031 September 15, 2028
2032 Convertible Notes $ 800,000 June 15, 2032 June 15, 2029