Strategy Posts $19.5B Q3 Net Income on $20.9B Bitcoin Gain, Shares Slip
Strategy reported $19.53B in Q3 net income, driven by a $20.91B bitcoin gain. Revenue fell 3%, BTC yield is negative 3.7% year to date, preferred holders approved daily dividends and CFO Andrew Kang is stepping down.
$19.53 billion. That is Strategy's third-quarter net income, reported Thursday, up from $2.79 billion a year earlier. A $20.91 billion gain on its bitcoin holdings drove it. Diluted EPS: $44.75 versus $8.42.
The headline is mostly an accounting effect. Operating income of $20.91 billion (versus $3.89 billion a year ago) largely reflects bitcoin fair value changes, not operating cash. Q3 revenue was $125.4 million, down 3% from $128.7 million.
MSTR fell in after-hours trading. Reports disagree on the size: about 2.5% per Yahoo Finance data, with other figures near 3.5%.
Holdings and the sell side
Strategy held 848,517 BTC as of Oct. 25, acquired for about $64.02 billion at an average of $75,446 per coin. Holdings are up 26% year to date. Market value was about $68.9 billion with bitcoin near $81,200 on Oct. 23.
In Q3 the company bought 7,218 BTC for about $588.1 million and sold 5,552 BTC for about $348.6 million. Year-to-date bitcoin sales total about $431.8 million, with proceeds supporting dividends and STRC repurchases.
BTC yield is negative 3.7% year to date. Bigger stack, weaker yield.
STRC buybacks and daily dividends
Strategy has repurchased about $2.04 billion of STRC this year, roughly 20.98 million shares at an average of $97.39. About $956.7 million remains under a $3 billion authorization. Preferred dividends totaled $419.6 million in the quarter.
CEO Phong Le framed the balance sheet this way:
"We grew our USD Assets to $5.1 billion, increased USD Duration to 3.4 years, and repurchased $2.0 billion of STRC,"
Phong Le, CEO of Strategy
USD assets rose to $5.07 billion: a $4.83 billion reserve plus $242.4 million in cash. That covers about 3.4 years of preferred dividends and interest. The company raised $21.23 billion year to date, including $5.41 billion net from Q3 common stock sales.
Preferred holders approved daily dividend accrual with 99.3% of votes cast, following the conditional daily STRC dividends declared on Oct. 16. STRC's first record date is Nov. 1, with payment Nov. 2. STRF, STRK and STRD follow with a Jan. 1 record date and Jan. 4 payment.
"Daily dividends are a natural step toward the tokenized, 24/7/365 financial system. Digital Credit is being built for that world, and Strategy intends to lead it,"
Phong Le, CEO of Strategy
Leadership change
CFO Andrew Kang steps down Nov. 5. Le takes over finance in the interim, and Reza Virasteh becomes CFO on Jan. 1, 2027. Reports differ on Virasteh's current title, describing him as either COO or EVP of operations.
Michael Saylor stayed bullish: "We’re at the beginning of the next bitcoin bull market."
What it means
The company is leaning on equity issuance and bitcoin sales to service its preferred obligations. K33 estimated earlier this month that STRC added $725 million to annual dividend obligations. Strategy skipped a bitcoin purchase on Oct. 26 and spent $204.9 million on STRC buybacks instead. The $5.07 billion USD reserve is the buffer against that load. With BTC yield negative and revenue shrinking, the quarter's profit rises and falls with the bitcoin price.
