MicroStrategy Reports $1.166 Billion Net Loss and Decrease in Revenues for Fiscal Year 2024

MicroStrategy Incorporated (Strategy) reported a net loss of $1.166 billion for the fiscal year ending December 31, 2024, compared to a net income of $429.1 million in 2023. Total revenues decreased to $463.5 million in 2024 from $496.3 million in 2023. This decrease was primarily driven by a decline in product license revenues, offset partially by an increase in subscription services revenues. The significant decrease in profitability was largely attributable to $1.790 billion in digital asset impairment losses during 2024, compared to $115.9 million in 2023.

Significant changes in financial performance were observed across several key areas. Product license revenues decreased by 35.5%, while subscription services revenues increased by 31.5%. Product support revenues decreased by 7.6%, and other services revenues (primarily consulting and education) decreased by 15.2%. The company's operating expenses increased substantially due to the significant digital asset impairment losses. The company's total headcount decreased to 1,534 employees as of December 31, 2024, from 1,934 employees as of December 31, 2023.

During 2024, Strategy purchased approximately 258,320 bitcoins at an aggregate purchase price of approximately $22.073 billion. In the period between January 1, 2025 and February 14, 2025, an additional 31,270 bitcoins were purchased for approximately $3.165 billion. No bitcoins were sold during either period. The company's bitcoin holdings significantly impacted its financial results, and the company intends to continue accumulating bitcoin. The company also engaged in various capital raising activities, including issuing debt and equity securities.

Key operational developments included a shift towards cloud-based subscription services, resulting in changes to revenue recognition and potentially higher attrition rates. The company also highlighted its strategic partnerships with various third-party vendors and its ongoing marketing efforts targeting specific audiences. The company's enterprise analytics software platform, Strategy One, incorporates generative AI capabilities. The company also noted its FedRAMP authorization for its government cloud solution.

Looking ahead, MicroStrategy anticipates continued accumulation of bitcoin, subject to market conditions. The company also expects its subscription services revenues to continue growing. However, the company cautioned about the volatility of bitcoin prices and the potential impact on its financial results, particularly given the adoption of ASU 2023-08 on January 1, 2025, which requires the measurement of bitcoin holdings at fair value. The company also highlighted various risks related to its bitcoin strategy, its indebtedness, and the competitive landscape of the enterprise analytics market.