Press release

MicroStrategy Announces First Quarter 2021 Financial Results

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MicroStrategy® (Nasdaq: MSTR), the largest independent publicly-traded business intelligence company, today announced financial results for the three-month period ended March 31, 2021 (the first quarter of its 2021 fiscal year).

“MicroStrategy’s first quarter results were a clear example that our two-pronged corporate strategy to grow our enterprise analytics software business and acquire and hold bitcoin is generating substantial shareholder value. We had one of our strongest operational quarters in our software business in years, highlighted by 10% revenue growth and continued improvement in non-GAAP profitability. The investments we have made in our platform in recent years are driving greater customer adoption of MicroStrategy, particularly in the cloud,” said Michael J. Saylor, CEO, MicroStrategy Incorporated.

“We continue to be pleased with our bitcoin strategy. We successfully raised more than $1 billion of additional capital in the quarter to expand our bitcoin holdings, which now exceed 91,000 bitcoins. We also hosted a very successful ‘Bitcoin for Corporations’ track at MicroStrategy World™ where we utilized our thought leadership in the cryptocurrency market to show how organizations can incorporate digital assets into their balance sheet management. We will continue to acquire and hold additional bitcoin as we seek to create additional value for shareholders.”

First Quarter 2021 Financial Highlights

  • Revenues: Total revenues for the first quarter of 2021 were $122.9 million, a 10.3% increase, or a 7.6% increase on a non-GAAP constant currency basis, compared to the first quarter of 2020. Product licenses and subscription services revenues for the first quarter of 2021 were $31.3 million, a 52.3% increase, or a 49.8% increase on a non-GAAP constant currency basis, compared to the first quarter of 2020. Product support revenues for the first quarter of 2021 were $70.6 million, a 0.7% decrease, or a 3.4% decrease on a non-GAAP constant currency basis, compared to the first quarter of 2020. Other services revenues for the first quarter of 2021 were $20.9 million, a 6.3% increase, or a 3.1% increase on a non-GAAP constant currency basis, compared to the first quarter of 2020.
  • Gross Profit: Gross profit for the first quarter of 2021 was $100.4 million, representing an 81.7% gross margin, compared to a gross margin of 78.0% in the first quarter of 2020.
  • Operating Expenses: Operating expenses for the first quarter of 2021 were $283.5 million, a 226.1% increase compared to the first quarter of 2020. Beginning in the third quarter of 2020, operating expenses included impairment losses on MicroStrategy’s digital assets, which were $194.1 million during the first quarter of 2021.
  • Loss from Operations: Loss from operations for the first quarter of 2021 was $183.2 million versus $0.1 million for the first quarter of 2020. Non-GAAP income from operations, which excludes share-based compensation expense and impairment losses and gains on sale from intangible assets, which include digital assets, was $18.7 million for the first quarter of 2021 versus $3.0 million for the first quarter of 2020.
  • Net (Loss) Income: Net loss for the first quarter of 2021 was $110.0 million, or $11.40 per share on a diluted basis, as compared to net income of $0.7 million, or $0.07 per share on a diluted basis, for the first quarter of 2020. Non-GAAP net income, which excludes share-based compensation expense, impairment losses and gains on sale from intangible assets, which include digital assets, interest expense arising from the amortization of debt issuance costs, and related income tax effects, was $14.9 million, or $1.54 per share on a non-GAAP diluted basis, for the first quarter of 2021, as compared to non-GAAP net income of $3.9 million, or $0.39 per share on a non-GAAP diluted basis, for the first quarter of 2020.
  • Cash and Cash Equivalents: As of March 31, 2021, MicroStrategy had cash and cash equivalents of $82.5 million, as compared to $59.7 million as of December 31, 2020, an increase of $22.9 million.
  • Digital Assets: As part of MicroStrategy’s previously announced treasury reserve policy and bitcoin acquisition strategy, a total of approximately 20,857 bitcoins were purchased at an aggregate purchase price of $1.086 billion in the first quarter of 2021 for an average purchase price of approximately $52,087 per bitcoin. As of March 31, 2021, the carrying value of MicroStrategy’s digital assets (comprised solely of bitcoin) was $1.947 billion, which reflects cumulative impairment charges of $264.8 million since acquisition. As of March 31, 2021, the average cost and average carrying value of MicroStrategy’s bitcoin were approximately $24,214 and $21,315, respectively.

    Further, in the second quarter of 2021 to date, MicroStrategy has purchased approximately 253 bitcoins at an aggregate purchase price of $15.0 million for an average purchase price for such additional bitcoins of approximately $59,339 per bitcoin. As of April 28, 2021, at 4:00 p.m. EDT, MicroStrategy held approximately 91,579 bitcoins and the market price of one bitcoin in MicroStrategy’s principal market was approximately $55,492. In future periods, MicroStrategy may purchase additional bitcoins and increase its overall holdings of bitcoin or sell its bitcoins and decrease its overall holdings of bitcoin.

  • Convertible Senior Notes: In February 2021, MicroStrategy issued $1.050 billion aggregate principal amount of 0% Convertible Senior Notes due 2027 (the “2027 Notes”). The 2027 Notes are senior unsecured obligations of MicroStrategy and do not bear regular interest. However, holders of the 2027 Notes may receive special interest under specified circumstances as outlined in the indenture for the 2027 Notes. Any special interest is payable semiannually in arrears on February 15 and August 15 of each year, beginning on August 15, 2021. The 2027 Notes are convertible into shares of MicroStrategy’s class A common stock at an initial conversion price of $1,432.46 per share. The 2027 Notes will mature on February 15, 2027, unless earlier converted, redeemed, or repurchased in accordance with their terms. Total net proceeds from the offering, after deducting initial purchaser discounts and issuance costs, were approximately $1.026 billion.

    As of March 31, 2021, the carrying value of the 2027 Notes was $1.026 billion, net of unamortized issuance costs, and was classified as a long-term liability in the “Convertible senior notes, net” line item in MicroStrategy’s Consolidated Balance Sheet. MicroStrategy early adopted Accounting Standards Update No. 2020-06, Debt – Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging – Contracts in Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”), effective January 1, 2021. ASU 2020-06 simplifies the accounting for convertible instruments and, as a result, MicroStrategy no longer separates the debt or issuance costs into liability and equity components. Upon adoption, MicroStrategy recorded a cumulative-effect adjustment related to the previously issued 0.750% Convertible Senior Notes due 2025 and increased its opening retained earnings balance by approximately $1.0 million.

The tables at the end of this press release include a reconciliation of GAAP to non-GAAP financial measures for the three months ended March 31, 2021 and 2020. An explanation of non-GAAP financial measures is also included under the heading “Non-GAAP Financial Measures” below. Additional non-GAAP financial measures are included in our “Q1 2021 Earnings Presentation,” which will be available under the “Events and Presentations” section of MicroStrategy’s investor relations website at https://www.microstrategy.com/en/investor-relations.

MicroStrategy uses its Intelligent Enterprise™ platform across the enterprise and has created an interactive dossier with quarterly financial performance data. Anyone can access the MSTR Financials dossier via a web browser, or by downloading the MicroStrategy Library™ app on an iOS or Android device. To download the native apps, visit MicroStrategy Library for iOS or MicroStrategy Library for Android.

Non-GAAP Financial Measures

MicroStrategy is providing supplemental financial measures for (i) non-GAAP income from operations that excludes the impact of share-based compensation expense and impairment losses and gains on sale from intangible assets, which include its digital assets, (ii) non-GAAP net income and non-GAAP diluted earnings per share that exclude the impact of share-based compensation expense, impairment losses and gains on sale from intangible assets, which include its digital assets, interest expense arising from the amortization of debt issuance costs related to MicroStrategy’s convertible senior notes, and related income tax effects, and (iii) non-GAAP constant currency revenues that exclude foreign currency exchange rate fluctuations. These supplemental financial measures are not measurements of financial performance under generally accepted accounting principles in the United States (“GAAP”) and, as a result, these supplemental financial measures may not be comparable to similarly titled measures of other companies. Management uses these non-GAAP financial measures internally to help understand, manage, and evaluate business performance and to help make operating decisions.

MicroStrategy believes that these non-GAAP financial measures are also useful to investors and analysts in comparing its performance across reporting periods on a consistent basis. The first supplemental financial measure excludes (i) a significant non-cash expense that MicroStrategy believes is not reflective of its general business performance, and for which the accounting requires management judgment and the resulting share-based compensation expense could vary significantly in comparison to other companies and (ii) significant impairment losses and gains on sale from intangible assets, which include MicroStrategy’s bitcoin. The second set of supplemental financial measures excludes the impact of (i) share-based compensation expense, (ii) impairment losses and gains on sale from intangible assets, which include MicroStrategy’s bitcoin, (iii) non-cash interest expense arising from the amortization of debt issuance costs related to MicroStrategy’s convertible senior notes, and (iv) related income tax effects. The third set of supplemental financial measures excludes changes resulting from fluctuations in foreign currency exchange rates so that results may be compared to the same period in the prior year on a non-GAAP constant currency basis. MicroStrategy believes the use of these non-GAAP financial measures can also facilitate comparison of MicroStrategy’s operating results to those of its competitors.

Conference Call

MicroStrategy will be discussing its first quarter 2021 financial results on a live Video Webinar today beginning at approximately 5:00 p.m. EDT. The live Video Webinar and accompanying presentation materials will be available under the “Events and Presentations” section of MicroStrategy’s investor relations website at https://www.microstrategy.com/en/investor-relations. Log-in instructions will be available after registering for the event. An archived replay of the event will be available beginning approximately two hours after the call concludes.

About MicroStrategy Incorporated

MicroStrategy (Nasdaq: MSTR) is the largest independent publicly-traded analytics and business intelligence company. The MicroStrategy analytics platform is consistently rated as the best in enterprise analytics and is used by many of the world’s most admired brands in the Fortune Global 500. We pursue two corporate strategies: (1) grow our enterprise analytics software business to promote our vision of Intelligence Everywhere and (2) acquire and hold bitcoin, which we view as a dependable store of value supported by a robust, public, open-source architecture untethered to sovereign monetary policy. For more information about MicroStrategy, visit www.microstrategy.com.

MicroStrategy, MicroStrategy World, Intelligent Enterprise, and MicroStrategy Library are either trademarks or registered trademarks of MicroStrategy Incorporated in the United States and certain other countries. Other product and company names mentioned herein may be the trademarks of their respective owners.

This press release may include statements that may constitute “forward-looking statements,” including estimates of future business prospects or financial results and statements containing the words “believe,” “estimate,” “project,” “expect,” or similar expressions. Forward-looking statements inherently involve risks and uncertainties that could cause actual results of MicroStrategy Incorporated and its subsidiaries (collectively, the “Company”) to differ materially from the forward-looking statements. Factors that could contribute to such differences include: the market price of bitcoin and any associated impairment charges that the Company may incur as a result of a decrease in the market price below the value at which the Company’s bitcoins are carried on its balance sheet; gains or losses on sales of bitcoins that the Company would incur upon any sale of its bitcoins; changes in the accounting treatment of the Company’s bitcoin holdings; changes in securities laws or other laws or regulations relating to bitcoin that could adversely affect the price of bitcoin or the Company’s ability to own bitcoin; a decrease in liquidity in the markets in which bitcoins are traded; security breaches, cyberattacks, unauthorized access, loss of private keys, or fraud that results in the Company’s loss of its bitcoins; the extent and timing of market acceptance of the Company’s new offerings; continued acceptance of the Company’s other products in the marketplace; the Company’s ability to recognize revenue or deferred revenue through delivery of products or satisfactory performance of services; the timing of significant orders; delays in or the inability of the Company to develop or ship new products; customers shifting from a product license model to a cloud subscription model, which may delay the Company’s ability to recognize revenue; fluctuations in tax benefits or provisions; impacts of the COVID-19 pandemic; competitive factors; general economic conditions; currency fluctuations; and other risks detailed in MicroStrategy’s registration statements and periodic reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to update these forward-looking statements for revisions or changes after the date of this release.

MSTR-F

MICROSTRATEGY INCORPORATED

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

 
 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2021

 

 

2020

 

 

 

(unaudited)

 

 

(unaudited)

 

Revenues

 

 

 

 

 

 

 

 

Product licenses

 

$

21,280

 

 

$

12,584

 

Subscription services

 

 

10,026

 

 

 

7,968

 

Total product licenses and subscription services

 

 

31,306

 

 

 

20,552

 

Product support

 

 

70,649

 

 

 

71,158

 

Other services

 

 

20,947

 

 

 

19,714

 

Total revenues

 

 

122,902

 

 

 

111,424

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

 

 

 

 

 

 

Product licenses

 

 

488

 

 

 

670

 

Subscription services

 

 

3,628

 

 

 

4,064

 

Total product licenses and subscription services

 

 

4,116

 

 

 

4,734

 

Product support

 

 

4,812

 

 

 

6,718

 

Other services

 

 

13,621

 

 

 

13,093

 

Total cost of revenues

 

 

22,549

 

 

 

24,545

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

100,353

 

 

 

86,879

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

Sales and marketing

 

 

38,198

 

 

 

39,518

 

Research and development

 

 

29,483

 

 

 

26,101

 

General and administrative

 

 

21,729

 

 

 

21,332

 

Digital asset impairment losses

 

 

194,095

 

 

 

0

 

Total operating expenses

 

 

283,505

 

 

 

86,951

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(183,152

)

 

 

(72

)

Interest (expense) income, net

 

 

(2,396

)

 

 

1,855

 

Other income, net

 

 

1,264

 

 

 

434

 

(Loss) income before income taxes

 

 

(184,284

)

 

 

2,217

 

(Benefit from) provision for income taxes

 

 

(74,264

)

 

 

1,560

 

Net (loss) income

 

$

(110,020

)

 

$

657

 

 

 

 

 

 

 

 

 

 

Basic (loss) earnings per share (1):

 

$

(11.40

)

 

$

0.07

 

Weighted average shares outstanding used in computing basic (loss) earnings per share

 

 

9,647

 

 

 

9,976

 

 

 

 

 

 

 

 

 

 

Diluted (loss) earnings per share (1):

 

$

(11.40

)

 

$

0.07

 

Weighted average shares outstanding used in computing diluted (loss) earnings per share

 

 

9,647

 

 

 

10,031

 

(1) Basic and fully diluted (loss) earnings per share for class A and class B common stock are the same.

MICROSTRATEGY INCORPORATED

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

 
 

 

 

March 31,

 

 

December 31,

 

 

 

2021

 

 

2020*

 

 

 

(unaudited)

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

82,544

 

 

$

59,675

 

Restricted cash

 

 

1,194

 

 

 

1,084

 

Accounts receivable, net

 

 

150,626

 

 

 

197,461

 

Prepaid expenses and other current assets

 

 

16,390

 

 

 

14,400

 

Total current assets

 

 

250,754

 

 

 

272,620

 

 

 

 

 

 

 

 

 

 

Digital assets

 

 

1,946,582

 

 

 

1,054,302

 

Property and equipment, net

 

 

41,091

 

 

 

42,975

 

Right-of-use assets

 

 

71,367

 

 

 

73,597

 

Deposits and other assets

 

 

15,013

 

 

 

15,615

 

Deferred tax assets, net

 

 

118,272

 

 

 

6,503

 

Total Assets

 

$

2,443,079

 

 

$

1,465,612

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable, accrued expenses, and operating lease liabilities

 

$

39,816

 

 

$

45,119

 

Accrued compensation and employee benefits

 

 

44,824

 

 

 

49,249

 

Deferred revenue and advance payments

 

 

198,980

 

 

 

191,250

 

Total current liabilities

 

 

283,620

 

 

 

285,618

 

 

 

 

 

 

 

 

 

 

Convertible senior notes, net

 

 

1,661,914

 

 

 

486,366

 

Deferred revenue and advance payments

 

 

14,517

 

 

 

14,662

 

Operating lease liabilities

 

 

81,849

 

 

 

84,328

 

Other long-term liabilities

 

 

34,329

 

 

 

33,382

 

Deferred tax liabilities

 

 

1,812

 

 

 

8,211

 

Total Liabilities

 

 

2,078,041

 

 

 

912,567

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

 

 

 

Preferred stock undesignated, $0.001 par value; 5,000 shares authorized; no shares issued or outstanding

 

 

0

 

 

 

0

 

Class A common stock, $0.001 par value; 330,000 shares authorized; 16,466 shares issued and 7,782 shares outstanding, and 16,307 shares issued and 7,623 shares outstanding, respectively

 

 

16

 

 

 

16

 

Class B convertible common stock, $0.001 par value; 165,000 shares authorized; 1,964 shares issued and outstanding, and 1,964 shares issued and outstanding, respectively

 

 

2

 

 

 

2

 

Additional paid-in capital

 

 

685,943

 

 

 

763,051

 

Treasury stock, at cost; 8,684 shares and 8,684 shares, respectively

 

 

(782,104

)

 

 

(782,104

)

Accumulated other comprehensive loss

 

 

(5,721

)

 

 

(3,885

)

Retained earnings

 

 

466,902

 

 

 

575,965

 

Total Stockholders’ Equity

 

 

365,038

 

 

 

553,045

 

Total Liabilities and Stockholders’ Equity

 

$

2,443,079

 

 

$

1,465,612

 

* Derived from audited financial statements.

MICROSTRATEGY INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 
 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2021

 

 

2020

 

 

 

(unaudited)

 

 

(unaudited)

 

Operating activities:

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(110,020

)

 

$

657

 

Adjustments to reconcile net (loss) income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

2,782

 

 

 

2,756

 

Reduction in carrying amount of right-of-use assets

 

 

2,086

 

 

 

2,053

 

Credit losses and sales allowances

 

 

(172

)

 

 

828

 

Deferred taxes

 

 

(76,759

)

 

 

957

 

Share-based compensation expense

 

 

7,711

 

 

 

3,111

 

Digital asset impairment losses

 

 

194,095

 

 

 

0

 

Amortization of issuance costs on convertible senior notes

 

 

1,172

 

 

 

0

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

6,774

 

 

 

14,406

 

Prepaid expenses and other current assets

 

 

(2,919

)

 

 

(3,295

)

Deposits and other assets

 

 

(62

)

 

 

84

 

Accounts payable and accrued expenses

 

 

(3,413

)

 

 

(154

)

Accrued compensation and employee benefits

 

 

(3,810

)

 

 

(13,031

)

Deferred revenue and advance payments

 

 

47,606

 

 

 

22,001

 

Operating lease liabilities

 

 

(2,458

)

 

 

(2,238

)

Other long-term liabilities

 

 

90

 

 

 

934

 

Net cash provided by operating activities

 

 

62,703

 

 

 

29,069

 

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

 

Purchases of digital assets

 

 

(1,086,375

)

 

 

0

 

Proceeds from redemption of short-term investments

 

 

0

 

 

 

10,000

 

Purchases of property and equipment

 

 

(447

)

 

 

(661

)

Purchases of short-term investments

 

 

0

 

 

 

(9,928

)

Net cash used in investing activities

 

 

(1,086,822

)

 

 

(589

)

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

Proceeds from convertible senior notes

 

 

1,050,000

 

 

 

0

 

Issuance costs paid for convertible senior notes

 

 

(24,596

)

 

 

0

 

Proceeds from sale of class A common stock under exercise of employee stock options

 

 

23,854

 

 

 

340

 

Purchases of treasury stock

 

 

0

 

 

 

(50,747

)

Net cash provided by (used in) financing activities

 

 

1,049,258

 

 

 

(50,407

)

 

 

 

 

 

 

 

 

 

Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash

 

 

(2,160

)

 

 

(3,871

)

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

 

22,979

 

 

 

(25,798

)

Cash, cash equivalents, and restricted cash, beginning of period

 

 

60,759

 

 

 

457,816

 

Cash, cash equivalents, and restricted cash, end of period

 

$

83,738

 

 

$

432,018

 

MICROSTRATEGY INCORPORATED

REVENUE AND COST OF REVENUE DETAIL

(in thousands)

 
 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2021

 

 

2020

 

 

 

(unaudited)

 

 

(unaudited)

 

Revenues

 

 

 

 

 

 

 

 

Product licenses and subscription services:

 

 

 

 

 

 

 

 

Product licenses

 

$

21,280

 

 

$

12,584

 

Subscription services

 

 

10,026

 

 

 

7,968

 

Total product licenses and subscription services

 

 

31,306

 

 

 

20,552

 

Product support

 

 

70,649

 

 

 

71,158

 

Other services:

 

 

 

 

 

 

 

 

Consulting

 

 

19,711

 

 

 

18,441

 

Education

 

 

1,236

 

 

 

1,273

 

Total other services

 

 

20,947

 

 

 

19,714

 

Total revenues

 

 

122,902

 

 

 

111,424

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

 

 

 

 

 

 

Product licenses and subscription services:

 

 

 

 

 

 

 

 

Product licenses

 

 

488

 

 

 

670

 

Subscription services

 

 

3,628

 

 

 

4,064

 

Total product licenses and subscription services

 

 

4,116

 

 

 

4,734

 

Product support

 

 

4,812

 

 

 

6,718

 

Other services:

 

 

 

 

 

 

 

 

Consulting

 

 

12,332

 

 

 

11,428

 

Education

 

 

1,289

 

 

 

1,665

 

Total other services

 

 

13,621

 

 

 

13,093

 

Total cost of revenues

 

 

22,549

 

 

 

24,545

 

 

 

 

 

 

 

 

 

 

Gross profit

 

$

100,353

 

 

$

86,879

 

MICROSTRATEGY INCORPORATED

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

LOSS FROM OPERATIONS

(in thousands)

 
 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

2021

 

 

2020

 

 

 

(unaudited)

 

 

(unaudited)

 

Reconciliation of non-GAAP income from operations:

 

 

 

 

 

 

 

 

Loss from operations

 

$

(183,152

)

 

$

(72

)

Share-based compensation expense

 

 

7,711

 

 

 

3,111

 

Digital asset impairment losses

 

 

194,095

 

 

 

0

 

Non-GAAP income from operations

 

$

18,654

 

 

$

3,039

 

MICROSTRATEGY INCORPORATED

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

NET (LOSS) INCOME AND (LOSS) EARNINGS PER SHARE

(in thousands, except per share data)

 
 

 

 

Three Months Ended

 

 

 

March 31,

 

2021

2020

 

 

 

(unaudited)

 

 

(unaudited)

 

Reconciliation of non-GAAP net income:

 

 

 

 

 

 

Net (loss) income

 

$

(110,020

)

 

$

657

 

Share-based compensation expense

 

 

7,711

 

 

 

3,111

 

Digital asset impairment losses

 

 

194,095

 

 

 

0

 

Interest expense arising from amortization of debt issuance costs

 

 

1,172

 

 

 

0

 

Income tax effects (1)

 

 

(78,084

)

 

 

162

 

Non-GAAP net income

 

$

14,874

 

 

$

3,930

 

 

 

 

 

 

 

 

Reconciliation of non-GAAP diluted earnings per share:

 

 

 

 

 

 

Diluted (loss) earnings per share

 

$

(11.40

)

 

$

0.07

 

Share-based compensation expense (per diluted share)

 

 

0.80

 

 

 

0.30

 

Digital asset impairment losses (per diluted share)

 

 

20.11

 

 

 

0.00

 

Interest expense arising from amortization of debt issuance costs (per diluted share)

 

 

0.12

 

 

 

0.00

 

Income tax effects (per diluted share)

 

 

(8.09

)

 

 

0.02

 

Non-GAAP diluted earnings per share

 

$

1.54

 

 

$

0.39

 

 

 

 

 

 

 

 

(1) Income tax effects reflect the net tax effects of stock-based compensation expense, digital asset impairment losses, and interest expense for amortization of debt issuance costs.

 

MICROSTRATEGY INCORPORATED

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

CONSTANT CURRENCY

(in thousands)

 
 

 

 

Three Months Ended

 

 

 

March 31,

 

 

 

(unaudited)

 

 

 

GAAP

 

 

Foreign

Currency

Exchange

Rate Impact (1)

 

 

Non-GAAP

Constant

Currency (2)

 

 

GAAP

 

 

GAAP %

Change

 

 

Non-GAAP

Constant

Currency

% Change (3)

 

 

 

2021

 

 

2021

 

 

2021

 

 

2020

 

 

2021

 

 

2021

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses

 

$

21,280

 

 

$

325

 

 

$

20,955

 

 

$

12,584

 

 

 

69.1

%

 

 

66.5

%

Subscription services

 

 

10,026

 

 

 

190

 

 

 

9,836

 

 

 

7,968

 

 

 

25.8

%

 

 

23.4

%

Total product licenses and subscription services

 

 

31,306

 

 

 

515

 

 

 

30,791

 

 

 

20,552

 

 

 

52.3

%

 

 

49.8

%

Product support

 

 

70,649

 

 

 

1,917

 

 

 

68,732

 

 

 

71,158

 

 

 

-0.7

%

 

 

-3.4

%

Other services

 

 

20,947

 

 

 

618

 

 

 

20,329

 

 

 

19,714

 

 

 

6.3

%

 

 

3.1

%

Total revenues

 

 

122,902

 

 

 

3,050

 

 

 

119,852

 

 

 

111,424

 

 

 

10.3

%

 

 

7.6

%

(1)

 

The “Foreign Currency Exchange Rate Impact” reflects the estimated impact of fluctuations in foreign currency exchange rates on international revenues.  It shows the increase (decrease) in international revenues from the same period in the prior year, based on comparisons to the prior year quarterly average foreign currency exchange rates. The term “international” refers to operations outside of the United States and Canada.

(2)

 

The “Non-GAAP Constant Currency” reflects the current period GAAP amount, less the Foreign Currency Exchange Rate Impact.

(3)

 

The “Non-GAAP Constant Currency % Change” reflects the percentage change between the current period Non-GAAP Constant Currency amount and the GAAP amount for the same period in the prior year.

MICROSTRATEGY INCORPORATED

DEFERRED REVENUE DETAIL

(in thousands)

 
 

 

 

March 31,

 

 

December 31,

 

 

March 31,

 

 

 

2021

 

 

2020*

 

 

2020

 

 

 

(unaudited)

 

 

 

 

 

 

(unaudited)

 

Current:

 

 

 

 

 

 

 

 

 

 

 

 

Deferred product licenses revenue

 

$

195

 

 

$

1,495

 

 

$

131

 

Deferred subscription services revenue

 

 

25,689

 

 

 

26,258

 

 

 

16,567

 

Deferred product support revenue

 

 

167,282

 

 

 

156,216

 

 

 

161,135

 

Deferred other services revenue

 

 

5,814

 

 

 

7,281

 

 

 

7,058

 

Total current deferred revenue and advance payments

 

$

198,980

 

 

$

191,250

 

 

$

184,891

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-current:

 

 

 

 

 

 

 

 

 

 

 

 

Deferred product licenses revenue

 

$

67

 

 

$

139

 

 

$

262

 

Deferred subscription services revenue

 

 

8,317

 

 

 

8,758

 

 

 

84

 

Deferred product support revenue

 

 

5,401

 

 

 

5,055

 

 

 

2,789

 

Deferred other services revenue

 

 

732

 

 

 

710

 

 

 

525

 

Total non-current deferred revenue and advance payments

 

$

14,517

 

 

$

14,662

 

 

$

3,660

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total current and non-current:

 

 

 

 

 

 

 

 

 

 

 

 

Deferred product licenses revenue

 

$

262

 

 

$

1,634

 

 

$

393

 

Deferred subscription services revenue

 

 

34,006

 

 

 

35,016

 

 

 

16,651

 

Deferred product support revenue

 

 

172,683

 

 

 

161,271

 

 

 

163,924

 

Deferred other services revenue

 

 

6,546

 

 

 

7,991

 

 

 

7,583

 

Total current and non-current deferred revenue and advance payments

 

$

213,497

 

 

$

205,912

 

 

$

188,551

 

* Derived from audited financial statements.