What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2025-08-05 compared with 2025-05-05 · 245 added, 163 removed, 412 unchanged (50% of the section changed)

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During 2024 and 2025, we used proceeds from various capital raising transactions to purchase bitcoin.

As of March 31, 2025, we held an aggregate of approximately 528,185 bitcoins.

As of June 30, 2025, we held an aggregate of approximately 597,325 bitcoins.

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 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.

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Approximate Average Purchase Price Per Bitcoin

Balance at December 31, 2023

Digital asset purchases

Digital asset impairment losses

Balance at March 31, 2024

Digital asset purchases

Digital asset impairment losses

Balance at June 30, 2024

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Balance at March 31, 2025

(a) In the first quarter of 2024, we purchased bitcoin using $782.0 million of the net proceeds from our issuance of the 2030A Convertible Notes, $592.3 million of the net proceeds from our issuance of the 2031 Convertible Notes, $137.3 million of the net proceeds from our sales of class A common stock under our at-the-market offering program for our class A common stock (the “Common Stock ATM Program”), and Excess Cash.

(b) In the second quarter of 2024, we purchased bitcoin using $756.0 million of the net proceeds from our issuance of the 2032 Convertible Notes and Excess Cash.

(c) In the third quarter of 2024, we purchased bitcoin using $1.105 billion of the net proceeds from sales of class A common stock under the Common Stock ATM Program, $458.2 million of the net proceeds from our issuance of the 2028 Convertible Notes, and Excess Cash.

(d) In the fourth quarter of 2024, we purchased bitcoin using $15.090 billion of the net proceeds from sales of class A common stock under the Common Stock ATM Program, and $2.974 billion of the net proceeds from our issuance of the 2029 Convertible Notes.

(e) In the first quarter of 2025, we purchased bitcoin using $4.37 billion of the net proceeds from sales of our class A common stock under the Common Stock ATM Program, $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 of our Perpetual Strike Preferred Stock and sales of Perpetual Strike Preferred Stock under the at-the-market offering program for our Perpetual Strike Preferred Stock, and $710.0 million of the net proceeds from the issuance of our Perpetual Strife Preferred Stock in the initial public offering of Perpetual Strife Preferred Stock.

Digital asset purchases

Unrealized gain on digital assets

Balance at June 30, 2025

(a) In the third quarter of 2024, we purchased bitcoin using $1.11 billion of the net proceeds from sales of class A common stock under our at-the-market offering program for our class A common stock, $458.2 million of the net proceeds from our issuance of the 2028 Convertible Notes, and Excess Cash.

(b) In the fourth quarter of 2024, we purchased bitcoin using $15.09 billion of the net proceeds from sales of class A common stock under our at-the-market offering program for our class A common stock, and $2.97 billion of the net proceeds from our issuance of the 2029 Convertible Notes.

(c) In the first quarter of 2025, we purchased bitcoin using $4.37 billion of the net proceeds from sales of our class A common stock under our at-the-market offering program for our 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 of our STRK Stock and sales of STRK Stock under the at-the-market offering program for our STRK Stock, and $710.0 million of the net proceeds from the issuance of our STRF Stock in the initial public offering of STRF Stock.

(d) In the second quarter of 2025, we purchased bitcoin using $5.19 billion of the net proceeds from sales under our at-the-market offering program for our class A common stock, $979.7 million of the net proceeds from our initial public offering of STRD Stock, $163.0 million of the net proceeds from the sales under the at-the-market offering program for our STRF Stock, and $438.0 million of the net proceeds from the sales under the at-the-market offering program for our STRK Stock.

Excess Cash refers to cash in excess of the minimum Cash Assets that we are required to hold under our Treasury Reserve Policy, which may include cash generated by operating activities and cash from the proceeds of financing activities.

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Market Value of Bitcoin Held at End of Quarter Using Ending Market Price (in thousands) (f)

December 31, 2023

March 31, 2024

June 30, 2024

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March 31, 2025

June 30, 2025

(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.

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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) on the date of sale, or at all.

Unrealized loss on digital assets and digital asset impairment losses have significantly contributed to our operating expenses.

During the three months ended March 31, 2025, the unrealized loss on digital assets of $5,906 million represented 98.5% of our operating expenses.

During the three months ended March 31, 2024, digital asset impairment losses of $191.6 million represented 66.3% of our operating expenses.

As of May 2, 2025, we held approximately 555,450 bitcoins that were acquired at an aggregate purchase price of $38.08 billion and an average purchase price of approximately $68,550 per bitcoin, inclusive of fees and expenses.

As of May 2, 2025, at 4:00 p.m.

Unrealized (gains) losses on digital assets and digital asset impairment losses have significantly contributed to our results of operations.

During the three and six months ended June 30, 2025, the unrealized gain on digital assets of $14.048 billion and $8.14 billion, respectively, effectively offset our operating expenses, representing 100.7% and 102.3%, of our operating expenses, respectively.

During the three and six months ended June 30, 2024, digital asset impairment losses of $180.1 million and $371.7 million, respectively, represented 64.1% and 65.2% of our operating expenses, respectively.

As of July 31, 2025, we held approximately 628,791 bitcoins that were acquired at an aggregate purchase price of $46.08 billion and an average purchase price of approximately $73,277 per bitcoin, inclusive of fees and expenses.

As of July 31, 2025, at 4:00 p.m.

Eastern Time, the market price of one bitcoin reported on the Coinbase exchange was $116,760.

Enterprise Analytics Software Strategy

Strategy is a pioneer in AI-powered business intelligence (BI), and a global leader in enterprise analytics solutions.

We provide software and services designed to turn complex, chaotic data environments into rich, reliable, and convenient information feeds for our customers.

Strategy is a pioneer in AI-powered intelligence solutions delivering a comprehensive portfolio that addresses a wide spectrum of enterprise data challenges.

We provide software and services designed to transform complex, fragmented data environments into unified

reliable information 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.

Our cloud-native flagship, Strategy One, powers some of the largest analytics deployments in the world for customers spanning a wide range of industries, including retail, banking, technology, manufacturing, insurance, consulting, healthcare, telecommunications, and the public sector.

Integral to the Strategy One platform 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, Strategy One provides non-technical users with timely, actionable insights for decision-making.

The analytics market is highly competitive and subject to rapidly changing technology and market conditions.

Strategy One, our cloud-native analytics platform, powers some of the largest business intelligence deployments in the world.

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 intelligence 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-assisted data modeling hastens data product creation, while its 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.

The AI and analytics markets are highly competitive and subject to rapidly changing technology and market conditions.

Our ability to compete successfully depends on a number of factors within and outside of our control.

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Operating Highlights

The following table sets forth certain operating highlights (in thousands) for the three months ended March 31, 2025 and 2024:

The following table sets forth certain operating highlights (in thousands) for the three and six months ended June 30, 2025 and 2024:

Three Months Ended

Six Months Ended

Product licenses

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General and administrative

Unrealized loss on digital assets

Unrealized gain on digital assets

Digital asset impairment losses

Total operating expenses

Loss from operations

Income (loss) from operations

Prior to our adoption of ASU 2023-08 on January 1, 2025, we incurred significant impairment losses on our digital assets, and we recognized gains upon sale of our digital assets, which were presented net of any impairment losses within operating expenses.

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In addition, we base our operating expense budgets on expected revenue trends and strategic objectives.

Many of our expenses, such as interest expense on debt, declared dividends on our preferred stock, tax liabilities, office leases and certain personnel costs, are relatively fixed.

Many of our expenses, such as interest expense on debt, declared dividends on our STRK Stock, STRF Stock, STRD Stock and STRC Stock (hereinafter collectively

referred to as “Preferred Stock”), tax liabilities, office leases and certain personnel costs, are relatively fixed.

We may be unable to adjust spending quickly enough to offset any unexpected shortfall in our cash flow.

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We therefore believe that period-to-period comparisons of our operating results may not be a good indication of our future performance.

As of March 31, 2025, we had a total of 1,483 employees, of whom 431 were based in the United States and 1,052 were based internationally.

As of June 30, 2025, we had a total of 1,512 employees, of whom 469 were based in the United States and 1,043 were based internationally.

The following table summarizes employee headcount as of the dates indicated:

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Three Months Ended

Six Months Ended

Cost of subscription services revenues

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Total share-based compensation expense

The $6.0 million decrease in share-based compensation expense during the three months ended March 31, 2025, as compared to the same period in the prior year, was primarily due to the forfeiture of certain stock awards and certain awards that became fully vested, partially offset by the grant of additional awards under the Stock Incentive Plans.

As of March 31, 2025, we estimated that an aggregate of approximately $143.1 million of additional share-based compensation expense associated with the Stock Incentive Plans and the 2021 ESPP will be recognized over a remaining weighted average period of 2.8 years.

The $4.9 million decrease in share-based compensation expense during the three months ended June 30, 2025, as compared to the same period in the prior year, was primarily due to the forfeiture of certain stock awards and certain awards that became fully vested, partially offset by the grant of additional awards under the Stock Incentive Plans.

The $10.9 million decrease in share-based compensation expense during the six months ended June 30, 2025, as compared to the same period in the prior year, was primarily due to the forfeiture of certain stock awards and certain awards that became fully vested, partially offset by the grant of additional awards under the Stock Incentive Plans.

As of June 30, 2025, we estimated that an aggregate of approximately $126.2 million of additional share-based compensation expense associated with the Stock Incentive Plans and the 2021 ESPP will be recognized over a remaining weighted average period of 2.7 years.

Critical Accounting Estimates

Our discussion and analysis of our financial condition and results of operations are based on our Consolidated Financial Statements, which have been prepared in accordance with GAAP.

The preparation of our Consolidated Financial Statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, and equity, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.

date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.

Actual results and outcomes could differ from these estimates and assumptions.

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Results of Operations

Comparison of the three months ended March 31, 2025 and 2024

Comparison of the three and six months ended June 30, 2025 and 2024

Except as otherwise indicated herein, the term “domestic” refers to operations in the United States and Canada and the term “international” refers to operations outside of the United States and Canada.

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Three Months Ended

Six Months Ended

Product Licenses and Subscription Services Revenues:

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Product licenses revenues.

Product licenses revenues decreased $5.7 million for the three months ended March 31, 2025, as compared to the same period in the prior year, primarily due to an overall decrease in the volume and average size of deals.

Our product licenses revenues may continue to experience declines in future periods as we continue to promote our cloud offering to new and existing customers.

Product licenses revenues decreased $2.1 million and $7.8 million for the three and six months ended June 30, 2025, respectively, as compared to the same periods in the prior year, primarily due to an overall decrease in the volume and average size of deals.

We expect our product licenses revenues to continue to experience declines in future periods as we continue to promote our cloud offering to new and existing customers.

Subscription services revenues.

Subscription services revenues are derived from our Cloud subscription service and are recognized ratably over the service period in the contract.

Subscription services revenues increased $14.1 million for the three months ended March 31, 2025, as compared to the same period in the prior year, primarily due to conversions to cloud-based subscriptions from existing on-premises customers (including a larger number of conversions for International customers), a net increase in the use of subscription services by existing customers, and sales contracts with new customers.

Subscription services revenues increased $16.7 million and $30.9 million for the three and six months ended June 30, 2025, respectively, as compared to the same periods 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.

We expect our subscription services revenues to continue to grow in future periods as we continue to promote our cloud offering to new and existing customers.

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Three Months Ended

Six Months Ended

Product Support Revenues:

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Product support revenues are recognized ratably over the term of the contract, which is generally one year.

Product support revenues decreased $10.2 million for the three months ended March 31, 2025, as compared to the same period in the prior year, primarily due to certain existing customers converting from perpetual product licenses with separate support contracts to our subscription services offerings.

Our product support revenues may experience declines in future periods as we continue to promote our cloud offering to new and existing customers.

Product support revenues decreased $9.7 million and $19.8 million for the three and six months ended June 30, 2025, respectively, as compared to the same periods 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.

We expect our product support revenues to experience declines in future periods as we continue to promote our cloud offering to new and existing customers.

Other services revenues.

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Three Months Ended

Six Months Ended

Other Services Revenues:

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Consulting revenues are derived from helping customers plan and execute the deployment of our software.

Consulting revenues decreased $2.1 million for the three months ended March 31, 2025, as compared to the same period in the prior year, primarily due to a decrease in demand for consulting services.

Consulting revenues decreased $1.6 million and $3.7 million for the three and six months ended June 30, 2025, respectively, as compared to the same period in the prior year, primarily due to a decrease in demand for consulting services.

Education revenues.

Education revenues are derived from the education and training that we provide to our customers to enhance their ability to fully utilize the features and functionality of our software.

These offerings include self-tutorials, custom course development, joint training with customers’ internal staff, and standard course offerings, with pricing dependent on the specific offering delivered.

Education revenues decreased $0.4 million for the three months ended March 31, 2025, as compared to the same periods in the prior year.

Education revenues did not materially change for the three and six months ended June 30, 2025, as compared to the same periods in the prior year.

Costs and Expenses

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Three Months Ended

Six Months Ended

Cost of Revenues:

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Cost of product licenses revenues consists of referral fees paid to channel partners, the costs of product manuals and media, and royalties paid to third-party software vendors.

Cost of product licenses revenues increased $0.4 million for the three months ended March 31, 2025, as compared to the same period in the prior year.

Cost of product licenses revenues did not materially change for the three and six months ended June 30, 2025, as compared to the same periods in the prior year.

Cost of subscription services revenues.

Cost of subscription services revenues consists of equipment, facility and other related support costs (including cloud hosting infrastructure costs), and personnel and related overhead costs.

Cost of subscription services revenues increased $5.8 million for the three months ended March 31, 2025, as compared to the same period in the prior year, primarily due to a $6.4 million increase in cloud hosting infrastructure costs, which is a result of the increased usage by new and existing cloud subscription services customers, offset by decreased personnel costs due to headcount reductions and change in the mix between domestic employees and international employees with lower average personnel costs.

Cost of subscription services revenues increased $6.3 million for the three months ended June 30, 2025, as compared to the same period in the prior year, primarily due to a $6.0 million increase in cloud hosting infrastructure costs, which is a result of the increased usage by new and existing cloud subscription services customers.

Cost of subscription services revenues increased $12.2 million for the six months ended June 30, 2025, as compared to the same period in the prior year, primarily due to a $13.2 million increase in cloud hosting infrastructure and service costs, which is a result of the increased usage by new and existing cloud subscription services customers, partially offset by a $1.5 million decrease in personnel costs due to headcount reductions and changes in the mix between domestic employees and international employees with lower average personnel costs.

Cost of product support revenues.

Cost of product support revenues consists of personnel and related overhead costs.

Cost of product support revenues decreased $1.2 million for the three months ended March 31, 2025, as compared to the same period in the prior year, primarily due to a decrease in personnel costs due to headcount reductions.

Cost of product support revenues decreased $0.9 million for the three months ended June 30, 2025, as compared to the same period in the prior year, primarily due to a decrease in personnel costs due to headcount reductions.

Cost of product support revenues decreased $2.1 million for the six months ended June 30, 2025, as compared to the same period in the prior year, primarily due to a $1.3 million decrease in share-based compensation expense primarily attributable to the forfeiture of certain awards and a decrease in personnel costs of $0.5 million due to headcount reductions.

Cost of consulting revenues.

Cost of consulting revenues consists of personnel and related overhead costs.

Cost of consulting revenues decreased $1.2 million for the three months ended March 31, 2025, as compared to the same period in the prior year, primarily due to a decrease in personnel costs of $1.9 million due to headcount reductions, partially offset by a $0.7 million increase in billable hours from outside contractor labor costs.

Cost of consulting revenues decreased $1.1 million for the three months ended June 30, 2025, as compared to the same period in the prior year, primarily due to a decrease in personnel costs of $1.9 million due to headcount reductions, partially offset by a $0.8 million increase in billable hours from outside contractor labor costs.

Cost of consulting revenues decreased $2.3 million for the six months ended June 30, 2025, as compared to the same period in the prior year, primarily due to a decrease in personnel costs of $3.8 million due to headcount reductions, partially offset by a $1.5 million increase in billable hours from outside contractor labor costs.

Cost of education revenues.

Cost of education revenues consists of personnel and related overhead costs.

Cost of education revenues did not materially change for the three months ended March 31, 2025, as compared to the same periods in the prior year.

Cost of education revenues did not materially change for the three and six months ended June 30, 2025, as compared to the same periods in the prior year.

Sales and marketing expenses.

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Three Months Ended

Six Months Ended

Sales and marketing expenses

Sales and marketing expenses decreased $5.9 million for the three months ended March 31, 2025, as compared to the same period in the prior year, primarily due to a $2.4 million decrease in employee salaries and related benefits primarily attributable to a decrease in average staffing levels and a $3.5 million net decrease in share-based compensation expense primarily attributable to the forfeiture of certain awards.

Sales and marketing expenses did not materially change for the three months ended June 30, 2025, as compared to the same period in the prior year and decreased $6.5 million for the six months ended June 30, 2025, as compared to the same period in the prior year.

The six month decrease was primarily due to (i) a decrease of $3.8 million in employee salaries and related benefits primarily attributable to a decrease in average staffing levels, and (ii) a $5.2 million net decrease in share-based compensation expense primarily attributable to the forfeiture of certain awards, partially offset by (iii) an increase in expense of $2.4 million due to a reduction in capitalized commissions.

Research and development expenses.

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Three Months Ended

Six Months Ended

Research and development expenses

Research and development expenses decreased $4.8 million for the three months ended March 31, 2025, as compared to the same period in the prior year, primarily due to (i) a $4.0 million decrease in employee salaries and bonuses primarily attributable to a decrease in average staffing levels, and (ii) a $3.9 million net decrease in share-based compensation expense primarily due to the forfeiture of certain awards, partially offset by a (iii) a $3.1 million increase in severance costs due to headcount reductions.

Research and development expenses decreased $6.2 million for the three months ended June 30, 2025, as compared to the same period in the prior year, primarily due to a $4.0 million decrease in employee salaries primarily attributable to a decrease in average staffing levels, and a $1.9 million net decrease in share-based compensation expense primarily due to the forfeiture of certain awards.

Research and development expenses decreased $11.0 million for the six months ended June 30, 2025, as compared to the same period in the prior year, primarily due to (i) a $9.2 million decrease in employee salaries and bonuses primarily attributable to a decrease in average staffing levels, and (ii) a $5.8 million net decrease in share-based compensation expense primarily due to the forfeiture of certain awards, partially offset by a (iii) a $3.4 million increase in severance costs due to headcount reductions.

General and administrative expenses.

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Three Months Ended

Six Months Ended

General and administrative expenses

General and administrative expenses increased $5.9 million for the three months ended March 31, 2025, as compared to the same period in the prior year, primarily due to (i) a $3.4 million increase in bitcoin custody fees;

General and administrative expenses did not materially change for the three months ended June 30, 2025, as compared to the same period in the prior year, and increased $6.3 million for the six months ended June 30, 2025, as compared to the same period in the prior year, primarily due to (i) a $6.9 million increase in bitcoin custody fees;

(ii) a $3.4 million increase related to various bitcoin advocacy initiatives, including political contributions and sponsorships;

(iii) a $1.6 million increase in costs related to special shareholder meeting;

and (iv) a $1.9 million net increase in share-based compensation expense primarily attributable to the grant of additional awards under the Stock Incentive Plans, partially offset by certain awards that became fully vested, partially offset by (v) a $4.7 million decrease due to employer payroll taxes for the first quarter of 2024 related to stock options exercised during that quarter;

and (vi) a $1.1 million decrease in legal, and professional fees.

Losses (gains) associated with digital assets Upon adoption of ASU 2023-08 on January 1, 2025, any subsequent increases or decreases in fair 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.

(iii) a $2.7 million increase in increased public filing costs;

(iv) a $1.5 million increase in bonus and other employee benefit costs;

(v) $1.3 million net increase in share-based compensation expense primarily attributable to the grant of additional awards under the Stock Incentive Plans;

and (vi) a $1.1 million increase in bad debt, partially offset by (vii) a $6.5 million decrease due to employer payroll taxes for stock options exercised in 2024;

and (viii) a $4.3 million decrease in legal and professional fees.

(Gains) losses associated with digital assets and digital asset impairment losses Upon adoption of ASU 2023-08 on January 1, 2025, any subsequent increases or decreases in fair 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.

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 establish a deferred tax asset related to bitcoin impairment losses.

Instead, we establish a deferred tax liability if the market value of bitcoin at the reporting date is greater than the average cost basis of our bitcoin holdings at such reporting date, and any subsequent increases or decreases in the market value of bitcoin will increase or decrease the deferred tax liability.

The following table sets forth the unrealized losses (gains) associated with our digital assets (in thousands):

The following table sets forth the unrealized (gains) losses on our digital assets for the three and six months ended June 30, 2025 and impairment losses on our digital assets for the three and six months ended June 30, 2024 (in thousands):

Three Months Ended

Unrealized loss on digital assets

Six Months Ended

Unrealized gain on digital assets

Digital asset impairment losses

We did not sell any of our digital assets during the three months ended March 31, 2025 or 2024.

As a result of our adoption of ASU 2023-08, we may incur greater losses during periods when we previously would have incurred smaller losses or no losses because we had already impaired the carrying value of our bitcoin to a low price observed during a prior period, and we may also incur gains during periods when the market value of bitcoin rises, as compared to periods prior to January 1, 2025, when we would not have incurred any gains under similar circumstances.

Accordingly, due in particular to the volatility in the price of bitcoin, we expect the adoption of ASU 2023-08 to increase the volatility of our financial results.

Additionally, as a result of ASU 2023-08 requiring a cumulative-effect adjustment to our opening balance of retained earnings as of January 1, 2025 and not permitting retrospective restatement of prior periods, our future results will not be comparable to results from periods prior to our adoption of the guidance.

We did not sell any of our digital assets during the three and six months ended June 30, 2025 and 2024.

Interest Expense, Net

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Three Months Ended

Six Months Ended

Interest expense, net:

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Total interest expense, net

Interest expense, net, increased $5.2 million for the three months ended March 31, 2025, as compared to the same period in the prior year, primarily as a result of (i) interest incurred related to the 2032 Convertible Notes (which were issued in June 2024), (ii) interest incurred related to the 2030A Convertible Notes and 2031 Convertible Notes (which were each issued in March 2024), (iii) interest incurred related to the 2028 Convertible Notes (which were issued in September 2024), (iv) issuance costs related to the 2029 Convertible Notes (which were issued in November 2024), and (v) issuance costs related to the 2030B Convertible Notes (which were issued in February 2025), partially offset by (vi) the 2025 Convertible Notes having been converted or redeemed in their entirety in July, 2024, (vii) the 2027 Convertible Notes having been converted or redeemed in their entirety in January 2025 and (viii) the 2028 Secured Notes having been redeemed in their entirety in September 2024.

Interest expense for future periods in 2025 is expected to decrease compared to the same period in 2024 as a result of a more favorable average interest rate on outstanding debt as of March 31, 2025.

Interest expense, net, increased $2.4 million for the three months ended June 30, 2025, as compared to the same period in the prior year, primarily as a result of interest incurred related to new Convertible Notes issued subsequent to June 2024 partially offset by reductions in interest expense due to the 2025 Convertible Notes having been converted or redeemed in their entirety in July 2024, the 2027 Convertible Notes having been converted or redeemed in their entirety in January 2025 and the 2028 Secured Notes having been redeemed in their entirety in September 2024.

Interest expense, net, increased $7.7 million for the six months ended June 30, 2025, as compared to the same period in the prior year, primarily as a result of interest incurred related to the new Convertible Notes issued subsequent to June 2024 partially offset by reductions in interest expense due to the 2025 Convertible Notes having been converted or redeemed in their entirety in July 2024, the 2027 Convertible Notes having been converted or redeemed in their entirety in January 2025 and the 2028 Secured Notes having been redeemed in their entirety in September 2024.

Interest expense for future periods in 2025 is expected to increase compared to the same periods in 2024 as a result of increased debt outstanding as of June 30, 2025.

Refer to Note 5, Long-term Debt, to the Consolidated Financial Statements for further information.

Other (Expense) Income, Net

For the three months ended March 31, 2025, other expense, net, of $3.9 million was comprised primarily of foreign currency transaction net losses.

For the three months ended March 31, 2024, other income, net, of $1.7 million was comprised primarily of foreign currency transaction net gains.

We recorded 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, as compared to a benefit from income taxes of $160.8 million on a pretax loss of $213.9 million that resulted in an effective tax rate of 75.2% for the three months ended March 31, 2024.

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.

During the three months ended March 31, 2024, our benefit from income taxes primarily related to the (i) a tax benefit related to share-based compensation (including the income tax effects of exercises of stock options and vesting of share-settled restricted stock units) and (ii) a tax benefit from an increase in our deferred tax asset related to the impairment on our bitcoin holdings.

As of March 31, 2025, we had a valuation allowance of $0.5 million primarily related to our deferred tax assets related to foreign tax credits in certain jurisdictions.

As of March 31, 2025, we had deferred tax liabilities with respect to the unrealized gain on our bitcoin holdings of approximately $2.28 billion.

For the three and six months ended June 30, 2025, other expense, net, of $8.3 million and $12.2 million, respectively, was comprised primarily of foreign currency transaction net losses.

For the three and six months ended June 30, 2024, other income, net, of $0.7 million and $2.4 million, respectively, was comprised primarily of foreign currency transaction net gains.

We recorded a provision for income taxes of $2.26 billion on a pretax income of $8.06 billion that resulted in an effective tax rate of 28.0% for the six months ended June 30, 2025, as compared to a benefit from income taxes of $273.3 million on a pretax loss of $428.9 million that resulted in an effective tax rate of 63.7% for the six months ended June 30, 2024.

During the six months ended June 30, 2025, our provision for income taxes primarily related to the tax effect of the unrealized gain on digital assets.

During the six months ended June 30, 2024, our benefit from income taxes primarily related to (i) a tax benefit related to share-based compensation (including the income tax effects of exercises of stock options and vesting of share-settled restricted stock units) and (ii) a tax benefit from an increase in our deferred tax asset related to the impairment on our bitcoin holdings.

As of June 30, 2025, we had a valuation allowance of $0.5 million primarily related to our deferred tax assets related to foreign tax credits in certain jurisdictions.

As of June 30, 2025, we had deferred tax liabilities with respect to the unrealized gain on our bitcoin holdings of approximately $6.31 billion.

Our deferred tax liabilities are partially offset by deferred tax assets, such as net operating losses and capitalized research and development costs.

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enacted the IRA in August 2022.

Among other things, unless an exemption by statute or regulation applies, a provision of the IRA imposes a 15% CAMT on a corporation with respect to an initial tax year and subsequent tax years, if the average annual adjusted financial statement income for any consecutive three-tax-year period preceding the initial tax year exceeds $1 billion.

On September 12, 2024, the Department of Treasury and the Internal Revenue Service issued proposed regulations with respect to the application of the CAMT.

Among other things, unless an exemption by statute or regulation applies, a provision of the IRA imposes a 15% CAMT on a corporation with respect to an initial tax year and subsequent tax years, if the average annual adjusted financial statement income (“AFSI”) for any consecutive three-tax-year period preceding the initial tax year exceeds $1 billion.

On September 12, 2024, the Department of the Treasury and the IRS issued proposed regulations with respect to the application of the CAMT.

On June 2, 2025, the IRS published Notice 2025-27, which signaled that the IRS plans to issue additional interim guidance on how unrealized gains and losses on certain investment assets reported for financial statement purposes should be taken into account for purposes of determining AFSI.

On July 30, 2025, a White House working group established by President Trump in January 2025 published a report on strengthening American leadership in digital financial technology, which called for the Department of the Treasury and the IRS to publish guidance addressing the determination of AFSI with respect to financial accounting for unrealized gains and losses on investment assets other than stock and partnership interests.

Due to our adoption of ASU 2023-08 as of January 1, 2025, we were required to recognize a cumulative-effect adjustment of $12.75 billion to the opening balance of our retained earnings as of January 1, 2025.

We will additionally be required to recognize unrealized gains or losses from changes in the fair value of digital assets in future reporting periods as income or losses.

For purposes of calculating the adjusted financial statement income, we will be required to ratably allocate this increase to our retained earnings over a four year period, from 2025 through 2028.

When determining whether we are subject to CAMT and when calculating any related tax liability for an applicable tax year, the proposed regulations provide that, among other adjustments, our adjusted financial statement income must include this ratable amount in addition to any unrealized gains or losses reported in the applicable tax year.

Accordingly, as a result of the enactment of the IRA and our adoption of ASU 2023-08 on January 1, 2025, unless the IRA is amended or the proposed regulations, when finalized, are revised to provide relief (or other interim relief is granted), we could become subject to CAMT in the tax years beginning in 2026 and beyond.

As the taxes to which we are subject will depend in significant part on the future price of bitcoin and the size of our bitcoin holdings, we are not able to estimate the impact of CAMT on our future income tax expense.

See “Risk Factors—Risks Related to Our Business in General—We may have exposure to greater than anticipated tax liabilities, including the potential taxation of unrealized gains on our bitcoin holdings.”

For purposes of calculating the AFSI, we will be required to ratably allocate this increase to our retained earnings over a four year period, from 2025 through 2028.

When determining whether we are subject to CAMT and when calculating any related tax liability for an applicable tax year, the proposed regulations provide that, among other adjustments, our AFSI must include this ratable amount in addition to any unrealized gains or losses reported in the applicable tax year.

Accordingly, as a result of the enactment of the IRA and our adoption of ASU 2023-08 on January 1, 2025, unless the IRA is amended or the proposed regulations, when finalized, are revised to provide relief (or other interim relief is granted), we expect, given the magnitude of our unrealized gain on digital assets as of June 30, 2025, that we would become subject to CAMT in the tax years beginning in 2026 and beyond.

As the taxes to which we would be subject will depend in significant part on the future price of bitcoin and the size of our bitcoin holdings, we are not able to estimate the impact of CAMT on our future income tax expense.

See “Risk Factors—Risks Related to Our Business in General—We may have exposure to greater than anticipated tax liabilities.”

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.

We are currently evaluating the full impact of this legislation on our consolidated financial statements.

Since the legislation was signed into law after June 30, 2025, its impacts are not included in our operating results for the six months ended June 30, 2025.

Deferred Revenue and Advance Payments

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The portions of multi-year contracts that will be invoiced in the future are not presented on the balance sheet in “Accounts receivable, net” and “Deferred revenue and advance payments” and instead are included in the remaining performance obligation disclosure below.

Total deferred revenue and advance payments decreased $23.3 million as of March 31, 2025, as compared to December 31, 2024, primarily due to (i) a decrease in deferred revenue from subscription services contracts, (ii) a decrease in deferred product support revenue due to the timing of product support renewals and an increase in conversions from on-premises to subscription services contracts, and (iii) decreases in deferred other services revenue and deferred product licenses revenues.

Total deferred revenue and advance payments decreased $2.8 million as of March 31, 2025, as compared to March 31, 2024, primarily due to (i) a decrease in deferred product support revenue from an increase in conversions from on-premises to subscription services contracts, partially offset by (ii) an increase in deferred revenue from subscription services contracts.

Total deferred revenue and advance payments decreased $24.5 million as of June 30, 2025, as compared to December 31, 2024, primarily due to (i) a decrease in deferred product support revenue due to the timing of product support renewals and an increase in conversions from on-premises to subscription services contracts, partially offset by (ii) an increase in deferred subscription services revenue due to the timing of cloud renewal contracts, and (iii) an increase in deferred revenue from new subscription service contracts.

Total deferred revenue and advance payments increased $7.6 million as of June 30, 2025, as compared to June 30, 2024, 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.

Our 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.

As of March 31, 2025, we had an aggregate transaction price of $442.8 million allocated to the remaining performance obligation related to subscription services, product support, product licenses, and other services contracts.

As of June 30, 2025, we had an aggregate transaction price of $470.6 million allocated to the remaining performance obligation related to subscription services, product support, product licenses, and other services contracts.

We expect to recognize approximately $278.5 million of the remaining performance obligation over the next 12 months and the remainder thereafter.

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Treasury securities.

As of March 31, 2025 and December 31, 2024, the amount of cash and cash equivalents held by our U.S.

As of June 30, 2025 and December 31, 2024, the amount of cash and cash equivalents held by our U.S.

entities was $14.7 million and $8.8 million, respectively, and by our non-U.S.

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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, 2025 and the three months ended March 31, 2024.

Under our Treasury Reserve Policy and bitcoin strategy, we use a significant portion of our cash, including cash generated from capital raising transactions, to acquire bitcoins, which are classified as indefinite-lived intangible assets.

As of December 31, 2024 and March 31, 2025, we held approximately 447,470 bitcoins and 528,185, respectively, all of which are unencumbered.

As of May 2, 2025, we held approximately 555,450 bitcoins, all of which are unencumbered, and which had an aggregate market value of $53.86 billion, based

on the market price of one bitcoin as reported on the Coinbase exchange as of 4:00 p.m.

We did not repatriate any foreign earnings and profits during the three and six months ended June 30, 2025 and 2024.

Under our Treasury Reserve Policy and bitcoin strategy, we use the vast majority of our cash, including cash generated from capital raising transactions, to acquire bitcoins, which are classified as indefinite-lived intangible assets.

As of June 30, 2025 and December 31, 2024, we held approximately 597,325 and 447,470 bitcoins, respectively, all of which are unencumbered.

As of July 31, 2025, we held approximately 628,791 bitcoins, all of which are unencumbered, and which had an aggregate market value of $73.42 billion as of July 31,

2025, based on the market price of one bitcoin as reported on the Coinbase exchange as of 4:00 p.m.

Eastern Time.

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On May 1, 2025, we entered into the May 2025 Sales Agreement and filed a prospectus supplement for an at-the-market equity offering program pursuant to which we may sell shares of class A common stock having an aggregate offering price of up to $21.0 billion, from time to time, through TD Securities (USA) LLC, The Benchmark Company, LLC, BTIG, LLC, Canaccord Genuity LLC, Cantor Fitzgerald & Co., Mizuho Securities USA LLC, Santander US Capital Markets LLC, and SG Americas Securities, LLC, as sales agents.

As of May 2, 2025, approximately $21.00 billion of our class A common stock remained available for issuance and sale pursuant to the May 2025 Sales Agreement.

As of June 30, 2025 and July 31, 2025, approximately $18.11 billion and $17.04 billion, respectively, of our class A common stock remained available for issuance and sale pursuant to the May 2025 Sales Agreement.

To the extent we make sales under the May 2025 Sales Agreement, we can use the net proceeds from such sales for general corporate purposes, including the acquisition of bitcoin, paying cash dividends on our outstanding preferred stock, and for working capital.

See “—At-the-Market Equity Offerings” below.

On March 10, 2025, we entered into the Strike Sales Agreement and filed a prospectus supplement for a new at-the-market equity offering program pursuant to which we may issue and sell shares of our Perpetual Strike Preferred Stock, having an aggregate offering price of up to $21.0 billion.

As of March 31, 2025 and May 2, 2025, approximately $20.97 billion and $20.87 billion, respectively, of our Perpetual Strike Preferred Stock remained available for issuance and sale pursuant to the Strike Sales Agreement.

To the extent we make sales under the Strike Sales Agreement, we can use the net proceeds from such sales for general corporate purposes, including the acquisition of bitcoin and for working capital.

On March 10, 2025, we entered into the STRK Sales Agreement and filed a prospectus supplement for a new at-the-market equity offering program pursuant to which we may issue and sell shares of our STRK Stock, having an aggregate offering price of up to $21.0 billion.

As of June 30, 2025 and July 31, 2025, approximately $20.52 billion and $20.45 billion, respectively, of our STRK Stock remained available for issuance and sale pursuant to the STRK Sales Agreement.

To the extent we make sales under the STRK Sales Agreement, we can use the net proceeds from such sales for general corporate purposes, including the acquisition of bitcoin and for working capital.

See “—At-the-Market Equity Offerings” below.

On October 30, 2024, we entered into the October 2024 Sales Agreement and filed a prospectus supplement for an at-the-market equity offering program pursuant to which we could sell shares of class A common stock having an aggregate offering price of up to $21 billion.

As of March 31, 2025, approximately $2.37 billion of our class A common stock remained available for issuance and sale pursuant to the October 2024 Sales Agreement.

As of May 2, 2025, the October 2024 Sales Agreement has been substantially depleted and further at-the-market sales of class A common stock will be made under the May 2025 Sales Agreement.

On May 22, 2025, we entered into the Original STRF Sales Agreement and filed a prospectus supplement for a new at-the-market equity offering program pursuant to which we may issue and sell shares of our STRF Stock, having an aggregate offering price of up to $2.1 billion.

On July 7, 2025, we amended the Original STRF Sales Agreement to include an additional sales agent.

As of June 30, 2025 and July 31, 2025, approximately $1.94 billion and $1.88 billion, respectively, of our STRF Stock remained available for issuance and sale pursuant to the STRF Sales Agreement.

To the extent we make sales under the STRF Sales Agreement, we can use the net proceeds from such sales for general corporate purposes, including the acquisition of bitcoin and for working capital.

See “—At-the-Market Equity Offerings” below.

On July 7, 2025, we entered into the STRD Sales Agreement and filed a prospectus supplement for a new at-the-market equity offering program pursuant to which we may issue and sell shares of our STRD Stock, having an aggregate offering price of up to $4.2 billion.

As of July 31, 2025, approximately $4.18 billion of our STRD Stock remained available for issuance and sale pursuant to the STRD Sales Agreement.

To the extent we make sales under the STRD Sales Agreement, we can use the net proceeds from such sales for general corporate purposes, including the acquisition of bitcoin and for working capital, and may also use the net proceeds to pay cash dividends on STRF Stock and STRD Stock.

See “—At-the-Market Equity Offerings” below.

On July 31, 2025, we entered into the STRC Sales Agreement and filed a prospectus supplement for a new at-the-market equity program pursuant to which we may issue and sell shares of our STRC Stock, having an aggregate offering price of up to $4.2 billion.

As of July 31, 2025, approximately $4.2 billion of our STRC Stock remained available for issuance and sale pursuant to the STRC Sales Agreement.

To the extent we make sales under the STRC Sales Agreement, we can use the net proceeds from such sales for general corporate purposes, including the acquisition of bitcoin and for working capital, and may also use the net proceeds to pay cash dividends on shares of any class or series of our preferred stock, other than our STRC Stock, then outstanding.

See “—At-the-Market Equity Offerings” below.

Initial Public Offerings of Preferred Stock

On February 5, 2025, we issued 7,300,000 shares of Perpetual Strike Preferred Stock in a public offering registered under the Securities Act.

In connection with such issuance, we filed the Strike Certificate of Designations with the Secretary of State of the State of Delaware designating an aggregate of 7,300,000 shares of, and establishing the terms of, the Perpetual Strike Preferred Stock.

We received approximately $563.2 million of net proceeds, after deducting the underwriting discounts and commissions and our offering expenses, from the issuance of our Perpetual Strike Preferred Stock in the initial public offering of Perpetual Strike Preferred Stock.

On February 5, 2025, we issued 7,300,000 shares of STRK Stock in a public offering registered under the Securities Act of 1933, as amended (the “Securities Act”).

In connection with such issuance, we filed the certificate of designations for the STRK Stock with the Secretary of State of the State of Delaware designating an aggregate of 7,300,000 shares of, and establishing the terms of, the STRK Stock.

We received approximately $563.2 million of net proceeds, after deducting the underwriting discounts and commissions and our offering expenses, from the issuance of our STRK Stock in the initial public offering of STRK Stock.

All net proceeds from the offering were used for general corporate purposes, including the acquisition of bitcoin and for working capital.

On March 25, 2025, we issued 8,500,000 shares of Perpetual Strife Preferred Stock in a public offering registered under the Securities Act.

In connection with such issuance, we filed the Strife Certificate of Designations with the Secretary of State of the State of Delaware designating an aggregate of 8,500,000 shares of, and establishing the terms of, the Perpetual Strife Preferred Stock.

We received approximately $710.9 million of net proceeds, after deducting the underwriting discounts and commissions and our offering expenses, from the issuance of our Perpetual Strife Preferred Stock in the initial public offering of Perpetual Strife Preferred Stock.

On March 25, 2025, we issued 8,500,000 shares of STRF Stock in a public offering registered under the Securities Act.

In connection with such issuance, we filed the certificate of designations for the STRF Stock with the Secretary of State of the State of Delaware designating an aggregate of 8,500,000 shares of, and establishing the terms of, the STRF Stock.

We received approximately $710.9 million of net proceeds, after deducting the underwriting discounts and commissions and our offering expenses, from the issuance of our STRF Stock in the initial public offering of STRF Stock.

All net proceeds from the offering were used for general corporate purposes, including the acquisition of bitcoin and for working capital.

For a discussion of the required dividends payable on and other rights of the Perpetual Strike Preferred Stock and Perpetual Strife Preferred Stock, see Note 9, Redeemable Preferred Stock, to the Consolidated Financial Statements included in this Quarterly Report.

On June 10, 2025, we issued 11,764,700 shares of STRD Stock in a public offering registered under the Securities Act.

In connection with such issuance, we filed the certificate of designations for the STRD Stock with the Secretary of State of the State of Delaware designating an aggregate of 11,764,700 shares of, and establishing the terms of, the STRD Stock.

We received approximately $979.5 million of net proceeds, after deducting the underwriting discounts and commissions and our offering expenses, from the issuance of our STRD Stock in the initial public offering of STRD Stock.

All net proceeds from the offering were used for general corporate purposes, including the acquisition of bitcoin and for working capital.

On July 29, 2025, we issued 28,011,111 shares of STRC Stock in a public offering registered under the Securities Act.

In connection with such issuance, we filed the certificate of designations for the STRC Stock with the Secretary of State of the State of Delaware designating an aggregate of 28,011,111 shares of, and establishing the terms of, the STRC Stock.

We received approximately $2.47 billion of net proceeds, after deducting the underwriting discounts and commissions and our offering expenses, from the issuance of our STRC Stock in the initial public offering of STRC Stock.

All net proceeds from the offering were used for general corporate purposes, including the acquisition of bitcoin and for working capital.

For a discussion of the dividends payable on and other rights of the STRK Stock, STRF Stock, STRD Stock and STRC Stock, see Note 9, Redeemable Preferred Stock and Note 14, Subsequent Events to the Consolidated Financial Statements included in this Quarterly Report.

Contractual and Other Obligations

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• rent payments under noncancellable operating leases;

• declared regular dividends on our Perpetual Strike Preferred Stock and Perpetual Strife Preferred Stock.;

• $9.2 million payments made in April 2025 related to the mandatory deemed repatriation transition tax (the “Transition Tax”) under the U.S.

Tax Cuts and Jobs Act (the “Tax Act”);

• declared regular dividends, if any, on our Preferred Stock, (in each case, to the extent declared by our board of directors or a duly authorized committee thereof), which, based on the number of shares of Preferred Stock outstanding as of June 30, 2025 (except as set forth below), would include:

o $24.4 million in dividends payable each quarterly period on our STRK Stock;

o $25.2 million in dividends payable each quarterly period on our STRF Stock;

o $29.4 million in dividends payable each quarterly period on our STRD Stock;

o 28,011,111 shares of STRC Stock were issued on July 29, 2025 resulting in $21.0 million in dividends payable each monthly period on the STRC Stock, assuming that the initial dividend rate of 9.00% remains unchanged.

• ongoing personnel-related expenditures and vendor payments.

The above items are explained in further detail in Note 5, Long-term Debt, to the Consolidated Financial Statements included in this Quarterly Report as well as under “Item 7.

The above items are explained in further detail in Note 5, Long-term Debt and Note 9 - Redeemable Preferred Stock, to the Consolidated Financial Statements included in this Quarterly Report as well as under “Item 7.

Management’s Discussion and Analysis of Financial Condition and Results of Operations—Liquidity and Capital Resources” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 and in the Notes to the Consolidated Financial Statements included therein.

On March 3, 2025, we announced that our board of directors declared a quarterly cash dividend of approximately $1.24 per share payable on our Perpetual Strike Preferred Stock.

On March 31, 2025, we paid a total dividend of $9.2 million to holders of record of our Perpetual Strike Preferred Stock as of March 15, 2025.

Other than (i) our issuance of the 2030B Convertible Notes, (ii) the conversions and redemption of the 2027 Convertible Notes, and (iii) the required dividends on our Perpetual Strike Preferred Stock and Perpetual Strife Preferred Stock, all of which are described more fully above and in Note 5, Long-term Debt and Note 9, Redeemable Preferred Stock, to the Consolidated Financial Statements included in this Quarterly Report, there have been no changes to our material contractual obligations and cash requirements since December 31, 2024.

On June 2, 2025, we announced that our board of directors declared quarterly cash dividends of approximately $2.00 per share payable on the STRK Stock, and approximately $2.64 per share payable on the STRF Stock.

The calculation of the STRF Stock per share dividend amount reflected the quarterly dividend accrued from March 25, 2025, the issuance date of the STRF Stock.

We declared and paid dividends of $32.6 million on the STRK Stock for the six months ended June 30, 2025 and $25.5 million on the STRF Stock for the six months ended June 30, 2025.

As of June 30, 2025, there were no preferred stock dividends in arrears.

As contemplated by the prospectus supplement for the initial public offering of STRC Stock, on July 31, 2025, we announced that our board of directors declared monthly cash dividends of $0.80 per share payable on the STRC Stock.

The calculation of the monthly dividend takes into account the dividend accrued from, but excluding, July 29, 2025, the issuance date of the STRC Stock.

Payment will be made on August 31, 2025 (or, if such date is not a business day, the next business day) to stockholders of record of the STRC Stock at the close of business on August 15, 2025.

Other than (i) our issuance of the 2030B Convertible Notes, (ii) the conversions and redemption of the 2027 Convertible Notes, (iii) the required dividends on our STRK Stock, STRF Stock, and STRC Stock, and (iv) the regular dividends on our STRD Stock, all of which are described more fully above and in Note 5, Long-term Debt, Note 9, Redeemable Preferred Stock, and Note 14, Subsequent Events, to the Consolidated Financial Statements included in this Quarterly Report, there have been no changes to our material contractual obligations and cash requirements since December 31, 2024.

Short-term and Long-term Liquidity

Short-term Liquidity.

Our short-term liquidity needs include working capital requirements, anticipated capital expenditures, dividend obligations on the Perpetual Strike Preferred Stock (to the extent that we do not pay such dividends in the form of shares of our class A common stock), dividend obligations on the Perpetual Strife Preferred Stock, and contractual obligations due within the next twelve months.

We expect our cash and cash equivalents, as of March 31, 2025, together with cash and cash equivalents generated by our operations, will not be sufficient to satisfy these obligations over the next twelve months.

However, we anticipate being able to use proceeds from equity or debt financing to meet these obligations.

Our short-term liquidity needs include working capital requirements, anticipated capital expenditures, 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, dividend obligations on our STRF Stock and STRC Stock, regular dividends on our STRD Stock and contractual obligations due within the next twelve months.

We expect that our cash and cash equivalents as of June 30, 2025, together with cash and cash equivalents generated by our operations, will not be sufficient to satisfy these needs over the next twelve months.

However, we anticipate being able to use proceeds from equity or debt financings to meet these needs.

Our ability to obtain equity and debt financing is subject to market conditions and other factors outside of our control, and we may not be able to obtain equity or debt financing in a timely manner, on favorable terms, or at all.

Although we do not anticipate needing to use our bitcoin to meet our short-term obligations, to the extent necessary, we would seek to use proceeds from the sale of our bitcoin to meet such obligations.

Although we do not anticipate needing to use our bitcoin to meet our short-term liquidity needs, to the extent necessary, we would seek to use proceeds from the sale of our bitcoin to meet such needs.

See “—Availability of Bitcoin for Liquidity” below and “Item 1A.

Risk Factors— Risks Related to Our Business in General— A significant decrease in the market value of our bitcoin holdings could adversely affect our ability to satisfy our financial obligations” for additional information.

Long-Term Liquidity.

Beyond the next 12 months, our long-term cash requirements are primarily for obligations related to our long-term debt and for payment of dividends on the Perpetual Strike Preferred Stock (to the extent that we do not pay such dividends in the form of shares of our class A common stock) and Perpetual Strife Preferred Stock.

We also have long-term cash requirements for obligations related to our operating leases, delivery of our new corporate aircraft, our various purchase agreements, and potentially CAMT.

We expect our cash and cash equivalents as of March 31, 2025, together with cash and cash equivalents generated by our operations, will not be sufficient to satisfy these obligations.

As a result, we would seek to satisfy these obligations through various options that we expect to be available to us, such as refinancing our debt or generating cash from other sources, which may include proceeds from equity or debt financings, or the sale of our bitcoin.

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 STRK Stock to the extent that we do not pay such dividends in the form of shares of our class A common stock, STRF Stock, and STRC Stock, and regular dividends on our STRD Stock.

We also have long-term cash requirements for needs related to our operating leases, delivery of our new corporate aircraft, our various purchase agreements, and potentially CAMT.

We expect our cash and cash equivalents as of June 30, 2025, together with cash and cash equivalents generated by our operations, will not be sufficient to satisfy these needs.

As a result, we would seek to satisfy these needs through various options that we expect to be available to us, such as refinancing our debt or generating cash from other sources, which may include proceeds from equity or debt financings, or the sale of our bitcoin.

See “—Availability of Bitcoin for Liquidity” below and “Item 1A.

Risk Factors—Risks Related to Our Business in General—A significant decrease in the market value of our bitcoin holdings could adversely affect our ability to satisfy our financial obligations” for additional information.

Risk Factors—Risks Related to Our Business in General—A significant decrease in the market value of our bitcoin holdings could adversely affect our ability to satisfy our financial obligations or liquidity needs” for additional information.

Furthermore, if the conditional conversion features of the Outstanding Convertible Notes are triggered, we may elect to settle the conversions of such Outstanding Convertible Notes in shares of our class A common stock, or a combination of cash and shares of class A common stock, rather than in all cash, which may enable us to reduce the amount of our cash obligations under the Outstanding Convertible Notes.

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During times of instability in the bitcoin market, we may not be able to sell our bitcoins at reasonable prices or at all.

As a result, our bitcoins 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.

As a result, our bitcoins 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.

In addition, upon sale of our bitcoin, we may incur additional taxes related to any realized gains or we may incur capital losses as to which the tax deduction may be limited.

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The following table sets forth a summary of our cash flows (in thousands) and related percentage changes for the periods indicated:

Six Months Ended June 30,

Net cash (used in) provided by operating activities

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Our primary uses of cash in operating activities are for personnel-related expenditures for software development, personnel-related expenditures for providing consulting, education, and subscription services, and for sales and marketing costs, general and administrative costs, interest expense related to our long-term debt arrangements, and income taxes.

Non-cash items to further reconcile net loss to net cash (used in) provided by operating activities consist primarily of depreciation and amortization, reduction in the carrying amount of operating lease right-of-use assets, deferred taxes, release of liabilities for unrecognized tax benefits, share-based compensation expense, unrealized loss or gain on digital assets, digital asset impairment losses and amortization of the issuance costs on our long-term debt.

Net cash used in operating activities increased $31.0 million for the three months ended March 31, 2025, as compared to the same period in the prior year, due to a $4.164 billion increase in net loss and a $15.1 million decrease from changes in operating assets and liabilities, which was partially offset by a $4.148 billion increase in non-cash items (principally related to unrealized losses on digital assets).

In particular, our cash from operations has been negatively impacted by our continued transition of customers to subscription services offerings, which has resulted in (i) reduced cash collections due to invoicing over multiple years, (ii) increased commissions to our sales team to incentivize cloud migrations, and (iii) increased costs of our cloud infrastructure to support increased usage.

We have also incurred additional bitcoin advocacy costs and custodial fees as we continue to pursue our bitcoin strategy.

Our interest payments for the three months ended March 31, 2025 have increased compared to the same period in the prior year primarily due to the issuances of the 2028 Convertible Notes, 2030A Convertible Notes, 2031 Convertible Notes, and 2032 Convertible Notes.

Non-cash items to further reconcile net income (loss) to net cash (used in) provided by operating activities consist primarily of depreciation and amortization, reduction in the carrying amount of operating lease right-of-use assets, deferred taxes, release of liabilities for unrecognized tax benefits, share-based compensation expense, unrealized loss or gain on digital assets, digital asset impairment losses, and amortization of the issuance costs on our long-term debt.

Net cash used in operating activities increased $42.6 million for the six months ended June 30, 2025, as compared to the same period in the prior year, due to a $5.96 billion increase in net income and a $25.4 million decrease from changes in operating assets and liabilities, which was partially offset by a $5.98 billion increase in non-cash items principally related to unrealized gains on digital assets.

In particular, our cash from operations has been negatively impacted by our continued transition of customers to subscription services offerings, which has resulted in (i) reduced cash collections due to invoicing over multiple years, (ii) increased commissions and (iii) increased costs of our cloud infrastructure to support increased usage.

We have also incurred additional bitcoin advocacy costs, custodial fees and personnel costs as we continue to pursue our bitcoin strategy.

Our interest payments for the six months ended June 30, 2025 have increased compared to the same period in the prior year primarily due to the issuances of the 2028 Convertible Notes and 2032 Convertible Notes.

Net cash used in investing activities.

The changes in net cash used in investing activities primarily relate to purchases of digital assets, advance deposits on a new corporate aircraft, and expenditures on property and equipment.

Net cash used in investing activities increased $6.030 billion for the three months ended March 31, 2025, as compared to the same period in the prior year, primarily due to a $6.022 billion increase in purchases of bitcoins and a $6.0 million deposit on a new corporate aircraft.

During the three months ended March 31, 2025, we purchased $7.662 billion of bitcoin using net proceeds from the issuances of our 2030B Convertible Notes, net proceeds from the public offering of our Perpetual Strike Preferred Stock, net proceeds from the public offering of our Perpetual Strife Preferred Stock, net proceeds from the sale of class A common stock under our at-the-market common stock equity offering program, net proceeds from the sale of Perpetual Strike Preferred Stock under our at-the-market Perpetual Strike Preferred Stock offering program, while during the three months ended March 31, 2024, we purchased $1.639 billion of bitcoin using net proceeds from the issuances of our 2030A Convertible Notes and 2031 Convertible Notes, net proceeds from the sale of class A common stock under common stock our at-the-market equity offering program then-in-place, and Excess Cash.

Net cash used in investing activities increased $12.02 billion for the six months ended June 30, 2025, as compared to the same period in the prior year, primarily due to a $12.00 billion increase in purchases of bitcoins and a $22.0 million deposit on a new corporate aircraft.

During the six months ended June 30, 2025, we purchased $14.43 billion of bitcoin using net proceeds from the issuances of our 2030B Convertible Notes;

net proceeds from the public offerings of our STRK Stock, STRF Stock and STRD Stock;

net proceeds from the sale of class A common stock under our at-the-market common stock equity offering program;

and net proceeds from the sale of STRK Stock and STRF Stock under our at-the-market STRK Stock and STRK Stock offering programs, respectively;

while during the six months ended June 30, 2024, we purchased $2.433 billion of bitcoin using net proceeds from the issuances of our 2030A Convertible Notes, 2031 Convertible Notes, and 2032 Convertible Notes, net proceeds from the sale of class A common stock under our at-the-market equity offering program then in place, and Excess Cash.

Net cash provided by financing activities.

The changes in cash provided by and used in financing activities primarily relate to the issuance and subsequent repayment of long-term debt, the sale of class A common stock under our at-the-market common stock offering

program, the sale of Perpetual Strike Preferred Stock under our at-the-market Perpetual Strike Preferred Stock offering program, net proceeds from the initial public offering of our Perpetual Strike Preferred Stock, net proceeds from the initial public offering of our Perpetual Strife Preferred Stock, the exercise or vesting of certain awards under the Stock Incentive Plans, and the sales of class A common stock under the 2021 ESPP.

Net cash provided by financing activities increased $6.046 billion for the three months ended March 31, 2025, as compared to the same period in the prior year, primarily due to (i) a $4.263 billion increase in net proceeds from our sale of class A common stock under our at-the-market offering programs, (ii) a $1.306 billion increase in net proceeds from the initial public offerings of our Perpetual Strike Preferred Stock and Perpetual Strife Preferred Stock and sales of Perpetual Strike Preferred Stock under our at-the-market Perpetual Strike Preferred Stock offering program during the three months ended March 31, 2025, and (iii) a $610.2 million increase in long-term debt proceeds, net of issuance costs, during the three months ended March 31, 2025, partially offset by (iv) a $125.5 million decrease in proceeds from the exercise of stock options under the Stock Incentive Plans in the three months ended March 31, 2025, as compared to the same period in the prior year and (v) an increase of $9.2 million in dividends paid on our preferred stock during three months ended March 31, 2025.

The changes in cash provided by financing activities primarily relate to the issuance and subsequent repayment of long-term debt;

the sale of class A common stock under our at-the-market common stock offering program;

the sale of our STRK Stock and STRF Stock under our at-the-market STRK Stock and STRF Stock offering programs, respectively;

dividends paid on our STRK Stock and STRF Stock, net proceeds from the initial public offerings of our STRK Stock, STRF Stock, and STRD Stock;

the exercise or vesting of certain awards under the Stock Incentive Plans, and the sales of class A common stock under the 2021 ESPP.

Net cash provided by financing activities increased $12.05 billion for the six months ended June 30, 2025, as compared to the same period in the prior year, primarily due to (i) a $9.51 billion increase in net proceeds from our sale of class A common stock under our at-the-market offering programs and (ii) $2.891 billion in aggregate net proceeds from the initial public offerings of our STRK Stock, STRF Stock, STRD Stock, and sales of STRK Stock and STRF Stock under our at-the-market STRK Stock and STRF Stock offering programs, respectively during the six months ended June 30, 2025, partially offset by (iii) a $176.5 million decrease in long-term debt proceeds, net of issuance costs, during the six months ended June 30, 2025, as compared to the same period in the prior year, (iv) a $131.5 million decrease in proceeds from the exercise of stock options under the Stock Incentive Plans in the six months ended June 30, 2025, as

compared to the same period in the prior year and (v) $58.1 million in dividends paid on our preferred stock during six months ended June 30, 2025.

Long-term Debt

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We principally used the net proceeds from the issuances of the Convertible Notes to acquire bitcoin, and we used a portion of the net proceeds from the 2028 Convertible Notes to redeem the 2028 Secured Notes, as discussed further below.

During the three months ended March 31, 2025, we paid $8.2 million in interest to holders of the Convertible Notes.

We did not pay any interest related to the Convertible Notes during the three months ended March 31, 2024.

During the three months ended March 31, 2025, we issued 7,373,528 shares of class A common stock and paid a nominal amount of cash in lieu of fractional shares in connection with the full conversion of $1.050 billion aggregate principal amount of 2027 Convertible Notes then outstanding equal to 100% of the principal amount of the 2027 Convertible Notes redeemed, plus accrued and unpaid interest, to but excluding such date.

During the six months ended June 30, 2025, we paid $17.23 million in interest to holders of the Convertible Notes.

During the six months ended June 30, 2024, we paid $2.4 million in interest to holders of the Convertible Notes.

During the six months ended June 30, 2025, we issued 7,373,528 shares of class A common stock and paid a nominal amount of cash in lieu of fractional shares in connection with the full conversion of $1.050 billion aggregate principal amount of 2027 Convertible Notes then outstanding equal to 100% of the principal amount of the 2027 Convertible Notes redeemed, plus accrued and unpaid interest, to but excluding such date.

During the six months ended June 30, 2024, we issued 12,672,400 shares of class A common stock and paid a nominal amount of cash in lieu of fractional shares in connection with the conversion requests in respect to $504.4 million in principal amount of the 2025 Convertible Notes.

The remaining 2025 Convertible Notes were redeemed or converted into class A common stock in the third quarter of 2024 and were not outstanding as December 31, 2024 or June 30, 2025.

In June 2021, we issued $500.0 million aggregate principal amount of the 2028 Secured Notes.

We used the net proceeds from the issuance of the 2028 Secured Notes to acquire bitcoin.

We did not pay any interest related to the 2028 Secured Notes during the three months ended March 31, 2025 and 2024.

We did not pay any interest related to the 2028 Secured Notes during the six months ended June 30, 2025 or 2024.

On September 26, 2024, we redeemed all of the outstanding 2028 Secured Notes at an aggregate redemption price of approximately $523.9 million and all collateral securing the 2028 Secured Notes was released.

In June 2022, we, through one of our wholly-owned subsidiaries, 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.

During each of the three months ended March 31, 2025 and 2024, we paid $0.3 million in principal and interest to the lender.

Other than as discussed above, during the three months ended March 31, 2025 and 2024, we did not repurchase or prepay any of our outstanding debt.

During each of the six months ended June 30, 2025 and 2024, we paid $0.5 million in principal and interest to the lender.

In June 2025, we entered into a loan agreement that provides for aggregate borrowings of up to $31.1 million, available in multiple tranches, and bearing interest, with respect to each tranche, at a variable rate equal to the one-year Secured Overnight Financing Rate plus 4.24%.

The loan will mature in December 2026.

As of June 30, 2025, the loan had a net carrying value of $15.8 million, and an outstanding principal balance of $16.07 million.

Other than as discussed above, during the six months ended June 30, 2025 and 2024, we did not repurchase or prepay any of our outstanding debt.

We or our affiliates may, at any time and from time to time, seek to retire or purchase our outstanding debt through cash purchases and/or exchanges for equity or debt, in open-market purchases, privately negotiated transactions or otherwise.

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From time to time, we have entered into sales agreements with agents pursuant to which we could issue and sell shares of our class A common stock through at-the-market equity offering programs, which we refer to as the Common Stock ATM Offerings.

On March 10, 2025, we entered into a sales agreement with agents pursuant to which we may issue and sell shares of our Perpetual Strike Preferred Stock through the Strike ATM Offering.

See Note 11, At-the-Market Equity Offerings and Note 14, Subsequent Events to the Consolidated Financial Statements for additional information regarding the Common Stock ATM Offerings and the Strike ATM Offering.

On March 10, 2025, we entered into a sales agreement with agents pursuant to which we may issue and sell shares of our STRK Stock through the STRK ATM Offering.

On May 22, 2025, we entered into a sales agreement with agents pursuant to which we may issue and sell shares of our STRF Stock through the STRF ATM Offering.

On July 7, 2025, we amended this sales agreement to add another sales agent.

Also on July 7, 2025, we entered into a sales agreement with agents pursuant to which we may issue and sell shares of our STRD Stock through the STRD ATM Offering.

On July 31, 2025, we entered into a sales agreement with agents pursuant to which we may issue and sell shares of our STRC Stock through the STRC ATM Offering.

See Note 11, At-the-Market Offerings and Note 14, Subsequent Events to the Consolidated Financial Statements for additional information regarding the Common Stock ATM Offerings, the STRK ATM Offering, the STRF ATM Offering, the STRD ATM Offering and the STRC ATM Offering.

The following table sets forth total shares sold and total net proceeds received (net of sales commissions and expenses) from shares sold under our at-the-market equity offering programs for the periods indicated (in thousands, except number of shares).

Three Months Ended

Total shares of class A common stock sold pursuant to the Common Stock ATM Offerings

Total net proceeds received from shares of class A common stock sold pursuant to the Common Stock ATM Offerings

Total shares of Perpetual Strike Preferred Stock sold pursuant to the Strike ATM Offering

Total net proceeds received from shares of Perpetual Strike Preferred Stock sold pursuant to the Strike ATM Offering

Six Months Ended

Number of shares sold pursuant to at-the-market sales offerings:

Shares of class A common stock sold pursuant to the Common Stock ATM Offerings

Shares of STRK Stock sold pursuant to the STRK ATM Offering

Shares of STRF Stock sold pursuant to the STRF ATM Offering

Net proceeds received from shares sold pursuant to at-the-market sales offerings:

Net proceeds received from sales made pursuant to the Common Stock ATM Offerings

Net proceeds received from sales made pursuant to the STRK ATM Offering

Net proceeds received from sales made pursuant to the STRF ATM Offering

Total net proceeds received from shares sold pursuant to at-the-market equity offering programs

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We rely primarily on such Consolidated Financial Statements to understand, manage, and evaluate our business performance and use the non-GAAP financial measures only supplementally.

Non-GAAP loss from operations

Non-GAAP loss from operations excludes share-based compensation expense, which is a significant non-cash expense that we believe is not reflective of our general business performance, and for which the accounting requires management judgment.

Non-GAAP income (loss) from operations

Non-GAAP income (loss) from operations excludes share-based compensation expense, which is a significant non-cash expense that we believe is not reflective of our general business performance, and for which the accounting requires management judgment.

Consequently, our accounting for share-based compensation expense could vary significantly in comparison to other companies.

The following is a reconciliation of our non-GAAP loss from operations to loss from operations, its most directly comparable GAAP measure, (in thousands) for the periods indicated:

The following is a reconciliation of our non-GAAP income (loss) from operations to income (loss) from operations, its most directly comparable GAAP measure, (in thousands) for the periods indicated:

Three Months Ended

Reconciliation of non-GAAP loss from operations:

Loss from operations

Six Months Ended

Reconciliation of non-GAAP income (loss) from operations:

Income (loss) from operations

Share-based compensation expense

Non-GAAP loss from operations

Non-GAAP net loss attributable to common stockholders and non-GAAP diluted loss per common share

Non-GAAP net loss attributable to common stockholders and non-GAAP diluted loss per common share each exclude the impact of (i) share-based compensation expense, (ii) interest expense arising from the amortization of debt issuance costs on our long-term debt, (iii) gains and losses on extinguishment of debt, if any, and (iv) related income taxes.

We believe non-GAAP net loss attributable to common stockholders and non-GAAP diluted loss per common share offer management and investors insight as they exclude significant non-cash expenses, gains and losses on debt extinguishment, and their related income tax effects.

The following are reconciliations of our non-GAAP net loss attributable to common stockholders and non-GAAP diluted loss per common share to net loss attributable to common stockholders and diluted loss per common share, respectively, their most directly comparable GAAP measures (in thousands, except per share data), for the periods indicated.

Non-GAAP income (loss) from operations

Non-GAAP net income (loss) attributable to common stockholders and non-GAAP diluted income (loss) per common share

Non-GAAP net income (loss) attributable to common stockholders and non-GAAP diluted income (loss) per common share each exclude the impact of (i) share-based compensation expense, (ii) interest expense arising from the amortization of debt issuance costs on our long-term debt, and (iii) related income taxes.

We believe non-GAAP net income (loss) attributable to common stockholders and non-GAAP diluted income (loss) per common share offer management and investors insight as they exclude significant non-cash expenses, and their related income tax effects.

The following are reconciliations of our non-GAAP net income (loss) attributable to common stockholders and non-GAAP diluted income (loss) per common share to net income (loss) attributable to common stockholders and diluted income (loss) per common share, respectively, their most directly comparable GAAP measures (in thousands, except per share data), for the periods indicated.

Three Months Ended

Reconciliation of non-GAAP net loss attributable to common stockholders of Strategy:

Net loss attributable to common stockholders of Strategy

Six Months Ended

Reconciliation of non-GAAP net income (loss) attributable to common stockholders of Strategy:

Net income (loss) attributable to common stockholders of Strategy

Share-based compensation expense

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Income tax effects (1)

Non-GAAP net loss attributable to common stockholders of Strategy

Reconciliation of non-GAAP diluted loss per common share (2):

Diluted loss per common share

Non-GAAP net income (loss) attributable to common stockholders of Strategy

Reconciliation of non-GAAP diluted income (loss) per common share (2):

Diluted income (loss) per common share

Share-based compensation expense (per diluted common share)

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Income tax effects (per diluted common share) (3)

Non-GAAP diluted loss per common share

(1) Income tax effects reflect the net tax effects of share-based compensation, which includes tax benefits and expenses on exercises of stock options and vesting of share-settled restricted stock units interest expense for amortization of debt issuance costs, and gains and losses on debt extinguishment, if any.

Non-GAAP diluted income (loss) per common share

(1) Income tax effects reflect the net tax effects of share-based compensation, which includes tax benefits and expenses on exercises of stock options and vesting of share-settled restricted stock units and interest expense for amortization of debt issuance costs.

(2) For reconciliation purposes, the non-GAAP diluted earnings (loss) per common share calculations use the same weighted average common shares outstanding as that used in the GAAP diluted earnings (loss) per common share calculations for the same period.

For example, in periods of GAAP net loss, otherwise dilutive potential shares of common stock from our share-based compensation arrangements, Perpetual Strike Preferred Stock and Convertible Notes are excluded from the GAAP diluted loss per common share calculation as they would be antidilutive, and therefore are also excluded from the non-GAAP diluted earnings or loss per common share calculation.

For example, in periods of GAAP net loss, otherwise dilutive potential shares of common stock from our share-based compensation arrangements, STRK Stock and Convertible Notes are excluded from the GAAP diluted loss per common share calculation as they would be antidilutive, and therefore are also excluded from the non-GAAP diluted earnings or loss per common share calculation.

(3) For the three and six months ended June 30, 2025, interest expense from the amortization of issuance costs of the Convertible Notes has been added back to the numerator in the GAAP diluted earnings per share calculation (as disclosed in Note 10, Basic and Diluted Earnings (Loss) per Common Share, to the Consolidated Financial Statements), and therefore the per diluted share effects of the amortization of issuance costs of the Convertible Notes have been excluded from the “Interest expense arising from amortization of debt issuance costs (per diluted share)” and “Income tax effects (per diluted share)” lines in the above reconciliation for the three and six months ended June 30, 2025.

Quantitative and Qualitat ive Disclosures About Market Risk

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Actual results could differ materially from those projected in the forward-looking statements.

We are exposed to the impact of market price changes in bitcoin and foreign currency fluctuations.

We are exposed to the impact of market price changes in bitcoin, foreign currency fluctuations and interest rate risk.

Market Price Risk of Bitcoin.

2 unchanged sentences

As of March 31, 2025, we held approximately 528,185 bitcoins with a carrying value of $43.546 billion on our Consolidated Balance Sheet.

As of June 30, 2025, we held approximately 597,325 bitcoins with a carrying value of $64.363 billion on our Consolidated Balance Sheet.

Bitcoin is a highly volatile asset that has traded below $50,000 per bitcoin and above $120,000 per bitcoin in our principal market in the 12 months preceding the date of this report.

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dollar, the currency in which we report our Consolidated Financial Statements.

International revenues accounted for 42.9% and 44.1% of our total revenues for the three months ended March 31, 2025 and 2024, respectively.

International revenues accounted for 43.0% and 42.8% of our total revenues for the three months ended June 30, 2025 and 2024, respectively, and 42.9% and 43.5% of our total revenues for the six months ended June 30, 2025, respectively.

We anticipate that international revenues will continue to account for a significant portion of our total revenues.

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dollar-denominated cash and investment accounts.

As of March 31, 2025 and December 31, 2024, a 10% adverse change in foreign currency exchange rates versus the U.S.

As of June 30, 2025 and December 31, 2024, a 10% adverse change in foreign currency exchange rates versus the U.S.

dollar would have decreased our aggregate reported cash and cash equivalents by 5.2% and 5.7%, respectively.

If average exchange rates during the three months ended March 31, 2025 had changed unfavorably by 10%, our revenues for the three months ended March 31, 2025 would have decreased by 3.8%.

During the three months ended March 31, 2025, our revenues were not significantly impacted by changes in weighted average exchange rates, as compared to the same period in the prior year.

If average exchange rates during the six months ended June 30, 2025 had changed unfavorably by 10%, our revenues for the six months ended June 30, 2025 would have decreased by 3.8%.

During the six months ended June 30, 2025, our revenues were not significantly impacted by changes in weighted average exchange rates, as compared to the same period in the prior year.

Interest Rate Risk.

We are exposed to changes in interest rates primarily via our STRC Stock, which accumulates cumulative dividends, which we refer to in this Item 3 Quantitative and Qualitative Disclosures About Market Risk as “regular dividends”, at a variable dividend rate, which has been initially set at 9.00% per annum.

However, we have the right, in our sole and absolute discretion, to adjust the regular dividend rate applicable to subsequent regular dividend periods, subject to certain restrictions, including restrictions on the maximum reduction of the dividend rate and a requirement to declare a dividend equal to at least the monthly SOFR per annum rate.

Our current intention (which is subject to change in our sole and absolute discretion) is to adjust the monthly regular dividend rate per annum in such manner as we believe is designed to cause the STRC Stock to trade at prices at or close to its stated amount of $100 per share.

As of July 31, 2025, if we determined to increase the regular dividend rate on our STRC Stock by 0.50%, the STRC Stock’s monthly dividend accrual would increase by approximately $1.2 million.

We do not believe our interest rate risk exposure via the STRC Stock is material as of July 31, 2025.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis