Strategy Inc 10-Q

Item 2. Management’s Discussion and A nalysis of Financial Condition and Results of Operations Forward-Looking Information This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). For this purpose, any statements contained herein that are not statements of historical fact, including without limitation, certain statements regarding industry prospects and our results of operations or financial position, may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” and similar expressions are intended to identify forward-looking statements. The important factors discussed under “III. Risk Factor Updates” in our Current Report on Form 8-K filed with the SEC on October 6, 2025 and “Item 1A. Risk Factors” of Part II of this Quarterly Report on Form 10-Q, which are incorporated by reference herein, among others, could cause actual results to differ materially from those indicated by forward-looking statements made herein and presented elsewhere by management from time to time. Such forward-looking statements represent management’s current expectations and are inherently uncertain. Investors are warned that actual results may differ from management’s expectations. Business Overview Strategy is the world's first and largest Bitcoin Treasury Company. We are a publicly traded company that has adopted Bitcoin as our primary treasury reserve asset. By using proceeds from equity and debt financings, as well as cash flows from our operations, we strategically accumulate Bitcoin and advocate for its role as digital capital. Our treasury strategy is designed to provide investors varying degrees of economic exposure to Bitcoin by offering a range of securities, including equity and fixed-income instruments. In addition, we provide industry-leading AI-powered enterprise analytics software, advancing our vision of Intelligence Everywhere. We leverage our development capabilities to explore innovation in Bitcoin applications, integrating analytics expertise with our commitment to digital asset growth. We believe our combination of operational excellence, strategic Bitcoin reserve, and focus on technological innovation positions us as a leader in both the digital asset and enterprise analytics sectors, offering a unique opportunity for long-term value creation. Our Bitcoin Strategy Our bitcoin strategy generally involves from time to time, subject to market conditions, (i) issuing debt or equity securities or engaging in other capital raising transactions with the objective of using the proceeds to purchase bitcoin and (ii) acquiring bitcoin with our liquid assets that exceed working capital requirements. We intend to fund further bitcoin acquisitions primarily through issuances of common stock and a variety of fixed-income instruments, including debt, convertible notes and preferred stock. We view our bitcoin holdings as long-term holdings and expect to continue to accumulate bitcoin. We have not set any specific target for the amount of bitcoin we seek to hold, and we will continue to monitor market conditions in determining whether to engage in additional financings to purchase additional bitcoin. This overall strategy also contemplates that we may (i) periodically sell bitcoin for general corporate purposes or in connection with strategies that generate tax benefits in accordance with applicable law, (ii) enter into additional capital raising transactions that are collateralized by our bitcoin holdings, and (iii) consider pursuing strategies to create income streams or otherwise generate funds using our bitcoin holdings. Additionally, we periodically engage in advocacy and educational activities regarding the continued acceptance and value of Bitcoin as an open, secure protocol for an internet-native digital capital asset, and we leverage our software development capabilities to explore innovation in Bitcoin applications. Under our Treasury Reserve Policy, our treasury reserve assets consist of: • cash and cash equivalents and short-term investments (“Cash Assets”) held by us that exceed working capital requirements; and • bitcoin held by us, with bitcoin serving as the primary treasury reserve asset on an ongoing basis, subject to market conditions and anticipated needs of the business for Cash Assets. We are not registered as an investment company under the Investment Company Act of 1940, as amended, and stockholders do not have the protections associated with ownership of shares in a registered investment company, nor the protections afforded by the Commodity Exchange Act of 1936. Our Enterprise Analytics Software Strategy Strategy is a pioneer in AI-powered 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™. 36 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. Bitcoin Activity and Holdings Bitcoin Acquisition Activity The following table presents a roll-forward of our bitcoin holdings, including additional information related to our bitcoin purchases, bitcoin sales (if any), unrealized loss (gain) on digital assets, digital asset impairment losses, and cumulative effect adjustments within the respective periods: Source of Capital Used to Purchase Bitcoin Digital Asset Original Cost Basis (in thousands) Digital Asset Impairment Losses (in thousands) Digital Asset Carrying Value (in thousands) Approximate Number of Bitcoins Held Approximate Average Purchase Price Per Bitcoin Balance at December 31, 2024 (before adoption of ASU 2023-08) $ 27,968,248 $ (4,058,875 ) $ 23,909,373 447,470 $ 62,503 Cumulative effect upon adoption of ASU 2023-08 0 4,058,875 17,881,048 0 0 Balance immediately following adoption of ASU 2023-08 $ 27,968,248 $ 0 $ 41,790,421 $ 447,470 $ 62,503 Digital asset purchases (a) 7,661,663 n/a 7,661,663 80,715 94,922 Unrealized loss on digital assets n/a (5,906,005 ) Balance at March 31, 2025 $ 35,629,911 n/a $ 43,546,079 528,185 $ 67,457 Digital asset purchases (b) 6,769,205 n/a 6,769,205 69,140 97,906 Unrealized gain on digital assets n/a 14,047,514 Balance at June 30, 2025 $ 42,399,116 n/a $ 64,362,798 597,325 $ 70,982 Digital asset purchases (c) 4,952,080 n/a 4,952,080 42,706 115,959 Unrealized gain on digital assets n/a 3,890,847 Balance at September 30, 2025 $ 47,351,196 n/a $ 73,205,725 640,031 $ 73,983 (a) In the first quarter of 2025, we purchased bitcoin using $4.37 billion of the net proceeds from sales under our Common Stock ATM then-in effect, $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 under the STRK ATM, and $710.0 million of the net proceeds from the initial public offering of STRF Stock. (b) In the second quarter of 2025, we purchased bitcoin using $5.19 billion of the net proceeds from sales under our Common Stock ATMs then-in effect, $979.7 million of the net proceeds from our initial public offering of STRD Stock, $163.0 million of the net proceeds from sales under the STRF ATM, and $438.0 million of the net proceeds from sales under the STRK ATM. (c) In the third quarter of 2025, we purchased bitcoin using $209.5 million of the net proceeds from the STRF ATM, $153.1 million of the net proceeds from the STRK ATM, $48.5 million of the net proceeds from the STRD ATM, $2.07 billion of the net proceeds from the Common Stock ATM, and $2.47 billion of the net proceeds from the initial public offering of STRC Stock. Our unrealized gains on digital assets for the three and nine months ended September 30, 2025 amounted to $3.89 billion and $12.03 billion, respectively, partially offset by $1.12 billion and $3.46 billion in deferred tax expense, respectively. See “Results of Operations – Bitcoin Impacts” additional information on unrealized gains and losses on digital assets. Bitcoin Holdings The following table shows the approximate number of bitcoins held at the end of each respective period, as well as market value calculations of our bitcoin holdings based on the lowest, highest, and ending market prices of one bitcoin on the Coinbase exchange (our principal market for bitcoin) for each respective quarter, as further defined below: 37 Approximate Number of Bitcoins Held at End of Quarter Lowest Market Price Per Bitcoin During Quarter (a) Market Value of Bitcoin Held at End of Quarter Using Lowest Market Price (in thousands) (b) Highest Market Price Per Bitcoin During Quarter (c) Market Value of Bitcoin Held at End of Quarter Using Highest Market Price (in thousands) (d) Market Price Per Bitcoin at End of Quarter (e) Market Value of Bitcoin Held at End of Quarter Using Ending Market Price (in thousands) (f) December 31, 2024 447,470 $ 58,863.90 $ 26,339,829 $ 108,388.88 $ 48,500,772 $ 93,390.21 $ 41,789,317 March 31, 2025 528,185 $ 76,555.00 $ 40,435,222 $ 109,358.01 $ 57,761,287 $ 82,444.71 $ 43,546,079 June 30, 2025 597,325 $ 74,420.69 $ 44,453,357 $ 112,000.00 $ 66,900,427 $ 107,751.68 $ 64,362,798 September 30, 2025 640,031 $ 105,119.70 $ 67,279,817 $ 124,533.00 $ 79,704,922 $ 114,378.49 $ 73,205,725 (a) The "Lowest Market Price Per Bitcoin During Quarter" represents the lowest market price for one bitcoin reported on the Coinbase exchange during the respective quarter, without regard to when we purchased any of our bitcoin. (b) The "Market Value of Bitcoin Held at End of Quarter Using Lowest Market Price" represents a mathematical calculation consisting of the lowest market price for one bitcoin reported on the Coinbase exchange during the respective quarter multiplied by the number of bitcoins we held at the end of the applicable period. (c) The "Highest Market Price Per Bitcoin During Quarter" represents the highest market price for one bitcoin reported on the Coinbase exchange during the respective quarter, without regard to when we purchased any of our bitcoin. (d) The "Market Value of Bitcoin Held at End of Quarter Using Highest Market Price" represents a mathematical calculation consisting of the highest market price for one bitcoin reported on the Coinbase exchange during the respective quarter multiplied by the number of bitcoins we held at the end of the applicable period. (e) The "Market Price Per Bitcoin at End of Quarter" represents the market price of one bitcoin on the Coinbase exchange at 4:00 p.m. Eastern Time on the last day of the respective quarter. (f) The "Market Value of Bitcoin Held at End of Quarter Using Ending Market Price" represents a mathematical calculation consisting of the market price of one bitcoin on the Coinbase exchange at 4:00 p.m. Eastern Time on the last day of the respective quarter multiplied by the number of bitcoins we held at the end of the applicable period. The amounts reported as “Market Value” in the above table represent only a mathematical calculation consisting of the price for one bitcoin reported on the Coinbase exchange (our principal market for bitcoin) in each scenario defined above multiplied by the number of bitcoins held by us at the end of the applicable period. Bitcoin and bitcoin markets may be subject to manipulation and the spot price of bitcoin may be subject to fraud and manipulation. Accordingly, the Market Value amounts reported above may not accurately represent fair market value, and the actual fair market value of our bitcoin may be different from such amounts and such deviation may be material. Moreover, (i) the bitcoin market historically has been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign currencies markets, relative anonymity, a developing regulatory landscape, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various other risks that are, or may be, inherent in its entirely electronic, virtual form and decentralized network and (ii) we may not be able to sell our bitcoins at the Market Value amounts indicated above, at the market price as reported on the Coinbase exchange (our principal market for bitcoin) on the date of sale, or at all. As of October 30, 2025, we held approximately 641,167 bitcoins, all of which are unencumbered, and which had an aggregate market value of $68.28 billion as of October 30, 2025 (based on the market price of $106,490 of one bitcoin as reported on the Coinbase exchange as of October 30, 2025, 4:00 p.m. Eastern Time). We hold our bitcoin with regulated custodians that have duties to safeguard our private keys. We continually seek to engage additional custodians to achieve a greater degree of diversification in the custody of our bitcoin as the extent of potential risk of loss is dependent, in part, on the degree of diversification. Our custodial services contracts do not restrict our ability to reallocate our bitcoin among our custodians. See “III. Risk Factor Updates—Risks Related to Our Bitcoin Strategy and Holdings— We face risks relating to the custody of our bitcoin, including the loss or destruction of private keys required to access our bitcoin and cyberattacks or other data loss relating to our bitcoin” in our Current Report on Form 8-K filed with the SEC on October 6, 2025. As of October 30, 2025, our bitcoin is held with the following custodians: 38 Custodian Number of Bitcoin Custodied (1) Bitcoin Custodied (%) Coinbase Custody Trust Company, LLC 330,809 51.6 % Anchorage Digital Bank N.A. 223,278 34.8 % Fidelity Digital Asset Services, LLC 87,081 13.6 % (1) Amounts shown are rounded to the nearest bitcoin Capital Markets Activity Consistent with our Treasury Reserve Policy and bitcoin strategy, we use the vast majority of our cash, including cash generated from capital raising transactions, to acquire bitcoin. We fund our purchases of bitcoin primarily from proceeds of our offerings of our class A common stock and various preferred stock instruments. We have also previously used proceeds from offerings of convertible notes and senior secured notes, and a loan secured by bitcoin, to purchase bitcoin, and we may incur additional indebtedness in the future, including for the purpose of purchasing bitcoin. We offer multiple types of securities to obtain broad access to equity and credit investors. We intentionally structure our preferred stock instruments to target investors interested in gaining economic exposure to bitcoin across a wide spectrum of yield, duration and risk tolerance preferences. For example, we believe we have designed each of our outstanding preferred stock instruments to appeal to a different type of investor as follows: • STRF Stock : income-focused investors with lower risk tolerance; • STRC Stock : income-focused investors seeking short duration; • STRK Stock: investors seeking yield with greater potential for price appreciation (due to the convertibility feature of STRK Stock); and • STRD Stock: investors seeking higher yields. We may offer additional preferred stock instruments in the future that target other market participants. We believe offering a range of securities, including equity and fixed income instruments, enables us to flexibly access a broad spectrum of investors, which in turn enables us to execute on our strategy of acquiring bitcoin in a manner we believe to be accretive to common stockholders on a per share basis. The type and amount of securities that we may issue and sell from time to time depend on a variety of factors, many of which are outside our control, including market conditions and demand for our instruments, our overall level of indebtedness, and the amount and timing of interest and dividend payments that we expect to make. In evaluating our capital markets transactions, we consider numerous factors, including, but not limited to the following: • Accretion to common shareholders : We consider whether the contemplated issuance and related bitcoin purchases are expected to increase our bitcoin per share (“BPS”) key performance indicator (“KPI”) and support our BTC Yield (as defined below) KPI over relevant horizons after considering dilution (if any), cash obligations, fees and execution costs. For example, purchasing bitcoin using proceeds from offerings of class A common stock would be expected to generate a lower BTC Yield than purchasing bitcoin using proceeds from offerings of non-convertible preferred stock instruments at the outset, but we are not required to pay any dividends on our common stock; • Existing and potential market demand : For new issuances of preferred stock and other novel instruments, we assess investor demand and aim to structure instruments that we believe will appeal to target market segments. As noted above, we structured each of our current preferred stock instruments to target a different market segment, which we base in part on feedback received from market soundings and other investor communications; • Cost of capital: For instruments with dividend or interest obligations, we assess all‑in cost (cash and potential dilution). For example, we evaluate the all-in cost of offerings of preferred stock instruments to include our dividend obligations as we expect to pay those dividends with the proceeds from the issuance of additional securities; • Leverage and asset coverage: We assess the impact of our offerings on our leverage profile and capital structure. For example, STRF Stock is our most senior preferred stock instrument, and offerings of STRF Stock increase the aggregate claims to our assets on liquidation and payments of dividends of STRF Stock above more junior preferred stock instruments, while increasing the economic leverage of our class A common stock; • Valuation discipline: For common equity, among other factors, we calibrate issuance to valuation references with respect to our bitcoin holdings; 39 • Market capacity: We assess demand and pacing (e.g., at-the-market offering capacity relative to trading volumes, or bookbuilding indications for underwritten transactions); and • Balance sheet resilience and flexibility: We evaluate capital markets transactions against long-term liquidity and stress scenarios. We do not weigh these considerations uniformly, and not all are applicable to every offering. These considerations also vary across our instrument portfolio, market conditions, liquidity needs, and strategic considerations. There may also be other unforeseen considerations with respect to future offerings. In all cases, we have significant discretion in evaluating these and other considerations and executing on our capital markets transactions. Equity Offerings The following table sets forth total shares sold and total net proceeds received from shares sold under our initial public and at-the-market offerings for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 (1) 2025 2024 (1) Number of shares sold (2) STRF Stock 1,881,542 n/a 11,948,292 n/a STRC Stock 28,011,111 n/a 28,011,111 n/a STRK Stock 1,404,499 n/a 13,605,866 n/a STRD Stock 557,441 n/a 12,322,141 n/a Class A common stock 5,712,041 8,048,449 32,562,256 10,000,069 Net proceeds received from shares sold (in thousands) (2) STRF Stock $ 217,434 n/a $ 1,091,342 n/a STRC Stock 2,473,800 n/a 2,473,800 n/a STRK Stock 152,824 n/a 1,193,240 n/a STRD Stock 48,462 n/a 1,027,948 n/a Class A common stock 2,199,360 1,105,141 11,847,257 1,242,293 Total net proceeds $ 5,091,880 $ 1,105,141 $ 17,633,587 $ 1,242,293 (1) On August 7, 2024, we completed a 10-for-1 stock split of our class A and class B common stock. See Note 1, Summary of Significant Accounting Policies, to the Consolidated Financial Statements, for further information. As a result of the stock split, all applicable share and per share information presented in this table for the three and nine months ended September 30, 2024 have been retroactively adjusted to reflect the stock split. (2) Includes shares sold and net proceeds received from shares sold under our initial public offerings of our Preferred Stock and at-the-market equity offerings of our class A common stock and Preferred Stock for the periods indicated. See Note 9, Redeemable Preferred Stock, for additional information on the initial public offerings of our Preferred Stock. The following table sets forth total shares sold and total net proceeds received from shares sold under our at-the-market equity offering programs for the periods indicated: 40 Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 (a) 2025 2024 (a) Number of shares sold pursuant to at-the market offerings STRF ATM 1,881,542 n/a 3,448,292 n/a STRC ATM - n/a - n/a STRK ATM 1,404,499 n/a 6,305,866 n/a STRD ATM 557,441 n/a 557,441 n/a Common Stock ATMs 5,712,041 8,048,449 32,562,256 10,000,069 Net proceeds received from shares sold pursuant to at-the-market offerings (in thousands) STRF ATM $ 217,434 n/a $ 380,468 n/a STRC ATM 0 n/a 0 n/a STRK ATM 152,824 n/a 630,014 n/a STRD ATM 48,462 n/a 48,462 n/a Common Stock ATMs 2,199,360 1,105,141 11,847,257 1,242,293 Total net proceeds $ 2,618,080 $ 1,105,141 $ 12,906,201 $ 1,242,293 (a) On August 7, 2024, we completed a 10-for-1 stock split of our class A and class B common stock. See Note 1, Summary of Significant Accounting Policies, to the Consolidated Financial Statements, for further information. As a result of the stock split, all applicable share and per share information presented in this table for the three and nine months ended September 30, 2024 have been retroactively adjusted to reflect the stock split. See Note 9, Redeemable Preferred Stock and Note 11, At-the-Market Offerings, to the Notes to Consolidated Financial Statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information. Refer to Note 14, Subsequent Events, for Preferred Stock ATM activity for the period from October 1, 2025 through October 30, 2025. Debt Offerings The following table sets forth the aggregate net proceeds (in thousands) from issuances of our Convertible Notes for the periods indicated: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 2025 2024 Net proceeds 2028 Convertible Notes $ 0 $ 997,375 $ 0 $ 997,375 2030A Convertible Notes 0 0 0 782,000 2030B Convertible Notes 0 0 1,984,852 0 2031 Convertible Notes 0 0 0 592,567 2032 Convertible Notes 0 0 0 786,000 Total net proceeds $ 0 $ 997,375 $ 1,984,852 $ 3,157,942 In addition, 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 September 30, 2025, the loan had a net carrying value of $20.8 million, and an outstanding principal balance of $21.1 million. For additional information on our Convertible Notes, see Note 5, Long-term Debt, to the Consolidated Financial Statements included in this Quarterly Report as well as Note 8, Long-term Debt, to the Consolidated Financial Statements of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. Bitcoin KPIs We seek to increase BPS by growing our bitcoin holdings faster than Assumed Diluted Shares Outstanding (defined below) through a combination of bitcoin acquisitions and disciplined use of equity and credit markets. To assess achievement of this strategy, we monitor and review the following KPIs: • Bitcoin Per Share (BPS) is a KPI that represents the ratio between our bitcoin holdings and Assumed Diluted Shares Outstanding, expressed in terms of Satoshis, where: 41 o “Assumed Diluted Shares Outstanding” refers to the aggregate of our Basic Shares Outstanding as of the dates presented plus all additional shares that would result from the assumed conversion of all outstanding convertible notes and convertible preferred stock, exercise of all outstanding stock option awards, and settlement of all outstanding restricted stock units and performance stock units as of such dates. Assumed Diluted Shares Outstanding is not calculated using the treasury method and does not take into account any vesting conditions (in the case of equity awards), the exercise price of any stock option awards or any contractual conditions limiting convertibility of convertible debt instruments. o “Basic Shares Outstanding” reflects the actual class A common stock and class B common stock outstanding as of the dates presented. For purposes of this calculation, outstanding shares of such stock are deemed to include shares, if any, that (A) were sold under at-the-market equity offering programs, or (B) were to be issued pursuant to (i) options that had been exercised, (ii) restricted stock units that have vested or (iii) conversion requests received with respect to convertible securities, but which in each case were pending issuance as of the dates presented. o A “Satoshi” or a “Sat” is one one-hundred-millionth of one bitcoin, currently the smallest indivisible unit of a bitcoin. • BTC Yield represents the percentage change in BPS from the beginning of a period to the end of the period. • BTC Gain represents the number of bitcoins held by us at the beginning of a period multiplied by the BTC Yield for the period. • BTC $ Gain represents the dollar value of the BTC Gain calculated by multiplying the BTC Gain by the market price of bitcoin. For determining BTC $ Gain on a quarter-to-date or year-to-date basis, unless otherwise specified, we use the current market price of bitcoin. For determining BTC $ Gain for a past fiscal year or other past period, we use the market price of bitcoin as of 4:00pm ET as reported on the Coinbase exchange on the last day of the applicable period. We use these market prices of bitcoin for this calculation solely for the purpose of facilitating this illustrative calculation. The following tables present our bitcoin holdings, Assumed Diluted Shares Outstanding, BPS and the price of bitcoin as of the dates indicated below, and the change in each for the three and nine month periods ended September 30, 2024 and 2025: As of June 30, 2025 Change (#) As of September 30, 2025 As of June 30, 2024 Change (#) As of September 30, 2024 Number of Bitcoin Held 597,325 42,705 640,031 226,331 25,889 252,220 Assumed Diluted Shares Outstanding (in thousands) 314,216 5,824 320,040 221,670 13,377 235,047 BPS 190,100 9,884 199,984 102,102 5,204 107,306 Bitcoin Price ($) 107,752 6,627 114,378 61,927 1,536 63,463 As of December 31, 2024 Change (#) As of September 30, 2025 As of December 31, 2023 Change (#) As of September 30, 2024 Number of Bitcoin Held 447,470 192,560 640,031 189,150 63,070 252,220 Assumed Diluted Shares Outstanding (in thousands) 281,735 38,305 320,040 207,636 27,411 235,047 BPS 158,826 41,158 199,984 91,097 16,209 107,306 Bitcoin Price ($) 93,390 20,988 114,378 42,531 20,932 63,463 The following tables present our BTC Yield, BTC Gain, and BTC $ Gain for the three and nine month periods ended September 30, 2024 and 2025: Three Months Ended September 30, Nine Months Ended September 30, 2025 2024 % Change 2025 2024 % Change BTC Yield 5.2 % 5.1 % 0.1 % (1) 25.9 % 17.8 % 8.1 % (1) BTC Gain 31,058 11,535 169 % 115,956 33,657 245 % BTC $ Gain (in millions, except percentages) $ 3,552 $ 732 385 % $ 13,263 $ 2,136 521 % (1) Represents the absolute change between the periods presented. • BTC Yield : We achieved BTC Yield of 5.2% and 25.9% for the three and nine months ended September 30, 2025, respectively, as compared to 5.1% and 17.8% during the same periods in the prior year, as applicable, primarily due to an acceleration of our bitcoin acquisitions and a change in mix of dilutive versus non-dilutive capital markets activity compared to the same periods from the prior year. o Three-months ended September 30 : We acquired 42,705 bitcoin (increasing our total holdings to 640,031) during the three months ended September 30, 2025, compared to 25,889 bitcoin during the three months ended September 30, 42 2024 (increasing our total holdings to 252,220). Of the approximately $5.1 billion we raised from capital markets activity during the three months ended September 30, 2025, approximately $2.3 billion was attributable to issuances under the STRK ATM and Common Stock ATMs, which resulted in an increase of approximately 5.8 million shares in Assumed Diluted Shares Outstanding (bringing our total Assumed Diluted Shares Outstanding to approximately 320.0 million as of September 30, 2025), while approximately $2.8 billion was attributable to issuances under the STRF ATM and STRD ATM and the initial public offering of STRC Stock, none of which increased Assumed Diluted Shares Outstanding. In comparison, the $2.1 billion we raised from capital markets activity during the three months ended September 30, 2024 was primarily attributable to issuances under our Common Stock ATMs and of our 2028 Convertible Notes, which resulted in an increase of approximately 13.4 million shares in Assumed Diluted Shares Outstanding (bringing our total Assumed Diluted Shares Outstanding to approximately 235.0 million as of September 30, 2024). Additionally, we used approximately $523.9 million of the proceeds from the offering of our 2028 Convertible Notes to repay the principal amount plus accrued and unpaid interest of our 2028 Senior Secured Notes, which increased Assumed Diluted Shares Outstanding without a corresponding increase to our bitcoin holdings during the three months ended September 30, 2024. We also utilized our Common Stock ATM to pay dividends on our preferred stock, which increased Assumed Diluted Shares Outstanding without a corresponding increase to our bitcoin holdings during the three months ended September 30, 2025. See “Liquidity and Capital Resources – Contractual and Other Obligations” for additional information. o N ine - months ended September 30: We acquired 192,561 bitcoin (increasing our total holdings to 640,031) during the nine months ended September 30, 2025, compared to 63,070 bitcoin during the nine months ended September 30, 2024 (increasing our total holdings to 252,220). Of the approximately $19.7 billion we raised from capital markets activity during the nine months ended September 30, 2025, approximately $15.0 billion was attributable to issuances under the STRK ATM and Common Stock ATMs, the issuance of the 2030B Convertible Notes and the initial public offering of STRK Stock, which resulted in an increase of approximately 38.3 million shares in Assumed Diluted Shares Outstanding (bringing our total Assumed Diluted Shares Outstanding to approximately 320.0 million as of September 30, 2025), while approximately $4.7 billion was attributable to issuances under the STRF ATM and STRD ATM and the initial public offerings of STRF Stock, STRC Stock and STRD Stock, which did not increase Assumed Diluted Shares Outstanding. In comparison, the $4.5 billion we raised from capital markets activity during the nine months ended September 30, 2024 was primarily attributable to issuances under our Common Stock ATMs and of our 2028 Convertible Notes, 2030A Convertible Notes, 2031 Convertible Notes and 2032 Convertible Notes, which resulted in an increase of approximately 27.4 million shares in Assumed Diluted Shares Outstanding (bringing our total Assumed Diluted Shares Outstanding to approximately 235.0 million Assumed Diluted Shares Outstanding as of September 30, 2024). Additionally, we used approximately $523.9 million of the proceeds from our offering of our 2028 Convertible Notes to repay the principal amount plus accrued and unpaid interest on our 2028 Senior Secured Notes, which increased Assumed Diluted Shares Outstanding without a corresponding increase to our bitcoin holdings during the nine months ended September 30, 2024. We also utilized our Common Stock ATMs to pay dividends on our preferred stock, which increased Assumed Diluted Shares Outstanding without a corresponding increase to our bitcoin holdings during the nine months ended September 30, 2025. See “Liquidity and Capital Resources –Contractual and Other Obligations” for additional information. • BTC Gain: We achieved BTC Gain of 31,058 and 115,956 for the three and nine months ended September 30, 2025, respectively, as compared to 11,535 and 33,657 during the same periods in the prior year, as applicable, primarily due to an increase in our bitcoin holdings as of the beginning of each applicable period in 2025 compared to the beginning of each applicable period in 2024 (as of June 30, 2025 and 2024, we held 597,325 and 226,331 bitcoin, respectively; as of December 31, 2023 and 2024, we held 189,150 and 447,470 bitcoin, respectively), as well as an increase in our BTC Yield for the nine months ended September 30, 2025 as compared to the prior year period, as set forth above. • BTC $ Gain: We achieved BTC $ Gain of approximately $3.552 billion and $13.263 billion for the three and nine months ended September 30, 2025, respectively, as compared to approximately $732.0 million and $2.136 billion during the same periods in the prior year, as applicable, primarily due to an increase in bitcoin price from $63,463 as of September 30, 2024 to $114,378 as of September 30, 2025, as well as an increase in BTC Gain compared to the same periods in the prior year, as set forth above. See “Important Information about KPIs” for additional information about these KPIs, including their purposes and limitations and for the calculation of Assumed Diluted Shares Outstanding. Factors Impacting Results We believe the following key factors have previously had, and may continue to have, material impacts to our financial results and liquidity, and our ability to achieve our business objectives: 43 • Bitcoin: o Financial results. Bitcoin is a highly volatile asset that has traded below $60,000 per bitcoin and above $120,000 per bitcoin on the Coinbase exchange (our principal market for bitcoin) in the 12 months preceding September 30, 2025. 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. Due to the volatility of bitcoin, and our substantial holdings of bitcoin, we expect changes in the market value of bitcoin to materially impact our results. o Bitcoin risks. Bitcoin is a digital asset, which is a novel asset class that is subject to significant legal, commercial, regulatory and technical uncertainty. Holding bitcoin does not generate any cash flows and involves custodial fees and other costs. Additionally, the price of bitcoin has historically experienced significant price volatility, and a significant decrease in the price of bitcoin would adversely affect our financial condition and results of operations. Our strategy of acquiring and holding bitcoin also exposes us to counterparty risks with respect to the custody of our bitcoin, cybersecurity risks, and other risks inherent to holding a digital asset. In particular, we are subject to the risk that, if our private keys with respect to our digital assets are lost or destroyed or other similar circumstances or events occur, we may lose some or all of our digital assets, which could materially adversely affect our financial condition and results of operations. • Capital markets activity and conditions: o Source of capital. We rely substantially on the availability of equity and debt capital markets to fund our preferred stock dividend obligations, interest expense, and other financial obligations. As such, we are subject to risks relating to the availability of capital to us on favorable terms or at all. o Preferred stock dividend obligations. Our outstanding preferred stock creates recurring and potentially variable cash obligations that can reduce funds available for operations, product investment, and debt service. In addition, any deferred dividends on certain of our preferred stock would accrue and compound, including at increasing rates in the case of STRF Stock, which could increase future cash outlays, while STRC Stock’s board-set variable rate can change monthly, introducing additional uncertainty to dividend expense. • Tax: o Deferred tax liability. Since adopting ASU 2023-08, we are no longer required to account for our bitcoin under a cost-less-impairment accounting model and we no longer record 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. o Legal and regulatory developments. ▪ CAMT: On September 30, 2025, the Treasury and the IRS issued the Interim Guidance which, in relevant part, clarifies that a corporation may disregard unrealized gains and losses on its digital asset holdings when computing AFSI for purposes of determining whether it is subject to the 15% CAMT under the IRA. The Treasury and IRS intend to issue revised proposed regulations similar to this Interim Guidance. As previously disclosed, pursuant to the Interim Guidance, we plan to exclude our unrealized gains and losses on our bitcoin holdings from the calculation of our AFSI for purposes of determining whether we are subject to CAMT. As a result, we no longer expect to become subject to CAMT due to unrealized gains on our bitcoin holdings. ▪ OBBBA: On July 4, 2025, the One Big Beautiful Bill Act was enacted in the U.S., introducing several changes to corporate taxation. These changes include modifications to capitalization of research and development expenses, limitations on deductions for interest expense, accelerated fixed asset depreciation, and adjustments to the international tax framework. The legislation did not have a material impact to our income tax expense or effective tax rate for the three months ended September 30, 2025 and we do not expect it to have a material impact on our 2025 financial statements. • Software business: o On-premise to cloud subscription. The ongoing transition from on-premise perpetual licenses to cloud subscriptions has resulted, and is expected to continue to result, in shifts in payment patterns and revenue recognition from upfront to ratable, creating variability in reported revenue, operating results and cash flows. As part of this shift, although during the three months ended September 30, 2025, product license revenues increased primarily due to a settlement fee from 44 a customer totaling $11 million for past usage and transition support resulting in us recognizing $9.3 million of this amount as license revenue during such period, product license revenues for the nine months ended September 30, 2025 declined and we expect them to continue to decline in future periods as we no longer market new perpetual licenses and product support revenues have decreased as customers migrate to cloud subscriptions in lieu of renewing legacy support contracts. o Deferred revenue and advance payments. Deferred revenue and advance payments represent amounts received or due from our customers before we transfer our software or services to the customer. For multi-year service contract arrangements, we generally invoice no more than one year in advance of services and record deferred revenue only for invoiced amounts. Revenue is subsequently recognized in the period(s) in which control of the software or services is transferred to the customer. The portions of multi-year contracts that will be invoiced in the future are not presented on the Consolidated Balance Sheets in “Accounts receivable, net” and “Deferred revenue and advance payments” and instead are included in the remaining performance obligation disclosure below. See “III. Risk Factor Updates” in our Current Report on Form 8-K filed with the SEC on October 6, 2025 and “Item 1A. Risk Factors” of Part II of this Quarterly Report on Form 10-Q for information regarding the risks relating to our bitcoin holdings and strategy, bitcoin generally, our securities and capital markets activities, our operations, and other important risk factors, the materialization of any of which could materially impact our results and liquidity. 45 Results of Operations The following table sets forth certain operating highlights (in thousands) for the three and nine months ended September 30, 2025 and 2024: Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 % Change 2025 2024 % Change Revenues: Product licenses $ 17,373 $ 11,087 56.7 % $ 31,820 $ 33,311 -4.5 % Subscription services 45,972 27,800 65.4 % 123,899 74,846 65.5 % Total product licenses and subscription services 63,345 38,887 62.9 % 155,719 108,157 44.0 % Product support 51,118 61,015 -16.2 % 155,728 185,440 -16.0 % Other services 14,228 16,169 -12.0 % 42,798 49,162 -12.9 % Total revenues 128,691 116,071 10.9 % 354,245 342,759 3.4 % Cost of revenues: Product licenses 632 769 -17.8 % 2,765 2,130 29.8 % Subscription services 19,594 11,454 71.1 % 49,929 29,618 68.6 % Total product licenses and subscription services 20,226 12,223 65.5 % 52,694 31,748 66.0 % Product support 7,157 8,572 -16.5 % 21,802 25,312 -13.9 % Other services 10,630 13,554 -21.6 % 33,238 38,239 -13.1 % Total cost of revenues 38,013 34,349 10.7 % 107,734 95,299 13.0 % Gross profit 90,678 81,722 11.0 % 246,511 247,460 -0.4 % Operating expenses: Sales and marketing 29,908 35,414 -15.5 % 91,131 103,116 -11.6 % Research and development 22,602 33,301 -32.1 % 71,096 92,795 -23.4 % General and administrative 38,173 33,505 13.9 % 115,220 104,300 10.5 % Unrealized gain on digital assets (3,890,847 ) 0 n/a (12,032,356 ) 0 n/a Digital asset impairment losses 0 412,084 n/a 0 783,807 n/a Total operating expenses (3,800,164 ) 514,304 NM (11,754,909 ) 1,084,018 NM Income (loss) from operations $ 3,890,842 $ (432,582 ) NM $ 12,001,420 $ (836,558 ) NM For the results of operations we have included the respective percentage of changes, unless greater than 100% or less than (100)%, in which case we have denoted such changes as not meaningful (NM). Bitcoin Impacts Unrealized gains associated with digital assets and digital asset impairment losses The following table sets forth the unrealized gains on our digital assets for the three and nine months ended September 30, 2025 and impairment losses on our digital assets for the three and nine months ended September 30, 2024 (in thousands): Three Months Ended Nine Months Ended September 30, % September 30, % 2025 2024 Change 2025 2024 Change Unrealized gain on digital assets $ (3,890,847 ) $ 0 n/a $ (12,032,356 ) $ 0 n/a Digital asset impairment losses $ 0 $ 412,084 n/a $ 0 $ 783,807 n/a 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. Due to the volatility of bitcoin, and our substantial holdings of bitcoin, we expect changes in the market value of bitcoin to materially impact our results. 46 We did not sell any of our digital assets during the three and nine months ended September 30, 2025 and 2024. Software Business Impacts Revenues • Product licenses revenues . Product license revenues are derived from fees earned for licensing our business intelligence software to customers on a term or perpetual basis, for installation either on-premises or in a customer-managed public cloud environment. Product license revenue is recognized at the point when control to the license is transferred to the customer. Product license revenues increased $6.3 million for the three months ended September 30, 2025, as compared to the same period in the prior year, primarily due to fees from a one-time settlement, partially offset by an overall decrease in the volume of deals as we continue to promote our cloud subscription services offerings to new and existing customers. Product license revenues decreased $1.5 million for the nine months ended September 30, 2025 as compared to the same period in the prior year, primarily due to a decrease in the volume of deals. • 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 $18.2 million and $49.1 million for the three and nine months ended September 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. • Product support revenues . Product support revenues are derived from providing technical software support and software updates and upgrades to customers. Product support revenues are recognized ratably over the term of the contract, which is generally one year. Product support revenues decreased $9.9 million and $29.7 million for the three and nine months ended September 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. Costs of Revenue • Cost of Revenues . Cost of revenues increased $3.7 million and $12.4 million for the three and nine months ended September 30, 2025, as compared to the same periods in the prior year, driven primarily by an increase in subscription services cost of revenues due to higher cloud‑hosting costs from increased customer and internal usage and subcontractor expenses, partially offset by lower personnel costs due to headcount reductions and forfeitures of certain equity incentive awards. Operating Expenses • Sales and marketing expenses . Sales and marketing expenses consist of personnel costs, commissions, and costs related to office facilities, travel, advertising, public relations programs, and promotional events, such as trade shows, seminars, and technical conferences. Sales and marketing expenses decreased $5.5 million and $12.0 million for the three and nine months ended September 30, 2025, respectively, as compared to the same period in the prior year primarily due to a decrease in personnel costs primarily attributable to a decrease in average staffing levels and forfeiture of certain equity incentive awards, partially offset by an increase in commissions. • Research and development expenses . Research and development expenses consist of the personnel costs for our software engineering personnel and related overhead costs. Research and development expenses decreased $10.7 million and $21.7 million for the three and nine months ended September 30, 2025, respectively, as compared to the same periods in the prior year, primarily due to a decrease in personnel costs primarily attributable to a decrease in average staffing levels and forfeiture of certain equity incentive awards, partially offset by increased cloud-hosting costs used for internal development and testing. • General and administrative expenses. General and administrative expenses consist of personnel and related overhead costs, and other costs of our executive, finance, human resources, information systems, and administrative departments, as well as third-party consulting, legal, and other professional fees, and third-party costs associated with our digital asset holdings. General and administrative expenses increased $4.7 million and $10.9 million for the three and nine months ended September 30, 2025, respectively, as compared to the same period in the prior year, primarily due to higher bitcoin custody fees, advocacy expenses, and public filing costs, partially offset by a reduction in personnel costs, primarily from lower payroll taxes related to stock option exercises, and decreased legal fees. 47 Interest Expense Impacts Interest expense, net, primarily relates to the contractual interest expense and amortization of issuance costs related to our long-term debt arrangements. The following table sets forth interest expense, net (in thousands) for the periods indicated: Three Months Ended Nine Months Ended September 30, September 30, 2025 2024 2025 2024 Interest expense, net: 2025 Convertible Notes $ 0 $ 38 $ 0 $ 3,865 2027 Convertible Notes 0 1,012 401 3,033 2028 Convertible Notes 2,627 320 7,874 320 2029 Convertible Notes 1,820 0 5,457 0 2030A Convertible Notes 2,236 2,224 6,699 5,013 2030B Convertible Notes 1,250 0 3,012 0 2031 Convertible Notes 1,936 1,929 5,802 4,133 2032 Convertible Notes 5,176 5,159 15,516 5,904 2028 Secured Notes 0 7,738 0 23,915 Other interest (income) expense, net 3,845 (291 ) 9,132 (707 ) Total interest expense, net $ 18,890 $ 18,129 $ 53,893 $ 45,476 Other (Expense) Income, Net For the three and nine months ended September 30, 2025, other expense, net, of $0.7 million and $12.9 million, respectively, was comprised primarily of foreign currency transaction net losses. For the three and nine months ended September 30, 2024, other expense, net, of $5.0 million and $2.6 million, respectively, was comprised primarily of foreign currency transaction net losses. Income Taxes We recorded a provision for income taxes of $3.35 billion on a pretax income of $11.93 billion that resulted in an effective tax rate of 28.0% for the nine months ended September 30, 2025, as compared to a benefit from income taxes of $411.8 million on a pretax loss of $907.6 million that resulted in an effective tax rate of 45.4% for the nine months ended September 30, 2024. During the nine months ended September 30, 2025, our provision for income taxes primarily related to the tax effect of the unrealized gain on digital assets. During the nine months ended September 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 September 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 September 30, 2025, we had deferred tax liabilities with respect to the unrealized gain on our bitcoin holdings of approximately $7.43 billion. Our deferred tax liabilities are partially offset by deferred tax assets, such as net operating losses and capitalized research and development costs. If the market value of bitcoin declines in future periods, our deferred tax liability with respect to the unrealized gain on our bitcoin holdings will decrease, and we may be required to establish additional valuation allowances against our deferred tax assets. Such increases in valuation allowances could materially and adversely affect net income in periods in which such charges are incurred. We routinely consider actions necessary to preserve or utilize tax attributes. We will continue to regularly assess the realizability of deferred tax assets. Our effective tax rate may fluctuate due to changes in our domestic and foreign earnings and losses, material discrete tax items, or a combination of these factors resulting from transactions or events. See “Factors Impacting Results – Tax” for a for a discussion of tax factors which have had, and may continue to have, a significant impact on our results. Deferred Revenue and Advance Payments Total deferred revenue and advance payments. Total deferred revenue and advance payments decreased $38.9 million as of September 30, 2025, 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 increased conversions from on-premises to subscription services contracts, partially offset by (ii) an increase in deferred subscription services revenue from new subscription service contracts with existing on-premises customer and new customers. Total deferred revenue and advance payments increased $13.3 million as of September 30, 2025, compared to September 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.  48 Current deferred revenue and advance payments decreased $37.3 million and increased $16.2 million as of September 30, 2025, compared to December 31, 2024, and September 30, 2024, respectively. Non-current deferred revenue and advance payments decreased $1.5 million and $2.9 million as of September 30, 2025, compared to December 31, 2024 and September 30, 2024, respectively. Remaining performance obligation. Our remaining performance obligation represents contracted future revenue, including deferred revenue, advance payments, and non-cancellable billable amounts that will be invoiced and recognized in future periods. As of September 30, 2025, our remaining performance obligation was $462.4 million of which approximately $280.0 million is expected to be recognized as revenue over the next 12 months. The timing of revenue recognition may vary depending on our satisfaction of related performance obligations, and the amount of deferred revenue, advance payments, and remaining performance obligations at any date may not be indicative of future revenues. Employees As of September 30, 2025, we had a total of 1,546 employees, of whom 270 were based in the United States and 1,276 were based internationally. The following table summarizes employee headcount as of the dates indicated: September 30, December 31, September 30, 2025 2024 2024 Subscription services 209 95 97 Product support 57 163 168 Consulting 249 275 305 Education 12 11 10 Sales and marketing 295 295 316 Research and development 486 498 529 General and administrative 238 197 212 Total headcount 1,546 1,534 1,637 Liquidity and Capital Resources Liquidity Principal and Potential Sources of Liquidity Our principal sources of liquidity include: • Cash and cash equivalents: Cash and cash equivalents may include holdings in bank demand deposits, money market instruments, certificates of deposit, and U.S. Treasury securities. As of September 30, 2025 and December 31, 2024, the amount of cash and cash equivalents held by our U.S. entities was $17.8 million and $8.8 million, respectively, and by our non-U.S. entities was $36.5 million and $29.3 million, respectively. We earn a significant amount of our revenues outside the United States. We did not repatriate any foreign earnings and profits during the three and nine months ended September 30, 2025 and 2024. • Accounts receivable: The primary sources of cash provided by operating activities are cash collections of our accounts receivable from customers following the sales and renewals of our product licenses, subscription services and product support, as well as consulting and education services. As of September 30, 2025 and December 31, 2024, our accounts receivable, net of allowance for credit losses was $113.4 million and $181.2 million, respectively. See “Cash Flows” below for a discussion of our accounts receivables. Our potential sources of liquidity include: • Bitcoin: As of September 30, 2025 and December 31, 2024, we held approximately 640,031 and 447,470 bitcoins, respectively, all of which are unencumbered. As of October 30, 2025, we held approximately 641,167 bitcoins, all of which are unencumbered, and which had an aggregate market value of $68.28 billion as of October 30, 2025 (based on the market price of $106,490 of one bitcoin as reported on the Coinbase exchange as of October 30, 2025, 4:00 p.m. Eastern Time). As discussed further below, although we do not anticipate needing to use our bitcoin to meet our liquidity needs in the next twelve months, we believe our substantial bitcoin holdings can serve as a source of liquidity, if necessary. See “Availability of Bitcoin for Liquidity” below. 49 • ATM Offerings: As of September 30, 2025 and October 30, 2025, we had the following capacities available for issuance and sale under our ATM offering programs: September 30, 2025 October 30, 2025 (millions) (millions) STRF ATM $ 1,718.8 $ 1,663.9 STRC ATM $ 4,200.0 $ 4,200.0 STRK ATM $ 20,368.8 $ 20,340.6 STRD ATM $ 4,151.4 $ 4,133.8 Common Stock ATM $ 15,908.8 $ 15,854.4 Short-term and Long-term Liquidity Needs As of September 30, 2025, our short-term and long-term liquidity needs include the following: • Short-term Liquidity. Our short-term liquidity needs include working capital requirements, anticipated capital expenditures, dividend obligations on our 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, interest payments on our Convertible Notes and contractual obligations due within the next twelve months. • Long-Term Liquidity . Beyond the next 12 months, our long-term cash needs are primarily for obligations related to our long-term debt and for payment of dividend obligations on our preferred stock. We also have long-term cash requirements for needs related to our operating leases, delivery of our new corporate aircraft, and our various purchase agreements primarily related to third-party cloud hosting services and third-party software supporting our products, marketing, and operations. For further details regarding certain of our short-term and long-term liquidity needs, see “Contractual and Other Obligations” below. Satisfying Liquidity Needs We do not expect to generate cash and cash equivalents from operations and our cash and cash equivalents as of September 30, 2025 will not be sufficient to satisfy our short-term or long-term liquidity needs. However, we anticipate being able to use proceeds from equity or debt financings to meet our short-term liquidity needs. 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. Additionally, we would seek to satisfy our long-term liquidity needs, including our debt obligations, through various means 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. Maturities and Holder Repurchase Rights . The Convertible Notes mature and become subject to holder put option rights as follows: Convertible Notes Maturity Date Put Option Date (1) 2028 Convertible Notes September 15, 2028 September 15, 2027 2029 Convertible Notes December 1, 2029 June 1, 2028 2030A Convertible Notes March 15, 2030 September 15, 2028 2030B Convertible Notes March 1, 2030 March 1, 2028 2031 Convertible Notes March 15, 2031 September 15, 2028 2032 Convertible Notes June 15, 2032 June 15, 2029 (1) Holders of the Convertible Notes may require us to repurchase for cash all or a portion of the Convertible Notes at 100% of principal plus accrued and unpaid interest on the dates indicated. Conversion of Convertible Notes. If the conditional conversion features of the Convertible Notes are triggered, we may elect to settle the conversions of such 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 Convertible Notes. Availability of Equity and Debt Financing for Liquidity 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. See “Risks Related to Our Business in General— 50 A significant decrease in the market value of our bitcoin holdings could adversely affect our ability to satisfy our financial obligations or liquidity needs” under the caption “III. Risk Factor Updates” to our Current Report on Form 8-K filed with the SEC on October 6, 2025 for additional information. Our ability to issue preferred stock and obtain debt financing, on terms we consider favorable, or at all, may also be affected in part by our corporate credit rating. On October 27, 2025, S&P Global Ratings assigned us a corporate credit rating of B-. This credit rating is not a recommendation by the rating agency to buy, sell, or hold our securities, is subject to revision or withdrawal at any time by the rating agency and should be evaluated independently of any other credit rating we may receive. S&P Global Ratings and other credit rating agencies review their ratings periodically, and there is no guarantee our current corporate credit rating will remain the same as described above. If our corporate credit rating were to be lowered, or if we were to be assigned lower corporate credit ratings by other rating agencies, or if any of our securities were to be assigned lower credit ratings, our ability to access the preferred stock and debt markets, our cost of funds, and other terms for new issuances of preferred stock or debt could be adversely impacted. Availability of Bitcoin for Liquidity We do not believe we will need to sell or engage in other transactions with respect to any of our bitcoins within the next twelve months to meet our liquidity needs, although we may from time to time sell or engage in other transactions with respect to our bitcoins as part of treasury management operations, as noted above. The bitcoin market historically has been characterized by significant volatility in its price, limited liquidity and trading volumes compared to sovereign currencies markets, relative anonymity, a developing regulatory landscape, susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various other risks inherent in its entirely electronic, virtual form and decentralized network. 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. 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. See “Risks Related to Our Bitcoin Strategy and Holdings—Our bitcoin holdings are less liquid than our existing cash and cash equivalents and may not be able to serve as a source of liquidity for us to the same extent as cash and cash equivalents” under the caption “III. Risk Factor Updates” to our Current Report on Form 8-K filed with the SEC on October 6, 2025 for additional information. Capital Plan In May 2025, we announced a capital plan to raise $84 billion in the medium-to-long term, including $42 billion of equity capital and $42 billion of fixed-income instruments, including debt, convertible notes and preferred stock. This capital plan reflects an increase from our capital plan initially announced in October 2024 to raise $42 billion in aggregate, and includes capital raised through the original plan . Capital Markets Transactions Initial Public Offerings of Preferred Stock We have completed four initial public offerings registered under the Securities Act of 1933, as amended (the “Securities Act”) of preferred stock during the nine months ended September 30, 2025. In connection with each offering, we have filed certificates of designations with the Secretary of State of Delaware designating the aggregate shares issued of, and establishing the terms of, each preferred stock instrument: Date Shares Sold Net Proceeds (millions) (1) STRF Stock March 25, 2025 8,500,000 $ 710.9 STRC Stock July 29, 2025 28,011,111 $ 2,473.8 STRK Stock February 5, 2025 7,300,000 $ 563.2 STRD Stock June 10, 2025 11,764,700 $ 979.5 (1) After deducting the underwriting discounts and commissions and our offering expenses. All net proceeds from these offerings were used for general corporate purposes, including the acquisition of bitcoin and for working capital. 51 At-the-Market Offerings We have sold shares of class A common stock and shares of preferred stock pursuant to five at-the-market equity offerings registered under the Securities Act during 2025.See “Capital Markets Activity” for additional information about our at-the-market equity offering activity for the three and nine month periods ended September 30, 2025 and 2024 and Note 14 “Subsequent Events” of the Notes to Consolidated Financial Statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for our at-the-market activity from October 1, 2025 to October 30, 2025. Debt Offerings On February 21, 2025, we completed a $2.0 billion private offering of our 2030B Convertible Notes. The 2030B Convertible Notes mature March 1, 2030. The net proceeds totaled approximately $1.99 billion and the issuance costs to us were approximately $15.1 million. We used the net process from this offering for general corporate purposes, including the acquisition of bitcoin and for working capital. See Note 5 Long-term Debt to the Notes to Consolidated Financial Statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information. Contractual and Other Obligations Our material contractual obligations and cash requirements as of September 30, 2025 consist of: • principal and interest payments related to our long-term debt, which includes: o principal due upon maturity of our long-term debt instruments in the aggregate of $8.24 billion; o $17.3 million in aggregate coupon interest due each semi-annual period for the Outstanding Convertible Notes; and o $0.23 million due monthly in principal and interest related to our other long-term secured debt. • payments under various purchase agreements, primarily related to third-party cloud hosting services and third-party software supporting our products, marketing, and operations, and a new corporate aircraft; • rent payments under noncancellable operating leases; • 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). For additional information about our dividends declared and paid during the three and nine months ended September 30, 2025, and the dividends payable in the future as and if declared, see “Dividends” below. • ongoing personnel-related expenditures and vendor payments. 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. Dividends The following table sets forth the aggregate dividends paid for the three and nine months ended September 30, 2025: Three Months Ended September 30, 2025 Nine Months Ended September 30, 2025 STRF Stock $ 29,181,863 $ 54,703,613 STRC Stock 45,751,481 45,751,481 STRK Stock 27,211,732 59,831,595 STRD Stock 37,635,709 37,635,709 Total $ 139,780,784 $ 197,922,398 We did not pay any dividends on our capital stock during the three or nine months ended September 30, 2024. 52 On September 30, 2025, we announced that our board of directors increased the monthly regular dividend rate per annum on STRC Stock from 10.00% to 10.25% effective for monthly periods commencing on or after October 1, 2025 and declared a monthly cash dividend of $0.854166667 per share payable on STRC Stock on October 31, 2025 to stockholders of record as of 5:00 p.m., New York City time, on October 15, 2025. For a discussion of the dividends paid and payable on, and other rights of the STRF Stock, STRC Stock, STRK Stock, and STRD Stock, see Note 9, Redeemable Preferred Stock and Note 14, Subsequent Events to the Notes to Consolidated Financial Statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q. Our 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 October 30, 2025 (except as set forth below), would include: • $31.1 million dividends payable each quarterly period on our STRF Stock; • $24.5 million dividends payable each monthly period on our STRC Stock (assuming the current dividend rate of 10.50% remains unchanged); • $27.8 million dividends payable each quarterly period on our STRK Stock; and • $31.3 million dividends payable each quarterly period on our STRD Stock. 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 STRF Stock, STRC Stock, and STRK 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. Cash Flows The following table sets forth a summary of our cash flows (in thousands) and related percentage changes for the periods indicated: Nine Months Ended September 30, 2025 2024 % change (unaudited) (unaudited) Net cash used in operating activities $ (45,612 ) $ (35,708 ) 27.7 % Net cash used in investing activities (19,417,576 ) (4,010,904 ) 384.1 % Net cash provided by financing activities 19,476,842 4,046,067 381.4 % Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash 2,649 77 3340.3 % Net increase (decrease) in cash, cash equivalents, and restricted cash 16,303 (468 ) 3583.5 % Cash, cash equivalents, and restricted cash, beginning of period 39,897 48,673 -18.0 % Cash, cash equivalents, and restricted cash, end of period $ 56,200 $ 48,205 16.6 % Net cash used in operating activities. The primary sources of cash provided by operating activities are cash collections of our accounts receivable from customers following the sales and renewals of our product licenses, subscription services and product support, as well as consulting and education services. 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 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 $9.9 million for the nine months ended September 30, 2025, as compared to the same period in the prior year, due to a $9.1 billion increase in net income offset by a $13.4 million increase from changes in operating assets and liabilities and a $9.1 billion increase in non-cash items. 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 nine months ended September 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. 53 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 $15.4 billion for the nine months ended September 30, 2025, as compared to the same period in the prior year, primarily due to a $15.4 billion increase in purchases of bitcoins and a $27.0 million deposit on a new corporate aircraft. During the nine months ended September 30, 2025, we purchased $19.38 billion of bitcoin using net proceeds from the issuances of our 2030B Convertible Notes; net proceeds from the initial public offerings of our STRF Stock, STRC Stock, STRK Stock and STRD Stock; net proceeds from the sale of class A common stock under our Common Stock ATMs; and net proceeds from the sale of STRF Stock, STRK Stock and STRD Stock under our STRF ATM, STRK ATM and STRD ATM, respectively; while during the nine months ended September 30, 2024, we purchased $4.01 billion of bitcoin using net proceeds from the issuances of our 2028 Convertible Notes, 2030A Convertible Notes, 2031 Convertible Notes, and 2032 Convertible Notes, net proceeds from the Common Stock ATMs, and Excess Cash. “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. Net cash provided by financing activities. 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 Common Stock ATMs; the sale of STRF Stock, STRK Stock and STRD Stock under our STRF ATM, STRK ATM and STRD ATM, respectively; dividends paid on our STRF Stock, STRC Stock, STRK Stock and STRD Stock, net proceeds from the initial public offerings of our STRF Stock, STRC Stock STRK 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 $15.4 billion for the nine months ended September 30, 2025, as compared to the same period in the prior year, primarily due to (i) a $10.6 billion increase in net proceeds from our sale of class A common stock under our Common Stock ATMs and (ii) $5.8 billion in aggregate net proceeds from the initial public offerings of our STRF Stock, STRC Stock, STRK Stock, STRD Stock, and sales of STRF Stock, STRK Stock and STRD Stock under our STRF ATM, STRK ATM and STRD ATM, respectively during the nine months ended September 30, 2025, partially offset by (iii) a $1.2 million decrease in long-term debt proceeds, net of issuance costs, during the nine months ended September 30, 2025, as compared to the same period in the prior year, (iv) a $120.8 million decrease in proceeds from the exercise of stock options under the Stock Incentive Plans in the nine months ended September 30, 2025, as compared to the same period in the prior year and (v) $198.0 million in dividends paid on our preferred stock during nine months ended September 30, 2025. Long-term Debt The terms of each of our long-term debt instruments and the interest payments we have made and are obligated to make on our long-term debt instruments are discussed more fully in Note 5, Long-term Debt, to the Consolidated Financial Statements included in this Quarterly Report as well as Note 8, Long-term Debt, to the Consolidated Financial Statements of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. 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. Such repurchases or exchanges, if any, will be upon such terms and at such prices as we may determine, and will depend on prevailing market conditions, our liquidity requirements, contractual restrictions and other factors. We may also seek to prepay our outstanding indebtedness. The amounts involved in any such repurchase or prepayment may be material. We could seek to fund any such debt repurchases or prepayments using proceeds from equity offerings that we may choose to undertake from time-to-time. 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. Actual results and outcomes could differ from these estimates and assumptions. Critical accounting estimates involve a significant level of estimation uncertainty and are estimates that have had or are reasonably likely to have a material impact on our financial condition or results of operations. We consider certain estimates and judgments related to revenue recognition to be critical accounting estimates for us, as discussed under “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical Accounting Estimates” included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. There have been no significant changes in such estimates and judgments since December 31, 2024. Important Information about KPIs The following table presents total bitcoin holding, basic shares outstanding, Assumed Diluted Shares Outstanding, Satoshis per basic shares outstanding, BPS, and bitcoin price for the periods as indicated. On August 7, 2024, we completed a 10-for-1 stock split of our class A and class B common stock. See Note 1, Summary of Significant Accounting Policies, to the Consolidated Financial Statements, 54 for further information. As a result of the stock split, all applicable share and per share information presented within the calculation of our KPIs in this Quarterly Report on Form 10-Q have been retroactively adjusted to reflect the stock split for all periods presented. As of As of As of As of June 30, 2024 September 30, 2024 June 30, 2025 September 30, 2025 December 31, 2023 September 30 2024 December 31, 2024 September 30, 2025 Total Bitcoin Holdings 226,331 252,220 597,325 640,031 189,150 252,220 447,470 640,031 Shares Outstanding (in thousands) Class A Common Stock 171,030 183,000 261,318 267,468 149,041 183,000 226,138 267,468 Class B Common Stock 19,640 19,640 19,640 19,640 19,640 19,640 19,640 19,640 Basic Shares Outstanding 190,670 202,640 280,959 287,109 168,681 202,640 245,778 287,109 2025 Convertible Notes, convertible at $39.80 3,659 - - - 16,330 - - - 2027 Convertible Notes, convertible at $143.25 7,330 7,330 - - 7,330 7,330 7,330 - 2028 Convertible Notes, convertible at $183.19 - 5,513 5,513 5,513 - 5,513 5,513 5,513 2029 Convertible Notes, convertible at $672.40 - - 4,462 4,462 - - 4,462 4,462 2030A Convertible Notes, convertible at $149.77 5,342 5,342 5,342 5,342 - 5,342 5,342 5,342 2030B Convertible Notes, convertible at $433.43 4,614 4,614 4,614 2031 Convertible Notes, convertible at $232.72 2,594 2,594 2,594 2,594 - 2,594 2,594 2,594 2032 Convertible Notes, convertible at $204.33 3,915 3,915 3,915 3,915 - 3,915 3,915 3,915 STRK Stock, convertible at $1,000.00 - - 1,220 1,361 - - - 1,361 Options Outstanding 5,916 5,678 4,158 3,757 12,936 5,678 4,956 3,757 Restricted Stock Units and Performance Stock Units Unvested 2,244 2,034 1,439 1,374 2,359 2,034 1,845 1,374 Assumed Diluted Shares Outstanding (in thousands) 221,670 235,047 314,216 320,040 207,636 235,047 281,735 320,040 Satoshis per Basic Shares Outstanding 118,703 124,467 212,603 222,923 112,135 124,467 182,063 222,923 Bitcoin Per Share (BPS) 102,102 107,306 190,100 199,984 91,097 107,306 158,826 199,984 Bitcoin Price $ 61,927 $ 63,463 $ 107,752 $ 114,378 $ 42,531 $ 63,463 $ 93,390 $ 114,378 Bitcoin Per Share (BPS) is a KPI that represents the ratio between our bitcoin holdings and Assumed Diluted Shares Outstanding, expressed in terms of Satoshis, where: • “Assumed Diluted Shares Outstanding” refers to the aggregate of our Basic Shares Outstanding as of the dates presented plus all additional shares that would result from the assumed conversion of all outstanding convertible notes and convertible preferred stock, exercise of all outstanding stock option awards, and settlement of all outstanding restricted stock units and performance stock units as of such dates. Assumed Diluted Shares Outstanding is not calculated using the treasury method and does not take into account any vesting conditions (in the case of equity awards), the exercise price of any stock option awards or any contractual conditions limiting convertibility of convertible debt instruments. • “Basic Shares Outstanding” reflects the actual class A common stock and class B common stock outstanding as of the dates presented. For purposes of this calculation, outstanding shares of such stock are deemed to include shares, if any, that (A) were sold under at-the-market equity offering programs, or (B) were to be issued pursuant to (i) options that had been exercised, (ii) restricted stock units that have vested or (iii) conversion requests received with respect to convertible securities, but which in each case were pending issuance as of the dates presented. • A “Satoshi” or a “Sat” is one one-hundred-millionth of one bitcoin, currently the smallest indivisible unit of a bitcoin. 55 Three months ended Nine months ended September 30, 2024 September 30, 2025 September 20, 2024 September 30, 2025 BTC Yield 5.1 % 5.2 % 17.8 % 25.9 % BTC Gain 11,535 31,058 33,657 115,956 BTC $ Gain (in millions) $ 732 $ 3,552 $ 2,136 $ 13,263 BTC Yield is a KPI that represents the percentage change in BPS from the beginning of a period to the end of a period. BTC Gain is a KPI that represents the number of bitcoins held by us at the beginning of a period multiplied by the BTC Yield for such period. BTC $ Gain is a KPI that represents the dollar value of the BTC Gain calculated by multiplying the BTC Gain by the market price of bitcoin. For determining BTC $ Gain quarter to date or year to date, unless otherwise specified, we use the current market price of bitcoin. For determining BTC $ Gain for a past fiscal year or other past period, we use the market price of bitcoin as of 4:00pm ET as reported on the Coinbase exchange on the last day of the applicable period. We use these market prices of bitcoin for this calculation solely for the purpose of facilitating this illustrative calculation. We use BPS, BTC Yield, BTC Gain and BTC $ Gain as KPIs to help assess the performance of our strategy of acquiring bitcoin in a manner we believe is accretive to shareholders. We believe these KPIs can supplement investors’ understanding of how we choose to fund bitcoin purchases and the value created in a period by: • in the case of BPS, measuring the ratio of our bitcoin holdings to Assumed Diluted Shares Outstanding, which provides investors a baseline with which to assess our achievement of our strategy of acquiring bitcoin in an accretive manner over a given period; • in the case of BTC Yield, measuring the percentage change in BPS from the beginning of a period to the end of a period, which helps investors assess how our achievement of our strategy of acquiring bitcoin in an accretive manner varies across periods; • in the case of BTC Gain, hypothetically expressing the percentage change reflected in the BTC Yield metric as if it reflected an increase in the amount of bitcoin held at the end of the applicable period as compared to the beginning of such period, which provides investors with visibility into the absolute change in our bitcoin holdings resulting from our BTC Yield; and • in the case of BTC $ Gain, further expressing that change as an illustrative dollar value by multiplying that bitcoin-denominated change by the market price of bitcoin at the end of the applicable period as described above. When we use these KPIs, management takes into account the various limitations of these metrics, including that they • do not take into account that our assets, including our bitcoin, are subject to (i) all of our existing and future liabilities, including our debt, and (ii) the preferential rights of our preferred stockholders to dividends and our assets in a liquidation, and that all such claims rank to senior to those of our common equity; and • assume that all indebtedness will be refinanced or, in the case of our senior convertible debt instruments and convertible preferred stock, converted into shares of class A common stock in accordance with their respective terms. BPS, BTC Yield, BTC Gain and BTC $ Gain are not, and should not be understood as, financial performance, valuation or liquidity measures. Specifically: • BPS does not represent (i) our ability to satisfy our financial obligations, or (ii) our book value per share. Ownership of a share of our common stock does not represent an ownership interest in the bitcoin held by us. • BTC Yield is not equivalent to “yield” in the traditional financial context. It is not a measure of the return on investment our shareholders may have achieved historically or can achieve in the future by purchasing our stock, or a measure of income generated by our operations or our bitcoin holdings, return on investment on our bitcoin holdings, or any other similar financial measure of the performance of our business or assets. • BTC Gain and BTC $ Gain are not equivalent to “gain” in the traditional financial context. They also are not measures of the return on investment our shareholders may have achieved historically or can achieve in the future by purchasing our stock, or measures of income generated by our operations or our bitcoin holdings, return on investment on our bitcoin holdings, or any other similar financial measure of the performance of our business or assets. It should also be understood that BTC $ Gain does not represent a fair value gain of our bitcoin holdings, and BTC $ Gain may be positive during periods when we have incurred fair value losses on our bitcoin holdings. The trading price of our class A common stock is informed by numerous factors in addition to our bitcoin holdings and our actual or potential shares of class A common stock outstanding, and as a result, the trading price of our securities can deviate significantly from the 56 market value of our bitcoin, and none of BPS, BTC Yield, BTC Gain or BTC $ Gain are indicative or predictive of the trading price of our securities. Investors should rely on the financial statements and other disclosures contained in our SEC filings. In particular, we have adopted Accounting Standards Update No. 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets (“ASU 2023-08”), which requires that we measure our bitcoin at fair value in our statement of financial position as of the end of a reported period, and recognize gains losses from changes in the fair value in net income for the reported period. As a result, we may incur unrealized gain or loss on digital assets based on changes in the market price of bitcoin during a period, which would not be reflected in BPS, BTC Yield, BTC Gain or BTC $ Gain. For example, if we increase our bitcoin holdings relative to Assumed Diluted Shares Outstanding during a reported period, we would achieve increased BPS and positive BTC Yield, BTC Gain and BTC $ Gain even if we report significant unrealized loss on digital assets for the period. Similarly, if we increase Assumed Diluted Shares Outstanding at a faster rate than our bitcoin holdings, then we would experience decreased BPS and negative BTC Yield, BTC Gain, and BTC $ Gain, even if we report significant unrealized gain on digital assets for the period. As noted above, these KPIs are narrow in their purpose and are used by management to assist it in assessing whether we are raising and deploying capital in a manner accretive to shareholders solely as it pertains to our bitcoin holdings. In calculating these KPIs, we do not consider the source of capital used for the acquisition of our bitcoin. When we purchase bitcoin using proceeds from offerings of non-convertible notes or non-convertible preferred stock, or convertible notes or preferred stock that carry conversion prices above the current trading price of our common stock or conversion rights that are not then exercisable, such transactions have the effect of increasing the BPS, BTC Yield, BTC Gain and BTC $ Gain, while also increasing our indebtedness and senior claims of holders of instruments other than class A common stock with respect to dividends and to our assets, including our bitcoin, in a manner that is not reflected in these metrics. If any of our convertible notes mature or are redeemed without being converted into common stock, or if we elect to redeem or repurchase our non-convertible instruments, we may be required to sell shares of our class A common stock or bitcoin to generate sufficient cash proceeds to satisfy those obligations, either of which would have the effect of decreasing BPS, BTC Yield, BTC Gain and BTC $ Gain, and adjustments for such decreases are not contemplated by the assumptions made in calculating these metrics. Accordingly, these metrics might overstate or understate the accretive nature of our use of capital to buy bitcoin because not all bitcoin is purchased using proceeds of issuances of class A common stock, and not all proceeds from issuances of class A common stock are used to purchase bitcoin.      In addition, we are required to pay dividends with respect to our perpetual preferred stock in perpetuity. We could pay these dividends with cash or, in the case of STRK Stock, by issuing shares of class A common stock. We have issued shares of class A common stock for cash to fund the payment of cash dividends, and we may in the future issue shares of class A common stock in lieu of paying dividends on STRK Stock. As a result, we have experienced, and may experience in the future, increases in Assumed Diluted Shares Outstanding without corresponding increases in our bitcoin holdings, resulting in decreases in BPS, BTC Yield, BTC Gain and BTC $ Gain for the applicable periods.   We have historically not paid any dividends on our shares of class A common stock, and by presenting these KPIs we make no suggestion that we intend to do so in the future. Ownership of our securities, including our class A common stock and preferred stock, does not represent an ownership interest in, or a redemption right with respect to, the bitcoin we hold.   We determine our KPI targets based on our history and future goals. Our ability to maintain any given level of BPS, or achieve positive BTC Yield, BTC Gain, or BTC $ Gain may depend on a variety of factors, including factors outside of our control, such as the price of bitcoin, and the availability of debt and equity financing on favorable terms. Past performance is not indicative of future results.    These KPIs are merely supplements, not substitutes to the financial statements and other disclosures contained in our SEC filings. They should be used only by sophisticated investors who understand their limited purpose and many limitations.  57 Item 3. Quantitative and Qualitat ive Disclosures About Market Risk The following discussion about our market risk exposures involves forward-looking statements. 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, foreign currency fluctuations and interest rate risk. Market Price Risk of Bitcoin. We have used a significant portion of our cash, including cash generated from capital raising transactions, to acquire bitcoin. We account for our bitcoin as indefinite-lived intangible assets. 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. As of September 30, 2025, we held approximately 640,031 bitcoins with a carrying value of $73.21 billion on our Consolidated Balance Sheet. Bitcoin is a highly volatile asset that has traded below $60,000 per bitcoin and above $120,000 per bitcoin in our principal market in the 12 months preceding September 30, 2025. A significant decrease in the price of bitcoin would have a material adverse effect on our earnings. Foreign Currency Risk. We conduct a significant portion of our business in currencies other than the U.S. dollar, the currency in which we report our Consolidated Financial Statements. International revenues accounted for 42.1% and 44.9% of our total revenues for the three months ended September 30, 2025 and 2024, respectively, and 42.6% and 44.0% of our total revenues for the nine months ended September 30, 2025, respectively. We anticipate that international revenues will continue to account for a significant portion of our total revenues. The functional currency of each of our foreign subsidiaries is generally the local currency. Assets and liabilities of our foreign subsidiaries are translated into U.S. dollars at exchange rates in effect as of the applicable Balance Sheet date and any resulting translation adjustments are included as an adjustment to stockholders’ equity. Revenues and expenses generated from these subsidiaries are translated at average monthly exchange rates during the quarter in which the transactions occur. Transaction gains and losses arising from transactions denominated in a currency other than the functional currency of the entity involved are included in the results of operations. As a result of transacting in multiple currencies and reporting our Consolidated Financial Statements in U.S. dollars, our operating results may be adversely impacted by currency exchange rate fluctuations in the future. We cannot predict the effect of exchange rate fluctuations upon our future results. We attempt to minimize our foreign currency risk by converting our excess foreign currency held in foreign jurisdictions to U.S. dollar-denominated cash and investment accounts. As of September 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 4.4% and 5.7%, respectively. If average exchange rates during the nine months ended September 30, 2025 had changed unfavorably by 10%, our revenues for the nine months ended September 30, 2025 would have decreased by 3.8%. During the nine months ended September 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 was 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, and we have increased regular dividends on STRC Stock, most recently on October 30, 2025, from 10.25% per annum to 10.50% per annum for the monthly period commencing on or after November 1, 2025. 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 STRC Stock to trade at prices at or close to its stated amount of $100 per share. As of October 30, 2025, if we determined to increase the regular dividend rate on our STRC Stock by 0.50%, STRC Stock’s monthly dividend accrual would increase by approximately $1.2 million. We do not believe our interest rate risk exposure via STRC Stock is material as of October 30, 2025. 58