Strategy Inc 10-K

Item 9A. Controls and Procedures Evaluation of Disclosure Controls and Procedures Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Annual Report. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Our disclosure controls and procedures are designed to provide reasonable assurance of achieving their control objectives. Based on the evaluation of our disclosure controls and procedures as of the end of the period covered by this Annual Report, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level. Management’s Report on Internal Control Over Financial Reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting. Internal control over financial reporting is defined in Rules 13a-15(f) and 15d-15(f) promulgated under the Exchange Act as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers and effected by the Company’s Board of Directors, management, and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with GAAP. Such internal control includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company, (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with GAAP, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements. 82 Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Projections of any evaluation of effectiveness to future periods are subject to the risk that the control may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Under the oversight of our Chief Executive Officer and Chief Financial Officer, our management conducted an assessment of the effectiveness of our internal control over financial reporting as of December 31, 2025 based on the criteria set forth in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on its assessment, management has determined that, as of December 31, 2025, our internal control over financial reporting is effective based on those criteria. Our independent registered public accounting firm, KPMG LLP, which audited the Consolidated Financial Statements included in this Annual Report, has issued an attestation report on our internal control over financial reporting. This report is included in the Reports of Independent Registered Public Accounting Firm in “Item 15. Exhibits, Financial Statement Schedules.” Changes in Internal Control Over Financial Reporting No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the three months ended December 31, 2025 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Item 9B. Other Information Annual Discretionary Cash Bonus Targets for Certain Executive Officers On February 18, 2026, the Company’s Compensation Committee established an annual discretionary cash bonus target for 2026 for the following executive officers of the Company in the amounts set forth opposite their names: Phong Le $ 1,300,000 Andrew Kang $ 600,000 Thomas C. Chow $ 450,000 Awards pursuant to the foregoing discretionary cash bonus target will be determined by the Company’s Compensation Committee based on its subjective evaluation of the performance of each of the executive officers in the context of general economic and industry conditions and the Company’s performance and achievement of its operational objectives during the year. Rule 10b5-1 Information On December, 5, 2025 , Thomas C. Chow , our Executive Vice President, General Counsel and Secretary , entered into a Rule 10b5-1 trading arrangement (as defined in Item 408 of Regulation S-K) intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) of the Exchange Act. This Rule 10b5-1 trading arrangement is intended to qualify as an “eligible sell-to-cover transaction” (as described in Rule 10b5-1(c)(1)(ii)(D)(3) under the Exchange Act). This sell-to-cover arrangement applies to restricted stock units and performance stock units that have been granted or may be granted in the future to Mr. Chow (other than those that (a) by their terms require the Company to withhold shares for tax withholding obligations in connection with vesting and settlement or (b) from which the Company elects to withhold shares to satisfy tax withholding obligations in connection with vesting and settlement), and provide for the automatic sale of a number of shares of class A common stock as is necessary to cover tax withholding obligations incurred in connection with the vesting or settlement of such awards, with the proceeds of the sale delivered to the Company in satisfaction of the applicable withholding obligation. This arrangement will remain in effect indefinitely until terminated by Mr. Chow. The total number of shares of class A common stock that may be sold pursuant to this instruction is not determinable, and will vary based on the extent to which vesting conditions are satisfied, the market price of the Company’s class A common stock at the time of settlement, applicable tax rates and the potential future grant of additional equity awards subject to such arrangement. Except as set forth above, none of our directors or officers (as defined in Rule 16a-1(f) promulgated under the Exchange Act) adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as defined in Item 408 of Regulation S-K) during the fourth quarter of 2025. Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections None. 83 PART III Item 10. Directors, Executive Officers and Corporate Governance The information required by this Item is incorporated herein by reference to the information provided under the headings “Executive Officers of the Company,” “Election of Directors – Nominees,” and “Corporate Governance and the Board of Directors and its Committees” in our definitive proxy statement for the 2026 Annual Meeting of Stockholders to be filed with the SEC not later than 120 days after the fiscal year ended December 31, 2025 (the “2026 Proxy Statement”). Item 11. Executive Compensation The information required by this Item (other than the information required by Item 402(v) of Regulation S-K) is incorporated herein by reference to the information provided under the headings “Executive and Director Compensation,” “Compensation Committee Report,” and “Corporate Governance and the Board of Directors and its Committees – Compensation Committee” in the 2026 Proxy Statement. Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters The information required by this Item is incorporated herein by reference to the information provided under the headings “Security Ownership of Certain Beneficial Owners and Management” and “Executive and Director Compensation – Equity Compensation Plan Information” in the 2026 Proxy Statement. Item 13. Certain Relationships and Related Transactions, and Director Independence The information required by this Item is incorporated herein by reference to the information provided under the heading “Corporate Governance and the Board of Directors and its Committees” in the 2026 Proxy Statement. Item 14. Principal Accountant Fees and Services The information required by this Item is incorporated herein by reference to the information provided under the heading “Independent Registered Public Accounting Firm Fees and Services” in the 2026 Proxy Statement. 84 PART IV Item 15. Exhibits, Financial Statement Schedules (a) The following documents are filed as part of this Annual Report: 1. Consolidated Financial Statements Page Reports of Independent Registered Public Accounting Firm 86 Consolidated Financial Statements: Balance Sheets 89 Statements of Operations 90 Statements of Comprehensive (Loss) Income 91 Statements of Mezzanine Equity and Stockholders’ Equity 92 Statements of Cash Flows 93 Notes to Consolidated Financial Statements 94 2. Exhibits 137 3. Consolidated Financial Statement Schedule Schedule II - Valuation and Qualifying Accounts 142 (b) Exhibits We hereby file as part of this Annual Report the exhibits listed in the Index to Exhibits. (c) Financial Statement Schedule The following financial statement schedule is filed herewith: Schedule II—Valuation and Qualifying Accounts All other items included in an Annual Report on Form 10‑K are omitted because they are not applicable or the answers thereto are none. Item 16. Form 10-K Summary None. 85 Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors Strategy Inc (formerly MicroStrategy Incorporated): Opinion on Internal Control Over Financial Reporting We have audited Strategy Inc (formerly MicroStrategy Incorporated) and subsidiaries (the Company) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive (loss) income, mezzanine equity and stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes and financial statement schedule, Schedule II, Valuation and Qualifying Accounts, (collectively, the consolidated financial statements), and our report dated February 19, 2026 expressed an unqualified opinion on those consolidated financial statements. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audit also included performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition and Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. /s/ KPMG LLP McLean, Virginia February 19, 2026 86 Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors Strategy Inc (formerly MicroStrategy Incorporated): Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Strategy Inc (formerly MicroStrategy Incorporated) and subsidiaries (the Company) as of December 31, 2025 and 2024, the related consolidated statements of operations, comprehensive (loss) income, mezzanine equity and stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2025, and the related notes and financial statement schedule, Schedule II, Valuation and Qualifying Accounts, (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025 and 2024, and the results of its operations and its cash flows for each of the years in the three-year period ended December 31, 2025, in conformity with U.S. generally accepted accounting principles. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 19, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. Change in Accounting Principle As discussed in Note 2(g) to the consolidated financial statements, the Company has changed its method of accounting for digital assets that are qualifying indefinite-lived intangible assets to fair value in the consolidated balance sheet, with changes in fair value recognized in the consolidated statement of operations as of January 1, 2025 due to the adoption of Accounting Standards Update No. 2023-08, Intangibles-Goodwill and Other-Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matter The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of a critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. Evaluation of audit evidence pertaining to the existence and control of the digital assets As discussed in Notes 2(g) and 4 to the consolidated financial statements, the Company accounts for its digital assets as indefinite-lived intangible assets. The digital assets are recorded at fair value as of December 31, 2025, with changes in fair value recognized in the consolidated statement of operations. As of December 31, 2025, the carrying value of the Company’s digital assets was $58.85 billion. 87 We identified the evaluation of audit evidence pertaining to the existence of the digital assets and whether the Company controls the digital assets as a critical audit matter. Especially subjective auditor judgement was involved in determining the nature and extent of evidence required to assess the existence of the digital assets and whether the Company controls the digital assets, as control over the digital assets is provided through private cryptographic keys stored using third-party custodial services at multiple locations that are geographically dispersed. In addition, information technology (IT) professionals with specialized skills and knowledge in blockchain technology were needed to assist in the evaluation of the sufficiency of certain audit procedures. The following are the primary procedures we performed to address this critical audit matter. We evaluated the design and tested the operating effectiveness of certain internal controls over the digital assets process, including a control over the comparison of the Company’s records of digital assets held to the custodial records. We involved IT professionals with specialized skills and knowledge in blockchain technology, who assisted in evaluating certain internal controls over the digital assets process performed at the custodial locations, related specifically to the generation of the private cryptographic keys, the storing of these keys, and the reconciliation of digital assets per the custodial service ledgers to the public blockchain. We obtained confirmation of the Company’s digital assets in custody as of December 31, 2025 and compared the total digital assets confirmed to the Company’s record of digital asset holdings. We also compared the Company’s record of digital asset transactions to the records on the public blockchain using a software audit tool. We applied auditor judgement in determining the nature and extent of audit evidence required, especially related to assessing the existence of the digital assets and whether the Company controls the digital assets. We evaluated the sufficiency and appropriateness of audit evidence obtained by assessing the results of procedures performed over the digital assets. /s/ KPMG LLP We have served as the Company’s auditor since 2013. McLean, Virginia February 19, 2026 88 STRATEGY INC CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) December 31, 2025 December 31, 2024 Assets Current assets: Cash and cash equivalents $ 2,301,470 $ 38,117 Restricted cash 1,873 1,780 Accounts receivable, net 205,748 181,203 Prepaid expenses and other current assets 55,046 31,224 Total current assets 2,564,137 252,324 Digital assets 58,854,028 23,909,373 Property and equipment, net 28,858 26,327 Right-of-use assets 46,975 54,560 Deposits and other assets 142,577 75,794 Deferred tax assets 4,507 1,525,307 Total assets $ 61,641,082 $ 25,843,685 Liabilities, Mezzanine Equity, and Stockholders' Equity Current liabilities: Accounts payable, accrued expenses, and operating lease liabilities $ 50,335 $ 52,982 Accrued compensation and employee benefits 69,986 58,362 Accrued interest 5,619 5,549 Preferred dividends payable 27,121 — Current portion of long-term debt, net 31,313 517 Deferred revenue and advance payments 272,118 237,974 Total current liabilities 456,492 355,384 Long-term debt, net 8,158,842 7,191,158 Deferred revenue and advance payments 5,451 4,970 Operating lease liabilities 46,135 56,403 Other long-term liabilities 4,736 5,379 Deferred tax liabilities 1,926,454 407 Total liabilities 10,598,110 7,613,701 Commitments and Contingencies Mezzanine Equity 10.00 % Series A Perpetual Strife Preferred Stock, $ 0.001 par value; 33,200 shares authorized, 12,840 shares issued and outstanding at December 31, 2025; redemption value and liquidation preference of $ 1,363,151 at December 31, 2025 1,191,128 — Variable Rate Series A Perpetual Stretch Preferred Stock,$ 0.001 par value; 70,435 shares authorized, 29,587 shares issued and outstanding at December 31, 2025; redemption value and liquidation preference of $ 2,958,706 at December 31, 2025 2,631,281 — 10.00 % Series A Perpetual Stream Preferred Stock, $ 0.001 par value; 7,750 shares authorized, 7,750 shares issued and outstanding at December 31, 2025; redemption value and liquidation preference of $ 909,850 at December 31, 2025 707,069 — 8.00 % Series A Perpetual Strike Preferred Stock, $ 0.001 par value; 269,800 shares authorized, 13,982 shares issued and outstanding at December 31, 2025; redemption value and liquidation preference of $ 1,398,195 at December 31, 2025 1,226,553 — 10.00 % Series A Perpetual Stride Preferred Stock, $ 0.001 par value; 61,176 shares authorized, 14,024 shares issued and outstanding at December 31, 2025; redemption value and liquidation preference of $ 1,402,422 at December 31, 2025 1,163,483 — Total mezzanine equity 6,919,514 — Stockholders’ Equity Preferred stock undesignated, $ 0.001 par value; 562,639 and 5,000 shares authorized, no shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively — — Class A common stock, $ 0.001 par value; 10,330,000 and 330,000 shares authorized, 292,422 and 226,138 shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively 292 226 Class B common stock, $ 0.001 par value; 165,000 shares authorized, 19,640 shares issued and outstanding at December 31, 2025 and December 31, 2024, respectively 20 20 Additional paid-in capital 37,806,554 20,411,998 Accumulated other comprehensive loss ( 5,171 ) ( 15,384 ) Retained earnings (accumulated deficit) 6,321,763 ( 2,166,876 ) Total stockholders’ equity 44,123,458 18,229,984 Total liabilities, mezzanine equity, and stockholders' equity $ 61,641,082 $ 25,843,685 The accompanying notes are an integral part of these Consolidated Financial Statements. 89 STRATEGY INC CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) Years Ended December 31, 2025 2024 2023 Revenues: Product licenses $ 39,674 $ 48,567 $ 75,351 Subscription services 175,657 106,776 81,179 Total product licenses and subscription services 215,331 155,343 156,530 Product support 204,225 243,805 263,888 Other services 57,677 64,308 75,843 Total revenues 477,233 463,456 496,261 Cost of revenues: Product licenses 3,956 3,060 1,929 Subscription services 72,956 42,440 31,776 Total product licenses and subscription services 76,912 45,500 33,705 Product support 28,592 33,289 22,434 Other services 43,913 50,679 53,805 Total cost of revenues 149,417 129,468 109,944 Gross profit 327,816 333,988 386,317 Operating expenses: Sales and marketing 122,956 138,081 149,671 Research and development 93,860 118,486 120,530 General and administrative 151,909 140,537 115,312 Unrealized loss on digital assets 5,403,476 — — Digital asset impairment losses — 1,789,862 115,851 Total operating expenses 5,772,201 2,186,966 501,364 Loss from operations ( 5,444,385 ) ( 1,852,978 ) ( 115,047 ) Interest expense, net ( 64,968 ) ( 61,941 ) ( 48,960 ) (Loss) gain on debt extinguishment — ( 22,933 ) 44,686 Other (expense) income, net ( 16,601 ) 3,506 ( 5,204 ) Loss before income taxes ( 5,525,954 ) ( 1,934,346 ) ( 124,525 ) Benefit from income taxes ( 1,677,802 ) ( 767,685 ) ( 553,646 ) Net (loss) income ( 3,848,152 ) ( 1,166,661 ) 429,121 Dividends on preferred stock ( 381,367 ) — — Net (loss) income attributable to common stockholders of Strategy ( 4,229,519 ) ( 1,166,661 ) 429,121 Basic (loss) earnings per share (1) $ ( 15.23 ) $ ( 6.06 ) $ 3.14 Weighted average common shares outstanding - Basic 277,660 192,549 136,706 Diluted (loss) earnings per share (1) $ ( 15.23 ) $ ( 6.06 ) $ 2.64 Weighted average common shares outstanding - Diluted 277,660 192,549 165,662 (1) For the years ended December 31, 2025 and 2024, basic and fully diluted (loss) earnings per share for class A and class B common stock are the same. The accompanying notes are an integral part of these Consolidated Financial Statements. 90 STRATEGY INC CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME (in thousands) Year Ended December 31, 2025 2024 2023 Net (loss) income $ ( 3,848,152 ) $ ( 1,166,661 ) $ 429,121 Other comprehensive income (loss), net of applicable taxes: Foreign currency translation adjustment 10,213 ( 3,940 ) 2,357 Total other comprehensive income (loss) 10,213 ( 3,940 ) 2,357 Comprehensive (loss) income $ ( 3,837,939 ) $ ( 1,170,601 ) $ 431,478 The accompanying notes are an integral part of these Consolidated Financial Statements. 91 STRATEGY INC CONSOLIDATED STATEMENTS OF MEZZANINE EQUITY AND STOCKHOLDERS’ EQUITY (in thousands) Mezzanine Equity Stockholders' Equity Perpetual Preferred Stock Class A Common Stock Class B Convertible Common Stock Treasury Stock Shares Amount Total Stockholders ' Equity Shares Amount Shares Amount Additional Paid- in Capital Shares Amount Accumulated Other Comprehensive Income (Loss) Retained Earnings (Accumulated Deficit) Balance at January 1, 2023 — $ — $ ( 383,120 ) 104,532 $ 18 19,640 $ 2 $ 1,841,120 $ ( 8,684 ) $ ( 782,104 ) $ ( 13,801 ) $ ( 1,428,355 ) Net income — — 429,121 — — — — — — — — 429,121 Other comprehensive income — — 2,357 — — — — — — — 2,357 — Issuance of class A common stock upon exercise of stock options — — 30,519 1,756 1 — — 30,518 — — — — Issuance of class A common stock under employee stock purchase plan — — 3,955 198 — — — 3,955 — — — — Issuance of class A common stock upon vesting of restricted stock units, net of withholding taxes — — ( 4,344 ) 260 — — — ( 4,344 ) — — — — Issuance of class A common stock under public offerings, net of issuance costs — — 2,020,089 50,979 5 — — 2,020,084 — — — — Share-based compensation expense — — 66,395 — — — — 66,395 — — — — Balance at December 31, 2023 — $ — $ 2,164,972 157,725 $ 24 19,640 $ 2 $ 3,957,728 $ ( 8,684 ) $ ( 782,104 ) $ ( 11,444 ) $ ( 999,234 ) Net loss — — ( 1,166,661 ) — — — — — — — — ( 1,166,661 ) Other comprehensive loss — — ( 3,940 ) — — — — — — — ( 3,940 ) — Par value adjustment for class A and B common stock issued upon stock split — — — — 157 — 18 ( 175 ) — — — — Retirement of treasury stock — — — ( 8,684 ) ( 9 ) — — ( 781,114 ) 8,684 782,104 — ( 981 ) Issuance of class A common stock upon exercise of stock options — — 184,287 7,826 2 — — 184,285 — — — — Issuance of class A common stock under employee stock purchase plan — — 4,304 94 — — — 4,304 — — — — Issuance of class A common stock upon vesting of restricted stock units, net of withholding taxes — — ( 2,207 ) 545 — — — ( 2,207 ) — — — — Issuance of class A common stock under public offerings, net of issuance costs — — 16,329,857 52,309 50 — — 16,329,807 — — — — Issuance of class A common stock upon conversions of convertible senior notes — — 645,164 16,323 2 — — 645,162 — — — — Share-based compensation expense — — 74,208 — — — — 74,208 — — — — Balance at December 31, 2024 — $ — $ 18,229,984 226,138 $ 226 19,640 $ 20 $ 20,411,998 $ — $ — $ ( 15,384 ) $ ( 2,166,876 ) Opening balance adjustment due to the adoption of ASU 2023-08, net of tax — — 12,746,378 — — — — — — — — 12,746,378 Other — — ( 1,098 ) — — — — — — — — ( 1,098 ) Net income — — ( 3,848,152 ) — — — — — — — — ( 3,848,152 ) Preferred stock cash dividends declared — — ( 408,489 ) — — — — — — — — ( 408,489 ) Other comprehensive income — — 10,213 — — — — — — — 10,213 — Issuance of class A common stock upon exercise of stock options — — 42,154 1,121 — — — 42,154 — — — — Issuance of class A common stock under employee stock purchase plan — — 5,435 39 — — — 5,435 — — — — Issuance of class A common stock upon vesting of restricted stock units, net of withholding taxes — — — 418 — — — — — — — — Issuance of class A common stock under public offerings, net of issuance costs — — 16,247,607 57,332 58 — — 16,247,549 — — — — Issuance of class A common stock upon conversions of convertible senior notes — — 1,045,222 7,374 8 — — 1,045,214 — — — — Share-based compensation expense — — 54,204 — — — — 54,204 — — — — Issuance of Series A Perpetual Strike Preferred Stock 13,982 1,226,553 — — — — — — — — — — Issuance of Series A Perpetual Strife Preferred Stock 12,840 1,191,128 — — — — — — — — — — Issuance of Series A Perpetual Stride Preferred Stock 14,024 1,163,483 — — — — — — — — — — Issuance of Series A Perpetual Stretch Preferred Stock 29,587 2,631,281 — — — — — — — — — — Issuance of Series A Perpetual Stream Preferred Stock 7,750 707,069 — — — — — — — — — — Balance at December 31, 2025 78,183 $ 6,919,514 $ 44,123,458 292,422 $ 292 19,640 $ 20 $ 37,806,554 $ — $ — $ ( 5,171 ) $ 6,321,763 The accompanying notes are an integral part of these Consolidated Financial Statements. 92 STRATEGY INC CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2025 2024 2023 Operating activities: Net income (loss) $ ( 3,848,152 ) $ ( 1,166,661 ) $ 429,121 Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization 25,517 17,808 14,527 Reduction in carrying amount of right-of-use assets 9,068 8,475 8,643 Deferred taxes ( 1,684,220 ) ( 775,851 ) ( 569,455 ) Share-based compensation expense 53,369 77,124 69,571 Unrealized loss on digital assets 5,403,476 — — Digital asset impairment losses — 1,789,862 115,851 Amortization of issuance costs on long-term debt 25,410 15,336 8,808 Other 3,484 — — Loss (gain) on debt extinguishment — 22,933 ( 44,686 ) Changes in operating assets and liabilities: Accounts receivable 20,406 6,337 11,694 Prepaid expenses and other current assets ( 28,892 ) 3,804 ( 11,358 ) Deposits and other assets 10,980 ( 10,668 ) ( 632 ) Accounts payable and accrued expenses 6,561 1,141 ( 634 ) Accrued compensation and employee benefits ( 46,593 ) ( 34,563 ) ( 12,000 ) Accrued interest 70 4,193 ( 1,336 ) Deferred revenue and advance payments ( 7,966 ) 1,049 2,362 Operating lease liabilities ( 10,662 ) ( 10,510 ) ( 10,218 ) Other long-term liabilities 903 ( 2,841 ) 2,454 Net cash provided by (used in) operating activities ( 67,241 ) ( 53,032 ) 12,712 Investing activities: Purchases of digital assets ( 22,467,083 ) ( 22,072,759 ) ( 1,902,299 ) Advance deposits on purchases of property and equipment ( 37,000 ) ( 10,500 ) — Purchases of property and equipment ( 8,212 ) ( 2,978 ) ( 2,938 ) Net cash used in investing activities ( 22,512,295 ) ( 22,086,237 ) ( 1,905,237 ) Financing activities: Proceeds from convertible senior notes 2,000,000 6,213,750 — Issuance costs paid for convertible senior notes ( 15,178 ) ( 81,033 ) — Payments to settle conversions and redemption of convertible senior notes ( 143 ) ( 398 ) — Repayments of secured debt and third-party extinguishment costs — ( 515,414 ) ( 160,033 ) Proceeds from other long-term secured debt, net of lender fees 31,000 — — Principal payments of other long-term secured debt ( 569 ) ( 539 ) ( 513 ) Proceeds from sale of preferred stock under public offerings 7,036,110 — — Issuance costs paid related to sale of preferred stock under public offerings ( 120,802 ) — — Dividends paid on preferred stock ( 381,367 ) — — Proceeds from sale of common stock under public offerings 16,271,959 16,363,023 2,029,214 Issuance costs paid related to sale of common stock under public offerings ( 25,072 ) ( 33,166 ) ( 9,141 ) Proceeds from exercise of stock options 42,154 184,287 30,518 Proceeds from sales under employee stock purchase plan 5,435 4,304 3,955 Payment of withholding tax on vesting of restricted stock units — ( 2,173 ) ( 4,114 ) Net cash provided by financing activities 24,843,527 22,132,641 1,889,886 Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash ( 544 ) ( 2,148 ) 444 Net increase (decrease) in cash, cash equivalents, and restricted cash 2,263,447 ( 8,776 ) ( 2,195 ) Cash, cash equivalents, and restricted cash, beginning of period 39,897 48,673 50,868 Cash, cash equivalents, and restricted cash, end of period $ 2,303,344 $ 39,897 $ 48,673 Supplemental disclosure of cash flow information: Cash paid during the year for interest $ 46,525 $ 44,571 $ 41,229 Cash paid during the year for income taxes, net of tax refunds $ 13,132 $ 1,059 $ 30,318 The accompanying notes are an integral part of these Consolidated Financial Statements. 93 STRATEGY INC NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (1) Organization Strategy Inc (“Strategy,” or the “Company”) is the world's first and largest Bitcoin Treasury Company. Strategy pursues financial innovation strategies designed to generate value from its bitcoin holdings, including by developing and issuing novel fixed-income instruments that provide investors varying degrees of economic exposure to bitcoin. In addition, the Company is an industry leader in AI-powered enterprise analytics software, advancing its vision of Intelligence Everywhere™. Strategy believes its combination of active bitcoin-focused capital management and a scaled operating software business positions the Company for long-term value creation across both digital asset and enterprise analytics markets. (2) Summary of Significant Accounting Policies (a) Basis of Presentation On August 11, 2025, the Company filed with the Secretary of State of the State of Delaware an amendment to its Second Restated Certificate of Incorporation (as amended and supplemented to date, its “Certificate of Incorporation”), to effect a change of its name from “MicroStrategy Incorporated” to “Strategy Inc”. On July 11, 2024, the Company announced a 10 -for-1 stock split of the Company’s class A common stock and class B common stock. The stock split was effected by means of a stock dividend to the holders of record of the Company’s class A common stock and class B common stock as of the close of business on August 1, 2024, the record date for the dividend. Shares held in treasury by the Company were not impacted by the stock split. The dividend was distributed after the close of trading on August 7, 2024 and trading commenced on a split-adjusted basis at market open on August 8, 2024. As a result of the stock split, all applicable share, per share, and equity award information has been retroactively adjusted in the Consolidated Financial Statements and Notes to Consolidated Financial Statements to reflect the stock split for all periods presented. In the opinion of management, all adjustments necessary for a fair statement of financial position and results of operations have been included. All such adjustments are of a normal recurring nature, unless otherwise disclosed. The accompanying Consolidated Financial Statements include the accounts of the Company and its subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. (b) Use of Estimates The preparation of the Consolidated Financial Statements, in conformity with GAAP, requires management to make estimates and judgments that affect the amounts reported in the Consolidated Financial Statements and accompanying notes. On an ongoing basis, the Company evaluates its estimates, including, but not limited to, those related to revenue recognition, allowance for doubtful accounts, investments, fixed assets, digital assets, leases, debt, share-based compensation, income taxes, including the carrying value of deferred tax assets, and litigation and contingencies, including liabilities that the Company deems not probable of assertion. The Company bases its estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets, liabilities, and equity that are not readily apparent from other sources. Actual results and outcomes could differ from these estimates and assumptions. (c) Fair Value Measurements The Company measures certain assets and liabilities at fair value on a recurring or nonrecurring basis. Fair value is defined as the price that is expected to be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company uses a three-level hierarchy that prioritizes fair value measurements based on the types of inputs used for the various valuation techniques. The three levels of the fair value hierarchy are described below: 94 Level 1: Quoted (unadjusted) prices in active markets that are accessible at the measurement date for identical, unrestricted assets or liabilities. Level 2: Inputs other than quoted prices that are either directly or indirectly observable, such as quoted prices in active markets for similar assets or liabilities, quoted prices for identical or similar assets or liabilities in inactive markets, or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities. Level 3: Inputs that are generally unobservable, supported by little or no market activity, and typically reflect management’s estimates of assumptions that market participants would use in pricing the asset or liability. The categorization of an asset or liability within the fair value hierarchy is based on the lowest level of input that is significant to the fair value measurement. The valuation techniques used by the Company when measuring fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company also estimates the fair value of cash and cash equivalents, restricted cash, accounts receivable, accounts payable and accrued expenses, and accrued compensation and employee benefits. The Company considers the carrying value of these instruments in the Consolidated Financial Statements to approximate fair value due to their short maturities. (d) Cash and Cash Equivalents and Restricted Cash Cash equivalents may include bank demand deposits, money market instruments, certificates of deposit, U.S. Treasury securities, and equivalent funds. The Company generally considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. Restricted cash consists of cash balances restricted in use by contractual obligations with third parties. (e) Credit Losses on Accounts Receivable The Company maintains an allowance for credit losses on its accounts receivable balances, which represents its best estimate of current expected credit losses over the contractual life of the accounts receivable. When evaluating the adequacy of its allowance for credit losses each reporting period, the Company analyzes accounts receivable balances with similar risk characteristics on a collective basis, considering factors such as the aging of receivable balances, payment terms, geographic location, historical loss experience, current information, and future expectations. Each reporting period, the Company reassesses whether any accounts receivable no longer share similar risk characteristics and should instead be evaluated as part of another pool or on an individual basis. Changes to the allowance for credit losses are adjusted through credit loss expense, which is presented within “General and administrative” operating expenses in the Consolidated Statements of Operations. (f) Concentrations of Credit Risk Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents, restricted cash, and accounts receivable. The Company places its cash equivalents with high credit-quality financial institutions to maintain safety and liquidity. The Company sells its offerings to various companies across several industries throughout the world in the ordinary course of business. The Company routinely assesses the financial strength of its customers and maintains allowances for anticipated losses. As of December 31, 2025 and 2024, no individual customer accounted for 10% or more of net accounts receivable, and for the years ended December 31, 2025, 2024, and 2023, no individual customer accounted for 10% or more of revenue. (g) Digital Assets In December 2023, the Financial Accounting Standards Board (“FASB”) issued 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”). ASU 2023-08 requires in-scope crypto assets (including the Company's bitcoin holdings) to be measured at fair value in the statement of financial position, with gains and losses from changes in the fair value of such crypto assets recognized in net income each reporting period. ASU 2023-08 also requires certain interim and annual disclosures for crypto assets within the scope of the standard. The Company adopted this guidance effective January 1, 2025 on a prospective basis, with a cumulative-effect adjustment to the opening balance of retained earnings. Prior periods were not restated. As a result, the Company’s financial results for the year ended December 31, 2025 are not directly comparable to the financial results for earlier periods. See Note 4, Digital Assets, to the Consolidated Financial Statements, for further information. 95 The adoption of ASU 2023-08 resulted in the following impacts as of January 1, 2025: Consolidated Balance Sheet December 31, 2024 As Reported Effect of the Adoption of ASU 2023-08 January 1, 2025 As Adjusted Digital assets $ 23,909,373 $ 17,881,048 $ 41,790,421 Deferred tax assets 1,525,307 ( 1,165,605 ) 359,702 Deferred tax liabilities 407 3,969,065 3,969,472 (Accumulated deficit) retained earnings $ ( 2,166,876 ) $ 12,746,378 $ 10,579,502 Although the Company continues to initially record its bitcoin purchases at cost, subsequent to the Company’s adoption of ASU 2023-08 on January 1, 2025, any increases or decreases in fair value are recognized as incurred in the Company's Consolidated Statements of Operations, and the fair value of the Company’s bitcoin is reflected within the Company's Consolidated Balance Sheets at each reporting period-end. As a result of the adoption of ASU 2023-08, the Company no longer accounts for its bitcoin under a cost-less-impairment accounting model and no longer establishes a deferred tax asset related to bitcoin impairment losses. Instead, the Company establishes a deferred tax liability if the fair market value of bitcoin at the reporting date is greater than the average cost basis of the Company’s bitcoin holdings at such reporting date, and any subsequent increases or decreases in the fair market value of bitcoin increases or decreases the deferred tax liability. If the fair market value of bitcoin declines to the point where the Company's cost basis in bitcoin exceeds the fair market value, the deferred tax liability with respect to the unrealized gains reverses and a deferred tax asset for the unrealized loss would be recorded and the Company may be required to establish a valuation allowance against all of the Company's US federal and state deferred tax assets. In determining the gain (loss) to be recognized upon sale, the Company calculates the difference between the sales price and carrying value of the specific bitcoin sold immediately prior to sale. (h) Property and Equipment Property and equipment are stated at cost, net of accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, as follows: three years for computer equipment and purchased software; five years for office equipment; 10 years for office furniture; and 19 years for the Company’s corporate aircraft, which has an estimated salvage value of 21 %. Leasehold improvements are amortized using the straight-line method over the estimated useful lives of the improvements or the term of the lease, whichever is shorter. The Company periodically evaluates the appropriateness of the estimated useful lives and salvage value of all property and equipment. Any change in the estimated useful life or salvage value is treated as a change in estimate and accounted for prospectively in the period of change. Expenditures for maintenance and repairs are charged to expense as incurred. When assets are retired or sold, the capitalized cost and related accumulated depreciation are removed from the property and equipment accounts and any resulting gain or loss is recognized in the results of operations. Eligible internal-use software development costs are capitalized subsequent to the completion of the preliminary project stage. Such costs include external direct material and service costs, employee payroll, and payroll-related costs. After all substantial testing and deployment is completed and the software is ready for its intended use, capitalization ceases and internal-use software development costs are then amortized using the straight-line method over the estimated useful life of the software, generally three years . The Company reviews long-lived assets for impairment whenever events or changes in business circumstances indicate that the carrying value of the assets may not be fully recoverable or that the useful lives of these assets are no longer appropriate. Each impairment test is based on a comparison of the undiscounted cash flows to the recorded value of the asset. If an asset is impaired, the asset is written down by the amount by which the carrying value of the asset exceeds the related fair value of the asset. (i) Leases A lease is a contract, or part of a contract, that conveys the right to both (i) obtain economic benefits from and (ii) direct the use of an identified asset for a period of time in exchange for consideration. The Company evaluates its contracts to determine if they contain a lease and classifies any lease components identified as an operating or finance lease. For each lease component, the Company recognizes a right-of-use (“ROU”) asset and a lease liability. ROU assets and lease liabilities are presented separately for operating and finance leases; however, the Company currently has no material finance leases. The Company’s operating leases are primarily related to office space in the United States and foreign locations. In a contract that contains a lease, a component is an item or activity that transfers a good or service to the lessee. Such contracts may be comprised of lease components, non-lease components, and elements that are not components. Each lease component represents a lessee’s right to use an underlying asset in the contract if the lessee can benefit from the right of 96 use of the asset either on its own or together with other readily available resources and if the right of use is neither highly dependent nor highly interrelated with other rights of use. Non-lease components include items such as common area maintenance and utilities provided by the lessor. The Company has elected the practical expedient to not separate lease components from non-lease components for office space. For each lease within this asset class, the non-lease components and related lease components are accounted for as a single lease component. Items or activities that do not transfer goods or services to the lessee, such as administrative tasks to set up the contract and reimbursement or payment of lessor costs, are not components of the contract and therefore no contract consideration is allocated to such items or activities. Consideration in the contract is comprised of any fixed payments and variable payments that depend on an index or rate. Payments in the Company’s operating lease arrangements are typically comprised of base office rent and parking fees. Costs related to the Company’s non-lease components, as described above, are generally variable and do not depend on an index or rate and are therefore excluded from the contract consideration allocated to the lease components. The Company’s operating lease arrangements generally do not contain any payments related to items or activities that are not components. Operating lease liabilities are initially and subsequently measured at the present value of unpaid lease payments, discounted at the discount rate of the lease. Operating lease ROU assets are initially measured as the sum of the initial lease liability, any initial direct costs incurred, and any prepaid lease payments, less any lease incentives received. The ROU asset is amortized over the term of the lease. The amortization of operating lease ROU assets is included in “Reduction in carrying amount of right-of-use assets” within the operating activities section of the Consolidated Statements of Cash Flows. A single lease expense is recorded within operating expenses in the Consolidated Statements of Operations on a straight-line basis over the lease term. Variable lease payments that are not included in the measurement of the lease liability are recognized in the period when the obligations for those payments are incurred. In the Company’s lease agreements, these variable payments typically include certain taxes, utilities, and maintenance costs, and other fees. The Company uses its incremental borrowing rate as the discount rate for all of its leases, as the rate implicit in the lease is not readily determinable in any of its lease contracts. In order to estimate a collateralized borrowing rate curve, the Company first estimates a synthetic credit rating and then applies modeling methodologies to an unsecured borrowing rate curve. In determining the incremental borrowing rate of each lease, the Company uses a centralized treasury approach and considers the currency of the contract, the economic environment in which the lease exists, and the term of the lease. The Company does not recognize lease liabilities or ROU assets for any short-term leases with a non-cancellable lease term of 12 months or less. Instead, the lease payments for these short-term leases are expensed on a straight-line basis over the lease term, and any variable payments are recognized in the period when the obligations for those payments are incurred. The Company believes that, using this methodology, the expense recorded reasonably reflects the Company’s short-term lease commitments. (j) Software Development Costs The Company did not capitalize any software development costs during the years ended December 31, 2025, 2024, and 2023. Due to the pace of the Company's software development efforts and frequency of its software releases, the Company’s software development costs are expensed as incurred within “Research and development” in the Consolidated Statements of Operations. (k) Loss Contingencies and Legal Costs The Company accrues loss contingencies that are believed to be probable and can be reasonably estimated. As events evolve during the administration and litigation process and additional information becomes known, the Company reassesses its estimates related to loss contingencies. Legal costs are expensed in the period in which the costs are incurred. (l) Deferred Revenue and Advance Payments Deferred revenue and advance payments are contract liabilities that represent amounts received or due from customers in advance of the Company transferring its software or services to the customer under an enforceable contract. Revenue is subsequently recognized in the period(s) in which control of the software or services is transferred to the customer. Deferred revenue is comprised of deferred product licenses and subscription services, product support, and other services revenue based on the transaction price allocated to the specific performance obligation in the contract with the customer, and presented as either current or non-current in the Consolidated Balance Sheets, depending on whether the software or services are expected to be transferred to the customer within the next year. (m) Debt Arrangements As discussed in Note 8, Long-term Debt, to the Consolidated Financial Statements, the Company has issued convertible senior notes and senior secured notes, and entered into secured term loan agreements in recent years. The embedded 97 conversion features in each of the convertible notes are indexed to the Company’s class A common stock and meet the criteria for classification in stockholders’ equity, and therefore derivative accounting does not apply. The Company records the aggregate principal amount of each of its debt instruments as a liability on its Consolidated Balance Sheets, offset by the issuance costs associated with each instrument. The issuance costs are amortized to interest expense using the effective interest method over the expected term of each debt instrument. (n) Redeemable Preferred Stock As of December 31, 2025, the following series of preferred stock of the Company were outstanding: (i) 10.00 % Series A Perpetual Strife Preferred Stock (“STRF Stock”), (ii) Variable Rate Series A Perpetual Stretch Preferred Stock (“STRC Stock”), (iii) 10.00 % Series A Perpetual Stream Preferred Stock ("STRE Stock"), (iv) 8.00 % Series A Perpetual Strike Preferred Stock (“STRK Stock”), and (v) 10.00 % Series A Perpetual Stride Preferred Stock (“STRD Stock”). In these Notes to Consolidated Financial Statements, STRF Stock, STRC Stock, STRE Stock, STRK Stock and STRD Stock are collectively referred to as “Preferred Stock.” In accordance with Accounting Standards Codification (“ASC”) 480, Distinguishing Liabilities from Equity, each series of Preferred Stock outstanding as of December 31, 2025 is classified within mezzanine equity, as certain events that could cause shares of each such series of Preferred Stock to become redeemable are not solely within the control of the Company. In each case, the carrying values of the shares are initially recognized based on proceeds received, net of issuance costs, and are not accreted to their redemption value unless it becomes probable that the shares will become redeemable. Refer to Note 12, Redeemable Preferred Stock, for further discussion. (o) Revenue Recognition The Company recognizes revenue using the five-step model: (i) Identifying the contract(s) with a customer, (ii) Identifying the performance obligation(s), (iii) Determining the transaction price, (iv) Allocating the transaction price to the performance obligations in the contract, and (v) Recognizing revenue when, or as, the Company satisfies a performance obligation. The Company has elected to exclude taxes assessed by government authorities in determining the transaction price, and therefore revenue is recognized net of taxes collected from customers. The Company enters into non-cancellable nonrefundable orders with customers and does not have a history of granting returns or refunds and therefore does not have a reserve for future returns. Performance Obligations and Timing of Revenue Recognition The Company primarily sells software and services that fall into the categories discussed below. Each category contains one or more performance obligations that are either (i) capable of being distinct (i.e., the customer can benefit from the software or service on its own or together with readily available resources, including those purchased separately from the Company) and distinct within the context of the contract (i.e., separately identifiable from other promises in the contract) or (ii) a series of distinct services that are substantially the same and have the same pattern of transfer to the customer. Aside from the Company’s term and perpetual product licenses, which are delivered at a point in time, the majority of the Company’s services are delivered over time. On- Premises Product Licenses The Company sells different types of business intelligence software licenses licensed on a term or perpetual basis for installation on premises by the customer; however, as of January 2025, Strategy on-premises product licenses have entered an end-of-support cycle, with full support for such licenses ending December 31, 2026. Although product licenses are sold with product support, the software is fully functional at the outset of the arrangement and is considered a distinct performance obligation. Revenue from product license sales is recognized when control of the license is transferred to the customer, which is the later of delivery or commencement of the license term. Cloud Services Subscriptions The Company also sells access to its software through fully managed cloud environments for commercial or government use, wherein customers access the software through a cloud environment that the Company manages on behalf of the customer. Cloud subscriptions are regularly sold on a standalone basis and include technical support, monitoring, backups, updates, and quarterly service reviews. Cloud subscriptions are generally considered a single performance obligation. Additionally, customers with existing on-premises software licenses may convert their installations to the Company's fully 98 managed cloud environment, on or around the time such on-premises licenses are typically terminated and replaced by a new subscription to the Company's cloud service. At conversion, an analysis is performed for each contract to determine whether any revenue adjustments are necessary given that the contract modifications revoke previously transferred rights to perpetual on-premise software. Such revenue adjustments were not material for the years ended December 31, 2025, 2024, and 2023. Revenue related to cloud subscriptions is recognized on a straight-line basis over the contract period, which is the period over which the customer has continuous access to the software and services. Product Support In all on-premises product license transactions and cloud service subscription transactions, customers receive technical support, either purchased separately or as an included component. Customers may also purchase a premium product support package for a fixed annual fee. All such current support includes both technical support and when-and-if-available software upgrades, which are treated as a single performance obligation as they are considered a series of distinct services that are substantially the same and have the same duration and measure of progress. Revenue from product support is recognized on a straight-line basis over the contract period, which is the period over which the customer has continuous access to product support. See Note 16, Segment Information, to the Consolidated Financial Statements for information regarding total revenues by geographic region. Estimates and Judgments The Company makes estimates and judgments to allocate the transaction price based on an observable or estimated Standalone Selling Prices (“SSP”). The Company also makes estimates and judgments with respect to capitalizing incremental costs to obtain a customer contract and determining the subsequent amortization period. These estimates and judgments are discussed further below. Determining the Transaction Price The Company does not adjust the transaction price for significant financing components where the time period between cash payment and performance is one year or less. However, there are circumstances where the timing between cash payment and performance may exceed one year. These circumstances generally involve prepaid multi-year license, product support and subscription services arrangements where the customer determines when the service is utilized. In these circumstances, the Company has determined no significant financing component exists because the customer controls when to utilize the service and because there are significant business purposes behind the timing difference between payment and performance (e.g., ensuring collectability in the case of subscription services). Allocating the Transaction Price Based on Standalone Selling Prices (SSP) The Company allocates the transaction price to each performance obligation in a contract based on its relative SSP, which is the price, or estimated price, of the software or service when sold on a standalone basis at contract inception. When SSP is not directly observable, the Company estimates SSP. The selling price of both subscription services and product licenses is highly variable. The Company estimates SSP using a residual approach after first determining the SSP of any other services included in the arrangement. SSP for standard product support is established as a percentage of the stated net license fee, consistent with normal pricing practices and historical standalone renewals at similar percentages. The Company routinely analyzes its SSP and concluded its methodology results in a reasonable allocation of the transaction price. (p) Incremental Costs to Obtain Customer Contracts The Company capitalizes costs incurred to obtain a contract with a customer when they are deemed incremental to obtaining the contract and expected to be recoverable. Capitalizable costs are generally limited to sales incentives paid to the Company’s sales team. The Company capitalizes the amounts related to new product support, cloud subscription, and term license contracts. Costs capitalized are amortized over a period of time that is consistent with the pattern of transfer to the customer, which the Company has determined is generally three years and includes consideration for contract length, anticipated renewals, product life cycle, and customer behavior. The Company amortizes the cost over this period on a straight-line basis for product support and subscription service components, and at point(s) in time coinciding with delivery of the license component of term license contracts. The Company has elected the practical expedient to expense capitalizable costs as incurred where the amortization period would be one year or less, which includes those amounts earned on perpetual license, consulting, and education contracts, and renewals of product support, cloud subscription, and term license contracts, if applicable. As of December 31, 2025 and 2024, capitalized costs to obtain customer contracts, net of accumulated amortization, were $ 79.3 million and $ 48.3 million, respectively, and are presented within “Deposits and other assets” in the Consolidated 99 Balance Sheets. During the years ended December 31, 2025, 2024, and 2023, amortization expenses related to these capitalized costs were $ 24.6 million, $ 12.3 million, and $ 8.1 million, respectively, and are reflected within “Sales and marketing” in the Consolidated Statements of Operations. (q) Share-based Compensation The Company maintains the 2013 Stock Incentive Plan (as amended, the “2013 Equity Plan”), and the 2023 Equity Incentive Plan (as amended, the “2023 Equity Plan,” and, together with the 2013 Equity Plan, the “Stock Incentive Plans”). As of May 2023, no new awards will be granted under the 2013 Equity Plan, though awards previously granted under the 2013 Equity Plan remain outstanding in accordance with their terms. Under the Stock Incentive Plans, the Company’s employees, officers, directors, and other eligible participants may be (with respect to the 2023 Equity Plan) and have been (with respect to both the 2023 Equity Plan and the 2013 Equity Plan) awarded various types of share-based compensation, including options to purchase shares of the Company’s class A common stock, restricted stock units, and other stock-based awards. Additionally, under the 2023 Equity Plan, awards may be and have been granted that are subject to the achievement of one or more performance measures established by the Company’s Board of Directors (the "Board") or a duly authorized committee thereof. In January 2025, the Company’s stockholders approved an amendment to the 2023 Equity Plan (the “2024 Plan Amendment”) that had been previously adopted by the Board in December 2024, subject to stockholder approval. The 2024 Plan Amendment amended the 2023 Equity Plan to provide that, beginning on December 20, 2024, each non-employee director who is newly appointed to the Board shall automatically receive, upon the date of such director’s initial appointment to the Board, equity awards having an aggregate fair value equal to $ 2,000,000 , one-half of which ($ 1,000,000 ) will consist of non-statutory stock options and one-half of which ($ 1,000,000 ) will consist of restricted stock units, with each award vesting annually in equal installments over four years . During 2021, the Company adopted and the Company’s stockholders approved the 2021 Employee Stock Purchase Plan (the “2021 ESPP”), under which eligible employees of the Company and certain of its subsidiaries may be provided with opportunities to purchase shares of the Company’s class A common stock. For options and other stock-based awards, the share-based compensation expense is based on the fair value of the awards on the date of grant, as estimated using the Black-Scholes valuation model. For restricted stock units, the share-based compensation expense is based on the fair value of the Company’s class A common stock on the date of grant. The fair value of liability-classified awards (e.g., the other stock-based awards and cash-settled restricted stock units) is remeasured at each reporting date. For performance stock units subject to a market condition, the Company uses a Monte Carlo simulation model to determine the grant date fair value. For the 2021 ESPP, the share-based compensation expense is based on the grant date fair value, which consists of the intrinsic value of any purchase discount and the fair value of the look-back provision using the Black-Scholes valuation model. The Company recognizes share-based compensation expense for service-conditioned awards granted under the Stock Incentive Plans and the 2021 ESPP on a straight-line basis over the requisite service period (generally, the vesting period for service-conditioned awards under the Stock Incentive Plans and the offering period under the 2021 ESPP). The Company recognizes share-based compensation expense for market-conditioned performance stock units granted under the 2023 Equity Plan ratably over the performance period using an accelerated attribution cost recognition method. Share-based compensation expense is recorded in cost of revenues or operating expense line items in the Consolidated Statements of Operations corresponding to the respective participant’s role or function. See Note 11, Share-based Compensation, to the Consolidated Financial Statements for further information regarding the Stock Incentive Plans, the 2021 ESPP, related share-based compensation expense, and assumptions used in determining fair value. (r) Income Taxes The Company is subject to federal, state, and local income taxes in the United States and a number of foreign countries. The Company accounts for income taxes under the asset and liability method, which requires the recognition of deferred tax assets and deferred tax liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, the Company determines deferred tax assets and deferred tax liabilities on the basis of differences between the financial statement and tax bases of assets and liabilities by using enacted tax rates in effect for the year in which differences are expected to reverse. The effect of a change in the tax rates on deferred tax assets and deferred tax liabilities is recognized in income in the period that includes the enactment date. For deferred tax assets, management assesses the available positive and negative evidence to estimate whether sufficient future taxable income will be generated to permit use of the existing deferred tax assets. The Company provides a valuation allowance to reduce deferred tax assets to the amount more-likely-than-not to be realized. For uncertain income tax positions, the Company uses a more-likely-than-not recognition threshold based on the technical merits of the income tax position taken. Income tax positions that meet the more-likely-than-not recognition threshold are 100 measured in order to determine the tax benefit recognized in the financial statements. The Company recognizes accrued interest related to unrecognized tax benefits as part of income tax expense. Penalties, if incurred, are recognized as a component of income tax expense. In December 2023, the FASB issued Accounting Standards Update No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires enhanced disclosures surrounding income taxes, particularly related to rate reconciliation and income taxes paid information. In particular, on an annual basis, companies are required to disclose specific categories in the rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold. Companies are also required to disclose, on an annual basis, the amount of income taxes paid, disaggregated by federal, state, and foreign taxes, and also disaggregated by individual jurisdictions above a quantitative threshold. The Company adopted ASU 2023-09 prospectively for its annual period ended December 31, 2025. The adoption of ASU 2023-09 did not have a material effect on the Company’s Consolidated Financial Statements or Notes to the Financial Statements. For further information, see Note 10, Income Taxes. (s) Basic and Diluted Earnings (Loss) Per Share Basic earnings (loss) per share is determined by dividing the net income (loss) attributable to common stockholders by the weighted average number of shares of common stock, including shares of class A common stock and class B common stock, outstanding during the period. Diluted earnings (loss) per share is determined by dividing the net income (loss) attributable to common stockholders by the weighted average number of shares of common stock and potential shares of common stock outstanding during the period. The impact from potential shares of common stock on the diluted earnings per share calculation are included when dilutive. Potential shares of common stock consisting of class A common stock issuable upon the exercise of outstanding employee stock options, the vesting of restricted stock units and performance stock units considered probable of achievement, and in connection with the 2021 ESPP, are computed using the treasury stock method. Potential shares of class A common stock issuable upon conversion of the Company’s convertible senior notes are computed using the if-converted method. In computing diluted earnings per share, the Company first calculates the earnings per incremental share (“EPIS”) for each class of potential shares of common stock and ranks the classes from the most dilutive (i.e., lowest EPIS) to the least dilutive (i.e., highest EPIS). Basic earnings per share is then adjusted for the effect of each class of shares, in sequence and cumulatively, until a particular class no longer produces further dilution. The Company has two classes of common stock: class A common stock and class B common stock. Holders of class A common stock generally have the same rights, including rights to dividends, as holders of class B common stock, except that holders of class A common stock have one vote per share while holders of class B common stock have ten votes per share. Each share of class B common stock is convertible at any time, at the option of the holder, into one share of class A common stock. As such, basic and fully diluted earnings per share for class A common stock and for class B common stock are the same. The Company has never declared or paid any cash dividends on either class A or class B common stock. As of December 31, 2025, the Company had five series of preferred stock outstanding: STRF Stock, STRC Stock, STRE Stock, STRK Stock and STRD Stock. Only STRK Stock is convertible into the Company’s class A common stock and, therefore, is the only series of Preferred Stock that impacts diluted earnings per common share. Each share of STRK Stock is convertible at any time, at the option of the holder, into 0.1 shares of class A common stock. None of the Company's other series of outstanding Preferred Stock are convertible into any class of the Company's common stock and therefore do not impact the Company's diluted earnings per common share. Refer to Note 12, Redeemable Preferred Stock, Redeemable Preferred Stock, to the Consolidated Financial Statements, for additional information on the dividend, voting, and other rights of the Company's outstanding preferred stock. The impact from potential shares of common stock on the diluted earnings per common share calculation are included when dilutive. Potential shares of class A common stock issuable upon the exercise of outstanding stock options, the vesting of restricted stock units and performance stock units considered probable of achievement, and in connection with the 2021 ESPP are computed using the treasury stock method. Potential shares of class A common stock issuable upon conversion of the Convertible Notes and upon conversion of the STRK Stock are computed using the if-converted method. See Note 13, Basic and Diluted Earnings (Loss) per Common Share, to the Consolidated Financial Statements for further information regarding the calculation of Basic and Diluted earnings (loss) per share. (t) Foreign Currency Translation The functional currency of the Company’s international operations is generally the local currency. Accordingly, such assets and liabilities of international subsidiaries are translated using exchange rates in effect at the end of the period, and revenue and expenses are translated using average monthly exchange rates for the period in which the transactions occur. The related translation adjustments are reported in “Accumulated other comprehensive loss” in stockholders’ equity. In general, upon complete or substantially complete liquidation of an investment in an international subsidiary, the amount of accumulated translation adjustments attributable to that subsidiary is reclassified from stockholders’ equity to the 101 consolidated statements of operations. 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 of December 31, 2025, 2024, and 2023, the cumulative foreign currency translation adjustments were $ 5.2 million, $ 15.4 million, and $ 11.4 million, respectively. No taxes were recognized on the temporary differences resulting from foreign currency translation adjustments for the years ended December 31, 2025, 2024, and 2023. Transaction gains and losses arising from transactions denominated in foreign currencies resulted in a net loss of $ 16.8 million in 2025, net gain of $ 2.9 million in 2024, and net loss of $ 5.6 million in 2023, respectively, and are included in “Other (expense) income, net” in the Consolidated Statements of Operations. (3) Recent Accounting Standards In November 2024, the FASB issued Accounting Standards Update No. 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) (“ASU 2024-03”). ASU 2024-03 requires specified information about certain costs and expenses be disclosed in the notes to the financial statements, including the expense caption on the face of the income statement in which they are disclosed, in addition to a qualitative description of remaining amounts not separately disaggregated. Entities will also be required to disclose their definition of “selling expenses” and the total amount in each annual period. The standard is effective for the Company for annual periods beginning January 1, 2027 and for interim periods beginning January 1, 2028, with updates applied either prospectively or retrospectively. Early adoption is permitted. The Company is currently evaluating the impact of this guidance on its disclosures. In September 2025, the FASB issued Accounting Standards Update No. 2025-06, Intangibles: Goodwill and Other‒Internal-Use Software: Targeted Improvements to the Accounting for Internal-Use Software (Subtopic 350-40) (ASU 2025-06) to modernize the accounting for software costs under Subtopic 350-40, Intangibles‒Goodwill and Other‒Internal-Use Software (referred to as “internal-use software”). Upon adoption, the Company will be required to account for internal-use software under the updated capitalization criteria. The standard is effective for our interim and annual 2028 periods, with early adoption permitted. The standard can be applied either prospectively, retrospectively, or under a modified transition approach. The Company is currently evaluating the impact of this guidance. (4) Digital Assets The Company accounts for its digital assets, which are comprised solely of bitcoin, as indefinite-lived intangible assets in accordance with ASC 350, Intangibles—Goodwill and Other and ASU 2023-08. The Company’s digital assets are initially recorded at cost. Subsequent to the Company’s adoption of ASU 2023-08 on January 1, 2025, bitcoin assets are measured at fair value as of each reporting period. The Company determines the fair value of its bitcoin in accordance with ASC 820, Fair Value Measurement, based on quoted (unadjusted) prices on the Coinbase exchange, the active exchange that the Company has determined is its principal market for bitcoin (Level 1 inputs). Changes in fair value are recognized as incurred in the Company's Consolidated Statements of Operations, within “Unrealized loss on digital assets”, within operating expenses in the Company’s Consolidated Statement of Operations. Prior to the adoption of ASU 2023-08, the Company’s digital assets were initially recorded at cost, and subsequently measured at cost, net of any impairment losses incurred since acquisition. Impairment losses were recognized as “Digital asset impairment losses” in the Company’s Consolidated Statement of Operations in the period in which the impairment occurred. Gains (if any) were not recorded until realized upon sale, at which point they were presented net of any impairment losses in the Company’s Consolidated Statements of Operations. The following table presents a reconciliation of the opening and closing balances of the Company’s digital assets, including purchases and unrealized gains or losses as calculated after the adoption of ASU 2023-08 on January 1, 2025, and digital asset impairment losses as calculated prior to the adoption of ASU 2023-08 (in thousands, except number of bitcoins) for the periods indicated. Digital Asset Carrying Value (in thousands) Approximate Number of Bitcoins Held Balance at December 31, 2022 (before the adoption of ASU 2023-08) $ 1,840,028 132,500 Digital asset purchases 1,902,299 56,650 Digital asset impairment losses ( 115,851 ) n/a Balance at December 31, 2023 (before the adoption of ASU 2023-08) $ 3,626,476 189,150 Digital asset purchases 22,072,759 258,320 Digital asset impairment losses ( 1,789,862 ) n/a Balance at December 31, 2024 (before the adoption of ASU 2023-08) $ 23,909,373 447,470 Cumulative effect upon adoption of ASU 2023-08 17,881,048 n/a 102 Digital asset purchases 22,467,083 225,030 Unrealized loss on digital assets (1) ( 5,403,476 ) n/a Balance at December 31, 2025 $ 58,854,028 672,500 (1) Unrealized loss on digital assets is included in Unrealized loss on digital assets on the Consolidated Statements of Operations. The Company did not sell any of its bitcoins during the years ended December 31, 2025, 2024, or 2023. The following table summarizes the Company’s digital asset holdings (in thousands, except number of bitcoins), as of the dates indicated. December 31 2025 2024 2023 Digital asset cost basis $ 50,435,331 $ 27,968,248 $ 5,895,489 Digital asset fair value $ 58,854,028 n/a n/a Cumulative digital asset impairment losses n/a $ 4,058,875 $ 2,269,013 The carrying value on the Company’s Consolidated Balance Sheet at each period-end prior to the adoption of ASC 2023-08 represented the lowest fair value (based on Level 1 inputs in the fair value hierarchy) of the bitcoin at any time since their acquisition. Therefore, these fair value measurements were made during the period from their acquisition through December 31, 2024. From time to time, the Company’s execution partners may extend short-term trade credits to the Company and to MacroStrategy LLC (“MacroStrategy”), a wholly-owned subsidiary of the Company, to purchase bitcoin in advance of using cash funds in the respective trading accounts. Previously, the Company also made bitcoin purchases on a delayed settlement basis. Trade credits and delayed settlement payments, as applicable, are due and payable after the bitcoin purchases are completed. In 2025 and 2024, certain bitcoin of the Company and MacroStrategy were subject to a first priority security interest and lien in order to secure payments owed by the Company or MacroStrategy with respect to these arrangements. While trade credits or delayed settlements are outstanding, the Company may incur interest fees and be required to maintain minimum balances in its trading and custody accounts with such execution partners. As of December 31, 2025 and 2024, the Company had no outstanding trade credits payable or delayed settlement obligations. The vast majority of the Company’s assets are concentrated in its bitcoin holdings. 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 the Company’s financial condition and results of operations. The Company’s strategy of acquiring and holding bitcoin also exposes it to counterparty risks with respect to the custody of its bitcoin, cybersecurity risks, and other risks inherent to holding a digital asset. In particular, the Company is subject to the risk that, if its private keys with respect to its digital assets are lost or destroyed or other similar circumstances or events occur, the Company may lose some or all of its digital assets, which could materially adversely affect the Company’s financial condition and results of operations. (5) Contract Balances The Company invoices its customers in accordance with billing schedules established in each contract. The Company’s rights to consideration from customers are presented separately in the Company’s Consolidated Balance Sheets depending on whether those rights are conditional or unconditional. The Company presents unconditional rights to consideration from customers within “Accounts receivable, net” in its Consolidated Balance Sheets. All of the Company’s contracts are generally non-cancellable and/or non-refundable, and therefore an unconditional right generally exists when the customer is billed or amounts are billable per the contract. Accounts receivable (in thousands) consisted of the following, as of: December 31, 2025 2024 Billed and billable $ 209,094 $ 183,391 Less: allowance for credit losses ( 3,346 ) ( 2,188 ) Accounts receivable, net $ 205,748 $ 181,203 103 Changes in the allowance for credit losses were not material for the year ended December 31, 2025. Rights to consideration that are subject to a condition other than the passage of time are considered contract assets until they are expected to become unconditional and transfer to accounts receivable. Current contract assets included in “Prepaid expenses and other current assets” in the Consolidated Balance Sheets consisted of $ 9.7 million and $ 2.6 million, as of December 31, 2025 and 2024, respectively, related primarily to performance obligations or services being rendered in advance of future invoicing associated with multi-year contracts. These true-up adjustments are generally not material. Non-current contract assets included in “Deposits and other assets” in the Consolidated Balance Sheets consisted of $ 4.7 million and $ 6.8 million, as of December 31, 2025 and 2024, respectively, related to performance obligations or services being rendered in advance of future invoicing associated with multi-year contracts. During the years ended December 31, 2025, 2024, and 2023, there were no significant impairments to the Company’s contract assets, nor were there any significant changes in the timing of the Company’s contract assets being reclassified to accounts receivable. Contract liabilities are amounts received or due from customers in advance of the Company transferring the software or services to the customer and presented as "Deferred revenue and advance payments" in the Consolidated Balance Sheets. In the case of multi-year service contract arrangements, the Company generally does not invoice more than one year in advance of services and does not record deferred revenue for amounts that have not been invoiced. Revenue is subsequently recognized in the period(s) in which control of the software or services is transferred to the customer. The Company’s “Accounts receivable, net” and “Deferred revenue and advance payments” balances in the Consolidated Balance Sheets include unpaid amounts related to contracts under which the Company has an enforceable right to invoice the customer for non-cancellable and/or non-refundable software and services. Changes in accounts receivable and changes in deferred revenue and advance payments are presented net of these unpaid amounts in “Operating activities” in the Consolidated Statements of Cash Flows. Deferred revenue and advance payments (in thousands) from customers consisted of the following, as of: December 31, 2025 2024 Current: Deferred product licenses revenue $ 3,053 $ 1,777 Deferred subscription services revenue 165,971 107,119 Deferred product support revenue 98,607 124,684 Deferred other services revenue 4,487 4,394 Total current deferred revenue and advance payments $ 272,118 $ 237,974 Non-current: Deferred product licenses revenue $ 91 $ 174 Deferred subscription services revenue 3,308 2,263 Deferred product support revenue 1,362 2,111 Deferred other services revenue 690 422 Total non-current deferred revenue and advance payments $ 5,451 $ 4,970 During the years ended December 31, 2025, 2024, and 2023, the Company recognized revenues of $ 242.9 million, $ 225.4 million, and $ 215.9 million, respectively, from amounts included in the total deferred revenue and advance payments balances at the beginning of the respective year. For the years ended December 31, 2025, 2024, and 2023, there were no significant changes in the timing of revenue recognition on the Company’s deferred balances. The Company’s remaining performance obligation represents all future revenue under contract and includes deferred revenue and advance payments and billable non-cancelable amounts that will be invoiced and recognized as revenue in future periods. The remaining performance obligation excludes contracts that are billed in arrears, such as certain time and materials contracts. The portions of multi-year contracts that will be invoiced in the future are not presented on the balance sheet within accounts receivable and deferred revenues and are instead included in the following remaining performance obligation disclosure. As of December 31, 2025, the Company had an aggregate transaction price of $ 588.0 million allocated to the remaining performance obligation related to subscription services, product support, product licenses, and other services contracts. The Company expects to recognize $ 344.2 million within the next 12 months and the remainder thereafter. 104 (6) Property and Equipment Property and equipment (in thousands) consisted of the following, as of: December 31, 2025 2024 Corporate aircraft and related equipment $ 48,996 $ 48,645 Computer equipment and purchased software 47,679 61,828 Furniture and equipment 11,942 9,708 Leasehold improvements 31,989 29,547 Internally developed software 5,969 9,917 Property and equipment, gross 146,575 159,645 Less: accumulated depreciation and amortization ( 117,717 ) ( 133,318 ) Property and equipment, net $ 28,858 $ 26,327 Depreciation and amortization expenses related to property and equipment were $ 5.8 million, $ 5.6 million, and $ 6.4 million for the years ended December 31, 2025, 2024, and 2023, respectively. (7) Leases The Company leases office space in the United States and foreign locations under operating lease agreements. Office space is the Company’s only material underlying asset class under operating lease agreements. The Company has no material finance leases. Under the Company’s office space lease agreements, fixed payments and variable payments that depend on an index or rate are typically comprised of base rent and parking fees. Additionally, under these agreements the Company is generally responsible for certain variable payments that typically include certain taxes, utilities and maintenance costs, and other fees. These variable lease payments are generally based on the Company’s occupation or usage percentages and are subject to adjustments by the lessor. The Company’s ROU asset and total lease liability balances were $ 47.0 million and $ 57.4 million, respectively, as of December 31, 2025, and $ 54.6 million and $ 66.8 million, respectively, as of December 31, 2024. The Company’s most significant lease is for its corporate headquarters in Northern Virginia. The ROU asset and total lease liability balances related to the Company’s corporate headquarters lease were $ 37.1 million and $ 46.8 million, respectively, as of December 31, 2025, and $ 42.8 million and $ 54.6 million, respectively, as of December 31, 2024. The lease agreement for the Company’s corporate headquarters location is set to expire in December 2030, with an option for the Company to extend the term for an additional five or 10 consecutive years. The Company is currently not reasonably certain it will exercise this renewal option and therefore has not included the renewal option in the lease term. Several of the Company’s remaining leases contain options for renewal or options to terminate all or a portion of the leased space. The Company continually assesses the likelihood of exercising these options and recognizes an option as part of its ROU assets and lease liabilities if and when it is reasonably certain that it will exercise the option. 105 The following table presents the Company’s total lease cost and other lease details for the periods indicated (in thousands, except years and discount rates): Years Ended December 31, 2025 2024 2023 Lease cost: Operating lease cost $ 12,574 $ 12,577 $ 13,081 Short-term lease cost 721 619 579 Variable lease cost 439 632 783 Total lease cost $ 13,734 $ 13,828 $ 14,443 Other information: Cash paid for amounts included in the measurement of operating lease liabilities $ 14,434 $ 14,525 $ 9,862 ROU assets obtained in exchange for new operating lease liabilities $ 1,110 $ 6,032 $ 6,183 Weighted average remaining lease term in years – operating leases 4.9 5.8 6.6 Weighted average discount rate – operating leases 6.0 % 6.0 % 6.0 % The following table presents the maturities of the Company’s operating lease liabilities as of December 31, 2025 (in thousands): For the year ended December 31, 2026 $ 15,093 2027 14,293 2028 13,815 2029 12,942 2030 8,097 Thereafter 1,442 Total lease payments 65,682 Less: imputed interest ( 8,240 ) Total $ 57,442 Reported as: Current operating lease liabilities $ 11,307 Non-current operating lease liabilities 46,135 Total $ 57,442 (8) Long-term Debt The net carrying value of the Company’s outstanding debt (in thousands) consisted of the following as of: 106 December 31, 2025 2024 2027 Convertible Notes $ — $ 1,041,352 2028 Convertible Notes 1,002,736 998,543 2029 Convertible Notes 2,982,316 2,975,037 2030A Convertible Notes 789,109 785,172 2030B Convertible Notes 1,989,115 — 2031 Convertible Notes 596,843 594,476 2032 Convertible Notes 790,113 787,417 Other long-term secured debt 39,923 9,678 Total $ 8,190,155 $ 7,191,675 Reported as: Current portion of long-term debt, net 31,313 517 Long-term debt, net 8,158,842 7,191,158 Total $ 8,190,155 $ 7,191,675 Convertible Senior Notes As of December 31, 2025, the following convertible notes were outstanding (the “Outstanding Convertible Notes”): • $ 1.01 billion aggregate principal amount of 0.625 % Convertible Senior Notes due 2028 (the “2028 Convertible Notes”); • $ 3.00 billion aggregate principal amount of 0 % Convertible Senior Notes due 2029 (the “2029 Convertible Notes”); • $ 800.0 million aggregate principal amount of 0.625 % Convertible Senior Notes due 2030 (the “2030A Convertible Notes”); • $ 2.00 billion aggregate principal amount of 0 % Convertible Senior Notes due 2030 (the “2030B Convertible Notes”); • $ 603.7 million aggregate principal amount of 0.875 % Convertible Senior Notes due 2031 (the “2031 Convertible Notes”); and • $ 800.0 million aggregate principal amount of 2.25 % Convertible Senior Notes due 2032 (the “2032 Convertible Notes”). Additionally, the Company also previously issued, in February 2021, $ 1.05 billion aggregate principal amount of 0 % Convertible Senior Notes due 2027 (the “2027 Convertible Notes”, and together with the Outstanding Convertible Notes, the “Convertible Notes”). All of the 2027 Convertible Notes were redeemed or converted into the Company’s class A common stock during the first quarter of 2025. Each of the Convertible Notes were issued in a private offering. The Outstanding Convertible Notes are, and the 2027 Convertible Notes were, senior unsecured obligations of the Company ranking senior in right of payment to any of the Company’s indebtedness expressly subordinated in right of payment to the Convertible Notes; equal in right of payment to any of the Company’s unsecured indebtedness not so subordinated; effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries. The following table summarizes the key terms of each of the Convertible Notes (principal at inception, net proceeds, and issuance costs are each reported in thousands). The summaries below are qualified in their entirety by the full text of the applicable indenture: 107 2027 Convertible Notes 2028 Convertible Notes 2029 Convertible Notes 2030A Convertible Notes 2030B Convertible Notes 2031 Convertible Notes 2032 Convertible Notes Issuance Date February 2021 September 2024 November 2024 March 2024 February 2025 March 2024 June 2024 Maturity Date (1) February 15, 2027 September 15, 2028 December 1, 2029 March 15, 2030 March 1, 2030 March 15, 2031 June 15, 2032 Principal at Inception $ 1,050,000 $ 1,010,000 $ 3,000,000 $ 800,000 $ 2,000,000 $ 603,750 $ 800,000 Stated Interest Rate (2) 0.000 % 0.625 % 0.000 % 0.625 % 0.000 % 0.875 % 2.250 % Interest Payment Dates (3) February 15 & August 15 March 15 & September 15 June 1 & December 1 March 15 & September 15 March 1 & September 1 March 15 & September 15 June 15 & December 15 Net Proceeds $ 1,025,830 $ 997,375 $ 2,974,250 $ 782,000 $ 1,984,852 $ 592,567 $ 786,000 Issuance Costs (4) $ 24,170 $ 12,625 $ 25,750 $ 18,000 $ 15,148 $ 11,183 $ 14,000 Effective Interest Rate (4) 0.39 % 1.05 % 0.24 % 1.14 % 0.25 % 1.30 % 2.63 % Date of Holder Put Option (5) n/a September 15, 2027 June 1, 2028 September 15, 2028 March 1, 2028 September 15, 2028 June 15, 2029 Initial Conversion Rate (6) 6.98 5.46 1.49 6.68 2.31 4.30 4.89 Initial Conversion Price (7) $ 143.25 $ 183.19 $ 672.40 $ 149.77 $ 433.43 $ 232.72 $ 204.33 Convertible at any time after the following date (8) (9) January 24, 2025 March 15, 2028 June 1, 2029 September 15, 2029 December 3, 2029 September 15, 2030 December 15, 2031 Not redeemable by the Company prior to the following date (10) February 20, 2024 December 20, 2027 December 4, 2026 March 22, 2027 March 5, 2027 March 22, 2028 June 20, 2029 Redemption Date (11) February 24, 2025 n/a n/a n/a n/a n/a n/a (1) “Maturity Date” is the stated maturity date under each applicable indenture governing such notes, unless earlier converted, redeemed, or repurchased in accordance with their terms. (2) Holders may receive additional or special interest under specified circumstances as outlined under each applicable indenture governing the Convertible Notes. (3) The 2029 Convertible Notes and the 2030B Convertible Notes do not bear regular interest. Additionally, the 2027 Convertible Notes did not bear regular interest prior to their redemption. (4) “Issuance Costs” reflect the customary offering expenses associated with each of the Convertible Notes. The Company accounts for these issuance costs as a reduction to the principal amount of the respective Convertible Notes and amortizes the issuance costs to interest expense from the respective debt issuance dates through the earlier of the “Maturity Date” or the “Date of Holder Put Option,” if applicable, at the “Effective Interest Rates” stated in the table. (5) “Date of Holder Put Option” represents the respective dates upon which holders of the 2028 Convertible Notes, 2029 Convertible Notes, 2030A Convertible Notes, 2030B Convertible Notes, 2031 Convertible Notes, and 2032 Convertible Notes each have a noncontingent right to require the Company to repurchase for cash all or any portion of their respective notes at a repurchase price equal to 100 % of the principal amount of such notes to be repurchased, plus any accrued and unpaid interest to, but excluding the repurchase date. (6) The “Initial Conversion Rate” is stated in the approximate number of shares of the Company’s class A common stock per $1,000 principal amount. The conversion rates are subject to customary anti-dilution adjustments. In addition, following certain events that may occur prior to the respective maturity dates or if the Company delivers a notice of redemption, the Company will increase the conversion rate for a holder who elects to convert its respective Convertible Notes in connection with such corporate event or notice of redemption, as the case may be, in certain circumstances as provided in each indenture governing the respective Convertible Notes. (7) The “Initial Conversion Price” is stated in dollars per share of the Company’s class A common stock. 108 (8) On or after the stated dates until the close of business on the second scheduled trading day immediately preceding the respective maturity dates, holders may convert the Convertible Notes at any time. Upon conversion of the Convertible Notes, the Company will pay or deliver, as the case may be, cash, shares of the Company’s class A common stock, or a combination of cash and shares of class A common stock, at the Company’s election. For the 2027 Convertible Notes, the date presented is the date on which the Company delivered its notice of full redemption of the 2027 Convertible Notes, which resulted in the 2027 Convertible Notes being convertible at any time thereafter until 5:00pm New York City time, on February 20, 2025. See below under “Conversions and Redemption of Convertible Notes” for further information. (9) Prior to the respective dates, the Convertible Notes are convertible only under the following circumstances: a. during any calendar quarter (and only during such calendar quarter) if the last reported sale price of the Company’s class A common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130 % of the conversion price of the respective Convertible Notes on each applicable trading day; b. during the five business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” (as defined under each applicable indenture governing the respective Convertible Notes) per $1,000 principal amount of the respective Convertible Notes for each trading day of the measurement period was less than 98 % of the product of the last reported sale price of the Company’s class A common stock and the applicable conversion rate on each such trading day; c. (a) in the case of the 2028 Convertible Notes, 2029 Convertible Notes, 2030A Convertible Notes, 2031 Convertible Notes and 2032 Convertible Notes, the Company calls any or all of such Convertible Notes for redemption, then a holder may surrender all or any part of such of its Convertible Notes as called for redemption for conversion at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; and (b) in the case of the 2030B Convertible Notes, the Company calls any 2030B Convertible Notes for redemption, then the holders of such 2030B Convertible Note may convert such 2030B Convertible Notes at any time before the close of business on the second business day immediately before the related redemption date; and d. upon occurrence of specified corporate events as described in each applicable indenture governing the respective Convertible Notes. (10) The Company may redeem for cash all or a portion of the Convertible Notes at its option, on or after the stated dates, if the last reported sale price of the Company’s class A common stock has been at least 130 % of the conversion price of the respective Convertible Notes then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides a notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption. The redemption price will be equal to 100 % of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. See below “Conversions and Redemption of Convertible Notes” subsection for information regarding the Company’s notice of redemption of the 2027 Convertible Notes. (11) “Redemption Date” for the 2027 Convertible Notes is the date on which the Company redeemed all outstanding 2027 Convertible Notes. If the Company undergoes a “fundamental change,” as defined in the respective indentures governing the Convertible Notes prior to maturity, subject to certain conditions, holders may require the Company to repurchase for cash all or any portion of their respective Convertible Notes at a fundamental change repurchase price equal to 100 % of the principal amount of the respective Convertible Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date. The respective indentures governing the Convertible Notes contain customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of at least 25 % in principal amount outstanding of the respective Convertible Notes may declare 100 % of the principal of, and accrued and unpaid interest, if any, on, all the respective Convertible Notes to be due and payable. Although the Convertible Notes contain embedded conversion features, the Company accounts for the Convertible Notes in their entirety as a liability because the conversion features are indexed to the Company’s class A common stock and meet the criteria for classification in stockholders’ equity and therefore do not qualify for separate derivative accounting. 109 Conversions and Redemption of Convertible Notes On January 24, 2025, the Company delivered a notice of full redemption (the "2027 Redemption Notice") to the trustee of the Company’s 2027 Convertible Notes for the redemption of all $ 1.05 billion in aggregate principal amount of the 2027 Convertible Notes then outstanding on February 24, 2025 (the “2027 Redemption Date”), at a redemption price equal to 100 % of the principal amount of the 2027 Convertible Notes to be redeemed, plus accrued and unpaid special interest, if any, to but excluding the 2027 Redemption Date, unless earlier converted. Due to the Company’s issuance of the 2027 Redemption Notice, the 2027 Convertible Notes became convertible at the option of the holders of such notes from the delivery of the 2027 Redemption Notice until 5:00 p.m., New York City time, on February 20, 2025. The Company elected to satisfy its conversion obligation with respect to the 2027 Convertible Notes by delivering solely shares of its class A common stock, together with cash in lieu of any fractional shares. Holders of the 2027 Convertible Notes requested to convert $ 1.05 billion in principal amount of the 2027 Convertible Notes for which the Company issued 7,373,528 shares of the Company’s class A common stock and paid a nominal amount of cash in lieu of fractional shares upon settlement of such conversion requests, in accordance with the terms and provisions of the indenture governing the 2027 Convertible Notes. There were no outstanding 2027 Convertible Notes as of December 31, 2025. During the year ended December 31, 2025, the Company received from certain holders of the 2031 Convertible Notes requests to convert an immaterial principal amount of the 2031 Convertible Notes, which the Company settled in shares of class A common stock and a nominal amount of cash in lieu of fractional shares in accordance with the terms and provisions of the indenture governing the 2031 Convertible Notes. During the year ended December 31, 2024 (and prior to the delivery of the 2025 Redemption Notice (defined below)), the Company received from certain holders of the Company’s 0.750 % Convertible Senior Notes due 2025 (the “2025 Convertible Notes”) requests to convert an immaterial principal amount of the 2025 Convertible Notes, which the Company elected to settle in shares of class A common stock and cash in accordance with the terms and provisions of the indenture governing the 2025 Convertible Notes. On June 13, 2024, the Company announced that it delivered a notice of redemption (the “2025 Redemption Notice”) to the trustee of the 2025 Convertible Notes for redemption of all $ 650.0 million in aggregate principal amount of the 2025 Convertible Notes then outstanding on July 15, 2024 (the “2025 Redemption Date”). Due to the Company’s issuance of the 2025 Redemption Notice, the 2025 Convertible Notes became convertible at the option of the holders of such notes from the delivery of the 2025 Redemption Notice until 5:00 p.m., New York City time, on July 11, 2024. The Company elected to satisfy its conversion obligation with respect to the 2025 Convertible Notes by delivering solely shares of its class A common stock, together with cash in lieu of any fractional shares. Holders of the 2025 Convertible Notes requested to convert $ 649.7 million in principal amount of the 2025 Convertible Notes prior to the 2025 Redemption Date, for which the Company issued 16,323,050 shares of the Company’s class A common stock and paid a nominal amount of cash in lieu of fractional shares upon settlement of such conversion requests, in accordance with the terms and provisions of the indenture governing the 2025 Convertible Notes. On the 2025 Redemption Date, the Company redeemed $ 0.3 million aggregate principal amount of 2025 Convertible Notes, constituting all of the 2025 Convertible Notes then outstanding, at an aggregate redemption price of $ 0.3 million in cash, equal to 100 % of the principal amount of the 2025 Convertible Notes redeemed, plus accrued and unpaid interest, to but excluding the 2025 Redemption Date. There were no outstanding 2025 Convertible Notes as of December 31, 2024. Collective Convertible Notes Disclosures As of December 31, 2025, the maximum number of shares into which the Convertible Notes could have been potentially converted if the conversion features were triggered at the conversion rates then in effect based on the Convertible Notes then outstanding on such date was: • 2028 Convertible Notes: 5,513,489 shares of class A common stock; • 2029 Convertible Notes: 4,461,600 shares of class A common stock; • 2030A Convertible Notes: 5,341,600 shares of class A common stock; • 2030B Convertible Notes: 4,614,400 shares of class A common stock; • 2031 Convertible Notes: 2,593,923 shares of class A common stock; and • 2032 Convertible Notes: 3,915,200 shares of class A common stock. The 2028 Convertible Notes, 2030A Convertible Notes, 2031 Convertible Notes and 2032 Convertible Notes were convertible at the option of the holders during certain quarters of the year ended December 31, 2025. However, the Company did not receive any requests to convert the 2028 Convertible Notes, 2030A Convertible Notes, and 2032 110 Convertible Notes during such periods. See “Conversions and Redemption of Convertible Notes” above for additional information about conversions of the 2031 Convertible Notes. The Outstanding Convertible Notes may be convertible in future periods if one or more of the conversion conditions are satisfied during future measurement periods. None of the Outstanding Convertible Notes are convertible at the option of holders during the three months ending March 31, 2026. No conversions of the Outstanding Convertible Notes occurred during the years ended December 31, 2025, 2024, and 2023, except for the 2031 Convertible Notes as discussed above under the “Conversions and Redemption of Convertible Notes” subsection. Other than the Company’s redemption of the 2027 Convertible Notes, the Company did not redeem any of the Convertible Notes during the year ended December 31, 2025. As of December 31, 2025 and 2024, the net carrying value of the Convertible Notes was classified as a long-term liability in the “Long-term debt, net” line item in the Company’s Consolidated Balance Sheets. The following is a summary of the Company’s convertible debt instruments as of December 31, 2025 and 2024 (in thousands): December 31, 2025 Outstanding Principal Amount Unamortized Issuance Costs Net Carrying Value Fair Value Amount Leveling 2028 Convertible Notes $ 1,010,000 $ ( 7,264 ) $ 1,002,736 $ 1,214,525 Level 2 2029 Convertible Notes 3,000,000 ( 17,684 ) 2,982,316 2,468,832 Level 2 2030A Convertible Notes 800,000 ( 10,891 ) 789,109 1,014,071 Level 2 2030B Convertible Notes 2,000,000 ( 10,885 ) 1,989,115 1,728,262 Level 2 2031 Convertible Notes 603,659 ( 6,816 ) 596,843 621,950 Level 2 2032 Convertible Notes 800,000 ( 9,887 ) 790,113 892,562 Level 2 Total $ 8,213,659 $ ( 63,427 ) $ 8,150,232 $ 7,940,202 December 31, 2024 Outstanding Principal Amount Unamortized Issuance Costs Net Carrying Value Fair Value Amount Leveling 2027 Convertible Notes $ 1,050,000 $ ( 8,648 ) $ 1,041,352 $ 2,134,125 Level 2 2028 Convertible Notes 1,010,000 ( 11,457 ) 998,543 1,927,828 Level 2 2029 Convertible Notes 3,000,000 ( 24,963 ) 2,975,037 2,447,682 Level 2 2030A Convertible Notes 800,000 ( 14,828 ) 785,172 1,657,323 Level 2 2031 Convertible Notes 603,750 ( 9,274 ) 594,476 877,559 Level 2 2032 Convertible Notes 800,000 ( 12,583 ) 787,417 1,324,602 Level 2 Total $ 7,263,750 $ ( 81,753 ) $ 7,181,997 $ 10,369,119 The fair value of the Convertible Notes is determined using observable market data other than quoted prices, specifically the last traded price at the end of the reporting period of identical instruments in the over-the-counter market (Level 2). 111 For the years ended December 31, 2025, 2024 and 2023, interest expense related to the Convertible Notes was as follows (in thousands): Year Ended December 31, 2025 Year Ended December 31, 2024 Year Ended December 31, 2023 Contractual Interest Expense Amortization of Issuance Costs Total Contractual Interest Expense Amortization of Issuance Costs Total Contractual Interest Expense Amortization of Issuance Costs Total 2025 Convertible Notes $ — $ — $ — $ 2,371 $ 1,494 $ 3,865 $ 4,875 $ 3,043 $ 7,918 2027 Convertible Notes — 401 401 — 4,046 4,046 — 4,029 4,029 2028 Convertible Notes 6,313 4,192 10,505 1,771 1,168 2,939 — — — 2029 Convertible Notes — 7,279 7,279 — 787 787 — — — 2030A Convertible Notes 5,000 3,937 8,937 4,069 3,172 7,241 — — — 2030B Convertible Notes — 4,263 4,263 — — — — — — 2031 Convertible Notes 5,282 2,457 7,739 4,154 1,909 6,063 — — — 2032 Convertible Notes 18,000 2,696 20,696 9,650 1,417 11,067 — — — Total $ 34,595 $ 25,225 $ 59,820 $ 22,015 $ 13,993 $ 36,008 $ 4,875 $ 7,072 $ 11,947 The Company paid $ 34.5 million, $ 16.5 million and $ 4.9 million, respectively, in interest related to the Convertible Notes during the years ended December 31, 2025, 2024, and 2023. The Company has not paid any additional interest or special interest related to the Convertible Notes to date. Senior Secured Notes On June 14, 2021, the Company issued $ 500.0 million aggregate principal amount of 2028 Secured Notes. The 2028 Secured Notes were sold under a purchase agreement, dated as of June 8, 2021, entered into by and among the Company, MicroStrategy Services Corporation, a wholly owned subsidiary of the Company (the “Guarantor”), and Jefferies LLC, for resale to qualified institutional buyers. The terms of the 2028 Secured Notes were governed by an indenture, dated as of June 14, 2021 (the “2028 Secured Notes Indenture”), among the Company, the Guarantor, and U.S. Bank National Association, as trustee and collateral agent. The 2028 Secured Notes were unconditionally guaranteed, jointly and severally, on a senior secured basis by the Guarantor and certain subsidiaries of the Company (excluding MacroStrategy) (collectively, the “Subsidiary Guarantors”). The 2028 Secured Notes bore interest at a fixed rate of 6.125 % per annum, payable semiannually in arrears on June 15 and December 15 of each year, beginning on December 15, 2021. The 2028 Secured Notes had a stated maturity date of June 15, 2028, unless earlier redeemed or repurchased in accordance with their terms and subject to a springing maturity date of September 15, 2025 or November 16, 2026 under certain conditions outlined in the 2028 Secured Notes Indenture. The springing maturity feature was not triggered while the 2028 Secured Notes were outstanding. The Company redeemed all of the 2028 Secured Notes on September 26, 2024 at a redemption price equal to 103.063 % of the principal amount of the 2028 Secured Notes, plus accrued and unpaid interest to, but excluding, September 26, 2024 (the “Redemption Price”). The Redemption Price consisted of a $ 515.3 million payment to redeem the full $ 500.0 million outstanding principal amount of the 2028 Secured Notes as of September 26, 2024 and an $ 8.6 million payment for accrued unpaid interest on the 2028 Secured Notes to but excluding September 26, 2024. The Company also incurred $ 0.1 million in third party fees in connection with the redemption of the 2028 Secured Notes. The net carrying value of the 2028 Secured Notes as of September 26, 2024, immediately prior to their redemption, was $ 492.5 million, which resulted in a $ 22.9 million loss on debt extinguishment recognized in the Company’s Consolidated Statement of Operations in the third quarter of 2024. While outstanding, the 2028 Secured Notes were secured, on a senior secured basis with the Company’s existing and future senior indebtedness, by a first priority security interest in substantially all of the Company’s and the Subsidiary Guarantors’ assets (the “Collateral”). The Collateral included any bitcoins or other digital assets acquired by the Company or a Subsidiary Guarantor on or after June 14, 2021. As of December 31, 2023, approximately 16,081 of the bitcoins held by the Company served as part of the Collateral. Upon the redemption of the 2028 Secured Notes in September 2024, all collateral securing the 2028 Secured Notes was released. 112 The Company incurred approximately $ 12.8 million in customary offering expenses associated with the 2028 Secured Notes. The Company accounted for these issuance costs as a reduction to the principal amount of the 2028 Secured Notes and amortized the issuance costs to interest expense over the contractual term of the 2028 Secured Notes at an effective interest rate of 6.58 %. No interest expense related to the 2028 Secured Notes was recognized after the debt was repaid in full during the third quarter of 2024. For the years ended December 31, 2024 and 2023, interest expense related to the 2028 Secured Notes was as follows (in thousands): Year Ended December 31, 2024 Year Ended December 31, 2023 Contractual Interest Expense Amortization of Issuance Costs Total Contractual Interest Expense Amortization of Issuance Costs Total 2028 Secured Notes $ 22,628 $ 1,287 $ 23,915 $ 30,625 $ 1,646 $ 32,271 The Company paid $ 23.9 million and $ 30.6 million respectively, in interest related to the 2028 Secured Notes during the years ended December 31, 2024 and 2023. Other long-term secured debt In June 2022, the Company, through a wholly-owned subsidiary, entered into a secured term loan agreement in the amount of $ 11.1 million, bearing interest at an annual rate of 5.2 %, and maturing in June 2027. The loan is secured by certain non-bitcoin assets of the Company that are not otherwise serving as collateral for any of the Company’s other indebtedness. After monthly payments made under the terms of the agreement, the loan had a net carrying value of $ 9.2 million and $ 9.7 million as of December 31, 2025 and 2024, respectively, and an outstanding principal balance of $ 9.2 million and $ 9.8 million as of December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, $ 0.6 million and $ 0.5 million of the respective net carrying values were short-term and presented in "Current portion of long-term debt, net" in the Consolidated Balance Sheets. In June 2025, the Company entered into a loan agreement that provides for aggregate borrowings of up to $ 31.1 million, available in multiple tranches, to fund a capital asset purchase. Amounts outstanding under the loan bear interest, with respect to each tranche, at a variable rate equal to the one-year Secured Overnight Financing Rate plus 4.24 %. The loan is secured by non-bitcoin assets that do not and will not otherwise serve as collateral for any of the Company’s other indebtedness. The loan will mature in 2026. After monthly payments made under the terms of these other long-term secured debt agreements, the other long-term secured debt had an aggregate net carrying value of $ 39.9 million and $ 9.7 million as of December 31, 2025 and 2024, respectively, and an aggregate outstanding principal balance of $ 40.3 million and $ 9.8 million as of December 31, 2025 and 2024, respectively. As of December 31, 2025, and 2024, $ 31.3 million and $ 0.5 million of the respective net carrying values were short-term and were presented in “Current portion of long-term debt, net” in the Consolidated Balance Sheets. Maturities The following table shows the maturities of the Company’s debt instruments as of December 31, 2025 (in thousands). The principal payments related to the 2028 Convertible Notes, 2029 Convertible Notes, 2030A Convertible Notes, 2030B Convertible Notes, 2031 Convertible Notes, and 2032 Convertible Notes are included in the table below as if the holders exercised their right to require the Company to repurchase all of the respective convertible notes on their respective Date of Holder Put Option. Payments due by period ended December 31, 2028 Convertible Notes 2029 Convertible Notes 2030A Convertible Notes 2030B Convertible Notes 2031 Convertible Notes 2032 Convertible Notes Other long-term secured debt Total 2026 $ — $ — $ — $ — $ — $ — $ 31,708 $ 31,708 2027 1,010,000 — — — — — 8,633 1,018,633 2028 — 3,000,000 800,000 2,000,000 603,659 — — 6,403,659 2029 — — — — — 800,000 — 800,000 2030 — — — — — — — — Thereafter — — — — — — — — Total $ 1,010,000 $ 3,000,000 $ 800,000 $ 2,000,000 $ 603,659 $ 800,000 $ 40,341 $ 8,254,000 As part of the Company’s bitcoin strategy, the Company expects to incur or continue to incur additional indebtedness and other fixed charges for the purposes of acquiring additional bitcoin and to satisfy its financial and other obligations. The Company’s ability to obtain equity and debt financing is subject to market conditions and other factors outside of its 113 control, and the Company may not be able to secure equity or debt financing in a timely manner, on favorable terms, or at all. If the Company is unable to obtain equity or debt financing, the Company could seek to use proceeds from the sale of its bitcoin to meet its obligations. Historically, the bitcoin market 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 inherent in its entirely electronic, virtual form and decentralized network. During times of market instability, the Company may not be able to sell its bitcoin at favorable prices or at all. As a result, the Company’s bitcoin holdings may not be able to serve as a source of liquidity for the Company to the same extent as cash and cash equivalents. Further, the Company’s bitcoin holdings do not enjoy the same protections as are available to cash or securities deposited with or transacted by institutions subject to regulation by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation. (9) Commitments and Contingencies (a) Commitments From time to time, the Company enters into certain types of contracts that require it to indemnify parties against third-party claims. These contracts primarily relate to agreements under which the Company assumes indemnity obligations for intellectual property infringement, as well as other obligations from time to time depending on arrangements negotiated with customers and other third parties. The conditions of these obligations vary. Thus, the overall maximum amount of the Company’s indemnification obligations cannot be reasonably estimated. Historically, the Company has not been obligated to make significant payments for these obligations and does not currently expect to incur any material obligations in the future. Accordingly, the Company has not recorded an indemnification liability on its Consolidated Balance Sheets as of December 31, 2025 or December 31, 2024. The following table shows future minimum payments related to noncancelable purchase agreements with initial terms of greater than one year as of December 31, 2025 (in thousands): Year Purchase Obligations 2026 $ 69,000 2027 59,644 2028 27,473 2029 — 2030 — Thereafter — $ 156,117 (b) Contingencies Brazil Matter Following an internal review initiated in 2018, the Company disclosed its belief that its Brazilian subsidiary failed or likely failed to comply with local procurement regulations in conducting business with certain Brazilian government entities. In 2020 the Company learned that the Brazilian Federal Police were investigating alleged corruption and procurement fraud involving certain government officials, including a transaction that was part of the basis of the Company’s previously reported failure or likely failure of its Brazilian subsidiary to comply with local procurement regulations. To the best of the Company’s knowledge, this investigation was concluded in 2023. Neither employees of the Company’s Brazilian subsidiary nor the subsidiary itself were targets of the Federal Police investigation. The Company’s Brazilian subsidiary voluntarily disclosed information from its 2018 internal review to Brazil’s General Superintendence of the Administrative Council for Economic Defense (“SG/CADE”), the Federal Comptroller General (“CGU”) and the Office of the Comptroller General of the State of São Paulo (“CGE-SP”). Following this voluntary disclosure and cooperation with these agencies, the Company’s Brazilian subsidiary signed leniency agreements with the SG/CADE in September 2020, with the CGU and the Federal General Attorney’s Office (“AGU”) in July 2024, and with the CGE-SP and the Office of the Attorney General of the State of São Paulo (“PGE-SP”) in April 2025. In 2023, the SG/CADE launched a public administrative proceeding to investigate potentially anticompetitive conduct by various entities and individuals in Brazil based in part on the information voluntarily disclosed by the Company’s Brazilian subsidiary, which is also one of the defendants in the proceeding. If at the end of the proceeding, SG/CADE’s Tribunal 114 confirms that the Brazilian subsidiary’s obligations under the leniency agreement it signed with SG/CADE have been fulfilled, the Brazilian subsidiary will receive full immunity from fines. Pursuant to its leniency agreement with the CGU and the AGU, the Brazilian subsidiary (i) paid approximately BRL 6.16 million (equivalent to approximately $ 1.1 million) in July 2024, (ii) agreed to certain undertakings regarding its compliance program, and (iii) has been granted immunity from debarment and other sanctions. As a result of this leniency agreement, the CGU dismissed its pending administrative action against the Brazilian subsidiary over alleged procurement violations. During 2024, the Company paid approximately $ 1.1 million in cash in respect of these matters as indicated above and accrued an additional $ 0.3 million in respect of losses that might be incurred with respect to these matters, resulting in a net accrual of $ 0.4 million as of December 31, 2024, with such accrued amount included as a component of “Accounts payable, accrued expenses, and operating lease liabilities” in the Consolidated Balance Sheet as of December 31, 2024. Pursuant to its leniency agreement with the CGE-SP and PGE-SP, the Brazilian subsidiary (i) paid approximately BRL 2.38 million (equivalent to approximately $ 0.4 million) in April 2025, and (ii) has been granted immunity from debarment and other sanctions. The Company’s Brazilian subsidiary continues to cooperate with requests from government authorities related to the above matters. As of December 31, 2025, the Company remained unable to reasonably estimate a range of loss beyond the payments described above. Shareholder Action On July 21, 2025, David Dodge filed a purported class action lawsuit in the Court of Chancery of the State of Delaware against the Company and the Company’s Board alleging violations of the Delaware General Corporation Law (the “DGCL”), and asserting a claim against the Company’s Board for breach of fiduciary duty in connection with the purported DGCL violation. Plaintiff Dodge purports to assert claims on behalf of himself and similarly situated holders of the Company’s common stock alleging that pursuant to Section 242 of the DGCL (“Section 242”), the holders of the Company’s common stock were entitled to vote on the STRK Amendment (as defined in Note 12, Redeemable Preferred Stock) the Company filed on July 7, 2025 with the Secretary of State of the State of Delaware. Refer to Note 12, Redeemable Preferred Stock, for additional information on the STRK Amendment. Plaintiff Dodge seeks, among other things, an order (i) finding, determining and declaring that the Company violated Section 242; (ii) finding, determining and declaring that the Board has breached its fiduciary duties; (iii) deeming the STRK Amendment ineffective and requiring that the Company file a certificate of correction with the Delaware Secretary of State invalidating the STRK Amendment; (iv) awarding unspecified damages to Plaintiff Dodge and the class, including interest; (v) awarding attorneys’ fees and costs; and (vi) granting other relief. At this time, the Company cannot predict the outcome or provide a reasonable estimate or range of estimates of the possible outcome or loss, if any, in this matter. Various Legal Proceedings and Contingent Liabilities The Company is also involved in various legal proceedings arising in the normal course of business. Although the outcomes of these legal proceedings are inherently difficult to predict, management does not expect the resolution of these legal proceedings to have a material adverse effect on the Company’s financial position, results of operations, or cash flows. The Company has contingent liabilities that, in management’s judgment, are not probable of assertion. If such unasserted contingent liabilities were to be asserted, or become probable of assertion, the Company may be required to record significant expenses and liabilities in the period in which these liabilities are asserted or become probable of assertion. (10) Income Taxes Income before Income Tax Expense – Domestic and Foreign U.S. and international components of (loss) income before income taxes (in thousands) were comprised of the following for the periods indicated: Years Ended December 31, 2025 2024 2023 U.S. $ ( 5,578,372 ) $ ( 1,966,444 ) $ ( 157,810 ) Foreign 52,418 32,098 33,285 Total $ ( 5,525,954 ) $ ( 1,934,346 ) $ ( 124,525 ) 115 The (benefit from) provision for income taxes (in thousands) consisted of the following for the periods indicated: Years Ended December 31, 2025 2024 2023 Current: Federal $ 24 $ ( 5,202 ) $ 2,774 State 708 72 3,376 Foreign 5,417 5,368 9,146 $ 6,149 $ 238 $ 15,296 Deferred: Federal $ ( 1,116,016 ) $ ( 505,359 ) $ ( 374,800 ) State ( 569,751 ) ( 262,441 ) ( 194,374 ) Foreign 1,816 ( 123 ) 232 $ ( 1,683,951 ) $ ( 767,923 ) $ ( 568,942 ) Total Income tax expense (benefit) Federal $ ( 1,115,992 ) $ ( 510,561 ) $ ( 372,026 ) State ( 569,043 ) ( 262,369 ) ( 190,998 ) Foreign 7,233 5,245 9,378 Total benefit $ ( 1,677,802 ) $ ( 767,685 ) $ ( 553,646 ) Reconciliation of Statutory Federal Income Tax Rate to the Effective Income Tax Rate The benefit from or provision for income taxes differs from the amount computed by applying the federal statutory income tax rate to the Company’s loss before income taxes as follows for the periods indicated. Below is a tabular rate reconciliation pursuant to the disclosure requirements of ASU 2023-09 for the year ended December 31, 2025 (in thousands): December 31, 2025 $ % U.S. Federal Statutory Tax Rate $ ( 1,160,450 ) 21.0 % State and Local Income Tax, Net of Federal Income Tax Effect* ( 449,659 ) 8.1 % Foreign Tax Effects Other Foreign Jurisdictions ( 3,912 ) 0.1 % Domestic U.S. Federal Effect of Cross-Border Tax Laws 2,746 ( 0.1 ) % Tax Credits ( 8,710 ) 0.2 % Nontaxable or Nondeductible Items Stock Compensation ( 61,051 ) 1.1 % Other 2,291 — % Changes in Unrecognized Tax Benefits 943 — % Total tax benefit and effective income tax rate $ ( 1,677,802 ) 30.4 % * State taxes in Virginia made up the majority (greater than 50 percent) of the tax effect in this category. During the year ended December 31, 2025, the Company's benefit from income taxes primarily related to (i) the tax effect of the unrealized loss on digital assets and (ii) 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). Below is a reconciliation of the statutory federal income tax expense and the Company’s total income tax expense for the years ended December 31, 2024 and 2023: 116 December 31, 2025 2024 2023 Income tax expense at federal statutory rate 21.0 % 21.0 % State taxes, net of federal tax effect 10.7 % 8.4 % Other international components ( 0.5 ) % ( 3.4 ) % Change in valuation allowance — % 409.5 % Non-deductible officers compensation ( 0.9 ) % ( 5.5 ) % Research and development tax credit 0.5 % 2.7 % Share-based compensation 8.7 % 3.4 % Rate changes, including states ( 0.1 ) % 11.0 % Other permanent differences (1) 0.3 % ( 2.5 ) % Effective income tax rate 39.7 % 444.6 % (1) Included in the “Other permanent differences” category in the table above are other permanent items, each below the threshold required for separate presentation in the table. During the year ended December 31, 2024, the Company's benefit from income taxes primarily related to (i) a tax benefit from an increase in the Company's deferred tax asset related to the impairment on its bitcoin holdings and (ii) 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). Income Tax Payments The following table presents income taxes paid (net of refunds received) for the year ended December 31, 2025 (in thousands): Jurisdictions Income Taxes Paid Federal Taxes U.S. $ 7,931 State Taxes Other State Jurisdictions 1,044 Foreign Taxes Netherlands 1,047 Other Foreign Jurisdictions 3,110 Total $ 13,132 117 Deferred tax assets and liabilities Deferred income taxes reflect the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company’s deferred tax assets and liabilities (in thousands) were as follows for the periods indicated: December 31, 2025 2024 Deferred tax assets, net: Net operating loss carryforwards $ 327,200 $ 231,063 Tax credit carryforwards 14,270 6,287 Intangible assets, including capitalized R&D 112,430 88,362 Deferred revenue 1,021 902 Accrued compensation 5,264 5,204 Share-based compensation expense 12,340 14,042 Digital asset impairment losses — 1,165,831 Interest expense carryforward 36,320 24,974 Lease liability 14,363 16,734 Other 6,719 1,854 Deferred tax assets before valuation allowance 529,927 1,555,253 Valuation allowance ( 494 ) ( 494 ) Deferred tax assets, net of valuation allowance 529,433 1,554,759 Deferred tax liabilities: Prepaid expenses and other ( 14,078 ) ( 8,278 ) Digital assets ( 2,417,297 ) — Property and equipment — ( 373 ) Deferred tax on undistributed foreign earnings ( 4,583 ) ( 3,962 ) Right of use asset ( 15,422 ) ( 17,246 ) Total deferred tax liabilities ( 2,451,380 ) ( 29,859 ) Total net deferred tax asset (liability) $ ( 1,921,947 ) $ 1,524,900 Reported as: Non-current deferred tax assets 4,507 1,525,307 Non-current deferred tax liabilities ( 1,926,454 ) ( 407 ) Total net deferred tax asset (liability) $ ( 1,921,947 ) $ 1,524,900 The Company had $ 1.10 billion of U.S. Net operating loss ("NOL") carryforwards as of December 31, 2025 that can be carried forward indefinitely and $ 775.9 million of U.S. NOL carryforwards as of December 31, 2024. In addition, as of December 31, 2025, the Company had $ 14.3 million of tax credits that will expire by 2045. The Company also had $ 7.6 million and $ 5.9 million of foreign NOL carryforwards as of December 31, 2025 and 2024, respectively. As of December 31, 2025, the Company also had gross state NOLs of $ 1.77 billion of which $ 516.6 million will expire between 2034 and 2044, and the remainder can be carried forward indefinitely. The Company’s valuation allowance of $ 0.5 million at both December 31, 2025 and 2024, primarily related to the Company’s deferred tax assets related to foreign tax credits in certain jurisdictions that, in the Company’s present estimation, more likely than not will not be realized. Valuation allowances have been established where the Company has concluded that it is more likely than not that such deferred tax assets are not realizable. The Company’s ability to realize its remaining deferred tax assets as of December 31, 2025 was primarily dependent upon generating sufficient taxable income of the proper character in future years. Management has concluded that there was sufficient positive evidence to support the expected realization of these deferred tax assets primarily due to the fact that the excess of the fair market value of the Company’s bitcoin over the cost basis of the Company’s bitcoin as of December 31, 2025 resulted in a significant built-in gain for tax purposes and was therefore a 118 source of future taxable income that was expected to allow all of the U.S. net deferred tax assets to be realized. As part of the assessment of the amount of the valuation allowance, the Company considered that it had the ability and intent to execute tax planning strategies if necessary, including selling bitcoin with a built-in gain. After consideration of all available evidence, the Company concluded that, as of December 31, 2025, it was more likely than not that its deferred tax assets, with the exception of certain foreign tax credits for which a valuation allowance had been established, would be realized. If the fair market value of bitcoin declines in future periods, the Company would need to assess other sources of forecasted taxable income of proper character, which could result in additional valuation allowances being recorded. If the fair market value of bitcoin declines to the point where the Company's cost basis in its bitcoin exceeds the fair market value, the deferred tax liability with respect to the unrealized gains would be reversed and a deferred tax asset for the unrealized loss would be recorded and the Company may be required to establish a valuation allowance against all of the Company's US federal and state deferred tax assets. As of December 31, 2025 and 2024, the Company had income taxes payable of $ 1.8 million and $ 9.5 million, respectively, recorded in "Accounts payable, accrued expenses, and operating lease liabilities" in the Company’s Consolidated Balance Sheets. As of December 31, 2025 and 2024, the Company had income taxes receivable of $ 4.5 million and $ 7.1 million, respectively, recorded in " Prepaid expenses and other current assets" in the Company's Consolidated Balance Sheets. As of December 31, 2025, the Company had gross unrecognized income tax benefits of $ 13.4 million, including accrued interest, $ 3.0 million of which was recorded in “Other long-term liabilities” and $ 10.4 million of which was recorded in “Deferred tax liability” in the Company’s Consolidated Balance Sheets. The change in unrecognized income tax benefits (in thousands) is presented in the table below for the periods indicated: 2025 2024 2023 Unrecognized income tax benefits at beginning of year $ 10,053 $ 7,898 $ 5,811 Increase (decrease) related to positions taken in prior period 967 216 1458 Increase related to positions taken in current period 2,380 2,898 930 Decrease related to settlement with tax authorities — — — Decrease related to expiration of statute of limitations ( 373 ) ( 959 ) ( 301 ) Unrecognized income tax benefits at end of year 13,027 10,053 7,898 Accrued interest 348 195 352 Gross unrecognized income tax benefits at end of year $ 13,375 $ 10,248 $ 8,250 If recognized, $ 13.4 million of the gross unrecognized income tax benefits as of December 31, 2025 would impact the Company’s effective tax rate. The Company recognizes estimated accrued interest related to unrecognized income tax benefits in the (benefit from) provision for income taxes. During the years ended December 31, 2025, 2024, and 2023, the Company released or recognized an immaterial amount of accrued interest. The amount of accumulated accrued interest related to the above unrecognized income tax benefits was approximately $ 0.3 million and $ 0.2 million as of December 31, 2025 and 2024, respectively. The Company files tax returns in numerous foreign countries as well as in the United States, and its tax returns may be subject to audit by tax authorities in all jurisdictions in which it files. Each country has its own statute of limitations for assessing additional tax liabilities. As of December 31, 2025, the Company’s U.S. federal income tax return for tax year 2022 is under audit. The Company's U.S. federal income tax returns for tax years 2022 and forward remain subject to potential examination. However, due to the Company’s use of state NOL carryovers in the United States, state tax authorities may attempt to reduce or fully offset the amount of state NOL carryovers from tax years ended 2011 and forward that the Company utilized in later tax years. The Company’s major foreign tax jurisdictions and the tax years that remain subject to potential examination are Italy and Poland for tax years 2021 and forward; and Spain, Germany, and the United Kingdom for tax years 2022 and forward. To date there have been no material audit assessments related to any of the applicable foreign jurisdictions. The Company previously disclosed that, given the potential magnitude of the unrealized gain on its digital assets, the Company expected that it could become subject to CAMT in future tax years. On September 30, 2025, the Treasury and IRS issued Interim Guidance which, in relevant part, clarifies that a corporation may disregard unrealized gains and losses on its digital asset holdings when computing AFSI (if such assets are measured at fair value for financial statement income purposes but are not marked to market for regular tax purposes) for purposes of determining whether it is subject to the CAMT. The Treasury and IRS intend to issue revised proposed regulations similar to the Interim Guidance. Pursuant to the Interim Guidance, the Company plans to exclude any unrealized gains and losses on its bitcoin holdings from the 119 calculation of its AFSI for purposes of determining whether the Company is subject to CAMT. As a result, the Company does not expect to become subject to CAMT due to unrealized gains on its bitcoin holdings, if any . (11) Share-based Compensation Stock Incentive Plans On May 24, 2023, the Company’s stockholders approved the Company’s 2023 Equity Plan, which became effective as of such date. No awards may be granted under the 2023 Equity Plan more than 10 years after the 2023 Equity Plan’s effective date. No new awards will be granted under the Company’s 2013 Equity Plan, though awards previously granted under the 2013 Equity Plan remain outstanding in accordance with their terms. Under the Stock Incentive Plans, the Company’s employees, officers, directors, and other eligible participants may be (with respect to the 2023 Equity Plan) and have been (with respect to both the 2023 Equity Plan and the 2013 Equity Plan) awarded various types of share-based compensation, including options to purchase shares of the Company’s class A common stock, restricted stock units, and other stock-based awards. Additionally, under the 2023 Equity Plan, awards may be and have been granted that are subject to the achievement of one or more performance measures established by the Company’s Board or a duly authorized committee thereof. Any shares issued under the Stock Incentive Plans may consist in whole or in part of authorized but unissued shares or treasury shares. On January 21, 2025, the Company’s stockholders approved the 2024 Plan Amendment. The 2024 Plan Amendment amended the 2023 Equity Plan to provide that, beginning on December 20, 2024, each non-employee director who is newly appointed to the Board shall automatically receive, upon the date of such director’s initial appointment to the Board, equity awards having an aggregate fair value equal to $ 2,000,000 , one-half of which ($ 1,000,000 ) will consist of a non-statutory stock option and one-half of which ($ 1,000,000 ) will consist of restricted stock units, with each award vesting annually in equal installments over four years . An aggregate of up to 19,327,030 shares of the Company’s class A common stock were initially authorized for issuance under the 2023 Equity Plan, comprised of (i) 2,000,000 shares of the Company’s class A common stock authorized under the 2023 Equity Plan and (ii) up to an aggregate of 17,327,030 shares of the Company’s class A common stock consisting of: (a) the shares of class A common stock reserved for issuance under the 2013 Equity Plan that remained available for grant as of May 23, 2023, and (b) shares of class A common stock subject to awards granted under the 2013 Equity Plan that were outstanding as of May 23, 2023 and which subsequently expire, terminate or are otherwise surrendered, cancelled or forfeited or repurchased by the Company at their original issuance price pursuant to a contractual repurchase right, including shares subject to awards granted under the 2013 Equity Plan that are delivered (either by actual delivery, attestation or net exercise) to the Company by a participant to (x) purchase shares upon the exercise of such award or (y) satisfy tax withholding obligations with respect to such awards, including shares retained from the award creating the tax obligation, subject, in the case of incentive stock options, to any limitations under the Internal Revenue Code of 1986, as amended. As of December 31, 2025, there were 3,142,799 shares of class A common stock reserved and available for future issuance under the 2023 Equity Plan. In determining related share-based compensation expense for any award under the Stock Incentive Plans, the Company has made an accounting policy election to account for forfeitures of awards as they occur and therefore share-based compensation expense presented below has not been adjusted for any estimated forfeitures. Stock option awards Stock options granted under the Stock Incentive Plans must have an exercise price equal to at least the fair market value of the Company’s class A common stock on the date of grant, become exercisable as established by the Board or the Compensation Committee, and expire no later than 10 years following the date of grant. The Company recognizes share-based compensation expense associated with such stock option awards on a straight-line basis over the award’s requisite service period (generally, the vesting period). With the exception of annual grants of stock option awards to non-employee members of the Company’s Board under the 2023 Equity Plan, which vest in full after one year , the stock option awards granted to date vest in equal annual installments over an approximately four-year vesting period (unless accelerated in connection with a change in control event under specified conditions or the death of the participant, in each case as set forth in the applicable option agreement or otherwise in accordance with provisions of the Stock Incentive Plans). Share-based compensation expense related to stock option awards is based on the fair value of the stock option awards on the date of grant, as estimated using the Black-Scholes valuation model. The Black-Scholes valuation model requires the input of certain management assumptions, including the expected term, expected stock price volatility, risk-free interest rate, and expected dividend yield. The Company estimates the term over which option holders are expected to hold their stock options by using the simplified method for “plain-vanilla” stock option awards because the Company’s stock option exercise history does not provide a reasonable basis to compute the expected term for stock options granted under the Stock 120 Incentive Plans. The Company primarily relies on historical stock price volatility using a simple average calculation method to estimate the expected stock price volatility over the expected term. The volatility assumption may be further adjusted to incorporate implied volatility if such impact would be significant to the overall fair value estimate. The risk-free interest rate is based on U.S. Treasury securities with terms that approximate the expected term of the stock options. The expected dividend yield is zero , as the Company has not previously declared cash dividends and does not currently intend to declare cash dividends on its class A common stock in the foreseeable future. These assumptions are based on management’s best judgment, and changes to these assumptions could materially affect the fair value estimates and amount of share-based compensation expense recognized. As of December 31, 2025, there were options to purchase 3,535,016 shares of class A common stock outstanding under the Stock Incentive Plans. The following table summarizes the Company’s stock option activity (in thousands, except per share data and years) for the periods indicated: Stock Options Outstanding Shares Weighted Average Exercise Price Per Share Aggregate Intrinsic Value Weighted Average Remaining Contractual Term (Years) Balance as of January 1, 2023 15,769 $ 28.83 Granted 368 29.01 Exercised ( 1,756 ) 17.38 $ 36,636 Forfeited/Expired ( 1,445 ) 44.15 Balance as of December 31, 2023 12,936 28.68 Granted 97 163.16 Exercised ( 7,826 ) 23.55 $ 807,096 Forfeited/Expired ( 251 ) 45.58 Balance as of December 31, 2024 4,956 38.56 Granted 64 282.46 Exercised ( 1,121 ) 37.61 $ 353,207 Forfeited/Expired ( 364 ) 44.94 Balance as of December 31, 2025 3,535 $ 42.63 Exercisable as of December 31, 2025 2,744 $ 37.93 $ 313,658 4.8 Expected to vest as of December 31, 2025 791 $ 58.93 81,418 6.8 Total 3,535 $ 42.63 $ 395,076 5.2 Stock options outstanding as of December 31, 2025 are comprised of the following range of exercise prices per share (in thousands, except per share data and years): Stock Options Outstanding at December 31, 2025 Range of Exercise Prices per Share Shares Weighted Average Exercise Price Per Share Weighted Average Remaining Contractual Term (Years) $ 12.45 - $ 20.00 909 $ 15.35 3.5 $ 20.01 - $ 30.00 868 $ 24.48 6.8 $ 30.01 - $ 40.00 15 $ 30.16 7.4 $ 40.01 - $ 50.00 894 $ 41.19 5.9 $ 50.01 - $ 70.00 718 $ 69.12 4.0 $ 70.01 -$ 220.00 77 $ 162.10 8.3 $ 220.01 - $ 300.00 36 $ 261.38 9.1 $ 300.01 - $ 364.20 11 $ 364.20 9.0 $ 364.21 and over 7 $ 371.27 9.5 Total 3,535 $ 42.63 5.2 121 An aggregate of 1,380,198 , 1,727,360 , and 2,606,250 stock options with an aggregate grant date fair value of $ 38.7 million, $ 41.3 million, and $ 51.6 million vested during the years ended December 31, 2025, 2024, and 2023, respectively. The weighted average grant date fair value of stock option awards using the Black-Scholes valuation model was $ 282.46 , $ 114.18 , and $ 19.49 for each share subject to a stock option granted during the years ended December 31, 2025, 2024, and 2023, respectively, based on the following assumptions: Years Ended December 31, 2025 2024 2023 Expected term of awards in years 5.5 - 6.3 5.5 - 6.3 5.5 - 6.3 Expected volatility 83.8 % - 91.5 % 75.1 %- 82.8 % 70.6 % - 74.1 % Risk-free interest rate 3.8 % - 4.4 % 4.2 % - 4.5 % 3.7 % - 4.4 % Expected dividend yield 0.0 % 0.0 % 0.0 % The Company recognized approximately $ 20.4 million, $ 39.4 million, and $ 44.8 million in share-based compensation expense for the years ended December 31, 2025, 2024, and 2023, respectively, from stock options granted under the Stock Incentive Plans. As of December 31, 2025, there was approximately $ 19.3 million of total unrecognized share-based compensation expense related to unvested stock options, which the Company expects to recognize over a weighted average vesting period of approximately 2.4 years. Share-settled restricted stock units Share-settled restricted stock units granted under the Stock Incentive Plans entitle recipients to receive a number of shares of the Company’s class A common stock over a vesting period, as specified in the applicable restricted stock unit agreement. Although the Company may in its sole discretion elect to pay fully or partially in cash in lieu of settling solely in shares, it does not currently intend to do so. Share-based compensation expense related to share-settled restricted stock units is based on the fair value of the Company’s class A common stock on the date of grant. The Company recognizes share-based compensation expense associated with such share-settled restricted stock unit awards on a straight-line basis over the award’s requisite service period (generally, the vesting period). With the exception of annual grants of share-settled restricted stock unit awards to non-employee members of the Board under the 2023 Equity Plan, which vest in full after one year , the share-settled restricted stock unit awards granted to date vest in equal annual installments over a four-year period (unless accelerated in connection with a change in control event under specified conditions or the death of the participant, in each case as set forth in the applicable restricted stock unit agreement or otherwise in accordance with provisions of the Stock Incentive Plan or applicable restricted stock unit agreement). As of December 31, 2025, there were 731,178 share-settled restricted stock units outstanding under the Stock Incentive Plans. The following table summarizes the Company’s share-settled restricted stock unit activity (in thousands) for the periods indicated: 122 Share-Settled Restricted Stock Units Outstanding Units Aggregate Intrinsic Value Balance as of January 1, 2023 1,196 Granted 1,229 Vested ( 365 ) $ 14,817 Forfeited ( 208 ) Balance as of December 31, 2023 1,852 Granted 328 Vested ( 571 ) $ 112,476 Forfeited ( 378 ) Balance as of December 31, 2024 1,231 Granted 176 Vested ( 418 ) $ 142,985 Forfeited ( 258 ) Balance as of December 31, 2025 731 Expected to vest as of December 31, 2025 731 $ 111,102 During the year ended December 31, 2025, the Company used a sell-to-cover method, under which all vested shares are issued and a portion is sold in the open market to satisfy employee payroll tax obligations. During the year ended December 31, 2025, 418,306 share-settled restricted stock units having an aggregate grant date fair value of of $ 23.4 million vested and were issued; of these issued shares, 136,608 shares were sold in the open market to satisfy employee tax obligations. During the year ended December 31, 2024, 570,980 share-settled restricted stock units having an aggregate grant date fair value of $ 19.0 million vested, and 25,060 shares were withheld to satisfy tax obligations, resulting in 545,920 issued shares. During the year ended December 31, 2023, 365,020 share-settled restricted stock units having an aggregate grant date fair value of $ 13.5 million vested, and 104,400 shares were withheld to satisfy tax obligations, resulting in 260,620 issued shares. The weighted average grant date fair value of share-settled restricted stock units granted during the years ended December 31, 2025, 2024, and 2023 was $ 271.72 , $ 146.50 and $ 29.28 , respectively, based on the fair value of the Company’s class A common stock. The Company recognized approximately $ 24.5 million , $ 24.2 million, and $ 17.4 million in share-based compensation expense for the years ended December 31, 2025, 2024, and 2023, respectively, from share-settled restricted stock units granted under the Stock Incentive Plans. As of December 31, 2025, there was approximately $ 59.6 million of total unrecognized share-based compensation expense related to unvested share-settled restricted stock units, which the Company expects to recognize over a weighted average vesting period of approximately 2.8 years. Share-settled performance stock units During the years ended December 31, 2025, 2024, and 2023, the Company granted performance stock units under the 2023 Equity Plan. Performance stock units entitle recipients to receive a number of shares of the Company’s class A common stock at a specified date in the future based on achievement of one or more performance measures, as specified in the applicable performance stock unit agreement. Although the Company may in its sole discretion elect to pay fully or partially in cash in lieu of settling solely in shares, it does not currently intend to do so. The vesting of each performance stock unit granted is subject to the Company’s achievement of a relative total shareholder return (“TSR”) performance goal over a three-year performance period with the number of performance stock units granted representing the number of performance stock units that would vest based on target performance. As more fully specified in the applicable grant agreements, the number of performance stock units that will vest will be based on the percentile ranking of the Company’s TSR over the three-year performance period as compared to the TSR of the members of the Nasdaq Composite Index over the same period (the “TSR Goal”), with the payout factor ranging from 0 % to 200 % of the number of performance stock units granted. The performance stock units, to the extent vested, will vest on the date the Compensation Committee of the Board certifies the level of achievement of the TSR Goal. Vesting of the performance stock units is also generally subject to the provision of service through the vesting date of the award (unless accelerated in connection with a termination following a change in control event as set forth in the applicable performance stock unit agreement or otherwise in accordance with provisions of the 2023 Equity Plan or applicable performance stock unit agreement). 123 The TSR Goal is considered a “market condition” under ASC 718, Compensation—Stock Compensation. The Company uses a Monte Carlo simulation model to determine the grant date fair value of performance awards with a market condition. The Monte Carlo simulation takes into consideration the assumptions noted below, in addition to the probability that the market condition will be achieved based on predicted stock price paths compared to peer companies in the Nasdaq Composite Index. The Company did not grant any performance awards prior to 2024. The weighted average grant date fair value of performance stock units using the Monte-Carlo simulation model was $ 445.66 and $ 313.86 for each performance stock unit granted during the years ended December 31, 2025 and 2024, respectively, based on the following assumptions: Years ending December 31, 2025 2024 Expected term of awards in years 3.0 3.0 Expected volatility 99.2 % 92.67 % - 95.50 % Risk-free interest rate 3.9 % 4.1 %- 4.4 % Expected dividend yield 0.0 % 0.0 % Since the Company accounts for forfeitures as they occur, as long as the performance stock unit recipient provides service to the Company during the requisite service period, share-based compensation expense associated with the grant date fair value of the performance stock units is recognized ratably over the performance period, regardless of the Company’s actual level of achievement against the TSR Goal. As of December 31, 2025, there were 238,508 performance stock units outstanding under the 2023 Equity Plan. The following table summarizes the Company’s performance stock unit activity (in thousands) for the period indicated: Share-Settled Performance Stock Units Outstanding Units Aggregate Intrinsic Value Balance as of January 1, 2023 — Granted 267 Vested — $ — Forfeited ( 13 ) Balance as of December 31, 2023 254 Granted 60 Vested — Forfeited ( 7 ) Balance as of December 31, 2024 307 Granted 24 Vested — $ — Forfeited ( 92 ) Balance as of December 31, 2025 239 Expected to vest as of December 31, 2025 239 $ 67,831 No performance stock units vested during the years ended December 31, 2025 or 2024. For the years ended December 31, 2025 and 2024, the Company recognized approximately $ 6.6 million and $ 8.4 million, respectively, in share-based compensation expense from performance stock units granted under the 2023 Equity Plan. As of December 31, 2025, there was approximately $ 13.7 million of total unrecognized share-based compensation expense related to unvested performance stock units, which the Company expects to recognize over a weighted average vesting period of approximately 1.7 years. Other stock-based awards and cash-settled restricted stock units From time to time the Company has granted “other stock-based awards” and “cash-settled restricted stock units” under the 2013 Equity Plan. Other stock-based awards are similar to stock options, and cash-settled restricted stock units are similar to the Company’s share-settled restricted stock units, except in each case these awards are settled in cash only and not in shares of the Company’s class A common stock. Due to their required cash settlement feature, these awards are classified 124 as liabilities in the Company’s Consolidated Balance Sheets and the fair value of the awards is remeasured each quarterly reporting period. The Company recognized a reduction of approximately $ 1.1 million and an expense of approximately $ 2.8 million, respectively, in share-based compensation expense from other stock-based awards and cash-settled restricted stock units for the years ended December 31, 2025 and 2024. During the year ended December 31, 2023, the Company recognized an expense of approximately $ 3.2 million in share-based compensation expense from other stock-based awards and cash-settled restricted stock units. As of December 31, 2025, there were no other stock-based awards or cash-settled restricted stock units outstanding and there was no unrecognized share-based compensation expense related to other stock-based awards and cash-settled restricted stock units. 2021 ESPP The Company also maintains the 2021 ESPP. The purpose of the 2021 ESPP is to provide eligible employees of the Company and certain of its subsidiaries with opportunities to purchase shares of the Company’s class A common stock in 6-month offering periods commencing on each March 1 and September 1. An aggregate of 1,000,000 shares of the Company’s class A common stock has been authorized for issuance under the 2021 ESPP. During the years ended December 31, 2025, 2024, and 2023, 38,806 shares, 93,668 shares, and 198,560 shares, respectively, of class A common stock were issued in connection with the 2021 ESPP. As of December 31, 2025, 463,596 shares of the Company’s class A common stock remained available for issuance under the 2021 ESPP. Unless otherwise determined by the Board, shares are purchased at a price equal to 85 % of the lesser of the closing price of the Company’s class A common stock on the first or last business day of the offering period, respectively. Share-based compensation expense is based on the grant date fair value, which consists of the intrinsic value of the 15 % discounted share purchase rights and the fair value of the look-back provision using the Black-Scholes valuation model, recognized on a straight-line basis over the offering period. The grant date is the offering period commencement date. During the years ended December 31, 2025, 2024, and 2023, the Company recognized approximately $ 2.9 million, $ 2.2 million and $ 1.9 million, respectively, in share-based compensation expense related to the 2021 ESPP. As of December 31, 2025, there was approximately $ 0.6 million of total unrecognized share-based compensation expense related to the 2021 ESPP, which the Company expects to recognize over a period of approximately 0.2 years. Tax Benefits Related to Equity Plans The following table summarizes the tax (benefit) expense related to the Company’s equity plans (in thousands) for the periods indicated: Years Ended December 31, 2025 2024 2023 Tax (benefit) expense related to: Share-based compensation expense $ ( 8,806 ) $ ( 15,652 ) $ ( 12,874 ) Exercises of stock options and vesting of share-settled restricted stock units ( 92,122 ) ( 216,477 ) ( 3,367 ) Total tax benefit related to the Company's equity plans $ ( 100,928 ) $ ( 232,129 ) $ ( 16,241 ) (12) Redeemable Preferred Stock The STRF Stock, STRC Stock, STRE Stock, STRK Stock and STRD Stock discussed in this note below are classified within mezzanine equity, as certain events that could cause such shares to become redeemable are not solely within the control of the Company. Issuances of the Preferred Stock are recognized based on proceeds received, net of issuance costs and are not accreted to its redemption value unless it is probable that the Preferred Stock will become redeemable. The Company has evaluated the probability of a redemption in connection with a Fundamental Change (defined below). Based on current facts and circumstances and the Company’s current and projected capital structure, management has determined that the occurrence of a Fundamental Change is remote. Accordingly, the Company concluded that accretion to the redemption value of the Preferred Stock is not required as of the reporting date. On July 7, 2025, the Company filed a certificate of amendment (the “STRK Amendment”) with the Secretary of State of the State of Delaware to the STRK Stock certificate of designations so that, together with other conforming changes, the STRK Stock has a liquidation preference that is initially $ 100 per share; provided, however, that, effective immediately after the close of business on each business day on or after July 7, 2025 (and, on or after July 7, 2025, if applicable, during the course of a business day on which any sale transaction to be settled by the issuance of STRK Stock is executed, from the exact time of the first such sale transaction during such business day until the close of business of such business day), the liquidation preference per share of STRK Stock will be adjusted to be the greatest of (i) the stated amount of $ 100 per 125 share of STRK Stock; (ii) in the case of any business day on or after July 7, 2025 with respect to which Strategy has, on such business day or any business day during the ten trading day period preceding such business day, executed any sale transaction to be settled by the issuance of STRK Stock, an amount equal to the Last Reported Sale Price (as defined in the STRK Stock certificate of designations) per share of STRK Stock on the trading day immediately before such business day; and (iii) the arithmetic average of the Last Reported Sale Prices per share of STRK Stock for each trading day of the ten consecutive trading days immediately preceding such business day; provided that, for purposes of the definition of liquidation preference, the execution of the STRK Amendment will be treated as an execution of a sale transaction settled by the issuance of STRK Stock. See Note 9, Commitments and Contingencies. The Company intends to seek common stockholder ratification of the STRK Amendment. Until such ratification has been completed, investors should treat the STRK Amendment as being subject to ratification. The following table summarizes the key terms and provisions of each series of Preferred Stock, and information relating to each series of Preferred Stock as of December 31, 2025. The summaries below are qualified in their entirety by the full text of the applicable certificate of designations: STRF Stock STRC Stock STRE Stock STRK Stock STRD Stock Trading Symbol STRF STRC STRE STRK STRD Stock Exchange NASDAQ NASDAQ Luxembourg Stock Exchange NASDAQ NASDAQ Initial Issuance Date March 25, 2025 July 29, 2025 November 13, 2025 February 5, 2025 June 10, 2025 Initial Shares Issued 8,500,000 28,011,111 7,750,000 7,300,000 11,764,700 Initial Public Offering Price per share $ 85.00 $ 90.00 € 80.00 $ 80.00 $ 85.00 Initial Net Proceeds (in thousands) $ 710,873 $ 2,473,800 € 608,734 $ 563,226 $ 979,486 Initial Issuance Costs (in thousands) $ 11,627 $ 47,200 € 11,266 $ 20,774 $ 20,514 Shares Issued as of December 31,2025 12,839,689 29,587,063 7,750,000 13,981,948 14,024,221 Par Value Per Share $ 0.001 $ 0.001 € 0.001 $ 0.001 $ 0.001 Liquidation Preference Per Share as of December 31, 2025 (1) $ 106.17 $ 100.00 € 100.00 $ 100.00 $ 100.00 Stated Amount $ 100.00 $ 100.00 € 100.00 n/a $ 100.00 Dividend Rate Per Annum as of December 31, 2025 (2) 10 % 10.75 % 10 % 8 % 10 % Cumulative Dividends Yes Yes Yes Yes No Dividend Payment Method Cash Cash Cash Cash, class A common stock, or a combination of both Cash Conversion Privilege None None None Convertible to class A common stock at any time None Initial Conversion Rate n/a n/a n/a 0.1 shares of class A common stock per share of STRK Stock n/a Redemption Rights (3) Yes Yes Yes Yes Yes Repurchase Rights (4) Yes, upon a fundamental change Yes, upon a fundamental change Yes, upon a fundamental change Yes, upon a fundamental change Yes, upon a fundamental change Board Rights (5) Yes No No Yes No (1) The liquidation preference per share of STRF Stock, STRC Stock, STRE Stock and STRD Stock generally approximates to the greater of the trading price per share of the applicable series of Preferred Stock or $ 100 (or, in the case of STRE Stock, € 100 ) as set forth in the applicable certificate of designations. As of December 31, 2025, the liquidation preference per share of STRK Stock was $ 100.00 . See Note 9, Commitments and Contingencies – Contingencies - Shareholder Action, for additional information. (2) Shares of STRC Stock accumulate cumulative dividends at a variable rate per annum on the stated amount thereof. The Company has the right, at its sole and absolute discretion, to adjust the regular dividend rate applicable to a regular dividend period in the manner set forth in the STRC Stock certificate of designations. The monthly regular dividend rate per annum on STRC Stock for the month ended December 31, 2025 was 10.75 %. On December 31, 2025, the Company increased the monthly regular dividend rate per annum on STRC Stock from 10.75 % to 11.00 % effective for monthly periods commencing on or after January 1, 2026. See Note 18, Subsequent Events, for additional information. 126 (3) As set forth in the applicable certificate of designations, upon the occurrence of certain events, the Company will have the right, at its election, to redeem all, and not less than all, of the applicable series of Preferred Stock for cash at a redemption price calculated in accordance with the applicable certificate of designations. The Company also has the right, to redeem (subject to certain limitations set forth in the STRC Stock certificate of designations) all or any whole number of issued and outstanding shares of STRC Stock at any time, and from time to time, on any redemption date, at a cash redemption price per share of $ 101 (or such higher amount as may be chosen in the Company’s sole discretion), plus accumulated and unpaid regular dividends, if any, thereon to, and including, the redemption date. (4) If a “Fundamental Change” (as defined in the applicable certificate of designations) occurs, then (subject to a limited exception in the case of STRK Stock), holders of each series of Preferred Stock will have the right to require the Company to repurchase some or all of their shares of the applicable series of Preferred Stock for cash at a repurchase price calculated in accordance with the applicable certificate of designations. (5) Holders of STRC Stock, STRE Stock and STRD Stock do not have the right to elect any directors to the Company’s board of directors upon non-payment of regular dividends. However, with respect to STRK Stock and STRF Stock, if (in each case, subject to the applicable certificate of designations) less than the full amount of accumulated and unpaid regular dividends on the applicable series of Preferred Stock have been declared and paid by the following regular dividend payment date in respect of each of (i) four or more consecutive regular dividend payment dates; and (ii) eight or more consecutive regular dividend payment dates, then, in each case, subject to certain limitations, the authorized number of the Company’s directors will automatically increase by one (or the Company will vacate the office of one of its directors) and the holders of the applicable series of Preferred Stock, voting together as a single class with the holders of each class or series of “Voting Parity Stock” (as defined in the applicable certificate of designations) with similar voting rights that are then exercisable, will have the right to elect one director to fill such directorship at the Company’s next annual meeting of stockholders (or, if earlier, at a special meeting of the Company’s stockholders called for such purpose). If, thereafter, all accumulated and unpaid regular dividends on the outstanding shares of the applicable series of Preferred Stock have been paid in full, then this right will terminate. Upon the termination of such right with respect to the applicable series of Preferred Stock and all other outstanding Voting Parity Stock, if any, the term of office of each person then serving as a director pursuant to this right will immediately and automatically terminate (and, if the authorized number of the Company’s directors was increased by one or two, as applicable, in connection with such election, then the authorized number of the Company’s directors will automatically decrease by one or two, as applicable). At-the-Market Offerings of Preferred Stock The Company is party to a sales agreement (the “Omnibus Sales Agreement”) with TD Securities (USA) LLC, Barclays Capital Inc., The Benchmark Company, LLC, BTIG, LLC, Canaccord Genuity LLC, Cantor Fitzgerald & Co., Clear Street LLC, Compass Point Research & Trading, LLC, H.C. Wainwright & Co., LLC, Keefe, Bruyette & Woods, Inc., Maxim Group LLC, Mizuho Securities USA LLC, Morgan Stanley & Co. LLC, Santander US Capital Markets LLC, SG Americas Securities, LLC and TCBI Securities, Inc., doing business as Texas Capital Securities, as sales agents (each an “Agent” and collectively, the “Agents”), pursuant to which the Company may from time to time through the Agents issue and sell shares of STRF Stock, STRC Stock, STRK Stock, STRD Stock, class A common stock and any additional series of preferred stock as may be designated by the Company from time to time in the future. Refer to Note 14, At-the-Market Offerings, for additional information regarding the Company’s at-the-market offering programs with respect to the Preferred Stock. Dividends on Preferred Stock Dividends on the Company's Preferred Stock are payable when, as and if declared by the Board, out of funds legally available for their payment: • in the case of STRF Stock, STRE Stock, STRK Stock, and STRD Stock, quarterly in arrears on March 31, June 30, September 30 and December 31 of each year; and • in the case of STRC Stock, monthly in arrears. During the year ended December 31, 2025, the Company declared and paid the following dividends : 127 Preferred Stock Cash Dividends Paid (in millions) STRF Stock $ 86.8 STRC Stock 122.1 STRE Stock (1) 12.0 STRK Stock 87.8 STRD Stock 72.7 Total Cash Dividends Paid $ 381.4 (1) Reflects the Euro to USD exchange rate in effect at the time of the applicable STRE Stock dividend payment. On December 31, 2025, the Company’s board of directors declared a cash dividend of $ 0.916666667 per share, payable on January 31, 2026 (or, if such date is not a business day, the next succeeding business day) to stockholders of record as of 5:00 p.m., New York City time, on January 15, 2026. As of December 31, 2025, the Company recorded $ 27.1 million relating to these STRC dividends, which is reflected as Preferred dividends payable on the December 31, 2025 consolidated balance sheet. Refer to Note 18, Subsequent Events, for additional information on the STRC Stock monthly regular dividend rate per annum and dividend declarations. (13) Basic and Diluted (Loss) Earnings per Share Basic earnings (loss) per common share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average common stock outstanding during the respective period. Net income (loss) attributable to common stockholders is computed by deducting both the dividends declared in the period on the Company’s redeemable preferred stock and the dividends accrued for the period on the Company’s redeemable preferred stock, if any, from net income (loss). The Company has two classes of common stock: class A common stock and class B common stock. Holders of class A common stock generally have the same rights, including rights to dividends, as holders of class B common stock, except that holders of class A common stock have one vote per share while holders of class B common stock have ten votes per share. Each share of class B common stock is convertible at any time, at the option of the holder, into one share of class A common stock. As such, basic and fully diluted earnings per common share for class A common stock and for class B common stock are the same. The Company has never declared or paid any cash dividends on either class A or class B common stock. As of December 31, 2025, the Company had five series of preferred stock outstanding: STRF Stock, STRC Stock, STRE Stock, STRK Stock, and STRD Stock. Holders of the Preferred Stock do not have voting rights, except for rights to appoint a director to the Company’s Board upon certain failures to pay dividends on STRF Stock and STRK Stock, and have rights to dividends and other rights as discussed in Note 12, Redeemable Preferred Stock, to the Consolidated Financial Statements. Additionally, each share of the STRK Stock is convertible at any time, at the option of the holder, into 0.1 shares of class A common stock. The impact from potential shares of common stock on the diluted earnings per common share calculation are included when dilutive. Potential shares of class A common stock issuable upon the exercise of outstanding stock options, the vesting of restricted stock units and performance stock units considered probable of achievement, and in connection with the 2021 ESPP are computed using the treasury stock method. Potential shares of class A common stock issuable upon conversion of the Convertible Notes and upon conversion of the STRK Stock are computed using the if-converted method. In computing diluted earnings per common share, the Company first calculates the earnings per incremental share (“EPIS”) for each class of potential shares of common stock and ranks the classes from the most dilutive (i.e., lowest EPIS) to the least dilutive (i.e., highest EPIS). Basic earnings per common share is then adjusted for the effect of each class of shares, in sequence and cumulatively, until a particular class no longer produces further dilution. The following table sets forth the computation of basic and diluted (loss) earnings per share (in thousands, except per share data) for the periods indicated: 128 Years Ended December 31, 2025 2024 2023 Numerator: Net (loss) income - Basic $ ( 3,848,152 ) $ ( 1,166,661 ) $ 429,121 Dividends on perpetual preferred stock ( 381,367 ) — — Net (loss) income attributable to common shareholders $ ( 4,229,519 ) $ ( 1,166,661 ) $ 429,121 Effect of dilutive shares on net (loss) income: Interest expense on 2025 Convertible Notes, net of tax — — 5,648 Interest expense on 2027 Convertible Notes, net of tax — — 2,874 Net (loss) income - Diluted $ ( 4,229,519 ) $ ( 1,166,661 ) $ 437,643 Denominator: Weighted average common shares of class A common stock 258,020 172,909 117,066 Weighted average common shares of class B common stock 19,640 19,640 19,640 Total weighted average shares of common stock outstanding - Basic 277,660 192,549 136,706 Effect of dilutive shares on weighted average common shares outstanding: Stock options — — 4,613 Restricted stock units — — 546 Performance stock units — — 130 Employee stock purchase plan — — 5 2025 Convertible Notes — — 16,332 2027 Convertible Notes — — 7,330 Total weighted average shares of common stock outstanding - Diluted 277,660 192,549 165,662 (Loss) earnings per share: Basic (loss) earnings per share (1) $ ( 15.23 ) $ ( 6.06 ) $ 3.14 Diluted (loss) earnings per share (1) $ ( 15.23 ) $ ( 6.06 ) $ 2.64 (1) Basic and fully diluted (loss) earnings per share for class A and class B common stock are the same in 2024 and 2025. 129 The following weighted average shares of potential class A common stock were excluded from the diluted (loss) earnings per share calculation because their impact would have been anti-dilutive (in thousands): Years Ended December 31, 2025 2024 2023 Stock options 4,186 6,926 5,896 Restricted stock units 968 1,647 297 Performance stock units 568 585 — Employee stock purchase plan 18 16 52 2025 Convertible Notes — 4,998 — 2027 Convertible Notes 709 7,330 — 2028 Convertible Notes 5,513 1,558 — 2029 Convertible Notes 4,462 497 — 2030A Convertible Notes 5,342 4,358 — 2030B Convertible Notes 3,961 — — 2031 Convertible Notes 2,594 2,046 — 2032 Convertible Notes 3,915 2,108 — Convertible preferred stock - STRK 1,041 — — Total 33,277 32,069 6,245 (14) At-the-Market Offerings From time to time, the Company has entered into sales agreements with agents pursuant to which the Company could issue and sell shares of its Preferred Stock and class A common stock through at-the-market equity offering programs. Pursuant to these agreements, the Company agreed to pay the sales agents commissions for their services in acting as agents with respect to the sale of shares through the at-the-market equity offering programs and also agreed to provide the sales agents with reimbursement for certain incurred expenses and customary indemnification and contribution rights. As of December 31, 2025, the Company entered into the Omnibus Sales Agreement, pursuant to which the Company may from time to time through the Agents issue and sell shares of STRF Stock, STRC Stock, STRK Stock, STRD Stock, class A common stock and any additional series of preferred stock as may be designated by the Company from time to time in the future. The following table sets forth total shares sold and net proceeds (net of sales commissions and expenses) received from shares sold under the Company's at-the-market equity offering programs for the years ended December 31, 2025, 2024 and 2023: 130 Year Ended December 31, 2025 2024 2023 Number of shares sold pursuant to at-the-market offerings: STRF Stock ATMs 4,339,689 n/a n/a STRC Stock ATMs 1,575,952 n/a n/a STRK Stock ATMs 6,681,948 n/a n/a STRD Stock ATMs 2,259,521 n/a n/a Class A common stock ATMs 57,331,466 52,308,512 50,978,900 Net proceeds received from shares sold pursuant to at-the-market offerings (in thousands): STRF Stock ATMs $ 479,674 n/a n/a STRC Stock ATMs 157,221 n/a n/a STRK Stock ATMs 663,349 n/a n/a STRD Stock ATMs 183,998 n/a n/a Class A common stock ATMs 16,247,607 16,329,857 2,020,089 Total $ 17,731,849 $ 16,329,857 $ 2,020,089 The sales commissions and expenses related to sales of class A common stock described above are considered direct and incremental costs and are charged against “Additional paid-in capital” on the Consolidated Balance Sheet in the period in which the corresponding shares are issued and sold. (15) Employee Benefit Plan The Company sponsors a benefit plan to provide retirement benefits for its employees, known as the MicroStrategy 401(k) Savings Plan (the “401(k) Plan”). Participants may make voluntary contributions to the 401(k) Plan of up to 75 % (and prior to September 30, 2022, up to 50 %) of their annual base pre-tax compensation, cash bonuses, and commissions not to exceed the federally determined maximum allowable contribution amounts. Participants may designate all or a portion of the 401(k) Plan elective deferral contributions as Roth elective deferral contributions instead of pre-tax elective deferral contributions. The 401(k) Plan permits for discretionary Company contributions. The Company makes a matching contribution to each 401(k) Plan participant in the amount of 50 % of the first 12 % of a participant’s contributions, up to a maximum of $ 5,000 per year. Further, all active participants become fully vested in the Company’s matching contributions after completing four years of employment, vesting in 25 % increments at the end of each year of employment with the Company. The Company made contributions to the 401(k) Plan totaling $ 1.6 million, $ 2.3 million, and $ 2.8 million during the years ended December 31, 2025, 2024, and 2023, respectively. (16) Segment Information The Company has one reportable operating segment, the “Software Business,” which is engaged in the design, development, marketing, and sales of the Company’s enterprise analytics software platform through cloud subscriptions and licensing arrangements and related services (i.e., product support, consulting, and education). The “Corporate & Other” category presented in the following tables is not considered an operating segment. It consists primarily of costs and expenses related to executing the Company’s bitcoin strategy and includes the unrealized losses, impairment charges and other third-party costs associated with the Company’s bitcoin holdings, net interest expense primarily related to long-term debt obligations (the net proceeds of which were primarily used to purchase bitcoin), and income tax effects generated from the Company’s bitcoin holdings and related debt issuances. Beginning in 2025, the Company has dedicated certain corporate resources to its bitcoin strategy. These costs, including related Share-based compensation expense are included within the “Corporate resources” and the “Share-based compensation expense” segment expense line items to better align with their activities and utilization. The Company’s chief operating decision maker (“CODM”) is the Company’s Chief Executive Officer, who manages the entity on a consolidated basis. The CODM uses “net income (loss)” to assess the profitability of the software business by comparing actual to budgeted results on a monthly basis. In doing so, he focuses on “controllable costs” across main functions of the Software Business and will allocate personnel and budget accordingly to maximize potential profitability. 131 The CODM also uses “net income (loss)” to understand the impact from income taxes and debt-related items for general tax and liquidity planning purposes. The following tables present (for each of the Software Business segment and Corporate & Other category, and on a consolidated basis) the Company’s revenues and significant expenses regularly provided to the CODM, reconciled to net income (loss) (in thousands) for each of the periods presented. Year-Ended December 31, 2025 Software Business Corporate & Other (6) Total Consolidated Total revenues $ 477,233 — $ 477,233 Significant expenses (1) Controllable Sales and marketing ( 100,665 ) — ( 100,665 ) Maintenance ( 27,264 ) — ( 27,264 ) Consulting ( 47,513 ) — ( 47,513 ) Cloud ( 72,973 ) — ( 72,973 ) Technology ( 88,361 ) — ( 88,361 ) Corporate resources ( 72,648 ) ( 26,702 ) ( 99,350 ) Non-Controllable Unrealized loss on digital assets — ( 5,403,476 ) ( 5,403,476 ) Digital asset custody fees — ( 17,375 ) ( 17,375 ) Share-based compensation expense ( 40,176 ) ( 13,193 ) ( 53,369 ) Payroll taxes on equity award exercises and vestings ( 5,838 ) ( 983 ) ( 6,821 ) Other segment items (2) ( 17,568 ) ( 3,484 ) ( 21,052 ) Interest expense, net (3) 332 ( 65,300 ) ( 64,968 ) Income tax benefit (4) 86,097 1,591,705 1,677,802 Net income (loss) $ 90,656 $ ( 3,938,808 ) $ ( 3,848,152 ) Total assets, as of December 31, 2025 (5) $ 537,054 $ 61,104,028 $ 61,641,082 132 Year-Ended December 31, 2024 Software Business Corporate & Other Total Consolidated Total revenues $ 463,456 — $ 463,456 Significant expenses (1) Controllable Sales and marketing ( 105,782 ) — ( 105,782 ) Maintenance ( 28,739 ) — ( 28,739 ) Consulting ( 56,472 ) — ( 56,472 ) Cloud ( 42,731 ) — ( 42,731 ) Technology ( 105,140 ) — ( 105,140 ) Corporate resources ( 85,479 ) — ( 85,479 ) Non-Controllable Digital asset impairment losses — ( 1,789,862 ) ( 1,789,862 ) Digital asset custody fees — ( 5,956 ) ( 5,956 ) Share-based compensation expense ( 77,124 ) — ( 77,124 ) Payroll taxes on equity award exercises and vestings ( 13,723 ) — ( 13,723 ) Other segment items (2) ( 167 ) ( 1,753 ) ( 1,920 ) Interest expense, net (3) — ( 61,941 ) ( 61,941 ) Loss on debt extinguishment — ( 22,933 ) ( 22,933 ) Income tax benefit (4) 226,961 540,724 767,685 Net income (loss) $ 175,060 $ ( 1,341,721 ) $ ( 1,166,661 ) Total assets, as of December 31, 2024 $ 743,190 $ 25,100,495 $ 25,843,685 133 Year Ended December 31, 2023 Software Business Corporate & Other Total Consolidated Total revenues $ 496,261 — $ 496,261 Significant expenses (1) Controllable Sales and marketing ( 112,408 ) — ( 112,408 ) Maintenance ( 20,058 ) — ( 20,058 ) Consulting ( 61,019 ) — ( 61,019 ) Cloud ( 31,466 ) — ( 31,466 ) Technology ( 106,901 ) — ( 106,901 ) Corporate resources ( 84,947 ) — ( 84,947 ) Non-Controllable Digital asset impairment losses — ( 115,851 ) ( 115,851 ) Digital asset custody fees — ( 1,572 ) ( 1,572 ) Share-based compensation expense ( 69,571 ) — ( 69,571 ) Payroll taxes on equity award exercises and vestings ( 820 ) — ( 820 ) Other segment items (2) ( 10,717 ) ( 1,182 ) ( 11,899 ) Interest expense, net (3) — ( 48,960 ) ( 48,960 ) Gain on debt extinguishment — 44,686 44,686 Income tax benefit (4) 10,553 543,093 553,646 Net income $ 8,907 $ 420,214 $ 429,121 Total assets, as of December 31, 2023 $ 470,353 $ 4,292,175 $ 4,762,528 (1) Significant expenses regularly provided to the CODM include both: (i) costs that the CODM considers to be “controllable”, for which the Company can manage future expense via the budgeting process (e.g. salaries, commissions, travel and entertainment expenses, third party-service provider fees, etc.), and that support each specific function of the Software Business (i.e. sales and marketing, maintenance, consulting, cloud, technology, and corporate resources) and (ii) costs that the CODM considers to be “non-controllable”, for which future expenses are primarily outside the Company’s control, such as digital asset impairment and custody fees, share-based compensation expense, and employer payroll taxes related to the exercise or vesting of certain awards under the Stock Incentive Plans. (2) Other segment items for the Software Business are primarily related to foreign currency transaction gains and losses, costs supporting the Company’s education function, one-time corporate initiatives, and certain expenses that are not easily allocable to specific functions. Other segment items for the Corporate & Other category are primarily related to third-party consulting and advisory fees. (3) Interest income (expense), net is substantially related to interest expense on the Company’s long-term debt arrangements, the proceeds from which were primarily used to purchase bitcoin. All of the Company’s interest income and expense are presented in the Corporate & Other category for the years ended December 31, 2024 and 2023. (4) Income tax effects allocated to the Corporate & Other category are related solely to transactions involving the Company’s bitcoin or debt, including unrealized gains or losses on digital assets, digital asset impairment losses, interest expense, gains and losses on debt extinguishments, share-based compensation expense, corporate resources (including personnel costs), and other third-party expenses. The income tax benefit in the Software Business category mainly relates to the tax benefit of the share-based compensation for employees. (5) Due to the adoption of ASU 2023-08, segment assets allocated to the Corporate & Other category as of December 31, 2025 included only the Company’s digital assets. As of December 31, 2025, segment assets included the Company’s digital assets and deferred tax assets primarily related to unrealized losses on digital assets. (6) Beginning in 2025, certain personnel costs for employees involved in the Company’s bitcoin strategy are allocated and reported within Corporate resources in the Corporate & Other category. Non‑Controllable costs include bitcoin fair value adjustments, bitcoin custody fees, and stock‑based compensation. 134 Depreciation and amortization are included in net income (loss), but are not regularly reported to the CODM. All remaining depreciation and amortization is related to the Software Business, and separately presented in the Company’s Consolidated Statements of Cash Flows. Significant non-cash items include unrealized gain or loss on digital assets post adoption of ASU 2023-08, digital asset impairment, share-based compensation, and gains and losses on debt extinguishments and are presented in the table above and in the Company’s Consolidated Statements of Operations and/or Statements of Cash Flows. The Company does not regularly report capital expenditures on long-lived assets to the CODM. T he following table presents total revenues and long-lived assets (in thousands) according to geographic region. Long-lived assets are comprised of right-of-use assets and property and equipment, net. The Corporate & Other category disclosed above is included within the U.S. region. Geographic regions: U.S. EMEA Other Regions Consolidated Total revenues Year ended December 31, 2025 $ 272,218 $ 162,661 $ 42,354 $ 477,233 Year ended December 31, 2024 $ 259,582 $ 155,923 $ 47,951 $ 463,456 Year ended December 31, 2023 $ 284,174 $ 155,914 $ 56,173 $ 496,261 Long-lived assets As of December 31, 2025 $ 66,022 $ 2,908 $ 6,903 $ 75,833 As of December 31, 2024 $ 69,767 $ 3,556 $ 7,564 $ 80,887 The EMEA region includes operations in Europe, the Middle East, and Africa. The other regions include all other foreign countries, generally comprising Latin America, the Asia Pacific region, and Canada. For the year ended December 31, 2025, Germany accounted for 10% or more of total consolidated revenues. For the years ended December 31, 2024 and 2023, no individual foreign country accounted for 10% or more of total consolidated revenues. For the years ended December 31, 2025, 2024, and 2023, no individual customer accounted for 10% or more of total consolidated revenues. As of December 31, 2025 and 2024, no individual foreign country accounted for 10% or more of total consolidated assets. (17) Related Party Transactions Saylor Indemnification Agreements Commencing in June 2021, Michael J. Saylor, the Company’s Chairman of the Board and Executive Chairman, provided indemnification coverage to the Company’s directors and officers (“D&Os”) through a series of indemnification agreements. These agreements were initially executed for applicable periods in which the Company determined not to obtain commercial D&O insurance policies and later to cover claims not insured under the Company’s commercial D&O liability policies. The Company determined that having indemnity coverage from Mr. Saylor was in the best interest of the Company. In June 2023, the Company bound new commercial D&O liability insurance policies (the “2023 Commercial Policies”) providing $ 40 million in aggregate coverage for a one-year term, but those policies excluded (i) claims previously noticed to and accepted by an earlier D&O insurer, (ii) claims related to acts or omissions giving rise to such claims, and demands, investigations, suits or other proceedings entered against an insured prior to June 24, 2022, and (iii) future interrelated wrongful acts (collectively, the “Excluded Claims”). Concurrently, the Company entered into a new indemnification agreement with Mr. Saylor (the “2023 Tail Agreement”), pursuant to which he agreed to cover the Excluded Claims for $ 157,000 for an initial one-year term, with options to extend for additional one-year periods. The Company elected to extend the 2023 Tail Agreement for an additional one-year term in June 2024 and paid Mr. Saylor $ 157,000 for that coverage period. In June 2025, the Company bound new commercial D&O liability insurance policies (the “2025 Commercial Policies”) providing $ 120 million in aggregate coverage for a one-year term. The Company has determined that the 2025 Commercial Policies provide sufficient coverage and, accordingly, the 2023 Tail Agreement was not extended beyond its June 2025 expiration. Allocation Agreements On August 31, 2022, the District of Columbia (the “District”), through its Office of the Attorney General, filed a civil complaint in the Superior Court of the District of Columbia naming as defendants (i) Michael J. Saylor, the Chairman of the Company’s Board and the Company’s Executive Chairman, in his personal capacity, and (ii) the Company. The District sought, among other relief, monetary damages under the District’s False Claims Act for the alleged failure of Mr. Saylor to pay personal income taxes to the District over a number of years together with penalties, interest, and treble damages. The 135 complaint alleged in the sole claim against the Company that it violated the District’s False Claims Act by conspiring to assist Mr. Saylor’s alleged failure to pay personal income taxes. On May 31, 2024, the District, Mr. Saylor, and the Company stipulated to the entry of a Consent Order and Judgment (“Consent Order”) with the court pursuant to which the District, upon receipt of all amounts due under the Consent Order, released Mr. Saylor and the Company from all claims and liabilities that the District asserted, could have asserted, or may assert in the future based on the conduct described in the complaints filed in the case. In connection with the Consent Order, on May 31, 2024, the Company and Mr. Saylor entered into an agreement pursuant to which Mr. Saylor and the Company agreed that Mr. Saylor would pay $ 40,000,000 due to the District to settle the case and resolve the litigation with the District. Pursuant to a separate agreement between Mr. Saylor and the Company, Mr. Saylor paid this settlement amount to the District in full and the Company was not obligated to make any contribution to the settlement payment. On July 15, 2024, Mr. Saylor and the Company entered into a separate agreement with counsel to Tributum, LLC, the relator in the case (the "Relator"), to resolve the amount due to such counsel in satisfaction of Relator’s claims for statutory expenses, attorneys’ fees and costs. Pursuant to a separate agreement between Mr. Saylor and the Company, Mr. Saylor paid this settlement amount in full and the Company was not obligated to make any contribution to this settlement payment. (18) Subsequent Events Dividends on Preferred Stock On February 2, 2026, the Company paid an aggregate $ 30.9 million of cash dividends on STRC Stock, representing a cash dividend per share of $ 0.916666667 and a dividend rate of 11.00 % per annum. On January 31, 2026, the Company declared a monthly cash dividend of $ 0.9375 per share payable on STRC Stock on February 28, 2026 (or, if such day is not a business day, the next business day) to stockholders of record as of 5:00 p.m., New York City time, on February 15, 2026. The cash dividend for the month ending February 28, 2026 represents a dividend rate of 11.25 % per annum. Bitcoin Holdings As of February 13, 2026, the Company held approximately 717,131 bitcoins with an aggregate fair market value of $ 49.3 billion (based on the market price of $ 68,734 of one bitcoin as reported on the Coinbase exchange as of February 13, 2026, 4:00 p.m. Eastern Time). 136 INDEX TO EXHIBITS Exhibit Number Description 3.1 Second Restated Certificate of Incorporation of the registrant (incorporated herein by reference to Exhibit 3.1 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2003 (File No. 000-24435)). 3.2 Certificate of Amendment to the registrant's Second Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed with the SEC on January 23, 2025 (File No. 000-24435)). 3.3 Certificate of Amendment to the registrant’s Second Restated Certificate of Incorporation (incorporated herein by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed with the SEC on August 11, 2025 (File No. 001-42509)). 3.4 Second Amended and Restated By-Laws of the registrant (incorporated herein by reference to Exhibit 3.2 to the registrant’s Current Report on Form 8-K filed with the SEC on August 11, 2025 (File No. 001-42509)). 3.5 Certificate of Designations of 8.00% Series A Perpetual Strike Preferred Stock (incorporated herein by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed with the SEC on February 5, 2025 (File No. 000-24435)). 3.6 Certificate of Designations of 10.00% Series A Perpetual Strife Preferred Stock (incorporated herein by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed with the SEC on March 25, 2025 (File No. 001-42509)). 3.7 Certificate of Amendment to Certificate of Designations of 8.00% Series A Perpetual Strike Preferred Stock (incorporated herein by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed with the SEC on July 7, 2025 (File No. 001-42509)). 3.8 Certificate of Designations of 10.00% Series A Perpetual Stride Preferred Stock (incorporated herein by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed with the SEC on June 10, 2025 (File No. 001-42509)). 3.9 Certificate of Designations of Variable Rate Series A Perpetual Stretch Preferred Stock (incorporated herein by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed with the SEC on July 29, 2025 (File No. 001-42509)). 3.10 Certificate of Increase for 8.00% Series A Perpetual Strike Preferred Stock (incorporated herein by reference to Exhibit 3.2 to the registrant’s Current Report on Form 8-K filed with the SEC on July 29, 2025 (File No. 001-42509)). 3.11 Certificate of Validation for 8.00% Series A Perpetual Strike Preferred Stock (incorporated herein by reference to Exhibit 3.10 to the registrant’s Quarterly Report on Form 10-Q filed with the SEC on August 5, 2025 (File No. 001-42509)). 3.12 Certificate of Increase for 10.00% Series A Perpetual Strife Preferred Stock (incorporated herein by reference to Exhibit 3.3 to the registrant’s Current Report on Form 8-K filed with the SEC on July 29, 2025 (File No. 001-42509)). 3.13 C ertificate of Validation for 10.00% Series A Perpetual Strife Preferred Stock (incorporated herein by reference to Exhibit 3.14 to the registrant’s Quarterly Report on Form 10-Q filed with the SEC on August 5, 2025 (File No.001-42509)). 3.14 Certificate of Increase for 10.00% Series A Perpetual Stride Preferred Stock (incorporated herein by reference to Exhibit 3.4 to the registrant’s Current Report on Form 8-K filed with the SEC on July 29, 2025 (File No. 001-42509)). 3.15 Certificate of Validation for 10.00% Series A Perpetual Stride Preferred Stock (incorporated herein by reference to Exhibit 3.14 to the registrant’s Quarterly Report on Form 10-Q filed with the SEC on August 5, 2025 (File No. 001-42509)). 3.16 Certificate of Increase for Variable Rate Series A Perpetual Stretch Preferred Stock (incorporated herein by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed with the SEC on July 31, 2025 (File No. 001-42509)). 3.17 Certificate of Designations of 10.00% Series A Perpetual Stream Preferred Stock (incorporated herein by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed with the SEC on November 13, 2025 (File No. 001-42509)). 4.1 Form of Certificate of Class A Common Stock of the registrant (incorporated herein by reference to Exhibit 4.1 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2024 (File No. 000-24435)). 4.2 Description of the registrant’s registered securities. 4.3 Indenture, dated as of March 8, 2024, by and between the registrant and U.S. Bank Trust Company, National Association, as trustee (incorporated herein by reference to Exhibit 4.1 to the registrant’s Current Report on Form 8-K filed with the SEC on March 11, 2024 (File No. 000-24435)). 4.4 Form of 0.625% Convertible Senior Note due 2030 (included within Exhibit 4.5 incorporated herein by reference to Exhibit 4.1 to the registrant’s Current Report on Form 8-K filed with the SEC on March 11, 2024 (File No. 000-24435)). 4.5 Indenture, dated as of March 18, 2024, by and between the registrant and U.S. Bank Trust Company, National Association, as trustee (incorporated herein by reference to Exhibit 4.1 to the registrant’s Current Report on Form 8-K filed with the SEC on March 19, 2024 (File No. 000-24435)). 4.6 Form of 0.875% Convertible Senior Note due 2031 (included within Exhibit 4.7 incorporated herein by reference to Exhibit 4.1 to the registrant’s Current Report on Form 8-K filed with the SEC on March 19, 2024 (File No. 000-24435)). 4.7 Indenture, dated as of June 17, 2024, by and between the registrant and U.S. Bank Trust Company, National Association, as trustee (incorporated herein by reference to Exhibit 4.1 to the registrant’s Current Report on Form 8-K filed with the SEC on June 20, 2024 (File No. 000-24435)). 4.8 Form of 2.25% Convertible Senior Note due 2032 (included within Exhibit 4.9 incorporated herein by reference to Exhibit 4.1 to the registrant’s Current Report on Form 8-K filed with the SEC on June 20, 2024 (File No. 000-24435)). 137 4.9 Indenture, dated as of September 19, 2024, by and between the registrant and U.S. Bank Trust Company, National Association, as trustee (incorporated herein by reference to Exhibit 4.1 to the registrant’s Current Report on Form 8-K filed with the SEC on September 20, 2024 (File No. 000-24435)). 4.10 Form of 0.625% Convertible Senior Note due 2028 (included within Exhibit 4.11 incorporated herein by reference to Exhibit 4.1 to the registrant’s Current Report on Form 8-K filed with the SEC on September 20, 2024 (File No. 000-24435)). 4.11 Indenture, dated as of November 21, 2024, by and between the registrant and U.S. Bank Trust Company, National Association, as trustee (incorporated herein by reference to Exhibit 4.1 to the registrant’s Current Report on Form 8-K filed with the SEC on November 21, 2024 (File No. 000-24435)). 4.12 Form of 0% Convertible Senior Note due 2029 (included within Exhibit 4.13 incorporated herein by reference to Exhibit 4.1 to the registrant’s Current Report on Form 8-K filed with the SEC on November 21, 2024 (File No. 000-24435)). 4.13 Indenture, dated as of February 21, 2025, by and between the registra nt and U.S. Bank Trust Company, National Association, as trustee (incorporated herein by reference to Exhibit 4.1 to the registrant’s Current Report on Form 8-K filed with the SEC on February 24, 2025 (File No. 001-42509)). 4.14 Form of 0% Convertible Senior Notes due 2030 (incorporated herein by reference to Exhibit 4.2 to the registrant’s Current Report on Form 8-K filed with the SEC on February 24, 2025 (File No. 001-42509)). 4.15 Form of Certificate of 8.00% Series A Perpetual Strike Preferred Stock of the registrant (included within Exhibit 3.4 incorporated herein by reference to Exhibit 3.1 to the registrant’s Current Report on Form 8-K filed with the SEC on February 5, 2025 (File No. 000-24435)). 4.16 Form of Certificate of 10.00% Series A Perpetual Strife Preferred Stock (incorporated herein by reference to Exhibit 4.1 to the registrant’s Current Report on Form 8-K filed with the SEC on March 25, 2025 (File No. 001-42509)). 4.17 Form of Certificate of 10.00% Series A Perpetual Stride Preferred Stock (incorporated herein by reference to Exhibit 4.1 to the registrant’s Current Report on Form 8-K filed with the SEC on June 10, 2025 (File No. 001-42509)). 4.18 Form of Certificate of Variable Rate Series A Perpetual Stretch Preferred Stock (incorporated herein by reference to Exhibit 4.1 to the registrant’s Current Report on Form 8-K filed with the SEC on July 29, 2025 (File No. 001-42509)). 4.19 Form of Certificate of 10.00% Series A Perpetual Stream Preferred Stock (incorporated herein by reference to Exhibit 4.1 to the registrant’s Current Report on Form 8-K filed with the SEC on November 13, 2025 (File No. 001-42509)). 10.1† MicroStrategy Incorporated 2013 Stock Incentive Plan (the “2013 Plan”) (incorporated herein by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed with the SEC on September 9, 2013 (File No. 000-24435)). 10.2† Amendment No. 1 to the 2013 Plan (incorporated herein by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed with the SEC on April 28, 2014 (File No. 000-24435)). 10.3† Amendment No. 2 to the 2013 Plan (incorporated herein by reference to Exhibit 99.3 to the registrant’s Registration Statement on Form S-8 filed with the SEC on July 25, 2014 (File No. 333-197645)). 10.4† Amendment No. 3 to the 2013 Plan (incorporated herein by reference to Exhibit 10.1 to the registrant’s Current Report on Form 8-K filed with the SEC on October 26, 2015 (File No. 000-24435)). 10.5† Amendment No. 4 to the 2013 Plan (incorporated herein by reference to Exhibit 10.4 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2018 (File No. 000-24435)). 10.6† Amendment No. 5 to the 2013 Plan (incorporated herein by reference to Appendix A to the registrant’s Definitive Proxy Statement on Schedule 14A filed with the SEC on April 15, 2021 (File No. 000-24435)). 10.7† Form of Nonstatutory Stock Option Agreement (2013) under the 2013 Plan (incorporated herein by reference to Exhibit 10.2 to the registrant’s Current Report on Form 8-K filed with the SEC on September 9, 2013 (File No. 000-24435)). 10.8† Form of Nonstatutory Stock Option Agreement (2016) under the 2013 Plan (incorporated herein by reference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2016 (File No. 000-24435)). 10.9† Form of Restricted Stock Unit (“RSU”) Agreement (2021) under the 2013 Plan (incorporated herein by reference to Exhibit 10.9 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (File No. 000-24435)). 10.10† Form of International RSU Agreement (2022) under the 2013 Plan (incorporated herein by reference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2022 (File No. 000-24435)). 10.11† Form of UK RSU Agreement (2021) under the 2013 Plan (incorporated herein by reference to Exhibit 10.11 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (File No. 000-24435)). 10.12† Form of Canada RSU Agreement (2021) under the 2013 Plan (incorporated herein by reference to Exhibit 10.12 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2021 (File No. 000-24435)). 10.13† Form of Argentina RSU Agreement (2022) under the 2013 Plan (incorporated herein by reference to Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2022 (File No. 000-24435)). 10.14† Form of China RSU Agreement (2022) under the 2013 Plan (incorporated herein by reference to Exhibit 10.3 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2022 (File No. 000-24435)). 10.15† Strategy Inc 2023 Equity Incentive Plan (the “2023 Plan”) (incorporated herein by reference to Exhibit 10.15 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (File No. 000-24435)) . 10.16† Amendment No. 1 to the 2023 Plan (incorporated herein by reference to Exhibit 10.16 to the registrant ' s Annual Report on Form 10-K for the fiscal year ended December 2024 (File No. 001-42509)). 138 10.17† U.S. Form of Nonstatutory Stock Option Agreement (2023) under the 2023 Plan (incorporated herein by reference to Exhibit 99.1 to the registrant’s Current Report on Form 8-K filed with the SEC on May 30, 2023 (File No. 000-24435)). 10.18† U.S. Form of RSU Agreement (2023) under the 2023 Plan (incorporated herein by reference to Exhibit 99.2 to the registrant’s Current Report on Form 8-K filed with the SEC on May 30, 2023 (File No. 000-24435)). 10.19† UK Form of Nonstatutory Stock Option Agreement (2023) under the 2023 Plan (incorporated herein by reference to Exhibit 10.4 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2023 (File No. 000-24435)). 10.20† UK Form of RSU Agreement (2023) under the 2023 Plan (incorporated herein by reference to Exhibit 10.5 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2023 (File No. 000-24435)). 10.21† China Form of Nonstatutory Stock Option Agreement (2023) under the 2023 Plan (incorporated herein by reference to Exhibit 10.6 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2023 (File No. 000-24435)). 10.22† China Form of RSU Agreement (2023) under the 2023 Plan (incorporated herein by reference to Exhibit 10.7 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2023 (File No. 000-24435)). 10.23† Canada Form of RSU Agreement (2023) under the 2023 Plan (incorporated herein by reference to Exhibit 10.8 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2023 (File No. 000-24435)). 10.24† International Form of Nonstatutory Stock Option Agreement (2023) under the 2023 Plan (incorporated herein by reference to Exhibit 10.9 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2023 (File No. 000-24435)). 10.25† International Form of RSU Agreement (2023) under the 2023 Plan (incorporated herein by reference to Exhibit 10.24 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (File No. 000-24435)). 10.26† UK Sub-Plan under the 2023 Plan (incorporated herein by reference to Exhibit 10.11 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2023 (File No. 000-24435)). 10.27† U.S. Form of Nonstatutory Stock Option Agreement (Non-Employee Director) (2023) under the 2023 Plan (incorporated herein by reference to Exhibit 10.12 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2023 (File No. 000-24435)) . 10.28† U.S. Form of RSU Agreement (Non-Employee Director) (2023) under the 2023 Plan (incorporated herein by reference to Exhibit 10.13 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2023 (File No. 000-24435)). 10.29† U.S. Form of Performance Stock Unit (“PSU”) Agreement (2023) under the 2023 Plan (incorporated herein by reference to Exhibit 99.3 to the registrant’s Current Report on Form 8-K filed with the SEC on May 30, 2023 (File No. 000-24435)). 10.30† China Form of RSU Agreement (2024) under the 2023 Plan (incorporated herein by reference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2024 (File No. 000-024435)). 10.31† U.S. Form of RSU Agreement (2024) under the 2023 Plan (incorporated herein by reference to Exhibit 10.3 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2024 (File No. 000-024435)). 10.32† U.K. Form of RSU Agreement (2024) under the 2023 Plan (incorporated herein by reference to Exhibit 10.4 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2024 (File No. 000-024435)). 10.33† Canada Form of RSU Agreement (2024) under the 2023 Plan (incorporated herein by reference to Exhibit 10.5 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2024 (File No. 000-024435)). 10.34† International Form of RSU Agreement (2024) under the 2023 Plan (incorporated herein by reference to Exhibit 10.6 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2024 (File No. 000-024435)). 10.35† U.S. Form of PSU Agreement (2024) under the 2023 Plan (incorporated herein by reference to Exhibit 10.7 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2024 (File No. 000-024435)). 10.36† Amendments made to certain outstanding RSU and PSU Agreements under the 2013 Plan and the 2023 Plan, the forms of which agreements were filed or incorporated by reference as Exhibits 10.9, 10.10, 10.11, 10.12, 10.13, 10.17, 10.19, 10.22, 10.24, and 10.28 to the registrant’s Annual Report on Form 10-K filed with the SEC on February 15, 2024 (incorporated herein by reference to Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30 2024 (File No. 000-024435)). 10.37† U.S. Form of RSU Agreement (2025) under the 2023 Plan (incorporated herein by reference to Exhibit 10.7 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2025 (File No. 001-42509)). 10.38† U.S. Form of Non Statutory Stock Option Agreement (2025) under the 2023 Plan (incorporated herein by reference to Exhibit 10.8 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2025 (File No. 001-42509)). 10.39† U.S. Form of RSU Agreement (Non-Employee Director) (2025) under the 2023 Plan (incorporated herein by reference to Exhibit 10.9 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2025 (File No. 001-42509)). 10.40† U.S. Form of Non Statutory Stock Option Agreement (Non-Employee Director) (2025) under the 2023 Plan (incorporated herein by reference to Exhibit 10.10 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2025 (File No. 001-42509)). 10.41† International Form of RSU Agreement (2025) under the 2023 Plan (incorporated herein by reference to Exhibit 10.11 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2025 (File No. 001-42509)). 10.42† International Form of Non Statutory Option Agreement (2025) under the 2023 Plan (incorporated herein by reference to Exhibit 10.12 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2025 (File No. 001-42509)). 139 10.43† Amendments to existing Forms of RSU Agreement and Option Agreements under the registrant’s 2013 Stock Incentive Plan and the 2023 Plan (incorporated herein by reference to Exhibit 10.13 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended September 30, 2025 (File No. 001-42509)). 10.44† Summary of Perquisites and Associated Other Compensation Arrangements for Named Executive Officers. 10.45† Summary of Director Fees, Equity Grants, Perquisites, and Associated Other Compensation Arrangements for Non-Employee Directors. 10.46† Sublease Agreement, dated as of January 31, 2011, by and between the Company and Aeromar Management Company, LLC (incorporated herein by reference to Exhibit 10.14 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2010 (File No. 000-24435)). 10.47† Summary of Designated Company Vehicles Policy (incorporated herein by reference to Exhibit 10.1 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended June 30, 2007 (File No. 000-24435)). 10.48† Summary of Cash Bonus and Salary Determinations for Certain Executive Officers (incorporated herein by reference to Item 9B to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 202 4 (File No. 00 1-42509 )). 10.49† Summary of Certain Provisions of CFO Offer Letter (incorporated herein by reference to Exhibit 10.2 to the registrant’s Quarterly Report on Form 10-Q for the fiscal quarter ended March 31, 2023 (File No. 000-24435)). 10.50† MicroStrategy Incorporated 2021 Employee Stock Purchase Plan (incorporated herein by reference to Exhibit 99.1 to the registrant’s Registration Statement on Form S-8 filed with the SEC on February 1, 2021 (File No. 333-252608)). 10.51† Summary of Certain Provisions of General Counsel Offer Letter . 10.52 Omnibus Sales Agreement, dated as of November 4, 2025, by and among the registrant and TD Securities (USA) LLC, Barclays Capital Inc., The Benchmark Company, LLC, BTIG, LLC, Canaccord Genuity LLC, Cantor Fitzgerald & Co., Clear Street LLC, Compass Point Research & Trading, LLC, H.C. Wainwright & Co., LLC, Keefe, Bruyette & Woods, Inc., Maxim Group LLC, Mizuho Securities USA LLC, Morgan Stanley & Co. LLC, Santander US Capital Markets LLC, SG Americas Securities, LLC and TCBI Securities, Inc., doing business as Texas Capital Securities (incorporated herein by reference to Exhibit 1.1 to the registrant’s Current Report on Form 8-K filed with the SEC on November 4, 2025 (File No. 001-42509)). 19 Strategy Inc Insider Trading Policy . 21.1 Subsidiaries of the registrant. 23.1 Consent of KPMG LLP. 31.1 Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Principal Executive Officer. 31.2 Certification pursuant to Rule 13a-14(a) or Rule 15d-14(a) of the Principal Financial Officer. 32.1 Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. 97.1 Dodd-Frank Compensation Recovery Policy (incorporated herein by reference to Exhibit 97.1 to the registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2023 (File No. 000-24435)) 101.INS Inline XBRL Instance Document. The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document. 101.SCH Inline XBRL Taxonomy Extension Schema with Embedded Linkbases Document. 104 Cover Page Interactive Data File (formatted as inline XBRL with applicable taxonomy extension information contained in Exhibits 101). _________________________________________________________________________ † Management contracts and compensatory plans or arrangements. 140 SIGNATURES Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the und ersigned, thereunto duly authorized. S TRATEGY I NC (Registrant) By: /s/ Phong Le Name: Phong Le Title: President & Chief Executive Officer Date: February 19, 2026 Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. Name Position Date / S / P HONG L E President & Chief Executive Officer and Director (Principal Executive Officer) February 19, 2026 Phong Le / S / A NDREW K ANG Executive Vice President & Chief Financial Officer (Principal Financial Officer) February 19, 2026 Andrew Kang / S / J EANINE M ONTGOMERY Vice President & Chief Accounting Officer (Principal Accounting Officer) February 19, 2026 Jeanine Montgomery / S / M ICHAEL J. S AYLOR Chairman of the Board of Directors & Executive Chairman February 19, 2026 Michael J. Saylor / S / PETER L. BRIGER Director February 19, 2026 Peter L. Briger / S / B RIAN B ROOKS Director February 19, 2026 Brian Brooks / S / JANE DIETZE Director February 19, 2026 Jane Dietze / S / STEPHEN X. GRAHAM Director February 19, 2026 Stephen X. Graham / S / JARROD M. PATTEN Director February 19, 2026 Jarrod M. Patten / S / C ARL J. R ICKERTSEN Director February 19, 2026 Carl J. Rickertsen / S / G REGG W INIARSKI Director February 19, 2026 Gregg Winiarski 141 SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS For the years ended December 31, 2025, 2024, and 2023 (in thousands) Balance at the beginning of the period Additions (1) Deductions Balance at the end of the period Allowance for credit losses: December 31, 2025 $ 2,188 1,437 ( 279 ) $ 3,346 December 31, 2024 $ 3,069 722 ( 1603 ) $ 2,188 December 31, 2023 $ 2,564 797 ( 292 ) $ 3,069 Deferred tax valuation allowance: December 31, 2025 $ 494 — — $ 494 December 31, 2024 $ 1,427 — ( 933 ) $ 494 December 31, 2023 $ 511,412 193 ( 510,178 ) $ 1,427 (1) Reductions in/charges to revenues and expenses. 142