Strategy Inc — Third Quarter 2026 Earnings Summary

Financial Performance:

• Operating income for Q3 2026 was $20.91 billion, compared to $3.89 billion in Q3 2025, driven by a $20.91 billion gain on digital assets versus a $3.89 billion gain in the prior year period.
• Net income for Q3 2026 was $19.53 billion, compared to $2.79 billion in Q3 2025.
• Net income attributable to common stockholders for Q3 2026 was $19.12 billion, compared to $2.65 billion in Q3 2025.
• Diluted earnings per share (EPS) for Q3 2026 were $44.75, compared to $8.42 in Q3 2025.
• Total revenues for Q3 2026 were $125.4 million, a 3% decrease year-over-year from $128.7 million in Q3 2025.
• Gross profit for Q3 2026 was $89.6 million with a 71% gross margin, compared to $90.7 million with a 70% gross margin in Q3 2025.
• Cash and cash equivalents as of September 30, 2026, were $2.50 billion, up from $1.71 billion as of June 30, 2026.
• Short-term investments as of September 30, 2026, were $3.40 billion, up from $736.1 million as of June 30, 2026.
• Dividends on preferred stock for Q3 2026 were $419.6 million, compared to $139.9 million in Q3 2025.
• Total liabilities as of September 30, 2026, were $8.65 billion, down from $10.60 billion as of December 31, 2025.
• Total stockholders' equity as of September 30, 2026, was $55.44 billion, up from $44.12 billion as of December 31, 2025.

Guidance and Future Outlook:

• Management expects distributions on preferred equity instruments to be treated as non-taxable return of capital (ROC) for the foreseeable future (ten years or more) due to expected lack of positive accumulated earnings & profits.
• Michael Saylor stated the company believes it is at the beginning of the next bitcoin bull market, citing institutional demand returning and banks embracing bitcoin.
• The company intends to lead the development of a tokenized, 24/7/365 financial system through its Digital Credit segment.
• The company plans to be a regular and disciplined purchaser of STRC shares while they trade below the $100 stated amount.
• The company may consider repurchasing MSTR shares when management believes they are trading below intrinsic value.

Business Segments and Product Lines:

• Digital Capital: Holdings increased to 848,517 bitcoins (26% growth year-to-date 2026) with a market value of $68.90 billion and an average cost basis of $75,446 per bitcoin.
• Digital Equity: Raised $21.23 billion of capital year-to-date 2026, becoming the 4th largest equity issuer in the U.S.
• Digital Credit: USD Assets grew to $5.07 billion (approx. $5.1 billion in CEO remarks), providing 3.4 years of coverage for dividend and interest obligations.
• Digital Credit: Upgraded STRC to daily dividends starting November 1, 2026, and STRF, STRK, and STRD to daily dividends starting January 1, 2027.
• Software Business: Revenues from product licenses and subscription services were $72.4 million in Q3 2026, while product support revenues were $37.7 million and other services were $15.3 million.

Market and Competitive Landscape:

• Strategy holds an 84% market share in the digital credit industry, with $16 billion in notional value across ten publicly listed securities.
• The company is the largest institutional holder of bitcoin and the world's first Bitcoin Treasury Company.
• The company's stock price increased 76% in Q3 2026, outperforming the 43% increase in the bitcoin price during the same period.
• Bitcoin price was 21% above its 200-week moving average as of the reporting period.

Risks and Challenges:

• Forward-looking statements highlight risks including fluctuations in bitcoin market price, availability of financing on favorable terms, and changes in accounting treatment for bitcoin.
• Risks include security breaches, cyberattacks, loss of private keys, and financial difficulties of digital asset industry participants.
• The company faces risks related to changes in securities laws, tax consequences, and the potential for deferred revenue recognition delays due to shifts to cloud subscription models.
• KPIs such as BTC Yield and BTC Gain do not account for senior claims on assets (debt and preferred stock) and may overstate or understate value attributable to common stockholders.

Management Commentary and Tone:

• Phong Le, President and CEO, emphasized the commitment to returning STRC to health and the innovation of daily dividends as a step toward a 24/7/365 financial system.
• Andrew Kang, CFO, noted Q3 operating income was the largest in the company's history and expressed gratitude for the support during his tenure.
• Michael Saylor, Founder and Executive Chairman, expressed confidence in the start of the next bitcoin bull market and the company's leadership position.
• The tone is confident and forward-looking, highlighting record operating income and significant capital raising despite a challenging bitcoin market.

Analyst Questions and Answers:

• No specific analyst questions and answers are included in the provided press release text.

Other Key Points:

• Andrew Kang will step down as CFO effective November 5, 2026; Reza Virasteh will become CFO effective January 1, 2027.
• The company repurchased $2.04 billion of STRC shares year-to-date 2026, with approximately $956.7 million of authorization remaining.
• The company sold approximately $431.8 million of bitcoin year-to-date 2026 to fund preferred stock dividends and STRC buybacks.
• Total cumulative dividends paid on all preferred stock to date were $1.48 billion.
• The company received $5.41 billion in net proceeds from ATM offerings in Q3 2026 and an additional $58.7 million between October 1 and October 23, 2026.
• The company adopted ASU 2023-08, requiring measurement of bitcoin at fair value with gains/losses recognized in net income.