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5 things we learned from Michael Saylor’s Strategy earnings call
Michael Saylor's Strategy (NASDAQ: MSTR) reported another blockbuster quarter. The company released its third-quarter earnings after market close on Oct. 30 with net income soaring to $2.8 billion. Its diluted earnings per share (EPS) were $8.42, beating analyst expectations of $8.15. Its Bitcoin (BTC) holding also increased to 640,808 BTC.
Here are the five key takeaways from the earnings call that took place at 5 PM ET on the same day:
Bitcoin holdings increased
Strategy solidified its dominance as the world’s largest corporate Bitcoin treasury, now holding 640,808 BTC valued at approximately $71 billion, or more than 3% of all Bitcoin ever created.
Year to date, Strategy has raised $19.8 billion in capital, primarily to acquire additional Bitcoin, while maintaining a fully unencumbered balance sheet.
Key numbers to remember:
The company’s Bitcoin per share metric, introduced last quarter, tracks how much Bitcoin each share effectively represents by dividing total BTC holdings by the number of diluted shares outstanding, expressed in satoshis.
As of Oct. 26, this figure rose to 41,370 satoshis per share, up from 39,716 on July 31, reflecting continued accumulation and growth in Bitcoin holdings on a per-share basis.
Record GAAP profit and a bigger BTC stack
Strategy highlighted a second straight quarter of sizeable GAAP earnings and more than $8 billion in positive earnings over the last four quarters.
Digital assets on the balance sheet rose to $73.2 billion in the third quarter from $64.4 billion in the second quarter, reflecting about $3.9 billion in fair-value gains and roughly $5 billion of additional BTC purchases. The company says 100% of its BTC is unencumbered.
First S&P rating opens doors
Strategy considers its recent S&P B– rating, the first public issuer rating for a Bitcoin treasury company, as a gateway to larger institutional pools, particularly high-yield credit.
While the rating currently gives no capital credit for BTC on the balance sheet, executives argued that evolving bank and prudential frameworks could improve treatment over time.
'Killer app' credit strategy
Strategy is pioneering a new financial model called “digital credit,” built entirely on Bitcoin as its foundation. The company has introduced a suite of perpetual preferred securities — STRF, STRK, STRD, and STRC — all backed by Bitcoin and designed to deliver tax-deferred, return-of-capital (ROC) dividends to investors.
Executives described digital credit as the “killer app” of digital capital, likening it to the historic gold-backed credit systems that once powered global finance, but reimagined for the Bitcoin era.
"We believe that digital credit is the killer app of digital capital, and we believe that the most compelling business model is a digital treasury company built on digital capital issuing digital credit," Saylor said.
Global expansion plans
Strategy plans localized preferred offerings in Canada, Europe, and Asia, likely denominated in local currencies and listed on local exchanges to avoid currency risk for investors.
In terms of its digital credit plans, Strategy sees vast global potential for its digital credit products, extending far beyond the U.S. market. The company is actively exploring opportunities across the Middle East, Europe, the U.K., Australia, Canada, Korea, Singapore, Japan, and Switzerland, with plans to launch localized versions of its Bitcoin-backed credit instruments denominated in pounds, euros, Canadian dollars, or Swiss francs.
"We create the currency we want, we put the appropriate amount of risk on it, we strip away the duration, and then we start selling pure yield. That is the compelling use case," Saylor added.
This article has been published in TheStreet via Yahoo News.
5 things we learned from Michael Saylor’s Strategy earnings call
Michael Saylor's Strategy (NASDAQ: MSTR) reported another blockbuster quarter. The company released its third-quarter earnings after market close on Oct. 30 with net income soaring to $2.8 billion. Its diluted earnings per share (EPS) were $8.42, beating analyst expectations of $8.15. Its ...
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