Bitcoin Bears Fruit: Positive Report for MicroStrategy in Q3 2023

As the halving approaches and the SEC prepares to rule on the Bitcoin ETF, MicroStrategy has unveiled its financial results for the third quarter of 2023, highlighting a particularly promising Bitcoin portfolio.

Success in the third quarter driven by Bitcoin

MicroStrategy has shown remarkable confidence in Bitcoin’s potential. Since the end of the second quarter, the company acquired 6,067 bitcoins for $167.0 million, averaging $27,531 per bitcoin.

As of October 31, 2023, the company held an impressive total of 158,400 bitcoins, acquired at a total cost of $4.69 billion, averaging $29,586 per bitcoin.

Andrew Kang, MicroStrategy’s Chief Financial Officer, emphasized the firm’s firm commitment to acquiring and holding bitcoins, particularly in a context where institutional adoption appears promising.

 “Our commitment to acquire and hold bitcoin remains strong, especially with the promising backdrop of potential increased institutional adoption,” he said.

Despite market fluctuations, the company remains confident in its Bitcoin strategy, viewing the leading cryptocurrency as a means to strengthen its balance sheet.

MicroStrategy’s overall financial performance

Beyond its Bitcoin investment, how did MicroStrategy perform financially in this quarter? The total revenue for the third quarter of 2023 reached $129.5 million, up by 3% from the previous year.

Software license revenues increased by 16% to $45.0 million, while subscription services revenues rose by 28% to $21.0 million.

The company also emphasized innovation with the launch of its inaugural software, MicroStrategy AI, leveraging Microsoft Azure OpenAI.

“The business intelligence sector is at the forefront of innovation with the integration of AI capabilities, and MicroStrategy was the first to commercialize its inaugural MicroStrategy AI software, released in the third quarter, leveraging Microsoft Azure OpenAI.

We believe that MicroStrategy is well-positioned to harness the Bitcoin headwinds and the growth of our BI business,” said Phong Le, President, and CEO of MicroStrategy.

However, it’s worth noting that the company recorded an operating loss of $25.2 million for this quarter, compared to an operating income of $6.1 million for the third quarter of 2022. This loss is partly attributed to the depreciation of their digital assets, amounting to $33.6 million.

MicroStrategy continues to demonstrate boldness in its BTC investment strategy while strengthening its position in the Business Intelligence market. Despite the risks associated with cryptocurrencies, the company appears convinced that Bitcoin will play a pivotal role in its financial future. Only time will tell if this bold strategy will yield long-term fruits.