TLDR
- Strategy bought 301,335 BTC in Q1, raising the total to 528,185 BTC.
- BTC Yield hit 13.7% YTD, and the 2025 goal was raised to 25%.
- Fair value accounting added $12.7B to retained earnings, but caused a $5.9B Q1 loss.
- Raised $9.8B+ via equity, notes, and preferred stock to fund BTC buys.
- Software revenue fell 3.6%, but subscriptions rose 61.6%.
Strategy™ (Nasdaq: MSTR/STRK/STRF) reported robust Q1 2025 financial results. During the quarter, the company added 301,335 BTC through a record $21 billion at-the-market (ATM) common stock offering. This raised its total Bitcoin holdings to 528,185 BTC, reinforcing its status as the largest corporate Bitcoin holder.
Strategy announces BTC Yield of 13.7% and BTC $ Gain of $5.8B year-to-date, doubles capital plan to $42B equity and $42B fixed income to purchase bitcoin, and increases BTC Yield target from 15% to 25% and BTC $ Gain target from $10B to $15B. $MSTR $STRK $STRF
— Strategy (@Strategy) May 1, 2025
The company recorded a BTC Yield of 11.0% in Q1 and 13.7% year-to-date as of April 28, 2025. This puts it on track to exceed its initial annual target of 15%, prompting Strategy to increase its 2025 BTC Yield goal to 25%. The firm also achieved a BTC $ Gain of $5.8 billion year-to-date, meeting 58% of its annual $10 billion target, which has now been revised upward to $15 billion.
Fair Value Accounting Boosts Retained Earnings
On January 1, 2025, Strategy adopted ASU 2023-08, transitioning to fair value accounting for its digital assets. This change led to a $12.7 billion uplift in retained earnings. However, due to a quarter-end Bitcoin price of $82,445, the company recorded a $5.9 billion unrealized fair value loss on digital assets in Q1.
At the time of writing, Bitcoin is currently trading at $$96,686.76 , Strategy expects a fair value gain of approximately $8.0 billion in Q2 2025.
Capital Raises Drive Bitcoin Accumulation
Strategy significantly broadened its capital base in Q1 by combining equity offerings and convertible notes. These included:
- $4.4B in Q1 and $2.2B post-Q1 from the class A common stock ATM program.
- $1.99B in net proceeds from the 0% Convertible Senior Notes issuance due 2030.
- $563.2M from the IPO of 8.00% Series A Perpetual Strike Preferred Stock.
- $30.4M in Q1 and $45.3M post-Q1 through the STRK ATM program.
- $710.9M from the IPO of 10.00% Series A Perpetual Strife Preferred Stock.
In January, shareholders approved a significant increase in authorized shares, rising to 10.3 billion for class A common stock and 1.005 billion for preferred stock.
Software Revenue Declines While Subscriptions Rise
Total revenue for the software segment was $111.1 million, down 3.6% from Q1 2024. Subscription services revenue, however, rose 61.6% year-over-year to $37.1 million. Product license and subscription services revenue grew 23.6%, while product support and other services declined by 16.2% and 15.0%, respectively.
Gross profit stood at $77.1 million with a margin of 69.4%, down from $85.2 million and a 74.0% margin in Q1 2024.
Net Loss Reflects Fair Value Accounting Adjustment
Due to the shift to fair value accounting, operating expenses surged to $6.0 billion, primarily driven by the $5.9 billion unrealized digital asset loss. The company posted a net loss of $4.217 billion, or $16.49 per diluted share, compared to a $53.1 million loss in Q1 2024.
Cash and cash equivalents increased to $60.3 million, up from $38.1 million at the end of 2024.
