Strategy reported Q3 net income of $2.8B, driven by fair value gains on its Bitcoin holdings

Strategy, trading on Nasdaq under several tickers including STRF, STRC, STRK, STRD, and MSTR, has finally snapped back into profit.

The company, which calls itself the world’s first Bitcoin Treasury Company, posted net income of $2.8 billion for the third quarter ending September 30. The profit came after a brutal 2024 when Strategy recorded steep losses as Bitcoin crashed.

Strategy reported operating income of $3.9 billion, reversing a loss of $432.6 million from a year earlier. Diluted earnings per share came in at $8.42, compared to a $1.72 loss per share in 2024.

President and CEO Phong Le said, “We increased our Bitcoin holdings to 640,808 and have raised $20 billion year-to-date through our capital markets platform.”

Phong reaffirmed Strategy’s full-year targets of $20 billion in BTC dollar gain and a 30% BTC yield.

Quarter turns profitable as BTC holdings swell

Chief Financial Officer Andrew Kang said the company “generated third-quarter operating income of $3.9 billion, net income of $2.8 billion, and diluted EPS of $8.42 per share, our second consecutive quarter of significant positive earnings.”

He linked the results to Bitcoin’s surge and the company’s digital credit operations. “We generated BTC yield of 26% and BTC dollar gain of $13 billion year-to-date,” Andrew added, projecting full-year operating income of $34 billion and net income of $24 billion if Bitcoin reaches $150,000 by year-end.

Executive Chairman Michael Saylor pointed to the scale of the company’s collateral, valued at over $71 billion, calling it “transparent, scalable, and homogeneous.” He said Strategy’s digital treasury framework allows it to create tax-efficient credit instruments with “return of capital” dividends that offer higher yields than conventional credit.

Saylor also noted that S&P assigned Strategy a B- credit rating, which he expects will “expand the addressable market for our securities.” Saylor said the company would continue innovating new instruments to “drive greater BTC amplification.”

Strategy’s Bitcoin portfolio, worth $70.9 billion at a market price of $110,600 per coin as of October 26, includes 640,808 bitcoins acquired for $47.4 billion at an average cost of $74,032 each.

Strategy said it achieved a BTC gain of 116,555 and BTC dollar gain of $12.9 billion year-to-date, compared to its 2025 goal of $20 billion. The BTC yield stood at 26%, slightly below the 30% annual target.

Capital raises and revenue details show momentum

Strategy raised $5.1 billion in new capital during Q3, with another $89.5 million collected between October 1 and October 26.

Under its Common Stock ATM program, it earned $2.2 billion by selling 5.7 million shares of class A stock, leaving $15.9 billion still available for sale. Through its STRK ATM program, it generated $152.8 million by issuing 1.4 million shares of its 8% Series A Perpetual Strike Preferred Stock, and another $23.8 million in October.

Roughly $20.4 billion remains available under that plan. Under the STRF ATM program, the firm received $217.3 million through 1.88 million shares of its 10% Series A Perpetual Strife Preferred Stock, followed by $50.4 million more in October.

It still has $1.7 billion capacity left. The STRD ATM program brought in $48.5 million during the quarter and an additional $15.3 million later, with $4.1 billion remaining. In July, Strategy raised $2.5 billion through an IPO of its STRC stock, selling 28 million shares at $90 per share.

Subscription services grew 65.4% to $46 million, while product licenses and subscription services rose 62.9% to $63.3 million. Product support revenue fell 16.2% to $51.1 million, and other services dropped 12% to $14.2 million.

Gross profit climbed to $90.7 million, reflecting a 70.5% margin.

To round up the earnings report, Strategy said in FY2025, it expects to generate operating income of $34 billion, net income of $24 billion, and diluted EPS of $80 per share by year-end. Saylor doubled down on his prediction that Bitcoin will hit $150,000 early next year.

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