Strategy Inc
For the period ended Sep 30, 2026. Filed Nov 2, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2026 · Filed Nov 2, 2026
MSTR$128.93-0.3%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-06-30; filed 2026-08-03.
0001050446-26-000044
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-09-30; filed 2026-11-02.
0001050446-26-000060
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 283 previous paragraphs and 273 current paragraphs.
123 unchanged; 102 reworded; 47 added; 50 removed; 8 previous and 1 current paragraphs rearranged.
Tables are not compared: 19 previous and 17 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (47)
Current report
(c)In the third quarter of 2025, we purchased bitcoin using $209.5 million of the net proceeds from ATM issuances of STRF Stock, $153.1 million of the net proceeds from ATM issuances of STRK Stock, $48.5 million of the net proceeds from ATM issuances of STRD Stock, $2.07 billion of the net proceeds from ATM issuances of class A common stock, and $2.47 billion of the net proceeds from the initial public offering of STRC Stock.
Current report
(g)In the third quarter of 2026, we purchased bitcoin using $588.1 million of the net proceeds from ATM sales of class A common stock.
Current report
(h)The proceeds from these sales were used to fund $239.9 million of dividend payments on Preferred Stock and to repurchase $108.6 million of STRC Stock.
Current report
Equity Repurchase Programs
Current report
In June 2026, the Company's board of directors authorized (i) a repurchase program for up to $1.0 billion aggregate purchase price of the Company's outstanding Preferred Stock and (ii) a repurchase program for up to $1.0 billion aggregate purchase price of the Company's class A common stock. The board subsequently increased the preferred stock repurchase authorization to $2.0 billion in September 2026 and $3.0 billion in October 2026.
Current report
During the three and nine months ended September 30, 2026, the Company repurchased 13,930,173 shares of STRC Stock for total aggregate consideration of $1.34 billion under the preferred stock repurchase program, leaving $657.6 million available as of September 30, 2026. All such repurchased shares were cancelled. From October 1, 2026 to October 25, 2026, we repurchased 7,050,335 shares of STRC Stock under our share repurchase program, for an aggregate purchase price of $700.9 million. As of October 25, 2026, the $956.7 million aggregate purchase price remained under this program, after giving effect to repurchases executed but not yet settled as of such date.
Current report
As of September 30, 2026 and October 25, 2026, the Company had not repurchased any shares of class A common stock under the class A common stock repurchase program, leaving $1.0 billion in remaining authorization as of both dates.
Current report
See “Liquidity and Capital Resources—Digital Credit Capital Framework” below for a description of these programs.
Current report
•BTC Gain represents the BTC Yield for a period in gross bitcoin terms.
Current report
•BTC $ Gain represents BTC Gain as an illustrative dollar value.
Current report
For additional information regarding these KPIs, including how they are calculated, their purposes, uses and limitations, and their principal components as of the relevant reporting dates for this Quarterly Report, see "Important Information about KPIs".
Current report
(2) Changes greater than 100% or less than (100)% are denoted as not meaningful (NM).
Current report
BTC Yield
Current report
Our BTC Yield was (11.9)% and (3.7)% for the three and nine months ended September 30, 2026, respectively, as compared to 6.2% and 25.9% during the same periods in the prior year. BTC Yield decreased in both 2026 periods, primarily due to:
Current report
•Greater use of class A common stock proceeds for purposes other than buying bitcoin. We increased sales of our class A common stock for purposes other than purchasing bitcoin, including funding our USD Assets, repurchasing Preferred Stock and paying increased Preferred Stock dividend obligations, which increased our Assumed Diluted Shares Outstanding without a corresponding increase in our bitcoin holdings. See "BTC Yield - Change in Assumed Diluted Shares Outstanding" below for additional information.
Current report
•Larger starting bitcoin balance. We began each 2026 period with larger bitcoin holdings, so the same amount of accretive capital raising to purchase bitcoin produced a smaller percentage increase in BPS (in Sats). See "Important Information about KPIs" for additional information.
Current report
•Lower premium to our underlying bitcoin. The portion of proceeds we raised from the sale of class A common stock to purchase bitcoin was raised at prices reflecting lower premiums relative to the value of our underlying bitcoin holdings on a per share basis.
Current report
Additionally, the following factors contributed to the decrease in BTC Yield during the three months ended September 30, 2026 as compared to the prior quarterly period:
Current report
•Change in mix of capital raising to acquire bitcoin. We decreased our amount of sales of non-convertible preferred stock used to acquire bitcoin. For information about our Preferred Stock issuances and related bitcoin purchases, see "Capital Markets Activity" and "Bitcoin Activity and Holdings" above.
Current report
•Acquisition of less bitcoin. We acquired less bitcoin and also sold bitcoin, resulting in a lower net increase in bitcoin holdings. For additional information about the change in our bitcoin holdings, see "Bitcoin Activity and Holdings" and "Important Information about KPIs".
Current report
For the nine-month comparison, the above factors driving the decrease in BTC Yield were partially offset by:
Current report
•Change in mix of capital raising to acquire bitcoin. We increased use of proceeds from issuance of non-convertible preferred stocks to acquire bitcoin. For information about our Preferred Stock sales, see "Capital Markets Activity" and "Bitcoin Activity and Holdings" above.
Current report
•Use of cash assets to reduce Assumed Diluted Shares Outstanding. Prior to the adoption of our USD Reserve policy, we used a portion of our cash assets held in the USD Reserve to fund repurchases of our 2029 Convertible Notes. See "Change in Assumed Diluted Shares Outstanding" for additional information.
Current report
There were no material offsets for the three-month period comparison.
Current report
Change in Assumed Diluted Shares Outstanding
Current report
The table below presents the change in Assumed Diluted Shares Outstanding during the three- and nine-month periods ended September 30, 2026 and 2025, as well as the proceeds from such issuances.
Current report
(1)Primarily reflects the grant, exercise and forfeiture of equity-based awards in the relevant period.
Current report
(2)Such proceeds from the three and nine month periods ended September 30, 2026 were used to fund USD Assets, repurchase Preferred Stock, and pay Preferred Stock dividends and Convertible Note interest, versus primarily to pay Preferred Stock dividends and Convertible Note interest in the prior year periods. See "Capital Markets Activity" and "Liquidity and Capital Resources" for additional information.
Current report
BTC Gain
Current report
BTC $ Gain
Current report
◦Other bitcoin risks. Holding bitcoin does not generate cash flows and involves custody costs, cybersecurity and counterparty risks, and significant legal, regulatory and technical uncertainty. These risks, including potential loss of our bitcoin holdings or adverse regulatory developments, could materially affect our financial condition, results of operations and liquidity. See Part II, Item 1A. Risk Factors “–Risks Related to Our Bitcoin Strategy and Holdings” of this Quarterly Report for additional information.
Current report
We recognized a gain on digital assets of approximately $20.91 billion and a loss on digital assets of approximately $1.86 billion for the three and nine months ended September 30, 2026, respectively. We recognized a gain on digital assets of approximately $3.89 billion and $12.03 billion for the three and nine months ended September 30, 2025, respectively. See “Factors Impacting Results—Bitcoin” above for additional information.
Current report
•Product licenses revenues. Product license revenues are derived from fees earned for licensing our business intelligence software to customers on a term or perpetual basis. Product license revenue is recognized at the point when control of the license is transferred to the customer. Product licenses revenues decreased by $13.5 million and $18.8 million for the three and nine months ended September 30, 2026, respectively, as compared to the same periods in the prior year, primarily due to the non-recurrence of product licenses revenues recognized in the prior-year period related to a customer settlement and the continued migration of customers to our Cloud subscription services offerings.
Current report
Total significant expenses were $109.5 million and $345.2 million for the three and nine months ended September 30, 2026, respectively, a decrease of $3.1 million and an increase of $7.4 million as compared to the same periods in the prior year. These changes were primarily driven by higher sales and marketing expenses in the three and nine month periods ended September 30, 2026 and cloud expenses in the nine month period ended September 30, 2026, partially offset by change in general and administrative expenses in the three and nine month periods ended September 30, 2026 due to changes in segment cost allocations. The changes in sales and marketing and cloud expenses were as follows:
Current report
•Cloud expenses. Cloud expenses consist primarily of personnel and cloud infrastructure costs. Cloud expenses increased by $0.3 million and $15.3 million for the three and nine months ended September 30, 2026, respectively, as compared to the same periods in the prior year. The increase for the three and nine-month periods was primarily driven by higher cloud infrastructure costs, partially offset by lower personnel expenses.
Current report
Interest Income
Current report
For the three and nine months ended September 30, 2026, interest income of $47.1 million and $79.5 million was primarily due to interest earned on the cash and cash equivalents and short-term investments held in our USD Assets, which we began building following the establishment of the USD Reserve in December 2025 and which totaled $5.80 billion as of September 30, 2026.
Current report
Interest Expense
Current report
For the three and nine months ended September 30, 2026, interest expense of $15.4 million and $47.3 million, respectively, compared to $19.0 million and $54.2 million for the same periods in the prior year. Interest expense consisted primarily of contractual interest and amortization of issuance costs on our Convertible Notes. Contractual interest was unchanged from the prior year, while amortization of issuance costs decreased, primarily as a result of our repurchase of $1.50 billion aggregate principal amount of our 2029 Convertible Notes in May 2026.
Current report
•USD Cash. In August 2026, we established USD Cash, a management-designated pool of U.S. dollar liquidity held separately from the USD Reserve and maintained for broader Bitcoin Treasury Company purposes, which may include acquiring bitcoin, expanding the USD Reserve, and other capital management activities. Unlike the USD Reserve, USD Cash is not subject to the use restrictions or minimum balance requirements of our USD Reserve policy, and we may increase, reduce or redeploy amounts designated as USD Cash from time to time based on market conditions, liquidity needs and other factors. We have funded USD Cash primarily with proceeds from sales of class A common stock under our ATM.
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Removed paragraphs (50)
Previous report
"Preferred Stock" refers to, collectively, our STRF Stock, STRC Stock, STRE Stock, STRK Stock and STRD Stock.
Previous report
(f)$75,578 presented in the Approximate Average Purchase or Sale Price Per Bitcoin column represents the average price we paid for the bitcoin we held as of June 30, 2026.
Previous report
(1) On March 23, 2026, we announced a new $21.0 billion offering of MSTR Stock (the “MSTR Increase”). The MSTR Stock amount available for issuance reflects the aggregate remaining capacity of both the current offering as of June 30, 2026 and the MSTR Increase. Sales under the MSTR Increase may begin once capacity under the existing offering is substantially depleted.
Previous report
•BTC Gain represents the gross number of bitcoins held by the Company at the beginning of a period multiplied by the BTC Yield for such period.
Previous report
•BTC Yield measures the percentage change in BPS (in Sats) from the beginning of a period to the end of a period, which helps management and investors assess how the Company’s achievement of its strategy of acquiring bitcoin in an accretive manner varies across periods. The Company uses BTC Yield to evaluate whether its capital markets activity and bitcoin acquisition strategy has resulted in gross per-share accretion (or dilution) on an Assumed Diluted Shares Outstanding basis over an applicable period, and to compare the impact of its strategy across periods. While issuances of STRF Stock, STRC Stock, STRE Stock and STRD Stock do not increase our Assumed Diluted Shares Outstanding, these securities, as well as STRK Stock and our Outstanding Convertible Notes, rank senior to our class A common stock, and would entitle their holders to claims on our assets (including bitcoin) senior to those of holders of our common stock if we were to liquidate; as a result, additional bitcoin acquired using the proceeds from the sale of such instruments may not accrete to common shareholders.
Previous report
The following table presents our bitcoin holdings, our Assumed Diluted Shares Outstanding, our BPS (in Sats), and the price of bitcoin, each as of June 30, 2026 and 2025, as well as the changes in each between the periods shown:
Previous report
•BTC Yield: We achieved BTC Yield of 5.0% and 8.1% for the three and six months ended June 30, 2026, respectively, as compared to 8.7% and 19.7% during the same periods in the prior year. These decreases were primarily due to (i) a substantially larger bitcoin balance as of March 31, 2026 and December 31, 2025 compared to the corresponding prior-year dates, which increased the numerator in the BPS (in Sats) calculation and made higher BTC Yield percentages more difficult to achieve, (ii) our class A common stock trading at a lower premium relative to the value of our underlying bitcoin holdings during the three and six months ended June 30, 2026 as compared to same periods from prior year, which reduced the BTC Yield attributable to class A common stock issuances used to purchase bitcoin, (iii) an increase in sales of our class A common stock for purposes other than purchasing bitcoin in the current periods, including for funding the USD Reserve and paying for dividends on our Preferred Stock and interest expense on our Convertible Notes, and (iv) sales of 1,395 bitcoins during the three months ended June 30, 2026. These factors were partially offset by increased sales of Preferred Stock during the three and sixth months ended June 30, 2026, which netted proceeds of $5.46 billion and $7.52 billion, respectively, which we used to purchase 72,408 and 100,438 bitcoins, respectively, during these periods, as compared to sales of Preferred Stock during the three and six months ended June 30, 2025, which netted proceeds of $1.61 billion and $2.95 billion, respectively, and corresponding purchases of 15,212 and 29,661 bitcoin, respectively.
Previous report
◦Three months ended June 30:
Previous report
▪Bitcoin Activity: During the three months ended June 30, 2026, we acquired 85,296 bitcoin and sold approximately 1,395 bitcoin, increasing our holdings on a net basis to approximately 846,000 bitcoin, as compared to 69,140 bitcoin acquired and none sold during the three months ended June 30, 2025. These purchases during the three months ended June 30, 2026 were funded primarily with net proceeds from issuances of STRC Stock and class A common stock. The purchases during the three months ended June 30, 2025 were funded primarily with net proceeds from issuances of class A common stock, STRK Stock and STRF Stock.
Previous report
▪Assumed Diluted Shares Outstanding: During the three months ended June 30, 2026, we issued approximately 24.7 million shares of class A common stock under our ATM for aggregate net proceeds of approximately $2.94 billion, and our repurchase of $1.50 billion aggregate principal amount of our 2029 Convertible Notes led to a decrease in the number of Assumed Diluted Shares Outstanding by approximately 2.2 million, which, collectively, increased our Assumed Diluted Shares Outstanding by approximately 22.4 million shares, to approximately 401.3 million as of June 30, 2026. Issuances of STRC Stock during this period did not increase our Assumed Diluted Shares Outstanding because shares of STRC Stock are not convertible into shares of class A common Stock. Of those net proceeds from the sale of our class A common stock, approximately $1.65 billion was used to fund the USD Reserve, approximately $317.0 million was used to pay dividends on our Preferred Stock, and approximately $9.0 million was used to pay interest on our Convertible Notes, with the remaining net proceeds used primarily to acquire bitcoin. Because a portion of the proceeds from sales of class A common stock under our ATM was used to pay dividends and interest rather than acquire bitcoin, those sales increased Assumed Diluted Shares Outstanding (the denominator of BPS (in Sats)) without a corresponding increase in our bitcoin holdings. As a result, the issuances reduced, or offset increases in, BTC Yield for the period. By comparison, during the three months ended June 30, 2025, we issued approximately 14.2 million shares of class A common stock and 4.6 million shares of STRK Stock (which is convertible to common stock on a 1 for 10 basis) under our ATM for aggregate net proceeds of approximately $5.7 billion, increasing our Assumed Diluted Shares Outstanding by approximately 14.6 million shares, to approximately 314.2 million as of June 30, 2025. Of the net proceeds from those class A common stock issuances and STRK issuances, approximately $49.1 million was used to pay dividends on our Preferred Stock and $9.0 million was used to pay interest on our Convertible Notes, with the remaining net proceeds used primarily to acquire bitcoin.
Previous report
◦Six months ended June 30:
Previous report
▪Bitcoin Activity: During the six months ended June 30, 2026, we acquired 174,895 bitcoin and sold approximately 1,395 bitcoin, increasing our holdings on a net basis to approximately 846,000 bitcoin, as compared to 149,855 bitcoin acquired and none sold during the six months ended June 30, 2025. These purchases during the six months ended June 30, 2026 were funded primarily with net proceeds from issuances of STRC Stock and class A common stock and STRK Stock. The purchases during the six months ended June 30, 2025 were funded primarily with net proceeds from issuances of class A common stock, STRK Stock and STRF Stock.
Previous report
▪Assumed Diluted Shares Outstanding: During the six months ended June 30, 2026, we issued approximately 58.5 million shares of class A common stock under our ATM for aggregate net proceeds of approximately $8.24 billion, and our repurchase of $1.50 billion aggregate principal amount of our 2029 Convertible Notes led to a decrease in the number of Assumed Diluted Shares Outstanding by approximately 2.2 million, which, collectively, increased our Assumed Diluted Shares Outstanding by approximately 56.4 million shares, to approximately 401.3 million as of June 30, 2026. Issuances of STRC Stock during this period did not increase our Assumed Diluted Shares Outstanding because shares of STRC Stock are not convertible into shares of class A common Stock. Of those net proceeds from the sale of our class A common stock, approximately $1.52 billion was used to fund the USD Reserve, approximately $546.0 million was used to pay dividends on our Preferred Stock, and approximately $17.3 million was used to pay interest on our Convertible Notes, with the remaining net proceeds used primarily to acquire bitcoin. Because a portion of the proceeds from sales of class A common stock under our ATM was used to pay dividends and interest rather than acquire bitcoin, those sales increased Assumed Diluted Shares Outstanding (the denominator of BPS (in Sats)) without a corresponding increase in our bitcoin holdings. As a result, the issuances reduced, or offset increases in, BTC Yield for the period. By comparison, during the six months ended June 30, 2025, we issued approximately 26.9 million shares of class A common stock and 12.2 million shares of STRK Stock (which is convertible to common stock on a 1 for 10 basis) under our ATM for aggregate net proceeds of approximately $10.69 billion, and issued the 2030B
Previous report
Convertible Notes for aggregate net proceeds of approximately $1.98 billion, collectively increasing our Assumed Diluted Shares Outstanding by approximately 32.5 million shares, to approximately 314.2 million as of June 30, 2025. Of the net proceeds from those class A common stock issuances and STRK issuances, approximately $58.1 million was used to pay dividends on our Preferred Stock and $17.2 million was used to pay interest on our Convertible Notes, with the remaining net proceeds used primarily to acquire bitcoin.
Previous report
See “Important Information about KPIs” below for additional information about these KPIs, including their purposes and limitations and for the calculation of Assumed Diluted Shares Outstanding.
Previous report
◦Bitcoin risks. Bitcoin is a digital asset, which is a novel asset class that is subject to significant legal, commercial, regulatory and technical uncertainty.
Previous report
▪No cash flows: Holding bitcoin does not generate any cash flows and involves custodial fees and other costs.
Previous report
▪Volatility: The price of bitcoin has historically experienced significant price volatility, and a significant decrease in the price of bitcoin would adversely affect our financial condition and results of operations.
Previous report
▪Counterparty, cybersecurity and custody risks: Our strategy of acquiring and holding bitcoin exposes us to counterparty risks with respect to the custody of our bitcoin, cybersecurity risks, and other risks inherent to holding a digital asset. In particular, we are subject to the risk that, if our private keys with respect to our digital assets are lost or destroyed or other similar circumstances or events occur, we may lose some or all of our digital assets, which could materially adversely affect our financial condition and results of operations.
Previous report
▪Legal and regulatory uncertainty: Due to the continuing evolution of the legal and regulatory framework governing bitcoin and those who own, hold, or transact in bitcoin, we face the risk that legislative and regulatory bodies in the U.S. and other jurisdictions may adopt new legislation, regulations, or guidance affecting bitcoin, digital assets, and market participants. Any such developments could have a material impact on bitcoin (including its price, liquidity, and utility), the digital asset markets generally, and us.
Previous report
We recognized an unrealized loss on digital assets of approximately $8.32 billion and $22.77 billion for the three and six months ended June 30, 2026, respectively. We recognized an unrealized gain on digital assets of approximately $14.05 billion and $8.14 billion for the three and six months ended June 30, 2025, respectively. Due to the volatility of bitcoin, and our substantial holdings of bitcoin, we expect changes in the fair market value of bitcoin to materially impact our results in future periods.
Previous report
Total significant expenses were $115.8 million and $235.7 million for the three and six months ended June 30, 2026, respectively, an increase of $1.3 million and $10.5 million as compared to the same periods in the prior year. Controllable expenses increased by $5.7 million and $15.9 million, primarily driven by higher sales and marketing, and cloud and maintenance expenses, while non-controllable expenses decreased by $4.5 million and $5.4 million. See the following discussion of the drivers of the changes in sales and marketing and cloud and maintenance expenses.
Previous report
•Cloud and Maintenance expenses. Cloud and Maintenance expenses consist primarily of personnel and related overhead costs associated with providing product support and cloud subscription services, as well as cloud hosting infrastructure costs. Cloud and Maintenance expenses increased by $5.5 million and $12.9 million for the three and six months ended June 30, 2026, respectively, primarily driven by increased cloud infrastructure costs.
Previous report
Interest Income (Expense) Impacts
Previous report
Interest income (expense), net, primarily relates to the contractual interest expense and amortization of issuance costs related to our long-term debt arrangements, as offset by interest income earned on interest-bearing cash equivalents and short-term investments. The following table sets forth interest expense, net for the periods indicated:
Previous report
Availability of the USD Reserve for Liquidity
Previous report
STRC Dividend Rate Policy
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Preferred Stock Repurchase Program
Previous report
BTC Monetization Program
Previous report
The repurchase programs and the BTC Monetization Program became effective upon their authorization and do not obligate us to repurchase any securities or to sell any bitcoin. As of July 24, 2026, we had not repurchased any shares of class A common stock under the class A common stock repurchase program, and we had not sold any bitcoin under the $1.25 billion USD Reserve-building component of the BTC Monetization Program. As of July 24, 2026, we had repurchased 288,930 shares of STRC Stock under the Preferred Stock repurchase program for an aggregate purchase price of $25.0 million.
Previous report
Capital Markets Transactions
Previous report
Initial Public Offerings of Preferred Stock
Previous report
We did not complete any initial public offerings of preferred stock during the three and six months ended June 30, 2026. We completed the initial public offerings of our STRF Stock, STRK Stock, and STRD Stock during the three and six months ended June 30, 2025. See “Capital Markets Activity” for additional information about our initial public offerings of preferred stock activity for the three and six months ended June 30, 2025. The net proceeds from these offerings were used for general corporate purposes, including the acquisition of bitcoin and for working capital.
Previous report
At-the-Market Offerings
Previous report
Debt Offerings and Repurchases
Previous report
During the three and six months ended June 30, 2026, we did not complete any new debt offerings. During the three months ended June 30, 2026, we completed a repurchase of $1.50 billion aggregate principal amount of our 2029 Convertible Notes for $1.38 billion in cash, representing an approximate 8% discount to par. The repurchase reduced the aggregate principal amount of our 2029 Notes outstanding by $1.50 billion and resulted in a gain on debt extinguishment of approximately $113.9 million. The repurchase was funded with cash reserves.
Previous report
During the first quarter of 2025, we completed a $2.00 billion private offering of our 2030B Convertible Notes, generating net proceeds of approximately $1.98 billion after $15.1 million of issuance costs. We used the net proceeds from this offering for general corporate purposes, including the acquisition of bitcoin and for working capital. See Note 6, Long-term Debt, to the Notes to Consolidated Financial Statements contained in Part I, Item 1 of this Quarterly Report for additional information.
Previous report
Our board of directors and stockholders approved an amendment and restatement to the certificate of designations of our STRC Stock to provide for scheduled dividend payments twice a month, instead of once. This amendment became effective at 12:01 a.m., New York City time, on June 30, 2026. The foregoing description of the STRC Stock amendment is qualified in its entirety by reference to the full text of the amended and restated certificate of designations of our STRC Stock included as Exhibit 3.9 to this Quarterly Report and incorporated herein by reference.
Previous report
On June 29, 2026, we announced that we will increase the regular dividend rate per annum on our STRC Stock to 12.00%, effective for semi-monthly periods with record dates on or after July 1, 2026. This adjustment has no effect on any previously declared but unpaid dividends on STRC Stock. On June 28, 2026, our board of directors declared semi-monthly cash dividends on STRC Stock of $0.50 per share (representing a per annum dividend rate of 12.00%) payable on July 31, 2026 to stockholders of record as of 5:00 p.m., New York City time, on July 15, 2026, and payable on August 15, 2026 to stockholders of record as of 5:00 p.m., New York City time, on July 31, 2026. As of June 29, 2026, we expected that the dividends payable on July 31, 2026 and August 15, 2026 would be characterized as non-taxable returns of capital to the extent of a stockholder’s tax basis in its STRC Stock for U.S. federal income tax purposes. See “Liquidity and Capital
Previous report
Resources—Digital Credit Capital Framework” above for additional information regarding the revised STRC dividend policy and our related capital management programs.
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Reworded paragraphs (102)
Previous wording
This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). For this purpose, any statements contained herein that are not statements of historical fact, including without limitation, certain statements regarding industry prospects and our results of operations or financial position, may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” and similar expressions are intended to identify forward-looking statements. The important factors discussed under Part II, "Item 1A. Risk Factors” of this Quarterly Report, which are incorporated by reference herein, among others, could cause actual results to differ materially from those indicated by forward-looking statements made herein and presented elsewhere by management from time to time. Such forward-looking statements represent management’s current expectations and are inherently uncertain. Investors are warned that actual results may differ from management’s expectations.
Current wording
This Quarterly Report on Form 10-Q (this “Quarterly Report”) contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). For this purpose, any statements contained herein that are not statements of historical fact, including without limitation, certain statements regarding industry prospects and our results of operations or financial position, may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believes,” “anticipates,” “plans,” “expects,” and similar expressions are intended to identify forward-looking statements. The important factors discussed under Part II, "Item 1A. Risk Factors” of this Quarterly Report, which are incorporated by reference herein, among others, could cause actual results to differ materially from those indicated by forward-looking statements made herein and presented elsewhere by management from time to time. Such forward-looking statements represent management’s current expectations and are inherently uncertain. Investors are warned that actual results may differ from management’s expectations.We undertake no obligation to update these forward-looking statements except as required by law.
Previous wording
As part of our capital management strategy, we maintain a U.S. dollar reserve (the "USD Reserve") intended to support the payment of dividends on our Preferred Stock and interest expense on our outstanding indebtedness. In June 2026, our board of directors approved a formal policy governing the USD Reserve and adopted a broader capital management framework, which we refer to as our “Digital Credit Capital Framework,” consisting of a board-approved USD Reserve policy, a revised STRC dividend rate policy, a repurchase program for our Preferred Stock, a repurchase program for our class A common stock, and a BTC monetization program, as discussed in further detail under “Liquidity and Capital Resources—Digital Credit Capital Framework” below. Our capital management strategy also contemplates that we may (i) enter into additional capital raising transactions that are secured, directly or indirectly, by our assets, including bitcoin, (ii)
Current wording
As part of our capital management strategy, we maintain (i) a U.S. dollar reserve (the "USD Reserve") intended to support the payment of dividends on the Preferred Stock and interest expense on the Company's outstanding indebtedness and (ii) a separately designated pool of U.S. dollar liquidity ("USD Cash" and, together with the USD Reserve, our "USD Assets") available for broader Bitcoin Treasury Company purposes, including acquiring bitcoin, repurchasing digital credit, expanding the USD Reserve and other capital management activities. The USD Reserve and USD Cash are each components of our broader capital management framework, which we refer to as our “Digital Credit Capital Framework.” See “Liquidity and Capital Resources—Digital Credit Capital Framework” below for a description of the six components of the Digital Credit Capital Framework. Our capital management strategy also contemplates that we may (i) enter into additional capital raising transactions that are secured, directly or indirectly, by our assets, including bitcoin, (ii) pursue strategies intended to generate income streams or otherwise generate funds using our bitcoin holdings, and (iii) periodically sell bitcoin for general corporate purposes, such as satisfying liquidity needs and financial obligations.
Previous wording
The following table presents a roll-forward of our bitcoin holdings, including additional information related to our bitcoin purchases, bitcoin sales, and unrealized gain or loss on digital assets within the respective periods:
Current wording
The following table presents a roll-forward of our bitcoin holdings, including additional information related to our bitcoin purchases, bitcoin sales, and gain or loss on digital assets within the respective periods:
Previous wording
(c)In the first quarter of 2026, we purchased bitcoin using $2.06 billion of the net proceeds from ATM sales of STRC Stock, $3.3 million of the net proceeds from ATM sales of STRK Stock and $5.19 billion of the net proceeds from ATM sales of class A common stock.
Current wording
(d)In the first quarter of 2026, we purchased bitcoin using $2.06 billion of the net proceeds from ATM sales of STRC Stock, $3.3 million of the net proceeds from ATM sales of STRK Stock and $5.19 billion of the net proceeds from ATM sales of class A common stock.
Previous wording
(d)In the second quarter of 2026, we purchased bitcoin using $5.46 billion of the net proceeds from ATM sales of STRC Stock, and $0.96 billion of the net proceeds from ATM sales of class A common stock.
Current wording
(e)In the second quarter of 2026, we purchased bitcoin using $5.46 billion of the net proceeds from ATM sales of STRC Stock, and $0.96 billion of the net proceeds from ATM sales of class A common stock.
Previous wording
(e)The proceeds from the sales were used to fund dividend payments on Preferred Stock.
Current wording
(f)The proceeds from these sales were used to fund dividend payments on Preferred Stock.
Previous wording
Our unrealized loss on digital assets for the three and six months ended June 30, 2026 amounted to $8.32 billion and $22.77 billion, respectively.
Current wording
Our gain on digital assets for the three months ended September 30, 2026 and loss on digital assets for the nine months ended September 30, 2026, amounted to $20.91 billion and $1.86 billion, respectively.
Previous wording
The amounts reported as “Market Value” in the above table represent a mathematical calculation consisting of the price for one bitcoin reported on the Coinbase exchange (our principal market for bitcoin) in each scenario defined above multiplied by the number of bitcoins held by us at the end of the applicable period. Bitcoin and bitcoin markets may be subject to manipulation and the spot price of bitcoin may be subject to fraud and manipulation. Accordingly, the Market Value amounts reported above may not accurately represent fair market value at any given point, and the actual fair market value of our bitcoin may be different from such amounts and such deviation may be material. Moreover, (i) the bitcoin market historically has been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign currencies markets, relative anonymity, a developing regulatory landscape, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various other risks that are, or may be, inherent in its entirely electronic, virtual form and decentralized network and (ii) we may not be able to sell our bitcoins at the Market Value amounts indicated above, at the market price as reported on the Coinbase exchange (our principal market for bitcoin) on the date of sale, or at all. The Market Value amount based on the market price of one bitcoin at the end of the applicable period is determined on the same basis as the fair value of our bitcoin recognized in our unaudited consolidated financial statements. See Note 3, Digital Assets, to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
Current wording
The amounts reported as “Market Value” in the above table represent a mathematical calculation consisting of the price for one bitcoin reported on the Coinbase exchange (our principal market for bitcoin) in each scenario defined above multiplied by the number of bitcoins held by us at the end of the applicable period. Bitcoin and bitcoin markets may be subject to manipulation and the spot price of bitcoin may be subject to fraud and manipulation. Accordingly, the Market Value amounts reported above may not accurately represent fair market value at any given point, and the actual fair market value of our bitcoin may be different from such amounts and such deviation may be material. Moreover, (i) the bitcoin market historically has been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign currencies markets, relative anonymity, a developing regulatory landscape, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various other risks that are, or may be, inherent in its entirely electronic, virtual form and decentralized network and (ii) we may not be able to sell our bitcoins at the Market Value amounts indicated above, at the market price as reported on the Coinbase exchange (our principal market for bitcoin) on the date of sale, or at all. The Market Value amount based on the market price of one bitcoin at the end of the applicable period is determined on the same basis as the fair value of our bitcoin recognized in our unaudited consolidated financial statements. See Note 3, "Digital Assets", to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report.
Previous wording
As of July 24, 2026, we held approximately 843,775 bitcoins, which had an aggregate market value of $54.14 billion, based on the market price of $64,164 of one bitcoin as reported on the Coinbase exchange at 4:00 p.m. Eastern Time on July 24, 2026.
Current wording
As of October 25, 2026, we held approximately 848,517 bitcoins, which had an aggregate market value of $68.27 billion, based on the market price of $80,456 of one bitcoin as reported on the Coinbase exchange at 4:00 p.m. Eastern Time on October 25, 2026.
Previous wording
We custody our bitcoin across multiple custodians to diversify our exposure to any single custodian. Our custodial services contracts do not restrict our ability to reallocate bitcoin among custodians, and our bitcoin holdings may be concentrated with a single custodian from time to time. Given the significant amount of bitcoin we hold, we continually evaluate and seek to engage additional digital asset custodians to further diversify custody risk. We may also, in the future, discontinue or change the use of one or more third-party custodians or utilize alternative custody arrangements, including self-custody. For a discussion of risks relating to the custody of our bitcoin, see Part II, Item 1A. Risk Factors "—Risks Related to Our Bitcoin Strategy and Holdings—Our bitcoin strategy exposes us to various risks, including risks associated with bitcoin", "—We face risks relating to the custody of our bitcoin, including the loss or destruction of private keys required to access our bitcoin and cyberattacks or other data loss relating to our bitcoin" and "—Our bitcoin strategy exposes us to risk of non-performance by counterparties."
Current wording
We custody our bitcoin across multiple custodians to diversify our exposure to any single custodian. Our custodial services contracts do not restrict our ability to reallocate our bitcoin among custodians and, given the significant amount of bitcoin we hold, we continually evaluate and seek to engage additional digital asset custodians to further diversify custody risk. We may also, in the future, discontinue or change the use of one or more third-party custodians or utilize alternative custody arrangements, including self-custody. For a discussion of risks relating to the custody of our bitcoin, see Part II, Item 1A. Risk Factors "—Risks Related to Our Bitcoin Strategy and Holdings—Our bitcoin strategy exposes us to various risks, including risks associated with bitcoin", "—We face risks relating to the custody of our bitcoin, including the loss or destruction of private keys required to access our bitcoin and cyberattacks or other data loss relating to our bitcoin" and "—Our bitcoin strategy exposes us to risk of non-performance by counterparties."
Previous wording
Consistent with our Digital Credit Capital Framework, we use the vast majority of our cash, including cash generated from capital raising transactions, to acquire bitcoin, pay for dividends on our Preferred Stock and interest expense on our Convertible Notes and fund our USD Reserve. We fund our purchases of bitcoin primarily from proceeds of our offerings of our class A common stock and Preferred Stock instruments. We have also previously used proceeds from offerings of convertible notes and senior secured notes, and a loan secured by bitcoin, to purchase bitcoin, and we may incur additional indebtedness in the future, including for the purpose of purchasing bitcoin.
Current wording
Consistent with our Digital Credit Capital Framework, we use the vast majority of our cash, including cash generated from capital raising transactions, to acquire bitcoin, pay dividends on our Preferred Stock and interest expense on our Convertible Notes, repurchase our Preferred Stock and fund our USD Assets. We fund our purchases of bitcoin primarily from proceeds of our offerings of our class A common stock and Preferred Stock instruments, as well as USD Cash. We have also previously used proceeds from offerings of convertible notes and senior secured notes, and a loan secured by bitcoin, to purchase bitcoin, and we may incur additional indebtedness in the future, including for the purpose of purchasing bitcoin.
Previous wording
The following table sets forth total shares sold and total net proceeds received from shares sold under our initial public and ATMs for the periods indicated. For the three and six months ended June 30, 2026, the amounts presented reflect only shares sold under our ATMs. For the three and six months ended June 30, 2025, the amounts include shares sold under both our initial public offerings and ATMs.
Current wording
The following table sets forth total shares sold and total net proceeds received from shares sold under our initial public offerings and ATMs for the periods indicated. For the three and nine months ended September 30, 2026, the amounts presented reflect only shares sold under our ATMs. For the three and nine months ended September 30, 2025, the amounts include shares sold under both our initial public offerings and ATMs.
Previous wording
From July 1, 2026 to July 24, 2026, we sold 13.0 million additional shares of class A common stock under our ATM for total net proceeds (net of sales commissions and expenses) of approximately $1.27 billion. These amounts include sales made during this period that were pending settlement as of July 24, 2026. From July 1, 2026 to July 24, 2026, we repurchased 288,930 shares of STRC Stock under our share repurchase program, for an aggregate purchase price of $25.0 million.
Current wording
From October 1, 2026 to October 25, 2026, we sold 0.4 million additional shares of class A common stock under our ATM for total net proceeds (net of sales commissions and expenses) of approximately $58.69 million.
Previous wording
During the three and six months ended June 30, 2026, we did not complete any new debt offerings. During the first quarter of 2025, we received net proceeds of approximately $1.98 billion from the issuance of our 2030B Convertible Notes. We used the net proceeds from this offering for general corporate purposes, including the acquisition of bitcoin and for working capital. In addition, in June 2025, we entered into a loan agreement that provides for aggregate borrowings of up to $31.1 million, available in multiple tranches, and bearing interest, with respect to each tranche, at a variable rate equal to the one-year Secured Overnight Financing Rate plus 4.24%.
Current wording
During the three and nine months ended September 30, 2026, we did not complete any new debt offerings. During the nine months ended September 30, 2025, we received net proceeds of approximately $1.98 billion from the issuance of our 2030B Convertible Notes during the first quarter of 2025. We used the net proceeds from this offering for general corporate purposes, including the acquisition of bitcoin and for working capital. In addition, in June 2025, we entered into a loan agreement that provides for aggregate borrowings of up to $31.1 million, available in multiple tranches, and bearing interest, with respect to each tranche, at a variable rate equal to the one-year Secured Overnight Financing Rate plus 4.24%.
Previous wording
During the three months ended June 30, 2026, we repurchased $1.50 billion aggregate principal amount of our 0% Convertible Senior Notes due 2029 in privately negotiated transactions, for an aggregate cash repurchase price of $1.38 billion. The repurchased notes were canceled.
Current wording
During the nine months ended September 30, 2026, we repurchased $1.50 billion aggregate principal amount of our 0% Convertible Senior Notes due 2029 in privately negotiated transactions, for an aggregate cash repurchase price of $1.38 billion. During the nine months ended September 30, 2025, we redeemed $1.05 billion aggregate principal amount of our 0% Convertible Senior Notes due 2027, for which we issued 7,373,528 shares of class A common stock and paid a nominal amount of cash in lieu of fractional shares.
Previous wording
•BTC Yield represents the percentage change in BPS (in Sats) from the beginning of a period to the end of a period.
Current wording
•BTC Yield represents the percentage change in BPS (in Sats) over a period.
Previous wording
The following tables present our BTC Yield, BTC Gain, and BTC $ Gain for the three and six months ended June 30, 2026 and 2025:
Current wording
The following tables present our BTC Yield, BTC Gain, and BTC $ Gain for the three and nine months ended September 30, 2026 and 2025:
Previous wording
For example, if BPS (in Sats) is 100 at the beginning of a fiscal year (the reference period), 110 at the end of the first quarter and 125 at the end of the second quarter, the BTC Yield for the second quarter (the applicable measurement period) is calculated as (125/100 − 1) less (110/100 − 1), or 15%—reflecting the 15-point BPS (in Sats) increase from 110 to 125 expressed against the reference period starting BPS (in Sats) of 100. The sum of the first quarter BTC Yield (10%) and the second quarter BTC Yield (15%) equals the year-to-date BTC Yield of 25% (125/100 − 1). See "Important Information about KPIs" for additional information.
Current wording
See "Important Information about KPIs" for additional information.
Previous wording
•BTC Gain: We achieved BTC Gain of 37,733 and 54,625 for the three and six months ended June 30, 2026, respectively, as compared to 46,008 and 88,109 during the same periods in the prior year, as applicable, primarily due to a decrease in our BTC Yield for the three and six months ended June 30, 2026, as compared to the same periods in the prior year, as set forth above, partially offset by an increase in our bitcoin holdings as of the beginning of 2026 compared to the beginning of 2025 (as of December 31, 2025 and 2024, we held 672,500 and 447,470 bitcoin, respectively).
Current wording
Our BTC Gain was (79,710) and (25,085) for the three and nine months ended September 30, 2026, respectively, as compared to 27,847 and 115,956 during the same periods in the prior year, primarily due to a decrease in our BTC Yield for the three and nine months ended September 30, 2026, as compared to the same periods in the prior year, as set forth above.
Previous wording
•BTC $ Gain: We achieved BTC $ Gain of approximately $2.22 billion and $3.21 billion for the three and six months ended June 30, 2026, respectively, as compared to approximately $4.96 billion and $9.49 billion during the same periods in the prior year, primarily due to a decrease in bitcoin price to $58,714 as of June 30, 2026 from $107,752 as of June 30, 2025, as well as a decrease in BTC Gain compared to the same periods in the prior year, as set forth above.
Current wording
Our BTC $ Gain was approximately $(6.66) billion and $(2.10) billion for the three and nine months ended September 30, 2026, respectively, as compared to approximately $3.19 billion and $13.26 billion during the same periods in the prior year, primarily due to a decrease in BTC Gain compared to the same periods in the prior year as set forth above.
Previous wording
We believe the following key factors have previously had, and may continue to have, material impacts to our financial results and liquidity, and our ability to achieve our business objectives:
Current wording
We believe the following key factors have previously had, and may continue to have, material impacts on our financial results and liquidity, and our ability to achieve our business objectives:
Previous wording
◦Financial results. Bitcoin is a highly volatile asset that has traded below $60,000 per bitcoin and above $120,000 per bitcoin on the Coinbase exchange (our principal market for bitcoin) in the 12 months preceding June 30, 2026. Although we continue to initially record our bitcoin purchases at cost, upon adoption of ASU 2023-08 on January 1, 2025, any subsequent increases or decreases in fair market value are recognized as incurred in the Consolidated Statements of Operations, and the fair value of our bitcoin is reflected within the Consolidated Balance Sheets each reporting period-end. Due to the volatility of bitcoin, and our substantial holdings of bitcoin, changes in the fair market value of bitcoin have materially impacted, and we expect will continue to materially impact, our results.
Current wording
◦Bitcoin volatility. Bitcoin is a highly volatile asset that has traded below $60,000 per bitcoin and above $125,000 per bitcoin on the Coinbase exchange in the 12 months preceding September 30, 2026. Although we continue to initially record our bitcoin purchases at cost, upon adoption of ASU 2023-08 on January 1,
Previous wording
◦Source of capital. We rely substantially on the availability of equity and debt capital markets to fund our preferred stock dividend payments, interest expense, and other financial obligations as well as to maintain the USD Reserve at current levels. We may also sell bitcoin pursuant to our board-authorized bitcoin monetization program to satisfy these obligations. As such, we are subject to risks relating to the availability of capital to us on favorable terms or at all, as well as our ability to sell bitcoin at attractive prices.
Current wording
◦Source of capital. We rely substantially on the availability of equity and debt capital markets to fund our Preferred Stock dividends, interest expense, and other financial obligations, and to maintain our USD Assets. We may also sell bitcoin pursuant to our BTC Monetization Program (as defined below) to satisfy these obligations. As such, we are subject to risks relating to the availability of capital to us on favorable terms or at all, as well as our ability to sell bitcoin at attractive prices.
Previous wording
◦Preferred stock dividend payments. Our outstanding Preferred Stock creates recurring and potentially variable cash obligations that can reduce funds available for operations, product investment, and debt service. In addition, any deferred dividends on certain of our Preferred Stock would accrue and compound, including at increasing rates in the case of STRF Stock, which could increase future cash outlays, while STRC Stock’s board-set variable rate can change monthly, introducing additional uncertainty to our expected dividend payments.
Current wording
◦Preferred stock dividend payments. Our outstanding Preferred Stock creates recurring and potentially variable cash obligations that can reduce funds available for operations, product investment, and debt service. Further, any deferred dividends on certain of our Preferred Stock would accrue and compound, including at increasing rates in the case of STRF Stock, while STRC Stock’s variable rate can change monthly, introducing further uncertainty to our expected dividend payments.
Previous wording
◦Interest on our USD Reserve. Cash equivalents held in our USD Reserve are generally invested in money market funds and other interest-bearing instruments. Interest income is affected by prevailing market interest rates and may decline in a falling-rate environment or increase in a rising-rate environment. Interest income is also affected by the size of our USD Reserve: to the extent we reduce the USD Reserve or increase it to scale with our interest and dividend obligations, the amount of interest income we earn would generally proportionately decrease or increase, respectively. Variations in interest rates and the size of our USD Reserve could materially impact our financial results.
Current wording
◦Interest on our USD Assets. Cash equivalents and short-term investments held in our USD Assets are generally invested in money market funds and other interest-bearing instruments. Interest income is affected by prevailing market interest rates and the size of our USD Assets; changes in either factor could materially impact our financial results.
Previous wording
◦Deferred taxes. Since adopting ASU 2023-08, we are no longer required to account for our bitcoin under a cost-less-impairment accounting model and no longer record deferred tax assets related to bitcoin impairment losses. Instead, we establish a deferred tax liability if the fair market value of bitcoin at the reporting date exceeds the average cost basis of our bitcoin holdings at such reporting date, and subsequent increases or decreases in the fair market value of bitcoin increase or decrease the deferred tax liability. If the fair market value of our bitcoin as of the end of any reporting period is below its average cost basis as of the end of the prior period, the deferred tax liability with respect to unrealized gains, if any, would be reversed, a deferred tax asset for the unrealized loss would be recorded, and we would be required to establish a valuation allowance against our U.S. federal and state deferred tax assets. As of June 30, 2026, the market value of bitcoin had declined to the point where the cost basis of our bitcoin holdings exceeded their fair market value. During the six months ended June 30, 2026, the deferred tax liability recognized as of December 31, 2025 was reversed, a deferred tax asset related to unrealized losses on bitcoin holdings was recorded, and a full valuation allowance on all of our domestic net deferred tax assets was established. As of June 30, 2026, the market value of bitcoin has remained below our cost basis, and we remain in a net deferred tax asset position; however, due to the full valuation allowance on all our domestic net deferred tax assets, no net deferred tax benefit is reflected in our financial statements. See Note 8, Income Taxes, to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report for additional information.
Current wording
◦Deferred taxes. Since adopting ASU 2023-08 we establish a deferred tax liability if the fair market value of bitcoin at the reporting date exceeds the average cost basis of our bitcoin holdings at such reporting date, and subsequent increases or decreases in the fair market value of bitcoin increase or decrease the deferred tax liability. If the fair market value of our bitcoin as of the end of any reporting period is below its average cost basis as of such date, the deferred tax liability with respect to unrealized gains, if any, would be reversed, a deferred tax asset for the unrealized loss would be recorded, and we may be required to establish a valuation allowance against our U.S. federal and state deferred tax assets. During the three months ended September 30, 2026, the fair value of our bitcoin holdings increased above their average cost basis. This resulted in (i) the elimination of the deferred tax asset related to the previous unrealized loss on our bitcoin holdings, (ii) the release of the valuation allowance against the U.S. federal and state deferred tax assets, and (iii) the recognition of a net deferred tax liability related to our bitcoin holdings and a deferred tax asset related to capital losses from sales of bitcoin as of September 30, 2026. See Note 8, "Income Taxes", to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report for additional information.
Previous wording
▪CAMT: On September 30, 2025, the Department of Treasury (the "Treasury") and the Internal Revenue Service (the "IRS") issued interim guidance ("Interim Guidance") which, in relevant part, clarifies that a corporation may disregard unrealized gains and losses on its digital asset holdings when computing average annual adjusted financial statement income ("AFSI") for purposes of determining whether it is subject to the 15% corporate alternative minimum tax ("CAMT") under the Inflation Reduction Act of 2022 (the "IRA"). The Treasury and IRS intend to issue revised proposed regulations similar to this Interim Guidance. As previously disclosed, pursuant to the Interim Guidance, we plan to exclude our unrealized gains and losses on our bitcoin holdings from the calculation of our AFSI for purposes of determining whether we are subject to CAMT. As a result, we do not expect to become subject to CAMT due to unrealized gains on our bitcoin holdings, if any.
Current wording
▪CAMT: On September 30, 2025, the Department of Treasury (the "Treasury") and the Internal Revenue Service (the "IRS") issued interim guidance ("Interim Guidance") which, in relevant part, clarifies that a corporation may disregard unrealized gains and losses on its digital asset holdings when computing average annual adjusted financial statement income ("AFSI") for purposes of determining whether it is subject to the 15% corporate alternative minimum tax ("CAMT") under the Inflation Reduction Act of 2022 (the "IRA"). As previously disclosed, we do not expect to become subject to CAMT due to unrealized gains on our bitcoin holdings, if any. However, if the Interim Guidance is revoked or if the proposed or final regulations, when published or adopted, do not provide appropriate relief, we could become subject to the CAMT in the future. See Part II, Item 1A. Risk Factors “–Risks Related to our Business in General–We may have exposure to greater than anticipated tax liabilities” for additional information.
Previous wording
▪OBBBA: On July 4, 2025, the One Big Beautiful Bill Act was enacted in the U.S., introducing several changes to corporate taxation. These changes include modifications to capitalization of research and development expenses, limitations on deductions for interest expense, accelerated fixed asset depreciation, and adjustments to the international tax framework. The legislation did not have a material impact to our income tax expense or effective tax rate for the three or six months ended June 30, 2026.
Current wording
▪OBBBA: On July 4, 2025, the One Big Beautiful Bill Act was enacted in the U.S., introducing several changes to corporate taxation. These changes include modifications to capitalization of research and development expenses, limitations on deductions for interest expense, accelerated fixed asset depreciation, and adjustments to the international tax framework. The legislation did not have a material impact to our income tax expense or effective tax rate for the three or nine months ended September 30, 2026.
Previous wording
◦On-premise to cloud subscription. During the three and six months ended June 30, 2026, we continued to migrate existing customers from on-premise perpetual licenses to cloud-based subscription offerings. This transition has resulted, and is expected to continue to result, in changes to payment patterns and revenue recognition, with a shift from upfront recognition to ratable recognition over the contract term, which has affected and may continue to affect our reported revenue, operating results, and cash flows. For the three and six months ended June 30, 2026, we experienced growth in cloud subscription services revenue of $22.0 million and $43.8 million, respectively, partially offset by declines in product license revenue and related product support revenue of $15.3 million and $25.5 million in the aggregate, respectively. We expect product license revenue and related product support revenue to continue to decline in future periods, as we no longer actively market new perpetual licenses or associated product support offerings.
Current wording
◦On-premise to cloud subscription. During the three and nine months ended September 30, 2026, we continued to migrate existing customers from on-premise perpetual licenses to cloud-based subscription offerings. This transition has resulted, and is expected to continue to result, in changes to payment patterns and revenue recognition, with a shift from upfront recognition to ratable recognition over the contract term, which has affected and may continue to affect our reported revenue, operating results, and cash flows. We expect product license revenue and related product support revenue to continue to decline in future periods, as we no longer actively market new perpetual licenses or associated product support offerings.
Previous wording
◦Deferred revenue and advance payments. Deferred revenue and advance payments represent amounts received or due from our customers before we transfer our software or services to the customer. For multi-year service contract arrangements, we generally invoice no more than one year in advance of services and record deferred revenue only for invoiced amounts. Revenue is subsequently recognized in the period(s) in which control of the software or services is transferred to the customer. The portions of multi-year contracts that will be invoiced in the future are not presented on the Consolidated Balance Sheets in “Accounts receivable, net” and “Deferred revenue and advance payments” and instead are included in the remaining performance obligation disclosure below.
Current wording
◦Deferred revenue and advance payments. Deferred revenue and advance payments represent amounts received or due from our customers before we transfer our software or services to the customer. For multi-year service contract arrangements, we generally invoice no more than one year in advance of services and record deferred revenue only for invoiced amounts. Revenue is subsequently recognized in the period(s) in which control of the software or services is transferred to the customer. The portions of multi-year contracts that will be invoiced in the future are not presented on the Consolidated Balance Sheets in “Accounts receivable, net” and “Deferred revenue and advance payments” and instead are included in the remaining performance obligation disclosure in Results of Operations below.
Previous wording
We began presenting Software and Bitcoin as two reportable operating segments in the second quarter of 2026 and the discussion below addresses both our consolidated results and, where useful to explain material drivers, segment-level results. See Note 13, Segment Information, to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report.
Current wording
We began presenting Software and Bitcoin as two reportable operating segments in the second quarter of 2026. The discussion below addresses both our consolidated results and, where useful to explain material drivers, segment-level results. See Note 13, "Segment Information", to the Consolidated Financial Statements included in Part I, Item 1 of this Quarterly Report.
Previous wording
Total revenues were $122.4 million and $246.7 million for the three and six months ended June 30, 2026, respectively, compared to $114.5 million and $225.6 million for the same periods in the prior year. All of our revenues in each period presented were generated by our Software segment. For a discussion of the drivers of the changes in our revenues, see "Software Segment" below.
Current wording
Total revenues were $125.4 million and $372.1 million for the three and nine months ended September 30, 2026, respectively, compared to $128.7 million and $354.2 million, respectively, for the same periods in the prior year. All of our revenues in each period presented were generated by our Software segment. For a discussion of the drivers of the changes in our revenues, see "Software Segment" below.
Previous wording
We recognized a net loss of $8.22 billion and $20.76 billion for the three and six months ended June 30, 2026, respectively, compared to net income of $10.02 billion and $5.80 billion for the same periods in the prior year. The unfavorable change was primarily attributable to unrealized losses on digital assets resulting from the volatility and decline in the market price of bitcoin during the 2026 periods, compared to unrealized gains on digital assets recognized during the comparable periods in the prior year.
Current wording
We recognized net income of $19.53 billion and net loss of $1.23 billion for the three and nine months ended September 30, 2026, respectively, compared to net income of $2.79 billion and $8.59 billion for the same periods in the prior year. The changes were primarily attributable to gains or losses on digital assets resulting from the volatility and change in the market price of bitcoin during the 2026 periods, compared to gains on digital assets recognized during the comparable periods in the prior year.
Previous wording
Our Bitcoin segment had net loss of $8.22 billion and $20.28 billion for the three and six months ended June 30, 2026, respectively. Segment net loss increased by $18.21 billion and $26.03 billion for the three and six months ended June 30, 2026, respectively, as compared to the same periods in the prior year, primarily due to unrealized losses on digital assets resulting from the volatility and decrease in the market price of bitcoin during the period, as compared to unrealized gains on digital assets recognized in the prior year.
Current wording
Our Bitcoin segment had net income of $19.01 billion and net loss of $1.26 billion for the three and nine months ended September 30, 2026, respectively. Segment net income (loss) increased by $16.26 billion for the three months ended September 30, 2026 and decreased by $9.77 billion for the nine months ended September 30, 2026, as compared to the same periods in the prior year, primarily due to a higher gain on digital assets for the three-month period resulting from an increase in the market price of bitcoin during the quarter, and a loss on digital assets for the nine-month period resulting from the volatility and decrease in the market price of bitcoin during the period, as compared to gains on digital assets recognized in the prior year periods.
Previous wording
Our Software segment had net income of $3.7 million and net loss of $485.7 million for the three and six months ended June 30, 2026 respectively, representing a decrease of $26.7 million and $534.3 million as compared to the same periods in the prior year. The following discussion presents the components of our Software segment results of operations.
Current wording
Our Software segment had net income of $519.3 million and $33.6 million for the three and nine months ended September 30, 2026, respectively, representing an increase of $485.1 million and a decrease of $49.1 million as compared to the same periods in the prior year. The following discussion presents the components of our Software segment results of operations.
Previous wording
Total Software segment revenues were $122.4 million and $246.7 million for the three and six months ended June 30, 2026, respectively, an increase of $7.9 million and $21.1 million as compared to the same periods in the prior year. The increases were primarily driven by growth in subscription services revenues, partially offset by declines in product support revenues, in each case reflecting the continued migration of our on-premises customers to our Cloud subscription services offerings. Changes in product licenses revenues and other services revenues were not significant in either period. See the following discussion of the drivers of the changes in subscription services and product support revenues.
Current wording
Total Software segment revenues were $125.4 million and $372.1 million for the three and nine months ended September 30, 2026, respectively, a decrease of $3.3 million and an increase of $17.9 million as compared to the same periods in the prior year. The changes in both periods reflected growth in subscription services revenues and declines in product support and product licenses revenues. The growth in subscription services revenues and decline in product support revenues reflect the continued migration of our on-premises customers to our Cloud subscription services offerings. The changes in subscription services, product support, and product licenses revenues were as follows:
Previous wording
•Subscription services revenues. Subscription services revenues are derived from our Cloud subscription service and are recognized ratably over the service period in the contract. Subscription services revenues increased by $22.0 million and $43.8 million for the three and six months ended June 30, 2026, respectively, as compared to the same periods in the prior year, primarily due to conversions to cloud-based subscriptions from existing on-premises customers, a net increase in the use of subscription services by existing customers, and sales contracts with new customers.
Current wording
•Subscription services revenues. Subscription services revenues are derived from our Cloud subscription service and are recognized ratably over the service period in the contract. Subscription services revenues increased by $22.6 million and $66.4 million for the three and nine months ended September 30, 2026, respectively, as compared to the same periods in the prior year, primarily due to conversions to cloud-based subscriptions from existing on-premises customers, a net increase in the use of subscription services by existing customers, and sales contracts with new customers.
Previous wording
•Product support revenues. Product support revenues are derived from providing technical software support and software updates and upgrades to customers. Product support revenues are recognized ratably over the term of the contract, which is generally one year. Product support revenues decreased by $11.8 million and $20.2 million for the three and six months ended June 30, 2026, respectively, as compared to the same periods in the prior year, primarily due to existing customers converting from on-premises product licenses with support contracts to our Cloud subscription services offerings and non-renewals of existing support contracts.
Current wording
•Product support revenues. Product support revenues are derived from providing technical software support and software updates and upgrades to customers. Product support revenues are recognized ratably over the term of the contract, which is generally one year. Product support revenues decreased by $13.4 million and $33.6 million for the three and nine months ended September 30, 2026, respectively, as compared to the same periods in the prior year, primarily due to existing customers converting from on-premises product licenses with support contracts to our Cloud subscription services offerings and non-renewals of existing support contracts.
Previous wording
•Sales and marketing expenses. Sales and marketing expenses consist of personnel costs, commissions, and costs related to office facilities, travel, advertising, public relations programs, and promotional events, such as trade shows, seminars, and technical conferences. Sales and marketing expenses increased by $3.0 million and $10.7 million for the three and six months ended June 30, 2026, respectively, as compared to the same periods in the prior year, primarily reflecting higher commission expense in connection with increased sales activity, as well as higher personnel and recruiting costs and higher spending on promotional events.
Current wording
•Sales and marketing expenses. Sales and marketing expenses consist of personnel costs, commissions, and costs related to promotional events, advertising and other sales and marketing related third-party expenses. Sales and marketing expenses increased by $2.8 million and $13.4 million for the three and nine months ended September 30, 2026, respectively, as compared to the same periods in the prior year. The increase for the three months ended September 30, 2026 was primarily driven by higher personnel costs. The increase for the nine months ended September 30, 2026 was primarily driven by higher personnel costs, as well as increased third-party marketing expenses.
Previous wording
Total deferred revenue and advance payments. Total deferred revenue and advance payments decreased by $51.5 million as of June 30, 2026, compared to December 31, 2025, primarily due to a decrease in deferred subscriptions services revenue and product support revenue due to the timing of renewals and increased conversions from on-premises to subscription services contracts. Total deferred revenue and advance payments increased $7.7 million as of June 30, 2026 compared to June 30, 2025, primarily due to (i) an increase in deferred revenue from new subscription services contracts, partially offset by (ii) a decrease in deferred product support revenue from existing customers migrating from on-premises to subscription services contracts.
Current wording
Total deferred revenue and advance payments. Total deferred revenue and advance payments decreased by $68.1 million as of September 30, 2026, compared to December 31, 2025, primarily due to a decrease in deferred subscriptions services revenue and product support revenue due to the timing of renewals and increased conversions from on-premises to subscription services contracts. Total deferred revenue and advance payments increased by $5.3 million as of September 30, 2026 compared to September 30, 2025, primarily due to (i) an increase in deferred revenue from new subscription services contracts, partially offset by (ii) a decrease in deferred product support revenue from existing customers migrating from on-premises to subscription services contracts.
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Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
2025, any subsequent increases or decreases in fair market value are recognized as incurred in the Consolidated Statements of Operations. Due to the volatility of bitcoin, and our substantial holdings, fluctuations in bitcoin price have materially impacted, and we expect will continue to materially impact, our results.
Rearranged previous paragraphs (8)
Previous report — wording carried elsewhere
pursue strategies intended to generate income streams or otherwise generate funds using our bitcoin holdings, and (iii) periodically sell bitcoin for general corporate purposes, such as satisfying liquidity needs and financial obligations.
Previous report — wording carried elsewhere
Class A Common Stock Repurchase Program
Previous report — wording carried elsewhere
See “Capital Markets Activity” for additional information about our ATM activity for the three and six months ended June 30, 2026 and 2025 and the period from July 1, 2026 to July 24, 2026, as well as our ATM capacities as of June 30, 2026.
Previous report — wording carried elsewhere
BTC Yield represents the percentage change in BPS (in Sats) from the beginning of a period to the end of a period.
Previous report — wording carried elsewhere
BTC $ Gain represents the dollar value of the BTC Gain calculated by multiplying the BTC Gain by the market price of bitcoin as reported on the Coinbase exchange as of the applicable measurement time.
Previous report — wording carried elsewhere
The Company uses BPS (in Sats), BTC Yield, BTC Gain and BTC $ Gain as KPIs to help assess the performance of its strategy of acquiring bitcoin in a manner it believes to be accretive to shareholders. The Company also believes these KPIs can supplement investors’ understanding of how the Company chooses to fund bitcoin purchases and the value created in a period:
Previous report — wording carried elsewhere
•BPS (in Sats) measures the ratio of the Company’s gross bitcoin holdings to Assumed Diluted Shares Outstanding, which provides management and investors a baseline with which to assess the Company’s achievement of its strategy of acquiring bitcoin in an accretive manner over a given period. When evaluating a capital raise transaction, the Company reviews this metric and considers the impact such transaction will have on this ratio on a pro forma basis. This metric forms the baseline for the Company’s BTC Yield, BTC Gain and BTC $ Gain KPIs, which present changes in BPS (in Sats) from the beginning of a period to the end of the period in different formats.
Previous report — wording carried elsewhere
•BTC $ Gain further expresses the percentage change reflected in the BTC Yield metric as an illustrative dollar value by multiplying that bitcoin-denominated change by the market price of bitcoin at the end of the applicable period as described above. The Company refers to this metric for illustrative purposes to consider the magnitude of the Company’s BTC Gain for an applicable period with reference to the market price of bitcoin as of the end of an applicable period.