third quarter of 2026
Filed Oct 29, 2026Filed under $MSTRStrategy Announces Third Quarter Financial Results; Operating Income of $21 Billion and Diluted EPS of $44.75
Third-quarter GAAP earnings were driven by a $20.91 billion gain on digital assets, while total revenues declined 3% year-over-year to $125.4 million and year-to-date BTC Yield was (3.7)%.
Key metrics
shortened, hover for the filing’s print| Metric | Value | q/q | y/y |
|---|---|---|---|
| Total revenues, three months ended September 30GAAP | $125.4M | – | a 3% decrease year-over-year |
| Product licenses revenue, three months ended September 30GAAP | $3.83M | – | – |
| Subscription services revenue, three months ended September 30GAAP | $68.59M | – | – |
| Total product licenses and subscription services revenue, three months ended September 30GAAP | $72.42M | – | – |
| Product support revenue, three months ended September 30GAAP | $37.68M | – | – |
| Other services revenue, three months ended September 30GAAP | $15.33M | – | – |
| Total cost of revenues, three months ended September 30GAAP | $35.79M | – | – |
| Gross profit, three months ended September 30GAAP | $89.6M | – | – |
| Gross margin, three months ended September 30GAAP | 71% gross margin | – | – |
| Sales and marketing expense, three months ended September 30GAAP | $32.27M | – | – |
| Research and development expense, three months ended September 30GAAP | $24.06M | – | – |
| General and administrative expense, three months ended September 30GAAP | $35.91M | – | – |
| Gain on digital assets, three months ended September 30GAAP | $20.91B | – | – |
| Operating income, three months ended September 30GAAP | $20.91B | – | – |
| Interest income, three months ended September 30GAAP | $47.05M | – | – |
| Interest expense, three months ended September 30GAAP | $15.38M | – | – |
| Income before income taxes, three months ended September 30GAAP | $20.94B | – | – |
| Provision for income taxes, three months ended September 30GAAP | $1.41B | – | – |
| Net income, three months ended September 30GAAP | $19.53B | – | – |
| Dividends on preferred stock, three months ended September 30GAAP | $419.6M | – | – |
| Net income attributable to common stockholders, three months ended September 30GAAP | $19.12B | – | – |
| Basic earnings per common share, three months ended September 30GAAP | $47.78 | – | – |
| Diluted earnings per common share, three months ended September 30GAAP | $44.75 | – | – |
| Weighted average common shares outstanding - Basic, three months ended September 30GAAP | 400.1M | – | – |
| Weighted average common shares outstanding - Diluted, three months ended September 30GAAP | 428.0M | – | – |
| Total revenues, nine months ended September 30GAAP | $372.1M | – | – |
| Gross profit, nine months ended September 30GAAP | $254.5M | – | – |
| Income (loss) from operations, nine months ended September 30GAAP | −$1.89B | – | – |
| Net income (loss), nine months ended September 30GAAP | −$1.23B | – | – |
| Net income (loss) attributable to common stockholders, nine months ended September 30GAAP | −$2.27B | – | – |
| Diluted earnings (loss) per common share, nine months ended September 30GAAP | $(6.27) | – | – |
| Digital assets, September 30, 2026GAAP | $70.82B | – | – |
| Approximate number of bitcoins held, September 30, 2026other | 847,666 | – | – |
| BTC Yield, year to date 2026other | (3.7)% | – | – |
| BTC Gain, year to date 2026other | (24,947) | – | – |
| BTC $ Gain, year to date 2026other | −$2.03B | – | – |
Segments
| Segment | Revenue | q/q | y/y |
|---|---|---|---|
| Product licensesRevenue declined versus $17,373 (in thousands) in the third quarter of 2025. | $3.83M | – | – |
| Subscription servicesRevenue increased versus $45,972 (in thousands) in the third quarter of 2025. | $68.59M | – | – |
| Product supportRevenue declined versus $51,118 (in thousands) in the third quarter of 2025. | $37.68M | – | – |
| Other servicesRevenue increased versus $14,228 (in thousands) in the third quarter of 2025. | $15.33M | – | – |
foreseeable future outlook
- NoteStrategy expects distributions paid on its preferred equity instruments to be treated as non-taxable return of capital for the foreseeable future (i.e., ten years or more).
- NoteSTRC daily dividends: November 2026 12.00% $1.00.
- NoteSTRF, STRK, and STRD daily dividends starting January 1, 2027.
Capital returns
- Year to date, the Company repurchased 20,980,508 shares of STRC ($2.10 billion aggregate notional) for approximately $2.04 billion at an average price of $97.39 per share.
- Approximately $956.7 million of authorization remains available under the $3.0 Billion Digital Credit Securities Repurchase Program.
- No repurchases to date under the $1.0 Billion MSTR Repurchase Program.
- $1.48 billion in cumulative dividends paid on all preferred stock to date.
- The Company has sold approximately $431.8 million of bitcoin year to date 2026 to fund a portion of its preferred stock dividends and STRC buybacks.
What drove it
- A $20.91 billion gain on digital assets drove third-quarter operating income of $20.91 billion.
- The Company held approximately 848,517 bitcoins as of October 25, 2026, with an original cost basis and market value of $64.02 billion and $68.90 billion, respectively.
- MSTR ATM sales generated net proceeds of $5,407.7 million during the third quarter of fiscal 2026.
- Gross margin was 71%, compared to 70% in the third quarter of 2025.
Concerns
- Total revenues were $125.4 million, a 3% decrease year-over-year.
- The nine-month period recorded a net loss of $(1,229,326) (in thousands) and an operating loss of $(1,891,577) (in thousands).
- BTC Yield was (3.7)% year to date 2026, BTC Gain was (24,947), and BTC $ Gain was $(2.03) billion.
- The Company sold approximately $431.8 million of bitcoin year to date 2026 to fund a portion of preferred stock dividends and STRC buybacks.
- Andrew Kang will step down as Executive Vice President and Chief Financial Officer effective November 5, 2026.
What to watch
- Bitcoin gains or losses recognized under ASU 2023-08, which directly affect reported net income.
- Execution of the remaining approximately $956.7 million authorization under the Digital Credit Securities Repurchase Program.
- The transition of the principal financial officer role to Phong Le and the planned January 1, 2027 appointment of Reza Virasteh as Executive Vice President and Chief Financial Officer.
- The Company’s USD Reserve of $4.83 billion and USD Cash of $242.4 million, representing approximately 3.4 years of coverage reserved for preferred stock dividend payments and interest on outstanding indebtedness.
Balance sheet and cash flow
- Cash and cash equivalents were $2.50 billion as of September 30, 2026, compared to $1.71 billion as of June 30, 2026.
- Short-term investments were $3.40 billion as of September 30, 2026, compared to $736.1 million as of June 30, 2026.
- Total assets were $77,151,549 (in thousands) as of September 30, 2026, compared to $61,641,082 (in thousands) as of December 31, 2025.
- Current portion of long-term debt, net was $1,045,669 (in thousands) and long-term debt, net was $5,669,745 (in thousands) as of September 30, 2026.
- The Company received net proceeds of approximately $5.41 billion from MSTR ATM sales during the three months ended September 30, 2026.
- Operating cash flow and free cash flow were not reported.
Analysis
Strategy reported third-quarter operating income of $20.91 billion and net income of $19.53 billion, compared with $3.89 billion and $2.79 billion, respectively, in the third quarter of 2025. The result was overwhelmingly driven by a $20.91 billion gain on digital assets. Diluted earnings per common share were $44.75, while net income attributable to common stockholders was $19.12 billion after $419.6 million of preferred-stock dividends.
The software operating business softened at the revenue line. Total revenues were $125.4 million, a 3% decrease year-over-year, as product licenses and product support revenue declined. Subscription services revenue increased to $68,590 (in thousands) from $45,972 (in thousands), and other services revenue increased to $15,327 (in thousands) from $14,228 (in thousands). Gross profit was $89.6 million versus $90.7 million, but gross margin improved to 71% from 70%.
The balance sheet and capital-markets activity expanded substantially. Cash and cash equivalents were $2.50 billion and short-term investments were $3.40 billion at September 30, 2026. The Company received net proceeds of approximately $5.41 billion from MSTR ATM sales during the quarter. Digital assets had a carrying value of $70,824,007 (in thousands) at September 30, 2026, and the Company disclosed approximately 848,517 bitcoin holdings as of October 25, 2026.
Capital allocation focused on supporting Digital Credit securities and preferred-stock obligations. The Company repurchased 20,980,508 STRC shares for approximately $2.04 billion year to date, while no MSTR shares had been repurchased under the $1.0 Billion MSTR Repurchase Program. It also sold approximately $431.8 million of bitcoin year to date to fund a portion of preferred-stock dividends and STRC buybacks. The stated USD Reserve and USD Cash provide approximately 3.4 years of coverage for preferred dividends and interest obligations.
The filing did not provide conventional revenue, margin, expense, or tax-rate financial guidance. Management instead disclosed expectations that preferred-equity distributions will be treated as non-taxable return of capital for the foreseeable future, stated as ten years or more, and announced daily-dividend timing for STRC, STRF, STRK, and STRD. The key reported counterpoint to the quarter’s large fair-value gain is the year-to-date BTC Yield of (3.7)% and BTC $ Gain of $(2.03) billion.
Management, verbatim
Strategy demonstrated its commitment to returning STRC to health. We grew our USD Assets to $5.1 billion, increased USD Duration to 3.4 years, and repurchased $2.0 billion of STRC.
Phong Le, President and Chief Executive Officer
Q3 operating income of $21 billion was the largest ever in Strategy’s history. We've also raised $21 billion of equity capital and increased our bitcoin holdings by 26% year-to-date in a challenging bitcoin market.
Andrew Kang, Chief Financial Officer
We’re at the beginning of the next bitcoin bull market. Banks are embracing bitcoin, bitcoin’s dominance among digital assets is growing, institutional demand is back, and bitcoin price is 21% above its 200-week moving average.
Michael Saylor, Founder and Executive Chairman
Not in the filing
stated, not guessed- Non-GAAP revenue, profit, operating income, net income, EPS, and margin metrics were not reported.
- Operating cash flow was not reported.
- Free cash flow was not reported.
- Conventional financial outlook for revenue, gross margin, operating expenses, or tax rate was not reported.
- Prior-quarter comparisons for total revenue, gross profit, operating income, net income, and diluted EPS were not reported.
- A previous release outlook was not provided.
Written by an AI language model from the company’s SEC earnings filing (Form 8-K Item 2.02, or Form 6-K for a foreign private issuer). Every figure is checked against the filing text, and a metric the filing does not print, or whose value, prior period and change do not add up, is dropped from the metrics. The model can still misread a table, in the metrics or in the text, so check a number in the filing before you rely on it. Consensus estimates, price targets and share-price reactions are not shown because they are not in the filing. AI-generated research, not investment advice.