Full-year BTC yield/dollar gain guidance doubled to 30% and $20B
MicroStrategy reported a transformational Q2 FY2025, driven by massive unrealized fair value gains on its Bitcoin holdings following the adoption of FASB fair value accounting. The company is aggressively expanding its capital structure by issuing innovative, Bitcoin-backed preferred equity instruments to both institutional and retail investors. Q2 GAAP EPS reached a record $32.60, driven by a $14 billion unrealized fair value gain on Bitcoin holdings.
Buzzberg readFull-year BTC yield/dollar gain guidance doubled to 30% and $20BMicroStrategy reported a transformational Q2 FY2025, driven by massive unrealized fair value gains on its Bitcoin holdings following the adoption of FASB fair value accounting. The company is aggressively expanding its capital structure by issuing innovative, Bitcoin-backed preferred equity instruments to both institutional and retail investors. Q2 GAAP EPS reached a record $32.60, driven by a $14 billion unrealized fair value gain on Bitcoin holdings.Read full analysisCollapse analysis
MicroStrategy reported a transformational Q2 FY2025, driven by massive unrealized fair value gains on its Bitcoin holdings following the adoption of FASB fair value accounting. The company is aggressively expanding its capital structure by issuing innovative, Bitcoin-backed preferred equity instruments to both institutional and retail investors. Q2 GAAP EPS reached a record $32.60, driven by a $14 billion unrealized fair value gain on Bitcoin holdings.
The company has raised $18.3 billion year-to-date, largely through new preferred equity offerings (STRF, STRK, STRD, STRC).
Management introduced a new KPI, 'Bitcoin per share' (BPS), and guided to a full-year EPS of $80 based on an assumed year-end Bitcoin price of $150,000.
Retail investors accounted for 23% ($570 million) of the recent 'Stretch' preferred equity offering, signaling strong retail demand for high-yield, Bitcoin-backed credit.
Revenue$0.1145B
+3% QoQ
EPS$32.60
reported
Gross margin68.77%
reported
Op margin-13.56%
reported
What changed this quarter
01
Guidance
Full-year BTC yield/dollar gain guidance doubled to 30% and $20B
Guidance tone
02
Other
MSTR ATM issuance threshold set at 2.5x MNAV
Q2 GAAP EPS reached a record $32.60, driven by a $14 billion unrealized fair value gain on Bitcoin holdings.
03
Other
Record Q2: $14B operating income, $10B net income
The company has raised $18.3 billion year-to-date, largely through new preferred equity offerings (STRF, STRK, STRD, STRC).
04
Demand
Stretch was largest U.S. IPO this year
Management was upbeat and celebratory, driven by record Q2 results, doubled full-year BTC targets, and Stretch's success as the largest IPO this year.
AI, capex & demand read
AI
Platform & monetization
Management said they used AI to design all four new preferred securities and to create digitally transformed, AI-generated capital instruments. There was no discussion of AI demand, adoption, monetization, or capacity beyond their own product development.
Demand
Bookings & conversion
Stretch was largest U.S. IPO this year. Management was upbeat and celebratory, driven by record Q2 results, doubled full-year BTC targets, and Stretch's success as the largest IPO this year.
Tone · upbeat
Management was upbeat and celebratory, driven by record Q2 results, doubled full-year BTC targets, and Stretch's success as the largest IPO this year.
Supply-chain alpha
A1
The U.S. Federal Housing Authority is pushing government-sponsored enterprises to accept cryptocurrency as mortgage collateral.
“guidance that came from William Pulte to Fannie Mae and Freddie Mac, where he said they should prepare their businesses to count cryptocurrency as an asset and a mortgage.”
“increasing that retail adoption by 3.7x. $570 million, 23% of the total capital that was raised in Stretch was retail, as thanks to our partners, Morgan Stanley, Fidelity, and others”
Transparent on-chain movements of large Bitcoin reserves by institutional custodians can trigger severe market volatility.
“80,000 Bitcoin got transferred to Galaxy. who then sold them and everybody in the world knew that the Bitcoin was moving... it created a massive dislocation in the market, like $3,000, $4,000 dislocation”
Coinbase is actively accumulating Bitcoin for its own balance sheet, reinforcing the trend of corporate treasury adoption and supporting underlying asset demand.
“Just a few minutes ago, Coinbase announced that they acquired more Bitcoin this quarter, thousands of Bitcoin.”
… 39, 43. There were 64 last year. And of course, as you look at this trend right now, 160 when we're not even to the end of 2025 is extraordinary. So we're in a hyper growth or hyper adoption phase for Bitcoin as a treasury reserve asset. Companies are racing to get into the Bitcoin 100. You can see there's even competition to track the Bitcoin 100 right now. And generally, any given week, there are 20 or more companies that are acquiring more Bitcoin. Just a few minutes ago, Coinbase announced that they acquired more Bitcoin this quarter, thousands of Bitcoin. So I see very positive trends here. And each of these companies could, in theory, acquire just as much Bitcoin or attempt to acquire just as much Bitcoin in a dollar value as we have acquired. Obviously, they won't get 3% of the Bitcoin supply, but you can imagine what happens when 100 companies are all competing to acquire as much Bitcoin as possible. The analysts are all starting to cover and track Bitcoin and they have outlooks for Bitcoin. So if you're going to cover the 160 Bitcoin companies that have Bitcoin on their balance sheet, you're going to have to form an opinion about Bitcoin. And so you can see that the …
The U.S. Federal Housing Authority is pushing government-sponsored enterprises to accept cryptocurrency as mortgage collateral. — This regulatory shift would legitimize Bitcoin as collateral in the traditional banking and housing sectors, unlocking massive new liquidity.
… the development of the industry. They also loosened restrictions on options trading of Bitcoin ETFs. Paul Atkins just released, gave a speech and made a number of comments about the digital assets industry. It's clear that he's very supportive of innovation, very supportive of the crypto economy, very supportive of your right to self-custody. And this is a welcome development from the SEC. Another welcome development is the guidance that came from William Pulte to Fannie Mae and Freddie Mac, where he said they should prepare their businesses to count cryptocurrency as an asset and a mortgage. This is going to accelerate the institutional adoption of Bitcoin as collateral in the banking industry. There could be no more legitimate driver of the collateralization of credit with Bitcoin than the U.S. Federal Housing Authority. Capitol Hill is embracing Bitcoin. There are three bills. One of them, the Genius Act, has already been passed. Clarity is coming in September and the Bitcoin Act allows for the government to acquire a million Bitcoin. These are picking up momentum. This is a positive development. US states are also embracing Bitcoin. We've now got three strategic Bitcoin …
Thanks, Suresh, and thanks everybody for taking my questions. Let me see if I can get two in if I can. The first is, at some point, does concentration of Bitcoin holdings at a single corporation impede adoption of Bitcoin as a store of value, let alone other potential monetary functions such as medium of exchange or unit of account? And if so, when might that point realistically come for strategy? Is that five years out? Is it 10 years out? Is it longer? Is it shorter? Or is it just the wrong question?
I'm sure everybody's got an opinion, but I'll start. I think we're accelerating institutional adoption, but we're also accelerating the adoption of Bitcoin, just like BlackRock is accelerating the adoption of Bitcoin, because we're channeling new forms of capital into the ecosystem. And, you know, you couldn't there's whole sets of capital that wouldn't come into the ecosystem if they don't have an investment grade credit worthy counterparty to trade with. So we don't really think there's any number. It's it's we're up to three percent of the system and it's getting exponentially harder. I've said before, it feels to me like if we get to 5%, Bitcoin is going to be a million dollars a coin. And if we get to 7.5%, it's going to be $10 million a coin or some ridiculous amount. If it does get to $10 million a coin, and if we do get to 7.5%, that will mean... that 93% of all the Bitcoin is held by somebody else somewhere, and that will cause an explosion of innovation in the rest of the world. For all we know, right, the harder we try to acquire it, the more it will decentralize to other places because you're going to see an explosion of other innovation because everybody else that's not BlackRock or not us or not whatever is gonna have all this Bitcoin that's valued at millions and millions of dollars a coin.
… highly over collateralized, short term debt. And so we think this is going to lead to success of opening up the preferred market, but also allowing us to use prefers on a go forward basis to raise more capital. Another extraordinary evolution from last week or discovery from last week is the retail interest in preferreds. So we went from raising about $153 million and 15% in our previous preferred offering stride to increasing that retail adoption by 3.7x. $570 million, 23% of the total capital that was raised in Stretch was retail, as thanks to our partners, Morgan Stanley, Fidelity, and others who were part of that raising. And so we're seeing demand for a product that we haven't seen before. I mean, this is a retail-focused product, but also there's institutionals that'll be interested in it. So our fourth time over, fourth time in into the preferred market, we think we'll unlock something that's gonna be able to help us with our capital structure. And how does this look over time with our convertible bonds? You'll see here that through the course of 2029, taking the earliest allowable call date, we should be able to let these equitize over time, or we'll be able to call …
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