M+E Connections

MicroStrategy continued to see growing interest and adoption of its cloud solutions in the third quarter (ended Sept. 30), while the company again saw good momentum in its Bitcoin strategy, the company said Oct. 28.

“Our enterprise analytics business delivered another strong quarter, and we are seeing growing adoption of the MicroStrategy platform, especially in the cloud by new and existing customers,” Phong Le, the company’s CFO and president, told analysts on an earnings call.

“For the fifth straight quarter we posted strong financial and operational results with our software business and made investments in Bitcoin,” he said, adding: “We also had another active and successful quarter with our Bitcoin acquisition strategy, executing on our fourth successful capital raise in the past year and expanding our digital asset holdings.”

Total MicroStrategy Q3 revenue grew slightly from a year ago to $128 million, which Le called “strong performance… against an incredibly difficult comp in the third quarter of 2020.” He pointed out that, in Q3 2020, the company “signed several deals that were delayed from the first half of 2020 due to COVID-19 and signed a large expansion transaction with a major financial institution.”

Comparing its revenue performance against 2019, which adjusts for those impacts, total Q3 revenue grew 7% from Q3 of 2019, he noted.

Q3 subscription revenue jumped 31% from Q3 of 2020, with current subscription billings up 23%, the company’s sixth straight quarter of double-digit growth, Le said.

MicroStrategy Cloud “continues to become a growing mix of our business, while our on-prem product continues to perform well,” Le told analysts. But he explained: “We’re committed to meeting the needs of our customers, regardless of how they would like to deploy MicroStrategy, some of whom operate in highly regulated industries or countries where a cloud deployment is not feasible. When you look at the overall growth of our subscription and license businesses, it is clear that underlying demand for our platform has demonstrated signs of strength.”

MicroStrategy also “experienced notable growth in both the number and size of OEM opportunities, including a deal with a multinational consumer credit reporting company and a deal with a video analytics company,” Le said but did not identify that company.

Summing up the company’s priorities, he said: “Our focus going forward remains on moving to cloud, expanding our OEM market share, modernizing our customer base and using our innovative offerings like HyperIntelligence to expand new prospects.”

Le was, meanwhile, “very pleased with the way our analytics business is performing,” he said, adding: “We are on the path of consistent growth, and we’re confident in our ability to achieve our long-term growth and profitability targets.”

Turning to the company’s Bitcoin strategy,” he said: “We had another active and successful quarter. We raised approximately $400 million in capital through the sale of Class A common shares as part of our aftermarket offering during the quarter. We used the proceeds of this offering and excess cash to purchase an additional approximately 8,957 Bitcoins at an average price of $46,876 per Bitcoin, net of fees and expenses.”

That represented the “fourth successful capital raise we’ve done in the past year, having raised $2.6 billion in new debt and equity capital that we deployed in support of our Bitcoin acquisition strategy,” he added.

MicroStrategy owns about 114,042 Bitcoins that it acquired for a total cost of $3.2 billion or $27,713 per Bitcoin, Le said.