M+E Connections

MicroStrategy continues to be encouraged by the advancements being made in artificial intelligence (AI) and is well-positioned to take advantage of generative AI and other breakthroughs, Phong Le, the company’s CEO and president, said Nov. 1, during a call with analysts to discuss MicroStrategy’s third quarter (ended Sept. 30).

Q3 subscription billings grew 17% from a year ago. Growth was “driven by our cloud business and a strong international license revenue quarter,” according to Le.

“We plan to continue to drive growth in our recurring revenue model, and to transition our business strategy and product offerings to a cloud native model,” he told analysts.

MicroStrategy’s focus, meanwhile, “will be on innovation at the intersection of artificial intelligence and business intelligence, using our first-to-market advantage in the enterprise scale integration of AI and BI to grow revenue in the cloud,” he said.

Le explained: “We’re at a major period of innovation in the technology industry. We believe the next innovation is to change how the world does business [with] digital money, with the continuing development of the Bitcoin ecosystem in digital intelligence through AI. The technological leaps that occurred in the past year in generative AI are real, and we expect to be at the forefront of integrating AI with BI.”

MicroStrategy is, he said, “well-positioned to gain competitive leverage in winning both of these areas of growth.” The company’s “mission for the past 30-plus years has been to enable intelligence everywhere for our customers, and with this mission ingrained in our corporate DNA through each major tech innovation, we have moved closer to accomplishing this goal,” he told analysts.

Turning to generative AI, he called it the “next big innovation that will bring us closer to intelligence everywhere.”

He told analysts: “Before diving into the integration of [generative] AI and our platform, it’s important to distinguish why MicroStrategy is poised to drive value in the AI space beyond the generic applications and hype built up in the broader market. Hyperscalers and mega software companies are investing billions amassing GPUs in legions of data scientists to build the best large language models … in the world. Much like we have done with cloud hyperscalers, we plan to openly partner with and leverage the technology investments in these companies rather than invest heavily to build our own models. Hundreds of smaller AI companies are taking a similar approach to us. But we’re already differentiating as we have done for decades in BI.”

Total MicroStrategy Q3 revenue grew 3.3% from a year ago, the company said. Product support revenue inched up 1.3% to  $66.9 million

Total subscription services revenue was $21 million, up 28% from a year ago.