MicroStrategy Inc. Files 2023 Annual Report on Form 10-K

TL;DR

<b>MicroStrategy Inc. filed its 2023 10-K, detailing financial agreements, stock activities, and key financial metrics.</b>

AI Summary

MICROSTRATEGY Inc (STRD) filed a Annual Report (10-K) with the SEC on February 15, 2024. MicroStrategy Inc. filed its 10-K report for the fiscal year ending December 31, 2023. The filing details various financial agreements, including sales agreements with Cowen and Company, LLC, Canaccord Genuity LLC, and BTIG LLC in November 2023. It also references a Secured Term Loan due in 2025 and convertible debt as of December 31, 2023. The report covers stock-related activities, including Share Settled Restricted Stock Units (RSUs) and Performance Stock Units. Key financial statement components like Accumulated Other Comprehensive Income and Retained Earnings are detailed for multiple fiscal years.

Why It Matters

For investors and stakeholders tracking MICROSTRATEGY Inc, this filing contains several important signals. The 10-K filing provides a comprehensive overview of MicroStrategy's financial health and operational activities for the fiscal year 2023, including details on its debt and equity structure. Information on various sales agreements and debt instruments offers insight into the company's capital raising and financing strategies.

Risk Assessment

Risk Level: medium — MICROSTRATEGY Inc shows moderate risk based on this filing. The company's significant holdings in Bitcoin and related volatility present a substantial risk to its financial stability and stock performance, as indicated by the nature of its digital asset investments.

Analyst Insight

Investors should review the detailed financial statements and risk factors in the 10-K to understand MicroStrategy's financial position and its exposure to digital asset market fluctuations.

Key Numbers

• 2023-12-31 — Fiscal Year End (Conformed period of report)
• 2024-02-15 — Filing Date (Filed as of date)
• 10-K — Form Type (Filing type)
• 000-24435 — SEC File Number (SEC filing identifier)

Key Players & Entities

• MICROSTRATEGY Inc (company) — Filer name
• 20231231 (date) — Conformed period of report
• 20240215 (date) — Filed as of date
• 0000950170-24-015847 (filing) — Accession number
• Cowen and Company, LLC (company) — Sales agreement participant
• Canaccord Genuity LLC (company) — Sales agreement participant
• BTIG LLC (company) — Sales agreement participant
• Jefferies LLC (company) — Sales agreement participant

FAQ

Risk Factors

• Digital Asset Holdings [high — financial]: The company's significant holdings in digital assets, particularly Bitcoin, expose it to substantial volatility and potential impairment charges, impacting financial results.
• Convertible Debt [medium — financial]: The company has outstanding convertible debt, which could lead to dilution of common stock upon conversion and impacts its leverage.
• Market Conditions [medium — market]: Adverse market conditions for enterprise software and digital assets could negatively affect the company's revenue and profitability.
• Reliance on Key Personnel [low — operational]: The company's success may depend on the continued service of key executive officers, including its Chairman and CEO.

Key Dates

• 2023-12-31: Fiscal Year End — Reporting period for the 10-K filing.
• 2024-02-15: Filing Date — Date the 10-K was officially filed with the SEC.

Key Financial Figures

• $0.001 — tered Class A common stock, par value $0.001 per share MSTR The Nasdaq Global Se
• $1.902 billion — gregate purchase price of approximately $1.902 billion for an average purchase price of approx
• $33,580 — average purchase price of approximately $33,580 per bitcoin, inclusive of fees and expe
• $287.9 million — gregate purchase price of approximately $287.9 million for an average purchase price of approx
• $32,670 — average purchase price of approximately $32,670 per bitcoin, inclusive of fees and expe
• $11.8 million — oins for cash proceeds of approximately $11.8 million at an average sale price of approximate
• $16,786 — an average sale price of approximately $16,786 per bitcoin, net of fees and expenses.
• $37.2 million — gregate purchase price of approximately $37.2 million for an average purchase price of approx
• $43,723 — average purchase price of approximately $43,723 per bitcoin, inclusive of fees and expe
• $3.626 billion — oin. At December 31, 2023, we carried $3.626 billion of digital assets on our balance sheet,
• $2.269 billion — imately 189,150 bitcoins and reflecting $2.269 billion in cumulative impairment losses attribu
• $46.8 million — in trading price fluctuations, and held $46.8 million in cash and cash equivalents. At Decemb
• $1.840 billion — lents. At December 31, 2022, we carried $1.840 billion of digital assets on our balance sheet,
• $2.153 billion — imately 132,500 bitcoins and reflecting $2.153 billion in cumulative impairment losses attribu
• $43.8 million — in trading price fluctuations, and held $43.8 million in cash and cash equivalents. As of F

Filing Documents

• mstr-20231231.htm (10-K) — 4391KB
• mstr-ex10_15.htm (EX-10.15) — 161KB
• mstr-ex10_24.htm (EX-10.24) — 65KB
• mstr-ex10_29.htm (EX-10.29) — 16KB
• mstr-ex10_30.htm (EX-10.30) — 7KB
• mstr-ex21_1.htm (EX-21.1) — 42KB
• mstr-ex23_1.htm (EX-23.1) — 4KB
• mstr-ex31_1.htm (EX-31.1) — 12KB
• mstr-ex31_2.htm (EX-31.2) — 12KB
• mstr-ex32_1.htm (EX-32.1) — 9KB
• mstr-ex97_1.htm (EX-97.1) — 26KB
• img5363399_0.jpg (GRAPHIC) — 395KB
• 0000950170-24-015847.txt (&nbsp;) — 18702KB
• mstr-20231231.xsd (EX-101.SCH) — 2178KB
• mstr-20231231_htm.xml (XML) — 3677KB

Business

Business 7 Item 1A.

Risk Factors

Risk Factors 17 Item 1B. Unresolved Staff Comments 44 Item 1C. Cybersecurity 44 Item 2.

Properties

Properties 45 Item 3.

Legal Proceedings

Legal Proceedings 45 Item 4. Mine Safety Disclosures 45 PART II Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities 46 Item 6. [Reserved] 46 Item 7.

Management's Discussion and Analysis of Financial Condition and Results of Operations

Management's Discussion and Analysis of Financial Condition and Results of Operations 47 Item 7A.

Quantitative and Qualitative Disclosures About Market Risk

Quantitative and Qualitative Disclosures About Market Risk 63 Item 8.

Financial Statements and Supplementary Data

Financial Statements and Supplementary Data 63 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 63 Item 9A.

Controls and Procedures

Controls and Procedures 64 Item 9B. Other Information 65 Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections 66 PART III Item 10. Directors, Executive Officers and Corporate Governance 67 Item 11.

Executive Compensation

Executive Compensation 67 Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 67 Item 13. Certain Relationships and Related Transactions, and Director Independence 67 Item 14. Principal Accountant Fees and Services 67 PART IV Item 15. Exhibits, Financial Statement Schedules 68 Item 16. Form 10-K Summary 68 2 The trademarks and registered trademarks of MicroStrategy Incorporated and its subsidiaries referred to herein include, but are not limited to, MicroStrategy, MicroStrategy ONE, MicroStrategy Auto, Intelligence Everywhere, HyperIntelligence, MicroStrategy Consulting, MicroStrategy Education, Dossier, MicroStrategy Cloud, Enterprise Semantic Graph, MicroStrategy Services, Global Delivery Center, and Intelligent Enterprise. Third-party product and company names mentioned herein may be the trademarks of their respective owners. 3 CERTAIN DEFINITIONS All references in this Annual Report on Form 10-K ("Annual Report") to "MicroStrategy," the "Company," "we," "us," and "our" refer to MicroStrategy Incorporated and its consolidated subsidiaries (unless the context otherwise indicates). FORWARD-LOOKING INFORMATION AND RISK FACTOR SUMMARY This Annual 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 under "Item 1. Business," "Item 1A. Risk Factors," and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" and located elsewhere herein concerning our plans, objectives, goals, beliefs, business strategies, future events, business conditions, results of operations, financial position, business outlook, business trends and other information, may be forward-looking statements. Without limiting the foregoing, words such as "might," "will,

Business

Item 1. Business Overview MicroStrategy recently announced that it considers itself the world's first Bitcoin development company. We are a publicly-traded operating company committed to the continued development of the Bitcoin network through our activities in the financial markets, advocacy and technology innovation. As an operating business, we are able to use cash flows as well as proceeds from equity and debt financings to accumulate bitcoin, which serves as our primary treasury reserve asset. We also develop and provide industry-leading AI-powered enterprise analytics software that promotes our vision of Intelligence Everywhere, and are using our software development capabilities to develop bitcoin applications. Our software business, which we have operated for over 30 years, is our predominant operational focus, providing cash flows and enabling us to pursue our bitcoin strategy. We believe that the combination of our operating structure, bitcoin strategy and focus on technology innovation differentiates us in the digital assets industry. Bitcoin Strategy Our bitcoin strategy includes (i) acquiring bitcoin using cash flows from operations and proceeds from equity and debt financings, (ii) developing product innovations that leverage Bitcoin blockchain technology, and (iii) periodically engaging in advocacy and educational activities regarding the continued acceptance and value of bitcoin as an open, secure protocol for an internet-native digital asset and the Lightning Network. Bitcoin Acquisition Strategy We believe that bitcoin is an attractive asset because it can serve as a store of value, supported by a robust and public open-source architecture, that is untethered to sovereign monetary policy. We also believe that, due to its limited supply, bitcoin offers the potential to serve as a hedge against inflation in the long-term and, if its adoption increases, the opportunity for appreciation in value. In September 2020, our Board of Directors

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View this 10-K filing on SEC EDGAR