MicroStrategy posts $461.2 million Q1 profit

The analytics software provider MicroStrategy, for the period January–March 2023, posted net income of $461.2 million. During the reporting period the company increased its holding in digital gold by 7,500 BTC — to 140,000 BTC.

“The commitment to the Bitcoin strategy remains unwavering as the cryptocurrency ecosystem evolves,” the press release said.

The company cited the resilience of the MicroStrategy One platform’s client base as a driver of revenue growth. The aim is to shift the business to cloud solutions while tightly controlling costs.

Revenue was $121.9 million (+2.2%, or +5.7% in constant currency, non-GAAP) versus Q1 2022.

The company reported operating loss of $20.3 million ($170 million in Q1 2022).

The return to profitability was helped by income tax benefits of $453.2 million and $48 million for the first quarters of 2023 and 2022, respectively.

In the first quarter the firm fully repaid a loan to Silvergate Bank of $161 million, secured by bitcoins. The obligation was due in 2025. This added $44.7 million to net income.

Impairment losses on digital assets were $18.9 million and $170.1 million for January–March 2023 and 2022, respectively.

As of March 31, 2023, the carrying value of the acquired 140,000 BTC stood at $2 billion, reflecting cumulative impairment losses of $2.17 billion and an average book value per BTC of about $14,289.

The initial cost basis per coin was $29,803, with a market price of $28,468.44.

As of the end of the first quarter, the company had $94.3 million in cash and cash equivalents, compared with $43.8 million as of December 31, 2022.

Earlier in September MicroStrategy filed to sell up to $500 million of stock. The proceeds could be used to purchase Bitcoin.

In February the company said in a filing with the SEC that it had managed to raise $46.6 million.

In April the position of MicroStrategy in Bitcoin turned positive after breaking above $30,000.