MSTR - Earnings call 3 2023 | MicroStrategy Incorporated

Due to licensing restrictions, you must log in to view earnings call transcripts.

Shirish Jajodia

[starts abruptly]...during today's call, we will refer to certain non-GAAP financial measures. Reconciliations showing GAAP versus non-GAAP results are available in our earnings release and presentation, which were issued today, and are available on our website, microstrategy.com.I would like to welcome you all to today's webinar and let you know that we will be taking questions using the Q&A feature at the bottom of your screen.

You can submit questions throughout the webinar, and Michael, Phong, or Andrew will answer questions at the end of the session. Please be sure to provide your name and your company's name when submitting your questions.Now I will walk you through the agenda for today's call.

First, Phong Le will cover the business results for the third quarter of 2023; second, Andrew Kang will cover the financial results for the third quarter of 2023; then Michael Saylor will provide a strategic review and discuss recent Bitcoin market updates; and lastly, we will open up to Q&A.With that, I will turn the call over to Phong Le, President and CEO at MicroStrategy. Phong?

Phong Le

was everyone. earnings revenues to highlights over an performance webinar. software services Total Hello, you all of consolidated year. product Shirish. an of services from and Total operations, increase revenues representing of product business. over an million, today's representing statement licenses million, year. platform revenues, to XX% was I'll of our revenue revenue of adoption in software Total you, license software I'd increased XX% year. $XX X% licenses which benefited welcome both like cloud subscription of our increase of licenses Thank of year over year million, consists were year $XX total $XXX.X increase start subscription revenues. with our Total in growth and

XX% licensed growth and driven year-over-year year.We subscription growth international strong to cloud was offerings good QX recurring business and our to to plan transition in with product by year Our QX cloud-native our a results strategy model growth to revenue continue revenue revenue model. We over drive quarter. a in and our billings achieved business

gen scalable, to a of companies these AI investments we we generic LLMs, differentiating scientists GPUs, invest ecosystem and digital some first-to-market our to are past period smaller models.Hundreds and are occurred cloud Much hype of us. that to done to the leverage on the and amassing mobile, progress.We're at money we partner the have easily built quickly real, software, open we're and ability both #X, multi-cloud openly areas poised Intelligence ubiquitous the through of world tools, OLAP was intelligence MicroStrategy technological broader approach intelligence, XX-plus into at be win decision their an The similar Semantic believe decades and case you looking making AI of focus how this cloud. deploy with excited positions layer, the growth. layer, intelligence services, we'll be does the done use in major of to integrating layer; digital #X, to are of this through generative But heavily relational models, to applications mission companies, through market. these corporate to day-to-day the making. has the artificial value AI with on to applications why is customers. for year Whether I'm MicroStrategy's architecture, areas and to and of build the have the we the forefront next Everywhere AI and in this or Our well on advantage We AI. and integrate to companies closer competitive BI. major trusted, #X will Bitcoin distinguish and in AI software be innovations our for sales major the which combination data innovation enable development on our gain of Hyperscalers embedding, the a We innovation, the in MicroStrategy a diving technologies believe uniquely us business billions, addition, the doing legions and with out and the multiple We of integration then of these positioned the step drive each next enterprises share more our investing about expect up actual beyond been continuing to enabled it's grow and in in the in data utilizing artificial Intelligence secure, intelligence.In the to believe work change different in each Semantic we our Everywhere.Before will technology we implementing years past business tech our intersection like industry. our we space data ingrained to introducing have moved BI leaps capabilities; are on platform, goal. and to of across technology and using in have web intelligence LLMs. this for hyperscalers, innovation AI business to to of in at world. our integrate with AI with the the rolling or of this build than BI rather of innovation us in decision in language build integration enterprise And into BI important databases, AI at business to we updates own BI mega the the #X, win to large critical best mission enterprise-scale already our as and revenue shift to desktop to with is bring DNA successfully intersection client-based component technologies reusable making. areas: years has believe XX making microservices; mobile that AI generative accomplishing what BI, taking X cloud, a BI call the big in and closer leverage for this is plan of like

and to to of language BI It from users. generation, But questions freeform the business all decisions. secured uses smart, natural AI and can structured Let sources and be data trusted reasoning, to with data answer is ideas. and unstructured on calculations other precise. hand, BI of personas me leveraging explain. make levels informed difficult is engage rigid

unreliable language hurdles see in demand cost ability decisions. However, customers teams efficiently, results can are and ONE and have efficiency and enough delivers AI.Right faster. large results, inaccurate AI do is false AI smart BI solutions distribute that customer solutions; bridging within are engineers our concerns simple and building focused prompt engineering as layer no and enterprise AI X, process the now, integration producing be referred have provides increased reliable marketers where define untrustworthy applications paramount.We more MicroStrategy to intelligence. objects gains, code precise the This are determinate and answers There's to data customer expect when even combinations governance, producing that data security; The a and There's MicroStrategy repository This to that with to natural value scale. help not better, scale, consistent X, X, business data or to write leverage responses in and generative make the and adoption. AI LLM Typical all informed enterprise platform a strategic face of solutions The corporate AI on hallucinations. helps many of engine. Semantic and so, be intelligence tool configuration. the acts achieve MicroStrategy as access and AI to true on control language generative a tackles make combining with value to in the primary more with layer of and growth data, analysts top with Semantic main commonly decisions AI to AI as advantage. ONE doing AI are: can the AI customer BI amplified, challenges AI trust processing, models, BI, at security and to business be top enterprise better done line access unlocked but drive and are BI

prompts our are accurate, tagging first BI implemented BI We've generate is to customer X, by of of needs to product data. system. MicroStrategy leverages scalable, SQL marks to user MicroStrategy set architecture secure, to Fully the database introduced features generate AI only the experience OpenAI. market, to interaction of structure are MicroStrategy. embedding new that a September, streamlines the tailored Auto technical the designed ONE. the This the enhancing is from through MicroStrategy queries X and the provides we in process. features AI business AI and exciting AI different which enhance feature reliable.In most and Azure cloud Our This company. answers to user and and solution. intended native features of of These address The Microsoft available advanced users: MicroStrategy framework innovations one results history release our more to higher-quality AI the collaborate engines pull

Our AI registered users asking AI self-service a tool. SQL metric? Answers, like SQL language Auto explain having conversation, user-based to the optimizations; suggested I the questions, dashboard our guide you is And with viable provides build statements code analytics. can website. data. and data available Expert beautiful is SQL answer and can review It's all into The MicroStrategy free support creation, assistant produce interactive favorite, in BI queries, and translate the platform a X, user transforms related data automatic MicroStrategy application their as my do dashboard. how language visual such natural and for engages into in natural personal processes the advanced AI insights. through automated complex natural Auto to Expert Dashboard questions employee Auto language, an transforming beautiful Auto on to

AI offering features revenue market question the AI and AI/BI XXXX? drives will into provide with processes Furthermore, to the enable our revenue solution the growth? of AI to enterprise-grade what also incentivizing fully and contextualized user.MicroStrategy optimize vastly which and footprint. the example, to migrate For are request cloud-native increasing enhances data consume platform of is data the new automate. deployment, MicroStrategy our shortens question. business basic understanding, AI value cloud, for is net This while that pricing. first to the integrated a answers the capabilities BI to time entry delivers level customers current a product rapidly first QX deep is by customers' consumption-based a with their forecasted exploration What and Customers of drivers expand ability with to

Our or for $X package $XX,XXX question. simply a XX,XXX questions, initial starter is

adopt workflows. for cloud roadmap. stream, We on-premise driving vision adoption to or when low into mechanism is We believe applications. grow this move the for inform relatively it customers that the and while set existing can product to our already Everywhere subscription providing revenue cloud up empowers Intelligence cost and in expect a entry customers new to to a onboard AI/BI this We're seeing AI.Our to AI environment of existing next-generation continues be the customers pricing best to MicroStrategy embedded drive modular

it allow to data machine Cloud AI/BI, cloud, customers' Therefore, that the AWS, needs. the in analytic includes fit private choice of customers are must security feeds with on and be the and a by advanced capabilities governance, and use myriad. of the Azure, This Google any customer's harnesses the LLMs variety platform platform use MicroStrategy feature deployment flexible third-party believe and We easily our learning enterprise for the build user, tool models standalone to which the integration and chatbots to choice. system used, and in tools, leverage that and on is data. our as the of platforms untrusted to roadmap the cases runs, or also customers' ability The deploy auditability LLM build-your-own-bot broad bots open for such customizable

of this product We're developments the for in cloud tap an questions be users users the chatbot Q&A AI on FP&A our our offering chatbot and about to to customers to a deploy currently develop example, the of For can their as answer moving roadmap.Now, our year. December product we AI/BI future We continue potential the budget, can excited initial website. to capability or to market available offering. on in to internal related expect into build-your-own-bot for solutions

microservices-based continue we deploy scaled We necessary design functionality.MicroStrategy This Microservices is now primary architecture integration cloud are of driving meet customers structure to that increasing of and In to part architecture the to build MicroStrategy of enable our fully independently. every containerized applications to customers' also of a modern, MicroStrategy solution, and flexibility, embraces from and microservices Cloud and modern QX, the for agility, multi-cloud. transition Cloud BI base a and cloud and with that to scalable, BI unlock aimed strategic partnership maintain deepen enhance the applications diversity. architecture penetration available which business. to designed and both Azure is level the in to on hyperscalers platform. AI into for our further monolithic implementation, Google technological and is innovating market features architecture up sell rapidly-evolving we platform containerized these to AI These in and with our the product also configurations Marketplaces, a be BI via functionality market. deployed is AI resilient, partner channels, demands highest the and AWS way our hyperscalers.We're growth, X all customer focus plan sales cloud-native technological can our success, firming

empower We have partner launched announced increased MicroStrategy centralizes assets include: the expanded our a including increased of partners of promote that product between training to to and streamlined excited partner marketing, engagement; sales, about recent tools technical highlights Snowflake. partnerships necessary MicroStrategy's expanded program with company. synergy with partners' sales and with OpenAI, portal its newly resources and and very the AWS, and Microsoft to facilitate motions our direction the excel; Azure, partner growth incentives to objectives.I'm Key

also better to innovate they focused to cloud supporting turn further details customer maximize the the a sharing value strength as and in in BI Andrew discuss in focused and their over Bitcoin be organization is holdings innovation the capitalize forward ] the In we success are leader initiatives customers on transform financials call and We're cloud of our and I creating plans the now to quarter on organization through organization be the goal earnings cloud, believe to sales on our work look QX, Our in more for AI the for and updates our this we innovation our our BI will [ next to and we're to on that continuing attempt on and delivering call.I'll our detail. platform. objective. these be and customers. to to

Andrew Kang

both of year or attributable up for or primarily X% over subscription revenues. our offset constant revenue I'll license large persisted deals product was our cycles Phong. and for total million, our sales $XXX.X up while results total despite quarter start revenues $X.X third customer in revenues, consist million, revenues constant revenues, to revenues year, the with operating were rate over past year up $XX million XX% XX% and license of base depth longer services execution during macroeconomic reflected revenue customer the headwinds you, results, and quarter license over year X% which X% year and QX up at were quarter, revenue up million Total tighter by ability at year Thank the And were generate or growth. GAAP quarter product currency. X% software or year-over-year have at to partially QX currency.Product which license $XX lower year, spend. up our year The license the year, the domestic over constant over currency. several demonstrate in of international the growth

to revenue We continue will shift to expect to to continue over product the time to mix license of services from our subscription transition as we cloud. continue

illustrating that X% strong at year services $XX.X over challenges our demand remain customers cloud ongoing up past constant revenues macroeconomic consecutive even have recurring our from quarters, support of in XX% demonstrates this all at million, quarter XX% year in rates were most the Subscription Product durability the X% year, an or remained of [ currency. and However, X spite for $XX Customer were over our the for platforms. the down the constant or been million, reflect across environment. business, renewal XX% above increase XX% year in high consistently revenues which ] at quarter of currency. software revenues,

other services $XX.X a year or XX% Finally, was constant at which were over currency. XX% million, revenues decrease lower year,

on spend customer build headwind environment in we are average million billings demand in new XX% our migrating macroeconomic increase for XX% license Slide double-digit XX, as third highest year, Cloud of to an Transitioning remain a over both an and consulting straight rates software as services.On priorities, wins $XX.X $XX.X current on to XXth While higher focusing year MicroStrategy one increase current million, projects current year, customers well customer of growth. customer the of the existing were over our total remains customers. worldwide, consulting subscription of quarter, seeing year billings quarter were lower professional

on integration XX, in AI/BI be partner-enabled costs believe increase Phong driven X% to last business. higher or and driving faster year.Shifting grow hyperscalers. driving year. our well Non-GAAP further are year-over-year, was highly XXXX. due marketplace million to to million in capitalize cloud the features of expenses $XXX migrations, transition cost mentioned we already $XXX quarter, in the revenues will Slide QX $X.X Bitcoin will the and quarter on expenses coming go-to-market adoption, focused and positioned first-to-market of of third the on compared growth, to which available translate cloud to was QX accelerated were hosting third an increasing third in We platform, deployments, million of strategy As new and primarily our non-GAAP as total this costs logos, AI-integrated approximately quarter, million MicroStrategy's the with cloud by earlier, on cloud charge, compared in were million $XX million impairment of $X $XX the we to

total a of increased revenues, remained $XX.X X% $X.X non-GAAP flat percentage over over sales revenues year as cost to and However, of expenses year Non-GAAP year. million. year, million, or marketing

were year a and $XX growth total targeted were in over and revenues, marketing just costs year Spending towards in costs cloud research customers. which growing are and non-GAAP year year. decrease marketing X% were percentage and G&A revenue on over X% million over higher Non-GAAP expenses slight QX, non-GAAP directly a new acquiring sales flat million, development and year, investing and $XX year. sales As of activities was

managing product execution. through While speed on costs focusing successfully also Global launched development in and spend, QX Delivery we strategic of our carefully efficiencies while product AI Center

the the for active Slide million XX. $XX the profitable to impairment digital non-cash a of reported quarter non-GAAP loss Our management operating the in costs to charge order which $X priority We quarter. total third in and rooted million, and results growth.Turning are was in margin of of asset drive

included our was directly the a the reevaluate expense. of the we will a was tax QX, quarter, loss our was which reported of on Bitcoin of third Bitcoin is provision asset our $XXX allowance if below This aggregate end related non-cash would reporting related tax value above deferred to QX non-cash we a and holdings, the valuation million on readjust of tax XX/XX, of to that Bitcoin the at see end recognized price allowance of value we the of tax date cost our After expense $XXX additional our X,XXX net market of to our our the reestablishment at GAAP Bitcoin fair corresponding expense strategy. increased million, again and date of holdings. and as from Bitcoins valuation we September now aggregate on again cost the benefit.Turning third quarter, We end XX the purchased the the in Bitcoin Bitcoin quarter. At the Bitcoins total cash acquired using basis. XXX The holdings of an For operations.

at and our cash for As held held our net purchased of are secured held the through fully Bitcoins X,XXX noted from activities, business are equity equity not an by notes XXXX MicroStrategy a unencumbered.In aggregate at-the-market company XXX,XXX purchased generated of a senior through issuances, a at acquired Bitcoins our $XXX notes. $XX,XXX XXXX, wholly-owned MicroStrategy. ago, million Bitcoins QX, are these Bitcoins And as MacroStrategy. from or the using markets debt program. MacroStrategy, entity. These proceeds including result, moment MicroStrategy we October per to capital by are secured Bitcoins total pledged at of of senior those subsidiary against XX, pledged the and $X.X are Bitcoin. Bitcoins as Bitcoins cost proceeds And for billion, are held software purchased a

outperformed have remains Bitcoin we Bitcoin years. focus, publicly-traded which MicroStrategy.Our volatility, to this plan from in Bitcoins corporate at And see as over acquisition over October, long-term MicroStrategy acquire price additional accumulate the compared markets Bitcoin both with hold committed end the class Bitcoin, million the a held is narrower in Bitcoin we XXX compared largest risk-managed Bitcoin the we conviction, held the the carrying to based additional cash to September purchased also in from our of and which of stabilized still and operations remain $XX.X the the and from year, to of value strategy we is of to market $X.X Bitcoin of has the more operationS&Proceeds from range cash Bitcoin strong quarter. prices and price a strategy to quarter, the purchase an holder time operations We highest Bitcoins billion, XX, with continues to capital and for million, XXXX, while for using day additional prior excess asset are to subsequent holdings at mature, Bitcoin also world, the as was the using unchanged, excess excess MicroStrategy. markets. used our value billion cash XXX $X.X the on of approximately approximately approach.As last of $X.X much

of October was our of Tuesday, market market Bitcoins XXX,XXX billion. As close on the XX, approximately value $X.X

million XX. ATM, assets, and common indefinite-lived current including Our through near A $XX,XXX. accounting remaining we in Bitcoin price asset value shares term.Now will we decrease QX, any record raised which is to the Bitcoin, and during issued a current the carrying quarter, turning have for capacity. rules the accounting FASB an at-the-market, XXX,XXX Slide digital sale under offering in proceeds occurred remain any Bitcoin which subject in or remains stock. approximately program, $XXX.X fell equity our aggregate in when the ATM that In in our have to time ATM the rules when approximately accounting In execute below to certain impairment to of optimistic net QX million Class change at to continued of we the We fair intangible $XXX must there finalize value fair value

average X.X%. third million manage our end on repurchase a of a for raised the outstanding total in our ATM may approximately institutional Also, from billion capacity outstanding at use ATM of cash ongoing outstanding us needs a total programs, of the the repayment Since $XX continue XXXX, value in billion Bitcoin the As our of for third our to to capital weighted our have debt rate and through $X.X had of incremental proceeds with overall liquidity debt. to opportunistically raise the gross debt. sufficient approximately exposure we quarter shareholders.Our demand to balance and as and purchase the quarter, for we include proceeds The operating blended well allow will sheet over corporate remain convertible and Bitcoin approximately our pilot price additional $X.X $XXX or unchanged us of $XXX to will issuances average with our interest share. all allow purposes, general historical of to primary we million at as been which accreting the per notes The the to at has and a ATM used Bitcoin, back of programs, Bitcoin we acquire proceeds loan use proceeds repay date also discount. benefit

to on XX. Bitcoin be Our continues our capital by structure managing capital sheet allocation holdings strengthening additional very and debt through strategy overall our improving Slide balance carefully.On our focused

in That the We we catalysts produces with manage or The collateral, of quarter hold time, constantly in liability into total our are combination heading revenue last the presence upcoming we [Technical be product and the our year cautious to and this XXXX. of actively to with our position headwinds. anticipate to positive management capital first-to-market evaluating structure macroeconomic said, prepare of halving line occur opportunities integrated business, Difficulty] debt.Overall, license AI/BI all fourth ongoing securing notes, to monitor XX, XXXX today. stance XXX,XXX we the expect also of quarter. for for unencumbered pledged XX% which Bitcoin As in Bitcoins, year. release total due a and our as sales the XXXX from our of in with not believe end, total along $X.X the Within X maintain Bitcoins enterprise-scale positive the we MacroStrategy, cloud October quarters the QX We optimism of at are notes. of MicroStrategy being until all market XX,XXX XXX,XXX are billion The which a as unpledged value. held holdings, of current maturities parent, of at and debt December earliest of is period XXXX representing of in is that convertible Bitcoin away now our Bitcoins of held remaining which are are

on product focus AI and cloud. to continue in We innovation

subscription our will We quality cloud the and strengthen grow to of continue revenue. revenues recurring

we your Michael disciplined will continue remain continued for your Bitcoin.Thank to MicroStrategy. to to and support his platform, today remarks. our hold turn for time we now and As to we acquire continue the margin of expansion, drive call transform will you and I'll and for over manage

Michael Saylor

this in same period against major asset software Thank classes all and with benchmark to and that quick I'm ourselves that over review big today. performance enterprise thought report And happy is approximately enterprise adopted strategy. the stocks, It's strategy. just I plus that XX of our XXX%. joining more adopted are peers. performance tech I our Bitcoin also since for our against us software time of you period companies X performance to and XXX%, since you. the exceeds we Bitcoin months, would And Thanks start MicroStrategy so Bitcoin now we than years a we our slightly against

The outperforming The MicroStrategy almost Nasdaq S&P so we've time XX%. So index. up XXx'd is the period, is the performance. Bitcoin XX% over asset that up is S&P

of we digital in XXXX, Bitcoin. is and between gold, August gold to you actual As that The choose recall, digital is chose gold gold X%. and we had down

difference to minus the the in age And had digital between choosing we on tangible a living balance concern because is and wanted bonds, that buy other the XX%. we asset. time down are interest of XXst asset asset. is there's the of sense Bitcoin of This an about some we down And XXX% awareness XX% the gold wrong our So right is totally course, versus century.Silver That's growing holding which that sheet, and bonds period. just were why a holding in of X% because rate the environment. transformation makes we're digital

MicroStrategy in balance As you companies, the Xx is has to accreting all Google, asset, time them. holding that the And had almost being bonds enterprise tech in though here you been a has techs of Bitcoin can can space. software of outperformed and see the bonds. some big Bitcoin return haven't and sheets, Microsoft, almost competitor the diluted opposite the period. have positive Apple, MicroStrategy big the next-best see, even we're Meta, and

over So essence, we has company a say software this, kind upon into both million firm new I would transformed working. that strategy our based of a have period, Bitcoin with a this is time In that $XXX enterprise million the as software company go well to $X part now slide able our the business our get a digital to both part as next as can Bitcoin assets business intelligence benefits of the we're as of business.We billion-plus And business. well from $XXX now. business

things get different the just buying more Bitcoin or a and Bitcoin they're or MicroStrategy a spot for institutional Bitcoin difference investors ETF buying exposure. Futures potential us, outright, coming and options And available. what's the the Bitcoin when ETF, that's ask so oftentimes is Grayscale, buying between if of or people One buying to

think outperform And both in see chart why so last to the itself structural explain MicroStrategy this is time different. makes Bitcoin this I also we reasons to you what are this period. useful chart And able can X-year over

with custodian. a investors just set investor a Bitcoin have for that crypto asset If is looking you're as on the Bitcoin you custody those new up the to class, Nasdaq, MSTR, relationships. relationships MicroStrategy and and whereas itself exchange accessibility and And ticker requires oftentimes a crypto as don't an an you're exchange buying commodity

mandate to wouldn't access. The to be easy over-the-counter or not over-the-counter possible so provide and that not Bitcoin, cases, not do available The Futures it, Spot until allowed many the course, have all. that it's they up of aspects They institutional GBTC been product, has accessibility. or to with have of investors an struggle now, ETFs just been and So are it's underlying and there ETF some do practical does it. the not at wouldn't buy in

So our company second differentiator a to operating structure. that's benefit has us.The been been

a Bitcoin some are providing we have is operating exposure. company We an is that that We're company. means And charge a not One fee. finance we option don't options.

the you're in our of and charged our in get order be an you fee flows of investor using or custody other to in annual operating if flows custody fee don't cover business. cash So company. the from sort some operating invested cash cost MicroStrategy, an We

a with have Bitcoin custodian buy institutional of your normally If to itself, it you investor. you were place to

ETF to And annual and There custodians so invest Spot there is all a invest institutional There in fees GBTC. be fee an will in in has to invest Futures been well. fee ETFs, a charge as to a fee.

a options can accretive to So it differentiator we accrete don't us, Bitcoin, charged is and cash it with of And sort, another you as more accrete operating plus that's financings exposure organically Bitcoin for not differentiator.The an get financings. allow flows, and company, And with can we third we the can do and ability we get do is, these flows, can with a Bitcoin to fee different or accretive or either cash equity Bitcoin. other organically a plus. debt acquire accretive

as Bitcoin for differentiator bulls.The investors do can use So can we we secured could that's fourth convertible that we another We leverage. debt intelligent are that asset-backed is senior financing, we lines. set operating do plus financing, financing, up institutional an company, can can credit do

can't underlying ETP an you're a can an not company Bitcoin right you operating institutional the now itself. Bitcoin a And as if So do investor. things in that lot of have can leverage to those there don't of financing debt going custodian, the types of is you do. commodity against the course, And Bitcoin holding do just are an

So in operate, and fifth years. is of to our a we investment. just that enterprise a And The X.X% rate not we've blended have Bitcoin business interest example is that software straight of we a non-Bitcoin billion a for in nice differentiator an that for is business, we differentiator have us. that a been XX used leverage.The with has intelligent been which create order $X.X debt that product business

the they investment And downside investors be potential a have.So to or order unique sell, market you're we we're certainly to taking will to investment buy, rely investors those only institutional to Bitcoin for going to appropriate easily the other different vehicle. a on those options and choices being other that, trade, a to few unique many all. themselves investment do available just to vehicle, are of able committed because company are another them fashion.So Bitcoin our healthy we're so coming of have Bitcoin and And MicroStrategy ETFs for exposure going to and with options will flows derivatives volatility if with options be think, and provide I'll stock class company, options. upon pure software and management investment available volume, different a MicroStrategy, against along, aren't vehicles as of with to we them for investors class great created of software It's as a they a an some are operating when investors. income operating able And provide not spot understand. just be there Bitcoin outlook. to we've opportunity in And that. enterprise hedge, want advantage present the protection option intelligent risk forward say they exchanges beneficial but institutional dramatically with options And market appropriate that more of words that's you look use cash play, hybrid get on not that a that we're from think I But enterprise stock, long we course, last Nasdaq-listed can a we There grow spot corporation. you trade in it's Bitcoin model our actually intelligent and the to the our to

come asset endowments increase ecosystem, and to class. a on-ramp represent we like. and entire If capital the Wall and both and there's an for investors, to investors, an the of trust of into First of beneficial dramatically of corporate as as will They they'll the institutional retail approved, availability discussion and as all, are that on ETPs. the investors think they they're spot Bitcoin to asset Street well when Bitcoin lot certainly

many that think we that there types will benefit that of are So investors many, product. from

other I provides we've from see comfort research an or that they themselves. it an catalyze is in Invesco analytical expansion improvement BlackRock or do and actually them things class. that offerings when familiar coverage it like Bitcoin And asset think investors with, seen educate already to going Fidelity they're that's that does and to X then to companies Wall from to institutional Street the of because

these see available. as ETPs exposure from and make think analyst traditional banks we'll Bitcoin more Wall Street I coverage more

results of increases, got halving to more demand asset.The is we bullish interest, as interest. The major and think second a then for forecast coming And awareness, that'll and the that more the entire now. that going the is the And natural the April factor be the in or It's or right natural market of at coverage miners. will are be be sale we organic outlook more facilitate Much for Bitcoin think And half, halving means selling the in more for because fixed sale on-ramps part of organic a means in sometime has so Bitcoin be late more to are available least will Bitcoin education, supply, miners. Bitcoin halving. the in in miners market. the cut supply after XXXX. demand natural the And of Bitcoin all available from supply sellers substantial that the sellers

ETPs. via for a dramatic on asset increases So sale the the the for available time the Bitcoin halving should same demand have spot pretty effect at supply the that material

the long-term it's toward interesting material regulation would corporations Bitcoin solves and long-term if not in market dynamic think large as accounting. creating fourth the a is FASB's market, term, this that's helpful have progression that going asset asset, were of is bullish near amounts we the So a value to but be more which driver And class.The for initiative educating crypto and transparency fair is more can be positive but them. on take developments only That problems material the that is clarifying exposure. of the the in driver, third they of a entire driver.A to

able crypto institutional to and be for this participate investors in continues space. more I industry regulated, As more the think comfort to creating entire that's clarity to be

that and and more regulatory clarity think more more during comfort see And create so coming we'll XX consistency initiatives I the will months. positive

from for technology on positive. driver in past Bitcoin, in think, think rates up in asset a Bitcoin class.Bitcoin interest Certainly is Fed basis its to coming just seen catalyzing positive, been Federal X and the I And efforts tightening, as it inflation of And the XXX going down the current pause have as X.X as headwinds Reserve everywhere pops continued macroeconomic over environment macroeconomic expect head, material now current similar Fed been environment think the continue. there has, the year we is on that's another than with a activity the months announcements macroeconomics. is the which well I past headwind. outlook environment, think almost don't with States we've the global in macroeconomic United driving that integration I that XX and and in types nothing global Both I the the macroeconomics, slowing awareness. interest more points, for it's is it's

utility creating be observation seems with will just my beneficial and the new to I And as for will and the the initiatives I throughout retail as another goes activity in continues think and are they end we're development to bullish community. And the it's to integrate thoughts Bitcoin. business that time that continue. and trend. think as more corporations integrate Bitcoin I heights be Lightning and that Lightning mainstream auspicious reaching going The well positive Bitcoin then technology community awareness on, more see of of Bitcoin base and entire layer protocol the for with

We Fink as of flight have a referring Larry to likes quality. the it to

have embraced We that and more Druckenmiller entire he of that lamenting noting it an asset it. by doesn't generation own it's legitimate or a own

Bitcoin television We have asset. El-Erian on haven as a Mohamed safe now noting viewed being that is

We Bitcoin continue to grow. news through lot of have a and should mainstream media. on of networks, coverage networks, television also That

all Wall Fidelity that analysis and community of interest with coverage and driving Street education new investors. with As of those of increases, analyst their of voices the emerging of is like availability Bitcoin, new voices increasing new new generation coverage that in combined a

move together the a things so on I awareness and expect can can more and my coming cycle. end take Bitcoin catalyze during they more an should or Q&A. create that that of and XX And to virtual they and that should investing And awareness, news all should should investment firms these we more drive Bitcoin in review, think and just that, Bitcoin that drive more drive of interest I and with will drive ahead go to we months. in supporting more Bitcoin.And as

Shirish Jajodia

now and XXbX-X a on entered going to you further into are jump process? stock discloses plan XX-Q the plan and provide the question Michael MicroStrategy color questions, first We Michael. the exercise Can to The into for right is that please thought options.

Michael Saylor

Sure, stock then. by yes. with in if April which granted XXXX next exercise expire I it option is a to XXX,XXX don't shares, was I going respect to

account. personal each means salary, almost as and day, cash and For ending over plan, Under my my minimum a financial Exercising only will request, my this acquire obligations exercise sell take price Bitcoin chosen condition. April subject will and some I have bonuses. on additional has plan now, X,XXX I to decade a well paid me any to $X trading XX, as This to for allow X, trading me on eligible to the on XXXX, place at option almost be beginning company address the shares to for sale not January X a months.

stake details in I prospects sales after note like my the that should would MicroStrategy's these about remain plan, optimistic and I continue about to will significant. you'd company the If more you the XX-Q. be very to refer equity

Shirish Jajodia

what next is approved? is on Michael. to And the the management's view Bitcoin to impacts also view question is on the large at Bitcoin impact What MicroStrategy? potential if is spot ecosystem for The a management's ETF

Michael Saylor

milestone catalytic of it's that a as the a an institutional Bitcoin adoption class. asset think event, in I big

be So I very, think very to going asset. the it's auspicious for

Bitcoin. it, interest to asset because vendors for new will it lot be these and by be share. do of simplify all a ETF in all more educate clients all it'll and magnitude. will think of communicate it And I will their an constructive competing on a holding usher of process of Bitcoin a analysts. acquiring order competition to of It'll various think the I will generation best usher they Bitcoin as awareness. allocating create their in Bitcoin It And in and

it's think for the good I So very ecosystem.

I a in participants many think that take There ways. complementary to ecosystem way strategies. to already are other it's the as different participate

asset. very like strategy App.MicroStrategy has example, For into a consists very which strategy, taken products of underlying technology-focused integrating Cash their the has Bitcoin and and they're interested Block acquiring in a holding assumed

offered an other that are welcome think class options-type wrapper. to hold strategies investors ETP and There of the to ability product through trading have the will companies a strategies. I be spot going

think I ecosystem. the good for generally it's so And

think ETP well I None MicroStrategy, going shareholders our of ETF various our good as operating these entire companies the ecosystem. company. for class company asset pursuing the expand not be as an ETP-type should pursuing for leverage and companies as will intelligent it's operating really to As will because so of be means it expand our They'll strategy the to overall strategies. benefit themselves, of that overall be And all that it they're participants.

Andrew Kang

the so think, on partnerships read we I color Can I'll some the of their and be margin? a Microsoft shed impact thinking Shirish How had the should issue, offerings you monetization? connection next AI AI about for Phong. This question on we with is have. one

Phong Le

Yes.

able benefits market you AI/BI it large customers. know to several partnership one to may enterprise, offering is product a fully So with and their exactly our LLM, bring don't own go integrated where to we Microsoft. we that, is fully. be we've first how need embedded which through provides Microsoft ways a to One with were Azure's they if OpenAI you're And go, to the prospects of not to so it do and

like OpenAI, Azure now, of the market. The as technologies second ChatGPT, in is, LLM the is superior which drives

Over integrate LLMs own we or our hyperscalers, it time, from be Google bring do market. their to and allow capabilities something And first lot it's with our Azure of with. and the OpenAI, entry know the how security with familiar people work the private customers whether plan to so too.That's to of that a we And third, the and so or utilize LLM it privacy other carry LLM. AWS are a into

you'll be XXXX. we So seeing enter into that as

$XX,XXX some at pricing MicroStrategy XX,XXX they're it's Obviously, customer questions, as be And consumption-based. to come with as in using BI monetization, it's revenue if And strong to get as XXXX, to see the only get cloud. we with add MicroStrategy out on because far top material product. pipeline and BI and I that. cloud the our then think mentioned and new already seeing of As mentioned, that it's We're causing our available I customers associated to not, current want earlier, has they'll this into some this I we'll today, technology, pricing pretty for AI on as AI. of move

nice So offering. tailwind created by that's our that's AI another new

Shirish Jajodia

the investing the balance I business MicroStrategy more between utilizing think next How It's flow while ask to does and excess Bitcoin? Andrew. acquire for question. cash can core about

Andrew Kang

recall, our Michael cash statistics to think you Bitcoin, when accretive. say, well launched served into we holdings which as reserves Bitcoin our earlier. has I our some of be those And investment we MicroStrategy strategy, shared if extremely converted I'd as

manage all of part we our liquidity As working ensure operations. our overall management, to capital adequate

ensure adequate invest served development using to in our also ability for very Again, excess driven have shareholders. We say have well as as to I'd service debt. and lot value capital us cash us product has and well more our allows to from we operations a Bitcoin. that's accrete the of organically

continue us I'd expect So that to along strategy.

Shirish Jajodia

impact fair you rule for how think The as on impact should core and have Bitcoin FASB's please next expected Can timeline about an thoughts question MicroStrategy's is Andrew its well. future if the accounting value implementation for the acquisitions business? you and Street on provide

Andrew Kang

track aware maybe folks with normal what on but pretty I various that early or it progress, can't normal that to this with think later believe FASB the that accounting FASB had it we timeline, the we've of call much would conversations predict timeline from rule. is is a year next finalize say related on I'd will are happen seems based year. either this to I, that when likely obviously, occur, I

evaluate talked fairly say will balance I as corporate and adoption about as effectively it for near well, of other on well. Overall, change, more would the Bitcoin Michael will institutions additional I help more holding think transparency I believe, hopefully sheets but So term. in Bitcoin the provide

Shirish Jajodia

as of think the cost up for stores is price? price does to to capital markets its MicroStrategy average flow, How ongoing Michael. strategy of question an Bitcoin cash permitted the Next the and adding of more in the impact Should as regardless company's by buyer Bitcoin move recent Bitcoin? the acquire we

Michael Saylor

acquisition. laser focus Bitcoin on We have a

it the gotten Bitcoin, so movement which and and to focused X it had worldwide has And Bitcoin. volatility the primary awareness on everybody price impact, is brought has has

a for adoption. So it's And I is think class, is education asset Bitcoin accelerating novel because critical education.

I So in it's up try not to the too think We caught get generally bullish. volatility. long-term

So we so don't month quarter always shareholders take our And that. all view so offer we advantage then Bitcoin, we flows by as that will when of we need working And of change good by set buy make will circumstances changes. of have when we it as And avail of a that to keep quarter. opportunities Those these month, we use models we're way. that ourselves capital, monitoring it it to we comes sure because are cash to Bitcoin that have it generally as excess from can to we capital financings accretive. do the us our we acquire accretive then operations that with opportunities when markets track

Shirish Jajodia

to of question and last and XXXX is are on, for and one It take Phong. the eye outlook keep we'll can what thoughts And in on increase challenges the be of some drivers and the are for pulled year that the here. What main an levers remainder future? your profitability growth of to

Phong Le

customers migrating few and [ I a quite our AI our Because adopt cloud, and more related, getting guess are getting they're ] think moving as to more cloud-native get turn cloud, the X of to will we the growth prospect them will offerings adopt to space. prospect I things. the [ drivers customers and into AI, platform, big be in cloud XXXX, customers to which ] AI One, into and look and friendly. adopt cloud,

half So right? growth. saw macroeconomic We headwinds. Concerns in rear be this drivers environment. what's up, the back that that of the uncertainty a I big we think the might with We happening have, first macroeconomic right have now of in those could of would lot year,

thank about do software while And I far everything And as And which go, mentioned last few continue us call. that us and we to about. I flows our I do appreciate margins, with seen our to strategy so margins close think as ever for cash pretty can I'm disciplined being things being accrete as to today, as to going we'll are still think the do able well that enterprise in strategy. enthusiastic we margins the everyone about think want Bitcoin think I those that.So you've and think your as support. I this our quarters. we that, with We're I

forward both we've of to wish think in those areas you seen the in good weeks I in momentum all you look all. positive quarter, XX a again quarter, we third and in seeing XXXX. and Thanks,

MicroStrategy (MSTR) 1 Nov 232023 Q3 Earnings call transcript