Strategy Inc

What they do

Strategy Inc operates as a bitcoin treasury company, holding over 843,000 bitcoins as of late July 2026, and issues preferred stock and convertible debt to fund bitcoin purchases. It also runs an AI-powered enterprise analytics software business, aiming for 'Intelligence Everywhere' across industries.

Revenue drivers

• Bitcoin treasury operations — Primary driver of financial results; holdings generate unrealized gains/losses from bitcoin price changes and sales under the BTC Monetization Program, with $218.4 million in sales year-to-date 2026.
• Enterprise analytics software — Legacy software business provides recurring subscription and product support revenue, though overall revenue is modest and has declined from $510.8M in 2021 to $477.2M in 2025.
• Digital credit instruments — Issuance of five classes of preferred stock (e.g., STRF, STRC, STRK) and convertible notes generates capital for bitcoin acquisitions; STRC issuances raised $7.53B year-to-date 2026.

Recent performance

In Q2 2026, Strategy reported a net loss of $8.22B or $24.45 per diluted share, compared to net income of $10.02B in Q2 2025, driven by an $8.32B unrealized loss on digital assets. Revenue for the quarter was $122.4M, roughly flat sequentially. As of June 30, 2026, cash and equivalents were $1.71B, with total assets of $52.56B and long-term debt of $6.67B. Bitcoin holdings grew 11% during the quarter to 846,000, and the USD Reserve was increased to $3.75B, covering over 2.1 years of preferred dividends and interest.

Strategy

Management's strategy is to accumulate bitcoin and issue novel 'digital credit' instruments to provide economic exposure to bitcoin while generating capital. They have established a USD Reserve to ensure liquidity for dividend and interest payments, and they intend to repurchase STRC preferred shares opportunistically at discounts to par. They also aim to grow Bitcoin Per Share and have introduced enhanced metrics like BTC Hurdle ARR (currently 10.8%) to track credit cost versus bitcoin returns. The company remains adaptable, exploring other financing structures to monetize bitcoin holdings.

Risks

• Bitcoin price volatility — Significant unrealized losses and potential futures losses if bitcoin price declines further; a $8.32B unrealized loss in Q2 2026 shows the impact.
• Liquidity and forced sales — If the USD Reserve is depleted and financing is unavailable, the company may be forced to sell bitcoin at unfavorable prices, potentially driving down the market.
• Cybersecurity threats — Substantially all bitcoin is held with custodians; security breaches or private key loss could result in partial or total loss of bitcoin, with limited insurance or liability coverage.
• Preferred dividend obligations — The company has incurred significant preferred dividend payments ($1.06B cumulative to date) and must continue to fund them, which could strain cash flows if bitcoin prices remain low.

Outlook

Management expects to continue growing bitcoin holdings and the USD Reserve, targeting $3.75B in reserve to cover over 2.1 years of obligations. They plan to maintain a regular and disciplined STRC repurchase program when the shares trade below $100, to reduce future dividend costs. They also expect to continue issuing preferred stock and other digital credit instruments, while keeping the bitcoin strategy adaptable to market conditions.