MicroStrategy released its Q3 report on Oct. 28, and the main highlight of the report is that the business intelligence firm has buffed up its Bitcoin stash by adding a total of 8,957 BTC to its holdings in Q3. This brings the value of its total Bitcoin portfolio to around $7 billion.
The firm’s crypto avid CEO Michael Saylor also revealed that there is more BTC accumulation to come.
Today, MicroStrategy is the world’s largest publicly traded corporate owner of Bitcoin with over 114,000 Bitcoins. We will continue to evaluate opportunities to raise additional capital to execute on our Bitcoin strategy.
Saylor highlighted in the report that the “overall demand” for the MicroStrategy platform and the growing adoption of the firm’s cloud-based solutions have all contributed to the firm’s strong performance in Q3.
MicroStrategy has impressively increased its Bitcoin holdings by 198% from a year ago. As of Sept. 30, it had 114,042 BTC purchased at an estimated average price of $27,713 per coin, with a net spend of $3.16 billion.
Meanwhile, the firm posted a carrying value of $2.406 billion for its BTC holdings and an impairment loss of $754.7 million, although this was just a paper loss.
Since the firm classifies Bitcoin as an “intangible asset,” it is required by accounting rules to report any impairment loss whenever the carrying value dips below its cost basis. However, the firm does not have to report any paper gains on the asset until a profit has been realized through liquidation.
With BTC currently trading at around $62,000, the value of MicroStrategy’s holdings is about $6.9 billion. The firm will make a profit of $3.75 billion if it decides to liquidate its Bitcoin right now.
MicroStrategy reported total revenue of $128 million for the quarter, marking a 0.5% increase compared to its Q3 results from 2020 while beating the Zacks Consensus Estimate by 0.39%. It posted earnings of $1.86 per share which is above the $1.12 initially forecasted per share.
Zacks confirmed yesterday that MicroStrategy has surpassed consensus estimates three times “over the last four quarters.”
According to Zacks Investment Research, “this quarterly report represents an earnings surprise of 66.07%. A quarter ago, it was expected that this business software company would post earnings of $0.73 per share when it actually produced earnings of $1.72, delivering a surprise of 135.62%.”
MicroStrategy also posted a gross profit of $105.7 million for the quarter, matching the numbers of the year before, with a net loss of $36.1 million for the quarter or $3.61 per share compared to the loss of $14.2 million or $1.48 per share in Q3 2020.
Its CEO Saylor reiterated his bullish sentiments for the digital gold by stating that “you do not sell your Bitcoin” in a retweet of his post from October 2020 where he declared his personal holdings of 17,732 BTC.