MicroStrategy Reports $94M in Profit in Q1 2023

• Business software intelligence platform MicroStrategy has posted a new profit of $94 million in Q1 2023.
• The company also reported $121.9 million in revenue, up 2.2% from the same time last year, a 2.2% increase from Q1 2022.
• Phong Lee, the CEO of MicroStrategy, stated that his company’s “conviction” in Bitcoin is as “strong” as ever.
• The company purchased 7,500 BTC in Q1, 2023, and now holds a total of 140,000 BTC worth around $4 billion.

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As the leading cryptocurrency in the blockchain sector, Bitcoin (BTC), took a dip below the $16k price level a few months ago following the collapse of multiple crypto companies, popular BTC bull MicroStrategy started witnessing heavy losses on its BTC holdings. However, due to the recent surge in the price of the oldest cryptocurrency, the company has started to minimize its losses on its crypto holdings and has now posted a net profit of $94 million in Q1 2023.

It is crucial to note that the company founded by long-time Bitcoin supporter, Michael Saylor has continued to purchase additional BTC amid the current bearish market. Interestingly, as per the recent press statement from MicroStrategy, the company posted a $94 million profit due to a one-time income tax benefit of $453.2 million. Interestingly, the company also reported $121.9 million in revenue, up 2.2% from the same time last year.

The current Chief Executive Officer (CEO) of MicroStrategy, Phong Lee, stated that his company’s “conviction” in Bitcoin is as “strong” as ever. Lee replaced Saylor as the CEO of the company last year, while the founder of the company moved into the role of executive director. 

“The conviction in our Bitcoin strategy remains strong as the digital asset environment continues to mature,” Lee said while adding that the company is hosting an in-person showcase known as the MicroStrategy World that will highlight “the key areas of product innovation” that will carry the business intelligence platform into the future.

Andrew Kang, the Chief Financial Officer of MicroStrategy, noted that the company had successfully repaid its loans to Silvergate Capital that it had taken to purchase Bitcoin (BTC) back in early 2022 during the crypto bear market. 

Furthermore, Kang also noted that his company “continued to strategically manage our balance sheet through the addition of 7,500 bitcoins in the quarter for a total of 140,000.” The current worth of the Tysons, Virginia-based company’s BTC holdings is around $3.9 billion, and it seems that the company might make additional purchases in the near future.  

“We remain disciplined on costs while investing in growth, and we will continue to execute our dual strategy of growing our business intelligence software business and acquiring Bitcoin for the future,” Lee added.

Another important factor in the Q1 2023 profit of the company can be attributed to the decrease in the operating cost of MicroStrategy. As per the press statement, the operating expenses for the first quarter of 2023 were $114.3 million, a 56.6% decrease compared to the first quarter of 2022. 

The operating cost for the company does not include the impairment charges that it suffered on its BTC holdings, which were $18.9 million during the first quarter of 2023, compared to $170.1 million in the first quarter of 2022.

“As of March 31, 2023, the original cost basis and market value of MicroStrategy’s bitcoin were $4.172 billion and $3.986 billion, respectively, which reflects an average cost per bitcoin of approximately $29,803 and a market price per bitcoin of $28,468.44, respectively,” noted the company. 

More importantly, in 2022, the District of Columbia Attorney General, Karl Racine, accused Michale Saylor of tax evasion and MicroStrategy of acting as a helper in the act. On the other hand, many crypto supporters believe that the Bitcoin bear market is over and investors can expect a rally soon.

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