MSTR Q2 Earnings Surprise, Revenue Surges, Stock Rises

Overview of MicroStrategy's Performance in Q2 2025

MicroStrategy, commonly referred to as Strategy, has experienced a decline in its stock price over the past three trading sessions following the release of its second-quarter 2025 financial results on July 31. Despite this drop, the company’s shares have still managed to gain 29.6% year to date, outperforming the broader Zacks Computer & Technology sector, which has seen an appreciation of 11.8%.

In the second quarter of 2025, Strategy reported non-GAAP earnings of $32.52 per share, a significant improvement from the loss of 76 cents per share in the same period last year. On a GAAP basis, the company posted earnings of $32.60 per share, surpassing the Zacks Consensus Estimate of a loss of 12 cents per share. Revenue for the quarter reached $114.5 million, exceeding the estimated amount by 2.09% and marking a 2.7% increase compared to the previous year.

Bitcoin Holdings and Performance

One of the most notable aspects of Strategy’s performance is its Bitcoin holdings. As of July 31, the company’s Bitcoin per share ratio stood at 39,716, reflecting the value of its Bitcoin holdings relative to the diluted shares outstanding. This metric highlights the company’s substantial investment in digital assets.

As of June 30, 2025, Strategy held approximately 597,325 bitcoins, with an original cost basis of $42.4 billion and a market value of $64.4 billion. This equates to an average cost per bitcoin of around $70,982 and a market price of $107,752. The company’s Bitcoin yield was 25% year to date, with a final yield of 19.7% at the end of the second quarter. Strategy has set a target of achieving a 30% Bitcoin yield for 2025.

In terms of gains, the company recorded a Bitcoin gain of $9.5 billion at the end of the second quarter and $13.2 billion year to date. It aims to achieve a total gain of $20 billion for the year.

Financial Highlights and Operating Results

The company’s operating income for the second quarter of 2025 was $14.03 billion, compared to an operating loss of $200.3 million in the same period last year. This impressive turnaround was largely driven by an unrealized gain on its digital assets, which amounted to $14 billion.

Product licenses and subscription services revenues rose 44% year over year to $48 million, making up 41.9% of total revenues. Subscription services alone surged 69.5% to $40.8 million, while product licenses declined 23% to $7.2 million. Product support and other services revenues also saw declines of 15.6% and 11.8%, respectively.

Gross margin contracted by 350 basis points on a year-over-year basis. However, operating expenses decreased significantly, with sales and marketing expenses down 130 bps, research and development expenses down 620 bps, and general and administrative expenses down 50 bps.

Future Outlook and Guidance

Looking ahead, Strategy has provided positive guidance for 2025. The company expects operating income of $34 billion, net income of $24 billion, and earnings of $80 per share, assuming a Bitcoin price of $150,000 at the end of the year.

Comparison with Other Stocks

Currently, Strategy holds a Zacks Rank of #3 (Hold). In comparison, several other stocks in the Zacks Computer & Technology sector have better rankings. MKS Inc., DoorDash, and Lumentum are among the top performers, each holding a Zacks Rank of #1 (Strong Buy).

MKS Inc. shares have declined 11.8% year to date, with earnings results expected on August 6. DoorDash shares have appreciated 52.3% year to date, with results scheduled for the same date. Lumentum shares are up 28.8% year to date, with results expected on August 12.