Prepared remarks
Hello, everyone, and good evening. I'm Shirish Jajodia, Corporate Treasurer and Head of Investor Relations at Strategy. I will be your moderator for Strategy's 2025 Fourth Quarter Earnings Webinar. We will start the call with a 60-minute presentation starting with Andrew Kang, followed by Phong Le and then Michael Saylor. This will be followed by a 30-minute interactive Q&A session with four Wall Street equity analysts and four Bitcoin analysts. Before we proceed, I will read the safe harbor statement. Some of the information we provide in this presentation regarding our future expectations, plans and prospects may constitute forward-looking statements. Actual results may differ materially from these forward-looking statements due to various important factors, including fluctuations in the price of Bitcoin. And the risk factors discussed in our current report on Form 8-K filed with the SEC on October 6, 2025, and under the caption Risk Factors in Strategy's quarterly report on Form 10-Q filed with the SEC on November 3, 2025. And the risks described in other filings that Strategy may make with the SEC from time to time. We assume no obligations to update these forward-looking statements, which speak only as of today. With that, I would like to turn the call over to Andrew Kang, the CFO of Strategy.
Thank you, Shirish, and thank you, everyone, for joining our call today. I'll start by touching on a few of our highlights for Q4 as well as for the full year 2025. We closed the year with 713,502 Bitcoin on our balance sheet, which represented approximately 3.4% of all Bitcoin that will ever exist. This reflects continued discipline around Bitcoin accumulation through the fourth quarter and further reinforces our position as the largest corporate holder of Bitcoin in the world. Also during 2025, we successfully raised over $25 billion of total capital, funding growth across our treasury strategy and expanding our product ecosystem. We now have five listed preferred equity securities, which has broadened investor access across yield, duration and risk profiles. Our execution throughout the year puts us in a position to enter 2026 with a stronger balance sheet, more access to liquidity and upside when hopefully Bitcoin price rallies soon.
2025 overall was a very important year with several strategic corporate events that I think strengthened our foundation as the world's leading Bitcoin treasury company. We adopted fair value accounting at the beginning of the year, which provided greater investor and market transparency of our Bitcoin holdings, which are now, as you know, marked to market each quarter. Second, Treasury and IRS guidance confirmed that unrealized Bitcoin gains would not be subject to additional corporate alternative minimum tax. We also received the first-ever credit rating for a Bitcoin treasury company, which marked an important step, I think, in institutional recognition and setting the foundation for future progress. And lastly, in Q4, we established a $2.25 billion cash reserve, which provides over 2.5 years of dividend coverage. This is an important enhancement to our overall risk management framework and supports our ability to meet our interest and dividend obligations through market cycles like the one we are seeing today.
Thank you. Turning to our Q4 financial results. We reported an operating loss of $17.4 billion and a net loss of $12.6 billion. These results were obviously driven by the quarter-end decline in Bitcoin's fair value under our mark-to-market accounting. For the full year, we reported an operating loss of $5.4 billion and a net loss of $4.2 billion. We updated our target range for the full year 2025, precisely because our results are highly dependent on Bitcoin price and can move meaningfully based on market conditions. It's important to call out that our full year results were within our target guidance based on where Bitcoin price ended the year. While accounting outcomes may fluctuate quarter-to-quarter, our long-term focus remains unchanged. We are committed to increasing Bitcoin per share and building durable shareholder value over the long term. Turning to our Bitcoin KPI performance for the full year.
At the start of the year, we established clear KPI targets tied to Bitcoin per share growth while recognizing a wide range of possible Bitcoin price outcomes. Under those conditions, we delivered a BTC yield of 22.8% for the year, beating the lower end of our target range, which was set at 22% to 26%. That translated into a total BTC Gain of 101,873 Bitcoin and a BTC dollar gain of $8.9 billion, also beating the lower end of our target range. The key takeaway is that even with significant volatility in Bitcoin price, our strategy remained disciplined, and we executed against our KPIs of increasing Bitcoin per share and compounding shareholder value for the long term. Since adopting Bitcoin as our treasury asset in 2020, we've consistently added Bitcoin per share each year. 2025 was yet another strong year in this regard and building on the momentum of prior years and demonstrating our ability to add more Bitcoin per share in both good markets and in challenging ones as well.
Our focus remains unchanged. Our goal is to systematically increase Bitcoin per share over time regardless of near-term market cycles and continue to deliver durable BTC value for our long-term investors. Thank you. Now turning to the balance sheet. Our digital assets increased from $23.9 billion at the end of 2024 to $58.9 billion at the end of 2025. This was due to a $17.9 billion increase in fair value at the beginning of the year balance as well as the fair value of the Bitcoin we added in 2025. As a result, we ended the year with also $2.3 billion in cash and cash equivalents of which, $2.25 billion of that represents our USD cash reserve. As of the end of 2025, we now carry a $1.9 billion deferred tax liability, which just reflects the accounting difference between the market value and the cost basis of our Bitcoin. Our long-term debt ended the year at $8.2 billion, which takes into account a new convertible bond as well as an equitization of a prior convert.
We do not plan to issue any new convertible debt in the future, and we'll focus on assessing strategic liability management opportunities to the extent market conditions make sense. Over time, we intend to reduce our leverage to enhance our credit profile. We also added $6.9 billion of preferred equity, diversifying our capital-raising channels. Total equity, including both preferred and common, rose to $51.1 billion, up from $22.8 billion a year ago. We added $6.9 billion of preferreds through five distinct IPOs and our common equity increased to $44.2 billion. We deployed all of that capital in an accretive manner to acquire more Bitcoin while delivering a 22.8% BTC yield. I'd say the year-over-year growth of our capital base strengthens our balance sheet and provides a more durable base to continue raising capital efficiently and acquiring more Bitcoin over the long term. Thank you.
Thanks, Andrew. First, just want to acknowledge the market conditions for today's call is challenging. The fact that we have thousands of people watching this is a testament to your intellect, your curiosity, and for many of you, your conviction. So thanks, everyone, for joining us today. Also look, some of you bought Bitcoin or MSTR in the last year. This is your first downturn. My advice is to hold on. Remember the fundamentals that cause you to buy Bitcoin. It's because Bitcoin is the digital transformation of capital, or maybe it's because it's the hardest and most ethical form of money, or because you believe in a non-sovereign, censor-resistant store of value. None of these fundamentals have changed in the last year or the last 18 years. From the MicroStrategy and Strategy shareholders, remember the fundamentals of why you bought into MSTR common because we are levered and amplified Bitcoin, we're built to outperform Bitcoin over the long run.
Perhaps you see us as digital innovators. We invented the enterprise business intelligence software space in the 1990s, and we invented digital treasury companies in 2020. Or it's because you believe in the management team that's here today. None of that has changed in the last year. For those of you who have been with us on this journey since 2020, you've seen other periods of Bitcoin and MSTR downturns, and you held on, and you were rewarded for your conviction. So thank you. I'm going to invite you to share your wisdom and confidence with those who are newer to the community. X is a great place to do this, and it's a fantastic opportunity to get together in person. We will have our sixth annual Bitcoin for Corporations in Las Vegas in 3 weeks, February 23 through 26. I'd love to see you there. It's a great place to learn about Bitcoin, Bitcoin treasury companies, digital credit, digital capital, and digital money.
It’s also a great place to see our software business in action. Our software business constitutes 1,500 employees and over 3,000 customers, and they'll be there showcasing the transformation of intelligence and the intersection of AI and BI. We saw a great year last year in our software business. We saw a big cloud transition as our revenue went from a decline to an increase of 3%, and our cloud revenue went up 65% year-over-year. So I invite you all to join us in Las Vegas, February 23 through 26. This is our business. We have been buying and holding Bitcoin since the third quarter of 2020, every single quarter. We now have 713,502 Bitcoin with a total acquisition cost of $54 billion and a $76,000 average Bitcoin purchase price. Recognizing now that Bitcoin is below the average Bitcoin price, you might ask the question, what does that mean? It really doesn't mean anything, right? It doesn't mean that we have any issues servicing our debt or paying the dividends on our preferreds.
We don't have any covenants or triggers that say when Bitcoin price goes below our average Bitcoin purchase price, anything has to occur other than we continue with our strategy. 2025, as Andrew mentioned, was a pretty big year for us in the capital markets. As you see here, in 2024, we raised $22.6 billion, and we actually outstripped that number in 2025. The significant change last year was we moved from convertible debt, $6.2 billion in '24 and $2 billion in '25, to $7 billion of preferred. Our transition demonstrates that we believed strongly in digital credit and invented the preferred market, which now other Bitcoin treasury companies are moving into. We're pretty excited about this. Year-to-date 2026, in the face of a tougher Bitcoin market, we were able to raise an additional $3.9 billion of capital in just 1 month and for the most part, buy Bitcoin with that.
Thank you, Phong. I'm delighted to have you join us today. All of our strategy is based upon looking at the fundamentals and taking a 10-year view. When you consider the fundamentals of digital capital, you have to start with the most important regulator in the entire world, and that is the President of the United States. We have a Bitcoin President, and he's intent upon making America the Bitcoin superpower, the crypto capital of the world and the leader in digital assets. I don't think you can underestimate the importance of having support for the industry and digital capital at the very top of the political structure. Now equally important, if we look at the cabinet that's been put in place, the entire government has embraced Bitcoin. When I say embraced Bitcoin, what I mean is 18 months ago, there was one person in the government that had an awareness of it and was skeptical to neutral or grudgingly accepting of it.
Now there are 12 individuals I'd want to highlight, the Vice President, Treasury Secretary, SEC Chair, Federal Reserve Chair, and many others, all Bitcoin believers. Capitol Hill has embraced Bitcoin. There's bipartisan consensus that the United States should embrace digital assets and capital, and that is a big deal. Big banks are embracing Bitcoin. The top financial institutions that allow IBIT trading have proliferated. TradFi and fintech have embraced Bitcoin as well. The number of trading accounts has increased across crypto-native exchanges, fintechs, neobanks, and brokerages. This is a clear bullish trend. The ETF trend is also encouraging, with a consistent increase in ETFs embracing Bitcoin. This corporate trend is evident as many companies have discovered the benefits of adding Bitcoin to their portfolios. The public markets are embracing Bitcoin as well, with more companies going public that are involved in digital assets. I see this as a very bullish indicator and a fundamental improvement in the structure of the industry.
Thank you, Michael. We will now move on to the interactive live Q&A section of our webinar. I would like to welcome all our Q&A guests and invite them to join on video. We look forward to hearing your questions. For the first question, I would like to invite Lance Vitanza, our research analyst from TD.
Questions and answers
My question is, since the beginning of the year, I can count 3 weeks over which your Bitcoin acquisitions have generated slightly negative Bitcoin yield. Now I'm all in favor of buying Bitcoin even when times are tough, but shouldn't the goal be to increase Bitcoin per share at all times rather than just increasing the total amount of Bitcoin that you own? Maybe if you could just talk about the strategy or the thinking that went into those 3 particular weeks and what that could mean going forward?
Yes, we agree with you. We don't aim to reproduce those weeks. The times that we've actually done dilutive transactions on a Bitcoin per share basis were generally associated with building up the U.S. dollar reserve, which we did in response to analysis and feedback from the market and some reflexive concerns that we wouldn't be able to pay the dividend if the equity capital markets closed us. The reason we did it was to improve the creditworthiness of the company. We would only take those actions when we feel like it's essential to defend the credit of the company because if people lose confidence in the credit, then it will ripple into losing confidence in the equity and the business model in general. We don't expect to see anything of that magnitude going forward because we've built the U.S. dollar reserve to the level where we don't have a credit problem.
Really useful presentation. I took a ton of notes. I wanted to ask you a 2-part question. On Slide 53, you talked about quantum vulnerability of Bitcoin. I know a lot of people have questions about this. Could you give us some idea of how Bitcoin and the core developers might think about addressing the quantum vulnerable wallets? Secondly, there are only 4.4 million wallets that have $10,000 worth of Bitcoin, which means the world hasn't really adopted Bitcoin yet. What do you think are some milestones or roadmaps that could further drive Bitcoin adoption?
With regard to the first question, I don't think it's appropriate for us to advocate a particular solution or a particular approach nor a particular time frame. Our role is to support all of the various communities and facilitate the evolution of consensus about what should and can be done, when it should be done, and how. The second topic is what are the catalysts for Bitcoin price to improve. I think the fundamental catalysts are regulatory support and the formation of banking credit networks. These will legitimize the asset, decrease the volatility, and improve its usefulness. The current financial market climate is ripe for constructive actions by regulators and banks, fostering innovations in financial credit that promote the growth of Bitcoin and digital assets.
Michael, I want to talk about recent events. The President presented his nominee for the next Fed Chair, which has exacerbated volatility across multiple asset classes, including Bitcoin. How would Strategy's capital allocation framework change if the next Fed chair is perceived to be less independent? Would you consider refinancing or retiring the converts at a discount to lower the cost of capital?
We try to be very reactive to market signals. The most obvious example is if our equity trades weak, we won't sell it. The same goes for our credit instruments. We want to assess everything in light of overall market conditions, including whether it is necessary to manage our convertible debt proactively. We generally don't expect any immediate action as we're focusing on our long-term strategy and growth.
Given the popularity of the STRC product, could you provide views on what you think is an appropriate minimum reserve relative to months of dividend coverage? Also, do you have any views on potential leverage options that could build on STRC and whether you would encourage it or not?
We target 2 to 3 years of dividend coverage with the USD reserve. We don’t foresee capping the dividend yield right now as it needs to align with market conditions. We welcome the development of products using STRC as long as they add liquidity without compromising security or stability.
What is your take on how the industry of digital asset treasury companies is likely to evolve? Do you expect consolidation or a shakeout, and what opportunities could arise for Strategy in this context?
Every business has to have an operating model that works, adds value if it's going to grow and prosper. The winners will evolve and find their niche. We’re primarily focused on making STRC a premier credit instrument. We believe our approach will maximize the potential of our innovative product without distraction or dilution.
I view MicroStrategy as the most asymmetric value investment in the world. My question relates to the Stretch product. If the price were to go below a certain level, would you establish a lower boundary on the yield?
We’re not looking to drive the yield down significantly. We want to maintain our product’s appeal over the long term while being mindful of market conditions. Our management will be deliberate in any adjustments we make.
Thank you, everyone. This concludes the Q&A portion of the webinar. I would like to thank all the guests for the questions and all the attendees for tuning in live. We had over 3,000 people join us live on Zoom webinar, over 4,000 people on YouTube live stream and over 180,000 views on X live stream. This should be one of the most viewed earnings calls in our history. I appreciate all your interest in curiosity, and thank you. I would like to now turn the call over to Phong for final closing remarks.
I want to echo everyone's thoughts. Thank you for the analysts for joining us. Thank you for everybody for dialing into the call and listening; thanks for those who are joining us online. I invite you all to join us in Las Vegas on February 25 at Strategy World and Bitcoin Corporations. If we don't see you there, we'll see you again in 3 months at our next earnings call. Thanks.