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 First Quarter Earnings Webinar. Before we proceed, I will read the safe harbor statement. Some of the information we provide during today's call 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 the risk factors discussed in our most recent 10-Q filed with the SEC and our 8-K filed on April 7, 2025. We assume no obligation to update these forward-looking statements, which speak only as of today. Also, during today's call, we will refer to certain non-GAAP financial measures. Reconciliations showing GAAP versus non-GAAP results are available in our earnings release and presentation, which were issued today and are available on our website at strategy.com.
I would now like to welcome you all to today's webinar and let you know that we will be taking questions using the Q&A feature at the bottom of the screen. You can submit your questions throughout the webinar, and Michael, Phong, and Andrew will answer the questions at the end of the session. Please be sure to provide your name and company's name when submitting your questions. I'll now walk you through the agenda for today's call. First, Phong Le will cover the business highlights for the first quarter of 2025. Second, Andrew Kang will cover the financial results for the first quarter. And then Michael Saylor will provide an in-depth strategic review of our Bitcoin treasury strategy. Lastly, we will open it up to Q&A. With that, now I'll turn the call over to Phong Le, President and CEO of Strategy.
Thank you, Shirish. Hello, everyone. I’d like to welcome you all to today’s webinar. With just a few days left, I’m thrilled to invite you to Strategy World 2025 next week, from May 5 to 8 in Orlando, Florida. You can meet our software customers, partners, and employees, explore innovations in AI and BI, and engage with global leaders shaping the future of Bitcoin for corporations. If you haven’t registered yet, please visit our website. I look forward to seeing many of you in Orlando. Now, moving on to the Bitcoin highlights for the first quarter of 2025. Strategy remains the largest corporate holder of Bitcoin worldwide, currently holding 553,555 bitcoins with a total market value of $52 billion as of April 28. In the first four months of 2025, we acquired an additional 106,085 bitcoins at a total cost of $9.9 billion, averaging around $93,600 per bitcoin. In Q1 2025, Bitcoin’s momentum significantly accelerated due to a series of landmark government actions.
Most notably, the Trump administration announced the creation of a strategic Bitcoin reserve, marking the first instance of a sovereign government publicly recognizing Bitcoin as a national reserve asset. Additionally, the administration's pro-Bitcoin regulatory stance further legitimized the asset class and attracted increased institutional interest, paving the way for deeper integration of Bitcoin into the U.S. financial system. We’ve also made substantial progress in the capital markets. In the first quarter of 2025 and up to this point in Q2 2025, we raised $6.6 billion in net proceeds through our at-the-market equity offering program and $2 billion through convertible note offerings. We also raised $1.4 billion via our newly listed preferred stock, Strike and Strife. We plan to keep issuing innovative fixed-income securities while aiming for our common stock to outperform Bitcoin through strategic leverage.
Since August 2020, Strategy has increased its balance sheet in every quarter through over 60 announcements, and all of our Bitcoin holdings remain fully unencumbered, showcasing our long-term commitment and consistent execution of our Bitcoin strategy. We are the most committed corporate holder of Bitcoin globally, representing 2.6% of all Bitcoin in existence. Our accumulation pace has significantly increased over the past two quarters, reflecting both market opportunities and effective treasury operations. As the world's first and largest Bitcoin treasury company, we are highly focused on capital markets innovation and our Bitcoin operations to strategically accumulate more Bitcoin. We have utilized $37.3 billion of capital to boost our Bitcoin holdings and enhance shareholder value. This capital was raised through three main channels: $10.6 billion in debt issuances, with $8.2 billion currently outstanding; $1.4 billion in perpetual preferred equity via Strike and Strife; and $25.9 billion from Class A common stock issuances, along with $836 million in cash flows from software operations.
As shown in this quarter’s capital markets activity, 2025 continues to build on the momentum from late 2024, having raised $10 billion year-to-date through a diverse mix of securities, including $6.6 billion in equity and $3.4 billion in fixed-income instruments, demonstrating our broad investor support and strong market access.
Thank you, Phong. I will begin with a quick review of the software results and then go into more detail on our Bitcoin results. In Q1, total software revenues were approximately $111 million, down 3.6% year-over-year. The lower product license revenues, along with support revenues in Q1 continue to be as expected, and our overall revenue trend continues to reflect the ongoing transition of our software business from on-prem to the cloud. Our cloud results in Q1, subscription services revenues increased 62% year-over-year and now make up approximately 33% of total revenues, continuing our quarter-over-quarter double-digit growth. Our subscription billings also grew again by 38% in Q1 to $24.5 million. The decline in product license revenues and support revenues continues to be offset by growth in cloud, and we continue to see growth in demand for our cloud platform and anticipate this trend to continue and strengthen in the coming quarters.
Lastly, cost of revenues were $34 million, up 13% compared to Q1 of last year. The increase was driven primarily by higher cloud hosting costs, which we expect to continue in future periods as a direct result of our growth in cloud. Moving on to Bitcoin. We adopted fair value accounting for Bitcoin holdings on January 1 this year, which has fundamentally changed how we value our Bitcoin treasury asset. At the beginning of the year, we began with our Bitcoin holdings valued just under $42 billion. On January 1, with the adoption of the new rule, we recognized $17.9 billion to our beginning balance of retained earnings, which was the difference between the carrying value on our books and the fair value based on Bitcoin price as of December 31. One fundamental difference now under fair value accounting is that our holdings are marked at the last day of every quarter, not throughout the quarter as before.
Any new Bitcoin purchased during the quarter were initially held at the purchase price of those Bitcoins, while our prior quarter and new quarter purchases are fair-valued as of the last day of each quarter. In Q1, the price of Bitcoin declined from approximately $93,400 at the end of the year to roughly $82,400 by the end of Q1, resulting in a $4.9 billion unrealized fair value loss on our pre-Q1 holdings. We also purchased throughout the course of Q1 an additional 80,715 bitcoins at an average price of approximately $94,900, representing $7.7 billion of new purchases. On the last day of Q1, because the market price of Bitcoin was approximately $83,400, these new purchases also reflected a fair value decline of about $1 billion. As a result, our overall Q1 unrealized fair market value loss was $5.9 billion, which flowed directly through our income statement.
Okay. I want to thank everybody for being with us today. And I'm going to start with an observation. Strategy is the world's most widely held Bitcoin security. You could think of it as the most widely held Bitcoin proxy. In fact, it's substantially more widely held than any of the spot ETFs in the world. We found that there are 13,000 institutions that have accounts holding MSTR. These institutions include asset managers, pension funds, insurance companies, and sovereign wealth funds. We traced 814,000 retail accounts, and we have over 500 ETFs, funds, and indices embedded in like the NASDAQ 100, Russell 1000, and the MSCI index. Some of these are extraordinary. For example, the Norway Sovereign Wealth Fund benefits every single citizen of Norway. We've traced our holdings to insurance companies with millions of beneficiaries and pension funds with many millions of beneficiaries. Altogether, our best estimate is that there are 55 million beneficiaries who are either direct holders of MSTR or are beneficiaries of the institutions that are invested in MSTR.
I'd like to talk about our BTC models. You're probably familiar with BTC Yield and BTC gain because we've talked about those a lot over the past six months. But I get lots of questions about how the company is going to continue to outperform Bitcoin and how we're going to continue to grow the stock, and what is the basis for the premium to NAV. If you want to understand how we create shareholder value, we have to look out much more than just on the current period. We're looking out a decade and considering the consequences of our capital markets transactions. We internally use a variety of these BTC metrics, and I will explain how we use them. One thing that's really important is how people think about BTC. Do you think that Bitcoin is going to go up 0% a year forever? If you do, we call that a skeptic. Do you think that Bitcoin is going to track the S&P Index? About 10% a year or so on average?
We call that a trader. Do you think that Bitcoin looks like a magnificent 7 stock or a dominant digital monitoring network, such as Google or Amazon? Those typically have growth rates of 20%. We call that an investor, or a tech investor, if you will. Finally, if you believe Bitcoin is destined to demonetize lots of other assets as digital capital, that makes you a maximalist. My long-term forecast is that I think Bitcoin is going to go up 29% ARR on average for the next 21 years. So keep those numbers in mind as we dive deeper.
Sure. Thanks, Shirish. First, fair value accounting, despite the fluctuations, provides greater transparency for our investors and more accurately represents the actual value of our Bitcoin holdings compared to previous accounting standards. This is definitely a benefit for us and other companies adopting Bitcoin. The former accounting methods often created obstacles, but now that those barriers are removed, we can expect a continual influx of new businesses embracing Bitcoin as a treasury asset. Transparency is crucial. Regarding the fluctuations, we naturally prefer the positive changes to the negative ones. However, we acknowledge that Bitcoin is inherently volatile. Overall, we remain unfazed by the downturns and believe that, over time, there will be more upward trends.
Thank you, Michael, for the very insightful session today. I know we went a lot over the original 1-hour mark, but we'll take 3 quick questions here, and I'll begin with the first one for Andrew. So now that you have adopted the fair value accounting, how do you feel about the big swings in earnings as a result of the Bitcoin price volatility?
I think it's a very virtuous cycle, and it's a mutually beneficial competition. The more companies that adopt the Bitcoin standard, the more legitimizing it is. As more companies adopt the Bitcoin standard, they're out there educating equity investors, and that brings more equity capital to the market. There are only 450 Bitcoin a day. And so as we're all buying that Bitcoin, the price of Bitcoin is stabilized, supported, and then driven up. If it grows from 0.1% to 1%, then the advantages of accelerating institutional adoption are profound, and they offset any possible competition for capital.
I'll start by saying that we have spent a significant amount of time discussing the key question. We are confident in our capital raises and our capital plan, which we have explored. We began by establishing a financial framework for Bitcoin because the current fiat financial model is not suitable for Bitcoin. We consider various metrics such as Bitcoin yield, Bitcoin per share, and Bitcoin gain basis. All our capital raises through our ATM have positively impacted Bitcoin yield, Bitcoin per share, and Bitcoin gain. Issuing equity at a value greater than 1x net asset value benefits shareholders rather than diluting their interests. Moreover, our fixed income instruments are even more beneficial. As net asset value increases, the yield curve flattens, making issuing equity increasingly similar to issuing fixed income.
Excellent. I think that brings us to the end of this webinar. So any final remarks from Phong?
Yes. I want to share with Mike and Andrew and Shirish, thanks for everybody for sitting through and understanding more about how we think about Bitcoin and think about strategy over the last 2 hours and 10 minutes. We appreciate all of your support. For those who will be in Orlando next week, very excited to meet and interact with all of you. Those who won't, we'll talk to you again in 12 weeks or so. Thanks, and have a good evening.