MSTR Earnings Wider Q1 Loss As Bitcoin Falls
MSTR earnings showed a wider Q1 loss after bitcoin slid, with revenue up and a shift to an actively managed bitcoin policy that could change hedging.
KEY TAKEAWAYS
- Net loss $12.8 billion driven by $14.5 billion unrealized digital-asset markdowns.
- Held 818,334 BTC; cost basis ~$61.8 billion; market value about $64.1 billion.
- Management shifted to an actively managed bitcoin policy and may sell bitcoin if accretive to bitcoin per share.
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Strategy Inc. (MSTR) reported first-quarter results on May 5, 2026, showing a wider loss linked to bitcoin’s price decline and signaling a shift to an actively managed bitcoin policy. The results highlight the sensitivity of the company’s large bitcoin holdings to market fluctuations.
Wider Q1 Loss Driven by Bitcoin Decline
The company said in a May 5 press release that its net loss attributable to common stockholders was $12.8 billion, with an operating loss of $14.5 billion that included a $14.5 billion unrealized loss on digital assets. Revenue rose 11.9% year over year to $124 million, while gross profit reached $83 million and gross margin narrowed to 67.1% from 69.4% a year earlier.
Bitcoin’s price fell about 25% during the quarter, dropping from roughly $87,000 in January to $68,000 at the end of March, with a low near $62,000 in February. Strategy cited this decline as a key factor behind the unrealized markdowns.
Bitcoin Holdings and Capital Raising
As of May 3, 2026, Strategy held 818,334 bitcoins, a 22% increase year to date, at an average purchase price of $75,537 per coin and a total cost basis of $61.8 billion. The market value of these holdings was about $64.1 billion as of May 1.
The company raised approximately $11.7 billion year to date through May 3, including $5.6 billion from issuing its STRC preferred security and $7.4 billion from at-the-market (ATM) offerings in the first quarter, plus $4.3 billion from April 1 through May 3. It added about 89,600 bitcoins in the quarter at a cost near $5.5 billion.
Strategy reported a bitcoin yield of 9.4% year to date and estimated U.S. dollar gains of about $5 billion from its bitcoin position through April, with net bitcoin gains of 63,410 coins.
On the May 5 earnings call, management described a shift to an actively managed bitcoin policy. President and CEO Phong Le said the company would consider selling bitcoin to buy U.S. dollars or debt if such moves increased bitcoin value per share. He said, "Our ability to sell bitcoin either to buy U.S. dollars or sell bitcoin to buy debt if it's accretive to bitcoin per share is something that we would consider doing going forward."
The results illustrate how Strategy’s performance and capital allocation are closely tied to bitcoin’s price movements and recent fundraising. The scale of holdings and the new willingness to trade them for cash or debt could alter how volatility affects accounting losses and investor returns.
