Shares of Strategy Inc. (NASDAQ:MSTR) gained momentum on Friday, driven by better-than-anticipated fourth quarter financial figures that were disclosed Thursday after market close. The stock's upward trajectory reflects investor optimism following a strong earnings report that beat consensus estimates on both earnings per share and revenue.
For the quarter in question, Strategy reported adjusted earnings per share (EPS) of $16.37, significantly surpassing the consensus analyst projection of $10.96. Additionally, the firm's reported revenues stood at $122.98 million, edging past the expected $118.47 million figure. These results indicate modest year-over-year revenue growth of 1.9%, underscoring incremental progress in the company’s top line performance.
The revenue composition reveals divergent trends among business segments. Subscription services generated $51.8 million during the quarter, representing a notable 62.1% increase compared to the previous year. Meanwhile, combined revenue from product licenses and subscription services expanded by 26.3%, reaching $59.6 million. Conversely, revenues from product support decreased by 16.9%, amounting to $48.5 million, and other services experienced a slight decline of 1.8% to $14.9 million.
Gross profit for the period totaled $81.3 million, corresponding to a gross margin of 66.1%. This margin contracted relative to the same period last year, which recorded $86.5 million in gross profit and a 71.7% margin. This narrowing margin highlights pressure on profitability metrics despite revenue growth.
Notably, Strategy reported an operating loss of $17.4 billion during the quarter. This loss was primarily driven by an unrealized diminution in the value of its digital asset holdings under fair value accounting standards. The resulting net loss for the quarter was $12.4 billion, equivalent to $42.93 per diluted share. These figures reflect the substantial impact of volatile digital asset valuations on the company's overall financial performance.
As of February 1, Strategy maintained an estimated position of approximately 713,502 bitcoins, with a total acquisition cost of $54.26 billion. This translates to an average cost basis of roughly $76,052 per bitcoin. The company indicated achieving a projected full-year 2025 bitcoin yield of 22.8%, reflecting its expected returns from digital asset management or associated activities during that fiscal year.
On the capital markets front, the company emphasized its success in raising $25.3 billion over fiscal year 2025, reflecting significant financing activities. Furthermore, it has expanded its digital credit platform, including its Security Token Receipts Company (STRC) program, which has scaled to an aggregate stated amount of $3.4 billion. This platform currently yields a dividend rate of 11.25%, illustrating a revenue-generating financing strategy tied to digital assets.
Technical analysis of the stock reveals a contrasting picture despite the positive fundamental news. The overall stock performance remains weighed down by company-specific concerns or tempered investor enthusiasm. The shares are currently trading 21.9% below their 20-day simple moving average (SMA) and further below the 100-day SMA by 45.8%, indicating ongoing short- to medium-term bearish momentum.
Examining the one-year perspective, Strategy’s shares have declined by approximately 62.78%, placing the stock nearer to its 52-week low levels rather than its highs. This pattern illustrates persistent headwinds faced by the business and investors' cautious stance.
Further technical indicators reinforce this cautious market viewpoint. The relative strength index (RSI) stands at 24.49, suggesting the stock is oversold on a short-term basis. Meanwhile, the moving average convergence divergence (MACD) remains below its signal line, signaling prevailing bearish pressures. This combination of oversold RSI alongside a negative MACD might hint at a potential short-term rebound should market conditions or corporate developments improve.
Key technical thresholds to watch include resistance at $155.00 and support at $104.00. Breaching the lower support level could prompt further downside, whereas surpassing resistance might suggest a trend reversal to the upside. Market participants should monitor these levels closely amidst fluctuating investor sentiment.
Following the release of its quarterly results, Strategy Inc. shares have appreciated by 18.36%, reaching $126.63 per share as observed in Benzinga Pro data at the time of reporting. This price movement signifies a robust market reaction to the earnings beat and growth in subscription businesses, despite the challenging backdrop of digital asset valuation losses.