Strategy Reports Record Net Income of $19.53 Billion in Third Quarter
Key Facts
Strategy reported net income of $19.53 billion and diluted earnings per share of $44.75 for the quarter ended September 30, 2026, compared with net income of $2.79 billion and earnings of $8.42 per share a year earlier. Operating income was $20.91 billion, including a gain of the same amount on digital assets, compared with operating income and a digital asset gain of $3.89 billion each in the third quarter of 2025. Chief Financial Officer Andrew Kang said operating income, rounded to $21 billion, was “the largest in Strategy’s history.” Net income attributable to common shareholders was $19.12 billion after accounting for $419.6 million in preferred stock dividends. In the corresponding quarter of 2025, net income attributable to common shareholders was $2.65 billion, while preferred stock dividends were $139.9 million.
The jump in net income coincided with a decline in operating revenue: revenue fell 3% to $125.4 million from $128.7 million in the third quarter of 2025. Gross profit was $89.6 million, compared with $90.7 million a year earlier, while the gross margin rose to 71% from 70%. In a filing dated October 5, the company estimated the quarter’s deferred tax expense at about $6.00 billion before the effect of releasing a valuation allowance. It said the release of the allowance associated with a deferred tax asset recorded at $4.12 billion on June 30 resulted in a tax benefit of about $4.12 billion. This benefit reduced the estimated tax expense to $1.88 billion.
Strategy held about 848,517 bitcoin on October 25, at a total purchase cost of $64.02 billion and an average cost of about $75,446 per coin, including fees and expenses. The company said its holdings were unchanged between October 19 and 25, as it neither bought nor sold bitcoin during that period. Its bitcoin purchases since the start of 2026 totaled about $14.33 billion, while it raised $21.23 billion in equity capital through October 25. Kang said the company had raised about $21 billion in equity capital and increased its bitcoin holdings 26% since the start of the year. These figures reflect the company’s reliance on equity issuance to finance growth in its bitcoin holdings.
On liquidity, cash and cash equivalents totaled $2.50 billion on September 30, compared with $1.71 billion on June 30. Short-term investments rose to $3.40 billion from $736.1 million over the same period. By October 25, Strategy said it had $5.07 billion in dollar-denominated assets, providing about 3.4 years of coverage for preferred stock dividend and interest obligations. The company’s moves during the year included repurchasing about $2.04 billion of STRC shares through October 25. Strategy also expected its preferred stock dividends to be treated as a tax-free return of capital for the foreseeable future, which it described as ten years or more.
Following the results announcement, Strategy shares fell 1.8% in after-hours trading on October 29. On financing, Michael Saylor said bitcoin was 21% above its more-than-200-week moving average and that institutional demand had returned; this was the chairman’s assessment. Daily distributions on STRC begin November 1, 2026, following shareholder approval on October 28. Daily distributions on STRF, STRK and STRD are set to begin January 1, 2027, and the schedule sets January 4 as the first payment date for those series. In a management change, Kang will leave the CFO position effective November 5 and remain an adviser through December 31, with Reza Verrasht taking the role on January 1, 2027.