Strategy Posts Record Net Income of $19.53 Billion in Third Quarter
Key Facts
Strategy reported net income of $19.53 billion and diluted earnings of $44.75 per share on October 29 for the third quarter ended September 30, 2026. The company said net income in the comparable period of 2025 was $2.79 billion, or $8.42 per share. Operating income rose to $20.91 billion from $3.89 billion a year earlier, and the result included digital asset gains of the same amount. The widening gap between the two periods reflects the effect of revaluing the company’s bitcoin holdings in its quarterly accounts. The record results came alongside a decline in core business revenue, highlighting the accounting role of digital asset gains in the quarter’s earnings.
Accounting rule ASU 2023-08 requires bitcoin to be measured at fair value at the end of the period, with changes in its value recognized in net income. As a result, price movements can flow through quarterly profit or loss before being realized through asset sales. After preferred stock dividends of $419.6 million, net income attributable to common shareholders was $19.12 billion. In the third quarter of 2025, that income was $2.65 billion after dividends of $139.9 million. Net operating revenue fell 3% to $125.4 million from $128.7 million, while gross profit declined to $89.6 million from $90.7 million, despite the gross margin rising to 71% from 70%.
Strategy held 848,517 bitcoin on October 25, up 26% since the start of 2026, after the company bought $14.33 billion worth of the cryptocurrency during the period. But the company’s BTC Yield measure was negative 3.7% year to date. Strategy says the metric does not represent an investment return for shareholders or a measure of operating income or asset performance. Its illustrative BTC $ Gain measure was also negative $2.03 billion, calculated using a bitcoin reference price of $81,200 on October 23. The company says this figure is not a realized or unrealized gain and does not represent the fair value gain on its holdings. In the company’s third-quarter comparison, MSTR shares rose 76% versus a 43% gain for bitcoin.
On liquidity, cash and cash equivalents totaled $2.50 billion on September 30, compared with $1.71 billion on June 30, while short-term investments rose to $3.40 billion from $736.1 million. Strategy raised net proceeds of $5.41 billion through its at-the-market offering program in the quarter ended September 30, then added $58.7 million between October 1 and 23. The company said it sold about $431.8 million of bitcoin year to date to fund part of its preferred stock dividends and repurchase STRC shares. On October 25, it said its dollar reserve stood at $5.07 billion, covering preferred stock dividend and interest obligations for 3.4 years. STRC share repurchases totaled about $2.04 billion through the same date, while Michael Saylor said the notional value of digital credit instruments reached $16 billion across 10 listed securities, with the company holding an 84% share of the activity.
Shareholders approved daily dividend payments on October 28, but implementation dates vary by security. Daily STRC dividends begin on November 1, 2026, while daily STRF, STRK and STRD dividends begin on January 1, 2027. In a management change, Chief Financial Officer Andrew Kang will step down on November 5 and remain as an adviser through December 31, while Phong Le will take on financial responsibilities on an interim basis during the transition. Reza Vahdat is scheduled to become chief financial officer on January 1, 2027. These dates set out a phased transition in financial management alongside a change in the frequency of preferred stock dividends.
The company is also watching MSCI’s November review, as changes to the eligibility of non-operating companies take effect at the close of trading on November 30, 2026, with the final list of potentially affected companies due on November 11. The rule says a security is ineligible for inclusion if the company is flagged under 4 or more of 5 financial ratios. Current constituents are removed only if they fail the ineligibility test in both of the two most recent annual disclosure periods. These conditions set the review criteria and timetable without determining on their own whether Strategy will be excluded from any index. The final list is due before the changes take effect at the end of the month.