Strategy Reports Record Operating Income of $20.91 Billion in Third Quarter
Key Facts
Strategy reported operating income of $20.91 billion in the third quarter of 2026, compared with $3.89 billion in the same period a year earlier, matching digital asset gains in both quarters, according to a company statement issued on October 29. Net income was $19.53 billion, or $44.75 per diluted share, compared with $2.79 billion and $8.42 per share a year earlier. The company said net income attributable to common shareholders was $19.12 billion after accounting for $419.6 million in preferred stock dividends. In the third quarter of 2025, that figure was $2.65 billion after $139.9 million in dividends. The large results came alongside a decline in company revenue, highlighting the gap between gains in the value of its digital assets and the performance of its operating business.
Revenue fell 3% year over year to $125.4 million in the third quarter, from $128.7 million a year earlier. Gross profit was $89.6 million, with a 71% margin, compared with $90.7 million and a 70% margin in the third quarter of 2025. The margin increased by one percentage point despite declines in gross profit and revenue. These operating figures came alongside operating income of $20.91 billion, the same level of gains the company recorded from its digital assets. In the year-earlier quarter, digital asset gains and operating income both stood at $3.89 billion, the company said.
Strategy said its stock rose 76% in the third quarter, outperforming bitcoin's 43% gain over the same period. Michael Saylor said bitcoin's price was 21% above its 200-week moving average, describing the company as "at the beginning of the next bull market." The company linked its stock performance to bitcoin's movement during the quarter, while reported net income remained tied to digital asset gains. On financing, Chief Executive Phong Le said the company increased its dollar assets to $5.1 billion and extended dividend and interest coverage to 3.4 years. He added that it repurchased $2.0 billion worth of STRC shares, and that shareholders approved the conversion of preferred stock dividends to daily distributions on October 28.
The company's cash and cash equivalents totaled $2.50 billion on September 30, up from $1.71 billion on June 30. Short-term investments also rose to $3.40 billion from $736.1 million over the same period. In an earlier filing with the U.S. Securities and Exchange Commission, Strategy estimated the book value of its digital assets at $70.82 billion on September 30. It said the fair value of bitcoin rising above its cost basis led to the reversal of a $4.12 billion deferred tax asset and the recording of a tax benefit of approximately the same amount. The company estimated its net deferred tax liability related to its bitcoin holdings and activities at $1.88 billion on September 30, noting that the financial information in that filing was prepared by management and had not been reviewed or audited by KPMG.
Strategy said it had sold about $431.8 million worth of bitcoin from the start of 2026 through October 25 to fund part of its preferred stock dividends and STRC repurchases. The company announced on October 12 that it had bought 250 bitcoin and repurchased $192 million worth of STRC shares. These moves are part of its efforts to manage liquidity and financing alongside its digital asset holdings. Chief Financial Officer Andrew Kang announced he would step down effective November 5, while remaining an adviser through December 31. Phong Le will assume the CFO's responsibilities during the transition, before Riza Verasteh becomes chief financial officer effective January 1, 2027.
Daily distributions for STRC shares will begin on November 1, 2026, while those for STRF, STRK and STRD shares will begin on January 1, 2027. The company said third-quarter results would be discussed in a live video webcast on October 29 at around 5 p.m. Eastern time, with a replay to be made available afterward. These dates cover the next steps announced by the company after shareholders approved daily distributions. The results thus place digital asset gains and dollar liquidity alongside changes to dividend policy and financial leadership. The quarterly comparison underscores the gap between the sharp increase in reported income and the decline in revenue during the period.