Strategy Posts Record Net Income of $19.53 Billion in Third Quarter
Key Facts
Strategy reported net income of $19.53 billion for the quarter ended September 30, 2026, on October 29, with diluted earnings of $44.75 per share, compared with net income of $2.79 billion and earnings of $8.42 per share in the third quarter of 2025. Operating income was $20.91 billion, versus $3.89 billion a year earlier. The company said its digital asset gains totaled $20.91 billion during the quarter, the same amount as operating income, compared with gains and operating income of $3.89 billion in the year-earlier period. The results reflect the central role of changes in the value of its bitcoin holdings in quarterly earnings. Revenue, by contrast, declined rather than matching the surge in net income.
The accounting rule followed by the company requires bitcoin to be measured at fair value at the end of the period, with gains and losses from changes in its value recognized in net income for that period. Digital asset gains therefore entered the quarterly results even though they had not been converted into cash proceeds when recorded. Net income attributable to common shareholders was $19.12 billion, after $419.6 million in preferred stock dividends. In the third quarter of 2025, income attributable to common shareholders was $2.65 billion, after dividends of $139.9 million. The comparison shows that preferred dividends were deducted before calculating the amount attributable to common shareholders in both periods.
At the operating level, revenue was $125.4 million, down 3% from $128.7 million in the third quarter of 2025. The company posted gross profit of $89.6 million, with a 71% margin, compared with gross profit of $90.7 million and a 70% margin a year earlier. While the gross margin rose one percentage point, gross profit and revenue declined year over year. These figures show the gap between the company’s business as measured by revenue and the digital asset gains that lifted operating income and net income. Strategy said its holdings totaled 848,517 bitcoin on October 25, up 26% since the start of 2026, and that it had bought $14.33 billion worth of bitcoin from the start of the year through that date.
But the company’s year-to-date measures of holdings performance showed a negative return: BTC Yield was negative 3.7%, while BTC $ Gain showed a loss of $2.03 billion through October 25. In the third quarter, MSTR shares rose 76%, compared with bitcoin’s 43% gain, according to the company’s disclosure. After the results were announced, the company’s shares closed at $141.62 on October 29, compared with $145.16 the previous day. Bitcoin also closed at $77,991.89, versus $81,343.50 on October 28. These daily closes reflect declines in the asset and the stock that day, despite their gains during the third quarter according to the company’s comparison.
Strategy raised net proceeds of about $5.41 billion from its at-the-market offering program during the three months ended September 30, and added $58.7 million between October 1 and 23. At the end of September, cash and cash equivalents totaled $2.50 billion, compared with $1.71 billion on June 30. Short-term investments also rose to $3.40 billion, from $736.1 million at the end of June. Chief Executive Phong Le said, "We expanded our dollar-denominated assets to $5.1 billion, increased our coverage period to 3.4 years, and repurchased $2.0 billion of STRC shares." Le said the coverage period includes preferred stock dividend and interest obligations, while the company said the repurchases totaled $2.0 billion through October 25.
On financing, Michael Saylor said the face value of digital credit instruments totaled $16 billion across ten listed securities, and that Strategy held an 84% share of this activity. The company said issuing digital credit would be its primary means of buying more bitcoin. It also said it had sold about $431.8 million worth of bitcoin since the start of 2026 to fund part of its preferred stock dividends and STRC share repurchases. These steps show that the company raised funding through offerings, used dollar-denominated assets to manage its obligations, and also sold some bitcoin to finance dividends and repurchases. Its stated approach combines digital credit instruments with limited bitcoin sales as part of capital management.
On management, Andrew Kang will leave his roles as executive vice president and chief financial officer effective November 5, 2026, and will remain an adviser to the company through December 31. Phong Le will assume chief financial responsibilities during the transition while retaining oversight of Bitcoin Strategy finance. Reza Vahdat will become chief financial officer on January 1, 2027. Separately, MSCI said changes in its November review concerning the eligibility of non-operating companies will take effect at the market close on November 30, and that the final list of affected companies will be published on November 11. The rule states that an existing company will be removed only if it fails the exclusion test in its two most recent annual reporting periods, while a security becomes ineligible if four or more of five financial metrics are recorded against it. Neither the review schedule nor the eligibility criterion confirms Strategy’s exclusion from any index.