Strategy Posts Record Operating Income of $20.91 Billion in Third Quarter
Key Facts
Strategy reported results on October 29 for its fiscal third quarter ended September 30, 2026, posting operating income of $20.91 billion and net income of $19.53 billion. Operating income compared with $3.89 billion in the third quarter of 2025, while its results included gains of $20.91 billion from digital assets. The figures reflect the impact of changes in the value of the company’s bitcoin holdings in its accounts, rather than growth in its ordinary operating business alone. Chairman Michael Saylor said in the results statement: "We are at the beginning of the next bitcoin bull market." He added that banks are adopting bitcoin and institutional demand has returned.
Diluted earnings per share were $44.75, compared with $8.42 a year earlier, while net income rose from $2.79 billion in the third quarter of 2025 to $19.53 billion. Net income attributable to common shareholders was $19.12 billion after accounting for $419.6 million in preferred stock dividends. These figures highlight the widening gap between accounting profitability and revenue performance during the period. The company posted revenue of $125.4 million, down 3% from $128.7 million a year earlier. Gross profit was $89.6 million, with a margin of 71%.
The U.S. accounting rules cited by the company require bitcoin to be measured at fair value at the end of the period, with gains or losses from changes in value recognized in period net income. As a result, earnings may include unrealized gains tied to the asset’s price and do not necessarily represent cash flows or recurring income from operations. Although bitcoin rose 43% in the third quarter, Strategy said its bitcoin yield metric was negative 3.7% year to date in 2026. Its BTC Gain metric also showed a decrease of 24,947 bitcoin, while BTC Dollar Gain was negative $2.03 billion year to date. These metrics place growth in the value of its holdings in the context of the company’s different measures of bitcoin performance.
Strategy said it owned 848,517 bitcoin as of October 25, up 26% year to date, and valued the holdings at $68.90 billion. The company said its stock rose 76% in the third quarter, exceeding bitcoin’s 43% gain over the same period. After the results were announced, the stock fell 2.6% in after-hours trading on October 29 to $137.91, according to Investing.com. EL7 data show bitcoin closed at $77,991.89 on October 29 and $77,368.77 on October 30. These moves show that the quarter’s gains did not prevent a decline in trading after the announcement.
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. According to the company, its cash reserve earmarked to cover dividend and interest obligations reached $5.07 billion as of October 25, providing 3.4 years of coverage. Strategy plans to convert dividends on its STRC preferred stock into daily payments starting November 1, 2026. Daily dividends on STRF, STRK and STRD shares will begin on January 1, 2027.
On the management front, Andrew Kang will step down as chief financial officer on November 5, 2026, with Reza Verasteh set to take over the role on January 1, 2027. Regarding the stock, Cantor Fitzgerald maintained its "overweight" rating and $208 price target, according to Investing.com, after hosting Saylor in Boston on October 28. The site also reported that MSCI changes could expose companies without substantial operating assets to possible exclusion from indexes. The final list is expected on November 11, with the changes taking effect after November 30. Potential outflows if Strategy is excluded from major indexes could reach $8.8 billion, according to the estimate cited by Investing.com.