Business intelligence firm MicroStrategy’s third-quarter earnings showed its net loss narrowed to $27.1 million for the quarter, as it continued to expand its bitcoin (BTC) portfolio despite poor cryptocurrency market conditions.
The owner of Bitcoin, the world’s largest public company, confirmed that it still owns 130,000 BTC by the end of the third quarter of 2022. This amount represents 0.62% of all bitcoins that will be owned, and the total cost is said to be around $4 billion, or $30,639 per bitcoin.
The company reported on Nov. 1 that an impairment charge of $727,000 for the quarter was well below the $917.8 million it recorded in the second quarter of 2022 or the $65 million a year earlier, thanks to the prior quarter. Bitcoin price is stable.
Impairment charges, an accounting term businesses use to describe a decrease in the value of a holding asset, had a cumulative impairment loss of about $2 billion as of Sept. 30, according to MicroStrategy.
During the earnings call, MicroStrategy President and CEO Phong Le reiterated the company’s long-term holding strategy, stating:
“To date, we have not sold any bitcoins. To reiterate our strategy, we seek to acquire and hold bitcoins for the long term. And we do not currently plan to engage in bitcoin sales. We have a long-term time horizon and the core business is not Influenced by recent Bitcoin price volatility.”
Michael Saylor, who stepped down as CEO on Aug. 8 but remains the company’s executive chairman, mentioned in a conference call that since the Bitcoin strategy began on Aug. 11, 2020 , the company’s share price rose 116% compared with Bitcoin’s 72% increase over the same period.
In the accompanying earnings report, CFO Andrew Yang echoed the FASB’s recent decision to support Bitcoin’s “fair value accounting,” stating:
“If eventually adopted and implemented, we believe fair value accounting will improve the unfavorable intangible accounting treatment currently applied to Bitcoin holdings and will foster greater institutional adoption of Bitcoin as an asset class”
MicroStrategy reported adjusted EPS of $0.96, compared with analysts’ estimates of a loss of $0.94, and its $125.4 million in revenue beat estimates by just 0.05%.
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The company’s revenue in the first and second quarters of last year hit $119.3 and $122.1 million, respectively. Its third-quarter revenue of $16.4 million came from its subscription services, up 51 percent from a year earlier, MicroStrategy’s fastest-growing revenue stream.
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