MicroStrategy Records A Whopping US$1.06 Billion Net Loss In Q2 2022 Due To ‘Crypto Winter’

MicroStrategy (Nasdaq: MSTR) just felt the brunt of the crashing bitcoin prices on the firm’s bottomline. The company announced on Tuesday its Q2 2022 financial results toplined by a quarterly revenue of US$122.1 million, down from Q2 2021’s US$125.4 million.

But this is overshadowed by the biggest decline in its financials; the firm recorded a staggering US$1.06 billion in net loss, a huge drop from last year’s US$299.3 million in net loss. The figure is heavily pulled down by recording US$917.8 million in digital asset impairment losses–something that Chairman CEO Michael Saylor has been trying to downplay.

And Saylor continues to project faith in the digital asset, despite the firm’s seemingly hesitation on buying the price dip and despite the company recording a big loss on impairment.

In fact, the controversial crypto bull executive seems to have doubled down on crypto investment, after he announced the company would be splitting his two top executive positions in two–with him taking on the chairmanship to focus on turning the company into a bitcoin investment vehicle.

The net loss for the quarter translates to US$94.01 loss per share, as the firm’s bottomline has been pulled down greatly by the impairment losses recorded for its bitcoin investment–the same problem that Tesla encountered. Microstrategy and Tesla continue to be the top two public companies that have bitcoin investments.

Breaking down the topline revenue figure, product licenses and subscription services revenues contributed US$20.1 million (down from US$22.2 million in Q1), product services revenue contributed US$14.0 million (up from US$10.3 million in Q1; product support services revenue, and other services added US$66.5 million (down from US$71.0 million in Q1).

Gross margin for the quarter ended at 79.4%, marginally down from last year’s 81.6%. But the firm incurred again expenses higher than its generated revenues mainly due to the digital asset impairment losses. For Q2, operating expenses came in at US$1.01 billion compared to Q2 2021’s US$516.6 million.

The firm also ended the quarter with US$69.4 million in cash and cash equivalents, putting the balance of current assets at US$219.7 million. Current liabilities came in at US$274.1 million.

MicroStrategy last traded at $298.05 on the Nasdaq.

Information for this briefing was found via Edgar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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