Strategy posts an $8.2 billion loss, but Bitcoin is still the only number investors care about

Strategy Inc. (Nasdaq: MSTR) reported an $8.22 billion net loss for the second quarter, but Bitcoin remains the number investors watch.

As of July 26, Strategy managed 843,775 BTC, but executives rounded to 846,000 BTC while citing quarterly growth. The coins have a cost basis of $63.69 billion and a market worth of $54.77 billion at Bitcoin’s price of $64,915 on July 27.

The company’s average cost was about $75,476 per coin. Holdings grew 11% during the quarter, while Bitcoin Per Share rose 5%. Year-to-date BTC Yield reached 4.5%, BTC Gain totaled 29,997 coins, and BTC Dollar Gain reached $1.95 billion.

Strategy takes the Bitcoin loss while the software unit keeps producing revenue

Strategy posted an $8.33 billion operating loss, against $14.03 billion in operating income one year earlier. An $8.32 billion unrealized digital-asset loss caused nearly all of that result. The same assets produced a $14.05 billion unrealized gain during the second quarter of 2025.

The amount of loss attributable to common shareholders stood at $8.62 billion after deduction of $400.7 million in preferred dividends. In the previous year, the common shareholders had earned $9.97 billion in profits after paying $49.1 million in preferred dividends. The diluted loss per share was at $24.45, while diluted earnings were at $32.60 in the previous year.

Quarterly revenue climbed 6.9% to $122.4 million from $114.5 million. Gross profit increased to $81.6 million from $78.7 million, while gross margin narrowed to 66.6% from 68.8%.

Cash fell to $1.71 billion on June 30 from $2.21 billion on March 31. Strategy also held $736.1 million in short-term investments, versus none at the end of March.

President and Chief Executive Officer Phong Le said convertible debt dropped 18% to about $6.7 billion, while the dollar reserve rose 12% to $2.4 billion during the quarter.

“Our objective is for STRC to trade over time at $99 to $100,” Phong said. The company plans to make continuous buybacks below $100, with the magnitude determined by price and liquidity. Phong said that discounted purchases reduce future preferred dividend expenses, but ordinary market demand determines the trading level.

Chief Financial Officer Andrew Kang said the reserve later reached $3.75 billion, enough for more than 2.1 years of preferred dividends and interest. Strategy has made 18 consecutive months of dividend payments without a miss. Andrew said, “Our BTC Hurdle ARR of 10.8% represents our current effective cost of credit.” BTC ARR above that rate gives Net BTC Per Share a positive spread.

Founder and Executive Chairman Michael Saylor said weak Bitcoin sentiment has not changed the Digital Credit plan. Michael said Strategy wants STRC near par with steady demand, strong liquidity and low volatility. “Our plan is to return STRC to health,” he said.

Strategy sells securities, pays STRC dividends and buys shares below par

At-the-market sales raised $8.4118 billion during the second quarter. MSTR generated $2.9467 billion, while STRC generated $5.465 billion. STRK, STRF, STRD and STRE generated nothing. Between July 1 and July 26, MSTR brought in another $1.276 billion, including shares sold but unsettled by July 26.

Strategy also bought back $1.5 billion of its 0% convertible notes due 2029 during May for about $1.38 billion in cash. The negotiated deal carried an 8% discount to face value and cut outstanding convertible principal from $8.21 billion to $6.71 billion.

STRC paid $0.92 on January 31 at an 11% rate, based on the January 15 record date. It paid $0.94 on February 28 at 11.25%, based on February 15. Payments of $0.96 followed on March 31, April 30, May 31 and June 30 at 11.5%, using record dates of March 15, April 15, May 15 and June 15.

Semi-monthly payments then began. Strategy paid $0.48 on July 15 at 11.5% for holders recorded June 30. It paid $0.50 on July 31 at 12% for holders recorded July 15, and scheduled another $0.50 for August 15 for holders recorded July 31. The 12% rate will stay until STRC trades near its $100 stated value for a sustained period.

From July 20 through July 26, Strategy repurchased 288,930 STRC shares carrying $28.89 million in stated value for about $25 million. The average price was $86.53, or 13.47% below par. Roughly $975 million remains under the $1 billion Digital Credit buyback program. Strategy plans to buy more at wider discounts and less as STRC nears $100.

While there is an additional $1 billion MSTR repurchase program that has not yet been executed, Strategy indicates that the management can buy back the common stock if they feel that it is undervalued.

The board may authorize up to $1.25 billion in Bitcoin sales to build the dollar reserve. Strategy may also sell coins to pay preferred dividends, cover interest, refill the reserve, or finance MSTR and Digital Credit buybacks. It sold about $218.4 million of Bitcoin during 2026 to fund part of its preferred dividend payments.

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