MicroStrategy Incorporated
07-30-09

MicroStrategy Announces Second Quarter 2009 Financial Results

--Diluted Earnings Per Share of $0.81

MCLEAN, Va., July 30, 2009 /PRNewswire-FirstCall via COMTEX News Network/ -- MicroStrategy(R) Incorporated (Nasdaq: MSTR), a leading worldwide provider of business intelligence software, today announced financial results for the three-month period ended June 30, 2009 (the second quarter of its 2009 fiscal year).

Second quarter 2009 revenues were $87.8 million versus $88.9 million for the second quarter of 2008. Product licenses revenues for the second quarter of 2009 were $20.5 million versus $21.1 million for the second quarter of 2008. Product support and other services revenues for MicroStrategy's core business intelligence (BI) business in the second quarter of 2009 were $64.1 million versus $65.1 million for the second quarter of 2008. Operating expenses for the second quarter of 2009 were $55.3 million versus $57.7 million for the second quarter of 2008.

Income from continuing operations before financing and other income and income taxes for the second quarter of 2009 was $16.5 million, or 19% of revenue, versus $15.1 million, or 17% of revenue, for the second quarter of 2008. Net income for the second quarter of 2009 was $10.0 million, or $0.81 per share on a diluted basis, compared to $8.1 million, or $0.66 per share on a diluted basis, for the second quarter of 2008.

For the second quarter of 2009, MicroStrategy's effective tax rate on income from continuing operations was 34% compared to 49% for the second quarter of 2008. The higher effective tax rate in 2008 was primarily the result of an adjustment that was made to the Company's deferred tax asset for state net operating losses and, to a lesser extent, net losses in certain foreign subsidiaries for which the Company was not able to recognize a tax benefit for financial reporting purposes in the second quarter of 2008.

As of June 30, 2009, MicroStrategy had cash and cash equivalents of approximately $176.2 million versus $122.9 million as of December 31, 2008, an increase of $53.3 million. As of June 30, 2009, MicroStrategy had 9,128,789 shares of class A common stock and 2,770,244 shares of class B common stock outstanding.

New Customers and New Deals with Existing Customers in Q2 2009 Included:

Bayer HealthCare Pharmaceuticals; Bell Canada; Burlington Coat Factory; Cingular Wireless; Citigroup Fund Services Canada, Inc.; Cryptologic, Inc.; CSC Holdings; Danier Leather Inc.; Doctor's Associates, Inc.; Emory Healthcare, Inc.; Family Dollar, Inc.; Fannie Mae; Freddie Mac; Genworth Financial Mortgage Insurance Company Canada; Heartland Payment Systems; Herbalife International of America, Inc.; Interstate Batteries; Jabil Circuit Inc.; La Capitale Assurances Generales; LinkedIn Corporation; McDonald's Corporation; Mercury Insurance Company; Meredith Corporation; National Institutes of Health (NIH); Netflix; Nu Skin Enterprises, Inc.; Paramount Pictures Corporation; Petco Animal Supplies, Inc.; Ross Stores, Inc.; Saint Elizabeth Health Care; Silverton Casino, LLC; Sony Media Software and Services; The Sherwin-Williams Company; Time Warner Cable; Toys R Us, Inc.; Tuesday Morning Inc.; University of Miami; U.S. Department of Defense; U.S. House of Representatives; U.S. Department of Education; U.S. Department of Energy; Wilbur-Ellis Company; Wyeth Consumer Healthcare (f/k/a Whitehall-Robins)

Examples of Customer Deals from Q2 2009:

Burlington Coat Factory Warehouse Corporation

Burlington Coat Factory Warehouse Corporation, a nationally recognized retailer with 433 stores in 44 states, has expanded its base of MicroStrategy licenses utilized for merchandising reporting and analytics. Burlington Coat Factory uses MicroStrategy for reporting and analysis on merchandising metrics. MicroStrategy teamed with QuantiSense to provide dashboards and reporting for Burlington Coat Factory with an end-to-end solution for their merchandising business intelligence requirements.

Heartland Payment Systems

Heartland Payment Systems is the nation's fifth largest payments processor, providing card processing, payroll, check management, and other payments solutions. A new MicroStrategy customer, Heartland selected MicroStrategy to enhance reporting and analysis capabilities for its merchants, giving them greater insights into their businesses. After conducting an extensive evaluation of BI products, MicroStrategy was selected because of its integrated platform, scalability for large volumes of data, and easy-to-use reporting capabilities for Heartland's diverse user population.

Saint Elizabeth Health Care

Saint Elizabeth Health Care (SEHC) recently deployed MicroStrategy to provide employees with the information they need and the tools required to use information to make better decisions. With additional software licenses, SEHC will rely on MicroStrategy's Dynamic Enterprise Dashboards and reporting capabilities to monitor key performance indicators tied to the organization's corporate strategies. MicroStrategy's dashboards and reports will provide vital insights that can help SEHC to enhance decision making and operational performance. SEHC is a Canadian not-for-profit charitable organization with a team of approximately 4,000 health professionals that deliver 3.8 million home care visits annually.

The University of Miami

The University of Miami recently expanded its use of MicroStrategy to gain greater insight into its academic environment and student population. End users across the various schools and colleges are able to access 12 BI applications, and rely on intuitive reports to examine current student reporting, fundraising, equality administration, financial aid, human resources, purchasing, student admissions, and student employment information. MicroStrategy provides reports relating to the current student body and application pool to help University of Miami users make important decisions on admissions acceptances and enrollment questions.

MicroStrategy Reporting Suite Announced:

In the second quarter of 2009, MicroStrategy announced a free reporting software package for departmental BI applications. MicroStrategy Reporting Suite enables companies to use MicroStrategy's integrated BI platform to develop and deploy premium, Web-based reporting applications, at no cost. MicroStrategy has eliminated cost and time impediments for departments and workgroups to initiate new reporting applications. Business users can simply visit the MicroStrategy Reporting Suite Web site, www.microstrategy.com/freereportingsoftware, download the free software, and begin building their reporting applications, all in the same day.

MicroStrategy's easy-to-use reporting software enables business users to quickly create the reports they need to gain critical insights into business data and make timely, analytically-based decisions. Users can view data in detailed tabular grid reports, graph data to analyze information quickly, drill-down to investigate root causes, make ad hoc queries, manage business performance with arithmetic and statistical metrics, and export data to Excel and PDF. When reporting requirements expand, companies can purchase licenses for more advanced report presentation, more interactivity, and additional BI users.

MicroStrategy Reporting Suite gives companies an easy entry point for initiating small, departmental reporting applications, along with a seamless path to build and expand BI deployments without creating independent silos of BI. Some departmental reporting tools create individual islands of BI that cannot be integrated into the larger BI system, resulting in inconsistent data and undermining the system's credibility. With MicroStrategy, organizations can efficiently merge departmental applications into a cohesive BI environment to ensure data consistency across the enterprise.

The MicroStrategy Reporting Suite includes the following:

    --  Up to 100 named user licenses of the MicroStrategy Reporting Suite:
        MicroStrategy Intelligence Server and MicroStrategy Web Reporter - with
        a 1 CPU limit
    --  Two named user licenses of development software: MicroStrategy Desktop
        and MicroStrategy Architect
    --  Two named user licenses of many of MicroStrategy's most popular
        products and services: MicroStrategy Web Analyst and Professional,
        MicroStrategy Mobile, MicroStrategy Office, MicroStrategy Report
        Services, MicroStrategy Distribution Services, and MicroStrategy OLAP
        Services
    --  Free online support, which includes access to MicroStrategy's
        extensive online searchable knowledge repository, online community
        forum, video guides, and online education
    --  Free e-mail support for 60 days for two named support liaisons to
        interact one-on-one with MicroStrategy Technical Support representatives
        via e-mail

    --  A Quick Start Guide and access to product documentation

To learn more, visit www.microstrategy.com/freereportingsoftware.

MicroStrategy Announces Availability of BI Reports and Dashboards on the Amazon Kindle DX:

MicroStrategy-based grid reports, graph reports, operational reports, scorecards, and dashboards can be stored and viewed on the Kindle DX in PDF format for enhanced productivity while out of the office. The Kindle DX's large screen enables users to review and analyze detailed business data, ranging from a complex financial performance dashboard to a 100-page operational report. Users can also easily share reports and dashboards with others during business meetings.

By storing business intelligence reports on the Kindle DX, users no longer need to print out and carry stacks of reports with them when they travel. The large memory capacity of the Kindle DX, with more than 3GB of usable storage, enables users to store tens of thousands of BI reports and dashboards. Users simply archive the reports after viewing them and retrieve the reports when needed.

MicroStrategy reports can be sent via e-mail to the Kindle DX, enabling users to monitor business performance while away from the office. With MicroStrategy, Kindle DX users can receive reports on a scheduled basis, and set up e-mail alerts triggered by important business indicators that inform them of time-sensitive issues. Users can also download business reports and documents directly to the Kindle DX at their convenience.

First BI Platform Vendor to Support the New Data Mining Standard, PMML 4.0:

MicroStrategy has enhanced its predictive analytics capabilities with support for the newest version of the data mining industry's leading standard, PMML 4.0. The Predictive Model Markup Language (PMML) standard is developed by Data Mining Group (DMG), an independent consortium of over two dozen leading technology companies, including MicroStrategy. The PMML standard describes how predictive models work and it makes the models easy to share across the organization for improved decision-making.

Data mining is an organic part of the MicroStrategy architecture that enables users to discover hidden patterns and predictive information in the data through standard enterprise reports and dashboards. While BI provides deep insight into historical data, data mining uses this information to help companies forecast future events. With MicroStrategy, users can easily deploy complex data mining models and include the results of these models in a variety of BI applications, such as call center analyses, customer relationship management, and financial budgeting and forecasting.

An active member of DMG since 2004, MicroStrategy has provided guidance and leadership in developing the PMML standard and continues to maintain its support for open platform standards, cross-vendor interoperability, and high data integrity. Along with existing data mining models, MicroStrategy 9 includes new capabilities, such as the Time Series model, which is used to forecast results along a given timeline, and the Association Rules model, which is helpful for discovering relationships in databases and recommending products that customers are most likely to purchase.

MicroStrategy Hosts Informational Events in India:

During July 2009, MicroStrategy is hosting a series of informational events in seven cities in India. The events will provide an overview of MicroStrategy's latest software release, MicroStrategy 9, and how it can help companies improve decision-making, increase productivity, streamline operations, and enhance business performance. Nine dinner events will be held between July 14, 2009 and July 31, 2009.

About MicroStrategy Incorporated

Founded in 1989, MicroStrategy is a global leader in business intelligence (BI) technology. MicroStrategy provides integrated reporting, analysis, and monitoring software that helps leading organizations worldwide make better business decisions every day. Companies choose MicroStrategy for its advanced technical capabilities, sophisticated analytics, and superior data and user scalability. More information about MicroStrategy (Nasdaq: MSTR) is available at www.microstrategy.com.

MicroStrategy, MicroStrategy 9, MicroStrategy Report Services, MicroStrategy Dynamic Enterprise Dashboards, MicroStrategy Reporting Suite, MicroStrategy Intelligence Server, MicroStrategy Business Intelligence Platform, MicroStrategy Architect, MicroStrategy Web, MicroStrategy OLAP Provider, MicroStrategy Office, MicroStrategy Mobile, and MicroStrategy Distribution Services are either trademarks or registered trademarks of MicroStrategy Incorporated in the United States and certain other countries. Other product and company names mentioned herein may be the trademarks of their respective owners.

This press release may include statements that may constitute "forward-looking statements," including estimates of future business prospects or financial results and statements containing the words "believe," "estimate," "project," "expect" or similar expressions. Forward-looking statements inherently involve risks and uncertainties that could cause actual results of MicroStrategy Incorporated and its subsidiaries (collectively, the "Company") to differ materially from the forward-looking statements. Factors that could contribute to such differences include: the ability of the Company to implement and achieve widespread customer acceptance of its MicroStrategy 9 software on a timely basis; the Company's ability to recognize deferred revenue through delivery of products or satisfactory performance of services; continued acceptance of the Company's products in the marketplace; the timing of significant orders; delays in the Company's ability to develop or ship new products; market acceptance of new products; competitive factors; general economic conditions, including significant downturns in industries, including the financial services and retail industries, in which we have a significant number of customers; currency fluctuations; and other risks detailed in the Company's registration statements and periodic reports filed with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.

    Contact:
    MicroStrategy Incorporated
    Investor Relations
    ir@microstrategy.com
    (703) 848-8600

                            MICROSTRATEGY INCORPORATED
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (in thousands, except per share data)

                              Three Months Ended         Six Months Ended
                                   June 30,                  June 30,
                                   --------                  --------
                               2009         2008         2009         2008
                               ----         ----         ----         ----
                          (unaudited)  (unaudited)  (unaudited)  (unaudited)
    Revenues
    Product licenses          $20,483      $21,052      $37,454      $43,179
    Product support and
     other services            67,276       67,804      130,546      131,581
                               ------       ------      -------      -------
      Total revenues           87,759       88,856      168,000      174,760
                               ------       ------      -------      -------

    Cost of Revenues
    Product licenses            1,980          461        2,576        1,020
    Product support and
     other services            13,957       15,648       28,022       29,594
                               ------       ------       ------       ------
      Total cost of
       revenues                15,937       16,109       30,598       30,614
                               ------       ------       ------       ------

    Gross profit               71,822       72,747      137,402      144,146
                               ------       ------      -------      -------

    Operating Expenses
    Sales and marketing        31,357       34,484       61,887       64,172
    Research and
     development               11,168        8,203       19,007       18,527
    General and
     administrative            12,800       15,001       27,144       32,311
                               ------       ------       ------       ------
      Total operating
       expenses                55,325       57,688      108,038      115,010
                               ------       ------      -------      -------

    Income from continuing
     operations before
     financing and other
     income and income
     taxes                     16,497       15,059       29,364       29,136
                               ------       ------       ------       ------

    Financing and Other
     (Expense) Income
     Interest income, net         251          660          395        1,458
    Other expense, net         (1,740)        (102)      (1,204)        (963)
                               ------         ----       ------         ----
      Total financing and
       other (expense)
       income                  (1,489)         558         (809)         495
                               ------          ---         ----          ---

    Income from
     continuing
     operations before
     income taxes              15,008       15,617       28,555       29,631
      Provision for income
       taxes                    5,056        7,719        9,943       12,772
                                -----        -----        -----       ------
    Income from
     continuing
     operations                 9,952        7,898       18,612       16,859

    Discontinued operations:
      Gain from sale of
       discontinued
       operations, net of
       tax provision ($69
       and $11,190,
       respectively)               15            -       14,437            -
      Income (loss) from
       discontinued operations,
       net of tax provision
       (benefit) ($0 and $197,
       for the three months
       ended, respectively,
       and ($54) and $123 for
       the six months ended,
       respectively)                -          228         (107)        (435)
                                  ---          ---         ----         ----
    Discontinued
     operations, net of
     tax                           15          228       14,330         (435)
                                   --          ---       ------         ----

                               ------       ------      -------      -------
    Net Income                 $9,967       $8,126      $32,942      $16,424
                               ------       ------      -------      -------

    Basic earnings (loss)
     per share (1):
      From continuing
       operations               $0.84        $0.66        $1.57        $1.42
      From discontinued
       operations                  $-        $0.02        $1.20       $(0.04)
                                   --        -----        -----       ------
         Basic earnings per
          share                 $0.84        $0.68        $2.77        $1.38
                                -----        -----        -----        -----
    Weighted average shares
     outstanding used in
     computing basic
     earnings per share        11,895       11,870       11,893       11,897
                               ------       ------       ------       ------

    Diluted earnings (loss)
     per share (1):
      From continuing
       operations               $0.81        $0.64        $1.52        $1.36
      From discontinued
       operations                  $-        $0.02        $1.17       $(0.03)
                                   --        -----        -----       ------
         Diluted earnings per
          share                 $0.81        $0.66        $2.69        $1.33
                                -----        -----        -----        -----
    Weighted average shares
     outstanding used in
     computing diluted
     earnings per share        12,256       12,324       12,237       12,351
                               ------       ------       ------       ------

    (1) Basic and fully diluted earnings per share for class A and class B
        common stock are the same

                          MICROSTRATEGY INCORPORATED
                    CONSOLIDATED STATEMENTS OF OPERATIONS
                    (in thousands, except per share data)
                                 (unaudited)

                      Core BI Business     Angel.com        Consolidated
                      ----------------     ---------        ------------
                        Three Months     Three Months       Three Months
                            Ended            Ended              Ended
                          June 30,         June 30,           June 30,
                          --------         --------           --------
                         2009     2008   2009     2008       2009     2008
                         ----     ----   ----     ----       ----     ----


    Revenues
    Product licenses  $20,483  $21,052     $-       $-    $20,483  $21,052
    Product support
     and other
     services          64,118   65,064      -        -     64,118   65,064
    Angel.com
     telephony
     services               -        -  3,158    2,740      3,158    2,740
                          ---      ---  -----    -----      -----    -----
      Total revenues   84,601   86,116  3,158    2,740     87,759   88,856
                       ------   ------  -----    -----     ------   ------

    Cost of Revenues
    Product licenses    1,980      461      -        -      1,980      461
    Product support
     and other
     services          12,705   15,208      -        -     12,705   15,208
    Angel.com
     telephony
     services               -        -  1,252      440      1,252      440
                          ---      ---  -----      ---      -----      ---
      Total cost of
       revenues        14,685   15,669  1,252      440     15,937   16,109
                       ------   ------  -----      ---     ------   ------
    Gross profit       69,916   70,447  1,906    2,300     71,822   72,747
                       ------   ------  -----    -----     ------   ------

    Operating Expenses
    Sales and
     marketing         30,289   32,063  1,068    2,421     31,357   34,484
    Research and
     development       10,312    7,259    856      944     11,168    8,203
    General and
     administrative    12,353   14,911    447       90(a)  12,800   15,001
                       ------   ------    ---       --      ------   ------
      Total operating
       expenses        52,954   54,233  2,371    3,455     55,325   57,688
                       ------   ------  -----    -----     ------   ------

    Income (loss) from
     continuing
     operations before
     financing and
     other income and
     income taxes      16,962   16,214   (465)  (1,155)    16,497   15,059
                       ------   ------   ----   ------     ------   ------

    Financing and Other
     (Expense) Income
    Interest income,
     net                  251      660      -        -        251      660
    Other expense,
     net               (1,740)    (102)     -        -     (1,740)    (102)
                       ------     ----    ---      ---     ------     ----
      Total financing
       and other
       (expense)
       income          (1,489)     558      -        -     (1,489)     558
                       ------      ---    ---      ---     ------      ---
    Income (loss)
     from continuing
     operations
     before income
     taxes            $15,473  $16,772  $(465) $(1,155)   $15,008  $15,617
      Provision for
       income taxes                                         5,056    7,719
                                                            -----    -----
    Income from
     continuing
     operations                                             9,952    7,898

    Discontinued
     operations:
      Gain from sale
       of discontinued
       operations, net
       of tax                                                  15        -
      Income from
       discontinued
       operations, net
       of tax                                                   -      228
                                                              ---      ---
    Discontinued
     operations, net
     of tax                                                    15      228

                                                           ------   ------
    Net income                                             $9,967   $8,126
                                                           ======   ======

    Basic earnings
     per share:
        From
         continuing
         operations                                         $0.84    $0.66
        From
         discontinued
         operations                                            $-    $0.02
                                                               --    -----
            Basic
             earnings
             per share                                      $0.84    $0.68
                                                            -----    -----

    Diluted earnings
     per share:
        From
         continuing
         operations                                         $0.81    $0.64
        From
         discontinued
         operations                                            $-    $0.02
                                                               --    -----
            Diluted
             earnings
             per share                                      $0.81    $0.66
                                                            -----    -----

         Basic weighted
          average shares
          outstanding                                      11,895   11,870
                                                           ======   ======
         Diluted weighted
          average shares
          outstanding                                      12,256   12,324
                                                           ======   ======

    (a)  An insignificant amount of general and administrative services is
         provided to the Angel.com business unit by MicroStrategy's core
         business operations.



                           MICROSTRATEGY INCORPORATED
                      CONSOLIDATED STATEMENTS OF OPERATIONS
                      (in thousands, except per share data)
                                   (unaudited)

                      Core BI Business      Angel.com           Consolidated
                      ----------------      ---------           ------------
                          Six  Months        Six  Months          Six Months
                            Ended              Ended                Ended
                           June 30,           June 30,             June 30,
                           --------           --------             --------
                         2009     2008     2009      2008       2009     2008
                         ----     ----     ----      ----       ----     ----


    Revenues
    Product licenses  $37,454  $43,179       $-        $-    $37,454  $43,179
    Product support
     and other
     services         124,730  126,476        -         -    124,730  126,476
    Angel.com
     telephony
     services               -        -    5,816     5,105      5,816    5,105
                          ---      ---    -----     -----      -----    -----
      Total revenues  162,184  169,655    5,816     5,105    168,000  174,760
                      -------  -------    -----     -----    -------  -------

    Cost of Revenues
    Product licenses    2,576    1,020        -         -      2,576    1,020
    Product support
     and services
     revenues          25,732   28,694        -         -     25,732   28,694
    Angel.com
     telephony
     services               -        -    2,290       900      2,290      900
                          ---      ---    -----       ---      -----      ---
      Total cost of
       revenues        28,308   29,714    2,290       900     30,598   30,614
                       ------   ------    -----       ---     ------   ------
    Gross profit      133,876  139,941    3,526     4,205    137,402  144,146
                      -------  -------    -----     -----    -------  -------

    Operating Expenses
    Sales and
     marketing         59,648   60,195    2,239     3,977     61,887   64,172
    Research and
     development       17,139   16,995    1,868     1,532     19,007   18,527
    General and
     administrative    26,260   32,161      884       150(a)  27,144   32,311
                       ------   ------      ---      ----     ------   ------
      Total operating
       expenses       103,047  109,351    4,991     5,659    108,038  115,010
                      -------  -------    -----     -----    -------  -------

    Income (loss) from
     continuing
     operations before
     financing and
     other income and
     income taxes      30,829   30,590   (1,465)   (1,454)    29,364   29,136
                       ------   ------   ------    ------     ------   ------

    Financing and Other
     (Expense) Income
    Interest income,
     net                  395    1,458        -         -        395    1,458
    Other expense,
     net               (1,204)    (963)       -         -     (1,204)    (963)
                       ------     ----      ---       ---     ------     ----
      Total financing
       and other
       (expense)
       income            (809)     495        -         -       (809)     495
                         ----      ---      ---       ---       ----      ---
    Income (loss)
     from continuing
     operations
     before income
     taxes            $30,020  $31,085  $(1,465)  $(1,454)   $28,555  $29,631
      Provision for
       income taxes                                            9,943   12,772
                                                               -----   ------
    Income from
     continuing
     operations                                               18,612   16,859

    Discontinued
     operations:
      Gain from sale
       of discontinued
       operations,
       net of tax                                             14,437        -
      Loss from
       discontinued
       operations,
       net of tax                                               (107)    (435)
                                                                ----     ----
    Discontinued
     operations,
     net of tax                                               14,330     (435)

                                                             -------  -------
    Net income                                               $32,942  $16,424
                                                             =======  =======

    Basic earnings
     (loss) per share:
        From
         continuing
         operations                                            $1.57    $1.42
        From
         discontinued
          operations                                           $1.20   $(0.04)
                                                               -----   ------
            Basic
             earnings
             per share                                         $2.77    $1.38
                                                               -----    -----

    Diluted earnings
     (loss) per share:
        From
         continuing
         operations                                            $1.52    $1.36
        From
         discontinued
         operations                                            $1.17   $(0.03)
                                                               -----   ------
            Diluted
             earnings
             per share                                         $2.69    $1.33
                                                               -----    -----

         Basic weighted
          average shares
          outstanding                                         11,893   11,897
                                                              ======   ======
         Diluted weighted
          average shares
          outstanding                                         12,237   12,351
                                                              ======   ======

    (a)  An insignificant amount of general and administrative services is
         provided to the Angel.com business unit by MicroStrategy's core
         business operations.

                            MICROSTRATEGY INCORPORATED
                           CONSOLIDATED BALANCE SHEETS
                      (in thousands, except per share data)

                                                       June 30,  December 31,
                                                          2009          2008
                                                          ----          ----
    Assets                                         (unaudited)     (audited)
    Current assets
      Cash and cash equivalents                       $176,167      $122,915
      Restricted cash and investments                    1,523           619
      Accounts receivable, net                          41,604        49,670
      Prepaid expenses and other current assets          8,053         9,518
      Deferred tax assets, net                          15,975        26,743
      Assets held-for-sale                                   -         4,964
                                                           ---         -----
    Total current assets                               243,322       214,429

    Property and equipment, net                          7,799         8,978
    Capitalized software development cost, net          16,890        14,823
    Deposits and other assets                           35,518        36,804
    Deferred tax assets, net                            10,737        17,105
                                                        ------        ------
    Total Assets                                      $314,266      $292,139
                                                      --------      --------

    Liabilities and Stockholders' Equity
    Current liabilities
      Accounts payable and accrued expenses            $21,708       $27,697
      Accrued compensation and employee benefits        33,284        42,634
      Deferred revenue and advance payments             75,258        66,495
      Deferred tax liabilities                             524             -
      Liabilities held-for-sale                              -         6,325
                                                           ---         -----
    Total current liabilities                          130,774       143,151

    Deferred revenue and advance payments                3,013         1,679
    Other long-term liabilities                          9,744         9,268
                                                         -----         -----

    Total Liabilities                                  143,531       154,098
                                                       -------       -------

    Stockholders' Equity
      Preferred stock undesignated, $0.001
       par value; 5,000 shares authorized;
       no shares issued or outstanding                       -             -
      Class A common stock, $0.001 par value;
       330,000 shares authorized; 14,176 shares
       issued and 9,129 shares outstanding, and
       14,167 shares issued and 9,120 shares
       outstanding, respectively                            14            14
      Class B common stock, $0.001 par value;
       165,000 shares authorized; 2,770 issued
       and outstanding                                       3             3
      Additional paid-in capital                       451,162       450,953
      Treasury stock, at cost; 5,047 shares           (366,191)     (366,191)
      Accumulated other comprehensive income             1,014         1,471
    Retained earnings                                   84,733        51,791
                                                        ------        ------
    Total Stockholders' Equity                         170,735       138,041
                                                       -------       -------
    Total Liabilities and Stockholders' Equity        $314,266      $292,139
                                                      --------      --------

                           MICROSTRATEGY INCORPORATED
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                                 (in thousands)
                                   (unaudited)
                                                           Six Months Ended
                                                                June 30,
                                                                --------
                                                             2009      2008
                                                             ----      ----

    Operating activities:
      Net income                                          $32,942   $16,424
      Plus:  (Income) loss from discontinued
       operations, net                                    (14,330)      435
                                                          -------       ---
          Income from continuing operations                18,612    16,859
      Adjustments to reconcile net income to net
       cash provided by operating activities:
        Depreciation and amortization                       4,761     3,102
        Bad debt expense                                      484       561
        Deferred taxes                                      7,917     8,539
        Stock-based compensation                                -        45
        Excess tax benefits from stock-based payment
         arrangements                                           -      (178)
        Other, net                                             (9)       32
      Changes in operating assets and liabilities:
        Accounts receivable                                 6,485    10,656
        Prepaid expenses and other current assets           1,495    (1,142)
        Deposits and other assets                             137      (334)
        Accounts payable and accrued expenses,
         compensation and employee benefits               (15,777)   (6,091)
        Deferred revenue and advance payments               9,692     8,345
        Other long-term liabilities                           464     1,198
                                                              ---     -----
          Net cash provided by operating activities
           from continuing operations                      34,261    41,592
          Net cash (used in) provided by operating
           activities from discontinued operations           (472)      472
                                                             ----       ---
              Net cash provided by operating activities    33,789    42,064
                                                           ------    ------
    Investing activities:
      Purchases of property and equipment                  (1,362)   (1,770)
      Capitalized software development costs               (4,218)   (2,862)
      Decrease in restricted cash and investments             238       758
                                                              ---       ---
          Net cash used in investing activities from
           continuing operations                           (5,342)   (3,874)
          Net cash provided by (used in) investing
           activities from discontinued operations         24,546       (84)
                                                           ------       ---
               Net cash provided by (used in) investing
                activities                                 19,204    (3,958)
                                                           ------    ------
    Financing activities:
      Distribution to Alarm.com minority shareholders         (60)        -
      Proceeds from sale of class A common stock under
       exercise of employee stock options                     261     1,986
      Excess tax benefits from stock-based payment
       arrangements                                             -       178
      Purchases of treasury stock                               -    (8,387)
                                                              ---    ------
          Net cash provided by (used in) financing
           activities from continuing operations              201    (6,223)
          Net cash provided by financing activities
           from discontinued operations                         -         -
                                                              ---       ---
              Net cash provided by (used in) financing
               activities                                     201    (6,223)
          Effect of foreign exchange rate changes on
           cash and cash equivalents                           58     2,526
                                                               --     -----
    Net increase in cash and cash equivalents from
     continuing operations                                 53,252    34,409
    Cash and cash equivalents, beginning of period        122,915    85,194
                                                          -------    ------
    Cash and cash equivalents, end of period             $176,167  $119,603
                                                         ========  ========

SOURCE MicroStrategy Incorporated

http://www.microstrategy.com

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