MicroStrategy Incorporated

MicroStrategy Announces Second Quarter 2010 Financial Results

08-02-10

41% Increase in License Revenue Year-Over-Year

MCLEAN, Va., Aug 02, 2010 /PRNewswire 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, 2010 (the second quarter of its 2010 fiscal year).

Second quarter 2010 revenues were $107.5 million versus $87.8 million for the second quarter of 2009, a 23% increase. Product licenses revenues for the second quarter of 2010 were $28.9 million versus $20.5 million for the second quarter of 2009, a 41% increase. Product support and other services revenues for MicroStrategy's core business intelligence (BI) business in the second quarter of 2010 were $74.5 million versus $64.1 million for the second quarter of 2009, a 16% increase.

Operating expenses for the second quarter of 2010 were $68.8 million versus $55.3 million for the second quarter of 2009, a 24% increase. During the second quarter of 2010, MicroStrategy capitalized $2.2 million in research and development costs associated with the development of its MicroStrategy Mobile(TM) software, while no software development costs were capitalized during the second quarter of 2009.

Net income for the second quarter of 2010 was $11.6 million, or $0.97 per share on a diluted basis, compared to $10.0 million, or $0.81 per share on a diluted basis, for the second quarter of 2009.

During the second quarter of 2010, MicroStrategy repurchased 368,055 shares of its class A common stock at an average price per share of $73.69 and an aggregate cost of $27.1 million. As of June 30, 2010, MicroStrategy had 8,722,113 shares of class A common stock and 2,694,362 shares of class B common stock outstanding.

Launch of MicroStrategy Mobile:

MicroStrategy Mobile, a platform that easily extends business intelligence applications (apps) to the iPhone(R) and iPad(TM), was made generally available on June 30, 2010 and introduced at MicroStrategy's user conference in Cannes, France on July 6, 2010.

MicroStrategy President and CEO Michael Saylor stated, "The mobile Internet is the next wave of information technology. We see a revolution afoot in business intelligence as organizations can now empower their executives, workforce, suppliers, and partners with immediate access to business information from mobile devices. We believe that mobile business intelligence has the potential to expand the BI market dramatically and that MicroStrategy Mobile is on the leading edge of this new market."

Easily Extends Enterprise Reports and Information Dashboards to the iPhone and iPad

MicroStrategy Mobile enables companies to easily extend graphs, grids, enterprise reports, and information dashboards to the iPhone and iPad. Many people prefer to consume business intelligence on their mobile devices rather than on their desktop computers, since mobile devices are more portable, always on, and always connected. Mobile business intelligence is a logical extension of traditional business intelligence, but requires even higher performance and the ability to serve even larger user populations. MicroStrategy's architecture is engineered to provide the speed and scalability to support the escalating demands of mobile BI applications.

Deploy Mobile BI Applications Quickly

With MicroStrategy Mobile, existing MicroStrategy projects can be extended to the iPhone, iPad, and BlackBerry, typically within several days. MicroStrategy Mobile applications are assembled in a point-and-click fashion and do not require any coding. App creators can choose from an array of finely-designed, iPhone and iPad-optimized displays and controls.

MicroStrategy Mobile includes the infrastructure needed to support each new mobile app, so application developers only need to focus on creating the user experience and not on the back-end infrastructure. MicroStrategy's metadata-driven design approach enables rapid, point-and-click portability of reports between platforms, including iPhone, iPad, BlackBerry(R), web browsers, Microsoft Office(TM), and Microsoft Windows(R).

Enhanced Business Intelligence User Experience

The latest release of MicroStrategy Mobile takes full advantage of the native capabilities of the iPhone and iPad to deliver an enhanced business intelligence experience to users. By leveraging the user-friendly features of the iPhone and iPad, MicroStrategy Mobile provides intuitive business intelligence that is optimized for the mobile user.

Integrated Mapping: MicroStrategy Mobile offers out-of-the-box integration with Google Maps(TM) for easy visualization of geospatial data and rapid location identification.

Multi-touch: MicroStrategy Mobile leverages the new Apple multi-touch gestures, such as swipe, tap, flick, and rotate, to ease data navigation for users.

BI-specific Gestures: MicroStrategy Mobile includes specialized data gestures such as drilling and paging that extend native iPhone functionality to enhance data exploration.

App Integration: App functionality can be extended by directly integrating with other on-device apps, including e-mail, browser, and text messaging; third-party apps such as social networks or payment solutions; and existing enterprise systems or data sources.

Sensor-based Query: MicroStrategy Mobile is integrated with on-device sensors, such as the GPS receiver, accelerometer, and bar code reader, to accelerate query speed and relevance. For example, since the device already knows the user's location, there is no need to manually enter the address.

Mobile Information Capture: Users can quickly capture information with on-device sensors, such as a camera or bar code reader, reducing the need for manual data entry.

Built for Enterprise Deployments

MicroStrategy Mobile inherits the core strengths of the MicroStrategy 9(TM) platform to provide an enterprise-grade foundation for mobile applications.

High Performance: MicroStrategy Mobile is designed to provide the high performance expected on mobile devices. Specifically, MicroStrategy Mobile uses multi-level caching, an in-memory data structure, and a high efficiency network interchange to provide the high performance required to make mobile business intelligence apps most useful.

Comprehensive Security: Security is one of the highest concerns of enterprises using mobile devices. MicroStrategy Mobile is designed to ensure the privacy and security of data, even when the devices leave the four walls of the enterprise.

High Scale Operation: MicroStrategy Mobile is designed specifically for high efficiency operation in environments of tens of thousands of users. MicroStrategy's powerful administrative tools make it easy for a small number of IT administrators to manage dozens of BI apps and many thousands of users from a central admin console.

MicroStrategy Mobile Suite Free Trial

MicroStrategy Mobile Suite(TM) is an easy-to-access, no cost software and services package that allows companies to try MicroStrategy Mobile. The free MicroStrategy Mobile Suite contains 25 perpetual named user licenses of MicroStrategy Mobile, a full set of development tools, online training, and technical support, all at no cost. Visit the MicroStrategy Mobile Suite website, http://www.microstrategy.com/freemobileBI to learn more.

MicroStrategy Mobile iPhone App on the Apple App Store

The MicroStrategy Mobile iPhone app is now available on the Apple App store. With the app, there are three demo datasets, including Restaurant Trends, Casino Management, and Retail Performance Management, that allow users to sample the functionality of MicroStrategy Mobile. To download, visit http://itunes.apple.com/us/app/microstrategy-mobile/id376256699?mt=8.

Customers Build Innovative BI Applications with MicroStrategy Mobile:

Alloso Technologies

Alloso Technologies, a software development and consulting company specializing in the hospitality industry, is using MicroStrategy Mobile to provide Hotel General Managers with access to real-time information, including P&L budgets, revenue segments, expenses, and links to guest reviews. "We were 'wowed' by MicroStrategy's technology and the ability to build this application in one week leveraging our existing infrastructure," said Jon Gorman, CTO at Alloso Technologies. "Our clients are very excited about our new iPhone app and the capabilities it provides to help them enhance efficiency and improve business performance."

GUESS?, Inc.

GUESS?, a widely recognized apparel company with over 1,200 GUESS and GUESS Accessory retail stores worldwide, was an early adopter of MicroStrategy Mobile for its mobile BI application that spotlights sales trends. "Our successful MicroStrategy Mobile application keeps us nimble and competitive in the industry, and provides us with the insight and information to drive record-setting revenues across our global operations," said Michael Relich, EVP, CIO & Strategy at GUESS?, Inc. "GUESS decision makers, including executives, corporate directors, district managers, buyers, and merchants, receive business-critical information via BlackBerry smartphones, enabling them to respond quickly and identify new opportunities for business growth. MicroStrategy's BI platform allows us to build focused apps that provide specific insight and are easy to use for our diverse user community."

GuestMetrics

GuestMetrics is a leading provider of customer insight solutions for the hospitality industry and its suppliers/distributors. The GuestMetrics iPhone App provides beverage suppliers and distributors with data on restaurant guests' purchasing behavior at the transaction level. "MicroStrategy Mobile enables us to deliver extremely useful iPhone apps to our clients," said Brian Barrett, President and CEO of GuestMetrics. "Our new app will help our clients quickly understand consumer trends, evaluate product performance, and plan successful consumer promotions. It's important that our mobile apps reflect our corporate culture, and MicroStrategy gives us the flexibility to design apps that infuse our brand identity and business environment."

Herbalife

Herbalife, a global network marketing company that sells products in 73 countries, chose MicroStrategy to deliver information dashboards on the iPhone. "MicroStrategy Mobile is way ahead of the competition in providing a high performance platform to quickly build and distribute custom business intelligence applications that fit our mobile devices," said Terry Adams, Senior Director of Development, Herbalife. "Our initial iPhone app will provide our management with real-time information on the sales performance and employee recruitment of our top-selling sales representatives. Our business users will be able to build and publish reports to the iPhone without having to rely on IS for support. With the ability to access interactive dashboards on their iPhones, our executives will be empowered to improve global operations and accelerate decision making around the clock."

Nygard

A leading fashion company that designs and markets women's fashion apparel, Nygard chose MicroStrategy Mobile for its mobile app to track product performance trends across store locations and reseller channels. "We consider ourselves pioneers in deploying innovative mobile applications, and are thrilled with the success achieved using MicroStrategy Mobile," said Len Nicolas, CIO, Nygard International. "Our mobile apps capture the spirit of innovation, corporate culture, and cutting-edge identity at Nygard. With MicroStrategy Mobile, Nygard's end users can track product performance trends across store locations and reseller channels using their BlackBerry smartphones."

VHA

VHA, a national health care network, selected MicroStrategy to build a mobile application that provides member hospitals with instant access to supply chain analytics data. VHA members can view price benchmarking and spending reports to help them manage and monitor cost reduction efforts. "Working closely with MicroStrategy helped VHA introduce an innovative, new capability to the health care market," said Guillermo Ramas, Vice President, Strategy & Product Development for Information and Data Services for VHA. "We were pleasantly surprised by how straightforward it was to build an effective mobile business intelligence application. MicroStrategy made it easy by simply extending their MicroStrategy 9-based metadata-driven, point-and-click development environment."

Zilliant

A leading provider of price optimization and management solutions for B2B manufacturers, distributors, high-tech, and industrial service companies, Zilliant chose MicroStrategy Mobile for its mobile app that will help sales people work more efficiently. "We are thrilled about working with MicroStrategy to deliver a high performing mobile BI solution to our clientele in the manufacturing and distribution industries," said Javier Aldrete, Director of Product Management, Zilliant. "MicroStrategy's BI platform provides a great foundation for developing and deploying apps that can be tailored for a mobile sales force to help them monitor performance, uncover sales opportunities, and improve profitability."

MicroStrategy's In-memory Technology Significantly Improves Business Intelligence Performance:

In April 2010, MicroStrategy announced a high performance initiative that includes the formation of a High Performance and Scalability Lab, the creation of a dedicated Performance Engineering team, and specific R&D efforts solely focused on providing MicroStrategy customers with the highest levels of performance for BI applications of all sizes.

MicroStrategy's In-memory technology is engineered to meet the increased demand for higher BI performance, which is driven by the rapid expansion of both data volumes and the number of BI users in organizations across industries. MicroStrategy accelerates performance by pre-calculating computations and placing the results into its In-memory acceleration engine to dramatically improve real-time query performance.

MicroStrategy 9 Release 2 offers significant performance improvements that make business intelligence faster for BI users. These enhancements include:

With these performance enhancements, MicroStrategy's High Performance and Scalability Lab found that customers can experience dramatic query response time and user scale improvements.

Faster Speed - Under 3-second response times for critical reports

Business people often run similar reports on a daily, weekly, or monthly basis. MicroStrategy's In-memory technology accelerates response times for these reports, as well as subsequent analyses, by up to 10 times compared to running the same queries against the data warehouse. With fewer reports running directly against the data warehouse, even ad hoc queries may observe better performance. The result is a much faster user experience allowing delivery of critical reports and analysis in less than 3 seconds.

Larger Scale - Deliver up to 145,000 queries per hour

Performance tests have shown MicroStrategy can deliver up to 145,000 queries per hour running on a single server of inexpensive, commodity hardware, enabling organizations to support the highest reporting volumes with modest hardware requirements.

For more details, visit http://www.microstrategy.com/high-performance-BI.

New Customers and New Deals with Existing Customers in Q2 2010 Included:

Aetna; AstraZeneca; Banco Espirito Santo; Bank of America; Barnes and Noble; Branch Banking & Trust Company; British Sky Broadcasting Group plc ("BSkyB"); Burlington Coat Factory; Centers for Medicare & Medicaid Services; Department of Veteran's Affairs; Dick's Sporting Goods; Emory Healthcare; Giant Tiger Stores Limited; Hudson's Bay Company; IMS Health; LinkedIn; MySpace; National Government Services; Nordstrom; Panda Restaurant Group; Patterson Companies; PHI Service Company; PPL Services; Prescription Solutions; Rogers Communications; Saint Elizabeth Health Care; Sears Holdings Management Corporation; Sensormatic Electronics; Skechers USA; Sumitomo; The Sherwin-Williams Company; The Travelers Indemnity Company; The Warnaco Group; Unified Western Grocers; Verizon Services; VHA; Wells Fargo & Co.; Whole Foods Market Services; World's Foremost Bank

Examples of Customer Deals from Q2 2010:

Giant Tiger

Giant Tiger is Canada's affordable and friendly family retail destination with more than 194 stores employing over 6,500 people. Giant Tiger recently expanded its deployment of MicroStrategy to provide its management team with detailed insights into sales, merchandising, financial, and inventory data. With MicroStrategy, Giant Tiger's management team will be able to analyze the organization's profitability and uncover new areas for improved financial performance. MicroStrategy was selected for its high performance, robust reporting capabilities, and strong presence in the retail industry.

Panda Restaurant Group

Panda Restaurant Group, with 18,000 associates in more than 1,300 locations in 38 states, is the nation's largest and fastest growing Asian restaurant chain, operating several successful restaurant concepts, including Panda Express, Panda Inn, and Hibachi-San. A new MicroStrategy customer, Panda Restaurant Group has selected MicroStrategy as its enterprise business intelligence solution. Panda Restaurant Group plans to use MicroStrategy to develop dashboard and reporting applications for its employees in Finance, Human Resources, Marketing, and Store Operations. End users will be able to monitor financial trends and improve decision making with respect to product profitability, store operations, and labor utilization. Panda evaluated Microsoft, Business Objects, and Cognos, and selected MicroStrategy for its Web-based platform, intuitive interface, and user scalability.

Skechers USA, Inc.

Skechers USA, Inc. designs, develops, and markets a diverse range of footwear for men, women, and children under the SKECHERS name, as well as under several uniquely branded names. A new MicroStrategy customer, Skechers selected MicroStrategy to enhance operational reporting and analytics, giving them greater insights into their businesses and brand performance. After conducting an extensive evaluation of BI products, MicroStrategy was selected because of its integrated platform, scalability for large volumes of data, expertise in the retail industry, and easy-to-use reporting capabilities for Skecher's user community.

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 ease-of-use, sophisticated analytics, and superior data and user scalability. MicroStrategy offers free reporting software that can be downloaded from its website, http://www.microstrategy.com/freereportingsoftware. More information about MicroStrategy (Nasdaq: MSTR) is available at www.microstrategy.com.

MicroStrategy, MicroStrategy 9, MicroStrategy Mobile and MicroStrategy Mobile Suite 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 extent and timing of acceptance in the market of the MicroStrategy Mobile application platform; the Company's ability to recognize revenue or deferred revenue through delivery of products or satisfactory performance of services; continued acceptance of the Company's other products in the marketplace; the timing of significant orders; delays in the Company's ability to develop or ship new products, such as new or modified products the Company may seek to develop as a result of its high performance initiatives; 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.

MSTR-F

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


                                              Three Months Ended
                                                   June 30,
                                                   --------
                                                 2010              2009
                                                 ----              ----
                                          (unaudited)       (unaudited)
    Revenues
    Product licenses                          $28,930           $20,483
    Product support and other services         78,607            67,276
      Total revenues                          107,537            87,759
                                              -------            ------

    Cost of Revenues
    Product licenses                            1,860             1,980
    Product support and other services         22,489            13,957
      Total cost of revenues                   24,349            15,937
                                               ------            ------

    Gross profit                               83,188            71,822
                                               ------            ------

    Operating Expenses
    Sales and marketing                        39,361            31,357
    Research and development                   10,812            11,168
    General and administrative                 18,674            12,800
      Total operating expenses                 68,847            55,325
                                               ------            ------

    Income from continuing operations
     before
    financing and other income and income
     taxes                                     14,341            16,497
                                               ------            ------

    Financing and Other Income (Expense)
    Interest income, net                           15               251
    Other income (expense), net                 2,144            (1,740)
      Total financing and other income
       (expense)                                2,159            (1,489)
                                                -----            ------

    Income from continuing operations
     before income taxes                       16,500            15,008
      Provision for income taxes                4,882             5,056
                                                -----             -----
    Income from continuing operations          11,618             9,952

    Discontinued operations:
      Gain from sale of discontinued
       operations, net of tax provision
       ($69 and $11,190, respectively)              -                15
      Loss from discontinued operations,
       net of tax benefit ($0 and $54,
       respectively)                                -                 -
    Discontinued operations, net of tax             -                15

    Net Income                                $11,618            $9,967
                                              =======            ======

    Basic earnings per share (1):
      From continuing operations                $1.00             $0.84
      From discontinued operations                 $-                $-
                                                  ---               ---
         Basic earnings per share               $1.00             $0.84
                                                =====             =====
    Weighted average shares outstanding
     used in computing basic
         earnings per share                    11,629            11,895
                                               ======            ======

    Diluted earnings per share (1):
      From continuing operations                $0.97             $0.81
      From discontinued operations                 $-                $-
         Diluted earnings per share             $0.97             $0.81
                                                =====             =====
    Weighted average shares outstanding
     used in computing diluted
         earnings per share                    12,029            12,256
                                               ======            ======





                                               Six Months Ended
                                                   June 30,
                                                   --------
                                                 2010              2009
                                                 ----              ----
                                          (unaudited)       (unaudited)
    Revenues
    Product licenses                          $46,884           $37,454
    Product support and other services        154,043           130,546
      Total revenues                          200,927           168,000
                                              -------           -------

    Cost of Revenues
    Product licenses                            3,775             2,576
    Product support and other services         42,198            28,022
      Total cost of revenues                   45,973            30,598
                                               ------            ------

    Gross profit                              154,954           137,402
                                              -------           -------

    Operating Expenses
    Sales and marketing                        72,748            61,887
    Research and development                   23,143            19,007
    General and administrative                 37,134            27,144
      Total operating expenses                133,025           108,038
                                              -------           -------

    Income from continuing operations
     before
    financing and other income and income
     taxes                                     21,929            29,364
                                               ------            ------

    Financing and Other Income (Expense)
    Interest income, net                          117               395
    Other income (expense), net                 4,993            (1,204)
      Total financing and other income
       (expense)                                5,110              (809)
                                                -----              ----

    Income from continuing operations
     before income taxes                       27,039            28,555
      Provision for income taxes                8,520             9,943
                                                -----             -----
    Income from continuing operations          18,519            18,612

    Discontinued operations:
      Gain from sale of discontinued
       operations, net of tax provision
       ($69 and $11,190, respectively)              -            14,437
      Loss from discontinued operations,
       net of tax benefit ($0 and $54,
       respectively)                                -              (107)
    Discontinued operations, net of tax             -            14,330

    Net Income                                $18,519           $32,942
                                              =======           =======

    Basic earnings per share (1):
      From continuing operations                $1.57             $1.57
      From discontinued operations                 $-             $1.20
                                                  ---             -----
         Basic earnings per share               $1.57             $2.77
                                                =====             =====
    Weighted average shares outstanding
     used in computing basic
         earnings per share                    11,759            11,893
                                               ======            ======

    Diluted earnings per share (1):
      From continuing operations                $1.52             $1.52
      From discontinued operations                 $-             $1.17
         Diluted earnings per share             $1.52             $2.69
                                                =====             =====
    Weighted average shares outstanding
     used in computing diluted
         earnings per share                    12,165            12,237
                                               ======            ======



    (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
                                        ----------------         ---------
                                           Three Months         Three Months
                                              Ended                Ended
                                            June 30,             June 30,
                                            --------             --------
                                        2010         2009  2010        2009
                                        ----         ----  ----        ----


    Revenues
    Product licenses                 $28,930      $20,483    $-          $-
    Product support and other
     services                         74,527       64,118     -           -
    Angel.com services                     -            - 4,080       3,158
      Total revenues                 103,457       84,601 4,080       3,158
                                     -------       ------ -----       -----

    Cost of Revenues
    Product licenses                   1,860        1,980     -           -
    Product support and other
     services                         20,399       12,705     -           -
    Angel.com services                     -            - 2,090       1,252
      Total cost of revenues          22,259       14,685 2,090       1,252
                                      ------       ------ -----       -----
    Gross profit                      81,198       69,916 1,990       1,906
                                      ------       ------ -----       -----

    Operating Expenses
    Sales and marketing               37,776       30,289 1,585       1,068
    Research and development           9,985       10,312   827         856
    General and
     administrative                   18,246       12,353   428         447
      Total operating expenses        66,007       52,954 2,840       2,371
                                      ------       ------ -----       -----

    Income (loss) from
     continuing operations
     before
    financing and other
     income and income taxes          15,191       16,962  (850)       (465)
                                      ------       ------  ----        ----

    Financing and Other
     Income (Expense)
    Interest income, net                  15          251     -           -
    Other income (expense),
     net                               2,121      (1,740)    23           -
      Total financing and other
       income (expense)                2,136      (1,489)    23           -
                                       -----       ------   ---         ---
    Income (loss) from
     continuing operations
     before income taxes             $17,327      $15,473 $(827)      $(465)
      Provision for income
       taxes
    Income from continuing
     operations

    Discontinued operations:
      Gain from sale of
       discontinued operations,
       net of tax
      Loss from discontinued
       operations, net of tax
    Discontinued operations,
     net of tax

    Net income

    Basic earnings per share:
        From continuing
         operations
        From discontinued
         operations
            Basic earnings per share

    Diluted earnings per
     share:
        From continuing
         operations
        From discontinued
         operations
            Diluted earnings per
             share

         Basic weighted average
          shares outstanding
         Diluted weighted average
          shares outstanding




                                                         Consolidated
                                                         ------------
                                                         Three Months
                                                             Ended
                                                           June 30,
                                                           --------
                                                       2010        2009
                                                       ----        ----


    Revenues
    Product licenses                                $28,930     $20,483
    Product support and other services               74,527      64,118
    Angel.com services                                4,080       3,158
      Total revenues                                107,537      87,759
                                                    -------      ------

    Cost of Revenues
    Product licenses                                  1,860       1,980
    Product support and other services               20,399      12,705
    Angel.com services                                2,090       1,252
      Total cost of revenues                         24,349      15,937
                                                     ------      ------
    Gross profit                                     83,188      71,822
                                                     ------      ------

    Operating Expenses
    Sales and marketing                              39,361      31,357
    Research and development                         10,812      11,168
    General and administrative                       18,674      12,800
      Total operating expenses                       68,847      55,325
                                                     ------      ------

    Income (loss) from continuing operations
     before
    financing and other income and income
     taxes                                           14,341      16,497
                                                     ------      ------

    Financing and Other Income (Expense)
    Interest income, net                                 15         251
    Other income (expense), net                       2,144     (1,740)
      Total financing and other income (expense)      2,159     (1,489)
                                                      -----      ------
    Income (loss) from continuing operations
     before income taxes                            $16,500     $15,008
      Provision for income taxes                      4,882       5,056
                                                      -----       -----
    Income from continuing operations                11,618       9,952

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

    Net income                                      $11,618      $9,967
                                                    =======      ======

    Basic earnings per share:
        From continuing operations                    $1.00       $0.84
        From discontinued operations                     $-          $-
            Basic earnings per share                  $1.00       $0.84
                                                      =====       =====

    Diluted earnings per share:
        From continuing operations                    $0.97       $0.81
        From discontinued operations                     $-          $-
            Diluted earnings per share                $0.97       $0.81
                                                      =====       =====

         Basic weighted average shares outstanding   11,629      11,895
                                                     ======      ======
         Diluted weighted average shares
          outstanding                                12,029      12,256
                                                     ======      ======


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


                                    Core BI Business          Angel.com
                                    ----------------          ---------
                                    Six Months Ended       Six Months Ended
                                        June 30,               June 30,
                                        --------               --------
                                    2010         2009   2010          2009
                                    ----         ----   ----          ----


    Revenues
    Product licenses             $46,884      $37,454     $-            $-
    Product support and
     other services              145,865      124,730      -             -
    Angel.com services                 -            -  8,178         5,816
      Total revenues             192,749      162,184  8,178         5,816
                                 -------      -------  -----         -----

    Cost of Revenues
    Product licenses               3,775        2,576      -             -
    Product support and
     other services               38,554       25,732      -             -
    Angel.com services                 -            -  3,644         2,290
      Total cost of
       revenues                   42,329       28,308  3,644         2,290
                                  ------       ------  -----         -----
    Gross profit                 150,420      133,876  4,534         3,526
                                 -------      -------  -----         -----

    Operating Expenses
    Sales and marketing           69,663       59,648  3,085         2,239
    Research and
     development                  21,643       17,139  1,500         1,868
    General and
     administrative               36,192       26,260    942           884
      Total operating
       expenses                  127,498      103,047  5,527         4,991
                                 -------      -------  -----         -----

    Income (loss) from
     continuing
     operations before
    financing and other
     income and income
     taxes                        22,922       30,829   (993)       (1,465)
                                  ------       ------   ----        ------

    Financing and Other
     Income (Expense)
    Interest income, net             117          395      -             -
    Other income
     (expense), net                4,970      (1,204)     23             -
      Total financing and
       other income
       (expense)                   5,087         (809)    23             -
                                   -----         ----    ---           ---
    Income (loss) from
     continuing
     operations before
     income taxes                $28,009      $30,020  $(970)      $(1,465)
      Provision for income
       taxes
    Income from
     continuing
     operations

    Discontinued
     operations:
      Gain from sale of
       discontinued
       operations, net of
       tax
      Loss from
       discontinued
       operations, net of
       tax
    Discontinued
     operations, net of
     tax

    Net income

    Basic earnings per
     share:
        From continuing
         operations
        From discontinued
         operations
            Basic earnings per
             share

    Diluted earnings per
     share:
        From continuing
         operations
        From discontinued
         operations
            Diluted earnings per
             share

         Basic weighted
          average shares
          outstanding
         Diluted weighted
          average shares
          outstanding




                                                         Consolidated
                                                         ------------
                                                       Six Months Ended
                                                           June 30,
                                                           --------
                                                       2010         2009
                                                       ----         ----


    Revenues
    Product licenses                                $46,884      $37,454
    Product support and other services              145,865      124,730
    Angel.com services                                8,178        5,816
      Total revenues                                200,927      168,000
                                                    -------      -------

    Cost of Revenues
    Product licenses                                  3,775        2,576
    Product support and other services               38,554       25,732
    Angel.com services                                3,644        2,290
      Total cost of revenues                         45,973       30,598
                                                     ------       ------
    Gross profit                                    154,954      137,402
                                                    -------      -------

    Operating Expenses
    Sales and marketing                              72,748       61,887
    Research and development                         23,143       19,007
    General and administrative                       37,134       27,144
      Total operating expenses                      133,025      108,038
                                                    -------      -------

    Income (loss) from continuing operations
     before
    financing and other income and income
     taxes                                           21,929       29,364
                                                     ------       ------

    Financing and Other Income (Expense)
    Interest income, net                                117          395
    Other income (expense), net                       4,993      (1,204)
      Total financing and other income
       (expense)                                      5,110         (809)
                                                      -----         ----
    Income (loss) from continuing operations
     before income taxes                            $27,039      $28,555
      Provision for income taxes                      8,520        9,943
                                                      -----        -----
    Income from continuing operations                18,519       18,612

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

    Net income                                      $18,519      $32,942
                                                    =======      =======

    Basic earnings per share:
        From continuing operations                    $1.57        $1.57
        From discontinued operations                     $-        $1.20
            Basic earnings per share                  $1.57        $2.77
                                                      =====        =====

    Diluted earnings per share:
        From continuing operations                    $1.52        $1.52
        From discontinued operations                     $-        $1.17
            Diluted earnings per share                $1.52        $2.69
                                                      =====        =====

         Basic weighted average shares outstanding   11,759       11,893
                                                     ======       ======
         Diluted weighted average shares
          outstanding                                12,165       12,237
                                                     ======       ======


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


                                                               December
                                                  June 30,        31,
                                                        2010        2009
                                                        ----        ----
    Assets                                       (unaudited)  (audited)
    Current assets
      Cash and cash equivalents                     $202,682    $224,769
      Restricted cash and investments                  1,054         549
      Accounts receivable, net                        52,608      56,399
      Prepaid expenses and other current assets       15,306      10,861
      Deferred tax assets, net                        15,153      12,642
                                                      ------      ------
    Total current assets                             286,803     305,220

    Property and equipment, net                       58,945      54,906
    Capitalized software development costs,
     net                                              12,407      13,431
    Deposits and other assets                          3,974       3,283
    Deferred tax assets, net                           3,151       6,490
                                                       -----       -----
    Total Assets                                    $365,280    $383,330
                                                    ========    ========

    Liabilities and Stockholders' Equity
    Current liabilities
      Accounts payable and accrued expenses          $27,370     $28,460
      Accrued compensation and employee benefits      39,225      46,277
      Deferred revenue and advance payments           86,149      77,783
      Deferred tax liabilities                           201         115
                                                         ---         ---
    Total current liabilities                        152,945     152,635

    Deferred revenue and advance payments              3,708       3,845
    Other long-term liabilities                       19,344      12,622
                                                      ------      ------

    Total Liabilities                                175,997     169,102
                                                     -------     -------

    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;
       14,307 shares issued and 8,722 shares
        outstanding, and 14,302 shares
       issued and 9,255 shares outstanding,
        respectively                                      14          14
      Class B common stock, $0.001 par value;
       165,000 shares authorized;
        2,694 shares issued and outstanding                3           3
      Additional paid-in capital                     453,299     453,170
      Treasury stock, at cost; 5,585 and 5,047
       shares, respectively                         (407,865)   (366,191)
      Accumulated other comprehensive (loss)
       income                                         (1,315)        604
    Retained earnings                                145,147     126,628
    Total Stockholders' Equity                       189,283     214,228
                                                     -------     -------
    Total Liabilities and Stockholders' Equity      $365,280    $383,330
                                                    ========    ========


                             MICROSTRATEGY INCORPORATED
                       CONSOLIDATED STATEMENTS OF CASH FLOWS
                                   (in thousands)
                                    (unaudited)

                                                      Six Months Ended
                                                          June 30,
                                                          --------
                                                      2010          2009
                                                      ----          ----

    Operating activities:
      Net income                                   $18,519       $32,942
      Less:  Income from discontinued
       operations, net                                   -      (14,330)
                                                       ---       -------
          Income from continuing operations         18,519        18,612
      Adjustments to reconcile net income to
       net cash provided by operating
       activities:
        Depreciation and amortization                6,119         4,761
        Bad debt expense                             1,648           484
        Deferred taxes                                 776         7,917
        Excess tax benefits from stock-based
         payment arrangements                          (12)            -
        Other, net                                      16            (9)
      Changes in operating assets and
       liabilities:
        Accounts receivable                           (402)        6,485
        Prepaid expenses and other current
         assets                                     (5,727)        1,495
        Deposits and other assets                     (882)          137
        Accounts payable and accrued expenses       (2,564)       (5,319)
        Accrued compensation and employee
         benefits                                   (5,439)     (10,458)
        Deferred revenue and advance payments       12,606         9,692
        Other long-term liabilities                  6,724           464
                                                     -----           ---
          Net cash provided by operating
           activities from continuing operations    31,382        34,261
          Net cash used in operating activities
           from discontinued operations                  -          (472)
                                                       ---          ----
              Net cash provided by operating
               activities                           31,382        33,789
                                                    ------        ------
    Investing activities:
      Purchases of property and equipment           (4,307)       (1,362)
      Capitalized software development costs        (2,185)       (4,218)
      Decrease in restricted cash and
       investments                                     223           238
                                                       ---           ---
          Net cash used in investing activities
           from continuing operations               (6,269)       (5,342)
          Net cash provided by investing
           activities from discontinued
           operations                                    -        24,546
                                                       ---        ------
               Net cash (used in) provided by
                investing activities                (6,269)       19,204
                                                    ------        ------
    Financing activities:
      Proceeds from sale of class A common
       stock under exercise of employee stock
       options                                         111           261
      Excess tax benefits from stock-based
       payment arrangements                             12             -
      Purchases of treasury stock                 (41,674)             -
      Distribution to Alarm.com minority
       shareholders                                      -           (60)
                                                       ---           ---
          Net cash (used in) provided by
           financing activities from continuing
           operations                             (41,551)           201
          Net cash provided by financing
           activities from discontinued
           operations                                    -             -
                                                       ---           ---
              Net cash (used in) provided by
               financing activities               (41,551)           201
          Effect of foreign exchange rate changes
           on cash and cash equivalents             (5,649)           58
                                                    ------           ---
    Net (decrease) increase in cash and
     cash equivalents                             (22,087)        53,252
    Cash and cash equivalents, beginning of
     period                                        224,769       122,915
                                                   -------       -------
    Cash and cash equivalents, end of
     period                                       $202,682      $176,167
                                                  ========      ========



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


SOURCE MicroStrategy Incorporated

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