MicroStrategy Announces Second Quarter 2020 Financial Results

July 28, 2020

TYSONS CORNER, Va.--(BUSINESS WIRE)--Jul. 28, 2020-- MicroStrategy® (Nasdaq: MSTR), the largest independent publicly-traded business intelligence company, today announced financial results for the three-month period ended June 30, 2020 (the second quarter of its 2020 fiscal year).

“MicroStrategy’s second quarter results were solid in the context of the challenging global economic environment and highlighted by double-digit subscription services revenue growth and significant improvements in profitability. We are encouraged by the adoption of the MicroStrategy Cloud and HyperIntelligence® as customers look for the best way to make fast, data-driven decisions,” said Michael J. Saylor, CEO, MicroStrategy Incorporated.

“We continue to make significant progress streamlining our cost structure and improving our operating efficiency. We now believe we are in a position to drive consistent and meaningful profitability going forward while also continuing to invest in revenue growth. This has given us the confidence to more actively utilize our strong balance sheet, which together with our improved operational performance provides multiple opportunities to generate substantial long-term value for our shareholders,” continued Mr. Saylor.

Capital Allocation Strategy

MicroStrategy today announced a new capital allocation strategy. With more than $500 million in cash and cash equivalents and short-term investments and an operating plan that anticipates generating material free cash flow going forward, MicroStrategy intends to return up to $250 million to its shareholders over the next 12 months. In addition, under this capital allocation strategy, MicroStrategy will seek to invest up to another $250 million over the next 12 months in one or more alternative investments or assets, which may include stocks, bonds, commodities such as gold, digital assets such as bitcoin, or other asset types. Both of these strategies will depend on market conditions.

Phong Le, President & CFO, MicroStrategy Incorporated, said, “MicroStrategy is announcing a capital allocation strategy that reflects a new direction in its commitment to capital stewardship. We believe the business will be able to generate material excess cash going forward and are confident that we can manage our day-to-day business and achieve reasonable growth objectives with approximately $50 million of operating cash. Accordingly, we believe it is appropriate to return a portion of this excess cash to our shareholders and invest a portion in assets with potentially higher returns than holding cash.”

Second Quarter 2020 Financial Highlights

  • Revenues: Total revenues for the second quarter of 2020 were $110.6 million, a 6.1% decrease, or a 4.3% decrease on a non-GAAP constant currency basis, compared to the second quarter of 2019. Product licenses and subscription services revenues for the second quarter of 2020 were $22.8 million, a 16.1% decrease, or a 13.5% decrease on a non-GAAP constant currency basis, compared to the second quarter of 2019. Product support revenues for the second quarter of 2020 were $70.0 million, a 4.0% decrease, or a 2.4% decrease on a non-GAAP constant currency basis, compared to the second quarter of 2019. Other services revenues for the second quarter of 2020 were $17.7 million, a 1.0% increase, or a 2.4% increase on a non-GAAP constant currency basis, compared to the second quarter of 2019.
  • Gross Profit: Gross profit for the second quarter of 2020 was $86.6 million, representing a 78.3% gross margin, compared to a gross margin of 78.5% in the second quarter of 2019.
  • Operating Expenses: Operating expenses for the second quarter of 2020 were $80.3 million, a 17.4% decrease compared to the second quarter of 2019.
  • Income from Operations: Income from operations for the second quarter of 2020 was $6.3 million versus loss from operations of $4.8 million for the second quarter of 2019. Non-GAAP income from operations, which excludes share-based compensation expense, was $8.6 million for the second quarter of 2020 versus non-GAAP loss from operations of $1.8 million for the second quarter of 2019.
  • Net Income: Net income for the second quarter of 2020 was $3.4 million, or $0.35 per share on a diluted basis, as compared to net income of $20.4 million, or $1.98 per share on a diluted basis, for the second quarter of 2019. In the second quarter of 2019, MicroStrategy completed the sale of its Voice.com domain name for a gain of $21.8 million, net of tax (the “Domain Name Sale”). Excluding the impact of the Domain Name Sale, non-GAAP net loss for the second quarter of 2019 was $1.4 million, or $0.14 per share on a diluted basis.
  • Cash and Short-term Investments: As of June 30, 2020, MicroStrategy had cash and cash equivalents and short-term investments of $530.9 million, as compared to $565.6 million as of December 31, 2019, a decrease of $34.8 million. During the second quarter of 2020, MicroStrategy repurchased 90,136 shares of its class A common stock for an aggregate purchase price of approximately $11.1 million. As of June 30, 2020, MicroStrategy had 7.7 million shares of class A common stock and 2.0 million shares of class B common stock outstanding.

The tables at the end of this press release include a reconciliation of GAAP to non-GAAP financial measures for the three and six months ended June 30, 2020 and 2019. An explanation of non-GAAP financial measures is also included under the heading “Non-GAAP Financial Measures” below. Additional non-GAAP financial measures are included in our “2Q 2020 Financial Results” presentation, which will be available under the “Events” section on MicroStrategy’s investor relations website at https://ir.microstrategy.com/events-presentations.

MicroStrategy uses its Intelligent Enterprise platform across the enterprise and has created an interactive dossier with quarterly financial performance data. Anyone can access the MSTR Financials dossier via a web browser, or by downloading the MicroStrategy Library app on an iOS or Android device. To download the native apps, visit MicroStrategy Library for iPad, MicroStrategy Library for iPhone, or MicroStrategy Library for Android tablet and smartphone.

Recent Business Highlights

The following are some key business highlights from the second quarter of 2020:

  • Numerous leading organizations, such as the Industrial and Commercial Bank of China, SEVEN-ELEVEN JAPAN CO., LTD., and Dubai Health Authority, purchased HyperIntelligence.
  • MicroStrategy 2020 Update 1 provided modern, consumer-grade experiences to every role across the enterprise, improving usability of multiple workflows such as dossier authoring, exporting, mobile linking, and more.
  • MicroStrategy 2020 Update 2 delivered new capabilities for business users, analysts, and architects via a new MicroStrategy application, enhancements to Dossier® and HyperIntelligence, and improvements to data connectors and Workstation.
  • MicroStrategy introduced Expert.Now, a new service for its customers and partners to connect immediately and face-to-face with MicroStrategy’s best and brightest experts. Subscribers in need of instant help or advice can connect with MicroStrategy’s team of analysts, architects, developers, and data scientists to build reports or dossiers, design HyperIntelligence cards or mobile apps, integrate new data sources, upgrade their platform, migrate to the cloud, or receive general support.

Conference Call

MicroStrategy will be discussing its second quarter 2020 financial results on a conference call today beginning at approximately 5:00 p.m. EDT. To access the conference call, dial (844) 824-7425 (domestically) or (716) 220-9429 (internationally) and use conference ID 7154964. A live and archived webcast and accompanying presentation materials will be available under the “Events” section on MicroStrategy’s investor relations website at https://ir.microstrategy.com/events-presentations. A replay of the conference call will be available beginning approximately two hours after the call concludes until August 4, 2020 at (855) 859-2056 (domestically) or (404) 537-3406 (internationally) using the passcode 7154964.

Non-GAAP Financial Measures

MicroStrategy is providing supplemental financial measures for (i) non-GAAP income (loss) from operations that excludes the impact of share-based compensation arrangements, (ii) non-GAAP net income (loss) and non-GAAP diluted earnings (loss) per share that exclude the impact from the Domain Name Sale in the second quarter of 2019, and (iii) non-GAAP constant currency revenues that exclude foreign currency exchange rate fluctuations. These supplemental financial measures are not measurements of financial performance under generally accepted accounting principles in the United States (“GAAP”) and, as a result, these supplemental financial measures may not be comparable to similarly titled measures of other companies. Management uses these non-GAAP financial measures internally to help understand, manage, and evaluate business performance and to help make operating decisions.

MicroStrategy believes that these non-GAAP financial measures are also useful to investors and analysts in comparing its performance across reporting periods on a consistent basis. The first supplemental financial measure excludes a significant non-cash expense that MicroStrategy believes is not reflective of its general business performance, and for which the accounting requires management judgment and the resulting share-based compensation expense could vary significantly in comparison to other companies. The second set of supplemental financial measures excludes the impact from the Domain Name Sale, which is outside of our normal business operations. The third set of supplemental financial measures excludes changes resulting from fluctuations in foreign currency exchange rates so that results may be compared to the same period in the prior year on a non-GAAP constant currency basis. MicroStrategy believes the use of these non-GAAP financial measures can also facilitate comparison of MicroStrategy’s operating results to those of its competitors.

About MicroStrategy Incorporated 

MicroStrategy (Nasdaq: MSTR) is the largest independent publicly-traded business intelligence company, with the leading enterprise analytics platform. Our vision is to enable Intelligence Everywhere. MicroStrategy provides modern analytics on an open, comprehensive enterprise platform used by many of the world’s most admired brands in the Fortune Global 500. Optimized for cloud and on-premises deployments, the platform features HyperIntelligence, a breakthrough technology that overlays actionable enterprise data on popular business applications to help users make smarter, faster decisions. For more information about MicroStrategy, visit www.microstrategy.com.

MicroStrategy, MicroStrategy Cloud, HyperIntelligence, Intelligent Enterprise, MicroStrategy Library, MicroStrategy 2020, Dossier, and Intelligence Everywhere 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 market acceptance of MicroStrategy’s new offerings, including MicroStrategy 2020; impacts of the COVID-19 pandemic; 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; fluctuations in tax benefits or provisions; the timing of significant orders; delays in or the inability of the Company to develop or ship new products; customers shifting from a product license model to a cloud subscription model; competitive factors; general economic conditions; currency fluctuations; and other risks detailed in the Company’s registration statements and periodic reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to update these forward-looking 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

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses

 

$

14,816

 

 

$

20,121

 

 

$

27,400

 

 

$

38,412

 

Subscription services

 

 

8,021

 

 

 

7,104

 

 

 

15,989

 

 

 

14,248

 

Total product licenses and subscription services

 

 

22,837

 

 

 

27,225

 

 

 

43,389

 

 

 

52,660

 

Product support

 

 

70,038

 

 

 

72,978

 

 

 

141,196

 

 

 

144,428

 

Other services

 

 

17,709

 

 

 

17,534

 

 

 

37,423

 

 

 

36,015

 

Total revenues

 

 

110,584

 

 

 

117,737

 

 

 

222,008

 

 

 

233,103

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses

 

 

514

 

 

 

552

 

 

 

1,184

 

 

 

1,071

 

Subscription services

 

 

3,792

 

 

 

3,489

 

 

 

7,856

 

 

 

7,087

 

Total product licenses and subscription services

 

 

4,306

 

 

 

4,041

 

 

 

9,040

 

 

 

8,158

 

Product support

 

 

6,837

 

 

 

7,721

 

 

 

13,555

 

 

 

14,788

 

Other services

 

 

12,846

 

 

 

13,588

 

 

 

25,939

 

 

 

28,577

 

Total cost of revenues

 

 

23,989

 

 

 

25,350

 

 

 

48,534

 

 

 

51,523

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

86,595

 

 

 

92,387

 

 

 

173,474

 

 

 

181,580

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

34,951

 

 

 

48,273

 

 

 

74,469

 

 

 

97,033

 

Research and development

 

 

25,867

 

 

 

27,764

 

 

 

51,968

 

 

 

55,979

 

General and administrative

 

 

19,449

 

 

 

21,180

 

 

 

40,781

 

 

 

43,784

 

Total operating expenses

 

 

80,267

 

 

 

97,217

 

 

 

167,218

 

 

 

196,796

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

 

6,328

 

 

 

(4,830

)

 

 

6,256

 

 

 

(15,216

)

Interest income, net

 

 

563

 

 

 

3,013

 

 

 

2,418

 

 

 

5,579

 

Other (expense) income, net

 

 

(1,995

)

 

 

29,431

 

 

 

(1,561

)

 

 

28,835

 

Income before income taxes

 

 

4,896

 

 

 

27,614

 

 

 

7,113

 

 

 

19,198

 

Provision for income taxes

 

 

1,509

 

 

 

7,220

 

 

 

3,069

 

 

 

6,710

 

Net income

 

$

3,387

 

 

$

20,394

 

 

$

4,044

 

 

$

12,488

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share (1):

 

$

0.35

 

 

$

1.99

 

 

$

0.41

 

 

$

1.21

 

Weighted average shares outstanding used in computing basic earnings per share

 

 

9,739

 

 

 

10,240

 

 

 

9,858

 

 

 

10,283

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share (1):

 

$

0.35

 

 

$

1.98

 

 

$

0.41

 

 

$

1.21

 

Weighted average shares outstanding used in computing diluted earnings per share

 

 

9,741

 

 

 

10,310

 

 

 

9,886

 

 

 

10,350

 

(1)

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

MICROSTRATEGY INCORPORATED

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

 

 

 

June 30,

 

 

December 31,

 

 

 

2020

 

 

2019*

 

 

 

(unaudited)

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

420,899

 

 

$

456,727

 

Restricted cash

 

 

1,221

 

 

 

1,089

 

Short-term investments

 

 

109,972

 

 

 

108,919

 

Accounts receivable, net

 

 

123,794

 

 

 

163,516

 

Prepaid expenses and other current assets

 

 

16,887

 

 

 

23,195

 

Total current assets

 

 

672,773

 

 

 

753,446

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

45,300

 

 

 

50,154

 

Right-of-use assets

 

 

81,543

 

 

 

85,538

 

Deposits and other assets

 

 

14,596

 

 

 

8,024

 

Deferred tax assets, net

 

 

18,834

 

 

 

19,409

 

Total Assets

 

$

833,046

 

 

$

916,571

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable, accrued expenses, and operating lease liabilities

 

$

31,468

 

 

$

33,919

 

Accrued compensation and employee benefits

 

 

40,806

 

 

 

48,792

 

Deferred revenue and advance payments

 

 

167,643

 

 

 

187,107

 

Total current liabilities

 

 

239,917

 

 

 

269,818

 

 

 

 

 

 

 

 

 

 

Deferred revenue and advance payments

 

 

5,910

 

 

 

4,344

 

Operating lease liabilities

 

 

98,283

 

 

 

103,424

 

Other long-term liabilities

 

 

30,452

 

 

 

30,400

 

Deferred tax liabilities

 

 

24

 

 

 

26

 

Total Liabilities

 

 

374,586

 

 

 

408,012

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

 

 

 

Preferred stock undesignated, $0.001 par value; 5,000 shares authorized; no shares issued or outstanding

 

 

0

 

 

 

0

 

Class A common stock, $0.001 par value; 330,000 shares authorized; 15,903 shares issued and 7,651 shares outstanding, and 15,888 shares issued and 8,081 shares outstanding, respectively

 

 

16

 

 

 

16

 

Class B convertible common stock, $0.001 par value; 165,000 shares authorized; 2,035 shares issued and outstanding, and 2,035 shares issued and outstanding, respectively

 

 

2

 

 

 

2

 

Additional paid-in capital

 

 

600,851

 

 

 

593,583

 

Treasury stock, at cost; 8,252 shares and 7,807 shares, respectively

 

 

(720,755

)

 

 

(658,880

)

Accumulated other comprehensive loss

 

 

(9,187

)

 

 

(9,651

)

Retained earnings

 

 

587,533

 

 

 

583,489

 

Total Stockholders’ Equity

 

 

458,460

 

 

 

508,559

 

Total Liabilities and Stockholders’ Equity

 

$

833,046

 

 

$

916,571

 

*

Derived from audited financial statements.

MICROSTRATEGY INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

 

(unaudited)

 

 

(unaudited)

 

Operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

4,044

 

 

$

12,488

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

5,828

 

 

 

3,623

 

Reduction in carrying amount of right-of-use assets

 

 

4,085

 

 

 

4,064

 

Credit losses and sales allowances

 

 

990

 

 

 

796

 

Net realized loss on short-term investments

 

 

0

 

 

 

41

 

Deferred taxes

 

 

273

 

 

 

(3,219

)

Share-based compensation expense

 

 

5,337

 

 

 

6,053

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

21,022

 

 

 

5,985

 

Prepaid expenses and other current assets

 

 

(493

)

 

 

7,089

 

Deposits and other assets

 

 

195

 

 

 

96

 

Accounts payable and accrued expenses

 

 

(1,823

)

 

 

(8,396

)

Accrued compensation and employee benefits

 

 

(8,708

)

 

 

(8,082

)

Deferred revenue and advance payments

 

 

347

 

 

 

33,489

 

Operating lease liabilities

 

 

(4,662

)

 

 

(4,316

)

Other long-term liabilities

 

 

86

 

 

 

(509

)

Net cash provided by operating activities

 

 

26,521

 

 

 

49,202

 

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

 

Proceeds from redemption of short-term investments

 

 

10,000

 

 

 

369,603

 

Purchases of property and equipment

 

 

(1,162

)

 

 

(8,432

)

Purchases of short-term investments

 

 

(9,928

)

 

 

(212,248

)

Net cash (used in) provided by investing activities

 

 

(1,090

)

 

 

148,923

 

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

Proceeds from sale of class A common stock under exercise of employee stock options

 

 

1,902

 

 

 

1,836

 

Purchases of treasury stock

 

 

(61,875

)

 

 

(48,244

)

Net cash used in financing activities

 

 

(59,973

)

 

 

(46,408

)

 

 

 

 

 

 

 

 

 

Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash

 

 

(1,154

)

 

 

33

 

Net (decrease) increase in cash, cash equivalents, and restricted cash

 

 

(35,696

)

 

 

151,750

 

Cash, cash equivalents, and restricted cash, beginning of period

 

 

457,816

 

 

 

110,786

 

Cash, cash equivalents, and restricted cash, end of period

 

$

422,120

 

 

$

262,536

 

MICROSTRATEGY INCORPORATED

REVENUE AND COST OF REVENUE DETAIL

(in thousands)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses and subscription services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses

 

$

14,816

 

 

$

20,121

 

 

$

27,400

 

 

$

38,412

 

Subscription services

 

 

8,021

 

 

 

7,104

 

 

 

15,989

 

 

 

14,248

 

Total product licenses and subscription services

 

 

22,837

 

 

 

27,225

 

 

 

43,389

 

 

 

52,660

 

Product support

 

 

70,038

 

 

 

72,978

 

 

 

141,196

 

 

 

144,428

 

Other services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consulting

 

 

16,578

 

 

 

15,494

 

 

 

35,019

 

 

 

32,097

 

Education

 

 

1,131

 

 

 

2,040

 

 

 

2,404

 

 

 

3,918

 

Total other services

 

 

17,709

 

 

 

17,534

 

 

 

37,423

 

 

 

36,015

 

Total revenues

 

 

110,584

 

 

 

117,737

 

 

 

222,008

 

 

 

233,103

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses and subscription services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses

 

 

514

 

 

 

552

 

 

 

1,184

 

 

 

1,071

 

Subscription services

 

 

3,792

 

 

 

3,489

 

 

 

7,856

 

 

 

7,087

 

Total product licenses and subscription services

 

 

4,306

 

 

 

4,041

 

 

 

9,040

 

 

 

8,158

 

Product support

 

 

6,837

 

 

 

7,721

 

 

 

13,555

 

 

 

14,788

 

Other services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consulting

 

 

10,168

 

 

 

11,909

 

 

 

21,596

 

 

 

24,894

 

Education

 

 

2,678

 

 

 

1,679

 

 

 

4,343

 

 

 

3,683

 

Total other services

 

 

12,846

 

 

 

13,588

 

 

 

25,939

 

 

 

28,577

 

Total cost of revenues

 

 

23,989

 

 

 

25,350

 

 

 

48,534

 

 

 

51,523

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

$

86,595

 

 

$

92,387

 

 

$

173,474

 

 

$

181,580

 

MICROSTRATEGY INCORPORATED

DEFERRED REVENUE DETAIL

(in thousands)

 

 

June 30,

 

 

December 31,

 

 

June 30,

 

 

 

2020

 

 

2019*

 

 

2019

 

 

 

(unaudited)

 

 

 

 

 

 

(unaudited)

 

Current:

 

 

 

 

 

 

 

 

 

 

 

 

Deferred product licenses revenue

 

$

100

 

 

$

481

 

 

$

633

 

Deferred subscription services revenue

 

 

17,934

 

 

 

16,561

 

 

 

15,393

 

Deferred product support revenue

 

 

142,543

 

 

 

161,670

 

 

 

152,866

 

Deferred other services revenue

 

 

7,066

 

 

 

8,395

 

 

 

7,894

 

Total current deferred revenue and advance payments

 

$

167,643

 

 

$

187,107

 

 

$

176,786

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-current:

 

 

 

 

 

 

 

 

 

 

 

 

Deferred product licenses revenue

 

$

168

 

 

$

293

 

 

$

405

 

Deferred subscription services revenue

 

 

90

 

 

 

97

 

 

 

116

 

Deferred product support revenue

 

 

5,152

 

 

 

3,417

 

 

 

3,083

 

Deferred other services revenue

 

 

500

 

 

 

537

 

 

 

571

 

Total non-current deferred revenue and advance payments

 

$

5,910

 

 

$

4,344

 

 

$

4,175

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total current and non-current:

 

 

 

 

 

 

 

 

 

 

 

 

Deferred product licenses revenue

 

$

268

 

 

$

774

 

 

$

1,038

 

Deferred subscription services revenue

 

 

18,024

 

 

 

16,658

 

 

 

15,509

 

Deferred product support revenue

 

 

147,695

 

 

 

165,087

 

 

 

155,949

 

Deferred other services revenue

 

 

7,566

 

 

 

8,932

 

 

 

8,465

 

Total current and non-current deferred revenue and advance payments

 

$

173,553

 

 

$

191,451

 

 

$

180,961

 

*

Derived from audited financial statements.

MICROSTRATEGY INCORPORATED

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

EXCLUSION OF SHARE-BASED COMPENSATION EXPENSE

(in thousands)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Reconciliation of non-GAAP income (loss) from operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

$

6,328

 

 

$

(4,830

)

 

$

6,256

 

 

$

(15,216

)

Share-based compensation expense

 

 

2,226

 

 

 

3,036

 

 

 

5,337

 

 

 

6,053

 

Non-GAAP income (loss) from operations

 

$

8,554

 

 

$

(1,794

)

 

$

11,593

 

 

$

(9,163

)

MICROSTRATEGY INCORPORATED

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

EXCLUSION OF DOMAIN NAME SALE

(in thousands, except per share data)

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2020

 

 

2019

 

 

2020

 

 

2019

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Reconciliation of non-GAAP net income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

3,387

 

 

$

20,394

 

 

$

4,044

 

 

$

12,488

 

Gain from Domain Name Sale, net of tax

 

 

0

 

 

 

(21,778

)

 

 

0

 

 

 

(21,778

)

Non-GAAP net income (loss)

 

$

3,387

 

 

$

(1,384

)

 

$

4,044

 

 

$

(9,290

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of non-GAAP diluted earnings (loss) per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

$

0.35

 

 

$

1.98

 

 

$

0.41

 

 

$

1.21

 

Gain from Domain Name Sale, net of tax (per diluted share)

 

 

0.00

 

 

 

(2.12

)

 

 

0.00

 

 

 

(2.11

)

Non-GAAP diluted earnings (loss) per share

 

$

0.35

 

 

$

(0.14

)

 

$

0.41

 

 

$

(0.90

)

MICROSTRATEGY INCORPORATED

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

CONSTANT CURRENCY

(in thousands)

 

 

 

Three Months Ended

 

 

 

June 30,

 

 

 

(unaudited)

 

 

 

GAAP

 

 

Foreign
Currency
Exchange
Rate Impact (1)

 

 

Non-GAAP
Constant
Currency (2)

 

 

GAAP

 

 

GAAP %
Change

 

 

Non-GAAP
Constant
Currency
% Change (3)

 

 

 

2020

 

 

2020

 

 

2020

 

 

2019

 

 

2020

 

 

2020

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses

 

$

14,816

 

 

$

(655

)

 

$

15,471

 

 

$

20,121

 

 

 

-26.4

%

 

 

-23.1

%

Subscription services

 

 

8,021

 

 

 

(46

)

 

 

8,067

 

 

 

7,104

 

 

 

12.9

%

 

 

13.6

%

Total product licenses and subscription services

 

 

22,837

 

 

 

(701

)

 

 

23,538

 

 

 

27,225

 

 

 

-16.1

%

 

 

-13.5

%

Product support

 

 

70,038

 

 

 

(1,165

)

 

 

71,203

 

 

 

72,978

 

 

 

-4.0

%

 

 

-2.4

%

Other services

 

 

17,709

 

 

 

(243

)

 

 

17,952

 

 

 

17,534

 

 

 

1.0

%

 

 

2.4

%

Total revenues

 

 

110,584

 

 

 

(2,109

)

 

 

112,693

 

 

 

117,737

 

 

 

-6.1

%

 

 

-4.3

%

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

(unaudited)

 

 

 

GAAP

 

 

Foreign
Currency
Exchange
Rate Impact (1)

 

 

Non-GAAP
Constant
Currency (2)

 

 

GAAP

 

 

GAAP %
Change

 

 

Non-GAAP
Constant
Currency
% Change (3)

 

 

 

2020

 

 

2020

 

 

2020

 

 

2019

 

 

2020

 

 

2020

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses

 

$

27,400

 

 

$

(1,196

)

 

$

28,596

 

 

$

38,412

 

 

 

-28.7

%

 

 

-25.6

%

Subscription services

 

 

15,989

 

 

 

(82

)

 

 

16,071

 

 

 

14,248

 

 

 

12.2

%

 

 

12.8

%

Total product licenses and subscription services

 

 

43,389

 

 

 

(1,278

)

 

 

44,667

 

 

 

52,660

 

 

 

-17.6

%

 

 

-15.2

%

Product support

 

 

141,196

 

 

 

(2,341

)

 

 

143,537

 

 

 

144,428

 

 

 

-2.2

%

 

 

-0.6

%

Other services

 

 

37,423

 

 

 

(498

)

 

 

37,921

 

 

 

36,015

 

 

 

3.9

%

 

 

5.3

%

Total revenues

 

 

222,008

 

 

 

(4,117

)

 

 

226,125

 

 

 

233,103

 

 

 

-4.8

%

 

 

-3.0

%

 (1)  

The “Foreign Currency Exchange Rate Impact” reflects the estimated impact from fluctuations in foreign currency exchange rates on international revenues. It shows the increase (decrease) in international revenues from the same period in the prior year, based on comparisons to the prior year quarterly average foreign currency exchange rates. The term “international” refers to operations outside of the United States and Canada.

   

 

 (2)  

The “Non-GAAP Constant Currency” reflects the current period GAAP amount, less the Foreign Currency Exchange Rate Impact.

   

 

 (3)  

The “Non-GAAP Constant Currency % Change” reflects the percentage change between the current period Non-GAAP Constant Currency amount and the GAAP amount for the same period in the prior year.

MICROSTRATEGY INCORPORATED

WORLDWIDE EMPLOYEE HEADCOUNT

 

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

 

2020

 

 

2020

 

 

2019

 

 

2019

 

 

2019

 

Subscription services

 

 

64

 

 

 

63

 

 

 

69

 

 

 

66

 

 

 

62

 

Product support

 

 

189

 

 

 

204

 

 

 

219

 

 

 

231

 

 

 

234

 

Consulting

 

 

421

 

 

 

425

 

 

 

392

 

 

 

390

 

 

 

404

 

Education

 

 

43

 

 

 

42

 

 

 

38

 

 

 

38

 

 

 

40

 

Sales and marketing

 

 

573

 

 

 

594

 

 

 

597

 

 

 

616

 

 

 

637

 

Research and development

 

 

684

 

 

 

721

 

 

 

743

 

 

 

775

 

 

 

764

 

General and administrative

 

 

285

 

 

 

314

 

 

 

338

 

 

 

337

 

 

 

336

 

Total headcount

 

 

2,259

 

 

 

2,363

 

 

 

2,396

 

 

 

2,453

 

 

 

2,477

 

 

MicroStrategy Incorporated
Michael Bizovi
ir@microstrategy.com
(703) 848-8600

Source: MicroStrategy Incorporated