8-K

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8 -K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): January 29, 2019

 

 

MICROSTRATEGY INCORPORATED

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   0-24435   51-0323571

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

 

1850 Towers Crescent Plaza

Tysons Corner, Virginia

  22182
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: (703) 848-8600

 

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

 

 

Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

 

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

 

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

 

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company  ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

 

 

 


Item 2.02.

Results of Operations and Financial Condition.

On January 29, 2019, MicroStrategy Incorporated (the “Company”) issued a press release announcing the Company’s financial results for the quarter ended December 31, 2018. A copy of this press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

The information disclosed pursuant to Item 2.02 in this Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth by specific reference in such a filing.

 

Item 9.01.

Financial Statements and Exhibits.

(d) Exhibits

 

Exhibit No.   

Description

99.1    Press release, dated January 29, 2019, regarding the Company’s financial results for the quarter ended December 31, 2018


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: January 29, 2019    

MicroStrategy Incorporated

            (Registrant)

    By:   /s/ Phong Le
    Name:   Phong Le
    Title:   Senior Executive Vice President, Chief Operating Officer & Chief Financial Officer
EX-99.1

Exhibit 99.1

Contact:

MicroStrategy Incorporated

Investor Relations

ir@microstrategy.com

(703) 848-8600

MicroStrategy Announces

Fourth Quarter 2018 Financial Results

TYSONS CORNER, Va., January 29, 2019 - MicroStrategy® Incorporated (Nasdaq: MSTR), a leading worldwide provider of enterprise analytics and mobility software, today announced financial results for the three-month period ended December 31, 2018 (the fourth quarter of its 2018 fiscal year).

MicroStrategy adopted Accounting Standards Update No. 2014-09, Revenue from Contracts with Customers (Topic 606) and its subsequent amendments (“ASU 2014-09”), effective January 1, 2018, and has adjusted its prior period consolidated financial statements to reflect full retrospective adoption.

Fourth quarter 2018 revenues were $131.9 million versus $136.4 million for the fourth quarter of 2017, a 3.3% decrease. Product licenses and subscription services revenues for the fourth quarter of 2018 were $38.3 million versus $39.1 million for the fourth quarter of 2017, a 2.0% decrease. Product support revenues for the fourth quarter of 2018 were $73.7 million versus $75.0 million for the fourth quarter of 2017, a 1.8% decrease. Other services revenues for the fourth quarter of 2018 were $20.0 million versus $22.3 million for the fourth quarter of 2017, a 10.5% decrease. Foreign currency effects had an unfavorable impact on revenues for the fourth quarter of 2018.

Operating expenses for the fourth quarter of 2018 were $108.2 million versus $94.5 million for the fourth quarter of 2017, a 14.5% increase, reflecting MicroStrategy’s previously announced strategy to seek to take greater advantage of the opportunities in the market by increasing its sales and marketing expenditures and increasing its research and development expenditures as it invests in its technology products and personnel.

Loss from operations for the fourth quarter of 2018 was $2.2 million versus income from operations of $17.1 million for the fourth quarter of 2017. Net income for the fourth quarter of 2018 was $3.3 million, or $0.30 per share on a diluted basis, as compared to net loss of $25.5 million, or $2.23 per share on a diluted basis, for the fourth quarter of 2017. The net loss in the fourth quarter of 2017 included an estimated one-time tax charge of $44.0 million resulting from the enactment of U.S. corporate tax reform legislation. Excluding the impact of this legislation, non-GAAP net income for the fourth quarter of 2017 was $18.5 million, or $1.62 per share on a diluted basis.

Additionally, non-GAAP income from operations, which excludes share-based compensation expense, was $1.3 million for the fourth quarter of 2018 versus $20.8 million for the fourth quarter of 2017. The tables at the end of this press release include a reconciliation of GAAP to non-GAAP financial measures for the three months ended December 31, 2018 and 2017. An explanation of non-GAAP financial measures is also included under the heading “Non-GAAP Financial Measures” below.

As of December 31, 2018, MicroStrategy had cash and cash equivalents and short-term investments of $576.1 million, as compared to $675.2 million as of December 31, 2017, a decrease of $99.1 million. As of December 31, 2018, MicroStrategy had 8.6 million shares of class A common stock and 2.0 million shares of class B common stock outstanding. During the fourth quarter of 2018, MicroStrategy repurchased an aggregate of 0.9 million shares of its class A common stock at an average price per share of $126.02 for an aggregate cost of $111.0 million.

MicroStrategy expects to report a material weakness in its internal control over financial reporting as of December 31, 2018 in its upcoming Annual Report on Form 10-K for the year ended December 31, 2018. The material weakness relates to general information technology controls in the areas of user access, program change-management and other matters impacting information technology systems that support MicroStrategy’s financial reporting processes. There have been no misstatements identified in the financial statements as a result of this material weakness and MicroStrategy expects to timely file its Form 10-K. Remediation of this material weakness is expected to be completed prior to the end of fiscal year 2019.


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.

Conference Call

MicroStrategy will be discussing its fourth quarter 2018 financial results on a conference call today beginning at approximately 5:00 p.m. EST. To access the conference call, dial (844) 824-7425 (domestically) or (716) 220-9429 (internationally) and use conference ID 1957548. A live and archived webcast will be available under the “Events” section on MicroStrategy’s investor relations website at http://ir.microstrategy.com/events.cfm. A replay of the conference call will be available beginning approximately two hours after the call concludes until February 5, 2019 at (855) 859-2056 (domestically) or (404) 537-3406 (internationally) using the passcode 1957548.

Recent Business Highlights

 

   

MicroStrategy announced the general availability of MicroStrategy 2019™, the industry’s first and only enterprise platform for HyperIntelligence™, transformational mobility, and federated analytics. On January 7, 2019, Founder, Chairman of the Board, President & CEO Michael J. Saylor and other members of MicroStrategy’s management team rang the Nasdaq opening bell to celebrate the launch of MicroStrategy 2019. MicroStrategy 2019 delivers modern analytics on an enterprise platform that can be deployed on-premises or on multiple private and public cloud platforms. It is designed to make every enterprise a more Intelligent Enterprise by delivering:

 

   

HyperIntelligence. This new category of analytics is designed to transform the way people interact with information and find answers by seamlessly delivering intelligence through zero-click experiences. With the HyperCard™ application, users with Google Chrome can hover over highlighted words on websites and other browser-based applications to instantly bring up relevant, contextual insights. With HyperIntelligence, users can also leverage APIs to design and deploy AI applications that deliver zero-click experiences via voice assistants, image recognition software, and GPS applications.

 

   

Transformational mobility. This category of analytical applications is targeted at the increasingly mobile workforce and delivers more ways for organizations to quickly deploy mobile productivity apps for a variety of business functions and roles. Users can build apps using mobile dossiers, no code drag-and-drop, and customized development using XCode or JavaScript.

 

   

Federated analytics. This mainstream category of analytics is targeted at analysts and data scientists, who enable long-term decision making. Whether it’s with dossiers, dashboards, or predictive models, or reporting for project performance, financial statements, or billing, MicroStrategy 2019 is designed to empower users with trusted analytics. Analysts who access data using Excel, Power BI, Qlik, or Tableau and data scientists who leverage RStudio or Jupyter Notebook can boost their productivity by using the MicroStrategy 2019 platform for trusted, scalable, federated analytics.

At the core of MicroStrategy 2019 is its Enterprise Semantic Graph™. This proprietary metadata foundation delivers a robust business glossary and index for a vast range of corporate information, making it a powerful method to consolidate disparate sources of data and deliver a single version of truth.

Learn more about MicroStrategy 2019 today. MicroStrategy customers on MicroStrategy 2019 platform can get started on HyperIntelligence by downloading the MicroStrategy HyperIntelligence extension at the Chrome Web Store. Customers can provision MicroStrategy 2019 in the cloud with the MicroStrategy for AWS and MicroStrategy for Azure provisioning consoles. A 30-day free trial is available for MicroStrategy 2019 on AWS and Microsoft Azure.


   

MicroStrategy announced that its customer Corporación Hijos de Rivera S.L., producer of Estrella Galicia beer and other leading beverage brands, piloted a new voice-powered business analytics and artificial intelligence (AI) application with Amazon’s customizable virtual assistant, Alexa, to simplify decision-making for its employees. Hijos de Rivera’s Estrella Galicia business created a voice-activated AI application for its users to glean data from its MicroStrategy analytics platform. By implementing Alexa across the business, Estrella Galicia is driving adoption to more decision makers, who can turn to Alexa for a direct pathway to the data they need. Users can more easily discern opportunities to be explored and make data-driven decisions to accelerate productivity and drive out operational inefficiencies.

 

   

MicroStrategy released the results of a Harvard Business Review Analytic Services (HBR-AS) study, “An Inflection Point for the Data-Driven Enterprise”, which polled 729 business leaders and personnel across various industries around the world. The HBR-AS study revealed concerning statistics for data-driven transformation, including that nearly one-third (32%) of respondents indicate that their organizations are still operating on static and backward-looking reporting. While 75% say it’s very important to deliver actionable intelligence to employees across the enterprise – the foundation for an Intelligent Enterprise – less than a quarter (24%) indicate their organizations are able to do so. Download An Inflection Point for the Data-Driven Enterprise today to learn more about these findings.

 

   

MicroStrategy won a NetworkWorld Asia 2018 Readers’ Choice Product Excellence Award in the Data Analytics and Business Intelligence category. MicroStrategy secured the top spot for the only award related to analytics and business intelligence. Readers chose MicroStrategy as the top technology vendor out of 21 business intelligence providers.

MicroStrategy World™ 2019

MicroStrategy will host its 22nd annual enterprise analytics and mobility conference, MicroStrategy World 2019, from February 4 to February 6 at the Phoenix Convention Center in Phoenix, Arizona. Keynote presentations at MicroStrategy World 2019 will take place on Tuesday, February 5, from 9:00 a.m. to 11:00 a.m. (MST) and Wednesday, February 6, from 10:00 a.m. to 12:00 p.m. (MST). Anyone can register to watch the MicroStrategy World 2019 live stream. Join or follow the conversation on Twitter using the hashtag #analytics19.

Non-GAAP Financial Measures

MicroStrategy is providing supplemental financial measures for income from operations that excludes the impact of share-based compensation arrangements and for net income and diluted earnings per share that exclude the impact from the enactment of U.S. corporate tax reform legislation. 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 because in the case of the supplemental measure for income from operations, it excludes a significant non-cash expense that MicroStrategy believes is not reflective of its general business performance, and in the case of the supplemental measures for net income and diluted earnings per share, they exclude one-time tax adjustments related to the enactment of U.S. corporate tax reform legislation. In addition, accounting for share-based compensation arrangements requires significant management judgment and the resulting expense could vary significantly in comparison to other companies. Therefore, 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 a leading worldwide provider of enterprise analytics and mobility software. A pioneer in the BI and analytics space, MicroStrategy delivers a world-class software platform and expert services to enable each of our customers to become a more Intelligent Enterprise. To learn more, visit MicroStrategy online, and follow us on LinkedIn, Twitter and Facebook.


MicroStrategy, Intelligent Enterprise, MicroStrategy Library, MicroStrategy 2019, HyperIntelligence, HyperCard, Enterprise Semantic Graph, and MicroStrategy World 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 2019; 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, including as a result of changes to U.S. federal tax laws; the timing of significant orders; delays in or the inability of the Company to develop or ship new products; competitive factors; general economic conditions, including economic uncertainty in the retail industry, in which the Company has 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. The Company undertakes no obligation to update these forward-looking statements for revisions or changes after the date of this press release.

MSTR-F


MICROSTRATEGY INCORPORATED

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

 

     Three Months Ended     Twelve Months Ended  
     December 31,     December 31,  
     2018     2017     2018     2017  
     (unaudited)     (as adjusted,
unaudited)
    (unaudited)     (as adjusted,
unaudited)
 

Revenues

        

Product licenses

   $ 31,200     $ 30,529     $ 88,057     $ 93,259  

Subscription services

     7,084       8,525       29,570       32,368  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total product licenses and subscription services

     38,284       39,054       117,627       125,627  

Product support

     73,662       75,025       296,216       289,184  

Other services

     19,971       22,302       83,795       89,032  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total revenues

     131,917       136,381       497,638       503,843  
  

 

 

   

 

 

   

 

 

   

 

 

 

Cost of revenues

        

Product licenses

     609       1,994       4,864       7,176  

Subscription services

     3,667       3,404       13,620       13,435  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total product licenses and subscription services

     4,276       5,398       18,484       20,611  

Product support

     5,557       4,387       20,242       17,481  

Other services

     16,052       14,968       60,773       58,557  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total cost of revenues

     25,885       24,753       99,499       96,649  
  

 

 

   

 

 

   

 

 

   

 

 

 

Gross profit

     106,032       111,628       398,139       407,194  
  

 

 

   

 

 

   

 

 

   

 

 

 

Operating expenses

        

Sales and marketing

     57,783       51,832       205,525       175,045  

Research and development

     28,028       21,419       102,499       78,766  

General and administrative

     22,378       21,240       86,134       80,161  
  

 

 

   

 

 

   

 

 

   

 

 

 

Total operating expenses

     108,189       94,491       394,158       333,972  
  

 

 

   

 

 

   

 

 

   

 

 

 

(Loss) income from operations

     (2,157     17,137       3,981       73,222  

Interest income, net

     3,157       1,756       11,855       5,205  

Other income (expense), net

     981       (576     4,646       (6,953
  

 

 

   

 

 

   

 

 

   

 

 

 

Income before income taxes

     1,981       18,317       20,482       71,474  

(Benefit from) provision for income taxes

     (1,320     43,816       (2,019     53,279  
  

 

 

   

 

 

   

 

 

   

 

 

 

Net income (loss)

   $ 3,301     $ (25,499   $ 22,501     $ 18,195  
  

 

 

   

 

 

   

 

 

   

 

 

 

Basic earnings (loss) per share (1):

   $ 0.30     $ (2.23   $ 1.98     $ 1.59  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding used in computing basic earnings (loss) per share

     11,129       11,447       11,375       11,444  
  

 

 

   

 

 

   

 

 

   

 

 

 

Diluted earnings (loss) per share (1):

   $ 0.30     $ (2.23   $ 1.97     $ 1.58  
  

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average shares outstanding used in computing diluted earnings (loss) per share

     11,151       11,447       11,412       11,547  
  

 

 

   

 

 

   

 

 

   

 

 

 

 

(1)

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


MICROSTRATEGY INCORPORATED

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

 

     December 31,     December 31,  
     2018     2017  
     (unaudited)     (as adjusted,
unaudited)
 

Assets

    

Current assets

    

Cash and cash equivalents

   $ 109,924     $ 420,244  

Restricted cash

     862       938  

Short-term investments

     466,186       254,927  

Accounts receivable, net

     171,359       165,364  

Prepaid expenses and other current assets

     30,068       19,180  
  

 

 

   

 

 

 

Total current assets

     778,399       860,653  

Property and equipment, net

     51,919       53,359  

Capitalized software development costs, net

     0       2,499  

Deposits and other assets

     8,134       7,411  

Deferred tax assets, net

     17,316       9,297  
  

 

 

   

 

 

 

Total Assets

   $ 855,768     $ 933,219  
  

 

 

   

 

 

 

Liabilities and Stockholders’ Equity

    

Current liabilities

    

Accounts payable and accrued expenses

   $ 33,684     $ 30,711  

Accrued compensation and employee benefits

     48,045       41,498  

Deferred revenue and advance payments

     176,540       198,734  
  

 

 

   

 

 

 

Total current liabilities

     258,269       270,943  

Deferred revenue and advance payments

     6,469       6,400  

Other long-term liabilities

     61,262       50,146  

Deferred tax liabilities

     37       4  
  

 

 

   

 

 

 

Total Liabilities

     326,037       327,493  
  

 

 

   

 

 

 

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; 15,837 shares issued and 8,552 shares outstanding, and 15,817 shares issued and 9,412 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

     576,957       559,918  

Treasury stock, at cost; 7,285 shares and 6,405 shares, respectively

     (586,161     (475,184

Accumulated other comprehensive loss

     (10,217     (5,659

Retained earnings

     549,134       526,633  
  

 

 

   

 

 

 

Total Stockholders’ Equity

     529,731       605,726  
  

 

 

   

 

 

 

Total Liabilities and Stockholders’ Equity

   $ 855,768     $ 933,219  
  

 

 

   

 

 

 


MICROSTRATEGY INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

     Twelve Months Ended  
     December 31,  
     2018     2017  
     (unaudited)     (as adjusted,
unaudited)
 

Operating activities:

    

Net income

   $ 22,501     $ 18,195  

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

    

Depreciation and amortization

     3,701       15,532  

Bad debt expense

     1,912       2,269  

Net realized loss on short-term investments

     153       0  

Deferred taxes

     (8,274     (3,605

Share-based compensation expense

     14,636       14,267  

Changes in operating assets and liabilities:

    

Accounts receivable

     (8,357     15,348  

Prepaid expenses and other current assets

     (6,561     (4,739

Deposits and other assets

     (1,201     3,029  

Accounts payable and accrued expenses

     3,378       (9,093

Accrued compensation and employee benefits

     5,116       (6,209

Deferred revenue and advance payments

     (22,126     (589

Other long-term liabilities

     5,749       33,917  
  

 

 

   

 

 

 

Net cash provided by operating activities

     10,627       78,322  
  

 

 

   

 

 

 

Investing activities:

    

Proceeds from redemption of short-term investments

     491,800       390,720  

Purchases of property and equipment

     (6,846     (3,982

Purchases of short-term investments

     (694,018     (456,468
  

 

 

   

 

 

 

Net cash used in investing activities

     (209,064     (69,730
  

 

 

   

 

 

 

Financing activities:

    

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

     2,471       1,677  

Purchases of treasury stock

     (110,977     0  

Payments on capital lease obligations and other financing arrangements

     (9     (21
  

 

 

   

 

 

 

Net cash (used in) provided by financing activities

     (108,515     1,656  
  

 

 

   

 

 

 

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

     (3,444     8,222  
  

 

 

   

 

 

 

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

     (310,396     18,470  

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

     421,182       402,712  
  

 

 

   

 

 

 

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

   $ 110,786     $ 421,182  
  

 

 

   

 

 

 


MICROSTRATEGY INCORPORATED

REVENUE AND COST OF REVENUE DETAIL

(in thousands)

 

     Three Months Ended      Twelve Months Ended  
     December 31,      December 31,  
     2018      2017      2018      2017  
     (unaudited)      (as adjusted,
unaudited)
     (unaudited)      (as adjusted,
unaudited)
 

Revenues

           

Product licenses and subscription services:

           

Product licenses

   $ 31,200      $ 30,529      $ 88,057      $ 93,259  

Subscription services

     7,084        8,525        29,570        32,368  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total product licenses and subscription services

     38,284        39,054        117,627        125,627  
  

 

 

    

 

 

    

 

 

    

 

 

 

Product support

     73,662        75,025        296,216        289,184  

Other services:

           

Consulting

     17,611        20,336        74,609        79,818  

Education

     2,360        1,966        9,186        9,214  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total other services

     19,971        22,302        83,795        89,032  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total revenues

     131,917        136,381        497,638        503,843  
  

 

 

    

 

 

    

 

 

    

 

 

 

Cost of revenues

           

Product licenses and subscription services:

           

Product licenses

     609        1,994        4,864        7,176  

Subscription services

     3,667        3,404        13,620        13,435  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total product licenses and subscription services

     4,276        5,398        18,484        20,611  
  

 

 

    

 

 

    

 

 

    

 

 

 

Product support

     5,557        4,387        20,242        17,481  

Other services:

           

Consulting

     13,746        13,439        53,605        52,018  

Education

     2,306        1,529        7,168        6,539  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total other services

     16,052        14,968        60,773        58,557  
  

 

 

    

 

 

    

 

 

    

 

 

 

Total cost of revenues

     25,885        24,753        99,499        96,649  
  

 

 

    

 

 

    

 

 

    

 

 

 

Gross profit

   $ 106,032      $ 111,628      $ 398,139      $ 407,194  
  

 

 

    

 

 

    

 

 

    

 

 

 


MICROSTRATEGY INCORPORATED

DEFERRED REVENUE DETAIL

(in thousands)

 

     December 31,      December 31,  
     2018      2017  
     (unaudited)      (as adjusted,
unaudited)
 

Current:

     

Deferred product licenses revenue

   $ 1,768      $ 3,760  

Deferred subscription services revenue

     13,508        17,324  

Deferred product support revenue

     152,501        168,185  

Deferred other services revenue

     8,763        9,465  
  

 

 

    

 

 

 

Total current deferred revenue and advance payments

   $ 176,540      $ 198,734  
  

 

 

    

 

 

 

Non-current:

     

Deferred product licenses revenue

   $ 542      $ 820  

Deferred subscription services revenue

     2,384        126  

Deferred product support revenue

     3,091        4,826  

Deferred other services revenue

     452        628  
  

 

 

    

 

 

 

Total non-current deferred revenue and advance payments

   $ 6,469      $ 6,400  
  

 

 

    

 

 

 

Total current and non-current:

     

Deferred product licenses revenue

   $ 2,310      $ 4,580  

Deferred subscription services revenue

     15,892        17,450  

Deferred product support revenue

     155,592        173,011  

Deferred other services revenue

     9,215        10,093  
  

 

 

    

 

 

 

Total current and non-current deferred revenue and advance payments

   $ 183,009      $ 205,134  
  

 

 

    

 

 

 


MICROSTRATEGY INCORPORATED

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

(in thousands, except per share data)

 

     Three Months Ended     Twelve Months Ended  
     December 31,     December 31,  
     2018     2017     2018     2017  
     (unaudited)     (unaudited)     (unaudited)     (unaudited)  

Reconciliation of non-GAAP income from operations:

        

(Loss) income from operations

   $ (2,157   $ 17,137     $ 3,981     $ 73,222  

Share-based compensation expense

     3,504       3,710       14,636       14,267  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP income from operations

   $ 1,347     $ 20,847     $ 18,617     $ 87,489  
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of non-GAAP net income:

        

Net income (loss)

   $ 3,301     $ (25,499   $ 22,501     $ 18,195  

Tax charges and adjustments related to U.S. tax reform

     0       44,018       (3,106     44,018  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP net income

   $ 3,301     $ 18,519     $ 19,395     $ 62,213  
  

 

 

   

 

 

   

 

 

   

 

 

 

Reconciliation of non-GAAP diluted earnings per share:

        

Diluted earnings (loss) per share

   $ 0.30     $ (2.23   $ 1.97     $ 1.58  

Impact of tax charges and adjustments related to U.S. tax reform (per diluted share)

     0.00       3.85       (0.27     3.81  
  

 

 

   

 

 

   

 

 

   

 

 

 

Non-GAAP diluted earnings per share

   $ 0.30     $ 1.62     $ 1.70     $ 5.39  
  

 

 

   

 

 

   

 

 

   

 

 

 


MICROSTRATEGY INCORPORATED

WORLDWIDE EMPLOYEE HEADCOUNT

 

     December 31,      September 30,      June 30,      March 31,      December 31,  
     2018      2018      2018      2018      2017  

Subscription services

     56        55        54        57        53  

Product support

     202        194        184        182        172  

Consulting

     452        458        443        441        441  

Education

     47        44        39        42        41  

Sales and marketing

     707        699        687        667        652  

Research and development

     716        688        651        604        559  

General and administrative

     348        326        322        313        298  
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total headcount

     2,528        2,464        2,380        2,306        2,216