Strategy Reports Q1 Loss as Bitcoin Holdings Trigger $14.46 Billion Unrealized Hit

Strategy Inc. (NASDAQ: MSTR) posted a much larger-than-expected first-quarter loss after a massive unrealized decline tied to its bitcoin holdings impacted earnings. The company reported a loss of $38.25 per share, missing analyst expectations of a $18.98 loss per share. Revenue reached $124.3 million, slightly below the $125.07 million consensus estimate but still representing an 11.9% increase from $111.1 million in the same quarter last year.

The software and bitcoin-focused company recorded an operating loss of $14.47 billion, compared to $5.92 billion a year earlier. The sharp decline was mainly caused by a $14.46 billion unrealized loss on digital assets. Despite the accounting setback, Strategy continued expanding its bitcoin portfolio aggressively during the quarter.

As of May 3, the company held 818,334 bitcoins, marking a 22% increase year to date. Strategy also reported a 9.4% BTC Yield for the period, highlighting continued confidence in its long-term bitcoin investment strategy. The total market value of its bitcoin holdings stood at approximately $64.14 billion, with an average purchase price of around $75,537 per bitcoin.

Following the earnings release, MSTR stock slipped 1% in after-hours trading as investors reacted to the deeper-than-expected loss. However, company executives remained optimistic about the future of bitcoin adoption and digital finance products.

CEO Phong Le stated that bitcoin adoption continues to accelerate in 2026 and pointed to the success of STRC preferred stock offerings. Strategy raised $5.58 billion through STRC offerings this year, representing 189% growth. The company also paid $692.5 million in cumulative dividends across 23 consecutive preferred equity distributions.

Strategy generated $83.4 million in gross profit during the quarter with a 67.1% gross margin. Cash and cash equivalents totaled $2.21 billion as of March 31, slightly down from $2.30 billion at the end of 2025.