Strategy, formerly known as MicroStrategy, has reported a significant loss for the fourth quarter of 2024 as it continues its aggressive Bitcoin investment strategy.
The company reported total revenue of $120.7 million for the fourth quarter of 2024, marking a 3% year-over-year decline, while full-year revenue stood at $463.5 million, down 7% from 2023. Despite growth in subscription services, which increased 48% year-over-year to $31.9 million, the overall revenue drop reflects a decline in other segments.
Strategy reported a GAAP operating loss of $1.016 billion, with non-GAAP operating losses reaching $997.1 million, primarily due to $1.006 billion in digital asset impairment losses. The company attributed these losses to fluctuations in Bitcoin prices and changes in accounting standards.
In an official statement, Strategy noted that its losses were largely driven by accounting rules rather than operational shortcomings, stating, “Our reported impairment losses are a reflection of the volatile nature of digital assets, not a fundamental weakness in our business model.”
Bitcoin holdings reach 471,107 BTC
While posting a loss, Strategy significantly increased its Bitcoin holdings in 2024. The company acquired 258,320 BTC over the past year, bringing its total to 471,107 BTC at an average purchase price of $64,511 per Bitcoin.
As of Feb. 4, its holdings are valued at approximately $46 billion, based on Bitcoin’s current market price of $98,700.
Strategy has financed these purchases through a combination of $21.7 billion in equity sales, $6.2 billion in convertible notes, and $584 million in perpetual preferred stock offerings.
Strategy has also been shifting its software business to a cloud-first model, reporting a 57% year-over-year increase in current subscription billings.
Shift to fair value accounting
Starting Q1 2025, Strategy adopted FASB Fair Value Accounting, which will allow the company to mark its Bitcoin holdings to market value each quarter instead of recording impairments when prices decline. This accounting change is expected to bring more transparency to Bitcoin valuations on its balance sheet.
