(Bloomberg) -- MicroStrategy Inc. registered a second consecutive quarterly loss after taking an impairment charge against the value of its roughly $14.5 billion in Bitcoin holdings.
The Tysons Corner, Virginia-based firm reported second-quarter revenue from its software business of $111.4 million, below analysts’ forecasts of $119.3 million. The net loss was $102.6 million or $5.74 a share, compared to a net income of $22.2 million or $1.52, in the year-earlier period. The company uses income from its software business to support Bitcoin purchases.
In 2020, MicroStrategy became the first public company to buy Bitcoin as a capital allocation strategy, with co-founder and Chairman Michael Saylor citing the need to hedge against inflation. While Saylor has won the admiration of digital-asset proponents, few US public company besides Tesla Inc. and a handful of crypto-related firms have decided to hold the volatile cryptocurrency on its balance sheet.
Revenue was the lowest in the last decade, other than the two quarters at the start of the Covid 19 lockdowns. Analysts have been keeping an eye on the revenue drop as to what it would mean for the company’s cash flow situation. MicroStrategy’s operations consumed $23.3 million, it’s biggest cash consumption in at least a decade, leaving them with $67 million of cash on hand, according to Bloomberg calculations.
MicroStrategy also filed to sell up to $2 billion in Class A shares and use the proceeds for purposes including the acquisition of Bitcoin and the repurchase or repayment of debt.
The company posted impairment losses from digital assets of $180.1 million in the quarter, compared to $24.1 million during the same quarter last year. MicroStrategy bought 12,222 Bitcoin in the quarter, bringing its total holdings to 226,500 Bitcoin.
Shares of MicroStrategy, which have appreciated 140% so far this year, rose about 4% in after-hours trading.
--With assistance from Tom Contiliano.
(Adds details on filing for stock offering in the fifth paragraph.)
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