Strategy (NASDAQ:MSTR) executives used the company’s fiscal 2025 fourth-quarter earnings webinar to reiterate a long-term “Bitcoin treasury” strategy while addressing the impact of recent Bitcoin price weakness on reported results and investor concerns around leverage, dividends, and the firm’s growing set of preferred equity “digital credit” instruments.
Q4 and full-year results reflected mark-to-market Bitcoin accounting
CFO Andrew Kang said the company ended 2025 with 713,502 Bitcoin on its balance sheet, which he described as approximately 3.4% of all Bitcoin that will ever exist. Kang noted Strategy adopted fair value accounting at the beginning of 2025, meaning its Bitcoin holdings are marked to market each quarter.
Bitcoin accumulation and KPI performance
Kang said Strategy continued to buy Bitcoin during the fourth quarter, purchasing 32,470 Bitcoin for approximately $3.1 billion. He also pointed to the volatility of quarter-to-quarter moves, noting that at the end of the third quarter the market value of Strategy’s Bitcoin position was about $73.2 billion based on a roughly $114,000 Bitcoin price, before Q4’s price decline drove an unrealized fair value loss of $17.4 billion.
For the full year, Kang said the market value of Strategy’s Bitcoin holdings increased from $41.8 billion at the end of 2024 to $58.9 billion at the end of 2025, and that Strategy added approximately 225,000 Bitcoin during 2025. He also highlighted internal KPI results, saying the company delivered a BTC Yield of 22.8% for the year—within its stated target range of 22% to 26%—translating to a total BTC gain of 101,873 Bitcoin and a BTC dollar gain of $8.9 billion.
Balance sheet changes, liquidity, and obligations
Kang said digital assets rose from $23.9 billion at the end of 2024 to $58.9 billion at the end of 2025. Strategy ended 2025 with $2.3 billion in cash and cash equivalents, including a $2.25 billion U.S. dollar cash reserve established in the fourth quarter, which he said provides over 2.5 years of dividend coverage.
He also discussed a $1.9 billion deferred tax liability tied to the accounting difference between market value and cost basis of Bitcoin, emphasizing it is a balance sheet item that changes with Bitcoin’s price and is not a cash tax obligation.
Long-term debt ended the year at $8.2 billion, reflecting a new convertible bond and an “equitization” of a prior convertible completed in early 2025. Kang said the company does not plan to issue new convertible debt in the future and intends to reduce leverage over time. He also said Strategy added $6.9 billion of preferred equity through five distinct IPOs and subsequent at-the-market activity, helping lift total equity (preferred and common) to $51.1 billion at year-end from $22.8 billion a year earlier.
Kang said total interest and dividend obligations are now $888 million, consisting of about $35 million of interest on convertibles (an average cost of about 42 basis points), plus $713 million in dividend obligations from cumulative preferreds and $140 million related to non-cumulative preferreds.
Preferred “digital credit,” STRC “Stretch,” and guidance tweaks
CEO Phong Le focused much of his remarks on capital markets activity and the company’s preferred equity instruments, describing 2025 as a major year in which Strategy shifted from convertible debt issuance toward preferreds. He said the company raised more capital in 2025 than in 2024, highlighting that it issued $7 billion of preferred in 2025 and said that in early 2026—despite a tougher Bitcoin market—Strategy raised $3.9 billion in one month and “for the most part” used it to buy Bitcoin.
Le described a suite of “digital credit” instruments launched in 2025, including “Stretch,” which he called the most important of the instruments and described as the company’s first “digital credit instrument” at $2.5 billion. He also highlighted liquidity in the instrument, citing $118 million of average daily trading over the last 30 days, and characterized the dividend as 11.25% with volatility around 7% (and more recently 6%, according to his comments).
Le said the company has been “seasoning” its digital credit, pointing to factors he said improved creditworthiness, including U.S. Treasury and IRS guidance that unrealized Bitcoin gains would not be subject to additional Corporate Alternative Minimum Tax, and Strategy receiving an S&P issuer credit rating of B-. He also said Strategy added the $2.25 billion cash reserve and increased Bitcoin holdings after launching Stretch.
Le announced a change to how Strategy evaluates Stretch’s trading price for purposes of its rate decisions: rather than using a five-day volume-weighted average price at month-end, the company will use the entire month’s VWAP, citing trading dynamics around record and payment dates.
During Q&A, Le said Strategy targets maintaining 2 to 3 years of dividend coverage in its U.S. dollar reserve, adding that it would not want coverage to fall below two years. Asked whether there is a cap on Stretch’s dividend rate, Le said the company does not have a cap at this time and will evaluate how the instrument behaves over time.
Management addresses dilution weeks, convertibles, MSCI, and quantum concerns
In Q&A, an analyst asked about several weeks early in 2026 when Bitcoin acquisitions generated slightly negative Bitcoin Yield. Management responded that it does not aim to repeat those weeks, and said the dilutive actions were generally tied to building the U.S. dollar reserve to improve creditworthiness and address concerns about dividend payment capacity if equity capital markets were to close.
Management also said the cash reserve could be used for any corporate purpose, including paying dividends or meeting credit obligations, and confirmed it could be used to redeem converts if the company chose.
On index inclusion, Kang said MSCI decided not to implement a proposal that could have excluded companies whose digital asset holdings represented more than 50% of total assets. Kang said Strategy submitted feedback arguing the threshold would be discriminatory and arbitrary, and emphasized the company remains an operating business with “30+ years” of software and tech history, 1,500 employees, and $477 million in annual revenue in 2025.
Executive Chairman Michael Saylor used his prepared remarks to outline what he described as improving industry fundamentals, including broader political, regulatory, banking, and ETF adoption. He also addressed “quantum” fears around Bitcoin, characterizing them as the latest in a series of recurring concerns and stating his view that quantum risk is likely “10 or more years away” before becoming a threat. Saylor said Strategy plans to initiate a Bitcoin security program to coordinate with the global cybersecurity and Bitcoin security community on quantum and other emergent threats, while avoiding premature or harmful protocol changes absent consensus.
Separately, management discussed its approach to refinancing and liability management for convertible notes. In response to a question about potential buybacks or refinancing, management said it does not view the converts as a major overhang and said it typically begins evaluating put or redemption events roughly a year in advance, potentially acting six months prior if needed.
Across the presentation and Q&A, executives repeatedly framed Strategy’s approach as long-term, emphasizing disciplined capital markets issuance, maintaining liquidity and dividend coverage, and continuing to grow Bitcoin holdings per share while expanding the investor base for its preferred “digital credit” products.
About Strategy (NASDAQ:MSTR)
Strategy, formerly known as MicroStrategy, Incorporated (NASDAQ: MSTR) is a global provider of enterprise analytics and mobility software. The company’s flagship platform offers business intelligence, data discovery, and advanced visualizations that enable organizations to analyze large volumes of data and deliver actionable insights. In addition to traditional on-premises deployments, Strategy provides a range of cloud-based services and managed offerings that allow customers to leverage the power of its analytics tools without managing complex infrastructure.
Founded in 1989 by Michael J.
