Bitcoin Gains Drive Strategy's $20.9B Q3 Operating Profit

Strategy reported $20.91 billion in third-quarter operating income on Oct. 29, driven almost entirely by gains on its bitcoin holdings rather than its software business.

The bitcoin treasury company said in its earnings release that it held 848,517 $BTC as of Oct. 25, up 26% year to date, and had raised $21.23 billion in capital over the same period.

Under fair-value accounting, changes in bitcoin’s market value flow through earnings even when coins are not sold. Strategy recorded a $20.912 billion digital-asset gain in Q3. Excluding that line, it would have recorded a $2.6 million operating loss, according to The Defiant’s calculation from its financial statements. Software revenue was $125.4 million, down 3% from a year earlier.

Bitcoin accumulation slowed during the quarter. Holdings rose about 0.2%, from 846,000 $BTC on June 30 to 847,666 on Sept. 30, while their original cost basis edged from $63.94 billion to $63.95 billion. The company bought 7,218 $BTC and sold 5,552 $BTC during Q3.

Despite the year-to-date increase in total holdings, Strategy’s “$BTC Yield” metric was negative 3.7%. That measure tracks the change in bitcoin per assumed diluted share, not an investment return.

STRC Nears $100 After Buybacks

“Returned $STRC to health,” Executive Chairman Michael Saylor wrote in his results summary.

Strategy tied that assessment to $2.04 billion of STRC repurchases and a larger dollar buffer. Through Oct. 25, it had bought back about 20.98 million preferred shares at an average $97.39 each, including repurchases awaiting settlement. Its STRC dashboard showed a $99.92 price at the Oct. 28 close, near the security’s $100 stated amount. The Defiant reported prices of $73–$78 in June.

Supporting the preferred still requires cash. Dividends across Strategy’s preferred stocks totaled $419.6 million in Q3, compared with $139.9 million a year earlier. The STRC annual dividend rate remains 12%.

Strategy raised $5.41 billion through its at-the-market share-sale programs in Q3, all from MSTR common stock rather than preferred issuance. It also sold $348.6 million of bitcoin during the quarter, directing $239.9 million to preferred dividends and $108.6 million to STRC repurchases.

As of Oct. 25, Strategy reported $5.07 billion of dollar assets, which it said covered about 3.4 years of preferred dividends and debt interest. Its company dashboard listed the combined annualized dividend and interest obligation at $1.509 billion.

The next change is payment frequency. Following shareholder approval on Oct. 28, STRC is scheduled to switch from twice-monthly dividends to daily entitlements on Nov. 1, payable the next business day. A separate SEC filing says the change does not alter dividend rates or total regular dividend obligations. STRF, STRK and STRD are scheduled to follow on Jan. 1, 2027.