MicroStrategy Incorporated (NASDAQ:MSTR) Q3 2023 Earnings Call Transcript

MicroStrategy Incorporated (NASDAQ:MSTR) Q3 2023 Earnings Call Transcript November 1, 2023

MicroStrategy Incorporated misses on earnings expectations. Reported EPS is $-10.08656 EPS, expectations were $0.74.

Shirish Jajodia: Hello, everyone, and good evening. I'm Shirish Jajodia, Vice President of Investor Relations and Treasury at MicroStrategy. I'll be your moderator for MicroStrategy's 2023 Third Quarter Earnings Webinar. Before we proceed, I will read the Safe Harbor statement. Some of the information we provide during today's call regarding our future expectations, plans and prospects may constitute forward-looking statements. Actual results may differ materially from these forward-looking statements due to various important factors, including the risk factors discussed in our most recent 10-Q filed with the SEC. We assume no obligation to update these forward-looking statements, which speak only as of today. Also, during today's call, we will refer to certain non-GAAP financial measures.

A computer programmer typing code in front of a 3D printed object, emphasizing new ways of product development.

Reconciliations showing GAAP versus non-GAAP results are available in our earnings release and presentation, which were issued today and are available on our website at microstrategy.com. I would like to welcome you all to today's webinar and let you know that we will be taking questions using the Q&A feature at the bottom of your screen. You can submit questions throughout the webinar, and Michael, Phong or Andrew will answer questions at the end of the session. Please be sure to provide your name and your company's name when submitting your questions. Now, I will walk you through the agenda for today's call. First, Phong Le will cover the business results for the third quarter of 2023. Second, Andrew Kang will cover the financial results for the third quarter of 2023.

Then, Michael Saylor will provide a strategic review and discuss the recent bitcoin market updates. And lastly, we will open up to Q&A. With that, I'll turn the call over to Phong Le, President and CEO of MicroStrategy. Phong?

Phong Le: Thank you, Shirish. Hello, everyone. I'd like to welcome all of you to today's earnings webinar. I'll start with the highlights of our software business. Total revenue was $129.5 million, representing an increase of 3% year-over-year, total software licenses revenues which consists of total product licenses and subscription services revenues. And our consolidated statement of operations were $45 million, representing an increase of 16% year-over-year. Total software licenses revenues performance benefited for both increased adoption of our cloud platform and growth in product license revenues. Total subscription services revenue was $21 million and increase at 28% year-over-year. Our Q3 subscription billings growth was 17% year-over-year.

We achieve good revenue results in Q3 with year-over-year growth driven by our cloud business and a strong international license revenue quarter. We plan to continue to drive growth in our recurring revenue model, and to transition our business strategy and product offerings to a cloud native model. Our focus will be on innovation at the intersection of artificial intelligence and business intelligence, using our first to market advantage in the enterprise scale integration of AI and BI to grow revenue in the cloud. I'm excited about the work we're doing in these areas and to share some updates with you and our progress. We're at a major period of innovation in the technology industry. We believe the next innovation is to change how the world does business or digital money, with the continuing development of the Bitcoin ecosystem in digital intelligence through AI.

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