MicroStrategy Announces Second Quarter 2019 Financial Results

Tuesday, July 30, 2019

TYSONS CORNER, Va.--(BUSINESS WIRE)--Jul. 30, 2019--MicroStrategy® Incorporated (Nasdaq: MSTR), a leading worldwide provider of enterprise analytics and mobility software, today announced financial results for the three-month period ended June 30, 2019 (the second quarter of its 2019 fiscal year).

Second Quarter 2019 Financial Highlights

  • Revenues: Total revenues for the second quarter of 2019 were $117.7 million, a 2.4% decrease or a 0.4% increase on a non-GAAP constant currency basis compared to the second quarter of 2018. Product licenses and subscription services revenues for the second quarter of 2019 were $27.2 million, a 1.3% increase or a 3.9% increase on a constant currency basis compared to the second quarter of 2018. Product support revenues for the second quarter of 2019 were $73.0 million, a 0.9% decrease or a 1.9% increase on a constant currency basis compared to the second quarter of 2018. Other services revenues for the second quarter of 2019 were $17.5 million, a 12.5% decrease or a 9.5% decrease on a constant currency basis compared to the second quarter of 2018.
  • Gross Profit: Gross profit for the second quarter of 2019 was $92.4 million, representing a 78.5% gross margin, compared to a gross margin of 79.2% in the second quarter of 2018.
  • Operating Expenses: Operating expenses for the second quarter of 2019 were $97.2 million versus $97.4 million for the second quarter of 2018, essentially flat year over year.
  • Loss from Operations: Loss from operations for the second quarter of 2019 was $4.8 million versus $1.8 million for the second quarter of 2018. Non-GAAP loss from operations, which excludes share-based compensation expense, was $1.8 million for the second quarter of 2019 versus non-GAAP income from operations of $1.6 million for the second quarter of 2018.
  • Net Income: Net income for the second quarter of 2019 was $20.4 million, or $1.98 per share on a diluted basis, as compared to net income of $4.8 million, or $0.42 per share on a diluted basis, for the second quarter of 2018. In the second quarter of 2019, MicroStrategy completed the sale of its Voice.com domain name for a gain of $21.8 million, net of tax (the “Domain Name Sale”). Excluding the impact of the Domain Name Sale, non-GAAP net loss for the second quarter of 2019 was $1.4 million, or $0.14 per share on a diluted basis.
  • Cash and Short-term Investments: As of June 30, 2019, MicroStrategy had cash and cash equivalents and short-term investments of $574.8 million, as compared to $576.1 million as of December 31, 2018, a decrease of $1.3 million.

The tables at the end of this press release include a reconciliation of GAAP to non-GAAP financial measures for the three and six months ended June 30, 2019 and 2018. An explanation of non-GAAP financial measures is also included under the heading “Non-GAAP Financial Measures” below.

MicroStrategy adopted Accounting Standards Update No. 2016-02, Leases (Topic 842), and its subsequent amendments (“ASU 2016-02”), effective January 1, 2019. Comparative prior period consolidated financial statements have not been restated and are not directly comparable to the current period consolidated financial statements.

MicroStrategy uses its Intelligent Enterprise platform across the enterprise and has created an interactive dossier with quarterly financial performance data. Anyone can access the MSTR Financials dossier via a web browser, or by downloading the MicroStrategy Library app on an iOS or Android device. To download the native apps, visit MicroStrategy Library for iPad, MicroStrategy Library for iPhone, or MicroStrategy Library for Android tablet and smartphone.

Recent Business Highlights

MicroStrategy has been successfully driving its growth and productivity initiatives throughout the first half of 2019, and its initiatives around the MicroStrategy 2019 platform, cloud, and customer adoption have been gaining more traction.

“I am very pleased with our accomplishments in the second quarter of 2019,” said Michael J. Saylor, CEO, MicroStrategy Incorporated. “The MicroStrategy 2019 platform won multiple industry awards, we have seen increased demand for our innovative Cloud and HyperIntelligence offerings, and we have improved key operational metrics for our business at the same time. Considering these accomplishments, I believe there is now a tremendous opportunity for MicroStrategy to take advantage of the dislocations that Tableau is likely to experience as a result of its pending acquisition by Salesforce.”

The following are some key business highlights from the second quarter of 2019:

  • MicroStrategy announced the general availability of MicroStrategy 2019 Update 2, adding powerful new capabilities and products to the industry’s first and only platform for Federated Analytics, Transformational Mobility, and HyperIntelligence. The latest update expands the platform’s suite of HyperIntelligence products to enrich web browsing, accelerate access to intuitive intelligence on iOS and Android devices, and add windows of contextual insights to email on Outlook. The new update also delivers powerful enhancements designed to augment user productivity on popular BI tools including Tableau, Power BI, and Qlik, putting trusted insights into the hands of a larger number of users within the enterprise. The HyperIntelligence for Mobile app can be easily downloaded and installed from the Google Play store and Apple AppStore.
  • MicroStrategy 2019 was recognized by Gartner, Inc. with the highest product scores across four use cases in the “Critical Capabilities for Analytics and Business Intelligence Platforms” report.1 According to Gartner’s findings, MicroStrategy ranks:
    • #1 in Agile, Centralized BI Provisioning Use Case, scoring 4.34 (out of 5)
    • #1 in Governed Data Discovery Use Case, scoring 4.24 (out of 5)
    • #1 in OEM or Embedded BI Use Case, scoring 4.64 (out of 5)
    • #1 in Extranet Deployment Use Case, scoring 4.38 (out of 5)
    • #2 in Decentralized Analytics Use Case, scoring 4.23 (out of 5)
  • MicroStrategy announced that the MicroStrategy Analytics Platform in the cloud is available on the Federal Risk and Authorization Management Program (FedRAMP) marketplace via IntelliCog Enterprise Cloud Analytics. With this first and only FedRAMP-ready enterprise analytics solution in the cloud, government agencies can rapidly adapt from old, insecure legacy IT to mission-enabling, secure, and cost-effective cloud-based IT.
  • To promote adoption of its award-winning MicroStrategy 2019 platform within the existing installed base, MicroStrategy bundled expert services into its premium support offerings and issued complimentary upgrades to its largest customers. MicroStrategy also launched the MicroStrategy Elite Support program, which includes 400 hours of platform upgrade and advisory services annually.
  • Following the announcements of the acquisitions of Tableau by Salesforce and Looker by Google, MicroStrategy reiterated its belief that its platform offering is a better long-term solution for organizations caught in the analytics industry upheaval. MicroStrategy’s independence, longevity, focus, and innovation uniquely position MicroStrategy as a preferred partner for companies seeking a better, long-term alternative for their analytics and mobility needs.
  • MicroStrategy sold the Voice.com domain name for $30 million in cash in a transaction facilitated by GoDaddy. MicroStrategy holds more than a dozen evocative and powerful domain names. While MicroStrategy’s focus continues to be on its core analytics and mobility business, it is open to leveraging these domain names in equity or other strategic transactions with well-funded parties. To learn more about these domain names, please visit www.microstrategy.com/domains.

[1]Gartner, Critical Capabilities for Analytics and Business Intelligence Platforms, James Richardson, Rita Sallam, Austin Kronz, 14 May 2019.

Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings or other designation. Gartner research publications consist of the opinions of Gartner’s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.

Conference Call

MicroStrategy will be discussing its second quarter 2019 financial results on a conference call today beginning at approximately 5:00 p.m. EDT. To access the conference call, dial (844) 824-7425 (domestically) or (716) 220-9429 (internationally) and use conference ID 9389810. A live and archived webcast will be available under the “Events” section on MicroStrategy’s investor relations website at https://ir.microstrategy.com/events-presentations. A replay of the conference call will be available beginning approximately two hours after the call concludes until August 6, 2019 at (855) 859-2056 (domestically) or (404) 537-3406 (internationally) using the passcode 9389810.

Non-GAAP Financial Measures

MicroStrategy is providing supplemental financial measures for (i) (loss) income from operations that excludes the impact of share-based compensation arrangements, (ii) net (loss) income and diluted (loss) earnings per share that exclude the impact from the Domain Name Sale, and (iii) revenues that exclude foreign currency exchange rate fluctuations. These supplemental financial measures are not measurements of financial performance under generally accepted accounting principles in the United States (“GAAP”) and, as a result, these supplemental financial measures may not be comparable to similarly titled measures of other companies. Management uses these non-GAAP financial measures internally to help understand, manage, and evaluate business performance and to help make operating decisions.

MicroStrategy believes that these non-GAAP financial measures are also useful to investors and analysts in comparing its performance across reporting periods on a consistent basis. The first supplemental financial measure excludes a significant non-cash expense that MicroStrategy believes is not reflective of its general business performance, and for which the accounting requires significant management judgment and the resulting share-based compensation expense could vary significantly in comparison to other companies. The second category of supplemental financial measures excludes the impact from the Domain Name Sale, which is outside of MicroStrategy’s normal business operations. The third category of supplemental financial measures excludes changes resulting from fluctuations in foreign currency exchange rates so that results may be compared to the same period in the prior year on a “constant currency” basis. MicroStrategy believes the use of these non-GAAP financial measures can also facilitate comparison of MicroStrategy’s operating results to those of its competitors.

About MicroStrategy Incorporated

MicroStrategy (Nasdaq: MSTR) is a leading worldwide provider of enterprise analytics and mobility software and services. Our mission is to make every enterprise a more Intelligent Enterprise. MicroStrategy 2019 delivers modern analytics on an open, comprehensive enterprise platform designed to drive business results with Federated Analytics, Transformational Mobility, and HyperIntelligence. To learn more, visit MicroStrategy online, and follow us on LinkedIn, Twitter, and Facebook.

MicroStrategy, Intelligent Enterprise, MicroStrategy Library, MicroStrategy 2019, HyperIntelligence, and MicroStrategy Analytics Platform are either trademarks or registered trademarks of MicroStrategy Incorporated in the United States and certain other countries. Other product and company names mentioned herein may be the trademarks of their respective owners.

This press release may include statements that may constitute “forward-looking statements,” including estimates of future business prospects or financial results and statements containing the words “believe,” “estimate,” “project,” “expect” or similar expressions. Forward-looking statements inherently involve risks and uncertainties that could cause actual results of MicroStrategy Incorporated and its subsidiaries (collectively, the “Company”) to differ materially from the forward-looking statements. Factors that could contribute to such differences include: the extent and timing of market acceptance of MicroStrategy’s new offerings, including MicroStrategy 2019; the Company’s ability to recognize revenue or deferred revenue through delivery of products or satisfactory performance of services; continued acceptance of the Company’s other products in the marketplace; fluctuations in tax benefits or provisions, including as a result of changes to U.S. federal tax laws; the timing of significant orders; delays in or the inability of the Company to develop or ship new products; competitive factors; general economic conditions; currency fluctuations; and other risks detailed in the Company’s registration statements and periodic reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to update these forward-looking statements for revisions or changes after the date of this release.

MSTR-F

MICROSTRATEGY INCORPORATED

CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share data)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses

 

$

20,121

 

 

$

19,292

 

 

$

38,412

 

 

$

36,593

 

Subscription services

 

 

7,104

 

 

 

7,584

 

 

 

14,248

 

 

 

15,246

 

Total product licenses and subscription services

 

 

27,225

 

 

 

26,876

 

 

 

52,660

 

 

 

51,839

 

Product support

 

 

72,978

 

 

 

73,676

 

 

 

144,428

 

 

 

148,091

 

Other services

 

 

17,534

 

 

 

20,050

 

 

 

36,015

 

 

 

43,639

 

Total revenues

 

 

117,737

 

 

 

120,602

 

 

 

233,103

 

 

 

243,569

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses

 

 

552

 

 

 

1,667

 

 

 

1,071

 

 

 

3,878

 

Subscription services

 

 

3,489

 

 

 

3,445

 

 

 

7,087

 

 

 

6,694

 

Total product licenses and subscription services

 

 

4,041

 

 

 

5,112

 

 

 

8,158

 

 

 

10,572

 

Product support

 

 

7,721

 

 

 

4,810

 

 

 

14,788

 

 

 

9,606

 

Other services

 

 

13,588

 

 

 

15,118

 

 

 

28,577

 

 

 

30,047

 

Total cost of revenues

 

 

25,350

 

 

 

25,040

 

 

 

51,523

 

 

 

50,225

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

92,387

 

 

 

95,562

 

 

 

181,580

 

 

 

193,344

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

48,273

 

 

 

50,978

 

 

 

97,033

 

 

 

102,313

 

Research and development

 

 

27,764

 

 

 

25,082

 

 

 

55,979

 

 

 

48,642

 

General and administrative

 

 

21,180

 

 

 

21,299

 

 

 

43,784

 

 

 

43,471

 

Total operating expenses

 

 

97,217

 

 

 

97,359

 

 

 

196,796

 

 

 

194,426

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

 

(4,830

)

 

 

(1,797

)

 

 

(15,216

)

 

 

(1,082

)

Interest income, net

 

 

3,013

 

 

 

3,223

 

 

 

5,579

 

 

 

5,257

 

Other income, net

 

 

29,431

 

 

 

4,461

 

 

 

28,835

 

 

 

2,867

 

Income before income taxes

 

 

27,614

 

 

 

5,887

 

 

 

19,198

 

 

 

7,042

 

Provision for income taxes

 

 

7,220

 

 

 

1,059

 

 

 

6,710

 

 

 

541

 

Net income

 

$

20,394

 

 

$

4,828

 

 

$

12,488

 

 

$

6,501

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share (1):

 

$

1.99

 

 

$

0.42

 

 

$

1.21

 

 

$

0.57

 

Weighted average shares outstanding used in computing basic earnings per share

 

 

10,240

 

 

 

11,459

 

 

 

10,283

 

 

 

11,453

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share (1):

 

$

1.98

 

 

$

0.42

 

 

$

1.21

 

 

$

0.57

 

Weighted average shares outstanding used in computing diluted earnings per share

 

 

10,310

 

 

 

11,493

 

 

 

10,350

 

 

 

11,488

 

(1) Basic and fully diluted earnings per share for class A and class B common stock are the same.

MICROSTRATEGY INCORPORATED

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

 

 

 

June 30,

 

 

December 31,

 

 

 

2019

 

 

2018*

 

 

 

(unaudited)

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

261,497

 

 

$

109,924

 

Restricted cash

 

 

1,039

 

 

 

862

 

Short-term investments

 

 

313,349

 

 

 

466,186

 

Accounts receivable, net

 

 

129,144

 

 

 

171,359

 

Prepaid expenses and other current assets

 

 

22,259

 

 

 

30,068

 

Total current assets

 

 

727,288

 

 

 

778,399

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

54,285

 

 

 

51,919

 

Right-of-use assets

 

 

89,631

 

 

 

0

 

Deposits and other assets

 

 

7,981

 

 

 

8,134

 

Deferred tax assets, net

 

 

20,535

 

 

 

17,316

 

Total Assets

 

$

899,720

 

 

$

855,768

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable, accrued expenses, and operating lease liabilities

 

$

32,300

 

 

$

33,684

 

Accrued compensation and employee benefits

 

 

41,561

 

 

 

48,045

 

Deferred revenue and advance payments

 

 

176,786

 

 

 

176,540

 

Total current liabilities

 

 

250,647

 

 

 

258,269

 

 

 

 

 

 

 

 

 

 

Deferred revenue and advance payments

 

 

4,175

 

 

 

6,469

 

Operating lease liabilities

 

 

108,183

 

 

 

0

 

Other long-term liabilities

 

 

33,990

 

 

 

61,262

 

Deferred tax liabilities

 

 

36

 

 

 

37

 

Total Liabilities

 

 

397,031

 

 

 

326,037

 

 

 

 

 

 

 

 

 

 

Stockholders’ Equity

 

 

 

 

 

 

 

 

Preferred stock undesignated, $0.001 par value; 5,000 shares authorized; no shares issued or outstanding

 

 

0

 

 

 

0

 

Class A common stock, $0.001 par value; 330,000 shares authorized; 15,853 shares issued and 8,205 shares outstanding, and 15,837 shares issued and 8,552 shares outstanding, respectively

 

 

16

 

 

 

16

 

Class B convertible common stock, $0.001 par value; 165,000 shares authorized; 2,035 shares issued and outstanding, and 2,035 shares issued and outstanding, respectively

 

 

2

 

 

 

2

 

Additional paid-in capital

 

 

584,764

 

 

 

576,957

 

Treasury stock, at cost; 7,648 shares and 7,285 shares, respectively

 

 

(634,405

)

 

 

(586,161

)

Accumulated other comprehensive loss

 

 

(9,310

)

 

 

(10,217

)

Retained earnings

 

 

561,622

 

 

 

549,134

 

Total Stockholders’ Equity

 

 

502,689

 

 

 

529,731

 

Total Liabilities and Stockholders’ Equity

 

 

899,720

 

 

 

855,768

 

* Derived from audited financial statements.

MICROSTRATEGY INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

 

Six Months Ended

 

 

 

June 30,

 

 

 

2019

 

 

2018

 

 

 

(unaudited)

 

 

(unaudited)

 

Operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

12,488

 

 

$

6,501

 

Adjustments to reconcile net income to net cash provided by operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

7,687

 

 

 

3,870

 

Write-offs and sales allowances

 

 

796

 

 

 

948

 

Net realized loss on short-term investments

 

 

41

 

 

 

0

 

Deferred taxes

 

 

(3,219

)

 

 

(5,758

)

Share-based compensation expense

 

 

6,053

 

 

 

8,121

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

5,985

 

 

 

5,044

 

Prepaid expenses and other current assets

 

 

7,089

 

 

 

453

 

Deposits and other assets

 

 

96

 

 

 

(344

)

Accounts payable and accrued expenses

 

 

(8,396

)

 

 

(7,775

)

Accrued compensation and employee benefits

 

 

(8,082

)

 

 

(3,015

)

Deferred revenue and advance payments

 

 

33,489

 

 

 

10,502

 

Operating lease liabilities

 

 

(4,316

)

 

 

0

 

Other long-term liabilities

 

 

(509

)

 

 

4,780

 

Net cash provided by operating activities

 

 

49,202

 

 

 

23,327

 

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

 

Proceeds from redemption of short-term investments

 

 

369,603

 

 

 

245,680

 

Purchases of property and equipment

 

 

(8,432

)

 

 

(2,644

)

Purchases of short-term investments

 

 

(212,248

)

 

 

(596,376

)

Net cash provided by (used in) investing activities

 

 

148,923

 

 

 

(353,340

)

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

Proceeds from sale of class A common stock under exercise of employee stock options

 

 

1,836

 

 

 

2,471

 

Purchases of treasury stock

 

 

(48,244

)

 

 

0

 

Payments on capital lease obligations and other financing arrangements prior to the adoption of ASU 2016-02

 

 

0

 

 

 

(9

)

Net cash (used in) provided by financing activities

 

 

(46,408

)

 

 

2,462

 

 

 

 

 

 

 

 

 

 

Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash

 

 

33

 

 

 

(2,240

)

Net increase (decrease) in cash, cash equivalents, and restricted cash

 

 

151,750

 

 

 

(329,791

)

Cash, cash equivalents, and restricted cash, beginning of period

 

 

110,786

 

 

 

421,182

 

Cash, cash equivalents, and restricted cash, end of period

 

$

262,536

 

 

$

91,391

 

MICROSTRATEGY INCORPORATED

REVENUE AND COST OF REVENUE DETAIL

(in thousands)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses and subscription services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses

 

$

20,121

 

 

$

19,292

 

 

$

38,412

 

 

$

36,593

 

Subscription services

 

 

7,104

 

 

 

7,584

 

 

 

14,248

 

 

 

15,246

 

Total product licenses and subscription services

 

 

27,225

 

 

 

26,876

 

 

 

52,660

 

 

 

51,839

 

Product support

 

 

72,978

 

 

 

73,676

 

 

 

144,428

 

 

 

148,091

 

Other services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consulting

 

 

15,494

 

 

 

17,710

 

 

 

32,097

 

 

 

38,997

 

Education

 

 

2,040

 

 

 

2,340

 

 

 

3,918

 

 

 

4,642

 

Total other services

 

 

17,534

 

 

 

20,050

 

 

 

36,015

 

 

 

43,639

 

Total revenues

 

 

117,737

 

 

 

120,602

 

 

 

233,103

 

 

 

243,569

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses and subscription services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses

 

 

552

 

 

 

1,667

 

 

 

1,071

 

 

 

3,878

 

Subscription services

 

 

3,489

 

 

 

3,445

 

 

 

7,087

 

 

 

6,694

 

Total product licenses and subscription services

 

 

4,041

 

 

 

5,112

 

 

 

8,158

 

 

 

10,572

 

Product support

 

 

7,721

 

 

 

4,810

 

 

 

14,788

 

 

 

9,606

 

Other services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consulting

 

 

11,909

 

 

 

13,542

 

 

 

24,894

 

 

 

26,863

 

Education

 

 

1,679

 

 

 

1,576

 

 

 

3,683

 

 

 

3,184

 

Total other services

 

 

13,588

 

 

 

15,118

 

 

 

28,577

 

 

 

30,047

 

Total cost of revenues

 

 

25,350

 

 

 

25,040

 

 

 

51,523

 

 

 

50,225

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

$

92,387

 

 

$

95,562

 

 

$

181,580

 

 

$

193,344

 

MICROSTRATEGY INCORPORATED

DEFERRED REVENUE DETAIL

(in thousands)

 

 

June 30,

 

 

December 31,

 

 

June 30,

 

 

 

2019

 

 

2018*

 

 

2018

 

 

 

(unaudited)

 

 

 

 

 

 

(unaudited)

 

Current:

 

 

 

 

 

 

 

 

 

 

 

 

Deferred product licenses revenue

 

$

633

 

 

$

1,768

 

 

$

1,819

 

Deferred subscription services revenue

 

 

15,393

 

 

 

13,508

 

 

 

13,847

 

Deferred product support revenue

 

 

152,866

 

 

 

152,501

 

 

 

151,909

 

Deferred other services revenue

 

 

7,894

 

 

 

8,763

 

 

 

7,783

 

Total current deferred revenue and advance payments

 

$

176,786

 

 

$

176,540

 

 

$

175,358

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-current:

 

 

 

 

 

 

 

 

 

 

 

 

Deferred product licenses revenue

 

$

405

 

 

$

542

 

 

$

794

 

Deferred subscription services revenue

 

 

116

 

 

 

2,384

 

 

 

9

 

Deferred product support revenue

 

 

3,083

 

 

 

3,091

 

 

 

3,950

 

Deferred other services revenue

 

 

571

 

 

 

452

 

 

 

1,063

 

Total non-current deferred revenue and advance payments

 

$

4,175

 

 

$

6,469

 

 

$

5,816

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total current and non-current:

 

 

 

 

 

 

 

 

 

 

 

 

Deferred product licenses revenue

 

$

1,038

 

 

$

2,310

 

 

$

2,613

 

Deferred subscription services revenue

 

 

15,509

 

 

 

15,892

 

 

 

13,856

 

Deferred product support revenue

 

 

155,949

 

 

 

155,592

 

 

 

155,859

 

Deferred other services revenue

 

 

8,465

 

 

 

9,215

 

 

 

8,846

 

Total current and non-current deferred revenue and advance payments

 

$

180,961

 

 

$

183,009

 

 

$

181,174

 

* Derived from audited financial statements.

MICROSTRATEGY INCORPORATED

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

EXCLUSION OF SHARE-BASED COMPENSATION EXPENSE

(in thousands)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Reconciliation of non-GAAP (loss) income from operations:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Loss from operations

 

$

(4,830

)

 

$

(1,797

)

 

$

(15,216

)

 

$

(1,082

)

Share-based compensation expense

 

 

3,036

 

 

 

3,378

 

 

 

6,053

 

 

 

8,121

 

Non-GAAP (loss) income from operations

 

$

(1,794

)

 

$

1,581

 

 

$

(9,163

)

 

$

7,039

 

MICROSTRATEGY INCORPORATED

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

EXCLUSION OF DOMAIN NAME SALE

(in thousands, except per share data)

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

June 30,

 

 

June 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Reconciliation of non-GAAP net (loss) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

20,394

 

 

$

4,828

 

 

$

12,488

 

 

$

6,501

 

Gain from Domain Name Sale, net of tax

 

 

(21,778

)

 

 

0

 

 

 

(21,778

)

 

 

0

 

Non-GAAP net (loss) income

 

$

(1,384

)

 

$

4,828

 

 

$

(9,290

)

 

$

6,501

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of non-GAAP diluted (loss) earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

$

1.98

 

 

$

0.42

 

 

$

1.21

 

 

$

0.57

 

Gain from Domain Name Sale, net of tax (per diluted share)

 

 

(2.12

)

 

 

0.00

 

 

 

(2.11

)

 

 

0.00

 

Non-GAAP diluted (loss) earnings per share

 

$

(0.14

)

 

$

0.42

 

 

$

(0.90

)

 

$

0.57

 

MICROSTRATEGY INCORPORATED

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

CONSTANT CURRENCY

(in thousands)

 

 

 

Three Months Ended

 

 

 

June 30,

 

 

 

(unaudited)

 

 

 

GAAP

 

 

Foreign

Currency

Exchange

Rate Impact (1)

 

 

Non-GAAP

Constant

Currency (2)

 

 

GAAP

 

 

GAAP %

Change

 

 

Non-GAAP

Constant

Currency

% Change (3)

 

 

 

2019

 

 

2019

 

 

2019

 

 

2018

 

 

2019

 

 

2019

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses

 

$

20,121

 

 

$

(616

)

 

$

20,737

 

 

$

19,292

 

 

 

4.3

%

 

 

7.5

%

Subscription services

 

 

7,104

 

 

 

(93

)

 

 

7,197

 

 

 

7,584

 

 

 

-6.3

%

 

 

-5.1

%

Total product licenses and subscription services

 

 

27,225

 

 

 

(709

)

 

 

27,934

 

 

 

26,876

 

 

 

1.3

%

 

 

3.9

%

Product support

 

 

72,978

 

 

 

(2,091

)

 

 

75,069

 

 

 

73,676

 

 

 

-0.9

%

 

 

1.9

%

Other services

 

 

17,534

 

 

 

(603

)

 

 

18,137

 

 

 

20,050

 

 

 

-12.5

%

 

 

-9.5

%

Total revenues

 

 

117,737

 

 

 

(3,403

)

 

 

121,140

 

 

 

120,602

 

 

 

-2.4

%

 

 

0.4

 

(1)

The “Foreign Currency Exchange Rate Impact” reflects the estimated impact from fluctuations in foreign currency exchange rates on international revenues. It shows the increase (decrease) in international revenues from the same period in the prior year, based on comparisons to the prior year quarterly average foreign currency exchange rates. The term “international” refers to operations outside of the United States and Canada.

 

(2)

The “Non-GAAP Constant Currency” reflects the current period GAAP amount, less the Foreign Currency Exchange Rate Impact.

 

(3)

The “Non-GAAP Constant Currency % Change” reflects the percentage change between the current period Non-GAAP Constant Currency amount and the GAAP amount for the same period in the prior year.

MICROSTRATEGY INCORPORATED

WORLDWIDE EMPLOYEE HEADCOUNT

 

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

June 30,

 

 

 

2019

 

 

2019

 

 

2018

 

 

2018

 

 

2018

 

Subscription services

 

 

62

 

 

 

54

 

 

 

56

 

 

 

55

 

 

 

54

 

Product support

 

 

234

 

 

 

224

 

 

 

202

 

 

 

194

 

 

 

184

 

Consulting

 

 

404

 

 

 

429

 

 

 

452

 

 

 

458

 

 

 

443

 

Education

 

 

40

 

 

 

50

 

 

 

47

 

 

 

44

 

 

 

39

 

Sales and marketing

 

 

637

 

 

 

675

 

 

 

707

 

 

 

699

 

 

 

687

 

Research and development

 

 

764

 

 

 

733

 

 

 

716

 

 

 

688

 

 

 

651

 

General and administrative

 

 

336

 

 

 

329

 

 

 

348

 

 

 

326

 

 

 

322

 

Total headcount

 

 

2,477

 

 

 

2,494

 

 

 

2,528

 

 

 

2,464

 

 

 

2,380

 

 

MicroStrategy Incorporated
Investor Relations
ir@microstrategy.com
(703) 848-8600

Source: MicroStrategy