MSTR
$158.06
Microstrategy Cl A
$2.14
1.37%
Earnings Details
3rd Quarter September 2019
Tuesday, October 29, 2019 4:01:00 PM
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Summary

Microstrategy Cl A (MSTR) Recent Earnings

Microstrategy Cl A (MSTR) reported 3rd Quarter September 2019 earnings of $0.94 per share on revenue of $119.7 million. The consensus earnings estimate was $0.73 per share on revenue of $125.2 million. Revenue fell 2.0% compared to the same quarter a year ago.

MicroStrategy Inc is a provider of enterprise-ready analytics, mobile, and security software platforms. The Company provides system-of-record reporting and interactive visualization capabilities offered on any device or in the cloud.

Results
Reported Earnings
$0.94
Earnings Whisper
-
Consensus Estimate
$0.73
Reported Revenue
$119.7 Mil
Revenue Estimate
$125.2 Mil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

MicroStrategy Announces Third Quarter 2019 Financial Results

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

Third Quarter 2019 Financial Highlights

  • Revenues: Total revenues for the third quarter of 2019 were $119.7 million, a 2.0% decrease, or a 0.4% increase on a non-GAAP constant currency basis, compared to the third quarter of 2018. Product licenses and subscription services revenues for the third quarter of 2019 were $26.9 million, a 2.3% decrease, or a 1.4% increase on a constant currency basis, compared to the third quarter of 2018. Product support revenues for the third quarter of 2019 were $72.9 million, a 2.1% decrease, or a 0.2% decrease on a constant currency basis, compared to the third quarter of 2018. Other services revenues for the third quarter of 2019 were $19.9 million, a 1.2% decrease, or a 1.1% increase on a constant currency basis, compared to the third quarter of 2018.
  • Gross Profit: Gross profit for the third quarter of 2019 was $95.9 million, representing an 80.1% gross margin, compared to a gross margin of 80.9% in the third quarter of 2018.
  • Operating Expenses: Operating expenses for the third quarter of 2019 were $91.3 million, a 0.3% decrease compared to the third quarter of 2018.
  • Income from Operations: Income from operations for the third quarter of 2019 was $4.6 million versus $7.2 million for the third quarter of 2018. Non-GAAP income from operations, which excludes share-based compensation expense, was $6.4 million for the third quarter of 2019 versus non-GAAP income from operations of $10.2 million for the third quarter of 2018.
  • Net Income: Net income for the third quarter of 2019 was $9.7 million, or $0.94 per share on a diluted basis, as compared to net income of $12.7 million, or $1.10 per share on a diluted basis, for the third quarter of 2018.
  • Cash and Short-term Investments: As of September 30, 2019, MicroStrategy had cash and cash equivalents and short-term investments of $578.3 million, as compared to $576.1 million as of December 31, 2018, an increase of $2.2 million.

“Our solid third quarter results reflect growing interest in MicroStrategy 2019 and increased adoption of HyperIntelligence.  Our customers continue to choose our award-winning platform to deliver timely insights to employees who may have previously struggled to find the insights they need,” said Michael J. Saylor, CEO, MicroStrategy Incorporated.  “Additionally, we are seeing increased customer interest in our cloud offerings for their simplicity, scalability, and speed.”

The tables at the end of this press release include a reconciliation of GAAP to non-GAAP financial measures for the three and nine months ended September 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

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

  • Organizations worldwide such as Clarín, Dallas Fort Worth International Airport, Freddie Mac, Gilbane Building Company, and Skechers are deploying HyperIntelligence to their front-line employees. HyperIntelligence reveals insights to users within their favorite business applications on the web or mobile device, or on screens as they pass by, without interrupting existing workflows.
  • Enhancements in MicroStrategy 2019 Update 2 and Update 3 make it easier for organizations faced with growing system demands to seamlessly move their MicroStrategy analytics and mobility deployments to the cloud.
    • Onyx CenterSource moved their on-premises analytics environment to MicroStrategy Cloud Platform on Amazon Web Services (AWS) to streamline costs, reduce data discrepancies, and address security and scalability. Onyx CenterSource can scale its Amazon S3 storage services and two environments up or down to save costs, and its platform upgrades are 75% faster on AWS cloud.
    • Fanatics reports that it uses MicroStrategy on AWS to run thousands of analytical queries and share dossiers with hundreds of employees in an instant, giving its users the intelligence they need to make critical sales and inventory adjustments on the fly, especially during big sports moments.
    • RAC Insurance will move its analytics environment to MicroStrategy Cloud Platform on Microsoft Azure to help reduce costs and allow employees to focus more on creating value for their members. Moving to the cloud forms part of RAC Insurance’s strategic business plan to transition its entire data analytics environment onto the Microsoft Azure platform.
  • MicroStrategy announced that it is providing analytics technology for Freddie Mac’s web-based mortgage insights tool, Evaluate|Compare|OptimizeSM (ECO), designed to help mortgage lenders with advanced evaluation tools. The ECO dashboard uses the MicroStrategy 2019 platform, interactive dossiers, and application program interfaces that, combined with market intelligence data, provide lenders with a valuable, near real time informational resource to help them deliver a better mortgage experience for borrowers.
  • MicroStrategy signed a public sector distribution agreement with immixGroup, an Arrow company. The agreement with immixGroup, the leading value-added distributor of enterprise IT for the U.S. public sector, allows MicroStrategy to grow its public sector business, accelerate sales cycles, and operate more efficiently in the government market. Federal agencies are able to deploy MicroStrategy 2019 on-premises, into their existing cloud infrastructure, or through the FedRAMP marketplace.
  • Ventana Research named MicroStrategy’s HyperIntelligence offering the 2019 Overall Digital Innovation Award winner. The Ventana Research Digital Innovation Awards recognize vendors pioneering new technology innovations and advancements in their respective markets, driving change and increasing value for organizations around the world.
  • Forrester Research, Inc. named MicroStrategy as a leader in “The Forrester Wave: Enterprise BI Platforms (Client-Managed), Q3 2019” report. MicroStrategy 2019 earned the maximum scores in eight out of 10 current offering criteria: Systems of insight, Architecture, Big data, Mobile, App building/customization, GUI, Data prep, and Deployment options.

MicroStrategy Names Lisa Mayr Chief Financial Officer

MicroStrategy also announced today that it has appointed Lisa Mayr as its new Senior Executive Vice President & Chief Financial Officer, effective as of her start date with the Company, which is expected to be on or about November 4, 2019. Ms. Mayr will succeed Phong Le, who has served as Chief Financial Officer of the Company since 2015. Mr. Le will continue serving as MicroStrategy’s Senior Executive Vice President & Chief Operating Officer.

Ms. Mayr previously served as chief financial officer of EverFi, Inc., a digital and interactive educational software company. Prior to EverFi, Ms. Mayr was vice president, finance and later chief financial officer of Blackboard, Inc., a global education technology company, where she helped with the transition from an on-premises license model to cloud. She also previously held senior finance positions at LivingSocial, Inc., GeoEye, Inc., and Celtic Capital, a financial advisory services firm she co-founded. Ms. Mayr holds a Bachelor of Arts in Economics and International Relations from American University and an M.B.A. from Georgetown University.

“We are thrilled to welcome Lisa to our management team. Lisa brings extensive financial management experience and impressive leadership capabilities, making her an excellent choice as MicroStrategy’s next Chief Financial Officer,” said Mr. Saylor. “I believe she will make significant contributions to MicroStrategy’s operational and strategic goals.”

Conference Call

MicroStrategy will be discussing its third 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 6998558. 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 November 5, 2019 at (855) 859-2056 (domestically) or (404) 537-3406 (internationally) using the passcode 6998558.

Non-GAAP Financial Measures

MicroStrategy is providing supplemental financial measures for (i) income (loss) from operations that excludes the impact of share-based compensation arrangements, (ii) net income and diluted earnings per share that exclude the impact from the U.S. Tax Cuts and Jobs Act (“U.S. tax reform”) in the third quarter of 2018 and the sale of the Voice.com domain name (the “Domain Name Sale”) in the second quarter of 2019, 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 management judgment and the resulting share-based compensation expense could vary significantly in comparison to other companies. The second set of supplemental financial measures excludes the impact from U.S. tax reform, which was a one-time tax charge, and the Domain Name Sale, which is outside of MicroStrategy’s normal business operations. The third set 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, MicroStrategy 2019, HyperIntelligence, Intelligent Enterprise, MicroStrategy Cloud, and MicroStrategy Library 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; 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

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses

 

$

18,972

 

 

$

20,264

 

 

$

57,384

 

 

$

56,857

 

Subscription services

 

 

7,894

 

 

 

7,240

 

 

 

22,142

 

 

 

22,486

 

Total product licenses and subscription services

 

 

26,866

 

 

 

27,504

 

 

 

79,526

 

 

 

79,343

 

Product support

 

 

72,885

 

 

 

74,463

 

 

 

217,313

 

 

 

222,554

 

Other services

 

 

19,942

 

 

 

20,185

 

 

 

55,957

 

 

 

63,824

 

Total revenues

 

 

119,693

 

 

 

122,152

 

 

 

352,796

 

 

 

365,721

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses

 

 

526

 

 

 

377

 

 

 

1,597

 

 

 

4,255

 

Subscription services

 

 

3,889

 

 

 

3,259

 

 

 

10,976

 

 

 

9,953

 

Total product licenses and subscription services

 

 

4,415

 

 

 

3,636

 

 

 

12,573

 

 

 

14,208

 

Product support

 

 

6,922

 

 

 

5,079

 

 

 

21,710

 

 

 

14,685

 

Other services

 

 

12,478

 

 

 

14,674

 

 

 

41,055

 

 

 

44,721

 

Total cost of revenues

 

 

23,815

 

 

 

23,389

 

 

 

75,338

 

 

 

73,614

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

95,878

 

 

 

98,763

 

 

 

277,458

 

 

 

292,107

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

43,935

 

 

 

45,429

 

 

 

140,968

 

 

 

147,742

 

Research and development

 

 

27,457

 

 

 

25,829

 

 

 

83,436

 

 

 

74,471

 

General and administrative

 

 

19,900

 

 

 

20,285

 

 

 

63,684

 

 

 

63,756

 

Total operating expenses

 

 

91,292

 

 

 

91,543

 

 

 

288,088

 

 

 

285,969

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

 

4,586

 

 

 

7,220

 

 

 

(10,630

)

 

 

6,138

 

Interest income, net

 

 

2,941

 

 

 

3,441

 

 

 

8,520

 

 

 

8,698

 

Other income, net

 

 

1,882

 

 

 

798

 

 

 

30,717

 

 

 

3,665

 

Income before income taxes

 

 

9,409

 

 

 

11,459

 

 

 

28,607

 

 

 

18,501

 

(Benefit from) provision for income taxes

 

 

(291

)

 

 

(1,240

)

 

 

6,419

 

 

 

(699

)

Net income

 

$

9,700

 

 

$

12,699

 

 

$

22,188

 

 

$

19,200

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share (1):

 

$

0.95

 

 

$

1.11

 

 

$

2.16

 

 

$

1.68

 

Weighted average shares outstanding used in computing basic earnings per share

 

 

10,251

 

 

 

11,467

 

 

 

10,273

 

 

 

11,458

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share (1):

 

$

0.94

 

 

$

1.10

 

 

$

2.15

 

 

$

1.67

 

Weighted average shares outstanding used in computing diluted earnings per share

 

 

10,309

 

 

 

11,538

 

 

 

10,336

 

 

 

11,502

 

(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)

 

 

September 30,

 

 

December 31,

 

 

 

2019

 

 

2018*

 

 

 

(unaudited)

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

375,071

 

 

$

109,924

 

Restricted cash

 

 

798

 

 

 

862

 

Short-term investments

 

 

203,218

 

 

 

466,186

 

Accounts receivable, net

 

 

118,002

 

 

 

171,359

 

Prepaid expenses and other current assets

 

 

24,665

 

 

 

30,068

 

Total current assets

 

 

721,754

 

 

 

778,399

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

51,993

 

 

 

51,919

 

Right-of-use assets

 

 

86,994

 

 

 

0

 

Deposits and other assets

 

 

7,455

 

 

 

8,134

 

Deferred tax assets, net

 

 

20,520

 

 

 

17,316

 

Total Assets

 

$

888,716

 

 

$

855,768

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable, accrued expenses, and operating lease liabilities

 

$

28,626

 

 

$

33,684

 

Accrued compensation and employee benefits

 

 

41,829

 

 

 

48,045

 

Deferred revenue and advance payments

 

 

160,244

 

 

 

176,540

 

Total current liabilities

 

 

230,699

 

 

 

258,269

 

 

 

 

 

 

 

 

 

 

Deferred revenue and advance payments

 

 

4,487

 

 

 

6,469

 

Operating lease liabilities

 

 

105,291

 

 

 

0

 

Other long-term liabilities

 

 

32,786

 

 

 

61,262

 

Deferred tax liabilities

 

 

34

 

 

 

37

 

Total Liabilities

 

 

373,297

 

 

 

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; 15,880 shares issued and 8,232 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

 

 

590,158

 

 

 

576,957

 

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

 

 

(634,405

)

 

 

(586,161

)

Accumulated other comprehensive loss

 

 

(11,674

)

 

 

(10,217

)

Retained earnings

 

 

571,322

 

 

 

549,134

 

Total Stockholders’ Equity

 

 

515,419

 

 

 

529,731

 

Total Liabilities and Stockholders’ Equity

 

$

888,716

 

 

$

855,768

 

* Derived from audited financial statements.

MICROSTRATEGY INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

Nine Months Ended

 

 

 

September 30,

 

 

 

2019

 

 

2018

 

 

 

(unaudited)

 

 

(unaudited)

 

Operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

22,188

 

 

$

19,200

 

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

11,543

 

 

 

3,483

 

Write-offs and sales allowances

 

 

892

 

 

 

1,053

 

Net realized loss on short-term investments

 

 

41

 

 

 

0

 

Deferred taxes

 

 

(3,352

)

 

 

(6,667

)

Release of liabilities for unrecognized tax benefits

 

 

(1,077

)

 

 

0

 

Share-based compensation expense

 

 

7,887

 

 

 

11,132

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

11,781

 

 

 

9,300

 

Prepaid expenses and other current assets

 

 

4,513

 

 

 

(1,075

)

Deposits and other assets

 

 

349

 

 

 

(956

)

Accounts payable and accrued expenses

 

 

(11,618

)

 

 

(5,816

)

Accrued compensation and employee benefits

 

 

(7,368

)

 

 

(3,901

)

Deferred revenue and advance payments

 

 

23,612

 

 

 

(4,032

)

Operating lease liabilities

 

 

(6,394

)

 

 

0

 

Other long-term liabilities

 

 

(674

)

 

 

1,527

 

Net cash provided by operating activities

 

 

52,323

 

 

 

23,248

 

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

 

Proceeds from redemption of short-term investments

 

 

589,357

 

 

 

348,980

 

Purchases of property and equipment

 

 

(9,382

)

 

 

(4,457

)

Purchases of short-term investments

 

 

(320,487

)

 

 

(674,528

)

Net cash provided by (used in) investing activities

 

 

259,488

 

 

 

(330,005

)

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

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

 

 

5,442

 

 

 

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

 

 

(42,802

)

 

 

2,462

 

 

 

 

 

 

 

 

 

 

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

 

 

(3,926

)

 

 

(3,904

)

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

 

 

265,083

 

 

 

(308,199

)

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

 

 

110,786

 

 

 

421,182

 

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

 

$

375,869

 

 

$

112,983

 

MICROSTRATEGY INCORPORATED

REVENUE AND COST OF REVENUE DETAIL

(in thousands)

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses and subscription services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses

 

$

18,972

 

 

$

20,264

 

 

$

57,384

 

 

$

56,857

 

Subscription services

 

 

7,894

 

 

 

7,240

 

 

 

22,142

 

 

 

22,486

 

Total product licenses and subscription services

 

 

26,866

 

 

 

27,504

 

 

 

79,526

 

 

 

79,343

 

Product support

 

 

72,885

 

 

 

74,463

 

 

 

217,313

 

 

 

222,554

 

Other services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consulting

 

 

18,038

 

 

 

18,001

 

 

 

50,135

 

 

 

56,998

 

Education

 

 

1,904

 

 

 

2,184

 

 

 

5,822

 

 

 

6,826

 

Total other services

 

 

19,942

 

 

 

20,185

 

 

 

55,957

 

 

 

63,824

 

Total revenues

 

 

119,693

 

 

 

122,152

 

 

 

352,796

 

 

 

365,721

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses and subscription services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses

 

 

526

 

 

 

377

 

 

 

1,597

 

 

 

4,255

 

Subscription services

 

 

3,889

 

 

 

3,259

 

 

 

10,976

 

 

 

9,953

 

Total product licenses and subscription services

 

 

4,415

 

 

 

3,636

 

 

 

12,573

 

 

 

14,208

 

Product support

 

 

6,922

 

 

 

5,079

 

 

 

21,710

 

 

 

14,685

 

Other services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consulting

 

 

11,102

 

 

 

12,996

 

 

 

35,996

 

 

 

39,859

 

Education

 

 

1,376

 

 

 

1,678

 

 

 

5,059

 

 

 

4,862

 

Total other services

 

 

12,478

 

 

 

14,674

 

 

 

41,055

 

 

 

44,721

 

Total cost of revenues

 

 

23,815

 

 

 

23,389

 

 

 

75,338

 

 

 

73,614

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

$

95,878

 

 

$

98,763

 

 

$

277,458

 

 

$

292,107

 

MICROSTRATEGY INCORPORATED

DEFERRED REVENUE DETAIL

(in thousands)

 

 

September 30,

 

 

December 31,

 

 

September 30,

 

 

 

2019

 

 

2018*

 

 

2018

 

 

 

(unaudited)

 

 

 

 

 

 

(unaudited)

 

Current:

 

 

 

 

 

 

 

 

 

 

 

 

Deferred product licenses revenue

 

$

470

 

 

$

1,768

 

 

$

584

 

Deferred subscription services revenue

 

 

12,812

 

 

 

13,508

 

 

 

11,736

 

Deferred product support revenue

 

 

139,402

 

 

 

152,501

 

 

 

131,185

 

Deferred other services revenue

 

 

7,560

 

 

 

8,763

 

 

 

7,538

 

Total current deferred revenue and advance payments

 

$

160,244

 

 

$

176,540

 

 

$

151,043

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Non-current:

 

 

 

 

 

 

 

 

 

 

 

 

Deferred product licenses revenue

 

$

368

 

 

$

542

 

 

$

730

 

Deferred subscription services revenue

 

 

142

 

 

 

2,384

 

 

 

0

 

Deferred product support revenue

 

 

3,440

 

 

 

3,091

 

 

 

3,701

 

Deferred other services revenue

 

 

537

 

 

 

452

 

 

 

492

 

Total non-current deferred revenue and advance payments

 

$

4,487

 

 

$

6,469

 

 

$

4,923

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total current and non-current:

 

 

 

 

 

 

 

 

 

 

 

 

Deferred product licenses revenue

 

$

838

 

 

$

2,310

 

 

$

1,314

 

Deferred subscription services revenue

 

 

12,954

 

 

 

15,892

 

 

 

11,736

 

Deferred product support revenue

 

 

142,842

 

 

 

155,592

 

 

 

134,886

 

Deferred other services revenue

 

 

8,097

 

 

 

9,215

 

 

 

8,030

 

Total current and non-current deferred revenue and advance payments

 

$

164,731

 

 

$

183,009

 

 

$

155,966

 

* 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

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

$

4,586

 

 

$

7,220

 

 

$

(10,630

)

 

$

6,138

 

Share-based compensation expense

 

 

1,834

 

 

 

3,011

 

 

 

7,887

 

 

 

11,132

 

Non-GAAP income (loss) from operations

 

$

6,420

 

 

$

10,231

 

 

$

(2,743

)

 

$

17,270

 

MICROSTRATEGY INCORPORATED

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

EXCLUSION OF U.S. TAX REFORM AND DOMAIN NAME SALE

(in thousands, except per share data)

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

September 30,

 

 

September 30,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

Reconciliation of non-GAAP net income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

 

$

9,700

 

 

$

12,699

 

 

$

22,188

 

 

$

19,200

 

Measurement-period adjustment related to U.S. tax reform

 

 

0

 

 

 

(3,106

)

 

 

0

 

 

 

(3,106

)

Gain from Domain Name Sale, net of tax

 

 

0

 

 

 

0

 

 

 

(21,778

)

 

 

0

 

Non-GAAP net income

 

$

9,700

 

 

$

9,593

 

 

$

410

 

 

$

16,094

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Reconciliation of non-GAAP diluted earnings per share:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share

 

$

0.94

 

 

$

1.10

 

 

$

2.15

 

 

$

1.67

 

Measurement-period adjustment related to U.S. tax reform (per diluted share)

 

 

0.00

 

 

 

(0.27

)

 

 

0.00

 

 

 

(0.27

)

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

 

 

0.00

 

 

 

0.00

 

 

 

(2.11

)

 

 

0.00

 

Non-GAAP diluted earnings per share

 

$

0.94

 

 

$

0.83

 

 

$

0.04

 

 

$

1.40

 

MICROSTRATEGY INCORPORATED

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

CONSTANT CURRENCY

(in thousands)

 

 

Three Months Ended

 

 

 

September 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

 

$

18,972

 

 

$

(921

)

 

$

19,893

 

 

$

20,264

 

 

 

-6.4

%

 

 

-1.8

%

Subscription services

 

 

7,894

 

 

 

(112

)

 

 

8,006

 

 

 

7,240

 

 

 

9.0

%

 

 

10.6

%

Total product licenses and subscription services

 

 

26,866

 

 

 

(1,033

)

 

 

27,899

 

 

 

27,504

 

 

 

-2.3

%

 

 

1.4

%

Product support

 

 

72,885

 

 

 

(1,400

)

 

 

74,285

 

 

 

74,463

 

 

 

-2.1

%

 

 

-0.2

%

Other services

 

 

19,942

 

 

 

(455

)

 

 

20,397

 

 

 

20,185

 

 

 

-1.2

%

 

 

1.1

%

Total revenues

 

 

119,693

 

 

 

(2,888

)

 

 

122,581

 

 

 

122,152

 

 

 

-2.0

%

 

 

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

 

 

September 30,

 

 

June 30,

 

 

March 31,

 

 

December 31,

 

 

September 30,

 

 

 

2019

 

 

2019

 

 

2019

 

 

2018

 

 

2018

 

Subscription services

 

 

66

 

 

 

62

 

 

 

54

 

 

 

56

 

 

 

55

 

Product support

 

 

231

 

 

 

234

 

 

 

224

 

 

 

202

 

 

 

194

 

Consulting

 

 

390

 

 

 

404

 

 

 

429

 

 

 

452

 

 

 

458

 

Education

 

 

38

 

 

 

40

 

 

 

50

 

 

 

47

 

 

 

44

 

Sales and marketing

 

 

616

 

 

 

637

 

 

 

675

 

 

 

707

 

 

 

699

 

Research and development

 

 

775

 

 

 

764

 

 

 

733

 

 

 

716

 

 

 

688

 

General and administrative

 

 

337

 

 

 

336

 

 

 

329

 

 

 

348

 

 

 

326

 

Total headcount

 

 

2,453

 

 

 

2,477

 

 

 

2,494

 

 

 

2,528

 

 

 

2,464

 

 

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

Source: MicroStrategy Incorporated