Strategy reported an $8.22 billion net loss for the second quarter after Bitcoin’s decline generated a large unrealized loss across the company’s digital-asset holdings.
The company recorded an $8.33 billion operating loss, including an $8.32 billion unrealized Bitcoin loss. Diluted losses reached $24.45 per common share, while net losses attributable to common shareholders totaled $8.62 billion after $400.7 million of preferred-stock dividends.
Bitcoin Decline Reverses Strategy’s 2025 Gain
Strategy’s second-quarter financial results marked a sharp reversal from the same period last year, when the company recorded $10.02 billion in net income following a $14.05 billion unrealized Bitcoin gain.
The underlying software business generated $122.4 million in quarterly revenue, up 6.9% from $114.5 million a year earlier. Gross profit increased to $81.6 million, although the gross margin narrowed to 66.6% from 68.8%.
Cash and cash equivalents stood at $1.71 billion on June 30, down from $2.21 billion at the end of March. Strategy also held $736.1 million in short-term investments.
Strategy Expands Capital Allocation Beyond Bitcoin
Strategy’s Q2 presentation formalized its transition from one-way capital issuance to active capital management.
Proceeds from future MSTR common-stock and preferred-stock issuances can be divided among Bitcoin purchases, the USD reserve, debt repurchases and securities buybacks. Bitcoin can also be sold to increase cash reserves, retire debt or repurchase MSTR and preferred shares when management considers those uses advantageous.
Strategy has board authorization to sell Bitcoin to add as much as $1.25 billion to its USD reserve, fund preferred dividends and interest payments, replenish cash used for those obligations or finance securities repurchases.
The company sold 3,620 BTC for $218.4 million during 2026, including a 3,588 BTC sale used to fund preferred distributions. The policy extends Strategy’s earlier shift away from an absolute never-sell position.
USD Reserve Reaches $3.75 Billion
Strategy increased its USD reserve to $3.75 billion, providing approximately 2.1 years of coverage for preferred dividends and debt interest. The current annual obligation is roughly $1.76 billion.
The company raised $17.06 billion through at-the-market programmes during 2026 and reduced outstanding convertible debt from $8.21 billion to $6.71 billion after repurchasing $1.5 billion of notes for $1.38 billion.
Strategy remained a net Bitcoin buyer despite introducing regular sales into its capital framework. It purchased 174,895 BTC and sold 3,620 BTC during the year, producing net acquisitions of 171,275 BTC.
Its holdings stood at 843,775 BTC on July 26, acquired for $63.69 billion at an average price of $75,476. The position was valued at $54.77 billion using a Bitcoin price of $64,915.
Management also rejected Bitcoin-backed borrowing for the current capital plan, citing counterparty exposure, borrowing costs and margin risk during the Q2 earnings call.
Strategy repurchased 288,930 STRC shares for $25 million at an average price of $86.53 and had $975 million remaining under its digital-credit securities repurchase authorization as of July 26.
