Strategy Reports $12.54B Q1 Loss on Bitcoin Decline

TLDR

• Strategy reported a $12.54 billion net loss in Q1 2026 after Bitcoin declined 24% during the quarter.
• The company recorded a $14.46 billion unrealized loss on its digital asset holdings.
• Revenue rose 11.9% year over year to $124.3 million despite weaker product license sales.
• Strategy held 818,334 BTC as of early May, equal to about 3.9% of Bitcoin’s total supply.
• Michael Saylor said the company may sell a small portion of Bitcoin to meet dividend obligations.

Strategy reported a $12.54 billion net loss for Q1 2026 after Bitcoin prices fell sharply. The company recorded a $14.46 billion unrealized loss on digital assets during the quarter. However, executives said they may sell a small portion of Bitcoin to meet dividend obligations.

Strategy Considers Limited Bitcoin Sales After Record Loss

Strategy disclosed the loss during its May 5 earnings call, and it linked the result to Bitcoin’s 24% quarterly decline. Revenue reached $124.3 million, up 11.9% year over year, while gross profit stood at $83.4 million with a 67.1% margin. However, operating loss widened to $14.47 billion, compared with $5.92 billion in Q1 2025. Net loss attributable to common stockholders totaled $12.77 billion, or $38.25 per diluted share.

Executive chairman Michael Saylor addressed the shift in treasury management during the call. He said, “We will probably sell some Bitcoin to pay a dividend just to inoculate the market and send the message that we did it.” He added that the company still views Bitcoin as its core asset and continues to buy regularly. However, he compared the approach to real estate development, where management sells portions and reinvests proceeds.

Strategy aims to cover about $1.5 billion in annual dividend obligations tied to its STRC preferred stock. The company said it can generate cash flow while maintaining its broader Bitcoin strategy. It also confirmed 23 on-time dividend payments totaling $693 million since early 2025.

Bitcoin Holdings Remain Above Cost Basis Despite Quarterly Decline

Strategy held 818,334 BTC as of early May, representing about 3.9% of Bitcoin’s total supply. The average acquisition price stood near $75,537 per coin, and the total cost basis reached about $61.8 billion. Despite the quarterly drop, the holdings remained modestly above the cumulative purchase price at recent market levels.

Bitcoin briefly fell below $81,000 during the earnings period, and MSTR shares dropped over 4% in after-hours trading. Analysts had expected revenue near $120 million and a large GAAP loss tied to digital asset valuation. Strategy slightly exceeded revenue expectations but posted a deeper bottom-line loss than projected.

The company continued aggressive accumulation in 2026 and added more than 63,000 BTC in the first four months. It raised over $11 billion year to date through preferred stock and capital markets transactions. Management said it tracks “BTC  Gain” and “Bitcoin yield” internally to assess performance over time.

Executives also proposed shifting STRC dividends to a semi-monthly schedule to improve liquidity. They said STRC recorded 3% volatility during the recent Bitcoin downturn and posted a 2.53 Sharpe ratio. The company confirmed ongoing capital raising efforts to support continued Bitcoin purchases.

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