BusinessWire

MicroStrategy Announces Fourth Quarter 2019 Financial Results

TYSONS CORNER, Va.--(BUSINESS WIRE)--$MSTR #MSTR--MicroStrategy® (Nasdaq: MSTR), a global leader in enterprise analytics software and services, today announced financial results for the three-month period ended December 31, 2019 (the fourth quarter of its 2019 fiscal year).


Our fourth quarter performance highlights increased customer adoption of our cloud offerings and our breakthrough HyperIntelligence® product. We’re seeing customers deploy an impressive variety and scale of HyperIntelligence use cases, reflecting the product’s ability to bring intelligence to more users, making them significantly faster and smarter,” said Michael J. Saylor, CEO, MicroStrategy Incorporated.

Mr. Saylor continued, “Optimized for the cloud, our open, comprehensive enterprise analytics platform, combined with our expert services, has been resonating in the market. As we look at the year ahead, we will remain focused on driving new and existing customer adoption of our latest platform – MicroStrategy 2020 – leading with our HyperIntelligence and cloud offerings.”

Fourth Quarter 2019 Financial Highlights

  • Revenues: Total revenues for the fourth quarter of 2019 were $133.5 million, a 1.2% increase, or a 2.7% increase on a non-GAAP constant currency basis, compared to the fourth quarter of 2018. Product licenses and subscription services revenues for the fourth quarter of 2019 were $37.3 million, a 2.5% decrease, or a 0.4% decrease on a non-GAAP constant currency basis, compared to the fourth quarter of 2018. Product support revenues for the fourth quarter of 2019 were $74.7 million, a 1.4% increase, or a 2.7% increase on a non-GAAP constant currency basis, compared to the fourth quarter of 2018. Other services revenues for the fourth quarter of 2019 were $21.5 million, a 7.5% increase, or an 8.6% increase on a non-GAAP constant currency basis, compared to the fourth quarter of 2018.
  • Gross Profit: Gross profit for the fourth quarter of 2019 was $108.9 million, representing an 81.6% gross margin, compared to a gross margin of 80.4% in the fourth quarter of 2018.
  • Operating Expenses: Operating expenses for the fourth quarter of 2019 were $99.3 million, an 8.2% decrease compared to the fourth quarter of 2018.
  • Income (Loss) from Operations: Income from operations for the fourth quarter of 2019 was $9.6 million versus loss from operations of $2.2 million for the fourth quarter of 2018. Non-GAAP income from operations, which excludes share-based compensation expense, was $12.0 million for the fourth quarter of 2019 versus $1.3 million for the fourth quarter of 2018.
  • Net Income: Net income for the fourth quarter of 2019 was $12.2 million, or $1.18 per share on a diluted basis, as compared to net income of $3.3 million, or $0.30 per share on a diluted basis, for the fourth quarter of 2018.
  • Cash and Short-term Investments: As of December 31, 2019, MicroStrategy had cash and cash equivalents and short-term investments of $565.6 million, as compared to $576.1 million as of December 31, 2018, a decrease of $10.5 million. During the fourth quarter of 2019, MicroStrategy repurchased 159,695 shares of its class A common stock for an aggregate purchase price of approximately $24.5 million. As of December 31, 2019, MicroStrategy had 8.1 million shares of class A common stock and 2.0 million shares of class B common stock outstanding.

The tables at the end of this press release include a reconciliation of GAAP to non-GAAP financial measures for the three and twelve months ended December 31, 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 fourth quarter of 2019:

  • A number of Fortune Global 500 companies, as well as numerous leading brands such as The Co-operators, Saint-Gobain, and Swiss Medical, purchased HyperIntelligence and are moving to empower their front-line employees with actionable insights.
  • MicroStrategy announced that it will host its 23rd annual user conference, MicroStrategy World 2020, from February 4 to February 6, 2020 in Orlando, Fla. Attendees will get a first look at the newest features and capabilities of MicroStrategy 2020, including new ways to experience HyperIntelligence, try new Dossier® authoring tools for content creators, learn about the federated analytics connectors to Jupyter and RStudio for data scientists, and more. Attendees will learn how MicroStrategy 2020 together with innovative uses of artificial intelligence (“AI”), mobility, and cloud technologies can be deployed to significantly boost productivity and drive greater analytics adoption across the enterprise.
  • MicroStrategy released the results of its “2020 Global State of Enterprise Analytics” report revealing that, despite 94% of organizations believing data and analytics is important to their digital transformation and business growth, most are not enabling a data-driven culture. Among the many findings, the report revealed that for 60% of employees, it takes hours or days to get the information they need, while only 3% can find information in seconds.
  • MicroStrategy published its “10 Enterprise Analytics Trends to Watch in 2020” report. In collaboration with leading analysts and influencers from Forrester, IDC, Constellation Research, Ventana Research and others, the annual MicroStrategy compilation highlights trends and insights that range from AI and mobile intelligence, to the explosion of data and data sources, to some very human factors including a predicted shortage of data and analytics talent.
  • MicroStrategy launched a new technology partnership with DataRobot, a leader in enterprise AI, designed to make it easier for businesses to integrate AI into their most popular applications and core processes by leveraging HyperIntelligence cards to deliver AI-driven insights and recommendations. HyperIntelligence seamlessly injects trusted and predictive analytics directly into popular business applications on both web and mobile – including Google’s G Suite, Microsoft Office 365, and SaaS applications such as Salesforce, Workday, and Confluence – making it possible to instantly reveal insights to users without interrupting their existing workflows.
  • MicroStrategy introduced innovations that aim to significantly boost productivity and drive analytics adoption to 100%. HyperIntelligence for Mobile is designed to provide the speed and agility that users need to make important decisions and take action quickly outside of the office.
  • MicroStrategy announced that 94% of survey respondents in The BI Survey 19, the industry’s largest independent global survey of BI users, recommend MicroStrategy. Conducted by the Business Application Research Center, The BI Survey 19 ranked MicroStrategy first in self-service, visual analysis, and location intelligence among the large global enterprise BI platforms peer group. In addition, MicroStrategy was rated a leader in its peer groups for business value, business benefits, mobile BI, innovation, functionality, dashboards, query performance, and distribution of reports.

Conference Call

MicroStrategy will be discussing its fourth quarter 2019 financial results on a conference call today beginning at approximately 5:00 p.m. EST. To access the conference call, dial (844) 824-7425 (domestically) or (716) 220-9429 (internationally) and use conference ID 6574498. 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 February 4, 2020 at (855) 859-2056 (domestically) or (404) 537-3406 (internationally) using the passcode 6574498.

Non-GAAP Financial Measures

MicroStrategy is providing supplemental financial measures for (i) non-GAAP income (loss) from operations that excludes the impact of share-based compensation arrangements, (ii) non-GAAP net income and non-GAAP diluted earnings per share that exclude the impact from the U.S. Tax Cuts and Jobs Act (the “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) non-GAAP constant currency 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 the 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 non-GAAP “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 global leader in enterprise analytics software and services. Our vision is to enable Intelligence Everywhere. MicroStrategy provides modern analytics on an open, comprehensive enterprise platform used by many of the world’s most admired brands in the Fortune Global 500. Optimized for cloud and on-premises deployments, the platform features HyperIntelligence, a breakthrough technology that overlays actionable enterprise data on popular business applications to help users make smarter, faster decisions. For more information about MicroStrategy, visit www.microstrategy.com.

MicroStrategy, HyperIntelligence, MicroStrategy 2020, Intelligent Enterprise, MicroStrategy Library, MicroStrategy World, Dossier, and Intelligence Everywhere 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 2020; 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; a substantial customer shift from a product license model to a cloud-based subscription model; 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

 

 

Twelve Months Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018*

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses

 

$

30,087

 

 

$

31,200

 

 

$

87,471

 

 

$

88,057

 

Subscription services

 

 

7,252

 

 

 

7,084

 

 

 

29,394

 

 

 

29,570

 

Total product licenses and subscription services

 

 

37,339

 

 

 

38,284

 

 

 

116,865

 

 

 

117,627

 

Product support

 

 

74,722

 

 

 

73,662

 

 

 

292,035

 

 

 

296,216

 

Other services

 

 

21,470

 

 

 

19,971

 

 

 

77,427

 

 

 

83,795

 

Total revenues

 

 

133,531

 

 

 

131,917

 

 

 

486,327

 

 

 

497,638

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses

 

 

534

 

 

 

609

 

 

 

2,131

 

 

 

4,864

 

Subscription services

 

 

4,185

 

 

 

3,667

 

 

 

15,161

 

 

 

13,620

 

Total product licenses and subscription services

 

 

4,719

 

 

 

4,276

 

 

 

17,292

 

 

 

18,484

 

Product support

 

 

6,607

 

 

 

5,557

 

 

 

28,317

 

 

 

20,242

 

Other services

 

 

13,310

 

 

 

16,052

 

 

 

54,365

 

 

 

60,773

 

Total cost of revenues

 

 

24,636

 

 

 

25,885

 

 

 

99,974

 

 

 

99,499

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

108,895

 

 

 

106,032

 

 

 

386,353

 

 

 

398,139

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

50,267

 

 

 

57,783

 

 

 

191,235

 

 

 

205,525

 

Research and development

 

 

25,987

 

 

 

28,028

 

 

 

109,423

 

 

 

102,499

 

General and administrative

 

 

23,013

 

 

 

22,378

 

 

 

86,697

 

 

 

86,134

 

Total operating expenses

 

 

99,267

 

 

 

108,189

 

 

 

387,355

 

 

 

394,158

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

 

9,628

 

 

 

(2,157

)

 

 

(1,002

)

 

 

3,981

 

Interest income, net

 

 

2,389

 

 

 

3,157

 

 

 

10,909

 

 

 

11,855

 

Other (expense) income, net

 

 

(2,361

)

 

 

981

 

 

 

28,356

 

 

 

4,646

 

Income before income taxes

 

 

9,656

 

 

 

1,981

 

 

 

38,263

 

 

 

20,482

 

(Benefit from) provision for income taxes

 

 

(2,511

)

 

 

(1,320

)

 

 

3,908

 

 

 

(2,019

)

Net income

 

$

12,167

 

 

$

3,301

 

 

$

34,355

 

 

$

22,501

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share (1):

 

$

1.19

 

 

$

0.30

 

 

$

3.35

 

 

$

1.98

 

Weighted average shares outstanding used in computing basic earnings per share

 

 

10,208

 

 

 

11,129

 

 

 

10,256

 

 

 

11,375

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share (1):

 

$

1.18

 

 

$

0.30

 

 

$

3.33

 

 

$

1.97

 

Weighted average shares outstanding used in computing diluted earnings per share

 

 

10,301

 

 

 

11,151

 

 

 

10,328

 

 

 

11,412

 

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

* Derived from audited financial statements.

 

MICROSTRATEGY INCORPORATED

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018*

 

 

 

(unaudited)

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

456,727

 

 

$

109,924

 

Restricted cash

 

 

1,089

 

 

 

862

 

Short-term investments

 

 

108,919

 

 

 

466,186

 

Accounts receivable, net

 

 

163,516

 

 

 

171,359

 

Prepaid expenses and other current assets

 

 

23,195

 

 

 

30,068

 

Total current assets

 

 

753,446

 

 

 

778,399

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

50,154

 

 

 

51,919

 

Right-of-use assets

 

 

85,538

 

 

 

0

 

Deposits and other assets

 

 

8,024

 

 

 

8,134

 

Deferred tax assets, net

 

 

19,409

 

 

 

17,316

 

Total Assets

 

$

916,571

 

 

$

855,768

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable, accrued expenses, and operating lease liabilities

 

$

33,919

 

 

$

33,684

 

Accrued compensation and employee benefits

 

 

48,792

 

 

 

48,045

 

Deferred revenue and advance payments

 

 

187,107

 

 

 

176,540

 

Total current liabilities

 

 

269,818

 

 

 

258,269

 

 

 

 

 

 

 

 

 

 

Deferred revenue and advance payments

 

 

4,344

 

 

 

6,469

 

Operating lease liabilities

 

 

103,424

 

 

 

0

 

Other long-term liabilities

 

 

30,400

 

 

 

61,262

 

Deferred tax liabilities

 

 

26

 

 

 

37

 

Total Liabilities

 

 

408,012

 

 

 

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; 15,888 shares issued and 8,081 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

 

 

593,583

 

 

 

576,957

 

Treasury stock, at cost; 7,807 shares and 7,285 shares, respectively

 

 

(658,880

)

 

 

(586,161

)

Accumulated other comprehensive loss

 

 

(9,651

)

 

 

(10,217

)

Retained earnings

 

 

583,489

 

 

 

549,134

 

Total Stockholders’ Equity

 

 

508,559

 

 

 

529,731

 

Total Liabilities and Stockholders’ Equity

 

$

916,571

 

 

$

855,768

 

* Derived from audited financial statements.

 

MICROSTRATEGY INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

 

Twelve Months Ended

 

 

 

December 31,

 

 

 

2019

 

 

2018*

 

 

 

(unaudited)

 

 

 

 

 

Operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

34,355

 

 

$

22,501

 

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

16,699

 

 

 

3,701

 

Sales allowances and bad debt

 

 

124

 

 

 

1,912

 

Net realized loss on short-term investments

 

 

41

 

 

 

153

 

Deferred taxes

 

 

(2,614

)

 

 

(8,274

)

Release of liabilities for unrecognized tax benefits

 

 

(2,837

)

 

 

0

 

Share-based compensation expense

 

 

10,209

 

 

 

14,636

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(3,672

)

 

 

(8,357

)

Prepaid expenses and other current assets

 

 

6,415

 

 

 

(6,561

)

Deposits and other assets

 

 

761

 

 

 

(1,201

)

Accounts payable and accrued expenses

 

 

(7,321

)

 

 

3,378

 

Accrued compensation and employee benefits

 

 

(2,658

)

 

 

5,116

 

Deferred revenue and advance payments

 

 

20,836

 

 

 

(22,126

)

Operating lease liabilities

 

 

(8,620

)

 

 

0

 

Other long-term liabilities

 

 

(851

)

 

 

5,749

 

Net cash provided by operating activities

 

 

60,867

 

 

 

10,627

 

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

 

Proceeds from redemption of short-term investments

 

 

684,356

 

 

 

491,800

 

Purchases of property and equipment

 

 

(10,182

)

 

 

(6,846

)

Purchases of short-term investments

 

 

(320,487

)

 

 

(694,018

)

Net cash provided by (used in) investing activities

 

 

353,687

 

 

 

(209,064

)

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

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

 

 

6,569

 

 

 

2,471

 

Purchases of treasury stock

 

 

(72,719

)

 

 

(110,977

)

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

 

 

0

 

 

 

(9

)

Net cash used in financing activities

 

 

(66,150

)

 

 

(108,515

)

 

 

 

 

 

 

 

 

 

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

 

 

(1,374

)

 

 

(3,444

)

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

 

 

347,030

 

 

 

(310,396

)

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

 

 

110,786

 

 

 

421,182

 

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

 

$

457,816

 

 

$

110,786

 

* Derived from audited financial statements.

 

MICROSTRATEGY INCORPORATED

REVENUE AND COST OF REVENUE DETAIL

(in thousands)

 

 

 

Three Months Ended

 

 

Twelve Months Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018*

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses and subscription services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses

 

$

30,087

 

 

$

31,200

 

 

$

87,471

 

 

$

88,057

 

Subscription services

 

 

7,252

 

 

 

7,084

 

 

 

29,394

 

 

 

29,570

 

Total product licenses and subscription services

 

 

37,339

 

 

 

38,284

 

 

 

116,865

 

 

 

117,627

 

Product support

 

 

74,722

 

 

 

73,662

 

 

 

292,035

 

 

 

296,216

 

Other services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consulting

 

 

19,524

 

 

 

17,611

 

 

 

69,659

 

 

 

74,609

 

Education

 

 

1,946

 

 

 

2,360

 

 

 

7,768

 

 

 

9,186

 

Total other services

 

 

21,470

 

 

 

19,971

 

 

 

77,427

 

 

 

83,795

 

Total revenues

 

 

133,531

 

 

 

131,917

 

 

 

486,327

 

 

 

497,638

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses and subscription services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses

 

 

534

 

 

 

609

 

 

 

2,131

 

 

 

4,864

 

Subscription services

 

 

4,185

 

 

 

3,667

 

 

 

15,161

 

 

 

13,620

 

Total product licenses and subscription services

 

 

4,719

 

 

 

4,276

 

 

 

17,292

 

 

 

18,484

 

Product support

 

 

6,607

 

 

 

5,557

 

 

 

28,317

 

 

 

20,242

 

Other services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consulting

 

 

11,668

 

 

 

13,746

 

 

 

47,664

 

 

 

53,605

 

Education

 

 

1,642

 

 

 

2,306

 

 

 

6,701

 

 

 

7,168

 

Total other services

 

 

13,310

 

 

 

16,052

 

 

 

54,365

 

 

 

60,773

 

Total cost of revenues

 

 

24,636

 

 

 

25,885

 

 

 

99,974

 

 

 

99,499

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

$

108,895

 

 

$

106,032

 

 

$

386,353

 

 

$

398,139

 

* Derived from audited financial statements.

 

MICROSTRATEGY INCORPORATED

DEFERRED REVENUE DETAIL

(in thousands)

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018*

 

 

 

(unaudited)

 

 

 

 

 

Current:

 

 

 

 

 

 

 

 

Deferred product licenses revenue

 

$

481

 

 

$

1,768

 

Deferred subscription services revenue

 

 

16,561

 

 

 

13,508

 

Deferred product support revenue

 

 

161,670

 

 

 

152,501

 

Deferred other services revenue

 

 

8,395

 

 

 

8,763

 

Total current deferred revenue and advance payments

 

$

187,107

 

 

$

176,540

 

 

 

 

 

 

 

 

 

 

Non-current:

 

 

 

 

 

 

 

 

Deferred product licenses revenue

 

$

293

 

 

$

542

 

Deferred subscription services revenue

 

 

97

 

 

 

2,384

 

Deferred product support revenue

 

 

3,417

 

 

 

3,091

 

Deferred other services revenue

 

 

537

 

 

 

452

 

Total non-current deferred revenue and advance payments

 

$

4,344

 

 

$

6,469

 

 

 

 

 

 

 

 

 

 

Total current and non-current:

 

 

 

 

 

 

 

 

Deferred product licenses revenue

 

$

774

 

 

$

2,310

 

Deferred subscription services revenue

 

 

16,658

 

 

 

15,892

 

Deferred product support revenue

 

 

165,087

 

 

 

155,592

 

Deferred other services revenue

 

 

8,932

 

 

 

9,215

 

Total current and non-current deferred revenue and advance payments

 

$

191,451

 

 

$

183,009

 

* 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

 

 

Twelve Months Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

$

9,628

 

 

$

(2,157

)

 

$

(1,002

)

 

$

3,981

 

Share-based compensation expense

 

 

2,322

 

 

 

3,504

 

 

 

10,209

 

 

 

14,636

 

Non-GAAP income from operations

 

$

11,950

 

 

$

1,347

 

 

$

9,207

 

 

$

18,617

 


Contacts

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


Read full story here
BusinessWire

MicroStrategy Announces Fourth Quarter 2019 Financial Results

TYSONS CORNER, Va.--(BUSINESS WIRE)--$MSTR #MSTR--MicroStrategy® (Nasdaq: MSTR), a global leader in enterprise analytics software and services, today announced financial results for the three-month period ended December 31, 2019 (the fourth quarter of its 2019 fiscal year).


Our fourth quarter performance highlights increased customer adoption of our cloud offerings and our breakthrough HyperIntelligence® product. We’re seeing customers deploy an impressive variety and scale of HyperIntelligence use cases, reflecting the product’s ability to bring intelligence to more users, making them significantly faster and smarter,” said Michael J. Saylor, CEO, MicroStrategy Incorporated.

Mr. Saylor continued, “Optimized for the cloud, our open, comprehensive enterprise analytics platform, combined with our expert services, has been resonating in the market. As we look at the year ahead, we will remain focused on driving new and existing customer adoption of our latest platform – MicroStrategy 2020 – leading with our HyperIntelligence and cloud offerings.”

Fourth Quarter 2019 Financial Highlights

  • Revenues: Total revenues for the fourth quarter of 2019 were $133.5 million, a 1.2% increase, or a 2.7% increase on a non-GAAP constant currency basis, compared to the fourth quarter of 2018. Product licenses and subscription services revenues for the fourth quarter of 2019 were $37.3 million, a 2.5% decrease, or a 0.4% decrease on a non-GAAP constant currency basis, compared to the fourth quarter of 2018. Product support revenues for the fourth quarter of 2019 were $74.7 million, a 1.4% increase, or a 2.7% increase on a non-GAAP constant currency basis, compared to the fourth quarter of 2018. Other services revenues for the fourth quarter of 2019 were $21.5 million, a 7.5% increase, or an 8.6% increase on a non-GAAP constant currency basis, compared to the fourth quarter of 2018.
  • Gross Profit: Gross profit for the fourth quarter of 2019 was $108.9 million, representing an 81.6% gross margin, compared to a gross margin of 80.4% in the fourth quarter of 2018.
  • Operating Expenses: Operating expenses for the fourth quarter of 2019 were $99.3 million, an 8.2% decrease compared to the fourth quarter of 2018.
  • Income (Loss) from Operations: Income from operations for the fourth quarter of 2019 was $9.6 million versus loss from operations of $2.2 million for the fourth quarter of 2018. Non-GAAP income from operations, which excludes share-based compensation expense, was $12.0 million for the fourth quarter of 2019 versus $1.3 million for the fourth quarter of 2018.
  • Net Income: Net income for the fourth quarter of 2019 was $12.2 million, or $1.18 per share on a diluted basis, as compared to net income of $3.3 million, or $0.30 per share on a diluted basis, for the fourth quarter of 2018.
  • Cash and Short-term Investments: As of December 31, 2019, MicroStrategy had cash and cash equivalents and short-term investments of $565.6 million, as compared to $576.1 million as of December 31, 2018, a decrease of $10.5 million. During the fourth quarter of 2019, MicroStrategy repurchased 159,695 shares of its class A common stock for an aggregate purchase price of approximately $24.5 million. As of December 31, 2019, MicroStrategy had 8.1 million shares of class A common stock and 2.0 million shares of class B common stock outstanding.

The tables at the end of this press release include a reconciliation of GAAP to non-GAAP financial measures for the three and twelve months ended December 31, 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 fourth quarter of 2019:

  • A number of Fortune Global 500 companies, as well as numerous leading brands such as The Co-operators, Saint-Gobain, and Swiss Medical, purchased HyperIntelligence and are moving to empower their front-line employees with actionable insights.
  • MicroStrategy announced that it will host its 23rd annual user conference, MicroStrategy World 2020, from February 4 to February 6, 2020 in Orlando, Fla. Attendees will get a first look at the newest features and capabilities of MicroStrategy 2020, including new ways to experience HyperIntelligence, try new Dossier® authoring tools for content creators, learn about the federated analytics connectors to Jupyter and RStudio for data scientists, and more. Attendees will learn how MicroStrategy 2020 together with innovative uses of artificial intelligence (“AI”), mobility, and cloud technologies can be deployed to significantly boost productivity and drive greater analytics adoption across the enterprise.
  • MicroStrategy released the results of its “2020 Global State of Enterprise Analytics” report revealing that, despite 94% of organizations believing data and analytics is important to their digital transformation and business growth, most are not enabling a data-driven culture. Among the many findings, the report revealed that for 60% of employees, it takes hours or days to get the information they need, while only 3% can find information in seconds.
  • MicroStrategy published its “10 Enterprise Analytics Trends to Watch in 2020” report. In collaboration with leading analysts and influencers from Forrester, IDC, Constellation Research, Ventana Research and others, the annual MicroStrategy compilation highlights trends and insights that range from AI and mobile intelligence, to the explosion of data and data sources, to some very human factors including a predicted shortage of data and analytics talent.
  • MicroStrategy launched a new technology partnership with DataRobot, a leader in enterprise AI, designed to make it easier for businesses to integrate AI into their most popular applications and core processes by leveraging HyperIntelligence cards to deliver AI-driven insights and recommendations. HyperIntelligence seamlessly injects trusted and predictive analytics directly into popular business applications on both web and mobile – including Google’s G Suite, Microsoft Office 365, and SaaS applications such as Salesforce, Workday, and Confluence – making it possible to instantly reveal insights to users without interrupting their existing workflows.
  • MicroStrategy introduced innovations that aim to significantly boost productivity and drive analytics adoption to 100%. HyperIntelligence for Mobile is designed to provide the speed and agility that users need to make important decisions and take action quickly outside of the office.
  • MicroStrategy announced that 94% of survey respondents in The BI Survey 19, the industry’s largest independent global survey of BI users, recommend MicroStrategy. Conducted by the Business Application Research Center, The BI Survey 19 ranked MicroStrategy first in self-service, visual analysis, and location intelligence among the large global enterprise BI platforms peer group. In addition, MicroStrategy was rated a leader in its peer groups for business value, business benefits, mobile BI, innovation, functionality, dashboards, query performance, and distribution of reports.

Conference Call

MicroStrategy will be discussing its fourth quarter 2019 financial results on a conference call today beginning at approximately 5:00 p.m. EST. To access the conference call, dial (844) 824-7425 (domestically) or (716) 220-9429 (internationally) and use conference ID 6574498. 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 February 4, 2020 at (855) 859-2056 (domestically) or (404) 537-3406 (internationally) using the passcode 6574498.

Non-GAAP Financial Measures

MicroStrategy is providing supplemental financial measures for (i) non-GAAP income (loss) from operations that excludes the impact of share-based compensation arrangements, (ii) non-GAAP net income and non-GAAP diluted earnings per share that exclude the impact from the U.S. Tax Cuts and Jobs Act (the “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) non-GAAP constant currency 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 the 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 non-GAAP “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 global leader in enterprise analytics software and services. Our vision is to enable Intelligence Everywhere. MicroStrategy provides modern analytics on an open, comprehensive enterprise platform used by many of the world’s most admired brands in the Fortune Global 500. Optimized for cloud and on-premises deployments, the platform features HyperIntelligence, a breakthrough technology that overlays actionable enterprise data on popular business applications to help users make smarter, faster decisions. For more information about MicroStrategy, visit www.microstrategy.com.

MicroStrategy, HyperIntelligence, MicroStrategy 2020, Intelligent Enterprise, MicroStrategy Library, MicroStrategy World, Dossier, and Intelligence Everywhere 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 2020; 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; a substantial customer shift from a product license model to a cloud-based subscription model; 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

 

 

Twelve Months Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018*

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses

 

$

30,087

 

 

$

31,200

 

 

$

87,471

 

 

$

88,057

 

Subscription services

 

 

7,252

 

 

 

7,084

 

 

 

29,394

 

 

 

29,570

 

Total product licenses and subscription services

 

 

37,339

 

 

 

38,284

 

 

 

116,865

 

 

 

117,627

 

Product support

 

 

74,722

 

 

 

73,662

 

 

 

292,035

 

 

 

296,216

 

Other services

 

 

21,470

 

 

 

19,971

 

 

 

77,427

 

 

 

83,795

 

Total revenues

 

 

133,531

 

 

 

131,917

 

 

 

486,327

 

 

 

497,638

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses

 

 

534

 

 

 

609

 

 

 

2,131

 

 

 

4,864

 

Subscription services

 

 

4,185

 

 

 

3,667

 

 

 

15,161

 

 

 

13,620

 

Total product licenses and subscription services

 

 

4,719

 

 

 

4,276

 

 

 

17,292

 

 

 

18,484

 

Product support

 

 

6,607

 

 

 

5,557

 

 

 

28,317

 

 

 

20,242

 

Other services

 

 

13,310

 

 

 

16,052

 

 

 

54,365

 

 

 

60,773

 

Total cost of revenues

 

 

24,636

 

 

 

25,885

 

 

 

99,974

 

 

 

99,499

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

 

108,895

 

 

 

106,032

 

 

 

386,353

 

 

 

398,139

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating expenses

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and marketing

 

 

50,267

 

 

 

57,783

 

 

 

191,235

 

 

 

205,525

 

Research and development

 

 

25,987

 

 

 

28,028

 

 

 

109,423

 

 

 

102,499

 

General and administrative

 

 

23,013

 

 

 

22,378

 

 

 

86,697

 

 

 

86,134

 

Total operating expenses

 

 

99,267

 

 

 

108,189

 

 

 

387,355

 

 

 

394,158

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

 

9,628

 

 

 

(2,157

)

 

 

(1,002

)

 

 

3,981

 

Interest income, net

 

 

2,389

 

 

 

3,157

 

 

 

10,909

 

 

 

11,855

 

Other (expense) income, net

 

 

(2,361

)

 

 

981

 

 

 

28,356

 

 

 

4,646

 

Income before income taxes

 

 

9,656

 

 

 

1,981

 

 

 

38,263

 

 

 

20,482

 

(Benefit from) provision for income taxes

 

 

(2,511

)

 

 

(1,320

)

 

 

3,908

 

 

 

(2,019

)

Net income

 

$

12,167

 

 

$

3,301

 

 

$

34,355

 

 

$

22,501

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share (1):

 

$

1.19

 

 

$

0.30

 

 

$

3.35

 

 

$

1.98

 

Weighted average shares outstanding used in computing basic earnings per share

 

 

10,208

 

 

 

11,129

 

 

 

10,256

 

 

 

11,375

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Diluted earnings per share (1):

 

$

1.18

 

 

$

0.30

 

 

$

3.33

 

 

$

1.97

 

Weighted average shares outstanding used in computing diluted earnings per share

 

 

10,301

 

 

 

11,151

 

 

 

10,328

 

 

 

11,412

 

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

* Derived from audited financial statements.

 

MICROSTRATEGY INCORPORATED

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018*

 

 

 

(unaudited)

 

 

 

 

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

456,727

 

 

$

109,924

 

Restricted cash

 

 

1,089

 

 

 

862

 

Short-term investments

 

 

108,919

 

 

 

466,186

 

Accounts receivable, net

 

 

163,516

 

 

 

171,359

 

Prepaid expenses and other current assets

 

 

23,195

 

 

 

30,068

 

Total current assets

 

 

753,446

 

 

 

778,399

 

 

 

 

 

 

 

 

 

 

Property and equipment, net

 

 

50,154

 

 

 

51,919

 

Right-of-use assets

 

 

85,538

 

 

 

0

 

Deposits and other assets

 

 

8,024

 

 

 

8,134

 

Deferred tax assets, net

 

 

19,409

 

 

 

17,316

 

Total Assets

 

$

916,571

 

 

$

855,768

 

 

 

 

 

 

 

 

 

 

Liabilities and Stockholders’ Equity

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Accounts payable, accrued expenses, and operating lease liabilities

 

$

33,919

 

 

$

33,684

 

Accrued compensation and employee benefits

 

 

48,792

 

 

 

48,045

 

Deferred revenue and advance payments

 

 

187,107

 

 

 

176,540

 

Total current liabilities

 

 

269,818

 

 

 

258,269

 

 

 

 

 

 

 

 

 

 

Deferred revenue and advance payments

 

 

4,344

 

 

 

6,469

 

Operating lease liabilities

 

 

103,424

 

 

 

0

 

Other long-term liabilities

 

 

30,400

 

 

 

61,262

 

Deferred tax liabilities

 

 

26

 

 

 

37

 

Total Liabilities

 

 

408,012

 

 

 

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; 15,888 shares issued and 8,081 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

 

 

593,583

 

 

 

576,957

 

Treasury stock, at cost; 7,807 shares and 7,285 shares, respectively

 

 

(658,880

)

 

 

(586,161

)

Accumulated other comprehensive loss

 

 

(9,651

)

 

 

(10,217

)

Retained earnings

 

 

583,489

 

 

 

549,134

 

Total Stockholders’ Equity

 

 

508,559

 

 

 

529,731

 

Total Liabilities and Stockholders’ Equity

 

$

916,571

 

 

$

855,768

 

* Derived from audited financial statements.

 

MICROSTRATEGY INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

 

 

Twelve Months Ended

 

 

 

December 31,

 

 

 

2019

 

 

2018*

 

 

 

(unaudited)

 

 

 

 

 

Operating activities:

 

 

 

 

 

 

 

 

Net income

 

$

34,355

 

 

$

22,501

 

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

16,699

 

 

 

3,701

 

Sales allowances and bad debt

 

 

124

 

 

 

1,912

 

Net realized loss on short-term investments

 

 

41

 

 

 

153

 

Deferred taxes

 

 

(2,614

)

 

 

(8,274

)

Release of liabilities for unrecognized tax benefits

 

 

(2,837

)

 

 

0

 

Share-based compensation expense

 

 

10,209

 

 

 

14,636

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(3,672

)

 

 

(8,357

)

Prepaid expenses and other current assets

 

 

6,415

 

 

 

(6,561

)

Deposits and other assets

 

 

761

 

 

 

(1,201

)

Accounts payable and accrued expenses

 

 

(7,321

)

 

 

3,378

 

Accrued compensation and employee benefits

 

 

(2,658

)

 

 

5,116

 

Deferred revenue and advance payments

 

 

20,836

 

 

 

(22,126

)

Operating lease liabilities

 

 

(8,620

)

 

 

0

 

Other long-term liabilities

 

 

(851

)

 

 

5,749

 

Net cash provided by operating activities

 

 

60,867

 

 

 

10,627

 

 

 

 

 

 

 

 

 

 

Investing activities:

 

 

 

 

 

 

 

 

Proceeds from redemption of short-term investments

 

 

684,356

 

 

 

491,800

 

Purchases of property and equipment

 

 

(10,182

)

 

 

(6,846

)

Purchases of short-term investments

 

 

(320,487

)

 

 

(694,018

)

Net cash provided by (used in) investing activities

 

 

353,687

 

 

 

(209,064

)

 

 

 

 

 

 

 

 

 

Financing activities:

 

 

 

 

 

 

 

 

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

 

 

6,569

 

 

 

2,471

 

Purchases of treasury stock

 

 

(72,719

)

 

 

(110,977

)

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

 

 

0

 

 

 

(9

)

Net cash used in financing activities

 

 

(66,150

)

 

 

(108,515

)

 

 

 

 

 

 

 

 

 

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

 

 

(1,374

)

 

 

(3,444

)

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

 

 

347,030

 

 

 

(310,396

)

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

 

 

110,786

 

 

 

421,182

 

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

 

$

457,816

 

 

$

110,786

 

* Derived from audited financial statements.

 

MICROSTRATEGY INCORPORATED

REVENUE AND COST OF REVENUE DETAIL

(in thousands)

 

 

 

Three Months Ended

 

 

Twelve Months Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018*

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

 

 

 

Revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses and subscription services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses

 

$

30,087

 

 

$

31,200

 

 

$

87,471

 

 

$

88,057

 

Subscription services

 

 

7,252

 

 

 

7,084

 

 

 

29,394

 

 

 

29,570

 

Total product licenses and subscription services

 

 

37,339

 

 

 

38,284

 

 

 

116,865

 

 

 

117,627

 

Product support

 

 

74,722

 

 

 

73,662

 

 

 

292,035

 

 

 

296,216

 

Other services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consulting

 

 

19,524

 

 

 

17,611

 

 

 

69,659

 

 

 

74,609

 

Education

 

 

1,946

 

 

 

2,360

 

 

 

7,768

 

 

 

9,186

 

Total other services

 

 

21,470

 

 

 

19,971

 

 

 

77,427

 

 

 

83,795

 

Total revenues

 

 

133,531

 

 

 

131,917

 

 

 

486,327

 

 

 

497,638

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cost of revenues

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses and subscription services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product licenses

 

 

534

 

 

 

609

 

 

 

2,131

 

 

 

4,864

 

Subscription services

 

 

4,185

 

 

 

3,667

 

 

 

15,161

 

 

 

13,620

 

Total product licenses and subscription services

 

 

4,719

 

 

 

4,276

 

 

 

17,292

 

 

 

18,484

 

Product support

 

 

6,607

 

 

 

5,557

 

 

 

28,317

 

 

 

20,242

 

Other services:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Consulting

 

 

11,668

 

 

 

13,746

 

 

 

47,664

 

 

 

53,605

 

Education

 

 

1,642

 

 

 

2,306

 

 

 

6,701

 

 

 

7,168

 

Total other services

 

 

13,310

 

 

 

16,052

 

 

 

54,365

 

 

 

60,773

 

Total cost of revenues

 

 

24,636

 

 

 

25,885

 

 

 

99,974

 

 

 

99,499

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit

 

$

108,895

 

 

$

106,032

 

 

$

386,353

 

 

$

398,139

 

* Derived from audited financial statements.

 

MICROSTRATEGY INCORPORATED

DEFERRED REVENUE DETAIL

(in thousands)

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018*

 

 

 

(unaudited)

 

 

 

 

 

Current:

 

 

 

 

 

 

 

 

Deferred product licenses revenue

 

$

481

 

 

$

1,768

 

Deferred subscription services revenue

 

 

16,561

 

 

 

13,508

 

Deferred product support revenue

 

 

161,670

 

 

 

152,501

 

Deferred other services revenue

 

 

8,395

 

 

 

8,763

 

Total current deferred revenue and advance payments

 

$

187,107

 

 

$

176,540

 

 

 

 

 

 

 

 

 

 

Non-current:

 

 

 

 

 

 

 

 

Deferred product licenses revenue

 

$

293

 

 

$

542

 

Deferred subscription services revenue

 

 

97

 

 

 

2,384

 

Deferred product support revenue

 

 

3,417

 

 

 

3,091

 

Deferred other services revenue

 

 

537

 

 

 

452

 

Total non-current deferred revenue and advance payments

 

$

4,344

 

 

$

6,469

 

 

 

 

 

 

 

 

 

 

Total current and non-current:

 

 

 

 

 

 

 

 

Deferred product licenses revenue

 

$

774

 

 

$

2,310

 

Deferred subscription services revenue

 

 

16,658

 

 

 

15,892

 

Deferred product support revenue

 

 

165,087

 

 

 

155,592

 

Deferred other services revenue

 

 

8,932

 

 

 

9,215

 

Total current and non-current deferred revenue and advance payments

 

$

191,451

 

 

$

183,009

 

* 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

 

 

Twelve Months Ended

 

 

 

December 31,

 

 

December 31,

 

 

 

2019

 

 

2018

 

 

2019

 

 

2018

 

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

 

(unaudited)

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income (loss) from operations

 

$

9,628

 

 

$

(2,157

)

 

$

(1,002

)

 

$

3,981

 

Share-based compensation expense

 

 

2,322

 

 

 

3,504

 

 

 

10,209

 

 

 

14,636

 

Non-GAAP income from operations

 

$

11,950

 

 

$

1,347

 

 

$

9,207

 

 

$

18,617

 


Contacts

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


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