Strategy reported $20.91 billion in third-quarter operating income, driven almost entirely by gains on its bitcoin holdings. Strategy sold bitcoin to fund preferred dividends and STRC repurchases during the quarter, and STRC dividends move to a daily schedule on Nov. 1.
Strategy reported $20.91 billion in third-quarter operating income on Oct. 29, driven almost entirely by gains on its bitcoin holdings rather than its software business. Net income reached $19.53 billion, up from $2.79 billion a year earlier.
Fair-value accounting drives the profit
Under fair-value accounting, changes in bitcoin's market value flow through earnings even when coins are not sold. Strategy recorded a $20.912 billion digital-asset gain in Q3. Excluding that line, it would have recorded a $2.6 million operating loss, according to The Defiant's calculation.
The company held 848,517 BTC as of Oct. 25, up 26% year to date. However, accumulation slowed in the quarter: holdings rose about 0.2%, from 846,000 BTC on June 30 to 847,666 on Sept. 30. Strategy bought 7,218 BTC and sold 5,552 BTC during Q3.
Meanwhile, software revenue fell 3% year over year to $125.4 million.
Preferred stock support costs cash
Strategy tied its STRC assessment to $2.04 billion of repurchases through Oct. 25. According to Executive Chairman Michael Saylor: "Returned $STRC to health."
Supporting the preferred still requires cash. Dividends across Strategy's preferred stocks totaled $419.6 million in Q3, compared with $139.9 million a year earlier. The company also sold $348.6 million of bitcoin in the quarter, directing $239.9 million to preferred dividends and $108.6 million to STRC repurchases.
As of Oct. 25, Strategy reported $5.07 billion of dollar assets, which it said covered about 3.4 years of preferred dividends and debt interest.
STRC moves to daily dividends
Holders of STRC, STRF, STRK and STRD preferred shares approved a change allowing dividends to accrue daily; the amendment received 99.3% of votes cast, according to results shared by Saylor. STRC's first record date will be Nov. 1, with payment on Nov. 2, while STRF, STRK and STRD will follow with a Jan. 1 record date and Jan. 4 payment.
A separate SEC filing says the change does not alter dividend rates or total regular dividend obligations.
Leadership is also changing. CFO Andrew Kang will step down on Nov. 5, with COO Reza Virasteh set to become CFO in January 2027. Strategy's MSTR shares fell about 3.5% in after-hours trading.
Sources: The Defiant, The Block
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