MSTR

Strategy is no longer an analyzable software company; by its own description it is "the world's first and largest Bitcoin Treasury Company," and the financials confirm it. Total assets ballooned +138.5% to $61.6B (overwhelmingly bitcoin) while the actual operating business generated just $477M of revenue (+3.0%) — essentially flat across five years ($511M in 2021 to $477M in 2025). The FY2025 net loss of -$3.85B (EPS -$15.23) is driven not by operations but by unrealized losses on digital assets, as the MD&A states the $2.68B increase in net loss was mirrored by a $2.68B increase in non-cash items "principally related to unrealized losses on digital assets." The reported -7.4 P/E and -8.7% ROE are therefore meaningless as valuation signals — you are not buying earnings, you are buying a levered claim on bitcoin.

The quality of that claim is deteriorating in ways the filing makes explicit. The company funded $22.5B of bitcoin purchases in 2025 entirely with $24.8B of financing — issuing five new classes of preferred 'digital credit' instruments on top of $8.16B of long-term debt. Those instruments carry heavy, escalating fixed costs: $381.4M of preferred dividends were paid in 2025, and the per-period run-rate disclosed (STRF $32.1M/qtr, STRC $32.4M/month at a raised 11.00–11.25%, STRE $23.0M/qtr, STRK $28.0M/qtr, STRD $35.1M/qtr) implies well over $600M of annualized obligations going forward. Meanwhile the underlying business throws off no cash to service them — operating cash flow was -$67.2M and worsening, hurt by the subscription transition and added "bitcoin advocacy costs, custodial fees and personnel costs." Management had to stand up a $2.25B 'USD Reserve' in December 2025 explicitly "to support the payment of dividends on our preferred stock and interest on our outstanding indebtedness" — a tacit admission that the cash to cover the capital stack must be raised or reserved, not earned.