Strategy Outperforms Expectations with Q3 Earnings

Shares of Strategy experienced a notable after-hours surge of nearly 6% following the Bitcoin treasury company's announcement of a $2.8 billion net income for its third quarter. While this figure represents a decrease compared to the second quarter, it still surpassed analyst expectations. On Thursday, Strategy reported diluted earnings per share of $8.42 for the three months ending September 30, beating Wall Street's consensus estimate of $8.15. The company's $2.8 million income for the quarter marks a significant improvement from the $340.2 million loss recorded during the same period last year, although it falls short of the record $10 billion net income achieved in Q2.

Bitcoin Rally Fuels Stock Price Increase

Strategy's stock (MSTR) climbed 5.7% in after-hours trading, exceeding $269, after closing the regular trading session on Thursday down over 7.5% at a six-month low of $254.57. Strategy holds the largest Bitcoin (BTC) stockpile among publicly traded companies, and the cryptocurrency's over 6.5% rise during the quarter significantly contributed to the company's income.

Volatility Impact on Strategy's Performance

Bitcoin experienced a 1.7% decline in the past 24 hours, recovering to $108,500 from an intraday low of under $106,500. The drop in Bitcoin's price, coupled with the decline in Strategy's stock, has reduced its mNAV to 1.05x, down from a peak of 3.89x in November following Bitcoin's surge after Donald Trump's US election win, according to data from StrategyTracker.

Optimistic Outlook for the Future

Strategy reported a Bitcoin yield of 26% year-to-date, resulting in a $13 billion gain, and reaffirmed its full-year outlook of achieving a 30% Bitcoin yield with a net income of $24 billion, based on its projection that Bitcoin will reach $150,000. The company added 42,706 BTC during the third quarter, bringing its total holdings to 640,031 BTC as of September 30. Since then, it has continued its purchasing activity, holding 640,808 BTC as of Sunday, which Strategy stated was acquired at an average cost of $74,032.