Strategy Reports $8.2B Q2 Net Loss as Bitcoin Holdings Hit 843K BTC

Key Takeaways

• Strategy's bitcoin holdings grew to 843,775 BTC, but the position sits well below its average cost basis given bitcoin's price near $64,900.
• The company reported an $8.2 billion net loss for Q2 2026, primarily from unrealized bitcoin losses under mark-to-market accounting rules, reversing a large profit in Q2 2025.
• Strategy raised over $17 billion year to date through equity sales and $7.5 billion through its STRC preferred stock, while cutting convertible debt by 18%.
• The company built a $3.75 billion cash reserve it says covers dividend and interest obligations for more than two years and has not missed a dividend payment in 18 months.
• Software revenue, a smaller part of the business, grew modestly and remained profitable at the gross margin level.

What is Strategy Inc's Q2 2026 earnings report?

Strategy Inc (Nasdaq: MSTR), the world's largest corporate holder of bitcoin, reported second-quarter 2026 financial results on July 30, 2026, showing an $8.2 billion net loss driven by an $8.3 billion unrealized loss on its bitcoin holdings, even as the company grew its bitcoin stack, cut debt, and raised billions through equity and preferred stock offerings.

Bitcoin Holdings Reach 843,775 BTC

As of July 26, 2026, Strategy held approximately 843,775 bitcoins, which the company says makes it the largest institutional holder of bitcoin globally. That represents 25% growth in holdings year to date. During the second quarter specifically, the company said it grew its bitcoin holdings by 11% to 846,000 bitcoin.

The company's cost basis and current market value diverge sharply due to the price decline: Strategy's bitcoin was acquired at an average cost of about $75,476 per coin, for a total cost basis of $63.69 billion. With bitcoin trading around $64,915 as of July 27, 2026, the market value of that stash was $54.77 billion — roughly $9 billion below cost.

The company uses internal metrics — BTC Yield, BTC Gain, and BTC $ Gain — to describe how much its per-share bitcoin exposure has grown from raising and deploying capital, separate from bitcoin's market price performance. Strategy explicitly cautions that these are not financial performance, valuation, or liquidity measures and should not be read as investment returns.

Why the Company Reported a Large Net Loss

Under accounting rules adopted in 2023 (ASU 2023-08), companies holding bitcoin must mark it to fair value each quarter and run the resulting gains or losses through net income. Because bitcoin's price fell during the quarter, Strategy recorded an $8.32 billion unrealized loss on its digital assets in Q2 2026, compared with a $14.05 billion unrealized gain in the same quarter of 2025.

That swing drove the company's headline numbers:

• Operating loss: $8.33 billion, versus $14.03 billion of operating income in Q2 2025
• Net loss: $8.22 billion, or $24.45 per diluted share, versus net income of $10.02 billion, or $32.60 per diluted share, a year earlier
• Net loss attributable to common stockholders: $8.62 billion, after $400.7 million in preferred dividends, versus net income of $9.97 billion a year earlier

Strategy's core software business, largely a separate line from its bitcoin strategy, posted more modest and positive figures: total revenue of $122.4 million (up 6.9% year over year) and gross profit of $81.6 million, a 66.6% gross margin.

Capital Raised and Debt Reduced

Strategy funds its bitcoin purchases primarily through stock sales and debt-like instruments carrying bitcoin exposure. Year to date through July 26, 2026, the company said it raised $17.06 billion via at-the-market (ATM) equity offering programs, including roughly $8.41 billion during Q2 alone and another $1.28 billion between July 1 and July 26.

On the debt side, Strategy said it cut its convertible note balance by repurchasing $1.50 billion in principal of its 0% convertible notes due 2029 for about $1.38 billion in cash in May 2026 — an 8% discount to face value. That reduced outstanding convertible debt from $8.21 billion to $6.71 billion, an 18% reduction the company highlighted as balance-sheet strengthening.

STRC Preferred Stock and the USD Reserve

A significant part of the release focuses on Strategy's STRC preferred stock, which the company wants to trade near its $100 stated value. Strategy said STRC issuances raised $7.53 billion year to date, a 254% increase, and that it raised the STRC dividend rate to 12.00% to support the stock trading closer to par.

The company also said it built a $3.75 billion "USD Reserve" — cash set aside to cover preferred dividends and interest — which it says now covers more than 2.1 years of those obligations. Strategy noted it has paid dividends for 18 consecutive months without a miss, including $1.06 billion in cumulative preferred dividends to date.

Between July 20 and July 26, 2026, under a $1.0 billion buyback program for its debt-like preferred instruments, Strategy repurchased 288,930 STRC shares (about $28.9 million in aggregate notional value) for roughly $25.0 million, a 13.47% discount to par. Separately, the company authorized a $1.0 billion MSTR common stock repurchase program but had made no repurchases under it as of the release date.

To fund some of these obligations, Strategy's board authorized a "BTC Monetization Program" allowing bitcoin sales to fund the USD Reserve, dividend and interest payments, or share repurchases. The company said it had sold about $218.4 million of bitcoin year to date under this program.

Executive Commentary

Strategy President and CEO Phong Le said the company grew bitcoin holdings, reduced debt, and increased its USD Reserve during the quarter "while navigating a meaningful bitcoin price decline," and reiterated a goal for STRC to trade between $99 and $100, with disciplined repurchases if it trades below that range.

CFO Andrew Kang pointed to the $3.75 billion USD Reserve as covering dividend and interest obligations for more than two years, and introduced a new metric called "BTC Hurdle ARR," which the company put at 10.8% as its current effective cost of credit.

Founder and Executive Chairman Michael Saylor characterized the environment as one of "muted bitcoin sentiment and market skepticism" and said the company's goal is to stabilize STRC's trading near par over time.

Risks and Considerations

Strategy's results illustrate risks inherent to a bitcoin-holding company under current accounting treatment:

• Bitcoin price volatility directly drives large swings in reported net income or loss, as seen in the reversal from a $10 billion profit to an $8.2 billion loss year over year.
• Leverage and dividend obligations: the company has issued significant convertible debt and preferred stock carrying fixed dividend and interest obligations that must be met regardless of bitcoin's price.
• Reliance on capital markets access: the strategy depends on continued ability to raise capital via ATM equity sales and preferred stock issuances on favorable terms.
• Company-defined metrics: Strategy's KPIs (BTC Yield, BTC Gain, BPS in Sats) are metrics the company itself designed and cautions are not standard financial performance or valuation measures.
• Regulatory and accounting treatment of bitcoin holdings and related tax treatment of dividends could change.

Also Read: Michael Saylor Bitcoin Strategy: What New Investors Need to Know