Strategy 8-K

Summary

Q3 2026 results and CFO transition. Strategy reported $21B of operating income, driven by a fair-value gain on bitcoin, while software revenue declined 3% Y/Y. The company is using equity issuance and preferred-stock repurchases to build its bitcoin holdings and support preferred-stock obligations; it also plans to move preferred dividends to daily payments. Andrew Kang resigns as CFO effective 11/05/2026 and remains as an adviser through year-end; CEO Phong Le will cover the finance function during the transition, and Reza Virasteh becomes CFO and co-principal financial officer on 1/1/2027, alongside Le. Shelley Khanna becomes chief accounting officer and principal accounting officer on 11/06/2026.

Key Figures

• The Q3 operating income increase reflects a $20.91B gain on digital assets, versus a $3.89B gain a year earlier. Software results were mixed: subscription services revenue rose to $68.6M from $46.0M, while product licenses fell to $3.83M from $17.4M and product support fell to $37.7M from $51.1M.
• As of 10/25/2026, Strategy held 848,517 bitcoin, up 26% YTD, after $14.33B of YTD purchases. Its BTC Yield—a measure of the change in bitcoin per assumed diluted share—was -3.7% YTD, and BTC $ Gain was $(2.03)B, using a bitcoin price of $81,200 on 10/23/2026. Strategy raised $21.23B of equity capital YTD, including $5.41B of net proceeds from ATM sales in Q3.
• As of 10/25/2026, USD assets were $5.07B, representing 3.4 years of preferred-dividend and interest coverage. YTD STRC repurchases totaled 20,980,508 shares for approximately $2.04B, at an average $97.39 per share, about a 2.6% discount to the $100 stated amount; $956.7M of the repurchase authorization remained. STRC daily dividends begin in November 2026, with daily dividends for STRF, STRK and STRD starting 1/1/2027.
• Virasteh’s CFO compensation includes a $500,000 base salary, a $400,000 annual discretionary cash-bonus target, $1.00M of RSUs and an option with a $1.00M Black-Scholes-based target value. The equity awards vest 25% annually over four years. Kang will continue receiving regular base pay through 12/31/2026 and, subject to a release, receive a $883,400 lump-sum payment and six months of COBRA coverage valued at approximately $20,000.

Guidance

• Preferred-stock distributions are expected to be treated as non-taxable returns of capital for the foreseeable future, defined as 10 years or more, based on the company’s expectation that it will not have positive accumulated earnings and profits or generate positive current earnings and profits in the current year or foreseeable future.

Investor Takeaways

• Track BTC Yield alongside bitcoin holdings and equity issuance: holdings rose 26% YTD, but BTC Yield was -3.7%; sustained improvement in BTC Yield would support the company’s stated per-share bitcoin-accretion strategy.
• Watch STRC’s trading level against its $100 stated amount and USD-asset coverage as daily dividends begin; maintaining the current 3.4 years of coverage and trading near stated amount would support management’s stated effort to restore STRC’s strength.
• Follow subscription-services revenue against product-license and product-support revenue; continued subscription growth would indicate that it is offsetting declines in the other software revenue lines.