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MicroStrategy (MSTR), now referred to as “Strategy,” has sparked considerable discussion in the investment community.

The company’s Bitcoin-focused treasury strategy has historically yielded impressive profits, but the most recent quarter revealed a significant earnings miss. The earnings per share (EPS) were reported at -$16.49, which was 575% lower than the anticipated -$2.44.

 

This outcome, combined with the stock price remaining stagnant despite Bitcoin reaching all-time highs, raises questions about the viability of the company’s business model and the legitimacy of its turnaround strategy.

MicroStrategy’s results illustrated a growing disconnect between its traditional operational performance and its Bitcoin-driven financial metrics In the second quarter of 2025. The unrealized gains from the company’s 628,791 Bitcoin holdings accounted for all of the $14.03 billion in operating income and $10.02 billion in net income, while software revenue contributed a mere $114.5 million.

Earnings are closely tied to fluctuations in Bitcoin’s price due to fair value accounting under ASU 2023-08. Overnight gains of $6.3 billion could be wiped out by a $10,000 decline in Bitcoin’s price. Furthermore, MicroStrategy’s aggressive capital-raising approach, which included $102.5 billion in Q2 through IPOs and ATMs, has expanded its equity base but slowed the growth of Bitcoin Per Share (BPS). The company’s ability to maintain a sustainable accumulation of Bitcoin is under pressure, as BPS has only increased by 25% year-to-date.

MicroStrategy updated its FY2025 guidance in response to the earnings miss, estimating $34 billion in operating income and $80 in diluted EPS, if Bitcoin closes the year at $150,000.

These goals, however, are predicated on three speculative hypotheses: Bitcoin’s Price Trajectory: The year-end price of $150,000 represents a 38% increase from the Q2 close of $107,752. This is attainable but by no means assured, according to historical volatility.