Strategy reported an $8.33 billion second-quarter operating loss after Bitcoin’s 27% decline this year drove a sharp reduction in the value of its digital asset portfolio.
Summary
- Strategy recorded an $8.32 billion unrealized digital asset loss during the second quarter.
- Its 843,775 BTC were worth $54.77 billion, below their $63.69 billion acquisition cost.
- The company posted an $8.22 billion net loss, equal to $24.45 per diluted share.
- A $3.75 billion dollar reserve provides 2.1 years of preferred dividend coverage under Strategy’s policy.
Strategy’s Bitcoin decline drives $8.33B loss
Bitcoin traded near $64,700 following Strategy’s earnings announcement, down from approximately $88,400 at the end of 2025. That decline left the company’s holdings valued below their aggregate purchase cost.
Strategy recorded an $8.32 billion unrealized loss on digital assets during the quarter, contributing to an operating loss of $8.33 billion. The results reversed the $14.05 billion unrealized gain recorded in the same quarter a year earlier.
The company reported a net loss of $8.22 billion, or $24.45 per diluted common share. Strategy posted net income of $10.02 billion, or $32.60 per share, during the comparable period last year.
Strategy shares were mostly unchanged in after-hours trading following the earnings release, suggesting investors had largely expected Bitcoin’s decline to weigh on the results.
Bitcoin holdings fall below Strategy’s acquisition cost
Strategy held 843,775 BTC as of July 26, an increase of 25% since the start of the year. The position had an original cost of $63.69 billion, including fees and expenses, and a market value of $54.77 billion.
Its average purchase price stood at approximately $75,476 per Bitcoin. With BTC trading near $64,700 after the report, the company’s position was about $10,776 underwater per coin based on its average acquisition cost.
The gap placed the total portfolio roughly $8.92 billion below its original cost. However, the reported quarterly loss was largely unrealized, meaning it reflected changes in Bitcoin’s market value rather than losses from selling the full position.
As crypto.news reported earlier, Strategy made no Bitcoin purchases between July 20 and July 26. Its total holdings remained unchanged at 843,775 BTC during that period.
The company has nevertheless sold approximately $218.4 million in Bitcoin this year to help fund preferred stock dividends. Those sales remain small relative to its overall digital asset reserve but show that Strategy is using part of the portfolio to meet financing obligations.
Strategy raises cash while reducing convertible debt
Strategy’s core software business generated quarterly revenue of $122.4 million, up 6.9% from $114.5 million a year earlier. Gross profit reached $81.6 million, representing a margin of 66.6%.
The company raised $17.06 billion through its capital markets programs during the year and reported a Bitcoin yield of 4.5%. That internal metric measures the change in Bitcoin held per assumed diluted share and does not represent a conventional investment yield.
Strategy also cut its convertible debt by 18% to $6.71 billion after repurchasing $1.5 billion of notes at a discount. The move reduced part of the company’s debt burden as lower Bitcoin prices placed pressure on its balance sheet.
Its U.S. dollar reserve rose by $525 million to $3.75 billion. Strategy said the reserve provides 2.1 years of coverage for preferred stock dividends under its current policy, although the calculation does not guarantee payments under every market condition.
Separate $1 billion repurchase programs have also been established for Strategy’s common shares and digital credit securities. The programs give the company the option to buy back securities but do not require it to use the full authorized amounts.
What the results mean for US investors
Strategy remains one of the largest publicly traded corporate Bitcoin holders, giving U.S. investors indirect exposure to BTC through its securities. Its shares can respond to Bitcoin prices as well as debt costs, equity issuance, preferred dividends and changes in the company’s capital structure.
The second-quarter loss shows how Bitcoin volatility can produce large swings in reported earnings. Strategy moved from a $14.05 billion unrealized digital asset gain a year earlier to an $8.32 billion unrealized loss this quarter.
Its increased cash reserve and lower convertible debt provide additional financial flexibility, but Bitcoin remains below the company’s average purchase price. Further declines could deepen unrealized losses, while a recovery above $75,476 would move the portfolio back above its aggregate acquisition cost.
