Strategy Inc Q1 FY2020 Earnings Call

· Earnings call transcript and AI-powered summary

  • Leadership Changes: Lisa Mayr resigned as CFO. Phong Le resumed CFO role in addition to COO duties.
  • Revenue:
    • Total revenue: $111.4M (↓3.4% YoY, ↓1.7% constant currency).
    • Product license revenue: $12.6M (↓31.2% YoY), impacted by COVID-19 deal slippage in late March.
    • Subscription services: $8M (↑11.5% YoY, ↑9.9% QoQ), due to growth in managed cloud platform adoption.
    • Product support: $71.2M (flat YoY, ↑1.2% constant currency).
    • Consulting services: ↑6.7% YoY (↑8.1% constant currency), delivered effectively via remote model.
  • Profitability:
    • Gross margin: 78% (↑from 77.3% YoY).
    • Operating expenses: $87M (↓12.7% YoY), due to reduced travel, in-person events, and staffing efficiencies.
    • Deferred revenue: $188.6M (↓3.1% YoY) affected by FX (-1.7%) and timing of managed cloud renewals moving to April.
  • Balance Sheet:
    • Cash and short-term investments: $539M.
    • No debt.
    • Repurchased 355,000 shares for $50.7M.
  • COVID-19 Impact & Strategy:
    • Transitioned to full remote work operation.

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Operator: Ladies and gentlemen, thank you for standing by, and welcome to the MicroStrategy Q1 2020 Earnings Call. At this time, all participant lines are in a listen-only mode. After the speakers’ presentation, there will be a question-and-answer session. [Operator Instructions]. Please be advised that today’s conference is being recorded. [Operator Instructions].I would now like to hand the conference over to your speaker today, Michael Saylor, Chairman, President and CEO. Please go ahead. Michael Saylor: Hello. This is Michael Saylor. I'm the Chairman, President and CEO of MicroStrategy. I'd like to welcome all of you to today's conference call regarding our 2020 first quarter financial results. This has been quite an unusual and eventful quarter for the world; and for MicroStrategy, we’re about to share an update. I will start with the change in our leadership team. Lisa Mayr has decided to resign from MicroStrategy to pursue other opportunities. We wish her well. I’m happy to announce that in her place Phong Le has agreed to resume his duties as CFO in addition to continuing his role of COO. He is here with me today and we will start by sharing our Safe Harbor notice. Phong Le: Thank you, Michael, and good evening, everyone. Some of the information we provide during today’s call regarding our future expectations, plans and prospects may constitute forward-looking statements. Actual results may differ materially from those forward-looking statements due to various importa

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