Strategy Inc Q2 FY2023 Earnings Call

· Earnings call transcript and AI-powered summary

  • Total Revenue: $120.4M, down 1% YoY; flat on a constant-currency basis.
  • Software License Revenue: $35.4M, up 4% YoY (7% CC), with subscription services at $19.9M, up 42% YoY (44% CC).
    • Product license revenue declined 23% YoY as the company shifts to a cloud-based model.
  • Revenue Composition: 70% of 1H 2023 revenue was recurring versus 66% in 2022.
  • Cloud Transition: Continued effort in transitioning from product license to subscription services.
  • Consulting Revenue: $18.9M, down 12% YoY due to reduced demand, expected to normalize later in 2023.

Product and Strategic Highlights

  • MicroStrategy ONE: Launched as a cloud-native, AI-enhanced platform blending business intelligence (BI) and artificial intelligence (AI).
  • AI Capabilities: New AI features launching in September 2023 including semantic graph integration with LLMs and natural-language insights tools like “data whisperer”.
  • Lightning Network: Lightning Rewards platform under development for incentivized engagement using Bitcoin Lightning Layer 2 payments.

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Operator: Hello, everyone, and good evening. I'm Shirish Jajodia, Vice President of Investor Relations and Treasury at MicroStrategy. I'll be your moderator for MicroStrategy's 2023 Second Quarter Earnings Webinar. Before we proceed, I will read the Safe-Harbor statement. 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 these forward-looking statements due to various important factors, including the risk factors discussed in our most recent 10-Q filed with the SEC. We assume no obligation to update these forward-looking statements, which speak only as of today. Also, during today's call, we will refer to certain non-GAAP financial measures. Reconciliations showing GAAP versus non-GAAP results are available in our earnings release and presentation, which were issued today and are available on our website at microstrategy.com. I would like to now welcome you all to today's webinar and let you know that we will be taking questions during the Q&A using the Q&A feature at the bottom of your screen. You can submit questions throughout the webinar, and Michael, Phong or Andrew will answer questions at the end of the session. Please be sure to provide your name and your company's name when submitting your questions. Now, I will walk you through the agenda for today's call. First, Phong Le will cover the business results for the second quart

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