Strategy reports $20.91bn quarterly operating profit as bitcoin holdings gain

Bitcoin Magazine

Strategy (MSTR) Posts Record Operating Income as Bitcoin Rebounds in Q3 2026

On Thursday, Strategy reported the biggest operating income in its history, at $20.91 billion for the third quarter of 2026. A paper gain on the bitcoin the company holds accounted for the bulk of that figure.

Net income came to $19.53 billion, or $44.75 per diluted share, compared with $2.79 billion a year earlier.

Chief Financial Officer Andrew Kang, whose departure was announced in the same release, put the result simply: “Q3 operating income of $21 billion was the largest ever in Strategy’s history.”

Because Strategy marks its bitcoin to market every quarter, price swings feed straight into earnings. Bitcoin gained ground over the period. As of October 23, with the token at $81,200, the company’s 848,517 bitcoin were valued at $68.9 billion. The average cost of those holdings is $75,446, so the position remains in profit on paper.

Kang described the buying as the quarter’s driving force, noting that the company “increased our bitcoin holdings by 26% year-to-date in a challenging bitcoin market.”

Revenue slipped 3% from a year earlier to $125.4 million, short of the $127.2 million analysts had estimated. Gross profit was $89.6 million, a 71% margin against 70% a year earlier. At the end of September, the company held $2.50 billion in cash and equivalents and $3.40 billion in short-term investments.

Strategy’s bitcoin per share slips

Bitcoin per share, the gauge management treats as its main measure, went in the opposite direction. For the year, BTC yield is negative 3.7%, which means each share now carries less bitcoin than it did in January. In dollar terms, the bitcoin position shows a $2.03 billion loss over the same stretch. To cover preferred dividends and stock buybacks, the company has sold roughly $431.8 million of bitcoin so far this year, an amount the release describes as approximately that figure.

During 2026, Strategy raised $21.23 billion of capital, among it $5.41 billion of net proceeds from its at-the-market program in the third quarter on its own. A substantial share of that money then went to buying back its own preferred stock. It repurchased 20,980,508 STRC shares for $2.04 billion, at an average of $97.39 apiece, which is below the $100 stated amount.

Chief Executive Phong Le said the buyback was designed to steady the security: “Strategy demonstrated its commitment to returning STRC to health.” Management plans to keep repurchasing while STRC trades under par, and about $956.7 million is still available under the authorization.

The company’s dollar reserves stand at $5.07 billion in total, comprising a $4.83 billion USD Reserve and $242.4 million of USD Cash. According to Strategy, that buffer covers 3.4 years of dividend and interest obligations. To help the security trade near its $100 stated amount, the board left the STRC dividend rate at 12.00%.

STRC moves to daily dividends

On October 28, shareholders approved a shift to daily dividends. STRC starts paying daily on November 1, with STRF, STRK and STRD following on January 1, 2027.

Le described the change as progress toward a different kind of market: “Daily dividends are a natural step toward the tokenized, 24/7/365 financial system. Digital Credit is being built for that world, and Strategy intends to lead it.”

Strategy also anticipates that its preferred distributions will qualify as a non-taxable return of capital for ten years or longer, since it does not expect positive accumulated earnings and profits. Shareholders should seek advice from their own tax advisers.

Even so, Strategy’s STRC stock is closing in on $100. STRC hit $99.99 earlier today, and a return to par would reopen funding for bitcoin purchases. As noted above, shareholders approved daily dividends to improve liquidity and curb price volatility. Strategy has not yet confirmed that it will restart STRC share issuance.