MicroStrategy Announces Fourth Quarter 2020 Financial Results

TYSONS CORNER, Va.--(BUSINESS WIRE)--MicroStrategy^® (Nasdaq: MSTR), the largest independent publicly-traded business intelligence company, today announced financial results for the three-month period ended December 31, 2020 (the fourth quarter of its 2020 fiscal year).

“2020 was a transformational year for MicroStrategy. In our enterprise intelligence business, we continue to embrace the virtual wave. We are successfully shifting our prospects and customers to our enterprise cloud platform, and also launched our new SaaS offering, Hyper.now. We also dramatically improved the efficiency and profitability of our business,” said Michael J. Saylor, CEO, MicroStrategy Incorporated.

“Regarding our bitcoin strategy, our pioneering decision to make bitcoin our primary treasury reserve asset has made MicroStrategy a thought leader in the cryptocurrency market and generated great interest in MicroStrategy as a corporation. Going forward, we continue to plan to hold our bitcoin and invest additional excess cash flows in bitcoin. Additionally, we will explore various approaches to acquire additional bitcoin as part of our overall corporate strategy.”

Fourth Quarter 2020 Financial Highlights

• Revenues: Total revenues for the fourth quarter of 2020 were $131.3 million, a 1.7% decrease, or a 3.4% decrease on a non-GAAP constant currency basis, compared to the fourth quarter of 2019. Product licenses and subscription services revenues for the fourth quarter of 2020 were $38.6 million, a 3.3% increase, or a 2.1% increase on a non-GAAP constant currency basis, compared to the fourth quarter of 2019. Product support revenues for the fourth quarter of 2020 were $71.9 million, a 3.8% decrease, or a 5.6% decrease on a non-GAAP constant currency basis, compared to the fourth quarter of 2019. Other services revenues for the fourth quarter of 2020 were $20.9 million, a 2.8% decrease, or an 5.3% decrease on a non-GAAP constant currency basis, compared to the fourth quarter of 2019.

• Gross Profit: Gross profit for the fourth quarter of 2020 was $110.5 million, representing an 84.2% gross margin, compared to a gross margin of 81.6% in the fourth quarter of 2019.

• Operating Expenses: Operating expenses for the fourth quarter of 2020 were $110.1 million, an 11.0% increase compared to the fourth quarter of 2019. Beginning in the third quarter of 2020, operating expenses included impairment losses on our digital assets, which were $26.5 million during the fourth quarter of 2020.

• Income from Operations: Income from operations for the fourth quarter of 2020 was $0.4 million versus income from operations of $9.6 million for the fourth quarter of 2019. Non-GAAP income from operations, which excludes share-based compensation expense and impairment losses and gains on sale from intangible assets, which include digital assets, was $30.1 million for the fourth quarter of 2020 versus $12.0 million for the fourth quarter of 2019.

• Net Income: Net income for the fourth quarter of 2020 was $2.7 million, or $0.27 per share on a diluted basis, as compared to net income of $12.2 million, or $1.18 per share on a diluted basis, for the fourth quarter of 2019. Non-GAAP net income, which excludes share-based compensation expense, impairment losses and gains on sale from intangible assets, which include digital assets, and interest expense arising from the amortization of debt discount and issuance costs was $20.4 million, or $2.07 per share on a non-GAAP diluted basis, for the fourth quarter of 2020, as compared to non-GAAP net income of $14.3 million, or $1.39 per share on a non-GAAP diluted basis, for the fourth quarter of 2019.

• Cash and Short-term Investments: As of December 31, 2020, MicroStrategy had cash and cash equivalents and short-term investments of $59.7 million, as compared to $565.6 million as of December 31, 2019, a decrease of $506.0 million.

• Digital Assets: As of December 31, 2020, the carrying value of MicroStrategy’s digital assets (comprised solely of bitcoin) was $1.054 billion, which reflects cumulative impairment charges of $70.7 million since acquisition. MicroStrategy accounts for its digital assets as indefinite-lived intangible assets, which are initially recorded at cost. Subsequently, they are measured at cost, net of any impairment losses incurred since acquisition. MicroStrategy determines the fair value of its bitcoin based on quoted (unadjusted) prices on the active exchange that MicroStrategy has determined is its principal market for bitcoin. MicroStrategy considers the lowest price of one bitcoin quoted on the active exchange at any time since acquiring the specific bitcoin. If the carrying value of a bitcoin exceeds that lowest price, an impairment loss has occurred with respect to that bitcoin in the amount equal to the difference between its carrying value and such lowest price. Impairment losses are recognized as “Digital asset impairment losses” in MicroStrategy’s Consolidated Statements of Operations. As of December 31, 2020, the average cost and average carrying value of MicroStrategy’s bitcoin were approximately $15,964 and $14,961, respectively. As of January 27, 2021, at 4:00 p.m. EST, MicroStrategy had 70,784 bitcoins and the market price of one bitcoin in the principal market was approximately $31,784.

• Convertible Senior Notes: In December 2020, MicroStrategy issued $650 million aggregate principal amount of 0.75% Convertible Senior Notes due 2025 (the “Notes”). The Notes are convertible into shares of MicroStrategy’s class A common stock at an initial conversion price of $397.99 per share. As of December 31, 2020, the carrying value of the Notes classified as a long-term liability in the “Convertible senior notes, net” line item was $486.4 million, net of unamortized debt discount and issuance costs. As of December 31, 2020, the carrying value of the Notes classified as equity in the “Additional paid-in capital” line item was $107.8 million, which reflects the debt discount, less issuance costs allocated to the equity component and related net deferred tax liabilities. The initial carrying amount of the liability component was determined by measuring the fair value of a similar debt instrument without any associated conversion features. The carrying amount of the equity component (representing the conversion option) was determined by deducting the fair value of the liability component from the principal value of the notes. The excess of the principal amount of the liability component over its carrying amount (i.e., the debt discount), along with any issuance costs allocated to the liability component, are amortized to interest expense over the term of the notes.

The tables at the end of this press release include a reconciliation of GAAP to non-GAAP financial measures for the three and twelve months ended December 31, 2020 and 2019. An explanation of non-GAAP financial measures is also included under the heading “Non-GAAP Financial Measures” below. Additional non-GAAP financial measures are included in our “Q4 2020 Earnings Presentation”, which will be available under the “Events and Presentation” section on MicroStrategy’s investor relations website at https://www.microstrategy.com/en/investor-relations. MicroStrategy uses its Intelligent Enterprise^™ platform across the enterprise and has created an interactive dossier with quarterly financial performance data. Anyone can access the MSTR Financials dossier via a web browser, or by downloading the MicroStrategy Library^™ app on an iOS or Android device. To download the native apps, visit MicroStrategy Library for iOS or MicroStrategy Library for Android.

Non-GAAP Financial Measures

MicroStrategy is providing supplemental financial measures for (i) non-GAAP income from operations that excludes the impact of share-based compensation expense and impairment losses and gains on sale from intangible assets, which include its digital assets, (ii) non-GAAP net income and non-GAAP diluted earnings per share that exclude the impact of share-based compensation expense, impairment losses and gains on sale from intangible assets, which include its digital assets and the sale of its Voice.com domain name in the second quarter of 2019 (the “Domain Name Sale”), interest expense arising from the amortization of the debt discount and issuance costs on the Company’s convertible senior notes, and related income tax effects, and (iii) non-GAAP constant currency revenues that exclude foreign currency exchange rate fluctuations. These supplemental financial measures are not measurements of financial performance under generally accepted accounting principles in the United States (“GAAP”) and, as a result, these supplemental financial measures may not be comparable to similarly titled measures of other companies. Management uses these non-GAAP financial measures internally to help understand, manage, and evaluate business performance and to help make operating decisions.

MicroStrategy believes that these non-GAAP financial measures are also useful to investors and analysts in comparing its performance across reporting periods on a consistent basis. The first supplemental financial measure excludes (i) a significant non-cash expense that MicroStrategy believes is not reflective of its general business performance, and for which the accounting requires management judgment and the resulting share-based compensation expense could vary significantly in comparison to other companies and (ii) significant impairment losses and gains on sale from intangible assets, which include MicroStrategy’s bitcoin. The second set of supplemental financial measures excludes the impact of (i) share-based compensation expense, (ii) impairment losses and gains on sale from intangible assets, which include MicroStrategy’s bitcoin and the Domain Name Sale, which was outside of MicroStrategy’s normal business operations, (iii) non-cash interest expense arising from the amortization of the debt discount and issuance costs related to MicroStrategy’s convertible senior notes, and (iv) related income tax effects. Although the portion of non-cash interest expense related to the amortization of the debt discount will be eliminated upon our planned adoption of ASU 2020-06 on January 1, 2021, excluding the current year non-cash interest expense related to both the amortization of the debt discount and the issuance costs will allow for greater comparability of our results after we adopt the new accounting rules. The third set of supplemental financial measures excludes changes resulting from fluctuations in foreign currency exchange rates so that results may be compared to the same period in the prior year on a non-GAAP constant currency basis. MicroStrategy believes the use of these non-GAAP financial measures can also facilitate comparison of MicroStrategy’s operating results to those of its competitors.

Bitcoin Acquisitions

As part of MicroStrategy’s previously announced treasury management and capital allocation strategies, MicroStrategy purchased a total of approximately 32,220 bitcoins at an aggregate purchase price of $700.0 million in the fourth quarter of 2020 for an average purchase price of approximately $21,726 per bitcoin. Further, in the first quarter of 2021 to date, MicroStrategy has purchased approximately 314 bitcoins at an aggregate purchase price of $10.0 million for an average purchase price for such additional bitcoins of approximately $31,808 per bitcoin. In future periods, MicroStrategy may purchase additional bitcoins and increase its overall holdings of bitcoin or sell its bitcoins and decrease its overall holdings of bitcoin.

Convertible Senior Notes

In December 2020, the Company issued $650.0 million aggregate principal amount of Notes. The Notes are senior unsecured obligations of the Company and bear interest at a fixed rate of 0.75% per annum, payable semiannually in arrears on June 15 and December 15 of each year, beginning on June 15, 2021. Holders of the Notes may receive additional interest under specified circumstances as outlined in the indenture relating to the issuance of the Notes. The Notes are convertible into shares of MicroStrategy’s class A common stock at an initial conversion price of $397.99 per share. The Notes will mature on December 15, 2025, unless earlier converted, redeemed or repurchased in accordance with their terms. The total net proceeds from the offering, after deducting initial purchaser discounts and issuance costs, were approximately $634.7 million.

Conference Call

MicroStrategy will be discussing its fourth quarter 2020 financial results on a live Video Webinar today beginning at approximately 5:00 p.m. EST. The live Video Webinar and accompanying presentation materials will be available under the “Events and Presentation” section on MicroStrategy’s investor relations website at https://www.microstrategy.com/en/investor-relations. Dial-in instructions will be available after registering for the event. An archived replay will be available beginning approximately two hours after the call concludes.

About MicroStrategy Incorporated

MicroStrategy (Nasdaq: MSTR) is the largest independent publicly-traded business intelligence company, with the leading enterprise analytics platform. Our vision is to enable Intelligence Everywhere^™. MicroStrategy provides modern analytics on an open, comprehensive enterprise platform used by many of the world’s most admired brands in the Fortune Global 500. Optimized for cloud and on-premises deployments, the platform features HyperIntelligence^®, a breakthrough technology that overlays actionable enterprise data on popular business applications to help users make smarter, faster decisions. For more information about MicroStrategy, visit www.microstrategy.com.

MicroStrategy, Intelligent Enterprise, MicroStrategy Library, Intelligence Everywhere, HyperIntelligence, and MicroStrategy 2020 are either trademarks or registered trademarks of MicroStrategy Incorporated in the United States and certain other countries. Other product and company names mentioned herein may be the trademarks of their respective owners.

This press release may include statements that may constitute “forward-looking statements,” including estimates of future business prospects or financial results and statements containing the words “believe,” “estimate,” “project,” “expect” or similar expressions. Forward-looking statements inherently involve risks and uncertainties that could cause actual results of MicroStrategy Incorporated and its subsidiaries (collectively, the “Company”) to differ materially from the forward-looking statements. Factors that could contribute to such differences include: the extent and timing of market acceptance of MicroStrategy’s new offerings; impacts of the COVID-19 pandemic; the market price of bitcoin and any associated impairment charges that the Company may incur as a result of a decrease in the market price below the value at which the Company’s bitcoins are carried on its balance sheet; gains or losses on sales of bitcoins that the Company would incur upon any sale of any of its bitcoins; changes in the accounting treatment of the Company’s holding of bitcoins; changes in securities laws or other laws or regulations relating to bitcoin which could adversely affect the price of bitcoin or the Company’s ability to own bitcoin; a decrease in liquidity in the markets in which bitcoins are traded; security breaches, cyberattacks, unauthorized access, loss of private keys or fraud that causes us to lose any of our bitcoin; the Company’s ability to recognize revenue or deferred revenue through delivery of products or satisfactory performance of services; continued acceptance of the Company’s other products in the marketplace; fluctuations in tax benefits or provisions; the timing of significant orders; delays in or the inability of the Company to develop or ship new products; customers shifting from a product license model to a cloud subscription model, which may delay our ability to recognize revenue; competitive factors; general economic conditions; currency fluctuations; and other risks detailed in MicroStrategy’s registration statements and periodic reports filed with the Securities and Exchange Commission. The Company undertakes no obligation to update these forward-looking statements for revisions or changes after the date of this release.

MSTR-F

MICROSTRATEGY INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2020			2019			2020			2019*
	(unaudited)			(unaudited)			(unaudited)
Revenues
Product licenses	$	29,770		$	30,087		$	86,743		$	87,471
Subscription services		8,788			7,252			33,082			29,394
Total product licenses and subscription services		38,558			37,339			119,825			116,865
Product support		71,886			74,722			284,434			292,035
Other services		20,875			21,470			76,476			77,427
Total revenues		131,319			133,531			480,735			486,327
Cost of revenues
Product licenses		564			534			2,293			2,131
Subscription services		3,321			4,185			14,833			15,161
Total product licenses and subscription services		3,885			4,719			17,126			17,292
Product support		4,743			6,607			23,977			28,317
Other services		12,157			13,310			49,952			54,365
Total cost of revenues		20,785			24,636			91,055			99,974
Gross profit		110,534			108,895			389,680			386,353
Operating expenses
Sales and marketing		39,111			50,267			148,910			191,235
Research and development		24,955			25,987			103,561			109,423
General and administrative		19,622			23,013			80,136			86,697
Digital asset impairment losses		26,456			0			70,698			0
Total operating expenses		110,144			99,267			403,305			387,355
Income (loss) from operations		390			9,628			(13,625	)		(1,002	)
Interest (expense) income, net		(1,917	)		2,389			710			10,909
Other (expense) income, net		(2,506	)		(2,361	)		(7,038	)		28,356
(Loss) income before income taxes		(4,033	)		9,656			(19,953	)		38,263
(Benefit from) provision for income taxes		(6,694	)		(2,511	)		(12,429	)		3,908
Net income (loss)	$	2,661		$	12,167		$	(7,524	)	$	34,355
Basic earnings (loss) per share (1):	$	0.28		$	1.19		$	(0.78	)	$	3.35
Weighted average shares outstanding used in computing basic earnings (loss) per share		9,408			10,208			9,684			10,256
Diluted earnings (loss) per share (1):	$	0.27		$	1.18		$	(0.78	)	$	3.33
Weighted average shares outstanding used in computing diluted earnings (loss) per share		9,849			10,301			9,684			10,328

(1)	Basic and fully diluted earnings (loss) per share for class A and class B common stock are the same.
*	Derived from audited financial statements.

MICROSTRATEGY INCORPORATED
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
	December 31,			December 31,
	2020			2019*
	(unaudited)
Assets
Current assets
Cash and cash equivalents	$	59,675		$	456,727
Restricted cash		1,084			1,089
Short-term investments		0			108,919
Accounts receivable, net		197,461			163,516
Prepaid expenses and other current assets		14,400			23,195
Total current assets		272,620			753,446
Digital assets		1,054,302			0
Property and equipment, net		42,975			50,154
Right-of-use assets		73,597			85,538
Deposits and other assets		15,615			8,024
Deferred tax assets, net		6,503			19,409
Total Assets	$	1,465,612		$	916,571
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable, accrued expenses, and operating lease liabilities	$	45,119		$	33,919
Accrued compensation and employee benefits		49,249			48,792
Deferred revenue and advance payments		191,250			187,107
Total current liabilities		285,618			269,818
Convertible senior notes, net		486,366			0
Deferred revenue and advance payments		14,662			4,344
Operating lease liabilities		84,328			103,424
Other long-term liabilities		33,382			30,400
Deferred tax liabilities		8,211			26
Total Liabilities		912,567			408,012
Stockholders’ Equity
Preferred stock undesignated, $0.001 par value; 5,000 shares authorized; no shares issued or outstanding		0			0
Class A common stock, $0.001 par value; 330,000 shares authorized; 16,307 shares issued and 7,623 shares outstanding, and 15,888 shares issued and 8,081 shares outstanding, respectively		16			16
Class B convertible common stock, $0.001 par value; 165,000 shares authorized; 1,964 shares issued and outstanding, and 2,035 shares issued and outstanding, respectively		2			2
Additional paid-in capital		763,051			593,583
Treasury stock, at cost; 8,684 shares and 7,807 shares, respectively		(782,104	)		(658,880	)
Accumulated other comprehensive loss		(3,885	)		(9,651	)
Retained earnings		575,965			583,489
Total Stockholders’ Equity		553,045			508,559
Total Liabilities and Stockholders’ Equity	$	1,465,612		$	916,571

*	Derived from audited financial statements.

MICROSTRATEGY INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
	Twelve Months Ended
	December 31,
	2020			2019*
	(unaudited)
Operating activities:
Net (loss) income	$	(7,524	)	$	34,355
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization		13,332			8,594
Reduction in carrying amount of right-of-use assets		8,210			8,105
Credit losses and sales allowances		2,732			124
Net realized (gain) loss on short-term investments		(94	)		41
Deferred taxes		(20,830	)		(2,614	)
Release of liabilities for unrecognized tax benefits		0			(2,837	)
Share-based compensation expense		11,153			10,209
Digital asset impairment losses		70,698			0
Gain on partial lease termination		(2,820	)		0
Amortization of debt discount and issuance costs on convertible senior notes		1,543			0
Changes in operating assets and liabilities:
Accounts receivable		(774	)		(3,672	)
Prepaid expenses and other current assets		2,346			6,415
Deposits and other assets		416			761
Accounts payable and accrued expenses		9,445			(7,321	)
Accrued compensation and employee benefits		(6,827	)		(2,658	)
Deferred revenue and advance payments		(20,223	)		20,836
Operating lease liabilities		(11,171	)		(8,620	)
Other long-term liabilities		4,007			(851	)
Net cash provided by operating activities		53,619			60,867
Investing activities:
Purchases of digital assets		(1,125,000	)		0
Proceeds from redemption of short-term investments		119,886			684,356
Purchases of property and equipment		(3,651	)		(10,182	)
Purchases of short-term investments		(9,928	)		(320,487	)
Net cash (used in) provided by investing activities		(1,018,693	)		353,687
Financing activities:
Proceeds from convertible senior notes classified as debt		496,473			0
Proceeds from convertible senior notes classified as equity		153,527			0
Issuance costs paid for convertible senior notes		(14,625	)		0
Proceeds from sale of class A common stock under exercise of employee stock options		51,082			6,569
Purchases of treasury stock		(123,224	)		(72,719	)
Net cash provided by (used in) financing activities		563,233			(66,150	)
Effect of foreign exchange rate changes on cash, cash equivalents, and restricted cash		4,784			(1,374	)
Net (decrease) increase in cash, cash equivalents, and restricted cash		(397,057	)		347,030
Cash, cash equivalents, and restricted cash, beginning of year		457,816			110,786
Cash, cash equivalents, and restricted cash, end of year	$	60,759		$	457,816

*	Derived from audited financial statements.

MICROSTRATEGY INCORPORATED
REVENUE AND COST OF REVENUE DETAIL
(in thousands)
	Three Months Ended				Twelve Months Ended
	December 31,				December 31,
	2020		2019		2020		2019*
	(unaudited)		(unaudited)		(unaudited)
Revenues
Product licenses and subscription services:
Product licenses	$	29,770	$	30,087	$	86,743	$	87,471
Subscription services		8,788		7,252		33,082		29,394
Total product licenses and subscription services		38,558		37,339		119,825		116,865
Product support		71,886		74,722		284,434		292,035
Other services:
Consulting		19,372		19,524		71,345		69,659
Education		1,503		1,946		5,131		7,768
Total other services		20,875		21,470		76,476		77,427
Total revenues		131,319		133,531		480,735		486,327
Cost of revenues
Product licenses and subscription services:
Product licenses		564		534		2,293		2,131
Subscription services		3,321		4,185		14,833		15,161
Total product licenses and subscription services		3,885		4,719		17,126		17,292
Product support		4,743		6,607		23,977		28,317
Other services:
Consulting		10,996		11,668		42,923		47,664
Education		1,161		1,642		7,029		6,701
Total other services		12,157		13,310		49,952		54,365
Total cost of revenues		20,785		24,636		91,055		99,974
Gross profit	$	110,534	$	108,895	$	389,680	$	386,353

*	Derived from audited financial statements.

MICROSTRATEGY INCORPORATED
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
INCOME (LOSS) FROM OPERATIONS
(in thousands)
	Three Months Ended				Twelve Months Ended
	December 31,				December 31,
	2020		2019		2020			2019
	(unaudited)		(unaudited)		(unaudited)			(unaudited)
Reconciliation of non-GAAP income from operations:
Income (loss) from operations	$	390	$	9,628	$	(13,625	)	$	(1,002	)
Share-based compensation expense		3,256		2,322		11,153			10,209
Digital asset impairment losses		26,456		0		70,698			0
Non-GAAP income from operations	$	30,102	$	11,950	$	68,226		$	9,207

MICROSTRATEGY INCORPORATED
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
NET INCOME (LOSS) AND EARNINGS (LOSS) PER SHARE
(in thousands, except per share data)
	Three Months Ended						Twelve Months Ended
	December 31,						December 31,
	2020			2019			2020			2019
	(unaudited)			(unaudited)			(unaudited)			(unaudited)
Reconciliation of non-GAAP net income:
Net income (loss)	$	2,661		$	12,167		$	(7,524	)	$	34,355
Share-based compensation expense		3,256			2,322			11,153			10,209
Digital asset impairment losses		26,456			0			70,698			0
Gain from Domain Name Sale		0			0			0			(29,829	)
Interest expense arising from amortization of debt discount and issuance costs		1,543			0			1,543			0
Income tax effects (1)		(13,548	)		(142	)		(25,841	)		7,450
Non-GAAP net income	$	20,368		$	14,347		$	50,029		$	22,185
Reconciliation of non-GAAP diluted earnings per share:
Diluted earnings (loss) per share	$	0.27		$	1.18		$	(0.78	)	$	3.33
Share-based compensation expense (per diluted share)		0.33			0.22			1.15			0.99
Digital asset impairment losses (per diluted share)		2.69			0.00			7.31			0.00
Gain from Domain Name Sale (per diluted share)		0.00			0.00			0.00			(2.89	)
Interest expense arising from amortization of debt discount and issuance costs (per diluted share)		0.16			0.00			0.16			0.00
Income tax effects (per diluted share)		(1.38	)		(0.01	)		(2.67	)		0.72
Non-GAAP diluted earnings per share	$	2.07		$	1.39		$	5.17		$	2.15

(1) Income tax effects reflect the net tax effects of stock-based compensation expense, digital asset impairment losses, gain from the Domain Name Sale, and interest expense for amortization of debt discount and issuance costs.

MICROSTRATEGY INCORPORATED
RECONCILIATION OF GAAP TO NON-GAAP MEASURES
CONSTANT CURRENCY
(in thousands)
	Three Months Ended
	December 31,
	(unaudited)
	GAAP		Foreign Currency Exchange Rate Impact (1)			Non-GAAP Constant Currency (2)		GAAP		GAAP % Change			Non-GAAP Constant Currency % Change (3)
	2020		2020			2020		2019		2020			2020
Revenues
Product licenses	$	29,770	$	310		$	29,460	$	30,087		-1.1	%		-2.1	%
Subscription services		8,788		112			8,676		7,252		21.2	%		19.6	%
Total product licenses and subscription services		38,558		422			38,136		37,339		3.3	%		2.1	%
Product support		71,886		1,313			70,573		74,722		-3.8	%		-5.6	%
Other services		20,875		533			20,342		21,470		-2.8	%		-5.3	%
Total revenues		131,319		2,268			129,051		133,531		-1.7	%		-3.4	%
	Twelve Months Ended
	December 31,
	(unaudited)
	GAAP		Foreign Currency Exchange Rate Impact (1)			Non-GAAP Constant Currency (2)		GAAP		GAAP % Change			Non-GAAP Constant Currency % Change (3)
	2020		2020			2020		2019		2020			2020
Revenues
Product licenses	$	86,743	$	(1,227	)	$	87,970	$	87,471		-0.8	%		0.6	%
Subscription services		33,082		121			32,961		29,394		12.5	%		12.1	%
Total product licenses and subscription services		119,825		(1,106	)		120,931		116,865		2.5	%		3.5	%
Product support		284,434		(358	)		284,792		292,035		-2.6	%		-2.5	%
Other services		76,476		304			76,172		77,427		-1.2	%		-1.6	%
Total revenues		480,735		(1,160	)		481,895		486,327		-1.1	%		-0.9	%

(1)	The “Foreign Currency Exchange Rate Impact” reflects the estimated impact of fluctuations in foreign currency exchange rates on international revenues. It shows the increase (decrease) in international revenues from the same period in the prior year, based on comparisons to the prior year quarterly average foreign currency exchange rates. The term “international” refers to operations outside of the United States and Canada.
(2)	The “Non-GAAP Constant Currency” reflects the current period GAAP amount, less the Foreign Currency Exchange Rate Impact.
(3)	The “Non-GAAP Constant Currency % Change” reflects the percentage change between the current period Non-GAAP Constant Currency amount and the GAAP amount for the same period in the prior year.

MICROSTRATEGY INCORPORATED
DEFERRED REVENUE DETAIL
(in thousands)
	December 31,		December 31,
	2020		2019*
	(unaudited)
Current:
Deferred product licenses revenue	$	1,495	$	481
Deferred subscription services revenue		26,258		16,561
Deferred product support revenue		156,216		161,670
Deferred other services revenue		7,281		8,395
Total current deferred revenue and advance payments	$	191,250	$	187,107
Non-current:
Deferred product licenses revenue	$	139	$	293
Deferred subscription services revenue		8,758		97
Deferred product support revenue		5,055		3,417
Deferred other services revenue		710		537
Total non-current deferred revenue and advance payments	$	14,662	$	4,344
Total current and non-current:
Deferred product licenses revenue	$	1,634	$	774
Deferred subscription services revenue		35,016		16,658
Deferred product support revenue		161,271		165,087
Deferred other services revenue		7,991		8,932
Total current and non-current deferred revenue and advance payments	$	205,912	$	191,451

*	Derived from audited financial statements.

MICROSTRATEGY INCORPORATED
WORLDWIDE EMPLOYEE HEADCOUNT
	December 31,		September 30,		June 30,		March 31,		December 31,
	2020		2020		2020		2020		2019
Subscription services		49		54		64		63		69
Product support		154		165		189		204		219
Consulting		393		397		421		425		392
Education		37		38		43		42		38
Sales and marketing		479		495		573		594		597
Research and development		642		666		684		721		743
General and administrative		243		258		285		314		338
Total headcount		1,997		2,073		2,259		2,363		2,396