UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

 

FORM 8-K

 

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): October 23, 2015

 

 

MICROSTRATEGY INCORPORATED

(Exact name of registrant as specified in its charter)

 

 

 

Delaware   0-24435   51-0323571

(State or other jurisdiction

of incorporation)

 

(Commission

File Number)

 

(I.R.S. Employer

Identification No.)

1850 Towers Crescent Plaza

Tysons Corner, Virginia

  22182
(Address of principal executive offices)   (Zip Code)

Registrant’s telephone number, including area code: (703) 848-8600

(Former name or former address, if changed since last report)

 

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions ( see General Instruction A.2. below):

 

  ¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

  ¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

  ¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

  ¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

 

 


Item 2.02. Results of Operations and Financial Condition.

On October 26, 2015, MicroStrategy Incorporated (the “Company”) issued a press release announcing the Company’s financial results for the quarter ended September 30, 2015. A copy of this press release is attached as Exhibit 99.1 to this Current Report on Form 8-K.

The information disclosed pursuant to Item 2.02 in this Form 8-K (including Exhibit 99.1) shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 (the “Exchange Act”) or otherwise subject to the liabilities of that section, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933 or the Exchange Act except as expressly set forth by specific reference in such a filing.

 

Item 5.02. Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

Stock Incentive Plan Amendment

On October 23, 2015, the Company adopted Amendment No. 3 (“Amendment No. 3”) to the MicroStrategy Incorporated 2013 Stock Incentive Plan (as previously amended, the “Plan”), subject to stockholder approval, to increase the total number of shares of the Company’s class A common stock authorized for issuance under the Plan by 200,000, from 1,500,000 to 1,700,000.

Any award granted under the Plan, as amended by Amendment No. 3, prior to stockholder approval of such amendment will be terminated or forfeited if stockholder approval of such amendment is not obtained within 12 months of the award grant date, and no such award may be exercised or settled prior to such stockholder approval.

This summary of Amendment No. 3 is qualified in its entirety by reference to the full text of the amendment, a copy of which is attached as an exhibit hereto.

 

Item 9.01. Financial Statements and Exhibits.

 

  (d) Exhibits

 

Exhibit
No.

  

Description

10.1    Amendment No. 3 to the MicroStrategy Incorporated 2013 Stock Incentive Plan
99.1    Press release, dated October 26, 2015, regarding the Company’s financial results for the quarter ended September 30, 2015


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: October 26, 2015     MicroStrategy Incorporated
                (Registrant)
    By:  

/s/ Phong Le

    Name:   Phong Le
    Title:   Senior Executive Vice President & Chief Financial Officer


EXHIBIT INDEX

 

Exhibit
No.

  

Description

10.1    Amendment No. 3 to the MicroStrategy Incorporated 2013 Stock Incentive Plan
99.1    Press release, dated October 26, 2015, regarding the Company’s financial results for the quarter ended September 30, 2015

Exhibit 10.1

MICROSTRATEGY INCORPORATED

Amendment No. 3 to

2013 Stock Incentive Plan

Pursuant to Section 11(d) of the 2013 Stock Incentive Plan (as previously amended, the “Plan”) of MicroStrategy Incorporated (the “Company”), the Plan is hereby amended as follows:

Section 4(a)(1) of the Plan is amended to read in its entirety as follows:

“(1) Authorized Number of Shares . Subject to adjustment under Section 9, Awards may be made under the Plan for up to 1,700,000 shares of class A common stock, $0.001 par value per share, of the Company (the “ Common Stock ”), any or all of which Awards may be in the form of Incentive Stock Options (as defined in Section 5(b)). Shares issued under the Plan may consist in whole or in part of authorized but unissued shares or treasury shares.”

This Amendment shall become effective on the date it is adopted by the Board; provided that, to the extent required, no Award shall be made pursuant to the Plan (other than an Award that would have been authorized under the Plan as in effect prior to this Amendment) before stockholder approval of this Amendment, unless the Award is conditioned upon stockholder approval of this Amendment and the Award provides that (1) it will terminate or be forfeited if stockholder approval of the Amendment is not obtained within 12 months from the date of the grant of such Award and (2) it may not be exercised or settled (or otherwise result in the issuance of Common Stock) prior to such stockholder approval.

Adopted by the Board of Directors on October 23, 2015

Approved by the Company’s stockholders

on                     , 20    

Exhibit 99.1

Contact:

MicroStrategy Incorporated

Investor Relations

ir@microstrategy.com

(703) 848-8600

MicroStrategy Announces

Third Quarter 2015 Financial Results

TYSONS CORNER, Va., October 26, 2015 - MicroStrategy ® Incorporated (Nasdaq: MSTR), a leading worldwide provider of enterprise software platforms, today announced financial results for the three-month period ended September 30, 2015 (the third quarter of its 2015 fiscal year).

Third quarter 2015 revenues were $129.5 million versus $151.2 million for the third quarter of 2014, a 14% decrease. Product licenses and subscription services revenues for the third quarter of 2015 were $34.1 million versus $40.0 million for the third quarter of 2014, a 15% decrease. Product support revenues for the third quarter of 2015 were $71.4 million versus $75.0 million for the third quarter of 2014, a 5% decrease. Other services revenues for the third quarter of 2015 were $24.1 million versus $36.2 million for the third quarter of 2014, a 33% decrease. Foreign currency headwinds continued to have a negative impact on revenues for the third quarter of 2015.

Operating expenses for the third quarter of 2015 were $74.1 million versus $123.2 million for the third quarter of 2014, a 40% decrease. Third quarter 2015 operating expenses included $0.1 million in restructuring costs, as compared to $11.6 million in restructuring costs in the third quarter of 2014. In addition, MicroStrategy did not capitalize any software development costs during the third quarter of 2015, as compared to $2.3 million in software development costs capitalized during the third quarter of 2014.

Income from operations for the third quarter of 2015 was $30.7 million, as compared to a loss from operations of $7.0 million for the third quarter of 2014. Net income for the third quarter of 2015 was $23.9 million, or $2.06 per share on a diluted basis, as compared to a net loss of $0.8 million, or $0.07 per share on a diluted basis, for the third quarter of 2014.

Non-GAAP income from operations, which excludes share-based compensation expense and restructuring costs, was $35.4 million for the third quarter of 2015 versus $8.5 million for the third quarter of 2014.

As of September 30, 2015, MicroStrategy had cash and cash equivalents and short-term investments of $456.9 million, as compared to $345.5 million as of December 31, 2014, an increase of $111.4 million. As of September 30, 2015, MicroStrategy had 9.3 million shares of class A common stock and 2.0 million shares of class B common stock outstanding.

The tables at the end of this press release include a reconciliation of income (loss) from operations to non-GAAP income (loss) from operations for the three and nine months ended September 30, 2015 and 2014. An explanation of this non-GAAP measure is also included under the heading “Non-GAAP Financial Measure” below.


Conference Call

MicroStrategy will be discussing its third quarter 2015 financial results on a conference call today beginning at approximately 6:00 p.m. EDT. To access the conference call, dial (844) 824-7425 (domestically) or (716) 220-9429 (internationally) and use conference ID 57551320. A live webcast and replay of the conference call will be available under the “Events & Presentations” section on MicroStrategy’s investor relations website at http://ir.microstrategy.com/events.cfm . The replay will be available beginning approximately two hours after the call concludes until October 31, 2015 at (855) 859-2056 (domestically) or (404) 537-3406 (internationally) using the passcode 57551320. An archived webcast will also be available under the “Events & Presentations” section on MicroStrategy’s investor relations website at http://ir.microstrategy.com/events.cfm .

MicroStrategy’s Worldwide Symposium Series Sets Record Attendance

Throughout Q3 of 2015, MicroStrategy’s Worldwide Symposium Series events set record attendance on their tour around the globe, demonstrating that business and IT audiences have a keen interest in learning about the powerful capabilities of MicroStrategy 10 Secure Enterprise™. MicroStrategy enthusiasts gathered for keynote presentations, hands-on enterprise data discovery workshops, and live Q&A and networking opportunities with innovators from MicroStrategy’s leading customers, partners, and sponsors.

More than 4,000 companies and organizations in the U.S., EMEA, and APAC rely on MicroStrategy to make sense of large data volumes, get answers in an instant, build stunning visualizations, and present a single version of the truth — securely, at scale, and on all standard devices. MicroStrategy’s customers who presented at the 2015 Symposium Series included AGBAR; Ahold; AIG; Amadeus Travel; Caisse d’Epargne; Carphone; Ceva Santé; Groupe BPCE; Hilton Worldwide; ING DIRECT España; Ipsen; Lottoland; McDonald’s España; McDonald’s UK; O2; Spar; Telefónica, S.A.; Weiler Corporation; and Zurich.

MicroStrategy 10.1™ Delivers New Features and Enhancements that Bolster Performance for Enterprise Data Discovery, Analytics, and Mobile

In September, MicroStrategy announced the general availability of MicroStrategy 10.1. The release included hundreds of new and improved features and a wide range of performance enhancements across the product platform. Further extending the self-service capabilities of MicroStrategy 10 Secure Enterprise, MicroStrategy Desktop™ 10.1 and MicroStrategy Web™ 10.1 added new enhancements for enterprise data discovery users, enabling data preparation and data wrangling across more data sources, while delivering a clean, new look with modern grid styles, navigation, and consolidated views and search. Other highlights included new capabilities for D3 visualizations, ESRI geospatial visualizations, and iOS 9 within MicroStrategy Mobile™ and custom Mobile Productivity Apps. To learn more about MicroStrategy Analytics™, visit: http://www.microstrategy.com/us/platform/whats-new .

The MicroStrategy 10.1 release came shortly after the release of MicroStrategy 10 Secure Enterprise, a groundbreaking enterprise analytics solution that combines traditional business intelligence functionality with data discovery, mobile analytics, and powerful enterprise security. MicroStrategy 10.1 builds on the version 10 foundation with a significant collection of new capabilities in speed, flexibility, and performance.

“Our customer focus has guided the development of MicroStrategy 10.1, helping to ensure that we continue to bring cutting-edge technology to the market,” said Paul Zolfaghari, President, MicroStrategy Incorporated. “Our new agile engineering development methods are resulting in new features and enhancements being rolled out to our global customer base on a more frequent basis. We are confident that 10.1 delivers an even higher level of analytics value for organizations and institutions around the world.”


MicroStrategy Connector to Presto Opens Door to Fast, Interactive Analytics for Big Data Exploration

In September, MicroStrategy announced that through its optimized Presto Connector, MicroStrategy 10 Secure Enterprise enables organizations with immense amounts of data to run thousands of quick, interactive analytic queries against multiple data stores. Developed by Facebook, Presto is an open source distributed SQL query engine for running interactive analytic queries against data sources of all sizes ranging from gigabytes to petabytes.

“The impact of having a JDBC connector to Presto is huge for the analytics community,” said Tim Lang, Senior Executive Vice President and Chief Technology Officer, MicroStrategy Incorporated. “MicroStrategy 10 Secure Enterprise’s optimized Presto Connector empowers our Big Data customers to query into their data quickly, interactively, at petabyte scale. It enables users to query and explore their immense amounts of data, sometimes spread across multiple data sources, without performance constraints. Having this connector in MicroStrategy Desktop and Web opens the door to build quick analytics for the masses who typically access Presto pragmatically and dump results in files or databases to connect with additional visualization tools.”

Targeted at analysts who expect fast interactive response times, Presto allows querying data where it lives, including Hive, Cassandra, relational databases or even proprietary data stores. A single Presto query can combine data from multiple sources, and Presto supports data exploration across an entire organization. Presto breaks the false choice between having fast analytics using an expensive commercial solution or using a slow “free” solution that requires excessive hardware.

Usher™ Achieves FIDO Alliance Certification for its Innovative Enterprise Mobile Security Solution

In August, Usher, MicroStrategy’s advanced enterprise security solution that is designed to replace vulnerable security measures such as passwords and keycards, was certified by The FIDO (Fast IDentity Online) Alliance . Usher passed a rigorous series of tests that measure compliance with the FIDO Universal Authentication Framework (UAF) and confirm interoperability with other FIDO Certified products and services that support FIDO 1.0 specifications.

“Achieving FIDO certification demonstrates MicroStrategy’s dedication to providing our customers and the marketplace with an innovative mobile security solution that ends the password nightmare,” said Jonathan Klein, President, MicroStrategy Incorporated. “Our customers can now use Usher to adopt the FIDO UAF standard in a matter of minutes—quickly making great improvements to their security. We encourage governments, businesses, and organizations to move beyond the antiquated password model and try out Usher’s robust and secure multi-factor authentication solution.”

Non-GAAP Financial Measure

MicroStrategy is providing a supplemental financial measure for income from continuing operations that excludes the impact of share-based compensation arrangements and restructuring activities. This financial measure is not a measurement of financial performance under generally accepted accounting principles in the United States (“GAAP”) and, as a result, this financial measure may not be comparable to similarly titled measures of other companies. Management uses this non-GAAP financial measure internally to help understand, manage, and evaluate business performance and to help make operating decisions. MicroStrategy believes that this non-GAAP financial measure is also useful to investors and analysts in comparing its performance across reporting periods on a consistent basis because it excludes a significant non-cash share-based compensation expense that MicroStrategy believes is not reflective of its general business performance and significant restructuring charges that we believe are not reflective of ongoing operating results. In addition, accounting for share-based compensation arrangements requires significant management judgment and the resulting expense could vary significantly in comparison to other companies. Therefore, MicroStrategy believes the use of this non-GAAP financial measure can also facilitate comparison of MicroStrategy’s operating results to those of its competitors.


About MicroStrategy Incorporated

Founded in 1989, MicroStrategy (Nasdaq: MSTR) is a leading worldwide provider of enterprise software platforms. The Company’s mission is to provide enterprise analytics, mobility, and security platforms that are flexible, powerful, scalable, and user-friendly. To learn more, visit MicroStrategy online, and follow us on Facebook and Twitter .

MicroStrategy, MicroStrategy 10, MicroStrategy 10 Secure Enterprise, MicroStrategy 10.1, MicroStrategy Mobile, MicroStrategy Analytics, MicroStrategy Desktop, MicroStrategy Web, and Usher 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, including MicroStrategy 10 Secure Enterprise; the impact on our business of the restructuring plan we adopted in the third quarter of 2014; 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; competitive factors; general economic conditions, including economic uncertainty in the retail industry, in which the Company has a significant number of customers; currency fluctuations; and other risks detailed in the Company’s registration statements and periodic reports filed with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these 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
September 30,
    Nine Months Ended
September 30,
 
     2015      2014     2015      2014  
     (unaudited)      (unaudited)     (unaudited)      (unaudited)  

Revenues

          

Product licenses

   $ 27,511       $ 33,969      $ 77,634       $ 91,208   

Subscription services

     6,546         5,993        20,285         16,317   
  

 

 

    

 

 

   

 

 

    

 

 

 

Total product licenses and subscription services

     34,057         39,962        97,919         107,525   

Product support

     71,392         75,019        211,444         221,069   

Other services

     24,087         36,221        76,984         102,365   
  

 

 

    

 

 

   

 

 

    

 

 

 

Total revenues

     129,536         151,202        386,347         430,959   
  

 

 

    

 

 

   

 

 

    

 

 

 

Cost of revenues

          

Product licenses

     2,680         1,542        5,895         5,456   

Subscription services

     3,075         4,502        9,800         13,829   
  

 

 

    

 

 

   

 

 

    

 

 

 

Total product licenses and subscription services

     5,755         6,044        15,695         19,285   

Product support

     3,174         3,695        9,734         10,713   

Other services

     15,755         25,214        52,265         73,577   
  

 

 

    

 

 

   

 

 

    

 

 

 

Total cost of revenues

     24,684         34,953        77,694         103,575   
  

 

 

    

 

 

   

 

 

    

 

 

 

Gross profit

     104,852         116,249        308,653         327,384   
  

 

 

    

 

 

   

 

 

    

 

 

 

Operating expenses

          

Sales and marketing

     36,403         58,195        109,142         178,028   

Research and development

     17,789         28,659        48,051         89,469   

General and administrative

     19,843         24,811        63,071         76,376   

Restructuring costs

     86         11,578        261         11,578   
  

 

 

    

 

 

   

 

 

    

 

 

 

Total operating expenses

     74,121         123,243        220,525         355,451   
  

 

 

    

 

 

   

 

 

    

 

 

 

Income (loss) from operations

     30,731         (6,994     88,128         (28,067

Interest income, net

     116         53        129         133   

Other income, net

     766         4,928        2,601         3,336   
  

 

 

    

 

 

   

 

 

    

 

 

 

Income (loss) before income taxes

     31,613         (2,013     90,858         (24,598

Provision for (benefit from) income taxes

     7,720         (1,168     24,038         (6,934
  

 

 

    

 

 

   

 

 

    

 

 

 

Net income (loss)

   $ 23,893       $ (845   $ 66,820       $ (17,664
  

 

 

    

 

 

   

 

 

    

 

 

 

Basic earnings (loss) per share (1):

   $ 2.10       $ (0.07   $ 5.89       $ (1.56
  

 

 

    

 

 

   

 

 

    

 

 

 

Weighted average shares outstanding used in computing basic earnings (loss) per share

     11,365         11,301        11,345         11,301   
  

 

 

    

 

 

   

 

 

    

 

 

 

Diluted earnings (loss) per share (1):

   $ 2.06       $ (0.07   $ 5.80       $ (1.56
  

 

 

    

 

 

   

 

 

    

 

 

 

Weighted average shares outstanding used in computing diluted earnings (loss) per share

     11,589         11,301        11,521         11,301   
  

 

 

    

 

 

   

 

 

    

 

 

 

 

(1) Basic and fully diluted earnings (loss) per share for class A and class B common stock are the same.


MICROSTRATEGY INCORPORATED

CONSOLIDATED BALANCE SHEETS

(in thousands, except per share data)

 

     September 30,
2015
    December 31,
2014*
 
     (unaudited)     

Assets

    

Current assets

    

Cash and cash equivalents

   $ 230,188      $ 146,919   

Restricted cash

     487        661   

Short-term investments

     226,689        198,547   

Accounts receivable, net

     55,039        78,633   

Prepaid expenses and other current assets

     12,078        17,669   

Deferred tax assets, net

     12,373        19,936   
  

 

 

   

 

 

 

Total current assets

     536,854        462,365   

Property and equipment, net

     68,862        77,852   

Capitalized software development costs, net

     17,807        13,469   

Deposits and other assets

     2,184        3,951   

Deferred tax assets, net

     2,247        1,160   
  

 

 

   

 

 

 

Total Assets

   $ 627,954      $ 558,797   
  

 

 

   

 

 

 

Liabilities and Stockholders’ Equity

    

Current liabilities

    

Accounts payable and accrued expenses

   $ 26,609      $ 35,458   

Accrued compensation and employee benefits

     38,570        50,588   

Accrued restructuring costs

     98        2,284   

Deferred revenue and advance payments

     115,504        108,413   

Deferred tax liabilities

     395        557   
  

 

 

   

 

 

 

Total current liabilities

     181,176        197,300   

Deferred revenue and advance payments

     10,297        10,818   

Other long-term liabilities

     20,166        22,679   

Deferred tax liabilities

     7,803        3,529   
  

 

 

   

 

 

 

Total Liabilities

     219,442        234,326   
  

 

 

   

 

 

 

Stockholders’ Equity

    

Preferred stock undesignated, $0.001 par value; 5,000 shares authorized; no shares issued or outstanding

     —          —     

Class A common stock, $0.001 par value; 330,000 shares authorized; 15,734 shares issued and 9,329 shares outstanding, and 15,660 shares issued and 9,255 shares outstanding, respectively

     16        16   

Class B common stock, $0.001 par value; 165,000 shares authorized; 2,035 shares issued and outstanding, and 2,055 shares issued and outstanding, respectively

     2        2   

Additional paid-in capital

     525,632        506,727   

Treasury stock, at cost; 6,405 shares

     (475,184     (475,184

Accumulated other comprehensive loss

     (6,047     (4,363

Retained earnings

     364,093        297,273   
  

 

 

   

 

 

 

Total Stockholders’ Equity

     408,512        324,471   
  

 

 

   

 

 

 

Total Liabilities and Stockholders’ Equity

   $ 627,954      $ 558,797   
  

 

 

   

 

 

 

 

* Derived from audited financial statements.


MICROSTRATEGY INCORPORATED

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

 

     Nine Months Ended
September 30,
 
     2015     2014  
     (unaudited)     (unaudited)  

Operating activities:

    

Net income (loss)

   $ 66,820      $ (17,664

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

    

Depreciation and amortization

     16,172        19,305   

Bad debt expense

     683        2,242   

Unrealized net loss (gain) on foreign currency forward contracts

     1,641        (926

Non-cash portion of adjustments to accrued restructuring costs

     (127     165   

Deferred taxes

     11,015        (12,337

Release of liabilities for unrecognized tax benefits

     (61     —     

Share-based compensation expense

     12,503        8,561   

Excess tax benefits from share-based compensation arrangements

     (963     —     

Reclassification of foreign currency translation adjustment from other comprehensive income

     (280     —     

Changes in operating assets and liabilities:

    

Accounts receivable

     19,511        23,488   

Prepaid expenses and other current assets

     3,377        (5,197

Deposits and other assets

     1,562        412   

Accounts payable and accrued expenses

     (4,933     (2,757

Accrued compensation and employee benefits

     (10,275     (19,380

Accrued restructuring costs

     (1,940     8,083   

Deferred revenue and advance payments

     11,153        11,723   

Other long-term liabilities

     (2,415     603   
  

 

 

   

 

 

 

Net cash provided by operating activities

     123,443        16,321   

Investing activities:

    

Proceeds from redemption of short-term investments

     316,000        222,300   

Purchases of property and equipment

     (3,352     (11,856

Purchases of short-term investments

     (344,033     (303,565

Capitalized software development costs

     (9,598     (2,254

Decrease (increase) in restricted cash

     113        (1,013
  

 

 

   

 

 

 

Net cash used in investing activities

     (40,870     (96,388

Financing activities:

    

Proceeds from sale of class A common stock under exercise of employee stock options

     5,439        —     

Excess tax benefits from share-based compensation arrangements

     963        —     

Payments on capital lease obligations and other financing arrangements

     (1,430     (2,035
  

 

 

   

 

 

 

Net cash provided by (used in) financing activities

     4,972        (2,035

Effect of foreign exchange rate changes on cash and cash equivalents

     (4,276     (2,063
  

 

 

   

 

 

 

Net increase (decrease) in cash and cash equivalents

     83,269        (84,165

Cash and cash equivalents, beginning of period

     146,919        220,171   
  

 

 

   

 

 

 

Cash and cash equivalents, end of period

   $ 230,188      $ 136,006   
  

 

 

   

 

 

 


MICROSTRATEGY INCORPORATED

REVENUE AND COST OF REVENUE DETAIL

(in thousands)

 

     Three Months Ended
September 30,
     Nine Months Ended
September 30,
 
     2015      2014      2015      2014  
     (unaudited)      (unaudited)      (unaudited)      (unaudited)  

Revenues

           

Product licenses and subscription services:

           

Product licenses

   $ 27,511       $ 33,969       $ 77,634       $ 91,208   

Subscription services

     6,546         5,993         20,285         16,317   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total product licenses and subscription services

     34,057         39,962         97,919         107,525   
  

 

 

    

 

 

    

 

 

    

 

 

 

Product support

     71,392         75,019         211,444         221,069   

Other services:

           

Consulting

     22,018         32,812         70,475         91,510   

Education

     2,069         3,409         6,509         10,855   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total other services

     24,087         36,221         76,984         102,365   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total revenues

     129,536         151,202         386,347         430,959   
  

 

 

    

 

 

    

 

 

    

 

 

 

Cost of revenues

           

Product licenses and subscription services:

           

Product licenses

     2,680         1,542         5,895         5,456   

Subscription services

     3,075         4,502         9,800         13,829   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total product licenses and subscription services

     5,755         6,044         15,695         19,285   
  

 

 

    

 

 

    

 

 

    

 

 

 

Product support

     3,174         3,695         9,734         10,713   

Other services:

           

Consulting

     14,723         23,841         49,526         68,830   

Education

     1,032         1,373         2,739         4,747   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total other services

     15,755         25,214         52,265         73,577   
  

 

 

    

 

 

    

 

 

    

 

 

 

Total cost of revenues

     24,684         34,953         77,694         103,575   
  

 

 

    

 

 

    

 

 

    

 

 

 

Gross profit

   $ 104,852       $ 116,249       $ 308,653       $ 327,384   
  

 

 

    

 

 

    

 

 

    

 

 

 


MICROSTRATEGY INCORPORATED

DEFERRED REVENUE DETAIL

(in thousands)

 

     September 30,
2015
    December 31,
2014*
    September 30,
2014
 
     (unaudited)           (unaudited)  

Current:

      

Deferred product licenses revenue

   $ 13,155      $ 10,927      $ 10,010   

Deferred subscription services revenue

     11,172        16,018        10,382   

Deferred product support revenue

     135,999        168,833        145,917   

Deferred other services revenue

     6,794        10,564        10,216   
  

 

 

   

 

 

   

 

 

 

Gross current deferred revenue and advance payments

     167,120        206,342        176,525   

Less: unpaid deferred revenue

     (51,616     (97,929     (55,818
  

 

 

   

 

 

   

 

 

 

Net current deferred revenue and advance payments

   $ 115,504      $ 108,413      $ 120,707   
  

 

 

   

 

 

   

 

 

 

Non-current:

      

Deferred product licenses revenue

   $ 6,344      $ 8,012      $ 7,700   

Deferred subscription services revenue

     808        750        669   

Deferred product support revenue

     6,962        7,505        7,062   

Deferred other services revenue

     1,166        1,047        951   
  

 

 

   

 

 

   

 

 

 

Gross non-current deferred revenue and advance payments

     15,280        17,314        16,382   

Less: unpaid deferred revenue

     (4,983     (6,496     (4,903
  

 

 

   

 

 

   

 

 

 

Net non-current deferred revenue and advance payments

   $ 10,297      $ 10,818      $ 11,479   
  

 

 

   

 

 

   

 

 

 

Total current and non-current:

      

Deferred product licenses revenue

   $ 19,499      $ 18,939      $ 17,710   

Deferred subscription services revenue

     11,980        16,768        11,051   

Deferred product support revenue

     142,961        176,338        152,979   

Deferred other services revenue

     7,960        11,611        11,167   
  

 

 

   

 

 

   

 

 

 

Gross current and non-current deferred revenue and advance payments

     182,400        223,656        192,907   

Less: unpaid deferred revenue

     (56,599     (104,425     (60,721
  

 

 

   

 

 

   

 

 

 

Net current and non-current deferred revenue and advance payments

   $ 125,801      $ 119,231      $ 132,186   
  

 

 

   

 

 

   

 

 

 

 

* Derived from audited financial statements.


MICROSTRATEGY INCORPORATED

RECONCILIATION OF GAAP TO NON-GAAP MEASURES

(in thousands)

 

     Three Months Ended
September 30,
    Nine Months Ended
September 30,
 
     2015      2014     2015      2014  
     (unaudited)      (unaudited)     (unaudited)      (unaudited)  

Reconciliation of non-GAAP income (loss) from operations:

          

Income (loss) from operations

   $ 30,731       $ (6,994   $ 88,128       $ (28,067

Share-based compensation expense

     4,546         3,879        12,503         8,561   

Restructuring costs

     86         11,578        261         11,578   
  

 

 

    

 

 

   

 

 

    

 

 

 

Non-GAAP income (loss) from operations

   $ 35,363       $ 8,463      $ 100,892       $ (7,928
  

 

 

    

 

 

   

 

 

    

 

 

 


MICROSTRATEGY INCORPORATED

WORLDWIDE EMPLOYEE HEADCOUNT

 

     September 30,
2014
     December 31,
2014
     March 31,
2015
     June 30,
2015
     September 30,
2015
 

Subscription services

     61         57         43         37         33   

Product support

     144         138         138         130         127   

Consulting

     676         600         554         508         480   

Education

     35         24         19         25         27   

Sales and marketing

     827         662         577         515         507   

Research and development

     965         645         580         508         464   

General and administrative

     417         344         321         303         301   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

 

Total headcount

     3,125         2,470         2,232         2,026         1,939