Strategy Inc (Nasdaq: MSTR) announced the establishment of a US dollar reserve of $1.44 billion and updates to its assumptions underlying its previously issued forward guidance and bitcoin key performance indicator (KPI) targets for the FY ending Dec 31, 2025, which were released on Oct 30, 2025.
Strategy confirmed its USD Reserve of $1.44B in order to support the payment of dividends on its “preferred stock” as well as interest on its “outstanding indebtedness.”
As explained in the announcement, the USD Reserve was reportedly funded using proceeds from “the sale of shares of class A common stock under Strategy’s at-the-market offering program.”
Strategy’s aim now is to maintain a USD Reserve in an “amount sufficient to fund at least 12 months of its Dividends.”
Strategy intends to strengthen the USD Reserve “over time, with the goal of ultimately covering 24 months or more of its Dividends.”
The maintenance of this USD Reserve, as well as its amount, terms and conditions, remains “subject to Strategy’s sole and absolute discretion.”
As clarified in the update, Strategy may adjust the USD Reserve from “time to time based on market conditions, liquidity needs and other factors.”
Michael Saylor, Founder and Executive Chair said that establishing a USD Reserve to complement their BTC Reserve “marks the next step in their evolution, and they believe it will position them to navigate short-term market volatility while delivering on their vision of being the world’s issuer of Digital Credit.”
Saylor added that Strategy holds 650,000 bitcoin, “about 3.1% of the 21 million bitcoin that will ever exist.”
In recognition of the role they play in the Bitcoin ecosystem, and to reinforce their commitment to credit investors and shareholders, they have now formed a USD Reserve that “covers 21 months of Dividends.”
Phong Le, President and Chief Executive Officer said they intend to use this reserve to pay their Dividends and “grow it over time.”
Strategy further announced updates to its assumptions underlying its previously issued forward guidance and Bitcoin KPI targets “for the fiscal year ending Dec 31, 2025.”
Rather optimisically, previous guidance assumed “a bitcoin price of $150,000 as of Dec 31, 2025, based on the approximate consensus midpoint of third-party research analyst year-end bitcoin price estimates available as of that date.”
The announcement from the AI focused firm has acknowledged that Bitcoin is actually a highly volatile asset, and the trading price of bitcoin has declined from “approximately $111,612 as of October 30, 2025 to as low as $80,660 on Nov 21, 2025.”
In light of the recent trading prices of bitcoin, Strategy is updating its assumptions “for the price of bitcoin as of year-end 2025 to reflect a range of prices consistent with the recent trading history of bitcoin and is providing corresponding ranges for FY2025 Operating Income, Net Income and Diluted Earnings Per Share as set forth below that would result if the price of bitcoin on Dec 31, 2025 is within such range.”
Based on an assumed year-end 2025 bitcoin price “range of $85,000 to $110,000, the target ranges for Strategy’s FY2025 Operating Income, Net Income and Diluted Earnings Per Share” are:
- FY2025 Operating Income (Loss): between approximately $(7.0) billion and $9.5 billion;
- FY2025 Net Income (Loss): between approximately $(5.5) billion and $6.3 billion; and
- FY2025 Diluted Earnings (Loss) Per Share: between approximately $(17.0) per share of common stock and $19.0 per share of common stock.
These ranges assume the “successful completion of capital raises to achieve Strategy’s FY2025 Bitcoin Yield Target and the deployment of proceeds from such raises to the purchase of bitcoin.”
Strategy has now reportedly adopted “Accounting Standards Update No. 2023-08, Intangibles—Goodwill and Other—Crypto Assets (Subtopic 350-60): Accounting for and Disclosure of Crypto Assets.”
As explained in the announcement, this practice now “requires that Strategy measure its bitcoin holdings at fair value, with gains and losses from changes in the fair value of bitcoin recognized in net income (loss) at each reporting period.”
Due to Strategy’s significant bitcoin holdings, Strategy’s earnings results are “extremely sensitive to and directly correlated with changes in the market price of bitcoin.”
As is typical in these types of announcements, Strategy can provide “no assurance or guarantee as to the price of bitcoin as of Dec 31, 2025, and as a result Strategy’s actual results may vary materially from the ranges of results set forth above if the market price of bitcoin as of Dec 31, 2025 varies materially from this assumed range of bitcoin prices.”
Strategy undertakes no obligation “to update this guidance, other than as may be required by applicable law.”
And based on the same assumed “year-end 2025 bitcoin price range of $85,000 to $110,000, and after giving effect to Strategy’s anticipated common stock issuances to maintain its USD Reserve, Strategy’s updated FY2025 Bitcoin KPI targets” are:
- FY2025 BTC Yield Target: between 22.0% and 26.0%; and
- FY2025 BTC $ Gain Target: between $8.4 billion and $12.8 billion.
- Strategy expects to achieve these targets “through preferred stock offerings, disciplined common stock issuances, and the resulting increase in its bitcoin holdings.”
Following the COVID outbreak of 2020, the firm adopted Bitcoin as their primary treasury reserve asset.
By using proceeds from equity and debt financings, as well as cash flows from operations, they “accumulate Bitcoin and advocate for its role as digital capital.”
Their treasury strategy is designed “to provide investors varying degrees of economic exposure to Bitcoin by offering a range of securities, including equity and fixed-income instruments.”
They provide AI-powered enterprise analytics software, “advancing their vision of Intelligence Everywhere.”
They leverage development capabilities in order “to explore innovation in Bitcoin applications, integrating analytics expertise with their commitment to digital asset growth.”
