Strategy Inc Posts $12.54B Net Loss in Q1 2026 as Bitcoin Price Drop Hits Holdings Hard

TLDR:

• • Strategy held 818,334 BTC as of May 3, 2026, reflecting a 22% year-to-date growth in bitcoin holdings.
    
  • STRC preferred stock raised $5.58B year to date, scaling to $8.5B total in just nine months of existence.
    
  • Strategy achieved a 9.4% BTC Yield and a $4.97B BTC Dollar Gain through the first four months of 2026.
  • The company has met 23 consecutive preferred dividend payments, totaling over $693 million since early 2025.

Strategy Inc posted a net loss of $12.54 billion for the first quarter of 2026. The loss was driven by a $14.46 billion unrealized loss on its bitcoin holdings.

Bitcoin prices fell during the quarter, pulling down the carrying value of the company’s digital assets. Despite the loss, Strategy continued expanding its bitcoin position and raising capital through its preferred equity products.

Bitcoin Holdings Expand Even as Prices Fall

Strategy held approximately 818,334 BTC as of May 3, 2026, marking a 22% growth year to date. The average purchase price per bitcoin stood at roughly $75,537.

The company’s total digital asset cost basis reached $61.81 billion. The market value of those holdings came in at $64.14 billion, based on a bitcoin price of about $78,374 as of May 1.

The company achieved a BTC Yield of 9.4% year to date through its capital markets activity. It also recorded a BTC Gain of 63,410 bitcoins and a BTC Dollar Gain of approximately $4.97 billion.

These figures reflect Strategy’s ongoing effort to grow bitcoin holdings on a per-share basis. The metrics are used internally to assess whether capital raises are accretive to shareholders.

President and CEO Phong Le addressed the broader market environment during the earnings announcement. “Adoption of Bitcoin continues to grow in 2026. Digital Credit, highlighted by STRC, has been a big success,” Le said.

He pointed to rising institutional activity from major banks as further validation of the company’s direction. Morgan Stanley, Goldman Sachs, and Citi were among those named as expanding into bitcoin-related services.

Strategy raised $11.68 billion year to date to fund its bitcoin acquisition strategy. The company used proceeds from its at-the-market offering program, pulling in $7.37 billion during Q1 alone.

An additional $4.32 billion came in between April 1 and May 3. Cash and cash equivalents stood at $2.21 billion as of March 31, 2026, down slightly from $2.30 billion at year-end 2025.

Total revenues rose 11.9% year over year to $124.3 million for the quarter. Gross profit reached $83.4 million, with a gross margin of 67.1%, compared to 69.4% in Q1 2025.

The software business remained a stable contributor to overall operations. Strategy continues to describe itself as an industry leader in AI-powered enterprise analytics software.

STRC Preferred Stock Sees Strong Demand

Strategy’s STRC preferred stock raised $5.58 billion year to date, representing 189% growth. The product scaled to $8.5 billion in just nine months, making it the largest preferred stock by market capitalization globally.

Daily trading volume reached $375 million, while volatility dropped to 3%. STRC maintained that stability even through the recent bitcoin bear market.

CFO Andrew Kang highlighted the company’s dividend track record during the quarter. “We continue to extend our track record of servicing our dividends, having now met our payment obligations on time and in full across 23 consecutive distributions,” Kang said.

Total cumulative preferred dividends declared and paid have reached over $693 million since early 2025. Kang also cited a BTC Dollar Gain of approximately $5 billion through the first four months of the year.

Executive Chairman Michael Saylor spoke to the growing ecosystem around the STRC instrument. “STRC has scaled to $8.5 billion in just 9 months and is now the largest preferred stock by market cap in the world,” Saylor said.

He attributed the product’s performance to its design, which extracts bitcoin’s returns while engineering price stability.

Saylor added that the company has proposed doubling STRC’s dividend payment frequency to a semi-monthly schedule.

Over $150 million of STRC is now held in corporate treasuries, including Prevalon, Strive, and Anchorage. More than $270 million sits across DeFi protocols such as Apyx and Saturn.

Strategy carries a Sharpe ratio of 2.53 on STRC. The company positions itself as the dominant issuer of digital credit instruments in the world.

Operating Loss Widens Year Over Year

Strategy’s operating loss for Q1 2026 reached $14.47 billion, compared to $5.92 billion for Q1 2025. The unrealized bitcoin loss of $14.46 billion accounted for nearly all of that figure.

Under current accounting standards, bitcoin must be marked to fair value each reporting period. Any price decline flows directly into the income statement as an unrealized loss.

Net loss attributable to common stockholders was $12.77 billion, compared to $4.23 billion in Q1 2025. On a diluted per-share basis, the loss came in at $38.25, versus $16.49 in the prior-year period.

The company’s preferred dividends contributed to the gap between net loss and the figure attributable to common stockholders. Strategy has declared and paid $692.5 million in cumulative preferred dividends to date.

Strategy confirmed it does not expect to generate accumulated earnings and profits for U.S. federal income tax purposes.

Distributions on preferred equity instruments are therefore expected to be treated as non-taxable return of capital for the foreseeable future.

This treatment is expected to remain in place for at least ten years. Shareholders are advised to consult their own tax advisors regarding individual circumstances.

Despite the reported losses, Strategy maintained its standing as the world’s largest corporate bitcoin holder. The company stated that its combination of bitcoin treasury management and enterprise analytics software supports long-term value creation.

Strategy’s dashboard at strategy.com serves as a public disclosure channel for its holdings, KPIs, and securities data. A live webinar covering the Q1 results was held on May 5 at 5:00 p.m. ET.

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