Long-term Debt

3 Months Ended

Mar. 31, 2025

Debt Disclosure [Abstract]

Long-term Debt

(5) Long-term Debt

The net carrying value of the Company’s outstanding debt (in thousands) consisted of the following, as of:

	March 31, 2025		December 31, 2024
2027 Convertible Notes	$	0	$	1,041,352
2028 Convertible Notes		999,587		998,543
2029 Convertible Notes		2,976,855		2,975,037
2030A Convertible Notes		786,152		785,172
2030B Convertible Notes		1,985,365		0
2031 Convertible Notes		595,087		594,476
2032 Convertible Notes		788,084		787,417
Other long-term secured debt		9,551		9,678
Total	$	8,140,681	$	7,191,675
Reported as:
Current portion of long-term debt, net		525		517
Long-term debt, net		8,140,156		7,191,158
Total	$	8,140,681	$	7,191,675

Convertible Senior Notes

As of March 31, 2025, the following convertible notes were outstanding (the “Outstanding Convertible Notes”):

•$1.010 billion aggregate principal amount of 0.625% Convertible Senior Notes due 2028 (the “2028 Convertible Notes”);

•$3.000 billion aggregate principal amount of 0% Convertible Senior Notes due 2029 (the “2029 Convertible Notes”);

•$800.0 million aggregate principal amount of 0.625% Convertible Senior Notes due 2030 (the “2030A Convertible Notes”);

•$2.000 billion aggregate principal amount of 0% Convertible Senior Notes due 2030 (the “2030B Convertible Notes”);

•$603.8 million aggregate principal amount of 0.875% Convertible Senior Notes due 2031 (the “2031 Convertible Notes”); and

•$800.0 million aggregate principal amount of 2.25% Convertible Senior Notes due 2032 (the “2032 Convertible Notes”).

Additionally, the Company also previously issued, in February 2021, the $1.050 billion aggregate principal amount of 0% Convertible Senior Notes due 2027 (the “2027 Convertible Notes”, and together with the Outstanding Convertible Notes, the “Convertible Notes”), all of which were redeemed or converted into the Company’s class A common stock during the three months ended March 31, 2025.

Each of the Convertible Notes were issued in a private offering. The Outstanding Convertible Notes are, and the 2027 Convertible Notes were, senior unsecured obligations of the Company ranking senior in right of payment to any of the Company’s indebtedness expressly subordinated in right of payment to the Convertible Notes; equal in right of payment to any of the Company’s unsecured indebtedness not so subordinated; effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries.

The following table summarizes the key terms of each of the Convertible Notes (principal at inception, net proceeds, and issuance costs are each reported in thousands):

	2027 Convertible Notes			2028 Convertible Notes			2029 Convertible Notes			2030A Convertible Notes			2030B Convertible Notes			2031 Convertible Notes			2032 Convertible Notes
Issuance Date	February 2021			September 2024			November 2024			March 2024			February 2025			March 2024			June 2024
Maturity Date (1)	February 15, 2027			September 15, 2028			December 1, 2029			March 15, 2030			March 1, 2030			March 15, 2031			June 15, 2032
Principal at Inception	$	1,050,000		$	1,010,000		$	3,000,000		$	800,000		$	2,000,000		$	603,750		$	800,000
Stated Interest Rate (2)		0.000	%		0.625	%		0.000	%		0.625	%		0.000	%		0.875	%		2.250	%
Interest Payment Dates (3)	February 15 & August 15			March 15 & September 15			June 1 & December 1			March 15 & September 15			March 1 & September 1			March 15 & September 15			June 15 & December 15
Net Proceeds	$	1,025,830		$	997,375		$	2,974,250		$	782,000		$	1,984,852		$	592,567		$	786,000
Issuance Costs (4)	$	24,170		$	12,625		$	25,750		$	18,000		$	15,148		$	11,183		$	14,000
Effective Interest Rate (4)		0.39	%		1.05	%		0.24	%		1.14	%		0.25	%		1.30	%		2.63	%
Date of Holder Put Option (5)	n/a			September 15, 2027			June 1, 2028			September 15, 2028			March 1, 2028			September 15, 2028			June 15, 2029
Initial Conversion Rate (6)		6.981			5.4589			1.4872			6.677			2.3072			4.297			4.894
Initial Conversion Price (7)	$	143.25		$	183.19		$	672.40		$	149.77		$	433.43		$	232.72		$	204.33
Convertible at any time after the following date (8) (9)	January 24, 2025			March 15, 2028			June 1, 2029			September 15, 2029			December 3, 2029			September 15, 2030			December 15, 2031
Not redeemable by the Company prior to the following date (10)	February 20, 2024			December 20, 2027			December 4, 2026			March 22, 2027			March 5, 2027			March 22, 2028			June 20, 2029
Redemption Date (11)	February 24, 2025			n/a			n/a			n/a			n/a			n/a			n/a

(1)“Maturity Date” is the stated maturity date under each applicable indenture governing such notes, unless earlier converted, redeemed, or repurchased in accordance with their terms.

(2)Holders may receive additional or special interest under specified circumstances as outlined under each applicable indenture governing the Convertible Notes.

(3)For the Convertible Notes issued in 2024, interest payments begin on (a) September 15, 2024 for each of the 2030A Convertible Notes and the 2031 Convertible Notes, (b) December 15, 2024 for the 2032 Convertible Notes, and (c) March 15, 2025 for the 2028 Convertible Notes. The 2029 Convertible Notes issued in 2024 and the 2030B Convertible Notes issued in 2025 do not bear regular interest.

(4)“Issuance Costs” reflect the customary offering expenses associated with each of the Convertible Notes. The Company accounts for these issuance costs as a reduction to the principal amount of the respective Convertible Notes and amortizes the issuance costs to interest expense from the respective debt issuance dates through the earlier of the “Maturity Date” or the “Date of Holder Put Option,” if applicable, at the “Effective Interest Rates” stated in the table.

(5)“Date of Holder Put Option” represents the respective dates upon which holders of the 2028 Convertible Notes, 2029 Convertible Notes, 2030A Convertible Notes, 2030B Convertible Notes, 2031 Convertible Notes, and 2032 Convertible Notes each have a noncontingent right to require the Company to repurchase for cash all or any portion of their respective notes at a repurchase price equal to 100% of the principal amount of such notes to be repurchased, plus any accrued and unpaid interest to, but excluding the repurchase date.

(6)The “Initial Conversion Rate” is stated in shares of the Company’s class A common stock per $1,000 principal amount. The conversion rates are subject to customary anti-dilution adjustments. In addition, following certain events that may occur prior to the respective maturity dates or if the Company delivers a notice of redemption, the Company will increase the conversion rate for a holder who elects to convert its respective Convertible Notes in connection with such corporate event or notice of redemption, as the case may be, in certain circumstances as provided in each indenture governing the respective Convertible Notes.

(7)The “Initial Conversion Price” is stated in dollars per share of the Company’s class A common stock.

(8)On or after the stated dates until the close of business on the second scheduled trading day immediately preceding the respective maturity dates, holders may convert the Convertible Notes at any time. Upon conversion of the Convertible Notes, the Company will pay or deliver, as the case may be, cash, shares of the Company’s class A common stock, or a combination of cash and shares of class A common stock, at the Company’s election. For the 2027 Convertible Notes, the date presented is the date on which the Company delivered its notice of full redemption of the 2027

Convertible Notes, which resulted in the 2027 Convertible Notes being convertible at any time thereafter until 5:00pm New York City time, on February 20, 2025. See below under “Conversions and Redemption of Convertible Notes” for further information.

(9)Prior to the respective dates, the Convertible Notes are convertible only under the following circumstances: (a) during any calendar quarter (and only during such calendar quarter) commencing after the calendar quarter ending on June 30, 2024 for the 2030A Convertible Notes and 2031 Convertible Notes, on September 30, 2024 for the 2032 Convertible Notes, on December 31, 2024 for the 2028 Convertible Notes, on March 31, 2025 for the 2029 Convertible Notes, or on June 30, 2025 for the 2030B Convertible Notes, if the last reported sale price of the Company’s class A common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price of the respective Convertible Notes on each applicable trading day; (b) during the five business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” (as defined under each applicable indenture governing the respective Convertible Notes) per $1,000 principal amount of the respective Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s class A common stock and the applicable conversion rate on each such trading day; (c) in the case of the 2028 Convertible Notes, 2029 Convertible Notes, 2030A Convertible Notes, 2031 Convertible Notes and 2032 Convertible Notes, the Company calls any or all of such Convertible Notes for redemption, then a holder may surrender all or any part of such of its Convertible Notes as called for redemption for conversion at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; (d) in the case of the 2030B Convertible Notes, the Company calls any 2030B Convertible Notes for redemption, then the holders of such 2030B Convertible Note may convert such 2030B Convertible Notes at any time before the close of business on the second business day immediately before the related redemption date; and (e) upon occurrence of specified corporate events as described in each applicable indenture governing the respective Convertible Notes.

(10)The Company may redeem for cash all or a portion of the Outstanding Convertible Notes at its option, on or after the stated dates, if the last reported sale price of the Company’s class A common stock has been at least 130% of the conversion price of the respective Convertible Notes then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides a notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption. The redemption price will be equal to 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. See below “Conversions and Redemption of Convertible Notes” subsection for information regarding the Company’s redemption of the 2027 Convertible Notes.

(11)“Redemption Date” for the 2027 Convertible Notes is the date on which the Company redeemed all outstanding 2027 Convertible Notes.

If the Company undergoes a “fundamental change,” as defined in the respective indentures governing the Convertible Notes prior to maturity, subject to certain conditions, holders may require the Company to repurchase for cash all or any portion of their respective Convertible Notes at a fundamental change repurchase price equal to 100% of the principal amount of the respective Convertible Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.

The respective indentures governing the Convertible Notes contain customary terms and covenants, including that upon certain events of default occurring and continuing, either the trustee of the respective Convertible Notes or the holders of at least 25% in principal amount outstanding of the respective Convertible Notes may declare 100% of the principal of, and accrued and unpaid interest, if any, on, all the respective Convertible Notes to be due and payable.

Although the Convertible Notes contain embedded conversion features, the Company accounts for the Convertible Notes in their entirety as a liability because the conversion features are indexed to the Company’s class A common stock and meet the criteria for classification in stockholders’ equity and therefore do not qualify for separate derivative accounting.

Conversions and Redemption of Convertible Notes

On January 24, 2025, the Company delivered a notice of full redemption (the “2027 Redemption Notice”) to the trustee of the Company’s 2027 Convertible Notes for the redemption of all $1.05 billion in aggregate principal amount of the 2027 Convertible Notes then outstanding on February 24, 2025 (the “2027 Redemption Date”), at a redemption price equal to 100% of the principal amount of the 2027 Convertible Notes to be redeemed, plus accrued and unpaid special interest, if any, to but excluding the 2027 Redemption Date, unless earlier converted. The Company elected to satisfy its conversion obligation with respect to the 2027 Convertible Notes by delivering solely shares of its class A common stock, together with cash in lieu of any fractional shares. Holders of the 2027 Convertible Notes requested to convert $1.050 billion in principal amount of the 2027 Convertible Notes for which the Company issued 7,373,528 shares of the Company’s class A common stock and paid a nominal amount of cash in lieu of fraction shares upon settlement of such conversion requests, in accordance with the terms and provisions of the indenture governing the 2027 Convertible Notes.

During the three months ended March 31, 2025, the Company received from certain holders of the 2031 Convertible Notes requests to convert an immaterial principal amount of the 2031 Convertible Notes, which the Company expects to settle in shares of class A common stock during the quarter ending June 30, 2025, in accordance with the terms and provisions of the indenture governing the 2031 Convertible Notes.

During the three months ended March 31, 2024, the Company received from certain holders of the Company’s 0.750% Convertible Senior Notes due 2025 (the “2025 Convertible Notes”) requests to convert an immaterial principal amount of the 2025 Convertible Notes, which the Company elected to settle in shares of class A common stock and cash in accordance with the terms and provisions of the indenture governing the 2025 Convertible Notes. The settlement was effected during the three months ended June 30, 2024. No shares of class A common stock were issued in respect of such conversions during the three months ended March 31, 2024. The 2025 Convertible Notes were previously redeemed or converted into the Company’s class A common stock in the third quarter of 2024 and were not outstanding as December 31, 2024 or March 31, 2025.

Collective Convertible Notes Disclosures

As of March 31, 2025, the maximum number of shares into which the Outstanding Convertible Notes could have been potentially converted if the conversion features were triggered at the conversion rates then in effect based on the Outstanding Convertible Notes then outstanding on such date was:

•2028 Convertible Notes: 5,513,489 shares;

•2029 Convertible Notes: 4,461,600 shares;

•2030A Convertible Notes: 5,341,600 shares;

•2030B Convertible Notes: 4,614,400 shares;

•2031 Convertible Notes: 2,594,314 shares; and

•2032 Convertible Notes: 3,915,200 shares.

The 2028 Convertible Notes, 2030A Convertible Notes, 2031 Convertible Notes, and 2032 Convertible Notes were convertible at the option of the holders during the three months ended March 31, 2025. In addition, the 2027 Convertible Notes were convertible at the option of the holders during the three months ended March, 31, 2025 prior to their redemption. The Outstanding Convertible Notes may be convertible in future periods if one or more of the conversion conditions is satisfied during future measurement periods. As of March 31, 2025, the last reported sale price of the Company’s class A common stock for at least 20 trading days during the 30 consecutive trading days ending on, and including, March 31, 2025 was greater than or equal to 130% of the conversion price of each of the 2028 Convertible Notes, 2030A Convertible Notes and 2032 Convertible Notes on each applicable trading day. Therefore, the 2028 Convertible Notes, 2030A Convertible Notes, and 2032 Convertible Notes are convertible at the option of the holders of the respective Convertible Notes during the second quarter of 2025.

The Company did not receive conversion requests with respect to the Convertible Notes during the three months ended March 31, 2025 and 2024, except the conversion requests received with respect to the 2027 Convertible Notes and 2031 Convertible Notes during the three months ended March 31, 2025, as described above under “Conversions and Redemption of Convertible Notes”. Additionally, as described above under “Conversions and Redemption of Convertible Notes,” during the three months ended March 31, 2024, the Company received conversion requests with respect to an immaterial principal amount of the 2025 Convertible Notes.

As of March 31, 2025, and December 31, 2024, the net carrying value of the Convertible Notes was classified as a long-term liability in the “Long-term debt, net” line item in the Company’s Consolidated Balance Sheets.

The following is a summary of the Company’s Outstanding Convertible Notes outstanding as of March 31, 2025 (in thousands):

	March 31, 2025
	Outstanding		Unamortized			Net Carrying		Fair Value
	Principal Amount		Issuance Costs			Value		Amount		Leveling
2028 Convertible Notes	$	1,010,000	$	(10,413	)	$	999,587	$	1,846,987	Level 2
2029 Convertible Notes		3,000,000		(23,145	)		2,976,855		2,426,196	Level 2
2030A Convertible Notes		800,000		(13,848	)		786,152		1,637,518	Level 2
2030B Convertible Notes		2,000,000		(14,635	)		1,985,365		1,909,206	Level 2
2031 Convertible Notes		603,750		(8,663	)		595,087		854,306	Level 2
2032 Convertible Notes		800,000		(11,916	)		788,084		1,292,139	Level 2
Total	$	8,213,750	$	(82,620	)	$	8,131,130	$	9,966,352

The following is a summary of the Company’s Convertible Notes outstanding as of December 31, 2024 (in thousands):

	December 31, 2024
	Outstanding		Unamortized			Net Carrying		Fair Value
	Principal Amount		Issuance Costs			Value		Amount		Leveling
2027 Convertible Notes	$	1,050,000	$	(8,648	)	$	1,041,352	$	2,134,125	Level 2
2028 Convertible Notes		1,010,000		(11,457	)		998,543		1,927,828	Level 2
2029 Convertible Notes		3,000,000		(24,963	)		2,975,037		2,447,682	Level 2
2030A Convertible Notes		800,000		(14,828	)		785,172		1,657,323	Level 2
2031 Convertible Notes		603,750		(9,274	)		594,476		877,559	Level 2
2032 Convertible Notes		800,000		(12,583	)		787,417		1,324,602	Level 2
Total	$	7,263,750	$	(81,753	)	$	7,181,997	$	10,369,119

The fair value of the Convertible Notes is determined using observable market data other than quoted prices, specifically the last traded price at the end of the reporting period of identical instruments in the over-the-counter market (Level 2).

For the three months ended March 31, 2025 and 2024, interest expense related to the Convertible Notes (including the 2025 Convertible Notes) was as follows (in thousands):

	Three Months Ended March 31, 2025						Three Months Ended March 31, 2024
	Contractual		Amortization of				Contractual		Amortization of
	Interest Expense		Issuance Costs		Total		Interest Expense		Issuance Costs		Total
2025 Convertible Notes	$	0	$	0	$	0	$	1,219	$	767	$	1,986
2027 Convertible Notes		0		401		401		0		1,010		1,010
2028 Convertible Notes		1,578		1,044		2,622		0		0		0
2029 Convertible Notes		0		1,818		1,818		0		0		0
2030A Convertible Notes		1,250		980		2,230		319		248		567
2030B Convertible Notes		0		513		513		0		0		0
2031 Convertible Notes		1,321		611		1,932		191		89		280
2032 Convertible Notes		4,500		668		5,168		0		0		0
Total	$	8,649	$	6,035	$	14,684	$	1,729	$	2,114	$	3,843

For the three months ended March 31, 2025, the Company paid $8.2 million in interest related to the Convertible Notes. The Company did not pay any interest related to the Convertible Notes or 2025 Convertible Notes during the three months ended March 31, 2024. The Company has not paid any additional interest or special interest related to the Convertible Notes to date.

On June 14, 2021, the Company issued $500 million aggregate principal amount of 6.125% Senior Secured Notes due 2028 (the “2028 Secured Notes”) in a private offering. These notes, which were guaranteed by MicroStrategy Services Corporation, a wholly owned subsidiary of the Company (the “Subsidiary Guarantor”), bore a fixed interest rate of 6.125% per annum, payable semiannually, with a maturity date of June 15, 2028, unless earlier redeemed or repurchased in accordance with their terms and subject to a springing maturity feature described in the indenture governing the 2028 Secured Notes. The 2028 Secured Notes were secured by a first priority security interest in the Company's and the Subsidiary Guarantor’s assets, including bitcoins acquired by the Company or the Subsidiary Guarantor after June 14, 2021. The Company redeemed all 2028 Secured Notes on September 26, 2024, at a redemption price equal to $523.9 million, and all collateral securing the 2028 Secured Notes was released. For additional information about the 2028 Secured Notes, see Note 8 to the Company’s Consolidated Financial Statements of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024.

For the three months ended March 31, 2024, interest expense related to the 2028 Secured Notes was as follows (in thousands):

	Three Months Ended March 31, 2024
	Contractual		Amortization of
	Interest Expense		Issuance Costs		Total
2028 Secured Notes	$	7,656	$	429	$	8,085

The Company did not pay any interest related to the 2028 Secured Notes during the three months ended March 31, 2024.

Other long-term secured debt

In June 2022, the Company, through a wholly-owned subsidiary, entered into a secured term loan agreement in the amount of $11.1 million, bearing interest at an annual rate of 5.2%, and maturing in June 2027. The loan is secured by certain non-bitcoin assets of the Company that are not otherwise serving as collateral for any of the Company’s other indebtedness. After monthly payments made under the terms of the agreement, the loan had a net carrying value of $9.6 million and $9.7 million as of March 31, 2025 and December 31, 2024, respectively, and an outstanding principal balance of $9.7 million and $9.8 million as of March 31, 2025 and December 31, 2024, respectively. As of March 31, 2025 and December 31, 2024, $0.5 million and $0.5 million of the respective net carrying values were short-term and were presented in “Current portion of long-term debt, net” in the Consolidated Balance Sheets.

Maturities

The following table shows the maturities of the Company’s debt instruments outstanding as of March 31, 2025 (in thousands). The principal payments related to the 2028 Convertible Notes, 2029 Convertible Notes, 2030A Convertible Notes, 2030B Convertible Notes, 2031 Convertible Notes, and 2032 Convertible Notes are included in the table below as if the holders exercised their right to require the Company to repurchase all of the respective convertible notes on their respective Date of Holder Put Option.

Payments due by period ended March 31,	2028 Convertible Notes		2029 Convertible Notes		2030A Convertible Notes		2030B Convertible Notes		2031 Convertible Notes		2032 Convertible Notes		Other long-term secured debt		Total
2026	$	0	$	0	$	0	$	0	$	0	$	0	$	577	$	577
2027		0		0		0		0		0		0		608		608
2028		1,010,000		0		0		2,000,000		0		0		8,477		3,018,477
2029		0		3,000,000		800,000		0		603,750		0		0		4,403,750
2030		0		0		0		0		0		800,000		0		800,000
Thereafter		0		0		0		0		0		0		0		0
Total	$	1,010,000	$	3,000,000	$	800,000	$	2,000,000	$	603,750	$	800,000	$	9,662	$	8,223,412