Basic and Diluted (Loss) Earnings per Share

3 Months Ended

Mar. 31, 2025

(10) Basic and Diluted Loss per Common Share

Basic net loss per common share is computed by dividing net loss attributable to common stockholders by the weighted-average common stock outstanding during the respective period. Net loss attributable to common stockholders is computed by deducting both the dividends declared in the period on the Perpetual Strike Preferred Stock and the Perpetual Strife Preferred Stock and the dividends accrued for the period on the Perpetual Strike Preferred Stock and the Perpetual Strife Preferred Stock from net loss. As of March 31, 2025, the aggregate and per share cumulative preferred dividends payable in arrears on the Perpetual Strife Preferred Stock were $1.4 million and $0.17, respectively. As of March 31, 2025, there were no cumulative preferred dividends payable in arrears on the Perpetual Strike Preferred Stock.

The Company has two classes of common stock: class A common stock and class B common stock. Holders of class A common stock generally have the same rights, including rights to dividends, as holders of class B common stock, except that holders of class A common stock have one vote per share while holders of class B common stock have ten votes per share. Each share of class B common stock is convertible at any time, at the option of the holder, into one share of class A common stock. As such, basic and fully diluted earnings per common share for class A common stock and for class B common stock are the same. The Company has never declared or paid any cash dividends on either class A or class B common stock.

The Company has two classes of preferred stock outstanding: Perpetual Strike Preferred Stock and Perpetual Strife Preferred Stock. Holders of the Company’s preferred stock do not have voting rights, except for rights to appoint a director to the Company’s board upon certain failures to pay dividends on preferred stock, and have rights to dividends and other rights as discussed in Note 9, Redeemable Preferred Stock, to the Consolidated Financial Statements. Additionally, each share of the Perpetual Strike Preferred Stock is convertible at any time, at the option of the holder, into 0.1 shares of class A common stock.

The impact from potential shares of common stock on the diluted earnings per common share calculation are included when dilutive. Potential shares of class A common stock issuable upon the exercise of outstanding stock options, the vesting of restricted stock units and performance stock units considered probable of achievement, and in connection with the 2021 ESPP are computed using the treasury stock method. Potential shares of class A common stock issuable upon conversion of the Convertible Notes and upon conversion of the Perpetual Strike Preferred Stock are computed using the if-converted method. In computing diluted earnings per common share, the Company first calculates the earnings per incremental share (“EPIS”) for each class of potential shares of common stock and ranks the classes from the most dilutive (i.e., lowest EPIS) to the least dilutive (i.e., highest EPIS). Basic earnings per common share is then adjusted for the effect of each class of shares, in sequence and cumulatively, until a particular class no longer produces further dilution. The following table sets forth the computation of basic and diluted loss per common share (in thousands, except per share data) for the periods indicated:


	Three Months Ended
	March 31,
	2025			2024
Numerator - Basic and Diluted:
Net loss	$	(4,217,370	)	$	(53,118	)
Dividends on preferred stock		(10,648	)		0
Net loss attributable to common stockholders of Strategy	$	(4,228,018	)	$	(53,118	)

Denominator - Basic and Diluted:
Weighted average shares of class A common stock outstanding		236,833			152,302
Weighted average shares of class B common stock outstanding		19,640			19,640
Total weighted average shares of common stock outstanding		256,473			171,942

Loss per common share:
Basic loss per common share (1)	$	(16.49	)	$	(0.31	)
Diluted loss per common share (1)	$	(16.49	)	$	(0.31	)

(1)

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

For the three months ended March 31, 2025 and 2024, the following weighted average shares of potential class A common stock were excluded from the diluted loss per common share calculation because their impact would have been anti-dilutive (in thousands).


	Three Months Ended
	March 31,
	2025		2024
Stock options		4,770		10,479
Restricted stock units		1,181		1,813
Performance stock units		590		516
Employee stock purchase plan		4		8
Convertible preferred stock		450		0
2025 Convertible Notes		0		16,332
2027 Convertible Notes		2,977		7,330
2028 Convertible Notes		5,513		0
2029 Convertible Notes		4,462		0
2030A Convertible Notes		5,342		1,409
2030B Convertible Notes		2,000		0
2031 Convertible Notes		2,594		399
2032 Convertible Notes		3,915		0
Total		33,798		38,286