Strategy Reports $2.8 Billion Q3 Net Income, Expands Bitcoin Holdings to 640,808 BTC

Executive Summary

Strategy reported a third-quarter 2025 net income of $2.8 billion, exceeding analyst expectations. This performance was achieved despite a decline from the prior quarter's record and a period of sideways Bitcoin trading. The company sustained its strategy of accumulating Bitcoin, significantly increasing its digital asset reserves through various capital market offerings.

The Event in Detail

Strategy, operating as a Bitcoin treasury company, reported a net income of $2.8 billion for the third quarter of 2025. This figure represents a notable decrease from the $10 billion recorded in the preceding quarter but surpassed analyst expectations, with diluted earnings per share (EPS) reaching $8.42 against an $8.15 estimate. This marks the company's weakest quarterly profit since adopting fair-value accounting in January.

The company's Bitcoin holdings grew substantially. As of the end of September, Strategy held 640,031 BTC, which further increased to 640,808 BTC by October 26, 2025. The aggregate original cost basis for these holdings stands at $47.4 billion, reflecting an average cost of $74,032 per Bitcoin. The market value of these assets was approximately $70.9 billion as of October 26, 2025, based on a market price of $110,600 per Bitcoin.

During the third quarter, Strategy acquired an additional 42,706 BTC at an aggregate purchase price of $4.95 billion, equating to an average purchase price of $115,959 per BTC. Bitcoin's price during Q3 2025 fluctuated from approximately $107,000 in early July to $114,000 by the end of September.

Financial Mechanics and Capitalization Strategy

Strategy's Bitcoin acquisition strategy is heavily reliant on capital market activities. The $4.95 billion used for Q3 Bitcoin purchases was primarily funded through net proceeds from multiple at-the-market equity offerings. These included $2.07 billion from its Class A common stock program and $2.47 billion from an underwritten offering of its STRC preferred stock, alongside smaller contributions from STRF, STRK, and STRD preferred stock programs.

Overall, the company received approximately $5.1 billion in net proceeds during Q3 2025 from these transactions, with an additional $89.5 million raised between October 1 and October 26, 2025. Year-to-date, Strategy has raised $20 billion through its capital markets platform, demonstrating a robust funding mechanism for its digital asset accumulation.

Market Implications and Broader Context

Despite beating Q3 EPS estimates, Strategy's stock experienced a nearly 14% decline during the quarter, closing at a six-month low of around $254 before rising approximately 4% in post-market trading following the earnings release. This market reaction is attributed to the Bitcoin market trading sideways and a narrowing of the company's market premium over its Bitcoin holdings.

Strategy's approach positions it as a significant corporate holder of Bitcoin, with its current holdings making it the 106th largest U.S. public firm by Bitcoin assets. The company projects Bitcoin to reach $150,000 by the end of 2025 and aims to conclude 2025 with between 700,000 and 800,000 BTC. Its financial robustness is underscored by an Altman Z-Score of 3.99.

This aggressive accumulation strategy positions Strategy as a highly leveraged play on Bitcoin's long-term thesis. If Bitcoin were to rally to the projected $150,000, and a net asset value premium of 2.5x to 3x were applied, the company's share price could range between $1,200 and $1,600, aligning with historical precedents. This strategy underscores a growing trend of corporate adoption of digital assets as treasury reserves, influencing broader market sentiment and the Web3 ecosystem.