MicroStrategy (NASDAQ:MSTR) is set to report third-quarter earnings on Oct. 29 after market close, following Bitcoin’s rebound and a potential swing from years of digital asset losses to a multibillion-dollar gain.
Over the past 90 days, Bitcoin has surged 27%, trading around $80,793. This reversal marks a turning point for MicroStrategy, which had previously recorded consecutive quarterly impairments on its BTC holdings. The company now estimates an unrealized gain of approximately $21 billion from its digital assets.
The company’s financial position has strengthened notably. Holdings increased by 11% to 846,000 BTC, while convertible debt declined 18% to $6.7 billion. It also holds $3.75 billion in USD reserves, covering over two years of operations. In addition, the board approved $1.0 billion buyback programs for both MSTR and STRC.
On the earnings front, analysts project a wide EPS range—from -$0.99 to $52.82—highlighting the significant impact that Bitcoin valuation adjustments will have on reported profits.
Reversing the Tide: From Massive Losses to Record Gains
In Q1 2025, MicroStrategy reported an EPS of -$24.45, significantly missing estimates of $3.07, due to an $8.32 billion unrealized loss on digital assets. Prior quarters weren’t much better, with losses reaching $14.46 billion in Q1 and $17.44 billion in Q4 2025.
Despite these setbacks, the balance sheet saw steady improvement. Bitcoin accumulation continued, debt levels dropped, and cash reserves grew—positioning the company favorably amid shifting crypto sentiment.
Wall Street Eyes Return to Profitability
The broad earnings forecast reflects uncertainty, particularly tied to fair-value accounting for Bitcoin. Analysts note that even modest movements in BTC value can dramatically sway net income figures.
Dividend Vote, Options Activity, and Short Interest in Focus
Investors are watching the Oct. 28 shareholder vote on daily dividends for preferred shares like STRC. Approval may improve liquidity and restore capital-raising capacity, especially important given that preferred dividends cost $400.7 million in Q2 alone.
Options activity also signals bullish sentiment ahead of earnings. There were 178,619 calls traded against 100,146 puts expiring Oct. 30, translating to a put/call ratio of 0.55—a strong indicator of upward momentum expectations.
Meanwhile, short interest remains elevated, setting the stage for a potential short squeeze if Bitcoin maintains its rally post-earnings.
A Strong Quarter Might Shift the Narrative
With MicroStrategy entering Q3 amid a four-quarter streak of EPS misses, all eyes are on whether it can return to profitability. CEO Phong Le has emphasized the firm is “levered and amplified Bitcoin,” meaning upside gains—and downside risks—are magnified accordingly.
If Bitcoin continues climbing and the dividend proposal passes, bears could face their toughest challenge yet. However, recent monthly declines in BTC underscore how volatile the trade remains.
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