According to Woofun AI, a rebound in Bitcoin prices during the third quarter of 2026 drove Strategy (MSTR.US) to a historic high in operating profit. Despite facing declining revenue, a negative year-to-date Bitcoin yield, and ongoing pressure to fund preferred stock dividends, the company still delivered record-breaking financial results for the quarter on the back of paper gains from its Bitcoin holdings, marking yet another extreme validation of its "Bitcoin proxy" business model in a volatile market. This performance not only set a new company record but also highlighted the enormous power of crypto asset price swings to reshape traditional financial statement structures. Data compiled by Woofun AI shows that Strategy's operating profit in the third quarter of 2026 reached US$20.91 billion, a figure driven mainly by massive paper gains generated by its Bitcoin holdings.
Net income came in at US$19.53 billion, equivalent to diluted earnings per share of US$44.75, compared with just US$2.79 billion in the same period of 2025, representing explosive growth. Outgoing Chief Financial Officer Andrew Kang commented: "The US$21 billion operating profit in the third quarter of 2026 is the highest level in Strategy's history." Because the company marks its Bitcoin holdings to market every quarter, rising Bitcoin prices translate directly into a surge in reported profit.
As of October 23, the total value of Strategy's 848,517 Bitcoins reached US$68.9 billion, with Bitcoin trading at US$81,200 at the time. The average holding cost of these Bitcoins was US$75,446, putting the company in a significantly profitable position on paper. Andrew Kang noted that newly purchased Bitcoin drove the performance improvement and emphasized: "In the current challenging Bitcoin market environment, we have increased our Bitcoin holdings by 26% year-to-date in 2026."
However, on traditional business metrics, Strategy's performance appeared lackluster or even under pressure. Total revenue was US$125.4 million, down 3% from the same period in 2025, and below analysts' estimate of US$127.2 million. Gross profit was US$89.6 million, with a margin of 71%, slightly higher than 70% in the same period of 2025. As of the end of September, the company's total cash and equivalents stood at US$2.5 billion, with short-term investments of US$3.4 billion.
Notably, the number of Bitcoins held per share declined. A key management metric shows that Bitcoin's annual yield is currently negative 3.7%, meaning the number of Bitcoins corresponding to each share is lower than in January. In dollar terms, the company's Bitcoin holdings suffered a loss of US$2.03 billion over the same period. To pay preferred stock dividends and share repurchase costs, the company sold approximately US$431.8 million worth of Bitcoin in 2026, broadly in line with disclosed data.
In 2026, Strategy raised a total of US$21.23 billion in capital, including US$5.41 billion in net proceeds from at-the-market repurchase programs in the third quarter alone. It then used most of the funds to repurchase preferred stock, buying back 20,980,508 shares of STRC (STRC.US) at an average price of US$97.39 per share, for a total cost of US$2.04 billion, slightly below the stated US$100 price. Chief Executive Officer Von Le said the repurchase program is aimed at stabilizing the company's development: "Strategy has demonstrated its determination to restore its share price to a healthy state."
Management has committed to continuing repurchases as long as STRC trades below par value, with approximately US$956.7 million of repurchase capacity still unused. The company currently holds total dollar reserves of US$5.07 billion, including US$4.83 billion in reserves and US$242.4 million in cash, enough to support 3.4 years of dividend and interest payments. The board kept the STRC dividend rate at 12.00% to keep the share price fluctuating around US$100.
In an innovation to shareholder return mechanisms, shareholders approved a daily dividend plan on October 28. STRC will begin paying daily dividends on November 1, while STRF (STRF.US), STRK (STRK.US), and STRD (STRD.US) will start on January 1, 2027. Von Le described the move as a natural step toward an all-weather digital financial system, emphasizing that digital credit is meant to lead this transformation. In addition, Strategy expects that preferred stock distribution proceeds may be treated as tax-free return of capital for 10 years or longer, and advises shareholders to consult tax advisors.
Currently, STRC's share price has approached par value, briefly touching US$99.99 earlier today. Once the share price returns to the US$100 par value, the company will regain room to purchase Bitcoin. Although the daily dividend is intended to improve liquidity and reduce volatility, Strategy has not yet confirmed whether it will restart STRC stock issuance.
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