Bitcoin whale Strategy reports a $12.54 billion Q1 loss as revenue rises to $124.3 million

Strategy (MSTR) closed the first quarter of 2026 with a $12.54 billion net loss, while revenue rose to $124.3 million. The loss came in at $38.25 per diluted share, a much worse result than Wall Street had penciled in.

Four analysts tracked by Yahoo Finance expected an average GAAP loss of $18.98 per share. The most bearish estimate was $36.89 per share, and Strategy still came in below that.

The quarter was ugly because Bitcoin had a terrible start to the year. BTC fell more than 23% between January and March, making it the worst first quarter for Bitcoin since 2018.

The selloff came as tech stocks dropped, Bitcoin ETF outflows grew, Trump’s 15% global tariff hit markets, the U.S.–Iran military escalation raised fear, and the Federal Reserve kept rates at 3.5% to 3.75%.

Bitcoin losses drag Strategy deeper into the red as revenue still grows

Strategy reported an operating loss of $14.47 billion for Q1 2026, compared with $5.92 billion in the same quarter last year. The company’s Bitcoin accounting took the hit. It recorded a $14.46 billion unrealized loss on its digital assets, versus $5.91 billion in unrealized losses in Q1 2025.

The net loss also got much worse. Strategy lost $12.54 billion in the quarter, compared with $4.22 billion a year earlier. The loss tied to common stockholders was $12.77 billion, up from $4.23 billion in Q1 2025.

Revenue went the other way. Strategy brought in $124.3 million, up 11.9% from $111.1 million last year. Gross profit was $83.4 million, compared with $77.1 million in the prior-year quarter. Its gross margin came in at 67.1%, down from 69.4%.

Cash also slipped a little. Strategy had $2.21 billion in cash and cash equivalents on March 31, 2026, down from $2.30 billion on December 31, 2025.

The Bitcoin bag was still huge. As of May 3, 2026, Strategy held 818,334 BTC. The company paid about $61.81 billion for that stash, or around $75,537 per coin. By May 1, those coins were worth about $64.14 billion, based on a price of $78,374 per Bitcoin. That left Strategy with about $2.3 billion in paper gain on its Bitcoin cost basis, even after the quarter punched it in the face.

Strategy also kept buying during the quarter. It added about 89,600 BTC for $5.5 billion, making it the second-biggest quarterly Bitcoin purchase in its history. Then the buying stopped for more than a week before earnings. The last reported buy came on April 27, when Strategy bought 3,273 BTC at $77,906 per coin.

Strategy uses STRC and ATM sales to keep funding its Bitcoin plan

CEO Phong Le told investors:

“Adoption of Bitcoin continues to grow in 2026. Digital Credit, highlighted by STRC, has been a big success. STRC has shown strong demand, high liquidity, and low volatility. We raised $5.6 billion year-to-date of STRC gross proceeds, increased daily trading volume to $375 million, while bringing volatility down to 3%, all done during a bitcoin bear market.”

According to Phong, Strategy continues to see traditional finance and major banks, including Morgan Stanley, Goldman Sachs, and Citi, announcing bitcoin ETFs, trading, custody, and lending services.

Phong named Morgan Stanley (MS), Goldman Sachs (GS), and Citigroup (C) while talking about banks building around Bitcoin products and services.

Strategy CFO Andrew Kang said, “Strategy is the dominant issuer of Digital Credit in the world, with over $13.5 billion of preferred equity outstanding, supported by a fortress Bitcoin balance sheet. Strong demand for our Digital Credit instrument, STRC, has driven a BTC Yield of 9.4% and BTC $ Gain of approximately $5 billion through the first four months of the year.”

Meanwhile, Strategy founder and Executive Chairman Michael Saylor said:

“STRC has scaled to $8.5 billion in just 9 months and is now the largest preferred stock by market cap in the world. By extracting bitcoin’s performance and engineering price stability, we have produced a credit instrument with a 2.53 Sharpe ratio.”

Strategy said its BTC Yield was 9.4% for the 2026 year-to-date. Its BTC Gain was 63,410 BTC, while BTC dollar gain was $4.97 billion. The company also raised about $7.37 billion in gross proceeds through its ATM offering program during the first quarter, then raised another $4.32 billion from April 1 to May 3.