Basic and Diluted (Loss) Earnings per Share

9 Months Ended

Sep. 30, 2025

(10) Basic and Diluted Earnings (Loss) per Common Share

Basic earnings (loss) per common share is computed by dividing net income (loss) attributable to common stockholders by the weighted-average common stock outstanding during the respective period. Net income (loss) attributable to common stockholders is computed by deducting both the dividends declared in the period on the Company’s redeemable preferred stock and the dividends accrued for the period on the Company’s redeemable preferred stock, if any, from net income (loss).

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.

As of September 30, 2025, the Company had four series of preferred stock outstanding: STRF Stock, STRC Stock, STRK Stock, and STRD Stock. Holders of the 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 STRK 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 STRK 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 earnings (loss) per common share (in thousands, except per share data) for the periods indicated:


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2025			2024			2025			2024
Numerator:
Net income (loss)	$	2,785,024		$	(340,174	)	$	8,588,500		$	(495,851	)
Dividends on preferred stock		(139,898	)		0			(198,040	)		0
Net income (loss) attributable to common stockholders of Strategy - Basic	$	2,645,126		$	(340,174	)	$	8,390,460		$	(495,851	)
Effect of dilutive shares on net income (loss):
Interest expense on 2027 Convertible Notes, net of tax		0			0			286			0
Interest expense on 2028 Convertible Notes, net of tax		1,871			0			5,626			0
Interest expense on 2029 Convertible Notes, net of tax		1,296			0			3,899			0
Interest expense on 2030A Convertible Notes, net of tax		1,592			0			4,786			0
Interest expense on 2030B Convertible Notes, net of tax		890			0			2,154			0
Interest expense on 2031 Convertible Notes, net of tax		1,378			0			4,145			0
Interest expense on 2032 Convertible Notes, net of tax		3,685			0			11,086			0
Dividends on STRK Stock		0			0			0			0
Net income (loss) - Diluted	$	2,655,838		$	(340,174	)	$	8,422,442		$	(495,851	)

Denominator:
Weighted average common shares of class A common stock		264,736			177,633			252,503			163,055
Weighted average common shares of class B common stock		19,640			19,640			19,640			19,640
Total weighted average shares of common stock outstanding - Basic		284,376			197,273			272,143			182,695

Effect of dilutive shares on weighted average common shares outstanding:
Stock options		3,419			0			3,704			0
Restricted stock units		655			0			769			0
Performance stock units		503			0			508			0
Employee stock purchase plan		0			0			2			0
Convertible preferred stock		0			0			0			0
2027 Convertible Notes		0			0			1,315			0
2028 Convertible Notes		5,513			0			5,513			0
2029 Convertible Notes		4,462			0			4,462			0
2030A Convertible Notes		5,342			0			5,342			0
2030B Convertible Notes		4,614			0			3,719			0
2031 Convertible Notes		2,594			0			2,594			0
2032 Convertible Notes		3,915			0			3,915			0
Total weighted average shares of common stock outstanding - Diluted		315,393			197,273			303,986			182,695

Income (loss) per share:
Basic income (loss) per share (1)	$	9.30		$	(1.72	)	$	30.83		$	(2.71	)
Diluted income (loss) per share (1)	$	8.42		$	(1.72	)	$	27.71		$	(2.71	)

(1) Basic and fully diluted earnings per common share for class A and class B common stock are the same.

For the three and nine months ended September 30, 2025 and 2024, the following weighted average shares of potential class A common stock were excluded from the diluted earnings (loss) per common share calculation because their impact would have been anti-dilutive (in thousands).


	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2025		2024		2025		2024
Stock options		53		5,823		46		7,481
Restricted stock units		6		1,587		13		1,756
Performance stock units		0		606		0		576
Employee stock purchase plan		0		8		0		13
Convertible preferred stock		1,304		0		915		0
2025 Convertible Notes		0		0		0		6,664
2027 Convertible Notes		0		7,330		0		7,330
2028 Convertible Notes		0		719		0		240
2029 Convertible Notes		0		0		0		0
2030A Convertible Notes		0		5,342		0		4,031
2030B Convertible Notes		0		0		0		0
2031 Convertible Notes		0		2,594		0		1,863
2032 Convertible Notes		0		3,915		0		1,506
Total		1,363		27,924		974		31,460