Author: Ben Weiss, DL News; Compiler: Deng Tong, Golden Finance

MicroStrategy wants investors to know it is hoarding Bitcoin.

MicroStrategy announced its first-quarter earnings report with the headline: "Currently Holding 214,400 Bitcoins."

In the second quarter, its announcement read: "Currently Holding 226,500 Bitcoin. ”

And the company’s founder and chairman, Michael Saylor, seems to have done little but fawn over the world’s largest cryptocurrency.

“Bitcoin is a swarm of cyber wasps in service to the Goddess of Wisdom, feeding on the fire of truth,” reads the featured post on his X profile.

But MicroStrategy isn’t just buying Bitcoin. It has 1,637 employees.

The vast majority of these employees are working on the company's data analytics products, said Saurabh Abhyankar, executive vice president and chief product officer.

Yes, MicroStrategy’s Bitcoin buying spree grabbed headlines — especially as the world’s largest cryptocurrency hit an all-time high and topped $100,000.

As the price of Bitcoin surges, so does MicroStrategy’s stock price.

The company’s Nasdaq-listed shares are up more than 450% this year, outpacing Bitcoin’s 135% gain.

Despite the Bitcoin craze, MicroStrategy employees continue to develop low-profile software for companies including hotelier Hilton, furniture retailer Crate & Barrel and airline Emirates.

Abhyankar said MicroStrategy's software products are a core part of its business -- and part of the daily lives of many people in the United States and elsewhere.

“You’re probably already using MicroStrategy,” he said, “because you’re interacting with some of the big banks and big retailers.”

MicroStrategy's signature product, MicroStrategy ONE, is not aimed at everyday users like Uber or Google Search.

Its enterprise software runs behind the scenes of large enterprises.

Take retailers as an example, Abhyankar said.

“Store managers need to do a lot to run their businesses.”

This includes data on store inventory, employee schedules and expected deliveries. These data and theThe software that does the classification is often siled.

In other words, a calendar used to manage employees is a different program than a calendar used to track store inventory.

But for large companies, it is more efficient for managers and senior executives to view everything through one platform.

“Fundamentally, our platform allows you to connect data from all these different systems,” Abhyankar said.

And because each company's software and data suites are different—Hilton and Crate & Barrel are not the same company—MicroStrategy's software must be flexible.

“Banks, retailers, hospitals, pharmaceutical companies, etc. – they run most of their businesses using MicroStrategy,” adds Abhyankar.

Current clients include companies as diverse as Pfizer, the U.S. Postal Service, and even fried chicken giant KFC.

Investors, however, didn't snap up MicroStrategy shares at more than $370 because they were optimistic about the company's ability to help hospitals run more efficiently.

MicroStrategy first offered its shares to the public in 1998. But in 2020, MicroStrategy attracted a new group of investors when Saylor announced that his company had purchased 21,454 Bitcoins for approximately $250 million.

“This investment reflects our belief that Bitcoin, the world’s most widely adopted cryptocurrency, is a reliable store of value and attractive An investment asset with greater long-term appreciation potential than holding cash.”

According to Bernstein analysts, MicroStrategy’s Bitcoin financial strategy is as follows: Use the remaining cash from the software business to buy Bitcoin. Buy Bitcoin by issuing stocks or bonds. As the price of Bitcoin (hopefully) rises, so will the value of MicroStrategy's funds, which will boost MicroStrategy's stock price.

Since 2020, the company has accumulated more than 402,100 Bitcoins worth approximately $40 billion.

MicroStrategy's stock price has moved in tandem with the price of Bitcoin, especially this year as the company has devoted more and more of its corporate resources to the cryptocurrency.

Investors often view cryptocurrency stocks as proxies for Bitcoin—an easy, cheap way to lock in Bitcoin gains without interacting directly with the cryptocurrency market.

In fact, Wall Street analysts who provide stock recommendations to institutional clients barely mention the software.

On Wednesday, Bernstein even identified the software unit as a potential obstacle to MicroStrategy's inclusion in the benchmark S&P 500 index.

A sentiment echoed by Bloomberg Intelligence analyst James Seyffart, who cited the company's "lack of profits" as a barrier to inclusion in the S&P 500.

Bernstein expects MicroStrategy to continue investing heavily in Bitcoin, sending its stock price to $600 within the next 12 months.

MicroStrategy's feverish focus on the world's largest cryptocurrency begs the question: Is its software business in decline?

From 2020 to 2024, quarterly revenue from software sales stagnated between $110 million and $135 million.

From the end of 2020 to the third quarter of 2024, MicroStrategy's headcount fell by 22%.

Abhyankar declined to say whether MicroStrategy is preparing to become a pure-play Bitcoin funding fund. “My goal is to grow the analytics business,” he said.

Instead, he said, he believes the company's focus on Bitcoin is well-matched with its software business.

He believes that MicroStrategy's soaring stock price helps attract and retain software talent, while its Bitcoin-centric balance sheet reduces the ability of its analytics business to pursue short-term profits at the expense of long-term gains. need.

Investors typically measure software vendors by growing quarterly revenue and customers, he said. However, MicroStrategy's Bitcoin balance sheet adds another metric for analysts to assess the company.

“My goal is to grow the analytics business.” — Saurabh Abhyankar

“Our Bitcoin strategy takes that pressure off so we can take a long-term approach to how we engineering investments and innovation strategies,” Abhyankar said.

Ultimately, he knew MicroStrategy's data analytics business wouldn't make headlines. However, Abhyankar assured that most of the company’s 1,637 employees are doing other things than just hoarding Bitcoin for Michael Saylor.

"Maybe we're just a small part of MicroStrategy," Abhyankar said, referring to the software business's prominence on the company's balance sheet. "But we are still an important part."