MicroStrategy Increases Sales but Misses Estimates on Earnings

Seth Jayson, The Motley Fool
Updated

MicroStrategy (NAS: MSTR) reported earnings on Jan. 30. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Dec. 31 (Q4), MicroStrategy met expectations on revenue and missed expectations on earnings per share.

Compared to the prior-year quarter, revenue improved significantly, and GAAP earnings per share dropped significantly.

Gross margins grew, operating margins dropped, and net margins contracted.

Revenue details
MicroStrategy logged revenue of $160.3 million. The nine analysts polled by S&P Capital IQ predicted a top line of $160.3 million. Sales were 15% higher than the prior-year quarter's $139.1 million.

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Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.

EPS details
Non-GAAP EPS came in at $0.81. The eight earnings estimates compiled by S&P Capital IQ anticipated $0.94 per share on the same basis. GAAP EPS of $0.81 for Q4 were 49% lower than the prior-year quarter's $1.60 per share.

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Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 76.5%, 10 basis points better than the prior-year quarter. Operating margin was 5.6%, 800 basis points worse than the prior-year quarter. Net margin was 5.6%, 730 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $140.6 million. On the bottom line, the average EPS estimate is $0.08.

Next year's average estimate for revenue is $636.0 million. The average EPS estimate is $3.08.

Investor sentiment
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 186 members out of 217 rating the stock outperform, and 31 members rating it underperform. Among 68 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 54 give MicroStrategy a green thumbs-up, and 14 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on MicroStrategy is hold, with an average price target of $122.00.

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At the time thisarticle was published Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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