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MicroStrategy Announces Fourth Quarter 2012 Financial Results

January 28, 2013

TYSONS CORNER, Va., Jan. 28, 2013 /PRNewswire/ — MicroStrategy® Incorporated (Nasdaq: MSTR), a leading worldwide provider of business intelligence (BI) and mobile software, today announced financial results for the three-month period ended December 31, 2012 (the fourth quarter of its 2012 fiscal year).

Fourth quarter 2012 revenues were $164.5 million versus $160.3 million for the fourth quarter of 2011, a 3% increase. Product licenses revenues for the fourth quarter of 2012 were $46.3 million versus $54.5 million for the fourth quarter of 2011, a 15% decrease. Product support and other services revenues for MicroStrategy’s core BI business for the fourth quarter of 2012 were $109.7 million versus $99.5 million for the fourth quarter of 2011, a 10% increase.

Operating expenses for the fourth quarter of 2012 were $111.3 million versus $113.7 million for the fourth quarter of 2011, a 2% decrease. The decrease in operating expenses was due primarily to a reduction in sales and marketing expense.

Net income for the fourth quarter of 2012 was $8.2 million, or $0.73 per share on a diluted basis, compared to $9.0 million, or $0.81 per share on a diluted basis, for the fourth quarter of 2011.

As of December 31, 2012, MicroStrategy had cash and cash equivalents of $224.4 million versus $199.6 million as of December 31, 2011, an increase of $24.8 million. As of December 31, 2012, MicroStrategy had 9,057,303 shares of class A common stock and 2,227,327 shares of class B common stock outstanding.

Fourth Quarter Highlights in Big Data, Mobile Applications, and Cloud-based BI

In the fourth quarter of 2012, MicroStrategy continued to bolster its position as a leading worldwide provider of business intelligence and mobile software. The company continued to offer visionary thought leadership, superior service to its customers, and disruptive new products.

MicroStrategy Announces the General Availability of Express, an Innovative New Software-as-a-Service (SaaS) Offering

In October 2012, MicroStrategy announced the general availability of Express, enabling any business person – regardless of technical skill – to access and analyze data on their own, and deploy powerful data-driven mobile apps to thousands of users within days. Express combines the simplicity and flexibility of a cloud-based solution with the analytical depth, performance and scalability of world-class business intelligence. Business people can access on-premises and cloud-based data rapidly and securely, and explore it using powerful and intuitive data visualizations. They can design and share mobile apps without writing a line of code. They can build boardroom-quality dashboards using pixel-perfect editing capabilities, and automatically publish personalized documents to any number of recipients. To try the free service, visit http://www.microstrategy.com/cloud/express/.

MicroStrategy Rated #1 by Dresner Advisory Study for Second Year in a Row for Mobile Business Intelligence Offering

In November 2012, MicroStrategy announced that it has been rated the top Mobile Business Intelligence offering out of 25 product offerings in the widely followed 2012 Wisdom of Crowds® Mobile Business Intelligence Market Study® from Dresner Advisory Services. This is the second year in a row MicroStrategy Mobile received this number one ranking.

The MicroStrategy Mobile BI platform goes above and beyond standard business intelligence to become a full mobile app development platform. The MicroStrategy Mobile App Platform enables organizations to build a wide variety of essential mobile apps that deliver workflows, transactions, mobile operations systems access, multimedia, and business intelligence in compelling custom native apps. The Dresner study rated MicroStrategy the top Mobile BI offering, with the highest platform score and the highest customer user rating for Mobile BI among all 25 vendors rated.

MicroStrategy Enhances Innovative Big Data Capabilities with Certified Integration to Amazon Redshift Analytical Data Warehouse Service

In November 2012, MicroStrategy announced that it certified its integration with the Amazon Redshift data warehouse service. Launched by Amazon Web Services (AWS), Amazon Redshift is a cloud-based analytical data warehouse service designed to deliver high performance analytics for data warehouse and Big Data applications.

MicroStrategy Releases Survey Results on the Use of Tablet Computers to Support Sales Activities

In December 2012, MicroStrategy announced the results of a survey of over 500 U.S. organizations on the use of tablet computers to support sales activities across many industries. Results of the online survey revealed that:

  • Nearly one in two salespeople cite limited mobile access to key sales systems – i.e. Customer Relationship Management (CRM), Content Management, Order Management – as a challenge.
  • C-level executives point to their respective salesforces’ lack of understanding of customer needs as a major barrier to selling (75%), along with failure to keep product knowledge current (50%).
  • The top five desired activities to perform on a mobile device include: create or update opportunities, view sales collateral, view CRM records, view sales analytics, and collaborate and share ideas with other sales team members.
  • Most sales organizations (72%) grade themselves at a B-level or below on sales meeting quality. To see additional survey result detail, visit http://www.microstrategy.com/download/files/mobile/MSESurveyResults.pdf.

Examples of Customer Deals from Q4 2012

Kinross Gold Corporation

Kinross Gold Corporation (NYSE: KGC) is a Canadian-based gold mining company with mines and projects in Brazil, Canada, Chile, Ecuador, Ghana, Mauritania, Russia and the United States, employing approximately 8,000 people worldwide. Kinross is expanding its use of the MicroStrategy Business Intelligence, Mobile and Analytics platforms to support initiatives around continuous improvement, cost management and mining productivity. Kinross selected MicroStrategy for its integrated architecture platform, ease-of-use, and visualization and reporting capabilities.

Nielsen Holdings N.V.

Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement company with leading market positions in marketing and consumer information, television and other media measurement, online intelligence, mobile measurement, trade shows and related properties. Nielsen selected MicroStrategy as its enterprise BI and Mobile software solution to provide its manufacturing, retailer and media clients with the ability to report and analyze market information for their respective products and services.

About MicroStrategy Incorporated

Founded in 1989, MicroStrategy (Nasdaq: MSTR) is a leading worldwide provider of enterprise software, including the MicroStrategy Business Intelligence (BI) Platform(TM), the MicroStrategy Mobile Platform(TM), and MicroStrategy Applications(TM). The Company offers its technologies for deployment in customer data centers and as proprietary cloud services. The MicroStrategy BI Platform enables leading organizations to analyze vast amounts of data and distribute business insight throughout the enterprise. The MicroStrategy Mobile Platform lets organizations rapidly build enterprise-caliber mobile applications needed to mobilize business processes and information. MicroStrategy Applications are a set of application services designed to help enterprises deploy mobile commerce and loyalty services, build mobile identity and cyber security services, as well as generate real-time insights into consumer preferences. MicroStrategy Cloud(TM) allows enterprises to deploy MicroStrategy BI apps and mobile apps more quickly and with lower financial risk than with traditional on-premises solutions. To learn more about MicroStrategy, visit www.microstrategy.com and follow us on Facebook (http://www.facebook.com/microstrategy) and Twitter (http://www.twitter.com/microstrategy).

MicroStrategy, MicroStrategy Business Intelligence Platform, MicroStrategy Mobile Platform, MicroStrategy Applications, MicroStrategy Express, and MicroStrategy Cloud are either trademarks or registered trademarks of MicroStrategy Incorporated in the United States and certain other countries. Other product and company names mentioned herein may be the trademarks of their respective owners.

This press release may include statements that may constitute “forward-looking statements,” including estimates of future business prospects or financial results and statements containing the words “believe,” “estimate,” “project,” “expect,” or similar expressions. Forward-looking statements inherently involve risks and uncertainties that could cause actual results of MicroStrategy Incorporated and its subsidiaries (collectively, the “Company”) to differ materially from the forward-looking statements. Factors that could contribute to such differences include: the extent and timing of market acceptance of MicroStrategy’s new offerings, including MicroStrategy 9.3, MicroStrategy Express, MicroStrategy Wisdom, MicroStrategy Alert and MicroStrategy Usher; the Company’s ability to recognize revenue or deferred revenue through delivery of products or satisfactory performance of services; continued acceptance of the Company’s other products in the marketplace; the timing of significant orders; delays in the Company’s ability to develop or ship new products; competitive factors; general economic conditions, including significant downturns in industries, including the financial services and retail industries, in which we have a significant number of customers; currency fluctuations; and other risks detailed in the Company’s registration statements and periodic reports filed with the Securities and Exchange Commission. By making these forward-looking statements, the Company undertakes no obligation to update these statements for revisions or changes after the date of this release.

                                                                                                            MICROSTRATEGY INCORPORATED
                                                                                                      CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                                                      (in thousands, except per share data)

                                                                                                                                            Three Months Ended          Twelve Months Ended
                                                                                                                                               December 31,                December 31,
                                                                                                                                               ------------                ------------
                                                                                                                                                                  2012                         2011                 2012  2011*
                                                                                                                                                                  ----                         ----                 ----  ----
                                                                                                                                                (unaudited)                 (unaudited)             (unaudited)
    Revenues
    Product licenses                                                                                                                                           $46,265                      $54,502             $147,344        $154,574
    Product support and other services                                                                                                                         118,188                      105,764              447,262         407,576
      Total revenues                                                                                                                                           164,453                      160,266              594,606         562,150
                                                                                                                                                               -------                      -------              -------         -------

    Cost of revenues
    Product licenses                                                                                                                                             1,632                        2,260                5,819           8,774
    Product support and other services                                                                                                                          38,050                       35,392              146,973         133,246
      Total cost of revenues                                                                                                                                    39,682                       37,652              152,792         142,020
                                                                                                                                                                ------                       ------              -------         -------

    Gross profit                                                                                                                                               124,771                      122,614              441,814         420,130
                                                                                                                                                               -------                      -------              -------         -------

    Operating expenses
    Sales and marketing                                                                                                                                         59,230                       69,125              219,845         243,029
    Research and development                                                                                                                                    26,708                       22,312               94,565          72,618
    General and administrative                                                                                                                                  25,340                       22,223               97,251          89,441
      Total operating expenses                                                                                                                                 111,278                      113,660              411,661         405,088
                                                                                                                                                               -------                      -------              -------         -------

    Income from operations before
    financing and other income and income taxes                                                                                                                 13,493                        8,954               30,153          15,042
                                                                                                                                                                ------                        -----               ------          ------

    Financing and other (expense) income
    Interest income, net                                                                                                                                            50                           60                  141             199
    Gain on sale of investment                                                                                                                                       -                            -                    -           3,371
    Other (expense) income, net                                                                                                                                 (1,801)                         666               (1,063)            688
      Total financing and other (expense) income                                                                                                                (1,751)                         726                 (922)          4,258
                                                                                                                                                                ------                          ---                 ----           -----

    Income from operations before income taxes                                                                                                                  11,742                        9,680               29,231          19,300
      Provision for income taxes                                                                                                                                 3,502                          680                8,685           1,360
                                                                                                                                                                 -----                          ---                -----           -----

    Net income                                                                                                                                                  $8,240                       $9,000              $20,546         $17,940
                                                                                                                                                                ======                       ======              =======         =======

    Basic earnings per share (1):                                                                                                                                $0.73                        $0.84                $1.87           $1.67
                                                                                                                                                                 =====                        =====                =====           =====
    Weighted average shares outstanding used in computing basic earnings per share                                                                              11,245                       10,767               10,995          10,719
                                                                                                                                                                ======                       ======               ======          ======

    Diluted earnings per share (1):                                                                                                                              $0.73                        $0.81                $1.84           $1.62
                                                                                                                                                                 =====                        =====                =====           =====
    Weighted average shares outstanding used in computing diluted earnings per share                                                                            11,281                       11,078               11,174          11,066
                                                                                                                                                                ======                       ======               ======          ======

    (1) Basic and fully diluted earnings per share for class A and class B common stock are the same.
    *Derived from audited financial statements.

                                                                                                                       MICROSTRATEGY INCORPORATED
                                                                                                                 CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                                                                 (in thousands, except per share data)

                                                                                      Core BI Business                    Angel.com                       Consolidated
                                                                                      ----------------                    ---------                       ------------
                                                                                     Three Months Ended              Three Months Ended                Three Months Ended
                                                                                        December 31,                    December 31,                      December 31,
                                                                                        ------------                    ------------                      ------------
                                                                                                           2012                               2011                         2012                 2011                 2012                 2011
                                                                                                           ----                               ----                         ----                 ----                 ----                 ----
                                                                                         (unaudited)                     (unaudited)                       (unaudited)           (unaudited)          (unaudited)          (unaudited)

    Revenues
    Product licenses                                                                                    $46,265                            $54,502           $                -    $               -              $46,265              $54,502
    Product support and other services                                                                  109,721                             99,467                            -                    -              109,721               99,467
    Angel.com services                                                                                        -                                  -                        8,467                6,297                8,467                6,297
      Total revenues                                                                                    155,986                            153,969                        8,467                6,297              164,453              160,266
                                                                                                        -------                            -------                        -----                -----              -------              -------

    Cost of revenues
    Product licenses                                                                                      1,632                              2,260                            -                    -                1,632                2,260
    Product support and other services                                                                   34,807                             32,539                            -                    -               34,807               32,539
    Angel.com services                                                                                        -                                  -                        3,243                2,853                3,243                2,853
      Total cost of revenues                                                                             36,439                             34,799                        3,243                2,853               39,682               37,652
                                                                                                         ------                             ------                        -----                -----               ------               ------
    Gross profit                                                                                        119,547                            119,170                        5,224                3,444              124,771              122,614
                                                                                                        -------                            -------                        -----                -----              -------              -------

    Operating expenses
    Sales and marketing                                                                                  56,590                             66,628                        2,640                2,497               59,230               69,125
    Research and development                                                                             25,079                             20,946                        1,629                1,366               26,708               22,312
    General and administrative                                                                           24,192                             21,288                        1,148                  935               25,340               22,223
      Total operating expenses                                                                          105,861                            108,862                        5,417                4,798              111,278              113,660
                                                                                                        -------                            -------                        -----                -----              -------              -------

    Income (loss) from operations before
    financing and other income and income taxes                                                          13,686                             10,308                         (193)              (1,354)              13,493                8,954
                                                                                                         ------                             ------                         ----               ------               ------                -----

    Financing and other (expense) income
    Interest income, net                                                                                     50                                 60                            -                    -                   50                   60
    Gain on sale of investment                                                                                -                                  -                            -                    -                    -                    -
    Other (expense) income, net                                                                          (1,799)                               709                           (2)                 (43)              (1,801)                 666
      Total financing and other (expense) income                                                         (1,749)                               769                           (2)                 (43)              (1,751)                 726
                                                                                                         ------                                ---                          ---                  ---               ------                  ---
    Income (loss) from operations before income taxes                                                   $11,937                            $11,077                        $(195)             $(1,397)             $11,742               $9,680
      Provision for income taxes                                                                                                                                                                                    3,502                  680
                                                                                                                                                                                                                    -----                  ---

    Net income                                                                                                                                                                                                     $8,240               $9,000
                                                                                                                                                                                                                   ======               ======

    Basic earnings per share                                                                                                                                                                                        $0.73                $0.84
                                                                                                                                                                                                                    =====                =====
    Weighted average shares outstanding used in computing basic earnings per share                                                                                                                                 11,245               10,767
                                                                                                                                                                                                                   ======               ======

    Diluted earnings per share                                                                                                                                                                                      $0.73                $0.81
                                                                                                                                                                                                                    =====                =====
    Weighted average shares outstanding used in computing diluted earnings per share                                                                                                                               11,281               11,078
                                                                                                                                                                                                                   ======               ======

                                                                                                                         MICROSTRATEGY INCORPORATED
                                                                                                                   CONSOLIDATED STATEMENTS OF OPERATIONS
                                                                                                                   (in thousands, except per share data)

                                                                                      Core BI Business                      Angel.com                       Consolidated
                                                                                      ----------------                      ---------                       ------------
                                                                                     Twelve Months Ended               Twelve Months Ended               Twelve Months Ended
                                                                                        December 31,                      December 31,                      December 31,
                                                                                        ------------                      ------------                      ------------
                                                                                                             2012                               2011                            2012                 2011                  2012                  2011
                                                                                                             ----                               ----                            ----                 ----                  ----                  ----
                                                                                         (unaudited)                       (unaudited)                       (unaudited)              (unaudited)          (unaudited)           (unaudited)

    Revenues
    Product licenses                                                                                     $147,344                           $154,574           $                   -    $               -              $147,344              $154,574
    Product support and other services                                                                    418,380                            382,594                               -                    -               418,380               382,594
    Angel.com services                                                                                          -                                  -                          28,882               24,982                28,882                24,982
      Total revenues                                                                                      565,724                            537,168                          28,882               24,982               594,606               562,150
                                                                                                          -------                            -------                          ------               ------               -------               -------

    Cost of revenues
    Product licenses                                                                                        5,819                              8,774                               -                    -                 5,819                 8,774
    Product support and other services                                                                    135,257                            121,924                               -                    -               135,257               121,924
    Angel.com services                                                                                          -                                  -                          11,716               11,322                11,716                11,322
      Total cost of revenues                                                                              141,076                            130,698                          11,716               11,322               152,792               142,020
                                                                                                          -------                            -------                          ------               ------               -------               -------
    Gross profit                                                                                          424,648                            406,470                          17,166               13,660               441,814               420,130
                                                                                                          -------                            -------                          ------               ------               -------               -------

    Operating expenses
    Sales and marketing                                                                                   209,975                            231,504                           9,870               11,525               219,845               243,029
    Research and development                                                                               88,190                             67,863                           6,375                4,755                94,565                72,618
    General and administrative                                                                             93,384                             86,237                           3,867                3,204                97,251                89,441
      Total operating expenses                                                                            391,549                            385,604                          20,112               19,484               411,661               405,088
                                                                                                          -------                            -------                          ------               ------               -------               -------

    Income (loss) from operations before
    financing and other income and income taxes                                                            33,099                             20,866                          (2,946)              (5,824)               30,153                15,042
                                                                                                           ------                             ------                          ------               ------                ------                ------

    Financing and other (expense) income
    Interest income (expense), net                                                                            143                                199                              (2)                   -                   141                   199
    Gain on sale of investment                                                                                  -                              3,371                               -                    -                     -                 3,371
    Other (expense) income, net                                                                            (1,035)                               764                             (28)                 (76)               (1,063)                  688
      Total financing and other (expense) income                                                             (892)                             4,334                             (30)                 (76)                 (922)                4,258
                                                                                                             ----                              -----                             ---                  ---                  ----                 -----
    Income (loss) from operations before income taxes                                                     $32,207                            $25,200                         $(2,976)             $(5,900)              $29,231               $19,300
      Provision for income taxes                                                                                                                                                                                          8,685                 1,360
                                                                                                                                                                                                                          -----                 -----

    Net income                                                                                                                                                                                                          $20,546               $17,940
                                                                                                                                                                                                                        =======               =======

    Basic earnings per share                                                                                                                                                                                              $1.87                 $1.67
                                                                                                                                                                                                                          =====                 =====
    Weighted average shares outstanding used in computing basic earnings per share                                                                                                                                       10,995                10,719
                                                                                                                                                                                                                         ======                ======

    Diluted earnings per share                                                                                                                                                                                            $1.84                 $1.62
                                                                                                                                                                                                                          =====                 =====
    Weighted average shares outstanding used in computing diluted earnings per share                                                                                                                                     11,174                11,066
                                                                                                                                                                                                                         ======                ======

                                                                                    MICROSTRATEGY INCORPORATED
                                                                                    CONSOLIDATED BALANCE SHEETS
                                                                               (in thousands, except per share data)

                                                                                                                     December 31,           December 31,
                                                                                                                                      2012     2011*
                                                                                                                                      ----      ----
    Assets                                                                                                           (unaudited)
    Current assets
      Cash and cash equivalents                                                                                                   $224,393               $199,634
      Restricted cash and short-term investments                                                                                        86                    289
      Accounts receivable, net                                                                                                      93,758                 94,723
      Prepaid expenses and other current assets                                                                                     13,288                 17,043
      Deferred tax assets, net                                                                                                      26,616                 31,516
                                                                                                                                    ------                 ------
    Total current assets                                                                                                           358,141                343,205

    Property and equipment, net                                                                                                    100,514                 95,311
    Capitalized software development costs, net                                                                                     10,360                  7,031
    Deposits and other assets                                                                                                        5,259                  5,306
    Deferred tax assets, net                                                                                                         3,664                  2,998
                                                                                                                                     -----                  -----
    Total Assets                                                                                                                  $477,938               $453,851
                                                                                                                                  ========               ========

    Liabilities and Stockholders' Equity
    Current liabilities
      Accounts payable and accrued expenses                                                                                        $42,492                $46,401
      Accrued compensation and employee benefits                                                                                    74,153                 68,308
      Deferred revenue and advance payments                                                                                        101,888                103,199
      Deferred tax liabilities                                                                                                         523                    485
                                                                                                                                       ---                    ---
    Total current liabilities                                                                                                      219,056                218,393

    Deferred revenue and advance payments                                                                                            8,823                 10,841
    Other long-term liabilities                                                                                                     43,517                 45,141
    Deferred tax liabilities                                                                                                         6,231                 10,498
                                                                                                                                     -----                 ------

    Total Liabilities                                                                                                              277,627                284,873
                                                                                                                                   -------                -------

    Stockholders' Equity
      Preferred stock undesignated, $0.001 par value; 5,000 shares authorized;
          no shares issued or outstanding                                                                                                -                      -
      Class A common stock, $0.001 par value; 330,000 shares authorized;
        15,462 shares issued and 9,057 shares outstanding, and 14,810 shares
         issued and 8,405 shares outstanding, respectively                                                                              15                     15
      Class B common stock, $0.001 par value; 165,000 shares authorized;
         2,227 and 2,378 shares issued and outstanding, respectively                                                                     2                      2
      Additional paid-in capital                                                                                                   468,087                457,837
      Treasury stock, at cost; 6,405 shares                                                                                       (475,184)              (475,184)
      Accumulated other comprehensive loss                                                                                          (1,515)                (2,052)
      Retained earnings                                                                                                            208,906                188,360
    Total Stockholders' Equity                                                                                                     200,311                168,978
                                                                                                                                   -------                -------
    Total Liabilities and Stockholders' Equity                                                                                    $477,938               $453,851
                                                                                                                                  ========               ========

    *Derived from audited financial statements.

                                                                                                                                MICROSTRATEGY INCORPORATED
                                                                                                                          CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                                                                      (in thousands)

                                                                                                                                                                                                                                                                     Twelve Months Ended
                                                                                                                                                                                                                                                                         December 31,
                                                                                                                                                                                                                                                                         ------------
                                                                                                                                                                                                                                                                           2012                         2011*
                                                                                                                                                                                                                                                                           ----                          ----
                                                                                                                                                                                                                                                                   (unaudited)
    Operating activities:
                                                 Net income                                                                                                                                                                                               $20,546                 $17,940
                                                  Adjustments to reconcile net income to net cash provided by
                                                  operating activities:
                                                 Depreciation and amortization                                                                                                                                                                             24,519                  18,526
                                                 Bad debt expense                                                                                                                                                                                           4,977                   1,485
                                                 Deferred taxes                                                                                                                                                                                               (79)                 (5,403)
                                                 Gain on sale of investment                                                                                                                                                                                     -                  (3,371)
                                                 Changes in operating assets and liabilities:
                                                 Accounts receivable                                                                                                                                                                                       (3,438)               (15,141)
                                                 Prepaid expenses and other current assets                                                                                                                                                                  1,002                   7,115
                                                 Deposits and other assets                                                                                                                                                                                     94                      85
                                                 Accounts payable and accrued expenses                                                                                                                                                                      3,154                   4,775
                                                 Accrued compensation and employee benefits                                                                                                                                                                 5,431                   9,061
                                                 Deferred revenue and advance payments                                                                                                                                                                     (3,861)                 18,498
                                                 Other long-term liabilities                                                                                                                                                                               (2,461)                  7,244
                                                                                                                                                                                                                                                           ------                   -----
                                                                                                                Net cash provided by operating activities                                                                                                                49,884                                     60,814
                                                                                                                                                                                                                                                                         ------                                     ------

    Investing activities:
                                                 Proceeds from sale of investment                                                                                                                                                                               -                   3,371
                                                 Purchases of property and equipment                                                                                                                                                                     (31,116)                (40,660)
                                                 Capitalized software development costs                                                                                                                                                                    (8,148)                 (5,907)
                                                 Insurance proceeds                                                                                                                                                                                         3,206                   7,065
                                                 Decrease (increase) in restricted cash and investments                                                                                                                                                       225                     (51)

                                                                                                                Net cash used in investing activities                                                                                                                   (35,833)                                   (36,182)
                                                                                                                                                                                                                                                                        -------                                    -------

    Financing activities:
                                                  Proceeds from sale of class A common stock under exercise of
                                                  employee stock options                                                                                                                                                                                   10,250                   2,463
                                                 Payments on capital lease obligations                                                                                                                                                                       (491)                      -
                                                                                                                Net cash provided by financing activities                                                                                                                 9,759                                      2,463
                                                                                                                                                                                                                                                                          -----                                      -----

    Effect of foreign exchange rate changes on cash and cash equivalents                                                                                                                                                                                                    949                                     (1,558)
                                                                                                                                                                                                                                                                            ---                                     ------
    Net increase in cash and cash equivalents                                                                                                                                                                                                                            24,759                                     25,537
    Cash and cash equivalents, beginning of period                                                                                                                                                                                                                      199,634                                    174,097
                                                                                                                                                                                                                                                                        -------                                    -------
    Cash and cash equivalents, end of period                                                                                                                                                                                                   $224,393                $199,634
                                                                                                                                                                                                                                               ========                ========

    *Derived from audited financial statements.

MSTR-F

Contact:
MicroStrategy Incorporated
Investor Relations
ir@microstrategy.com
(703) 848-8600

SOURCE MicroStrategy Incorporated


Source: PR Newswire