Strategy reported a Q2 net loss of $102.6 million, driven by a $180.1 million impairment charge on its bitcoin holdings. The company, which holds 226,331 bitcoins, also announced plans to raise $2 billion through an at-the-market equity offering to buy more BTC. Despite the loss, it posted positive operating income of $21.9 million.
The bitcoin impairment hit
The $180.1 million impairment charge reflects the accounting rule that forces companies to write down the value of digital assets when prices fall below their purchase cost. Strategy acquired its bitcoin stash at an average price of $36,798 per coin. As of the end of Q2, the holdings were valued at roughly $14.7 billion — well above the cost basis, but the impairment rule still applies to any quarter where the market price dips below that average.
That's a familiar pain point for Strategy. The company has taken similar charges in previous quarters as bitcoin's price swung. The net loss of $102.6 million is almost entirely attributable to that non-cash charge.
Cash reserves and dividend coverage
To reassure investors, Strategy has built a cash reserve that covers more than two years of dividend payments. The company didn't disclose the exact size of that reserve, but the message is clear: even if bitcoin's price stays low, the dividend isn't at risk. That's a key point for income-focused shareholders who've watched the stock's volatility.
Equity raise for more bitcoin
Strategy isn't slowing down its bitcoin buying. The company plans to raise $2 billion through an at-the-market equity offering — essentially selling new shares over time to fund additional purchases. It's the same playbook Strategy has used before: issue stock, buy bitcoin, repeat. The offering doesn't have a set deadline, so the company can pace its sales depending on market conditions.
The move signals that management still sees bitcoin as a long-term bet worth doubling down on, even after a loss-making quarter.
Operating income stays positive
Strip out the impairment charge, and Strategy's core business actually made money. The company reported $21.9 million in operating income for Q2. That's a sign that its software and services operations — the original business — are still generating cash, even as the bitcoin strategy dominates headlines.
Strategy's next concrete step will be executing the $2 billion equity offering. No timeline has been given, but the filing is live. Investors will be watching the pace of share sales and any new bitcoin buys.
