Strong Strategy Earnings Backed by Digital Asset Gains

Strategy, formerly known as MicroStrategy (MSTR), has cleared the requirements for potential addition to the S&P 500 (^GSPC) after delivering one of its strongest quarters on record. Strategy eligibility follows consistent profitability under new accounting rules and a surge in digital asset gains, positioning it for review in the September 2025 index rebalance.

Strong Earnings Backed by Digital Asset Gains

The company reported second-quarter 2025 operating income of $14 billion and net income of $10 billion. Diluted earnings per share reached $32.6 during the three-month period. Revenue totaled $114.5 million, reflecting a 2.7% increase from the same quarter last year. Subscription services advanced almost 70% in Strategy year-over-year growth, and were the primary contributors to growth.

This increase stands out from the prior quarter’s results where impairment losses linked to BTC dragged down overall earnings. Strategy started to use fair-value accounting policies as of January 2025, allowing the company to recognize unrealized gains on digital assets. The policies contributed to a surge of paper gains as bitcoin (BTC-USD) remained above $100,000 throughout the quarter.

Due to these gains, the company’s balance sheet experienced considerable growth during the reporting period. Recognizing a change in market value marked a point of difference from the company’s past financial statements.

Bitcoin Holdings and Performance Metrics

By June 30, 2025, the firm reported ownership of 597,325 bitcoin. Management also disclosed a BTC Yield of 19.7% year-to-date. This measure represents the change in the ratio between the company’s bitcoin holdings and diluted shares outstanding.

The firm indicated that digital assets remain central to its performance indicators. Gains recorded during the quarter reflected the rising value of bitcoin alongside new accounting treatment.

Management raised its full-year 2025 outlook based on these results. Projections now include $34 billion in operating income, $24 billion in net income, and $80 in diluted earnings per share. The guidance assumes a year-end bitcoin price of $150,000.

Path to S&P 500 Eligibility

Consistent quarterly profitability now brings the firm in line with all S&P 500 entry standards. Requirements include a U.S. listing, a market capitalization exceeding $8.2 billion, average daily trading volumes above 250,000 shares, and a public float of more than 50%. Companies must also report positive earnings in the most recent quarter and over the trailing twelve months.

The next scheduled review for index changes will occur in September 2025. Announcements from S&P Dow Jones Indices are expected on September 5, with any changes effective September 19. The index committee maintains full discretion over selections, though Strategy now meets the technical thresholds for consideration.