All right, we've given everyone a few minutes or about a minute to get onboard here. Good evening, everyone. I'm Jeremy Price, MicroStrategy's Senior Vice President of Financial Planning and Analysis and Head of Investor Relations. I'll be your moderator for MicroStrategy's 2021 First Quarter Earnings Webinar. Before we proceed, I will read the safe harbor statement. Some of the information we provide during today's call regarding our future expectations, plans and prospects may constitute forward-looking statements. Actual results may differ materially from these forward-looking statements due to various important factors, including the factors discussed in our most recent 10-Q filed with the SEC. We assume no obligation to update these forward-looking statements, which speak only as of today. Also, during today's call, we will refer to certain non-GAAP financial measures. Reconciliation showing GAAP versus non-GAAP results are available in our earnings release and presentation, which were issued today and are available on our website at www.MicroStrategy.com. I would like to welcome you all to today's webinar, and let you know that we will be taking questions using the Q&A feature at the bottom of your screen. You can submit questions throughout the webinar, and Michael or Phong will answer them at the end of the session. Please be sure to provide your name and your company's name when submitting your questions. And with that, I will turn the call over to Michael Saylor, Chairman and CEO of MicroStrategy.

Thank you, Jeremy. Hi, I'm Michael Saylor. I'm the Chairman and CEO of MicroStrategy. I'd like to welcome all of you to today's webinar regarding our 2021 first quarter financial results. I'm here with Phong Le, our President and Chief Financial Officer. First, I'd like to pass the floor to Phong, who is going to provide an update on our operations and finance for the quarter.

Thank you, Michael. I'll start with our first quarter performance. MicroStrategy delivered one of our best quarters in recent history with impressive results across the board as we continue to execute well against each of our strategic priorities. Q1 was our third consecutive strong quarter, which demonstrates that we're seeing real momentum in the enterprise analytics software market and that the product improvements we made over the last five years and operational changes we undertook in the first half of 2020 have fundamentally improved our enterprise analytics software business. Total revenues in the quarter grew 10% or 8% at a constant currency basis compared to the first quarter of 2020, which is our strongest quarterly performance in five years. While we clearly benefited from a favorable comparison due to COVID-19 in Q1 of 2020, we had a strong quarter throughout the software business. Product licenses revenue grew 69% year-over-year, but more impressively it grew 16% versus the first quarter of 2019. Subscription revenues in the quarter were up 26% compared to the first quarter of 2020. Subscription billings grew 19%, our fourth straight quarter of double-digit billings growth. Operating loss was $183.2 million, which includes an impairment charge of $194.1 million related to the accounting treatment of our Bitcoin holdings. Non-GAAP operating income was $18.7 million, an increase of $15.6 million or 514% year-over-year. Overall, we benefited from an attractive sales flywheel that reflects improvement in our marketing and go-to-market efficiency and the product investments we have made to modernize the client experience with solutions like Library, Dossier and HyperIntelligence, as well as further investments in enterprise capabilities like Workstation and our open APIs. We saw a positive impact on our enterprise analytics software business from our Bitcoin acquisition strategy, which has elevated the overall profile of MicroStrategy and further…

Thank you, Phong. I'd like to say a few things about marketing. We, over the last 12 months, have digitally transformed our sales marketing and our services operations. So I'm really pleased that the advances we're making in marketing on our – our website has grown from being just a small part of our marketing strategy to being the greater part of our marketing strategy. And if you go to the MicroStrategy.com website, you'll see that you can sign up, you can get tech support, you can learn about any one of our products, you can get education, you can learn as an investor anything you need to learn, you can find out about jobs. In essence, the website has become a streaming on demand version of the company's sales force marketing function, and even its executive team. Our website had 281% growth in new accounts created year-over-year, so an extraordinary boost in our engagement with customers and prospects. You all, of course, know we converted MicroStrategy World into an on demand virtual activity. We had 811% growth in attendees to our annual conference because of that. So we were able to dramatically drive up engagement while dramatically raising our costs. We use Twitter more often, both at the corporate level and I as the Chief Executive, I have 775,000 Twitter followers now and that is up by something like 600% or so over the past six months. So we've got dramatic growth there, and we're able to use that in order to deliver messages and information to customers, to prospects and to investors. We're utilizing YouTube a lot more. The corporate MicroStrategy YouTube channel had 1000% growth year-over-year in views, and it's exploded. We did a keynote for MicroStrategy World with myself and Ross Stevens that ended up streaming…

Alright. Thank you, Michael. We're going to jump right in. We've got lots of great questions. And so the first question is going to be for Phong. The comment and question or perpetual license growth was one of the strongest growth rates you've seen in many years. Yes, easy comp, but it was impressive. What is driving this? Was it perpetual versus cloud?

Yes. So we saw strength in both our perpetual growth and our cloud growth, which we're pretty excited about. As you mentioned, the comp was easy year-over-year we were up 69% in perpetual license revenue, but even compared to Q1 2019 we were up 16%. And on the cloud side, we were up 26% year-over-year and our cloud billing this is up 19% year-over-year. So all those metrics are some of the best that we've seen in history, and I would say we've seen growth on both sides. The reason why we're still seeing growth in perpetual; two drivers, one is our existing customer base is primarily large enterprises and for them moving to cloud will take time. And so we want to be a part of that impetus, but many are still buying on prem and obviously we're not going to turn that down. And the second key factor is we are also actively moving people off of perpetual maintenance, which you see in our product support line and moving them to term licenses, which will show up in product license revenue. So that's another driver or some of that growth that you're seeing. But overall we're very happy with the growth rates in Q1, whether you compare it to 2020, 2019, or in the years, recent years before that.

Great. Thank you, Phong. Next question is for Michael. Post the convert, I'm wondering if you could go into more detail on how you might further use the balance sheet to acquire more Bitcoin.

Well, I think so far we've done two financings both of them are unsecured. So that means that we have not pledged any assets on our balance sheet as part of any future financing. So we've got a lot of options as to whether we pursue secured financing and we pursue more unsecured financing or we look to pledge additional collateral either cash or Bitcoin to financing. We don't have any concrete thing to announce at this point and so we're just always evaluating different options. When we have an option that we find to be compelling and accretive, then we'll pursue it and we will make that announcement at the appropriate time.

Great. Thank you, Michael. Next question for Phong. Can you give some more color on the license revenue strength and the mix between net new up sell, perhaps by verticals and regions where you see a faster recovery versus areas of weakness?

Yes. I wouldn't say that there were any particular surprises versus previous trends, right? Like on any particular quarter, we generally average around 20% of our revenues from new customers and 80% of our license revenues from existing customers and that was similar for Q1. Although we're seeing more leads, as we mentioned with net new prospects as they come on, they typically purchases smaller dollar amounts starting upfront and then we'll expand over time. As far as industry breakdowns go similar breakdown as we've seen in the past technology in particular, retail, financial services, federal government sectors, healthcare were all very strong for us in Q1. So I would say we're continuing to play to our strengths and we'll probably continue do that and we will see some expansion over time of prospects especially.

Thanks Phong. And maybe a follow-on to that: one question is around what drove the pickup in the large deal activity. And can you talk a little bit about what you're hearing from customers when they're purchasing tensions and how this might translate to growth in license revenue going forward?

Yes. I'll take the second part first purchase intentions. We are seeing and expanding of investment in enterprise analytics in general, especially the enterprise part of analytics. I think a lot of corporations are realizing how important things like forecasting and scenario analysis and real-time analytics and understanding supply chains, et cetera, all those things became very important last year. And I think what corporations realize as you kept patchwork solutions. You can't put in departmental dashboards in place of enterprise analytics. You can't have ungoverned data. All of the things that we were competing against everyone realizes you need a true enterprise analytics solution for a large corporation to be able to differentiate and to be able to primarily deal with a lot of external changes, which is what whole last year was. So large enterprises I think are coming back to us and we are focused on bringing in large deals and we did well in Q1. The other big piece that I mentioned is our OEM business and that continues to do really well. And generally speaking, when we sell the OEMs to embed our software and theirs, those tend to be larger sized deals also.

Okay. Next question, Michael, as we move more towards a digital society and MicroStrategy is firmly placed substantial, suitably to achieve further growth. What are some concerns that keep you up at night from a CEO perspective? And secondly, do you have plans to incorporate blockchain into related technologies within your products and services?

I think it's an exciting time right now, as we see the digital transformation, the society and I think people understand that, that there's a big digital transformation of their P&Ls and their operations, but we've been big advocates and evangelists for the digital transformation of the balance sheet and the conversion of analog assets and conventional treasury assets into digital assets like Bitcoin. What keeps me up? I think the big challenge is to educate the marketplace. There's a lot of education that we need to do, and to that effect we've uploaded all of our playbooks to hope.com. We've got lots of education materials at hope.com. We have a curated the best and the brightest, the books, papers, resources, reports that we can, we make them available and we're continuing to invest in synthesizing better education materials so that other corporations and other investors can rapidly get educated on what is Bitcoin? What is this digital monitoring network? Why is it important? And how can they best craft their Bitcoin strategy?

Thank you, Michael. And Phong one for you. Will there be dividend payouts or stock splits now or in the future?

Maybe. I don't think we really comment on our capital allocation and dividend payouts and stock splits and those kinds of things, but they're all, they're all things that we consider from time-to-time.

Thanks. And one, let's say, stay on the topic of accounting. What exactly is the $265 million cumulative impairment charge and what does it consist of?

Yes. It's a great question. The way the accounting for intangible assets work is we have to assess them every single quarter for impairment charges. And with Bitcoin, we take a look at what is the lowest price of any particular Bitcoin that we carry and we impair it down the lowest price. It's a sort of precedent GAAP accounting. It is a little bit unusual and we take an impairment as a result of that. That's the reason we reconcile to what we call non-GAAP results. Also we should take out that impairment charge and take out share-based compensation and show our results without those charges. And we also share what we – most of our investors see as our actual market value of Bitcoin, in addition to the book value of Bitcoin.

Thanks, Phong. And let's shift back to Michael, and this might be Michael and Phong. Can you share some direct commentary you heard from CEOs and CFOs about how they might incorporate Bitcoin into their broader treasury strategies during your customer event?

I'll start and then Phong can go. I think that I've had a number of conversations with management teams and CEOs, and I think they're very interested in what we did, why we did it, the outlook for Bitcoin and then the legal accounting, regulatory and execution issues. And for large companies, sometimes I speak with them directly and then for smaller companies and for follow-up, we direct them to all the content we've got on the website, and that's been very popular and well received.

Phong, any additional comments?

Yes. Just in general, I mean, you're seeing in the results. We see it in our leads also, there are folks who are just discovering MicroStrategy either through digital channels or through our website, and Michael mentioned the traffic. MicroStrategy world is a big lead generation event for us. So the fact that we have 5X the number of people attend, all those things end-up creating more leads for our software business, which end-up creating overtime more revenue. It also creates an energy; I talked about it a little bit sort of this energy of us being a forward-leaning technology company. There's a lot of positives that come with that in a halo effect into our BI business also. And so that all is very positive. That said a lot of – a big part of the reason why we're starting to see success as we laid this groundwork over the last five years, right. We rolled out MicroStrategy 2019. In 2019, we upgraded customers aggressively and those customers that upgraded to our latest version of our software are starting to see the value of it and are willing to invest more into the company MicroStrategy. And so things that we've done over the last three, four or five years are starting to see results in positive aspects of that too.

Thanks Phong. We have time for one more question, I think so. For Michael and maybe Phong at the end. You mentioned that Bitcoin thought leadership is driving inbound software leads from new customers. Can you elaborate a little bit more on that?

Alright, just for me or for Phong?

I think it's a – it was directed towards you, but I think Phong will have something to say as well.

I just think that the lead flows much higher because people know about us and they're aware of our company, our brand and our products and what we stand for. And because Bitcoin is the most explosive and most exciting idea right now in mainstream investing, that means that our name gets associated with it a lot. Today on CNBC they had their annual draft where they drafted the Top 10 investment ideas for the year, and the number one draft pick was a Bitcoin and the other announcers were kind of irritated. They didn't get the draft Bitcoin. So I think that we benefit by association and it drives other types of lead low to us.

Any other thoughts Phong?

No. I think Michael got that either. I don't have anything to add to it.

Okay. Alright. With that, thank you everyone for the thoughtful questions. This concludes the Q&A portion of the webinar. We'll now move on to closing remarks from Michael.

Well I want to thank all of our shareholders. Thanks. Thanks for logging into this call. And thank you for your support. We do appreciate it. I will look forward along with Phong and Jeremy to seeing you in 12 weeks, and until then all the best.