Strategy IncMSTR
Strategy Inc Debt Disclosure
(8) Long-term Debt
The net carrying value of the Company’s outstanding debt (in thousands) consisted of the following as of:
| December 31, | |||||||||||
| 2025 | 2024 | ||||||||||
| 2027 Convertible Notes | $ | — | $ | 1,041,352 | |||||||
| 2028 Convertible Notes | 1,002,736 | 998,543 | |||||||||
| 2029 Convertible Notes | 2,982,316 | 2,975,037 | |||||||||
| 2030A Convertible Notes | 789,109 | 785,172 | |||||||||
| 2030B Convertible Notes | 1,989,115 | — | |||||||||
| 2031 Convertible Notes | 596,843 | 594,476 | |||||||||
| 2032 Convertible Notes | 790,113 | 787,417 | |||||||||
| Other long-term secured debt | 39,923 | 9,678 | |||||||||
| Total | $ | 8,190,155 | $ | 7,191,675 | |||||||
| Reported as: | |||||||||||
| Current portion of long-term debt, net | 31,313 | 517 | |||||||||
| Long-term debt, net | 8,158,842 | 7,191,158 | |||||||||
| Total | $ | 8,190,155 | $ | 7,191,675 | |||||||
Convertible Senior Notes
As of December 31, 2025, the following convertible notes were outstanding (the “Outstanding Convertible Notes”):
•$1.01 billion aggregate principal amount of 0.625% Convertible Senior Notes due 2028 (the “2028 Convertible Notes”);
•$3.00 billion aggregate principal amount of 0% Convertible Senior Notes due 2029 (the “2029 Convertible Notes”);
•$800.0 million aggregate principal amount of 0.625% Convertible Senior Notes due 2030 (the “2030A Convertible Notes”);
•$2.00 billion aggregate principal amount of 0% Convertible Senior Notes due 2030 (the “2030B Convertible Notes”);
•$603.7 million aggregate principal amount of 0.875% Convertible Senior Notes due 2031 (the “2031 Convertible Notes”); and
•$800.0 million aggregate principal amount of 2.25% Convertible Senior Notes due 2032 (the “2032 Convertible Notes”).
Additionally, the Company also previously issued, in February 2021, $1.05 billion aggregate principal amount of 0% Convertible Senior Notes due 2027 (the “2027 Convertible Notes”, and together with the Outstanding Convertible Notes, the “Convertible Notes”). All of the 2027 Convertible Notes were redeemed or converted into the Company’s class A common stock during the first quarter of 2025.
Each of the Convertible Notes were issued in a private offering. The Outstanding Convertible Notes are, and the 2027 Convertible Notes were, senior unsecured obligations of the Company ranking senior in right of payment to any of the Company’s indebtedness expressly subordinated in right of payment to the Convertible Notes; equal in right of payment to any of the Company’s unsecured indebtedness not so subordinated; effectively junior in right of payment to any of the Company’s secured indebtedness to the extent of the value of the assets securing such indebtedness; and structurally junior to all indebtedness and other liabilities (including trade payables) of the Company’s subsidiaries. The following table summarizes the key terms of each of the Convertible Notes (principal at inception, net proceeds, and issuance costs are each reported in thousands). The summaries below are qualified in their entirety by the full text of the applicable indenture:
| 2027 Convertible Notes | 2028 Convertible Notes | 2029 Convertible Notes | 2030A Convertible Notes | 2030B Convertible Notes | 2031 Convertible Notes | 2032 Convertible Notes | ||||||||||||||||||||||||||||||||||||||
| Issuance Date | February 2021 | September 2024 | November 2024 | March 2024 | February 2025 | March 2024 | June 2024 | |||||||||||||||||||||||||||||||||||||
| Maturity Date (1) | February 15, 2027 | September 15, 2028 | December 1, 2029 | March 15, 2030 | March 1, 2030 | March 15, 2031 | June 15, 2032 | |||||||||||||||||||||||||||||||||||||
| Principal at Inception | $ | 1,050,000 | $ | 1,010,000 | $ | 3,000,000 | $ | 800,000 | $ | 2,000,000 | $ | 603,750 | $ | 800,000 | ||||||||||||||||||||||||||||||
| Stated Interest Rate (2) | 0.000 % | 0.625 | % | 0.000 % | 0.625 | % | 0.000 | % | 0.875 | % | 2.250 | % | ||||||||||||||||||||||||||||||||
| Interest Payment Dates (3) | February 15 & August 15 | March 15 & September 15 | June 1 & December 1 | March 15 & September 15 | March 1 & September 1 | March 15 & September 15 | June 15 & December 15 | |||||||||||||||||||||||||||||||||||||
| Net Proceeds | $ | 1,025,830 | $ | 997,375 | $ | 2,974,250 | $ | 782,000 | $ | 1,984,852 | $ | 592,567 | $ | 786,000 | ||||||||||||||||||||||||||||||
| Issuance Costs (4) | $ | 24,170 | $ | 12,625 | $ | 25,750 | $ | 18,000 | $ | 15,148 | $ | 11,183 | $ | 14,000 | ||||||||||||||||||||||||||||||
| Effective Interest Rate (4) | 0.39 | % | 1.05 | % | 0.24 | % | 1.14 | % | 0.25 | % | 1.30 | % | 2.63 | % | ||||||||||||||||||||||||||||||
| Date of Holder Put Option (5) | n/a | September 15, 2027 | June 1, 2028 | September 15, 2028 | March 1, 2028 | September 15, 2028 | June 15, 2029 | |||||||||||||||||||||||||||||||||||||
| Initial Conversion Rate (6) | 6.98 | 5.46 | 1.49 | 6.68 | 2.31 | 4.30 | 4.89 | |||||||||||||||||||||||||||||||||||||
| Initial Conversion Price (7) | $ | 143.25 | $ | 183.19 | $ | 672.40 | $ | 149.77 | $ | 433.43 | $ | 232.72 | $ | 204.33 | ||||||||||||||||||||||||||||||
| Convertible at any time after the following date (8) (9) | January 24, 2025 | March 15, 2028 | June 1, 2029 | September 15, 2029 | December 3, 2029 | September 15, 2030 | December 15, 2031 | |||||||||||||||||||||||||||||||||||||
| Not redeemable by the Company prior to the following date (10) | February 20, 2024 | December 20, 2027 | December 4, 2026 | March 22, 2027 | March 5, 2027 | March 22, 2028 | June 20, 2029 | |||||||||||||||||||||||||||||||||||||
| Redemption Date (11) | February 24, 2025 | n/a | n/a | n/a | n/a | n/a | n/a | |||||||||||||||||||||||||||||||||||||
(1)“Maturity Date” is the stated maturity date under each applicable indenture governing such notes, unless earlier converted, redeemed, or repurchased in accordance with their terms.
(2)Holders may receive additional or special interest under specified circumstances as outlined under each applicable indenture governing the Convertible Notes.
(3)The 2029 Convertible Notes and the 2030B Convertible Notes do not bear regular interest. Additionally, the 2027 Convertible Notes did not bear regular interest prior to their redemption.
(4)“Issuance Costs” reflect the customary offering expenses associated with each of the Convertible Notes. The Company accounts for these issuance costs as a reduction to the principal amount of the respective Convertible Notes and amortizes the issuance costs to interest expense from the respective debt issuance dates through the earlier of the “Maturity Date” or the “Date of Holder Put Option,” if applicable, at the “Effective Interest Rates” stated in the table.
(5)“Date of Holder Put Option” represents the respective dates upon which holders of the 2028 Convertible Notes, 2029 Convertible Notes, 2030A Convertible Notes, 2030B Convertible Notes, 2031 Convertible Notes, and 2032 Convertible Notes each have a noncontingent right to require the Company to repurchase for cash all or any portion of their respective notes at a repurchase price equal to 100% of the principal amount of such notes to be repurchased, plus any accrued and unpaid interest to, but excluding the repurchase date.
(6)The “Initial Conversion Rate” is stated in the approximate number of shares of the Company’s class A common stock per $1,000 principal amount. The conversion rates are subject to customary anti-dilution adjustments. In addition, following certain events that may occur prior to the respective maturity dates or if the Company delivers a notice of redemption, the Company will increase the conversion rate for a holder who elects to convert its respective Convertible Notes in connection with such corporate event or notice of redemption, as the case may be, in certain circumstances as provided in each indenture governing the respective Convertible Notes.
(7)The “Initial Conversion Price” is stated in dollars per share of the Company’s class A common stock.
(8)On or after the stated dates until the close of business on the second scheduled trading day immediately preceding the respective maturity dates, holders may convert the Convertible Notes at any time. Upon conversion of the Convertible Notes, the Company will pay or deliver, as the case may be, cash, shares of the Company’s class A common stock, or a combination of cash and shares of class A common stock, at the Company’s election. For the 2027 Convertible Notes, the date presented is the date on which the Company delivered its notice of full redemption of the 2027 Convertible Notes, which resulted in the 2027 Convertible Notes being convertible at any time thereafter until 5:00pm New York City time, on February 20, 2025. See below under “Conversions and Redemption of Convertible Notes” for further information.
(9)Prior to the respective dates, the Convertible Notes are convertible only under the following circumstances:
a.during any calendar quarter (and only during such calendar quarter) if the last reported sale price of the Company’s class A common stock for at least 20 trading days (whether or not consecutive) during the period of 30 consecutive trading days ending on, and including, the last trading day of the immediately preceding calendar quarter is greater than or equal to 130% of the conversion price of the respective Convertible Notes on each applicable trading day;
b.during the five business day period after any five consecutive trading day period (the “measurement period”) in which the “trading price” (as defined under each applicable indenture governing the respective Convertible Notes) per $1,000 principal amount of the respective Convertible Notes for each trading day of the measurement period was less than 98% of the product of the last reported sale price of the Company’s class A common stock and the applicable conversion rate on each such trading day;
c.(a) in the case of the 2028 Convertible Notes, 2029 Convertible Notes, 2030A Convertible Notes, 2031 Convertible Notes and 2032 Convertible Notes, the Company calls any or all of such Convertible Notes for redemption, then a holder may surrender all or any part of such of its Convertible Notes as called for redemption for conversion at any time prior to the close of business on the second scheduled trading day immediately preceding the redemption date; and (b) in the case of the 2030B Convertible Notes, the Company calls any 2030B Convertible Notes for redemption, then the holders of such 2030B Convertible Note may convert such 2030B Convertible Notes at any time before the close of business on the second business day immediately before the related redemption date; and
d.upon occurrence of specified corporate events as described in each applicable indenture governing the respective Convertible Notes.
(10)The Company may redeem for cash all or a portion of the Convertible Notes at its option, on or after the stated dates, if the last reported sale price of the Company’s class A common stock has been at least 130% of the conversion price of the respective Convertible Notes then in effect for at least 20 trading days (whether or not consecutive), including the trading day immediately preceding the date on which the Company provides a notice of redemption, during any 30 consecutive trading day period ending on, and including, the trading day immediately preceding the date on which the Company provides notice of redemption. The redemption price will be equal to 100% of the principal amount of the Convertible Notes to be redeemed, plus accrued and unpaid interest to, but excluding, the redemption date. See below “Conversions and Redemption of Convertible Notes” subsection for information regarding the Company’s notice of redemption of the 2027 Convertible Notes.
(11)“Redemption Date” for the 2027 Convertible Notes is the date on which the Company redeemed all outstanding 2027 Convertible Notes.
If the Company undergoes a “fundamental change,” as defined in the respective indentures governing the Convertible Notes prior to maturity, subject to certain conditions, holders may require the Company to repurchase for cash all or any portion of their respective Convertible Notes at a fundamental change repurchase price equal to 100% of the principal amount of the respective Convertible Notes to be repurchased, plus any accrued and unpaid interest to, but excluding, the fundamental change repurchase date.
The respective indentures governing the Convertible Notes contain customary terms and covenants, including that upon certain events of default occurring and continuing, either the Trustee or the holders of at least 25% in principal amount outstanding of the respective Convertible Notes may declare 100% of the principal of, and accrued and unpaid interest, if any, on, all the respective Convertible Notes to be due and payable.
Although the Convertible Notes contain embedded conversion features, the Company accounts for the Convertible Notes in their entirety as a liability because the conversion features are indexed to the Company’s class A common stock and meet the criteria for classification in stockholders’ equity and therefore do not qualify for separate derivative accounting.
Conversions and Redemption of Convertible Notes
On January 24, 2025, the Company delivered a notice of full redemption (the "2027 Redemption Notice") to the trustee of the Company’s 2027 Convertible Notes for the redemption of all $1.05 billion in aggregate principal amount of the 2027 Convertible Notes then outstanding on February 24, 2025 (the “2027 Redemption Date”), at a redemption price equal to 100% of the principal amount of the 2027 Convertible Notes to be redeemed, plus accrued and unpaid special interest, if any, to but excluding the 2027 Redemption Date, unless earlier converted. Due to the Company’s issuance of the 2027 Redemption Notice, the 2027 Convertible Notes became convertible at the option of the holders of such notes from the delivery of the 2027 Redemption Notice until 5:00 p.m., New York City time, on February 20, 2025. The Company elected to satisfy its conversion obligation with respect to the 2027 Convertible Notes by delivering solely shares of its class A common stock, together with cash in lieu of any fractional shares. Holders of the 2027 Convertible Notes requested to convert $1.05 billion in principal amount of the 2027 Convertible Notes for which the Company issued 7,373,528 shares of the Company’s class A common stock and paid a nominal amount of cash in lieu of fractional shares upon settlement of such conversion requests, in accordance with the terms and provisions of the indenture governing the 2027 Convertible Notes. There were no outstanding 2027 Convertible Notes as of December 31, 2025.
During the year ended December 31, 2025, the Company received from certain holders of the 2031 Convertible Notes requests to convert an immaterial principal amount of the 2031 Convertible Notes, which the Company settled in shares of class A common stock and a nominal amount of cash in lieu of fractional shares in accordance with the terms and provisions of the indenture governing the 2031 Convertible Notes.
During the year ended December 31, 2024 (and prior to the delivery of the 2025 Redemption Notice (defined below)), the Company received from certain holders of the Company’s 0.750% Convertible Senior Notes due 2025 (the “2025 Convertible Notes”) requests to convert an immaterial principal amount of the 2025 Convertible Notes, which the Company elected to settle in shares of class A common stock and cash in accordance with the terms and provisions of the indenture governing the 2025 Convertible Notes.
On June 13, 2024, the Company announced that it delivered a notice of redemption (the “2025 Redemption Notice”) to the trustee of the 2025 Convertible Notes for redemption of all $650.0 million in aggregate principal amount of the 2025 Convertible Notes then outstanding on July 15, 2024 (the “2025 Redemption Date”). Due to the Company’s issuance of the 2025 Redemption Notice, the 2025 Convertible Notes became convertible at the option of the holders of such notes from the delivery of the 2025 Redemption Notice until 5:00 p.m., New York City time, on July 11, 2024. The Company elected to satisfy its conversion obligation with respect to the 2025 Convertible Notes by delivering solely shares of its class A common stock, together with cash in lieu of any fractional shares. Holders of the 2025 Convertible Notes requested to convert $649.7 million in principal amount of the 2025 Convertible Notes prior to the 2025 Redemption Date, for which the Company issued 16,323,050 shares of the Company’s class A common stock and paid a nominal amount of cash in lieu of fractional shares upon settlement of such conversion requests, in accordance with the terms and provisions of the indenture governing the 2025 Convertible Notes. On the 2025 Redemption Date, the Company redeemed $0.3 million aggregate principal amount of 2025 Convertible Notes, constituting all of the 2025 Convertible Notes then outstanding, at an aggregate redemption price of $0.3 million in cash, equal to 100% of the principal amount of the 2025 Convertible Notes redeemed, plus accrued and unpaid interest, to but excluding the 2025 Redemption Date. There were no outstanding 2025 Convertible Notes as of December 31, 2024.
Collective Convertible Notes Disclosures
As of December 31, 2025, the maximum number of shares into which the Convertible Notes could have been potentially converted if the conversion features were triggered at the conversion rates then in effect based on the Convertible Notes then outstanding on such date was:
•2028 Convertible Notes: 5,513,489 shares of class A common stock;
•2029 Convertible Notes: 4,461,600 shares of class A common stock;
•2030A Convertible Notes: 5,341,600 shares of class A common stock;
•2030B Convertible Notes: 4,614,400 shares of class A common stock;
•2031 Convertible Notes: 2,593,923 shares of class A common stock; and
•2032 Convertible Notes: 3,915,200 shares of class A common stock.
The 2028 Convertible Notes, 2030A Convertible Notes, 2031 Convertible Notes and 2032 Convertible Notes were convertible at the option of the holders during certain quarters of the year ended December 31, 2025. However, the Company did not receive any requests to convert the 2028 Convertible Notes, 2030A Convertible Notes, and 2032
Convertible Notes during such periods. See “Conversions and Redemption of Convertible Notes” above for additional information about conversions of the 2031 Convertible Notes.
The Outstanding Convertible Notes may be convertible in future periods if one or more of the conversion conditions are satisfied during future measurement periods. None of the Outstanding Convertible Notes are convertible at the option of holders during the three months ending March 31, 2026.
No conversions of the Outstanding Convertible Notes occurred during the years ended December 31, 2025, 2024, and 2023, except for the 2031 Convertible Notes as discussed above under the “Conversions and Redemption of Convertible Notes” subsection.
Other than the Company’s redemption of the 2027 Convertible Notes, the Company did not redeem any of the Convertible Notes during the year ended December 31, 2025.
As of December 31, 2025 and 2024, the net carrying value of the Convertible Notes was classified as a long-term liability in the “Long-term debt, net” line item in the Company’s Consolidated Balance Sheets.
The following is a summary of the Company’s convertible debt instruments as of December 31, 2025 and 2024 (in thousands):
| December 31, 2025 | |||||||||||||||||||||||||||||
| Outstanding Principal Amount | Unamortized Issuance Costs | Net Carrying Value | Fair Value | ||||||||||||||||||||||||||
| Amount | Leveling | ||||||||||||||||||||||||||||
| 2028 Convertible Notes | $ | 1,010,000 | $ | (7,264) | $ | 1,002,736 | $ | 1,214,525 | Level 2 | ||||||||||||||||||||
| 2029 Convertible Notes | 3,000,000 | (17,684) | 2,982,316 | 2,468,832 | Level 2 | ||||||||||||||||||||||||
| 2030A Convertible Notes | 800,000 | (10,891) | 789,109 | 1,014,071 | Level 2 | ||||||||||||||||||||||||
| 2030B Convertible Notes | 2,000,000 | (10,885) | 1,989,115 | 1,728,262 | Level 2 | ||||||||||||||||||||||||
| 2031 Convertible Notes | 603,659 | (6,816) | 596,843 | 621,950 | Level 2 | ||||||||||||||||||||||||
| 2032 Convertible Notes | 800,000 | (9,887) | 790,113 | 892,562 | Level 2 | ||||||||||||||||||||||||
| Total | $ | 8,213,659 | $ | (63,427) | $ | 8,150,232 | $ | 7,940,202 | |||||||||||||||||||||
| December 31, 2024 | |||||||||||||||||||||||||||||
| Outstanding Principal Amount | Unamortized Issuance Costs | Net Carrying Value | Fair Value | ||||||||||||||||||||||||||
| Amount | Leveling | ||||||||||||||||||||||||||||
| 2027 Convertible Notes | $ | 1,050,000 | $ | (8,648) | $ | 1,041,352 | $ | 2,134,125 | Level 2 | ||||||||||||||||||||
| 2028 Convertible Notes | 1,010,000 | (11,457) | 998,543 | 1,927,828 | Level 2 | ||||||||||||||||||||||||
| 2029 Convertible Notes | 3,000,000 | (24,963) | 2,975,037 | 2,447,682 | Level 2 | ||||||||||||||||||||||||
| 2030A Convertible Notes | 800,000 | (14,828) | 785,172 | 1,657,323 | Level 2 | ||||||||||||||||||||||||
| 2031 Convertible Notes | 603,750 | (9,274) | 594,476 | 877,559 | Level 2 | ||||||||||||||||||||||||
| 2032 Convertible Notes | 800,000 | (12,583) | 787,417 | 1,324,602 | Level 2 | ||||||||||||||||||||||||
| Total | $ | 7,263,750 | $ | (81,753) | $ | 7,181,997 | $ | 10,369,119 | |||||||||||||||||||||
The fair value of the Convertible Notes is determined using observable market data other than quoted prices, specifically the last traded price at the end of the reporting period of identical instruments in the over-the-counter market (Level 2).
For the years ended December 31, 2025, 2024 and 2023, interest expense related to the Convertible Notes was as follows (in thousands):
| Year Ended December 31, 2025 | Year Ended December 31, 2024 | Year Ended December 31, 2023 | |||||||||||||||||||||||||||||||||||||||||||||||||||
| Contractual Interest Expense | Amortization of Issuance Costs | Total | Contractual Interest Expense | Amortization of Issuance Costs | Total | Contractual Interest Expense | Amortization of Issuance Costs | Total | |||||||||||||||||||||||||||||||||||||||||||||
| 2025 Convertible Notes | $ | — | $ | — | $ | — | $ | 2,371 | $ | 1,494 | $ | 3,865 | $ | 4,875 | $ | 3,043 | $ | 7,918 | |||||||||||||||||||||||||||||||||||
| 2027 Convertible Notes | — | 401 | 401 | — | 4,046 | 4,046 | — | 4,029 | 4,029 | ||||||||||||||||||||||||||||||||||||||||||||
| 2028 Convertible Notes | 6,313 | 4,192 | 10,505 | 1,771 | 1,168 | 2,939 | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| 2029 Convertible Notes | — | 7,279 | 7,279 | — | 787 | 787 | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| 2030A Convertible Notes | 5,000 | 3,937 | 8,937 | 4,069 | 3,172 | 7,241 | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| 2030B Convertible Notes | — | 4,263 | 4,263 | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| 2031 Convertible Notes | 5,282 | 2,457 | 7,739 | 4,154 | 1,909 | 6,063 | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| 2032 Convertible Notes | 18,000 | 2,696 | 20,696 | 9,650 | 1,417 | 11,067 | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 34,595 | $ | 25,225 | $ | 59,820 | $ | 22,015 | $ | 13,993 | $ | 36,008 | $ | 4,875 | $ | 7,072 | $ | 11,947 | |||||||||||||||||||||||||||||||||||
The Company paid $34.5 million, $16.5 million and $4.9 million, respectively, in interest related to the Convertible Notes during the years ended December 31, 2025, 2024, and 2023. The Company has not paid any additional interest or special interest related to the Convertible Notes to date.
Senior Secured Notes
On June 14, 2021, the Company issued $500.0 million aggregate principal amount of 2028 Secured Notes. The 2028 Secured Notes were sold under a purchase agreement, dated as of June 8, 2021, entered into by and among the Company, MicroStrategy Services Corporation, a wholly owned subsidiary of the Company (the “Guarantor”), and Jefferies LLC, for resale to qualified institutional buyers. The terms of the 2028 Secured Notes were governed by an indenture, dated as of June 14, 2021 (the “2028 Secured Notes Indenture”), among the Company, the Guarantor, and U.S. Bank National Association, as trustee and collateral agent.
The 2028 Secured Notes were unconditionally guaranteed, jointly and severally, on a senior secured basis by the Guarantor and certain subsidiaries of the Company (excluding MacroStrategy) (collectively, the “Subsidiary Guarantors”). The 2028 Secured Notes bore interest at a fixed rate of 6.125% per annum, payable semiannually in arrears on June 15 and December 15 of each year, beginning on December 15, 2021. The 2028 Secured Notes had a stated maturity date of June 15, 2028, unless earlier redeemed or repurchased in accordance with their terms and subject to a springing maturity date of September 15, 2025 or November 16, 2026 under certain conditions outlined in the 2028 Secured Notes Indenture. The springing maturity feature was not triggered while the 2028 Secured Notes were outstanding.
The Company redeemed all of the 2028 Secured Notes on September 26, 2024 at a redemption price equal to 103.063% of the principal amount of the 2028 Secured Notes, plus accrued and unpaid interest to, but excluding, September 26, 2024 (the “Redemption Price”). The Redemption Price consisted of a $515.3 million payment to redeem the full $500.0 million outstanding principal amount of the 2028 Secured Notes as of September 26, 2024 and an $8.6 million payment for accrued unpaid interest on the 2028 Secured Notes to but excluding September 26, 2024. The Company also incurred $0.1 million in third party fees in connection with the redemption of the 2028 Secured Notes. The net carrying value of the 2028 Secured Notes as of September 26, 2024, immediately prior to their redemption, was $492.5 million, which resulted in a $22.9 million loss on debt extinguishment recognized in the Company’s Consolidated Statement of Operations in the third quarter of 2024.
While outstanding, the 2028 Secured Notes were secured, on a senior secured basis with the Company’s existing and future senior indebtedness, by a first priority security interest in substantially all of the Company’s and the Subsidiary Guarantors’ assets (the “Collateral”). The Collateral included any bitcoins or other digital assets acquired by the Company or a Subsidiary Guarantor on or after June 14, 2021. As of December 31, 2023, approximately 16,081 of the bitcoins held by the Company served as part of the Collateral. Upon the redemption of the 2028 Secured Notes in September 2024, all collateral securing the 2028 Secured Notes was released.
The Company incurred approximately $12.8 million in customary offering expenses associated with the 2028 Secured Notes. The Company accounted for these issuance costs as a reduction to the principal amount of the 2028 Secured Notes and amortized the issuance costs to interest expense over the contractual term of the 2028 Secured Notes at an effective interest rate of 6.58%.
No interest expense related to the 2028 Secured Notes was recognized after the debt was repaid in full during the third quarter of 2024. For the years ended December 31, 2024 and 2023, interest expense related to the 2028 Secured Notes was as follows (in thousands):
| Year Ended December 31, 2024 | Year Ended December 31, 2023 | ||||||||||||||||||||||||||||||||||
| Contractual Interest Expense | Amortization of Issuance Costs | Total | Contractual Interest Expense | Amortization of Issuance Costs | Total | ||||||||||||||||||||||||||||||
| 2028 Secured Notes | $ | 22,628 | $ | 1,287 | $ | 23,915 | $ | 30,625 | $ | 1,646 | $ | 32,271 | |||||||||||||||||||||||
The Company paid $23.9 million and $30.6 million respectively, in interest related to the 2028 Secured Notes during the years ended December 31, 2024 and 2023.
Other long-term secured debt
In June 2022, the Company, through a wholly-owned subsidiary, entered into a secured term loan agreement in the amount of $11.1 million, bearing interest at an annual rate of 5.2%, and maturing in June 2027. The loan is secured by certain non-bitcoin assets of the Company that are not otherwise serving as collateral for any of the Company’s other indebtedness. After monthly payments made under the terms of the agreement, the loan had a net carrying value of $9.2 million and $9.7 million as of December 31, 2025 and 2024, respectively, and an outstanding principal balance of $9.2 million and $9.8 million as of December 31, 2025 and 2024, respectively. As of December 31, 2025 and 2024, $0.6 million and $0.5 million of the respective net carrying values were short-term and presented in "Current portion of long-term debt, net" in the Consolidated Balance Sheets.
In June 2025, the Company entered into a loan agreement that provides for aggregate borrowings of up to $31.1 million, available in multiple tranches, to fund a capital asset purchase. Amounts outstanding under the loan bear interest, with respect to each tranche, at a variable rate equal to the one-year Secured Overnight Financing Rate plus 4.24%. The loan is secured by non-bitcoin assets that do not and will not otherwise serve as collateral for any of the Company’s other indebtedness. The loan will mature in 2026.
After monthly payments made under the terms of these other long-term secured debt agreements, the other long-term secured debt had an aggregate net carrying value of $39.9 million and $9.7 million as of December 31, 2025 and 2024, respectively, and an aggregate outstanding principal balance of $40.3 million and $9.8 million as of December 31, 2025 and 2024, respectively. As of December 31, 2025, and 2024, $31.3 million and $0.5 million of the respective net carrying values were short-term and were presented in “Current portion of long-term debt, net” in the Consolidated Balance Sheets.
Maturities
The following table shows the maturities of the Company’s debt instruments as of December 31, 2025 (in thousands). The principal payments related to the 2028 Convertible Notes, 2029 Convertible Notes, 2030A Convertible Notes, 2030B Convertible Notes, 2031 Convertible Notes, and 2032 Convertible Notes are included in the table below as if the holders exercised their right to require the Company to repurchase all of the respective convertible notes on their respective Date of Holder Put Option.
| Payments due by period ended December 31, | 2028 Convertible Notes | 2029 Convertible Notes | 2030A Convertible Notes | 2030B Convertible Notes | 2031 Convertible Notes | 2032 Convertible Notes | Other long-term secured debt | Total | ||||||||||||||||||||||||||||||||||||||||||
| 2026 | $ | — | $ | — | $ | — | $ | — | $ | — | $ | — | $ | 31,708 | $ | 31,708 | ||||||||||||||||||||||||||||||||||
| 2027 | 1,010,000 | — | — | — | — | — | 8,633 | 1,018,633 | ||||||||||||||||||||||||||||||||||||||||||
| 2028 | — | 3,000,000 | 800,000 | 2,000,000 | 603,659 | — | — | 6,403,659 | ||||||||||||||||||||||||||||||||||||||||||
| 2029 | — | — | — | — | — | 800,000 | — | 800,000 | ||||||||||||||||||||||||||||||||||||||||||
| 2030 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Thereafter | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
| Total | $ | 1,010,000 | $ | 3,000,000 | $ | 800,000 | $ | 2,000,000 | $ | 603,659 | $ | 800,000 | $ | 40,341 | $ | 8,254,000 | ||||||||||||||||||||||||||||||||||
As part of the Company’s bitcoin strategy, the Company expects to incur or continue to incur additional indebtedness and other fixed charges for the purposes of acquiring additional bitcoin and to satisfy its financial and other obligations. The Company’s ability to obtain equity and debt financing is subject to market conditions and other factors outside of its
control, and the Company may not be able to secure equity or debt financing in a timely manner, on favorable terms, or at all. If the Company is unable to obtain equity or debt financing, the Company could seek to use proceeds from the sale of its bitcoin to meet its obligations. Historically, the bitcoin market has been characterized by significant volatility in price, limited liquidity and trading volumes compared to sovereign currencies markets, relative anonymity, a developing regulatory landscape, potential susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges, and various other risks inherent in its entirely electronic, virtual form and decentralized network. During times of market instability, the Company may not be able to sell its bitcoin at favorable prices or at all. As a result, the Company’s bitcoin holdings may not be able to serve as a source of liquidity for the Company to the same extent as cash and cash equivalents. Further, the Company’s bitcoin holdings do not enjoy the same protections as are available to cash or securities deposited with or transacted by institutions subject to regulation by the Federal Deposit Insurance Corporation or the Securities Investor Protection Corporation.
Historical Timeline
| Fiscal Year | Filed | |
|---|---|---|
| 2025 | Feb 19, 2026 | Showing above |
| 2024 | Feb 18, 2025 | |
| 2023 | Feb 15, 2024 | |
| 2022 | Feb 16, 2023 | |
| 2021 | Feb 16, 2022 | |
About Debt Disclosures
Debt disclosures detail a company's borrowing structure — the types of instruments, interest rates, maturity schedule, and covenant restrictions that define its financial obligations and flexibility. This section is essential for assessing refinancing risk, interest rate exposure, and the margin of safety against financial distress.
Key signals: the maturity schedule reveals concentration risk — large maturities within 1-2 years during tight credit markets can force dilutive refinancing or asset sales. Compare the fair value of debt against carrying amount to gauge whether the market views the company's credit risk differently than the balance sheet suggests. Watch covenant compliance disclosures for tightening cushions, especially leverage and interest coverage ratios. Variable-rate debt exposure quantifies sensitivity to interest rate changes. Secured versus unsecured mix affects recovery rates and future borrowing capacity. Compare net debt-to-EBITDA against industry peers and covenant limits to assess financial health.