Good evening, everyone. I’m Jeremy Price MicroStrategy Senior Vice President of Financial Planning and Analysis and Head of Investor Relations. I'll be your moderator for MicroStrategy is 2020 Fourth Quarter Earnings Webinar. And 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 risk 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'll refer to certain non-GAAP financial measures. Reconciliations showing GAAP versus non-GAAP results were available in our earnings release and presentation, which were issued today and are available on our website at www.microstrategy.com.

Hi, this is Michael Saylor. I'm the Chairman and CEO of MicroStrategy I'd like to welcome all of you here today to our webinar regarding our 2020 fourth quarter financial results. I'm here with Phong Le, our President and Chief Financial Officer. I'd like to pass the floor to Phong who is going to discuss our operational and financial results for the quarter.

Thank you, Jeremy. Thank you, Michael. The fourth quarter was a good finish to what was an exciting and transformational year for MicroStrategy. Before I review our fourth quarter results in detail. I want to underscore the key highlights from 2020 for the company. First we had a solid sales year in light of the economic environment. Total revenue for the year was down only modestly and our performance in the second half of the year was notably strong. We also made important progress and our shift towards our cloud offering which drove current subscription billings to $15.5 million as of December 31, 2020 up 41% year-over-year. Second, we embrace the virtual wave to dramatically improve the cost structure and operating efficiency of the business. For the year, we reduced non-GAAP operating expenses by 15% or $55.8 million and increased non-GAAP operating income of $68.2 million dollars from $9.2 million in 2019. Third, we deploy the excess capital on our balance sheet to generate substantial shareholder value. We return, a $123 million to shareholders via share repurchases and instituted the unique an innovative treasury reserve policy that made MicroStrategy the first publicly traded company to utilize bitcoin as its primary treasury reserve rights. Over the course of the year, we purchased 70,469 bitcoins for an aggregate price $1.125 billion or an average price $15,964 per bitcoin. As of 4:00 p.m. in January 27 our digital assets had a market value of $2.2 billion. Finally regarding our bitcoin strategy our pioneering decision to make bitcoin our primary study reserve asset has made MicroStrategy a thought leader in crypto currency market in generating great interest in MicroStrategy as a corporation.

Thanks Phong. I'm really excited about 2021 looking forward if we think about the really exciting technology opportunities we have HyperIntelligence is really the cutting edge of MicroStrategy’s business development strategy. HyperNow really represents giving people the power of HyperIntelligence out of the cloud in a multi-tenant environment in less than an hour. I think the HyperNow gives us scalable HyperIntelligence. If we can take all of the human labor out of the mix and all of the software downloads and installations of the mix then it’s possible for a mid-sized company and Singapore on a Saturday afternoon to find our website sign up for HyperNow plug into our SaaS offering, integrate into one of their databases, plug in their enterprise security, build an application and deploy it out to thousands, tens of thousands or hundreds of thousands of their employees. Customers and partners all not even on a week-day without talking anybody on the phone, without going into the office it's just really compelling. HyperIntelligence is not just compelling because we're going to be deploying it out of the cloud in 2021. It's also exciting because we've made a lot of nice upgrades to HyperIntelligence. For example, we provided HyperVision and you can see an example of HyperVision on our strategy.com website. But the idea is, I look at the documents and I lighted up in 10 different colors based upon the underlying metrics that the HyperIntelligence engine sees and codifies. So wouldn't it be great if I can read a list of one thousand names and see the ones in green that are making me money, the ones in red that are losing money and the ones in the yellow that I need to be focused on my see it in a split-second that's HyperVision. We made it possible to build these HyperVision applications and deploy them rapidly many cases less than half an hour. Our technology strategy is take 20 years of engineering of business intelligence that's industrial strength that was formally deployed on-premises or in single-user instances and to place that into a multi-tenant through SaaS offering take away the friction and make it possible for anyone honor of anytime to build these applications quickly and easily. So Hyper is part of it. The multi-tenant cloud is part of it another really cool part of it is the embedded aspect of our business intelligence offering. Everybody wants to embed intelligence into their apps into their websites with HyperIntelligence you can actually build a HyperCard application. If you're a big retailer, a big exchange and Amazon and eBay, what have you, you can build a HyperCard application. And then you could deploy it into your own website with just a few lines of code that you paste into website using our SDK, and what that means is we view the website with millions of users and you wanted to deploy HyperIntelligence on your website, without any download without any installation of an extension without any special authentication. You could build that app, you could deploy it on your website, you could deploy it out of our cloud subject to your security using our SDK in an hour on a Saturday that's really powerful embedding. We focused upon similar types of embedding technology to allow you to embed very, very deep analytics from MicroStrategy is platform or dossiers from MicroStrategy’s platform. And I think the thing that makes us truly industrial strength in 2021 is the ability to spin up these cloud environments plug them into data and then embed them into applications that already have thousands or hundreds of thousands or millions of users. So we're really excited about that. I'm excited about some other cool innovations we're working on. For example, the next version of HyperNow and HyperIntelligence has the ability to tweet and share to Twitter HyperCards. And so I think you're going to start to see more HyperCards floating around the Twitter sphere shortly. As always our business strategy is to innovate on the cutting edge to provide the most modern, the most enterprise grade platform that we can. And to be the industrial strength platform for intelligence for corporations that make their living off of extracting these insights and those corporations need to embed those into their own OEM offerings. We are running the virtual wave as you can see right now. And as I say to people and my own corporation all the time – in the era of the virtual wave, you can now so many words at speed of light and you can bend time and space. What are you going to do with that power? What it means to us is reach out to more of our customers more frequently more effectively. You're going to see that in full force next week with MicroStrategy World which is going to be our biggest marketing and education event in the history of the company. It's free to all, it used to be that our business was about, collecting 2,000 3,000 or 4,000 customers for a few days at some hotel in Vegas or Orlando or somewhere in Europe. And they had to take three, four, five days of their life to come. I estimate that probably between the expenses of MicroStrategy and the customer expenses it was a $10 million operation to stage a MicroStrategy World. This year we're going to have a MicroStrategy World event, which will be better and be more comfortable for our customers. We’ll have dramatically more attendees. We’ll spend an order of magnitude less money and they will spend almost no money. We are already in excess of 10,000 expected attendees, but that registration is building very, very rapidly as we approach the final date. That MicroStrategy World now we'll have more engaging sessions. We’ll have solutions sessions. We’ll be bringing together our customers that are working on common platforms everywhere in the world. We're doing some innovative things to make this easier for international customers in Europe, and Asia-Pacific to get involved. Of course we'll generate huge amounts of content that will be uploaded as on demand streaming content so that it continues to work for our customers in the coming 12 months. We've had the opportunity with that MicroStrategy World event to add a track call the bitcoin for corporation’s summit. And that's very, very exciting for us as well I’ll say more about that in a second. A few words on our capital allocation strategy as you know, we've been using bitcoin as our treasury reserve asset and we continue to believe that bitcoin serves as the best store of value and its very attractive investment asset with more long-term appreciation potential to holding cash. Going forward, we're going to pursue two corporate strategies. One strategy is to grow our enterprise software business. The other strategy is to acquire more bitcoin, it is a bitcoin strategy that means we're not only holding our bitcoin as a primary treasury reserve asset, but we'll also be seeking to actively acquire additional bitcoin as part of our overall corporate strategy. In the quarter, we did acquire bitcoin on three separate occasion or two separate occasions. We acquired $50 million worth of bitcoin at $19,227 a bitcoin on which we announced around the 4th of December. And around 21st of December, we announced we had acquired another $650 million worth of bitcoin at around $21,925 a bitcoin. And of course as Phong pointed out on the 22nd of January, we acquired more bitcoin $10 million worth of it at $31,808. Our view of bitcoin is, it is the technically superior digital asset in the world. It’s a superior asset for storing value over the long-term. That means we expect capital to flow into this asset from other weaker assets or other assets that don't have the favorable technical characteristics of bitcoin. And in addition to bitcoin being a great digital asset and a great store of value bitcoin is also an open protocol for moving monetary energy. It is in essence the first digital monetary network having an engineered safe haven assets and also having it run on a digital monitoring network makes it an extraordinarily unique opportunity for our company. We intend to continue in our role as an innovator and as a market thought leader in the space. One thing we've done is prepared a bitcoin corporate playbook and we have gathered all of our documents related to governance, to accounting, to security, to technical protocols, to finance that we believe would be interesting to other corporations that wish to integrate bitcoin into their corporate strategy. And we're going to open source these documents and make them freely available to the world. We think it's good for the industry, we think it's good for us. And if you sign up for our bitcoin for corporation’s summit next week, you'll be able to get early access to these documents. We will go beyond this to make other bitcoin education materials available to anyone in the world that's interested in them. We have done that up to now by placing many of these education materials on our hope.com domain. So if you ever want to know more about bitcoin just remember bitcoin is hope and type hope and you will go to our hope domain and you will see not only the ability to sign up for this conference. But also all of the other bitcoin materials we have gathered and curated. I continue to advocate the bitcoin standard and evangelize bitcoin as a solution to many problems that corporations and individual investors around the world face. We've had good success in our outreach. On YouTube I've got videos, some videos that have run 400,000 times certainly 2 million hours or more probably 2 million to 4 million hours of streaming video on YouTube that we've contributed. We believe this is good for bitcoin we believe it's good for MicroStrategy’s brand. We believe that is going to help us to grow our enterprise software business as well as to pursue our bitcoin strategy. And so far we've seen lots of positive benefits from our educational initiatives, very, very good feedback from our employees. We're finding that we're able to attract and recruit employees more easily. We found it's good for employee retention and moral. We found it's also very good for our sales and marketing and outreach to corporations all over the world. When you are an enterprise software company, one of the most important things to do is always established relationships with Senior C-suite executives. And if they know your company and if they've heard your company and there are positive vibes in the marketplace around your brand that makes it easier for all of our executives and sales teams to meet with and engage with the customer. So we feel really good about the synergy between our software strategy and our bitcoin strategy and we'll continue with that. With regard to Bitcoin for corporations next week on the 3rd and 4th of February, we will host I expect it will be about 2,000 or more executives and officers, directors and advisors of corporations who are interested in figuring out how they might integrate bitcoin into their corporate strategy. And it's a hot topic because as the bitcoin monetary network grows, you’ll see lots of examples of successes like Grayscale. Grayscale grew their assets by a factor of 10 in 12 months. You’ll see successes like Square and PayPal, both of which have had extraordinary success by plugging their mobile apps into bitcoin. You’ll see other companies like Genesis and ID who have an extraordinary success acting as prime brokers for bitcoin. You see companies like Fidelity they are having success offering, offering fund and brokerage and custodial services for bitcoin. The industry is really growing rapidly all the companies in the industry that have that have managed to integrate bitcoin into their strategy, either on their balance sheet as a treasury reserve asset or and their P&L are seeing extraordinary enthusiastic response from – market share gains and they're creating shareholder value. We're going to be sharing everything that we know about how to go about doing this. And in addition to laying out our methodology and sharing our experiences, we've also brought together 10 of the enterprise grade bitcoin vendors in this space. And either I or Phong will be interviewing the CEOs or the heads of institutional services and sales for each of these top 10 vendors in the space. So that if you wanted to come up to speed in a matter of 10 hours and jump start a process that would take you two or three months then you can do it in two days next week. And of course when we finish with our sessions next week, we will go ahead and upload those on demand to make those resources available to the industry going forward for the coming year. So to summarize, we're really enthusiastic about our enterprise software strategy HyperIntelligence. Our multi-tenant cloud and our embedded Intelligence in SDK capabilities give us a differentiated offering in the market we're best-in-class there. And I expect we'll continue to grow that business. We're very enthusiastic about our bitcoin strategy. We have a chance to be a leader in this marketplace and we're going to do our best to execute on that strategy and help other companies follow us in what we have done. And with that I want to thank everybody for your support and shareholders. And I will go ahead and pass the floor to Jeremy for Q&A.

A - Jeremy Price: Thank you, Michael. We've got some good questions here and we'll start off with Michael. Michael, how do you envision the role of MicroStrategy participation in the bitcoin network evolving in the future and will the company look to build a software business that leverages the growth of bitcoin – the bitcoin monetary network will you expand the company go beyond being a leader for bitcoin treasury education?

We have a strong team and we're actively studying the bitcoin industry and all the activities in the process in the industry and all the data in the industry to determine the best way for us to add value with our existing business intelligence and HyperIntelligence. Although we don't have anything that we are ready to announce, right now. We are enthusiastic about the opportunity to bring our intelligence to the industry at the right time in the right fashion.

All right. Just as a reminder, please use the Q&A feature at the bottom of your zoom screen in order to ask questions. Next question for Phong, how should we think about the growth of license in 2021 given the momentum around cloud in subscription?

Yes thanks, Jeremy. Obviously we're pretty excited about the ability to transition to the cloud. We are still early in that process. I think as I noted, we saw 21% growth in our cloud revenue on a year-over-year basis and 41% growth on our cloud billings on a year-over-year basis that was off of Q3 where we saw an 80% growth in cloud billings on a year-over-year basis. So, although early on we're starting to see good momentum. Obviously when we see subscription revenue come through it’s recognized on a ratable basis so it ends up depressing slightly our product license revenue. And many people study cloud transition models and have experienced that. So if not for that cloud growth in Q4, we would have seen higher product license revenues. All that said, our revenue is generally speaking were flat from Q4, and flat for the full year. I think as we start to accelerate our growth in 2021 across perpetual licenses and cloud. My goal is to not see a significant change in our product license revenue, not a significant impact from our transition to cloud and see growth in both. And I think with the momentum that we see in our business that is a potential positive outcome its growth across all of our revenue segment.

Good, thank you, Phong. Next question and I think there are a couple of people who have asked this or some version of this. Are you planning to do another convertible debt offering or have you considered issuing equity debt or others securities to allow you to purchase more bitcoins?

We're continuing and continuously evaluating our capital position, as well as the market conditions in the capital markets. We have sufficient liquidity to operate our business as it's currently conducted while it's possible to raise additional capital if we think it makes sense to, it would be inappropriate for me to comment on any future financial plans.

Okay and I think a follow-up question there is, will you purchase additional bitcoins in future periods?

Well bitcoin is an important part of our overall strategy. So going forward, we will continue to plan to hold our bitcoin we will invest additional excess cash flows in bitcoin. And we'll explore various approaches to acquire additional bitcoin as part of our general corporate strategy.

All right, thank you Michael. Let's see here. Are you a software company or just a bitcoin investment vehicle?

We’re a global leader enterprise analytics software and services. We continue to operate the software business as we have over the last 30 years. I mean, but at the same time bitcoins an important part of our strategy, we have a bitcoin strategy. In addition to our software strategies so if you just keep in mind that we've got two strategies we're going to pursue them both very enthusiastically. Then I think that's the best way to think about the company. We're going to grow our enterprise software business and we're going to acquire additional bitcoin on the balance sheet.

All right. This one is another bitcoin question, does your bitcoin strategy depend on selling high and buying back more bitcoin at lower prices?

No, no, it doesn't. Our belief is that that bitcoin is the first effective digital monetary network and it's going to grow over time. We're early adopters. The early bitcoin holders are adopters. It's the solution to every company's problem and every individual investor’s problem. And so, as more and more corporations adopt the bitcoin’s standard and they use it as a store of value. As more investors and mutual funds and hedge funds use it as a store of value, as more individuals use it as a store of value, the overall amount of monetary energy, the total amount of capital flowing into the network is just going to increase in time. And because there's a fixed amount of Bitcoin, that just means the price is going to go up. And as I've said to many people, if you - the nature in the free market is in a free market capital flows from the weakest assets to the strongest assets. If you were in an economy that had a collapse in currency like Venezuela, and you had dollars and you had Venezuelan Bolivar. Well, the dollar is going to go up in value versus the Bolivar continuously and forever, as long as the one currency is weakening, the other is strengthening. And I think free capital markets were continuously adjusting as the capital flows to the place where you get the highest return. I think because Bitcoin is the technically superior asset, it's thermodynamically sound money, I think that more and more monetary energy or capital will flow into it. I think the price will continue. And certainly, there's no reason why it shouldn't replace gold as a nonsovereign store of wealth, and gold is a $10 trillion asset class. So we don't try to time the market. We don't think there's any particular point at which you would ever trade out of the market. Bitcoin is a better safe haven asset than gold. If, in the future, God comes down and invent something better than Bitcoin and more money and more people adopted that, and that becomes bigger and stronger and better, and we see that, well, we'll share that with our shareholders. And we may incorporate that into our treasury reserve strategy. But right now, Bitcoin seems to be a dynamically strongest asset and a technically superior asset. So we just intend to progressively acquire more Bitcoin. And we'll probably do it at prices that are going up. I think when we acquired Bitcoin at $11,800, then we did it at $10,000 when it dipped down, and we did it at $19,000, then we did at $21,000, then we did it at $31,000. We're not really attempting to time the market. We're strategic buyers, and we're looking out a decade or longer, which we think is the right way to think about this.

All right. Thank you, Michael. I'm going to give a question to Phong here. I think Michael has been working too hard. From the time a CFO or a CEO of a publicly traded company mentally commits to buying Bitcoin for their company, to the time it confirms on the blockchain and is on their balance sheet, what's the average time frame for the whole process?

Yes, it's a good question and something actually we'll be addressing in our Bitcoin for Corporations Summit next week. There's really no sort of straight answer or one-size-fits-all answer. It depends on how a publicly traded company might decide to invest in Bitcoin. If they decide to invest in a fund, it could be quite a bit faster. There are corporate governance issues and treasury issues that need to be worked through. If they decide to invest directly into Bitcoin on the exchange and through a custom solution, that could take longer as they identify the right platform, the right custodian or custodians, and the associated controls to it. So it literally can be done in a matter of weeks if somebody wanted to invest via a fund, and it could take months, as long as six or nine months depending on the corporate governance structure and how detailed the corporation wants to be in.

Thank you, Phong. Next question is, is MicroStrategy using a self-custody cold storage solution for the company Bitcoin holdings or are services of a third-party custodian being utilized?

We can't comment on that for security reasons, unfortunately, but thanks for asking.

All right. We've got another cryptocurrency question. Are you interested in acquiring other cryptocurrencies or diversifying beyond Bitcoin?

Is this for me or for Phong?

I'll let you take that one, Mike.

This is for you, Mike.

Yes. Our view is that Bitcoin is an institutional grade treasury reserve asset. It's 95% dominant as a proof of work crypto asset network. That makes it the crypto asset winner if the use case is money or long-term store of value, i.e., digital gold. So what we wanted with our treasury was, in essence, digital gold from the dominant monetary network in the world, the one that was most secure, the one that was most adopted by other institutional grade investors. And that would be Bitcoin. I think the other cryptos are investment theses. They are more like venture capital investments, and they have a different risk reward profile. And so we don't have a portion of our treasury allocated to venture capital, so it wouldn't be appropriate for us.

All right. Thank you, Michael. This one will be for Phong. When do you think your subscription revenue will become over 50% of total revenue? And would you agree that it's conservative to assume, based on the current product offering, your total revenue to grow, let's say, 7% to 9% CAGR during the next five years and generate over $500 million of free cash flow?

Yes. So a lot of interesting questions in there. First, on our split of revenue, subscription revenue versus support revenue, I think it's probably the way you think about it. We're, right now, we have about $280 million in support revenue and $35 million in subscription revenue, so maybe 10% of total subscription. We are looking to aggressively change that mix shift, right, and move customers who are currently on-prem perpetual maintenance paying customers to subscription customers. We think it's a higher quality customer, a better level of engagement, and it's something that the whole organization that is working hard on. That said, not every customer is ready to move to the cloud, and we're not going to force them to move to the cloud. So like in 2019 when we had a big program to upgrade all our customers to our latest version of MicroStrategy, this year and going forward, we'll have a program to move our customers to what we call our enterprise cloud. And then over time, we'll have them move to our SaaS cloud. We think it's an important core part to the business. What is that pacing? I think we'll know a lot better after this year at what pace we can move because we're not forcing our customers and we'll move as fast as can with respect to our customers. As far as our growth levels, we've talked about a long-term plan, call it three to five years, where we think we can achieve 10% revenue growth. We talked about that in our Analyst Day. Now does that translate to 7% to 9% CAGR over the next five years? I don't think we can get quite that specific yet. But we think that range is not unreasonable. And as a result of that, we think we can see some more incremental cash flow generated from the business so that we can reinvest it for corporate purposes or into Bitcoin.

Thank you, Phong. And next question is, how are you hedging the volatility in the price of Bitcoin in your financial statements? If Bitcoin is being accounted for as an indefinitely lived intangible asset with annual impairment tests, will there not be a lot of volatility in the financials year-over-year?

Yes. It's a good accounting question, but it's sort of the, I'll call it, book value of our Bitcoin versus what may be perceived as the market value of our Bitcoin. How we get to, based on the accounting of Bitcoin as an intangible asset, is every single quarter, we take each and every one of our wallets of Bitcoin and we look at the prevailing low price on our current exchange that we look at and we write-down or impair each of those wallets' stock price. And that's what's led to, I'll call it, sort of GAAP changes in our balance sheet that you saw in Q3 and Q4. And there is a - it creates a perceived disconnect between the book value and what one might interpret as the market value of our Bitcoin. What we've done is we provided non-GAAP financials that back out that impact in our financial statements and in our earnings report. And as a result, I think there's transparency into both means, the book value and a potential market value that someone can understand better. And I think the market understands that very well and it's very mature. So we don't really need to do any other, I'll call it, hedging of the volatility of our Bitcoin assets as a result.

And if I could piggyback, Jeremy, we don't hedge the Bitcoin. I don't think it would be a good idea to hedge the Bitcoin. I think that the volatility comes hand-in-hand with the appreciation and the value of the Bitcoin. So it's a mistake to pursue any particular hedging strategy. We would be losing the alpha or the theoretical return on the Bitcoin over time. Our financing time frame is five years. We have five year convertible note. So we certainly don't look at the volatility over the course of a day, a week, a month or even a year. And over five years, we don't really have any financing against the Bitcoin itself marked to the value of the Bitcoin. The financing is just against the business in general. So I would characterize us as being very patient, long-term holders a Bitcoin, not overly concerned with near-term or even midterm volatility for that matter.

All right. Thank you both for those answers. And I'd like to thank everyone for submitting questions and participating in the call. I'm going to turn it back over to Michael for some closing remarks.

Okay, Jeremy. I want to thank everybody that joined us today. For our shareholders on the call, thank you for your support. We look forward to speaking with you again in 12 weeks. And until then, all the best.