MicroStrategy(MSTR) - 2022 Q4 - Annual Report

Bitcoin Holdings and Impairments - As of December 31, 2022, the company held approximately 132,500 bitcoins with a carrying value of $1.840 billion, reflecting cumulative impairments of$ 2.153 billion[358] - For the year ended December 31, 2022, the company incurred impairment losses, net of gains on sale, of $1.286 billion on its bitcoin holdings[358] - The company's bitcoin acquisition strategy exposes it to various risks, including price fluctuations and regulatory changes[12] International Revenues and Currency Risks - International revenues accounted for 40.2%, 44.0%, and 41.9% of total revenues for the years ended December 31, 2022, 2021, and 2020, respectively[359] - A 10% adverse change in foreign currency exchange rates would have decreased the company's reported cash and cash equivalents by 4.5% as of December 31, 2022[362] - If average exchange rates had changed unfavorably by 10% during the year ended December 31, 2022, revenues would have decreased by 3.7%[362] Interest Expense and Loan Risks - The annual interest expense on the 2025 Secured Term Loan, based on a floating rate of 7.76%, would be approximately$ 16.1 million[363] - If the floating rate increased by 100 basis points, the annual interest expense on the 2025 Secured Term Loan would rise to approximately $18.2 million[363] Operational Risks - The shift from a product license model to a cloud subscription model may lead to higher future attrition rates and affect revenue recognition timing[16] - The company faces significant risks related to cybersecurity, which could adversely impact its operations and reputation[16]