MicroStrategy Announces Fourth Quarter 2012 Financial Results

        MicroStrategy Announces Fourth Quarter 2012 Financial Results

Record $164.5 Million in Total Revenues

PR Newswire

TYSONS CORNER, Va., Jan. 28, 2013

TYSONS CORNER, Va., Jan. 28, 2013 /PRNewswire/ --MicroStrategy® Incorporated
(Nasdaq: MSTR), a leading worldwide provider of business intelligence (BI) and
mobile software, today announced financial results for the three-month period
ended December 31, 2012 (the fourth quarter of its 2012 fiscal year).

Fourth quarter 2012 revenues were $164.5 million versus $160.3 million for the
fourth quarter of 2011, a 3% increase. Product licenses revenues for the
fourth quarter of 2012 were $46.3 million versus $54.5 million for the fourth
quarter of 2011, a 15% decrease. Product support and other services revenues
for MicroStrategy's core BI business for the fourth quarter of 2012 were
$109.7 million versus $99.5 million for the fourth quarter of 2011, a 10%
increase.

Operating expenses for the fourth quarter of 2012 were $111.3 million versus
$113.7 million for the fourth quarter of 2011, a 2% decrease. The decrease in
operating expenses was due primarily to a reduction in sales and marketing
expense.

Net income for the fourth quarter of 2012 was $8.2 million, or $0.73 per share
on a diluted basis, compared to $9.0 million, or $0.81 per share on a diluted
basis, for the fourth quarter of 2011.

As of December 31, 2012, MicroStrategy had cash and cash equivalents of $224.4
million versus $199.6 million as of December 31, 2011, an increase of $24.8
million. As of December 31, 2012, MicroStrategy had 9,057,303 shares of class
A common stock and 2,227,327 shares of class B common stock outstanding.

Fourth Quarter Highlights in Big Data, Mobile Applications, and Cloud-based BI

In the fourth quarter of 2012, MicroStrategy continued to bolster its position
as a leading worldwide provider of business intelligence and mobile software.
The company continued to offer visionary thought leadership, superior service
to its customers, and disruptive new products.

MicroStrategy Announces the General Availability of Express, an Innovative New
Software-as-a-Service (SaaS) Offering

In October 2012, MicroStrategy announced the general availability of Express,
enabling any business person – regardless of technical skill – to access and
analyze data on their own, and deploy powerful data-driven mobile apps to
thousands of users within days. Express combines the simplicity and
flexibility of a cloud-based solution with the analytical depth, performance
and scalability of world-class business intelligence. Business people can
access on-premises and cloud-based data rapidly and securely, and explore it
using powerful and intuitive data visualizations. They can design and share
mobile apps without writing a line of code. They can build boardroom-quality
dashboards using pixel-perfect editing capabilities, and automatically publish
personalized documents to any number of recipients. To try the free service,
visit http://www.microstrategy.com/cloud/express/.

MicroStrategy Rated #1 by Dresner Advisory Study for Second Year in a Row for
Mobile Business Intelligence Offering

In November 2012, MicroStrategy announced that it has been rated the top
Mobile Business Intelligence offering out of 25 product offerings in the
widely followed 2012 Wisdom of Crowds® Mobile Business Intelligence Market
Study® from Dresner Advisory Services. This is the second year in a row
MicroStrategy Mobile received this number one ranking.

The MicroStrategy Mobile BI platform goes above and beyond standard business
intelligence to become a full mobile app development platform. The
MicroStrategy Mobile App Platform enables organizations to build a wide
variety of essential mobile apps that deliver workflows, transactions, mobile
operations systems access, multimedia, and business intelligence in compelling
custom native apps. The Dresner study rated MicroStrategy the top Mobile BI
offering, with the highest platform score and the highest customer user rating
for Mobile BI among all 25 vendors rated.

MicroStrategy Enhances Innovative Big Data Capabilities with Certified
Integration to Amazon Redshift Analytical Data Warehouse Service

In November 2012, MicroStrategy announced that it certified its integration
with the Amazon Redshift data warehouse service. Launched by Amazon Web
Services (AWS), Amazon Redshift is a cloud-based analytical data warehouse
service designed to deliver high performance analytics for data warehouse and
Big Data applications.

MicroStrategy Releases Survey Results on the Use of Tablet Computers to
Support Sales Activities

In December 2012, MicroStrategy announced the results of a survey of over 500
U.S. organizations on the use of tablet computers to support sales activities
across many industries. Results of the online survey revealed that:

  oNearly one in two salespeople cite limited mobile access to key sales
    systems – i.e. Customer Relationship Management (CRM), Content Management,
    Order Management – as a challenge.
  oC-level executives point to their respective salesforces' lack of
    understanding of customer needs as a major barrier to selling (75%), along
    with failure to keep product knowledge current (50%).
  oThe top five desired activities to perform on a mobile device include:
    create or update opportunities, view sales collateral, view CRM records,
    view sales analytics, and collaborate and share ideas with other sales
    team members.
  oMost sales organizations (72%) grade themselves at a B-level or below on
    sales meeting quality. To see additional survey result detail, visit
    http://www.microstrategy.com/download/files/mobile/MSESurveyResults.pdf.

Examples of Customer Deals from Q4 2012

Kinross Gold Corporation

Kinross Gold Corporation (NYSE: KGC) is a Canadian-based gold mining company
with mines and projects in Brazil, Canada, Chile, Ecuador, Ghana, Mauritania,
Russia and the United States, employing approximately 8,000 people worldwide.
Kinross is expanding its use of the MicroStrategy Business Intelligence,
Mobile and Analytics platforms to support initiatives around continuous
improvement, cost management and mining productivity. Kinross selected
MicroStrategy for its integrated architecture platform, ease-of-use, and
visualization and reporting capabilities.

Nielsen Holdings N.V.

Nielsen Holdings N.V. (NYSE: NLSN) is a global information and measurement
company with leading market positions in marketing and consumer information,
television and other media measurement, online intelligence, mobile
measurement, trade shows and related properties. Nielsen selected
MicroStrategy as its enterprise BI and Mobile software solution to provide its
manufacturing, retailer and media clients with the ability to report and
analyze market information for their respective products and services.

About MicroStrategy Incorporated

Founded in 1989, MicroStrategy (Nasdaq: MSTR) is a leading worldwide provider
of enterprise software, including the MicroStrategy Business Intelligence (BI)
Platform™, the MicroStrategy Mobile Platform™, and MicroStrategy
Applications™. The Company offers its technologies for deployment in customer
data centers and as proprietary cloud services. The MicroStrategy BI Platform
enables leading organizations to analyze vast amounts of data and distribute
business insight throughout the enterprise. The MicroStrategy Mobile Platform
lets organizations rapidly build enterprise-caliber mobile applications needed
to mobilize business processes and information. MicroStrategy Applications
are a set of application services designed to help enterprises deploy mobile
commerce and loyalty services, build mobile identity and cyber security
services, as well as generate real-time insights into consumer preferences.
MicroStrategy Cloud™ allows enterprises to deploy MicroStrategy BI apps and
mobile apps more quickly and with lower financial risk than with traditional
on-premises solutions. To learn more about MicroStrategy, visit
www.microstrategy.com and follow us on Facebook
(http://www.facebook.com/microstrategy) and Twitter
(http://www.twitter.com/microstrategy).

MicroStrategy, MicroStrategy Business Intelligence Platform, MicroStrategy
Mobile Platform, MicroStrategy Applications, MicroStrategy Express, and
MicroStrategy Cloud are either trademarks or registered trademarks of
MicroStrategy Incorporated in the United States and certain other countries.
Other product and company names mentioned herein may be the trademarks of
their respective owners.

This press release may include statements that may constitute "forward-looking
statements," including estimates of future business prospects or financial
results and statements containing the words "believe," "estimate," "project,"
"expect," or similar expressions. Forward-looking statements inherently
involve risks and uncertainties that could cause actual results of
MicroStrategy Incorporated and its subsidiaries (collectively, the "Company")
to differ materially from the forward-looking statements. Factors that could
contribute to such differences include: the extent and timing of market
acceptance of MicroStrategy's new offerings, including MicroStrategy 9.3,
MicroStrategy Express, MicroStrategy Wisdom, MicroStrategy Alert and
MicroStrategy Usher; the Company's ability to recognize revenue or deferred
revenue through delivery of products or satisfactory performance of services;
continued acceptance of the Company's other products in the marketplace; the
timing of significant orders; delays in the Company's ability to develop or
ship new products; competitive factors; general economic conditions, including
significant downturns in industries, including the financial services and
retail industries, in which we have a significant number of customers;
currency fluctuations; and other risks detailed in the Company's registration
statements and periodic reports filed with the Securities and Exchange
Commission. By making these forward-looking statements, the Company
undertakes no obligation to update these statements for revisions or changes
after the date of this release.

MICROSTRATEGY INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
                        Three Months Ended            Twelve Months Ended
                        December 31,                  December 31,
                        2012           2011           2012           2011*
                        (unaudited)    (unaudited)    (unaudited)
Revenues
Product licenses        $          $          $           $   
                        46,265        54,502        147,344       154,574
Product support and     118,188        105,764        447,262        407,576
other services
 Total revenues        164,453        160,266        594,606        562,150
Cost of revenues
Product licenses        1,632          2,260          5,819          8,774
Product support and     38,050         35,392         146,973        133,246
other services
 Total cost of         39,682         37,652         152,792        142,020
revenues
Gross profit            124,771        122,614        441,814        420,130
Operating expenses
Sales and marketing     59,230         69,125         219,845        243,029
Research and            26,708         22,312         94,565         72,618
development
General and             25,340         22,223         97,251         89,441
administrative
 Total operating       111,278        113,660        411,661        405,088
expenses
Income from operations
before
financing and other
income and income       13,493         8,954          30,153         15,042
taxes
Financing and other
(expense) income
Interest income, net    50             60             141            199
Gain on sale of         -              -              -              3,371
investment
Other (expense)         (1,801)        666            (1,063)        688
income, net
 Total financing and   (1,751)        726            (922)          4,258
other (expense) income
Income from operations  11,742         9,680          29,231         19,300
before income taxes
 Provision for income  3,502          680            8,685          1,360
taxes
Net income              $         $         $           $   
                        8,240          9,000          20,546        17,940
Basic earnings per      $        $        $        $    
share (1):              0.73           0.84           1.87             1.67
Weighted average
shares outstanding
used in computing       11,245         10,767         10,995         10,719
basic earnings per
share
Diluted earnings per    $        $        $        $    
share (1):              0.73           0.81           1.84             1.62
Weighted average
shares outstanding
used in computing       11,281         11,078         11,174         11,066
diluted earnings per
share
(1) Basic and fully
diluted earnings per
share for class A and
class B common stock
are the same.
*Derived from audited
financial statements.



MICROSTRATEGY INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
                Core BI Business          Angel.com                 Consolidated
                Three Months Ended        Three Months Ended        Three Months Ended
                December 31,              December 31,              December 31,
                2012         2011         2012         2011         2012         2011
                (unaudited)  (unaudited)  (unaudited)  (unaudited)  (unaudited)  (unaudited)
Revenues
Product         $       $       $       $       $       $     
licenses         46,265      54,502         -        -     46,265      54,502
Product
support and     109,721      99,467       -            -            109,721      99,467
other services
Angel.com       -            -            8,467        6,297        8,467        6,297
services
 Total         155,986      153,969      8,467        6,297        164,453      160,266
revenues
Cost of
revenues
Product         1,632        2,260        -            -            1,632        2,260
licenses
Product
support and     34,807       32,539       -            -            34,807       32,539
other services
Angel.com       -            -            3,243        2,853        3,243        2,853
services
 Total cost    36,439       34,799       3,243        2,853        39,682       37,652
of revenues
Gross profit    119,547      119,170      5,224        3,444        124,771      122,614
Operating
expenses
Sales and       56,590       66,628       2,640        2,497        59,230       69,125
marketing
Research and    25,079       20,946       1,629        1,366        26,708       22,312
development
General and     24,192       21,288       1,148        935          25,340       22,223
administrative
 Total
operating       105,861      108,862      5,417        4,798        111,278      113,660
expenses
Income (loss)
from
operations
before
financing and
other income    13,686       10,308       (193)        (1,354)      13,493       8,954
and income
taxes
Financing and
other
(expense)
income
Interest        50           60           -            -            50           60
income, net
Gain on sale    -            -            -            -            -            -
of investment
Other
(expense)       (1,799)      709          (2)          (43)         (1,801)      666
income, net
 Total
financing and
other           (1,749)      769          (2)          (43)         (1,751)      726
(expense)
income
Income (loss)
from            $       $       $       $        $       $     
operations      11,937       11,077        (195)      (1,397)     11,742        9,680
before income
taxes
 Provision
for income                                                          3,502        680
taxes
Net income                                                          $       $     
                                                                     8,240       9,000
Basic earnings                                                      $       $     
per share                                                             0.73       0.84
Weighted average shares
outstanding used in                                                 11,245       10,767
computing basic earnings
per share
Diluted                                                             $       $     
earnings per                                                          0.73       0.81
share
Weighted average shares
outstanding used in                                                 11,281       11,078
computing diluted earnings
per share



MICROSTRATEGY INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
                Core BI Business          Angel.com                 Consolidated
                Twelve Months Ended       Twelve Months Ended       Twelve Months Ended
                December 31,              December 31,              December 31,
                2012         2011         2012         2011         2012         2011
                (unaudited)  (unaudited)  (unaudited)  (unaudited)  (unaudited)  (unaudited)
Revenues
Product         $       $       $       $       $       $     
licenses        147,344      154,574          -        -    147,344      154,574
Product
support and     418,380      382,594      -            -            418,380      382,594
other services
Angel.com       -            -            28,882       24,982       28,882       24,982
services
 Total         565,724      537,168      28,882       24,982       594,606      562,150
revenues
Cost of
revenues
Product         5,819        8,774        -            -            5,819        8,774
licenses
Product
support and     135,257      121,924      -            -            135,257      121,924
other services
Angel.com       -            -            11,716       11,322       11,716       11,322
services
 Total cost    141,076      130,698      11,716       11,322       152,792      142,020
of revenues
Gross profit    424,648      406,470      17,166       13,660       441,814      420,130
Operating
expenses
Sales and       209,975      231,504      9,870        11,525       219,845      243,029
marketing
Research and    88,190       67,863       6,375        4,755        94,565       72,618
development
General and     93,384       86,237       3,867        3,204        97,251       89,441
administrative
 Total
operating       391,549      385,604      20,112       19,484       411,661      405,088
expenses
Income (loss)
from
operations
before
financing and
other income    33,099       20,866       (2,946)      (5,824)      30,153       15,042
and income
taxes
Financing and
other
(expense)
income
Interest
income          143          199          (2)          -            141          199
(expense), net
Gain on sale    -            3,371        -            -            -            3,371
of investment
Other
(expense)       (1,035)      764          (28)         (76)         (1,063)      688
income, net
 Total
financing and
other           (892)        4,334        (30)         (76)         (922)        4,258
(expense)
income
Income (loss)
from            $       $       $        $        $       $     
operations      32,207       25,200       (2,976)     (5,900)     29,231       19,300
before income
taxes
 Provision
for income                                                          8,685        1,360
taxes
Net income                                                          $       $     
                                                                    20,546       17,940
Basic earnings                                                      $       $     
per share                                                             1.87       1.67
Weighted average shares
outstanding used in                                                 10,995       10,719
computing basic earnings
per share
Diluted                                                             $       $     
earnings per                                                          1.84       1.62
share
Weighted average shares
outstanding used in                                                 11,174       11,066
computing diluted earnings
per share



MICROSTRATEGY INCORPORATED
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share data)
                                        December 31,        December 31,
                                        2012                2011*
Assets                                  (unaudited)
Current assets
 Cash and cash equivalents             $     224,393   $     199,634
 Restricted cash and short-term        86                  289
investments
 Accounts receivable, net              93,758              94,723
 Prepaid expenses and other current    13,288              17,043
assets
 Deferred tax assets, net              26,616              31,516
Total current assets                    358,141             343,205
Property and equipment, net             100,514             95,311
Capitalized software development costs, 10,360              7,031
net
Deposits and other assets               5,259               5,306
Deferred tax assets, net                3,664               2,998
Total Assets                            $    477,938     $    453,851
Liabilities and Stockholders' Equity
Current liabilities
 Accounts payable and accrued expenses $      42,492  $      46,401
 Accrued compensation and employee     74,153              68,308
benefits
 Deferred revenue and advance payments 101,888             103,199
 Deferred tax liabilities              523                 485
Total current liabilities               219,056             218,393
Deferred revenue and advance payments   8,823               10,841
Other long-term liabilities             43,517              45,141
Deferred tax liabilities                6,231               10,498
Total Liabilities                       277,627             284,873
Stockholders' Equity
 Preferred stock undesignated, $0.001
par value; 5,000 shares authorized;
 no shares issued or               -                   -
outstanding
 Class A common stock, $0.001 par
value; 330,000 shares authorized;
 15,462 shares issued and 9,057
shares outstanding, and 14,810 shares
 issued and 8,405 shares            15                  15
outstanding, respectively
 Class B common stock, $0.001 par
value; 165,000 shares authorized;
 2,227 and 2,378 shares issued and  2                   2
outstanding, respectively
 Additional paid-in capital            468,087             457,837
 Treasury stock, at cost; 6,405 shares (475,184)           (475,184)
 Accumulated other comprehensive loss  (1,515)             (2,052)
 Retained earnings                     208,906             188,360
Total Stockholders' Equity              200,311             168,978
Total Liabilities and Stockholders'     $    477,938     $    453,851
Equity
*Derived from audited financial
statements.



MICROSTRATEGY INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
                                                  Twelve Months Ended
                                                  December 31,
                                                  2012           2011*
                                                  (unaudited)
Operating activities:
 Net income                                       $   20,546  $   17,940
 Adjustments to reconcile net income to net cash
 provided by operating activities:
     Depreciation and amortization                24,519         18,526
     Bad debt expense                             4,977          1,485
     Deferred taxes                               (79)           (5,403)
     Gain on sale of investment                   -              (3,371)
 Changes in operating assets and liabilities:
     Accounts receivable                          (3,438)        (15,141)
     Prepaid expenses and other current assets    1,002          7,115
     Deposits and other assets                    94             85
     Accounts payable and accrued expenses        3,154          4,775
     Accrued compensation and employee benefits   5,431          9,061
     Deferred revenue and advance payments        (3,861)        18,498
     Other long-term liabilities                  (2,461)        7,244
               Net cash provided by operating     49,884         60,814
               activities
Investing activities:
 Proceeds from sale of investment                 -              3,371
 Purchases of property and equipment              (31,116)       (40,660)
 Capitalized software development costs           (8,148)        (5,907)
 Insurance proceeds                               3,206          7,065
 Decrease (increase) in restricted cash and       225            (51)
 investments
               Net cash used in investing         (35,833)       (36,182)
               activities
Financing activities:
 Proceeds from sale of class A common stock       10,250         2,463
 under exercise of employee stock options
 Payments on capital lease obligations            (491)          -
               Net cash provided by financing     9,759          2,463
               activities
Effect of foreign exchange rate changes on cash   949            (1,558)
and cash equivalents
Net increase in cash and cash equivalents         24,759         25,537
Cash and cash equivalents, beginning of period    199,634        174,097
Cash and cash equivalents, end of period          $  224,393   $  199,634
*Derived from audited financial statements.



MSTR-F

Contact:
MicroStrategy Incorporated
Investor Relations
ir@microstrategy.com
(703) 848-8600

SOURCE MicroStrategy Incorporated

Website: http://www.microstrategy.com