MicroStrategy Inc. (MSTR, Financial) filed Quarterly Report for the period ended 2012-06-30.
Microstrategy Incorporated has a market cap of $1.26 billion; its shares were traded at around $122.41 with a P/E ratio of 92.2 and P/S ratio of 2.3.
Product licenses revenues decreased $1.5 million and increased $8.5 million for the three and six months ended June 30, 2012, respectively, as compared to the same periods in the prior year. For the three months ended June 30, 2012 and 2011, product licenses transactions with more than $0.5 million in recognized revenue represented 39.8% and 39.4%, respectively, of our product licenses revenues. For the six months ended June 30, 2012, our top three product licenses transactions totaled $9.1 million in recognized revenue, or 13.1% of total product licenses revenues, compared to $6.7 million, or 11.0% of total product licenses revenues, for the six months ended June 30, 2011.
Sales and marketing expenses decreased $9.1 million for the three months ended June 30, 2012, as compared to the same period in the prior year, primarily due to a $7.3 million decrease in compensation and related costs due to a decrease in staffing levels, a $1.1 million decrease in travel and entertainment expenditures, a $0.4 million decrease in facility and other related support costs, and a $0.2 million decrease in consulting and advisory costs. Sales and marketing headcount decreased 10.8% to 729 at June 30, 2012 from 817 at June 30, 2011. We do not expect to change sales and marketing headcount significantly in the near term.
Except as discussed below, we intend to indefinitely reinvest the accumulated undistributed earnings of certain foreign subsidiaries. Therefore, the annualized effective tax rate applied to our pre-tax income from operations for the period ended June 30, 2012 did not include any provision for U.S. federal and state taxes on the amount of the undistributed foreign earnings. U.S. federal tax laws, however, require us to include in our U.S. taxable income certain investment income earned outside of the U.S. in excess of certain limits (Subpart F deemed dividends). Because Subpart F deemed dividends are already required to be recognized in our U.S. federal income tax return, we regularly repatriate Subpart F deemed dividends to the U.S. and no additional tax is incurred on the distribution. As of June 30, 2012 and December 31, 2011, the amount of cash and cash equivalents held by U.S. entities was $31.7 million and $35.7 million, respectively, and by non-U.S. entities was $163.8 million and $163.9 million, respectively. If the cash and cash equivalents held by non-U.S. entities were to be repatriated to the U.S., we would generate U.S. taxable income to the extent of our undistributed foreign earnings, which amounted to $159.9 million at December 31, 2011. Although the tax impact of repatriating these earnings is difficult to determine, we would not expect the maximum effective tax rate that would be applicable to such repatriation to exceed the U.S. statutory rate of 35.0%, after considering applicable foreign tax credits.
As of June 30, 2012 and December 31, 2011, the amount of cash and cash equivalents held by U.S. entities were $31.7 million and $35.7 million, respectively, and by non-U.S. entities were $163.8 million and $163.9 million, respectively. We earn a significant amount of our revenues outside the U.S. and, except for Subpart F deemed dividends, we intend to indefinitely reinvest undistributed earnings of certain non-U.S. entities. We do not anticipate needing to repatriate the cash or cash equivalents held by non-U.S. entities to the U.S. to finance our U.S. operations. However, if we were to elect to repatriate these amounts, we would generate U.S. taxable income to the extent of our undistributed foreign earnings, which amounted to $159.9 million at December 31, 2011. Although the tax impact of repatriating these earnings is difficult to determine and our effective tax rate could increase as a result of any such repatriation, we would not expect the maximum effective tax rate that would be applicable to such repatriation to exceed the U.S. statutory rate of 35.0%, after considering applicable foreign tax credits.
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Microstrategy Incorporated has a market cap of $1.26 billion; its shares were traded at around $122.41 with a P/E ratio of 92.2 and P/S ratio of 2.3.
Highlight of Business Operations:
For example, if there had been no change to foreign currency exchange rates from 2011 to 2012, international product licenses revenues would have been $13.3 million rather than $12.2 million and $30.1 million rather than $28.6 million for the three and six months ended June 30, 2012, respectively. If there had been no change to foreign currency exchange rates from 2011 to 2012, sales and marketing expenses for our core BI business would have been $50.6 million rather than $48.7 million and $106.3 million rather than $103.8 million for the three and six months ended June 30, 2012, respectively.Product licenses revenues decreased $1.5 million and increased $8.5 million for the three and six months ended June 30, 2012, respectively, as compared to the same periods in the prior year. For the three months ended June 30, 2012 and 2011, product licenses transactions with more than $0.5 million in recognized revenue represented 39.8% and 39.4%, respectively, of our product licenses revenues. For the six months ended June 30, 2012, our top three product licenses transactions totaled $9.1 million in recognized revenue, or 13.1% of total product licenses revenues, compared to $6.7 million, or 11.0% of total product licenses revenues, for the six months ended June 30, 2011.
Sales and marketing expenses decreased $9.1 million for the three months ended June 30, 2012, as compared to the same period in the prior year, primarily due to a $7.3 million decrease in compensation and related costs due to a decrease in staffing levels, a $1.1 million decrease in travel and entertainment expenditures, a $0.4 million decrease in facility and other related support costs, and a $0.2 million decrease in consulting and advisory costs. Sales and marketing headcount decreased 10.8% to 729 at June 30, 2012 from 817 at June 30, 2011. We do not expect to change sales and marketing headcount significantly in the near term.
Except as discussed below, we intend to indefinitely reinvest the accumulated undistributed earnings of certain foreign subsidiaries. Therefore, the annualized effective tax rate applied to our pre-tax income from operations for the period ended June 30, 2012 did not include any provision for U.S. federal and state taxes on the amount of the undistributed foreign earnings. U.S. federal tax laws, however, require us to include in our U.S. taxable income certain investment income earned outside of the U.S. in excess of certain limits (Subpart F deemed dividends). Because Subpart F deemed dividends are already required to be recognized in our U.S. federal income tax return, we regularly repatriate Subpart F deemed dividends to the U.S. and no additional tax is incurred on the distribution. As of June 30, 2012 and December 31, 2011, the amount of cash and cash equivalents held by U.S. entities was $31.7 million and $35.7 million, respectively, and by non-U.S. entities was $163.8 million and $163.9 million, respectively. If the cash and cash equivalents held by non-U.S. entities were to be repatriated to the U.S., we would generate U.S. taxable income to the extent of our undistributed foreign earnings, which amounted to $159.9 million at December 31, 2011. Although the tax impact of repatriating these earnings is difficult to determine, we would not expect the maximum effective tax rate that would be applicable to such repatriation to exceed the U.S. statutory rate of 35.0%, after considering applicable foreign tax credits.
As of June 30, 2012 and December 31, 2011, the amount of cash and cash equivalents held by U.S. entities were $31.7 million and $35.7 million, respectively, and by non-U.S. entities were $163.8 million and $163.9 million, respectively. We earn a significant amount of our revenues outside the U.S. and, except for Subpart F deemed dividends, we intend to indefinitely reinvest undistributed earnings of certain non-U.S. entities. We do not anticipate needing to repatriate the cash or cash equivalents held by non-U.S. entities to the U.S. to finance our U.S. operations. However, if we were to elect to repatriate these amounts, we would generate U.S. taxable income to the extent of our undistributed foreign earnings, which amounted to $159.9 million at December 31, 2011. Although the tax impact of repatriating these earnings is difficult to determine and our effective tax rate could increase as a result of any such repatriation, we would not expect the maximum effective tax rate that would be applicable to such repatriation to exceed the U.S. statutory rate of 35.0%, after considering applicable foreign tax credits.
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