Diluted Earnings Per Share of $0.81 MCLEAN, Va., July 30 /PRNewswire-FirstCall/ -- MicroStrategy Incorporated (NASDAQ:MSTR), a leading worldwide provider of business intelligence software, today announced financial results for the three-month period ended June 30, 2009 (the second quarter of its 2009 fiscal year). Second quarter 2009 revenues were $87.8 million versus $88.9 million for the second quarter of 2008. Product licenses revenues for the second quarter of 2009 were $20.5 million versus $21.1 million for the second quarter of 2008. Product support and other services revenues for MicroStrategy's core business intelligence (BI) business in the second quarter of 2009 were $64.1 million versus $65.1 million for the second quarter of 2008. Operating expenses for the second quarter of 2009 were $55.3 million versus $57.7 million for the second quarter of 2008. Income from continuing operations before financing and other income and income taxes for the second quarter of 2009 was $16.5 million, or 19% of revenue, versus $15.1 million, or 17% of revenue, for the second quarter of 2008. Net income for the second quarter of 2009 was $10.0 million, or $0.81 per share on a diluted basis, compared to $8.1 million, or $0.66 per share on a diluted basis, for the second quarter of 2008. For the second quarter of 2009, MicroStrategy's effective tax rate on income from continuing operations was 34% compared to 49% for the second quarter of 2008. The higher effective tax rate in 2008 was primarily the result of an adjustment that was made to the Company's deferred tax asset for state net operating losses and, to a lesser extent, net losses in certain foreign subsidiaries for which the Company was not able to recognize a tax benefit for financial reporting purposes in the second quarter of 2008. As of June 30, 2009, MicroStrategy had cash and cash equivalents of approximately $176.2 million versus $122.9 million as of December 31, 2008, an increase of $53.3 million. As of June 30, 2009, MicroStrategy had 9,128,789 shares of class A common stock and 2,770,244 shares of class B common stock outstanding. New Customers and New Deals with Existing Customers in Q2 2009 Included: Bayer HealthCare Pharmaceuticals; Bell Canada; Burlington Coat Factory; Cingular Wireless; Citigroup Fund Services Canada, Inc.; Cryptologic, Inc.; CSC Holdings; Danier Leather Inc.; Doctor's Associates, Inc.; Emory Healthcare, Inc.; Family Dollar, Inc.; Fannie Mae; Freddie Mac; Genworth Financial Mortgage Insurance Company Canada; Heartland Payment Systems; Herbalife International of America, Inc.; Interstate Batteries; Jabil Circuit Inc.; La Capitale Assurances Generales; LinkedIn Corporation; McDonald's Corporation; Mercury Insurance Company; Meredith Corporation; National Institutes of Health (NIH); Netflix; Nu Skin Enterprises, Inc.; Paramount Pictures Corporation; Petco Animal Supplies, Inc.; Ross Stores, Inc.; Saint Elizabeth Health Care; Silverton Casino, LLC; Sony Media Software and Services; The Sherwin-Williams Company; Time Warner Cable; Toys R Us, Inc.; Tuesday Morning Inc.; University of Miami; U.S. Department of Defense; U.S. House of Representatives; U.S. Department of Education; U.S. Department of Energy; Wilbur-Ellis Company; Wyeth Consumer Healthcare (f/k/a Whitehall-Robins) Examples of Customer Deals from Q2 2009: Burlington Coat Factory Warehouse Corporation Burlington Coat Factory Warehouse Corporation, a nationally recognized retailer with 433 stores in 44 states, has expanded its base of MicroStrategy licenses utilized for merchandising reporting and analytics. Burlington Coat Factory uses MicroStrategy for reporting and analysis on merchandising metrics. MicroStrategy teamed with QuantiSense to provide dashboards and reporting for Burlington Coat Factory with an end-to-end solution for their merchandising business intelligence requirements. Heartland Payment Systems Heartland Payment Systems is the nation's fifth largest payments processor, providing card processing, payroll, check management, and other payments solutions. A new MicroStrategy customer, Heartland selected MicroStrategy to enhance reporting and analysis capabilities for its merchants, giving them greater insights into their businesses. After conducting an extensive evaluation of BI products, MicroStrategy was selected because of its integrated platform, scalability for large volumes of data, and easy-to-use reporting capabilities for Heartland's diverse user population. Saint Elizabeth Health Care Saint Elizabeth Health Care (SEHC) recently deployed MicroStrategy to provide employees with the information they need and the tools required to use information to make better decisions. With additional software licenses, SEHC will rely on MicroStrategy's Dynamic Enterprise Dashboards and reporting capabilities to monitor key performance indicators tied to the organization's corporate strategies. MicroStrategy's dashboards and reports will provide vital insights that can help SEHC to enhance decision making and operational performance. SEHC is a Canadian not-for-profit charitable organization with a team of approximately 4,000 health professionals that deliver 3.8 million home care visits annually. The University of Miami The University of Miami recently expanded its use of MicroStrategy to gain greater insight into its academic environment and student population. End users across the various schools and colleges are able to access 12 BI applications, and rely on intuitive reports to examine current student reporting, fundraising, equality administration, financial aid, human resources, purchasing, student admissions, and student employment information. MicroStrategy provides reports relating to the current student body and application pool to help University of Miami users make important decisions on admissions acceptances and enrollment questions. MicroStrategy Reporting Suite Announced: In the second quarter of 2009, MicroStrategy announced a free reporting software package for departmental BI applications. MicroStrategy Reporting Suite enables companies to use MicroStrategy's integrated BI platform to develop and deploy premium, Web-based reporting applications, at no cost. MicroStrategy has eliminated cost and time impediments for departments and workgroups to initiate new reporting applications. Business users can simply visit the MicroStrategy Reporting Suite Web site, http://www.microstrategy.com/freereportingsoftware, download the free software, and begin building their reporting applications, all in the same day. MicroStrategy's easy-to-use reporting software enables business users to quickly create the reports they need to gain critical insights into business data and make timely, analytically-based decisions. Users can view data in detailed tabular grid reports, graph data to analyze information quickly, drill-down to investigate root causes, make ad hoc queries, manage business performance with arithmetic and statistical metrics, and export data to Excel and PDF. When reporting requirements expand, companies can purchase licenses for more advanced report presentation, more interactivity, and additional BI users. MicroStrategy Reporting Suite gives companies an easy entry point for initiating small, departmental reporting applications, along with a seamless path to build and expand BI deployments without creating independent silos of BI. Some departmental reporting tools create individual islands of BI that cannot be integrated into the larger BI system, resulting in inconsistent data and undermining the system's credibility. With MicroStrategy, organizations can efficiently merge departmental applications into a cohesive BI environment to ensure data consistency across the enterprise. The MicroStrategy Reporting Suite includes the following: -- Up to 100 named user licenses of the MicroStrategy Reporting Suite: MicroStrategy Intelligence Server and MicroStrategy Web Reporter - with a 1 CPU limit -- Two named user licenses of development software: MicroStrategy Desktop and MicroStrategy Architect -- Two named user licenses of many of MicroStrategy's most popular products and services: MicroStrategy Web Analyst and Professional, MicroStrategy Mobile, MicroStrategy Office, MicroStrategy Report Services, MicroStrategy Distribution Services, and MicroStrategy OLAP Services -- Free online support, which includes access to MicroStrategy's extensive online searchable knowledge repository, online community forum, video guides, and online education -- Free e-mail support for 60 days for two named support liaisons to interact one-on-one with MicroStrategy Technical Support representatives via e-mail -- A Quick Start Guide and access to product documentation To learn more, visit http://www.microstrategy.com/freereportingsoftware. MicroStrategy Announces Availability of BI Reports and Dashboards on the Amazon Kindle DX: MicroStrategy-based grid reports, graph reports, operational reports, scorecards, and dashboards can be stored and viewed on the Kindle DX in PDF format for enhanced productivity while out of the office. The Kindle DX's large screen enables users to review and analyze detailed business data, ranging from a complex financial performance dashboard to a 100-page operational report. Users can also easily share reports and dashboards with others during business meetings. By storing business intelligence reports on the Kindle DX, users no longer need to print out and carry stacks of reports with them when they travel. The large memory capacity of the Kindle DX, with more than 3GB of usable storage, enables users to store tens of thousands of BI reports and dashboards. Users simply archive the reports after viewing them and retrieve the reports when needed. MicroStrategy reports can be sent via e-mail to the Kindle DX, enabling users to monitor business performance while away from the office. With MicroStrategy, Kindle DX users can receive reports on a scheduled basis, and set up e-mail alerts triggered by important business indicators that inform them of time-sensitive issues. Users can also download business reports and documents directly to the Kindle DX at their convenience. First BI Platform Vendor to Support the New Data Mining Standard, PMML 4.0: MicroStrategy has enhanced its predictive analytics capabilities with support for the newest version of the data mining industry's leading standard, PMML 4.0. The Predictive Model Markup Language (PMML) standard is developed by Data Mining Group (DMG), an independent consortium of over two dozen leading technology companies, including MicroStrategy. The PMML standard describes how predictive models work and it makes the models easy to share across the organization for improved decision-making. Data mining is an organic part of the MicroStrategy architecture that enables users to discover hidden patterns and predictive information in the data through standard enterprise reports and dashboards. While BI provides deep insight into historical data, data mining uses this information to help companies forecast future events. With MicroStrategy, users can easily deploy complex data mining models and include the results of these models in a variety of BI applications, such as call center analyses, customer relationship management, and financial budgeting and forecasting. An active member of DMG since 2004, MicroStrategy has provided guidance and leadership in developing the PMML standard and continues to maintain its support for open platform standards, cross-vendor interoperability, and high data integrity. Along with existing data mining models, MicroStrategy 9 includes new capabilities, such as the Time Series model, which is used to forecast results along a given timeline, and the Association Rules model, which is helpful for discovering relationships in databases and recommending products that customers are most likely to purchase. MicroStrategy Hosts Informational Events in India: During July 2009, MicroStrategy is hosting a series of informational events in seven cities in India. The events will provide an overview of MicroStrategy's latest software release, MicroStrategy 9, and how it can help companies improve decision-making, increase productivity, streamline operations, and enhance business performance. Nine dinner events will be held between July 14, 2009 and July 31, 2009. About MicroStrategy Incorporated Founded in 1989, MicroStrategy is a global leader in business intelligence (BI) technology. MicroStrategy provides integrated reporting, analysis, and monitoring software that helps leading organizations worldwide make better business decisions every day. Companies choose MicroStrategy for its advanced technical capabilities, sophisticated analytics, and superior data and user scalability. More information about MicroStrategy (NASDAQ:MSTR) is available at http://www.microstrategy.com/. MicroStrategy, MicroStrategy 9, MicroStrategy Report Services, MicroStrategy Dynamic Enterprise Dashboards, MicroStrategy Reporting Suite, MicroStrategy Intelligence Server, MicroStrategy Business Intelligence Platform, MicroStrategy Architect, MicroStrategy Web, MicroStrategy OLAP Provider, MicroStrategy Office, MicroStrategy Mobile, and MicroStrategy Distribution Services 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 ability of the Company to implement and achieve widespread customer acceptance of its MicroStrategy 9 software on a timely basis; the Company's ability to recognize deferred revenue through delivery of products or satisfactory performance of services; continued acceptance of the Company's products in the marketplace; the timing of significant orders; delays in the Company's ability to develop or ship new products; market acceptance of 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. Contact: MicroStrategy Incorporated Investor Relations (703) 848-8600 MICROSTRATEGY INCORPORATED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) Three Months Ended Six Months Ended June 30, June 30, -------- -------- 2009 2008 2009 2008 ---- ---- ---- ---- (unaudited) (unaudited) (unaudited) (unaudited) Revenues Product licenses $20,483 $21,052 $37,454 $43,179 Product support and other services 67,276 67,804 130,546 131,581 ------ ------ ------- ------- Total revenues 87,759 88,856 168,000 174,760 ------ ------ ------- ------- Cost of Revenues Product licenses 1,980 461 2,576 1,020 Product support and other services 13,957 15,648 28,022 29,594 ------ ------ ------ ------ Total cost of revenues 15,937 16,109 30,598 30,614 ------ ------ ------ ------ Gross profit 71,822 72,747 137,402 144,146 ------ ------ ------- ------- Operating Expenses Sales and marketing 31,357 34,484 61,887 64,172 Research and development 11,168 8,203 19,007 18,527 General and administrative 12,800 15,001 27,144 32,311 ------ ------ ------ ------ Total operating expenses 55,325 57,688 108,038 115,010 ------ ------ ------- ------- Income from continuing operations before financing and other income and income taxes 16,497 15,059 29,364 29,136 ------ ------ ------ ------ Financing and Other (Expense) Income Interest income, net 251 660 395 1,458 Other expense, net (1,740) (102) (1,204) (963) ------ ---- ------ ---- Total financing and other (expense) income (1,489) 558 (809) 495 ------ --- ---- --- Income from continuing operations before income taxes 15,008 15,617 28,555 29,631 Provision for income taxes 5,056 7,719 9,943 12,772 ----- ----- ----- ------ Income from continuing operations 9,952 7,898 18,612 16,859 Discontinued operations: Gain from sale of discontinued operations, net of tax provision ($69 and $11,190, respectively) 15 - 14,437 - Income (loss) from discontinued operations, net of tax provision (benefit) ($0 and $197, for the three months ended, respectively, and ($54) and $123 for the six months ended, respectively) - 228 (107) (435) --- --- ---- ---- Discontinued operations, net of tax 15 228 14,330 (435) -- --- ------ ---- ------ ------ ------- ------- Net Income $9,967 $8,126 $32,942 $16,424 ------ ------ ------- ------- Basic earnings (loss) per share (1): From continuing operations $0.84 $0.66 $1.57 $1.42 From discontinued operations $- $0.02 $1.20 $(0.04) -- ----- ----- ------ Basic earnings per share $0.84 $0.68 $2.77 $1.38 ----- ----- ----- ----- Weighted average shares outstanding used in computing basic earnings per share 11,895 11,870 11,893 11,897 ------ ------ ------ ------ Diluted earnings (loss) per share (1): From continuing operations $0.81 $0.64 $1.52 $1.36 From discontinued operations $- $0.02 $1.17 $(0.03) -- ----- ----- ------ Diluted earnings per share $0.81 $0.66 $2.69 $1.33 ----- ----- ----- ----- Weighted average shares outstanding used in computing diluted earnings per share 12,256 12,324 12,237 12,351 ------ ------ ------ ------ (1) Basic and fully diluted earnings per share for class A and class B common stock are the same MICROSTRATEGY INCORPORATED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (unaudited) Core BI Business Angel.com Consolidated ---------------- --------- ------------ Three Months Three Months Three Months Ended Ended Ended June 30, June 30, June 30, -------- -------- -------- 2009 2008 2009 2008 2009 2008 ---- ---- ---- ---- ---- ---- Revenues Product licenses $20,483 $21,052 $- $- $20,483 $21,052 Product support and other services 64,118 65,064 - - 64,118 65,064 Angel.com telephony services - - 3,158 2,740 3,158 2,740 --- --- ----- ----- ----- ----- Total revenues 84,601 86,116 3,158 2,740 87,759 88,856 ------ ------ ----- ----- ------ ------ Cost of Revenues Product licenses 1,980 461 - - 1,980 461 Product support and other services 12,705 15,208 - - 12,705 15,208 Angel.com telephony services - - 1,252 440 1,252 440 --- --- ----- --- ----- --- Total cost of revenues 14,685 15,669 1,252 440 15,937 16,109 ------ ------ ----- --- ------ ------ Gross profit 69,916 70,447 1,906 2,300 71,822 72,747 ------ ------ ----- ----- ------ ------ Operating Expenses Sales and marketing 30,289 32,063 1,068 2,421 31,357 34,484 Research and development 10,312 7,259 856 944 11,168 8,203 General and administrative 12,353 14,911 447 90(a) 12,800 15,001 ------ ------ --- -- ------ ------ Total operating expenses 52,954 54,233 2,371 3,455 55,325 57,688 ------ ------ ----- ----- ------ ------ Income (loss) from continuing operations before financing and other income and income taxes 16,962 16,214 (465) (1,155) 16,497 15,059 ------ ------ ---- ------ ------ ------ Financing and Other (Expense) Income Interest income, net 251 660 - - 251 660 Other expense, net (1,740) (102) - - (1,740) (102) ------ ---- --- --- ------ ---- Total financing and other (expense) income (1,489) 558 - - (1,489) 558 ------ --- --- --- ------ --- Income (loss) from continuing operations before income taxes $15,473 $16,772 $(465) $(1,155) $15,008 $15,617 Provision for income taxes 5,056 7,719 ----- ----- Income from continuing operations 9,952 7,898 Discontinued operations: Gain from sale of discontinued operations, net of tax 15 - Income from discontinued operations, net of tax - 228 --- --- Discontinued operations, net of tax 15 228 ------ ------ Net income $9,967 $8,126 ====== ====== Basic earnings per share: From continuing operations $0.84 $0.66 From discontinued operations $- $0.02 -- ----- Basic earnings per share $0.84 $0.68 ----- ----- Diluted earnings per share: From continuing operations $0.81 $0.64 From discontinued operations $- $0.02 -- ----- Diluted earnings per share $0.81 $0.66 ----- ----- Basic weighted average shares outstanding 11,895 11,870 ====== ====== Diluted weighted average shares outstanding 12,256 12,324 ====== ====== (a) An insignificant amount of general and administrative services is provided to the Angel.com business unit by MicroStrategy's core business operations. MICROSTRATEGY INCORPORATED CONSOLIDATED STATEMENTS OF OPERATIONS (in thousands, except per share data) (unaudited) Core BI Business Angel.com Consolidated ---------------- --------- ------------ Six Months Six Months Six Months Ended Ended Ended June 30, June 30, June 30, -------- -------- -------- 2009 2008 2009 2008 2009 2008 ---- ---- ---- ---- ---- ---- Revenues Product licenses $37,454 $43,179 $- $- $37,454 $43,179 Product support and other services 124,730 126,476 - - 124,730 126,476 Angel.com telephony services - - 5,816 5,105 5,816 5,105 --- --- ----- ----- ----- ----- Total revenues 162,184 169,655 5,816 5,105 168,000 174,760 ------- ------- ----- ----- ------- ------- Cost of Revenues Product licenses 2,576 1,020 - - 2,576 1,020 Product support and services revenues 25,732 28,694 - - 25,732 28,694 Angel.com telephony services - - 2,290 900 2,290 900 --- --- ----- --- ----- --- Total cost of revenues 28,308 29,714 2,290 900 30,598 30,614 ------ ------ ----- --- ------ ------ Gross profit 133,876 139,941 3,526 4,205 137,402 144,146 ------- ------- ----- ----- ------- ------- Operating Expenses Sales and marketing 59,648 60,195 2,239 3,977 61,887 64,172 Research and development 17,139 16,995 1,868 1,532 19,007 18,527 General and administrative 26,260 32,161 884 150(a) 27,144 32,311 ------ ------ --- ---- ------ ------ Total operating expenses 103,047 109,351 4,991 5,659 108,038 115,010 ------- ------- ----- ----- ------- ------- Income (loss) from continuing operations before financing and other income and income taxes 30,829 30,590 (1,465) (1,454) 29,364 29,136 ------ ------ ------ ------ ------ ------ Financing and Other (Expense) Income Interest income, net 395 1,458 - - 395 1,458 Other expense, net (1,204) (963) - - (1,204) (963) ------ ---- --- --- ------ ---- Total financing and other (expense) income (809) 495 - - (809) 495 ---- --- --- --- ---- --- Income (loss) from continuing operations before income taxes $30,020 $31,085 $(1,465) $(1,454) $28,555 $29,631 Provision for income taxes 9,943 12,772 ----- ------ Income from continuing operations 18,612 16,859 Discontinued operations: Gain from sale of discontinued operations, net of tax 14,437 - Loss from discontinued operations, net of tax (107) (435) ---- ---- Discontinued operations, net of tax 14,330 (435) ------- ------- Net income $32,942 $16,424 ======= ======= Basic earnings (loss) per share: From continuing operations $1.57 $1.42 From discontinued operations $1.20 $(0.04) ----- ------ Basic earnings per share $2.77 $1.38 ----- ----- Diluted earnings (loss) per share: From continuing operations $1.52 $1.36 From discontinued operations $1.17 $(0.03) ----- ------ Diluted earnings per share $2.69 $1.33 ----- ----- Basic weighted average shares outstanding 11,893 11,897 ====== ====== Diluted weighted average shares outstanding 12,237 12,351 ====== ====== (a) An insignificant amount of general and administrative services is provided to the Angel.com business unit by MicroStrategy's core business operations. MICROSTRATEGY INCORPORATED CONSOLIDATED BALANCE SHEETS (in thousands, except per share data) June 30, December 31, 2009 2008 ---- ---- Assets (unaudited) (audited) Current assets Cash and cash equivalents $176,167 $122,915 Restricted cash and investments 1,523 619 Accounts receivable, net 41,604 49,670 Prepaid expenses and other current assets 8,053 9,518 Deferred tax assets, net 15,975 26,743 Assets held-for-sale - 4,964 --- ----- Total current assets 243,322 214,429 Property and equipment, net 7,799 8,978 Capitalized software development cost, net 16,890 14,823 Deposits and other assets 35,518 36,804 Deferred tax assets, net 10,737 17,105 ------ ------ Total Assets $314,266 $292,139 -------- -------- Liabilities and Stockholders' Equity Current liabilities Accounts payable and accrued expenses $21,708 $27,697 Accrued compensation and employee benefits 33,284 42,634 Deferred revenue and advance payments 75,258 66,495 Deferred tax liabilities 524 - Liabilities held-for-sale - 6,325 --- ----- Total current liabilities 130,774 143,151 Deferred revenue and advance payments 3,013 1,679 Other long-term liabilities 9,744 9,268 ----- ----- Total Liabilities 143,531 154,098 ------- ------- 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; 14,176 shares issued and 9,129 shares outstanding, and 14,167 shares issued and 9,120 shares outstanding, respectively 14 14 Class B common stock, $0.001 par value; 165,000 shares authorized; 2,770 issued and outstanding 3 3 Additional paid-in capital 451,162 450,953 Treasury stock, at cost; 5,047 shares (366,191) (366,191) Accumulated other comprehensive income 1,014 1,471 Retained earnings 84,733 51,791 ------ ------ Total Stockholders' Equity 170,735 138,041 ------- ------- Total Liabilities and Stockholders' Equity $314,266 $292,139 -------- -------- MICROSTRATEGY INCORPORATED CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) (unaudited) Six Months Ended June 30, -------- 2009 2008 ---- ---- Operating activities: Net income $32,942 $16,424 Plus: (Income) loss from discontinued operations, net (14,330) 435 ------- --- Income from continuing operations 18,612 16,859 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 4,761 3,102 Bad debt expense 484 561 Deferred taxes 7,917 8,539 Stock-based compensation - 45 Excess tax benefits from stock-based payment arrangements - (178) Other, net (9) 32 Changes in operating assets and liabilities: Accounts receivable 6,485 10,656 Prepaid expenses and other current assets 1,495 (1,142) Deposits and other assets 137 (334) Accounts payable and accrued expenses, compensation and employee benefits (15,777) (6,091) Deferred revenue and advance payments 9,692 8,345 Other long-term liabilities 464 1,198 --- ----- Net cash provided by operating activities from continuing operations 34,261 41,592 Net cash (used in) provided by operating activities from discontinued operations (472) 472 ---- --- Net cash provided by operating activities 33,789 42,064 ------ ------ Investing activities: Purchases of property and equipment (1,362) (1,770) Capitalized software development costs (4,218) (2,862) Decrease in restricted cash and investments 238 758 --- --- Net cash used in investing activities from continuing operations (5,342) (3,874) Net cash provided by (used in) investing activities from discontinued operations 24,546 (84) ------ --- Net cash provided by (used in) investing activities 19,204 (3,958) ------ ------ Financing activities: Distribution to Alarm.com minority shareholders (60) - Proceeds from sale of class A common stock under exercise of employee stock options 261 1,986 Excess tax benefits from stock-based payment arrangements - 178 Purchases of treasury stock - (8,387) --- ------ Net cash provided by (used in) financing activities from continuing operations 201 (6,223) Net cash provided by financing activities from discontinued operations - - --- --- Net cash provided by (used in) financing activities 201 (6,223) Effect of foreign exchange rate changes on cash and cash equivalents 58 2,526 -- ----- Net increase in cash and cash equivalents from continuing operations 53,252 34,409 Cash and cash equivalents, beginning of period 122,915 85,194 ------- ------ Cash and cash equivalents, end of period $176,167 $119,603 ======== ======== DATASOURCE: MicroStrategy Incorporated CONTACT: MicroStrategy Incorporated Investor Relations, +1-703-848-8600, Web Site: http://www.microstrategy.com/

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