Strategy reported a first-quarter loss of $12.77 billion, or $38.25 per share, widening significantly from the $4.23 billion loss in the same period last year. The bitcoin treasury company attributed the poor performance to declining values in its cryptocurrency holdings, which it records as immediate accounting losses.

Revenue rose to $124.3 million from $111.1 million, showing growth despite the massive losses. The company's accounting approach recognizes declines in bitcoin value as immediate losses, which contributed to the widened deficit during a period of volatile crypto markets that affected many digital asset investors.

Results fell short of analyst expectations, who projected a loss of $7.17 per share on $120.8 million in revenue. The substantial miss raises questions about Strategy's business model and its vulnerability to cryptocurrency price fluctuations, particularly as digital currencies continue to experience significant market swings.