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MICROSTRATEGY INC - 10-Q - Management's Discussion and Analysis of Financial Condition and Results of Operations(Edgar Glimpses Via Acquire Media NewsEdge) FORWARD-LOOKING INFORMATION This Quarterly Report on Form 10-Q contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). For this purpose, any statements contained herein that are not statements of historical fact, including without limitation, certain statements regarding industry prospects and our results of operations or financial position, may be deemed to be forward-looking statements. Without limiting the foregoing, the words "believes," "anticipates," "plans," "expects," and similar expressions are intended to identify forward-looking statements. The important factors discussed under "Part II. Item 1A. Risk Factors," among others, could cause actual results to differ materially from those indicated by forward-looking statements made herein and presented elsewhere by management from time to time. Such forward-looking statements represent management's current expectations and are inherently uncertain. Investors are warned that actual results may differ from management's expectations. Overview MicroStrategy® is a leading worldwide provider of business intelligence and mobile software. Our business intelligence (BI) software platform enables organizations to analyze vast amounts of data and distribute business insight throughout the enterprise. Recently, MicroStrategy has invested significantly in a number of additional software technologies designed to help organizations capitalize on four disruptive technology trends: Big Data, Mobile Applications, Cloud-based Services, and Social Networking. These forces are reshaping products, companies, industries, and economies around the world, and we expect them to drive significant new investments from companies and governments in the coming years. The MicroStrategy Business Intelligence PlatformTM delivers reports and dashboards to business users via a web interface and via office productivity software tools. The MicroStrategy Mobile PlatformTM lets organizations rapidly build mobile apps used to mobilize business processes and distribute BI results via a range of mobile devices, including the Apple® iPhone®, iPod touch®, iPad ®, and iPad Mini, and Android®-based smart phones and tablets. It enables organizations to build a wide variety of mobile apps that deliver BI, business workflows, transactions, and multimedia in compelling custom apps. MicroStrategy CloudTM is a cloud-based BI Platform-as-a-Service (PaaS) offering. It allows enterprises to deploy MicroStrategy BI and mobile apps using MicroStrategy's BI Platform and MicroStrategy's Mobile Platform more quickly and with lower upfront costs than equivalent on-premises solutions. MicroStrategy ExpressTMis designed to be the fastest way for companies, departments, and small businesses to build and deploy MicroStrategy-caliber BI and mobile apps with little or no assistance of internal IT professionals. MicroStrategy Express guides business people through a streamlined flow - from data-to-discovery-to-dashboard-to-distribution - and is available as a cloud-based service to allow rapid startup. MicroStrategy WisdomTM is an application for market intelligence that leverages the vast amount of data available in social networks and publicly available databases to create unique views of the consumer and brand landscape. MicroStrategy Alert is a mobile commerce application designed to help retailers compete effectively in the new mobile world by providing a mobile channel for marketing, commerce, and loyalty directly from merchants to their customers. MicroStrategy UsherTM is a mobile application that provides businesses with a mobile identity network alternative to traditional employee IDs, keys, and proximity cards. It can help companies reduce fraud, manage workforces, improve customer service, and reduce the threat of cyber-attacks. Our BI and Mobile Platforms, together with related product and support services, continue to generate the vast majority of our revenue. During the three months ended March 31, 2013 and 2012, we did not generate significant revenues from MicroStrategy Express, MicroStrategy Wisdom, MicroStrategy Alert, or MicroStrategy Usher. 13 -------------------------------------------------------------------------------- Table of Contents During the three months ended March 31, 2012, we operated Angel.com, a provider of cloud-based Customer Experience Management (CEM) solutions for Interactive Voice Response (IVR) and contact centers. On February 25, 2013, in connection with our consideration of strategic alternatives relating to our Angel.com business, we committed to a plan to sell the business. We made the decision to sell the business in order to focus on our business intelligence software and services offerings. On March 15, 2013, we completed the sale of our equity interest in Angel.com to Genesys Telecommunications Laboratories, Inc. As a result of the transaction, we received consideration of approximately $111.2 million, resulting in a net cash inflow of $100.7 million after $10.5 million in transaction costs. The sale of our ownership interest in Angel.com resulted in us recognizing an after-tax gain of approximately $57.4 million in the first quarter of 2013, which included the cost of terminating all outstanding Angel.com employee stock options prior to the closing of the transaction and other costs associated with the sale, and is subject to certain post-closing adjustments. Accordingly, on our Consolidated Balance Sheets, we have classified the associated assets and liabilities of the Angel.com business as held-for-sale as of December 31, 2012. In our Consolidated Statement of Operations, we classified operations of the Angel.com business as Loss from Discontinued Operations, net of tax, because we have no expectation of significant continuing involvement or cash flows from this business following its divestiture. All assets and liabilities that are reported in these financial statements as held-for-sale as of December 31, 2012 are reported at the lower of the carrying cost or fair value less cost to sell. The following table sets forth certain operating highlights (in thousands) for the three months ended March 31, 2013 and 2012: |