Leverage provides the opportunity to generate higher returns if the price increases. In this illustration, assuming Bitcoin price reaches $250,000 keeping Bitcoin count constant, spot Bitcoin without leverage would return approximately 290%. In this example, adding leverage to acquire more Bitcoin would return between approximately 395% to 425% depending on the amount of leverage, further boosting returns compared to simply holding the spot Bitcoin. If the market value of our bitcoin increases, we believe this would create more opportunities to manage our leverage targets. With the opportunity to take on more leverage in a prudent risk managed fashion, the value generated from our increasing Bitcoin holdings would be expected to outperform even further if Bitcoin prices continue to rise.
We believe our unique value proposition as the world’s first Bitcoin development company has enabled us to generate tremendous value for our shareholders. I’ll now turn the call over to Andrew to discuss our financials for the quarter in further detail.
Andrew Kang: Thank you, Phong. I’ll, start with first, a recap of our software financial results. For the Q1, total revenues were a $115.2 million, which was down about 5% year-over-year. Consistent with prior recent quarters, the slight decline remains in part due to our ongoing shift, of revenue from on-prem to cloud. Q1 on-prem product license revenues, which make up about 11% of total revenue, were about $12.900 million, which is down 26% year-over-year. As I mentioned in prior calls, we continue to transition our business to the cloud, and we fully anticipate lower product license revenues to continue as we migrate existing customers off on-prem licenses and bring them on to the cloud. More importantly, as Phong mentioned earlier, we continue to grow subscription services revenues, which reflects stronger, more durable recurring software revenue.
In Q1, subscription services revenues, which now make up about 20% of total revenues, were $23 million, which reflects an increase of 22% year-over-year. Non-GAAP subscription billings, which represent new cloud bookings in the quarter, also grew by 30% in the Q1 to $17.7 million, which was our fourth straight year of quarterly double-digit growth in cloud bookings. Q4 last year was an important milestone for us in the progress toward cloud transition, where for the first time, our subscription services revenues were higher than our product license revenues. This successful trend continued in the first quarter of 2024, which reflects the ongoing progress towards converting our revenue to recurring subscription services. The mix of revenue will continue to shift from on-premise product license to subscription services throughout 2024, as we focus on delivering meaningful AI-based products to our customers, which is only available in the cloud.
We are pleased with the progress we have made from the adoption from our customers to our cloud platform worldwide, and we still have more to do, and we’ll continue to focus on new products and innovation to drive more demand in that space. Beginning with the first quarter of 2024, we modified our reported financials to break out our quarterly results into two categories: First, the software business category reflects income or loss from operations related distinctly to our enterprise BI software business. And the corporate and other category reflects the other non-software related components associated with our digital asset holdings, which include impairment charges and other related third-party costs. While we continue to operate under one reportable operating segment, which is engaged in design, development, and sales of our software platform through licensing arrangements, cloud subscriptions, and related services, we believe this breakout of our operating results into these two categories provides better transparency with respect to the performance of our software business, while isolating the impacts related to changes in Bitcoin prices.
In Q1, the software business revenues were $115 million as mentioned a moment ago, while the cost of revenues were $30 million up 7.4%, compared to Q1 of last year. The increase in costs were in part due to higher cloud hosting, a result of higher usage by new and existing cloud subscription services customers. It was also attributed to costs associated with standing up an enhanced customer success function with an added focus on transitioning customers to our cloud platform, in addition to servicing and managing our strong existing customer base. Software business operating expenses were $96.1 million, up 1.7%, compared to $94.5 million in Q1 of last year. The increase was primarily due to higher G&A expenses this quarter, which was specifically related to an increase in employer payroll taxes in connect with employee stock option exercises in the Q1.
However, overall operating expenses were also offset by lower costs in sales, marketing, and R&D, also consistent with recent quarters as we maintain strong discipline in expenses and we continue to optimize overall headcount. Non-cash, stock based compensation expense was mostly flat year-over-year at $17.8 million for the quarter. And overall non-GAAP adjusted operating income or profit from the software business category was $6.9 million. If you take into account the employer paid payroll taxes related to stock option exercises in Q1, which were not material in prior periods, non-GAAP adjusted operating income from the core software business would have reflected $14.3 million for the first quarter, more appropriately reflecting the quarter’s profitability from our software business.
Lastly, the corporate and other operating expense category for the quarter is almost entirely attributable to Bitcoin impairment charges, which were $192 million, compared to $20 million in Q1 of last year, the result of Bitcoin price fluctuations throughout this past quarter. Turning to our Bitcoin strategy more specifically, we had one of the most successful quarters of adding more Bitcoin to our balance sheet, as we acquired 25,128 Bitcoins in the first quarter, our second largest single quarter increase in Bitcoin Holdings since Q4 2020. Additionally, after the end of first quarter, we purchased an additional 122 Bitcoins using $8 million of excess cash. And as of April 26, 2024, the company held a total of 214,400 Bitcoins acquired from an aggregate cost of $7.54 billion or $35,180 per Bitcoin.
To break down the Bitcoin acquisition activity year-to-date by entity, Bitcoin acquired the proceeds from equity capital markets activities that occurred after the issuance of our senior secured notes are held at MacroStrategy, a wholly-owned subsidiary of MicroStrategy. Year-to-date, we have added 2,652 Bitcoins to MacroStrategy’s Holdings at an aggregate purchase price of $137 million using net proceeds from our at the market or ATM equity issuance programs in February. Currently, we hold 175,721 unencumbered Bitcoins, representing 82% of our total holdings or $11.2 billion incurred market value, which are held at MacroStrategy. These are all unrestricted and provide the option to potentially leverage this strategic asset in the future. Bitcoin’s acquired through proceeds from debt activities that occurred after the issuance of our senior secured notes, namely the two recent convertible note issuances in Q1 are held at MicroStrategy, the parent, and also serve as collateral securing our 2028 senior secured notes.
