Bakkt, Inc. · NYSE:BKKT
Bakkt — Q1 2024 Earnings Presentation
29 slides from Bakkt's earnings presentation, May 15, 2024
Slide 1: First Quarter 2024 Earnings
First Quarter 2024 Earnings May 15, 2024
Slide 2: Important notice
Important notice Unless the context otherwise provides, “we,” “us,” “our,” “Bakkt” and like terms refer to Bakkt Holdings, Inc. and its subsidiaries. FORWARD-LOOKING STATEMENTS This presentation and accompanying oral presentation contains “forward-looking statements” within the meaning of Section 27
Slide 3: Perspectives on the Business
Perspectives on the Business
Slide 4: 2024 priorities
2024 priorities Laser focused on executing three key priorities to drive shareholder value Broaden client network and Expand our products and Continued improvement of deepen existing relationships solutions our cost structure • Collaborate with our clients as • Continue development of our • Continue
Slide 5: Performance - Q1 '24 update
Performance - Q1 '24 update Revenue, net 1 Financial Update1,2 • Revenue, net up 32.8% YoY reflecting increased crypto trading revenue • Notional crypto traded volume up 324% QoQ • Opex, excluding crypto costs down by 16% YoY from cost reduction initiatives • Net loss reduced by 53% YoY to $21.3M •
Slide 6: Well-positioned to capitalize on crypto market tailwinds
Performance - We believe we are well-positioned to capitalize on crypto market tailwinds • We are benefiting from strong tailwinds for retail crypto trading due to higher industry wide activity and coin prices Total crypto mkt ($T) o Our Q1’24 notional traded volume was 324% higher vs. Q4’23 and ove
Slide 7: Performance – Accelerating expense restructuring
Performance – Accelerating expense restructuring Projected results of May restructuring initiative ~20% ~$7mm ~$13mm Lower headcount Cash savings in Annualized cash (Year-end 20241 vs. 2023) 2024 savings2 1. Headcount includes all exempt and non-exempt employees and contractors, including headcount
Slide 8: Strengthening Bakkt's Position
Strengthening Bakkt’s Position Performance Platform and Process and Products People Partners
Slide 9: Platform and Products – What's happening in the market?
Platform and Products – What's happening in the market? The Crypto Trading Market has been built Institutional investors need a trading platform primarily for retail investors purpose-built to align with their needs and priorities As confidence has returned post-FTX, retail- The SEC's approval of Bi
Slide 10: Platform and Products - the BakktX ECN
Platform and Products - the BakktX ECN Building on our industry-leading foundation of institutional custody and compliant trading, we plan to launch our own foreign exchange-style ECN “BakktX.” Once launched, BakktX aims to offer a high-performance, low-latency, low-cost trading venue for institutio
Slide 11: Partners – The Bakkt Ecosystem
Partners – The Bakkt Ecosystem CLIENT SEGMENTS EXECUTION BROKERAGES TRADING DESKS AGGREGATORS CORE OFFERINGS LIQUIDITY • Bakkt Crypto Solutions • BakktX ECN • Bakkt Custody ASSET CRYPTO MANAGERS NATIVES GO-TO-MARKET TECH PARTNERS CUSTODY CLEARING
Slide 12: Financial results
Financial results
Slide 13: 1Q24 key performance indicators
1Q24 key performance indicators • Crypto enabled accounts of 6.3mm have continued to increase steadily QoQ • Crypto trading volume up 324% QoQ driven by exceptionally strong client trading activity • Loyalty redemption volume down 6% YoY driven by lower redemption activity in travel and gift cards •
Slide 14: 1Q24 revenues
1Q24 revenues 1Q24 results include Bakkt Crypto, which we acquired on April 1, REVENUES BY PRODUCT ($MM) 2023. In accordance with GAAP, we are presenting crypto services Loyalty Crypto revenue on a gross basis. $200 $180 $854.6 $160 $140 $120 Crypto revenues $100 $347.6 $841.3 $80 $204.8 $214.5 • Gr
Slide 15: 1Q24 crypto services revenue and related costs
1Q24 crypto services revenue and related costs 1Q24 results include Bakkt Crypto, which we acquired on April 1, 2023. In accordance with GAAP, we are presenting our crypto services revenue and crypto costs and execution, clearing and brokerage fees on a gross basis. Crypto services revenue CRYPTO SE
Slide 16: 1Q24 operating expenses
1Q24 operating expenses 1Q24 results include Bakkt Crypto, which we acquired on April 1, 2023. In accordance with GAAP, we are presenting our crypto costs and execution, clearing and brokerage fees on a gross basis • Total operating expenses of $886.4mm includes EXPENSES ($MM) $837.6mm of crypto cos
Slide 17: 1Q24 Adjusted EBITDA (non-GAAP)
1Q24 Adjusted EBITDA (non-GAAP) • 1Q24 Adjusted EBITDA loss of $(16.3)mm decreased YoY primarily due to a reduction in total compensation and benefits Note: All financial data on this slide is unaudited. Adjusted EBITDA is a non-GAAP financial measure. For more information, please refer to the Notes
Slide 18: Summary of 1Q24 condensed results
Summary of 1Q24 condensed results 1Q24 results include Bakkt Crypto (f/k/a Apex Crypto LLC), now known as Bakkt Crypto, which we acquired on April 1, 2023. In accordance with GAAP, we are presenting crypto services revenue and crypto costs and execution, clearing and brokerage fees on a gross basis
Slide 19: 1Q24 condensed balance sheet
1Q24 condensed balance sheet • $74.6mm of cash, cash equivalents and available-for-sale securities • $4.3mm increase in cash, cash equivalents and available-for-sale securities since December 31, 2023 reflects $38mm net proceeds from the initial closing of registered direct offering, less 1Q24 cash
Slide 20: Updating our expected full year 2024 outlook
Updating our expected full year 2024 outlook FINANCIAL METRIC MARCH 25th OUTLOOK MAY 15th OUTLOOK Updates to Key Assumptions Gross Crypto Revenue, Crypto Costs and ECB Revenues • Total revenues of $3,292mm - Total revenues of $3,002mm - $5,114mm $4,447mm • Increased revenue contribution from existin
Slide 21: Concluding thoughts
Concluding thoughts
Slide 22: Notes
Notes
Slide 23: Definitions
NOTES Definitions Crypto-enabled accounts: total crypto accounts open Transacting accounts: unique accounts that perform at least one transaction across crypto buy/sell and loyalty redemption each month. Monthly figures are de-duped for the month. Quarterly figure represents sum of all months in the
Slide 24: Adjusted EBITDA
NOTES Adjusted EBITDA Adjusted EBITDA is a non-GAAP financial measure, which we define as earnings before interest, income taxes, depreciation, amortization, acquisition-related expenses, share-based and unit-based compensation expense, goodwill and intangible assets impairments, restructuring charg
Slide 25: Adjusted EBITDA reconciliation – Non-GAAP
NOTES Adjusted EBITDA reconciliation – Non-GAAP Note: Quarterly financial data on this slide in unaudited. Adjusted EBITDA is a non-GAAP financial measure.
Slide 26: Free cash flow reconciliation – Non-GAAP
NOTES Free cash flow reconciliation – Non-GAAP Free Cash Flow is a non-GAAP financial measure. Free Cash Flow is cash flow from operations adjusted for “capitalized internal use software development costs and other capital expenditures” and “interest income.” We adjust for capitalized expenses assoc
Slide 27: Statement of operations
NOTES Statement of operations Note: Quarterly financial data on this slide is unaudited.
Slide 28: Balance sheet
NOTES Balance sheet Note: Quarterly financial data on this slide is unaudited.
Slide 29: Statement of cash flows
NOTES Statement of cash flows Note: Quarterly financial data on this slide is unaudited.