Bakkt, Inc. · NYSE:BKKT
Bakkt — Q1 2023 Earnings Presentation
26 slides from Bakkt's earnings presentation, May 11, 2023
Slide 1: First Quarter 2023 Earnings
First Quarter 2023 Earnings May 11, 2023
Slide 2: Important notice
Important notice Unless the context otherwise provides, “we,” “us,” “our,” “Bakkt” and like terms refer (i) prior to October 15, 2021 (the closing date of the business combination), to Bakkt Opco Holdings, LLC (f/k/a Bakkt Holdings, LLC, “Opco”) and its subsidiaries and (ii) after October 15, 2021,
Slide 3: Our differentiated platform and 2023 key priorities position us to win
Our differentiated platform and 2023 key priorities position us to win Activate and broaden Strategically allocate Expand crypto platform client network capital • Combining Bakkt’s secure custody • Collaborating closely with existing • Opportunistically deploying capital solutions with Apex Crypto’s
Slide 4: Apex Crypto acquisition update
Apex Crypto acquisition update
Slide 5: We are excited to have closed our acquisition of Apex Crypto
We are excited to have closed our acquisition of Apex Crypto Transformational acquisition Focused execution • Bringing Apex Crypto’s trading capabilities • Integration of businesses underway together with our secure crypto solutions • Near-term focus on expanding into new • ~5.8mm crypto-enabled acc
Slide 6: Our acquisition provides access to new client verticals in high growth sectors
Our acquisition provides access to new client verticals in high growth sectors Broad reach across client verticals Examples of our expanded • Our acquisition broadens client base our client reach into an attractive addressable market with the rapidly FINTECHS & growing fintech industry NEOBANKS • Fi
Slide 7: We're able to provide advanced crypto trading to clients
We’re able to provide advanced crypto trading to clients Deep liquidity Seamless integration & customer Advanced order • Partner with several top crypto experience management system liquidity providers to provide • Clients integrate with easy-to-use APIs in ~45 • Full spectrum of order types unparal
Slide 8: We are well-positioned to significantly broaden our reach into international markets
We are well-positioned to significantly broaden our reach into international markets • Given strong demand coming from our client base for international expansion, we are • UK - $233B in crypto • Central, Northern & Western focused on bringing our crypto capabilities transacted, ranking 6th Europe (
Slide 9: Apex Crypto key performance indicators
Apex Crypto key performance indicators Volume trends have performed in-line with the overall industry C r y p t o -e n a b le d a c c o u n t s (m illio n s ) Ac t ive a c c o u n t s (t h o u s a n d s ) 7.0 1,200 5.6 5.8 974 6.0 5.2 1,000 4.9 795 5.0 4.5 800 4.0 531 600 521 490 3.0 400 2.0 1.0 200
Slide 10: Apex Crypto enhances our path to profitability
Apex Crypto enhances our path to profitability FY 2022 • Gross revenue of $3,071mm was driven by strong 1H22 results before crypto market events stalled activity levels Apex Crypto gross revenue ($ millions) • Crypto costs and execution, clearing and brokerage fees of $3,063mm in line FY 2022 $3,071
Slide 11: Financial results
Financial results
Slide 12: Summary of 1Q23 condensed results
FINANCIAL RESULTS Summary of 1Q23 condensed results • Net revenues of $13.0mm increased 4% YoY, driven by increase in transaction revenues • Operating expenses of $58.4mm decreased $2.6mm, or 4% YoY, primarily due to a reduction in total SG&A expenses • Includes a $4.3mm restructuring charge • Total
Slide 13: 1Q23 Adjusted EBITDA (non-GAAP)
FINANCIAL RESULTS 1Q23 Adjusted EBITDA (non-GAAP) • 1Q23 Adjusted EBITDA loss of $(28.9)mm was flat YoY. Higher non-share-based and unit-based compensation costs, offset by lower marketing costs and professional service fees Note: All financial data on this slide is unaudited. Adjusted EBITDA is a n
Slide 14: 1Q23 Net revenues
FINANCIAL RESULTS 1Q23 Net revenues Ne t r e v e n u e s ($ m m ) • Net revenues of $13.0mm increased 4% YoY 1Q net revenues 4% YoY • Transaction revenues of $7.5mm increased 15% $18 YoY, driven by an increase in air travel in loyalty $15.6 redemptions $16 • Subscription and service revenues of $5.
Slide 15: 1Q23 Operating expenses
FINANCIAL RESULTS 1Q23 Operating expenses Ex p e n s e s ($ m m ) Total expenses 1Q operating expenses 4% YoY; 11% YoY (ex. restructuring costs) • Total operating expenses of $58.4mm decreased 4% YoY SG&A expenses $1,607.8 • Total SG&A expenses of $6.7mm decreased 29% YoY driven by a reduction in
Slide 16: Key performance indicators
FINANCIAL RESULTS Key performance indicators Tr a n s a c t in g a c c o u n t s (0 0 0 ) 1Q 2% YoY First quarter 2023 958 • Transacting accounts across our platform up 2% YoY 678 681 686 690 • Digital asset conversion volume up 6% YoY • YoY growth driven by increased air travel, partially offset
Slide 17: 1Q23 Condensed balance sheet
FINANCIAL RESULTS 1Q23 Condensed balance sheet • $117.6mm of available cash, cash equivalents and available-for-sale securities • Cash usage of $121.8mm includes: • $67.2mm in cash held in escrow for payment of Apex Crypto transaction¹ • $13.6mm of seasonably high payable settlements, including $4.1
Slide 18: We are well-positioned to benefit from improving crypto market conditions
CLOSING REMARKS We are well-positioned to benefit from improving crypto market conditions Differentiated platform built Significant expansion Strategically allocate for sustainable growth opportunities capital • Our best-in-class crypto • Focus on expanding into new • Opportunistically deploy infras
Slide 19: Notes
Notes
Slide 20: Definitions
NOTES Definitions Legacy Bakkt key performance Legacy Apex Crypto key performance indicators indicators Digital asset conversion volume: Dollar value of Crypto-enabled accounts: total accounts open on the transaction volume across loyalty redemption, crypto Apex Crypto platform buy/sell and gift car
Slide 21: 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 22: Adjusted EBITDA reconciliation – Non-GAAP
NOTES Adjusted EBITDA reconciliation – Non-GAAP Note: All financial data on this slide in unaudited. Adjusted EBITDA is a non-GAAP financial measure. 22
Slide 23: Balance sheet
NOTES Balance sheet Note: All financial data on this slide is unaudited. 23
Slide 24: Statement of operations
NOTES Statement of operations Note: All financial data on this slide is unaudited. 24
Slide 25: Statement of cash flows
NOTES Statement of cash flows Note: All financial data on this slide in unaudited. 25
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