Bakkt, Inc. · NYSE:BKKT
Bakkt — Q3 2023 Earnings Presentation
29 slides from Bakkt's earnings presentation, Nov 14, 2023
Slide 1: Third Quarter 2023 Earnings
Third Quarter 2023 Earnings November 14, 2023
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 contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as
Slide 3: Business updates
Business updates
Slide 4: Key investor takeaways
Key investor takeaways Throughout 2023 we have made substantial progress against our goal laid out earlier this year, to simplify our business and focus resources on areas with strong product market fit, scalability and a clear path to profitability Despite a difficult environment for crypto markets
Slide 5: Our industry leading platform resonates strongly with market participants
Our industry leading platform resonates strongly with market participants • End-to end crypto capabilities, from onramps to advanced trading and secure custody • Loyalty redemption platform provides clients with flexible, comprehensive solutions CRYPTO CUSTODY CRYPTO TRADING LOYALTY REDEMPTION • Sec
Slide 6: Expansion into nine new international markets expected by year-end
Expansion into nine new international markets expected by year-end • We are pleased with the progress we are making on our international expansion strategy, with expansion into markets that are attractive due to their regulatory environments, sizable TAM and strong demand from clients Regions Status
Slide 7: Continuing to rapidly expand our broad crypto trading and custody network
Continuing to rapidly expand our broad crypto trading and custody network NEW CRYPTO TRADING NEW CUSTODY We intend to join EDX’s clearing house We intend to provide advanced end-to-end and custodial network initially serving solutions, which may include Trade, Fiat as a back-up qualified custodian O
Slide 8: Rapid execution to provide a swift, seamless onboarding and activation experience
Rapid execution to provide a swift, seamless onboarding and activation experience for clients recently added to our extensive network NEW ONBOARDING CLIENTS NEW LIVE CLIENTS TRADING Rapid execution to launch leading new app Substantially complete leveraging Trade & Fiat Onramps. Enabling with integr
Slide 9: Empowering Caesars Rewards members to easily access crypto
Empowering Caesars Rewards members to easily access crypto • Bakkt® Crypto Rewards will debut with Caesars Entertainment as a seamless experience for Caesars Rewards members • Caesars Rewards members will have the opportunity to redeem their Rewards Credits for bitcoin • Enabling millions of Caesars
Slide 10: Our industry leading custody platform continues to get even better
Our industry leading custody platform continues to get even better NEWLY ACHIEVED AWARD FROM THE DIGITAL BANKER BES T EXPANDED SUPPORT FOR ADDITIONAL COINS DIGIT AL AS S ET • We are expanding the coins that can be custodied in our C US T O DIAN secure, compliant and trusted custody platform. Total s
Slide 11: Buy, Hold and… Use
Buy, Hold and… Use We are partnering with leading Lightning Service Providers • We are driving Bitcoin to utility with our investments in We have partnered with two of the leading Lightning the Lightning Network. Excited about our near-term Service Providers to collaboratively build out a global lau
Slide 12: Financial results
Financial results
Slide 13: Summary of 3Q23 condensed results
Summary of 3Q23 condensed results 3Q23 results include Apex 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 • Total revenues of $204.8mm reflects significant in
Slide 14: 3Q23 Adjusted EBITDA (non-GAAP)
3Q23 Adjusted EBITDA (non-GAAP) 3Q23 Adjusted EBITDA loss of $(21.6)mm decreased YoY primarily due to a reduction in total compensation and benefits Note: All financial data on this slide is unaudited. Adjusted EBITDA is a non-GAAP financial measure. For more information, please refer to the Notes s
Slide 15: 3Q23 Revenues
3Q23 Revenues 3Q23 results include Apex Crypto, which we REVENUES BY PRODUCT ($MM) Loyalty Crypto acquired on April 1, 2023. In accordance with GAAP, $100 $347.6 we are presenting crypto services revenue on a $80 $204.8 gross basis $60 $335.3 Crypto revenues $40 $13.2 $15.9 $13.2 $191.8 $20 $0.5 $0.
Slide 16: 3Q23 Operating expenses
3Q23 Operating expenses 3Q23 results include Apex 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 $257.6mm EXPENSES ($MM) includes $190.1mm of crypto cost
Slide 17: 3Q23 Crypto services revenue and related costs
3Q23 Crypto services revenue and related costs 3Q23 results include Apex 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 SERV
Slide 18: 3Q23 Key performance indicators
3Q23 Key performance indicators • Crypto enabled accounts of 6.1mm have continued to increase steadily • Crypto trading volume down 42% QoQ due to lower activity levels from Webull Pay customers • Loyalty redemption volume down 3% YoY driven by lower hotel and rental car redemption activity • Assets
Slide 19: 3Q23 Condensed balance sheet
3Q23 Condensed balance sheet • $90.9mm of available cash, cash equivalents and available-for-sale securities. • 3Q cash usage of $8.5mm • Excluding non-recurring cash items, including a $15.2mm return of cash from ICE Clearing related to the delisting of futures and options contracts, cash usage was
Slide 20: Updated outlook expectations
Updated outlook expectations UPDATED 2023 OUTLOOK PRELIMINARY 2024 OUTLOOK UPDATED OUTLOOK PRIOR OUTLOOK COMMENTS OUTLOOK Revenues • Total revenues of • Total revenues of • Crypto revenue impacted by Revenues • Total revenues of ~$750mm - ~$1,268mm ~$2,132mm - ~$3,771mm industrywide volumes, timing
Slide 21: Our strong execution and industry leading platform position us well for continued success
Our strong execution and industry leading platform position us well for continued success We will continue to leverage the synergies of our expanded crypto capabilities with our differentiated reputation as a secure and reliable partner to scale our business and drive profitability Differentiated pl
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: All financial data on this slide in unaudited. Adjusted EBITDA is a non-GAAP financial measure. 25
Slide 26: Balance sheet
NOTES Balance sheet Note: All financial data on this slide is unaudited. 26
Slide 27: Statement of operations
NOTES Statement of operations Note: All financial data on this slide is unaudited. 27
Slide 28: Statement of cash flows
NOTES Statement of cash flows Note: All financial data on this slide in unaudited. 28
Slide 29: 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