Bakkt : Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

About this update from Bakkt, Inc.

Management's Discussion and Analysis of Financial Condition and Results of Operations. The following discussion and analysis of financial condition and results of operations should be read together with the accompanying consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q for the quarter ended September 30, 2025 (this "Report") and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024 (our "Form 10-K") , which is incorporated herein by reference. References in this section to "we," "us," "our," "Bakkt" or the "Company" and like terms refer to Bakkt Holdings, Inc. and its subsidiaries for the three and nine months ending September 30, 2025, unless the context otherwise requires. Some of the information contained in this discussion and analysis or set forth elsewhere in this Report, including information with respect to our plans and strategy for our business, includes forward-looking statements. Such forward-looking statements are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those contemplated by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those factors discussed above in "Cautionary Statement Regarding Forward-Looking Statements" and "Item 1A. Risk Factors." In this section and elsewhere in this Report, we use the following terms, which are defined as follows: • "Client" means businesses with whom we contract to provide services to customers on our platform, and includes financial institutions, hedge funds, merchants, retailers, third party partners and other businesses (except in the accompanying notes to the consolidated financial statements, where we refer to revenue earned from customers, instead of clients. The term customers is in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customers ("ASC 606").) • "Crypto" or "Crypto asset" means an asset that is built using blockchain technology, including virtual currencies (as used in the State of New York), coins, cryptocurrencies, stablecoins, and other tokens. Our platform enables transactions in certain supported crypto assets. For purposes of this Form 10-Q, we use crypto assets, virtual currency, coins, and tokens interchangeably. • "Customer" means an individual user of our platform. Customers include customers of our clients who transact in crypto through, and have accounts on, our platform (except as defined for ASC 606 purposes above). Overview General Founded in 2018, Bakkt is building the backbone of next-generation financial infrastructure. We provide solutions that enable institutional participation in the digital asset economy - spanning crypto assets trading, tokenization, stablecoin payments, and artificial intelligence-driven finance. With the scale, security, and regulatory compliance demanded by global institutions, we are positioned at the center of a generational transformation in what money is, how it moves, and how markets operate. Our platform is built to operate across various crypto assets and offers clients the flexibility to choose some or all of our capabilities, and the manner in which these capabilities are enabled for consumers, based on their needs and objectives. Some clients may choose to enable our capabilities directly in their experience, while others may want a "ready-to-go" storefront and leverage capabilities such as our web-based technology. Our institutional-grade platform, born out of our former parent company, Intercontinental Exchange, Inc. ("ICE"), supports "know your customer" ("KYC"), anti-money laundering ("AML"), and other anti-fraud measures to combat financial crime . Third-Quarter Highlights and Trends We believe that our third-quarter results and recent actions marked a major inflection point in our transformation into a pure-play digital asset infrastructure company: • We completed the divestiture of our Loyalty Business, completing our exit from all non-core operations; • We streamlined our activities into trading, payments and international markets, marking a critical step in our evolution into a unified digital asset infrastructure platform; • We simplified our capital structure through the collapse of our legacy Up-C structure, unifying all shareholders under a single class of stock; and • We redeemed the remaining balance of the Convertible Debenture, resulting in a long term debt-free balance sheet. Crypto Market Developments The U.S. cryptocurrency market has undergone a significant transformation, driven by a maturing regulatory environment, increased institutional participation, and sustained retail adoption. This positive momentum creates a favorable backdrop for Bakkt's continued growth. Key market drivers include: • Political Shift and Pro-Innovation Policy: The current political climate is increasingly supportive of digital assets. Recent actions, including the establishment of a Strategic Bitcoin Reserve and the signing of the GENIUS Act , signal a commitment to positioning the U.S. as a global leader in blockchain innovation. The bipartisan push for the Blockchain Regulatory Certainty Act (often referred to as the 'Clarity Act') also aims to provide clear rules for non-custodial service providers, fostering a more stable environment for developers. • Legislative Progress: The newly enacted GENIUS Act is a landmark piece of legislation that provides a comprehensive regulatory framework for stablecoins. By mandating full reserve backing and defining stablecoins as a distinct asset class (not a security or commodity), the Act enhances consumer protection and provides the regulatory certainty needed to unlock significant growth in this sector. • Broadening Adoption: The market continues to see robust adoption. According to the 2025 "Security.org" report, approximately 28% of U.S. adults now own cryptocurrency, a figure that has nearly doubled since 2021. This demonstrates growing public confidence and a lasting shift in consumer behavior. Recent Developments Up-C Collapse On November 3, 2025, we completed an internal reorganization to streamline our corporate structure by eliminating the Company's umbrella partnership-C corporation ("Up-C") structure (the "Reorganization"). As part of the Reorganization, NewCo replaced the Company as a listed holding company. In connection with the Reorganization, (i) holders of shares of Class A Common Stock ceased to hold such shares and received an equivalent number of shares of NewCo Class A Common Stock that have the same voting and economic rights as Class A Common Stock, (ii) holders of shares of Class V Common Stock ceased to hold such shares and received an equivalent number of shares of of NewCo Class V Common Stock that have the same voting and economic rights as the Bakkt Class V Common Stock, (iii) holders of Paired Interests ceased to hold such Paired Interests and received an equivalent number of shares of NewCo Class A Common Stock, resulting in the elimination of shares of NewCo Class V Common Stock and NewCo having only one class of outstanding common stock, (iv) holders of membership units of the Management Vehicle ceased to hold membership units of the Management Vehicle and received in exchange corresponding Opco Incentive Unit granted under the Opco Plan, as amended, held by the Management Vehicle, together with the share of NewCo Class V Common Stock paired therewith, and (v) holders of Opco Incentive Units, together with the share of NewCo Class V Common Stock paired therewith, ceased to hold such Opco Incentive Units and the shares of NewCo Class V Common Stock paired therewith, and received in exchange the right to receive a corresponding number of validly issued, fully paid and nonassessable share of NewCo Class A Common Stock. Amendment to Tax Receivable Agreement & Contribution Agreement In connection with the Reorganization, we, ICE and Mr. Naheta entered into the TRA Amendment as well as the Contribution Agreement. Pursuant to the TRA Amendment and the Contribution Agreement, ICE and Mr. Naheta agreed that they would, at closing, (i) contribute their rights under the TRA to NewCo in exchange for a cash payment from NewCo equal to the respective amount to which ICE and Mr. Naheta would otherwise be entitled under the TRA (as amended), (ii) Mr. Naheta would further contribute such cash payable to Mr. Naheta to NewCo in exchange for shares of NewCo Class A Common Stock, and (iii) ICE would further contribute such cash payable to ICE to NewCo in exchange for shares of NewCo Preferred Stock, each convertible into one share of NewCo Class A Common Stock (such conversion being conditional upon the expiry or termination of the waiting period (and any extension thereof, including pursuant to any timing agreement) applicable to it under the HSR Act), and further agreed that the respective obligations of ICE and Mr. Naheta, on the one hand, and NewCo, on the other hand, to transfer the foregoing cash amounts will be net-settled and offset against one another. In addition, the TRA Amendment sets the discount rate to be used in calculating TRA payments to TRA holders at 18%, calculated as of the date of consummation of the Reorganization, except that for ICE and Mr. Naheta only, the value of the TRA payment was capped at the value of such payment calculated as of the date of the TRA Amendment. Loyalty Business Sale Closing On October 1, 2025, we completed the sale of the Loyalty Business to Project Labrador Holdco, LLC. At the Closing, Opco delivered the equity of the Acquired Entities, together with an amount of cash equal to $18,876,950, which consisted of an agreed amount of $9,974,000 plus (i) the amount of the most negative working capital of the business that existed in the twelve months prior to the closing date, (ii) the amount of estimated indebtedness, and (iii) agreed expenses, and minus (iv) certain deductions for amounts owed by the Purchaser to Opco, subject to post-closing adjustments. Opco also placed the Escrow Amount (defined below) into an escrow account, to hold funds for the indemnity obligations of Opco and the working capital adjustment and indebtedness adjustment, in each case as set forth in the Purchase Agreement and an accompanying escrow agreement. At the Closing of the Transaction, pursuant to an escrow agreement, Opco deposited with the escrow agent (i) $1,000,000 into an indemnity escrow account (the "Indemnity Escrow Amount"), and (ii) $1,500,000 into a working capital adjustment escrow account (the "Adjustment Escrow Amount" and together with the Indemnity Escrow Amount, the "Escrow Amount"), in each case to be disbursed by the escrow agent in accordance with the terms of the Purchase Agreement and the escrow agreement. Subject to certain exceptions, on the applicable Escrow Termination Date (as defined in the Purchase Agreement), the escrow agent shall disburse the remaining Escrow Amount, if any. After the twelve-month anniversary of the Closing, the parties will determine whether the value of working capital delivered to the Purchaser at the Closing was greater than the greatest absolute value of working capital that existed in the twelve months following the date of the Closing. If the value of working capital delivered to the Purchaser at the Closing was greater than such greatest absolute value, the Purchaser shall pay to Opco the difference between the value of working capital delivered to the Purchaser at the Closing and such greatest absolute value. In addition, at the Closing, approximately $5,000,000 in restricted cash was loaned to the Purchaser by Opco pursuant to the Purchase Agreement and unsecured subordinated promissory notes to support obligations under certain agreements of the Acquired Entities. Such notes are expected to be repaid by the Purchaser when such cash is no longer restricted. Stock Option Awards In connection with the Offering, on July 29, 2025, the Board and its Compensation Committee granted the Options to select members of management, subject to approval by the Company's shareholders, which approval was obtained on October 31, 2025. No consideration was received by the Company for the granting of the Options. Due to the limited share reserve under the 2021 Incentive Plan, the Options were approved outside the 2021 Incentive Plan. Notwithstanding the foregoing, the Options will be governed in all respects as if issued under the 2021 Incentive Plan, except with respect to the 2021 Incentive Plan's minimum vesting requirements. The Options are structured as a commitment by the grantee to exercise a predetermined number of Options every quarter for eight quarters (i.e., the Mandatory Exercise Options) at an exercise price per share equal to $10.00, which reflects the fair market value of a share of Class A Common Stock on the date of the grant. For each quarter in which the grantee exercises the Mandatory Exercise Options, the grantee will be entitled to exercise an additional number of Options (i.e., the Optional Exercise Options), which Optional Exercise Options will become exercisable for a period of up to one year. If a grantee does not exercise the Mandatory Exercise Options in any quarterly tranche during the applicable mandatory exercise period, then the grantee's remaining Options (in respect of the current quarterly tranche and any subsequent quarterly tranche) will be forfeited automatically. In order to further facilitate management's continued participation and investment in Company growth, in the event that any Options are forfeited by a grantee in accordance with the forfeiture terms set forth above, the Options will be available for future grant by the Compensation Committee to service providers of the Company, as identified by the Compensation Committee, and which subsequent grants will be in the form of stock options made on the same terms as the Options and will have an exercise price equal to or greater than fair market value as of such applicable date of grant. Key Factors Affecting Our Performance Growing Our Client Base Our ability to increase revenue is dependent upon the successful growth of our client base on the platform. We collaborate with leading brands and have built an extensive network across numerous industries including financial institutions, merchants and travel and entertainment. To date, management has focused on client acquisition primarily through a business-to-business-to-consumer ("B2B2C") model. Our goal is to provide these clients with opportunities to leverage our capabilities either through their existing environment or by leveraging our platform. Our acquisition of Bakkt Crypto Solutions complements our B2B2C growth strategy by broadening our business partnerships to fintechs and neobanks. Product Expansion and Innovation The crypto marketplace is rapidly evolving. The continued attractiveness of our platform to clients is contingent upon the sustained ability to innovate and expand product offerings. Meeting the evolving technological demands and capabilities required by the client base is critical for realizing continued revenue growth.. Competition The crypto marketplace is highly competitive with numerous participants competing for the same clients. Additionally, some of our clients may seek to develop their own technology to replace their need for our platform. We believe we are well positioned with our ability to provide capabilities around emerging crypto assets on a single, highly secure, institutional-grade technology platform. General Economic and Market Conditions Our performance is impacted by the strength of the overall macroeconomic environment and crypto market conditions, which are beyond our control. Negative market conditions hinder client activity, including extended decision timelines around implementing crypto strategies. See "Crypto Market Developments" above . Regulations in U.S. & International Markets We are subject to many complex, uncertain and overlapping local, state and federal laws, rules, regulations, policies and legal interpretations (collectively, "laws and regulations") in the markets in which we operate. These laws and regulations govern, among other things, consumer protection, privacy and data protection, labor and employment, anti-money laundering, money transmission, competition, and marketing and communications practices. These laws and regulations will likely have evolving interpretations and applications, particularly as we introduce new products and services and expand into new jurisdictions. We are seeking to bring trust and transparency to crypto . We are and will continue to be subject to laws and regulations relating to the collection, use, retention, security, and transfer of information, including the personally identifiable information of our clients and all of the users in the information chain. We have developed and frequently evaluate and update our compliance models to ensure that we are complying with applicable restrictions. As investment continues, the intersection of technology and finance will require ongoing engagement as new applications emerge. Crypto asset and distributed ledger technology have significant, positive potential with proper collaboration between industry and regulators. Cryptocurrency Held on Platform The Company held cryptocurrency in custodial products on its platform for client customers totaling $1,427.1 million at fair value as of September 30, 2025. In accordance with the SEC Staff Accounting Bulletin No. 122, these assets are not recorded in the Company's consolidated balance sheets. Similarly, as the Company has an obligation to securely store cryptocurrency on its platform, it had a corresponding unrecorded liability of $1,427.1 million as of September 30, 2025. Since the risk of loss related to the obligation to safeguard crypto assets for users of its platform is remote, the Company did not record a liability for such risk of loss as of September 30, 2025 and December 31, 2024 in the Company's consolidated balance sheets. Key Performance Indicators We are in the process of updating our key performance indicators ("KPIs") to reflect the strategic direction of our crypto business and sale of the loyalty business. • Notional traded volume. We define notional traded volume as the total notional volume of crypto transactions. The figures we use represent gross values recorded as of the order date. Notional traded volumes were $400.3 million and $2,025.3 million during the three and nine months ending September 30, 2025, respectively . • Assets under custody. We define assets under custody as the sum of coin quantities held by customers multiplied by the final quote for each coin on the last day of the period. Assets under custody were $1,427.1 and $2,301.9 million as of September 30, 2025 and December 31, 2024, respectively. We expect to continue to evolve our KPIs in future quarters. Results of Operations The following table is our consolidated statements of operations for the three and nine months ended September 30, 2025 and September 30, 2024 , respectively (in thousands): Three Months Ended September 30, 2025 Three Months Ended September 30, 2024 Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024 Crypto services revenue $ 402,211 $ 316,333 $ 2,036,070 $ 1,654,814 Operating expenses: Crypto costs 396,815 312,841 2,012,524 1,636,514 Execution, clearing and brokerage fees 3,965 2,207 15,797 11,229 Compensation and benefits 8,084 9,868 26,040 31,250 Professional services 7,364 5,282 16,562 12,300 Technology and communication 2,210 2,158 5,511 7,306 Selling, general and administrative 3,211 7,830 9,978 19,744 Depreciation and amortization 153 107 527 281 Related party expenses - 150 - 450 Goodwill and intangible assets impairments - - - - Impairment of long-lived assets 480 601 480 744 Restructuring expenses 5,107 425 5,335 7,492 Other operating expenses 85 1 135 97 Total operating expenses 427,474 341,470 2,092,889 1,727,407 Operating income (loss) from continuing operations (25,263) (25,137) (56,819) (72,593) Interest (expense) income, net (50) 1,014 518 3,215 (Loss) gain from change in fair value of warrant liability (37,187) 19,984 (13,543) 13,916 Other (expense) income, net 40,921 263 40,887 910 Loss from continuing operations before income taxes (21,579) (3,876) (28,957) (54,552) Income tax (expense) benefit 25 113 (101) (119) Net loss from continuing operations (21,554) (3,763) (29,058) (54,671) Three Months Ended September 30, 2025 compared to Three Months Ended September 30, 2024 Financial Summary The three months ended September 30, 2025 included the following notable items relative to the three months ended September 30, 2024: • Revenue increased $85.9 million primarily driven by an increase in crypto trading volume compared to the prior year third quarter; and • Operating expenses increased $86.0 million primarily driven by higher crypto trading costs in connection with higher crypto trading volume compared to the prior year third quarter. Revenue Revenues consist of crypto revenue. We earn revenue when consumers use our services to buy, sell, and store crypto. Substantially all of our crypto services revenue transaction revenue from crypto buy/sell trades where we earn a spread on both legs of the transaction (reported gross). Crypto Services Revenue ($ in thousands) Three Months Ended September 30, 2025 Three Months Ended September 30, 2024 $ Change % Change Crypto services $ 402,211 $ 316,333 $ 85,878 27.1 % Crypto services revenue increased by $85.9 million, or 27.1%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was primarily driven by improved market trading volume for crypto as compared to the prior year third quarter. Operating Expenses Operating expenses consist of crypto costs, execution, clearing and brokerage fees, compensation and benefits, professional services, technology and communication expenses, selling, general and administrative expenses, acquisition-related expenses, depreciation and amortization, related party expenses, goodwill and intangible assets impairments, impairment of long-lived assets, restructuring charges, and other operating expenses. Crypto Costs ($ in thousands) Three Months Ended September 30, 2025 Three Months Ended September 30, 2024 $ Change % Change Crypto costs $ 396,815 $ 312,841 $ 83,974 26.8 % Crypto costs represent the gross value of crypto sold by our customers on our platform. These costs are measured at the executed price at the time of the trade. Crypto costs increased by $84.0 million , or 26.8%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024 . The increase reflects improved crypto market trading relative to the prior year third quarter. Execution, Clearing and Brokerage Fees ($ in thousands) Three Months Ended September 30, 2025 Three Months Ended September 30, 2024 $ Change % Change Execution, clearing and brokerage fees $ 3,965 $ 2,207 $ 1,758 79.7 % Execution, clearing and brokerage fees primarily represent payments to clients in exchange for driving order flow to our platform. Execution, clearing and brokerage fees increased by $1.8 million during the three months ended September 30, 2025 . The increase reflects increased crypto transaction volume as described above. Compensation and Benefits ($ in thousands) Three Months Ended September 30, 2025 Three Months Ended September 30, 2024 $ Change % Change Compensation and benefits $ 8,084 $ 9,868 $ (1,784) (18.1 %) Compensation and benefits expense include all salaries and benefits, compensation for contract labor, incentive programs for employees, payroll taxes, share-based and unit-based compensation and other employee related costs. We have restructured our personnel to reduce headcount and adjusted our expense base to better align with our operational priorities and business strategy. Compensation and benefits decreased by $1.8 million, or 18.1%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease was primarily due to decreases of $6.2 million in salaries and wages, and bonuses, slightly offset by an increase of $3.9 million in non-cash compensation. Professional Services ($ in thousands) Three Months Ended September 30, 2025 Three Months Ended September 30, 2024 $ Change % Change Professional services $ 7,364 $ 5,282 $ 2,082 39.4 % Professional services expense includes fees for accounting, legal and regulatory fees. Professional services increased by $2.1 million, or 39.4% , for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase was primarily due to an increase in strategic and transformational initiatives and transaction activity during the three months ended September 30, 2025. Technology and Communication ($ in thousands) Three Months Ended September 30, 2025 Three Months Ended September 30, 2024 $ Change % Change Technology and communication $ 2,210 $ 2,158 $ 52 2.4 % Technology and communication costs represent all non-headcount related costs to deliver technological solutions. Such costs principally include amounts paid for software licenses and software-as-a-service arrangements utilized for operating, administrative and information security activities, fees paid for third-party data center hosting arrangements, and fees paid to telecommunications service providers and for telecommunication software platforms necessary for operation of our customer support operations. These costs are driven by client requirements, system capacity, functionality and redundancy requirements. Technology and communications expense also includes fees paid for access to external market data and associated licensing costs, which may be impacted by growth in electronic contract volume, our capacity requirements, changes in the number of telecommunications hubs, and connections with customers to access our electronic platforms directly. Technology and communications expense decreased by $0.1 million, or 2.4%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease was primarily due to a decrease of $0.4 million in hosting fees, $0.2 million in software license fees, and $0.1 million in telecommunications. We expect these costs to decline in the future as we optimize our operational footprint. Selling, General and Administrative ($ in thousands) Three Months Ended September 30, 2025 Three Months Ended September 30, 2024 $ Change % Change Selling, general and administrative $ 3,211 $ 7,830 $ (4,619) (59.0 %) Selling, general and administrative expenses include marketing, advertising, business insurance, rent and occupancy, bank service charges, dues and subscriptions, travel and entertainment, and other general and administrative costs. Our marketing activities primarily consist of web-based promotional campaigns, promotional activities with clients, conferences and user events, and brand-building activities. Selling, general and administrative expenses do not include any headcount cost, which is reflected in "Compensation and benefits" on the consolidated statements of operations. We expect these costs will decrease as a percentage of our revenue in future years as we gain improved operating leverage from our projected revenue growth and exercise prudent expense management. Selling, general and administrative costs decreased by $4.6 million, or 59.0%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease was primarily due to a decrease of $1.8 million in general insurance compared the previous year third quarter. Depreciation and Amortization ($ in thousands) Three Months Ended September 30, 2025 Three Months Ended September 30, 2024 $ Change % Change Depreciation and amortization $ 153 $ 107 $ 46 43.0 % Depreciation and amortization expense consists of amortization of intangible assets from business acquisitions and internally developed software and depreciation of purchased software and computer and office equipment over their estimated useful lives. Depreciation and amortization increased by $46.0 thousand, or 43.0%, for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The increase is primarily related to capitalized software development. Related Party Expenses ($ in thousands) Three Months Ended September 30, 2025 Three Months Ended September 30, 2024 $ Change % Change Related party expenses $ - $ 150 $ (150) (100.0 %) Related party expenses consist of fees for transition services agreements. Related party expenses decreased by $0.2 million, or (100.0%) , for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. The decrease was due to the termination of the ICE transition services agreement in December 2023. Impairment of long-lived assets ($ in thousands) Three Months Ended September 30, 2025 Three Months Ended September 30, 2024 $ Change % Change Impairment of long-lived assets 480 $ 601 $ (121) (20.1 %) Impairment of long-lived assets decreased by $0.3 million, or (35.5%) for the three months ended September 30, 2025 compared to the three months ended September 30, 2024. During the quarter ended September 30, 2025, we recorded impairment charges of $0.5 million related to internally developed software assets that are in the process of being replaced with upgraded trading technology. Restructuring Expenses ($ in thousands) Three Months Ended September 30, 2025 Three Months Ended September 30, 2024 $ Change % Change Restructuring expenses $ 5,107 $ 425 $ 4,682 n/m Restructuring expenses of $5.1 million during the three months ended September 30, 2025 consist of severance costs related to the May 2, 2024 reduction in force that resulted in the termination of 28 employees. Loss from Change in Fair Value of Warrant Liability ($ in thousands) Three Months Ended September 30, 2025 Three Months Ended September 30, 2024 $ Change % Change Loss from change in fair value of warrant liability $ (37,187) $ 19,984 $ (57,171) n/m We recorded a loss of $37.2 million during the three months ended September 30, 2025 for the change in fair value on the revaluation of our warrant liabilities associated with our public warrants and the Class 1 and Class 2 warrants from the 2024 Concurrent Offerings. We recorded a loss of $20.0 million during the three months ended September 30, 2024 for the change in fair value on the revaluation of our warrant liabilities. These are non-cash losses and/or gains which are driven by fluctuations in the market price of our public warrants and valuation of our Class 1 and Class 2 warrants from the Concurrent Offerings. Other (Expense) Income, net ($ in thousands) Three Months Ended September 30, 2025 Three Months Ended September 30, 2024 $ Change % Change Other (expense) income, net $ 40,921 $ 263 $ 40,658 n/m Other (expense) income, net primarily consists of non-operating gains and losses. During the three months ended September 30, 2025, we had other income of $40.9 million primarily related to $43.4 million net earnings impact related to the fair value of a derivative instrument, partially offset by a $2.6 million loss on the extinguishment of debt. During the three months ended September 30, 2024, we had other income of $0.3 million primarily related to foreign currency translation. Income Tax Expense ($ in thousands) Three Months Ended September 30, 2025 Three Months Ended September 30, 2024 $ Change % Change Income tax expense $ 25 $ 113 $ (88) (77.9 %) Income tax expense during the three months ended September 30, 2025 and September 30, 2024, primarily consists of current state tax expense related to certain state jurisdictions wherein we are required to file income tax returns. Nine Months Ended September 30, 2025 compared to Nine Months Ended September 30, 2024 Financial Summary The nine months ended September 30, 2025 included the following notable items relative to the nine months ended September 30, 2024: • Revenue increased $381.3 million primarily driven by a significant increase in Crypto services revenue resulting from an increase in trading volume; and • Operating expenses increased $365.5 million primarily driven by increased crypto trading costs in conjunction with increased crypto service revenue. Crypto Services Revenue ($ in thousands) Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024 $ Change % Change Crypto services $ 2,036,070 $ 1,654,814 $ 381,256 23.0 % Crypto services revenue increased by $381.3 million, or 23.0%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase was primarily driven by increased crypto trading volume. Crypto Costs ($ in thousands) Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024 $ Change % Change Crypto costs $ 2,012,524 $ 1,636,514 $ 376,010 23.0 % Crypto costs represent the gross value of crypto sold by our customers on our platform. These costs are measured at the executed price at the time of the trade. Crypto costs increased by $376.0 million, or 23.0%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. This increase was primarily driven by increased crypto trading volume. Execution, Clearing and Brokerage Fees ($ in thousands) Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024 $ Change % Change Execution, clearing and brokerage fees $ 15,797 $ 11,229 $ 4,568 40.7 % Execution, clearing and brokerage fees primarily represent payments to clients in exchange for driving order flow to our platform. Execution, clearing and brokerage fees increased $4.6 million, or 40.7%, during the nine months ended September 30, 2025 relative to the same period in the prior year. The increase reflects increased volume in Crypto trading revenue. Compensation and Benefits ($ in thousands) Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024 $ Change % Change Compensation and benefits $ 26,040 $ 31,250 $ (5,210) (16.7 %) Compensation and benefits expense include all salaries and benefits, compensation for contract labor, incentive programs for employees, payroll taxes, share-based compensation and other employee related costs. We have restructured our personnel to reduce headcount and adjusted our expense base to better align with our operational priorities and business strategy. Compensation and benefits decreased by $5.2 million, or 16.7%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The decrease was primarily due to decreases of $3.7 million in salaries and wages and, $3.4 million in bonuses, $0.8 in stock-based compensation, and $0.8 million in benefit related costs as the Company continues to optimize its cost structure. Professional Services ($ in thousands) Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024 $ Change % Change Professional services $ 16,562 $ 12,300 $ 4,262 34.7 % Professional services expense includes fees for accounting, legal and regulatory fees. Professional services increased by $4.3 million, or 34.7%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024 . The increase was primarily due to increases of $1.7 million in legal and $0.8 million of other professional fees, slightly offset by a $0.5 million decrease in audit and tax fees primarily due to an increase in strategic and transformational initiatives and transaction activity during the six months ended September 30, 2025. Technology and Communication ($ in thousands) Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024 $ Change % Change Technology and communication $ 5,511 $ 7,306 $ (1,795) (24.6 %) Technology and communication costs represent all non-headcount related costs to deliver technological solutions. Such costs principally include amounts paid for software licenses and software-as-a-service arrangements utilized for operating, administrative and information security activities, fees paid for third-party data center hosting arrangements, and fees paid to telecommunications service providers and for telecommunication software platforms necessary for operation of our customer support operations. These costs are driven by client requirements, system capacity, functionality and redundancy requirements. Technology and communications expense also includes fees paid for access to external market data and associated licensing costs, which may be impacted by growth in electronic contract volume, our capacity requirements, changes in the number of telecommunications hubs, and connections with customers to access our electronic platforms directly. Technology and communications expense decreased by $1.8 million, or 24.6%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The decrease was primarily due to a decrease of $1.8 million in hardware and software license fees, $0.8 million in hosting fees, and $0.3 million in telecommunications fees. Selling, General and Administrative ($ in thousands) Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024 $ Change % Change Selling, general and administrative $ 9,978 $ 19,744 $ (9,766) (49.5 %) Selling, general and administrative expenses include marketing, advertising, business insurance, rent and occupancy, bank service charges, dues and subscriptions, travel and entertainment, and other general and administrative costs. Our marketing activities primarily consist of web-based promotional campaigns, promotional activities with clients, conferences and user events, and brand-building activities. Selling, general and administrative expenses do not include any headcount cost, which is reflected in "Compensation and benefits" on the consolidated statements of operations. We expect these costs will decrease as a percentage of our revenue in future years as we gain improved operating leverage from our projected revenue growth. Selling, general and administrative costs decreased by $9.8 million, or 49.5%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The decrease was primarily due to a $4.1 million decrease in general insurance, $1.0 million in marketing and promotions, and a $0.6 million decrease in non-recurring vendor cost. Depreciation and Amortization ($ in thousands) Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024 $ Change % Change Depreciation and amortization $ 527 $ 281 $ 246 87.5 % Depreciation and amortization expense consists of amortization of intangible assets from business acquisitions, internally developed software and depreciation of purchased software and computer and office equipment over their estimated useful lives. Depreciation and amortization increased by $0.2 million, or 87.5%, for the nine months ended September 30, 2025 compared to the nine months ended September 30, 2024. The increase was primarily due to amortization associated with software development costs, as the Company continues to capitalize internally developed software development related to Bakkt Crypto. Restructuring Expenses ($ in thousands) Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024 $ Change % Change Restructuring expenses $ 5,335 $ 7,492 $ (2,157) (28.8 %) Restructuring expenses of $5.3 million during the nine months ended September 30, 2025 consist of severance costs related to a reduction in force executed in the first quarter of 2025. Restructuring expenses of $7.5 million during the nine months ended September 30, 2024 consisted of severance costs and accelerated vesting of non-cash compensation related to the termination of a former executive and certain other employees. Gain (Loss) from Change in Fair Value of Warrant Liability ($ in thousands) Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024 $ Change % Change Gain (loss) from change in fair value of warrant liability $ (13,543) $ 13,916 $ (27,459) n/m We recorded a gain of $13.5 million during the nine months ended September 30, 2025 for the change in fair value on the revaluation of our warrant liabilities associated with our public warrants and Class 1 and Class 2 warrants from the Concurrent Offerings. We recorded a loss of $13.9 million during the nine months ended September 30, 2024 for the change in fair value on the revaluation of our warrant liabilities. These are non-cash losses and gains and are driven by fluctuations in the market price of our public warrants and valuation of our Class 1 and Class 2 warrants from the Concurrent Offerings. Other (Expense) Income, net ($ in thousands) Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024 $ Change % Change Other (expense) income, net $ 40,887 $ 910 $ 39,977 n/m Other (expense) income, net primarily consists of non-operating gains and losses. During the nine months ended September 30, 2025, we recognized income, net, of $40.9 million, a primarily related to $43.4 million net earnings impact related to the fair value of a derivative instrument, a net gain of $1.8 million on the assignment of our New York office lease, $0.6 million of sublease income on our Alpharetta headquarters lease, and $1.0 million gain on foreign currency, offset by a $2.3 million loss on the sale of Bakkt Trust and $2.6 million loss on the extinguishment of debt. During the nine months ended September 30, 2024, we recognized income of $0.9 million primarily related to foreign currency. Income Tax Expense ($ in thousands) Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024 $ Change % Change Income tax expense $ (101) $ (119) $ 18 (15.1 %) Income tax expense during the nine months ended September 30, 2025 and September 30, 2024 primarily consists of current state tax expense related to certain state jurisdictions wherein we are required to file income tax returns during the period. Liquidity and Capital Resources As of September 30, 2025, we had $58.3 million and $6.1 million of cash and cash equivalents and restricted cash, respectively. Cash and cash equivalents consist of cash deposits at banks and money market funds. Restricted cash is held to satisfy certain minimum capital requirements pursuant to regulatory requirements, or as collateral for insurance contracts and our purchasing card facility. On June 17, 2025, we entered into a private placement (the "Private Placement") with YA II PN, LTD., a Cayman Islands exempt limited company (the "Investor"). The Private Placement closed on June 18, 2025. Pursuant to the terms of the Private Placement, the Investor purchased a $25 million convertible debenture (the "Convertible Debenture") from the Company for a price of $23.75 million. On July 28, 2025, the Company entered into an Underwriting Agreement with Clear Street LLC and Cohen & Co. Capital Markets, a division of Cohen & Company Securities, LLC (collectively, the "Underwriters"), pursuant to which the Company agreed to sell and issue to the Underwriters an aggregate of 6,753,627 shares (the "Shares") of the Company's Class A Common Stock and, for certain purchasers, 746,373 Pre-Funded Warrants (the "Offering"). The aggregate gross proceeds to the Company from the Offering were $75 million, before deducting fees to the underwriters and other offering expenses payable by the Company. We intend to use our unrestricted cash, inclusive of the proceeds from the Private Placement and Offering, to complete the sale of the Loyalty Business and to fund our day-to-day operations, including, but not limited to funding our regulatory capital requirements, compensating balance arrangements and other similar commitments, each of which is subject to change, and as available (i) activate new crypto clients, (ii) maintain our product development efforts, and (iii) optimize our technology infrastructure and operational support. We utilized $23.8 million of unrestricted cash, and transferred $3.1 million of restricted cash, to complete the sale of the Loyalty Business on October 1, 2025. We continue to evaluate our headcount and expense base. In forecasting the Company's expectation of cash needs for the initial going concern evaluation, the Crypto services revenue growth projections exclude activation of new clients or products currently not live on Bakkt's platform as of the date of release of these consolidated financial statements. In addition, we may in the future enter into arrangements to acquire or invest in complementary businesses, services, technologies or intellectual property rights. However, except with respect to our potential acquisition of DTR pursuant to the Cooperation Agreement, we have no agreements or commitments with respect to any such acquisitions or investments at this time. Management believes that the Company's cash and cash equivalents will be sufficient to fund Bakkt's operations for 12 months from the date of these financial statements are issued. Our future cash requirements will depend on many factors, including our revenue growth rate, the timing and extent of overhead, sales and marketing expenditures to support projected growth, our ability to limit our software development investments to features and functionality with a clear line of sight to revenue generation, and our ability to retain our clients. The following table summarizes our cash flows for the periods presented ( in thousands) : Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024 Net cash used in operating activities $ (142,586) $ (52,605) Net cash (used in) provided by investing activities $ (15,401) $ 7,895 Net cash provided by financing activities $ 81,354 $ 44,078 Operating Activities Since our inception, we have yet to achieve positive cash flow from operations. Our primary uses of cash include compensation and benefits for headcount-related expenses, investment in software and product development of our technology platforms, and associated non-headcount technology and communication cost to develop, operate and support our customer-facing technology platforms. Net cash flows used in operating activities of $142.6 million for the nine months ended September 30, 2025 was primarily related to cash outflows resulting from change in our operating assets and liabilities of $99.3 million and a $43.4 million non-cash gain resulting from the change in fair value of derivative assets. Net cash outflows from changes in operating assets and liabilities for the nine months ended September 30, 2025 were primarily from a $77.5 million decrease in customer funds mainly related to Webull moving a substantial portion of its trading activity off the Company's platform, $7.3 million increase in accounts receivable, a $3.6 million decrease in operating lease liabilities, primarily related to the assignment of the New York office lease, the disposition of $3.5 million in net assets for Bakkt Trust, a $3.4 million decrease in accounts payable.and a $2.4 million decrease in TSA related party payables. Net cash flows used in operating activities of $52.6 million for the nine months ended September 30, 2024 was primarily related to our net loss of $63.1 million, offset by net cash inflows resulting from changes in our operating assets and liabilities of $9.2 million and non-cash charges of $1.3 million. Net cash inflows from changes in our operating assets and liabilities for the nine months ended September 30, 2024 resulted primarily from a $18.6 million increase in customer funds and a decrease in prepaid insurance of $7.4 million, partially offset by a decrease of accounts payable and accrued liabilities of $13.5 million. The non-cash charges primarily consisted of share-based compensation of $13.0 million, gain from change in fair value of warrant liability of $(13.9) million , and non-cash lease expense of $1.0 million . Investing Activities Net cash flows used in investing activities of $15.4 million for the nine months ended September 30, 2025 consisted of a $11.5 million equity method investment, $2.7 million for acquisition of intangible assets and the purchase of $5.1 million of available-for-sale securities, partially offset by $4.5 million of proceeds from the sale of Bakkt Trust. Net cash flows provided by investing activities of $7.9 million for the nine months ended September 30, 2024 consisted of the receipt of $36.7 million of proceeds from the sale of available-for-sale securities, partially offset by the purchase of $26.0 million of available-for-sale debt securities and $2.8 million of capitalized costs of internally developed software for our technology platforms. Financing Activities Net cash flows provided by financing activities of $81.4 million during the nine months ended September 30, 2025 primarily consisted of $63.0 million in proceeds from common stock issuance, $22.2 million in proceeds from the Private Placement, and $7.5 million in proceeds from pre-funded warrants, slightly offset by $3.4 million in tax withholding payments for vested equity awards. Net cash flows provided by financing activities of $44.1 million for the nine months ended September 30, 2024 consisted $46.5 million of proceeds from the 2024 Concurrent Offerings, net of issuance costs, partially offset by $2.4 million tax withholding payments for vested equity awards. Tax Receivable Agreement Concurrently with the completion of the VIH Business Combination, we entered into the TRA. Pursuant to the TRA, among other things, holders of Opco Common Units may, subject to certain conditions, from and after April 16, 2022, exchange such Opco Common Units (along with a corresponding number of shares of our Class V Common Stock), for Class A Common Stock on a one-for-one basis, subject to the terms of the Exchange Agreement, including our right to elect to deliver cash in lieu of Class A Common Stock and, in certain cases, adjustments as set forth therein. Opco will have in effect an election under Section 754 of the Internal Revenue Code for each taxable year in which an exchange of Opco Common Units for Class A Common Stock (or cash) occurs. As of September 30, 2025, 1,063,576 Opco Common Units were exchanged for Class A Common Stock. Based on our history of taxable losses, we have concluded that it is not probable to expect cash tax payments in the foreseeable future and as such, no value has been recorded under the TRA. In connection with the Reorganization, we, ICE and Mr. Naheta entered into the TRA Amendment as well as the Contribution Agreement. Pursuant to the TRA Amendment and the Contribution Agreement, ICE and Mr. Naheta agreed that they would, at closing, (i) contribute their rights under the TRA to NewCo in exchange for a cash payment from NewCo equal to the respective amount to which ICE and Mr. Naheta would otherwise be entitled under the TRA (as amended), (ii) Mr. Naheta would further contribute such cash payable to Mr. Naheta to NewCo in exchange for shares of NewCo Class A Common Stock, and (iii) ICE would further contribute such cash payable to ICE to NewCo in exchange for shares of NewCo Preferred Stock, each convertible into one share of NewCo Class A Common Stock (such conversion being conditional upon the expiry or termination of the waiting period (and any extension thereof, including pursuant to any timing agreement) applicable to it under the HSR Act), and further agreed that the respective obligations of ICE and Mr. Naheta, on the one hand, and NewCo, on the other hand, to transfer the foregoing cash amounts will be net-settled and offset against one another. In addition, the TRA Amendment sets the discount rate to be used in calculating TRA payments to TRA holders at 18%, calculated as of the date of consummation of the Reorganization, except that for ICE and Mr. Naheta only, the value of the TRA payment was capped at the value of such payment calculated as of the date of the TRA Amendment. Contractual Obligations and Commitments The following is a summary of our significant contractual obligations and commitments as of September 30, 2025 (in thousands): Payments Due by Period Less than 1 year 1-3 years 3-5 years More than 5 years Total Purchase obligations (1) $ 4,500 $ 1,500 $ - $ - $ 6,000 Future minimum operating lease payments (2) 1,860 3,875 4,092 4,321 14,148 Total contractual obligations $ 6,360 $ 5,375 $ 4,092 $ 4,321 $ 20,148 (1) Represents minimum commitment payments under a four-year cloud computing arrangement. In December 2023, we agreed to amend the cloud computing arrangement and extended the payment period for an additional year. (2) Represents rental payments under operating leases with remaining non-cancellable terms in excess of one year. On April 7, 2022, we entered into a corporate card services agreement with Bank of America to provide a purchasing card facility that we utilize for redemption purchases made from vendors as part of our loyalty redemption platform. Expenditures made using the purchasing card facility were payable at least bi-monthly, are not subject to formula-based restrictions and do not bear interest if amounts outstanding are paid when due and in full. The purchasing card facility required us to maintain a concentration account with the lender subject to a minimum liquidity maintenance requirement of $7.0 million along with the accounts receivable of our subsidiary, within the loyalty business. Bakkt Holdings, Inc. serves as the guarantor on behalf of our subsidiary under the commercial purchasing card facility. In March 2024, Bank of America required us to pledge as collateral the amounts which were previously required to be maintained in the concentration account. In April 2024, Bank of America reduced our credit line associated with the purchasing card facility from $35.0 million to $20.0 million. In January 2025, Bank of America further reduced our credit line associated with the purchasing card facility from $20.0 million to $18.0 million and changed payment frequency to weekly. There is no defined maturity date for the purchasing card facility. In March 2025, Bank of America further reduced the credit line to $15.0 million. In September 2025, we terminated use of the purchasing card facility in anticipation of the sale of the Loyalty business. Bakkt Holdings, Inc. was released as a guarantor under the commercial purchasing card facility, and our cash collateral requirement was reduced from $7.0 million to $1.5 million as security for any remaining redemption activity processed under the facility. On March 19, 2025, we entered into a Cooperation Agreement with DTR and Mr. Naheta, the sole stockholder of DTR, pursuant to which DTR will provide, subject to the negotiation and execution of a definitive commercial agreement, us with certain exclusive payment processing technology, application programming interfaces, and infrastructure to be integrated into our platform for the enablement of global payments processing services in the jurisdictions where we or our affiliates operate. On the date that is twelve (12) months following the date of on which we initiate processing payments using all or part of DTR's technology (the "Call Event Deadline"), we shall have the exclusive right (such right, the "Call Option") to require Mr. Naheta to sell, convey, transfer, assign and deliver to us 100% of the capital stock and all other equity interests of DTR (the "DTR Equity"). This Call Option may be exercised by us at any time prior to the Call Event Deadline. If we do not exercise the Call Option within the Call Event Deadline, then for a period beginning on the date of expiration of the Call Event Deadline and ending on the second anniversary of the Call Event Deadline, if DTR or Mr. Naheta receives an offer or proposal from a third-party to purchase more than 50% of the DTR Equity, then (i) Mr. Naheta shall provide written notice to us of the material financial and other terms and conditions of such offer or proposal (such notice, the "ROFR Notice") and (ii) for a period of 15 days following receipt of the ROFR Notice, we shall have the right to purchase the DTR Equity on the same terms as set forth in the ROFR Notice (the "ROFR"). The ROFR Notice will expire in the event that (a) the terms proposed by us are not the same or as favorable as those in the ROFR Notice or (b) we exercise the ROFR pursuant to a ROFR Notice but the ROFR transaction is not consummated within 90 days following the date of the ROFR Notice, subject to certain automatic extensions for regulatory approvals, required authorizations or our stockholder approval, which such automatic extension shall not exceed 90 days. If the cumulative volume of payments processed by us utilizing DTR's technology or otherwise facilitated by DTR's technology infrastructure for enabling global payment processing exceeds $2 billion during any 18-month period following the date of the Cooperation Agreement (the "Put Event"), then within three years of such Put Event (the "Put Event Deadline"), Mr. Naheta shall have the right to require us to purchase, acquire and accept from Mr. Naheta the DTR Equity (the "Put Option"). As consideration for the sale of the DTR Equity contemplated by a Put Option or a Call Option, Mr. Naheta will be entitled, in exchange for all of the DTR Equity, to a number of shares of the Class A Common Stock, representing at least 19.9% and no more than 31.5%, of our aggregate common stock (which such total shall include the shares of the then outstanding and issued Class A Common Stock and the shares of Class A Common Stock then exchangeable for the paired interests represented by our Class V Common Stock, par value $0.0001 per share), plus the aggregate number of shares of our Class A Common Stock issuable upon full exercise or conversion of any options, warrants or other convertible or derivative securities then outstanding, on an as-converted basis, which shall not include our publicly traded warrants currently listed on the NYSE (BKKT WS) and any warrants to purchases of Class A Common Stock that are below the Bakkt Share Price (as defined below) (the "Bakkt Share Number") subject to any DTR Adjustment (as defined below); provided that Mr. Naheta will be entitled to a "top up" of additional shares of Class A Common Stock to the extent any such public warrants are actually exercised. Any indebtedness of DTR outstanding immediately prior to the closing of a Call Option or Put Option transaction and certain transaction expenses in excess of $1.0 million incurred by or on behalf of DTR or Mr. Naheta (such amount, the "DTR Value") shall proportionately reduce the number of shares Mr. Naheta is entitled to receive in a Put Option or Call Option transaction (the "DTR Adjustment"). If either we or Mr. Naheta shall exercise the above described Call Option or Put Option, respectively, such transaction shall be (i) executed pursuant to a customary purchase agreement that will contain representations, warranties and interim operating covenants by the Company, DTR and Mr. Naheta that are customary for a transaction of this nature (the "Definitive Agreement"), (ii) subject to, among other things, obtaining any required regulatory approvals, non- objections and/or similar authorizations, our stockholder approval (including compliance with any applicable requirements of the NYSE) and Delaware law, (iii) subject to receipt by us of a fairness opinion from an independent financial advisor, (iv) subject to the execution by the parties of a definitive agreement reflecting the commercial arrangement described above, and (v) subject to us having terminated any lines of credit in effect on the date of the Cooperation Agreement and having repaid in full any indebtedness then outstanding and borrowed thereunder. The Definitive Agreement shall also provide for a clause to allow the Special Committee of the Board to pursue any superior proposal for a transaction that, if consummated, would result in our change of control that is conditioned upon the termination of the Put Option; provided, that we will negotiate reasonably and in good faith with any prospective party to include the Put Option or have such Put Option exercised immediately prior to the closing of such proposed transaction. If, after such negotiation, the Put Option will be terminated, we will be obligated to pay Mr. Naheta a termination fee of 3.0% of the DTR Value, as determined immediately prior to the termination of the Put Option. The price payable by us for the DTR Equity in any such Put Option or Call Option transaction shall be the fair market value as determined by a third-party valuation from an independent valuation firm, and the price of the Class A Common Stock to be issued in a Put Option or Call Option transaction shall be equal to the volume weighted average price of the Class A Common Stock on the NYSE over the 30 consecutive trading day period ending on the trading day immediately preceding the date on which the Class A Common Stock would be issued pursuant to the Cooperation Agreement (the "Bakkt Share Price"), subject to the floor and price cap mechanisms described above. Non-GAAP Financial Measures The unaudited interim consolidated financial statements included in this Report are prepared in accordance with United States generally accepted accounting principles ("GAAP"). We use non-GAAP financial measures to assist in comparing our performance on a consistent basis for purposes of business decision-making by removing the impact of certain items that management believes do not directly reflect our core operations. We believe that presenting non-GAAP financial measures is useful to investors because it (a) provides investors with meaningful supplemental information regarding financial performance by excluding certain items that we believe do not directly reflect our core operations, (b) permits investors to view performance using the same tools that we use to budget, forecast, make operating and strategic decisions, and evaluate historical performance, and (c) otherwise provides supplemental information that may be useful to investors in evaluating our results. We believe that the presentation of the following non-GAAP financial measures, when considered together with the corresponding GAAP financial measures and the reconciliations to those measures provided herein, provides investors with an additional understanding of the factors and trends affecting our business that could not be obtained absent these disclosures. Adjusted EBITDA We present Adjusted EBITDA as a non-GAAP financial measure. We believe that Adjusted EBITDA provides relevant and useful information, which is used by management in assessing the performance of our business. EBITDA is defined as earnings before interest, income taxes, depreciation, and amortization. Adjusted EBITDA is defined as EBITDA before share-based and unit-based compensation expense, goodwill and intangible assets impairments, restructuring charges, changes in the fair value of our warrant liability and certain other non-cash and/or non-recurring items that do not contribute directly to our evaluation of operating results and are not components of our core business operations. Adjusted EBITDA provides management with an understanding of earnings before the impact of investing and financing transactions and income taxes, and the effects of aforementioned items that do not reflect the ordinary earnings of our operations. This measure may be useful to an investor in evaluating our performance. Adjusted EBITDA is not a measure of our financial performance under GAAP and should not be considered as an alternative to net income (loss) or other performance measures derived in accordance with GAAP. Our definition of Adjusted EBITDA may not be comparable to similarly titled measures used by other companies. Non-GAAP financial measures like Adjusted EBITDA have limitations, should be considered as supplemental in nature and are not meant as a substitute for the related financial information prepared in accordance with GAAP. The non-GAAP financial measures should be considered alongside other financial performance measures, including net income (loss) and our other financial results presented in accordance with GAAP. The following table presents a reconciliation of net income (loss), the most directly comparable GAAP operating performance measure, to our Adjusted EBITDA for each of the periods indicated (in thousands): Three Months Ended September 30, 2025 Three Months Ended September 30, 2024 Nine Months Ended September 30, 2025 Nine Months Ended September 30, 2024 Net loss $ (23,156) $ (6,291) $ (37,069) $ (63,078) Depreciation and amortization 153 107 527 281 Interest expense (income), net 50 (1,014) (518) (3,215) Income tax expense (benefit) (25) (113) 101 119 EBITDA (22,978) (7,311) (36,959) (65,893) Share-based and unit-based compensation expense 4,731 2,263 13,423 12,164 Loss (gain) from change in fair value of warrant liability 37,187 (19,984) 13,543 (13,916) Impairment of long-lived assets 480 601 480 744 Restructuring expenses 5,107 425 5,335 7,067 Shelf registration expenses - - - 200 Transition services expense - 1,033 - 300 Gain on lease assignment - - (1,755) - Loss on sale of Bakkt Trust - - 2,301 - Loss on extinguishment of convertible debenture 2,617 - 2,617 - Loss from discontinued operations 1,602 2,528 8,011 8,407 Adjusted EBITDA (loss) $ 28,746 $ (20,445) $ 6,996 $ (50,927) Adjusted EBITDA for the three months ended September 30, 2025 increased by $49.2 million or 240.6% as compared to the three months ended September 30, 2024 primarily due to $43.5 million of other income from a derivative gain and a $6.7 million reduction in compensation (excluding share-based and unit-based compensation expense), professional services, technology and selling, general and administrative expenses for the three months ended September 30, 2025 relative to the same period in the prior year. Adjusted EBITDA loss for the nine months ended September 30, 2025 decreased by $57.9 million or 113.7% as compared to the nine months ended September 30, 2024 mainly due to an overall lower net loss for the nine months ended September 30, 2025 relative to the same period in the prior year. The decreased loss was primarily due to $43.5 million of other income from a derivative gain, and a $13.8 million reduction in compensation (excluding share-based and unit-based compensation expense), professional services, technology and selling, general and administrative expenses for the nine months ended September 30, 2025 relative to the nine months ended September 30, 2024 Critical Accounting Policies and Estimates Our consolidated financial statements are prepared in accordance with GAAP, which requires us to make estimates and apply judgments that affect the reported amounts. In our notes to the unaudited consolidated financial statements, we describe the significant accounting policies used in preparing the consolidated financial statements. Our management has discussed the development, selection, and disclosure of our critical accounting policies and estimates with the Audit and Risk Committee of the Board. For further information about our critical accounting policies and estimates, refer to " Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations " in our Form 10-K filed with the SEC on March 20, 2025. There have been no material changes to our critical accounting policies and estimates since the filing of our Form 10-K. Use of Estimates The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. We base our estimates and assumptions on various judgments that we believe to be reasonable under the circumstances. The significant estimates and assumptions that affect the financial statements may include, but are not limited to, going concern, income tax valuation allowances, useful lives of intangible assets and property, equipment and software, fair value of financial assets and liabilities, determining provision for credit losses, valuation of acquired tangible and intangible assets, the impairment of intangible assets and goodwill, and fair market value of Bakkt incentive units. Actual results and outcomes may differ from management's estimates and assumptions and such differences may be material to our consolidated financial statements. Recently Issued and Adopted Accounting Pronouncements Recently issued and adopted accounting pronouncements are described in Note 2 in the unaudited consolidated financial statements included in this Report .

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