Core Insights - Bakkt Holdings, Inc. is under investigation by Bragar Eagel & Squire, P.C. for potential violations of federal securities laws and unlawful business practices [1] - The company announced that Bank of America and Webull Pay will not renew their commercial agreements, leading to a significant drop in stock price on heavy trading volume [2] Company Developments - Bakkt has rescheduled its fourth quarter 2024 earnings release and delayed the filing of its annual 2024 financial report to finalize its consolidated financial statements [2] - The stock experienced a notable decline following the announcement of the non-renewal of commercial agreements and the delays in financial reporting [2] Legal Context - The law firm is reaching out to stockholders who may have suffered losses and is investigating claims related to Bakkt's business practices [1][3]

Financial Performance - The Company incurred a net loss of $798.0 million as of December 31, 2024, raising substantial doubt about its ability to meet obligations for at least 12 months[535]. - The Company’s accumulated deficit totaled $798.0 million as of December 31, 2024, indicating ongoing financial challenges[535]. - Total revenues for 2024 reached $3,490,220, a significant increase of 347% compared to $780,136 in 2023[567]. - Crypto services revenue surged to $3,441,056 in 2024, up from $726,988 in 2023, reflecting a growth of 373%[567]. - Operating loss for 2024 was $92,916, an improvement from a loss of $227,890 in 2023[567]. - Net loss attributable to Bakkt Holdings, Inc. for 2024 was $46,659, compared to a net loss of $74,854 in 2023, indicating a reduction of 37%[567]. - Comprehensive loss for 2024 was $105,121, compared to $225,262 in 2023, showing a reduction of 53%[570]. - The total net loss for the year ended December 31, 2023, was $1,989,934, which represents a significant increase compared to the previous year's loss of $1,411,829[573]. - The total comprehensive loss for the year was $1,103,447, which includes net losses and other comprehensive income adjustments[573]. Capital Structure and Financing - The company entered into a $40.0 million secured revolving credit facility for working capital and general corporate purposes in August 2024[48]. - The fair value of Class 1 and Class 2 warrants was recorded at $42.8 million as of December 31, 2024, with grant date fair values of $27.7 million and $2.6 million respectively[539]. - The Company plans to implement cost reduction measures, including personnel reductions and a hiring freeze, to preserve cash and fund operations[535]. - Cash and cash equivalents decreased to $39,049 in 2024 from $52,882 in 2023, a decline of 26%[565]. - Total liabilities rose to $206,524 in 2024, compared to $129,597 in 2023, marking an increase of 59%[565]. - The Company secured a $40 million revolving credit facility with ICE, maturing on December 31, 2026, to enhance liquidity[601]. Customer Engagement and Services - The company provides crypto-related services including trading, custody, and external transfers for various supported crypto assets[58][60]. - As of December 31, 2024, approximately 47% of total customer crypto assets were self-custodied by Bakkt Crypto[85]. - Webull accounted for 74% and 73% of the company's Crypto services revenues for the years ended December 31, 2024 and 2023, respectively[116]. - Revenue from crypto services has become a significant driver of the business following the acquisition of Bakkt Crypto in April 2023, with expectations for continued growth as the client base expands[118]. - The company plans to add 17 coins to its platform in 2024 and enhance deposit and withdrawal functionalities, expanding its market reach from individual consumers to businesses and trust entities[122]. - The company operates under a "business-to-business-to-consumer" (B2B2C) model, focusing on building scalable partnerships to drive customer acquisition and engagement[124]. Regulatory Compliance and Risk Management - The company has established a comprehensive cybersecurity program and maintains compliance with various regulatory standards, including PCI-DSS and NYDFS requirements[130]. - Bakkt Crypto holds a money transmitter license in each jurisdiction where it operates, ensuring compliance with record-keeping and reporting requirements[132]. - The company is subject to various licensing and regulatory requirements for its virtual currency business, including a "BitLicense" from NYDFS and a Louisiana virtual currency business activity license[133]. - The SEC's evolving stance on crypto assets may lead to changes in regulatory requirements affecting the company's crypto services[135]. - The Company has implemented a comprehensive Anti-Money Laundering (AML) compliance program to prevent illicit activities on its platform[139]. Operational Efficiency and Strategic Planning - The Company’s strategic plan since Q4 2022 focuses on optimizing capital allocation and reducing cash expenses due to ongoing losses[535]. - The assessment of the Company's ability to continue as a going concern involved evaluating forecasted cash flows and revenue growth rate assumptions[536]. - The Company utilized a discounted cash flow model for its impairment testing, reflecting assumptions regarding revenue growth rates and discount rates[543]. - The Company’s revenue growth rate assumptions were evaluated against historical results and relevant market data to ensure accuracy[545]. - The company is actively monitoring evolving privacy, data protection, and cybersecurity regulations that may impact its operations[136]. Employee Relations and Corporate Culture - The company maintains good relations with its employees, with no work stoppages reported[148]. - The company emphasizes a culture of accountability and ethical behavior among its employees, providing regular training on compliance with industry regulations[145]. - As of December 31, 2024, the company had a total of 559 full-time employees, with approximately 15% dedicated to engineering, design, or product roles[148]. Market Expansion and Partnerships - The company has made headway in building partnerships across various industries, with significant untapped growth opportunities remaining[108]. - The acquisition of Apex Crypto LLC was completed on April 1, 2023, enhancing the company's crypto service offerings[583]. - The company is investigating a possible sale or wind-down of Bakkt Trust due to lack of market traction and high capital costs, with a definitive agreement reached to sell it to ICE[584]. - As of December 31, 2024, the company offers crypto services across the U.S., Latin America, Europe, and Asia, expanding its market reach[587].

Financial Data and Key Metrics Changes - In Q4 2024, total revenues net of crypto costs increased 6.6% year-over-year to $17.8 million, while total operating expenses decreased 69% year-over-year to $29.5 million [22][23] - Net loss improved 48.7% year-over-year to $40.4 million, and adjusted EBITDA loss improved 66.3% year-over-year to $6.4 million [23][62] - For the full year, total revenues net of crypto costs increased 8.8% to $63 million, and net loss improved 54.2% to $103.4 million [23][61] Business Line Data and Key Metrics Changes - The crypto business saw significant growth, with monthly notional trading volume reaching record highs, totaling $1.78 billion in Q4, a 465% sequential increase and 778% year-over-year growth [21][22] - Loyalty redemption volume increased 33.8% sequentially, indicating positive trends in that segment as well [54] Market Data and Key Metrics Changes - Assets under custody for the brokerage business reached $2.3 billion, up 145.2% from the previous quarter and up 228.1% year-over-year, driven by higher coin prices [54] - The company processed over $5 trillion in adjusted volume across nearly 200 million accounts in 2024, highlighting the growth of stablecoins [9] Company Strategy and Development Direction - The company is undergoing a strategic transformation to focus on becoming a pure play crypto infrastructure company, including a partnership with DTR to enter the cross-border stablecoin payments industry [6][10] - The divestiture of Bakkt Trust Company aims to streamline operations and improve cost structure, expected to reduce operating expenses by $3.8 million annually [15][16] Management's Comments on Operating Environment and Future Outlook - Management noted favorable macro conditions for the crypto industry entering 2025, with increased institutional adoption and a more crypto-friendly regulatory environment under the new US administration [36][38] - The company anticipates total revenues for Q1 2025 to be in the range of $1.03 billion to $1.28 billion, reflecting continued growth [65] Other Important Information - The company has formed relationships with various companies to enhance its capabilities in crypto brokerage and institutional trading [32] - The strategic addition of new supported coins contributed to exceptional notional volume performance, with 12 new coins added in 2024 [27] Q&A Session Summary Question: What impact will the Webull contract change have on revenue? - The company acknowledged that Webull represented approximately 74% of its crypto revenues for 2024 and is working closely with them to ensure a smooth transition as they modify their infrastructure [30][31]

Bakkt (BKKT) Q4 2024 Earnings Call March 19, 2025 11:22 PM ET Company Participants Cody Fletcher - DirectorAndy Main - CEO & PresidentKaren Alexander - CFO Operator Greetings, and welcome to the Bakkt Fourth Quarter twenty twenty four Earnings Conference Call. At this time, all participants are in a listen only mode. As a reminder, this conference call is being recorded. I will now turn it over to Cody Fletcher, Investor Relations Advisor at Bakkt. Please go ahead. Cody Fletcher Hello, everyone. Thank you f ...

Financial Performance - Total revenue for Q4 2024 reached $1,797.3 million, a 737.9% increase year-over-year, while full year revenue was $3,490.2 million, up 347.4% from the previous year[4][11]. - Crypto services revenue for FY 2024 was $3,441.1 million, up from $727.0 million in FY 2023, marking a growth of 373%[33]. - Net loss for Q4 2024 improved by 48.7% to $40.4 million, while the full year net loss decreased by 54.2% to $103.4 million[5][13]. - Adjusted EBITDA loss for Q4 2024 was $6.4 million, a 66.3% improvement year-over-year, and for the full year, it was $64.2 million, down 31.6%[5][13]. - Operating loss for Q4 2024 was $11.7 million, an improvement compared to a loss of $78.5 million in Q4 2023[33]. - Net loss attributable to Bakkt Holdings, Inc. for FY 2024 was $46.7 million, a reduction from $74.9 million in FY 2023[33]. - Adjusted EBITDA loss for FY 2024 was $64.2 million, an improvement from a loss of $93.9 million in FY 2023[40]. Trading and Account Growth - Notional crypto trading volume in Q4 2024 was $1,777.6 million, representing a 778% increase year-over-year and a 465% increase sequentially[6][18]. - Crypto enabled accounts grew to 6.7 million, an 8.1% increase year-over-year, and total transacting accounts increased by 6.5% to approximately 974,429[6]. - Assets under custody increased by 228.1% year-over-year to $2,301.9 million, driven by higher trading prices for crypto assets[6]. Strategic Initiatives - The company signed a definitive agreement to divest its Bakkt Trust custody business to Intercontinental Exchange for $1.5 million, which is expected to streamline operations and reduce annual operating expenses by $3.8 million[12][14]. - BakktX trading infrastructure has been successfully integrated, enhancing efficiency and scalability, enabling the company to handle increased trading volumes with 100% uptime[19]. - The company is exploring strategic alternatives for its Loyalty business segment, including a potential sale or wind-down, to focus on core crypto offerings[15]. Future Outlook - For Q1 2025, Bakkt expects total revenues between $1,043 million and $1,300 million, with gross crypto revenues projected at $1,035 million to $1,290 million[22]. Cash and Assets - Cash and cash equivalents at the end of Q4 2024 totaled $153.7 million, compared to $118.5 million at the end of Q4 2023[36]. - Total assets as of December 31, 2024, were $269.4 million, slightly up from $265.3 million as of December 31, 2023[31]. - Total liabilities increased to $206.5 million as of December 31, 2024, compared to $129.6 million as of December 31, 2023[31]. - Customer funds payable rose significantly to $88.6 million in Q4 2024, up from $32.9 million in Q4 2023[31]. - The company reported a net cash provided by operating activities of $31.4 million in Q4 2024, contrasting with a net cash used of $6.8 million in Q4 2023[35].

Group 1 - Bakkt Holdings, Inc. shares fell over 31% in after-hours trading on March 17, 2025, following the announcement that Bank of America and Webull will not renew their commercial agreements, which are set to expire in April and June 2025 respectively [2] - The company also announced a delay in filing its annual Form 10-K for the fiscal year ending December 31, 2024 [2] - Block & Leviton is investigating Bakkt Holdings for potential securities law violations and is reaching out to investors who may have lost money [1][4] Group 2 - Investors who purchased Bakkt Holdings common stock and experienced a decline in share value may be eligible to recover losses [3] - Block & Leviton is recognized as a leading securities class action firm, having recovered billions for defrauded investors [7] - The firm encourages whistleblowers with non-public information about Bakkt Holdings to assist in the investigation, with potential rewards of up to 30% of any successful recovery [6]

Group 1 - Bakkt Holdings, Inc. shares fell over 31% in after-hours trading on March 17, 2025, following the announcement that Bank of America and Webull will not renew their commercial agreements, which are set to expire in April and June 2025 respectively [2] - The company also announced a delay in filing its annual Form 10-K for the fiscal year ending December 31, 2024 [2] - Block & Leviton is investigating Bakkt Holdings for potential securities law violations and may file an action to recover losses for investors [4] Group 2 - Investors who have lost money in Bakkt Holdings, regardless of whether they sold their shares, may be eligible to contact Block & Leviton for assistance [3] - Block & Leviton is recognized as a leading securities class action firm, having recovered billions for defrauded investors [7] - Whistleblowers with non-public information about Bakkt Holdings may receive rewards of up to 30% of any successful recovery by providing original information to the SEC [6]

Group 1: TMTG and Bakkt Acquisition - Trump Media and Technology Group (TMTG) is in advanced talks to purchase cryptocurrency exchange Bakkt, with an all-share purchase being finalized [1] - Bakkt acknowledged the rumors regarding the potential transaction but refrained from commenting on market speculation [2] - A TMTG acquisition of Bakkt would strengthen Trump's involvement in the cryptocurrency industry, which he has supported during his presidential campaign [5] Group 2: Market Reactions and Cryptocurrency Performance - Bakkt's shares surged 162.5% following the news of the potential acquisition, with an additional 14.8% increase in premarket trading [2] - TMTG shares rose 16.7% on the day of the report but fell over 7% in afternoon trading the following day [4] - Bitcoin's price increased over 32% since November 5, reaching an all-time high of more than $93,000, driven by expectations of a favorable regulatory environment under Trump's administration [6] - The total cryptocurrency market value reached an all-time high of $3.16 trillion, with derivatives open interest exceeding $102 billion [7]

Core Insights - President-elect Donald Trump's social media company, Trump Media & Technology Group (TMTG), is in advanced talks to acquire cryptocurrency firm Bakkt in an all-share deal [1][6] - Bakkt's market capitalization was reported to be over $150 million as of Monday [2] - Bakkt shares surged more than 162% on Monday following news of the potential acquisition, with a further increase of 3.3% on Tuesday, while TMTG shares rose over 16% before falling approximately 9% the next day [4] Company Overview - Bakkt has faced challenges in achieving profitability since going public in 2021, particularly in its crypto custody business, which reported operating losses of $27,000 against revenues of $328,000 for the three months ending September 30 [9] - The crypto custody division is expected to be excluded from the acquisition deal [10] - TMTG, which operates the social media platform Truth Social, has also struggled with profitability, reporting a net loss of $19 million and approximately $1 million in revenue for the period ending September 30 [13] Market Context - The acquisition represents Trump's continued interest in the cryptocurrency sector, aligning with his pro-crypto stance during his campaign [6] - Following Trump's electoral victory, stocks of Bitcoin and crypto firms have seen significant increases as investors anticipate a relaxation of industry regulations [8] - Truth Social has struggled to compete with larger platforms, having only around 76,000 daily active users in the US as of May, compared to X's 100 million users [14][15]

Group 1 - Proactive provides fast, accessible, informative, and actionable business and finance news content to a global investment audience [2][3] - The news team covers a wide range of sectors including biotech, pharma, mining, natural resources, battery metals, oil and gas, crypto, and emerging technologies [3] - Proactive has a presence in key finance and investing hubs with bureaus and studios located in major cities such as London, New York, and Sydney [2] Group 2 - The company emphasizes the use of technology to enhance workflows and improve content production [4] - Proactive employs automation and software tools, including generative AI, while ensuring that all content is edited and authored by humans [5]