Core Viewpoint - Faruqi & Faruqi, LLP is investigating potential claims against Bakkt Holdings, Inc. due to allegations of misleading statements regarding its revenue sources and client relationships, particularly following the termination of key contracts that significantly impact its financial outlook [2][4]. Group 1: Legal Investigation and Class Action - Faruqi & Faruqi is encouraging investors who suffered losses in Bakkt to discuss their legal options, with a deadline of June 2, 2025, to seek the role of lead plaintiff in a federal securities class action [1][2]. - The firm has a history of recovering hundreds of millions of dollars for investors since its founding in 1995 [3]. Group 2: Allegations Against Bakkt - The complaint alleges that Bakkt misrepresented the stability and diversity of its crypto services revenue, which was heavily reliant on a single contract with Webull [4]. - Bakkt disclosed that Webull accounted for 74% of its crypto services revenue and that 98% of its total revenue was derived from crypto services during the nine months ending September 30, 2024 [5]. - Additionally, Bank of America, which contributed 17% of Bakkt's loyalty services revenue, is also terminating its contract, leading to a projected 73% loss in top-line revenue [5]. Group 3: Market Reaction - Following the announcement of the contract terminations, Bakkt's share price fell by $3.50, or 27.3%, closing at $9.33 per share on March 18, 2025, with unusually high trading volume [6].

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, while net loyalty revenues were $11.1 million, down 8.3% sequentially and 26.5% year-over-year [57][58] 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 [54] - The company processed over $5 trillion in adjusted stablecoin volume in 2024, indicating a strong market presence [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 is aimed at concentrating resources on core competitive advantages in crypto brokerage and institutional trading services [13][15] Management's Comments on Operating Environment and Future Outlook - Management highlighted favorable macro conditions for the crypto industry entering 2025, including increased institutional adoption and a more crypto-friendly regulatory environment [36][39] - 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 a new partnership with DTR, which is expected to enhance its capabilities in the stablecoin payments market [10][12] - The company is exploring strategic alternatives for its loyalty business, indicating a focus on optimizing its service offerings [13] Q&A Session Summary Question: What impact will the Webull contract change have on revenue? - Management acknowledged that Webull represented approximately 74% of crypto revenues for 2024 and that the transition would impact revenue in the short term, but emphasized the importance of strategic initiatives to support Webull's scaling [30][31]

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]