Quarterly net revenue of $13.6 million,
increased 60% year over year
Strong customer activity with digital asset
conversion volume up 60% year over year
Available cash and other liquid assets1 of over
$315 million provides significant growth capital
Updated revenue and cash usage guidance for
2022 reflects the current macroeconomic environment
Net cash use expected to decline 15-20% in 2H22
versus first half 2022 level, driven by prudent expense
management
Bakkt Holdings, Inc. (“Bakkt”) (NYSE: BKKT) announced its
financial and operational results for the second quarter ended June
30, 2022.
“We are proud of our second quarter performance where we
delivered robust revenue growth, with 2Q net revenues up 60%
year-over-year, and maintained a strong balance sheet, with over
$315 million in available cash and other highly liquid assets,”
said Gavin Michael, President and CEO. “Our strong platform and
compliance-first approach enable us to withstand challenging
markets and continue to execute against our roadmap, working
closely with our partners to fully integrate our capabilities and
help bring them to market.”
Recent Strategic Highlights
- Powering Loyalty: Visa – We signed a strategic alliance
with Visa to provide our solutions to Visa’s extensive
network.
- Crypto Connect: Sullivan Bank – We are continuing to
sign up new banks for our crypto capabilities through our
previously announced platform partnerships. We are pleased to add
our newest partner, Sullivan Bank, and will enable their retail
clients to buy, sell and hold cryptocurrency within their existing,
trusted banking environment. Our secure, stable, regulated and
trusted platform provides simple access to crypto for a growing
number of consumers.
- Crypto Platform: Mayor of Miami – We are engaged with
the Mayor of Miami to explore opportunities to activate Miami’s
crypto ecosystem. We will partner with the Mayor on various use
cases including Bakkt® Crypto Payout.
Second Quarter Financial Highlights
(unaudited)
$mm's
Successor
2Q22
Predecessor
2Q21
Increase/
(decrease)
Net revenues
$13.6
$8.5
60%
Operating expenses
57.1
39.8
43%
Operating loss
$(43.6)
$(31.3)
(39%)
Net loss
$(27.6)
$(31.9)
13%
Adjusted EBITDA (non-GAAP)
$(29.6)
$(24.9)
(19%)
__________________
1
Includes other highly liquid assets such
as Treasury bills and notes; excludes restricted cash
- Transacting accounts of 681,000 increased 10% year-over-year.
Digital asset conversion volume of $205 million increased 60%
year-over-year due to strong loyalty redemption growth, led by
increased travel activity.
- Net revenue of $13.6 million increased 60% year-over-year,
primarily driven by strong transaction revenue growth from loyalty
redemption.
- Operating expense of $57.1 million increased 43%
year-over-year, primarily driven by increased noncash compensation
expense.
- Adjusted EBITDA (non-GAAP) of $(29.6 million) decreased 19%
year-over-year, primarily due to higher operating expenses.
Updated Guidance for 20222
- Net revenue expected to grow to $57 million - $62 million in
2022, an increase of approximately 45% to 60% compared to $27.9
million in Predecessor from 1/1/21-10/14/21 and $11.5 million in
Successor from 10/15/21-12/31/21 (or 2021 Combined net revenue of
$39.4 million).
- Prior 2022 guidance of $60 million - $80 million.
- Updated guidance due to elongated crypto decision timelines
given current market environment and summer air travel supply
constraints.
- Assumes macro environment that supports strong merchandise
loyalty redemption volume in the seasonally strong fourth
quarter.
- Expect to use $135 million - $140 million of cash during 2022
as we continue to work to execute on our roadmap.
- Prior 2022 guidance of $150 million - $170 million.
- We used approximately $76 million of cash in the first half of
2022.
- Updated outlook reflects an approximate 15% to 20% reduction in
the second half of 2022 from levels in the first half of the year,
driven by prudent expense management, while continuing to deliver
on our roadmap.
- Strong available liquidity, with approximately $315 million of
available cash and other liquid assets1 as of June 30, 2022.
- We expect to continue to invest in growing the business, and
therefore expect to recognize quarterly net losses during
2022.
Webcast and Conference Call Information
Bakkt will host a conference call at 9:00AM ET, August 11, 2022.
The live webcast of Bakkt’s earnings conference call can be
accessed at https://investors.bakkt.com, along with the earnings
press release and accompanying slide presentation. Investors and
analysts interested in participating in the call are invited to
dial (844) 200-6205 or (646) 904-5544, and reference participant
access code 262063 approximately ten minutes prior to the start of
the call. A replay will be available promptly after the call and
can be accessed by dialing (866) 813-9403 and entering the access
code 733268. The replay will be available through September 10,
2022.
__________________
2
Guidance assumes no further significant
disruptions from COVID-19 pandemic; potential acquisitions and
other significant opportunities are not included in this guidance.
See disclaimers for more information regarding forward-looking
statements, which includes all guidance provided herein
About Bakkt
Bakkt is a digital asset platform that unlocks crypto and drives
loyalty to create delightful, connected experiences for a broad
range of clients. Bakkt’s platform, available through the Bakkt App
and to partners, amplifies consumer spending and bolsters loyalty
programs, adding value for all key stakeholders within the Bakkt
payments and digital assets ecosystem. Launched in 2018, Bakkt is
headquartered in Alpharetta, GA. For more information, visit:
https://www.bakkt.com/ | Twitter @Bakkt | LinkedIn
https://www.linkedin.com/company/bakkt/
Bakkt-E
Source: Bakkt Holdings, Inc.
Basis of Presentation
“Predecessor” information represents the results of Bakkt
Holdings, LLC prior to the business combination with VPC Impact
Acquisition Holdings (VIH), which closed on October 15, 2021.
“Successor” information represents the results of Bakkt Holdings,
Inc. from the date the business combination closed through the end
of the applicable period. “Combined” information represents the
combination of Predecessor and Successor for the applicable period.
Bakkt has provided the Combined information as management uses such
information when evaluating the company’s results for periods that
straddle the closing of the business combination. Combined
information has not been calculated in accordance with generally
accepted accounting principles (“GAAP”).
Note on Forward-Looking Statements
This press release contains “forward-looking statements” within
the meaning of Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934, as
amended. Such statements include, but are not limited to,
statements regarding Bakkt’s guidance, plans, objectives,
expectations and intentions with respect to future operations,
products, services and the application of Bakkt’s available cash,
among others. Forward-looking statements can be identified by words
such as “will,” “likely,” “expect,” “continue,” “anticipate,”
“estimate,” “believe,” “intend,” “plan,” “projection,” “outlook,”
“grow,” “progress,” “potential” or words of similar meaning. Such
forward-looking statements are based upon the current beliefs and
expectations of Bakkt’s management and are inherently subject to
significant business, economic and competitive uncertainties and
contingencies, many of which are difficult to predict and beyond
Bakkt’s control. Actual results and the timing of events may differ
materially from the results anticipated in such forward-looking
statements. You are cautioned not to place undue reliance on such
forward-looking statements. Such forward-looking statements relate
only to events as of the date on which such statements are made and
are based on information available to us as of the date of this
press release. Unless otherwise required by law, we undertake no
obligation to update any forward-looking statements made in this
press release to reflect events or circumstances after the date of
this press release or to reflect new information or the occurrence
of unanticipated events.
The following factors, among others, could cause actual results
and the timing of events to differ materially from the anticipated
results or other expectations expressed in such forward-looking
statements: (i) risks related to disruption of management time from
ongoing business operations due to post-closing business
combination matters; (ii) the impact of the ongoing COVID-19
pandemic; (iii) changes in the markets in which Bakkt competes,
including with respect to its competitive landscape, technology
evolution or regulatory changes; (iv) changes in the markets that
Bakkt targets; (v) risk that Bakkt may not be able to execute its
growth strategies, including identifying and executing
acquisitions; (vi) risks relating to data security; and (vii) risk
that Bakkt may not be able to develop and maintain effective
internal controls. The foregoing list of factors is not exhaustive.
You should carefully consider the foregoing factors and the other
risks and uncertainties described under the heading “Risk Factors”
in Bakkt’s filings with the Securities and Exchange Commission,
including its most recent Annual Report on Form 10-K and any
subsequent Quarterly Reports on Form 10-Q.
Definitions
Digital asset conversion volume:
Dollar value of transaction volume across loyalty redemption,
crypto buy/sell and gift card purchases
Transacting accounts: Unique
accounts that perform transactions on the Bakkt platform each
month
Non-GAAP Financial Measures
Adjusted EBITDA is a non-GAAP financial measure, which we define
as earnings before interest, income taxes, depreciation,
amortization and certain non-cash and/or non-recurring items that
do not contribute directly to our evaluation of operating results.
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 tied measures used by other companies.
In addition to the items above, Adjusted EBITDA as a non-GAAP
financial measure also excludes interest income (expense) and other
income (expense), and income tax (expense) benefit, as these items
are not components of our core business operations.
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. These limitations include the
following:
- share-based and unit-based compensation expense, including
changes in the fair value of our participation unit liability,
which has been excluded from Adjusted EBITDA because the amount of
such expenses in any specific period may not directly correlate to
the underlying performance of our business operations, has been,
and will continue to be for the foreseeable future, a significant
recurring expense in our business and an important part of our
compensation strategy;
- changes in the fair value of our warrant liability, which in
any specific period may not directly correlate to the underlying
performance of our business operations, and do not necessarily
reflect future cash outlays as the liability is measured at each
reporting date;
- the intangible assets being amortized, and property and
equipment being depreciated, may have to be replaced in the future,
and the non-GAAP financial measures do not reflect cash capital
expenditure requirements for such replacements or for new capital
expenditures or other capital commitments; and
- non-GAAP measures do not reflect changes in, or cash
requirements for, our working capital needs.
Because of these limitations, Adjusted EBITDA should be
considered alongside other financial performance measures,
including net loss and our other financial results presented in
accordance with GAAP.
Reconciliation of GAAP Net Income /
(Loss) to Non-GAAP Adjusted EBITDA ($ in millions)
(unaudited)
Successor
Predecessor
2Q22
2Q21
Net loss
$(27.6)
$(31.9)
Depreciation and amortization
6.1
3.0
Interest (income) expense
(0.2)
0.1
Income tax (benefit) expense
(5.1)
0.2
EBITDA
$(26.8)
$(28.6)
Acquisition-related transaction costs
0.2
2.5
Share-based and unit-based compensation
expense
7.1
1.3
(Gain) from change in fair value of
warrant liability
(10.3)
0.0
ICE transition services expense
0.3
0.0
Adjusted EBITDA
$(29.6)
$(24.9)
Consolidated Balance Sheet ($ in
millions)
Successor
As of 6/30/22
(unaudited)
As of 12/31/21
Assets
Current Assets:
Cash and cash equivalents
$126.8
$391.4
Restricted cash
16.5
16.5
Customer funds
0.6
0.6
Available-for-sale securities
188.7
0.0
Accounts receivable, net
21.8
18.1
Prepaid insurance
23.6
32.2
Safeguarding asset for cryptoassets
147.1
0.0
Other current assets
7.7
4.8
Total current assets
532.8
463.5
Property, equipment and software, net
21.3
6.1
Goodwill
1,527.1
1,527.1
Intangible assets, net
377.7
388.5
Deposits with clearinghouse, noncurrent
(affiliate in Predecessor period)
15.2
15.2
Other assets
24.1
13.9
Total assets
$2,498.1
$2,414.3
Liabilities and Stockholders’
Equity
Current liabilities:
Accounts payable and accrued
liabilities
$65.6
$64.1
Customer funds payable
0.6
0.6
Deferred revenue, current
4.1
4.6
Due to related party (affiliate in
Predecessor period)
0.6
0.6
Safeguarding obligations for
cryptoassets
147.1
0.0
Other current liabilities
2.1
3.7
Total current liabilities
220.1
73.6
Deferred revenue, noncurrent
3.9
4.8
Warrant liability
4.7
17.4
Deferred tax liabilities, net
22.4
11.6
Other noncurrent liabilities
22.4
12.7
Total liabilities
273.5
120.1
Stockholders’ equity:
Class A common stock ($0.0001 par value,
750,000,000 shares authorized, 75,343,724 shares issued and
outstanding as of 6/30/22 and 57,164,388 shares issued and
outstanding as of 12/31/21)
0.0
0.0
Class V common stock ($0.0001 par value,
250,000,000 shares authorized, 188,438,938 shares issued and
outstanding as of 6/30/22 and 206,271,792 shares issued and
outstanding as of 12/31/21)
0.0
0.0
Additional paid-in capital
718.6
566.8
Accumulated other comprehensive (loss)
(0.1)
(0.1)
Accumulated deficit
(109.4)
(98.3)
Total stockholders’ equity
609.1
468.4
Noncontrolling interest
1,615.6
1,825.8
Total equity
2,224.7
2,294.2
Total liabilities and stockholders’
equity
$2,498.1
$2,414.3
Consolidated Statement of Operations ($
in millions) (unaudited)
Successor
Predecessor
2Q22
2Q21
Revenues:
Net revenues (includes related party net
revenues of $14 and affiliate net revenues of $(17),
respectively)
$13.6
$8.5
Operating expenses:
Compensation and benefits
34.2
19.9
Professional services
1.9
0.8
Technology and communication
4.2
3.9
Selling, general and administrative
9.8
9.0
Acquisition-related expenses
0.2
2.5
Depreciation and amortization
6.1
3.0
Related party expenses (affiliate in
Predecessor period)
0.3
0.5
Other operating expenses
0.5
0.3
Total operating expenses
57.1
39.8
Operating loss
(43.6)
(31.3)
Interest income (expense), net
0.2
(0.1)
Gain from change in fair value of warrant
liability
10.3
0.0
Other income (expense), net
0.4
(0.3)
Loss before income taxes
(32.7)
(31.7)
Income tax benefit (expense)
5.1
(0.2)
Net loss
(27.6)
(31.9)
Less: Net loss attributable to
noncontrolling interest
(23.7)
-
Net loss attributable to Bakkt
Holdings, Inc.
$(3.9)
-
Net loss per share attributable to Bakkt
Holdings, Inc.
Class A common stockholders per share:
Basic
$(0.05)
-
Diluted
$(0.05)
-
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220810005724/en/
Investor Relations Ann DeVries, Head of Investor
Relations Ann.DeVries@bakkt.com
Media Lauren Post, Head of Communications
Lauren.Post@bakkt.com
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