Bakkt Reports First Quarter 2025 Results

- Entered into cooperation agreement with Distributed Technologies Research $(DTR.AU)$ in Q1 2025 for access to AI and stablecoin payment infrastructure

- Commercial agreement with DTR, expected to be completed by Q3 2025, expected to bring new products for customers, including merchant checkout widget and white-label AI-powered plug-in for global money movement

- Strengthened the leadership team with the addition of Ankit Khemka, Chief Product Officer, and Phillip Lord, President, Bakkt International

- Net income of $16.2 million, up 176.5% year-over-year, 140.4% sequentially

ALPHARETTA, Ga.--(BUSINESS WIRE)--May 12, 2025-- 

Bakkt Holdings, Inc. ("Bakkt," "Company," "we" or "us") (NYSE: BKKT) announced its financial and operational results for the quarter ended March 31, 2025.

Co-CEO Comments:

"The planned strategic collaboration between DTR and Bakkt will represent a transformative convergence of capabilities that we believe will position us to capture significant share in the rapidly expanding stablecoin payments ecosystem," said Akshay Naheta, Co-CEO of Bakkt. "By integrating DTR's cutting-edge payments infrastructure and AI capabilities with Bakkt's U.S. regulated trading platform, we will create a comprehensive ecosystem designed for frictionless movement between crypto trading, AI-powered solutions, and global digital payments. Our integration roadmap includes the launch of innovative products that we expect will redefine user experiences in the digital asset space while adhering to all compliance standards. We're committed to bridging the gap between traditional finance and decentralized finance through AI-integrated payments platforms, creating value for both institutional and retail customers with our groundbreaking products and solutions we look forward to bringing to market."

He continued, "We've also strengthened our executive leadership team with two key hires: Ankit Khemka as Chief Product Officer, to accelerate the rollout of our innovative product roadmap, and Phillip Lord as President of Bakkt International, to further expand our sales leads for helping with the launch of established, global fintech platforms in the U.S. market. Additionally, we're conducting a thorough and strategic review of our priorities and organizational structure. We see meaningful opportunities to drive sharper resource allocation, unlock cost efficiencies, and deliver savings across the business, which will be reflected over the next few quarters."

"Bakkt's evolution into a focused crypto infrastructure company is accelerating with remarkable momentum," said Andy Main, Co-CEO and President of Bakkt. "With our planned strategic divestitures of non-core assets and our collaboration with DTR, we're sharpening our focus on our fundamental crypto strengths while simultaneously enhancing our technological capabilities and reducing operating expenses. Our commercial agreement with DTR, which we are presently negotiating, will unlock access to DTR's advanced AI frameworks, which we believe will create unprecedented opportunities for product innovation, operational efficiencies, and customer engagement. We're seeing growing interest from global exchanges, decentralized wallet providers and financial institutions seeking compliant access to next-generation payment solutions. The positive regulatory trajectory in the U.S. for stablecoins, including progress on key legislation like the STABLE Act, combined with major financial and technology companies preparing to enter the space, validates our strategic direction and the timing of our cooperation with DTR as digital payments continue to evolve rapidly."

First Quarter 2025 Key Performance Indicators:

   -- Crypto enabled accounts grew to 6.8 million, up 7.9% year-over-year. 
 
   -- Total transacting accounts remained relatively flat year-over-year and 
      declined 20.1% sequentially to approximately 777,349, driven by reduced 
      broader market activity. 
 
   -- Notional traded volume, comprised of total crypto trading and loyalty 
      redemption, increased 16.6% year-over-year to $1,213.0 million for the 
      quarter, driven by stronger crypto market activity and increased prices 
      and down 39.1% sequentially due to the reduced broader market activity. 
 
   -- Assets under custody increased 52.5% year-over-year to $1,872.6 million, 
      primarily due to higher trading prices for crypto assets and declined 
      18.7% sequentially due to lower crypto prices from the fourth quarter 
      2024. 

First Quarter 2025 Financial Highlights (unaudited):

   -- Total revenues of $1,074.9 million for the quarter reflect a 25.8% 
      increase year-over-year in gross crypto services revenues driven by Bakkt 
      Crypto and the overall increase in broader market activity and a decrease 
      of 40.2% sequentially due to the reduced broader market activity. Net 
      loyalty revenues of $9.2 million for the quarter decreased 30.3% 
      year-over-year and 17.1% sequentially, driven by reduced volume-based 
      services revenue and transaction volume and the exit of a loyalty client 
      in 2024. 
 
   -- Total operating expenses of $1,093.4 million for the quarter, up 23.3% 
      year-over-year driven by an increase in crypto costs and execution, 
      clearing and brokerage fees ("ECB") driven by higher trading volume, and 
      down 39.6% sequentially due to the reduced broader market activity from 
      the surge post-election. 
 
   -- Total operating expenses excluding crypto costs and ECB decreased 
      year-over-year 36.3% to $31.1 million for the quarter, driven by 
      reductions in Selling, General and Administrative expenses ("SG&A") and 
      compensation and benefits expenses resulting from our restructuring 
      actions in 2024 and increased sequentially 5.4% due to a shift from cash 
      bonuses to stock-based compensation and a non-recurring $4.0 million cash 
      bonus accrual reversal. 
 
   -- Operating loss improved year-over-year 41.8% to $18.5 million for the 
      quarter due to the reduction in operating expenses (outside of ECB) 
      driven from the reduction in SG&A and compensation and benefits expenses 
      resulting from our restructuring actions in 2024 and increased 42.0% 
      sequentially due to lower net loyalty and crypto revenues. 
 
   -- Net income (loss) improved 176.5% year-over-year and 140.4% sequentially 
      from a loss of $21.3 million to a profit of $16.2 million for the quarter 
      driven by the reduction in operating expenses (outside of ECB) and the 
      recognized gain from the fair value of warrant liability recognized in 
      the first quarter of 2025. 
 
   -- Adjusted EBITDA loss (non-GAAP) improved year-over-year 11.0% to $14.5 
      million for the quarter primarily due to the overall decrease in SG&A and 
      compensation and benefits expenses and decreased 126.6% sequentially due 
      to the change in fair value of warrant liability. 
 
                     First Quarter 2025 Condensed Results 
 
                                                                    Increase/ 
$ in millions                                       1Q25     1Q24   (decrease) 
Total revenues(1)                               $1,074.9   $854.6        25.8% 
   Crypto costs and execution, clearing and 
    brokerage fees                               1,062.3    837.6        26.8% 
   Operating expenses, excluding crypto costs 
    and execution, clearing and brokerage 
    fees                                            31.1     48.8      (36.3%) 
                                                --------  -------  ----------- 
Total operating expenses                         1,093.4    886.4        23.3% 
                                                --------  -------  ----------- 
Operating loss                                    (18.5)   (31.8)      (41.8%) 
Net income/ (loss)                                  16.2   (21.3)     (176.5%) 
Adjusted EBITDA loss (non-GAAP)                  ($14.5)  ($16.3)        11.0% 
----------------------------------------------  --------  -------  ----------- 
 
1. In accordance with GAAP, crypto services revenue and crypto costs and 
execution, clearing and brokerage fees are presented on a gross basis as the 
Company is a principal in those transactions. 
 

Recent Operational Updates:

   -- DTR Cooperation Agreement: 
 
          -- In March 2025, Bakkt entered into a cooperation agreement with 
             Distributed Technologies Research (DTR), which announced a planned 
             collaboration with DTR intended to provide Bakkt with access to 
             and stablecoin payment infrastructure. Under this agreement, and a 
             commercial agreement presently being negotiated, DTR will provide 
             Bakkt with proprietary payment processing technology, advanced 
             APIs, DTR's advanced AI, and infrastructure to be integrated into 
             Bakkt's platform, enabling global transfers and settlement 
             services across all jurisdictions where Bakkt or its affiliates 
             operate. 
 
          -- The commercial agreement is expected to be signed in by Q3 2025 
             and will formalize specific terms, revenue structures, and 
             implementation timelines and is also expected to bring several 
             potential new products for customers, including a merchant 
             checkout widget and white-label AI-powered plugin for global money 
             movement. Bakkt has already initiated preliminary integration 
             processes, working to combine its regulated crypto trading 
             platform with DTR's innovative stablecoin infrastructure and AI 
             capabilities, as Bakkt positions itself to gain substantial market 
             share in the expanding stablecoin payments ecosystem. However, 
             there is no guarantee that the commercial agreement or planned 
             integration with DTR will be executed on terms favorable to Bakkt, 

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