Bakkt, Inc. Q4 FY2024 earnings call

• Strategic Transformation: Undertaking a shift to a crypto-focused company. Akshay Naheta joined as co-CEO, bringing a commercial partnership with DTR for cross-border stablecoin payments. Sold Bakkt Trust Company to Intercontinental Exchange to focus on core crypto business.
• Operational Highlights: Implemented BakktX order matching technology, added new supported coins in Q4. Webull notified non-renewal of contract, but working on transition. 2024 strategic priorities included expanding client relationships, broadening product suite, and improving cost structure.

Crypto Business

• Fourth Quarter Performance: Total trading volumes reached $1.78 billion, a 465% sequential improvement and 778% year-over-year growth. Total revenues net of crypto costs, execution, clearing, and brokerage fees increased 6.6% year-over-year to $17.8 million. Full year total revenues net of these costs rose 8.8% to $63 million.
• Key Metrics: Ended Q4 with 6.7 million crypto-enabled accounts. Transacting accounts totaled 974,429, with 418,253 related to crypto trading. Notional crypto volume was $1.78 billion. Assets under custody at custodian partners for brokerage business reached $2.3 billion, up 145.2% quarter-over-quarter.

Loyalty Business

• Net loyalty revenues in Q4 were $11.1 million, down 8.3% sequentially and 26.5% year-over-year.

• Q1 2025 Outlook: Anticipates total revenues in the range of $1.03 billion to $1.28 billion, with gross crypto revenues $1.02 billion to $1.27 billion and net loyalty revenues $8.5 million to $9.9 million. Crypto costs and execution, clearing, and brokerage fees expected $1.02 billion to $1.27 billion. Projected ending cash balance $22 million to $26 million, including potential draw from ICE line of credit.

• Regulatory Uncertainties: Uncertainties related to the commercial partnership with DTR and crypto operations.
• Competition: Intense competition in the digital asset custody landscape.
• Client Impact: Impact of Webull not renewing contracts.