Bakkt, Inc. Q2 FY2025 earnings call

• Strategic realignment: Streamlined operations, reduced costs, exited noncore businesses, and refocused on crypto. Completed sale of Bakkt Trust Company to ICE and entered definitive agreement to divest Loyalty business.
• Partnership with DTR: Stablecoin payment infrastructure in partnership with DTR, designed for institutional grade standards and new cross-border use cases.
• Brokerage-in-a-box: Turnkey platform with SOC 2 compliance, planning to roll out Brokerage-in-a-box 2.0 with enhanced capabilities, more coins, trading engine upgrade, social features, and yield generation.
• Stablecoin payments: Bakkt Agent, AI-powered global transfers product, launched private beta, planning to roll out consumer offering and pilot with businesses.
• Bitcoin treasury strategy: Entered Japan market by acquiring stake in Marusho Hotta Co Ltd, rebranding to bitcoin.jp, planning to expand to other markets.

For the second quarter of 2025, total revenue was $577.9 million. Gross crypto services revenue was $568.1 million, up 14.3% year-over-year but down 46.7% sequentially. Crypto services revenue net of costs and execution clearing and brokerage fees (ECB) totaled $2.9 million, up 41.1% year-over-year but down 15.7% sequentially. Net Loyalty revenues were $9.8 million, down 23.3% year-over-year but up 6.8% sequentially. Crypto trading volumes were $565 million, Loyalty redemptions were $168 million. Total active transacting accounts were 689,000, with 265,000 Loyalty redemption accounts and 424,000 crypto trading accounts. Assets under custody at custodian partners for brokerage business totaled $1.36 billion.

• Plan to roll out Brokerage-in-a-box 2.0 with enhanced trading and user experience features. - Launch Bakkt Agent consumer offering and Q4 pilot with select businesses. - Expand Bitcoin treasury strategy into other strategic markets and geographies, starting with Japan.

• Market volatility: Broader market trends and regulatory uncertainty impacted crypto trading volumes. - Regulatory uncertainties: Changes in regulations could affect operations. - Competition: Increased competition in custody landscape following repeal of SAB 121.