Bakkt Holdings, Inc. Q4 FY2025 earnings call

Strategy and Key Drivers - Building a secure infrastructure and products for global money movement, vision to build next-gen financial ecosystem. - Organized around three engines: Markets (institutional-grade digital asset infrastructure), Agent (programmable money and AI-powered finance), Global (international expansion with capital-light investment model). ### Operational Highlights - Laid groundwork in 2025 with partnerships, including tier one telco partnerships in US and Europe for Backed Agent, distribution partnerships for improved reach, and commercial agreements with Nexo, Ascendix, Ubit for Markets. - DTR transaction brings composable API platform, cross-border payments capability, and complementary regulatory framework in Europe. - Backed Markets platform has best bid offer engine, order management and risk, flexible funding rails, with competitive advantages in flexibility, tech stack, offerings, and compliance. - Backed Agent has modular tech stack, efficiency layer with agents Clara, Lucy, RAFI, programmable APIs, and direct-to-consumer products like Zyra app, Everyday Money app, and AI-powered loan underwriting. - Backed Global is capital-disciplined model with independent governance, investments in Japan and India tracking well ahead of benchmarks. - 2025 involved leadership changes, transformation of business, divestiture of loyalty business, simplification of capital structure, and platform re-architecture.

Bakkt is organized around three engines: Bakkt Markets, Backed Agent, and Backed Global. Bakkt Markets' core KPI is total transacting volume, with significant expansion expected due to DTR's addition of stablecoin on-ramp and off-ramp capabilities. Backed Agent's metric is monthly active users, a volume business driven by user transactions. Backed Global focuses on strategic asset value, with investments in Japan and India showing strong returns. Fiscal 2025 total revenue was $2.3 billion, down 32% YoY, operating expenses excluding crypto costs were $156 million with a $65 million increase in stock-based compensation, adjusted EBITDA improved from a loss of $57 million to $33 million loss.

Future Outlook - For Bakkt Markets, expect total transacting volume to expand substantially with DTR's addition. - For Backed Agent, focus on monthly active users as a measure of platform adoption. - For Backed Global, continue evaluating high-growth markets with clear regulatory and legal environments, right management team, and local partners. - Fiscal 2026 expected to have a cleaner P&L with legacy impacts like loyalty divestiture, EPSI collapse, and restructuring expenses no longer recurring, allowing focus on core operating business.

Risks - Regulatory uncertainties could impact the ability to expand and operate in certain jurisdictions. - Competitive landscape in the fintech space could pose challenges in gaining market share and maintaining competitive advantages. - Dependence on partnerships and their successful execution to drive growth and revenue.

Q: Talk about distribution partners, pipeline, and end customers.

A: Focus on US and Europe, partnering with top telco players in each market. Backed Agent looks at large networks with hundreds of millions of users, technology is plug and play. Advanced discussions on category-defining deals expected to be announced soon.

Q: Navigate regulatory landscape.

A: Backed Global companies follow local regulations. Bact Agent and Markets have pan-US licensing coverage and New York BitLicense, work with local regulated institutions in other countries.

Q: Capital raised and competitive advantage in partnerships.

A: Recapitalizing balance sheet has helped instill confidence in partners, important for financial stability and working as counterparty.

Q: Why fold DTR into BACT and benefits.

A: Intention from start, cooperation agreement in March, DTR brings composable API, cross-border payments, and regulatory framework. Benefits include seamless service provision, ability to offer new capabilities like stablecoin settlements, and collapsing overlapping technology for modern stack.

Q: Competitive landscape around stablecoin enablement.

A: Large scale of cross-border stablecoin payments opportunity, Backed Markets and Agent have advantages in distribution, tech stack efficiency, and partnerships to scale rapidly.