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
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 |
Updated Guidance for 20222
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:
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
|
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) |
- |
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