Fourth Quarter 2021 net revenue of $2.2 million
for Predecessor, $11.5 million for Successor and $13.7 million for
Combined (non-GAAP); Combined net revenue (non-GAAP) increased 45%
over prior year quarter
Net revenue expected to grow to $60 million -
$80 million in 2022, an increase of approximately 50% to 100%
compared to 2021 Combined net revenue, respectively
Over $390 million of available cash provides
significant growth capital
Signed partnerships across crypto services,
loyalty and payments
Activated point conversion capabilities for
Wyndham Rewards customers
Financial results include significant non-cash
charges related to the closing of business combination with VPC
Impact Acquisition Holdings (VIH)
Bakkt Holdings, Inc. (“Bakkt”) (NYSE: BKKT) announced its
financial results for the fourth quarter and full year ended
December 31, 2021.
“Our impressive revenue growth in the fourth quarter and full
year reflects the strong momentum we are seeing across our platform
as we continue to diversify our future revenue streams,” said Gavin
Michael, CEO of Bakkt. “We are excited to provide crypto services,
loyalty and payments to our growing list of signed partners. We’re
working closely with our partners to launch new solutions such as
crypto rewards and crypto disbursements in the near-term. In
addition, we will be expanding on our offerings to enable open loop
crypto wallets and offer additional cryptos on our platform1. We
have a strong balance sheet and are well-capitalized to grow our
business.”
Recent Strategic Highlights
- Crypto Services: Manasquan Bank, Hanover Bank and Valliance
Bank – These new partners, signed through our previously
announced platform partnerships, will enable their retail clients
to buy, sell and hold cryptocurrency within their existing, trusted
banking environment. Our secure, stable, regulated and trusted
platform provides simple access to crypto for a growing number of
consumers.
- Disbursements & Crypto Rewards: BringMeThat.com –
Our partnership connects crypto to the gig economy, working with a
food delivery service operating in thousands of US cities. Bakkt
will enable customers to pay with participating points, or with
crypto held on our platform. The crypto payout feature will allow
drivers to receive a portion of their earnings in crypto.
- Crypto Custody: Nexo – We will provide cryptocurrency
custody services to Nexo. Our warehouse allows for safe and secure
storage, leveraging state-of-the-art physical and cyber security,
institutional grade technology and governance, and is backed by
cold and warm wallet insurance.
- Powering Loyalty: Wyndham Rewards – We activated point
conversion capabilities for Wyndham Rewards points customers. This
partnership demonstrates the power of our B2B2C model with higher
customer engagement levels and more efficient marketing.
____________________ 1 Subject to regulatory approval
Fourth Quarter Financial Highlights
$ in millions
Predecessor
(10/1/21 – 10/14/21)
Successor
(10/15/21 – 12/31/21)
Net revenue
$2.2
$11.5
Operating expense
$52.6
$86.0
Net loss (1)
($49.7)
($153.1)
(1) Net loss for the Successor reflects management’s current
estimate for income tax benefit (expense), which is subject to
change. See “Basis of Presentation” below.
- Transacting accounts of 867,000 in the fourth quarter of 2021
increased 13% year-over-year. Digital asset conversion volume of
$222 million increased 34% year-over-year due to strong growth, led
by travel.
- Combined net revenue (non-GAAP) of $13.7 million increased $4.2
million or 45% over prior year quarter, primarily driven by strong
transaction revenue growth from loyalty redemption.
- Operating expense of $52.6 million for the Predecessor and
$86.0 million for the Successor were driven by $43.3 million and
$48.7 million of significant items related to the business
combination, respectively. These expenses include non-cash
compensation charges triggered by the transaction and other
acquisition-related expenses.
- Adjusted EBITDA (non-GAAP) was $0.3 million for the Predecessor
and ($21.8 million) for the Successor.
Significant items related to the business combination
The fourth quarter 2021 Predecessor and Successor results
included certain significant items related to the business
combination, which are largely non-cash, including:
- A non-cash mark-to-market expense of $79.4 million in the
Successor related to the fair value of warrant liabilities issued
by VIH prior to the business combination.
- A non-cash compensation charge of $30.6 million for Predecessor
and $47.2 million for Successor related to the issuance of Class V
common stock of Bakkt and common units of the former Bakkt parent
company in exchange for legacy interests in that former parent
company using an initial aggregate valuation of $2.1 billion.
- Acquisition-related expense of $12.7 million for Predecessor
and $1.5 million for Successor.
Full Year 2021 Financial Highlights
$ in millions
Predecessor
(1/1/21 – 10/14/21)
Successor
(10/15/21 – 12/31/21)
Net revenue
$28.0
$11.5
Operating expense
$168.0
$86.0
Net loss (1)
($139.2)
($153.1)
(1) Net loss for the Successor reflects management’s current
estimate for income tax benefit (expense), which is subject to
change. See “Basis of Presentation” below.
- Combined net revenue (non-GAAP) of $39.4 million increased
$10.9 million or 38% over prior year, primarily driven by strong
transaction revenue growth from loyalty redemption.
- Operating expense of $168.0 million for the Predecessor and
$86.0 million for the Successor were driven by significant items
related to the business combination, as described above.
- Adjusted EBITDA (non-GAAP) was ($65.6 million) for the
Predecessor and ($21.8 million) for the Successor.
Guidance for FY 20222
- Net revenue expected to grow to $60 million - $80 million in
2022, an increase of approximately 50% to 100% compared to 2021
Combined net revenue, respectively.
- Expect to use $150 million - $170 million of cash during 2022
as we continue to invest for future growth; strong available
liquidity with more than $390 million of available cash on hand as
of 12/31/21.
- We expect to recognize quarterly net losses during 2022 as we
invest in and ramp up the business.
Webcast and Conference Call Information
Bakkt will host a conference call at 9:00AM ET, February 17,
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 814008 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 644535. The replay will be available through March 19,
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 trusted digital asset platform that enables consumers
to buy, sell, store and spend digital assets. Bakkt’s platform, now
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- 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.
Combined information has not been calculated in accordance with
generally accepted accounting principles (“GAAP”). Bakkt has
provided the Combined information as an additional non-GAAP
financial measure as management uses such information when
evaluating the company’s results for periods that straddle the
closing of the business combination.
Presentation of net loss for the Successor reflects management’s
current estimate for income tax benefit (expense), which is subject
to change pending finalization of purchase accounting estimates
related to the business combination as permitted under Accounting
Standards Codification 805 – Business Combinations.
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, Bakkt’s
guidance for 2022 and statements regarding Bakkt’s plans,
objectives, expectations and intentions with respect to future
operations, products, services and use of proceeds from the
business combination, among others. Forward-looking statements can
be identified by words such as “will,” “likely,” “expect,”
“continue,” “anticipate,” “estimate,” “believe,” “intend,” “plan,”
“projection,” “outlook” 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) a delay or failure to realize the expected benefits
from the business combination; (ii) risks related to disruption of
management time from ongoing business operations due to
post-closing business combination matters; (iii) the impact of the
ongoing COVID-19 pandemic; (iv) changes in the markets in which
Bakkt competes, including with respect to its competitive
landscape, technology evolution or regulatory changes; (v) changes
in the markets that Bakkt targets; (vi) risk that Bakkt may not be
able to execute its growth strategies, including identifying and
executing acquisitions; (vii) risks relating to data security; and
(viii) 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 in the “Risk Factors”
section of the definitive proxy statement/prospectus filed by Bakkt
(under the name VPC Impact Acquisition Holdings) on September 17,
2021 and other filings that Bakkt may, from time-to-time, make with
the Securities and Exchange Commission.
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, certain non-cash and/or non-recurring items (which
items do not contribute directly to our evaluation of operating
results), and interest income, other income and income tax benefit
(which items are not components of our core business operations).
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. 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 and has
certain limitations, including:
- unit-based compensation expense, which has been excluded from
Adjusted EBITDA because the amount of such expenses in any specific
period may not directly correlate to the underlying performance of
our business operations, has been, and will continue to be for the
foreseeable future, a significant recurring expense in our business
and an important part of our compensation strategy;
- the intangible assets being amortized, and property and
equipment being depreciated, may have to be replaced in the future,
and the non-GAAP financial measures do not reflect cash capital
expenditure requirements for such replacements or for new capital
expenditures or other capital commitments; and
- non-GAAP measures do not reflect changes in, or cash
requirements for, our working capital needs.
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. Our definition of Adjusted EBITDA may not be
comparable to similarly titled measures used by other
companies.
Reconciliation of GAAP Net Income / (Loss) to Non-GAAP
Adjusted EBITDA ($ in millions)
Successor
Predecessor
$mm's
10/15/21 - 12/31/21
10/1/21- 10/14/21
Three Months Ended
12/31/20
Year Ended 12/31/20
Net loss
($153.1)
($49.7)
($29.6)
($79.6)
Depreciation and amortization
5.4
0.5
2.6
8.2
Interest (income) expense
(0.0)
0.0
0.1
(0.1)
Income tax (benefit) expense (1)
0.1
(0.8)
0.4
0.4
EBITDA
($147.6)
($49.9)
($26.5)
($71.2)
Acquisition-related transaction costs
1.6
12.7
1.9
13.4
Share-based and unit-based compensation
expense
44.5
33.9
1.7
2.1
Loss from change in fair value of warrant
liability
79.4
-
-
-
Other (2)
0.3
3.6
11.8
15.7
Adjusted EBITDA
($21.8)
$0.3
($11.0)
($40.0)
(1) Income tax (benefit) expense for Successor reflects
management’s current estimate. See “Basis of Presentation.” As a
result, Income tax benefit (expense) and items derived from it are
subject to change.
(2) Includes restructuring charges, impairment of long-lived
assets, cancellation of common units, gain on extinguishment of
software license liability, ICE transition services expense,
non-recurring bitcoin sale income, net and transition services to
Bakkt clearing
Condensed Balance Sheet ($ in millions)
Successor
Predecessor
$mm's
12/31/21
12/31/20
Assets
Cash and cash equivalents
$391.4
$75.4
Other current assets
72.2
56.7
Total current assets
$463.5
$132.1
Goodwill
1,527.1
233.4
Intangible assets, net
388.5
62.2
Other assets
35.2
40.7
Total Assets
$2,414.3
$468.4
Liabilities, Stockholders’ Equity and
Members’ Equity
Current liabilities
$73.5
$51.1
Noncurrent liabilities
34.9
7.5
Total liabilities
$108.5
$58.6
Total stockholders’ equity and members’
equity
Noncontrolling interest
1,826.1
0.0
Mezzanine equity
0.0
21.5
Total equity
479.8
388.3
Total liabilities, stockholders’ equity
and members’ equity
$2,414.3
$468.4
Condensed Statement of Operations ($ in millions)
Successor
Predecessor
$mm's
10/15/21 - 12/31/21
10/1/21- 10/14/21
Three Months Ended
12/31/20
Year Ended 12/31/20
Net revenue
$11.5
$2.2
$9.4
$28.5
Compensation and benefits
62.2
33.9
12.6
43.1
SG&A
8.5
0.8
4.7
8.2
Other expense
15.3
18.0
20.8
56.3
Total operating expense
86.0
52.6
38.2
107.6
Operating loss
($74.5)
($50.5)
($28.7)
($79.1)
Other income (expense), net
(78.5)
0.0
(0.5)
(0.1)
Loss before income taxes
($153.0)
($50.5)
($29.2)
($79.2)
Income tax benefit (expense) (1)
(0.1)
0.8
(0.4)
(0.4)
Net loss
($153.1)
($49.7)
($29.6)
($79.6)
Less: Net loss for noncontrolling
interest
($120.7)
Net loss attributable to Bakkt
Holdings, Inc.
($32.4)
Currency translation adjustment, net of
tax
(0.3)
0.3
0.3
0.2
Comprehensive loss
($153.4)
($49.4)
($29.3)
($79.4)
Less: Comprehensive income (loss) for
noncontrolling interest
(120.9)
Comprehensive income (loss)
attributable to Bakkt Holdings, Inc.
($32.4)
(1) Income tax (benefit) expense for Successor reflects
management’s current estimate. See “Basis of Presentation.” As a
result, Income tax benefit (expense) and items derived from it are
subject to change.
View source
version on businesswire.com: https://www.businesswire.com/news/home/20220217005110/en/
Investor Relations Ann DeVries, Head of Investor
Relations Ann.DeVries@bakkt.com
Media Lauren Post, Head of Communications
Lauren.Post@bakkt.com
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