Bakkt Hldgs Q3 2026 Earnings Call Transcript

Bakkt Hldgs (NYSE:BKKT) reported third-quarter financial results on Monday. The transcript from the company’s third-quarter earnings call has been provided below.

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View the webcast at https://edge.media-server.com/mmc/p/kcw55w8h/

Summary

Bakkt Holdings reported a decrease in total revenue to $149.2 million from $402.2 million a year ago, but achieved a GAAP net income of $14.3 million, including a $26.8 million non-cash gain from Transchem warrants.

Total transacting volume (TTV) for the third quarter was $147.9 million, with a target of $3 billion for the full year 2026 and $6 billion for the first half of 2027, relying on existing client pipeline and activations.

The company is focused on monetization and profitable growth, with strategic initiatives including the expansion of stablecoin infrastructure and cross-border payments, as well as growth in strategic markets like India and Japan.

Bakkt announced the Bakkt Engine report for monthly volume visibility and is working on embedding finance products with co-branded credit cards and stablecoin services.

Operating expenses were reduced significantly, contributing to a narrower operating loss, and the company remains focused on cost discipline while planning for future growth and client activity conversion.

Full Transcript

OPERATOR

Hello and welcome to Bakkt Hldgs third quarter 2026 earnings call and webcast. At this time, all participants are in a listen-only mode. After the speaker’s presentation, there will be a question-and-answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. I would now like to turn the call over to Cody Fletcher.

You may begin.

Cody Fletcher (Investor Relations)

Good afternoon and welcome to Bakkt Hldgs’ third quarter 2026 earnings call. Joining me are Akshay Naheta, our Chief Executive Officer, Daniel Leshag, our Chief Commercial Officer, and Matt White, our Chief Financial Officer. Today’s discussion contains forward-looking statements within the meaning of the federal securities laws, including statements about our full year 2026 and first half 2027 total transacting volume targets, our monthly active user target, product launch timing, our expectations for our strategic positions in India and Japan, and our planned monthly reporting. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those reflected or implied.

We refer you to the cautionary language in our earnings release, in this presentation, and in our SEC filings, including the risk factors set forth in our most recent Form 10-K and our quarterly reports on Form 10-Q. Today’s discussion also includes references to non-GAAP measures including EBITDA and adjusted EBITDA. Reconciliations to the nearest GAAP measures and the definitions and methodology for our operational metrics are included in this presentation and in today’s release. And with that I will turn the call over to our CEO, Akshay Naheta. Akshay,

Akshay Naheta (President and CEO)

Thank you, Cody. And thank you all for joining us today. Here we present our final report card. All eight pillars are now at or above a foundation threshold of 75. The largest gains were in partners and distribution, up 25 points, and operational efficiency, up 15 points. The foundational transformation is now complete. Our focus is now on monetization and profitable growth going forward. The settlement layer of global finance is being rebuilt, and stablecoins are creating new infrastructure for cross-border payments, treasury and settlement. And the evidence is in the public disclosure of the largest payment networks and banks. Stablecoins in circulation stand at approximately 295 billion, with third-party forecasts of 2 trillion to 4 trillion by 2030. Cross-border payment flows were an estimated 208 trillion last year.

And since our last call, one of the two largest card networks reported stablecoin settlement running above 25 billion on an annualized basis, almost 10 times the level of a year ago, and 21 leading international financial institutions announced plans to establish a stablecoin company initially focused on US dollar stablecoins. They are the incumbents replumbing settlement because the economics demand it. Bakkt’s network itself has reached more than 75 countries, connecting clients through regulated infrastructure and local distribution. Here are the quarter’s operating metrics and our volume targets. Total transacting volume was 147.9 million in the third quarter and 557.9 million year to date. Monthly active users on our payment rails were 9,760 in September, our first reported month. Strategic asset value was approximately 145 million at September 30th, up from 119 million at June 30th.

Today we reiterate the approximately 3 billion full year TTV target we announced on September 9th. We are also setting a target of approximately 6 billion of TTV for the first half of 2027. Both targets rest on the existing pipeline, clients already in integration, with activations that began in October and from December. The Bakkt Engine report will give you monthly visibility into the ramp between quarterly results. Daniel will explain how we are converting the pipeline into client activity.

Daniel Leshag (Chief Commercial Officer)

Thank you, Akshay, and good afternoon everyone. Total transacting volume was 147.9 million for the quarter compared with 168.8 million in the second quarter. Trading activity declined in the quarter. The new institutional and cross-border client flows behind our expected ramp were still in integration, so the third quarter figure does not capture their expected contribution. Our focus is moving clients into live activity and growing their usage. The commercial team began coming together in August with key hires joining from mid-August into early September. They brought existing relationships and business with them, already in the process of converting into volume and revenue, and their immediate task is to complete that conversion into live client activity. Clients are seeking faster settlement, transparent pricing and cross-border reach through a single integration. The Bakkt Payments Portal is live for business clients, connecting bank accounts and wallets, cash and stablecoins, and beneficiary payments in one interface.

Availability and features depend on onboarding jurisdiction and applicable requirements. We are also building a dedicated cross-border trading desk for institutional demand outside the United States. An initial fourth quarter launch remains subject to banking documentation, technology readiness and applicable approvals. Our full year target implies approximately $2.44 billion of TTV in the fourth quarter against $557.9 million through September. We expect the increase to come primarily from institutional cross-border clients already progressing through integration, including integrations underway during the third quarter. Client activations began in October. We expect the pace to increase as further integrations and launch requirements are completed. Launch timing and clients’ subsequent activity are the critical factors in the fourth quarter ramp.

The ramp has two components: new clients becoming active, and live clients routing more of their settlement, treasury and payments activity through Bakkt over time, which creates repeat transactions. We already see recurring institutional cross-border activity on the platform. These flows are less dependent on crypto trading sentiment, although transaction levels may vary. The first half target assumes a fuller period of contribution from fourth quarter activations, further launches and increased usage.

It depends on timely activation and sustained client activity. That is the basis for our near-term volume expectations: converting work already underway into flows through the platform. We will report actual volume and its drivers while protecting commercially sensitive client information. Our revenue economics combine transaction and processing fees with foreign exchange conversions across the on-ramps, off-ramps and the corridors we serve. Revenue per dollar of volume depends on the services used and the transaction mix. As activity grows, we expect more two-way flows across the network where on-ramp and off-ramp flows become more balanced.

We expect better liquidity, utilization and execution efficiency supporting improved transaction margins. That is why we see an opportunity for both revenue growth and improving economics as the platform scales. Beginning in December, the monthly Bakkt Engine report will disclose completed-month TTV starting with November on the same basis as our quarterly reporting. It will also show annualized run-rate volume, or ARV. That’s the month’s actual TTV multiplied by 12. ARV measures the annualized pace of volume. It is not revenue or a forecast of the next 12 months. We expect that pace to increase as clients activate and expand their activity. Each report will explain what drove that month’s volume.

Together, Bakkt Engine gives shareholders a way to follow the trajectory month by month and to assess our progress against the targets we have set. Bakkt Agent enables businesses, banks, fintechs and brands to offer financial products to their own customers. MAUs were 9,760 in September, our first reported month, against an unchanged target of approximately 25,000 for December measured on the same basis. MAUs count end users who complete at least one qualifying fiat transaction on a Bakkt-operated payment rail during the month. The measure spans our payment rails, including the partner applications built on Agent, and counts a user once per client application without deduplication.

Across applications, growth depends on partner launches translating into customer usage and repeat engagement. We will continue reporting MAUs quarterly with our results. Embedded finance is available today and partners are integrating accounts, payments and international transfers into their own customer experiences. Our planned products are co-branded credit cards, neobank-as-a-service with a conversational AI interface, and stablecoin card-as-a-service with Thread announced on October 13th, a US customer credit program settling in stablecoins. Launches remain subject to product readiness, partner timing, banking network requirements and applicable approvals.

Akshay will now cover Bakkt Global. Akshay

Akshay Naheta (President and CEO)

Bakkt Global holds our strategic positions in India and Japan. Strategic asset value was approximately 145 million at September 30 compared with 119 million at June 30. It comprises 134.8 million fair value of our Transchem investment and 10.4 million equity method carrying value of our Bitcoin Japan Corporation investment. SAV reconciles to our 10-Q and reflects reported asset values rather than operating revenue or cash generated by the business.

In India, Transchem is expanding its brokerage platform through acquisitions and partnerships. We expect the platform to serve more than 250,000 customers by the first half of 2027 and the local broker business to earn a return on equity of around 20%. That customer base could provide a distribution channel for tokenized global assets through Bakkt. Converting that opportunity into activity requires customer onboarding, eligibility and adoption alongside product readiness and applicable approvals.

In Japan, through Bitcoin Japan Corporation, we are exploring opportunities to tokenize private market investments for eligible investors around the world. We are considering both centralized and decentralized distribution models, with structures and availability subject to applicable regulatory requirements. For Bakkt, the economic opportunity is to provide the infrastructure connecting these assets with investors and to earn fees from the resulting transactions and services.

With that, I will turn it over to Matt to review the financial results. Matt

Matthew White (Chief Financial Officer)

Thank you, Akshay, and good afternoon everyone. It’s great to be here on my first call as the CFO at Bakkt. Total revenue was $149.2 million compared with $402.2 million a year ago. Crypto services revenue is presented gross, so it moves with trading volume and is substantially offset by crypto costs and execution fees. Bakkt reported GAAP net income of $14.3 million, or $0.31 per diluted share, including a $26.8 million non-cash gain on the Transchem warrants. On an operating basis, our operating loss was $14.4 million, 43% narrower than a year ago. We remain focused on cost discipline.

Operating expenses excluding crypto costs and execution fees were $16.1 million, down 40% from $26.7 million a year ago and down 24% excluding last year’s $5.6 million of restructuring and impairment charges. We ended the quarter with $37.3 million of cash and restricted cash, no long-term debt and no shares sold under our at-the-market program. That gives us the flexibility to keep investing in commercial activation while remaining disciplined. On the cost side, adjusted EBITDA was a loss of $11.8 million compared with a loss of $14.8 million a year ago, a $3 million improvement year over year. As Daniel explained, transaction economics depend on product mix, corridors and the balance of flows. Those factors are still developing and are expected to evolve through much of next year, so we are not providing a stabilized gross margin assumption today. Our priority is to convert growing client activity into sustainable operating results.

Back to Akshay for our execution priorities. Akshay

Akshay Naheta (President and CEO)

Our execution priorities for the fourth quarter and the first half of 2027 are on this slide, and they follow directly from what you’ve heard today. Let me close with our four things to take away. First, the volume targets rest on the existing pipeline, clients already in integration, converted by a commercial team now in seat. Second, the ramp began in October and builds in two ways: new clients going live and live clients routing more of their settlement, treasury and payments through the platform.

Third, volume converts to revenue through transaction and processing fees and foreign exchange conversion. And as flows across the network become more two-way, we expect transaction margins to improve. And finally, from December, the Bakkt Engine report will show you actual monthly volumes so you can measure our progress against the targets we have set. We will judge our progress by client activity, revenue and operating performance and ask you to do the same.

Thank you for your time and your continued support. Operator, we are ready to take questions.

OPERATOR

Thank you. I am showing no questions in the queue. And that concludes today’s conference call. Thank you for joining us. Thank you for your participation. You may now disconnect.

Disclaimer: This transcript is provided for informational purposes only. While we strive for accuracy, there may be errors or omissions in this automated transcription. For official company statements and financial information, please refer to the company’s SEC filings and official press releases. Corporate participants’ and analysts’ statements reflect their views as of the date of this call and are subject to change without notice.