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Dec 31, 2022
Bakkt Q4 2022 Earnings Report
Bakkt's Q4 2022 results reflected a year-over-year revenue increase driven by loyalty redemption business, alongside strategic restructuring efforts.
Key Takeaways
Bakkt Holdings, Inc. reported a 14% increase in quarterly net revenues, reaching $15.6 million, driven by transaction revenue from the loyalty redemption business. The company's focus on business simplification and expense management led to corporate restructurings expected to reduce headcount by approximately 40% by year-end 2023. Despite a net loss of $323.9 million, the company's available cash, cash equivalents, and available-for-sale securities totaled $239.4 million, providing significant liquidity.
Net revenues increased 14% year-over-year to $15.6 million, driven by the loyalty redemption business.
Digital asset conversion volume increased 19% year-over-year to $263 million due to loyalty redemption related to increased travel activity.
Corporate restructurings are expected to reduce headcount by approximately 40% by year-end 2023, with $29 million in cash savings expected in 2023.
The company announced a multi-faceted strategic alliance with Caesars Entertainment.
Bakkt
Bakkt
Forward Guidance
Bakkt provided its full year 2023 outlook, excluding the net revenue and expenses from Apex Crypto since the acquisition is subject to regulatory approval.
Positive Outlook
- FY 2023 net revenues expected to grow to $62 million - $72 million, up ~15% - 30% from 2022.
- FY 2023 net cash used in operating activities expected to be ($100 million) - ($110 million), improving ~5% - 15% from 2022.
- FY 2023 free cash flow (non-GAAP) expected to be ($105 million) - ($115 million), improving ~25% - 30% from 2022
- Expand crypto platform with investments in custody solutions.
- Integration of Apex Crypto to expand into new international markets.
Challenges Ahead
- Outlook estimates exclude the net revenue and expenses from Apex Crypto since the acquisition is subject to regulatory approval
- Market conditions continue to be challenging.
- The company anticipates a restructuring charge in the first quarter of 2023 of approximately $3.7 million to $4.1 million.
- Elongated timing for expected cryptoasset product activations.
- Decline in market capitalization.