Release Date: November 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Bakkt Holdings Inc (BKKT, Financial) experienced a significant increase in notional trading volumes, surpassing October's total volume by 114 million in just the first 12 days of November.
- The company successfully commenced trading on the BakktX platform, marking the beginning of a broader rollout strategy to institutional clients.
- Bakkt Holdings Inc (BKKT) onboarded Blackwire onto its brokerage infrastructure solution, expanding its client network and product offerings.
- The company introduced 9 new coins to its Bakkt crypto solutions platform, which contributed to a notable improvement in trading volumes.
- Bakkt Holdings Inc (BKKT) achieved a 39.7% reduction in operating expenditures year-over-year, driven by cost reduction initiatives.
Negative Points
- Q3 crypto and loyalty services revenue was down approximately 8.8% from the same quarter last year.
- The company experienced a 36.2% sequential decline in crypto notional traded volume.
- Bakkt Holdings Inc (BKKT) is considering winding down Bakkt Trust due to its lack of market traction and high cost of capital.
- Total expenses for the quarter were $355.8 million, including $315.0 million of crypto cost in execution, clearing, and brokerage fees.
- The company adjusted its full-year 2024 outlook, forecasting lower loyalty revenue and crypto revenue contributions at the low end of the previously provided range.
Q & A Highlights
Q: What is Bakkt doing to bring its products to the market, and how can others be excited about them?
A: Andrew Main, President & CEO, explained that Bakkt's priority is delivering innovative, high-quality products that meet market demand. The company is focusing on BakktX to capitalize on growing institutional interest in crypto trading. While much of the work is behind the scenes, Bakkt is committed to creating long-term value for shareholders and establishing itself as a leader in the crypto ecosystem. Announcements are made only when developments are finalized.
Q: What is the long-term vision for Bakkt, and what unique value can it offer that competitors can't match?
A: Andrew Main, President & CEO, stated that Bakkt aims to be a leader in the crypto ecosystem, focusing on retail crypto trading and BakktX for institutional trading. The company offers unmatched security, compliance expertise, and a strong network of partnerships. Bakkt's collaboration with industry leaders demonstrates its commitment to innovation and long-term value.
Q: How has Bakkt's trading volume been affected by recent market conditions?
A: Andrew Main, President & CEO, noted that Bakkt saw a significant increase in trading volumes following the US presidential election, with notional trading volumes dramatically increasing. As of November 12, Bakkt traded $259 million in notional volume, exceeding October's total by $114 million.
Q: What are the financial highlights from Bakkt's Q3 performance?
A: Karen Alexander, Interim CFO, reported that Q3 crypto and loyalty services revenue was $13.4 million, down 8.8% from last year. Operating expenditures were $40.7 million, 39.7% lower year-over-year, driven by cost reduction initiatives. The company completed another reduction in force in October to improve cost structure.
Q: What strategic initiatives is Bakkt pursuing to enhance its market position?
A: Andrew Main, President & CEO, highlighted Bakkt's focus on expanding its client network, deepening relationships, and launching BakktX. The company is also recalibrating its go-to-market approach to target established US and international companies, resulting in an expanding sales opportunity pipeline.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
