8-K: Bakkt Announces Preliminary 2023 Financial Results, Meeting Prior Guidance

Bakkt Holdings, Inc. released preliminary financial results for the fourth quarter and full year 2023, with estimates generally aligning with previously provided guidance.

Summary

• Bakkt has released preliminary financial results for the fourth quarter and full year of 2023.
• Total revenue for Q4 2023 is estimated to be between $213 million and $215 million.
• Gross crypto revenue for Q4 2023 is estimated to be between $197 million and $199 million.
• Net loyalty revenue for Q4 2023 is estimated to be between $13 million and $15 million.
• Total crypto costs for Q4 2023 are estimated to be between $196 million and $198 million.
• Available cash, cash equivalents, and available-for-sale securities at the end of 2023 are estimated to be between $68 million and $70 million.
• Net cash used in operating activities for Q4 2023 is estimated to be between $16 million and $18 million.
• Free cash flow usage for Q4 2023 is estimated to be between $18 million and $20 million.
• Total revenue for the full year 2023 is estimated to be between $778 million and $780 million.
• Gross crypto revenue for the full year 2023 is estimated to be between $725 million and $727 million.
• Net loyalty revenue for the full year 2023 is estimated to be between $51 million and $53 million.
• Total crypto costs for the full year 2023 are estimated to be between $720 million and $722 million.
• Net cash used in operating activities for the full year 2023 is estimated to be between $87 million and $89 million.
• Free cash flow usage for the full year 2023 is estimated to be between $100 million and $102 million.
• These preliminary results are subject to revision and will be finalized in the company's Annual Report on Form 10-K.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive as the results are within guidance, but the company is still experiencing negative cash flow and the results are preliminary and subject to change.

Positives

• The preliminary financial results for both the fourth quarter and full year 2023 are generally within the previously provided guidance ranges.
• The company's revenue streams, including gross crypto and net loyalty revenues, are performing as expected.
• Bakkt's cash position is within the estimated range, providing some financial stability.

Negatives

• The preliminary nature of the results means they are subject to revision and may change when the full financial statements are finalized.
• The company is still experiencing negative free cash flow, with usage estimated at $100 million to $102 million for the full year 2023.
• Net cash used in operating activities is also negative, estimated at $87 million to $89 million for the full year 2023.

Risks

• The preliminary financial results are unaudited and subject to change, potentially materially, during the finalization of the annual report.
• The company may identify items that require adjustments, including potential non-cash asset impairments.
• The forward-looking statements are subject to various business, economic, and competitive uncertainties that could cause actual results to differ materially.
• The company's ability to implement its business plans and strategies is a risk factor that could impact future performance.

Future Outlook

Bakkt expects to report its fourth quarter 2023 results during a conference call in March, at which point it will discuss its 2023 financial results in more detail. The company also notes that the preliminary results are subject to change and may be adjusted during the finalization of the annual report.

Management Comments

• Bakkt's management has provided preliminary financial results that are within the previously communicated guidance ranges.
• Management has cautioned that the preliminary results are subject to revision and may change during the finalization of the annual report.

Industry Context

This announcement comes as the crypto industry continues to experience volatility and regulatory scrutiny. Bakkt's performance is being closely watched as it seeks to establish itself as a key player in the institutional crypto space.

Comparison to Industry Standards

• It is difficult to make direct comparisons without knowing the exact business model of other crypto companies, however, companies like Coinbase and Block (formerly Square) have reported significant revenue fluctuations in the past year due to market volatility.
• Bakkt's revenue is primarily driven by crypto trading and loyalty programs, which is similar to some competitors, but the specific mix and performance of these segments will need to be compared to industry benchmarks when available.
• The company's free cash flow usage is a concern, as many tech companies are focusing on profitability and cash generation, and this will need to be compared to similar companies in the sector.

Stakeholder Impact

• Shareholders will be interested in the final audited results and any adjustments made to the preliminary figures.
• Employees may be impacted by the company's financial performance and future strategic decisions.
• Customers will be interested in the company's ability to continue providing services and products.
• Creditors will be monitoring the company's cash flow and financial stability.

Next Steps

• Bakkt will finalize its financial statements for the year ended December 31, 2023.
• The company will report its fourth quarter 2023 results during a conference call in March.
• Bakkt will file its Annual Report on Form 10-K for the year ended December 31, 2023.

Key Dates

Keywords

crypto, financial results, revenue, preliminary, guidance, cash flow, loyalty, Bakkt