10-Q: Bakkt Q3 2025: Crypto Revenue Surges, Loyalty Business Divested

Bakkt Holdings, Inc. reports a significant increase in crypto services revenue for Q3 2025, driven by higher trading volumes, alongside the completion of its Loyalty Business divestiture and a corporate structure streamlining.

Summary

• Crypto services revenue increased by $85.9 million (27.1%) to $402.2 million for the three months ended September 30, 2025, compared to the prior year's third quarter.
• Operating expenses increased by $86.0 million to $427.5 million for Q3 2025, primarily due to higher crypto trading costs in connection with increased trading volume.
• Net loss from continuing operations was $(21.6) million for Q3 2025, compared to $(3.8) million for Q3 2024.
• Net loss attributable to Bakkt Holdings, Inc. was $(14.9) million for Q3 2025, compared to $(2.9) million for Q3 2024.
• Adjusted EBITDA significantly improved, increasing by $49.2 million (240.6%) to $28.7 million for Q3 2025.
• For the nine months ended September 30, 2025, crypto services revenue increased by $381.3 million (23.0%) to $2,036.1 million.
• Net loss attributable to Bakkt Holdings, Inc. for the nine months ended September 30, 2025, was $(21.9) million, an improvement from $(27.5) million for the same period in 2024.
• Adjusted EBITDA loss decreased by $57.9 million (113.7%) to $7.0 million for the nine months ended September 30, 2025.
• The divestiture of the Loyalty Business was completed on October 1, 2025, for $1.00 consideration plus cash adjustments, resulting in an estimated loss on sale of $20.5 million.
• The corporate structure was streamlined by eliminating the Up-C structure on November 3, 2025, unifying shareholders under a single class of stock.
• The remaining $7.5 million Convertible Debenture was redeemed for cash on September 15, 2025, resulting in a long-term debt-free balance sheet.
• Acquired approximately 28% of MarushoHotta Co., Ltd. (MHT) for $11.5 million on August 6, 2025; the investment was valued at $79.5 million as of September 30, 2025.
• Webull Pay LLC, the largest crypto client (74% of 2024 crypto services revenue), did not renew its agreement, effective June 14, 2025, though limited services continue.
• Public Platform LLC (18% of 9M 2025 crypto services revenue) completed offboarding customers on October 25, 2025, expecting a decline in crypto services revenue in Q4 2025.
• Cash and cash equivalents stood at $58.3 million as of September 30, 2025, with restricted cash of $6.1 million.
• Raised $75.0 million in gross proceeds from a common stock and pre-funded warrants offering on July 30, 2025.

Sentiment

Score: 4

Explanation: While crypto services revenue grew and strategic initiatives like the Loyalty Business divestiture and Up-C collapse were completed, the significant increase in net loss and the loss of major clients (Webull and Public) pose substantial challenges to future revenue and profitability. The positive market context and MHT investment are offset by these operational headwinds and ongoing accumulated deficit.

Positives

• Crypto services revenue increased by 27.1% in Q3 2025 and 23.0% in 9M 2025, driven by improved market trading volume.
• Adjusted EBITDA significantly improved, increasing by $49.2 million (240.6%) in Q3 2025 and decreasing loss by $57.9 million (113.7%) in 9M 2025.
• Successfully completed the divestiture of the non-core Loyalty Business, marking a strategic transformation into a pure-play digital asset infrastructure company.
• Streamlined the corporate capital structure by eliminating the Up-C structure, unifying shareholders under a single class of stock.
• Achieved a long-term debt-free balance sheet by redeeming the remaining $7.5 million Convertible Debenture.
• Made a strategic equity method investment in MarushoHotta Co., Ltd. (MHT) for $11.5 million, with the investment's public trading value at $79.5 million as of September 30, 2025, indicating a substantial unrealized gain.
• The SEC concluded its inquiry of Bakkt Crypto on March 3, 2025, advising no enforcement action was intended.
• Management believes current liquidity is sufficient to fund operations for the next 12 months.
• The political climate is increasingly supportive of digital assets, with recent pro-innovation policies and legislative progress, such as the GENIUS Act for stablecoins and the bipartisan push for the Blockchain Regulatory Certainty Act.
• Broadening adoption of cryptocurrency is noted, with 28% of U.S. adults now owning crypto, nearly double since 2021.

Negatives

• Net loss from continuing operations increased to $(21.6) million in Q3 2025 from $(3.8) million in Q3 2024.
• Net loss attributable to Bakkt Holdings, Inc. increased to $(14.9) million in Q3 2025 from $(2.9) million in Q3 2024.
• Experienced significant client losses: Webull (74% of 2024 crypto revenue) did not renew its agreement, and Public (18% of 9M 2025 crypto revenue) offboarded customers, which is expected to cause a decline in crypto services revenue in Q4 2025.
• Incurred a loss on the sale of Bakkt Trust of $2.3 million.
• Recognized a loss on the extinguishment of the convertible debenture of $2.6 million.
• Recorded a non-cash loss from the change in fair value of warrant liability of $(37.2) million in Q3 2025 and $(13.5) million in 9M 2025.
• Accumulated deficit totaled $819.9 million as of September 30, 2025, indicating ongoing losses.
• Incurred impairment charges of $0.5 million related to internally developed software assets.
• Restructuring expenses amounted to $5.1 million in Q3 2025 and $5.3 million in 9M 2025 due to a reduction in force and executive terminations.
• Customer funds payable decreased significantly by $77.5 million, primarily due to Webull moving trading activity off the platform.

Risks

• Ability to grow and manage growth profitably.
• Uncertainty in obtaining regulatory approvals to execute on the commercial agreement with Distributed Technologies Research Global Ltd. (DTR).
• Challenges in successfully integrating operations with DTR, including its infrastructure, and achieving expected benefits.
• Uncertain and evolving regulatory environment for cryptocurrencies, digital stablecoin payments, and blockchain technologies.
• Changes in business strategy and the successful adoption of the updated Investment Policy and related treasury strategy.
• Price volatility, limited liquidity, and trading volumes of digital assets, including Bitcoin.
• Potential widespread susceptibility to market abuse and manipulation in digital asset markets.
• Compliance and internal control failures at exchanges and other risks inherent in the entirely electronic, virtual, and decentralized network of digital assets.
• Fluctuation of operating results due to fair value accounting for digital assets.
• Ability to time the price of digital asset purchases.
• Impact of digital asset market value on ability to satisfy financial obligations, including any debt financings.
• Unrealized fair value gains on digital asset holdings potentially subjecting the Company to corporate alternative minimum tax.
• Risk of regulators reclassifying digital assets (including Bitcoin) as securities, leading to violations of securities laws or classification as an investment company.
• Competition from other Bitcoin treasury companies and spot-traded Bitcoin products.
• Enhanced regulatory oversight due to the Investment Policy and treasury strategy.
• Greater fraud, security failures, or operational problems on digital asset trading venues compared to established asset classes.
• Malfunction, breakdown, or abandonment of underlying blockchain protocols or other technological difficulties preventing access to digital assets.
• Concentration of digital asset holdings relative to non-digital assets.
• Inability to use digital asset holdings as a source of liquidity to the same extent as cash and cash equivalents.
• Security breaches or cyber-attacks leading to unauthorized access or loss of digital assets.
• Loss of direct control over digital assets if held through third-party custodians, with risks of insolvency, theft, or compromised security.
• Not being subject to legal and regulatory protections applicable to investment companies or obligations applicable to investment advisers.
• Non-performance, breach of contract, or other violations by counterparties assisting with the Investment Policy.
• Future capital requirements and ability to raise capital.
• Changes in the market, competitive landscape, technology evolution, or applicable laws/regulations.
• Volatility and disruptions in crypto, digital payments, and stablecoin markets, including banks not providing services.
• Adverse effects from macroeconomic, geopolitical, business, and/or competitive factors.
• Ability to launch new services/products or profitably expand into new markets.
• Ability to execute growth strategies, including acquisitions and divestitures, and add new clients.
• Failure to comply with extensive government regulations, oversight, licensure, and appraisals.
• Exposure to liability, litigation, or reputational damage related to data security.
• Impact of goodwill or other intangible asset impairments.
• Lack of control over DTR potentially leading to DTR not supporting or developing licensed technology.
• Ability to maintain NYSE listing.
• Ongoing class action and derivative litigation related to disclosures about client non-renewals.
• The U.S. federal government shutdown could adversely affect the company through regulatory delays, increased market volatility, and decreased transaction volumes.

Future Outlook

Management expects a decline in crypto services revenue starting in Q4 2025 due to the offboarding of Public Platform LLC. The company is actively pursuing alternative customer and partner relationships to mitigate this impact. Management believes current cash and cash equivalents, including net proceeds from the recent common stock and pre-funded warrant issuance, will be sufficient to fund operations for 12 months from the date of the financial statements' issuance. Future cash requirements depend on revenue growth, overhead, sales and marketing expenditures, software development investments, and client retention. The company may acquire or invest in complementary businesses, services, technologies, or intellectual property rights in the future, with a potential acquisition of DTR under the Cooperation Agreement.

Management Comments

• We believe that our third-quarter results and recent actions marked a major inflection point in our transformation into a pure-play digital asset infrastructure company.
• The current political climate is increasingly supportive of digital assets. Recent actions, including the establishment of a Strategic Bitcoin Reserve and the signing of the GENIUS Act, signal a commitment to positioning the U.S. as a global leader in blockchain innovation.
• The bipartisan push for the Blockchain Regulatory Certainty Act (often referred to as the 'Clarity Act') also aims to provide clear rules for non-custodial service providers, fostering a more stable environment for developers.
• The newly enacted GENIUS Act is a landmark piece of legislation that provides a comprehensive regulatory framework for stablecoins. By mandating full reserve backing and defining stablecoins as a distinct asset class (not a security or commodity), the Act enhances consumer protection and provides the regulatory certainty needed to unlock significant growth in this sector.
• The market continues to see robust adoption. According to the 2025 'Security.org' report, approximately 28% of U.S. adults now own cryptocurrency, a figure that has nearly doubled since 2021.
• Management is actively assessing the impact of this change [Public Platform LLC offboarding] and is pursuing alternative customer and partner relationships to mitigate the effect on future segment performance.
• Management believes that the Company's cash and cash equivalents will be sufficient to fund Bakkt's operations for 12 months from the date of these financial statements are issued.

Industry Context

The filing highlights a positive shift in the U.S. cryptocurrency market, characterized by a maturing regulatory environment, increased institutional participation, and sustained retail adoption. Key drivers include a pro-innovation political climate, evidenced by the Strategic Bitcoin Reserve and the GENIUS Act for stablecoins, and legislative progress like the Blockchain Regulatory Certainty Act. This broader market momentum, with 28% of U.S. adults owning crypto (nearly double since 2021), creates a favorable backdrop for Bakkt's pure-play digital asset infrastructure strategy, despite specific client losses. The company positions itself at the center of a generational transformation in money and markets, leveraging its institutional-grade platform for crypto trading, tokenization, stablecoin payments, and AI-driven finance.

Comparison to Industry Standards

• The company states its platform supports 'know your customer' ('KYC'), 'anti-money laundering' ('AML'), and other anti-fraud measures, which are standard for institutional-grade financial platforms in the crypto space.
• The GENIUS Act is described as a 'landmark piece of legislation' that provides a 'comprehensive regulatory framework for stablecoins' by mandating full reserve backing and defining stablecoins as a distinct asset class, enhancing consumer protection and regulatory certainty, setting a new standard for stablecoin regulation.
• The Blockchain Regulatory Certainty Act aims to provide 'clear rules for non-custodial service providers,' fostering a more stable environment for developers, indicating a move towards clearer industry standards.
• The company's acquisition of 28% of MarushoHotta Co., Ltd. (MHT), a publicly traded company listed in Tokyo, for $11.5 million, with a market value of $79.5 million as of September 30, 2025, suggests a successful strategic investment compared to its cost.
• According to the 2025 'Security.org' report, approximately 28% of U.S. adults now own cryptocurrency, a figure that has nearly doubled since 2021, providing a general market adoption benchmark.

Management Changes

Corporate Governance

Legal Proceedings

• On April 2, 2025, a putative class action complaint was filed in the U.S. District Court for the Southern District of New York against the Company and certain current and former officers, alleging false or misleading statements and omissions related to the non-renewal of agreements with Webull and Bank of America. An amended complaint was filed on September 15, 2025, and the Company anticipates moving to dismiss all claims.
• On June 6, 2025, a verified stockholder derivative complaint was filed in the United States District Court for the Northern District of Georgia against the Company and various officers and directors, asserting claims for breach of fiduciary duty, unjust enrichment, and violations of the Securities Exchange Act of 1934, based on the same allegations as the federal securities litigation. This complaint was voluntarily dismissed without prejudice on June 27, 2025.
• On July 14, 2025, July 16, 2025, and July 18, 2025, the Board of Directors received demand letters from three shareholders regarding the same alleged misconduct as the federal securities litigation, seeking an internal investigation, civil action, and various Board actions. Two of the three shareholders have agreed to pause Board consideration pending resolution of the motion to dismiss the federal securities litigation.
• The SEC concluded its inquiry of Bakkt Crypto on March 3, 2025, regarding its trading platform, asset listing, classification, and customer/service provider relationships, advising that it did not intend to recommend an enforcement action.

Related Party Transactions

• In August 2025, the Company entered into agreements with a family member of an executive for branding, website management, public relations, and social media management services, with fees payable of approximately $0.2 million.
• On July 31, 2025, the Company entered into a Commercial Agreement with Distributed Technologies Research Global, Ltd. (DTR), whose sole stockholder is Mr. Naheta (CEO), for integration of financial transaction processing and cryptocurrency trading solutions with DTR's stablecoin-powered global payments technology. Bakkt will receive a customary fee for processed payments.
• On March 17, 2025, Bakkt entered into an agreement with Intercontinental Exchange Holdings, Inc. ('ICE'), a major shareholder, to purchase Bakkt Trust for $1.5 million cash plus assumption of regulatory capital and operating costs. The sale was completed on May 15, 2025.
• In conjunction with the sale of Bakkt Trust, Bakkt and ICE entered into a transition services agreement (TSA) for up to six months, with fees not material for Q3 2025.
• On August 12, 2024, Bakkt and Opco entered into a $40.0 million revolving credit facility with ICE. The Company drew down $5.0 million on March 27, 2025, and repaid all principal and accrued interest on June 18, 2025. The facility was terminated on July 30, 2025.
• In connection with the 2024 Concurrent Offerings, Bakkt entered into a securities purchase agreement with ICE (a related party) on February 29, 2024, to sell Class A Common Stock, Class 1 Warrants, and Class 2 Warrants, raising net proceeds of approximately $9.8 million from ICE.
• In connection with the Up-C collapse on November 3, 2025, ICE and Mr. Naheta (CEO) amended the Tax Receivable Agreement (TRA) and contributed their TRA rights to NewCo in exchange for cash/stock, with specific terms for discount rates and payment caps.

Stakeholder Impact

• Shareholders: Positive impact from streamlined corporate structure and potential for improved investor appeal, but negative impact from increased net loss, accumulated deficit, dilution from equity offerings, and uncertainty from ongoing litigation and significant client losses.
• Employees: Negative impact from restructuring efforts, including job losses and severance costs, but positive for select management members receiving stock option awards.
• Customers/Clients: Negative impact from the loss of major clients (Webull, Public, Bank of America Loyalty Business) indicating potential dissatisfaction or competitive pressures, while continued focus on product innovation aims to enhance platform attractiveness.
• Creditors: Positive impact from the redemption of the Convertible Debenture, resulting in a long-term debt-free balance sheet, and management's belief in sufficient liquidity for the next 12 months.
• Regulatory Bodies: Positive impact from the SEC concluding its inquiry into Bakkt Crypto with no enforcement action intended and ongoing compliance with licenses, but continuous compliance burden and risk due to evolving regulatory landscape in the crypto space.

Next Steps

• Actively pursue alternative customer and partner relationships to mitigate the impact of Public Platform LLC's offboarding.
• Continue to evaluate headcount and expense base to optimize the cost structure.
• Potentially enter into arrangements to acquire or invest in complementary businesses, services, technologies, or intellectual property rights.
• Negotiate and execute a definitive commercial agreement with DTR for exclusive payment processing technology.
• Consider exercising the Call Option to acquire 100% of DTR Equity within 12 months of initiating payments using DTR's technology.
• Address the class action lawsuit and shareholder demands, with an anticipated motion to dismiss all claims.
• Continue to evaluate the impact of the One Big Beautiful Bill Act (OBBBA) on consolidated financial statements and disclosures.
• Implement additional tax disclosures required by ASU No. 2023-08 and ASU No. 2023-09, effective for annual periods beginning in fiscal 2025.
• Evaluate the impact of ASU 2025-06 on consolidated financial statements and related disclosures, effective for fiscal years beginning after December 15, 2027.
• Richard Galvin to serve as a Class I director.
• Sales under Marc D'Annunzio's Rule 10b5-1 Plan can start on December 10, 2025.
• Sales under De'Ana Dow's Rule 10b5-1 Plan can start on June 22, 2026.

Key Dates

Recommendation

Bakkt is undergoing a significant strategic transformation to become a pure-play digital asset infrastructure company, marked by the divestiture of its Loyalty Business and the streamlining of its corporate structure. While crypto services revenue showed strong growth in Q3 2025, the company continues to incur substantial net losses and faces significant headwinds from the non-renewal of major client contracts (Webull and Public), which are expected to negatively impact Q4 2025 revenue. The recent capital raise and debt repayment improve liquidity and balance sheet health, and the strategic investment in MHT shows promise. However, the ongoing accumulated deficit, client churn, and the inherent regulatory and market volatility risks in the crypto space warrant a cautious approach. Investors should hold to observe the company's ability to replace lost revenue, achieve profitability, and successfully execute its refined digital asset strategy amidst a rapidly evolving industry.

Keywords

Cryptocurrency, Digital Assets, Crypto Trading, Stablecoin Payments, Blockchain, SEC Filing, 10-Q, Financial Technology, Fintech, Digital Payments, Corporate Restructuring, Divestiture, Capital Raise, Investment Policy, Bitcoin, Ethereum, Bakkt, MHT, DTR, NYSE