8-K: Bakkt Recasts 2024 Financials Amid Client Exits, Going Concern Warning

Bakkt Holdings, Inc. has recast its 2024 financial statements to reflect the sale of its Loyalty Business as a discontinued operation, while also disclosing significant client losses and a going concern warning.

Summary

• Recasted prior period financial information in the 2024 Form 10-K to remove the Loyalty Business results, classifying it as a discontinued operation as of September 30, 2025.
• The sale of the Loyalty Business was completed on October 1, 2025, to Project Labrador Holdco, LLC.
• Crypto services revenue increased by $2,714.1 million, or 373.3%, to $3,441.056 million for the year ended December 31, 2024, compared to $726.988 million in 2023.
• Operating loss from continuing operations improved to $(82.586) million in 2024 from $(156.244) million in 2023.
• Net loss from continuing operations improved to $(94.411) million in 2024 from $(153.653) million in 2023.
• Net loss from discontinued operations was $(9.036) million in 2024, a significant improvement from $(72.159) million in 2023.
• Total net loss improved to $(103.447) million in 2024 from $(225.812) million in 2023.
• Webull, which represented 74% of Crypto services revenue in 2024, will not renew its agreement when it ends on June 14, 2025.
• Bank of America, which represented approximately 16% of Loyalty net revenue in 2024, will not renew its commercial agreement, expiring April 22, 2025.
• Management's fully implemented operating budgets and forecasts, reflecting the loss of Webull's revenue, raise substantial doubt about the ability to fund operations for at least 12 months.
• Bakkt Trust will be sold to Intercontinental Exchange Holdings, Inc. (ICE) for $1.5 million plus the assumption of approximately $3.0 million in regulatory capital requirements.
• A Cooperation Agreement was entered into with Distributed Technologies Research Ltd. (DTR) for exclusive payment processing technology, including a Call Option to acquire DTR Equity.
• Crypto-enabled accounts grew to 6.7 million as of December 31, 2024, from 6.2 million in 2023.
• Notional traded volume from crypto increased to $3,446.6 million in 2024 from $727.1 million in 2023.
• Assets under custody increased to $2,301.9 million as of December 31, 2024, from $701.6 million in 2023.

Sentiment

Score: 3

Explanation: While the company shows strong growth in its crypto services revenue and has taken steps to streamline its business by divesting the Loyalty Business and Bakkt Trust, the explicit 'substantial doubt about its ability to continue as a going concern' due to the loss of its largest crypto client (74% of revenue) and another significant client, overshadows these positives. The need for significant cost reductions and potential future capital raises, despite recent funding, indicates a precarious financial position.

Positives

• Crypto services revenue surged by 373.3% to $3,441.056 million in 2024, driven by increased trading volume.
• Operating loss from continuing operations significantly narrowed to $(82.586) million in 2024 from $(156.244) million in 2023.
• Net loss from continuing operations improved to $(94.411) million in 2024 from $(153.653) million in 2023.
• Total net loss decreased by over 50% to $(103.447) million in 2024 from $(225.812) million in 2023.
• Crypto-enabled accounts grew to 6.7 million in 2024, up from 6.2 million in 2023.
• Notional traded volume from crypto increased nearly five-fold to $3,446.6 million in 2024.
• Assets under custody more than tripled to $2,301.9 million in 2024.
• Secured a $40.0 million revolving credit facility with ICE on August 12, 2024.
• The SEC concluded its inquiry into Bakkt Crypto on March 3, 2025, without recommending an enforcement action.
• The sale of Bakkt Trust to ICE for $1.5 million plus assumption of $3.0 million regulatory capital will reduce high capital costs.
• Entered into a Cooperation Agreement with DTR for exclusive payment processing technology, offering a strategic growth opportunity.

Negatives

• Webull, a single client, accounted for 74% of 2024 Crypto services revenue and will not renew its agreement after June 14, 2025, posing a material revenue reduction risk.
• Bank of America, representing 16% of 2024 Loyalty net revenue, will not renew its commercial agreement after April 22, 2025.
• Management's operating budgets raise substantial doubt about the ability to fund operations for at least 12 months, indicating a going concern risk.
• Accumulated deficit totaled $798.0 million as of December 31, 2024.
• Net cash used in operating activities was $(21.2) million for the year ended December 31, 2024.
• The non-renewal of Webull's agreement increases the risk of a potentially material goodwill impairment.
• Loss from change in fair value of warrant liability increased significantly to $(17.186) million in 2024 from $(1.571) million in 2023.
• Bank of America reduced the purchasing card facility credit line from $35.0 million to $18.0 million and changed payment frequency to weekly.

Risks

• The company's ability to grow and manage growth profitably.
• The possibility of being unable to obtain applicable regulatory approvals to execute on the commercial agreement with Distributed Technologies Research Global Ltd. (DTR).
• Whether the company will be able to successfully integrate its operations with those of DTR, including its infrastructure, and achieve the expected benefits therefrom.
• The regulatory environment for crypto currencies and digital stablecoin payments.
• Changes in the company's business strategy.
• The company's adoption of its updated Investment Policy (Investment Policy) and related treasury strategy, including the ability to successfully consummate acquisitions, integrate or manage investments in potential acquisition targets and investees.
• The price of digital assets, including Bitcoin.
• Risks associated with owning digital assets, including price volatility, limited liquidity and trading volumes, relative anonymity, potential widespread susceptibility to market abuse and manipulation, compliance and internal control failures at exchanges and other risks inherent in its entirely electronic, virtual, form and decentralized network.
• The fluctuation of operating results, including because the company may be required to account for its digital assets at fair value.
• The company's ability to time the price of its purchase of digital assets pursuant to its strategy.
• The impact of the market value of digital assets on the company's ability to satisfy its financial obligations, including any debt financings.
• Unrealized fair value gains on digital asset holdings subjecting the company to the corporate alternative minimum tax.
• Legal, commercial, regulatory and technical uncertainty regarding digital assets and enhanced regulatory oversight of companies holding digital assets including the possibility that regulators reclassify any digital assets the company holds, including Bitcoin, as a security causing the company to be in violation of securities laws and be classified as an investment company under the Investment Company Act of 1940.
• Competition by other Bitcoin treasury companies and the availability of spot-traded products for Bitcoin.
• Enhanced regulatory oversight as a result of the company's Investment Policy and related treasury strategy.
• The possibility of experiencing greater fraud, security failures or operational problems on digital asset trading venues compared to trading venues for more established asset classes, and any malfunction, breakdown or abandonment of the underlying blockchain protocols, or other technological difficulties, may prevent access to or use of such digital assets.
• The concentration of the company's expected digital asset holdings relative to non-digital assets.
• The inability to use digital asset holdings as a source of liquidity to the same extent as cash and cash equivalents, due to, for example, risks associated with digital assets and other risks inherent to its entirely electronic, virtual form and decentralized network.
• The company or a third-party service provider experiencing a security breach or cyber-attack where unauthorized parties obtain access to its digital assets.
• The loss of access to or theft or data loss of digital assets, which could be unrecoverable due to the immutable nature of blockchain transactions.
• If the company elects to hold its digital assets through a third-party custodian, the loss of direct control over its digital assets and dependence on the custodians security practices and operational integrity which may lead to the loss of its digital assets as a result of the insolvency of the custodian, theft by employees or insiders of the custodian or if the custodians security measures are comprised, including as a result of a cyber-attack.
• The company not being subject to the legal and regulatory protections applicable to investment companies such as mutual funds and exchange-traded funds, or to obligations applicable to investment advisers.
• The non-performance, breach of contract or other violations by counterparties assisting the company in effecting its Investment Policy and related treasury strategy.
• Future capital requirements and sources and uses of cash, including funds to satisfy liquidity needs.
• The company's ability to raise capital and investments.
• Changes in the market in which the company competes, including with respect to its competitive landscape, technology evolution or changes in applicable laws or regulations.
• Changes in the markets that the company targets.
• Volatility and disruptions in the crypto, digital payments and stablecoin markets that subject the company to additional risks, including the risk that banks may not provide banking services to the company and market sentiments regarding crypto currencies, digital payments and stablecoins.
• The possibility that the company may be adversely affected by other macroeconomic, geopolitical, business, and/or competitive factors.
• The company's ability to launch new services and products, including with its expected commercial partners, or to profitably expand into new markets and services.
• The company's ability to execute growth strategies, including identifying and executing acquisitions and divestitures and initiatives to add new clients.
• The company's ability to reach definitive agreements with its expected commercial counterparties.
• Failure to comply with extensive government regulations, oversight, licensure and appraisals.
• Uncertain and evolving regulatory regime governing blockchain technologies, stablecoins, digital payments and crypto.
• The company's ability to establish and maintain effective internal controls and procedures.
• Exposure to any liability, protracted and costly litigation or reputational damage relating to data security.
• The impact of any goodwill or other intangible assets impairments on operating results.
• The possibility, as a result of the company's lack of control over DTR, that DTR will not continue to make available, support or develop technology currently licensed pursuant to the existing commercial agreement with DTR.
• The company's ability to maintain the listing of its securities on the New York Stock Exchange.
• Webull's decision not to renew its agreement will materially reduce Crypto services revenue, which will increase future cash requirements.
• Substantial doubt about the company's ability to continue as a going concern.

Future Outlook

The company anticipates continued growth in crypto revenue by expanding its client base and customer engagement. It expects to limit future hiring and optimize headcount, aiming for compensation and benefits expenses, as well as selling, general and administrative costs, to decrease as a percentage of revenue over time. The company plans to draw on its ICE Credit Facility in 2025 to fund operations as it scales its Crypto product offering. However, the non-renewal of the Webull agreement is expected to significantly reduce Crypto services revenue, raising substantial doubt about the company's ability to fund operations for at least 12 months, necessitating planned cost reduction measures and potential future capital raises.

Management Comments

• Management determined that the Loyalty Business met the criteria for classification as held for sale and a discontinued operation as of September 30, 2025, based on commitment to a formal plan to sell, significance to historical operations, and expectation of elimination of operations and cash flows.
• Management believes that its planned cost reduction measures can be successfully implemented and alleviate the substantial doubt that was raised about our ability to continue as a going concern.
• We expect crypto revenue to continue to increase as we grow our client base and our customers.
• We expect that our compensation and benefits expenses will decrease as a percentage of our revenue over time.
• We expect [selling, general and administrative] costs will decrease as a percentage of our revenue in future years as we gain improved operating leverage from our projected revenue growth.
• We believe we are well-positioned to provide innovative, multi-faceted product solutions and grow with this evolving market.
• We believe we are well positioned with our ability to provide capabilities around emerging crypto assets on a single, highly secure, institutional-grade technology platform.

Industry Context

The U.S. cryptocurrency market experienced dramatic evolution in 2024 and early 2025, marked by regulatory framework changes, technological innovation, and institutional adoption. Bitcoin's price surged, exceeding $103,000 in January 2025, partly due to SEC approval of the first Bitcoin ETFs, which accumulated over $105 billion in assets under management. Crypto adoption among U.S. adults nearly doubled since 2021, reflecting a maturing market. The company's strategic shift to a pure-play cryptocurrency infrastructure platform aligns with these trends, aiming to capitalize on the expanding global crypto market.

Comparison to Industry Standards

• The U.S. cryptocurrency market evolved dramatically in 2024 and early 2025, with Bitcoin's price increasing from approximately $39,500 on January 22, 2024, to over $103,000 in January 2025.
• SEC approval of the first Bitcoin ETFs in 2024 led to over $105 billion in assets under management, contributing to Bitcoin hitting all-time highs and a market cap of $1.8 trillion.
• Security.org's 2025 Cryptocurrency Adoption and Consumer Sentiment Report indicates an estimated 28% of U.S. adults owned cryptocurrencies as of January 31, 2025, nearly doubling since 2021.
• The company's platform is described as 'institutional-grade' and 'born out of our former parent company, Intercontinental Exchange, Inc. (ICE),' suggesting a high standard of infrastructure.
• The company faces 'competition by other Bitcoin treasury companies' but does not name specific comparable entities or provide their performance metrics for direct comparison.

Management Changes

Corporate Governance

Legal Proceedings

• Putative class action lawsuit filed April 21, 2022, alleging false or misleading statements and omissions in SEC filings related to financial statements, accounting, and internal controls. A settlement in principle for $3.0 million was reached on March 14, 2023, and preliminary approval was granted on September 21, 2023, but a final approval order has not yet been issued.
• An opt-out action related to the class action, filed June 23, 2023, was dismissed on March 5, 2024, as the plaintiff intended to pursue remedies as a class member.
• A derivative action related to the class action, filed February 20, 2023, was voluntarily dismissed on July 31, 2023.
• The SEC concluded its inquiry of Bakkt Crypto on March 3, 2025, advising that it did not intend to recommend an enforcement action.
• Aspire Loyalty Travel Solutions, LLC (a former Loyalty Business subsidiary) received a vendor letter on January 25, 2024, alleging breach of agreement; the matter was settled for $1.1 million in May 2024.
• Bakkt Brokerage was expelled by FINRA for failure to file independently audited financial statements for 2023 and is in the process of winding down its business.

Related Party Transactions

• ICE Credit Facility: On August 12, 2024, Bakkt and Opco executed a $40.0 million secured revolving line of credit facility with Intercontinental Exchange Holdings, Inc. (ICE), a major shareholder.
• Apex TSA: Apex Fintech Solutions, Inc. (AFS) provides technical support and transition-related services to Bakkt Crypto Solutions, with expenses of $0.6 million in 2024 and $1.1 million in 2023.
• ICE TSA: Intercontinental Exchange, Inc. (ICE) provided insurance, digital warehouse, data center, technical support, and other transition-related services, with expenses of $2.8 million in 2023 and $1.2 million in 2022. This agreement terminated in December 2023.
• Sale of Bakkt Trust: On March 17, 2025, an agreement was entered into to sell all outstanding equity interests of Bakkt Trust to ICE for $1.5 million plus the assumption of regulatory capital requirements.
• Cooperation Agreement with DTR: On March 19, 2025, a Cooperation Agreement was entered into with Distributed Technologies Research Ltd. (DTR) and Akshay Naheta, the sole stockholder of DTR, who will also become co-Chief Executive Officer and a Board member.
• Concurrent Registered Direct Offering with ICE: In February 2024, ICE purchased 461,361 shares of Class A Common Stock and associated warrants as part of a registered direct offering, raising approximately $9.8 million in net proceeds.

Stakeholder Impact

• Shareholders: Face significant uncertainty due to the 'going concern' warning and the loss of a major client (Webull, 74% of crypto revenue), which could lead to further share price volatility. Potential for dilution from future capital raises. The strategic shift to a pure-play crypto focus and the DTR partnership offer long-term growth potential if successfully executed.
• Employees: Subject to planned cost reduction measures, including personnel reductions and a hiring freeze, as the company optimizes its expense base. Management changes, including the appointment of a new co-CEO, may impact organizational structure and culture.
• Customers: Loyalty Business customers will be impacted by the sale of that segment. Crypto customers may experience changes due to the non-renewal of the Webull agreement, but the company aims to scale its crypto product offering and activate new clients.
• Creditors: The 'going concern' warning increases risk for all creditors. Intercontinental Exchange Holdings, Inc. (ICE) is a significant creditor through the $40.0 million revolving credit facility.
• Suppliers: The company plans changes to vendors as part of its cost reduction measures, potentially impacting existing supplier relationships.

Next Steps

• Implement planned cost reduction measures, including personnel reductions, a hiring freeze, changes to vendors, and additional discretionary spending cuts.
• Scale the Crypto product offering and activate new crypto clients to replace lost revenue.
• Maintain product development efforts and optimize technology infrastructure and operational support.
• Draw on a portion of the ICE Credit Facility in 2025 to fund operations as needed.
• Pursue regulatory approval for the sale of Bakkt Trust to ICE.
• Integrate Distributed Technologies Research Ltd. (DTR)'s exclusive payment processing technology into the platform.
• Evaluate the Call Option to acquire DTR Equity.
• Address the significant reduction in Crypto services revenue following Webull's non-renewal.
• Manage the expiration of the Bank of America commercial agreement for Loyalty services.
• Continue to evaluate headcount and expense base for further optimization.

Key Dates

Recommendation

The company faces severe financial challenges, explicitly stating 'substantial doubt about its ability to continue as a going concern' due to the non-renewal of its largest crypto client (Webull, representing 74% of 2024 crypto revenue) and another significant loyalty client (Bank of America, 16% of 2024 loyalty revenue). While crypto services revenue grew significantly in 2024 and strategic steps like the Loyalty Business divestiture and DTR partnership are positive, the immediate and material revenue loss, coupled with an accumulated deficit of $798.0 million and continued cash burn from operations, presents an extremely high-risk profile. Despite planned cost reductions and a new credit facility, the magnitude of the revenue loss and the explicit going concern warning suggest a strong likelihood of further financial distress and potential significant share price depreciation. A 'sell' recommendation is warranted given these critical uncertainties and the immediate threat to operational viability.

Keywords

Crypto, Digital Assets, Discontinued Operations, Financial Recast, Going Concern, Webull, Bakkt Trust, DTR, Revolving Credit Facility, NYSE, Bitcoin, Blockchain, Fintech, Loyalty Business, SEC Filing