Bakkt (BKKT) Q3 2026 Earnings Call Transcript

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DATE

Monday, Nov. 9, 2026

CALL PARTICIPANTS

• Chief Executive Officer-Akshay Naheta
• Chief Commercial Officer-Daniel Ishag
• Chief Financial Officer-Matthew A. White

TAKEAWAYS

• Total Transacting Volume (TTV) -- $147.9 million for the third quarter, compared with $168.8 million in the second quarter.
• Full-Year TTV Guidance -- Approximately 3 billion, reflecting an expected fourth-quarter ramp from institutional and cross-border clients already in integration.
• First Half 2027 TTV Target -- Approximately 6 billion, assuming a fuller period of contribution from activations and further product launches.
• Monthly Active Users (MAUs) -- 9,760 in September, compared with a year-end target of approximately 25,000 for December.
• Strategic Asset Value (SAV) -- $145.2 million as of Sept. 30, driven by the value of international investments in Transchem and Bitcoin Japan Corporation.
• Net Income -- $14.3 million, or $0.31 per diluted share, which included a $26.8 million noncash gain on warrants.
• Adjusted EBITDA Loss -- $11.8 million, representing a $3 million improvement from the prior-year period.
• Total Revenue -- $149.2 million, representing a 62.9% decrease from $402.2 million in the prior-year quarter.
• Operating Loss -- $14.4 million, which narrowed by 43% year over year due to reduced compensation and professional services costs.
• Operating Expenses -- $16.1 million (excluding crypto costs and execution fees), down 40% from $26.7 million a year ago.
• Cash Balance -- $37.3 million in cash and restricted cash as of Sept. 30, with no long-term debt.
• Transchem Investment Value -- $134.8 million, comprising the fair value of warrants in the India-based brokerage platform.
• Bitcoin Japan Investment -- $10.4 million, reflecting the equity method carrying value of the strategic position.
• Indian Platform Growth -- A target of 250,000 customers by the first half of 2027, with an expected return on equity of 20%.
• Net Cash Used in Operations -- $17.9 million for the quarter, compared with $44.8 million used during the first nine months of the year.
• Stablecoin Circulation -- 295 billion globally, with industry forecasts ranging from 2 trillion to 4 trillion by 2030.
• Annualized Stablecoin Settlement -- 25 billion for a major card network, representing a 10-fold increase year over year.

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RISKS

• Ishag stated, "Launch timing and client subsequent activity are the critical factors in the fourth quarter," noting that meeting volume targets depends on the speed of client activation.
• Naheta warned that converting international distribution opportunities into activity "Requires Customer Onboarding, Eligibility, And Adoption Alongside Product Readiness And Applicable Approvals," highlighting regulatory and operational hurdles in India and Japan.

SUMMARY

Bakkt, Inc. (NYSE:BKKT) has completed its foundational transformation and transitioned its focus toward monetization and commercial growth within the stablecoin and cross-border payment infrastructure sectors. Management reported that its settlement and payment rails now reach 75 countries, connecting institutional clients to regulated infrastructure. The company reiterated its full-year transacting volume target of approximately 3 billion, noting that client activations for the existing pipeline began in October 2026. Management stated that the commercial ramp is driven by institutional and cross-border clients who were in the integration phase during the third quarter.

• Monthly reporting framework: CEO Naheta stated, "from December, the Bakkt Engine report will give you monthly visibility into the ramp between quarterly results."
• Institutional team expansion: The company added several senior leaders to its commercial organization, including a new Global Head of Markets and a Senior Vice President for Institutional Partnerships.
• Strategic assets in India: Management expects its Indian brokerage platform, Transchem, to serve more than 250,000 customers by the first half of 2027.
• Stablecoin payments portal: The Bakkt Payments Portal is now live, providing business clients with an interface to connect bank accounts and wallets for stablecoin settlement.
• Future product pipeline: The company is developing co-branded credit cards and a conversational AI interface for its neobank-as-a-service offering.

INDUSTRY GLOSSARY

• Total Transacting Volume (TTV): The aggregate notional value of all transactions processed through the company's platforms.
• Annualized Run-Rate Volume (ARV): A metric calculating the annualized pace of volume by multiplying a single month's transacting volume by 12.
• Strategic Asset Value (SAV): The sum of the company's strategic positions, including equity investments and warrants, as reported on the balance sheet.
• Monthly Active User (MAU): A unique end user who completes at least one qualifying fiat transaction on a company-operated payment rail during a calendar month.
• Bakkt Agent: A business-to-business solution that allows partners to embed financial products into their own customer applications.
• Bakkt Global: The segment of the company managing strategic international investments and partnerships, primarily in India and Japan.

Full Conference Call Transcript

Operator: Hello, and welcome to Bakkt's Third Quarter 26 Earnings Call and Webcast. Will be a questio-and- answer session. To ask a question during the session, you will need to press 1 on your telephone. You would then hear a automated message advising your hand is raised. To withdraw your question, please press 1 again. I would now like to turn the call over to Cody Fletcher.

Cody Fletcher: You may begin. Good afternoon. Welcome to Bakkt's Third Quarter 26 Earnings Call. Joining me are Akshay Naheta, our chief executive officer Daniel Ishag, our chief commercial officer and Matthew A. White, our chief financial officer. Today's discussion contains forward looking statements within the meaning of the federal securities laws including statements about our full year 2026 and first half of 27 total transacting volume targets. Our monthly active user target, product launch timing, our expectations for our strategic positions in India and Japan, and our planned monthly reporting. Forward looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those reflected or implied.

We refer you to the cautionary language in our earnings release, in this presentation, and in our SEC filings, including the risk factors set forth in our most recent Form 10-Ks and our quarterly reports on Form 10 Q. Today's discussion also includes references to non GAAP measures, including EBITDA and adjusted EBITDA. Reconciliations to the nearest GAAP measures, and the definitions and methodology for our operational metrics are included in this presentation and in today's release. And with that, I will turn the call over to our CEO, Akshay Naheta. Akshay.

Akshay Naheta: Thank you, Cody, and thank you all for joining us today. Here we present our final report card. All 8 pillars are now at or above a foundation threshold of 75. The largest gains were in partners and distribution, up 25 points, and operational efficiency, up 15 points. The foundational transformation is now complete. Our focus is now on monetization and profitable growth going forward. The settlement layer of global finance is being rebuilt. And stablecoins are creating new infrastructure for cross border payments, treasury and settlement, and the evidence is in the public disclosure of the largest payment networks and banks. Stablecoins in circulation is $295 billion with third party forecasts of $2 trillion to $4 trillion by 2030.

Cross border payment flows were an estimated $28 trillion last year. And since our last call, 1 of the 2 largest card networks reported stablecoin settlement. Running above $25 billion on an annualized basis. almost 10x the level of a year ago, and 21 leading international financial institutions announced plans to establish a stablecoin company initially focused on U.S. Dollar stablecoins. They are the incumbents, replumbing settlement, because the economics demand it. Bakkt's network itself has reached more than 75 countries, connecting clients to regulated infrastructure and local distribution. Here are the quarter's operating metrics and our volume targets. Total transacting volume was $147.9 million in the quarter. and $557.9 million year to date.

Monthly active users on our payment rails was 9.76 thousand in September, our first reported month. Strategic asset value was approximately $145 million at September 30, up from $119 million at June 30. Today, we reiterate the approximately $3 billion full year TTV target we announced on September 9. We are also setting a target of approximately $6 billion of TTV for the first half of 27. Both targets rest on the existing pipeline: clients already in integration with activations that began in October. And from December, the Bakkt Engine report will give you monthly visibility into the ramp between quarterly results. Daniel will explain how we are converting the pipeline into client activity. Daniel?

Daniel Ishag: Thank you, Akshay. Good afternoon, everyone. Total transaction volume was $147.9 million for the quarter, compared with $168.8 million in the second quarter. Trading activity declined in the quarter. The new institutional and cross border client flows behind our expected ramp was still in integration. So the third quarter figure does not capture their expected contribution. Our focus is moving clients into live activity growing their usage. The commercial team began coming together in August with key hires joining from mid August into early September. They brought existing relationships and business with them. Already in the process of converting into volume and revenue. And their immediate task is to complete that conversion into live client activity.

Clients are seeking faster settlement, transparent pricing, and cross border reach through a single integration. The Bakkt payments portal is live for business clients, connecting bank accounts and wallets, cash and stablecoins, and beneficiary payments in 1 interface. Availability and features depend on onboarding, jurisdiction, and applicable requirements. We are also building a dedicated cross border trading desk for institutional demand outside the United States. An initial fourth quarter launch remains subject to banking, documentation, technology readiness and applicable approvals. Our full year target implies approximately $2.44 billion of TTV in fourth quarter against $557.9 million through September. We expect the increase to come primarily from institutional and cross border clients already progressing through integration.

Including integrations underway during the third quarter. Client activations began in October, We expect the pace to increase as further integrations and launch requirements are-- Launch timing and client subsequent activity are the critical factors in the fourth quarter. The ramp has 2 components. New clients becoming active and live clients reaching more of their settlements, treasury, and payments activity through Bakkt over time. Which creates repeat transactions. We already see recurring institutional cross border activity on the platform. These flows are less dependent on crypto trading sentiment although transaction levels may vary. The first half target assumes a fuller period of contribution from fourth quarter activations. Further launches and increased usage.

It depends on timely activation and sustained client activity. That is the basis of our near term volume expectations. Converting work already underway into flows through the platform. We will report actual volume and its drivers protecting commercially sensitive client information. Our revenue economics combine transaction and processing fees with foreign exchange conversions across the on ramps, off ramps and the corridors we serve. Revenue per dollar of volume depends on the services used and the transaction mix As activity grows, we expect more 2 way flows across the network. Where on ramp and off ramp flows become more balanced. We expect better liquidity utilization and execution efficiency supporting improved transaction margins.

That is why we see an opportunity for both revenue growth and improving economics as the platform scales. Beginning in December, the monthly Bakkt Engine report will disclose completed month TTV, starting with November. On the same basis as our quarterly reporting. It will also show annualized run rate volume, or ARV. that is the month's actual TCV multiplied by 12. ARV measures the annualized pace of volume. It is not revenue or forecast over the next 12 months. We expect that pace to increase as clients activate and expand our activity. Each report will explain what drove that month's volume. Together, that gives shareholders a way to follow the trajectory month by month.

And to assess our progress against the targets we have set. BakktAgent enables businesses banks, fintechs, brands to offer financial products to their own customers. MAUs were 9.76 thousand in September, our first reported month. Against an unchanged target of approximately 25 thousand for December. Measured on the same basis. MAUs count end users who completed at least 1 qualifying Fiat transaction on a Bakkt-operated payment rail during the month. The measure spans our payment rails, including the partner applications built on Agent and counts the user once per client's application. Without deduplication across applications. Growth depends on partner launches translating into customer usage and repeat engagement. We will continue reporting MAUs quarterly with our results.

Embedded finance is available today, and partners are integrating accounts, payments and international transfers into their own customer experiences. Our planned products are co branded credit cards, a neobank-as-a-service a service, with a conversational AI interface. And stablecoin card as a service with Thread. Announced on October 13. A U.S. customer credit program settling in stablecoins. Launches remain subject to product readiness partner timing, anchor network requirements, and applicable approvals. Akshay will now cover Bakkt Global.

Akshay Naheta: Thank you, Akshay. Bakkt Global holds our strategic positions in India and Japan, Strategic asset value was approximately $145 million at September 30, compared with $119 million at June 30. It comprises $134.8 million fair value of our Transchem investment and $10.4 million equity method carrying value of our Bitcoin Japan Corporation investment. SAV reconciles to our 10 Q and reflects reported asset values rather than operating revenue or cash generated by the business. In India, Transchem is expanding its brokerage platform through acquisitions and partnerships. We expect the platform to serve more than 250 thousand customers by the first half of 27 and the local broker business to earn a return on equity of around 20%.

That customer base could provide a distribution channel for tokenized global assets through Bakkt. Converting that opportunity into Activity Requires Customer Onboarding, Eligibility, And Adoption Alongside Product Readiness And Applicable Approvals. In Japan, through Bitcoin Japan Corporation, we are exploring opportunities to tokenize private market investments for eligible investors around the world. We are considering both centralized and decentralized distribution models with structures and availability subject to applicable regulatory requirements. For BAC, the economic opportunity is to provide the infrastructure connecting these assets with investors and to earn fees from the resulting transactions and services. With that, I will turn over to Matthew to review the financial results. Matthew?

Matthew A. White: Thank you, Akshay, and good afternoon, everyone. it is great to be here on my first call as the CFO at Bakkt. Total revenue was $149.2 million compared with $402.2 million a year ago. Crypto services revenue is presented gross, it moves with trading volume and is substantially offset by crypto costs and execution fees. Bakkt reported GAAP net income of $14.3 million or $0.31 per diluted share including a $26.8 million noncash gain on the Transchem warrants. On an operating basis, our operating loss was $14.4 million, 43% narrower than a year ago. We remain focused on cost discipline.

Operating expenses, excluding crypto costs and execution fees, were $16.1 million down 40% from $26.7 million a year ago and down 24% excluding last year's $5.6 million of restructuring and impairment charges. We ended the quarter with $37.3 million of cash and restricted cash. No long term debt, and no shares sold under our at the market program. That gives us the flexibility to keep investing in commercial activation while remaining disciplined on the cost side. Adjusted EBITDA was a loss of $11.8 million compared with a loss of $14.8 million a year ago. A $3 million improvement year over year As Daniel explained, transaction economics depend on product mix, corridors, and the balance of flows.

Those factors are still developing and are expected to evolve through much of next year. We are not providing a stabilized gross margin assumption today. Our priority is to convert growing client activity into a sustainable operating results. Back to Akshay for our execution priorities. Akshay?

Akshay Naheta: Our execution priorities for the fourth quarter and the first half of 27 are on this slide. And they follow directly from what you have heard today. Let me close with our 4 things to take away. First, the volume targets rest on the existing pipeline. Clients already in integration, converted by a commercial team now in their seats. Second, the ramp began in October. And builds in 2 ways: new clients going live, and live clients routing more of their settlement treasury and payments through the platform. Third, volume converts to revenue through transaction. And processing fees and foreign exchange conversion. And as flows across the network become more 2 way, we expect transaction margins to improve.

And finally, from December, the Bakkt Engine report will show you actual monthly volume so you can measure our progress against the targets we have set. We will judge our progress by client activity, revenue, and operating performance and ask you to do the same. Thank you for your time and your continued support. Operator, we are ready to take questions.

Operator: Thank you. I am showing no questions in the queue. And that concludes today's conference call. Thank you for joining us. You may now disconnect. You may now disconnect.

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