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Research from Water Tower Research

Water Tower Research is a leading equity research firm that provides research on micro, small and mid cap companies.

Water Tower Research was founded by Wall Street veterans after witnessing a fundamental shift in the investment research industry with the result being a declining knowledge base among investors, a lack of awareness and a shrinking pool of fundamental research being conducted on companies across the small-cap and micro-cap spectrum. The same issues are now increasingly occurring in the mid-cap space. This sea change within the investment community is impacting not only the companies themselves but also current shareholders and potential investors. With significantly less active sell-side sponsorship by Wall Street, a substantial information gap has developed between companies and various constituents in the financial community. The net result is fewer channels for insight and information to flow between companies and investors.

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<ul><li>Bakkt reported a 3Q23 loss of $0.19/share on net revenue of $14.6 million, slightly below our estimates of a loss of $0.18/share loss on net revenue of $15.5 million (consensus was for a loss of $0.17/share on $16.1 million).</li><li>The crypto environment continues to be challenging. President and CEO Gavin Michael said the quarter “clearly demonstrated our ability to execute” in a tough market.</li><li>Michael also highlighted the company’s push and significant progress in expanding outside the US, which is in need of clarifying legislation.</li></ul>

Bakkt reported a 3Q23 loss of $0.19/share on net revenue of $14.6 million, slightly below our estimates of a loss of $0.18/share loss on net revenue of $15.5 million (consensus was for a loss of $0.17/share on $16.1 million).The crypto environment continues to be challenging. President and CEO Gavin Michael said the quarter “clearly demonstrated our ability to execute” in a tough market.Michael also highlighted the company’s push and significant progress in expanding outside the US, which is in need of clarifying legislation.

Bakkt Holdings, Inc. - 3Q23 Earnings Show Solid Execution in a Challenging Environment

<ul><li>On November 9, Bakkt announced the expansion of its international footprint and custody client base.</li><li>Key to its international efforts is expectations to be live with crypto capabilities across new Latin American, European, and Asian markets by year-end.</li><li>CEO Gavin Michael said the company was “working efficiently to expand into international regions with more regulatory clarity and sizeable addressable markets.”</li></ul>

On November 9, Bakkt announced the expansion of its international footprint and custody client base.Key to its international efforts is expectations to be live with crypto capabilities across new Latin American, European, and Asian markets by year-end.CEO Gavin Michael said the company was “working efficiently to expand into international regions with more regulatory clarity and sizeable addressable markets.”

<ul><li>On October 23, Bakkt announced that it was supporting the new Universal Money Address (UMA) open standard for money transmission.</li><li>This is being done in collaboration with Lightspark, where Bakkt will be one of its initial partners.</li><li>The initial launch of the UMA- capable Lightning service will support cross-border remittances, B2B settlement, instantaneous deposits and withdrawals for trading, or globally interoperable P2P.</li></ul>

On October 23, Bakkt announced that it was supporting the new Universal Money Address (UMA) open standard for money transmission.This is being done in collaboration with Lightspark, where Bakkt will be one of its initial partners.The initial launch of the UMA- capable Lightning service will support cross-border remittances, B2B settlement, instantaneous deposits and withdrawals for trading, or globally interoperable P2P.

Bakkt Holdings, Inc. - Lightning Network Going Mainstream

<div><div><div><div><ul style="list-style-type: disc;"><li><p>Founded in 2018, Bakkt builds solutions that enable its clients to grow with the crypto economy.</p></li><li><p>Through institutional-grade custody, trading, and on-ramp capabilities, its clients leverage technology that’s built for sustainable, long-term involvement in crypto.</p></li><li><p>Bakkt Chief Product Officer Dan O’Prey joined us on The Water Tower Hour podcast to discuss Bakkt’s crypto infrastructure business, its history as part of ICE, cryptocurrency differences, its custody focus, and why it is different. </p></li></ul></div></div></div></div>

Founded in 2018, Bakkt builds solutions that enable its clients to grow with the crypto economy.Through institutional-grade custody, trading, and on-ramp capabilities, its clients leverage technology that’s built for sustainable, long-term involvement in crypto.Bakkt Chief Product Officer Dan O’Prey joined us on The Water Tower Hour podcast to discuss Bakkt’s crypto infrastructure business, its history as part of ICE, cryptocurrency differences, its custody focus, and why it is different. 

Bakkt Holdings, Inc - Bakkt Highlights the Latest in Cryptocurrencies

<div><div><div><div><ul style="list-style-type: disc;"><li><p>2Q23 revenue of $347.6 million now includes the Apex Crypto acquisition (rebranded as Bakkt Crypto Solutions).</p></li><li><p>Net loyalty revenues of $12.3 million were down 8% Y/Y, driven by a reduction in volume-based service revenues.</p></li><li><p>Adjusted EBITDA loss was down 17% Y/Y (from a $29.6 million loss to a $24.5 million loss) as the company has taken expense management steps. </p></li></ul></div></div></div></div>

2Q23 revenue of $347.6 million now includes the Apex Crypto acquisition (rebranded as Bakkt Crypto Solutions).Net loyalty revenues of $12.3 million were down 8% Y/Y, driven by a reduction in volume-based service revenues.Adjusted EBITDA loss was down 17% Y/Y (from a $29.6 million loss to a $24.5 million loss) as the company has taken expense management steps. 

Bakkt Holdings, Inc. - 2Q23 Revenues Jump on Apex Crypto Acquisition Closing

United States

Bakkt Holdings, Inc. operates as a software company. The Company develops digital asset marketplace that enables consumers to buy, sell, store, and spend digital assets. Bakkt Holdings serves customers worldwide.

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Bakkt (BKKT US)

Bakkt Holdings, Inc. - 3Q23 Earnings Show Solid Execution in a Challenging Environment

Michael also highlighted the company’s push and significant progress in expanding outside the US, which is in need of clarifying legislation.

Water Tower Research

UPDATE NOTE - Bakkt Holdings, Inc.

Key to its international efforts is expectations to be live with crypto capabilities across new Latin American, European, and Asian markets by year...

Water Tower Research

Bakkt Holdings, Inc. - Lightning Network Going Mainstream

On October 23, Bakkt announced that it was upporting the new Universal Money Address (UMA) open standard for money transmission.

Water Tower Research

Bakkt Holdings, Inc - Bakkt Highlights the Latest in Cryptocurrencies

Through institutional-grade custody, trading, and on-ramp capabilities, its clients leverage technology that’s built for sustainable, long-term...

Water Tower Research

Bakkt Holdings, Inc. - 2Q23 Revenues Jump on Apex Crypto Acquisition Closing

Adjusted EBITDA loss was down 17% Y/Y (from a $29.6 million loss to a $24.5 million loss) as the company has taken expense management steps.

Water Tower Research

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