Bakkt projects growth with Q1 revenue up 33% By Investing.com

Bakkt Holdings, Inc. (NYSE: BKKT), a digital asset marketplace, reported a 33% increase in first-quarter revenue to $17 million, bolstered by a significant rise in crypto trading volumes. The company’s CEO, Andy Main, outlined three strategic priorities during the earnings call: expanding the client network, enhancing product solutions, and managing expenses.

Bakkt also announced a workforce reduction of 20% by year-end for cost optimization and launched an Electronic Communication Network (ECN) for institutional clients. Despite the revenue increase, the company experienced a net loss of $21.3 million for the quarter but expects a positive shift in cash utilization towards the year’s end.

Key Takeaways

• Bakkt’s Q1 revenue increased to $17 million, a 33% rise year-over-year.
• Notional crypto volume surged by 94%, with a 324% sequential increase in crypto trading volumes.
• The company plans to cut its workforce by 20% to achieve cost savings.
• Bakkt launched an ECN for institutional trading and custody.
• Assets under custody grew by 76% YoY to $1,233.2 million.
• Net loss for the quarter stood at $21.3 million.
• Bakkt anticipates full-year revenues of $3,002 million to $4,447 million, with crypto revenue expected to be a major contributor.
• The company aims to triple crypto trading accounts in 2024, with new client growth as a key driver.

Company Outlook

• Bakkt expects full-year 2024 revenues between $3,002 million and $4,447 million.
• Crypto trading accounts are projected to increase 1 to 3 times, with significant growth from new clients.
• The company plans to introduce new crypto coin pairs in the second half of 2024 and expects to add more institutional clients.
• Operating expenses are forecasted to be between $155 million and $165 million after restructuring actions in May 2024.

Bearish Highlights

• The company reported a quarterly net loss of $21.3 million.
• A cash burn of $33.7 million was reported, including one-time expenses.
• Monthly cash utilization is expected to average around $4 million for the remainder of the year.

Bullish Highlights

• Crypto trading volumes outperformed the industry with a 324% increase sequentially.
• Bakkt’s assets under custody showed a robust growth of 76% YoY.
• The company is backed by Intercontinental Exchange (NYSE:) in its expansion efforts.

Misses

• Despite the increase in revenue, the company faced a significant net loss and cash burn in the first quarter.

Q&A…