- Earnings call transcript Q3 2022

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Operator

Greetings, and welcome to the Bakkt Third Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation.

As a reminder, this conference call is being recorded. I will now turn it over to Ann DeVries, Head of Investor Relations at Bakkt. ahead. go Please

Ann DeVries

Relations thank quarter and earnings joining for Bakkt. our us presentation certain will Good statements forward-looking call. you Today's third about Investor on found earnings can statements separate at presentation, Bakkt's www.investors.bakkt.com cause that contain are morning, uncertainty differ These be for beyond website including expectations call circumstances, many in from current the of Bakkt's on or such changes which the management implied to Bakkt forward-looking which and are actual and those expressed based statements. of are materially control, may the subject results to in of

the For to of in Factors most discussion Bakkt's XX-Q. of filings quarterly Bakkt's complete recent a refer its on Form Form on annual please subsequent statements including to its its more and and XX-K discussion related business, report Securities and with Risk the uncertainties the report forward-looking Commission, Exchange

presentation, Generally calculated discussing in financial measures. results During Principles, to to non-GAAP are refer Accounting will Accepted that addition certain today's with accordance in we

SEC. on our this, and presentation our this the for the was our with of release, basis results filed morning the information refer which measures, financial earnings please non-GAAP more to For

to Officer; Joining will After our that, are Michael, me the and questions platform. to Technologies turn Gavin. receive and the through Officer. answer Say it questions Gavin from I'll on now from Financial Gavin Karen will we prepared Chief today's Chief answer Executive Alexander, analyst we available be over call After remarks, community. our Karen investors

Gavin Michael

for morning, thanks joining. Ann. Good you, Thank everyone, and

interest Apex and We and businesses that the market to digital focus, and Within economic from traditional the position expect and to in inflation from our strong for for in of volatility continued is us consumers headwinds transformative to consumers, through core later Crypto, our businesses cycle, the institutions recognize the still rates there we enabling to enables both digital the Our discuss same. rising and value goal markets be with Bakkt Crypto. acquisition remains working by we'll call. assets. connect significant in like We're to our invest unlock economy which

the the are not this to involved. Crypto may can be shock and the in continuing at week, see that fallout waves initial limited the Looking events parties we

We tokens. any FTX no have exposure or the of parties to impacted or

We are with we're way. a mind, long sustainable mature in risk. We've thoughtful to focused building and utilize on strategic, approach for the how intentional, always taken a this and disciplined With capital. we term in being

enhancing time, activating core We at and with be the business cash and usage and processes the prudent even driving but productivity. in to our will product in our offerings optimize invest simplifying partners, same continue we by will more

the across loyalty. to businesses is institutional unique by and Bakkt our technology grade our and underpinned platform; consumer crypto on moving offers platform Now, experiences scaled is stack. It

within these Our significantly addition partners. customizable with to scaled services to Crypto merchandise areas. access defined and fully from stand buy, experiences our We the further for by our solutions valuable of sell, offer loyalty hold partners products provide our travel which Apple crypto product Apex

Our platform in that because these on marketplace is the seen well our quickly. to very doing we've focused scale position they and resonate

for and but our that suite of into opportunities they're consumer to profitability. and drive significant these loyalty only have path product each in to Like tandem. our crypto continue crypto offerings leaning also are rewards. demand work to individually, in and rich We simplification products clear with Not a powerful

Crypto looking the for and Position and XX are increasingly Back Loyalty adoption the and believe We've segments seen any us during solutions entered very we complimentary in to a costs. rewards our widespread for and programs offset already into the dig crypto to and acquire extremely than of more reach in drive path working it'll crypto our tough to more spending looking loyalty institutions. fintechs that incredibly markets this utility across Apex has can are As that sooner solutions. consumer to to just consumers utility Apex us loyalty let's bolster investible Businesses Solutions. stages market programs new the as that any scale of leading robust in earn time, faster, develop, addition our this environment. from continues offer these still including so narrative us early their opportunities offer look environment with will on. deeper be to I'm to Crypto to to trading agreement advanced definitive crypto behaviors clients to revenue excited for platforms. an relevant to than more into to as our Crypto businesses, things Fintech been asset platform kind and is client viewed Apex market on clients, around of move some the We're customers of we've enable significant profitability. we've consumers,

team We with our co-market expand We're also our roadmaps relationship to accelerate our to initiatives continuing and By build working to products. and grow Serve. continue across with our and in marketing business, activate sales product building our their out to and partners with organic the pipeline sales market

their opportunities webinars, to educate where leadership, teams we their content, ongoing other means clients. this are So jointly and participating thought and

consumer the in resulted premium demand more This already and enable This back customer ecosystem. into loyalty instant to content outlets has options activated number provide update continue conversion a across transaction name customer solutions shop of We partners merchandise. brands and in rates. increased meet from choice to redemption for and invest back quicker we've expanded our opportunity. to includes funding to expanded including travel flows We storefronts

more is is link by extremely Apex acquisition card than revenue We're This users more seen crypto new to The times the and we've platform. in crypto significantly client transaction users the meaningful scale back deal a our more bank generation complimentary versus new crypto card that already opening immediate with of buy more link meaningful partners. example, a to XX us as For This account offer well excited source two as expanded present. over new acquisition a our funding accelerates versus doors are clients verticals. not likely Crypto. a XX likely link providing bank to It and that quickly asset to enables segments provides unique differentiated to capabilities more we're and to than that are as times new segments a account. debit debit users volume client strategy growing a and our where

individuals transformational for crypto deal further bench. is our This welcome across our We talented engineering, trading to to company. also with expertise get technology deepen and

Apex and our of are our of new choice offer deal addition to advanced and attractive. to the programs. able adds and significantly financial platform, of existing structure for clients. financially our With fintech's, features merchants, The provider a to poised crypto Crypto institutions, leapfrogs roadmaps be This loyalty industries to extremely this capabilities we to to be across is

and payment As acquired The million revenue revenue have shared, stock upon a deal targets up all and with in our beneficial and intentional. the the its to to is we've If cash The of crypto impact XXXX. financial of million the overall is be deal the significant targets through on back back to picture. $XX acquired will purchase close. in this by and expected paid, additional initial financial achievement business XXX our meets is to modes, depending structure business price is on seller it's accretive

expect As this what closely more bolster we really we've means. so said, transaction that path profitability, to our at to talk let's

EPS free to bare will Crypto Apex rate. growth revenue cash of acquisition Our and our flow

accretive adjusted close. business expect the We EPS to following addition be full Apex of year the in to Crypto deal

are of least XX% targeting margin in expansion We at operating an deal excluding costs. XXXX

acquisition associated flow restructuring XXXX initiatives. from million the cash free and expect XX We through of

technology the by We transaction efficiencies. XXXX, XX in meaningful to from XX also range count million expect cash head driven savings through primarily of this and

as Our benefits double incremental will expect to to the through XXXX. in pipeline, from our transaction revenue operating growing Apex only opportunities significant we're grow the by active partnerships margin. financial revenue continue Leveraging XX excited the driving the and we

deal this financial to shared, the maximizes solutions involvement. backed benefit ongoing structure and I for Apex incentivizes As the FinTech of

the XXX% back drive deal $XXX linked up profit Crypto out this the from growth FinTech financial the in clearly year lower achieve of stock be targets We Apex of growth targets financial and we million impact receive this this transaction of notes value to that in these to Apex ensure upon growth the achieving appropriately targets Apex purchase than gross below and payment profit If includes XX year returns consideration XXXX. were believe than accretive XXXX the are show that to growth deal earn of our over will Aside back must is out, the targets deal to closing. revenue laid of the of earn seller on more aggressive with would Apex in result the earn full to XX% shareholders. stock contingent targeted on significant at backed for to incremental targets performance EPS that these below closing, amount Crypto more targets business. amounts full at and out issuance for at profit of these robust based Crypto or and year terms. price in Gross proportionally provides cash growth immediately stop its XX% transaction out issuance of right million these no are solutions of contingent back feel established all. growth issuance to the The confident

go and enhance deeper Now on how map. they capabilities roadmap platform our and Apex Crypto's will accelerate product our let's

cash offer deposits ability coin. choose customers with will offered coins we seamless the open withdrawals with and Bitcoin more for coins along than functionality light XX the to Bitcoin, partners loop acquisition, the With their having to and with

We are offer that passive hold consumers crypto a number the taking many today crypto for in Stating increasingly that limited and to will forward. expect a capability coins. to capability become for income capabilities transacting relevant also able to going very enables of a they we who attractive from be earn

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strength serves. experiences, crypto will also offerings serves be the currently new custody. and customer from client's royalty We back bring currently payments, to Apex able Crypto to Crypto

partners segment XXX with destination to segments. other offering important value factor to forward. AI, are the so us we to top includes people growth backed marker. the millennials be identify to also to FinTech serving are network revenue Karen five Zs new group get and other represents plan a bringing to add to We to in already maximize clients business customers on. customer to relationships shareholders. Crypto. has creating a To get customer exciting and of a expect another accretive of EPS, FinTech's crypto to attractive expect in product solutions, of acquisition one future quarter. competitive for implement huge opportunities provides enabled platform most The provides and bolstering platform the positioned this and has each and to Consult BXC and highly data products jointly The new crypto the in approximately fintechs XX% more are a firms customers, continue speed the more and also addressable in we segment pricing deal, Apex pulling will through faster. products the the or and talented the their we've with into from crypto an offer customers businesses to able and immediately will in along crypto continue is to this Apex will over strength spoken it growth target features The new impactful Crypto are financially as deeply, broader million nature to restructuring potential engage B and Crypto joint for sense to grow crypto to much market single more the Apex moving to access profitability. more all universe frequently revenue opportunity. earlier deepen a but Morning represent It expect more the We'll trade more chapter. focus Research, fourth Apex The we volume and the and services accretive and Crypto according growth XX% space. accounts Neobanks enables ownership this Z BS FinTech already than offering for more quickly together. in future free demographic Gen from is millennials features going According customer most. Gen to US cash an interested we're flow to our differentiated comprising this provide This have This these broader product capabilities a stakeholders that we This which grow platform scaling where and these of to more economy than more and of our access consumers it for path crypto to makes of to scale overall with

the so focus excited enables us technology trading, strategy. to welcome backed. made our a core acquisition, with across to investments and and to platform our Crypto lot expertise are necessary we've addition know In simplify team just crypto in of critical the capabilities we that XXXX, which in We're to members to on Apex

just on the innovation share to make We both about so of wait and to our strong elements our across business. have have are cultures, in to that and alignment many passionate a this natural synergy the delivery There deal together. alignment crypto. platform we'll I can't backed more progress

our move So business. on to additional highlights from let's strategic

and We're Going to multifaceted deeper Global across Payments Payments, to to on their engineering, product. excited teams the with be progress network. making we're on our sales, partnership bring and utility working crypto Global access marketing

Our to crypto us Connect crypto cases. We've buy NetSpend for Net use our on and is crypto with which integration through for rewards, complete pilot up employees NetSpend a additional crypto collaborate capabilities. sets work to launched

brings We B for to back. brand, C our which life with significantly In are strategy market refreshed verticals B our closely also supported on expanded through to go QX, we working positioning Tesis sales to targeting key partner crypto presence a rewards. to

we've than partner initiatives qualified been of more traction leads awareness leads, generate experiences, doubling beginning expanding build average year. and already of strong with marketing supporter this to seeing we're monthly since to a and As the more

to continue slightly crypto longer market services, see interest buying We related the in cycle. even a with and to custody

Karen narrative valuable quarter. is partners CFO, pass for clearly our in review crypto for And I'll insights The it Our results form utility. trends. a our can emerging our financial to these help with shifting of are of conversation these into Alexander, we and the ahead that, opportunities to providing for channels is stay crypto

Karen Alexander

now everyone. financial results. the and walk I you, Gavin, Thank quarter morning you through will third good

represent Holdings non-gap forward, the Back Inc. the XXth, prior term Successor period the Holdings. from XXXX combination Impact predecessor is which the results LLC Holdings to exclude As October of This predecessor These a to post-merger reminder, figure. use successor XXth, of represents a From the results applicable Back combined of is represents period. XXXX. any and October the results for results we VPC Acquisition

quarter which Slide results. XX.X strong revenue or by Turning the here third strong the large out to The from come from third key our the driven as net to We of activity $X.X of million, have loyalty XXXX primarily we is XX, driver we've financial increased for XX% by XXXX, of quarters. rebounding a quarter quarter redemption pandemic. recent saw compared million travel to

As previously quarter goodwill this charge. billion asset disclosed, included and non-cash a $X.X impairment intangible

an market As crypto a from result a our our affect capitalization cash impact reminder, our activations. and the this to accordance operating liquidity charge revenue timing or operations decline or was This future does for and the the and expected generally charge have not of in the accounting accept product impact is elongated principles non-cash in activities. on of

expenses non-cash one-time count. up or an $XX over the $X.XX and share base back the The XX% company interest an this XX.X loss allocated head million the diluted quarter ink. non-controlling is in operating billion, million year, net loss the primarily compensation year average and leaving $XXX.X our basic to charge, net $X.X Excluding attributable loss Net due diluted holdings of which basic were loss of million a which in shares. to on resulted $X.X in was a was XX per to period, operating for in share billion, and increase million

company. $XXX adjusted $XX.X loss and million billion XX, total EBITDA their and of at EBITDA related $X.X third and of with for XXXX. our that including charge. increase in is June revenue Slide The asset losses at third XX% in the of and million the were is increased and revenue share levels. goodwill recent compared respectively. volumes period, XX% adjustments account showed XX, non-cash revenue prior year quarter out have seen adjusted primarily quarter the May of EBITDA for through quarter in pandemic an net million. investment larger due reflects in aggregate Total shareholder enterprise and increased XX, ICE to Slide to Adjusted the XX.X have XXXX. the versus and net the we XXXX. and year third in items in the broken in result was EBITDA ownership Our of as of we impacted subscription revenue On remains customers was growing we quarter impairment over as quarters for travel growth service most period acquisition intangible EBITDA XXXX that the higher year transaction consistent the XXXX which strong adjusted increase was On revenue. The October shares, between of shareholding pre XX with of to our the EBITDA of

As quarter as the of seeing high a loyalty constraints subsided, COVID-XX supply redemption volumes travel we prices. mentioned we were and the impacts last softening in result

in observe quarter. to softening the continue We the third

goodwill ramp well Turning an and XXXX. to operating XXXX the to infrastructure. impairment by the XX, expense, to increased in our due to expected to type issuance team third hiring our The product company was count of $XX.X intangible compensation grow and expense Slide public related always The as We've invested compensation increased expense investments. up XX% we business. DFA funds business in was have a units roadmap to quarter to our and investment expense in center expense compared company. total compensation restricted stock excluding related million which quarter-over-quarter year asset our receiving quarter, to our increase invested third in driven head to call non-cash to was up XX% we for increase the charges to and non-cash as in public Charge the running count $XX.X throughout building related was after Total the of business be expense We XXXX investments year-over-year. million, mainly due technology total increased transaction from build of year-over-year as

the initial roadmap to XXXX. well further that of that Apex limit built acquisition year company, investments we prudent simplifying think in the in future plan acquisition business, earlier in to our us most leverage Crypto fourth in we build seen expect hiring sized completed given we we have this our of We out to especially the mentioned be We given to of as by that on any and ensure environment well in pending have macroeconomic Gavin our team place. quarter. We are Crypto business in this have are ensuring efforts to we the the environment. the and focused presentation supply in right our our our for that that help the Apex. will our we've appropriate as supports headwinds this is will that believe we and implementing are resources positioned restructuring

platform third for and the over dollar year. growth which expect back On aligned and XXXX. the accessed Transacting and a over As the a restructuring are slide million XXX performance indicators. year full are and XXX,XXX in back have in recognize accounts particularly loyalty strong crypto KPIs a measure our These capabilities of was across we saw quarter quarter XX% to fourth loyalty conversions result, in the revenue experiences we key asset weighted across our of year were reflects we redemption, growth. charge year, XX% XX, travel. of across Digital breadth quarter both experiences. Volume the how more up partner to reflect the of XXXX of directly

for XXXX We while saw volume to relationships. increase expect the as compared have well travel in quarter XXXX, post-COVID as demand strong year. travel year this We quarter crypto increase volume over activate we higher build reflecting as as announced third this travel materially to in partners an new we of

see continue first a June. observed to travel in volume We softening of

For hotels instance, have traveler demand rental impacted a for hotels in over preferences quarter. for home the third vacation

with scale a crypto transaction. accounts, value total X sheet, remained will balance Our these given platform, million maintaining of the their We've with our on and and $XX enabled around self-fund cash which leaves conditions macroeconomic Apex of billion challenging acquisition trade. component focused available million notional financed on trades $XX significant crypto impact We quarter highly million Crypto significant in liquidity we a liquid highly the us to metrics on over assets, with of cash strong roadmap other invited their ended the Apex have especially believe us. the $XXX.X in third

the of asset charge million. due reiterate sheet a quarter As I we quarter, total that this our to impairment to was generally goodwill and we the goodwill took declined impairment non-cash accepted and charge non-cash intangible want took result this to intangible balance asset principles. accounting $XXX.X that

the reflect Given our business. and Even growth. market deterioration more million investing our does macroeconomic term environment about in underlying continued future so current of fundamentals not now with business, are in any and acquisition the growth quarter, business long of potential capitalization core excited drive Apex of as used we Crypto. we our cash to In the $XX.X third of future we

in capital included expenditures million $X.X continue our technology quarter This invest to as we platform. of

We income, benefit guidance. also increased cash car one-time a X.X the In in to facility, new facility facilitate light the macroeconomic reflected of payment purchasing move wasn't a payout. migration interchange onetime of the related which to of new million to we a challenging resulted which midyear to accelerated our cash had the in environment,

business, focusing We on cash expense to levels from benefits with related our decline core in large usage are we dollar to further of expecting XXXX to investments increased from XXXX and our as the business. reductions completion grow XXXX due revenue coupled in

Next, XXXX. around expectations to outlook let's our move on for

and we the disruptions prolonged which million that range XX the provided low expect talked end travel We revenue that in about to was decision volumes elongated the to at XX earnings, to cycles earlier. due we crypto QX of be to

our cash $XXX disclosed our excluding million the to within the for million, $X.X expect fall cash previously range year of to of accelerated million. one-time usage payment we Next, $XXX

mentioned in focus fourth solutions quarter. on implement business core earlier, further restructuring to we we As our will plan the a we our as looked

a the take As quarter. a expect result, fourth to in charge we restructuring

the would preliminary financials and all the in XXXX we on I that expected strategic summarize view Given on it our thought impact beyond. this call, on helpful updates to provided be our

We the in from benefits environment. the decline impact XXXX cash by macroeconomic fourth related focus levels dollar of usage and revenue a expect investments combined the believe restructuring. in from on large We light the challenging completion in XXXX prudent, possibility quarter managing to increased our and driven keen prolonged expense cash usage of our reductions of XXXX to of especially is our

Next, we Apex benefits expect acquisition from financial of our Crypto. material

As expansion Crypto we mentioned Apex are in from earlier, targeting operating at XXXX margin of least Gavin XX%.

expect We XX business million pass for Apex I and his closing in will through now incremental of the Gavin cash it result Crypto acquisition cumulative back also XXXX. of approximately free to to remarks. our restructuring

Gavin Michael

Karen. Thanks

As part be of integrate with including stakeholders, relentless focus to expeditiously. our onto working and of we'll regulators on our the acquisition platform our Crypto execution, the business key complete Apex diligently

across us verticals, us Apex the bolsters the Crypto choice with broader and Apex of crypto products to acquisition with merchant board. client is Our any us enabling transformational, offering, providing be or positioning product our reach of other assets. to our provider offer for program loyalty institution, financial crypto digital Crypto new innovative expand and

on the a expense environment and prudent growth. focused given remain on We are control balance We long we're strong sheet. maintaining term sustainable macroeconomic focused vigilant and

protect We will our implement we will shareholders. take such and the plan its as actions to restructuring necessary in XQ company

cycle. We our the through how remain disciplined with highly we capital allocate will

recent finance. that here capital and allocation runway term stay our of the crypto as the XX% We're decisions indicates don't our this Crypto's research even crypto ahead. reflect mentality. a see the It's in curious advancement long survey next it long who has for Our to career own in and crypto modern that

manage over every it value to to to And We day will to provide long our Anne and Q&A. continue turn term to growth shareholders. I'll strive sustainable

Ann DeVries

Gavin. Thanks

in to the from We'll votes investor to look of skip the we given answering over our say, the community into turn start analyst the we'll by of group We'll presentation, value and move community. that upon Q&A from those long-term strategy Gavin We'll questions that, number also leading questions Let's share live themes. to our common questions seen. around by have session. After together questions vision, ranked that top particularly those, earlier. were questions questions which from addressed touched those

Karen, would question back first why know and you to [ph] wants this? whether are this. be who stocks is I pin is from S on able we Our about Rajiv selling to concerned

Karen Alexander

to. happy remains have Their relationship XX% with remained shares. with be shareholder we aggregate consistent very I'd our strong ownership of a them. our shareholder largest Sure, continue to has ownership ICE and

that than investment method a for non-cash third evaluation accounts require noticed third, and writedown ICE by quarter rules triggered ICE's, in their and other of of have may temporary third equity You goodwill was in non-cash an on investments the our backed investment. during Generally intangible their Accepted value method for based in write as observable Accounting such recognized equity the asset non-cash ownership quarter. related investment its to ICE as data impairment down charge back market impairment stake back

Ann DeVries

for Thanks Karen. that. clarifying

from is office the a from these acquire to space, on rapidly is personnel a a Jonathan elaborate Gavin, one. to and can asks, who goal hire company question please? new assets? management, next you large taking as Could this essentially one new take new small B, business please that the Our continues with what a company's

Gavin Michael

thanks Yeah, sure. question. for the Well,

Let's step back for a minute.

and That's always has pursued connecting be the build economy. that the to public become the DFA achieve goal Our grow we to company investments teams and key this could make to collaboration. in scalable drive access to the physical co-located the to to in goal, a business, funds and digital a the been why business person to a be grow location impactful talent for process necessary including company

that Our BXBXC a achieve us help roadmap and we're investing in growth. will multinational continued positioning scale and supports partners large

to our creation the in pace of XXXX the to earlier, to value long-term invest and mentioned investments significantly XXXX. customers, of the build Karen in decline we our to investment out use the shareholders, support These of our our company and expect partners, As employees. to to we

Ann DeVries

Thank you.

the the will will phase? this you company take handle back any one? adoption new Stanley slow Gavin, How can Next, partnerships. announcing CS the

Gavin Michael

can one. Yes, take I that

robust a BXBXC of working that potential The helping on clients been in making we're we're initiatives pipeline. develop that with have strong have very We those traction described impactful to our earlier and pipeline and names. further marketing I sales

brings of distribution pipeline our over scale platform. of in onto FinTech Our key to platform AFS recent our That's over with this Crypto XXX immediate it and one and the acquisition XX extensive acquisition, Apex the partnerships brings ecosystem. clients aspects of the that FinTech an

fit point and partners crypto crypto with studies we So with taking interest flow for with we're to help are crypto. That it's conversations regarding some we've adoption partners the environment, the the do conducted consumers Whether given strong work companies remains. product on our or determine and we said, that closely having time make to entry in into right them based business. decision their their timing, recognize research point current their

adoption entry Additional point. will their regulatory also determine help help further businesses drive and clarity

compliance and from which principles atmosphere founding is class why built an One our will day into prioritizes crypto mature an of faster one. back's that principles security, regulation, as asset platform those we've in that is

Ann DeVries

Thank you.

go if Next to does up Will them, take and adapt one? company Crypto to the this Is Shea [ph] fading? they do and Karen, they do going that to so, is asked, plan how can under? back now with this? do what to deal you plan changes

Karen Alexander

can give on take I you my Sure. this.

period best prolonged and using strategy ensure do ready sheet agree be the to is is prepare their them. As of they for opportunistic week That of our so improve, Gavin that any build this a that we midst that headwinds? to and we companies events see strong have when to but conditions haven't week's This environment. with crypto liquidity mentioned, helped, just market we in said, time I we enough balance believe to capitalize on a this Are are certainly that. don't we Yes, saving. crypto

adapt puts to to a are. diverse depending of a their lean our crypto targets. flexible cash environment we We to platform from us have our challenging and cycle capital including We into evolving roadmap balance partners confident market have on opportunities us Further, provider of Apex feel sustain over needs on the our ability acquiring an Crypto, to prolonged achieve what highly with to and in aspects our should trusted XXX various the our macroeconomic business knee landscape be that growth with position through allows platform assets of available and our new ones the million self-funding liquid are nature nimble This other to we the sheet. of that services rise. can while the and a be capabilities,

Ann DeVries

Karen. Thanks

you asked, crypto manage a do one for again. prices? the for P how Save one's think downturn time last have platform. you this I We Dr. from in Karen, question

Karen Alexander

to down, impact prices, happy good. in prices it. I'm take on it's in up Yeah, Volatility have downturn crypto us. whether or a is crypto A doesn't negative necessarily generally

trades in to more make creates back we sheet. it interest As hold customers, back with so we trading balance our volume customer positions, to offset little very on

and addition we we new Apex offerings our as opportunity. a see some expect crypto volatility the financial scale impact in with with and Crypto as As a the even crypto result, Great. partners crypto to would have from of coming it's online, don't material revenue we really growth as prices declining

Ann DeVries

open analyst now line would I phone turn questions to to that, community. from with up the to the over call And to like the operator back take the

Operator

[Operator question line Water Roy comes instructions] from Research. line the Tower is open. John, Our with of first your John now

John Roy

Thank you.

were it some helpful. Payments. on the last, long would more might to Global you talking pilot about us Gavin, cetera. how color be timing, Any So with Can it's where that color you give et supposed lead,

Gavin Michael

you for Yeah, sure. Thank good the morning. John, question.

broader, with focus our couple Bitcoin of sell, spend take be internal in start to the The pilot next Payments use we the The reception the what we've we moment due NetSpend account So pilot the to that hold the broader crypto understand is the that it and the months works, Global of of like, course net as currencies. and right promise marketplace. about the while in demand get next fiat launch broader spoken presentation into net is been spoke at ready a through allowing capability about to initiatives. to a traditional show functionality the to employees different from alongside several the buy, into we able in by the across platform access spend run assets see their the has to is how with embedding of

John Roy

Great.

a new Apex announcement and the Apex to you prospects you're obviously pipeline and Have to too say, a Hey, important them. this on, that As get with any seen is come going is early? little you follow sounds or interesting

Gavin Michael

too that of in on the the closing is transaction all spoken of about the, a moment, for planning early. we're At little we've our synergies the working integration, the making and the focus talent that incredibly It's acceleration roadmap the the to our and the We're the capabilities continue that platform, by our call. it of to deepen access excited in to to today's Crypto our Apex it brings brings bench. sure

Operator

Thank you for question. your

the question Jefferies. line Williams next is of your line Trevor, from Trevor comes now Our open. with

Trevor Williams

on Good. week net know just this more in I thanks. couple talked light broadly, Gavin you FTX, guys what's what that get and you of to more fallout, started kind just on a now Great, structure the industry decision impact think you with FIS specific with have broadly happened FIS clarity question on the whether But for crypto. drawn for making offering regulatory back have ecosystem will FTX the of about picture bigger demand curious out. crypto quarters just to that's from from just timeframes be then on

trying think at demand get a to kind backdrop. softening of been had Just this how you what much exacerbates already Thanks.

Gavin Michael

the for Hey, you question. good Trevor. morning Thank

market is, from our compliance structures about we market are that proposition trading activities always take set about believe activities. to, risk. we're to a will that to our set We approach we to, all have first clarity a custodial the there care greater to up regulation. that seeing around thoughtful has our what think We great are setting being really of be, environment our I separate where regulated been to

help we into As we've that said, the people's think will accelerate, space. entry that

straight into much those it's In is an landscape, I of as these and are terms streaming embedded to developed, as cases. cases whether an asset, are that than a story, yet asset? crypto more, of drive benefits drive how broadly, it's think the we always be the in there we days, be we've result is to payments us which these, there think think way it'll what through continue store investing, more into and from still new the thinking the simply just will what about payments simply How see Trading what broadly finance as of just trading straight do moving I capability moving as use about seen it it to that of but last part away of that's landscape, showing and of the other micropayments, utility beyond so thinking changing it the continue value to looking course a more we or continue use changing type Whether of several on pieces. the does focus at payments activities.

Trevor Williams

give the modeling of from but for the follow order with you help for next that how to on is just burn slow think dynamics just can any Thanks. there here? just pieces, it could I expectation us year, Understood. then can magnitude And moving just qX, as especially much be XXXX as on a the you my of number know cash on up help moderate us would give great. for about in Thanks. we any

Karen Alexander

could take that one. I

was we for meant us. to a cash earlier, be of mentioned building as In always terms year XXXX burn,

public a of were third to plateaued we company. the head building as we has be the where we quarter. with out count capabilities So are and really up ramping And that think,

there's about we're of couple where point burn focused coming think cash we this a that places XXXX, at So into on.

crypto the First And revenue the us of as obviously on on a where to stream give Apex we acquisition the side. activations further side well. would is revenue do Crypto going be expect then

head at the On the expense looking and our our some advantage side, we're really to from count looking we to solidifying take that expenses expect of synergies Crypto. of at Apex get

capitalize really leverage the the built of as operation ongoing of leverage model in well think terms that of in that there's we We the As we've business. has capabilities. these terms our now think

the revenue give think, in think the and appropriate give going terms see something XXXX, drivers on of on on side. we I certainly we color fronts side I time at to that the but I, of So you're more those when would magnitude both month

Operator

Thank you your for question.

Jeff Fargo. of line Cantwell line the open. Jeff, from comes Wells your question next with now Our is

Jeff Cantwell

to with forth. so me being appreciate and join couple been Hey, crypto to regarding on I calls. always and wanted this questions industry the perspective are you on you a of week allowing follow these up couple and events asked FTX you've and very thank thoughtful

you on over it's is what unpack, much. and, the regulatory those what now the why we the environment time to think change one thoughts of from and a where love hear you of to going I your you're to hack, and question, think perspective, we're a Thanks front get right your developments. right several and see the crypto, over months. on to I from to next where sort often very get it's expect the wanted to regulatory all in are regulatory that. would So gaps doing I approach and It should think thoughts perspective

Gavin Michael

see and with we've Thanks, approach help on, them we of our We our products to educate welcomed regulatory doing to the change. closely products those very think always continue thoughtful market. Look, into introductions to and regulation. as the we'll start we what we about and, and on are regulators how Jeff. the Yeah, services a our responses to work Obviously, evolve sure. to

I leverage thoughtful I and that becomes that approach risk, liquid lending think we've to is here a the other thing is important that repo and important. taken mature always think positions, avoiding

the a So kept. response there's monies sure simply when are separation you think making that of be may consumer occur, the about and it'll where around clear regulatory where how

of when there'll making separate from that on think how the happening is be our it's very and importantly, sorts managed making people clear in these disclosures, continued leverage. and any business, side custodial decisions. very, the sure very well of is other risk where that sure I parts understand they're business, what's focus that that So contains that it of And making

to debate it around bring into and in drive into a to fill to and the to business as the infrastructure Our around start thinking take we what continue how move impact. discussion the crypto using we use we the the core Working built built mechanism and goal really technology to closely enhance infrastructure into market crypto is doing these How to for services to the need. and start about being that is is the do that reward using space, unmet are we that the, have utility. that onto to customer

that be will Some of payments. around

an way do unlock digital the that will way approach start from how the And assets? commerce, evolution of, so of see view, see to we point of around we the think these which of, of we be I Some our of while very power compliance, broader the around has been about start to we'll welcome evolve think in utility. continue way that sense risk, to We nimble the and regulatory be clarity, discussion we we in continue about driving thoughtful we this of think we'll

Jeff Cantwell

for upon, your mean TAM then will base sense then in your appreciate board. expand comes will or enabled, And your, active slide the can Can a up, on transaction that's follow fiber trending user to you're trending And it's and whether a as think Does anything a kind active of all this on Appreciate you I XX. TAM the Apex, whether talking crypto of just versus to color. through to actives of the bit Great. a this is be us little a us a as that like piece regards get users? I'm where that about well. see trying help be current where you kind just give

Karen Alexander

accounts accounts I can to be The million that REG are effectively are able transact. take X to enabled registered that one.

subset like of So tam. kind I It's a about of would the think that.

of expect up which trading up, crypto, then able signed TAM and a million would revenue. your of case, every So customer really have the partner has is of this total the to $X be accounts trade subset that have in a drive to set you them, percentage to

Operator

your are for no There no questions registered. at currently There instructions] [Operator question. questions Thank more more you this leading are time.

for closing you. pass Thank remarks. the back our call team management will I So to

Ann DeVries

connecting everyone morning. good you a look Have We day. soon. earnings call to attending this our All right. again for Thanks with forward

Operator

This concludes today's conference participation. call. your Thank for you

Bakkt (BKKT) 10 Nov 222022 Q3 Earnings call transcript