Bakkt Inc.
03/19/2026 | Press release | Distributed by Public on 03/19/2026 15:05
Annual Report for Fiscal Year Ending December 31, 2025 (Form 10-K)
Management's Discussion And Analysis Of Financial Condition And Results Of Operations
The following discussion and analysis of financial condition and results of operations should be read together with our audited consolidated financial statements and the related notes included under Item 8 of this Form 10-K (this "Report"). References in this section to "we," "us," "our," "Bakkt" or the "Company" and like terms refer to Bakkt, Inc. and its subsidiaries for the years ended December 31, 2025, December 31, 2024, and December 31, 2023, unless the context otherwise requires. Some of the information contained in this discussion and analysis or set forth elsewhere in this Form 10-K, including information with respect to our plans and strategy for our business, includes forward-looking statements. Such forward-looking statements are based on the beliefs of our management, as well as assumptions made by, and information currently available to, our management. Actual results could differ materially from those contemplated by the forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those factors discussed above in "Cautionary Note Regarding Forward-Looking Statements" and "Item 1A. Risk Factors."
On July 23, 2025, Bakkt Opco Holdings, LLC ("Opco"), a wholly owned subsidiary of the Company, entered into an agreement to sell all of the issued and outstanding equity interests of Bridge2 Solutions, LLC, Aspire Loyalty Travel Solutions, LLC, Bridge2 Solutions Canada, Ltd., and B2S Resale, LLC (collectively, the "Acquired Companies") to Project Labrador Holdco, LLC, a wholly owned subsidiary of Roman DBDR Technology Advisors, Inc. (the "Purchaser" or "Roman"). These entities comprised our loyalty and travel redemption business (the "Loyalty Business"). The sale transaction closed on October 1, 2025, which completed a part of our strategic transformation into a pure-play digital asset infrastructure platform.
In accordance with United States generally accepted accounting principles ("U.S. GAAP"), Bakkt management determined that the Loyalty Business met the criteria for classification as held for sale and a discontinued operation as of September 30, 2025. This determination was based on management's commitment to a formal plan to sell the business, the significance of the business to the Company's historical operations, and the expectation that the sale will result in the elimination of the operations and cash flows of the Loyalty Business from ongoing operations. As such, the results of operations, financial position, and cash flows of the Loyalty Business have been reclassified and are presented as discontinued operations for all periods presented, where applicable. Assets and liabilities related to the Loyalty Business have been reclassified as held for sale in the consolidated balance sheets, and the related operating results, including any gains or losses on the sale, are reported separately from continuing operations in the consolidated statements of operations for all periods presented. Refer to Note 3, Discontinued Operations, in the notes to the accompanying audited consolidated financial statements for further information.
Overview
In this section and elsewhere in this Form 10-K, we use the following terms, which are defined as follows:
•"Client"means businesses with whom we contract to provide services to customers on our platform, and includes financial institutions, hedge funds, merchants, retailers, third party partners, and other businesses (except in the accompanying notes to the consolidated financial statements, where we refer to revenue earned from customers, instead of clients. The term customers is in accordance with the Financial Accounting Standards Board ("FASB") Accounting Standards Codification ("ASC") 606, Revenue from Contracts with Customers ("ASC 606")).
•"Digital Asset"means an asset that is built using blockchain technology, including virtual currencies (as used in the State of New York), coins, cryptocurrencies, stablecoins, and other tokens. Our platform enables transactions in certain supported digital assets. For purposes of this Form 10-K, we use digital assets, virtual currency, coins, and tokens interchangeably.
•"Customer"means an individual user of our platform. Customers include customers of our clients who transact in digital assets through, and have accounts on, our platform (except as defined for ASC 606 purposes above).
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Founded in 2018, Bakkt, Inc. (the "Company") builds digital financial infrastructure designed to support institutional participation in the digital asset economy. During fiscal year 2025, the Company undertook a strategic transformation, focusing on divesting non-core assets, simplifying our corporate and capital structure, and investing in infrastructure to support our core platform. These initiatives are intended to improve our operating efficiency, align our business with our long-term strategy, and position us to scale our technology and services.
Our long-term strategy is to build and scale an integrated financial infrastructure platform through our three solutions: Bakkt Markets, Bakkt Agent, and Bakkt Global. We intend to expand our trading and payment infrastructure, develop software that enables institutions and customers to integrate and operate artificial intelligence-driven financial services through our platform, and invest in regulated entities in key jurisdictions. This strategy is designed to support institutional adoption of digital asset trading, stablecoin payments, and related financial services.
Our solutions include:
Bakkt Markets- Bakkt Markets enables institutions to launch secure, compliant, and advanced digital asset brokerage, trading and payment capabilities through a plug-and-play platform. It provides access to digital asset trading, stablecoin on- and off- ramps, custody integration, liquidity, and payment infrastructure through a unified technology stack designed to reduce the time, cost, and complexity of building these capabilities internally.
Bakkt Markets is supported by Bakkt's regulatory licenses, compliance framework, and global settlement infrastructure, allowing customers to offer digital asset services to their end users while relying on Bakkt for trade execution, order and payment routing, funding, and operational support. This solution is designed to serve financial institutions, fintech platforms, and digital asset companies seeking to enable digital asset functionality within their existing customer experience.
Bakkt Agent- Bakkt Agent provides institutions, with plans to provide direct to consumer, with programmable access to Bakkt's financial infrastructure through an intelligent software layer that coordinates onboarding, account creation, funding, and global money movement. Bakkt Agent utilizes automation and software-based agents to facilitate functions such as customer onboarding and identity verification, virtual account issuance, stablecoin and fiat payment rails, and domestic and cross-border payouts through application programming interfaces ("APIs") and configurable workflows.
Bakkt Agent is designed to simplify the integration and operation of financial services by abstracting operational and technical complexity and enabling customers to programmatically initiate, manage, and monitor financial transactions, settlement, account activity, and compliance processes. Bakkt Agent's modular architecture allows institutions to embed financial capabilities into their own applications and systems, supporting faster product deployment, operational efficiency, and the ability to scale financial services across multiple jurisdictions and payment networks.
Bakkt Global- Bakkt Global enables Bakkt to expand its technology and infrastructure into international markets through strategic investments in jurisdiction-specific entities operating in regulated financial markets. These investments are intended to establish a local presence in jurisdictions with established regulatory frameworks, providing Bakkt with access to licenses, regulatory permissions, and operating capabilities required to offer digital asset trading, payment, and settlement services.
Through Bakkt Global, Bakkt seeks to extend its trading infrastructure, stablecoin and fiat payment rails, and settlement services into new geographic markets through strategic investments in locally regulated entities. This approach enables Bakkt to access additional liquidity, customers, and financial networks while operating within local regulatory frameworks and supporting geographic diversification.
Digital Asset Market Developments
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The digital asset landscape underwent a fundamental shift in 2025, transitioning from a speculative retail market into the foundational architecture of global finance. This shift was defined by legislative clarity and formation of global standards for compliance, institutional integration, and the utilitarian expansion of stablecoins.
Widely considered one of the most significant pieces of digital asset legislation to date, the passage of the GENIUS Act in July 2025 created a federal regulatory framework for payment stablecoins. Further, the GENIUS Act clarified that payment stablecoins are neither securities nor commodities, removing them from SEC and CFTC jurisdictions. It also requires issuers to maintain 1:1 backing with high-quality liquid assets, such as U.S. dollars or short-term Treasuries, and to publish monthly reserve attestations. Establishing a federal framework provided regulated banks with a clear pathway to integrating stablecoins into existing payment infrastructure.
In 2025, the digital asset markets saw fluid trends influenced by a mix of global trade tensions. As of early 2026, the digital asset markets appear to be in a similar dynamic environment, but has gained support from institutional holders; growth accelerated by the SEC's 2025 rule changes including the rescission of Staff Accounting Bulletin 121 ("SAB 121") which significantly reduced capital and risk management constraints, paving the way for major banks to expand custody offerings.
Beyond regulatory progress, the industry continued investing in real-world use cases. In 2025 and early 2026, Real World Assets ("RWA"), specifically the tokenization of private credit, government bonds, and equities, continued to gain traction. NYSE and Nasdaq announced strategic initiatives to provide tokenized securities platforms to facilitate 24/7 trading and settlement of U.S. listed equities and ETFs and is currently undergoing the SEC approval process. The market also saw the early emergence of "agentic payments," where AI agents use HTTP-native settlement standards to execute autonomous transactions, signaling a broader transition from digital assets as purely tradable instruments toward functioning economic infrastructure.
Another adoption trend In 2025 was the surge in Stablecoin adoption, driven by increased regulatory clarity. Adjusted payment volume grew 733% year-over-year, exceeding $9 trillion. By early 2026, adjusted stablecoin volume reached an annualized rate of $10.2 trillion, outpacing PayPal's $1.6 trillion by more than 5 times. Consequently, major banks are integrating stablecoins into core settlement. Furthermore, corporate treasuries began migrating "idle cash" from zero-interest bank accounts into yield-bearing stablecoins which offer the security of a Treasury bill combined with the instant liquidity of a digital asset.
Recent Developments
February 2026 Registered Direct Offering
On February 27, 2026, we entered into a securities purchase agreement (the "Purchase Agreement") with a single investor, pursuant to which we agreed to sell and issue to the Investor an aggregate of 3,024,799 shares of the Company's Class A common stock, par value $0.0001 per share (the "Common Stock") and pre-funded warrants (the "Pre-Funded Warrants") to purchase an aggregate of 2,475,201 shares of Common Stock (the "Offering"). The price in the Offering was $8.75 per share of Common Stock and $8.7499 per Pre-Funded Warrant, which is the price per share of Common Stock in the Offering, minus the $0.0001 exercise price per Pre-Funded Warrant. The Offering closed on March 2, 2026.
The gross proceeds to the Company from the Offering were approximately $48.125 million, before deducting placement agent fees and estimated offering expenses payable by the Company. The Company intends to use the net proceeds from the Offering for working capital, general corporate purposes and strategic initiatives.
The Purchase Agreement contains customary representations, warranties and agreements by the Company (including a lock-up agreement, pursuant to which, subject to specified exceptions, the Company has agreed not to offer or transfer shares of Common Stock or Common Stock equivalents during the 45 day period following the date of the Purchase Agreement), customary conditions to closing, indemnification obligations of the Company and the investor,
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including for liabilities under the Securities Act of 1933, as amended (the "Securities Act") and termination provisions. In connection with the Offering, the Company's officers and directors have also entered into lock-up agreements, pursuant to which, subject to specified exceptions, they have agreed not to offer or transfer their shares of Common Stock or Common Stock equivalents during the 45-day period following the date of the Purchase Agreement.
The Pre-Funded Warrants are exercisable at any time in whole or in part so long as the aggregate number of shares of Common Stock beneficially owned by the holder (together with its affiliates) would not exceed 9.90% of the number of shares of Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of such Pre-Funded Warrant. Such percentage may be increased or decreased to any number not in excess of 9.90% at the holder's election upon notice to the Company, any such increase not to take effect until the 61st day after notice to the Company. The Pre-Funded Warrants contain standard adjustments to the exercise price, including for stock splits, stock dividends and pro rata distributions and contain customary terms regarding the treatment of such Pre-Funded Warrants in the event of a fundamental transaction, which include but are not limited to a merger or consolidation involving the Company, a sale of all or substantially all of the assets of the Company, or a business combination resulting in any person acquiring more than 50% of the voting power of the capital stock of the Company.
Change of Name.
Effective January 22, 2026, the Company changed its name to Bakkt, Inc.
Distributed Technologies Research Global Ltd. Acquisition
On January 11, 2026, Bakkt Opco Holdings, LLC ("Opco"), a Delaware limited liability company and wholly owned subsidiary of the Company, entered into a Share Purchase Agreement (the "Purchase Agreement") by and among Opco, the Company, Distributed Technologies Research Global Ltd., a private limited company incorporated in Cyprus ("DTR"), and Akshay Naheta. Pursuant to the terms and subject to the conditions set forth in the Purchase Agreement, the Company will acquire DTR by issuing to Mr. Naheta and other beneficial owners of DTR shares an aggregate number of shares of its Common Stock equal to 31.5% of the aggregate number of shares of the Common Stock that are issued and outstanding immediately prior to the closing, plus the aggregate number of shares of the Company's capital stock issuable upon full exercise or conversion of any options, warrants or other convertible derivative securities that are outstanding immediately prior to the closing, on an as-converted basis, but excluding any warrants to purchase shares of the Common Stock to the Mr. Naheta and other beneficial owners of DTR shares.
Commercial Agreement With DTR
On July 31, 2025, we entered into a Commercial Agreement (the "Commercial Agreement") with DTR which sets forth the terms and conditions governing the integration of Bakkt's various solutions related to financial transaction processing and digital asset trading with DTR's technology related to the execution of global payments powered by stablecoins.
Since the inception of the Commercial Agreement, we have successfully integrated the Bakkt and DTR platforms to support a unified Know Your Customer ("KYC") workflow across multiple product lines. This integration facilitates streamlined onboarding and compliance monitoring for our shared ecosystems. Furthermore, the combined platform architecture now supports U.S.-based fiat on- and off-ramp capabilities, allowing for seamless transitions between traditional currency and digital assets.
Under the Commercial Agreement, DTR grants Bakkt and its affiliates a non-exclusive, non-transferable, sublicensable license for the duration of the term of the Commercial Agreement to access, display, reproduce, modify, create derivative works of, and otherwise use the DTR's technology in certain territories; and DTR and its affiliates a non-exclusive, non-transferable, sublicensable, worldwide, right and license to display, reproduce, modify, create derivative
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works of, and otherwise use Bakkt solutions as needed. For each payment that is processed under the Commercial Agreement, Bakkt will be entitled to a customary fee for similar types of transactions.
The initial term of the Commercial Agreement is three years from the date of execution, unless terminated earlier. At any time, either party will be able to terminate the Commercial Agreement in the event of insolvency of the other party or a material breach of the other party that has not been cured. Pursuant to the terms and conditions of the Commercial Agreement, DTR will be subject to certain restrictions on its ability to provide services or technology that are competitive with the project in certain territories. The Commercial Agreement contains customary representations, warranties and covenants. The parties have also agreed to indemnify and hold each other harmless from claims alleging infringement of third-party intellectual property, gross negligence or willful misconduct, or arising from a party's customer agreement, except these indemnification obligations do not apply with respect to any intellectual property or data that is not created or provided by the other party, combined with other products or processes not provided by the other party, or where the other party continues the alleged infringing activity.
Up-C Collapse
On November 3, 2025, the Company completed an internal reorganization to streamline its corporate structure by eliminating the Company's umbrella partnership-C-corporation ("Up-C") structure (the "Reorganization").
As part of the Reorganization, Bakkt formed a new holding company ("NewCo") that replaced the Company as a listed parent company. In connection with the Reorganization, (i) holders of shares of Class A common stock, par value $0.0001 per share, of the Company ("Bakkt Class A Common Stock") ceased to hold such shares and received an equivalent number of shares of Class A common stock, par value $0.0001 per share, of NewCo ("NewCo Class A Common Stock") that have the same voting and economic rights as Bakkt Class A Common Stock, (ii) holders of shares of Class V common stock, par value $0.0001 per share, of the Company ("Bakkt Class V Common Stock") ceased to hold such shares and received an equivalent number of shares of Class V common stock, par value $0.0001 per share, of NewCo ("NewCo Class V Common Stock") that have the same voting and economic rights as the Bakkt Class V Common Stock, (iii) holders of common units in Bakkt Opco Holdings, LLC, each coupled with one share of Bakkt Class V Common Stock (together, the "Paired Interests"), ceased to hold such Paired Interests and received an equivalent number of shares of NewCo Class A Common Stock, resulting in the elimination of shares of NewCo Class V Common Stock and NewCo having only one class of outstanding common stock, (iv) holders of membership units of the Management Vehicle ceased to hold membership units of the Management Vehicle and received in exchange corresponding Opco Incentive Unit granted under the Opco Plan, as amended, held by the Management Vehicle, together with the share of NewCo Class V Common Stock paired therewith, and (v) holders of Opco Incentive Units, together with the share of NewCo Class V Common Stock paired therewith, ceased to hold such Opco Incentive Units and the shares of NewCo Class V Common Stock paired therewith, and received in exchange the right to receive a corresponding number of validly issued, fully paid and nonassessable share of NewCo Class A Common Stock.
Sale of Loyalty
On October 1, 2025, Bakkt completed the sale of the Loyalty business to Project Labrador Holdco, LLC. At the Closing, the Company delivered the equity of the Acquired Entities, together with an amount of cash equal to $18,876,950, which consisted of an agreed amount of $9,974,000 plus (i) the amount of the most negative working capital of the business that existed in the twelve months prior to the closing date, (ii) the amount of estimated indebtedness, and (iii) agreed expenses, and minus (iv) certain deductions for amounts owed by the Purchaser to Opco, subject to post-closing adjustments. Opco also placed the Escrow Amount (defined below) into an escrow account, to hold funds for the indemnity obligations of Opco and the working capital adjustment and indebtedness adjustment, in each case as set forth in the Purchase Agreement and an accompanying escrow agreement. At the Closing of the Transaction, pursuant to an escrow agreement, Opco deposited with the escrow agent (i) $1,000,000 into an indemnity escrow account (the "Indemnity Escrow Amount"), and (ii) $1,500,000 into a working capital adjustment escrow account (the "Adjustment Escrow Amount" and
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together with the Indemnity Escrow Amount, the "Escrow Amount"), in each case to be disbursed by the escrow agent in accordance with the terms of the Purchase Agreement and the escrow agreement. Subject to certain exceptions, on the applicable Escrow Termination Date (as defined in the Purchase Agreement), the escrow agent shall disburse the remaining Escrow Amount, if any. After the twelve-month anniversary of the Closing, the parties will determine whether the value of working capital delivered to the Purchaser at the Closing was greater than the greatest absolute value of working capital that existed in the twelve months following the date of the Closing. If the value of working capital delivered to the Purchaser at the Closing was greater than such greatest absolute value, the Purchaser shall pay to Opco the difference between the value of working capital delivered to the Purchaser at the Closing and such greatest absolute value. In addition, at the Closing, approximately $5,000,000 in restricted cash was loaned to the Purchaser by Opco pursuant to the Purchase Agreement and unsecured subordinated promissory notes to support obligations under certain agreements of the Acquired Entities. Such notes are expected to be repaid by the Purchaser when such cash is no longer restricted.
In connection with the sale of the Loyalty Business,the Company entered into a transition services agreement pursuant to which the Company and the Purchaser or their respective affiliates will provide certain transition services to one another.
Sale of Bakkt Trust
In October 2024, we began investigating a possible wind-down and dissolution of Bakkt Trust Company LLC ("Bakkt Trust") due to its lack of market traction and high cost of capital (due to regulatory requirements). As this process has progressed, we have also worked to find strategic alternatives for Bakkt Trust. In November 2024, we amended Bakkt Trust's supervisory agreement with the New York State Department of Financial Services ("NYDFS") to provide for lower capital requirements for Bakkt Trust in exchange for its suspension of all customer activities.
In March 2025, we entered into an agreement with ICE, a significant stockholder of ours, whereby ICE agreed to purchase all of the outstanding equity interests of Bakkt Trust in exchange for $1.5 million plus the assumption of Bakkt Trust's regulatory capital requirement, which was approximately $3.0 million as of signing, and certain operating costs of Bakkt Trust during the period between the signing of the purchase agreement and the closing of the transaction (subject to such closing). The sale closed on May 15, 2025.
Investment Policy
On June 10, 2025, we announced the adoption of our updated corporate investment policy, enabling the Company to allocate capital into digital assets, as part of our broader treasury and corporate strategy, subject to market conditions and the anticipated liquidity needs of the business ("Investment Policy"). Subject to the Investment Policy, we may acquire Bitcoin or other digital assets, using excess cash, proceeds from future equity or debt financings, or other capital sources. We may also explore further opportunistic financing alternatives, including the issuance of convertible notes, bonds, or other debt instruments, for the purpose of acquiring Bitcoin or other digital assets or otherwise in accordance with the Company's investment policy. To date, the Company has not purchased any Bitcoin or other digital assets under the investment policy
July 2025 Equity Offering
On July 28, 2025, the Company entered into an Underwriting Agreement (the "Underwriting Agreement") with Clear Street LLC and Cohen & Co. Capital Markets, a division of Cohen & Company Securities, LLC (collectively, the "Underwriters"), pursuant to which the Company agreed to sell and issue to the Underwriters an aggregate of 6,753,627 shares (the "Shares") of the Company's Class A Common Stock, and, for certain purchasers, 746,373 2025 Pre-Funded Warrants (the "Offering"). The price to the public in the Offering was $10.00 per Share and $9.9999 per 2025 Pre-Funded
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Warrant, which was the price per share at which the Shares were being sold to the public in the Offering, minus the $0.0001 exercise price per Pre-Funded Warrant. See Note 11, Warrants, for further details regarding the 2025 Pre-Funded Warrants.
The Offering closed on July 30, 2025. The proceeds to the Company from the Offering were $75.0 million, net of fees to the underwriters and other offering expenses payable by the Company. Bakkt intends to use the net proceeds from the Offering to purchase Bitcoin and other digital assets in accordance with its Investment Policy, for working capital, and for general corporate purposes.
The Underwriting Agreement contains customary representations, warranties and agreements by the Company (including a lock-up agreement, pursuant to which, subject to specified exceptions, the Company agreed not to offer or transfer Shares during the 60 day period following the date of the Underwriting Agreement), customary conditions to closing, indemnification obligations of the Company and the Underwriters, including for liabilities under the Securities Act of 1933, as amended (the "Securities Act") and termination provisions. In connection with the Offering, the Company's officers and directors and ICE also entered into lock-up agreements, pursuant to which, subject to specified exceptions, they agreed not to offer or transfer their Shares during the 90-day period following the date of the Underwriting Agreement.
Key Factors Affecting Our Performance
Growing Our Client Base
Our ability to increase our revenue stream depends on our ability to grow clients on our platform. We collaborate with leading brands and have built an extensive network across numerous industries including financial institutions, wealth management, payments and digital asset exchanges. To date, management has been focused on building through clients within a business-to-business-to-consumer ("B2B2C") model. Our goal is to provide these clients opportunities to leverage our capabilities either through their existing environment or by leveraging our platform. Our acquisition of BFS complemented our B2B2C growth strategy by broadening our business partnerships to fintechs and neobanks.
Product Expansion and Innovation
The digital asset marketplace is rapidly evolving. We believe our ability to continue innovating our platform will increase the attractiveness of our platform to clients. Our ability to meet the capability demands of our clients will allow us to continue to grow revenue.
Competition
The digital asset marketplace is highly competitive with numerous participants competing for the same clients. Additionally, some of our clients may seek to develop their own technology to replace their need for our platform. We believe we are well positioned with our ability to provide capabilities around emerging digital assets on a single, highly secure, institutional-grade technology platform.
General Economic and Market Conditions
Our performance is impacted by the strength of the overall macroeconomic environment and digital asset market conditions, which are beyond our control. Negative market conditions hinder client activity, including extended decision timelines around implementing digital asset strategies. See "Crypto Market Developments" above.
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Regulations in U.S. & International Markets
We are subject to many complex, uncertain and overlapping local, state and federal laws, rules, regulations, policies and legal interpretations (collectively, "laws and regulations") in the markets in which we operate. These laws and regulations govern, among other things, consumer protection, privacy and data protection, labor and employment, anti-money laundering, money transmission, competition, and marketing and communications practices. These laws and regulations will likely have evolving interpretations and applications, particularly as we introduce new products and services and expand into new jurisdictions.
We are seeking to bring trust and transparency to digital assets. We are and will continue to be subject to laws and regulations relating to the collection, use, retention, security, and transfer of information, including the personally identifiable information of our clients and all of the users in the information chain. We have developed and frequently evaluate and update our compliance models to ensure that we are complying with applicable restrictions.
As investment continues, the intersection of technology and finance will require ongoing engagement as new applications emerge. We believe digitalassetsand distributed ledger technology have significant, positive potential with proper collaboration between industry and regulators.
Digital Assets Held on Platform
The Company held digital assets in custodial products on its platform for client customers totaling $911.5 million and $2,301.9 million at fair value as of December 31, 2025 and 2024, respectively. In accordance with Securities and Exchange Commission Staff Accounting Bulletin No. 122, these assets are not recorded in the Company's Consolidated balance sheets. Similarly, as the Company has an obligation to securely store digital assets on its platform, it has a corresponding unrecorded liability of $ 911.5 million and $2,301.9 million as of December 31, 2025 and 2024, respectively. Since we believe the risk of loss related to the obligation to safeguard digital assets for users of its platform is remote, the Company did not record a liability for such risk of loss as of December 31, 2025 and 2024 in the Company's consolidated balance sheets.
Key Performance Indicators
We are in the process of updating our key performance indicators ("KPIs") to reflect the strategic direction of our digital asset business and sale of the Loyalty Business.
•Notional traded volume. We define notional traded volume as the total notional volume of digital asset transactions. The figures we use represent gross values recorded as of the order date. Notional traded volumes from digital asset transactions were $2,323.0 million, $3,446.6 million, and $727.1 millionduring the years ended December 31, 2025, December 31, 2024, and December 31, 2023, respectively.
•Assets under custody.We define assets under custody as the sum of coin quantities held by customers multiplied by the final quote for each coin on the last day of the period. Assets under custody were $911.5 and $2,301.9 million as of December 31, 2025 and December 31, 2024, respectively.
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Results of Continuing Operations
The following table sets forth our consolidated statements of operations for the years ended December 31, 2025, December 31, 2024, and December 31, 2023, respectively (in thousands):
| Year Ended December 31, 2025 | Year Ended December 31, 2024 | Year Ended December 31, 2023 | |||||||||||||||
| Revenues: | |||||||||||||||||
| Crypto services | $ | 2,335,243 | $ | 3,441,056 | $ | 726,988 | |||||||||||
| Total revenues | 2,335,243 | 3,441,056 | 726,988 | ||||||||||||||
| Operating expenses: | |||||||||||||||||
| Crypto costs (See Note 2) | 2,308,390 | 3,403,207 | 718,511 | ||||||||||||||
| Execution, clearing and brokerage fees | 18,436 | 24,024 | 3,772 | ||||||||||||||
| Compensation and benefits | 77,336 | 36,071 | 45,494 | ||||||||||||||
| Professional services | 25,256 | 16,445 | 10,164 | ||||||||||||||
| Technology and communication | 7,307 | 9,476 | 12,488 | ||||||||||||||
| Selling, general and administrative | 12,666 | 24,380 | 30,887 | ||||||||||||||
| Acquisition-related expenses | 53 | 128 | 4,299 | ||||||||||||||
| TRA settlement expense | 26,875 | - | - | ||||||||||||||
| Depreciation and amortization | 607 | 343 | 12,334 | ||||||||||||||
| Related party expenses | - | 600 | 3,902 | ||||||||||||||
| Goodwill and intangible assets impairments | - | - | 12,660 | ||||||||||||||
| Impairment of long-lived assets | 733 | 744 | 24,103 | ||||||||||||||
| Restructuring expenses | 5,335 | 8,194 | 4,249 | ||||||||||||||
| Other operating expenses | 84 | 30 | 369 | ||||||||||||||
| Total operating expenses | 2,483,078 | 3,523,642 | 883,232 | ||||||||||||||
| Operating loss from continuing operations | (147,835) | (82,586) | (156,244) | ||||||||||||||
| Interest income, net | 791 | 4,318 | 4,338 | ||||||||||||||
| Gain (loss) from change in fair value of warrant liability | 30,191 | (17,186) | (1,571) | ||||||||||||||
| Other income, net | 19,469 | 1,153 | 179 | ||||||||||||||
| Loss from continuing operations before income taxes and equity in earnings of affiliates | (97,384) | (94,301) | (153,298) | ||||||||||||||
| Income tax (benefit) expense | (49) | 110 | 355 | ||||||||||||||
| Net loss from continuing operations before equity in net earnings of affiliates | $ | (97,335) | $ | (94,411) | $ | (153,653) | |||||||||||
Year Ended December 31, 2025 Compared to Year Ended December 31, 2024
Financial Summary
The year ended December 31, 2025 included the following notable items relative to the year ended December 31, 2024:
•Revenue decreased $1,105.8 millionprimarily driven by a decrease in Crypto services revenue resulting from a decrease in trading volume, including the loss of Webull Pay LLC ("Webull") as a client in June 2025 and Public Platform LLC ("Public") in October 2025; and
•Operating expenses decreased $1,040.6 million primarily driven by decreased crypto trading costs as a result in decreased Crypto services revenue.
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Revenue
Revenues consist of digital asset services. We earn revenue when consumers use our services to buy, sell, and store digital assets. Substantially all of our Crypto services revenue is transaction revenue from digital asset buy/sell trades where we earn a spread on both legs of the transaction (reported gross).
Crypto Services Revenue
| ($ in thousands) | Year Ended December 31, 2025 | Year Ended December 31, 2024 |
$ Change
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% Change
|
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Crypto services
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$ | 2,335,243 | $ | 3,441,056 | $ | (1,105,813) | (32.1 | %) | |||||||||||||||
Crypto services revenue decreased by $1,105.8 millionfor the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease was primarily driven by decreased crypto trading volume, primarily due to the loss of Webull in June 2025 and Public in October 2025.
Operating Expenses
Operating expenses consist of crypto costs, execution, clearing and brokerage fees, compensation and benefits, professional services, technology and communication expenses, selling, general and administrative expenses, acquisition-related expenses, depreciation and amortization, related party expenses, goodwill and intangible assets impairments, impairment of long-lived assets, restructuring charges, and other operating expenses.
Crypto Costs
| ($ in thousands) | Year Ended December 31, 2025 | Year Ended December 31, 2024 | $ Change | % Change | |||||||||||||||||||
| Crypto costs | $ | 2,308,390 | $ | 3,403,207 | $ | (1,094,817) | (32.2 | %) | |||||||||||||||
Crypto costs represent the gross value of crypto sold on our platform. These costs are measured at the executed price at the time of the trade. Crypto costs decreased by $1,094.8 million for the year ended December 31, 2025, compared to the year ended December 31, 2024, This decrease was primarily driven by decreased crypto service volume, primarily due to the loss of Webull in June 2025 and Public in October 2025..
Execution, Clearing and Brokerage Fees
| ($ in thousands) | Year Ended December 31, 2025 | Year Ended December 31, 2024 | $ Change | % Change | |||||||||||||||||||
| Execution, clearing and brokerage fees | $ | 18,436 | $ | 24,024 | $ | (5,588) | (23.3 | %) | |||||||||||||||
Execution, clearing and brokerage fees primarily represent payments to clients in exchange for driving order flow to our platform. Execution, clearing and brokerage fees were $18.4 million during the year ended December 31, 2025, a decrease of $5.6 million compared to the year ended December 31, 2024.The decrease reflects decreased volume in Crypto services revenue.
Compensation and Benefits
| ($ in thousands) | Year Ended December 31, 2025 | Year Ended December 31, 2024 |
$ Change
|
% Change
|
|||||||||||||||||||
| Compensation and benefits | $ | 77,336 | $ | 36,071 | $ | 41,265 | 114.4 | % | |||||||||||||||
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Compensation and benefits expense include all salaries and benefits, compensation for contract labor, incentive programs for employees, payroll taxes, share-based and unit-based compensation and other employee related costs.
Compensation and benefits increased by $41.3 million, or 114.4%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase was primarily due to increases of $47.1 million in non-cash compensation mostly related to the Option Plan, and increases of $1.9 million in severance charges slightly offset by decreases of $10.3 million in salaries, wages and benefits, and $1.6 million in contract labor. See Note 13, Share-Based and Unit-Based Compensation,for further details regarding the Option Plan.
Professional Services
| ($ in thousands) | Year Ended December 31, 2025 | Year Ended December 31, 2024 |
$ Change
|
% Change
|
|||||||||||||||||||
| Professional services | $ | 25,256 | $ | 16,445 | $ | 8,811 | 53.6 | % | |||||||||||||||
Professional services expense includes fees for accounting, legal and regulatory fees. Professional services increased by $8.8 million, or 53.6%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase was primarily due to increases of $6.4 millonin legal fees and $4.5 millionin other professional fees. slightly offset by a decrease of $2.1 millionin audit and tax fees.
Technology and Communication
| ($ in thousands) | Year Ended December 31, 2025 | Year Ended December 31, 2024 |
$ Change
|
% Change
|
|||||||||||||||||||
|
Technology and communication
|
$ | 7,307 | $ | 9,476 | $ | (2,169) | (22.9 | %) | |||||||||||||||
Technology and communication costs represent all non-headcount related costs to deliver technological solutions. Such costs principally include amounts paid for software licenses and software-as-a-service arrangements utilized for operating, administrative and information security activities, fees paid for third-party data center hosting arrangements, and fees paid to telecommunications service providers and for telecommunication software platforms necessary for operation of our customer support operations. These costs are driven by client requirements, system capacity, functionality and redundancy requirements.
Technology and communications expense also includes fees paid for access to external market data and associated licensing costs, which may be impacted by growth in electronic contract volume, our capacity requirements, changes in the number of telecommunications hubs, and connections with customers to access our electronic platforms directly. Technology and communications expense decreased by $2.2 million, or 22.9%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease was primarily due to lower software license fees and hosting fees.
Selling, General and Administrative
| ($ in thousands) | Year Ended December 31, 2025 | Year Ended December 31, 2024 |
$ Change
|
% Change
|
|||||||||||||||||||
|
Selling, general and administrative
|
$ | 12,666 | $ | 24,380 | $ | (11,714) | (48.0 | %) | |||||||||||||||
Selling, general and administrative expenses include marketing, advertising, business insurance, rent and occupancy, bank service charges, dues and subscriptions, travel and entertainment, and other general and administrative costs. Our marketing activities primarily consist of web-based promotional campaigns, promotional activities with clients, conferences and user events, and brand-building activities. Selling, general and administrative expenses do not include any headcount cost, which is reflected in Compensation and benefits in the consolidated statements of operations. .
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Selling, general and administrative costs decreased by $11.7 million, or 48.0%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease was primarily due to a $8.0 millionreduction in insurance cost, a $1.5 millionreduction in marketing and promotions, and a $1.5 million in other operating cost.
Depreciation and Amortization
| ($ in thousands) | Year Ended December 31, 2025 | Year Ended December 31, 2024 |
$ Change
|
% Change
|
|||||||||||||||||||
| Depreciation and amortization | $ | 607 | $ | 343 | $ | 264 | 77.0 | % | |||||||||||||||
Depreciation and amortization expense consists of amortization of intangible assets from business acquisitions, internally developed software and depreciation of purchased software and computer and office equipment over their estimated useful lives. Intangible assets subject to amortization consist primarily of acquired technology and client relationships from completed acquisitions. Depreciation and amortization increased by $0.3 million, or 77.0%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The increase was primarily due to increases in software development cost.
Related Party Expenses
| ($ in thousands) | Year Ended December 31, 2025 | Year Ended December 31, 2024 | $ Change | % Change | |||||||||||||||||||
| Related party expenses | $ | - | $ | 600 | $ | (600) | (100.0 | %) | |||||||||||||||
Related party expenses consist of fees for transition services agreements. Related party expenses decreased by $0.6 million, or 100.0%, for the year ended December 31, 2025 compared to the year ended December 31, 2024. The decrease was primarily due to the expiration of a transition services agreement in 2024 related to the purchase of BFS.
Restructuring expenses
| ($ in thousands) | Year Ended December 31, 2025 | Year Ended December 31, 2024 |
$ Change
|
% Change
|
|||||||||||||||||||
| Restructuring expenses | $ | 5,335 | $ | 8,194 | $ | (2,859) | (34.9 | %) | |||||||||||||||
Restructuring expenses of $5.3 million during the year ended December 31, 2025 consist of severance cost related to the August 2025 resignation of the Co-CEO and a reduction in force executed in the first quarter of 2025. Restructuring expenses during the year ended December 31, 2024 consisted of severance costs and accelerated vesting of non-cash compensation related to the termination of a former executive and certain other employees.
Gain (Loss) from Change in Fair Value of Warrant Liability
| ($ in thousands) | Year Ended December 31, 2025 | Year Ended December 31, 2024 |
$ Change
|
% Change
|
|||||||||||||||||||
| Gain (loss) from change in fair value of warrant liability | $ | 30,191 | $ | (17,186) | $ | 47,377 | (275.7 | %) | |||||||||||||||
We recorded a gain of $30.2 million during the year ended December 31, 2025 for the change in fair value on the revaluation of our warrant liabilities associated with our public warrants and Class 1 and Class 2 warrants from the Concurrent Offerings. We recorded a loss of $17.2 million during the year ended December 31, 2024 for the change in fair value on the revaluation of our warrant liabilities. These are non-cash losses and gains and are driven by fluctuations in the market price of our public warrants and valuation of our Class 1 and Class 2 warrants from the Concurrent Offerings.
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Other Income, net
| ($ in thousands) | Year Ended December 31, 2025 | Year Ended December 31, 2024 |
$ Change
|
% Change
|
|||||||||||||||||||
| Other income, net | $ | 19,469 | $ | 1,153 | $ | 18,316 | 1588.6 | % | |||||||||||||||
Other income, net primarily consists of non-operating gains and losses. During the year ended December 31, 2025, we recorded a net $14.0 million of income related to a derivative and $8.9 million gain from lease assignments, partially offset by a $2.3 million loss on sale of Bakkt Trust, a $2.6 million loss on extinguishment of convertible debentures. During the year ended December 31, 2024, we recorded $0.9 million in sublease income, and $0.3 million related to general miscellaneous income and expenses.
Income Tax (Expense) Benefit
| ($ in thousands) | Year Ended December 31, 2025 | Year Ended December 31, 2024 |
$ Change
|
% Change
|
|||||||||||||||||||
| Income tax (benefit) expense | $ | (49) | $ | 110 | $ | (159) | (144.5 | %) | |||||||||||||||
Income tax expense in the years ended December 31, 2025 and 2024 primarily consist of current foreign and state tax expense related to certain state jurisdictions wherein we are required to file income tax returns.
Loss from Discontinued Operations, Net of Tax
Loss from discontinued operations, net of tax represents the net loss associated with the sale of the Loyalty Business. See Note 3, Discontinued Operations, to the accompanying consolidated financial statements for further information.
Liquidity and Capital Resources
Our consolidated statements of cash flows includes cash flows from discontinued operations for all periods presented, and therefore the following liquidity discussion includes both continuing and discontinued operations.
As of December 31, 2025, we had $27.0 million and $0.6 million of cash and cash equivalents and restricted cash, respectively. Cash and cash equivalents consist of cash deposits at banks and money market funds. Restricted cash is held to satisfy collateral requirements for insurance contracts and bank ACH processing. Restricted cash decreased during 2025 primarily due to lower insurance collateral requirements and the sale of Bakkt Trust and our Loyalty Business.
On July 28, 2025, the Company entered into an Underwriting Agreement with Clear Street LLC and Cohen & Co. Capital Markets, a division of Cohen & Company Securities, LLC (collectively, the "Underwriters"), pursuant to which the Company agreed to sell and issue to the Underwriters an aggregate of 6,753,627 shares of the Company's Class A Common Stock and, for certain purchasers, 746,373 Pre-Funded Warrants (the "Offering"). The aggregate gross proceeds to the Company from the Offering were $75 million, before deducting fees to the underwriters and other offering expenses payable by the Company.
On June 17, 2025, we entered into a private placement (the "Private Placement") with YA II PN, LTD., a Cayman Islands exempt limited company (the "Investor"). The Private Placement closed on June 18, 2025. Pursuant to the terms of the Private Placement, the Investor purchased a $25 million convertible debenture (the "Convertible Debenture") from the Company for a price of $23.75 million. The Investor converted $17.5 million of the Convertible Debenture into 1,746,552 shares of Class A Common Stock in the third quarter of 2025 and the Company elected to redeem the remaining $7.5 million of Convertible Debentures for cash, including a redemption premium of $0.4 million, in September 2025.
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We intend to use our unrestricted cash, inclusive of the proceeds from the Private Placement and Offering, to fund our day-to-day operations, including, but not limited to funding our regulatory capital requirements, compensating balance arrangements and other similar commitments, each of which is subject to change, and as available (i) activate new digital asset clients, (ii) maintain our product development efforts, and (iii) optimize our technology infrastructure and operational support. We continue to evaluate our headcount and expense base. In forecasting the Company's expectation of cash needs for the initial going concern evaluation, the Crypto services revenue growth projections exclude activation of new clients or products currently not live on Bakkt's platform as of the date of release of these consolidated financial statements. In addition, we may in the future enter into arrangements to acquire or invest in complementary businesses, services, technologies or intellectual property rights. However, except with respect to our proposed acquisition of DTR, we have no agreements or commitments with respect to any such acquisitions or investments at this time. Management believes that the Company's cash and cash equivalents will be sufficient to fund Bakkt's operations for 12 months from the date of these financial statements are issued.
Our future cash requirements will depend on many factors, including our revenue growth rate, the timing and extent of overhead, sales and marketing expenditures to support projected growth, our ability to limit our software development investments to features and functionality with a clear line of sight to revenue generation, and our ability to retain our clients.
The following table, inclusive of discontinued operations, summarizes our cash flows for the periods presented:
| Year Ended December 31, 2025 | Year Ended December 31, 2024 | Year Ended December 31, 2023 | |||||||||||||||
| Net cash used in operating activities | $ | (153,399) | $ | (21,203) | $ | (60,697) | |||||||||||
| Net cash provided by (used in) investing activities: | $ | (38,122) | $ | 14,134 | $ | 65,970 | |||||||||||
| Net cash provided by (used in) financing activities: | $ | 82,084 | $ | 43,818 | $ | (2,634) | |||||||||||
Operating Activities
Since our inception, we have yet to achieve positive cash flow from operations. Our primary uses of cash include compensation and benefits for headcount-related expenses, investment in software and product development of our technology platforms, and associated non-headcount technology and communication cost to develop, operate and support our customer-facing technology platforms.
Net cash used in operating activities of $153.4 million for the year ended December 31, 2025 was primarily related to our net loss of $132.2 million, offset by net non-cash charges of $70.1 million and changes in our operating assets and liabilities of $91.3 million. The non-cash charges for the year ended December 31, 2025 primarily consisted of share-based compensation of $71.6 million, TRA equity settlements of $23.0 million, loss on sale of businesses of $22.7 million, loss from extinguishment of convertible debentures of $2.6 million,non-cash lease expense of $0.9 million, intangible and long-lived asset impairments of $1.0 million, and depreciation and amortization of $0.6 million, partially offset by the change in fair value of our warrant liability of $30.2 million, the gain on lease assignments of $8.9 million, the gain from changes in the fair value of derivative assets of 14.0 million and other adjustments of $0.5 million. Net cash outflows from changes in our operating assets and liabilities for the year ended December 31, 2025 resulted primarily from a $73.9 million decrease in customer funds payable, a $5.1 million decrease in accounts payable and accrued liabilities, a $4.1 million reduction in operating lease liabilities, a $3.3 million reduction in assets and liabilities of businesses held for sale, a $2.5 million funding of an escrow account associated with the Loyalty business sale, and a $2.4 million reduction in due to related party, partially offset by a $1.2 million decrease in prepaid insurance.
Net cash used in operating activities of $21.2 million for the year ended December 31, 2024 was primarily related to our net loss of $103.4 million, offset by non-cash charges of $35.9 million and changes in our operating assets and liabilities of $46.3 million. The non-cash charges for the year ended December 31, 2024 primarily consisted of share-based
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compensation of $15.8 million, the change in fair value of our warrant liability of $17.2 million, non-cash lease expense of $1.7 million, intangible and long-lived asset impairments of $0.9 million, depreciation and amortization of $0.3 million, partially offset by other adjustments of $0.1 million. Net cash inflows from changes in our operating assets and liabilities for the year ended December 31, 2024 resulted primarily from a $55.6 million increase in customer funds, a $9.1 million decrease in prepaid insurance, and a $5.4 million decrease in accounts receivable, which were partially offset by a $15.6 million decrease in accounts payable, a $3.3 million decrease in deferred revenue and $3.6 million decrease in operating lease liabilities.
Net cash used in operating activities of $60.7 millionfor the year ended December 31, 2023was primarily related to our net loss of $225.8 million, offset by non-cash charges of $123.2 millionand changes in our operating assets and liabilities of $41.9 million. The non-cash charges for the year ended December 31, 2023primarily consisted of intangible and long-lived asset impairments of $90.8 million, share-based compensation of $15.5 million, depreciation and amortization of $13.9 million, non-cash lease expense of $3.1 millionand the loss from the change in fair value of our warrant liability of $1.6 million, partially offset by the change in fair value of the contingent consideration of $3.0 million. Net cash inflows from changes in our operating assets and liabilities for the year ended December 31, 2023resulted primarily from a $32.3 millionincrease in customer funds, a non-recurring return of a $15.2 million deposit with ICE Clear US, Inc., a decrease in prepaid insurance of $9.8 million, and an increase in amounts due to related parties of $2.1 million, which were partially offset by an increase in accounts payable and accrued liabilities of $8.0 million, an increase in operating lease liabilities of $3.0 million, and an increase in accounts receivable of $10.0 million.
Investing Activities
Net cash flows used in investing activities of $38.1 million for the year ended December 31, 2025 primarily consisted of $20.1 million cash paid for the divestiture of the Loyalty Business, $17.6 million of cash advances to the buyer of the Loyalty Business, $11.5 million for the purchase of an equity method investment, $2.7 million for the purchase of intangible assets, and $1.2 million in capital expenditures, partially offset by $10.6 million of derivative proceeds and $4.5 million of proceeds from the sale of Bakkt Trust.
Net cash flows provided by investing activities of $14.1 millionfor the year ended December 31, 2024primarily consisted of the receipt of $35.2 millionof proceeds from the sale of available-for-sale securities, partially offset by the purchase of $18.0 million of available-for-sale debt securities, and $3.1 million of capitalized costs of internally developed software for our technology platforms.
Net cash flows provided by investing activities of $66.0 millionfor the year ended December 31, 2023primarily consisted of the receipt of $185.8 millionof proceeds from the sale of available-for-sale securities, partially offset by the purchase of $61.8 million of available-for-sale debt securities, $47.9 million net cash used to acquire BFS, $0.6 million cash used to acquire Bakkt Brokerage and $9.4 million of capitalized costs of internally developed software for our technology platforms.
Financing Activities
Net cash flows provided by financing activities of $82.1 million for the year ended December 31, 2025 consist of $70.4 million in proceeds from Common Stock issuance and exercise of pre-funded warrants, $23.8 million in proceeds from the issuance of Convertible Debentures, net of issuance costs, partially offset by $7.5 million used to repay the Convertible Debentures, the repurchase and retirement of $3.1 million of Class A Common Stock that was withheld from vested equity grants and $1.5 million of financing fees.
Net cash flows provided by financing activities of $43.8 million for the year ended December 31, 2024 consist of $46.5 million in proceeds from our Concurrent Offerings, partially offset by the repurchase and retirement of $2.7 million of Class A Common Stock that was withheld from vested equity grants.
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Net cash flows used in financing activities of $2.6 million for the year ended December 31, 2023resulted from proceeds from the repurchase and retirement of $2.6 million of Class A Common Stock that was withheld from vested equity grants.
Contractual Obligations and Commitments
The following is a summary of our significant contractual obligations and commitments as of December 31, 2025 (in thousands):
| Payments Due by Period | |||||||||||||||||||||||||||||
| Less than 1 year | 1-3 years | 3-5 years | More than 5 years | Total | |||||||||||||||||||||||||
|
Purchase obligations(1)
|
$ | 4,050 | $ | - | $ | - | $ | - | $ | 4,050 | |||||||||||||||||||
|
Future minimum operating lease payments(2)
|
554 | - | - | - | 554 | ||||||||||||||||||||||||
| Total contractual obligations | 4,604 | - | - | - | 4,604 | ||||||||||||||||||||||||
(1)Represents minimum commitment payments under a four-year cloud computing arrangement. In December 2023, we agreed to amend the cloud computing arrangement and extended the payment period for an additional year.
(2)Represents rental payments under operating leases with remaining non-cancellable terms of less than one year.
Non-GAAP Financial Measures
We use non-GAAP financial measures to assist in comparing our performance on a consistent basis for purposes of business decision-making by removing the impact of certain items that management believes do not directly reflect our core operations. We believe that presenting non-GAAP financial measures is useful to investors because it (a) provides investors with meaningful supplemental information regarding financial performance by excluding certain items that we believe do not directly reflect our core operations, (b) permits investors to view performance using the same tools that we use to budget, forecast, make operating and strategic decisions, and evaluate historical performance, and (c) otherwise provides supplemental information that may be useful to investors in evaluating our results.
We believe that the presentation of the following non-GAAP financial measures, when considered together with the corresponding GAAP financial measures and the reconciliations to those measures provided herein, provides investors with an additional understanding of the factors and trends affecting our business that could not be obtained absent these disclosures.
Adjusted EBITDA
We present Adjusted EBITDA as a non-GAAP financial measure.
We believe that Adjusted EBITDA provides relevant and useful information, which is used by management in assessing the performance of our business. Adjusted EBITDA is defined as earnings before interest, income taxes, depreciation, amortization, acquisition-related expenses, share-based and unit-based compensation expense, goodwill and intangible assets impairments, restructuring charges, changes in the fair value of our warrant liabilityand certain other non-cash and/or non-recurring items that do not contribute directly to our evaluation of operating results and are not components of our core business operations. Adjusted EBITDA provides management with an understanding of earnings before the impact of investing and financing transactions and income taxes, and the effects of aforementioned items that do not reflect the ordinary earnings of our operations. This measure may be useful to an investor in evaluating our performance. Adjusted EBITDA is not a measure of our financial performance under GAAP and should not be considered as an alternative to net income (loss) or other performance measures derived in accordance with GAAP. Our definition of Adjusted EBITDA may not be comparable to similarly titled measures used by other companies.
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Non-GAAP financial measures like Adjusted EBITDA have limitations, should be considered as supplemental in nature and are not meant as a substitute for the related financial information prepared in accordance with GAAP. The non-GAAP financial measures should be considered alongside other financial performance measures, including net loss and our other financial results presented in accordance with GAAP.
The following table presents a reconciliation of net loss from continuing operations, the most directly comparable GAAP operating performance measure, to our Adjusted EBITDA for each of the periods indicated (in thousands):
| Year Ended December 31, 2025 | Year Ended December 31, 2024 | ||||||||||
| Net loss from continuing operations | $ | (97,658) | $ | (94,411) | |||||||
| Depreciation and amortization | 607 | 343 | |||||||||
| Interest income, net | (791) | (4,318) | |||||||||
| Income tax (benefit) expense | (49) | 110 | |||||||||
| EBITDA | (97,891) | (98,276) | |||||||||
| Acquisition-related expenses | 53 | 128 | |||||||||
| Share-based and unit-based compensation expense | 65,418 | 13,941 | |||||||||
| Loss (gain) from change in fair value of warrant liability | (30,191) | 17,186 | |||||||||
| Impairment of long-lived assets | 733 | 744 | |||||||||
| Restructuring expenses | 5,335 | 8,194 | |||||||||
| Shelf registration expenses | - | 200 | |||||||||
| Transition services expense | - | 600 | |||||||||
| Gain on lease assignments | (8,884) | - | |||||||||
| Loss on sale of Bakkt Trust | 2,301 | - | |||||||||
| Loss on extinguishment of convertible debenture | 2,617 | - | |||||||||
| TRA Settlements | 26,875 | - | |||||||||
| Adjusted EBITDA loss | $ | (33,634) | $ | (57,283) | |||||||
Adjusted EBITDA loss for the year ended December 31, 2025 decreased by $23.6 million, or 41.3%, as compared to the year ended December 31, 2024. The decrease was primarily due to a $14.9 million increase in other income primarily from a derivative asset, a $11.7 million reduction in selling, general and administrative expense, a $10.2 million decrease in compensation and benefits and a $2.2 million decrease in in technology and communications expense, partially offset by a $8.8 million increase in professional expense and a $5.4 million decrease in crypto services revenue net of crypto costs and execution, clearing and brokerage fees.
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Critical Accounting Policies and Estimates
Our consolidated financial statements are prepared in accordance with GAAP, which requires us to make estimates and apply judgments that affect the reported amounts. In our notes to the audited consolidated financial statements, we describe the significant accounting policies used in preparing the consolidated financial statements. Our management has discussed the development, selection, and disclosure of our critical accounting policies and estimates with the Audit Committee of the Board. The following items require significant estimation or judgment:
Going Concern
At each reporting period, in accordance with ASC 205-40, Going Concern("ASC 205-40"), we evaluate whether there are conditions or events that raise substantial doubt about our ability to continue as a going concern within one year after the date the financial statements are issued. In accordance with ASC 205-40, our initial evaluation can only include management's plans that have been fully implemented as of the issuance date. Operating forecasts for new products or markets cannot be considered in the initial evaluation as those product and market launches have not been fully implemented.
Accordingly, our evaluation entails analyzing prospective fully implemented operating budgets and forecasts for expectations of our cash needs and comparing those needs to the current cash and cash equivalent balances. This evaluation initially does not take into consideration the potential mitigating effect of management's plans that have not been fully implemented as of the date the financial statements are issued. When substantial doubt exists under this methodology, we evaluate whether the mitigating effect of its plans sufficiently alleviates substantial doubt about our ability to continue as a going concern. The mitigating effect of management's plans, however, is only considered if both (1) it is probable that the plans will be effectively implemented within one year after the date that the financial statements are issued, and (2) it is probable that the plans, when implemented, will mitigate the relevant conditions or events that raise substantial doubt about the entity's ability to continue as a going concern within one year after the date that these consolidated financial statements are issued.
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Business Combinations
We account for our business combinations using the acquisition accounting method, which requires us to determine the fair value of identifiable assets acquired and liabilities assumed, including any contingent consideration, to properly allocate the purchase price to the individual assets acquired and liabilities assumed and record any residual purchase price as goodwill in accordance with ASC 805, Business Combinations. We identify and attribute fair values and estimated lives to the intangible assets acquired and allocate the total cost of an acquisition to the underlying net assets based on their respective estimated fair values. Determining the fair value of assets acquired and liabilities assumed requires management's judgment and involves the use of significant estimates, including projections of future cash inflows and outflows, discount rates and asset lives. These determinations will affect the amount of amortization expense recognized in future periods. Contingent consideration is initially recorded at its fair value at the acquisition date and is revalued every financial reporting date thereafter. Adjustments to contingent consideration liabilities after the completion of acquisition accounting are recorded in the consolidated statement of operations. We base our fair value estimates on assumptions we believe are reasonable but recognize that the assumptions are inherently uncertain.
If the initial accounting for the business combination has not been completed by the end of the reporting period in which the business combination occurs, provisional amounts are reported to present information about facts and circumstances that existed as of the acquisition date. Once the measurement period ends, which in no case extends beyond one year from the acquisition date, revisions to the accounting for the business combination are recorded in earnings.
All acquisition-related costs, other than the costs to issue debt or equity securities, are accounted for as expenses in the period in which they are incurred.
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Goodwill and Other Intangible Assets
Goodwill and intangible assets that have indefinite useful lives are accounted for in accordance with ASC 350, Intangibles - Goodwill and Other. We allocate the cost of an acquired entity to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The excess of the acquisition consideration transferred over the fair value of the net assets acquired, including other intangible assets, is recorded as goodwill. Goodwill is tested for impairment at the reporting unit level, and we are organized and operate as a single reporting unit. Goodwill and indefinite-lived intangible assets are tested at least annually or more frequently when events or circumstances occur that indicate that it is more likely than not that an impairment has occurred. In assessing goodwill and intangible assets for impairment, we first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test. In the qualitative assessment, we may consider factors such as economic conditions, industry and market conditions and developments, overall financial performance and other relevant entity-specific events in determining whether it is more likely than not that the fair value of the reporting unit is less than the carrying amount. Should we conclude that it is more likely than not that the recorded goodwill and intangible assets amounts have been impaired, we would perform the impairment test. An impairment loss is recognized in earnings if the estimated fair value of a reporting unit or indefinite lived intangible asset is less than the carrying amount of the reporting unit or intangible asset. Significant judgment is applied when goodwill and intangible assets are assessed for impairment.
Identifiable intangible assets with finite lives are amortized on a straight-line basis over their estimated useful lives and are also reviewed at least annually for impairment or more frequently if conditions exist that indicate that an asset may be impaired.
We recorded no impairment of goodwill and other intangible assets from continuing operations during the years ended December 31, 2025 and December 31, 2024, respectively. We recorded no impairment of goodwill and other intangible assets from discontinued operations during the years ended December 31, 2025 and December 31, 2024, respectively. See Note 6, Goodwill and Intangible Assets, Net, to our audited consolidated financial statements for additional disclosures related to the impairment of goodwill and other intangible assets. The carrying value of our tradename intangible asset was equal to its fair value and our single reporting unit had no cushion on its goodwill impairment analysis immediately after the impairment was recorded in 2023. Therefore if there are further delays in our ability to execute on our strategy, negative deviations from the budgets utilized in these analyses or further declines in our market capitalization further impairment of our assets is possible.
Crypto Services Revenue Recognition
BFS offers customers the ability to purchase or sell certain digital assets on its platform. BFS partners with a number of liquidity providers to provide customers with immediate liquidity and access to digital assets. BFS settles with the liquidity partners on a daily basis. The contract with a customer is created when a customer agrees to execute a trade on our platform. Each customer purchase and sale transaction only has a single performance obligation which is execution of the trade. We consider the sale of customer digital assets associated with delisted digital assets to be revenue in the context of our contracts with customers. We own the digital assets during the period of time between the customer transaction and the liquidity provider settlement and accordingly act as a principal in the arrangement. We report the gross proceeds of a sale to a customer or liquidity provider, including a spread on the market price of the digital assets as revenue. Substantially all of the consideration is allocated to the execution performance obligation, which is satisfied when we record the transaction to the customer's account. Custody services are rendered over the initial contract term which we have concluded is one day. Customers have a material right to obtain additional custody services at no cost by not selling the purchased digital assets, which is recognized over the period that the assets are held on our platform. The consideration allocated to the custody and material right performance obligations is estimated on the basis of a cost plus a margin approach and was not material to the year ended December 31, 2025.
Judgment is required in determining whether the Company is the principal or the agent in our contracts with customers. We have determined that we are the principal in transactions with customers as we control the digital assets
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prior to its delivery to the customer and we are primarily responsible for the delivery of the digital assets to the customer. Accordingly, revenue and costs associated with BFS's services are presented gross in our consolidated statement of operations.
Where applicable, we make payments to introducing brokers based on the transaction volume from resulting customer volume. These payments are expensed in the period they are incurred and are included in "Clearing, Execution and Brokerage Fees" on the consolidated statement of operations.
Deferred Revenue
Deferred revenue includes amounts invoiced prior to us meeting the criteria for revenue recognition. We invoice clients for service fees at the time the service is performed, and such fees are recognized as revenue over time as we satisfy our performance obligation. The portion of deferred revenue to be recognized in the succeeding twelve-month period is recorded as current deferred revenue, and the remaining portion is recorded as non-current deferred revenue. We have determined that these arrangements do not contain a significant financing component, and therefore the transaction price is not adjusted.
Warrants
We account for our ordinary share warrants in accordance with applicable accounting guidance provided in ASC 815, Derivatives and Hedging-Contracts in Entity's Own Equity, as either derivative liabilities or as equity instruments depending on the specific terms of the warrant agreement. We classify as equity any equity-linked contracts that (1) require physical settlement or net-share settlement or (2) give us a choice of net-cash settlement or settlement in our own shares (physical settlement or net-share settlement). We classify as assets or liabilities any equity-linked contracts that (1) require net-cash settlement (including a requirement to net-cash settle the contract if an event occurs and if that event is outside our control) or (2) give the counterparty a choice of net-cash settlement or settlement in shares (physical settlement or net-share settlement). All public and private placement warrants issued by us were deemed to qualify for liability classification.
Impairment of Long-Lived Assets
Our long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying value of the asset may not be recoverable. We also evaluate the period of depreciation and amortization of long-lived assets to determine whether events or circumstances warrant revised estimates of useful lives. When indicators of impairment are present, we determine the recoverability of our long-lived assets by comparing the carrying value of our long-lived assets to future undiscounted net cash flows expected to result from the use of the assets and their eventual disposition. If the estimated future undiscounted cash flows demonstrate the long-lived assets are not recoverable, an impairment loss would be calculated based on the excess of the carrying amounts of the long-lived assets over their fair value.
We recorded impairment of long-lived assets of $0.7 million and $0.7 million during the years ended December 31, 2025 and December 31, 2024, respectively. See Note 6, Goodwill and Intangible Assets, Net, and Note 7, Consolidated Balance Sheet Components, to our audited consolidated financial statements for additional disclosures related to impairment of long-lived assets.
Use of Estimates
The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in our audited consolidated financial statements and accompanying notes. We base our estimates and assumptions on various judgments that we believe to be reasonable under the circumstances. The significant estimates and assumptions that affect the financial statements may include, but are not limited to, going concern, those that are related to income tax valuation allowances, useful lives of intangible assets and property, equipment and software, fair value of financial assets and liabilities, determining provision for credit losses,
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valuation of acquired tangible and intangible assets, the impairment of intangible assets and goodwill, and fair market value of Bakkt common units, incentive units and participation units. Actual results and outcomes may differ from management's estimates and assumptions and such differences may be material to our audited consolidated financial statements.
Recently Issued and Adopted Accounting Pronouncements
Recently issued and adopted accounting pronouncements are described in Note 2, Summary of Significant Accounting Policies, toour audited consolidated financial statements.
Bakkt Inc. published this content on March 19, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on March 19, 2026 at 21:05 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]