Bakkt Turns Profitable on Noncash Warrant Gain
A $98.5 million noncash gain on Transchem warrants put Bakkt in profit even as its adjusted EBITDA loss widened.
Bakkt, Inc. (BKKT), a regulated financial technology company, reported a second-quarter profit after a year-earlier loss, with an investment revaluation outweighing losses from operations. The company also began processing payments through acquired infrastructure, advancing the commercial rollout that followed its earlier rebuilding effort.
Net income attributable to Bakkt was $80.8 million, or $1.94 a diluted share, against a $14.7 million loss a year earlier. The profit included the gain on Transchem warrants and a separate $1.4 million noncash gain on a legacy warrant liability. Neither represented revenue from customers using the platform.
The Transchem investment moved from pending approval to an asset recognized on Bakkt’s balance sheet. After receiving Indian regulatory approvals, Transchem allotted 47.5 million warrants to Bakkt in June. Bakkt paid approximately $9.4 million initially and carried the position at $107.9 million at quarter-end, with changes in fair value recognized in earnings each period.
Bakkt Global, the company’s international investment and distribution business, reported strategic asset value of $118.5 million at June 30, including its Bitcoin Japan investment. The company cautioned that the measure did not represent liquidation value. Full exercise of the Transchem warrants would require approximately $28.2 million more within the exercise period of 18 months from issuance.
The operating business remained loss-making. Adjusted EBITDA loss widened to $11.8 million from $9.8 million in the same quarter last year on a continuing-operations basis. The deterioration primarily reflected lower crypto services revenue after transaction costs, alongside higher salaries and contract labor and an equity-method investment loss, partly offset by lower selling, general and administrative expenses.
Revenue fell 70% year over year to $170.1 million. The decline reflected previously disclosed client transitions and industry-wide softness in digital-asset trading volumes. Crypto costs and execution, clearing and brokerage fees totaled $169.3 million, absorbing nearly all reported revenue because crypto transactions were recorded on a gross basis.
Operating expenses excluding those transaction costs increased to $20.5 million from $19.0 million. The change primarily reflected two months of acquired DTR operating costs and professional-services expenses supporting the integration and its India strategy. The total also included a noncash asset impairment and depreciation and amortization primarily associated with acquired DTR intangibles.
The commercial rollout gave the quarter a different operating profile from the rebuilding described in March and the acquisition closing announced in May. Bakkt Markets had six live offerings spanning trading infrastructure, digital-asset and stablecoin execution, payment services and the Bakkt Widget. Second-quarter total transacting volume was $168.8 million.
Payments activity entered that volume measure on May 1 through the acquired DTR infrastructure. Wire and ACH funding capabilities also went live, connecting bank funding to stablecoin settlement through a single API. Bakkt distinguished payments accounting from crypto trading: payments generated fees and spreads as revenue, rather than the full transaction value.
Bakkt Agent Embedded Finance became available for partner integration, covering accounts, payments and international transfers. The company targets initial co-branded cards, a conversational interface and Neobank-as-a-Service for the fourth quarter. Management expects approximately 25,000 monthly active users in December, subject to partner launches, implementation, approvals and adoption.
Cash, cash equivalents and restricted cash stood at $50.7 million at June 30, down from $82.6 million at March 31. Bakkt ended the quarter without long-term debt.
For the first half, Bakkt used $26.9 million in operating cash and received $69.6 million in equity-offering proceeds. Total transacting volume for the six months was $410.0 million.
Bakkt continues to expect approximately $2.5 billion in full-year transacting volume. That outlook assumes client integrations and activations progress through compliance and launch stages on anticipated schedules, with activity ramping in the second half.
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