Digital asset firm Bakkt, which is owned by Intercontinental Exchange (ICE), reported a strong increase in total revenue to $780 million for the year 2023, yet encountered a net loss of $226 million.
The net loss marks an 89% improvement compared to the previous year, which reflects the company’s strides toward financial stability.
The revenue growth from 2022’s $56 million is attributed to the successful acquisition and integration of Bakkt Crypto (previously Apex Crypto) in April last year. However, the platform’s operating expenses soared to more than $1 billion amid heightened costs associated with crypto transactions. This figure also included clearing and brokerage fees linked to the acquisition.
“Our focus for 2024 is on a set of strategic initiatives that will provide our business with efficient scale, including broadening our client network, expanding our product set and prudently managing expenses,” said Andy Main, CEO of Bakkt.
Bakkt said it remains optimistic despite a 49% reduction in notional traded volume, influenced by lower industry-wide volumes and decreased activity on partner app Webull Pay. The company expects an impressive revenue increase to up to $5.1 billion for 2024, indicating a potential 555% growth year-over-year. Yet, it anticipates its crypto-related costs to align with the revenue increase, forecasting a range between $3.2 billion and $5.02 billion.
Bakkt’s financial journey has not been without its challenges. Earlier this month, the New York Stock Exchange issued a warning regarding potential delisting due to the company’s stock falling below the $1.00 per share threshold for over 30 days. The stock price stood at $0.54 on the last trading day reported. In response, Bakkt has undergone leadership changes, appointing Andy Main as the new CEO, with former CEO Gavin Michael transitioning to an advisory role until March 2025.
Founded by the parent company of the New York Stock Exchange in 2018, Bakkt had been pegged as a potential game-changer for Bitcoin during the 2018 bear market. Despite the crypto market’s recovery from a challenging 2022, Bakkt has reported nine consecutive quarters of net losses since becoming a publicly listed entity in October 2021.
In 2021, Bakkt launched a digital wallet, which was subsequently discontinued in 2022, as the company shifted its focus towards crypto custody and trading services. Its broader initiative to use Bitcoin for payments has largely fallen short of expectations, although projects like the Lightning Network seek to upgrade transaction efficiency through layer-2 blockchain solutions.
In 2023, Bakkt cut support for 25 out of the 36 crypto tokens that were listed on its recently acquired trading platform, Apex Crypto. At the time, Bakkt didn’t provide a reason for the delisting, but the company was seeking to focus on a smaller number of more popular tokens. It also can be attributed to recent regulations and changes in the crypto industry.
