In its Q4 2022 report, fintech Bakkt also revealed plans to peg its acquisition of crypto exchange Apex Crypto.
Bakkt (NYSE: BKKT) aware its fourth-quarter 2022 earnings, revealing a revenue take of $15.6 million. Although this figure was slightly below the consensus estimate of $16 million, it represents a 14% year-over-year (YoY) increase. However, the fourth-quarter revenue increase from the digital asset management technology platform was accompanied by a corresponding increase in expenses. This development resulted in a heavy impairment charge of $272 million, which affected Bakkt’s overall bottom line.
Bakkt’s Q4 and full-year 2022 earnings report revealed worse-than-expected adjusted earnings. According to the company, these earnings before interest, taxes, depreciation and amortization (EBITDA) were negative $30.5 million. From another perspective, EBITDA was 30.3% higher than in the fourth quarter of 2021. Analysts, meanwhile, were expecting a negative figure of $28 million.
Company CEO expresses satisfaction with overall performance despite Bakkt’s high impairment charge in Q4 2022
Bakkt’s operating loss for the quarter increased to $341 million from $86 million, which is a huge increase of 300%. These expenses heavily impacted the company, driven primarily by intangible asset impairment charges and non-cash goodwill of $272 million.
Nonetheless, Bakkt Chairman and CEO Gavin Michael expressed his satisfaction with the company’s latest earnings performance. As Michael said:
“We are proud of all that we have accomplished throughout 2022 despite an incredibly difficult market environment. “We delivered on our product roadmap, worked closely with our partners to go to market, added leading industry players to our partner network, and announced our acquisition of Apex Crypto.”
Michael also expressed his faith in Bakkt’s future operational prospects based on the large number of fintech resources. Furthermore, the Bakkt CEO said that the company would continually position itself for optimal success as market conditions improve. In Michael’s own words:
“While market conditions remain challenging, we are optimistic that our differentiated platform, regulatory and compliance-first approach, strong balance sheet, and extensive partner network will position us well for success. Our 2023 priorities will appropriately balance growth and discipline, allowing us to be one of the best-positioned crypto companies when market conditions improve.”
Bakkt outlined its 2023 priorities influenced by an appropriate balance of “growth and discipline.” Goals this year include expanding its crypto platform, activating and expanding its partner network, and simplifying business and expense management.
In addition, Bakkt’s full-year 2023 outlook includes an increase in net income of up to 30% to $72 million and an improvement in operating net cash by 15% to $110 million. In addition, the Georgia-based technology platform is also looking to improve free cash flow (non-GAAP) by 30% to $115 million.
Apex Cryptocurrency Acquisition
Bakkt is looking to close its acquisition of crypto investment platform Apex Crypto in 2023 and speed up the integration process. The fintech firm says it will provide a financial outlook after the close, subject to regulatory approval.
Bakkt expects to complete the acquisition of Apex Crypto within the first six months of this year. Additionally, the digital asset management enabler seeks to boost utility through earnings, rewards, and payout features. These include the implementation of layer 2 protocols, such as the Bitcoin Lightning Network.
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Tolu is a Lagos-based blockchain and cryptocurrency enthusiast. He likes to demystify the crypto stories down to the basics so that anyone anywhere can understand them without too much prior knowledge. When he’s not up to his neck in crypto-stories, Tolu likes music, loves to sing, and is an avid movie buff.
