Bakkt has announced (1) its earnings for the fourth quarter of 2022, reporting $15.6 million in revenue. Although this number was lower than the expected $16 million, it still marks a 14% rise over the previous year (YoY).
Q4 revenue growth for the digital asset management software system was met with increased costs. This turn of events caused a $272,000,000 impairment charge, significantly affecting Bakkt’s bottom line.
Reported adjusted earnings for Bakkt’s fiscal fourth quarter and full year 2022 were lower than projected. According to the business, this equates to a loss of $30.5 million in EBITDA (earnings before interest, taxes, depreciation, and amortization).
When compared to the 4th quarter of 2021, this quarter’s EBITDA is 30.3% higher. On the other hand, experts had predicted a loss of $28 million.
Despite a massive impairment charge of $1.6 million in Bakkt’s fiscal fourth quarter of 2022, the company’s chief executive is pleased with its performance thus far.
During the third quarter, Bakkt’s operational loss ballooned to $341 million, up from $86 million. This is a staggering 300% year-over-year growth.
These costs hit the corporation hard due largely to $272 million in non-cash goodwill and intangible assets impairment losses.
Yet, Bakkt President and CEO Gavin Michael said he was pleased with the company’s recent financial performance.
To paraphrase Michael:
Notwithstanding the challenging market conditions during 2022, we are very pleased with our achievements. We brought our products to market as planned, collaborated closely with our partners, expanded our network of collaborators to include top names in the industry, and made our plans to acquire Apex Crypto publicly.
Michael was optimistic about Bakkt’s potential going forward because of the fintech’s plenty of resources. Bakkt’s CEO further assured investors that the company would maintain a position of strength in anticipation of favorable market developments. From Michael himself:
We believe that our unique platform, regulation and compliance-first strategy, strong balance sheet, and extensive network of partners will set us up for success despite the continued volatility in the market. As market conditions improve in 2023, we will be one of the finest crypto businesses because our priorities will strike the right mix between expansion and discipline.
When outlining its goals for 2023, Bakkt cited a healthy mix of “development and discipline” as a key factor. Its goals for 2018 include developing its cryptocurrency platform, energizing and growing its partner network, and streamlining its financial processes.
Moreover, Bakkt expects to increase its net sales by as much as 30% to $72 million in 2023 and its operational net cash by 15% to $110 million.
The Georgia-based software platform also hopes to increase its free cash flow by 30% to $115 million.
Purchase of Apex Exchange
In 2023, Bakkt plans to finalize its purchase of Apex Crypto, a cryptocurrency investing platform, and speed up regional integration. Once the market closes, the fintech firm plans to release its financial forecast if it receives the necessary regulatory approvals.
Within the first half of this year, Bakkt plans to finalize the acquisition of Apex Crypto. The utility-driving characteristics of the digital asset management system include earning, reward, and payment, and layer 2 protocols, like the Bitcoin Lightning Network, are one example.