Bakkt Holdings Inc Aktie

Thank you. Hello and welcome to BAC's second quarter 2026 earnings call and webcast. At this time, all participants are in a listen-only mode. of the speaker's presentation, there will be a question and answer session. To ask the question during the session, you will need to press star 11 on your telephone. Then, hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. I would now like to hand the conference over to Cody Fletcher. Sir, you may begin.

Good afternoon and welcome to VAC's second quarter, 2026 earnings call. with me on the call are Akshay Nehetta, our Chief Executive Officer, Daniel Ashad, our Chief Commercial Officer, and Karen Alexander, our Chief Financial Officer. Today's discussion contains forward-looking statements within the meaning of the federal security laws. looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those reflected or implied. We refer you to the cautionary language in our earnings release, in this presentation, and in our SEC filings, including the risk factors set forth in our most recent Form 10-K and Form 10-Q for the period ended March 31st. 1st, 2026. Today's discussion also includes references to non-GAAP measures, including EBITDA and adjusted EBITDA. Reconciliations to their nearest GAAP measures, along with definitions and methodology for operational metrics, total transacting volume, monthly active users and strategic asset value are included in this presentation. With that, I will turn the call over to our CEO, Akshay Nath. Akshay?.

Thank you, Cody, and thank you all for joining us today. The clearest way to understand BAC today is as one platform powered by three complementary engines, markets, agent, and global. Each engine addresses a significant opportunity on its own, but together they create a compounding flywheel that can become more valuable with every product, client, and market we add. Back markets is the regulated infrastructure layer. It provides the rails for payments, settlement, trading, and over time, the tokenization of real world assets. The financial system was not designed for continuous global activity. We are building infrastructure for a world in which value can move securely, programmatically, and around the clock.

Back to Agent is the intelligence and distribution layer. It transforms that infrastructure into a simpler and more powerful financial experience. For our clients, it creates a single platform through which they can launch differentiated financial products and deepen their customer relationships. And for their customers, it can make managing and moving money dramatically more intuitive. And finally, Back Global expands our strategic reach. It provides access to important markets, differentiated assets, and scale distribution opportunities that would be slower and more capital intensive to build organically. As those positions develop, they can bring additional relationships, capabilities and opportunities into the broader backed platform.

Beneath all three engines is the same shared foundation, regulatory compliance in KYC combined with programmable 24-7 stablecoin settlements. That common infrastructure is important because it means we are not building three separate businesses. We are building one integrated operating system. And that is where the flywheel becomes more powerful. Markets provides the rails. Agents bring intelligence, customers, and distribution onto those rails. and global expands the assets, relationships, and markets that can connect to the platform. More distribution can generate more activity. More activity can make the infrastructure more valuable.

And a stronger platform can support more products, partnerships, and strategic opportunities. Each engine gives back a meaningful way to win, and together they create a platform designed to compound. With every turn of the flywheel, every product, client, and market we add, the system becomes more valuable and harder to replicate. Last quarter, I introduced the scorecard as a qualitative management view of our execution. It is not financial guidance. It is a way to show where back is progressing, where we are investing and where our attention remains focused. The headline this quarter is clear. Execution is accelerating across the platform.

Every category is either stable or improved. Six of the eight categories are now at 75 or above and the that required the greatest attention are also showing the fastest improvement. Part Partners and distribution increased 20 points, the largest movement on the page. Following the DTR close, we rebuilt the commercial organization, sharpened the offering, and advanced the integrations and partnerships required to bring more clients and more activity onto the platform. At 50, it remains our most important execution priority, but we are entering this next phase with a materially stronger commercial foundation. better visibility into upcoming activations and growing confidence in the potential for flows to scale meaningfully as those integrations come online. Team and talent increased 15 points to 75. We have strengthened the leadership bench, made substantial progress integrating DTR into our platform, and aligned the organization around a clear set of commercial priorities.

AI-enabled execution is also becoming increasingly embedded across the company, helping our teams with greater speed and leverage. That discipline is contributing directly to operational efficiency, which increased by 10 points. We're building a leaner, faster, and more scalable operating model. One designed to support substantially greater activity without creating the cost structure of a traditional financial institution. The broader foundation continues to strengthen. Regulatory is at 85, infrastructure and technology are both at 80 with the DPR rails now in-house and the agent platform on track for the second half. Financial strength remains at 75, supported by a balance sheet with no long-term debt.

And global network has increased to 75 as a strategic positions and international relationships continue to develop. The important shift is the stage that has now reached. Much of the foundational build is in place. Our focus is increasingly moving towards external outcomes, launching new products, activating clients, and scaling transaction flows. Each engine has a clear ownership, and we intend to remain transparent and accountable for the progress we make. The foundation is in place, execution is strengthening, and commercial activation is now the next major growth unlock. With that,.

Let me turn the call over to Daniel to take you through markets and agent. Thank you Akshay and good afternoon everyone. Before I turn to the platform, let me briefly share what I've seen in my first three months. Akshay has aligned product, engineering, compliance and sales around the same commercial priorities and that alignment is translating into faster, more coordinated execution. The market we're building into has continued to expand this quarter. Stablecoin market capitalization reached an all-time high of approximately $320 billion in May 2026. Adjusted on-chain stablecoin volume reached approximately $1.79 trillion in June, a new monthly high.

And global cross-border payment flows reached approximately $208. $1.5 trillion in 2025. Against markets of this scale, focused adoption across priority clients, corridors and use cases can drive a step change in volume from our current base. Today most of that money still moves through traditional correspondent banking. That means multi-day settlement, intermediary fees, FX costs, failed transactions and limited transparency. The further you move away from the major currencies, the more pronounced these problems become. That is exactly what our infrastructure has been built to address. Let me bring you up to date where the platform stood at the end of the second quarter. four key numbers, one core KYC framework across the product set, access across more than 63 countries, support for 19 currencies, and connectivity across 10 public blockchains.

Behind those numbers are four production APIs, all live today. This quarter, we consolidated onboarding across the product suite. A client can complete the core compliance process once and use that foundation as it activates additional products. with product and market specific requirements applied where needed. The second is our stable coin API, which provides the settlement rail from fiat to stablecoins and back again. WIRE and ACH went live this quarter, closing the loop between traditional bank rails and stablecoin settlement within a single API. That gives clients faster settlement. More importantly, it gives them settlement speed they can turn into a commercial advantage for their own customers. The third is Zyra, our chat native interface for cross-border payments.

Kyra has supported live fiat payment corridors since last September and is now integrated into BAC's in-house payment stack. And the fourth is the BACt widget, are embeddable on an off-ramp. Partners can integrate it directly into their own platforms and deliver the service within their existing customer experience. The widget combines the other APIs and demonstrates the strength of the platform. It is modular, but the modules work together. The principle is simple. Integrate once, then activate what you need. core integration, one common regulated foundation, and an expanding menu of products and services. The six offerings on the left are live and available today.

They include our trading infrastructure, stablecoin OTC, digital asset OTC, our stablecoin on and off ramp, cross-border payments through the Zyra API, and the backed widget. None of this is roadmap. These products are live and being sold today. For the second quarter, total transacting volume was approximately 169 million. For the first half, TTV was approximately 410 million. Our current full year 2026 TTV target remains approximately 2.5 billion, and we remain confident in achieving it. Movement in the second quarter was driven principally by lower trading activity. At the same time, payments entered TTV for the first time following the May 1 integration.

The initial production volume is an important proof point. It demonstrates that the payment infrastructure is live, in-house, and processing real institutional and cross-border flow. We expect payments to become an increasingly important contributor to growth from here. The commercial problems we are solving are consistent across clients, reducing pre-funding, shortening settlement times, improving traceability, and simplifying multi-party payouts. Those needs arise across supplier settlement, trade-related payments, global payroll, and contractor payments. Our infrastructure addresses them through one core integration across the markets and currencies we support. Achieving our full year target requires a meaningful acceleration in the second half.

Our confidence is based on a broader set of drivers now in place, six live offerings, payments contributing to TTV for the first time, and client integrations and activations already progressing through defined compliance, technical, and launch stages. The expected step up does not depend solely on a recovery and trading activity. In addition to activating our previously described relationships, we're advancing further opportunities across payments, the widget, and embedded finance. I also want to be clear about the metric. TTV is the total notional value moving through our platforms and the margin we earn varies by transaction type. These businesses generate fees and spreads on flow as volume and product adoption scale, we expect the revenue opportunity to expand alongside them. The commercial organization is in place and selling today with senior coverage continuing to expand in line with the opportunity set.

We We have six live offerings. Integrations and activations are underway, and the mandate is clear. Activate clients, grow volume, and execute. That brings me to the second engine, and I want to be precise about what backed agent is because it's the newest part of the story. Aft Agent is a B2B and a B2B2C platform. We do not sell directly to consumers. We sell it to businesses, banks, fintechs, and brands, which use it to offer financial products to their own customers.

The agent turns the regulated rails you have just seen into a simpler and more valuable customer relationship by connecting three layers. First, regulated rails, accounts, payments, cards, and cross-border transfers. Second, financial intelligence, customer financial context used with the appropriate permissions to personalize the experience. And third, customer action, a simple interface that turns insight into action. For the end customer, that can create a more useful financial experience. For our clients, it creates a stronger distribution model. deeper engagement, more financial activity, and more opportunities to generate value from the customer base. The client controls the customer experience and drives distribution, but provides the regulated rails and the intelligence underneath.

The way I think about it is simple. The intelligence layer amplifies the value of every regulated rail beneath it. Agent is organized around three product paths. Embedded Finance is commercially available today for partner integration. We expect co-branded card programs and neobank as a service to launch in the fourth quarter, subject to applicable approvals. First, backed agents embedded finance. Clients can embed accounts, payments, and international transfers into their existing experience through one modular platform, more than 63 countries, 19 currencies, 10 chains, one core KYC framework, and 24-7 stablecoin settlement. And you'll see one more line on the card, targeted for Q4 of this year.

A conversational interface on top of those rails, designed to let a customer ask, understand, and act in plain language. every action running through the same regulated APIs and secure authorization. For clients, it is a differentiated experience that would otherwise require assembling multiple technology, banking, and regulatory relationships. Second, co-branded card programs designed around the client's brand and customer relationship, with issuing, payments, and loyalty supported by a regulated stack and banking partners. Third, NEOBANK as a service, a full branded experience with accounts, savings, cards, and rewards, and cross-border payments, while BACT operates the regulated infrastructure underneath. Availability will vary by client and market remains subject to applicable regulatory, licensing, bank partner, and network requirements. requirements. The commercial logic is consistent with markets, one modular regulated stack, and multiple product paths that allow a client to start with the capability it needs and expand as its customer's relationship develops. This slide brings the product to life.

It illustrates the branded end user experience that NeoBank as a service is designed to deliver. A client's customers can get paid into a checking account, save towards goals, spend on cards with rewards, and send money across borders, all within the client's own app and brand. It's one branded experience with more opportunities to engage customers as they manage everyday money. And the experience is assembled from the same modular capabilities I've just described. Let me close the agent story with the commercial logic behind the product set. This is a flywheel at the level of a single client. Markets provides the regulated rails, and agent gives the client multiple ways to use those rails across a deeper customer relationship.

The path shown here is illustrative. A customer can enter the product path that best fits its needs and expand its additional capabilities come online. The three steps are embed, engage, and expand. A client can embed accounts, payments, and international transfers inside its existing experience. It can then engage customers more frequently through a co-branded card program. and it can expand into a full branded neobank experience with accounts, savings, cards, rewards and cross-border payments. Across those paths, the client uses the same core integration and regulated infrastructure with onboarding and KYC applied as required by product and market. The commercial opportunity expands in three ways.

First, each additional product creates more opportunities for fees and transacting volume on the same core platform. Second, each product can add permitted financial context, helping make the next experience more relevant and better timed. And third, expanding an existing client relationship can be more efficient than acquiring a new one. Deeper product adoption can strengthen retention for our clients and its customers and for backed with its clients. This is the strategy. Activate clients on the capabilities available today, expand each relationship over time, and continue adding new clients to the platform. Grow every client relationship as we grow the client base. With that, back to Akshay for Back Global.

Akshay.

Thank you, Daniel. The third engine is back global with our strategic investments in Japan and India. Japan gives back the foothold in major private capital and innovation ecosystems where access to issuers, private market opportunities and local partners can be as valuable as the capital itself. The strategic fit is very direct. Bitcoin Japan creates local access, relationships and potential asset supply. Private Markets provides the global technology and regulated infrastructure we are building to support the tokenization, settlement, and distribution of eligible private market assets. Rather than building a private markets footprint from scratch, we can leverage Bitcoin Japan's partnerships to participate in this large and growing opportunity in a capital efficient way. India represents a distribution side of the same strategy.

Through Transchem, which we expect to be renamed in due course subject to required approvals, we are pursuing a broker-led approach that can include acquisitions and strategic partnerships will scale local distribution across India's rapidly expanding investor market. BAC's role is to create the global asset pipeline and tokenization stack. Eligible private market and other real world assets delivered through regulated local channels and ultimately experienced by consumers from modern BAC powered investment platform. That agent can make that experience far simpler, helping customers discover, understand, transact in and manage global investment opportunities through an intuitive financial interface. The end state is powerful. Japan can build differentiated access to private markets and real world assets India can build scaled consumer distribution. BAC connects both with its markets infrastructure, agent experience, and global operating stack. These are not passive holdings. These are important footholds in a much larger platform opportunity.

And this slide is deliberately straightforward. the increase in the illustrative value of our strategic investments in Japan and India, including amounts currently reported in our financial statements and cash previously received. We invested in these markets strategically and a significant portion of the increase is reflected in BAC's reported financial position. Both markets have independent government governance and strong local management teams who are executing for the long term. That reflects the capital discipline behind our approach, targeted investments in strategically important platforms that can create meaningful upside without requiring us to build every capability or market position from scratch. But we see this as an early marker not the end state. As we execute on the strategy, build scale across markets and agents, and as these positions develop into operating platforms with deeper asset access and distribution, we believe the value that they create for back shareholders will compound substantially over the long term. What is visible on this slide today is only the beginning of the opportunity ahead.

Last quarter, we introduced one primary KPI for each engine and here's where we stand. For back markets, total transacting volume, approximately 410 million for the first half, including payments volume alongside trading for the first time. And we continue to expect approximately two and a half billion for the first half. For backed agent, monthly active users. We are not reporting any use today because the relevant backed agent products do not have activity that is meaningful yet. But this quarter we are setting the first marker. Based on the launch plan, our chief product officer, Ankit Khenka, and the product team have laid out.

Our initial target is approximately 25,000 monthly active users by year end. Embedded Finance is commercially available for partner integration now. Commercial end user launches and the MAUs that come with them begin as partners activate. The other drivers are on the calendar. Neobank is a service targeted for the fourth quarter and our cross border corridors, including flows into India and South Asia ramping through the second half. And to be clear about what the number is, this is our year end monthly target, not an annual average. For back global strategic asset value, approximately 119 million as of June 30th, we have revised the definition of SAV this quarter to align it directly with our financial statements.

It now consists of 10.6 million equity method carrying value for our Japan investment and the 107.9 million fair value of the Transchem warrants. There are no internal valuation models or additional components. API reconciles directly to the amounts reported in the financial statements in our 10Q. We will report TTV and SAV consistently each quarter and we expect to begin reporting NAUs quarterly once the relevant back to agent activity is meaningful so you can follow activation and scale as it happens. With that, I'll turn the call over to Kevin.

Karen to review the financial results. Karen? Thank you, Akshay. The financial takeaway for the quarter is straightforward. FACS reported gap net income of $80.8 million. Diluted EPS for the quarter was $1.94 per share. This is a strong reported gap result and an important milestone as we build a more valuable full-stack financial platform. We ended the quarter with 50.7 million of cash and restricted cash and no long-term debt. That gives us meaningful flexibility to continue investing in commercial activation with discipline.

We now have six live commercial offerings, 410 million of total transacting volume in the first half and a current full year 2026 TTV target of approximately 2.5 billion. Based on the integrations and customer activations underway, we remain confident in achieving that target. The Transchem fair value re-measurement is reflected in our gap results and is fully disclosed in our materials. The broader point is that Bakkt enters the second half with a stronger platform, growing commercial momentum, and a clear path to greater flows as customer activations ramp. We believe those flows can scale meaningfully from here, supported by the still early adoption of stablecoins across global trading and settlements. This reconciliation is provided for transparency and comparability with the prior year presented on the same continuing operations basis. see one new line, 3.6 million of transaction related advisory fees, which are excluded from adjusted EBITDA and not expected to occur at this level. Our focus is on translating the platform, integrations, and client pipeline we have built into higher levels of activity and operating leverage as activations ramp.

In closing, we have developed a financial operating system for the AI in token economy. We are investing across regulated infrastructure, intelligence, and distribution to deliver higher value solutions and tools to our customers. enter the second half with a stronger platform, clear commercial momentum, and substantial room to scale. With that, let's go to Q&A. Cody, back to you.

Thank you. Ladies and gentlemen, as a reminder to ask the question, please press star 11 on your telephone. Then wait for your name to be announced. To withdraw your question, please press star 11 again. please stand by while we compile the Q&A roster. Our first question comes from the line of Brian Dobson with Clear Street. Your line is open.

Thanks and good evening. So you've made some significant headway during the quarter. I was wondering if maybe you could take a step back and tell us how you see the business evolving further over the next 12 months. Thanks, Brian. So I think that we've.

we continue to maintain the year end target on our total transacting volume at two and a half billion. And I think that as the commercial team has expanded and we've attracted great talent to that team over the past quarter, we believe that that volume will ramp up significantly next year. this time, we are not going to be giving financial guidance for next year. But if you assume the trend that we are forecasting going into year end, I think that that trend will accelerate even faster going into next year. Yes, thanks. And then in terms of capital allocation,.

you look across your product portfolio and you seek to deploy, you know, incremental dollars, right, putting incremental dollars to work, which areas do you find most attractive and would like to see, you know, some financial muscle put behind or to grow them?.

I mean, at this time, really our entire commercial offering is focused on connected and it's integrated in one framework. And where we are really spending a lot of time is in attracting the right kind of talent to the organization to actually go ahead and scale and activate the different relationships that we have to scale the transacting volume. Because at the end of the day, that's what translates into. revenues for us and earnings. And so from my perspective, I don't think there are any major financial capital allocations that we see on the horizon for the moment. other than the ones that we've already disclosed and and i think that our heads down focus is on really going out and executing uh on the opportunities and client activations that are currently underway already.

All right, thanks for that, Collin. Thank you. Please stand by for our next question. Our next question comes from the line of Mark Palmer with Benchmark. Your line is open.

Yes, thank you and thanks for taking my question. I wanted to ask about the monetization of total transacting volume. especially given that you have six live offerings How should we think about the blended take rate of those combined offerings, and how does the take rate differ across each of them? Thank you.

Yes, so I think the best way to think about this, Mark, is that when you're looking at stablecoin related volume overall as it relates to any of the G3 currencies which is double dollars, euros, and sterling, you're looking at very slim margins and take rates that range from a few basis points all the way to in the low teen basis points. But then the real margin comes in... the cross-border payments opportunities, which are, you know, today our platform is live in over 63 countries. We execute in over 19 currencies. And. And there, the margins can range from anywhere between 50 basis points to close to one and a half points. And... I think that we have not given out any guidance in terms of where the blended take rate will come out. But I think starting next quarter, you'll start... getting more evidence on where that number lands. I don't know if Daniel wants to add anything to this if he's on the call.

Good evening. As we start solving payment problems around the world, as I actually mentioned, we've got 60 plus countries we're working in. We're seeing significant demand across a number of the emerging markets for cross-border payments, and that's where we're really positioned to take advantage of. greater margins. Over that, because we have an integrated offering, we're able to solve customer problems incredibly quickly without multiple onboardings. And those efficiencies are starting to really scale into major savings for our partners. So over the coming quarters, we look forward to keeping you updated.

Thank you. Ladies and gentlemen, at this time I would like to turn the call back over to Cody for more questions.

Thank you, operator. So before we close, we wanted to address some questions we hear most often from our retail investor community. These are all drawn from our followers on X and some other public channels. First one here is for Daniel. Daniel, what progress has BAC made since completing the DTR acquisition?.

Hi there. We closed the DCR acquisition on April 30th and in just two months In just two months, we've consolidated onboarding. We've launched wire and ACH funding. We've brought the payments infrastructure completely in-house and included payments in the TTV for the first time. As mentioned earlier in the call, we now have six live commercial offerings connected through one integration framework, and we've strengthened the commercial organization with exceptional talent this quarter. The core foundation is integrated. Our focus now is activating new clients and scaling the associated volume.

Great. Thank you, Daniel. The second one is for Akshay, kind of around BAC Global. How should shareholders think about the strategic and financial value of BAC Global?.

So, Back Global, the investments that we made there have already created significant shareholder value for back shareholders. But the strategic opportunity is a lot broader than the financial gains that we've made from these investments. As I said in my prepared remarks, Japan basically expands our access to global private markets and the associated real world asset tokenization opportunities that that presents. And India really provides us with a very scaled distribution platform. which then back and connect through both back markets and back to agent. So we believe that these investments in these two countries through Black Global can compound substantially in value for back shareholders over the long term. as these respective operating platforms scale. But at the same time, the strategic benefits and the associated revenue benefits that BAC gets through markets and agent will be be materially visible as these platforms grow. So what is visible today is only the beginning of the opportunity ahead.

And I think that these tie in completely into the overall back strategy. but they also add to BACT in a big way because of the supply side and the demand side of the equation that we're creating through India and Japan.

Thank you. And our last question here, probably our most common, but when do you expect to be operationally break-even? So the core platform is in place and I.

as we've alluded to in our prepared remarks, the activity we see is going to grow substantially across the rails that we've already built and we expect meaningful operating leverage without having to recreate the cost base of a traditional financial institution We're not providing a precise date today. However, based on the current execution plan and the client activations that are already underway, My expectation is that BACT will reach adjusted EBITDA break-even during the fourth quarter, at some point during the fourth quarter of 2026. That expectation depends principally on the timing and scale of these activations and the visibility we have on those, but I believe we are well positioned. to achieve that important milestone by then. All right.

Thank you, Akshay and Daniel and Karen and operator. Back to you for closing. Thank you.

Ladies and gentlemen, that concludes today's conference call. Thank you for your participation. You may now disconnect.

This live transcript is auto-generated without human intervention or review.

[Call has ended.]

Thank you for standing by and welcome to Bakkt's First Quarter 2026 Earnings Conference Call. [Operator Instructions] I would now like to hand the call over to Cody Fletcher with Investor Relations. Please go ahead.

Hello there and welcome to Bakkt's first quarter 2026 earnings call. Joining me on the call are Akshay Naheta, our Chief Executive Officer; and Karen Alexander, our Chief Financial Officer.

Today's discussion contains forward-looking statements within the meaning of the federal securities laws. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those reflected or implied. We refer you to the cautionary language in our earnings release, in this presentation, and in our SEC filings, including the risk factors set forth in our most recent Form 10-K and our Form 10-Q for the period ended March 31, 2026.

Today's discussion also includes references to non-GAAP measures, including EBITDA and adjusted EBITDA. Reconciliations and definitions for our operational metrics, Total Transacting Volume, Monthly Active Users, and Strategic Asset Value -- are included in the Appendix.

And with that, I will turn the call over to our CEO, Akshay Naheta. Akshay?

Thank you Cody and hello everyone, thank you for joining us.

Before I walk through the quarter, I want to frame the environment Bakkt is operating in because the most important point for investors right now is that we are in the early innings of a structural shift in the global payments architecture, and the ocean we are fishing in is far larger than any single competitor will capture.

The global payment flows today sit in 3 distinct tiers. At the base, between $200 and $300 trillion of annual cross-border and wholesale volume that moves across legacy rails. These rails are operational and systemically important and structurally slow, expensive, and constrained to banking hours.

Above that, an application and payments layer has emerged over the past 15 years -- with Stripe, Circle, Chime, Revolut, BVNK, and others intermediating roughly $6 trillion of annual volume. This layer modernized the user experience but sits on top of the same legacy rails. Bakkt Agent operates here -- and the APIs built on Bakkt's regulated foundation, EU presence for cross-border expansion, and on and off-ramp coverage to more than 60 countries allows for real-time, automated settlement. And at the leading edge, regulated market infrastructure clears approximately $2 trillion of annual volume in digital assets. Bakkt Markets sits in this space with our pan-U.S. money transmitter licenses, the New York BitLicense, institutional-grade compliance along with fiat-to-stablecoin conversions at scale.

These 3 tiers will continue to coexist and our view is that stablecoin infrastructure cannibalizes legacy rails over the next several years to become the connective tissue between all 3.

We do not have to be the biggest fish in this ocean. The space is large enough that a regulated infrastructure provider with disciplined capital allocation along with durable rails can build a material business without confronting any single incumbent head-on. That is the structural backdrop that investors should keep in mind.

A short tour of the field as it stands today. On peers and capital deployment over the past 15 months, 3 of the most significant institutions in global payments have committed cap by conducting strategic M&A transactions. Stripe acquired Bridge for $1.1 billion in February 2025. Mastercard announced its acquisition of BVNK for $1.8 billion in March 2026 and here this month is the latest data point in the same direction. These are capital commitments by institutions whose cost of capital and regulatory scrutiny makes speculative allocation structurally unlikely.

On regulatory architecture, 2 pieces of U.S. legislation defined the operating environment going forward, signed in July 2025, established a federal framework for payment stablecoins. The OCC and FDIC issued proposed implementing rules earlier this year. Final regulations are required by July 18, 2026, and the act becomes substantially effective by early 2027 with a defined 3-year transition window. The CLARITY Act -- the companion piece on the trading and intermediary side cleared the house in July 2025 and is now moving in the Senate with the yield compromise resolved on May 1 [Technical Difficulty] markup expected this month and the administration targeting passage by mid-summer.

Both statutes raised the regulatory bar materially. They make the licensing footprint compliance posture and settlement infrastructure that took years to the same infrastructure the laws now require. That is a tailwind for new incumbents who build ahead of the rules. On market macros, stablecoin settlement volume reached approximately $33 trillion in 2025, up 72% from $19 trillion in 2024. Cap stabilization is at an all-time high at approximately $320 billion at the quarter end, and the cross-border payments addressable market is projected to grow from $44 trillion today to approximately $67 trillion by 2030. Whatever share of this back converts into revenue over time, the absolute size is the key point to keep in mind. The field is taking shape. The rules are being written in our favor, and the work is purely focused on our ability to execute.

Before walking you through the operating segments, I want to share how I, as the CEO, view our progress against the internal milestones that we've set for ourselves. The categories on this slide are subjective and are the ones that I track personally. The ratings are my own assessment informed by the leadership team. They're qualitative, not financial, and they're definitely not guidance. The methodology is internal and the disclosures on the slide and in the appendix set out the basis on which they should be read. We've created 8 categories across 3 bands. The foundation band category scored at 75 or above, which is where the durable platform sits. Regulatory at 80, given our pan-U.S. MTLs, the New York BitLicense, FinCEN registration, EU VASP. The infrastructure layer at 80, which includes now the DTR payment rails and settlement engine, which is now wholly in-house and dual capabilities on the payments segment within the Bakkt infrastructure.

And finally, financial strength and technology, both at 75. We have a debt-free balance sheet with $82.6 million of liquidity at the end of the quarter and continued cost discipline and efficiencies. And now modular with the agent platform on track for a launch sometime in Q3. The in-progress band, which is in the range of 50-74 is where the work is moving but not finished. The global network at 70 with our presence in 60-plus jurisdictions, gated on partner activation and regulatory closure so that we can further expand the global network and the target is to reach over 90 jurisdictions by year-end.

The team and talent at 60. A+ bench under Daniel and Ankit. AI leverage operationalizing across functions, DTR integration in flight. And on the operational efficiency front, we are at 50, which is despite meaningful cost resets over the last year, there is more that can be done on this -- in this area and with further assistance from technology enablement over the balance of the year. The active focus band, which is the categories below 40, is where the priority sits, which is the partners and distribution. At 30 is the lowest score on the page, intentionally so. The sales organization has had to be rebuilt, and we made progress on that front, where through the close of DTR over the next 4 quarters, we are about to convert the bottom of the funnel substantially into real recognizable revenues.

We are also building out our sales team, and I will delve into further details on that front as we go along this presentation. One direct point, the categories scored highest are the ones under direct management control. The categories that scored the lowest depend on partner activations, regulatory approvals and sales cycle conversions on calendars we do not entirely control on our own. None of those will change overnight. They will change quarter-by-quarter, and this scorecard is a framework that I will use to update you as we go along for the rest of this year.

Now let's go into the 3 engines that drive Bakkt. The business is organized around 3 growth engines and the framework -- and that framework is how we will update investors. First, Bakkt Markets, which is our institutional-grade infrastructure for digital assets, which allows our partners to market in a quick and efficient manner. Second is Bakkt Agent, which is our programmable money and AI-powered finance layer, which allows frictionless, intelligible interfaces to provide full stack banking services to their respective consumers or network. And finally, Bakkt Global, which is our international expansion and value creation, which is run on a disciplined capital-light model.

Turning to our first engine, Bakkt Markets. Markets is a B2B business. Institutional sales cycles and regulated infrastructure are measured in quarters, not weeks. Counterparty onboarding, compliance review, integration testing and treasury approvals are the sequence regardless of how compelling the underlying product is. The work has been to establish that sequence with a credible roster of clients and convert it to live volume. The current Bakkt Markets roster comprises institutional-grade counterparties operating the regulated assets across the U.S., Europe and Asia. Clients we expect to come on board as they grow their own businesses at scale. Volumes come from 2 sources, both fee and spread businesses that scale with notional throughput. The first is trading flow, crypto services activity routed through partner platforms and settled across our rails. The second is payments flow, which in 3 stablecoin flows now powered by the DTR rails, which are wholly in-house.

On the product market side, the technology upgrade scheduled for the second half of 2026 expands the market surface materially. More than 200 available assets at rollout, social and copy trading, a new advanced trading engine and an improved client interface. And on the commercial side, we'd like to introduce Daniel Ishag, who joins us as the Chief Commercial Officer. Daniel built and led Gyzer he ran there, which was centered around institutional B2B sales discipline, partner integration sequencing and relationship-driven pipeline conversion is exactly the playbook that markets needs at this stage. He's leading the rebuild and will be converting our pipeline into actionable revenues.

I want to give an example about one of the partner activations that we've onboarded over the last few weeks, which is Zoth. In May, we signed a strategic memorandum of understanding with Zoth, a privacy-first stablecoin solutions provider built for the agentic economy across South Asia and the Middle East and North Africa. There were 3 components: partners, Zoth currently processes approximately $300 million in annualized total payments volume. The partnership target is approximately $1 billion in annualized TPV by the year-end 2026, according to Zoth's projections as enterprise corridors get activated over time. Second, the regulated layers. Zoth operates as authorized agent within Bakkt Financial Solutions, our pan-U.S. money trasmitter subsidiary. The structure puts Bakkt's MTL footprint and FinCEN MSV registration around Zoth's Enterprise clients. That regulatory wrapper is the asset Zoth's clients are buying when they choose Bakkt. Third, the corridors live or activating. U.S.A. to South Asia, the largest U.S. outbound remittance corridor, U.S.A. to Philippines and Nigeria, U.S.A. to the Middle East, covering the GCC expat workforce and UAE to South Asia, the largest Middle East corridor; and Sub-Saharan Africa across Uganda, Kenya, Ghana and South Africa. The strategic point is direct. Cross-border stablecoin payments in emerging markets remittance by regulatory configuration. Bakkt's licensing stack is the unlock that takes commercial pipelines from pilot to production, along with Zoth's regulatory coverage in these jurisdictions. A definitive commercial agreements are expected to follow in due course.

Turning to the second engine, Bakkt Agent. Agent is the unit economics on each transaction are small. The cost base required to operate it is fixed and modest and the arithmetic is straightforward. At scale, modest take rates against fixed costs convert to meaningful net income. The execution priority is throughput and the throughput will come from product activation increasing surface area of partners. With DTR now in-house, the payments capabilities that drive that throughput across B2B, P2P and end user surfaces sit inside Bakkt and ramp on Bakkt's road map.

Agent is built on 4 pillars: the technology programmability and efficiency and distribution. On the technology front, we have a modular tech stack, which is engineered to scale without the architectural debt of incumbent. For programmability, our products are built for programmable finance rather than retrofitted into it. Stablecoin issuance, redemption and on and off-prem logic are native to our stack. And finally, on efficiency and distribution with our low cost to serve from linear headcount growth. Our flat operating costs against growing volume converts to operating leverage, which our partner networks whose aggregate reach extends to hundreds of millions of users, subject to definitive partner agreements and product launches. Each pillar is a deliberate capital allocation decision and we expect Agent to compound the value as it creates for Bakkt over time. The Agent commercial model has 3 layers. The engine is Bakkt's regulatory rails, licenses, custody and settlement. Our 60-plus destination off-ramps and interact in more than 15 currencies across the different blockchain integrations as well as same-day settlement, all owned by Bakkt. The catalyst is the partners, concentrated markets where embedded distribution is available at scale, carrying trust and reach we could not replicate organically. And the value add is the utility, which is the daily use surfaces that drive volume back through Bakkt.

Telecom illustrates the model. Telecom markets are concentrated. 2 or 3 operators serve the majority of customers in most geographies. Initial launch focus is the U.S. and Europe and the embedded SIM connectivity, distribution and utility in one motion. The eSIM API extension lets us extend the same capability to additional partners in parallel. Beyond telecom, we are in active conversations across additional verticals where the same model applies. We will share more as those are already activated and announced.

And finally, Bakkt Global, which is our third engine. These are markets where Bakkt is making strategic investments where we see the long-term potential, the demographic and digital adoption tailwinds are durable, and we see a clear regulatory framework, which is forming. The 2 positions reported both as of March 31, 2026. One is Bitcoin Japan Corporation, which is listed on the Tokyo Stock Exchange. It has a blended carrying value that has moved from approximately $11.5 million when we made our investment to $31.7 million at the end of the quarter. Bitcoin Japan Corporation is building its AI and Bitcoin economy and will detail its forward strategy at its upcoming AGM. On India, our position is structured through a warrant subscription in a company called Transchem Limited, which is listed on the Bombay Stock Exchange. We are still awaiting regulatory approvals on our investment into the Indian company. And once that has been approved by the regulators, we will update further on the strategy for the company going forward.

From an illustrative perspective, the mark-to-market value at the quarter end was approximately $44.3 million, and the forward plan for the India position includes a broker-dealer rollout and a program of global and tokenized investments subject to regulatory time line. The 3 core KPIs going forward that I believe investors should track are as follows: for Bakkt Markets, the KPI is total transacting volume, the aggregate notional flow across the markets and agents platform. In 2026, our TTV was approximately $241 million, and our year-end estimate is approximately $2.5 billion as partner integrations activate and scale. With DTR now in-house, institutional payments volume from counterparties already integrated with the DTR stack will begin by the conference of the year. For Bakkt agent, the KPI is monthly active users, the direct measure of platform adoption and the lead indicator for transaction frequency. Reporting begins once we've launched the product. And we will further update on guidance for the monthly active user we are ready to announce the partnerships and launch the platform.

And lastly, on Bakkt Global, the KPIs strategic asset value, the aggregate value generated by the investment strategy incorporating mark-to-market valuations on listed holdings, cash proceeds realized and any unrealized gains. At the end of Q1, that value sat at approximately $76 million against approximately $21 million of capital commitments across both the Japanese and Indian investments. Strategic asset value in accordance with GAAP and does not represent realized returns and is subject to market and foreign exchange risks. Methodology and reporting time line for all 3 KPIs are set out in the appendix. With that, I will hand the call to Karen to walk over the financials.

Thank you, Akshay. The Q1 2025 comparable period in our filings reflects Bakkt as a different company. The loyalty business divested in October 2025 and reported as a discontinued operation since the third quarter of last year was a meaningful component of the historical cost base and a meaningful detractor from operating profitability. Stripped out, what we are left with is a clean focused operating platform, the platform we will execute the 3-engine strategy from. The numbers on this slide should be read in that light.

The cost base picture is the more useful framing, and it is the picture on the slide in front of you. Q1 2025 as reported, reflects the Bakkt of 15 months ago, with loyalty inside the consolidated cost base. Total controllable OpEx on a reported basis was $31.1 million. The loyalty divestiture removed approximately $12.2 million of quarterly controllable operating expense from the run rate. On a continuing operations basis, Q1 2025 controllable OpEx was $18.9 million. Q1 2026 controllable OpEx was $18.6 million, materially in line with the continuing operations comparative despite approximately $2.5 million of incremental professional services expense tied to the DTR acquisition and that global investment activity.

The line items show the same picture. Compensation and benefits, technology and communication, SG&A and other operating expenses all decreased year-over-year, reflective of our cost restructuring efforts through 2025. On the capital position, as of March 31, 2026, cash, cash equivalents and restricted cash totaled $82.6 million, principally reflecting $66.8 million of net cash provided by financing activities. The company has no long-term debt and no noncontrolling interest. Two takeaways. One, the cost base is a fraction of what it was. And on a like-for-like basis, the company is operating on the cost base it intends to scale from with further improvements to come. Two, the balance sheet is clean and debt-free and capital is sized to execute the 3-engine strategy that Akshay outlined. With that, I'll return the call to Akshay for closing remarks.

Thank you, Karen. Let me close where I started. The fintech sector is large and is akin to an ocean. The sums of money moving across global payments, the rate at which stablecoin infrastructure is being adopted by the largest institutions in the world and the regulatory architecture that the GENIUS Act and the CLARITY Act are now layering over that adoption, those forces taken together describe a structural shift, the size of which leaves room for every one to play.

We do not intend to be the largest company. In fact, this will not be a winner-takes-all sector. And any company with the right combination of technology, regulatory standing and talent can build a material business while allowing others enough room to build their own. Bakkt, I believe, has a material advantage on 2 of those 3 dimensions today, and we are building hard on the third. Our technology stack is modular, programmable and now with DTR in-house unified across markets and agents. We believe that stack will be a key enabling a larger share of regulated stablecoin volume as the market shifts onto the rails, GENIUS and CLARITY now defined.

On regulatory infrastructure, our footprint across the U.S. and Europe gives us a license to operate efficient more than 60 jurisdictions. And finally, on team and talent, we are now one team under one roof. The DTR team has joined back. And with Daniel Ishag coming on as the Chief Commercial Officer leading the rebuild of the sales organization, along with Ankit and Remi, product and engineering teams, we are operating as one unified platform. We are attracting and hiring A+ talent to the company and the intellectual capital of this company has materially increased and the bench is the right bench for the stage we are in. The work in front of us is what we've discussed here today, volume and quality customers. With Daniel leading the commercial organization, we hope to be converting leads closing the bottom of the funnel and signing definitive agreements of the pipeline built over the past year. The product is now ready. The license stack is in place, the infrastructure is in place, and the capital is in place. And while sales cycles and B2B regulated infrastructure are measured in quarters, we hope to be delivering on an accelerated time line going forward. The platform is built and the next phase is at the beginning of our acceleration phase. Excited about the opportunities ahead, and we will keep you abreast of the momentum as it builds. Thank you for your time. Operator, we are ready to take questions.

[Operator Instructions] Our first question comes from the line of Mark Palmer of Benchmark.

With regard to the closing of the DTR deal, what integration remains or needs to be done at this point? Of course, as you just mentioned, the personnel are all migrating. But what actual integration work with regard to stablecoin infrastructure, in particular, still needs to be done?

Thank you, Mark. So with regards to the integrations, there was a delay in the vote, which delayed the transaction for about 4 to 5 weeks, be that as it may. The integration work is primarily on the compliance stack and the finance and treasury stack, whereas most of the client-facing integrations, which are the APIs and we're converting the APIs into SDKs that are compliant with the U.S. We need to adhere to with regards to U.S. MTLs. Those are the integrations that are left because as you can appreciate that until the acquisition hasn't closed, just given the GDPR and equivalent data protection requirements as well as from a cybersecurity perspective, we couldn't give access to the systems and different technology stacks that were within the DTR stack to be migrated to Bakkt. And so now that the Chinese wall is basically broken down, we now are able to fully migrate both the Bakkt and the DTR platforms onto one regulated compliance stack as well as ensure that all of the data -- transaction volume data is also over the next few weeks, will be able to flow seamlessly within the Bakkt systems for -- from an accounting perspective and so on.

And with regard to regulatory approvals, obviously, you've already got a strong regulatory footprint in the U.S. and Europe. But looking at the rest of the world, what regulatory approvals are you currently pursuing? And what is the status of those?

We are not pursuing any other regulatory approval relates the payments processing business because we work with other regulated partners because remember, all our focus is on the remittance corridor, which is we're focused on originating cross-border volume from Europe and the U.S. and focused on remitting that into work with only other regulated players, banks, payment service providers and so on in those respective jurisdictions. So in terms of regulatory, we don't need any further regulatory approvals to operate in that space. But in terms of every new jurisdiction that we go into, there are very specific requirements that are needed to be -- and records that need to be maintained locally with the regulated partner there as to who's sending the money and the source of funds and so on. And that mechanism is built on a jurisdiction-by-jurisdiction basis. So far, as I alluded to, we are able to process transactions into 60 jurisdictions around the world, 60 countries around the world. And we hope that by the end of the year, we get to more than 90 countries around the world. So we are fully compliant in terms of being able to transmit the required data for processing payments within those 60 countries.

As I show no further questions in queue, that does conclude the Q&A portion of our call and the conference for today. Thank you for participating. You may now disconnect.

Good morning. Thanks, everybody, for coming today to Bakkt's first Investor Day, both here in person and virtually at homes or in your offices. We really do appreciate you joining.

Before we begin, I would like to direct your attention to the forward-looking statements, some disclaimer to these materials. Our presentation will include statements regarding future events, business strategy and market opportunity. These statements are subject to risks and uncertainties that could cause actual results to differ materially from those projected. We encourage you to review the risk factors in our most recent filings with the SEC. And without further ado, I am pleased to introduce Bakkt's Chief Executive Officer, Akshay Naheta.

Welcome, everyone. This is our first Investor Day, and I want to give you a little bit of not a progress report, but really a view into what we've worked on over the last year, what we've systemically rebuilt and where we're taking the company from here.

We are entering the next phase of Bakkt's growth with massive momentum behind us, both from a regulatory perspective as well as the economic and financial tailwinds that lie within this sector of payments and financial services. And it's a very precise engineered strategy that we've put together that we really look forward to disclosing as we go along throughout the year.

We've rebuilt our governance, capital structure and technology, and we have a great line of sight. Our pipeline is primed. The regulatory path is clear, and we are rewriting the definition of category-defining deals. Today is our opportunity to show you exactly what we've built, the immense velocity at which we're moving and why Bakkt is positioned to lead in this category.

Quick overview of the agenda for today. We'll cover 5 areas, a quick overview of our strategy and the key drivers behind it, the market opportunity and how Bakkt is positioned to capitalize on it. And finally, a product deep dive across our 3 engines and a quick review of the year 2025, which was operationally and financially a bit volatile, but we've gone through the restructuring that we had to do. And then finally, Q&A followed by my closing remarks.

The mission is simple: build a secure infrastructure and products that make money work in real life globally. It's the precise description of the problem we are solving. Money is too slow, too expensive and too opaque for most people and most transactions worldwide. Bakkt is building the infrastructure layer that changes that for institutions, customers and for companies.

Our vision. To build the next-gen financial ecosystem, one that sits between the intersection of programmable money, regulated infrastructure and AI-driven agentic finance. The analogy I use is that what AWS did for software, it led companies build without owning servers. Bakkt does that for finance. We provide the license, regulated, scalable rails so that partners don't have to build them. We've done all the work for them.

The world is moving towards programmable money. Stablecoins now settle more than $30 trillion annually, and Bitcoin is becoming a treasury asset for a lot of corporates and sovereigns around the world. And then in the middle of all of this, you have the tokenization opportunity of real-world assets, which is moving from pilot to production in real time.

Bakkt is positioned exactly where all this is breaking out, and we are well on our way to take advantage of these opportunities. So we've organized Bakkt around 3 engines. These are engines because each one generates its own revenues while powering the others. Bakkt Markets is our institutional-grade infrastructure for digital assets. It gets institutions to markets faster and more safely.

Bakkt Agent is our programmable money and AI-powered Agentic finance infrastructure. It is frictionless, intelligent and fully auditable. And finally, Bakkt Global, which is our international expansion and strategic value creation engine. We are applying our intellectual capital, technology and products to the world's highest growth markets through disciplined capital-light investment model.

Critically, these 3 engines are complementary. Markets provides the regulated rails. Agents use those rails to move money globally that benefits both consumers and businesses. And finally, Global leverages all of our understanding in these different areas to take it into new jurisdictions to generate tremendous value for shareholders and early results are already showing that for Bakkt shareholders.

The quick accelerants. So we have laid the groundwork over 2025, and we have immense momentum on all kinds of partnerships that are currently underway. I've showcased a few of these partnerships here, but we are deep in discussions with several partners across the ecosystem, and we've got immense momentum on that front. For agent, we've signed up Tier 1 telco partnerships across U.S. and Europe, which will embed connectivity into our fintech product.

The distribution partnerships involve category-defining deals, which will improve our immediate reach and will tap into a network of our partners, lowering customer acquisition costs. And we really look forward to announcing significant partnerships along this line over the very near term. With Better and Zoth, we embed our APIs into their product flows, generating volume from day 1.

And then for the Market segment with Nexo, AscendEX and Oobit, we help expand their liquidity and our global client base. These are all commercial agreements with real volume and real economics, and I'm extremely confident in each of these partnerships and what they're going to deliver for Bakkt shareholders.

There are 3 core KPIs for shareholders to follow going forward. For Bakkt Markets, it's going to be total transacting volume between what we have, which is a legacy brokerage in-a-box business for -- that Bakkt shareholders are aware of. With DTR coming into the fold, we've significantly added to our stablecoin on-ramp, off-ramp capabilities. So I expect the total transaction volume within Bakkt Markets to expand substantially, and Nick will talk about it during his presentation.

For Bakkt Agent, the metric is monthly active users. It's a volume business. Users transacting is what drives the revenue and MAUs is the right measure for platform adoption and distribution reach. And finally, for Bakkt Global, we look at strategic asset value, the investment and equity value of our global strategy generates. In Japan, we've already made 3x our money. In India, we've made 5x the money. The methodology is internally defined and incorporates mark-to-market valuations, cash proceeds and any unrealized gains.

These are independently governed businesses in different high-growth markets, and they will also generate revenues for Bakkt, which will then contribute directly to Bakkt's financial statements. These 3 KPIs will be reported as each product and platform becomes operational. The timing is tied to launch milestones and not a fixed calendar date at this time and full disclosure on definitions, methodology and reporting time lines is in the appendix.

So let me quickly briefly touch upon the Bakkt and DTR transaction. This is foundational to everything you're going to hear today. It is, in our view, a category-defining transaction for digital finance infrastructure. DTR brings us 2 things, products and people. On the product side, we have a composable API platform that Bakkt Agent, which is the cross-border payments capability and expands Bakkt markets into stablecoin payment settlements. These aren't roadmap items. They're all live and ready to be deployed. DTR also brings complementary regulatory framework in Europe.

They hold the VASP license, which then sits alongside Bakkt's existing pan-U.S. MTL coverage and the New York BitLicense. So together, we have the regulated footprint to grow the business across both sides of the Atlantic.

On the people front, the DTR team is primarily 90% engineering, and it includes our CTO, Remi, who you will hear from later today, which then brings in world-class engineering talent and a proven track record of building scalable global fintech businesses. The acquisition is subject to customary closing conditions and shareholder approval.

So DTR really unlocks cross-border volume for Bakkt on stablecoin payments. This is where really stablecoin technology is -- comes to the fore. The TAM here is enormous. Cross-border payment flows are $44 trillion today and growing quite rapidly to about $67 trillion by 2023, according to -- 2033 according to FXC Intelligence. DTR gives Bakkt 3 specific revenue hooks into that volume: stablecoin on-ramp, off-ramp fees on every fiat to crypto conversion, embedded financial services revenue on every flow and a scalable compliance stack that accelerates partner onboarding and therefore, volume.

Note the TAM figures represent the full global market, and our serviceable and obtainable market will be disclosed as we formalize specific corridor strategies. Coming to the regulated front -- coming to the regulatory front, we've got immense tailwinds from clarity within the U.S. regulatory environment. The GENIUS Act on stablecoins was signed last summer and the CLARITY Act on Digital Asset Markets is currently moving through Congress as we speak.

While the rest of the industry plays catch up with these newly passed laws, Bakkt's infrastructure is already built for it with our licenses and regulatory stack. We built this infrastructure before it was required, and that gives us a durable competitive advantage. The 4-part cycle on this slide is not aspirational. It describes our current positioning, regulatory alignment along with infrastructure readiness then helps accelerated adoption, thereby enabling scalable growth. We are in that loop today.

And at this time, I would like to introduce Nick Baes to give you a walk-through on Bakkt Markets.

Thank you, Akshay. I'm Nick Baes, COO at Bakkt. I'm going to walk you through Bakkt Markets, our institutional digital asset trading business and how we're expanding it through our partner ecosystem and the DTR transaction.

The DTR transaction doesn't just build out Bakkt agent, it materially expands Bakkt markets. Three specific capability additions: Over-the-counter trading infrastructure that enables higher margin execution and larger institutional transactions, stablecoin on and off-ramps that add payment and settlement fees alongside cross-border transaction volume and a scalable compliance stack that accelerates client onboarding and drives revenue growth.

Pre-DTR, Bakkt Markets was a spot trading and custody business. Post DTR, it's a full spectrum institutional digital finance platform, spot, OTC, stablecoin settlement and cross-border payments. The revenue model expands accordingly: Execution spreads on OTC, settlement fees on stablecoin flows and onboarding-driven volume from the compliance stack.

Now let's talk through the institutional digital asset trading layer. The Bakkt Markets platform has 3 core components that work together as a single institutional execution layer, best bid offer engine. We aggregate real-time pricing across multiple venues to provide clients the tightest spreads on every trade. That is institutional grade price discovery. Order management and risk.

Every order is prevalidated for minimum size, holding sufficiency and marketability before execution. Nonmarketable orders are held rather than rejected. Exceptions surface in real time. Flexible funding rails. We offer 3 fiat funding models. You can use Bakkt banking relationships and infrastructure. You can bring your own banking infrastructure or you can integrate with our partner, Apex Fintech Solutions to offer a consolidated funding model across TradFi and digital assets. This allows each client to use the funding and brokerage infrastructure that fits their platform. All of this is done on credentialed infrastructure of the SOC 1 and SOC 2 certified.

Let's now talk about differentiation in the market. We offer 4 competitive advantages that are difficult to replicate. Flexibility. We don't force partners into a single structure. They choose the fund rails, the business model and the integration depth that works for them. Tech stack. Institutional-grade execution engine with real-time risk controls built on modular APIs, the same architectural principle as the Agent platform, composable, scalable and auditable.

Offerings. From spot trade to fiat on and off-ramps to cross-border stablecoin payments via DTR. That breadth of product across one regulatory relationship is unique in the market.

Compliance and governance. We offer MTL coverage across all 50 states plus a New York BitLicense. When a partner becomes -- when a partner works with Bakkt, they go live without navigating their own licensing. Our regulatory infrastructure becomes theirs. For fintech companies, payment providers, exchanges and brokers who want U.S. market access, that is an enormous time-to-market advantage.

Now let's talk a little bit more about our partnerships and integration. 4 strategic partners, each expanding a different dimension of the Bakkt Markets platform.

Nexo. We enable U.S. regulated trading infrastructure and expands our digital -- excuse me, expands our institutional partner network and drives transaction-based revenue growth. Nexo is a Tier 1 digital asset lender with global institutional relationships. Their network is our network.

AscendEX. Expands our global customer base and demonstrates platform demand and scalability. Recurring revenue through activity. AscendEX proves the B2B2C model works at international scale.

Oobit. A consumer app that lets users spend digital assets via an Oobit-issued debit card. It powers the buy-sell deposit and withdraw flows. Our stablecoin and onboard APIs enable bank transfer on and off-ramp across 30-plus EU and Asia countries. Lastly but not least, DTR, adds cross-border payments and stablecoin settlements, expands the product suite well beyond trading and supports ongoing platform upgrades.

DTR is the infrastructure layer that allows Bakkt to evolve from a trading platform into a complete digital finance infrastructure. Pull the 3 things together, regulatory infrastructure, onboarding new customers and growing current offerings. Let's talk regulatory infrastructure. Again, partners don't need to run their own licensing processes. They use ours as a plug-and-play solution. This is how we gain access to the U.S. customer base quickly.

Onboarding new customers. Third-party custodians and liquidity providers expand our offering set. Durable banking relationships provide the fiat rails. These are the relationships that let us say yes to institutional clients on day 1.

Growing our current offering. Stablecoin settlement and on and off-ramps are the new revenue layer, enabled by DTR. That turns Bakkt Markets from a trading business into a payments infrastructure business, cross-selling trading, custody and payments from a single institutional relationship. The bottom line for Bakkt Markets. This is a high-margin, recurring revenue business that gets better as volume grows as each partner adds liquidity into the ecosystem.

Now I'd like to hand it over to Remi and Ankit to review Bakkt Agent.

Thanks, Nick. I'm ready. Together with Ankit, we'll talk through Bakkt Agent, our AI programmable finance platform. Bakkt Agent is really built on 4 pillars: our technology pillar, which is a modular tech stack built for scale. Our efficiency layer lowers our cost to serve while volume grows with our headcount. Programmability. Bakkt Agent is built for the world of programmable finance, automated, logic-based money movements. And finally, distributions, we plug directly into existing networks of hundreds of millions of users.

I'll start with tech. This is the tech stack that makes it all work underneath, both our APIs and direct-to-consumer products. The tech stack is split into 4 main areas. We have our consumer apps at the top. We have our APIs underneath that we serve to our partners. We have our micro services layer, which is a logic engine, all tied together with a messaging bus, allowing them to work asynchronously and independently from each other.

Finally, at the bottom, we have a data lake that ties it all up together. All the data that is generated internally, externally, all falls into one place, laying the groundwork for our AI workforce to work with us.

Our second pillar is efficiency. Legacy financial infrastructures -- legacy financial institutions, sorry, scale headcount as they scale revenue. Our core operating model is built for automation. We have 3 agents that currently work at Bakkt. Clara, which is our knowledge agent. You can ask anything up to Clara about our customers, about our business model, about our transactions that go through the platform.

She speeds up time to answer by 98%, allowing the team to focus on growth rather than getting context. We have Lucy who watches every transaction that goes through the platform, helps our detection time by 83%. This helps us maintain our 99.9% platform availability. And finally, we have Rafi, which today produces 94% -- or sorry, 74% of merged codes, making sure that we speed up our delivery by over 50% without adding headcount to our engineering team.

These are not aspirational metrics. These are operational numbers today, and they are a direct reflection of the groundwork that we've laid to make the right architecture decisions from the start. For our consumers, this just means faster, simpler and more modular and reliable money movements.

Next, I'll talk about programmability and what does this mean for us and why does it matter now. Bakkt is building products for a world where money is programmable. We have our 3 composable APIs that can be used together or separate from each other. The first one is the Zaira API, a chat-native cross-border payment supports voice, text and image inputs. It's a single API endpoint that our partners can integrate with and gives them access to our full regulated financial infrastructure.

We have our Accounts API, allowing us to issue debit, credit, savings accounts, all virtual and named in U.S. dollars, euro and GBP sterling. It has access to instant payment rails in all those 3 native currencies and embeds eSIM issuance. Finally, our Stablecoin API allows payout into 57-plus countries across 15 different currencies, 10 public blockchains with same-day settlement 24/7.

Like I said earlier, these 3 APIs can be used independently or composed together. Akshay mentioned Zoth. Zoth uses our Stablecoin API and our accounts API together. Better. Better's integration is with our accounts API.

Talking about the 2 of them. Better embeds the Accounts API within their mortgage journey, allowing the mortgage applicant to deposit funds with Better from day 1, helping them waive some of the mortgage application fees. Zoth uses our stablecoin financial infrastructure to enable users to more easily pay in and pay out of the Zoth app.

I'll dive a bit into Zaira. Zaira is the most technically sophisticated part of our stack. At the center, we have a primary agent. It's a large language model that is based on Google Gemini and then fine-tuned in-house that helps orchestrate user intent between 15 different subagents. Those 15 subagents include KYC, settlement, FX, compliance, treasury, each specialize in their own domain, each operates autonomously within their scope.

At the bottom, we have a self-testing layer. This is really what makes Zaira an intelligent swarm of agents. It helps analyze output and input of user intent and then what the swarm comes out with and learns over time, improving itself. Zaira is not just a chatbot. It's production grade, self-evaluating and designed for institutional quality, reliability in global payments.

Now to talk about our direct-to-consumer offering, I'll hand it over to Ankit.

Hello, everyone. I'm Ankit Khemka. I'm the Chief Product Officer at Bakkt. So let's talk about our direct-to-consumer products. Firstly, is the Zaira app, the chat-native remittance app, which is voice, text and image input. It covers global money movement from the U.S. to 57 countries. It includes a built-in KYC/AML and FX and local settlements. No separate app or separate onboarding is needed. When you're using Zaira app, it's all inbuilt.

Second is our Everyday Money app. It's a full-service mobile banking app for daily use that is currently being built. It offers debit and savings -- debit cards, savings accounts, credit cards, peer-to-peer payments, simplified onboarding and a retention-focused UX. It's a digital banking product that thinks that users come back to every day.

Finally, our AI-powered loan underwriting product, which is AI-assisted underwriting and decisioning for consumer credit. Faster approvals with consistent policy controls dramatically lowers cost to serve through automation versus traditional credit underwriting.

So let me deep dive on the Everyday Money app. The product covers the full life cycle of a user's financial life. You can get, spend, save, send, control your finances. Customers will have access to products such as checking account, debit cards, credit card with a rewards program, a savings product, cross-border transfers and more importantly, data-driven insights across their financial life.

Let me focus on the last pillar, which is the distribution. The single biggest cost in consumer fintech is customer acquisition. Traditional partners spend hundreds of dollars to acquire a customer. We've solved that problem structurally by partnering with organizations that have already earned massive consumer trust.

Instead of spending millions of dollars in paid marketing, which I've done before, we plug into existing networks where we can leverage own reach. Organic reach and brand trust, they drive customer acquisition. And then on top of that, there's network effects that helps with virality. So we are extremely confident about our pipeline and are in advanced conversations with a few partners, especially for the consumer fintech platform.

At Bakkt, we believe connectivity and everyday finance is intertwined. Someone with a bank account and an Internet connection can go about their daily business fairly easily. Telecom markets now are naturally concentrated. Typically, 2 or 3 partners serve the majority of the country's population.

So we partner with the leading operator in each geography we want to operate in, and that gives us immediate reach through their existing distribution. With that partnership, we've embedded eSIM technology directly into our consumer fintech product. This creates a deeper relationship with our customers, higher retention due to higher switching costs. More importantly, for the consumer fintech app, owning the primary banking relationship across the customers is the holy grail. Partnerships like this are the foundation of driving the primary banking relationship.

Our launch focus is in the U.S. and Europe, and we have massive momentum from these telecom partners. In parallel, we are also extending our eSIM capabilities to partners via APIs. So with our distribution strategy, Bakkt is accelerating its time to scale and revenue growth. The engine, which is Bakkt, we provide the regulated rails. Partners don't need to build compliance or licensing infrastructure. We provide all that.

The catalyst is our own reach that drives organic acquisition at scale through our distribution partnerships. This means we can do customer acquisition that is structurally below any other competitor, which is relying on paid channels and more importantly, the value add, the telco integration provides a deeper integration with our customers, which improves retention and lifetime value. So this combination is a flywheel. We get low CAC, high retention and an expanding user base. I'll hand it over now to Akshay.

So I want to now touch on our third growth engine, which is Bakkt Global. At its core, it's really a capital disciplined model of expanding our intellectual capital, technology and services into the world's highest growth opportunities and markets. To be clear, this is not an experiment. This is well thought out, methodical capital allocation, and it is already delivering great results for Bakkt shareholders.

Furthermore, we are extremely confident in the trajectory ahead for this business. Effectively, what we're doing is we're building independently governed businesses in some of the world's highest growth fintech opportunities. We deploy capital. We take an ownership stake and then help guide the strategic direction, products and services into independently governed businesses.

The independent governance is deliberate. It's a design choice because we don't want these to be characterized as subsidiaries. They have their own boards, their management teams and they devise their own business plans, which are guided by us. It creates accountability and credibility with all stakeholders, the shareholders, the local regulators and then the customers of these businesses.

In return, Bakkt shareholders derive compounding strategic shareholder value and the requisite growth at those businesses at scale. We invest the money, not the infrastructure. Our products, if required, travel with us and can be leveraged by these businesses as and where it's applicable. So it's a scalable and repeatable business model.

The flywheel here is driven by the unique business strategy, which then feeds into the unique product strategy and it's supported by an independent governance and management team. And Bakkt sits right at the center of it all, deploying the capital and receiving recurring value back. What makes this really scalable is the product set is already built. The playbook for standing these up as independently governed entities is proven. And we apply it market by market, geography by geography.

These are publicly traded companies in some of the world's most attractive and liquid stock markets. We've done it twice so far, Japan, which we consummated over the summer last year and our announcement in India sometime in late November last year. This is kind of the roadmap that has set both our internal expectations and how we expect these to play out going forward.

I'm happy to report that both of these opportunities are tracking well ahead of our internal benchmarks when we set out to make these investments. I'm also looking forward to the public disclosures from these businesses in the near term, which will then shine further light on how limitless the potential scale of each underlying opportunity is.

Quick update on the Japan business. It's called Bitcoin Japan Corporation. It's listed on the Tokyo Stock Exchange under the ticker 8105. We invested about $11.5 million in August of last year. And as of mid-March, we generated almost $37 million of returns. That's pretty good outcome, but I think this is going to dwarf what is really to come off this going forward.

Phillip Lord, who's the CEO of the company, is in the crowd here today. And I am extremely confident in the leadership and the business plan that him and his team are putting together. I serve as the Chairman of the Board, and so I have good insight into what Phillip is doing and making sure our shareholder money is being deployed in the right manner.

Bitcoin Japan's broader strategy, as outlined on their website, is powering the AI and Bitcoin economy in Japan. And at their upcoming AGM, I think Phillip will be able to shed further light on exactly where he's going with this. Japan, mind you, is the second largest market capitalization globally after the U.S. And I really look forward to disclosing some of the great work that the team has undertaken in the business.

Coming to India. We committed $10 million late last year. As of March, it's a 5x plus return on the deployed -- on yet to be deployed capital. We are pending regulatory approval, which I expect in the very, very near term, hopefully, before the end of the quarter. The strategy that's been discussed thus far in India includes a broker-dealer M&A rollout, which then leverages Bakkt's tokenization capabilities to offer real-world assets in a tokenized format to the existing broker-dealer customers.

We are extremely excited about the opportunity in India given the size of the market. It's the second largest derivatives market in the world. And it is also one of the most exciting consumer fintech opportunities that exist anywhere on the planet, given the size and scale of the population. We believe this investment will ultimately represent incredible value for Bakkt shareholders, which, in my personal opinion, will be multiples of what you're seeing over here in the very near term.

So with that, what's in store for 2026 on the global side. While we continue to evaluate additional market opportunities where we can expand, I think our criteria are very, very high to go into any new jurisdiction. We want to have a clear, high-growth strategic fintech opportunity. We need the right regulatory and legal environment that we can navigate. And then finally, we also need to bring in the right management team and have the right local partner to be able to execute on that business plan.

So we are going to be very selective in how we grow this, but the current line of sight that we have with the existing investments that we made is incredible, and we really look forward to sharing more updates with you as these companies make their plans public.

So it's good to take a few minutes to go back to what happened over 2025. I took over as CEO about 4 days from now to the day a year ago. And it really matters to understand where we're going forward. We've really laid the groundwork to set back up as a platform for exponential growth, especially with all of the advanced discussions and partnership opportunities that we have lined up, and I expect to announce here in the very near term.

So when I joined as CEO following the cooperation agreement with DTR in March, we -- it was clear to me that we had to request patience from our existing shareholders because we needed to transform the business from the ground up, bring in the right people, upgrade the technology and put in the right governance framework to really set Bakkt up for success in the future.

On the leadership side, we brought in Ankit Khemka as the Chief Product Officer. He was the Head of Growth at Revolut and primarily focuses on Bakkt Agent. Phillip Lord, who joined us as President of Bakkt International, is here in the crowd as well. Unfortunately, when he saw the opportunity in Japan and realized how large and scalable it is, he requested that he become sole CEO of the Japan business and is now running that business for us.

So thank you, Phillip, for all that you did in the few months that you were at Bakkt. And finally, we are joined with the existing management team at Bakkt that was there before I joined. Karen Alexander as the CFO; Marc D'Annunzio as a General Counsel; and Nick Baes as the COO, who primarily oversees Bakkt Markets.

We believe that we have now positioned the company and really the team, engineering team, in particular, with the right domain expertise, execution track record and an alignment with where Bakkt is really going forward. And finally, we revamped the Board significantly. We added Lynn Alden, Mike Alfred and Richard Galvin to the Board. All 3 of them join us as independent directors, and we have Lynn and Mike in the crowd today here with us. They all did their independent diligence, challenged our assumptions and joined because they really believed in the strategy.

We've now also aligned the governance framework at Bakkt in line with where we are going and the opportunity that lies ahead of us, which is, I think, one of the most important things we've done. At the end of the day, it's really about people. And I think both at the Board level and the management team level, now I feel like we are on the right path.

With all of these governance leadership changes that we brought in front, we have the right industry expertise and the oversight to ensure that we can deliver for our shareholders going forward. Quick reflection on the past 12 months.

So we did the leadership reset. We regained the focus as a digital asset infrastructure platform. We divested all noncore assets, completed the sale of loyalty and then brought in the talent across teams to be able to deploy the technology that we need to succeed going forward.

We significantly simplified the capital structure, got rid of the Up-C structure, eliminated significant costs across the organization, recapitalized the balance sheet and made it all debt-free. And finally, we also brought in a whole new institutional shareholder base as a consequence of the turnaround and the transformation story that was undergoing at Bakkt.

And finally, we've done a full platform re-architecture, positioning Bakkt for scale through the DTR Cooperation Agreement, the launch of Global and Agent and hopefully, if shareholders approve the DTR acquisition.

With that, I'm going to hand it over to Karen Alexander to give us a quick overview of the financials.

Hello, everybody. Good morning. I'm Karen Alexander. I'm the Chief Financial Officer at Bakkt. I'm going to walk you through our fiscal 2025 financials and what they tell us about the business going forward.

Just to set the context, as you've already heard from Akshay, fiscal year 2025 was a year of deliberate transformation. The financial statements that you're going to see reflect that. There was noise from divestitures, restructuring charges and some of the onetime items that we've cited that I want to make sure we separate clearly from the underlying operating performance of the business going forward.

Turning to this next slide. I wanted to focus on 4 data points in terms of our continuing operations in 2025. The first is total revenue. That was down 32% year-over-year from $3.4 billion to $2.3 billion. Now thinking about what this number is, substantially all of this is gross transaction services revenue.

It's a flow-through number that largely offsets the crypto costs that you see in operating expenses. So the gross revenue decline had 2 drivers to it. One, as we disclosed earlier, we had amended a commercial agreement with Webull in Q1 that reduced transaction volume. The other thing that we saw was lower crypto trading volume overall and asset prices through most of 2025.

And if you compare that to the strong market that we had in Q4 2024 postelection, that's really what's going on with this revenue component. The second metric I wanted to point out is operating expenses, which again include the cost of crypto, that's an offset to crypto -- the revenues.

So you see that going down from $3.5 billion to $2.5 billion. So that tracks revenue. But drilling into this trend, if you look at OpEx, excluding crypto costs, that came in at $156 million. That's up by $96 million, but it's important to note that, that increase is almost entirely driven by approximately $65 million of stock-based compensation, and that related to management equity grants during this reorganization that we've been talking about.

That's a noncash expense that we expect to recalibrate moving forward. The loss from continuing operations is roughly flat year-over-year, a $98 million loss versus a $94 million loss. But when you strip out the nonrecurring stock-based compensation I previously mentioned, the underlying improvement is real, and you're going to see that in the adjusted EBITDA.

Adjusted EBITDA improved from a loss of $57 million to a loss of $33 million. That's a $24 million improvement year-over-year. And I think that, that is the most important trend on this slide. Adjusted EBITDA improvement is driven by approximately $18 million increase in other income, and that primarily relates to the derivative asset and equity method investment gains associated with Japan.

There was also a $12 million reduction in SG&A. What this validates is that the cost structure is working and that the global strategy is already contributing to the income statement. So thinking about that as our continuing results, let's think through some of the legacy impact that we had in our 2025 financial statements that will go to 0 or near 0 in 2026.

First off is the Loyalty divestiture. We recognized $34.6 million net loss from discontinued operations, which is Loyalty. This is fully behind us, and it doesn't repeat in 2026. We will have a clean, continuing operations P&L going forward. The Up-C collapse. As Akshay mentioned, we felt that this was important to collapse the structure that was creating ongoing drag.

We incurred $26.9 million of TRA settlement costs. Most of that was paid in equity, but that was a combination of cash and equity. That will not reoccur in 2026. Restructuring expenses included $5.3 million of severance and platform transition costs. This is also nonrecurring. All in, what you see for the onetime legacy impact for 2025 was $66.8 million.

Every dollar of this is either nonrecurring or already behind us. So the headline is this. We start fiscal year 2026 with a dramatically cleaner P&L. The noise goes away and what remains is the core operating business. So that was the cost. Let's think about what that bought us. As I mentioned, the $66.8 million that I mentioned in last screen was deliberate. Every dollar was spent to clear a legacy drag that would have constrained the business going forward, and it does not repeat.

On the 3 eliminated items, that disc ops $34.6 million drag in fiscal year 2025 goes to 0. Loyalty and Custody are fully wound down with no recurring P&L impact. As Akshay mentioned, long-term debt is fully extinguished. We have no debt service obligations or covenants constraining the strategy. Noncontrolling interest has been zeroed out with the Up-C collapse in November.

Now we have one class of equity, one cap table, full shareholder alignment. As a current snapshot into the business, we have about $88 million of cash and restricted cash at the end of February. We ended 2025 with approximately $27 million of cash. And as we noted, we raised $48.1 million from the February registered direct offering plus restricted cash.

In closing, we have sufficient liquidity to execute across all 3 growth engines we talked about today. The transformation cost was real, and it is fully behind us.

So with that, I will turn it over to Akshay and Cody to start Q&A.

Thanks, everybody. All right. Any questions from the audience? Mika is roaming around with the microphone. Any questions? Here we go. Dillon Heslin from ROTH.

I guess could you talk about distribution partners? And like what does the pipeline look like? How do you get embedded in there? And then how many, I guess, end customers do they have? Like how do you go about going from where you're at now to a much bigger base of people you're feeding your platform into?

So I think we talked about the telco partnerships. And obviously, these -- I mean our focus is U.S. and Europe. As Ankit mentioned, there are 2 to 3 large-scale telco players in each market, and we are partnering with 1 of the top 2 or 3 telco players in each of those markets, which then really gives us a very good customer acquisition engine going forward.

On the additional distribution partnerships, I think from a Bakkt Agent perspective, we are looking at very large networks where you have hundreds of millions of users either on the platform or already having touch points with these networks. And the way our technology works is it's plug and play. So we've done all the work. We've built the infrastructure for you to be able to launch something yourself, it's literally -- you [ scan ] the app and launch it or if you have an existing platform, you embed our chatbot within it, and you can basically run on our regulated rails with all of the infrastructure and piping at the back to launch a fully fledged fintech platform.

So we are in very, very advanced discussions on some category-defining deals. And in the very near term, I really look forward to updating you once we are ready to do so in accordance with SEC regulations and so on. I hope that answers your question.

Thank you, Dillon. Any other questions from the audience? And Marni from Macquarie as well.

This is Marni Lysaght from Macquarie. I guess it would just be good to maybe when we think about the pipeline, how you -- just a bit more color on how you navigate the regulatory landscape. I mean you've called out trying to not have like the operating structure, not encompassing subsidiaries and just the way how you approach that as you evolve.

So I think the regulatory landscape is a 2-part kind of vector. One is Bakkt Global, which is -- these are independent companies that are in their own jurisdictions, and they follow the regulations and laws in those local jurisdictions. I don't think Bakkt has anything to do with what's happening in India or Japan.

I think those companies themselves focus on the local regulatory environment. So that's straightforward and clear. In terms of Bakkt Agent and Markets, we have the pan-U.S. licensing coverage and similar to our brokerage in a box business, which we've been doing now for over 5 years, even before my time. We've literally leveraged that business model, which has been approved by regulators and transferred it over to the agent side, which is almost the same thing, you on-ramp, off-ramp, the only capabilities that you're adding on top are cross-border payments.

And Ankit talked about our capabilities to be able to do almost near instantaneous settlements in over 57 countries, which I expect will get to over 90 countries by the end of the year. There, we work with local, regulated financial institutions, banks, payment service providers, et cetera, who then there is a -- we have to follow their local requirements. They go through all the KYC/AML requirements from their perspective. We ensure that we cover those on our side. And so far, we've successfully done it for almost 57 countries, and I don't see any problems with us getting to 90 by the end of the year. Does that answer your question?

Yes, that's clear.

I think we have one more here.

Jared Watson from retail. Akshay, you talked previously about wanting Bakkt to compete in the public markets. Has that and kind of the capital you raised in the balance sheet been a competitive advantage in partnership discussions and things like that, especially when some of your competitors are private?

I think it's made a big difference because when I joined Bakkt if -- I have a couple of colleagues from the sales team over here in the crowd. I mean the big issue was that people were scared about having their own deposits or customer deposits sitting at Bakkt, even though it's all segregated, it's lying within a trust, we can't really co-mingle funds or use them.

And so I think recapitalizing the balance sheet has helped materially with these customers and partners. And I think also from an ongoing business perspective, I think no one wants to do all of the integrations with the company and then there's uncertainty around the financial stability of the business going forward.

So I think that's, again, been a big driver of instilling confidence in helping us go and drive an active pipeline on the B2B side. And as we go into stablecoin on-ramp, off-ramp payments, I think you will see it all unfolding pretty exponentially as we go through this year because the volumes on pure stablecoin on-ramp, off-ramp cross-border payments is in the billions.

And if you don't have a strong balance sheet, even though you don't take any financial risk or hold customer funds because it's all instantaneous, people want to make sure that you have a strong balance sheet to be able to have the confidence of working with you as a counterparty. So I think it's helped tremendously.

I got one more from Darren at [ home ]. Thank you, Darren. For Akshay, given you founded DTR, can you kind of speak to why it was necessary to fold it into Bakkt? And then also just to double click on all the benefits that DTR brings to Bakkt Agent in kind of maybe near term and long term.

I'm going to have Ankit and Nick answer the question in a little bit more detail. So you hear it from the people who are executing and are touching the technology on a day-to-day basis. But just to rewind, it was always the intention for DTR to be folded into Bakkt, obviously, subject to shareholder approvals and the like.

And the transaction was put together in March of last year. And I mean I joined as CEO, and I wasn't sure given all of the clouds around Bakkt with the Loyalty business, if -- I didn't have any experience running a Loyalty business or a call center business. So until and unless that business was hived off, I didn't know if -- because my focus is fintech and the changing financial landscape going forward, I think it made sense for both companies to get into a cooperation agreement type partnership.

And now that, that -- the loyalty business is behind us and given all of the opportunities with the distribution pipeline that we have that are in very, very late and advanced stages, I think the Board and the Board can speak for itself. The independent committee and the Board thought that it would make economic sense for these companies to come together to be able to provide those services in a seamless manner to the end customers. But Nick, do you want to add color to the market side and Ankit on the...

Yes, my pleasure. Yes, now that we're done with the prepared remarks, I can tell you how exciting it really is to have DTR in the fold. Working in the space of our markets business, we are primarily focused on spot trading. And that business is durable and resilient and still valuable. But what we are seeing in the space and you're talking to prospects over the last couple of years is questions around stablecoins and payments and cross-border. And they saw our regulatory footprint and they said, well, they come to us with opportunities to power them.

And we were trying to figure out how our existing technology could power them, and there's just a lot of rough edges. And so it was very difficult to actually convince prospects to come in and partner with us on that capability. The DTR transaction, we've been in a commercial arrangement with them for 9 months. We've already done integrations to help power these things, and we're ready to go and launch and already ready in the U.S. to offer that capability.

And now when those prospects come to us, we cannot turn them away, which is really exciting. And then we also can collapse a lot of technology with a lot of overlapping technology. There's a lot of synergies there that you can collapse together onto a more modern technology stack. So that's been really transformative for us. And we're really looking forward to bringing that out to market in the next couple of months. Ankit, do you want to talk about agents?

So the Bakkt Agent product is actually built on the tech stack from DTR. It's actually built from the ground up. I'll just give you 2 examples. The Zaira app that we have, which is a global money movement solution is using everything that DTR has built and then adding agents on top of it. So it's fully integrated. And the second example would be the everyday money movement -- the money app that we have built.

If you remember the modular tech stack that Remi showed, that's exactly how we have built the money movement -- the money app, right? So we've taken different product features. Each of them are built independently. So they are modular and scalable, and then they all connect together for the fintech consumer platform that we're building. So it's actually been instrumental. And it's really cool in the sense that the way we have built this is very, very scalable. It can work across geographies. It can work across platforms. This is pretty cool stuff.

And then we have, I think, probably time for one more here from Paul Golding also at Macquarie. He was asking kind of how are you viewing the competitive landscape around stablecoin enablement and relative positioning?

There are 2 segments, Bakkt Markets, Bakkt Agent. I think on the Bakkt Markets side, my view is that the architecture of payment systems is going to change dramatically over the next few years. You're already seeing some very large M&A transactions happen. And I think we are very well aware of what our competitors are doing in the space. But the scale of the opportunity is so large in payments that doing a few tens of billions of dollars of volume is a drop in the ocean, just given the scale of $44 trillion of cross-border payments that we have today.

So once we have all of this capability that Nick talked about within the Bakkt Markets platform, I think you'll start seeing us sign up larger and larger clients. I think we're already seeing very good results with Nexo. I think Zoth is something which will also go live over the course of the next month or so. And the volume will scale pretty rapidly now that we fully integrated the DTR tech stack on the Bakkt Market side.

On the Agent side, I think it all boils down to -- from a competitor standpoint, it's all about distribution. I think being able to provide the products, there was a flywheel that was shown -- being able to provide the products in a cost-efficient manner, I think we've done that through our tech stack because we've got very little human intervention throughout the tech stack, right from onboarding to accounting to compliance to money movements to treasury management and so on.

And you go to any neobank or fintech that's out there, whether it's -- I'll give you a few examples, Chime or Revolut or companies like that. And with Ankit being at Revolut for so many years, we have a lot of insights into that space. It's really about distribution partnerships. And so we've really taken a very thoughtful approach where we don't have to go and spend hundreds of millions of dollars like these companies did and be loss-making for years, but we will be able to scale pretty rapidly to a large number of monthly active users without spending that kind of money. And I think that's why when we launch that in the very near term with the right distribution partners, it's one of the metrics that should be followed closely.

All right. Thank you. And then I wanted to hand the mic over to member of the Board, Mike Alfred, if you want to speak. Do you want to say anything? Okay. I'm sorry, I thought you had something you want to say. Well, that's all the questions in. And then we'll pass it back to Akshay for kind of closing remarks here. Thank you.

In closing, look, 2025 has been a year where we've really laid the groundwork. There was a lot of heavy lifting. It wasn't all easy along the way, especially with divesting the loyalty business. We've stripped away the noise. We've rebuilt the foundation.

And I believe that Bakkt is now very well positioned as a company to compound long-term shareholder value. Really, all of the structural work, I would say, 90% of it is behind us at this stage. We are also at a very interesting time in the world, I mean periods in which the architecture of money changes are very rare. And I believe we are in one of those periods today. I thought we were in that period 3 years ago when I left SoftBank to start DTR.

And there were 3 structural forces that -- rather 2 that were shaping my thoughts around where the financial infrastructure was moving. One was we had many years of peace in the world. And with the Ukraine-Russia war that started in early 2022 that changed that landscape pretty dramatically. And I would say, over the last few weeks, it's changed dramatically yet again.

And then the second thing is global debt levels even back in 2022 were at the -- fiscal debt level were at all-time highs. I don't think you've seen that level of global debt at the macro level in peace time for -- since the beginning of time. So given the global debt levels across all major economies around the world, there is -- and the geopolitical backdrop, I believe that this is going to reshape the architecture of money going forward.

And these new digital systems, which is stablecoins primarily are going to redefine how value is stored, transferred and programmed. And the growth that we're seeing in artificial intelligence also, I think, is going to be a dramatic driver in how the software stack is structured in all financial institutions going forward. So I believe that we've positioned ourselves at Bakkt right in the center of it all.

And we are -- we don't have any legacy debt, technology debt per se to tackle this because we've built everything from the ground up. And Bakkt sits at the intersection of these incredible changes that are happening around the world. And I believe that we will be able to take a significant advantage of the opportunities that lie ahead of us.

So looking ahead into 2026, we've built significant momentum. We've announced or are very close to announcing some very, very large partnerships. The discussions are progressing. We are in advanced conversations, and we expect aggressive growth at Bakkt Agent through the adoption of monthly active users on the platform.

We have a very clear line of sight on that. What lies ahead of us is a period of disciplined execution. We've got the right team that we put in place to do that. And this will translate into long-term value for shareholders, I believe. And I really thank our existing shareholders before I joined the company for their patience. And hopefully, if they stay on with us, I believe they will be rewarded along with us for the journey ahead. So thank you so much for your time today and appreciate you joining us in person here today. Thank you.

Greetings, and welcome to the Bakkt Third Quarter 2025 Earnings Conference Call. [Operator Instructions]. As a reminder, today's program is being recorded.

I will now turn the call over to Cody Fletcher, Investor Relations Adviser at Bakkt. Please go ahead.

Hello, everyone. And thank you for joining Bakkt's Third Quarter 2025 earnings call. Before we get started, I'd like to remind everyone that during today's call, we may make certain forward-looking statements. These statements include, but are not limited to, our expectations regarding Bakkt's transformation into a pure-play digital asset infrastructure company, the performance and future development of our markets, agent and global, our international expansion strategy, including anticipated actions related to our Japan investment and future jurisdictions, our plans for platform upgrades, cost optimization, hiring and brand initiatives.

Expectations regarding the StableCoin, Bitcoin and tokenization markets and our outlook for 2026 KPIs in our planned Investor Day. These statements are based on management's current expectations and are subject to risks and uncertainties, which may cause actual results to differ materially from those expressed or implied in such forward-looking statements.

For additional information regarding forward-looking statements and risk factors, please refer to our filings with the Securities and Exchange Commission. Further, in addition to discussing results that are calculated in accordance with generally accepted accounting principles, -- we will also make reference to certain non-GAAP financial measures. For more detailed information on our non-GAAP financial disclosures, please refer to our full earnings release, which can be found on our Investor Relations website. Thank you. And I will now turn the call over to Akshay.

Thank you, everyone. Thank you for joining the call. Today, our focus is around 1 clear mission to power the next generation of Global Finance that clarity of purpose matters. It allows us to align our people, sharpen our strategy and channel our resources with conviction towards the future we see emerging. Across the world, individuals and institutions are reevaluating what money really is, how it moves and how markets operate.

We believe this shift will define the next era of Global Finance, and we see it unfolding across 3 major fronts. First, Bitcoins continue to rise as a globally recognized digital store of value, the new foundation for trust and savings. Second, the rapid transformation of banking and payments accelerated by AI and Stablecoins which are reshaping how value flows through the economy. And third, the tokenization of real world assets, redefining how everything from bonds to commodities to property is traded and settled in the future. Back stands at the center of this evolution, building the compliance, secure and scalable infrastructure that enables these systems to connect and grow.

Our vision is simply at bold to be the trusted bridge between the physical and digital world finance, enabling seamless value transfer society accelerates into an AI equivalent economy. If we take a step back, it's clear the evolution of global finance is already underway, and the scale of opportunity is extraordinary. Out of an estimated $700 trillion in global assets, only a small fraction currently live on blockchain rails. That's rapidly changing as digital infrastructure becomes increasingly integrated into traditional systems.

Bitcoin continues to gain acceptance as a credible treasury asset among corporates, sovereigns and institutions. Stablecoins meanwhile now settle over $30 trillion annually surpassing Visa and new policy frameworks such as the U.S. Genius Act, are establishing clear regulatory card rails that legitimize this market. At the same time, tokenization is moving from pilot to production. Financial institutions are beginning to issue and settle assets on programmable rails with BCG forecasting nearly $19 trillion in tokenized value by 2033.

The takeaway, the total addressable market for digital asset infrastructure is enormous, and we are still in the very early innings. Bakkt is positioning itself at the center of this transformation with a regulated rail custody and settlement layer that will power this ecosystem. We are aligning our capital talent and road map to deliver tangible outcomes shaped by these powerful global trends. This quarter represents an important milestone in Bakkt's journey.

We delivered strong results with $29 million in adjusted EBITDA, which demonstrates the scalability and efficiency of our evolving business model. On the balance sheet, we closed the quarter with approximately $64 million in cash and restricted cash and no debt, reflecting disciplined execution and a significantly strengthened financial foundation.

While I'm pleased with these results, I want to be absolutely clear, this is just the beginning. The heavy lifting of our transformation is largely behind us, and I expect to complete the process by the end of Q4 as the elements of our restructuring, product launches, distribution partnership and cost initiatives all start coming together. This quarter also affirms the strength of our back global business model, a framework built for durability and scale.

It validates the structural and strategic changes we made are already translating into tangible performance. And as we look ahead, I'll walk you through the decisive actions we've taken since I became CEO, what remains in our road map and how Bakkt is uniquely positioned to power the structural rearchitecture of global finance.

When I stepped in as CEO following the cooperation agreement with DTR, that was spread to thing, a collection of disconnected initiatives burdened by noncore assets and inefficient cost structure and a lack of strategic focus that had built up over years of missteps. We acted with immense urgency. Over the past 2.5 quarters, we've executed a disciplined and deliberate transformation, one that touched every part of the business.

We exited noncore operations, reconstituted the Board, streamlined our organization and refocused entirely around one mission, building a leading regulated digital asset infrastructure platform. We rebuild back from the ground up, simplifying our technology stack, reducing external dependencies and attracting top-tier talent to lead our 3 core verticals. Bakkt Markets, Bakkt Agent and Bakkt Global, which I'll discuss shortly.

We also strengthened governance and leadership. Phillip Lord, our President of International, is driving our expansion across Japan, Korea and India, connecting us to some of the world's most dynamic capital markets. Ankit Kamka, our Chief Product Officer, and who was the former Head of Growth at Revolut is accelerating innovation and integration across our products primarily on the Stablecoin front.

At the Board level, we previously welcomed Mike Alfred and Lynn Alden, and today, I'm very pleased to welcome Richard Galvin, 3 deeply independent thinkers and accomplished entrepreneurs. These are not professional "directors" collecting fees. Each conducted their own diligence, challenged our assumptions and joined the Board after gaining conviction in our vision, our road map and the integrity of our transformation. That engagement brings institutional discipline and intellectual rigor to Bakkt's covenants, not box sticky.

We eliminated structural overhangs, significantly reduce costs and strengthen our balance sheet. Today, every dollar we spend is driving monetization through trading spreads, custody fees, Stablecoin flows and recurring revenues. This has not just been a cleanup exercise but instead a full-scale reboot of the company that is now ready for the exciting disruption currently underway for the next few decades of finance. And we did it at what many would consider lightning speed.

As we approach the end of Q4, our transformation enters its final phase. From here the focus shifts from transformation to acceleration, integrating our platforms, expanding our regulated custody and advancing strategic partnerships across markets and Stablecoin infrastructure. A key milestone this quarter was the simplification of our capital structure.

In Q3, we announced -- and on November 3 close, the collapse of our Up-C structure, eliminating the Dualos share system that dates back to our deals back in 2021. That structure serves its purpose early on, but over time, it's become a total drag. It added complexity, reduced liquidity and created friction for institutional investors. With the Up-C collapse complete, Bakkt now operates as one company, one cap table and one mission. Shareholders, management employees are now aligned under a single corporate entity, a major step forward in transparency, governance and shareholder alignment.

We also strengthened our balance sheet. Between Q2 and Q3, we raised roughly $100 million in new capital and eliminated all outstanding debt giving back a cleaner, stronger financial foundation. We carry more than $120 million of tax loss carryforwards, a valuable asset that will offset future taxable income as profitability scale. To underscore my own conviction, I personally invested about $1.5 million in back shares in August through open market purchases. And as of October 31, shareholders have authorized me to purchase up to 13.4 million more stock through an option plan.

I view this not as a signal, but as a statement of belief. I'm fully aligned with our shareholders for the long term. And let me make one point very clear, Bakkt is not in the business of perpetual equity issuance. We are not a digital "a digit asset treasury vehicle" chasing exposure through dilution. We've turned the corner financially debt-free discipline and focus any future capital raising will be done strategically, selectively and with a deep respect for shareholder value.

This new structure and capital position gives us the flexibility to pursue opportunities, but always with the discipline and alignment that shareholders expect and that I personally demand. With our foundation reset and capital structure simplified, we are now focused on what defines Bakkt our 3 growth engines, markets, agent and global. Bakkt markets is the foundation. It provides institutional-grade infrastructure for digital assets, connecting clients to liquidity, market-making and regulated custody through our nationwide money transition licenses and New York bid license.

This is how institutions trade on Bakkt, compliant, efficient and secure. Bakkt agent is how money moves. It's our programmable finance platform, combining Stablecoins, AI agents and cross-border payments into one seamless system, making sending, spending, saving and transacting as easy as messaging. This positions Bakkt at the heart of the Sable coin adoption wave and global remittance demand. Bakkt Global takes our technology into new jurisdictions through a minority investment model designed to generate investment gains and our long-term recurring revenue. We started in Japan where early progress in validating the model, and we'll share more updates as it scales in the quarters ahead.

Together, these businesses form a unified regulated digital asset company, connecting how markets trade, how money moves and how value is stored.

Let's start with Bakkt markets, our core business, the engine of our infrastructure and the foundation of how modern digital markets will eventually trade in my opinion. This division is primarily U.S.-based and built around a simple but powerful flywheel, market infrastructure, balance sheet strength and regulatory licensing, each reinforcing the other as volumes grow and liquidity deepens. Our regulated core is anchored by MTL licenses across the U.S. and our New York with license designed for institution-grade performance, offering deep liquidity, Stablecoin on and off ramps, OTC trading and secure custody through the new partnership of Bakkt eye storage with Intercontinental Exchange scheduled to launch in Q1 2026.

We are also expanding through Bakkt FX and evolution of our brokerage-in-a-box business. It provides a single point of access for B2B2C clients to route trade settled and custody assets, serving exchanges, fintechs and brokers that want to operate compliantly in the U.S. without building the regulatory stack themselves. Together, these elements make Bakkt markets, the engine room of our platform compliant connected and build to scale.

Next Bakkt Agent is how money moves seamlessly, intelligently and globally. Stablecoins have become one of the most disruptive forces in modern finance. They're reshaping how money is stored, sent and earned at a fraction of the cost of legacy rates. Bakkt Agent is our response, a programmable finance platform operating behind the scenes as the AI-driven architecture powering the next wave of digital banking. Under the hood, Bakkt Agent is an AI-first modular stack built from the ground up, multiple AI agents coordinate workflows across payments, compliance and treasury, integrating with partner banks, card networks and payment providers worldwide.

The result is a white label customizable foundation that allows any partner to launch a neobank grade experience quickly and compliantly. Rather than building a direct-to-consumer business, our model is distribution partnerships driven and asset-light partners embed Bakkt Agent into their products, leveraging our licensing coverage, global partnerships and modern APIs without the heavy integration costs.

Through our conversational interface Zaira we are starting with cross-border remittances, a nearly $850 billion market, where consumers still pay up to 7% fees. Bakkt Agent enables faster, cheaper and more intuitive transfers built for scale. At its core, Bakkt Agent is the programmable financial stack unifying Global Money Movement, rewards and AI-driven finance into one seamless platform. We expect to announce significant distribution partnerships in the near term as we move to a scale rollout in the quarters ahead.

Bakkt Global is where our infrastructure model meets international scale, enabling entry into high-value markets while compounding long-term shareholder value. At its core, Bakkt Global may give our shareholders look through exposure to Bitcoin through publicly listed entities and select jurisdictions if those entities decide to pursue a strategy to hold Bitcoin on their balance sheet. When these entities deploy capital to Bitcoin, Bakkt earns recurring custody and management fees by being the lowest cost regulated provider to these entities, while our shareholders indirectly participate in Bitcoin upside.

Each of these entities will maintain independent governance and boards to ensure transparency and credibility. Our first investment is already underway in Japan for which the AGM is set for November 11 and where we expect the company, Bitcoin Japan Corporation to outline its strategy. This model deliberately extends our markets and agent infrastructure globally, enabling us to own minority stakes in high-potential jurisdictions expand our footprint, compound fee income and generate recurring revenue, all while maintaining discipline on capital intensity.

As we look ahead for 2026 KPIs, I want to provide a clear view of how Bakkt makes money going forward ahead of the Investor Day scheduled for some time in Q1 2026. Our model is diversified, recurring and designed to compound as we scale dramatically over the coming quarters. Across markets, Agent and Global, each vertical contributes revenue streams, each reinforcing the other. Bakkt markets generates B2B and B2B2C revenue through market-making OTC spreads, trading volume and lending fees, the core liquidity engine of the platform.

Bakkt Agent earned Stablecoin on-ramp off-ramp revenue from transaction volume, spreads and FX conversion powered by our AI first architecture and embedded through distribution partnerships. Bakkt Global, add licensing, management fees, NAV accretion and investment gains from our minority holdings in international partners. Together, these form a resilient multilayer revenue engine where market provides liquidity agent drive Stablecoin and payment flows and global expands our reach into new jurisdictions that can amplify both.

As we look across our milestones for the fourth quarter, our goals are clear: Bakkt aims to complete its transformation while strengthening the core engine that will position us to drive growth in 2026. Everything we've done, the operational reset, technology upgrades and cost optimization moves in one direction towards a leaner, faster and more disciplined platform built for scale and sustained profitability for which we've already seen the green shoots in this quarter's results.

At the same time, we're expanding our reach across all 3 growth engines. In markets, we are driving customer growth, completing key technology upgrades that will enhance liquidity and trading performance. For Bakkt Agent, we are opening new distribution corridors and advancing partnerships that will expand our Stablecoin and cross-border flows and through Bakkt Global, we are extending our infrastructure into additional jurisdictions beyond Japan continuing to do so in a capital-light disciplined manner.

We are also staying focused on the foundation, continuing to fine-tune our cost base, bringing in exceptional talent and rolling out the refreshed brand and website much needed that will reflect who we are today. As we released our 2026 KPIs and prepare for our to be announced Investor Day in Q1, shareholders will have a clear line of sight into how all these pieces come together into one cohesive strategy. And if we keep with the baseball analogy, I've been using on X recently, it feels like we are at the top of the mine.

The transformation innings are nearly behind us. Now it's about execution, closing out the quarter cleanly staying focused and finishing strong. By December 31, I'm feeling quite confident sitting here that we'll be able to look back and call this turnaround complete at that time.

With that, I'd like to hand over the call to Karen Alexander, our CFO, for a deeper dive into the financials. Karen?

Thank you, Akshay. Before I get into the numbers, I want to acknowledge that this quarter still reflects some residual impact from our Loyalty business, which remains part of our results through year-end 2025. This means you'll continue to see some accounting noise as we report both continuing and discontinued operations. While this may make the GAAP figures appearing even, the underlying economics of our core digital asset business are much clearer when you look at our adjusted metrics.

As a reminder, beginning in Q1 2026 once loyalty is fully behind us, our financial reporting will be clean and directly aligned with the diversified revenue model, Akshay, outlined earlier. For the quarter, total GAAP revenue was $402 million, up 27% year-over-year, primarily driven by higher crypto trading activities.

Crypto costs and execution clearing and brokerage fees increased proportionately consistent with volume growth. Operating expenses, excluding those costs, were roughly flat at $26.7 million, reflecting lower compensation and SG&A following restructuring initiatives. Excluding about $5 million of nonrecurring restructuring charges, operating expenses would have declined by over 18% year-over-year, demonstrating continued cost discipline.

As a result, adjusted EBITDA reached $28.7 million compared with a loss of $20.4 million in Q3 2024. And adjusted net income from continuing operations was $15.7 million. These measures better represent the earnings power of our digital asset infrastructure platform. They exclude discontinued operations and onetime noncash items, such as fair value changes and warrants, allowing investors to see the true progress of our core business.

We expect the remaining transition noise to taper through year-end by Q1 2026 that financials will fully reflect the leaner, more focused company we've rebuilt with clear visibility into sustainable growth and profitability.

Turning to the balance sheet. We ended the quarter with $64 million in cash, cash equivalents and restricted cash and importantly, no long-term debt. As we complete our transformation, this balance sheet reflects a disciplined financial foundation, strong liquidity, no structural overhangs and sufficient flexibility to support both near-term commitments and future growth.

We expect to use a portion of this cash in the fourth quarter to close the loyalty divestiture and fund working capital, as we complete the transition to a pure-play digital asset platform. In our financial statements this quarter, you'll also notice the inclusion of current and noncurrent assets held for sale, which represents the loyalty business and associated balances. Upon closing, this will roll off the balance sheet, leaving behind a streamlined digital asset infrastructure company that clearly reflects the economics of our continuing operations.

Our focus remains on maintaining a resilient and efficient balance sheet, ensuring that we have the liquidity and flexibility to execute on our road map, pursue strategic opportunities responsibly and continue delivering long-term value for shareholders.

With that, I'll hand it back to Akshay for closing remarks.

Thank you, Karen. To reiterate, this quarter marks another important step forward in Bakkt's transformation. As we move through the fourth quarter, you'll begin to see the changing of the guard, a new Bakkt taking shape. What's emerging reflects the culmination of a year of tough decisions, disciplined execution and the establishment of a foundation built for scale and long-term profitability. The heavy lifting is largely behind us, and the momentum heading into 2026 is not just exciting [indiscernible]. The structure is now in place, the strategies to and alignment across our people, partners and shareholders have never been stronger.

Over the coming weeks, we'll work to finalize the remaining elements of this transformation. And by the time we speak again, I'm confident Bakkt will have completed its restructuring phase and will be operating with a clear line of sight to sustain profitable growth in 2026 and beyond. To our partners, our customers and especially our shareholders, thank you for your continued trust, patience and belief in what we are building.

That concludes our third quarter 2025 earnings call. I'll hand it back to the operator.

[Operator Instructions] And our first question comes from the line of Chris from Rosenblatt Securities. .

Congrats on the progress here. I'd just like to think about the business as it stands today? And maybe, Akshay, if you could sort of could sort of give us a little more insight on to -- in the core offerings on the sort of the brokerage side? And how that might compare to Bakkt Zero Hash is offering. I think that's been a pretty major transaction in the space and it feels like they're kind of similar to what Bakkt is doing, but I feel I'm not quite sure where all the dots connect and how this fits from a competitive standpoint. So maybe you could help me with that sort of area of questioning sort of how is Bakkt compared to Zero Hash?

Sure. Look, I think as far as Bakkt in Zero Hash, the direct comparison is concerned, I think we're both looking at being the picks and shovels layer, the regulated infrastructure that lets the ecosystem operate securely and at scale. I think there are lots of similarities and comparisons on that front. And as you can see, I think there is a lot of talk around Stablecoins and the new payment rails these days. And so from my perspective, when I look at everything that's happening in the space from the recent M&A activity, whether it's Zero Hash and others as well as private market valuations in the space, you can really draw your own conclusions in terms of what their value is relative to Bakkt, et cetera.

But I think that, look, we bring a pretty similar product suite just on the Bakkt Markets business relative to Zero Hash, except that we are doing this in a public setting where we plan on doing it without any heavy burn and not chasing top line volume and revenue growth, which is not profitable and doing it in a disciplined manner. So that's my perspective on this from what I know.

Okay. Great. Very exciting. Towards the back of the slides on the milestones. #9 is released KPIs for 2026. I'm not looking for a sneak preview of what your targets are. But what are the key KPIs? If you can talk about at this point, just what should we be following here to monitor the progress on the new Bakkt?

Look, that's the reason why I laid out the slide earlier because I knew that there would be this question around key KPIs for 2026. And the slide earlier gives you exactly how we look at our business in terms of how the revenues are generated and how that all flows down to the bottom line. And so I would just say that in terms of KPIs, I think it will be driven from each of these 6 different boxes that I've highlighted. And the key variable for each of these boxes to actually make money and for it to actually flow down into revenues and then finally into profit.

So I think when you look at Bakkt Markets, as an example, it will be around trading volume and the spreads that we are generating, spreads and fees that we're generating, which then flows down to revenue. So that's very straightforward. On the Bakkt Agent side, I think you'd look at something around stabe coin transaction volume and the combined blended spread and FX conversion rates that we are making on that front. And when it comes to Bakkt Global, I think you're looking at 2 aspects of it. One is the NAV accretion of our investments that we are making because that's -- all of the investments that we're making are booked based on an equity method of accounting.

So for example, our $11 million investment or so in Japan is today worth significantly higher than that. but we haven't put it through the P&L statement. And so that's something that sits on our balance sheet marked that at -- sorry, at our cost value. But -- however, depending on, as I mentioned in my prepared remarks, depending on whether these companies that we invest in, decide to go and pursue a Bitcoin treasury strategy or want to leverage some of our technology and license that, then there will be additional licensing and recurring revenue in terms of revenues that we'll end up generating. And I think we'll give you more color on all of these fronts as we go ahead and release the KPIs for 2026.

And our next question comes from the line of Mark Palmer from Benchmark.

Yes. I know you touched on this during your prepared remarks, but just wanted to dig into it a little bit more, can you talk about the roles of partnerships, joint ventures on the one hand and M&A on the other as [Audio Gap]

That we can publicly share with everyone over the next -- over the coming quarter or two, and I think that is actually one of the gating factors for actually releasing the KPIs because until we get this in hand or are very close to doing it, we don't want to go out and release the KPIs. So our model is to grow through partnerships because that's the best way to grow. We don't want to be consumer-facing directly. I think that costs a lot of money to go out and expand and spend the money on customer acquisition costs. And so we will definitely continue pursuing distribution lead partnership model to get the volumes onto the platform, and we look forward to updating everyone as and when we are ready to announce these partnerships.

And congratulations on the progress.

Thank you.

[Operator Instructions] Our next question comes from the line of Justin Pan from Clear Street.

It's [indiscernible]. Obviously, a ton of exciting work over the past quarter [indiscernible] structure of the business and having a clear path for next year. I guess when we think about '26, what are some of the considerations done on both the macro and the policy side you would call out that would be both potential tailwinds and headwinds to growth as we think about that would look for 2026?

I mean, the most exciting thing is the CLARITY Act that's hopefully going to get past soon, certainly, hopefully, next year. I think that's a very exciting development for us. And just getting the regulatory clarity as it relates to real world asset tokenization is a big opportunity for us in general. Other than that, I think not much else on the policy front in the U.S. I think the administration has already paved away. And from day 1, they've declared their intention to make sure that America becomes a crypto capital of the world. And increasingly, it's already -- if it hasn't already become that, it's definitely well along its way to become that.

I think the other thing that's very exciting is looking at all of these very large financial institutions getting their sleeves rolled out to participate in the Stablecoin space because we are the bigs and shovels, and we are Stablecoin agnostic, and I just see a very, very bright future in terms of volume growth, cross currency, Stablecoin FX-related growth and so on. And so we built a business which is ready to take advantage of all of those opportunities that lie ahead of us. And like I said, we're very early in the story very, very early innings for wants to transpire here over the next several decades. So that's my view.

Got it. That's helpful. And just one more for me. You talked a bit about your international expansion model, beginning with Japan. I guess could you touch on some geographies that you're focused on next? And what's the strategy for scaling beyond the U.S. and Europe .

I think the model is the same. I explained it in my prepared remarks. But I think, look, you're going to hear from the company in Japan tomorrow, there is EGM tomorrow. And I think it will become clearer as to what that company's strategy is going forward. The other jurisdictions that I alluded to in my prepared remarks are South Korea and India. And again, the idea will be to see what we can leverage on the markets and agent infrastructure side to grow in these high potential jurisdictions and expanding our footprint. So that we are very focused on our core market, which is the U.S., but then these companies are leveraging either our product services or technology to then grow, but then also give back some licensing and other revenue back to back.

If there are no further questions from analysts, I'll pass the call back to Cody Fletcher for some questions from the retail community.

Thank you, operator. We have our first question from ex user at [indiscernible] 333. His question was Visa, Mastercard, Zell, they're all now talking about stable points. So how can Bakkt kind of compete with these companies.

Okay, you want to take this one?

I mean, it's similar to what Chris was alluding to as it relates to Zero Ash. But look, I'll answer this as well. So it's a fair question. we don't really see ourselves competing head-on with the big card networks of the auto peer systems. What Bakkt is doing is more of the picks and shovels layer, the regulated infrastructure that lets the whole ecosystem operate securely and at scale. And so there's a lot being said about Stablecoins and new payment rails these days, and it's a good thing because it validates the overall direction that we are heading in. But there are still some very big gaps in how those systems work, particularly around compliance, custody, the payment rails and then the integration of it all into the [indiscernible] rails.

And for Bakkt, the cooperation agreement with VTR brings those capabilities directly inside Bakkt. And that really gives us a very solid footing as this market continues to evolve and grow materially over years to come, in my opinion. So the fintech space is huge. That's why I left a very lucrative career to be involved in this space because I believe that it's never going to be a winner take all space. It's that big.

Different players can go exist, some consumer-facing others like us providing the regulated backbone underneath. And if you look at generally speaking, what's happening in terms of the recent M&A activity, by some of the very companies that you were mentioned in the questions and the private market valuations in the space, you can draw your own conclusions. Many of these companies are being bought by the very large names that were mentioned while they might not be showing any top line growth and are doing it with a lot of heavy burn and with our profitability. At least that's what the bankers are telling us.

So we are taking a much more disciplined approach. We're building a sustainable compliant business that can scale responsibly and as the transformation ramps up here at year-end, I think that discipline combined with where the broader market is headed, would speak for itself as to what Bakkt is building at this end. Hope that answers the question.

That's great. And our last question here is from another X user at Amir Amex Trades. Amir said, being invested in your company for 4-plus years like so many other shareholders back in time again loses all of its gains due to poor decisions and lack of updates. What will this new leadership team do differently to improve shareholder value over time.

So yes, Amir and a few other users on X have messaged me from time to time directly or treated at me, and I completely understand the frustration. I mean this is exactly why this new leadership team came in to fix the structure clean up the balance sheet and refocus Bakkt on its core mission. I definitely cannot control or manage the company based on short-term stock price moves. As Mr. Buffett famously says, in the short term, the markets are voting machine. But in the long term, it's a weighing machine. And our job really is to build the kind of substance that the market will weigh over time.

I believe we've made a lot of strong progress on the transformation, and we expect to have it largely completed by year-end. Either before year-end or at our Investor Day in Q1 26, we'll share clear KPIs. We hope to announce the distribution partnerships that are currently being worked out, and we'll outline the next phase of our road map accordingly. And I hope that, Amir, you will see that progress and you'll continue supporting us as a long-term shareholder. Back to you, Cody.

Thanks, Akshay. That's all the questions we have from retail. So thank you, operator, to close this out.

Certainly. Thank you, ladies and gentlemen, for your participation in today's conference. This does conclude the program. You may now disconnect. Good day.