Executive Summary

Net revenue grew 38.0% year-over-year to $9.1M, driven by loyalty redemptions and onboarding a large financial institution; operating expense rose 60.5% to $39.0M as management invested in growth and merger-related costs, resulting in net loss of $(28.8)M and adjusted EBITDA of $(24.1)M .
Partnerships with Mastercard, Fiserv, Finastra and Choice materially expanded distribution, with management citing >100M addressable consumers; this B2B2C strategy is the central growth vector into 2022 .
No formal revenue/EPS guidance was provided; management highlighted Q4 seasonality (higher transaction revenues) and elevated Q4 merger-related expenses, implying near-term operating loss persistence .
Stock reaction catalysts centered on Mastercard/Fiserv news; shares surged following those announcements, underscoring investor enthusiasm for scaled distribution of crypto and loyalty solutions .

What Went Well and What Went Wrong

What Went Well

Distribution wins: Mastercard, Fiserv, Finastra, Choice partnerships expand access to banks, merchants and loyalty programs, with >100M addressable consumers cited; “we’ll invest the proceeds from our recent business combination to activate our partnerships” (CEO) .
Revenue growth and usage momentum: Net revenue +38% YoY to $9.1M; subscription and service revenue $6.4M (+18% YoY) and transaction revenue $2.7M (+133% YoY), supported by travel recovery and loyalty redemptions (CFO) .
Platform KPIs improving: ~1.7M transacting accounts YTD, Q3 up ~20% YoY; ~$105M notional transactions in Q3, up ~50% YoY, with expected seasonal strength in Q4 (CFO) .

What Went Wrong

Losses widened: Net loss increased to $(28.8)M from $(18.0)M YoY; operating loss $(29.9)M vs $(17.7)M, reflecting higher compensation (headcount), SG&A (marketing) and merger costs (CFO) .
Elevated operating expenses: Total expenses rose to $39.0M (+60% YoY), with compensation +$9.6M (+76% YoY) and SG&A +$2.8M (+167% YoY), pressuring adjusted EBITDA to $(24.1)M (CFO) .
No formal guidance: Management did not issue quantitative ranges for revenue/margins; near-term commentary pointed to increased Q4 expenses tied to the merger, offering limited visibility for earnings inflection (CFO) .

Financial Results

Metric	Q3 2020	Q3 2021	YoY Change
Net Revenue ($USD Millions)	$6.6	$9.1	+38.0%
Operating Expense ($USD Millions)	$24.3	$39.0	+60.5%
Operating Loss ($USD Millions)	$(17.7)	$(29.9)	(63.0%)
Net Loss ($USD Millions)	$(18.0)	$(28.8)	(61.1%)
Adjusted EBITDA ($USD Millions)	$(12.3)	$(24.1)	(95.9%)
Net Income Margin %	(272.7%)	(316.7%)	Deteriorated

Notes:

Other income in Q3 2021 included a nonrecurring $1.1M gain from bitcoin sale tied to inventory rebalancing for ether launch (CFO) .
EPS was not reported given pre-merger share count differences (CFO) .

Segment revenue components (Q3 2021):

Component	Q3 2021 ($USD Millions)
Subscription & Service Revenue	$6.4
Transaction Revenue	$2.7

KPIs and operating metrics:

KPI	Q3 2021	YoY Change
Transacting Accounts (platform, YTD)	~1.7M	+20% in Q3 YoY
Notional Transactions ($USD Millions, Q3)	~$105	+~50% YoY
Addressable Market (end consumers via partners)	>100M	Expanded via partnerships

Balance sheet snapshot (selected items):

Metric ($USD Thousands)	Dec 31, 2020	Sep 30, 2021
Cash and Cash Equivalents	$75,361	$22,106
Goodwill	$233,429	$233,429
Intangible Assets, net	$62,199	$57,336
Total Assets	$468,376	$397,730
Total Liabilities	$58,594	$73,975
Members’ Equity	$388,330	$300,181

Non-GAAP reconciliation highlights:

Adjustment (Q3 2021)	Impact ($USD Thousands)
Depreciation & Amortization	+3,270
Acquisition-related transaction costs	+1,766
Unit-based compensation	+604
Nonrecurring bitcoin sale income, net	(1,024)
Adjusted EBITDA	$(24,123)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Revenue	Q4 2021	None disclosed	Seasonality expected to lift transaction revenue in Q4 (historical pattern)	N/A
Operating Expenses	Q4 2021	None disclosed	Elevated expenses expected tied to merger-related costs	N/A
EPS/Tax/Segments	Q4 2021	None disclosed	No formal quantitative guidance provided	N/A

Earnings Call Themes & Trends

Topic	Previous Mentions (Q-2 / Q-1)	Current Period (Q3 2021)	Trend
B2B2C distribution strategy	Limited public disclosures pre-merger (company private)	Core go-to-market; partners to activate users via co-marketing	Strengthening via new partnerships
Crypto-as-a-Service to banks/merchants	N/A	Mastercard, Finastra integrations to enable buy/sell/hold and loyalty-crypto fungibility	Expanding
Loyalty program monetization	N/A	Choice Hotels launch; Wyndham integration; strong redemption volume	Accelerating
Regulatory posture	N/A	Platform engineered with strong controls; sees regulation as positioning advantage	Stable, confident
Product expansion (ETH support)	N/A	Ether introduction; bitcoin inventory rebalance referenced	Broadening asset coverage
KPI trajectory	N/A	Transacting accounts +20% YoY in Q3; $105M notional volume (+50% YoY)	Improving

Management Commentary

CEO: “Bakkt has made tremendous strides in proving our model, building strategic partnerships and enhancing our platform capabilities to connect the digital economy… we will invest the proceeds from our recent business combination to activate our partnerships” .
CEO on distribution: “We lead the way in providing crypto as a service to non-crypto-native companies… enabling banks and credit unions to offer crypto rewards and cards” .
CFO: “Net revenues of $9.1 million, increased… primarily driven by strong transaction revenue growth from the redemption of rewards… Operating expenses of $39 million… primarily due to increased head count… SG&A up $2.8 million driven by marketing” .
CFO on one-time items: “Other income was $1.1 million, primarily related to a nonrecurring gain from the sale of bitcoin to rebalance… related to the introduction of ether” .

Q&A Highlights

Loyalty integrations pipeline: Existing white-label clients (e.g., Wells Fargo, United) engaged to expand into consumer app experiences; partners seek innovative ways to reengage customers as travel rebounds (CEO) .
Addressable market composition: >100M estimate nets out overlapping relationships; reach via Mastercard, Finastra, Fiserv, Choice/Wyndham (CEO) .
User acquisition pace: Backlog of partner activations targeted for 1H22; platform designed for rapid consumption via APIs (CEO/CFO) .
Regulatory stance: Heritage from ICE; platform with strong controls; management sees agility amid evolving rules rather than a headwind (CEO) .
Stablecoins/CBDC: Focus near-term on BTC/ETH; prepared to support stablecoins/CBDC if mainstream given regulatory posture (CEO) .

Estimates Context

Wall Street consensus via S&P Global for Q3 2021 was unavailable. We attempted to retrieve S&P Global estimates, but the request limit was exceeded, and Bakkt did not report EPS due to share count differences pre-merger, limiting comparability and likely coverage. Values retrieved from S&P Global.*

Key Takeaways for Investors

Distribution scale is the core thesis: Mastercard, Fiserv, Finastra unlock large bank/merchant networks; expect progressive partner activations to drive user and volume growth into 2022 .
Revenue quality improving: Subscription/service revenue ($6.4M) remains the bulk; transaction revenue ($2.7M) is scaling with travel recovery and loyalty redemptions; seasonality should aid Q4 .
Near-term losses likely persist: Operating expense growth (compensation, SG&A, merger costs) pressured margins; management flagged elevated Q4 expenses .
Non-GAAP adjustments matter: Adjusted EBITDA loss widened to $(24.1)M; note nonrecurring $1.024M bitcoin sale income and absence of prior-year impairment benefits in YoY compare .
Regulatory positioning is a differentiator: ICE heritage and custodian infrastructure may ease partner adoption amid heightened scrutiny .
Trading lens: Newsflow on new partner activations is likely to be the stock’s primary catalyst; prior Mastercard/Fiserv headlines drove outsized moves, suggesting sensitivity to distribution milestones .
Medium-term thesis: If the B2B2C motion converts addressable partners into active users with higher engagement (loyalty-crypto fungibility, pay-with-points, custodial wallets), operating leverage can improve as marketing amortizes over scaled cohorts .

Additional relevant Q3 2021 press releases:

Mastercard partnership (Oct 25, 2021) .
Fiserv partnership (Oct 25, 2021) .
Finastra partnership (Oct 13, 2021) .
Choice Hotels program launch (Sept 28, 2021) .

Prior two quarters’ earnings:

Bakkt was private and did not file standalone public quarterly earnings press releases for Q1/Q2 2021; we searched investor portals and press wires and did not find them, limiting quarter-over-quarter trend analysis .

Sources: Q3 2021 Form 8-K and Exhibit 99.1 press release ; Q3 2021 earnings call transcript ; external press releases and coverage as linked above.

Bakkt Holdings, Inc. (BKKT)·Q3 2021 Earnings Summary