Bakkt, Inc.: Form 10-Q for the period ended Jun 30, 2026

The following discussion and analysis of financial condition and results of operations should be read together with the accompanying consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q for the quarter ended June 30, 2026 (this "Report") and in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (our "Form 10-K"), which is incorporated herein by reference.

References in this section to “we,” “us,” “our,” “Bakkt” or the “Company” and like terms refer to Bakkt, Inc. and its subsidiaries for the three and six months ending June 30, 2026, unless the context otherwise requires. Our consolidated results include the operations of Distributed Technologies Research Global Ltd ("DTR") from May 1, 2026, following completion of the acquisition on April 30, 2026. References to the acquired business are made only where necessary to describe the transaction, historical periods, or related accounting matters; since the completion of the acquisition, DTR's people, technology, products and transaction activity are part of Bakkt.

Some of the information contained in this discussion and analysis, including information regarding our plans, strategy, product development, commercial pipeline, expected launches, target markets, investments and future financial or operating performance, includes forward-looking statements. These statements are based on management's current beliefs, assumptions and information and are subject to risks and uncertainties. Actual results could differ materially from those contemplated by the forward-looking statements. Factors that could cause or contribute to such differences include those discussed under "Cautionary Note Regarding Forward-Looking Statements" and "Item 1A. Risk Factors" in this Report and in our other filings with the United States Securities and Exchange Commission (the "SEC").

In this section and elsewhere in this Report, we use the following terms, which are defined as follows:

• "Client" means a business with which we contract to provide services to customers on our platform, including financial institutions, financial technology firms, digital asset companies, hedge funds, merchants, retailers and other businesses. In the notes to our consolidated financial statements, the term "customer" is used as required by Financial Accounting Standards Board Accounting Standards Codification Topic 606, Revenue from Contracts with Customers ("ASC 606").
• "Customer" means an individual or business end user of a client's service that transacts through our platform, unless the context refers to a customer for purposes of ASC 606.
• "Digital asset" means an asset that is created, issued, recorded or transferred using blockchain or distributed ledger technology, including digital asset currencies, stablecoins and other digital tokens. We use "digital asset," "virtual currency," "digital asset currency," "coin" and "token" as contextually appropriate.
• "Platform" means the technology, infrastructure, software, compliance capabilities and related services through which we provide our products and services.

Overview

General

Bakkt is a regulated financial technology company that builds and operates infrastructure for digital asset trading, programmable finance and cross-border payments. During 2025, we substantially completed a strategic transformation that included divesting non-core businesses, simplifying our corporate and capital structure and focusing our resources on a unified digital financial infrastructure platform. During the first half of 2026, we continued that transformation by completing our acquisition of an agentic payments and stablecoin platform, integrating that technology into our platform and advancing strategic investments in Japan and India.

Our platform strategy is organized around three complementary business engines - Bakkt Markets, Bakkt Agent and Bakkt Global - supported by a common stablecoin-enabled settlement, compliance and onboarding foundation. Markets provides the regulated infrastructure; Agent packages the infrastructure into modular, embedded and conversational financial products; and Global extends our reach through selected international investments and local partnerships. We intend for the three engines to share technology, compliance processes, distribution and transaction flows, which may reduce implementation complexity for clients, improve operating leverage and create opportunities to cross-sell additional capabilities. Our ability to realize these benefits depends on successful execution, client adoption, regulatory approvals, commercial agreements and market conditions.

Bakkt Markets

Bakkt Markets enables financial institutions, financial technology firms and digital asset businesses to integrate digital asset trading, payment and treasury capabilities through our platform. Our services span digital asset trade execution and liquidity access, stablecoin on- and off-ramps, payment and settlement, custody and treasury solutions, and related operational support. These services are offered as a menu of modular capabilities: clients can integrate through application programming interfaces ("APIs") or through interfaces designed for AI-agent access, including Model Context Protocol ("MCP") server or Tools and can activate only the modules they need without rebuilding the underlying technology and compliance infrastructure.

Our cross-border payments solutions are designed to address long-standing inefficiencies in international payments, including foreign exchange costs, failed transactions, hedging costs, settlement speed and limited auditability. By enabling faster, programmable settlement, including for currency corridors outside the largest global currencies, we believe our solutions can reduce transaction and hedging costs for clients, improve transparency and auditability, and allow clients to use accelerated settlement as a commercial advantage, including in negotiating payment terms with their own counterparties and suppliers. We believe these capabilities expand the range of payment flows our platform can address.

Bakkt Markets is supported by licenses and registrations held by our operating subsidiaries, including pan-U.S. money transmitter licenses and a New York BitLicense, together with our compliance, security and risk-management framework. The permissions available under any license or registration vary by jurisdiction and activity, and certain services depend on third-party banks, custodians, liquidity providers and other counterparties. Our Markets revenue currently is generated principally from digital asset transactions and is sensitive to client mix, trading activity, digital asset prices and spreads.

Bakkt Agent

Bakkt Agent is our AI-native financial services layer. It takes the regulated capabilities delivered through Bakkt Markets' APIs and puts an intelligent agent in control of them — using AI to interpret intent, orchestrate multi-step financial actions, and execute transactions on a client's or end user's behalf across onboarding, funding, payments and settlement, together with the compliance processes that support them. Clients embed these agentic capabilities in their own products on a white-label basis, through conversational interfaces or direct integration, to deliver financial services driven by intent rather than manual coding or workflows.

We are developing three principal product configurations: a modular neobanking-as-a-service stack, white-label card and credit card programs, and agentic cross-border transfers. Through the neobanking-as-a-service offering, businesses would be able to use our technology and regulated infrastructure on a white-label basis to offer programmable finance and account-based products to their end customers, subject in each case to applicable licensing, bank partner, network and regulatory requirements. Certain infrastructure modules are available, while other products remain in development or are subject to partner, bank, network or regulatory requirements.

Bakkt Global

Bakkt Global is our strategy for extending our technology, brand and infrastructure into selected international markets through strategic investments and local partnerships. We seek opportunities in jurisdictions with established or developing regulatory frameworks, liquid capital markets and demand for digital financial infrastructure. Our current strategic Global investments are in Bitcoin Japan Corporation, a Tokyo Stock Exchange-listed company (TSE: 8105), and Transchem Limited, a BSE-listed company in India (BSE: 500422). These investments are intended to complement our other business engines by extending our technology, infrastructure and commercial capabilities into selected international markets. We expect to leverage our infrastructure in these markets and, over the medium term, we expect these strategic investments to create meaningful opportunities to grow our platform. These opportunities are subject to local regulations, required approvals and commercial execution, and their timing and financial impact are uncertain.

The value and strategic benefit of these investments depend on market prices, foreign currency exchange rates, the performance and governance of the investees, regulatory developments, and the completion of contemplated corporate actions.

Second-Quarter Highlights and Trends

The following developments were significant to our business and results during the second quarter and first half of 2026:

• We completed the acquisition of Distributed Technologies Research Global Ltd. on April 30, 2026 in an all-stock transaction and began consolidating its results as of May 1, 2026. We integrated its payment, stablecoin, onboarding and compliance technology into Bakkt's platform and subsumed the pre-existing commercial agreement into the combined company. The acquisition affects period-to-period comparability because our results for the three and six months ended June 30, 2026 include two months of the acquired operations, while prior periods do not.
• We continued consolidating onboarding and identity processes across our product modules and enabled additional wire and ACH funding capabilities. These capabilities are designed to support digital asset trading, stablecoin conversion, fiat transfers and cross-border settlement through a common infrastructure layer.
• Following receipt of required Indian regulatory approvals, Transchem allotted 47,500,000 warrants to Bakkt in June 2026. We initially paid approximately $9.4 million, representing 25% of the aggregate subscription amount, and the remaining aggregate subscription amount payable upon full exercise was approximately $28.2 million as of June 30, 2026. The warrants may be exercised in one or more tranches during an 18-month exercise period.
• We acquired Gyzer and brought its embeddable fiat-to-crypto on- and off-ramp embedded user interfaces onto our platform, connecting it to our stablecoin and onboarding infrastructure. This allows clients to enable stablecoins purchase and sale directly into their own applications and adds a new channel for transaction volume across the platform. The acquisition also brought experienced leadership and an operating team across engineering, compliance and sales into Bakkt, including Daniel Ishag, who joined as our Chief Commercial Officer.

Digital Asset Market Developments

During the second quarter of 2026, the regulatory treatment of digital assets continued to evolve and has drawn significant attention from legislative and regulatory bodies around the world. Recent developments relating to digital assets and cryptocurrency include the adoption of the Guiding and Establishing National innovation for U.S. Stablecoins Act (the “GENIUS Act”) and the proposal of the Digital Asset Market Clarity Act (the “CLARITY Act”).

Legislation in the US and abroad is expected to provide increased certainty for market participants and accelerate institutional adoption. Enactment of the “GENIUS Act”, established a federal framework for “payment stablecoins,”

treating them as payment systems, and mandating fiat-backed reserves, monthly disclosures, anti-money laundering safeguards, and similar measures. Stablecoins have grown rapidly as an alternative to bitcoin and other digital assets as a medium of exchange and store of value, and their use as an alternative to bitcoin could expand further as a result of the GENIUS Act being enacted. Additionally, the CLARITY Act, currently under consideration by the U.S. Senate, seeks to provide for a system of regulation of the offer and sale of digital assets by the SEC and CFTC and establish a provisional registration regime.

We believe increased global regulatory clarity will result in increased conviction in stablecoins by consumers and enterprises alike, which will drive greater adoption. We believe these trends will naturally increase the value of our global licensing network and the use of our platform.

Key Factors Affecting Our Performance

Client Base, Concentration and Transaction Activity

Our ability to generate revenue depends on retaining existing clients, activating new clients, increasing transaction activity and expanding the products used by each client. Client onboarding can require commercial negotiations, technical integration, due diligence, compliance review and regulatory coordination, which may result in long sales and activation cycles.

Product Development and Commercialization

Our growth strategy requires us to develop, integrate and commercialize new capabilities while maintaining a secure, resilient and compliant platform. The integration of our acquired payment technology gives us a common onboarding, stablecoin and settlement foundation across Markets and Agent. We expect to continue investing in product engineering, compliance, banking and network relationships, and client implementation. Products described as available may still require client-specific integration, approvals or third-party arrangements before they generate revenue. Delays, cost overruns, limited adoption or changes in partner requirements could adversely affect our results.

Integration of Acquisitions and Operating Efficiency

Following the April 2026 acquisition of DTR, we integrated DTR’s payment, stablecoin, onboarding and compliance technology into our platform. The broader integration of DTR into our business remains ongoing, including with respect to personnel, controls and commercial processes following the April 2026 acquisition of DTR. Our results are affected by the pace and cost of these ongoing integration activities, which may require additional compensation, professional services, technology and compliance expenditures. We continue to evaluate our headcount, vendor relationships, technology architecture and other operating costs to focus resources on initiatives with a clear path to commercial value. Savings may take longer to realize than expected and may be offset by growth investments.

Competition

The markets for digital asset infrastructure, stablecoin payments, embedded finance and cross-border payments are highly competitive and rapidly evolving. We compete with digital asset exchanges and brokers, financial technology platforms, payment processors, banks, custody providers, stablecoin issuers, blockchain-native infrastructure companies and internally developed client solutions. Competitive factors include regulatory permissions, security, asset and currency coverage, liquidity, price, speed, reliability, user experience, geographic reach, integration effort and brand trust. Increased competition may reduce spreads and fees, raise client-acquisition and product-development costs or slow adoption.

General Economic and Market Conditions

Digital asset transaction activity is cyclical and can change rapidly in response to asset prices, volatility, interest rates, liquidity, macroeconomic conditions, geopolitical events and risk sentiment. Our Global investments also expose us to public-equity-market fluctuations and foreign currency movements. These factors may affect revenue, fair-value measurements, equity-method results, liquidity and the carrying value or recoverability of our assets. The amount and timing of these effects may be difficult to predict.

Regulation in U.S. and International Markets

We operate in a highly regulated environment. Our activities are subject to laws and regulations relating to money transmission, virtual currencies, securities, commodities, banking, payments, anti-money laundering, sanctions, privacy, cybersecurity, consumer protection and AI, among other areas. Requirements differ by jurisdiction and may change or be interpreted differently over time. We may need additional licenses, registrations, approvals or partner arrangements to launch particular products or enter new markets. Regulatory developments can increase our costs, delay commercialization, restrict product features or create liability, while clear and workable frameworks may support institutional adoption of our services.

Strategic Investments and Capital Allocation

Bakkt Global requires us to allocate capital to strategic investments whose value and liquidity may be volatile. The quoted market price of an investee's shares may not be achievable for our position because of trading volumes, contractual restrictions, regulatory requirements, market impact, taxes, foreign exchange or other factors. The Transchem Warrants require additional capital if we elect to exercise them, and the expected strategic benefits of our investments may depend on actions by the investees and third parties. We evaluate these opportunities together with our operating cash needs, regulatory capital requirements and other commitments.

Key Performance Indicators

We use operating and statistical measures to evaluate our business, identify trends, formulate plans and make strategic decisions, and we believe these measures provide investors with useful supplemental information about our operating performance and trends across our business lines. These measures are operating and statistical metrics used by management to evaluate performance and are not financial measures prepared in accordance with U.S. GAAP. Beginning in the second quarter of 2026, our principal KPIs are Total Transacting Volume for Bakkt Markets and Strategic Asset Value for Bakkt Global. Following the commercial launch of Bakkt Agent products, we intend to report Monthly Active Users for Bakkt Agent. We may refine the definitions and methodologies as the underlying products and investment strategy develop. If we materially change a methodology, we expect to disclose the change, the reasons for the change and, where practicable, its effect on prior-period information.

Total Transacting Volume

Total Transacting Volume ("TTV") is the aggregate notional value of transactions processed through Bakkt's platforms during the period. TTV includes digital asset purchases and sales routed through client platforms; institutional and business-to-business payments, including cross-border stablecoin payments; peer-to-peer fiat transfers; consumer and business payments processed through our infrastructure; and other transaction activity routed through our platforms. The relationship between TTV and revenue differs by transaction type. For digital asset purchases and sales, where crypto services revenue is presented on a gross basis, the notional value of transactions is generally also recognized as revenue, with substantially offsetting crypto costs and execution, clearing and brokerage fees. For payments and transfer activity, TTV reflects the notional value of funds moved through our infrastructure, and the associated fees and spreads, rather than the notional value, are recognized as revenue. Accordingly, TTV is an operating metric of transactional activity; it is not a substitute for revenue determined in accordance with GAAP, and it does not represent profitability, assets held by the Company, or cash flow. We use TTV to monitor the scale, adoption and mix of transaction activity across our platform, and we believe TTV provides investors with useful supplemental information about the volume of activity we facilitate. Because TTV reflects gross notional transaction amounts rather than net revenue and includes transaction types with materially different revenue and margin profiles, period-over-period changes in TTV should not be viewed as indicative of changes in our net revenue or operating results.

TTV was $168.8 million for the three months ended June 30, 2026, consisting of $161.9 million of digital asset trading activity and $6.8 million of payments activity, and $410.0 million for the six months ended June 30, 2026. The six-month amount includes $241.2 million of notional traded volume reported for the first quarter of 2026. Beginning May 1, 2026, TTV includes activity processed through the payment infrastructure acquired on April 30, 2026 in connection with the acquisition of DTR. Activity of the acquired business before May 1, 2026 is not included, and prior periods have not been recast.

Digital asset trading activity remained below the levels experienced in the corresponding periods of the prior year, resulting in lower gross digital asset services revenue, substantially offset by corresponding decreases in digital asset costs and execution, clearing and brokerage fees.

Strategic Asset Value

Strategic Asset Value ("SAV") is the aggregate value of our Bakkt Global strategic positions as reported in our consolidated balance sheet. We use SAV to monitor the value of these positions for internal capital-allocation and reporting purposes, and we believe SAV provides investors with useful supplemental information about our exposure to the equity value of these positions. SAV equals the sum of (i) the carrying value of our equity method investment in Bitcoin Japan Corporation and (ii) the fair value of our Transchem Warrant position, in each case as reported in the accompanying unaudited consolidated financial statements. Positions are included in SAV from the date of allotment or acquisition and are removed upon disposal; cash previously received or amounts receivable in connection with our investments are not included in SAV.

Because the components of SAV are measured under different accounting frameworks — the equity method for the Bitcoin Japan Corporation investment, which reflects our share of the investee's book value on a one-quarter lag and is not marked to market, and fair value under ASC 820 for the Transchem Warrants, which reflects, among other inputs, a discount for lack of marketability — SAV does not represent the aggregate market value of the underlying shares, current liquidation value, net asset value, revenue, income or cash flow, and does not deduct taxes or transaction costs. The quoted market prices of the investees' listed shares may differ, in either direction, from the values at which our positions are carried, and actual realizable value may differ materially from SAV.

SAV was approximately $118.6 million as of June 30, 2026, consisting of the $10.6 million carrying value of our equity method investment in Bitcoin Japan Corporation and the $107.9 million fair value of our Transchem Warrant position.

Monthly Active Users

We intend to report Monthly Active Users (“MAUs”) as an additional key performance indicator beginning in the second half of 2026. A Monthly Active User is a unique end user completing at least one qualifying activity in an applicable Bakkt Agent-powered product during the calendar month, such as payments, transfers, card transactions, account funding, digital asset transactions or the use of agentic financial services delivered through a client application. A user is counted once per client application per month, regardless of the number of activities or products used within that application. An end user who transacts through more than one client application would be counted once for each application. MAUs will include end users of client applications built on Bakkt Agent as well as users of the Company’s own Agent-powered offerings. MAUs measure reach and adoption; they do not measure revenue or profitability, and revenue associated with an individual user varies by product and client arrangement. We do not report MAUs for the current period because partner products had not yet begun generating qualifying activity as of June 30, 2026; we will present the definition and methodology in effect when reporting begins.

Results of Operations

The following table is our consolidated statements of operations for the three and six months ended June 30, 2026 and June 30, 2025, respectively (in thousands):

Three Months Ended June 30, 2026 compared to Three Months Ended June 30, 2025

Financial Summary

The three months ended June 30, 2026 included the following notable items relative to the three months ended June 30, 2025:

• Revenue decreased $398.0 million primarily driven by a decrease in crypto trading volume compared to the prior year second quarter; and
• Operating expenses decreased $394.5 million primarily driven by lower crypto trading costs in connection with lower crypto trading volume compared to the prior year second quarter.

Revenue

Revenues are derived from the provision of digital asset services. We earn revenue when consumers use our services to buy, sell, and store digital assets. Substantially all of our Crypto services revenue is transaction revenue from digital asset buy/sell trades where we earn a spread on both legs of the transaction (reported gross).

Crypto Services Revenue

($ in thousands)

Crypto services revenue decreased by $398.0 million, or 70.0%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease was primarily driven by decreased crypto trading volume primarily driven by the loss of Webull and Public as clients, as well as broader market volume reductions compared to the prior year second quarter.

Operating Expenses

Operating expenses consist of crypto costs, execution, clearing and brokerage fees, compensation and benefits, professional services, technology and communication expenses, selling, general and administrative expenses, acquisition-related expenses, depreciation and amortization, related party expenses, goodwill and intangible assets impairments, impairment of long-lived assets, restructuring charges, and other operating expenses.

Crypto Costs

($ in thousands)

Crypto costs represent the gross value of crypto sold by our customers on our platform. These costs are measured at the executed price at the time of the trade. Crypto costs decreased by $393.1 million, or (70.1%), for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. This decrease was primarily driven by decreased crypto trading volume.

Execution, Clearing and Brokerage Fees

($ in thousands)

Execution, clearing and brokerage fees primarily represent payments to clients in exchange for driving order flow to our platform. Execution, clearing and brokerage fees decreased by $2.8 million during the three months ended June 30, 2026. The decrease reflects decreased crypto transaction volume as described above.

Compensation and Benefits

($ in thousands)

Compensation and benefits expense include all salaries and benefits, compensation for contract labor, incentive programs for employees, payroll taxes, share-based and unit-based compensation and other employee related costs.

We have restructured our personnel to reduce headcount and adjusted our expense base to better align with our operational priorities and business strategy, as well as our integration of DTR.

Compensation and benefits decreased by $3.2 million, or 31.6%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease was primarily due to decreases of $3.9 million in non- cash compensation, partially offset by a $0.5 million increase in non-development contract labor and a $0.2 million increase salaries and wages, benefits and payroll tax.

Professional Services

($ in thousands)

Professional services expense includes fees for accounting, legal and regulatory fees. Professional services increased by $3.2 million, or 78.6%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was primarily due to an increase of $3.9 million in consulting and advisory fees and a $0.3 million increase in legal fees, mainly in relation to strategic and transformational initiatives, partially offset by a $1.0 million decrease in audit and tax fees.

Technology and Communication

($ in thousands)

Technology and communication costs represent all non-headcount related costs to deliver technological solutions. Such costs principally include amounts paid for software licenses and software-as-a-service arrangements utilized for operating, administrative and information security activities, fees paid for third-party data center hosting arrangements, and fees paid to telecommunications service providers and for telecommunication software platforms necessary for operation of our customer support operations. These costs are driven by client requirements, system capacity, functionality and redundancy requirements. Technology and communications expense also includes fees paid for access to external market data and associated licensing costs, which may be impacted by growth in electronic contract volume, our capacity requirements, changes in the number of telecommunications hubs, and connections with customers to access our electronic platforms directly.

Technology and communications expense increased by $0.4 million, or 26.4%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was primarily due to an increase of $0.2 million in business licenses and registration fees, and an increase of $0.1 million in software as a service (SaaS) costs.

Selling, General and Administrative

($ in thousands)

Selling, general and administrative expenses include marketing, advertising, business insurance, rent and occupancy, bank service charges, dues and subscriptions, travel and entertainment, rent and occupancy, and other general and administrative costs. Our marketing activities primarily consist of conferences and user events, and brand-building activities. Selling, general and administrative expenses do not include any headcount cost, which is reflected in the compensation and benefits financial statement line item.

Selling, general and administrative costs decreased by $0.9 million, or 28.8%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The decrease was primarily due to a $0.5 million reduction in insurance expense, a $0.3 million reduction in occupancy expense, a $0.2 million reduction in Board of Directors expenses and a $0.2 million reduction in dues and subscriptions, partially offset by a $0.3 million increase in travel and entertainment costs.

Depreciation and Amortization

($ in thousands)

Depreciation and amortization expense consists of amortization of intangible assets from business acquisitions and internally developed software and depreciation of purchased software and computer and office equipment over their estimated useful lives. Depreciation and amortization increased by $0.9 million, or 583.1%, for the three months ended June 30, 2026 compared to the three months ended June 30, 2025. The increase was primarily due to amortization of intangible assets we recognized in the second quarter of 2026 from the acquisitions of DTR and Gyzer.

Impairment of long-lived assets

($ in thousands)

During the three months ended June 30, 2026, we recognized a $1.2 million impairment charge related to the decision to the decision to cease further development of certain internally developed software.

Gain (loss) from Change in Fair Value of Warrant Liability

($ in thousands)

We recorded a gain of $1.4 million during the three months ended June 30, 2026 for the change in fair value on the revaluation of our warrant liabilities associated with our public warrants and the Class 1 and Class 2 warrants. We recorded a loss of $(8.6) million during the three months ended June 30, 2025 for the change in fair value on the revaluation of our warrant liability associated with our public warrants. These are non-cash losses and gains which are driven by fluctuations in the market price of our public warrants and valuation of our Class 1 and Class 2 warrants.

Change in fair value of Transchem Warrants

($ in thousands)

During the three months ended June 30, 2026, we invested in a subscription allotment for Transchem Warrants that we account for at fair value. During the three months ended June 30, 2026, we recognized a gain from the change in the fair value of the Transchem Warrants relative to the day one subscription payment.

Other (Expense) Income, net

($ in thousands)

Other (expense) income, net primarily consists of non-operating gains and losses. During the three months ended June 30, 2026, we had other income of $0.3 million primarily related to $0.3 million of realized income from the

Derivative asset. During the three months ended June 30, 2025, we had other expenses of $2.0 million primarily related to the $3.4 million net loss on the sale of Bakkt Trust in May 2025 and foreign currency translation.

Six Months Ended June 30, 2026 compared to Six Months Ended June 30, 2025

Financial Summary

The six months ended June 30, 2026 included the following notable items relative to the six months ended June 30, 2025:

• Revenue decreased $1,220.1 million primarily driven by a significant decrease in Crypto services revenue resulting from a decrease in trading volume primarily as a result of the loss of Webull and Public as clients; and
• Operating expenses decreased $1,215.1 million primarily driven by decreased crypto trading costs in conjunction with decreased crypto service revenue.

Crypto Services Revenue

($ in thousands)

Crypto services revenue decreased by $1,220.1 million, or 74.7%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease was primarily driven by decreased crypto trading volume primarily driven the loss of Webull and Public as clients, as well as broader market volume reductions compared to the first half of 2025.

Crypto Costs

($ in thousands)

Crypto costs decreased by $1,207.8 million, or 74.8%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. This decrease was primarily driven by decreased crypto trading volume.

Execution, Clearing and Brokerage Fees

($ in thousands)

Execution, clearing and brokerage fees decreased $8.5 million, or 72.1%, during the six months ended June 30, 2026 relative to the same period in the prior year. The decrease reflects decreased Crypto trading volume.

Compensation and Benefits

($ in thousands)

62

Compensation and benefits decreased by $4.4 million, or 24.5%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease was primarily due to decreases of $4.2 million in non-cash compensation, partially offset by an increase of $0.5 million in recruitment expenses compared to the same period last year.

Professional Services

($ in thousands)

Professional services increased by $5.7 million, or 62.4%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily due to a $3.7 million increase in consulting and advisory services and a $2.8 increase in legal fees, mainly in relation to strategic and transformational initiatives, partially offset by a $0.7 million reduction in audit and tax fees.

Technology and Communication

($ in thousands)

Technology and communications expense increased by $0.2 million, or 5.6%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily due to a $0.4 million increase in business licenses and registration fees, partially offset by $0.2 of reductions in internet access and hosting fees.

Selling, General and Administrative

($ in thousands)

Selling, general and administrative costs decreased by $2.1 million, or 30.7%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The decrease was primarily due to a $1.0 million decrease in occupancy cost and $1.0 million decrease in insurance cost.

Depreciation and Amortization

($ in thousands)

Depreciation and amortization increased by $0.7 million, or 198.9%, for the six months ended June 30, 2026 compared to the six months ended June 30, 2025. The increase was primarily due to amortization of intangible assets we recognized in the second quarter of 2026 from the acquisitions of DTR and Gyzer.

Gain from Change in Fair Value of Warrant Liability

($ in thousands)

63

We recorded a gain of $6.1 million during the six months ended June 30, 2026 for the change in fair value on the revaluation of our warrant liabilities associated with our public warrants and Class 1 and Class 2 warrants. We recorded a gain of $23.6 million during the six months ended June 30, 2025 for the change in fair value on the revaluation of our warrant liabilities. These are non-cash gains and are driven by fluctuations in the market price of our public warrants and valuation of our Class 1 and Class 2 warrants.

Change in fair value of Transchem Warrants

($ in thousands)

During the six months ended June 30, 2026, we invested in a subscription allotment for Transchem Warrants that we account for at fair value. During the six months ended June 30, 2026, we recognized a gain from the change in the fair value of the Transchem Warrants relative to the day one subscription payment.

Other Income, net

($ in thousands)

Other income, net primarily consists of non-operating gains and losses. During the six months ended June 30, 2026, we recognized income, net, of $1.3 million in gains and changes in value connected to settlements of derivative assets, partially offset by $0.5 million of sublease commission expense associated with a lease extinguishment. During the six months ended June 30, 2025, other income was flat, as the net gain of approximately $1.8 million on the assignment of our New York office lease and $0.5 million of sublease income on our Alpharetta headquarters was offset by the $2.3 million loss on sale of Bakkt Trust.

Liquidity and Capital Resources

As of June 30, 2026, we had $50.0 million and $0.7 million of cash and cash equivalents and restricted cash, respectively. Cash and cash equivalents consist of cash deposits at banks and money market funds. Restricted cash is held to satisfy certain minimum capital requirements pursuant to regulatory requirements, or as collateral for insurance contracts.

In February 2026, we raised gross proceeds of approximately $48.1 million in connection with issuance of shares of Common Stock and the 2026 Pre-Funded Warrants in a registered direct offering (the "RDO").

In January 2026, we established an at-the-market sales program (the "ATM Program") by entering into a Sales Agreement (the “Sales Agreement”) with each of The Benchmark Company, LLC, Virtu Americas LLC, Clear Street LLC, Cohen & Company Capital Markets, a division of Cohen & Company Securities, LLC, Macquarie Capital (USA) Inc., Rosenblatt Securities Inc. and Roth Capital Partners, LLC (each, a “Sales Agent” and together, the “Sales Agents”). Pursuant to the Sales Agreement, the Company may sell, from time to time, up to an aggregate sales price of $300,000,000 of its Common Stock, through the Sales Agents. Sales of Common Stock made pursuant to the Sales Agreement may be made by any method deemed to be an “at the market offering” as defined in Rule 415(a)(4) of the Securities Act of 1933, as amended, including sales made in ordinary brokers’ transactions on the New York Stock Exchange or otherwise at market prices prevailing at the time of the sale, at prices related to prevailing market prices or at negotiated prices and block trades. Gross proceeds from sales under the ATM Program in the first quarter of 2026 were $21.5 million.

We intend to use our unrestricted cash for working capital and general corporate purposes, including, but not limited to funding our regulatory capital requirements, compensating balance arrangements and other similar commitments, each of which is subject to change, and as available (i) activate new digital asset clients, (ii) maintain our product development efforts, and (iii) optimize our technology infrastructure and operational support. We continue to evaluate our headcount and expense base. In forecasting the Company's expectation of cash needs for the initial going concern evaluation, the Crypto services revenue growth projections exclude activation of new clients or products currently not live on Bakkt's platform as of the date of release of these consolidated financial statements. In addition, we may in the future enter into arrangements to acquire or invest in complementary businesses, services, technologies or intellectual property rights. However, except with respect to our acquisition of DTR, we have no agreements or commitments with respect to any such acquisitions or investments at this time. Management believes that the Company's cash and cash equivalents will be sufficient to fund Bakkt's operations for 12 months from the date of these financial statements are issued.

Our future cash requirements will depend on many factors, including our revenue growth rate, the timing and extent of overhead, sales and marketing expenditures to support projected growth, our ability to limit our software development investments to features and functionality with a clear line of sight to revenue generation, and our ability to retain our clients.

The following table summarizes our cash flows for the periods presented (in thousands):

Operating Activities

Since our inception, we have yet to achieve positive cash flow from operations. Our primary uses of cash include compensation and benefits for headcount-related expenses, investment in software and product development of our technology platforms, and associated non-headcount technology and communication cost to develop, operate and support our customer-facing technology platforms.

Net cash flows used in operating activities of $26.9 million for the six months ended June 30, 2026 was primarily driven by the net income of $69.2 million, adjusted for the $97.8 million non-cash change the fair value of the Transchem Warrant and derivative asset, a $6.1 million non-cash gain resulting from the change in warrant liabilities and a $5.9 million increase in customer funds payable, partially offset by cash outflows resulting from the change in our operating assets and liabilities of $7.3 million, a non cash long-lived asset impairment loss of $1.2 million, depreciation and amortization of $1.1 million, and $4.7 million of non-cash compensation expense.

Net cash flows used in operating activities of $95.9 million for the six months ended June 30, 2025 was primarily related to cash outflows resulting from a $67.2 million decrease in customer funds payable, a $2.4 million reduction in our net operating assets and liabilities (excluding customer funds payable), and $26.4 million of net operating cash expenses.

Investing Activities

Net cash flows used in investing activities of $12.4 million for the six months ended June 30, 2026 primarily consisted of $2.0 million of capitalized costs of internally developed software for our technology platforms, $3.2 million of cash consideration for the acquisition of DTR, $9.4 million of cash consideration for the Transchem Warrant subscription, partially offset by $2.7 million of proceeds from the Derivative asset.

Net cash flows provided by investing activities of $4.4 million for the six months ended June 30, 2025 primarily consisted of proceeds from the sale of Bakkt Trust.

Financing Activities

Net cash flows provided by financing activities of $67.2 million during the six months ended June 30, 2026 primarily consisted of $67.1 million of net proceeds from the issuance of Common Stock and 2026 Pre-Funded Warrants in the RDO and under our ATM Program and $0.5 million of proceeds for stock option exercises, slightly offset by $0.3 million in tax withholding payments for vested equity awards.

Net cash flows provided by financing activities of $21.3 million during the six months ended June 30, 2025 primarily consisted of $23.8 million in proceeds from the issuance of convertible debentures, slightly offset by tax withholding payments of $1.7 million for vested equity awards and $0.8 million in financing fees related to the convertible debenture issuance.

Contractual Obligations and Commitments

The following is a summary of our significant contractual obligations and commitments as of June 30, 2026 (in thousands):

(1) Represents minimum commitment payments under a four-year cloud computing arrangement. Several amendments have resulted in the payment period for the cloud computing arrangement being extended to early 2027.

Non-GAAP Financial Measures

The unaudited interim consolidated financial statements included in this Report are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). We use non-GAAP financial measures to assist in comparing our performance on a consistent basis for purposes of business decision-making by removing the impact of certain items that management believes do not directly reflect our core operations. We believe that presenting non-GAAP financial measures is useful to investors because it (a) provides investors with meaningful supplemental information regarding financial performance by excluding certain items that we believe do not directly reflect our core operations, (b) permits investors to view performance using the same tools that we use to budget, forecast, make operating and strategic decisions, and evaluate historical performance, and (c) otherwise provides supplemental information that may be useful to investors in evaluating our results.

We believe that the presentation of the following non-GAAP financial measures, when considered together with the corresponding GAAP financial measures and the reconciliations to those measures provided herein, provides investors with an additional understanding of the factors and trends affecting our business that could not be obtained absent these disclosures.

Adjusted EBITDA

We present Adjusted EBITDA as a non-GAAP financial measure.

We believe that Adjusted EBITDA provides relevant and useful information, which is used by management in assessing the performance of our business. EBITDA is defined as earnings before interest, income taxes, depreciation, and amortization. Adjusted EBITDA is defined as EBITDA before share-based and unit-based compensation expense, goodwill and intangible assets impairments, restructuring charges, changes in the fair value of our warrant liability and certain other non-cash and/or non-recurring items that do not contribute directly to our evaluation of operating results and are not components of our core business operations. Adjusted EBITDA provides management with an understanding of earnings before the impact of investing and financing transactions and income taxes, and the effects of aforementioned items that do not reflect the ordinary earnings of our operations. This measure may be useful to an investor in evaluating our performance. Adjusted EBITDA is not a measure of our financial performance under GAAP and should not be considered as an alternative to net income (loss) or other performance measures derived in accordance with GAAP. Our definition of Adjusted EBITDA may not be comparable to similarly titled measures used by other companies.

Non-GAAP financial measures like Adjusted EBITDA have limitations, should be considered as supplemental in nature and are not meant as a substitute for the related financial information prepared in accordance with GAAP. The non-GAAP financial measures should be considered alongside other financial performance measures, including net income (loss) and our other financial results presented in accordance with GAAP.

The following table presents a reconciliation of net income (loss) from continuing operations, the most directly comparable GAAP operating performance measure, to our Adjusted EBITDA for each of the periods indicated (in thousands):

Adjusted EBITDA loss for the three months ended June 30, 2026 increased by $2.0 million or 20.1% as compared to the three months ended June 30, 2025 primarily due to a decrease of $2.0 million in crypto services revenue net of crypto cost and execution and brokerage fees, a $0.7 million increase in salaries and contract labor, and a $0.3 million loss from an equity method investment that did not occur in the prior period, partially offset by a $0.9 million reduction in selling, general and administrative expenses.

Adjusted EBITDA loss for the six months ended June 30, 2026 increased by $4.0 million or 18.4% as compared to the six months ended June 30, 2025 mainly due to a decrease of $3.8 million in crypto service revenue net of crypto cost and execution, clearing and brokerage fees, a $2.1 million increase in professional services expenses, and a $0.5 million loss from an equity method investment that did not occur in the prior period, partially offset by a $2.1 million reduction in selling, general and administrative expenses and $1.3 million of net realized income from the Derivative asset.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with U.S. GAAP, which requires us to make estimates and apply judgments that affect the reported amounts. In our notes to the unaudited consolidated financial statements, we describe the significant accounting policies used in preparing the consolidated financial statements. Our management has discussed the development, selection, and disclosure of our critical accounting policies and estimates with the Audit and Risk Committee of the Board. For further information about our critical accounting policies and estimates, refer to “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Form 10-K filed with the SEC on March 19, 2026. There have been no material changes to our critical accounting policies and estimates since the filing of our Form 10-K.

Use of Estimates

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in our consolidated financial statements and accompanying notes. We base our estimates and assumptions on various judgments that we believe to be reasonable under the circumstances. The significant estimates and assumptions that affect the financial statements may include, but are not limited to, going concern, income tax valuation allowances, useful lives of intangible assets and property, equipment and software, fair value of financial assets and liabilities, determining provision for credit losses, valuation of acquired tangible and intangible assets, the impairment of intangible assets and goodwill, and fair market value of Bakkt incentive units. Actual results and outcomes may differ from management's estimates and assumptions and such differences may be material to our consolidated financial statements.

Recently Issued and Adopted Accounting Pronouncements

Recently issued and adopted accounting pronouncements are described in Note 2 in the unaudited consolidated financial statements included in this Report.

Evaluation of Disclosure Controls and Procedures

As required by Rule 13a-15(b) under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), we have evaluated, under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Report. Our disclosure controls and procedures are designed to provide reasonable assurance that the information required to be disclosed by us in reports that we file under the Exchange Act is accumulated and communicated to management, including our President and Chief Executive Officer (principal executive officer) and Chief Financial Officer (principal financial officer), as appropriate, to allow timely decisions regarding required disclosure and is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC. Based on the evaluation of our disclosure controls and procedures, our President and Chief Executive Officer and Chief Financial Officer have concluded that as of June 30, 2026, our disclosure controls and procedures were, in design and operation, effective at a reasonable assurance level.

Changes in Internal Control Over Financial Reporting

There were no changes to our internal control over financial reporting (as defined in Rule 13a-15(f) and Rule 15d-15(f) under the Exchange Act) during the quarter ended June 30, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Limitations on Effectiveness of Controls and Procedures

In designing and evaluating our disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives. In addition, the design of disclosure controls and procedures must reflect the fact that there are resource constraints and that management is required to apply judgment in evaluating the benefits of possible controls and procedures relative to their costs. Our management, including our principal executive officer and principal financial officer, believe that our disclosure controls and procedures and internal control over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, our management does not expect that our disclosure controls and procedures or our internal control over financial reporting will prevent all errors and all fraud.

There have been no material changes from the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2025, as supplemented by the risk factors previously disclosed in the Company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2026.