Sentiment Analysis of the earnings transcript to help figure out if there are any bullish or bearish sentiments that could be gathered from it. We're doing ML and AI based analysis on the earnings call to get some more insights.
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| Statement |
|---|
| This should reduce our reliance on industry activity volumes and provide stability to our revenue stream during uncertain market activity levels |
| These recent wins are testament to the product market fit of our capabilities and the continued focus on growing our core crypto solutions |
| We see a strong pathway for our entry |
| I think us being able to take advantage of that good regulatory clarity, consumer sentiment together with strong backlog against a recurring revenue model is really giving us great confidence as we move into 2024 |
| We've made substantial strides this quarter, expanding our trading and custody network |
| We've made international expansion a key priority, and we've demonstrated our ability to act quickly with our capabilities active in nine new markets by the end of this year |
| This will generate strong revenue growth for us as we look to 2024 |
| As we see regulatory clarity, we see the consumer sentiment return to a very positive level |
| The progress we have highlighted in signing new retail and institutional crypto customers will drive strong backlog going into 2024 |
| Our loyalty redemption capabilities also continue to be a strength as we provide our clients with a full spectrum of flexible and comprehensive solutions |
| This was another consecutive quarter where we clearly demonstrated our ability to execute and leverage our industry leading platform, made stronger from our acquisition of Apex Crypto to win new clients and deliver results for our existing ones |
| These customers have unique needs, and Bakkt is well-positioned to serve them as a qualified custodian |
| 2023 has been a year of enhancing our industry-leading platform across advanced trading capabilities and secure, compliant custody that's built to evolve and adapt with the changing regulatory landscape |
| We're pleased that our disciplined approach to expense management is paying off |
| The applications themselves have been a stamp of approval from traditional finance, and SEC approval of spot Bitcoin ETFs will be a positive step towards mainstream acceptance and legitimacy in the financial world |
| We've made substantial progress this past quarter and we're building momentum for future growth and success |
| It hasn't been an easy journey, but I believe there are better days ahead for this company and our shareholders |
| This marks our entry into the gaming and entertainment industry, which should provide exciting opportunities to expand |
| As we've already taken steps to ensure we are compliant and regulatory first within these markets, we can confidently and quickly broaden our reach to millions of new customers going forward |
| Earlier this year, we communicated our plan to simplify our business and allocate our capital towards areas of the business with strong product market fit, scalability, and a clear path to profitability |
| And as Karen also mentioned, the shift to an ARR model to a subscription model as we are growing and evolving the business, I think provides good underpinnings to the forecast and outlook that Karen gave as part of the presentation |
| We're excited to see this happen and for the opportunities this will bring to the larger market |
| We're pleased with the progress we're making, but what's even more important is that we're moving quickly to onboard all of these clients and activate our crypto capabilities expeditiously |
| We're seeing and continue to see a lot of opportunities to increase efficiencies through the integration of the Apex team and systems with the legacy Bakkt team |
| That's what will drive our stock price higher |
| During the course of 2023, we've made substantial progress against this goal |
| This was driven by an increase in transaction revenue, which was $6.8 million for the quarter, up 5% year-over-year |
| Which markets do you see having the best setup or the least barriers for you outside the U.S.? Gavin Michael John, I think it's the ones that we've spoken about this morning where we see strong regulatory clarity |
| Ultimately, we believe the best way to allocate our capital to generate higher returns for our shareholders is to invest in the business, deliver on milestones, and accelerate our past profitability |
| We've gained significant interest in our upgraded platform from both existing clients and prospects, with many now operating in our sandbox, while trading and custody will always be at Bakkt's core |
| Statement |
|---|
| Given the pullback and significant investments in the loyalty business, we've lowered our long-term revenue growth expectations for this business |
| Since that update, we have seen continued softness in loyalty travel redemption levels, as well as lower market retail crypto transaction activity |
| As depicted here, our crypto trading volumes were down a substantial amount on a sequential basis |
| The quarter-over-quarter decline that we saw in the third quarter was due to a slowdown in overall industry-wide activity levels, as well as lower customer activity during the migration of Webull accounts to Webull Pay, which Gavin mentioned earlier on this call |
| Our assets under custody of $506 million declined 23% sequentially due to the impact from delisting certain coins and a reduction in certain coin prices |
| We still lack a clear regulatory framework, and headwinds from bad actors in the space have muted trading volumes |
| Meanwhile, loyalty redemption volume was down 4% year-over-year |
| As a fellow shareholder, I've certainly been disappointed by the stock price performance |
| crypto market remains challenging |
| Gross crypto services revenue of $191.8 million was impacted by lower industry-wide volumes and lower activity levels from Webull Pay customers |
| Loyalty redemption transacting accounts were down 13% year-over-year, due to a decline in hotel, rental car, and gift card activity |
| I know that the downward pressure on our stock price has been incredibly frustrating to all of our shareholders |
| Due to the migration during the quarter, we experienced a slowdown in client activity on our platform |
| Accordingly, we are reducing our expectation of net loyalty and net crypto revenue activity contribution for 2023 to $57 million to $60 million, comprised of gross crypto revenues of $697 million to $1,215 million and net loyalty revenues of $53 million, less crypto costs of $693 million to $1,208 million |
| If you normalize for these factors, the quarter-over-quarter decline in our crypto trading volumes was right in line with the overall crypto market industry, which was down 23% |
| During the quarter, volumes were impacted by lower activity levels from Webull Pay customers and the delisting of certain coins |
| So it wasn't surprising that we saw some disruption and decrease in trading engagement metrics from that group of customers as they were acclimating themselves to the new Webull Pay experience |
| EBITDA and adjusted EBITDA for the quarter were losses of $48.7 million and $21.6 million respectively |
| We continually hear that custody pricing has been under pressure |
| Once we've done that, further expansion is relatively painless |
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