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In its Q4 2022 report, fintech Bakkt also revealed plans to tie up its acquisition of crypto exchange Apex Crypto.
Bakkt (NYSE: BKKT) posted its Q4 2022 earnings, revealing a revenue haul of $15.6 million. Although this figure came in slightly below the consensus estimate of $16 million, it nonetheless represents a 14% increase year-over-year (YoY). However, the digital asset management technology platform’s Q4 increase in revenue was accompanied by a corresponding expense hike. This development resulted in a hefty impairment charge of $272 million, which impacted Bakkt’s overall bottom line.
The Bakkt Q4 and full-year 2022 earnings report revealed worse-than-expected adjusted earnings. According to the company, these earnings before interest, tax, depreciation, and amortization (EBITDA) were negative $30.5 million. From another perspective, EBITDA came in 30.3% higher than the fourth quarter of 2021. Meanwhile, analysts had expected a figure of negative $28 million.
Company CEO Expresses Satisfaction with Overall Performance Despite Bakkt Q4 2022 Steep Million Impairment Charge
Bakkt’s operating loss for the quarter rose to $341 million from $86 million, representing a lofty 300% increase. These expenses weighed heavily on the company, primarily driven by intangible assets impairment charges and non-cash goodwill of $272 million.
Nonetheless, Bakkt President and Chief Executive Officer Gavin Michael expressed satisfaction with the company’s latest earnings performance. As Michael put it:
“We are proud of all that we accomplished throughout 2022 despite an incredibly difficult market environment. “We delivered on our product roadmap, worked closely with our partners to go to market, added leading industry players to our partner network, and announced our acquisition of Apex Crypto.”
Michael also expressed faith in Bakkt’s future operational prospects based on the fintech’s wealth of resources. In addition, the Bakkt CEO said the company would continually position itself for optimal success upon improving market conditions. In Michael’s own words:
“While market conditions continue to be challenging, we are optimistic that our differentiated platform, regulatory and compliance-first approach, balance sheet strength, and broad partner network will position us well for success. Our priorities for 2023 will appropriately balance growth and discipline, enabling us to be one of the best-positioned crypto companies when market conditions improve.”
Bakkt delineated its priorities for 2023 as influenced by an appropriate balance of “growth and discipline.” This year’s objectives include expanding its crypto platform, activating and broadening its partner network, and simplifying business and expense management.
Furthermore, Bakkt’s 2023 full-year outlook includes growing net revenue up to 30% to $72 million and improving operational net cash by 15% to $110 million. In addition, the Georgia-based technology platform also seeks to improve free cash flow (non-GAAP) by 30% to $115 million.
Apex Crypto Acquisition
Bakkt looks to close its acquisition of crypto investment platform Apex Crypto in 2023 and speed up the integration process. The fintech company says it will provide a financial outlook after the close, subject to regulatory approval.
Bakkt expects to conclude the Apex Crypto acquisition within the first six months of this year. Furthermore, the digital asset management facilitator seeks to drive utility via earning, reward, and pay features. These include deploying Layer 2 protocols such as the Bitcoin Lightning Network.