Bakkt is done with 2022 and is looking ahead to execute a couple of plans that could very well position it a bit higher in the industry. However, the previous year did not go as expected by the company. To start with, it reported a net loss of $1.5 billion for the third quarter of 2022. Reports claim that a larger portion of the net loss was driven by the goodwill impairment charge of $272 million.
That is a possibility since the same factor has driven the net operating expenses to rise from $86 million to $341 million. That represents an increase of 300% from the fourth quarter of last year. Not exactly the kind of increase that Bakkt was looking for; however, impairment charges for non-cash goodwill and intangible assets appear to have taken a serious toll on two different aspects of the company.
Revenue was estimated to touch $16 million for Bakkt. Reports now show that the number has been restricted to $15.6 million. This is little to worry about as it still shows an increase of 14% on a Year-on-Year basis. EBITDA – short for Earnings Before Interest, Tax, Depreciation, & Amortization – danced at a 30% higher estimate with a negative $30.5 million against the estimate of $28 million.
Bakkt is now leaving that behind to move ahead with the possible acquisition of Apex Crypto. It will also look to invest in the custody while driving the utility through different features like reward, earning, and pay. It will further include the utility of Layer 2 protocols which could potentially bring Bitcoin’s Lightning Network into its ecosystem.
The reports and other developments come amid the time when Bakkt is transitioning from serving customers to serving businesses by nixing the consumer app. B2B technical solutions are likely to take center stage at Bakkt. According to a statement issued by its Chief Executive Officer, Gavin Michael, the company is now focusing the investment on the core solutions that better fit the market demands and position it to scale at a faster rate.
This was said after clarifying that Bakkt is discontinuing the app to ensure that more support is being extended to support clients and partners.
Bakkt was founded in 2018 with the idea of connecting technology to commerce. Since its inception, Bakkt has functioned with the vision to offer a platform for loyalty, cryptocurrency, and commerce so that the idea of digital commerce is planted with its roots deep in the ground, only to grow as fast as possible.
It is backed by a team of experts who have the mindset of bringing innovation to the table. The leadership team comprises Karen Alexander as the CFO, Marc D’Annunzio as the GCS, and Mark Elliot as the CSMO, among many other notable names.Earnings in Q4 have dropped, as evidenced by the figures reported, but Bakkt stands a chance to execute its plans for a rebound.