Bakkt Holdings, Inc.

Welcome to the BAC First Quarter 2022 Earnings Conference Call. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the former presentation. As a reminder, this conference call is being recorded. I will now turn it over to Anne DeVries, Head of Investor Relations at BAC. Please go ahead.

Good morning, and thank you for joining us for BAC's first quarter earnings call. Today's presentation, including the separate earnings call presentation that can be found at our investor relations website at www.investors.bac.com, will contain certain forward-looking statements about BAC. These statements are based on the current expectations of the management of BAC and are subject to uncertainty and changes in circumstance, many of which are beyond BAC's control, which may cause actual results to differ materially from those expressed or implied in such forward-looking statements. For a more complete discussion on forward-looking statements and the uncertainties related to BAC's business, please refer to its filings with the Securities and Exchange Commission, including the discussion of BAC's risk factors in its most recent annual report on Form 10-K and its subsequent quarterly report on Form 10-Q. During today's presentation, in addition to discussing results that are calculated in accordance with generally accepted accounting principles, we will refer to certain non-GAAP financial measures. For more information on this, the basis of our presentation for our financial results and our non-GAAP measures, please refer to our earnings release, which was filed this morning with the SEC. Joining me on today's call are Gavin Michael, Chief Executive Officer, and Drew Levin, Chief Financial Officer. After our prepared remarks, we will answer questions we receive from our investors through the SAIT Technologies platform. After that, Gavin and Drew will be available to answer questions from the analyst community. I'll now turn it over to Gavin.

Thank you, Anne. Good morning, everyone, and thanks for joining. At BAT, we're connecting the digital economy, powering commerce by unlocking value from digital assets. We're forging new partnerships and activating our products in this growing ecosystem, while also deepening relationships with existing partners to really create new opportunities. Momentum is building across our business, and we've built a strong foundation for our future growth. So let's dig in. We help our partners actively participate in the new and dynamic economy that's driven by digital assets. BAC's crypto services are just one of our core pillars. Crypto has proven that it has staying power, and we're helping businesses play catch up. Our products and services enable businesses to meet rapidly changing user needs and increase relevance to their customers. Let's walk through some updates on our core capabilities. Our crypto buy-sell capabilities, or backed Crypto Connect, connects our partners' customers to crypto where they're already transacting digitally. Our embedded experience will be live soon with a number of partners. And this embedded experience is built upon the same crypto capabilities being used in market today through our app. It includes core services to onboard customers to manage buy-sell capabilities, And all of this is done in a seamless experience in their trusted banking environment. Rather than watching deposits flow out of their ecosystem to crypto exchanges, banks can help keep their customer attention within their environment while realizing the brand benefits of these innovative solutions. We also enable our partners to increase customer acquisition, especially of new and younger demographics. This is a segment everyone is competing for today. Our B2B2C go-to-market approach allows us to build scale quickly, and our platform partnerships enable us to efficiently roll this capability out to potentially hundreds of member banks and millions of end users. This is where our partnerships with platforms like Fiserv and Finestra are so critical. And as we signed a number of banks to our Crypto Connect offering and continue to build the technology to launch with them later this year. Our approach has traction in the market. This is shown by our recent announcement, including the addition of American Bank, which is the first bank slated to go live. We expect to see a strong acceleration in the second half of this year. Let's next turn to backed crypto payouts. We all know that the war for talent is impacting every single sector. Transformation and innovation is happening in the payout space quickly, and backed crypto payout allows employers to differentiate their opportunities from others by allowing their employees to receive a portion of their pay in crypto. We surveyed the gig economy workers and found that nearly 80% would like to receive either all or a portion of their pay in cryptocurrency. Our first partner in the gig worker space is Bring Me That, a food delivery service platform. We're also excited to announce today that we're adding Latro, a creative marketplace for enterprises and SMEs, to our list of partners. Starting soon, creators who take on Latro projects will be able to get paid a portion or all of their pay in crypto. We continue to work with our platform partners to make this crypto payout capability available to a multitude of industries and market segments. Backed crypto payout has strong applicability across gaming and gambling, marketplaces, the creator economy, the sharing economy, and traditional employers. The ability for larger audiences to passively acquire crypto will only increase further adoption and uptake. So moving next to crypto rewards, which we believe is a terrific entry point for crypto adoption by many more people in a passive way, and we believe can democratize access and inclusivity for everyone. Consumers can earn crypto through their daily activities, And our research is showing that as they get access to even small amounts of crypto, their knowledge increases significantly and they're more likely to buy and engage more deeply in the crypto economy. Crypto rewards will be live later this year, first with Fiserv through their You Choose Rewards program, serving financial institutions, debit and credit cards. Cardholders in these programs will soon have the option to redeem their points directly for crypto. We're working across multiple partners to enable earning crypto both with credit cards and within merchant loyalty programs. With MasterCard specifically, we're working together to integrate crypto rewards into their platform to make it easy for clients to implement once we go live. We're collaborating on the product, customer experience, and market fit. And we're taking the time to get this right to ensure that we have a seamless experience for our joint partners. Brands that offer crypto rewards create this truly differentiated customer engagement, as consumers will frequently come back to check their crypto rewards and balances. And crypto buyers and holders are leading the charge on this trend. A study we released earlier this year found that over 70% of those who purchased crypto at least once in the past six months are likely to redeem loyalty points for cryptocurrency. And about half of the crypto buyers are interested in earning cryptocurrency instead of loyalty points. It's so very clear that offering crypto rewards can drive a brand's credibility for being innovative and create a deeper connection that they're looking for, all leading to improved growth. So moving to the next page, we're excited to launch Pay With Points, and it's live with Wyndham Rewards. With this capability, Wyndham Rewards members can use their points to pay anywhere that Apple Pay and Google Pay are accepted. Pay With Points enables the extension of more traditional point redemption opportunities, and we can bring this type of integration to a really wide universe of brands. We're able to create unmatched payment ease and more flexible use of loyalty points. As brands compete to differentiate themselves, our Pay With Points capability is a big step forward for driving brand affinity. while also providing customers with new sources of funds and showing them increased value for their loyalty. You know, we saw in a 2021 wise market of study that when compared to other payment options available in the industry, 90% of participants stated that pay with points increases the ease of redemption. This also creates a terrific retention feature, as consumers say they'd be more likely to stay with a loyalty program that offers this capability. We see lots of ways that brands can take advantage of this capability. For faster speed to market, the functionality is embedded in our app, and partners like Wyndham use this as a storefront for linking their payment capabilities. For brands that are looking for an integrated experience, we simply embed the functionality in their ecosystem. This product has terrific scalability, and we're able to bring the familiar experience of checking out and paying in points to a really broad array of merchants. Turning to our platform, Back does much more than just provide technology to our customers. We work with our partners and customers to ensure that they are compliant with the regulatory standards required to offer crypto to their customers and help them work with their regulators on the overall understanding of this evolving space. We're regulated by NYDFS and our compliance measures, controls and rigorous risk management practices are at the core of how we operate. We have the right infrastructure in place bank trust charters, bit license, MTLs in every state required to be highly regulatory compliant and secure. We also provide sales support and 24-7 customer service, along with co-branded marketing collateral, to really help our partners educate their consumers about crypto and sell their batch-enabled products. We are working to gain clarity on some of the recent statements regarding crypto from the various regulatory bodies. We're working closely with our partners to navigate through regulation thoroughly. We're excited about our recent partnerships. We announced a strategic alliance with Global Payments. As part of this agreement, Global Payments will be supporting a wide range of our use cases. starting with enabling cryptocurrency redemption in customer loyalty programs offered by bank card clients and then expanding into its banking as a service offering to include access to cryptocurrency and ultimately leveraging their issuing technologies for linking virtual debit credit and prepaid solution in addition to working with them in these areas we're broadly collaborating with Global Payments on multinational merchant payment acceptance. Another partner we recently signed is PSCU. They provide payment and digital banking solutions to their members, which include more than 1,900 credit unions and banks. In partnership with PSCU, we'll be bringing back Crypto Connect capabilities to credit unions across the country. We're really excited to work with our new partners to activate each of these areas of collaboration and really illustrate the value that our platform can bring to businesses and subsequently to the broader ecosystem of consumers that they all represent. And with that, I'll pass it along to Drew for a review of our financial results for this quarter.