Bakkt Holdings, Inc.

first quarter 2026 earnings conference call. Currently, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 1-1 on your telephone. To remove yourself from the queue, you may press star 1-1 again. I would now like to hand the call over to Cody Fletcher with Investor Relations. Please go ahead.

Hello there, and welcome to VAC's first quarter 2026 earnings call. Joining me on the call today are Akshay Nehata, our Chief Executive Officer, and Karen Alexander, our Chief Financial Officer. Today's discussion contains forward-looking statements within the meaning of the Federal Security Clause. Forward-looking statements are subject to risks and uncertainties that could cause actual results to differ materially from those reflected or implied. We refer you to the cautionary language in our earnings release, this presentation, and in our SEC filings, including the risk factors set forth in our most recent Form 10-K and our Form 10-Q for the period ended March 31st, 2026. Today's discussion also includes references to non-GAAP measures, including EBITDA and adjusted EBITDA, reconciliations and definitions for our operational metrics, total transacting volume, monthly active users, and strategic asset value are included in the appendix. And with that, I will turn the call over to our CEO, Akshay Netta. Akshay.

Thank you, Cody. And hello, everyone. Thank you for joining us. Before I walk through the quarter, I wanted to frame the environment BRAC is operating in, because the most important point for investors right now is that we are in the early innings of a structural shift in the global payments architecture, and the ocean we are fishing in is far larger than any single competitor will capture. The global payment flows today sit in three distinct tiers. At the base, between $200 and $300 trillion of annual cross-border and wholesale volume that moves across legacy rails. These rails are operational. and systematically important. Structurally slow, expensive, and constrained to banking hours. Above that, an application and payments layer has emerged over the past 15 years, with Stripe, Circle, Chime, Revolut, BVNK, and others, intermediating roughly six trillion of annual volume. This layer modernized the user experience, but sits on top of the same legacy rails. BAT agent operates here, And the API is built on backed regulated foundation, EU presence for cross-border expansion, and on- and off-ramp coverage to more than 60 countries, allows for real-time automated settlements. And at the leading edge, regulated market infrastructure clears approximately $2 trillion of annual volume in digital assets. Backed markets sits in this space. with our Pan-US money transmitter licenses, the New York BIT license, institutional compliance with fiat to stablecoin conversions at scale. These three tiers will continue to coexist, and our view is that stablecoin infrastructure cannibalizes legacy rails over the next several years to become the connective layer between all three. We do not have to be the biggest fish in this ocean. Raj Nadella- Large enough that a regulated infrastructure structure provider with discipline capital allocation, along with durable rails can build a material business without confronting any single incumbent head on that is the structural backdrop that investors should keep in mind. A short tour of the field as it stands today. On peers and capital deployment over the past 15 months, three of the most significant institutions in global payments have committed by conducting strategic M&A transactions. Stripe acquired Bridge for $1.1 billion in February 2025. MasterCard announced its acquisition of BVNK for $1.8 billion in March 2026. And this month, is the latest data point in the same direction. These are capital commitments by institutions whose cost of capital and regulatory scrutiny makes speculative allocation structurally unlikely. On regulatory architecture, two pieces of U.S. legislation define the operating environment going forward. Signed in July 2025, establish the federal framework for payment stablecoins. The OCC and FDIC issued proposed implementing rules earlier this year. Final regulations are required by July 18, 2026, and the Act becomes substantive by early 2027 with a defined three-year transition window. The Clarity Act, the companion piece on the trading and intermediary side, cleared the House in July 2025 and is now moving in the Senate with the yield compromise resolved on May 1st. team backup expected this month and the administration targeting passage by mid-summer. Both statutes raise the regulatory bar materially. They make the licensing footprint compliance posture and settlement infrastructure that took years to assemble as the same infrastructure the laws now require. That is a tailwind for new incumbents who built ahead of the rules. On market macros, stablecoin settlement volume reached approximately $33 trillion in 2025, up 72% from $19 trillion in 2024. Stabilization is at an all-time high at approximately $320 billion at the quarter end, and the cross-border payments addressable market is projected to grow from $44 trillion today to approximately $67 trillion by 2030. Whatever share of this back converts into revenue over time, the absolute is the key point to keep in mind. The field is taking shape, the rules are being written in our favor, and the work is purely focused on our ability to execute. Before walking you through the operating segments, I want to as the CEO view our progress against the internal milestones that we've set for ourselves. The categories on the slide are subjective and are the ones that I track personally. The ratings are my own assessment informed by the leadership team. They're qualitative, not financial, and they're definitely not guidance. The internal and the disclosure on the slide and in the appendix set out the basis on which they should be read. We've created eight categories across three bands, the foundation band, categories scored at 75 or above, which is where the durable platform sits. Regulatory at 80, given our PAN US MTLs, the New York Bitlicense, FinCEN registration, EUBAS. The infrastructure layer at 80, which includes now the DTR payment rails and settlement engine, which is now wholly in-house. and real capabilities on the payment segment within the backed infrastructure. And finally, financial strength and technology, both at 75, we have a debt-free balance sheet with 82.6 million of liquidity at the end of the quarter and continued cost discipline and efficiencies. And modular with the agent platform on track for a launch sometime in Q3. The in-progress band, which is in the range of 50 to 74 is where the work is moving but not finished. The global network at 70 with our presence in 60 plus jurisdiction gated on partner activation and regulatory closure so that we can further expand the global network and the target is to reach over 90 jurisdictions by year end. The team and talent at 60 A-plus bench under Daniel and Ankit, AR leverage operationalizing across functions, DTR integration in flight. And on the operational efficiency front, we are at 50, which is despite meaningful cost resets over the last year, there is more that can be done in this area and with technology enablement over the balance of the year. The active focus band, which is the categories below 40 is where the priority sits, which is the partners and distribution. At 30 is the lowest score on the page, intentionally so. The sales organization has had to be rebuilt, and we finally made progress on that front where through the close of DTR over the next four quarters, we are about to convert the bottom of the funnel substantially into real recognizable revenues. We're also building out our sales team, and I will delve into further details on that as we go along this presentation. One direct point, the categories scored highest are the ones under direct management control. The categories that scored the lowest depend on partner activations, regulatory approvals, and sales cycle conversions on calendars we do not entirely control on our own. None of those will change overnight. They will change quarter by quarter. Scorecard is a framework that I will use to update you as we go along for the rest of this year. Now let's go into the three engines that drive Bakkt. The business is organized around three growth engines, and that framework is how we will update investors. First, Bakkt Markets, which is our institutional-grade infrastructure for digital assets, which allows our partners to market in a quick and efficient manner. Second is Backed Agent, which is a programmable money and AI-powered finance layer, which allows frictionless and intelligible interfaces to provide full-stack banking services to their respective consumers or network. And finally, Backed Global, which is our international expansion and value creation, which is run on a disciplined capital life model. Turning to our first engine, Backed Markets. Markets is a B2B business. Institutional sales cycles and regulated infrastructure are measured in quarters, not weeks. Counterparty onboarding, compliance review, integration testing, and treasury approvals are the sequence, regardless of how compelling the underlying product is. The work has been to establish that sequence with a credible roster of clients and convert it to live volume. The current back markets roster comprises institutional-grade counterparties operating the regulated assets across the US, Europe, and Asia. Clients we expect to come as they grow their own businesses at scale. Volumes come from two sources, both fee and spread businesses that scale with notional throughput. The first is trading flow. Crypto services activity routed through partner platforms and settled across our rails. The second is payment flow, in three stablecoin flows now powered by the DTR rails, which are wholly in-house. On the product market side, the technology upgrade schedule for the second half of 2026 expands the market surface materially. More than 200 available assets are rolled out, social and copy trading, a new advanced trading engine, and an improved client interface. And on the commercial side, we'd like to introduce Daniel Ishag, who joins us as the Chief Commercial Officer. Daniel built and led Geyser. He ran there, which was centered around institutional B2B sales discipline, partner integration sequencing, and relationship-driven pipeline conversion is exactly the playbook that markets need at this stage. He's leading the rebuild and will be converting our pipeline into actionable revenues. I want to give an example about one of the partner activations that we've onboarded over the last few weeks. which is Zot. In May, we signed a strategic memorandum of understanding with Zot, a privacy-first stablecoin solutions provider built for the agentic economy across South Asia and the Middle East and North Africa. There were three components. Zot currently processes approximately $300 million in annualized total payments volume. The partnership target is approximately $1 billion in annualized TPV by the year end 2026. according to Zotts projections as enterprise corridors get activated over time. Second, the regulated layers Zotts operates agent within Bakkt Financial Solutions, a pan-US money transmitter subsidiary. The structure puts Bakkt's MTL footprint and FinCEN MSV registration around Zotts enterprise clients. That regulatory wrapper is the asset Zotts clients are buying when they choose Bakkt. Third, the corridors live or activating. USA to South Asia, the largest US outbound remittance corridor. USA to Philippines and Nigeria. USA to the Middle East, covering the GCC expect workforce. And UAE to South Asia, the largest Middle East corridor. And sub-Saharan Africa across Uganda, Kenya, Ghana, and South Africa. The strategic point is direct. Cross-border stablecoin payments in emerging markets It is by regulatory configuration. BAC's licensing stack is the unlock that takes commercial pipelines from pilot to production along with ZOX regulatory coverage in these jurisdictions. Definitive commercial agreements are expected to follow in due course. Turning to the second engine, BAC agent. Ravinder Kaur, Agent is the unit economics and each transaction or small the cost base required to operate it is fixed and modest. Ravinder Kaur, And the arithmetic is straightforward at scale modest take rates against fixed costs convert to meaningful net income, the execution priority is throughput and the throughput will come from product active impression of using surface area of partners. With DTR now in-house, the payments capabilities that drive that throughput across B2B, P2P, and end user surfaces sit inside BAC and ramp on BAC's roadmap. Agent is built on four pillars, the technology, programmability, efficiency, and distribution. On the technology front, we have a modular tech stack, which is engineered to scale without the architectural debt of incumbents. For programmability, our products are built for programmable finance rather than retrofitted into it. Stablecoin issuance, redemption, and on and off ramp logic are native to our stack. And finally, on efficiency and distribution with our low cost to serve, from linear headcount growth, our flat operating costs against growing volume converts to operating leverage, which our partner networks whose aggregate reach extends to hundreds of millions of users subject to definitive partner agreements and product launches. Each pillar is a deliberate capital allocation decision. Expect agent to compound the value that it creates for backed over time. The agent commercial model has three layers. The engine is backed. Regulatory rails, licenses, custody, and settlement are 60 plus destination off ramps and are backed in more than 15 currencies. across the different blockchain integrations, as well as same-day settlement, all owned by Max. The catalyst is the partners, concentrated markets where embedded distribution is available at scale, carrying trust and reach. We could not replicate organically. And the value add is the utility, which is the daily use surfaces that drive volume back through back. Telecom illustrates the model. Telecom markets are concentrated. Two or three operators serve the majority of customers in most geographies. Initial launch focus is the US and Europe, and the connectivity, distribution, and utility in one motion. The eSIM API extension lets us extend the same capability to additional partners in parallel. Beyond telecom, we are in active conversations across additional verticals where the same model applies. We will share more as those are already activated and announced. And finally, BACT Global, which is our third engine. These are markets where BACT is making strategic investments where we see the long-term potential, the demographic, and digital adoption tailwinds are durable. and we see a clear regulatory framework which is forming. The two positions reported both as of March 31st, 2020. First one is Bitcoin Japan Corporation, which is listed on the Tokyo Stock Exchange. It has a blended carrying value that has moved from approximately 11 and a half million when we made our investment to 31.7 million at the end of the quarter. Bitcoin Japan Corporation is building its AI and Bitcoin economy and will detail its forward strategy at its upcoming AGM. On India, our position is structured through a warrant subscription in a company called Transchem Limited, which is listed on the Bombay Stock Exchange. We are still awaiting regulatory approvals on our investment into the Indian company. And once that has been approved by the regulators, we will update further on the strategy for the company going forward. From an illustrative perspective, the mark-to-market value at the quarter end was approximately $44.3 million. And the forward plan for the India position includes a broker-dealer rollout and a program of global and tokenized investments subject to regulatory timelines. The three core KPIs going forward that I believe investors should track are as follows. For back markets, the KPI is total transacting volume, the aggregate notional flow across the markets and agents platform. In 2006, our TTV was approximately $241 million, and our year-end estimate is approximately $2.5 billion as partner integrations activate and scale. With DTR in-house, institutional payments volume from counterparties already integrated with the DTR stack will begin by the conference of the year. For backed agent, the KPI is monthly active users, the direct measure of platform adoption, and the lead indicator for transaction frequency. Reporting begins once we've launched the product. And we will further update on guidance for the monthly active user we are ready to announce the partnerships and launch the platform. And lastly, on BAT Global, the KPI strategic asset value, the aggregate value generated by the investment strategy incorporating mark-to-market valuations on listed holdings, cash proceeds realized, and any unrealized gains. At the end of Q1, that value sat at approximately $76 million against approximately $21 million of capital commitments across both the Japanese and Indian investments. Strategic asset value in accordance with GAAP and does not represent realized returns and is subject to market and foreign exchange risk. Methodology and reporting timeline for all three KPIs are set out in the appendix. With that, I will hand the call to Karen to walk over the financials.