Greetings and welcome to the Bakkt First Quarter 2025 Earnings Conference Call. At this time all participants are in a listen-only mode. As a reminder this conference call is being recorded. I'll now turn it over to Cody Fletcher, investor relations advisor at Bakkt. Please go ahead.

Hello everyone and thank you for joining Bakkt’s first quarter 2025 earnings call. Before we get started I'd like to remind everyone that today's earnings call includes a separate supplemental presentation that can be found at our investor relations website at www.investors.bakkt.com. During today's call we will make certain forward-looking statements including statements regarding our cooperation agreement with DTR, the proposed commercial agreement with DTR expected by Q3 2025, and the anticipated integration of DTR stablecoin and AI payment infrastructure with Bakkt’s regulated platform. We'll also discuss our strategic transformation to a pure play crypto infrastructure company including the divestiture of our custody business to ICE, including expected timelines and ongoing discussions regarding our loyalty business, as well as expectations regarding the stablecoin payments market, regulatory environment, and our product roadmap. These statements are based on management's current expectations and are subject to risks and uncertainties which may cause actual results to differ materially from those expressed or implied in such forward-looking statements. For additional information regarding forward-looking statements and risk factors, please refer to our filings with the Securities and Exchange Commission, including our quarterly report on Form 10-Q for the first quarter of 2025. Further, in addition to discussing results that are calculated in accordance with generally accepted accounting principles, we also make reference to certain non-GAAP financial measures. For more detailed information on our non-GAAP financial disclosures, please refer to our earnings release which can be found on our Investor Relations website. Thank you, and I'll now turn the call over to Andy.

Thank you, Cody, and hello everyone. Thanks for joining Bakkt’s first quarter 2025 earnings call, and it's great to connect with you all again. With me today is Karen Alexander, our Chief Financial Officer, and I am excited to introduce Akshay Naheta, Founder of Distributed Technologies Research, or DTR, who officially joined Bakkt as co-CEO on March 21st. Starting with our Q1 performance, we navigated a slower crypto market following the post-election rally of late 2024, with our total transaction volume reaching $1.06 billion for the quarter. This represents a 40% sequential decline from our strong Q4 results and a 23% below the broader market. On a year-over-year basis, our performance reflects a more positive story, with volumes growing 23%, outpacing the growth of our broader market benchmark. This achievement is particularly meaningful, considering we are comparing against a period that included March 2024's significant activity and price surge driven by Bitcoin ETF purchases and the meme coin rally we saw from SHIB and DOGE. Despite softer market conditions, this volume represents substantial progress for Bakkt as we continue to grow our market presence. We believe these metrics demonstrate our platform's resilience. While we adjust to current market dynamics, we believe our year-over-year performance relative to the industry demonstrates the strength of our value proposition and expanding customer base. For the quarter, total revenues net of crypto costs, execution, clearing, and brokerage fees decreased 25.9% year-over-year to $12.6 million. Total operating expenses, excluding crypto costs and execution, clearing, and brokerage fees decreased 36.3% year-over-year to $31.1 million. Net income improved 176.5% year-over-year from a loss to a profit of $16.2 million. Adjusted EBITDA loss non-GAAP improved 11% year-over-year to $14.5 million. From an operational standpoint, we are making progress on our transformation to a pure-play crypto infrastructure company. The sale…

Thank you, Andy, and thank you everyone for joining us today. I would like to preface my remarks by saying how optimistic I am for the future of Bakkt at this pivotal time as we stand at the cusp of transforming Bakkt into a prime gateway for programmable money. By leveraging our position as a regulated, publicly traded entity with comprehensive license coverage across the U.S., a SOC 2 compliant tech stack, robust liquidity solutions, and brokerage-in-a-box capabilities, I believe Bakkt has a strong foundation to capture the significant opportunities ahead. In addition, I believe Bakkt’s highly sophisticated and trusted infrastructure and regulatory moat gives us a competitive opportunity to leverage DTR's stablecoin and AI payments technology, allowing us to enter the global payments and remittance ecosystems. Most excitingly, we believe that the expected integration of DTR's APIs for agentic global payments will harness the power of AI to create intelligent, programmable money solutions that transform how businesses and consumers interact with digital assets in their daily transactions. This collaboration aims to transform Bakkt into a pure-plate crypto infrastructure company by combining complementary strengths. Bakkt’s established regulatory framework and trading capabilities provide a secure foundation essential for institutional adoption and consumer trust. The planned DTR integration will introduce innovative technology that enables seamless movement of money by bridging national payment rails and currencies with stablecoins. We believe that this will result in a powerful convergence of regulated innovation between traditional and decentralized finance and will create an agentic infrastructure well-suited for supporting the next generation of digital commerce at a global scale. Now let me walk you through our go-to-market strategy and implementation timeline. While the commercial agreement is not yet complete, there will be engineering work to integrate DTR into Bakkt and finalize our ability to secure API-enabled fiat…

Thank you, Akshay. I will now walk you through Bakkt’s first quarter KPIs and financial results. As a reminder, in accordance with GAAP, we present crypto services revenue and crypto costs and execution clearing and brokerage fees on a gross basis as we are a principal in the crypto services we provide our customers. By contrast, we are an agent in the loyalty redemption services we provide our loyalty customers. Therefore, loyalty revenue is presented on a one-line net basis. Starting on Slide 20, I'll walk you through our Q1 KPIs, which provide insight into the underlying trends driving our business. We concluded the first quarter with 6.8 million crypto-enabled accounts, demonstrating continued steady growth over the past 12 months despite the broader market volatility. Regarding transacting accounts, we recorded a total of 777,349 active accounts in the first quarter, segmented into 377,679 loyalty redemption accounts and 399,765 crypto trading accounts. While this represents a sequential decline from Q4 2024, it aligns with the broader crypto market's cooling period following the exceptional activity we experienced in the fourth quarter, driven by post-election optimism. The year-over-year comparison is relatively flat. As Andy highlighted earlier, our notional volumes reflected the market's moderation after last quarter's record-breaking performance. Total notional volumes in Q1 reached $1.21 billion, comprising $1.06 billion from crypto trading and $153 million from loyalty redemptions. Our crypto volumes underperformed market benchmarks on a sequential basis that outpaced the market on a year-over-year comparison, demonstrating our resilience over longer timeframes. Loyalty redemption volumes declined both sequentially and year-over-year. Finally, assets under custody at our custodian partners for our brokerage business totaled $1,873,000,000 at quarter end. This represents an 18.7% decrease from the previous quarter, but a 52.5% increase year-over-year, with movements primarily driven by fluctuations in underlying crypto asset prices rather…

Thank you, Karen, Andy, Akshay, and everyone for attending our earnings call. We look forward to connecting with you again soon.

Ladies and gentlemen, this concludes our event. You may now disconnect. Thank you.