Bakkt Holdings Inc (BKKT) 2023 Q3 法說會逐字稿

Greetings, and welcome to the Bakkt Q3 2023 Earnings Conference Call. Question-and-answer session will follow the formal presentation. And as a reminder, this conference call is being recorded.

您好，歡迎參加 Bakkt 2023 年第三季財報電話會議。正式演講結束後將進行問答環節。溫馨提醒，本次電話會議正在錄音。

I will now turn it over to Ann DeVries, Head of Investor Relations at Bakkt, Please go ahead.

現在我將把發言權交給 Bakkt 投資者關係主管 Ann DeVries，請發言。

Good morning, and thank you for joining us for Bakkt third quarter earnings call. Today's presentation, including a separate earnings call presentation that can be found on our Investor Relations website at www.investors.com will contain certain forward-looking statements. 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 a more complete discussion on forward-looking statements and the risks and uncertainties related to Bakkt business, please refer to its filings with the Securities and Exchange Commission.

早安，感謝您參加 Bakkt 第三季財報電話會議。今天的演示，包括可以在我們的投資者關係網站 www.investors.com 上找到的單獨的收益電話會議演示，將包含某些前瞻性陳述。這些聲明是基於管理層目前的預期，並受風險和不確定性的影響，這可能導致實際結果與此類前瞻性聲明中表達或暗示的結果有重大差異。有關前瞻性陳述以及與 Bakkt 業務相關的風險和不確定性的更完整討論，請參閱其向美國證券交易委員會提交的文件。

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 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 Karen Alexander, Chief Financial Officer. After our prepared remarks, we will answer questions that we received from our investors through the State Technologies platform. After that, Gavin and Karen will be available to answer questions from the analyst community.

在今天的演示中，除了討論按照公認會計原則計算的結果之外，我們還將參考某些非 GAAP 財務指標。有關這方面的更多信息，以及我們財務業績和非公認會計準則指標的呈現基礎，請參閱我們今天上午向美國證券交易委員會提交的收益報告。參加今天電話會議的還有執行長 Gavin Michael；以及財務長凱倫·亞歷山大（Karen Alexander）。在發表準備好的發言之後，我們將透過 State Technologies 平台回答投資人提出的問題。之後，Gavin 和 Karen 將回答分析師社群的問題。

I'll now turn it over to Gavin.

現在我將把它交給加文。

Thank you, Ann. Good morning, everyone, and thanks for joining. Earlier this year, we communicated our plan to simplify our business and allocate our capital towards areas of the business with strong product market fit, scalability and a clear path to profitability. During the course of 2023, we've made substantial progress against this goal. Our specific priorities for the year included expanding our crypto platform, expanding and activating our client network and strategically allocating capital. Our teams have been nimble and flexed to deliver on all of these priorities despite challenging market conditions.

謝謝你，安。大家早安，感謝大家的加入。今年早些時候，我們傳達了簡化業務的計劃，將資本分配到具有強大產品市場契合度、可擴展性和明確盈利路徑的業務領域。 2023年，我們朝著這項目標取得了實質進展。我們今年的具體重點包括擴展我們的加密平台、擴大和激活我們的客戶網路以及策略性地分配資本。儘管市場條件嚴峻，我們的團隊仍靈活應對，完成所有這些優先事項。

The U.S. crypto market remains challenging. We still lack a clear regulatory framework and headwinds from bad actors in the space have muted trading volumes. However, we are seeing green shoots with institutional investors looking to participate in crypto ETFs and digit asset tokenization. We've been flexible in adjusting our strategy as needed to meet these challenges.

美國加密貨幣市場依然充滿挑戰。我們仍然缺乏明確的監管框架，而且來自該領域不良行為者的阻力已經抑制了交易量。然而，我們看到機構投資者希望參與加密貨幣 ETF 和數位資產代幣化的跡象。我們根據需要靈活調整策略以應對這些挑戰。

We've made international expansion a key priority, and we've demonstrated our ability to act quickly with our capabilities active in 9 new markets by the end of this year. And there's more to come on the international front. This is just the beginning for us. This will generate strong revenue growth for us as we look to 2024. We continue our focus on custody and signing up new clients with the recent flight to quality that we've experienced as well as delivering enhancements to our offering. The custody product further diversifies our future revenue streams, given it's not as reliant on trading volumes.

我們把國際擴張作為一項重要任務，並且，截至今年年底，我們已經在 9 個新市場開展業務，證明了我們快速行動的能力。國際方面還將有更多措施。對我們來說這只是一個開始。展望 2024 年，這將為我們帶來強勁的收入成長。由於託管產品不再那麼依賴交易量，它進一步使我們未來的收入來源多樣化。

We've also reduced our reliance on market volumes and the related volatility in our revenue stream by signing on new clients with more of a subscription-based revenue model. Lastly, in light of the challenging market and slower revenue opportunities this year, we've been focused on controlling expenses. We've made a lot of hard decisions to make cuts and have been very prudent with our spend. It hasn't always been easy, but it's paid off with our core operating expenses, excluding crypto costs and impairment charges, down 26% year-over-year. That's real progress, and we'll continue to focus on that.

我們也透過簽約更多採用訂閱制的收入模式的新客戶，減少了對市場規模的依賴以及相關的收入流波動。最後，鑑於今年市場充滿挑戰且收入機會放緩，我們致力於控制費用。我們做出了很多艱難的削減決定，並且非常謹慎地控制開支。這並不總是那麼容易，但我們的核心營運費用（不包括加密成本和減損費用）年減了 26%，這讓我們獲得了回報。這是真正的進步，我們將繼續關注這一點。

2023 has been a year of enhancing our industry-leading platform across advanced trading capabilities and secure compliant custody that's built to evolve and adapt with the changing regulatory landscape. Our platform has reliable infrastructure that supports our trading and custody capabilities. Recent market events, including SBF Gilt verdict, all underscore how important it is to crypto responsibly and how critical it is to have a partner like that who uphold the highest standards of transparency, security and compliance. Our loyalty redemption capabilities also continue to be a strength as we provide our clients with a full spectrum of flexible and comprehensive solutions.

2023 年是我們行業領先平台的增強年，該平台涵蓋先進的交易能力和安全的合規託管，旨在隨著不斷變化的監管環境而發展和適應。我們的平台擁有可靠的基礎設施，支援我們的交易和託管能力。最近的市場事件，包括 SBF Gilt 判決，都強調了負責任地使用加密貨幣的重要性，以及擁有一個堅持最高透明度、安全性和合規標準的合作夥伴的重要性。我們為客戶提供全方位靈活、全面的解決方案，我們的忠誠度兌換能力也持續保持優勢。

While we remain committed to expanding in the U.S. market, we've adjusted our strategy to quickly overcome the challenging U.S. crypto trading environment. With that, we've capitalized on opportunities to expand with new and existing clients into attractive international markets with more regulatory clarity and sizable addressable markets. We are currently live with crypto trading in Spain and several Latin American regions, including Argentina, Brazil and Mexico. We plan to continue to further expand with our partners in Lat Am, such as Happy and Ibex. As we shared last week, Bakkt plans to offer our crypto trading and custody services to 3.

在我們仍然致力於擴大美國市場的同時，我們也調整了策略，以迅速克服充滿挑戰的美國加密交易環境。由此，我們抓住機會，與新舊客戶一起拓展到監管更加清晰、潛在市場規模更大的有吸引力的國際市場。我們目前正在西班牙和阿根廷、巴西和墨西哥等幾個拉丁美洲地區進行加密貨幣交易。我們計劃繼續與 Happy 和 Ibex 等拉丁美洲合作夥伴進一步擴大合作。正如我們上週所分享的，Bakkt 計劃向 3 家公司提供我們的加密貨幣交易和託管服務。

Over in the U.K., the EU, Australia and throughout Asia, including Singapore and Hong Kong, all anticipating activation by year-end. These examples are just the beginning stages of our international expansion efforts. As we enter into new markets, we will follow a land-and-expand strategy, meaning following our initial launches, we will expand our network and reach with other clients. The hardest part of expanding into new markets is the initial landing. Once we've done that, further expansion is relatively painless.

英國、歐盟、澳洲以及新加坡和香港等整個亞洲地區都預計在年底前啟動這項措施。這些例子只是我們國際擴張努力的開端。當我們進入新市場時，我們將遵循登陸和擴張策略，這意味著在我們最初推出產品之後，我們將擴大我們的人脈並與其他客戶建立聯繫。拓展新市場最困難的部分是最初的落地。一旦我們做到了這一點，進一步的擴展就相對輕鬆了。

As we've already taken steps to ensure we are compliant and regulatory first within these markets, we can confidently and quickly broaden our reach to millions of new customers going forward. In addition to the international clients, we continue to grow in the U.S. as well, expanding our broad network and further emphasizing our product market fit. On the trading front, Bakkt secure platform is resonating with crypto-native companies in the industry, such as OpenNode, which intends to use our advanced end-to-end solutions.

由於我們已經採取措施確保我們在這些市場中首先遵守法規並受到監管，因此我們可以自信地、迅速地將我們的業務範圍擴大到數百萬新客戶。除了國際客戶之外，我們還在美國繼續發展，擴大我們的廣泛網絡並進一步強調我們的產品市場契合度。在交易方面，Bakkt 安全平台與業內加密原生公司產生了共鳴，例如 OpenNode，它們打算使用我們先進的端到端解決方案。

Events of the past year have shown the value and need for qualified custodians. And in turn, we've seen increased interest in our secure and highly regulated platform. We're expanding with institutionally backed companies like EDX markets, a digital asset marketplace for crypto-native firms and large FIs. Bakkt as a qualified custodian has preliminary agreed to join their clearing house and custodial network. We've entered the family offices and high net worth space with our new live client, Libo-BTC Ledger Group, a firm that helps investors seamlessly access the most liquid digital asset markets for the acquisition and safe storage of cryptocurrencies. These customers have unique needs, and Bakkt is well positioned to serve them as a qualified custodian.

過去一年的事件顯示了合格保管人的價值和必要性。反過來，我們看到人們對我們安全且受到嚴格監管的平台的興趣日益濃厚。我們正在與 EDX 市場等機構支持的公司合作擴張，EDX 市場是針對加密原生公司和大型金融機構的數位資產市場。 Bakkt 作為合格託管人，已初步同意加入其清算所和託管網路。我們透過新的即時客戶 Libo-BTC Ledger Group 進入了家族辦公室和高淨值領域，該公司致力於幫助投資者無縫訪問最具流動性的數位資產市場，以獲取和安全儲存加密貨幣。這些客戶有獨特的需求，而 Bakkt 有能力作為合格的託管人為他們提供服務。

And finally, we've agreed to enter unchanged enterprise custody network. Unchanged allows their clients to securely take control of their big coin with their cold storage volts. As part of the custody network, Bakkt intends to serve as the institutional signature, also known as a key agent for customers' collaborative custody multisig vaults. We've made substantial strides this quarter, expanding our trading and custody network. And as this expanded network allows us to reach new industries and new international markets in our work together. These recent wins are a testament to the product market fit of our capabilities and the continued focus on growing our core crypto solutions.

最後，我們同意進入保持不變的企業託管網路。 Unchanged 允許其客戶使用冷藏伏特安全地控制他們的大硬幣。作為託管網路的一部分，Bakkt 旨在充當機構簽名，也稱為客戶協作託管多重簽名保險庫的關鍵代理。本季我們取得了實質進展，擴大了我們的交易和託管網路。這個擴大的網絡使我們能夠在共同合作中接觸到新的產業和新的國際市場。這些最近的勝利證明了我們的產品市場適應能力以及我們對發展核心加密解決方案的持續關注。

As our crypto business matures and we grow both internationally and domestically, we expect that our revenue mix will also evolve with an increasing share of our revenue coming from subscription-based annual recurring revenue, which will provide stability during uncertain crypto markets. We're executing at a faster rate than ever before, moving quickly with newly signed clients in order to activate and go live efficiently.

隨著我們的加密業務日趨成熟以及我們在國際和國內市場的成長，我們預計我們的收入結構也將發生變化，越來越多的收入來自基於訂閱的年度經常性收入，這將在不確定的加密市場中提供穩定性。我們的執行速度比以往更快，快速與新簽約客戶合作，以便有效率地啟動和上線。

We offer seamless integration and customer experiences, which enable clients to integrate in around 45 days, adding active traders to our platform quickly. We're currently live with blockchain.com, LeboBTC, Happy and Fin Equities due to our smooth onboarding and activation experience. We continue to expand our relationships with our current partners. Investor recently appointed Bakkt as its U.S. crypto provider with migration of the existing customer accounts expected by year-end. We're also expanding our crypto capabilities with blockchain.com into new U.S. regions, including Hawaii, Louisiana, Nevada and Virginia.

我們提供無縫集成和客戶體驗，使客戶能夠在大約 45 天內進行集成，並快速將活躍交易者添加到我們的平台。由於我們順暢的入職和激活體驗，我們目前與 blockchain.com、LeboBTC、Happy 和 Fin Equities 合作。我們繼續擴大與現有合作夥伴的關係。投資者最近任命 Bakkt 為其美國加密貨幣提供商，預計年底前完成現有客戶帳戶的遷移。我們也透過 blockchain.com 將我們的加密功能擴展到美國新的地區，包括夏威夷、路易斯安那、內華達和維吉尼亞。

We executed rapidly with Webull to facilitate a smooth Webull Pay at launch, and we're now enabling account sign-ups. During this quarter, we will finish migrating customers to Webull Pay. Due to the migration during the quarter, we experienced a slowdown in client activity on our platform. We've been working closely with the Webull team to monitor customer activity and roll out enhancements to improve their customers' experience and drive deeper engagement levels. We're pleased to continue expanding our relationship with Webull Pay.

我們與 Webull 迅速合作，以確保 Webull Pay 的順利推出，並且我們現在正在支援帳戶註冊。本季度，我們將完成客戶向 Webull Pay 的遷移。由於本季的遷移，我們平台上的客戶活動有所放緩。我們一直與 Webull 團隊密切合作，監控客戶活動並推出增強功能，以改善客戶體驗並提高更深層的參與度。我們很高興繼續擴大與 Webull Pay 的合作關係。

As some other clients have decided to exit the crypto business, Webull Pay has created a model to transition crypto accounts and maintain them on the Bakkt platform. We're also working to expand our relationship with Webull on new and exciting use cases. We have been working closely with the Caesars team to bring our crypto rewards capabilities to their members. Once live, Caesars Rewards members will have the option to redeem their rewards credits for Bitcoin via Bakkt's user-friendly experience. Our teams are excited to bring crypto capabilities to the more than 60 million members of the worldwide highly acclaimed Caesars Rewards platform early in Q1.

由於一些其他客戶決定退出加密業務，Webull Pay 創建了一個模型來轉換加密帳戶並將其維護在 Bakkt 平台上。我們也致力於擴大與 Webull 的合作關係，探索新的、令人興奮的用例。我們一直與凱撒團隊密切合作，為他們的會員帶來我們的加密獎勵功能。一旦上線，Caesars Rewards 會員將可以選擇透過 Bakkt 的用戶友好體驗將其獎勵積分兌換為比特幣。我們的團隊很高興在第一季初為全球備受讚譽的 Caesars Rewards 平台的 6000 多萬會員帶來加密功能。

We are relaunching our custody platform with increased capabilities, including segregated wallet structure and a flexible policy engine. Our platform offers a foundation for our clients to safeguard their crypto assets. In collaboration with our clients, we will offer off-exchange trading, settlement service and co custodial service, illustrating the breadth of the platform. We'll be expanding the coins that can be custodied on our platform to include a total of 8 coins, Bitcoin, Ethereum, Bitcoin Cash, Dogecoin, Ethereum Classic, Litecoin, Shiba Inu and USD Coin.

我們正在重新推出具有更強大功能的託管平台，包括獨立錢包結構和靈活的策略引擎。我們的平台為客戶提供了保護其加密資產的基礎。我們將與客戶合作，提供場外交易、結算服務和共同託管服務，展現平台的廣度。我們將擴大可以在我們的平台上託管的貨幣範圍，總共包括 8 種貨幣，即比特幣、以太坊、比特幣現金、狗狗幣、以太坊經典、萊特幣、柴犬幣和美元幣。

Our redeveloped offering has already been awarded best digital asset custodian by the digital banker, and we've notably increased our marketing efforts to continue to spread awareness of our offering. We've gained significant interest in our upgraded platform from both existing clients and prospects with many now operating in our sandbox. While trading and custody will always be at Bakkt's core, we've spoken many times about the evolution of crypto and Bitcoin from a speculative asset to powering everyday utility. With this, we've been investing in the Lightning network, and we're looking forward to the near-term launch of our Lightning service to select clients. This service will allow them to leverage for cross-border remittances, B2B settlement, instantaneous deposits and withdrawals for trading and global interoperable P2P.

我們重新開發的產品已經被數位銀行家評為最佳數位資產託管人，我們也加強了行銷力度，繼續提高我們產品的知名度。我們升級的平台已引起了現有客戶和潛在客戶的極大興趣，其中許多客戶現在都在我們的沙盒中運行。雖然交易和託管永遠是 Bakkt 的核心，但我們已經多次談到加密貨幣和比特幣從投機資產到日常實用資產的演變。為此，我們一直在投資閃電網絡，並期待近期向選定的客戶推出我們的閃電服務。這項服務將使他們能夠利用跨境匯款、B2B 結算、交易的即時存款和提款以及全球互通的 P2P。

We have partnered with 2 of the leading lighting service providers to collaboratively build out our global network of compliant on and off ramps. A multifaceted relationship with Ibex includes working together on Lightning, and we recently shared the news that we'll be collaborating with Lightspark to support a new open standard for money transmission, Universal Money addresses or UMAs. UMA makes sending money as simple as sending an e-mail and the new service can be leveraged for a number of use cases. We have a vision for Internet native payments that is shared by Lightspark and IBEX. These partnerships are a natural fit for our business.

我們與兩家領先的照明服務供應商合作，共同建立我們的全球合規上下坡網路。我們與 Ibex 的多方面關係包括在 Lightning 上的合作，最近我們也分享了將與 Lightspark 合作支援新的資金傳輸開放標準、通用貨幣地址或 UMA 的訊息。 UMA 讓匯款變得像發送電子郵件一樣簡單，而這項新服務可用於多種用例。我們對網路原生支付有著與 Lightspark 和 IBEX 相同的願景。這些合作關係與我們的業務非常契合。

So with that, I'll turn it over to Karen to discuss our financial and operating results for the quarter.

因此，我將把話題轉到凱倫身上，討論我們本季的財務和營運表現。

Thanks, Gavin. I will now walk you through our third quarter financial results. A quick reminder that in accordance with GAAP, we present crypto services revenue, encrypted costs and execution, clearing and brokerage fees on a gross basis since we are in principle in the corrective services we provide our customers. By contrast, we are an agent in the loyalty redemption services we provide our loyalty customers. So loyalty revenue is presented on a one-line net basis. Crypto costs and execution clearing and brokerage fees, which we will refer to as crypto costs and ECB for the remainder of this call, drive gross crypto services revenue and the difference between these items represents crypto-trading contribution to margin.

謝謝，加文。現在我將向大家介紹我們第三季的財務表現。快速提醒一下，根據 GAAP，我們以總額為基礎列示加密服務收入、加密成本以及執行、清算和經紀費用，因為我們原則上為客戶提供糾正服務。相較之下，我們是向忠誠客戶提供忠誠度兌換服務的代理商。因此，忠誠度收入是按單線淨額呈現的。加密成本以及執行清算和經紀費用（在本次電話會議的剩餘部分中我們將其稱為加密成本和 ECB）推動了加密服務的總收入，這些項目之間的差額代表了加密交易對保證金的貢獻。

Please see the notes section of our earnings presentation for additional detail on crypto Services revenue and related costs. Turning to Slide 13. We have our third quarter 2023 financial results. We had total revenue of $204.8 million, of which $191.8 million was gross crypto services revenue. Total revenues increased significantly year-over-year due to our acquisition of Apex Crypto, which closed on April 1, 2023. We had $13.0 million of net loyalty services revenue. Operating expenses were $257.6 million, which reflects a significant year-over-year increase in crypto costs and ECB driven by related crypto services activity.

有關加密服務收入和相關成本的更多詳細信息，請參閱我們的收益報告的註釋部分。轉到投影片 13。我們的總收入為 2.048 億美元，其中 1.918 億美元為加密服務總收入。由於我們收購了 Apex Crypto，總收入同比大幅增長，該收購於 2023 年 4 月 1 日完成。營運費用為 2.576 億美元，這反映了加密成本和相關加密服務活動推動的 ECB 年比大幅成長。

During the third quarter, in accordance with generally accepted accounting principles, we conducted our annual goodwill and intangible assets impairment testing. Earlier this year, we spoke about strategically allocating more of our capital towards the crypto business while maintaining existing offerings and relationships in the loyalty business. We meet the systems and given our expectations for which products have a clear path to profitability.

第三季度，我們依照公認會計原則，進行了年度商譽和無形資產減損測試。今年早些時候，我們談到了策略性地將更多資金分配給加密業務，同時維持忠誠度業務中的現有產品和關係。我們滿足系統並給出我們對哪些產品具有明確盈利途徑的期望。

Given the pullback on significant investments in the loyalty business, we've lowered our long-term revenue growth expectations for this business. As a result, we recognized a $23.3 million non-cash intangible asset impairment charge and our loyalty technology and customer relationship intangible assets and the back brand name intangible. The charge is non-cash and does not have any impact on our future operations or affect the liquidity or cash flow from operating activities.

鑑於對忠誠度業務的重大投資的撤回，我們下調了對該業務的長期收入成長預期。因此，我們確認了 2,330 萬美元的非現金無形資產減損費用以及我們的忠誠度技術和客戶關係無形資產以及後品牌無形資產。這筆費用是非現金的，不會對我們未來的營運產生任何影響，也不會影響經營活動的流動性或現金流。

Operating expenses, excluding crypto cost in ECB and noncash goodwill and intangible asset impairment charges were $44.2 million. This represents a decrease of 26% year-over-year. This improvement is primarily due to a reduction in total compensation and benefits as we are continuing to recognize the benefit from earlier expense actions. The net loss for the quarter was $51.7 million, which resulted in a diluted net loss of $0.19 per share on an average diluted share base of 91.4 million shares.

營業費用（不包括 ECB 中的加密成本以及非現金商譽和無形資產減損費用）為 4,420 萬美元。與去年同期相比下降了 26%。這項改善主要歸因於總薪資和福利的減少，因為我們繼續認識到早期費用行動帶來的好處。本季淨虧損為 5,170 萬美元，平均攤薄股本為 9,140 萬股，每股攤薄淨虧損 0.19 美元。

Net loss allocated to the non-controlling interest in the operating company was $34.4 million, leaving a $17.3 million loss attributable to Bakkt Holdings, Inc. or a net loss of $0.19 per share on an average basic share count of 91.4 million shares. Our total share count as of September 30 was 274.7 million trips. ICE remains our largest shareholder as they own 64% of our aggregate shares, which has remained relatively consistent with their shareholding in prior periods.

分配給營運公司非控股權益的淨虧損為 3,440 萬美元，其中 Bakkt Holdings, Inc. 的虧損為 1,730 萬美元，或平均基本股數為 9,140 萬股，每股淨虧損 0.19 美元。截至 9 月 30 日，我們的總行程次數為 2.747 億次。 ICE 仍然是我們最大的股東，擁有我們 64% 的股份，與前期的持股比例相對一致。

Note that the percent ownership is down slightly year-over-year due to new Class A share issuances and not due to the sale of shares by ICE. On Slide 14, we have our EBITDA and adjusted EBITDA for the third quarter of 2023. Adjusted EBITDA reflects adjustments for non-cash and acquisition-related items that impacted the period. EBITDA and adjusted EBITDA for the quarter were losses of $48.7 million and $21.6 million, respectively.

請注意，持股比例同比略有下降，是因為新發行了 A 類股票，而不是因為 ICE 出售股票。在投影片 14 上，我們有 2023 年第三季的 EBITDA 和調整後的 EBITDA。本季的 EBITDA 和調整後 EBITDA 分別為虧損 4,870 萬美元和 2,160 萬美元。

Adjusted EBITDA loss improved during the prior year period primarily due to lower compensation and benefit costs. On Slide 15, we show revenues for the company. Total revenue for the third quarter of 2023 was $204.8 million. Gross crypto services revenue for the quarter was $191.8 million. The quarter-over-quarter decline that we saw in the third quarter was due to a slowdown in overall industry-wide activity levels as well as lower customer activity during the migration of Webull accounts to Webull Pay, which Gavin mentioned earlier on this call.

調整後的 EBITDA 損失較上年同期有所改善，主要由於薪資和福利成本降低。在幻燈片 15 上，我們展示了公司的收入。 2023 年第三季總營收為 2.048 億美元。本季加密服務總收入為 1.918 億美元。我們在第三季度看到的環比下降是由於整個行業活動水平的放緩以及 Webull 帳戶遷移到 Webull Pay 期間客戶活動減少，Gavin 在之前的電話會議上提到了這一點。

We've been working closely with the Webull team to monitor customer activity and roll out enhancements to improve their customers' experience and drive deeper engagement levels in the new map. As Gavin mentioned earlier, as our crypto business matures, we expect that our revenue mix will also evolve with an increasing share of our revenue coming from subscription-based annual recurring revenues. This should reduce our reliance on industry activity volumes and provide stability to our revenue stream during uncertain market activity levels.

我們一直與 Webull 團隊密切合作，監控客戶活動並推出增強功能，以改善客戶體驗並在新地圖中提高更深層的參與度。正如 Gavin 之前提到的，隨著我們的加密業務的成熟，我們預計我們的收入結構也將發生變化，越來越多的收入來自訂閱的年度經常性收入。這應該會減少我們對行業活動量的依賴，並在市場活動水平不確定的情況下為我們的收入流提供穩定性。

Net royalty revenues of $13.0 million increased 2% year-over-year. This was driven by an increase in transaction revenue, which was $6.8 million for the quarter, up 5% year-over-year. This improvement was primarily due to higher air travel activity and loyalty redemptions. Subscription and service revenues of $6.2 million were relatively flat year-over-year. Turning to Slide 16. We have total operating expense. Total expense for the third quarter of $257.6 million includes $190.1 million of Crypto cost and ECB. These costs are driven by crypto grading volumes. G&A expenses of $7.4 million were down 4% year-over-year due to a reduction in marketing expenses. Total compensation expense of $24.6 million declined 35% compared to the third quarter of 2022 due to lower head count and a decrease in non-cash compensation expense.

淨特許權使用費收入為 1,300 萬美元，年增 2%。這是由於交易收入增加所致，本季交易收入為 680 萬美元，年增 5%。這一改善主要歸因於航空旅行活動和忠誠度兌換的增加。訂閱和服務收入為 620 萬美元，與去年同期相比基本持平。翻到第 16 張投影片。第三季的總支出為 2.576 億美元，其中包括 1.901 億美元的加密成本和 ECB。這些成本是由加密分級量決定的。由於行銷費用減少，一般及行政開支為 740 萬美元，年減 4%。總薪酬支出為 2,460 萬美元，與 2022 年第三季相比下降了 35%，原因是員工人數減少和非現金薪酬支出減少。

Other expenses of $12.1 million were down 16% year-over-year due to lower depreciation and amortization and acquisition-related expenses. We're pleased that our disciplined approach to expense management is paying off. We will remain prudent around our costs to ensure that we are strategic with where we spend and how we allocate our capital towards opportunities that provide the highest returns. Turning to Slide 17. We have a slide comparing gross crypto services revenue in Crypto Cost and ECB. Gross crypto services revenue of $191.8 million was impacted by lower industry-wide volumes and lower activity levels from Webull Pay customers. Crypto costs in ECB were $190.1 million for the quarter.

其他費用為 1,210 萬美元，年減 16%，原因是折舊和攤提以及收購相關費用減少。我們很高興看到我們嚴謹的費用管理方法取得了成效。我們將對成本保持審慎，以確保我們在支出方面具有策略性，以及如何將資本分配給能帶來最高回報的機會。轉到投影片 17。加密服務總收入為 1.918 億美元，受到全行業交易量下降和 Webull Pay 客戶活動水準下降的影響。本季 ECB 的加密成本為 1.901 億美元。

During the quarter, we adjusted our revenue share agreement with Webull Pay for the rest of the year to increase revenue retained by Bakkt while we Webull Pay engagement stabilizes. The benefit from this adjustment is reflected in the results for the quarter and acts as a partial offset to the decline in gross revenue. As a result, if you compare the 2 columns for Q3 '23 in the graph, you will see that the contribution to margin from crypto-trading activities, also known as our take rate was higher this quarter compared to historical periods.

在本季度，我們調整了與 Webull Pay 在今年剩餘時間的收入分成協議，以在 Webull Pay 參與度穩定的同時增加 Bakkt 保留的收入。此項調整帶來的好處反映在本季的業績中，並部分抵銷了總收入的下降。因此，如果比較圖表中 23 年第三季的兩列，您會發現本季加密交易活動對保證金的貢獻（也稱為我們的佣金率）高於歷史時期。

The Q3 23 take rate of approximately 80 basis points of gross crypto services revenue is higher than the historical average of between 30 and 40 basis points, which will continue into Q4 23. On Slide 18, we have our key performance indicators. As a reminder, we have included Apex crypto in the historical KPI figures on this slide for comparison purposes. We had 6.1 million crypto enabled accounts at the end of the third quarter, which reflects a steady increase over time.

23 年第三季的加密服務總收入的接受率約為 80 個基點，高於 30 至 40 個基點的歷史平均水平，並且這一趨勢將持續到 23 年第四季度。提醒一下，為了方便比較，我們在此投影片的歷史 KPI 資料中包含了 Apex 加密。截至第三季末，我們擁有 610 萬個加密帳戶，這反映出隨著時間的推移呈現穩定成長。

Next, we have our transacting accounts, which we break out into crypto and loyalty accounts. There were $1.0 million transacting accounts in the third quarter, of which $592,000 were for loyalty redemption and 454,000 were for crypto traces. Loyalty redemption transaction accounts were down 13% year-over-year due to a decline in hotel, rental car and gift card activity. Crypto transacting accounts were up 3% sequentially due to increased activity related to the delisting of certain points.

接下來，我們有交易帳戶，我們將其分為加密帳戶和忠誠度帳戶。第三季交易帳戶數為 100 萬美元，其中 59.2 萬美元用於忠誠度兌換，45.4 萬美元用於加密貨幣追蹤。由於飯店、租車和禮品卡活動的減少，忠誠度兌換交易帳戶較去年同期下降 13%。由於與某些點的退市相關的活動增加，加密交易帳戶數環比增長了 3%。

Notional traded volume is also broken out between crypto and loyalty redemptions. Total notional traded volume was $366 million, of which $191 million was from crypto and $176 million was related to loyalty redemption. On this chart, we have also included the crypto industry trading volumes, which is the orange line. As depicted here, our crypto trading volumes were down a substantial amount on a sequential basis. During the quarter, volumes were impacted by lower activity levels from Webull Pay customers and the delisting of certain points. If you normalize for these factors, the quarter-over-quarter decline in our crypto trading volumes was right in line with the overall crypto market industry, which was down 0.3%. Meanwhile, loyalty redemption volume was down 4% year-over-year. Our assets under custody of $506 million declined 23% sequentially due to the impact from delisting certain coins and a reduction in certain Quinn prices.

名目交易量也分為加密貨幣和忠誠度兌換兩種。總名目交易量為 3.66 億美元，其中 1.91 億美元來自加密貨幣，1.76 億美元與忠誠度兌換有關。在此圖表中，我們也包含了加密產業的交易量，即橘色線。如圖所示，我們的加密貨幣交易量較上季大幅下降。在本季度，交易量受到 Webull Pay 客戶活動水準較低和某些點的退市的影響。如果將這些因素標準化，我們的加密貨幣交易量較上季下降與整個加密貨幣市場產業的下降 0.3% 一致。與此同時，忠誠度兌換量較去年同期下降了 4%。由於某些代幣退市的影響以及某些 Quinn 價格的下降，我們託管的 5.06 億美元資產環比下降了 23%。

Turning to Slide 19. We have our condensed balance sheet. We ended the third quarter with $90.9 million of cash, cash equivalents and available-for-sale securities. Our cash usage for the quarter was $8.5 million. During the quarter, we had a non-recurring addition of cash of $15.2 million, which was returned to us from ICE clearing and is related to the delisting of features and options contracts. Excluding the return of cash from ICE clearing, our cash usage from operating activities was $19.0 million, which was slightly higher than the second quarter cash usage of $18.2 million. Although we saw improvements in our operating expense base, including lower acquisition-related expenses, marketing and insurance expense. Revenues were lower due to crypto trading volumes, which we discussed earlier, which led to the slight pickup in cash usage.

翻到第 19 張投影片。截至第三季度，我們的現金、現金等價物及可供出售證券總額為 9,090 萬美元。我們本季的現金使用量為 850 萬美元。在本季度，我們非經常性增加了 1520 萬美元的現金，這是 ICE 清算返還給我們的，與功能和期權合約的退市有關。不包括ICE清算的現金回報，我們的經營活動現金使用量為1,900萬美元，略高於第二季的1,820萬美元。儘管我們的營業費用基礎有所改善，包括收購相關費用、行銷和保險費用的降低。由於我們之前討論過的加密貨幣交易量，收入較低，導致現金使用量略有增加。

Recall that last quarter, we updated our 2023 outlook for both revenue and free cash flow utilization with an expectation that net revenue contribution from loyalty and crypto revenue activities would be between $64 million and $70 million, and our free cash flow utilization would be between $90 million and $96 million. Since that update, we have seen continued softness in loyalty travel redemption levels as well as lower market retail crypto transaction activity. Additionally, our recently announced international retail crypto clients will begin to contribute to revenue in late Q4 2023, which is a bit later than the timing previously anticipated in last quarter's outlook update.

回想一下，上個季度，我們更新了 2023 年收入和自由現金流利用率的展望，預計忠誠度和加密收入活動帶來的淨收入貢獻將在 6,400 萬美元至 7,000 萬美元之間，我們的自由現金流利用率將在 9,000 萬美元至 9,600 萬美元之間。自從那次更新以來，我們看到忠誠度旅行兌換水準持續疲軟，以及市場零售加密交易活動下降。此外，我們最近宣布的國際零售加密客戶將在 2023 年第四季末開始貢獻收入，這比上一季展望更新中預期的時間略晚。

Accordingly, we are reducing our expectation of net loyalty in net crypto revenue activity contribution for 2023 to $57 million to $60 million, comprised of gross crypto revenues of $697 million to $1,215 million and net loyalty revenues of $53 million, less crypto costs of $693 million to $1,208 million. This directly impact free cash flow utilization, notwithstanding continued progress in reducing cash expenses. And as such, we now expect free cash flow utilization for 2023 to be approximately $100 million. The progress we have highlighted in signing new retail and institutional crypto customers will drive strong backlog going into 2024.

因此，我們將 2023 年淨忠誠度對加密淨收入活動貢獻的預期降低至 5,700 萬美元至 6,000 萬美元，其中包括 6.97 億美元至 12.15 億美元的加密總收入和 5,300 萬美元的淨忠誠度收入，減去 6.93 億美元至 12.08 億美元的加密成本。儘管在減少現金支出方面不斷取得進展，但這仍直接影響了自由現金流的利用。因此，我們現在預計 2023 年的自由現金流利用率約為 1 億美元。我們在簽署新的零售和機構加密客戶方面所取得的進展將推動 2024 年的強勁積壓訂單。

Our preliminary guidance for 2024 provides color on the time line to revenue from these new customers. We preliminarily expect gross crypto revenues of $3,406 million to $9,005 billion. Net loyalty revenues of approximately $55 million, in crypto costs of 3,386 million to $8.976 million. This translates into loyalty and crypto revenue activities driving $75 million to $95 million of net revenue contribution in 2024. The increased revenue expectation is driven by new retail and institutional customers with loyalty revenues expected to increase slightly.

我們對 2024 年的初步指導為從這些新客戶獲得收入的時間表提供了指導。我們初步預期加密貨幣總收入為 34.06 億美元至 90.05 億美元。淨忠誠度收入約 5,500 萬美元，加密成本為 33.86 億美元至 897.6 萬美元。這意味著忠誠度和加密收入活動將在 2024 年帶來 7500 萬至 9500 萬美元的淨收入貢獻。

As Gavin mentioned earlier, the 2024 revenue outlook includes an expectation of increased diversity of crypto revenue, both geographically with the ramp-up in international retail crypto and by customer segment with the growth in institutional custody revenue. It also includes an expectation of approximately 25% to 50% increased subscription revenue driven by subscription-based retail crypto revenue. 2024 free cash utilization is expected to be $43 million to $63 million, reflecting further reductions to our cash expenses. At the high end of our revenue range, we see a pathway to be approximately breakeven on an adjusted EBITDA basis by the end of 2024.

正如 Gavin 先前所提到的，2024 年的收入前景包括對加密貨幣收入多樣性增加的預期，無論是從地理上看，隨著國際零售加密貨幣的增加，還是從客戶細分上看，隨著機構託管收入的增長。它還包括預計訂閱收入將增加約 25% 至 50%，這主要得益於基於訂閱的零售加密收入。 2024 年自由現金利用率預計為 4,300 萬美元至 6,300 萬美元，反映出我們的現金支出進一步減少。在我們的營收範圍的高端，我們預計到 2024 年底，調整後的 EBITDA 將基本達到收支平衡。

I will now pass it back to Gavin for his closing remarks.

現在我將把發言交還給加文，請他作最後發言。

Thanks, Karen. Just a few final thoughts. We've made substantial progress this past quarter, and we're building momentum for future growth and success. This was another consecutive quarter where we clearly demonstrated our ability to execute and leverage our industry-leading platform, made stronger from our acquisition of Apex Crypto to win new clients and deliver results for our existing ones. We're actively executing our international growth strategy. Our crypto capabilities will be live in 9 attractive international markets by year's end.

謝謝，凱倫。最後還有幾點想法。我們在過去的一個季度取得了實質的進展，並正在為未來的成長和成功積蓄力量。這是我們連續一個季度清楚地展示了我們執行和利用行業領先平台的能力，透過收購 Apex Crypto，我們贏得了新客戶並為現有客戶帶來了成果，從而使我們變得更加強大。我們正在積極執行我們的國際成長策略。今年底，我們的加密功能將在 9 個具有吸引力的國際市場上線。

This is a significant milestone for us and testament to how we push forward when faced with challenges in this case, a difficult environment in the U.S. around crypto regulation. Our team is flexible, adaptable and quick to find other paths to success. We're still going strong with adding new clients to our roster. We're building an extensive network of clients in a diverse group of industries as the synergies of our expanded crypto capabilities and industry-leading infrastructure resonates with market participants. We're pleased with the progress we're making, but what's even more important is that we're moving quickly to onboard all of these clients and activate our crypto capabilities expeditiously.

這對我們來說是一個重要的里程碑，也證明了我們在面臨挑戰（美國加密監管環境艱難）時如何繼續前進。我們的團隊靈活、適應性強，能夠快速找到成功的其他途徑。我們仍在不斷增加新的客戶。隨著我們擴展的加密功能和行業領先的基礎設施的協同作用與市場參與者產生共鳴，我們正在多元化的行業中建立廣泛的客戶網絡。我們對所取得的進展感到滿意，但更重要的是，我們正在迅速接納所有這些客戶，並迅速啟動我們的加密功能。

Lastly, we'll continue to be prudent on how we allocate capital and manage our expenses. Our results this quarter clearly demonstrate that our disciplined approach to managing expenses are yielding results, but we won't skimp on making investments in areas that make sense and have a clear path to profitability, such as the redevelopment of our custody foundation to make it even stronger for our clients, all the investments that we're making in the Lightning network to increase crypto utility. We're being smart with where we spend our hard-earned money and look forward to sharing with you in the future how those investments are reaping rewards. Thank you for joining us today.

最後，我們將繼續謹慎分配資本和管理費用。本季度的業績清楚地表明，我們嚴謹的費用管理方法正在取得成效，但我們不會吝惜在合理且具有明確盈利途徑的領域進行投資，例如重新開發我們的託管基礎以使其為客戶服務更加強大，我們在閃電網絡中進行的所有投資都是為了提高加密貨幣的實用性。我們會明智地花我們辛苦賺來的錢，並期待將來與您分享這些投資如何獲得回報。感謝您今天加入我們。

And with that, I'll turn it over to Ann to manage Q&A.

接下來，我將把問題交給安 (Ann) 來負責問答環節。

Thanks, Gavin. Let's move over to questions from the investor community. Leading into our Q&A session, we'll start by answering the top questions from today ranked by a number of votes. We have consolidated some of the questions I address similar games. After that, we'll turn to live questions from the analyst community.

謝謝，加文。讓我們來討論一下投資者群體的問題。在進入問答環節之前，我們將首先回答今天按投票數排序的熱門問題。我們整合了我解決類似遊戲的一些問題。之後，我們將轉向分析師社群的現場提問。

The first question we will address is about our stock price, which several investors, including [Walter P., Syed H. and Jeffrey C.] submitted. They would like to know what our plan is to raise the stock price, whether we are at risk for delisting and why we aren't using cash to do a stock repurchase. Karen, can you answer this question?

我們要解決的第一個問題是關於我們的股票價格，包括 [Walter P.、Syed H. 和 Jeffrey C.] 在內的幾位投資者都提出了這個問題。他們想知道我們提高股價的計畫是什麼，我們是否面臨退市的風險，以及為什麼我們不使用現金回購股票。凱倫，你能回答這個問題嗎？

Of course. I know that the downward pressure on our stock price has been incredibly frustrating to all of our shareholders. As a fellow shareholder, I have certainly been disappointed by the stock price performance. We are closely monitoring our stock price. And should we receive a listing notice, we would take necessary action to remediate such as a reverse stock split. We are committed to our shareholders and to remaining a public company.

當然。我知道，我們股價的下行壓力讓所有股東感到非常沮喪。身為股東，我確實對股價表現感到失望。我們正在密切關注我們的股票價格。如果我們收到上市通知，我們將採取必要的補救措施，例如反向股票分割。我們致力於服務股東並維持上市公司的形象。

Ultimately, we believe the best way to allocate our capital to generate higher returns for our shareholders is to invest in the business, deliver on milestones and accelerate our path to profitability. That's what will drive our stock price higher. We always consider all options. And while a stock repurchase since tempting, it ultimately will not provide sustainable growth and returns that investing in our business well. Thank you to all of our shareholders for sticking with us. It hasn't been an easy journey, but I believe there are better days ahead for this company and our shareholders. Thanks, Karen.

最終，我們相信，分配資本以為股東創造更高回報的最佳方式是投資於業務，實現里程碑並加速我們的獲利之路。這將會推高我們的股價。我們總是考慮所有的選擇。雖然股票回購很誘人，但它最終不會為我們的業務帶來可持續的成長和回報。感謝所有股東對我們的支持。這並不是一段輕鬆的旅程，但我相信這家公司和我們的股東的未來會更好。謝謝，凱倫。

Our next question hit on a few themes from Jabra HanchilaS around the status of partnerships, including MasterCard and our plans to drive future success. Gavin, can you take this one?

我們的下一個問題涉及 Jabra HanchilaS 提出的幾個主題，涉及合作夥伴關係的現狀，包括萬事達卡以及我們推動未來成功的計劃。加文，你能拿這個嗎？

Yes, sure. I think there was a comment from one of the investors mentioned that we haven't had any major partnerships since we announced the acquisition of Apex Crypto a year ago. I don't quite agree with that. We've signed up numerous new clients since April 1, which is when we closed our acquisition of Apex Crypto and have a number of other clients in late-stage negotiations who we expect to announce before too long. Our new relationships span across new and diverse industries and also marks our foray into new international markets. This will enable us to land and expand and greatly broaden our reach across the world.

是的，當然。我記得有一位投資人提到，自從一年前宣布收購 Apex Crypto 以來，我們還沒有建立任何重大合作關係。我不太同意這一點。自 4 月 1 日我們完成對 Apex Crypto 的收購以來，我們已經簽約了許多新客戶，並且還有許多其他客戶處於後期談判階段，我們預計不久將會公佈這些客戶的消息。我們的新關係涵蓋了新興和多樣化的行業，也標誌著我們進入新的國際市場。這將使我們能夠登陸並擴展並極大地拓寬我們在世界各地的影響力。

We formed strategic alliances with industry leaders such as pad and fire blocks, which provides an extensive network of prospective clients. Also prior to closing our acquisition, we signed up Caesars Entertainment as a new client, which, as I mentioned, will launch early in Q1. This marks our entry into the gaming and entertainment industry, which should provide exciting opportunities to expand. I've said this before, and I will reiterate that we greatly value our relationship with MasterCard and continue to work with them on being able to provide our crypto capabilities to their customers. Our respective teams have completed the development work, and we're in the process of testing.

我們與墊塊和防火塊等行業領導者建立了策略聯盟，從而提供了廣泛的潛在客戶網路。此外，在完成收購之前，我們簽約了凱撒娛樂（Caesars Entertainment）作為新客戶，正如我所提到的，該公司將於第一季初推出。這標誌著我們進入遊戲和娛樂產業，這將提供令人興奮的擴展機會。我之前說過，這次我再次重申，我們非常重視與萬事達卡的關係，並將繼續與他們合作，為他們的客戶提供我們的加密功能。我們各自的團隊已經完成了開發工作，目前正在進行測試。

We expect to be able to commence a collective sales efforts soon. But that said, until the U.S. regulatory environment for crypto gets fixed, I think many TradFi companies will remain on the sidelines and wait to activate their crypto strategies. We'll be here ready to resume our work with them when that happens, but I think that catalyst really does need to happen for us.

我們希望能夠很快開始集體銷售活動。但話雖如此，在美國加密貨幣監管環境得到修復之前，我認為許多 TradFi 公司仍將保持觀望態度，等待啟動其加密貨幣策略。當這種情況發生時，我們將隨時準備與他們恢復合作，但我認為這種催化劑確實需要發生在我們身上。

And last question from the [safe platform is from Syed H.], who asked if we are involved in any of the spot ETF applications. Gavin, can you give your thoughts on this one?

安全平台的最後一個問題來自 Syed H.，他詢問我們是否參與了任何現貨 ETF 應用。加文，你能談談你對此的看法嗎？

Yes, thanks for the question. The applications themselves have been a stamp of approval from traditional finance and SEC approval of spot Bitcoin ETFs will be a positive step towards mainstream acceptance and legitimacy in the financial world. We're excited to see this happen and for the opportunities this will bring to the larger market with custody being a core anchor product for Bakkt, approval would open up the market for us, and we're prepared to serve as a qualified custodian. We're looking forward to providing you with updates here when appropriate.

是的，謝謝你的提問。這些申請本身已經獲得了傳統金融的認可，而美國證券交易委員會對現貨比特幣 ETF 的批准將是朝著金融界主流接受和合法性邁出的積極一步。我們很高興看到這種情況發生，這將為更大的市場帶來機遇，託管是 Bakkt 的核心錨定產品，批准將為我們打開市場，我們準備成為合格的託管人。我們期待在適當的時候在此為您提供更新資訊。

And with that, I would now like to turn the call back over to the operator to open up the phone line to take questions from the analyst community.

說完這些，我現在想將電話轉回給接線員，以便開通電話線路來回答分析師群體的問題。

(Operator Instructions) Our first question comes from Trevor Williams from Jefferies.

（操作員指示）我們的第一個問題來自 Jefferies 的 Trevor Williams。

This is Yvonne Jeng on for Trevor Williams. My first one relates to the crypto services revenue and the increase in the take rate this quarter. Can you provide more color about the change in the revenue share agreement with Webull Pay and how we should expect the take rate to trend going forward? And my second question is, what do you see as a normalized pace of OpEx growth beyond 2023, excluding crypto costs and ECP fees.

這是 Trevor Williams 的 Yvonne Jeng。我的第一個問題與加密服務收入和本季的接受率成長有關。您能否詳細介紹與 Webull Pay 的營收分成協議的變化，以及我們預期未來的收費率趨勢如何？我的第二個問題是，您認為 2023 年以後營運支出成長的正常化速度是多少（不包括加密成本和 ECP 費用）。

It's Karen. I'm happy to take that question. Starting with the take rate. As we've mentioned earlier, we've worked successfully completed a migration of the Webull's crypto accounts over to Webull Pay during the third quarter. That migration required existing customers to activate new accounts that Webull Pay to be, to continue to create crypto. So it wasn't surprising that we saw some disruption and decrease in trading and see metrics from that group of customers as they were acclimating themselves to the new Webull Pay experience.

是凱倫。我很高興回答這個問題。從接受率開始。正如我們之前提到的，我們已經在第三季度成功完成了將 Webull 的加密帳戶遷移到 Webull Pay。此次遷移需要現有客戶啟動 Webull Pay 的新帳戶，才能繼續建立加密貨幣。因此，我們看到交易出現一些中斷和減少，並看到該組客戶的指標，因為他們正在適應新的 Webull Pay 體驗，這並不奇怪。

So we've been working actually very closely with Webull to monitor this customer activity and roll out enhancements. And in the meantime, I think the adjustment that Webull made to our rev share agreement to allow us to retain more of that reduced gross volume of trading is really a testament to them to our collaborative relationship. So we expect that to continue through the end of the year. And then the expectation at this point is as the Webull Pay customer experience continues to evolve, we'll see those trading levels return, and we will revert back in 2024 to more historical take rate, which has typically been if you include the historical Apex history and to be between 30 and 40 bps. And then just in terms of the second question, can you just repeat it one more time just to make sure I have it.

因此，我們實際上一直與 Webull 密切合作，以監控客戶活動並推出增強功能。同時，我認為微牛對我們的收入分成協議所做的調整，允許我們保留更多減少的總交易量，這確實證明了他們對我們的合作關係的重視。因此我們預計這種情況將持續到今年年底。然後，目前的預期是，隨著 Webull Pay 客戶體驗的不斷發展，我們將看到這些交易水準的回升，並將在 2024 年恢復到更歷史性的接受率，如果包括歷史 Apex 歷史記錄，則通常為 30 到 40 個基點之間。然後就第二個問題而言，您能否再重複一次以確保我理解正確。

Yes, I was just curious what you see as a more normalized pace of expense growth beyond this year, excluding crypto cost and ECP fees?

是的，我只是好奇，您認為今年以後不包括加密成本和 ECP 費用在內的費用增長速度會更加正常化嗎？

Yes, so on the expense growth, one of the things that we've highlighted is we've taken a lot of actions in 2023 to reset our expense footprint. We're seeing and continue to see a lot of opportunities to increase efficiencies through the integration of the Apex team and systems with the legacy Bakkt team. So we actually expect our cash expenses to continue to come down in 2024. When you look at the guidance, the preliminary guidance that I gave for 2024 in terms of free cash flow utilization, that reflects, when you compare that to the revenue guidance that we provided, we are looking at continued reductions to our expense rate in 2024. It probably expenses somewhere in the $130 million rate on a cash basis.

是的，關於費用成長，我們強調的一件事是我們在 2023 年採取了許多行動來重置我們的費用足跡。我們已經看到並將繼續看到透過將 Apex 團隊和系統與傳統 Bakkt 團隊整合來提高效率的許多機會。因此，我們實際上預計我們的現金支出將在 2024 年繼續下降。

The next question comes from Andrew Bond from Rosenblatt Securities.

下一個問題來自羅森布拉特證券公司的安德魯邦德 (Andrew Bond)。

I just want to start with the guidance on the revenue side for 2024, you're expecting a pretty big ramp in gross and net revenue from the current run rate. So I just wanted to get an idea of this primarily from the international additions and kind of what are your assumptions on the broader volume environment given -- to achieve this activity or growth? And additionally, how are volumes tracking quarter-to-date with the stronger October for Crypto?

我只是想從 2024 年收入的指引開始，您預計目前的運行率將帶來毛收入和淨收入的大幅成長。因此，我只是想主要從國際新增情況來了解這一點，以及您對給定的更廣泛的數量環境有何假設——以實現這一活動或增長？此外，10 月份加密貨幣交易量表現強勁，本季迄今的交易量如何？

Happy to take that question. In terms of the outlook for 2024, I guess, first off, we thought it was important and helpful to get a preliminary outlook in 2024, given the fact that we have made traction in signing new clients and relationships, as I mentioned earlier in the call. A lot of these are set for activation towards the very end of 2023. So if you -- yes, well, we don't see a lot of impact of these new relationships in 2023.

很高興回答這個問題。就 2024 年的展望而言，我想，首先，我們認為對 2024 年做出初步展望非常重要且有幫助，因為正如我在電話會議中早些時候提到的那樣，我們在簽約新客戶和建立新關係方面取得了進展。其中許多計劃在 2023 年底啟動。

We do see it as a strong backlog as we get into 2024. The range that I provided, when you break down that revenue, and you put it on a net basis for crypto is somewhere between $20 million and $40 million. And that really is -- that range reflects a kind of variance in what we expect market engagement to be as well as time line for activations. The international component is going to be a big component of that range. So if you look under any scenario, we think that international retail crypto revenue can be almost half of that net crypto revenue coming into 2024.

進入 2024 年，我們確實認為這是一個強勁的積壓訂單。事實確實如此——這個範圍反映了我們預期的市場參與度以及激活時間表的某種差異。國際部分將成為該範圍的重要組成部分。因此，無論從哪種情況來看，我們都認為到 2024 年，國際零售加密貨幣收入可能幾乎佔加密貨幣淨收入的一半。

And again, we look at that as not only the progress that we've made signing these relationships internationally, as Gavin mentioned, it really is a land and expand as we activate and gain footholds into these markets. But also a lot of these international relationships, they have signed up for a more of a subscription model and how we will generate revenue. And the fact that they will sign up for a tier of trading, where they basically pay a flat amount as far within a certain tier. And if they go above that volume, then it will revert to more of a volume-based model. So I think, again, in terms of the composition of that, it can be that the ARR component of that also provides a good line of sight in terms of how we're guiding at least initially 2024.

而且，正如加文所說，我們認為這不僅是我們在國際上簽署這些關係所取得的進展，而且隨著我們在這些市場中活躍起來並站穩腳跟，這確實是一塊土地，而且正在不斷擴張。但許多國際關係也簽署了更多的訂閱模式以及我們將如何創造收入。事實上，他們會簽約一個交易等級，基本上在某個等級內支付固定金額。如果它們的交易量超過該水平，那麼它將恢復為基於交易量的模型。因此，我認為，就其組成而言，其中的 ARR 部分也可以為我們至少在最初階段如何指導 2024 年提供良好的視線。

Okay. And just on that recurring subscription piece and the expected shift there. Can you remind us what kind of what percentage your revenue is currently recurring? And where do you expect that to get to over the next 12 months as you kind of onboard some of these international partners with this new subscription plan?

好的。這只是關於定期訂閱部分和預期的轉變。您能否提醒我們一下您目前的經常性收入佔比是多少？當您透過這項新的訂閱計畫吸收一些國際合作夥伴時，您預計未來 12 個月內將會取得怎樣的進展？

Yes. So right now, the subscription portion of our revenue stream is in the loyalty part of our business. So it's about, if you break down the royalty revenue, about $10 million of the revenues are purely subscription-based revenues. And then looking into what the potential is for 2024, we can see that increasing anywhere from 25% to 50% on a dollar basis based on the contribution of crypto ARR contracts, in particular from international, but we're certainly not limited to international for that type of combo.

是的。因此現在，我們收入來源的訂閱部分屬於我們業務的忠誠度部分。因此，如果細分版稅收入，大約有 1000 萬美元的收入純粹是基於訂閱的收入。然後研究一下 2024 年的潛力，我們可以看到，根據加密 ARR 合約的貢獻，特別是來自國際的貢獻，以美元計算，這一數字將增加 25% 到 50%，但對於這種類型的組合，我們當然不僅限於國際。

Okay. Just lastly for me on the capital front. How are you guys feeling your position heading into next year, just given your current run rates and particularly if the volume environment doesn't improve much from here. Any plans on the thoughts on the capital front.

好的。對我來說，這是關於資本的最後一點。考慮到你們目前的運作率，特別是如果產量環境從現在起沒有太大改善的話，你們對明年的前景有何看法？在資本方面有什麼計畫嗎？

Yes. As I mentioned when we -- I talked about the outlook for 2024. Looking at the progress that we're making in reducing expenses and the potential revenue outlook, we continue to see a path to breakeven on an adjusted EBITDA basis by the end of 2024. At the moment, we have sufficient cash to provide our operations. Yes. Certainly, as you think about the company's journey, the original fundraising that we did from the pack was intended to fund a 3-year road map. So I think as we get into 2024, we would be naturally looking at the next steps for the company in terms of the capital raise, but is not something that we imminently need to execute on the plans that we outlined in the guidance that we gave.

是的。正如我在談論 2024 年的前景時提到的那樣。是的。當然，當你思考公司的發展歷程時，我們從團隊中最初籌集的資金旨在為三年的發展路線圖提供資金。因此，我認為，隨著進入 2024 年，我們自然會考慮公司在融資方面的下一步行動，但這並不是我們迫切需要執行的指導方針中概述的計劃。

The next question comes from Peter Christiansen from Citigroup Inc.

下一個問題來自花旗集團的 Peter Christiansen。

A quick one on the Webull disruption. Just curious, was that throughout the quarter or halfway or towards the end? Just the sense there? And then on the relaunch of the custody product, just curious if you're seeing incremental value-add generating value-based pricing. We continually hear that custody pricing has been under pressure. Just curious if the relaunch and some of the new capabilities that's helping you drive pricing.

快速了解一下微牛的中斷。只是好奇，那是在整個季度還是中途還是快結束時？只是有這種感覺嗎？然後，在託管產品的重新推出時，我很好奇您是否看到增量增值產生了基於價值的定價。我們不斷聽到託管定價面臨壓力的消息。只是好奇重新推出的一些新功能是否有助於您提高定價。

Peter, I can certainly take the first part of the question on Webull Pay. So Webull started their migration of customers over to the new Webull Pay experience at the beginning of Q3, so in July. So we started to see that impact on engagement levels at the beginning of the third quarter. And the adjustment to the route share agreement that we executed with them is retroactive to July 1. In terms of the custody product and what we're seeing in terms of pricing, the most of the pricing that we're executing is an AUC fee model that is scaled to the amount of AUC that we bring on to the platform. There are some minimums.

彼得，我當然可以回答有關 Webull Pay 的第一部分問題。因此，Webull 在第三季初（也就是 7 月）開始將客戶遷移到新的 Webull Pay 體驗。因此，我們從第三季初就開始看到這種對參與程度的影響。我們與他們執行的路線共享協議的調整將追溯至 7 月 1 日。有一些最低限度。

So it's not completely volatile, but there are other elements of customer hip services that have more of a subscription component as well. So for instance, disaster recovery is something that we've talked about as a capability that we see the market coming to us for. That is more of a bubbly subscription amount. So it's, I would say, mostly then AUC with some opportunities for the additional subscription-based revenue. And certainly, as we expand those capabilities, we see that opportunity for subscription or ARR type revenue to increase.

所以它並不是完全不穩定的，但客戶服務還有其他元素，也有更多的訂閱成分。舉例來說，災難復原是我們討論過的、市場需要的功能。這更像是泡沫訂閱金額。所以，我想說，這主要是 AUC，但也有一些基於訂閱的額外收入機會。當然，隨著我們擴展這些功能，我們看到訂閱或 ARR 類型收入增加的機會。

(Operator Instructions) Next question comes from John Roy from Water Tower Research.

（操作員指示）下一個問題來自水塔研究公司的約翰·羅伊（John Roy）。

And I got 2 questions. It was the unchanged network. I'd love to get a little more color on that. And anything on timing would be useful.

我有 2 個問題。這是一個未發生改變的網路。我很想對此進行更多的詮釋。任何與時間有關的事情都是有用的。

John, I'll take the unchanged one. Being part of this network is really an added dimension to what we're doing for custody. So if you think about, as Karen said earlier in responding to Pete's question that we have the asset under custody model, but what we're seeing is these value-added services that are coming into the market and the partnership with unchanged is one of those, where we're holding part of the key, as I said in the prepared remarks. And then we're acting as one of the key signers in the transaction. We like this model a lot. It's hugely scalable. We anticipate being active in that network by year's end.

約翰，我要不變的那一個。成為這個網路的一部分確實為我們在監護方面所做的工作增加了一個維度。所以如果你想想，正如凱倫之前在回答皮特的問題時所說的那樣，我們擁有資產託管模式，但我們看到的是這些進入市場的增值服務，與不變的合作關係就是其中之一，正如我在準備好的評論中所說的那樣，我們掌握著部分關鍵信息。然後我們充當交易中的關鍵簽名者之一。我們非常喜歡這個模型。它的可擴展性極強。我們預計將在今年年底前在該網路中活躍起來。

Great. And then maybe transitioning a little bit to the international. I was curious, obviously, the U.S. market needs some regulatory clarity to say at least. Which markets do you see having the best setup or the least barriers for you outside the U.S.?

偉大的。然後可能會稍微轉向國際化。我很好奇，顯然，美國市場至少需要一些監管明確性。您認為除美國之外，哪些市場為您提供最好的設置或最少的障礙？

John, I think it's the ones that we've spoken about this morning where we see strong regulatory clarity. We see a strong pathway for our entry. We've already demonstrated with markets like Spain where we live today, together with that with some of the Lat Am markets that we're working with regulators who have provided good guardrails for how the assets and the trading should operate. And we're working with partners who really want to take advantage of that shifting sentiment within the market. As we see regulatory clarity, we see the consumer sentiment returned to a very positive level.

約翰，我認為，正如我們今天早上所談論的，我們看到了嚴格的監管清晰度。我們看到了一條通往我們進入的強大道路。我們已經向我們現在所在的西班牙等市場以及一些拉丁美洲市場展示了我們正在與監管機構合作，他們為資產和交易的運作方式提供了良好的保障。我們正在與真正希望利用市場情緒轉變的合作夥伴合作。隨著監管變得更加清晰，我們看到消費者情緒恢復到了非常積極的水平。

So the ones that we've spoken about this morning, those in Lat Am, Hong Kong, Singapore, Australia are all markets that we like to live together with the U.K. and parts of Europe. And as Karen also mentioned, the shift to an ARR model to a subscription model as we are growing and evolving the business, I think, provides good underpinnings to the forecast that an outlook that Karen gave as part of the presentation. I think us being able to take advantage of that regulatory clarity, consumer sentiment, together with strong backlog against our recurring revenue model is really giving us great confidence as we move into 24.

因此，我們今天早上談到的拉丁美洲、香港、新加坡、澳洲等市場都是我們希望與英國和歐洲部分地區共存的市場。而且正如 Karen 所提到的，隨著我們業務的發展和進步，我們從 ARR 模式轉向訂閱模式，我認為這為 Karen 在演示中提出的預測提供了良好的基礎。我認為，我們能夠利用監管的明確性、消費者的情緒以及我們經常性收入模式的強勁積壓訂單，這確實給了我們在進入 24 年後充滿信心。

We have no further questions, so I'll hand the call back to the management team for any concluding remarks.

我們沒有其他問題了，因此我將把電話交回給管理團隊以作最後總結。

Thank you, everyone, for attending our earnings call this morning. We look forward to connecting with you again soon.

感謝大家參加今天上午的財報電話會議。我們期待很快再次與您聯繫。

This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines.

今天的電話會議到此結束。非常感謝您的出席。現在您可以斷開線路了。