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| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets, Net | Goodwill and Intangible Assets, Net Changes in goodwill for the periods presented consisted of the following (in thousands):
The Company recorded no impairment charges related to goodwill and other intangible assets during the years ended December 31, 2025 and 2024, and recorded an impairment charge of $12.7 million during the year ended December 31, 2023. No goodwill was allocated to the sale of the Loyalty business based on the financial terms and conditions of the transaction. During the second quarter of 2025, the Company completed the sale of Bakkt Trust and included approximately $3.3 million of goodwill in the carrying amount of Bakkt Trust upon sale and in determining the loss on sale. Impairment Analyses Performed During The Year Ended December 31, 2025 The Company conducts an impairment assessment annually in the fourth quarter, or more frequently if impairment indicators are present. On March 14, 2025, the Company's largest crypto client, Webull, notified the Company that it would not renew its agreement with Bakkt that ended on June 14, 2025, although the Company continues to service a limited number of states under an amended agreement with Webull. Due to the significance of Webull to the Company's historical Crypto services revenue, Bakkt management determined that the non-renewal notification was a triggering event indicating a potential impairment of the Company's goodwill during the three months ended March 31, 2025. The Company elected to bypass performing a qualitative assessment and proceeded directly to a quantitative impairment assessment. The Company retained a third-party valuation firm to estimate the fair value of its indefinite lived intangible asset (the “Tradename”) and single reporting unit. Goodwill impairment is measured as the excess of a reporting unit's carrying amount over its estimated fair value, not to exceed the carrying amount of goodwill for that reporting unit. For the quantitative goodwill impairment analysis, the Company compared the estimated fair value of its reporting unit to the carrying amount. The estimated fair value of the reporting unit was derived using a market approach and an income approach, with equal weighting given to both approaches. A discounted cash flow (“DCF”) model was used for the income approach. The DCF model reflected the Company’s assumptions regarding revenue growth rates, forecast earnings before interest, taxes, depreciation, and amortization (“EBITDA”) margins (and thus operating expenses), capital expenditures, discount rates (including the company-specific risk premium assumption), terminal period growth rates, economic and market trends, and other expectations about the anticipated operating results of its reporting unit. Management estimates of future performance and metrics of guideline public companies (“GPCs”) were used to estimate revenue growth rates, EBITDA margins, and discount rate. Market and industry reports and data were used to estimate terminal period growth rates. The base of the income approach utilized the Company’s projected cash flow estimates, which are unobservable, Level 3 inputs. Unobservable inputs are used to measure fair value to the extent that relevant observable inputs are not available. The overall forecast estimate was developed using the best information available as of March 31, 2025, in consultation with a third-party valuation firm. The discount rate used is intended to be commensurate with the risks and uncertainty inherent in Bakkt’s business. The market approach valuation was derived from metrics of the GPCs, which are Level 2 inputs, and management estimates of future performance with consideration for a control premium. A significant judgment in using the market approach includes the selection of comparable GPCs with consideration of risk profiles, size, geography, and business operations. The impairment analysis for the Tradename involved the use of a relief from royalty approach, which estimated the value of the stream of payments a market participant would pay to make use of the in-place Tradename. Significant judgments in this analysis included forecasted revenue and growth rates, the royalty rate, and the discount rate. The discount rate used in the valuations described above was 12.5%. The results of the Company’s quantitative impairment analyses as of March 31, 2025 indicated that there was no impairment of the Company’s Tradename or goodwill. In the event the financial performance of the reporting unit does not meet management’s expectations in the future, the Company experiences a prolonged macroeconomic downturn, there is a decline in the Company’s market capitalization, or there are other negative revisions to key assumptions used in the DCF or Market Approach used to value the Tradename and reporting unit, the Company may be required to perform additional impairment analyses with respect to the reporting unit and Tradename and could be required to recognize impairment charges. The Company performed its annual goodwill impairment test in the fourth quarter of 2025. For the annual assessment, management evaluated the following qualitative factors: •Macroeconomic conditions impacting the Company’s commercial objectives and/or business plans; •Industry and market considerations, including the structural growth in institutional adoption, stablecoins and real-world asset tokenization; •Cost factors and overall Company financial performance; and •The Company’s market capitalization relative to the book value of its equity. Bakkt management determined that there were no events or circumstances that changed the Company’s previous conclusion as of March 31, 2025 that the fair value of its single reporting unit exceeded its carrying amount. Impairment Analyses Performed During The Year Ended December 31, 2024 The Company conducts an impairment assessment annually in the fourth quarter, or more frequently if impairment indicators are present. The Company retained a third-party valuation firm to estimate the fair value of its Tradename and single reporting unit. Goodwill impairment is measured as the excess of a reporting unit's carrying amount over its estimated fair value, not to exceed the carrying amount of goodwill for that reporting unit. For the quantitative goodwill impairment analysis, the Company compared the estimated fair value of its reporting unit to the carrying amount. The estimated fair value of the reporting unit was derived using a market approach and an income approach, with equal weighting given to both approaches. A DCF model was used for the income approach. The DCF model reflected the Company’s assumptions regarding revenue growth rates, forecast EBITDA margins (and thus operating expenses), capital expenditures, discount rates (including the company-specific risk premium assumption), terminal period growth rates, economic and market trends, and other expectations about the anticipated operating results of its reporting unit. Management estimates of future performance and metrics of GPCs were used to estimate revenue growth rates, EBITDA margins, and discount rate. Market and industry reports and data were used to estimate terminal period growth rates. The base of the income approach utilized the Company’s projected cash flow estimates, which are unobservable, Level 3 inputs. Unobservable inputs are used to measure fair value to the extent that relevant observable inputs are not available. The overall forecast estimate was developed using the best information available as of October 1, 2024, in consultation with a third-party valuation firm. The discount rate used is intended to be commensurate with the risks and uncertainty inherent in Bakkt’s business. The market approach valuation was derived from metrics of the GPCs, which are Level 2 inputs, and management estimates of future performance with consideration for a control premium. A significant judgment in using the market approach includes the selection of comparable GPCs with consideration of risk profiles, size, geography, and business operations. The impairment analysis for the Tradename involved the use of a relief from royalty approach, which estimated the value of the stream of payments a market participant would pay to make use of the in-place Tradename. Significant judgments in this analysis included forecasted revenue and growth rates, the royalty rate, and the discount rate. The discount rate used in the valuations described above was 12.5%. The results of the Company’s 2024 quantitative impairment analyses indicated there was no impairment of the Company’s Tradename or goodwill. Bakkt Management considered the existence of material nonpublic information as of December 31, 2024 in reaching this conclusion (Level 3 inputs). The Company’s goodwill was not impacted by foreign currency translation during the year ended December 31, 2025 and was impacted by foreign currency translation of less than $0.1 million during the year ended December 31, 2024. Intangible assets consisted of the following (in thousands):
During the year ended December 31, 2025, the Company acquired website domain names for approximately $2.7 million. The domain names were acquired to support the global expansion of Bakkt’s digital asset strategy in strategic jurisdictions. Bakkt did not record any amortization of intangible assets for the years ended December 31, 2025 and 2024. Amortization of intangible assets for the year ended December 31, 2023 was $2.7 million and is included in Depreciation and amortization in the consolidated statements of operations.
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