v3.26.1
Income Taxes
 12 Months Ended
Dec. 31, 2025
Income Tax Disclosure [Abstract]  
Income Taxes Income Taxes
As a result of the business combination that resulted in Bakkt becoming a public company, the Company acquired a controlling interest in Opco, which is treated as a partnership for U.S. federal income tax purposes, and in most applicable state and local income tax jurisdictions. As a partnership, Opco is not itself subject to U.S. federal and certain state and local income taxes. Any taxable income or loss generated by Opco is passed through to and included in the taxable income or loss of its partners, including the Company following the business combination, on a pro rata basis. The Company’s U.S. federal and state income tax expense primarily relates to the Company’s allocable share of any taxable income or loss of Opco following the business combination. In addition, Opco’s wholly owned corporate subsidiaries that are consolidated for U.S. GAAP purposes but separately taxed for foreign income tax purposes as corporations are generating foreign income tax expense.
Subsequent to the Reorganization discussed in Note 12, Stockholders’ Equity, the interests in Opco were consolidated and as such Opco is no longer treated as a partnership for U.S. federal income tax purposes effective December 29, 2025.
The domestic and foreign components of income (loss) from continuing operations before income taxes for the following periods were as follows (in thousands):
Year Ended December 31, 2025Year Ended December 31, 2024Year Ended December 31, 2023
Domestic$(97,384)$(94,301)$(153,294)
Foreign— — (4)
Loss from continuing operations before provision for income taxes(97,384)(94,301)(153,298)
Loss from discontinued operations before provision for income taxes(34,555)(8,976)(72,070)
Total loss before income taxes$(131,939)$(103,277)$(225,368)
Details of the income tax expense (benefit) from continuing operations are as follows (in thousands):
Year Ended December 31, 2025Year Ended December 31, 2024Year Ended
December 31, 2023
Current:
Foreign$— $— $— 
Federal— — — 
State(49)110 355 
Total current income tax expense (benefit)(49)110 355 
Deferred:
Foreign— — — 
Federal— — — 
State— — — 
Total deferred income tax expense (benefit)— — — 
Income tax (benefit) expense from continuing operations(49)110 355 
Income tax expense (benefit) from discontinued operations19 60 89 
Total Income tax (benefit) expense$(30)$170 $444 

Year Ended December 31, 2025%
Tax provision at federal statutory rate$(20,451)21.00 %
Increase (decrease) in income tax resulting from:
State income taxes, net of federal tax effect (a)(39)0.04 %
Non-taxable or non-deductible items
Noncontrolling interest4,000 (4.11)%
Stock compensation3,207 (3.29)%
TRA settlements expense4,250 (4.36)%
Changes in valuation allowance14,772 (15.17)%
Tax Credits67 (0.07)%
Other
Deferred tax adjustment1,587 (1.63)%
Perm goodwill(7,442)7.64 %
Provision for (benefit from) income taxes$(49)0.05 %
(a) State taxes in California, New York and Texas made up the majority (greater than 50 percent) of the tax effect in this category.
Year Ended December 31, 2024Year Ended
December 31, 2023
Tax provision at federal statutory rate$(19,803)$(32,193)
Increase (decrease) in income tax resulting from:
State income taxes, net of federal tax effect (a)(3,175)919 
Noncontrolling interest10,871 21,517 
Fair value of warrant liability3,609 330 
Changes in valuation allowance7,078 5,860 
Stock compensation2,156 2,097 
Subsidiary liquidation— 1,978 
Other(626)(153)
Provision for (benefit from) income taxes$110 $355 
Effective tax rate(0.12)%(0.23)%
The effective tax rate differs from the federal statutory rate primarily due to the loss allocated to noncontrolling interest that is not taxed to the Company, impacts from the Reorganization and changes to the Company’s valuation allowance. While Opco incurred a net loss before income taxes of $97.4 million for the year ended December 31, 2025, only $72.4 million was allocated to Bakkt Inc. The remaining $25.0 million is benefited for tax purposes by members outside of the reporting group. The tax benefit of $49.0 thousand relates to current state and foreign tax since the Company has recorded a full valuation allowance that offsets the tax benefit of its losses.
The following summarizes the significant components of our deferred tax assets and liabilities (in thousands):
December 31, 2025December 31, 2024
Deferred tax assets:
Investment in partnership$— $124,810 
Net operating loss carryforwards
49,665 33,638 
Deferred and share-based compensation
10,384 2,607 
Warrant liability5,304 — 
Intangible assets and Goodwill108,123 — 
Other
5,899 541 
Total deferred tax assets
179,375 161,596 
Less: valuation allowance
(177,609)(152,453)
Net deferred tax assets
1,766 9,143 
Deferred tax liabilities:
Intercompany asset with Opco
— 9,143 
Other1,766 — 
Total deferred tax liabilities
1,766 9,143 
Net deferred tax assets (liabilities)
$— $— 
Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The table above includes deferred income taxes from businesses held for sale.
Since Opco is no longer treated as a partnership for U.S. federal income tax purposes at December 31, 2025, the Investment in Partnership no longer exists and therefore, the deferred tax assets and liabilities associated with the Company’s assets and liabilities are presented above.
Deferred tax assets are reduced by a valuation allowance if, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The realizability of the deferred tax assets, in each jurisdiction, is dependent upon the generation of future taxable income sufficient to utilize the deferred tax assets on income tax returns, including the reversal of existing temporary differences, historical and projected operating results and tax planning strategies. Management assessed that certain of the Company’s deferred tax assets were not more likely than not to be realized. As such. the Company had a valuation allowance of $177.6 million and $152.5 million as of December 31, 2025 and December 31, 2024, respectively. The $25.1 million of increase in the valuation allowance during the year was primarily related to the generation of net operating losses that are not expected to be realized.
As of December 31, 2025, the Company had gross federal net operating loss carryforwards (“NOLs”) of $199.3 million, all of which can be carried forward indefinitely. The Company also had state NOLs of $132.8 million which begin to expire in 2031. As of December 31, 2024, the Company had gross federal NOL carryforwards of $122.7 million, all of which can be carried forward indefinitely. The Company had capital loss carryforwards of $3.0 million which will expire in 2028 and tax credits of $0.5 million that begin to expire in 2031.
The Company and its affiliates file income tax returns in the U.S. federal jurisdiction, and various state and foreign jurisdictions. The Company is currently under examination by the Internal Revenue Service (“IRS”) for tax year ended 2022 which began in April 2025. The Company has responded to initial request from the IRS. While the Company does not anticipate any material tax adjustments from the examination, it could impact the Company’s income tax positions and related disclosures. The Company is open to examination for federal, state, and foreign jurisdictions with varying statues, ranging generally from three to five years.
The Company’s non-U.S. subsidiaries are subject to Global Intangible Low-Taxed Income (“GILTI”) provisions under the Tax Cuts and Jobs Act. The Company has elected to recognize the tax expense related to GILTI as a period cost in the period incurred.
The effects of uncertain tax positions are recognized in the consolidated financial statements if these positions meet a “more-likely-than-not” threshold. For those uncertain tax positions that are recognized in the consolidated financial statements, liabilities are established to reflect the portion of those positions where the Company cannot conclude “more-likely-than-not” to be realized upon ultimate settlement. The Company had no unrecognized tax benefits or related interest and penalties accrued as of both December 31, 2025 and December 31, 2024.
The Company did not make any income tax payments net of refunds during the year ended December 31, 2025.
On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was signed into law by President Trump. Key provisions of the OBBBA include the reinstatement of 100% bonus depreciation, the immediate expensing of domestic research and experimentation expenditures, and modifications to the limitation on business interest deductions. The OBBBA did not have a material impact on the Company's consolidated financial statements and disclosures.