Q3 2021 Bakkt Holdings Inc Earnings Call
[music].
Greetings and welcome to the third quarter 'twenty to 'twenty One earnings conference call. At this time, all participants are in a listen I do Mike.
<unk> session will follow the formal presentation.
As a reminder, this conference is being recorded.
I will now trying to tell you that debates head of Investor Relations.
Please go ahead.
Good morning, and thank you for joining us for <unk> third quarter earnings call today's presentation, including the separate earnings call presentation that can be found at our Investor Relations website at investors got back Dot com contain certain statements about back that are forward looking statements within the meaning of the U S. Private Securities Litigation Reform Act of 19.
<unk> five.
These statements are based on the current expectations of the management of that.
Alrighty and changes in circumstances many.
All of which are beyond <unk> control, which may cause actual results to differ materially from those expressed or implied in such forward looking statements and.
In addition, these statements are based on a number of assumptions that are subject to change. Please refer to our company's most recent current report on form 8-K filed on October 21, 2021. Following the closing of our recent business combination for a more complete discussion on forward looking statements and the risk factors applicable to our company.
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 a reconciliation of such measures to the most comparable GAAP measure.
And third unrelated information can be found in our earnings release, which was recently filed this morning with the SEC.
Joining me on today's call are Kevin Michael Chief Executive Officer, and drew Levine, Chief Financial Officer. After our prepared remarks, Gavin and Joe will be available for you.
I'll now turn it over to Kevin.
Thanks, Ed Good morning, everyone. Thank you for spending time with us this morning.
Great pleasure to welcome everyone to our inaugural quarterly earnings call for that.
Hi, Jeremy this back started in January of this year shortly before the merger with BPC impact acquisition Holdings was announced.
I'm proud of all that we have accomplished since we announced the transaction.
Particularly as we have worked through the close and the access to capital that public listing will provide us.
We began with the opportunity to help consumers.
And institutions manage their digital assets.
Total asset spend crypto currency loyalty points and rewards gift cards.
And expanding into new asset classes.
Consumers manage these assets easily.
And importantly businesses and merchants kind of enabled them for use across the channels in a way that consumers might want to.
Also institutions seek the financial infrastructure and capabilities to access new markets products and digital asset ecosystem.
<unk> vision is simple.
Connect the digital economy.
But how we got here today is important.
And 2021 was a significant year for our company's journey.
Early in 2021, we announced the merger with BPC impact acquisition Holdings.
Leaving up to being deemed effective by the SEC in mid September we launched a platform to the market.
Which includes our consumer app.
We hired a diverse and highly skilled management team with a combination of backgrounds in fintech, crypto banking and loyalty, which.
The course of this year setting the foundation for our go forward strategy.
Our first fully integrated partner with choice hotels came onto the platform in Q3, and we've made recent announcements of significant partnerships with fenestra Mastercard and <unk>.
These are expected to further accelerate our growth and help us gain meaningful momentum heading into 2022.
We're excited by the different creative and innovative ways partners are looking to engage with the <unk> platform.
And the flexibility of our offerings is the key differentiator of our go to market strategy and a major theme of the way forward for us and I'll talk about this a little bit later this morning.
Our customers fall into three broad categories.
Chairman businesses and institutions.
We allow consumers to access to digital assets, they have earned or accumulated over time.
These assets include crypto currencies merchant offers loyalty points and gift cards.
Consumers can access the digital assets using our platform.
Embedded within the ecosystems of partners or by using our consumer App.
They will also enjoy the option to earn crypto rewards overcame rewards for crypto.
Unlocking the potential to achieve more value from their rewards and permitting the rewards to work harder for customers.
Two businesses, we are building and strengthening our growing network to tap into new opportunities for customer engagement.
Businesses can leverage the <unk> platform to drive consumer loyalty and deepen relationships.
By broadening the usage of rewards and loyalty points further integrating that brand into a consumer's day to day life.
And by innovating with crypto surfaces, and crypto rewards they are appealing to a growing segment of digitally savvy consumers.
Finally, we help reduce the financial liabilities associated with loyalty programs and enable new sources of consumer spending and loyalty programs that drive growth.
For institutions, who seek the financial infrastructure and capabilities to access new markets products and digital assets.
We provide greater regulatory clarity.
Price discovery and more effective risk management.
Our platform has three complementary aspects.
Our loyalty redemption service.
And alternate payment method.
Core digital asset market players.
Our loyalty redemption service and institutional grade loyalty platform born out of that acquisition of bridge two solutions in February of 2020.
Provides seamless and cost effective alternatives for consumers to leverage their loyalty points.
We have strong partnerships with leading brands and some of the most prominent financial institution.
We enable these companies to deliver consumer choice and convenience with alternate payment methods that allow consumers to spend the value of the digital assets across merchants and enable businesses to gain access to consumers increased spending power.
Our digital asset marketplace enables participants to seamlessly transact in a growing universe of digital assets.
And it has applications for consumers businesses and institutions.
Regulated custodian and trading solutions.
Through our unique positioning.
Intersection of loyalty crypto and payment platforms.
Platform is built for the digital future that is growing exponentially.
The <unk> platform is our core differentiator.
It's secure and fully regulated borne out about heritage for bi.
Our core technology stack is digitally asset nature of it.
Allows us to use cases across asset and transaction types.
The growing ecosystem continues to create more and more and broader opportunities for consumers to transact.
Our capabilities are built to scale and support enterprise and consumer users across crypto.
Royalty and payments was 24 seven customer support.
Our primary business model is.
To see.
We acquire consumers via partners.
Other than focusing on accessing consumers directly.
And yet the.
End user will recognize out servicing capabilities based on the uniqueness and differentiation in market.
As our recent announcements show, we are working to build out our network of partners.
Our goal is to provide these partners opportunities to leverage that capability.
Can you just through their existing channels or by leveraging our consumer experiences.
We will grow users by marketing into the customer base without partners.
And deepening their engagement with the our capabilities through co marketing campaigns across our partner channel.
And orange channels.
We are truly just getting started.
What we're seeing so far is the b to b to C construct enables us to scale faster and gain users more efficiently.
Direct to consumer strategy.
Importantly, this flexibility of our platform enables consumers to utilize a variety of backed offerings in a way that is most attractive to them.
We may see some customers lean into a crypto capabilities, while another enjoys the discounted gift card offers.
While others simply want to redeem points for merchandise all cash.
That type of variability.
That helps drive our relevance across a broad array of consumer segments.
I wanted to lean into the flexibility theme and discuss what this looks like and the opportunities that abound with emerging and evolving space.
The momentum of the BACS platform is all about it's tower holistic.
This means that every account and action that is happening across all of our capabilities.
The BACS platform is built to operate.
At the intersection of Crypto.
And payment.
And partners select on a ray of out capabilities based on their needs and objectives.
And what that looks like will intentionally there.
Uh huh.
We've discussed this framework as the company previously.
But we're just so excited without newly announced partners across a variety of industries. We will soon see these experiences come to life.
We enable a significant amount of partner choice.
Some may choose to keep their consumers entirely in their own experience.
But others may need a ready to bow storefront and leverage the back.
To meet this need.
Partners can choose to fully embed our capabilities within the digital environment.
Or take specific backed platform capabilities.
Crypto buy sell or hold and spend entirely powered buyback.
That's a shed.
Without b to B to C go to market strategy.
We expect most people will connect with us through companies brands and brand experiences that they already know and trust and they are really part of their everyday lives.
These accounts and transaction interactions are expected to be a strong driver of our growth and traction on our platform.
And they clearly demonstrate the power of the B to B to C model.
We connect the digital economy by enabling consumers to invest.
Our spend and pay sand and redeem digital assets.
Customers can buy and sell bitcoin.
And as we announced last week very soon Isa on a secure regulated and scalable platform.
For us we enable broad access in us.
Simple and intuitive digital experience, which can either be embedded in our partners' experience are accessed via our consumer app.
We lead the way in providing crypto as a service to non crypto nature of companies.
An area with significant wide open space and increasing demand as we see crypto adoption broader across markets.
A major transformation to existing rewards program is already underway.
And back to will enable businesses to offer crypto rewards to their customers.
Customers might earn and redeem crypto, which will be available for rewards programs credit cards and other merchant programs through our partners.
This approach allows businesses to deepen their customer relationships and drive increased loyalty.
While creating a new pathway to crypto through passive acquisition millions of Americans.
We've introduced new ways to access digital assets.
Consumers can use crypto or other digital assets to make everyday purchases.
<unk> enables businesses to create choice and convenience with their existing rewards points and digital assets.
Or new ones like <unk>.
Victor.
This is particularly striking since we're bringing liquidity to assets that were previously illiquid.
As consumers use points miles or crypto to pay.
We are seeing greater value and their brand loyalty.
Finally, we offer a full spectrum of options to redeeming loyalty points, including travel gift.
Gift cards, Apple products and more we recognize that businesses want to offer consumers choice innovation and convenience.
And the <unk> platform was constructed with this in mind.
Perhaps most importantly, these capabilities are complementary and can be taken advantage of we get a very flexible construct.
Partners can choose a combination of these and work with us to make sure that the resulting offered works for the objective that I had for that program.
We already have powerful partnerships in integration.
We have deep relationships with.
And connections into a significant portion of the Premier loyalty partners in North America within.
With an addressable market of over 100 million consumer.
And we have focused much of our time energy and resource.
Past few months.
<unk> these partnerships and signing new ones to enable growth in the coming quarters.
We believe these connections will provide self reinforcing network effect.
Like partners co marketing our platform to their customers.
And customer loyalty.
And we're seeing momentum in partnering with companies across consumer financial services trend.
Travel and entertainment.
Retail and platform companies, such as banking and customer loyalty platform.
And as you can clearly see partners can choose to work with us across all of our friends.
Really just solving those services that align most today.
Mark.
So let's go through a few examples of the capabilities we've discussed on slide 10.
And how we will activate them with partners.
Offering crypto as a service expands the availability of crypto capabilities to partners and customers, while alleviating the operational and regulatory considerations that they would face and building the offering in house.
In late October we announced a partnership with Mastercard that is designed to make it easier for merchants.
And fin techs in the U S to offer their consumers to buy sell and hold digital assets in custodial wallets.
We are also working with Mastercard to streamline the issuance of Mastercard debit and credit cards by banks and credit unions with the option of crypto reward capabilities that are entirely powered by the best platform.
In addition, we are integrating with Mastercard loyalty solutions to create new and unique opportunities for consumers to earn crypto and to create fungibility between loyalty points crypto and other digital assets.
Yes, so incredibly excited about this partnership.
Not only because mastercard as a preeminent player in technology and payments.
We view the crypto reward states as a tremendous opportunity that will take shape, a new and interesting ways that a partnership is uniquely positioned to win.
Mastercard serves more than 20000 financial institutions with $2 9 billion between use worldwide.
And together, we can chart, a new path with crypto and.
Businesses and consumers new ways to earn.
And transact with.
Just couldnt be more excited about the opportunities on the horizon with Mastercard.
Given the multifaceted nature of the Mastercard announcement.
Thought it was important to pause quickly.
On the potential use cases that we're working towards with Mastercard.
I'll provide more insights into what this might look like.
We might see a partner bank of a crypto rewards rewards the easily.
Neither partner like double rewards on BEC partner spend.
Hi, Paul.
Comes in EEP step into crypto.
Which leads to broader promotional and reward opportunity.
Part of the banks are increasingly competing with a broader group of Fintech.
Ongoing rice to create compelling offers.
These banks can join the crypto movement without having to build in house capabilities.
And increased customer acquisition and engagement.
While appealing to a younger customer demographic with more innovative offering.
Another recently announced crypto service partner fenestra will enable consumers to buy sell store and span a range of crypto currency via the <unk> platform.
These capabilities will be available to customers with community banks and credit unions as part of <unk> fusion digital banking solution.
Finished your solutions are used by more than 5000 financial institutions in the Americas alone.
The functionality, which will soon be available will also enable financial institutions to offer their account holders access to the growing crypto market without having to leave their existing trusted banking environment.
The extension of the BACS platform digital asset capabilities into partner ecosystem.
Will be an important offering for us going forward.
Many community banks and credit unions are interested in offering their customers innovative new opportunities.
Backs robust digital marketplace helps to seamlessly integrate crypto cash management money transfer wallet capabilities.
Our modern user experience and.
API enabled platform.
The BACS platform and attractive solution for financial institutions seeking an intuitive.
Tightly integrated.
Risk solution to offer crypto services.
Starbucks continues to be a strategic partner.
In developing practical and trusted application for customers to convert digital assets into U S. Dollar.
We use at Starbucks.
Starbucks has integrated the <unk> platform as a payment method for customers to reload the Starbucks card in the Starbucks App.
Can see this in the visual today backed as a payment method on your Starbucks at.
We believe payment integration.
Roads and importance as consumers.
Track manage and spend their digital assets.
Our payment capabilities will take a dip towards form in our integration with <unk> and <unk>.
Carat omnichannel ecosystem.
Allowing businesses to pursue new options for merchant acceptance payout royalty programs and transactions with crypto and digital assets.
Most recent collaboration is with choice hotels to expand the utility of the company's rewards program.
Starting early in September.
Choice privileges members can convert their rewards points to cash.
And then use that cash to buy crypto currency.
You couldn't use it online or in store anyway, Apple pay or Google pay is accepted.
We are seeing early signs of success with this partnership including considerable benefits.
Any direct to consumer marketing efforts.
Specifically, our conversion rates are higher and the cost to acquire a consumer about 50% lower.
We're seeing higher return engagement from these customers.
More broadly our brand is embedded in the choice hotels brand environment.
And we're partnering on evergreen marketing and pains and incentives.
Over the summer, we announced a partnership with Wyndham rewards to allow program members to link view and redeem the Wyndham rewards points.
This is expected to be live within the back deck before the end of the year.
The results we are seeing provide a peek into what we can see when we have several life partners with ongoing and evergreen co marketing campaign.
Each partner, we work group provides valuable learnings that we can take through to improving the next implementation.
Deep expertise and loyalty services and redemptions really sets us apart as we look to connect across a variety of digital assets.
We have innovated and unique ways to support redemption options.
Customers can convert rewards into merchandise.
Each experience hotel stays all travel.
This part of the platform has seen significant momentum with growing numbers of loyalty conversion and redemption.
We support several large financial institutions and airlines, such as Wells Fargo, and United Mileage plus in managing their rewards programs.
We manage online Apple store.
That is all priced in miles or points or really any of the assets that we support on the platform.
Expanding these redemption opportunities across our platform and across digital asset.
Be a key part of our growth strategy with new and existing partners.
In the last 12 months.
We've had over 12 million visits to our loyalty redemption services and has driven approximately 500 million.
Annual redemption volume.
Notable given the return to travel we've seen through 2021.
I Hope this provides a better understanding about business and the momentum we have going forward.
It's now my great pleasure to turn it over to drew Levine, our CFO to discuss our third quarter financial results.
Drew is achieved.
Thanks, Kevin I'll now discuss <unk> financial results for the third quarter of 2021.
As a reminder, the earnings we are discussing related to back our prior to the business combination and therefore certain measures such as EPS are not reported given differences in share count and other factors.
Slide 18 has a summary of our financial results for the third quarter of 2021.
The previous quarter and the same quarter of 2020.
Net revenues of $9 1 million increased by $2 5 million or 38% year over year, primarily driven by strong transaction revenue.
From the redemption of rewards on our platform.
Operating expenses of $39 million increased $14 7 million or 60% year over year.
Primarily due to increased head count.
Other income was $1 1 million.
Early related to a nonrecurring gain from the sale of bitcoin to rebalance the bitcoin inventory that we hold for liquidity purposes.
The balance was related to the introduction of either to our platform.
Bitcoin, we sold had a low cost base since it was acquired in early 2020, which drove the large gain on sale.
Slide 19 shows a further breakdown of our revenue.
As shown on the previous slide net revenue was $9 1 million.
The largest component of that revenue subscription and service revenue was $6 4 million and increased 18% year over year.
Partially due to the addition of a large financial institution to our platform.
Transaction revenue of $2 7 million increased 133% year over year, primarily due to high customer activity and the redemption of loyalty rewards and the recovery in travel activity previously impacted by Covid.
Transaction revenue shows a high degree of seasonality and we expect to see an increase in revenue in the fourth quarter in line with previous years.
Negative revenue improved $1 $4 million year over year, as we removed certain rebates for trading and clearing a bitcoin futures at the end of 2020.
Slide 20 provides further details on the operating expense compensation.
<unk> expense increased by $9 6 million or 76% year over year, primarily due to increases in head count to build out the management team.
To support business growth.
We invest in tech development.
SG&A increased by $2 $8 million or 167% year over year, primarily due to an increase of $2 $6 million in marketing expenses associated with customer acquisition and partnership marketing.
Other expenses increased year over year, primarily due to merger related costs.
Year to date merger related costs were $12 1 million.
The fourth quarter is expected to have elevated expenses related to the merger, which will fully impact noncash compensation and merger related expenses.
Slide 21 has our adjusted earnings before interest tax depreciation and amortization or EBITDA.
Which was a loss of $24 1 million for the third quarter of 2021.
Adjusted EBITDA decreased by $11 8 million or 96% year over year, primarily due to a $10 $9 million increase in our net loss due to the factors I discussed.
$2 $5 million decrease in impairment of technology assets due to the impairment we took one year ago.
And at $1.1 million increase due to the nonrecurring income from the sale of Bitcoin that I mentioned previously.
Now to touch on some key performance metrics.
We have included metrics that we feel are key to understanding our business performance.
Over time, we will continue to evaluate these metrics and adjusted as appropriate.
As Kevin described earlier, our B to B to C model brings activity to our overall platform and there is huge opportunity for growth.
To reflect our capabilities are embedded across both partner impact branded experiences.
We are using transacting accounts to represent users across the <unk> platform. They use a variety of services we offer such.
Such as regaining loyalty points for traveler merchandise or buying and selling bitcoin to facilitate facilitate everyday purchases.
For the first three quarters of 2021, we had $1 7 million accounts transact on the <unk> platform and that was up in the third quarter of 2021 by 20% year over year.
Commerce has rebounded from lower pandemic levels.
The opportunity for us to continue expanding the capabilities on our platform and provide more value added experience to these users is tremendous.
We rolled out our consumer app at the end of the first quarter of 2021.
<unk> already have about a quarter of a 1 million accounts through the gap even before we closed the merger and gained access to almost $450 million in capital for partner Activations and marketing did.
Digital asset conversion volume represents the total amount of notional value that is transacted on our platform across loyalty redemption crypto buy sell gift card purchases and other activities.
In the third quarter of 2021, reprocessed, approximately $105 million of notional transactions, which was up approximately 50% compared to the same quarter in the previous year.
The fourth quarter is historically, a seasonal high for performance and we expect to see volumes increase again in the fourth quarter of 2021.
The crypto buying fill activity is just starting to increase with the rollout of our platform.
We expect to see growth in the future as we execute with existing partners and bring new partners and users onto the platform.
We're really just getting started and are realizing the potential of the <unk> platform.
We look forward to accelerating our growth through our recently announced partnerships.
On slide 23, we have details on our post business combination capital structure.
Given the structure of the merger we will have two classes of shares that I want to spend a few minutes to walk you through.
Post merger, we currently have approximately $257 4 million total shares outstanding.
Nearly $50 million of class a shares.
This includes $12 3 million shares from the IH IPO that were not redeemed.
$5 2 million founder shares in.
And $32 5 million shares from pipe investors.
Approximately $207 $4 million would be outstanding shares of our class B shares.
<unk> B shares were issued as merger consideration and the business combination.
Along with an equal number of Opco common units, which are together paired interacts with certain rights to convert.
<unk> shares after the six month lockup.
The share counts do not include shares issuable upon exercise of warrants for future equity grants for board and management incentives.
We have approximately $16 5 million warrants outstanding which have an exercise price of $11 50.
Those may be exercised pursuant to the terms of the warrant agreement starting on November 15th 2021.
The FC structure, resulting from the merger will create a financial reporting structure, where the class B shares within the operating company partnership will not participate in the basic and diluted share count until the company generates a profit or as close to generating a profit.
This will result in our reported share count consisting of the class a shares.
Non vested restricted stock units or other similar instruments that are based on class a shares.
If class B shares are exchanged for class a shares which can be done at the holder's option subject to certain limitations, most notably the six month lockup agreement.
Those class a shares will then also be included in the basic and diluted share count.
That concludes my section on the financial results I will now turn it back over to Kevin for his closing remarks.
Thanks.
So just to emphasize the path for me.
Pat has an incredibly unique place in the market.
With a highly secure and regulated platform.
Differentiated capabilities across crypto loyalty and payments.
Partnerships with leading brands and.
In a world class management team to execute on our growth agenda.
We will utilize the nearly $450 million of recent deal funding to execute this plan.
So this mean.
Continuing to grow our b to B to C partnerships and activating those that we've already announced.
Enhancing our products and capabilities to support existing and new partnerships.
Deepening consumer relationships without partners.
We will execute on new growth opportunities as they arise.
We are just so excited for back to realize our full potential.
Thank you all very much for listening to us today and with that we'll take your questions.
Thank you.
If you'd like to ask a question. Please press star followed by one thing that kind of thing.
Thank you Pat now.
Have you changed your mind I want to turn your question Staphylococci.
Turning to speak Keith Im sure Youll find it on me take lightly.
Our first question today comes from Trevor Williams with Jefferies. Kevin Your line is open.
Great. Thanks, Good morning, guys and it's been great to see all the progress just over the course of the year by Todd.
As we think about.
The potential for more loyalty integrations within the consumer App, specifically, how ripe opportunity to convert the relationships you guys already have Martha.
White label side.
For loyalty redemption through bridge to start thinking about you called out Wells Fargo and United in the deck just thinking of those as an example.
How have those conversations gone with the existing white label customers on and then kind of what are the gating factors to be able to get them onboard into the consumer app. So any thoughts there would be great. Thanks.
Good morning, Trevor it's great to hear from you look I think it's a great question, we're leveraging all of our integrations and the work that we do with those as a trusted partner to continue to look at other ways, we can add value.
What form that we've said is really focus on this intersection of crypto payments and loyalty and by constructing new offerings for those that we already work on the merchandising part of the platform with we're finding very robust discussion obviously, we take into account the broader.
That they find themselves in particularly with some of the travel and entertainment partners, but what we're seeing is as we see a broader recovery in their businesses. They are looking for opportunities to re engage with their customers in new and innovative ways and that plays right into the sweet spot of our platform.
And of the work that we're doing to continue to structure those rewards proposition. This stretch beyond the simple merchandising and look at the way in which we can enhance loyalty and multiply the number of touch points they have.
<unk>.
Okay perfect that makes that all makes a ton of sense and then along those same lines I know the timing of the transaction was a little bit extended relative to what the initial hope had been can you give us a sense from fit all that changed your approach over the last six to nine months and where you were focused more on the partner.
Ship side.
And now with the transaction closed should we expect that to accelerate some of the potential discussions that might have been put on hold over the last year. Thanks very much.
So I think attributed we've continued to find partners through the course of the last several months we've made two.
Terrific multi year partnerships with.
Bob to comment on price.
We finished strong as good indicators of how strong the value proposition is and how relevant it is to the market as we think about what we're doing now with the <unk>.
Capital that we've raised from the transaction, it's all about accelerating those activation together with continuing through onboard.
Additional partners focused very much on consumer financial services travel and entertainment retail and then these platform and payment companies that give us greater reach into the marketplace.
When you look at more broadly where the business is positioned we are so excited by the fact that we have an addressable market that is already stretching beyond the $100 million. So when we start to think about the work from now on in it really isn't about activation and when we talk about the funds that we've had in writing through the transaction is very much about putting that too.
Work against these activation so we haven't by any stretch of imagination.
Pause during the close of the transaction and in fact, I think we've exited in a very very strong space would that addressable market with some great partners on board and then proof points with customers like China.
Right.
Mhm.
Thats all points well taken I'm, just thinking of whether Theres, just some kind of an unlock post transaction on the new partnership side, but I totally get that the just the size of the opportunity with Mastercard and finasteride and fiserv all of that's been great to see itself I. Appreciate the color guys. Thanks, so much.
Thank you. Our next question today comes from I mean Lau of Oppenheimer.
Your line is open.
Good morning, and thank you for taking my question.
Could you please add a little bit little bit more color on the 100 million of potential end users. So addressable market and I think Mastercard has over 500 million cards.
I think you've mentioned, Kevin $2 9 billion cards globally. So what is included or excluded in your $100 million user estimate. Thank you.
Hello, and good morning, Congrats you hear from us when we look at how the addressable market.
We're trying we're looking at different vehicles, so clearly modest because obviously it gives us reach with it.
And credit card network together with an expense issue as we also look at.
Yes.
Opportunity we finished strong.
Through our partnership with <unk>.
Making our solutions available to the customers of community banks and credit unions as part of Investor confusion digital banking solution.
With over 5000 financial institutions across the Americas, when we think about <unk>.
Together with the community and credit even to think through the bank's platform together with reaching the merchant through the Omnichannel solution. So when we think about our addressable market. We're working by considering the reach that these partners have we think the same when we think about choice when we think.
About winning them now the reason you see a commit it down is because we're also trying to account for the fact that.
Most people hold multiple relationships, while we expect that to be an opportunity for us in the way in which we measure our progress with these transacting accounts, we're also being reasonable in the way in which we estimate where we are with respect to our addressable market.
Got it that's very helpful. And then how do you think about the pace of user acquisition over the next couple of quarters skipping a partnership with Mastercard and Pfizer and then broadly speaking can you also give us an update of your.
Projection its a 31 million active users in 2025 still the same or any change there. Thank you.
So I'll start and then I'll pass to drew on the on the metrics. So when you think about where we are with our recently announced partnership these will take some time to implement but we already have very robust discussions underway.
Activating the next set of partners that are made available to us through the partnerships that we have so in working with Mastercard and working with <unk> working with <unk>, we already have a roster of opportunities does that present.
Anything to us we focused very hard on building a platform that makes it easy for our partners to consume our services quickly. So what I would take away from this is that we have very strong momentum as we enter 2020 food. So this quarter has been about building the backlog for execution.
In the first half of next year.
And with regards to the long term projections I think as we've been saying now for a number of months as we've ramped up to the merger closed the opportunity here is going to be signing partners and then marketing into those partners consumer basis to bring users onto the overall back platform and I think with the partner.
Since we announced previously the one offs, we've just announced.
Presumably ones, we will announce in the future I think we're very optimistic that there is that there is a lot of growth ahead for the <unk> platform.
Got it thank you very much.
Thank you as a reminder, if you'd like to ask a question. Please press star followed by one on your telephone keypad now.
The next question today comes from Kevin Dede of HC Wainwright, Kevin Your line is open.
Thank you Gavin and drew thanks, very much for taking my question I appreciate it.
Yeah, absolutely thanks for joining us.
So I'm curious I mean I.
I think you've developed a heck of an ecosystem.
Integrating all the partnerships I was curious as whether or not you were looking at specific crypto on ramps and off ramps companies like simplex or banks.
So.
Kevin when we when we think about the opportunity for US we are in the work in the crude space.
When looking at the ability for us to be able to act as that bridge for non crypto native companies to get access to crypto services. So for example, the work we're doing with master card to be able to tight crypto rewards and use that as a way for people to continue to innovate and take advantage.
Thank you for the transformation.
In the rewards space.
So our focus is really about how do we bring utility to crypto in our customers' everyday lives and helping partners take advantage of what that presents to them in the way in which they wouldn't be able to grow that business. So we look very closely at.
How we work to be able to enable crypto and give them access to it.
That business taking into account that is one of our core competencies on the platform playing in that unique space of payment loyalty and crisp.
Okay, Kevin Thank you.
I know the sort of the.
Paul of increased regulation, Hans many players on the crypto space I'm wondering how.
Do you perceive it what do you think you might need to do add back just to make sure you operate within regulatory compliance.
So our platform in clean engineered to be digitally asset in either from the ground up we would come out of a strong heritage of regulation given our background from <unk> and the platform itself is designed with a strong set of controls and regulatory practices.
I recall, so as we watch the regulatory landscape evolve around us we're able to respond very very quickly to that changing environment. So we don't see the headwind of regulation. In fact, we believe that we're well placed given where we've come from given the way. We then any of the platform.
To be able to respond in a very agile fashion as the regulatory environment evolves around us.
Okay.
Do you.
Do you have a particular opinion on various stable coins and how they may be regulated and how that might affect the way that you handle them in your platform.
So our focus continues to be how do we take the existing crypto assets, who we support bitcoin.
Into the market to be able to find new and innovative ways to give access to everyday consumption, whether it be through the passive acquisition of crypto or whether it be through the use of rewards and payments. When we think about how auto prices are evolving obviously, we keep an eye.
I on what's happening with cytokines.
Central Bank digital currency, and we think that we will price to say become mainstream.
Importantly, given our background and given a regulatory posture.
Right now, we're very focused on the coins that we support and making sure that we make those available but we're doing it in a way that is keeping one eye on how the market is evolving around us.
Well very good. Thank you for accommodating me Kevin I appreciate your time.
Thank you Kevin Thank you.
Thank you for your question, we have no further questions on the line, so I'll hand back to Andy.
<unk> for closing remarks.
Thank you. Thank you everyone for attending.
Earnings call. This morning, and your continued interest and we look forward to speaking with the plan.
Claire.
This concludes today's call. Thank you for joining US you may now disconnect your lines.
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