Circle Internet Group, Inc., the issuer of the USDC stablecoin, has posted its first quarterly results since going public in June.
Summary
- Circle posted $658M in Q2 revenue but reported a $482M net loss from IPO-related costs.
- USDC’s market share grew to 28% as adjusted EBITDA hit $126M.
- A secondary stock offering has pressured Circle’s share price.
According to its Q2 earnings report released on Aug. 12, the business reported strong revenue growth and a spike in USD Coin (USDC) adoption. However, it also saw a significant net loss as a result of accounting charges related to its recent initial public offering.
Strong USDC adoption drives revenue growth
The company surpassed analyst projections, with $658 million in revenue and reserve income for the second quarter, up 53% from the previous year. Reserve income rose 50% to $634 million, driven by higher interest rates and an 86% increase in average USDC circulation. Other revenue, which includes subscription and transaction services, grew 252% to $24 million.
USDC circulation climbed 90% from a year earlier to $61.3 billion at the end of the quarter. Circle’s share of the fiat-backed stablecoin market rose to 28%, while on-chain transaction volume grew more than fivefold to nearly $6 trillion.
Adjusted EBITDA, or earnings before interest, taxes, depreciation, and amortization, often used to gauge core profitability, came in at $126 million, up 52% from last year. The revenue less direct costs margin, which measures profit after subtracting direct expenses like payment processing, narrowed to 38% from 42% due to higher distribution and transaction costs.
IPO charges and secondary offering weigh on Circle stock
The company posted a net loss of $482 million, compared with a $32.9 million profit a year earlier, largely due to $591 million in non-cash charges tied to the IPO. These included $424 million in stock-based compensation and $167 million from a revaluation of convertible debt as Circle’s stock price rose after listing.
In addition, Circle announced a secondary public offering of 10 million Class A shares immediately after the earnings release. While the offering is aimed at increasing liquidity, it signaled potential dilution to investors, sending the stock down more than 8% in after-hours trading.
Expanding network and blockchain plans
In May, Circle launched the Circle Payments Network, enabling financial institutions to use USDC for near-instant cross-border settlements. There are currently four active payment corridors and more than 100 institutions in the works. To further integrate USDC into traditional payment systems, strategic alliances have been formed with Binance, Corpay, FIS, Fiserv, and OKX.
Adding to the string of product updates, on Aug. 12, the company unveiled Arc, an open Layer-1 blockchain focused on stablecoin finance. A public testnet expected this fall. Circle’s position in the U.S. stablecoin market has also been strengthened by favorable regulatory tailwinds, such as the GENIUS Act’s passage.
