Circle Internet Group, Inc., the company behind the USDC stablecoin, has released its first quarterly earnings since going public in June.
The Q2 report, published on August 12, highlighted robust revenue growth and increased adoption of USD Coin. Despite this, the company posted a substantial net loss due to accounting charges tied to its recent initial public offering.
Rising USDC Adoption Fuels Revenue Growth
The company exceeded analyst expectations, reporting $658 million in revenue and reserve income for Q2, a 53% increase from the previous year. Reserve income rose 50% to $634 million, fueled by higher interest rates and an 86% jump in average USDC circulation. Other revenue, including subscription and transaction services, surged 252% to $24 million.
USDC circulation grew 90% year-over-year, reaching $61.3 billion by the end of the quarter. Circle’s share of the fiat-backed stablecoin market increased to 28%, while on-chain transaction volume more than quintupled to nearly $6 trillion.
Adjusted EBITDA—a measure of core profitability before interest, taxes, depreciation, and amortization—came in at $126 million, up 52% from last year. However, the revenue minus direct costs margin, which reflects profit after direct expenses like payment processing, narrowed to 38% from 42% due to higher distribution and transaction costs.
IPO Costs and Secondary Offering Weigh on Circle’s Stock
The company reported a net loss of $482 million, a sharp decline from a $32.9 million profit a year ago, primarily driven by $591 million in non-cash charges related to its IPO. These charges included $424 million in stock-based compensation and $167 million from a revaluation of convertible debt as Circle’s stock price rose post-listing.
Additionally, Circle announced a secondary public offering of 10 million Class A shares immediately following the earnings release. While intended to boost liquidity, the move raised concerns about potential dilution, causing the stock to fall more than 8% in after-hours trading.
Broadening Network and Blockchain Initiatives
In May, Circle launched the Circle Payments Network, allowing financial institutions to use USDC for near-instant cross-border settlements. The network currently operates four active payment corridors, with over 100 institutions in development. To further embed USDC into traditional payment systems, Circle has formed strategic partnerships with Binance, Corpay, FIS, Fiserv, and OKX.
Continuing its product expansion, the company introduced Arc on August 12—an open Layer-1 blockchain focused on stablecoin finance, with a public testnet slated for this fall. Circle’s position in the U.S. stablecoin market has also been bolstered by favorable regulatory developments, including the passage of the GENIUS Act.
