Key Highlights

  • CRCL shares traded up 6.78% at $91.69, with the 50-day Moving Average moving above the 200-day average.
  • Second-quarter Revenue and reserve income was $701 million, up 7%, while adjusted EBITDA reached $143 million at a 50% margin.
  • USDC in circulation ended the quarter at $73.3 billion, up 19% year over year, against a $76.5 billion average.
  • Full-year other revenue guidance rose to $310 million to $330 million, and the Margin outlook rose to 41.7% to 43.7%.
  • The Arc network launched on September 16, and Circle held $1.73 billion in cash and equivalents at June 30.

Circle Internet Group (NYSE:CRCL) shares are trading up 6.78% at $91.69, and the stock's 50-day simple moving average has moved above its 200-day, a pattern technical analysts call a golden cross. The company has a market Capitalization of $23.39 billion.

Circle issues USDC, a dollar-backed stablecoin, and operates payments and network infrastructure around it. Most of its revenue is income earned on the reserves that back USDC in circulation.

Reserve Income Growth Offsets a Lower Reserve Return Rate

Second-quarter revenue and reserve income was $701 million, up 7% year over year. Reserve income was $668 million, up 5%, as 25% growth in average USDC in circulation was partly offset by a 66 basis point decline in the reserve return rate to 3.5%.

Other revenue was $34 million, up 41%. USDC in circulation ended the quarter at $73.3 billion, up 19% year over year and below the quarterly average of $76.5 billion. Onchain USDC transaction Volume reached $14.8 trillion, up 151%.

Adjusted EBITDA Rises as Costs Reset After the IPO

Adjusted EBITDA was $143 million, up 8%, at a 50% margin. Adjusted operating expenses rose 23% to $146 million, which management tied to Investment in product development, market infrastructure and artificial intelligence. Distribution, transaction and other costs were $412 million, up 1%.

Net income from continuing operations was $48 million, against a loss of $482 million a year earlier. GAAP operating expenses fell 56% as stock-based compensation linked to the 2025 initial public offering dropped out of the comparison.

Arc Mainnet and Trust Charters Anchor the Roadmap

Circle launched the Arc network on September 16, with launch partners that include asset managers, card networks and market infrastructure operators. USDC serves as the network's gas token. Circle also received final approval from the Office of the Comptroller of the Currency for a national trust bank and approval from the New York Department of Financial Services for a limited-purpose trust company.

Guidance changes reflect the product push. Full-year other revenue is now expected at $310 million to $330 million, up from $150 million to $170 million, and includes recognized revenue from the ARC token presale. The revenue-less-distribution-cost margin outlook rose to 41.7% to 43.7% from 38% to 40%, while adjusted Operating Expense guidance was held at $570 million to $585 million.

Circle also reiterated a through-cycle compound annual growth target of 40% for USDC in circulation.

Rate Sensitivity Stays the Key Variable

The golden cross reflects past price data. Reserve income remains tied to short-term interest rates and USDC balances, and quarter-end circulation sat below the quarterly average. The next report will show whether USDC growth and Arc-related revenue offset the lower reserve return rate.