Q2 2026 Circle Internet Group Inc Earnings Call Transcript
Key Points
- USDC circulation grew 19% year-over-year to $73.3 billion, with average circulation reaching an all-time high of $76.5 billion, despite a 40% decline in the broader digital asset market.
- USDC's share of stablecoin transaction volume reached nearly 70% in June, a new record, up from 36% in Q2 last year.
- The company received its OCC National Trust Bank Charter and a New York limited purpose trust charter, enhancing its regulatory standing and enabling federally supervised digital asset services.
- ARC mainnet is set to launch on September 16 with a strong cohort of validators, including major financial institutions, and partnerships with DTCC and BlackRock to tokenize securities and deploy BUIDL on the network.
- CPN annualized total payment volume reached $23 billion as of July 31, up 130% since the last earnings report, with plans to begin monetizing the network in the second half of the year.
- Other revenue guidance was raised to $310-$330 million, driven by ARC token presale revenue of $242 million, with 75% expected to be recognized in 2026.
- Digital asset market weakness led to a 40% year-over-year decline in market cap, reducing trading activity and DeFi collateral demand, which impacted USDC circulation growth.
- Reserve return rate declined 66 basis points year-over-year to 3.48%, reflecting lower SOFR rates, which partially offset revenue growth.
- Other revenue declined $8 million quarter-over-quarter due to moderating blockchain revenue and a deliberate shift in focus to ARC over other blockchain partnerships.
- Subscription and services revenue declined $7 million due to fewer blockchain integrations, and transaction revenue declined $1 million from lower validator rewards.
- Adjusted operating expenses increased 23% year-over-year and 8% sequentially, driven by investments in ARC marketing, infrastructure, and AI capabilities, with guidance expected to land at the higher end of the range.
- The Hyperliquid arrangement is expected to have a minimal impact on Q2 results, with the full impact to be reflected starting in Q3, potentially affecting future margins.
I need to remind everyone that our earnings press release presentation in this call contains statements that are forward-looking. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events.
Information containing risks, uncertainties, and other factors that could cause these results to differ is included in our SEC filings.
Additionally, nothing in this presentation constitutes an offer to sell or a solicitation of an offer to buy securities or an invitation or inducement to engage in investment activity. We will also disclose non-GAAP financial measures on this call today. Definitions of those non-GAAP financial measures and reconciliations can be found in the earnings release and earnings presentation, which are posted on investor.circle.com.
Non-GAAP financial measures should be considered in addition to, not as a substitute for, GAAP measures.
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