CRCL Filings — Circle Internet Group, Inc. - FilingSpy
CRCL
Circle Internet Group, Inc.
Circle builds and runs USDC, one of the world's largest dollar-pegged stablecoins, plus the euro-pegged EURC and a tokenized fund called USYC. These digital dollars live on public blockchains, letting people and businesses move money as easily as sending a message. Founded in Boston in 2013 by Jeremy Allaire and Sean Neville, Circle created USDC in 2018 with Coinbase. The name reflects its goal of making value circle the globe, and it became the first stablecoin issuer to go public on the New York Stock Exchange.
USDC circulation growth offsets a 66 bps reserve-rate decline, while a $424M IPO charge rolls off, swinging Circle to a $48M profit.
The $424 million IPO stock-comp charge that drove last year's loss is gone. rose 7% to $701 million and reached $48 million as a 25% increase in average USDC in circulation offset a 66-basis-point decline in the reserve return rate to 3.5%. The core engine — reserve income less distribution costs — grew 15%, but compensation costs are rising and the reserve rate keeps compressing.
Key takeaways
was $48.2 million, compared to a $482.1 million loss a year ago, almost entirely because the $424 million IPO-related charge did not recur.
Reserve income, the company's core stream, rose 7% to $701.3 million as a 25% increase in average USDC in circulation more than offset a 66-basis-point decline in the reserve return rate to 3.5%.
Distribution and transaction costs were nearly flat at $410 million, up only 1% , as higher costs from new partners were largely offset by a decrease in Coinbase's share of on-platform USDC balances.
What changed
The reserve return rate declined another 66 to 3.5%, continuing the compression flagged in every prior period; USDC circulation growth of 25% on an average basis remained large enough to keep reserve income rising, but the rate of growth slowed from 20% in Q1 to 7% in Q2.
Distribution and transaction costs, flagged as a watch item in prior quarters, grew only 1% — a clear deceleration from the 17% growth in Q1 and 74% in Q3 2025 — as a shift in Coinbase's share of on-platform USDC balances offset costs from new partnerships.
What to watch
Whether the reserve return rate stabilizes near 3.5% or continues to decline, and whether USDC circulation growth remains large enough to keep reserve income rising as the rate compresses further.
The trajectory of compensation and G&A expenses, which rose sequentially on higher legal fees and IT infrastructure costs, and whether remains at the $39 million quarterly level.
The timing and success of the Arc blockchain mainnet launch and the ARC Token distribution, given the $242 million in gross presale proceeds raised in the quarter and the May 2028 repayment contingency.
Section summaries
Management's Discussion and Analysis
Q2 2026 revenue rose 7% to $701M on 19% USDC growth; net income swung to $48M from a $482M loss a year ago.
⌄
Total and reserve income grew 7% to $701M, driven by a 25% increase in average USDC in circulation, partially offset by a 66 decline in the to 3.5%.
Operating expenses fell 56% to $254 million, driven by the absence of the prior-year IPO stock-comp charge, though general and administrative costs rose on higher legal fees and IT infrastructure build-out.
rose to $517.4 million from $247.1 million a year ago, and rose to $516.4 million from $245.6 million, as favorable working-capital changes reversed the pressure seen in the prior quarter.
USDC in circulation reached $77.2 billion at quarter-end, up 19% , and the company held $2.6 billion in total corporate liquidity including cash and corporate-held stablecoins.
Compensation expenses, which rose 83% in Q1 and were flagged as a material drag, remained elevated: was $39 million in the quarter, and total operating expenses, while down on the IPO-comp comparison, rose sequentially on higher G&A and IT costs.
rebounded to $517.4 million after falling to $21.1 million in Q1, as the unfavorable working-capital changes that reversed growth in the prior quarter unwound.
Whether the shift in Coinbase's share of on-platform USDC balances is a one-quarter dynamic or the start of a structural change in distribution-cost economics.
from continuing operations improved by $530M to $48M, primarily due to the non-recurrence of a $424M charge tied to the prior-year IPO.
rose 14% to $143M, with an of 50%, as less distribution costs grew 15% to $289M.
Distribution and transaction costs increased only 1% to $410M, as higher costs from new partners were largely offset by a decrease in Coinbase's share of on-platform USDC balances.
Operating expenses fell 56% to $254M, mainly from the absence of the prior-year IPO-related expense, though G&A and IT infrastructure costs rose on higher legal fees and platform build-out.
Liquidity remained strong with $2.6B in total cash and corporate-held stablecoins; the company also raised $242M in gross proceeds from an ARC Token presale.
Quantitative and Qualitative Disclosures About Market Risk
Interest rate shifts affect reserve income and distribution costs, while foreign currency risk remains immaterial and unhedged.
⌄
A hypothetical +200 rate rise from June 2026’s 3.49% average yield would increase reserve income by $1,475M and distribution costs by $720M over the next twelve months.
A hypothetical -200 rate decline from the same base would decrease reserve income by $1,475M and distribution costs by $720M.
The sensitivity analysis assumes USDC in circulation stays at the June 30, 2026 level and that asset allocation remains unchanged, given the difficulty of forecasting user behavior.
The company states it cannot accurately predict the net impact of rate changes on reserve income or distribution costs because USDC circulation is complex and uncertain.
A 10% move in foreign exchange rates would not materially affect operating results or financial condition, and the company does not currently hedge foreign currency exposure.
From time to time, we may be subject to various legal proceedings and claims that arise in the ordinary course of our business activities. The results of litigation and claims cannot be predicted with certainty. Refer to “Risk factors—Risks related to our business and industry—W…
⌄
From time to time, we may be subject to various legal proceedings and claims that arise in the ordinary course of our business activities. The results of litigation and claims cannot be predicted with certainty. Refer to “Risk factors—Risks related to our business and industry—We are and may continue to be subject to litigation, including individual and class action lawsuits, as well as regulatory audits, disputes, inquiries, investigations, and enforcement actions by regulators and governmental authorities” of Part I of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, and Note 22 to our unaudited Condensed Consolidated Financial Statements included in this Form 10-Q for a summary of legal proceedings to which we are a party.