Circle Internet Group, Inc. 2026 Q2 Earnings Call

Good morning. Welcome to Circle's second quarter 2026 earnings conference call. I'm Scott Blair, Circle's Head of Strategic Finance. Earlier this morning, we posted our earnings press release and earnings presentation on the circle investor relations website, investor.circle.com. A transcript of this call will be posted on that website once available. I need to remind everyone that our earnings press release presentation and this call contain 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. Today, I'm joined by Jeremy Allaire, our Co-Founder, Chief Executive Officer, and Chairman, and Jeremy Fox-Geen, our Chief Financial Officer, who will walk us through Q2 results. With that, I'd like to turn the call over to Jeremy Allaire.

Thank you, Scott. I'm excited to be here with all of you today to discuss Circle's second quarter results. As I've done in the past, I want to begin at a higher level and put in context where we are and what is driving Circle's strategy. We are living through a global moment. Around the world, governments, financial institutions, and businesses are embracing digital dollars. Stablecoins are becoming federally regulated digital dollar money in the U.S., and similar frameworks are taking hold in major markets all around the world. This is the moment Circle has been building toward for more than a decade. That moment has drawn enormous attention, and with it, competition. I want to address that directly. Circle is in a position of significant leadership. We have built deep and durable competitive moats around trust, liquidity, regulatory standing, technology, and network scale.

Our position has never been stronger. At the center of that position is USDC and the extraordinary network we have built around it. That network was built with partners, including a strategic partnership with Coinbase that we have grown over many years. I'm pleased to share today that our agreement with Coinbase has renewed on its existing terms, ensuring that USDC remains central across all of Coinbase's products. At the same time, we look forward to continuing to grow our USDC network through distribution arrangements with strategically aligned partners. Let me start with the foundations of that network. USDC is the leading stablecoin network in the world, and it rests on significant technology and operational infrastructure. Circle and our stablecoin infrastructure are the most widely regulated in the industry. We hold over 55 licenses and registrations across major jurisdictions.

That position took years to establish and is what ensures the legal availability of our infrastructure around the world, something that will take others many years to replicate. The software infrastructure that powers this open network runs on every major blockchain technology, spanning 35 blockchain networks and reaching users in 185 countries. We provide the critical protocols and on-chain smart contracts that make digital dollars work seamlessly wherever users are, in whatever application they are using, in a safe way. This is unparalleled in the industry. Alongside all of this, the financial infrastructure underneath USDC includes more than 15 partner banks around the world, from some of the largest global systemically important banks to critical fintech-focused banks, ensuring the liquidity that underpins our network.

We have also built a network of more than 150 distribution partners that have an economic interest in embedding USDC, growing USDC, and supporting it across their commercial platforms. This is expanding and accelerating. Critically, thousands of other companies are also part of our network, with products and services that have integrated USDC and use our infrastructure. They span every sector: wallets, DeFi protocols, payment apps, banks, neobanks, asset managers, exchanges, custodians, trading firms, brokerages, and large enterprises. These companies have built and continue to build fundamental utility around USDC. That strength is evident even in recently announced purported consortium projects. Approximately 70% of the companies that have expressed interest are already participants on our network. Whatever role they may ultimately play in those projects, the more important fact is that they are already building on, distributing, and supporting USDC today. Our network is not theoretical or aspirational.

It is the largest, deepest, and most widely integrated in the industry, and its scale creates powerful, self-reinforcing network effects that will be extraordinarily difficult to replicate. Liquidity is essential to those network effects and to Circle's competitive position. On a primary basis, we have scaled USDC minting and redemption all around the world. In the second quarter, we saw an average of $1.9 billion of daily minting and redemption, up 105% year-over-year. This is infrastructure that works at scale. On a secondary basis, several billion dollars of USDC trades every day, making USDC one of the most liquid digital currencies in the world. Transaction volume on the network continues to grow robustly, with daily on-chain transaction volume averaging $163 billion per day in Q2, up 151% year-over-year. This liquidity is what makes digital dollars work in markets, in payments, and across business applications.

Turning to the quarter, I want to focus on a few key highlights. We ended the quarter with $73.3 billion of USDC in circulation, representing approximately 20% year-over-year growth. Total revenue and reserve income was $701 million. Adjusted EBITDA margin demonstrated continued healthy profitability, transactional volume with USDC grew 151% year-over-year to nearly $15 trillion. We also saw expansion of our platform. In a huge milestone, we received our OCC national trust bank charter, shortly thereafter, an additional limited purpose trust charter from the state of New York. As announced today, we have major strategic partners coming alongside us for the Arc Mainnet launch, which is happening this quarter on September 16th. In another milestone, global systemically important banks began offering USDC minting and redemption directly to their institutional clients.

Our payments network, CPN, continued to see very robust growth, reaching nearly $15 billion in annualized total payment volume on a trailing 30-day basis at the end of Q2. We continued to build out and strengthen flagship partnerships, from global banks to major regional financial technology players, payments companies, and global financial firms. I want to spend a moment on the National Trust Bank, because it represents something foundational. With final OCC approval, we have established Circle National Trust, an infrastructure bank for the internet financial system. This is about confidence. Circle National Trust gives leading companies and financial institutions a federally supervised foundation on which to build digital asset services.

It allows us to bring core elements of USDC into this new federally supervised framework. It becomes a way to project Circle's infrastructure into global markets for payments, for capital markets, and for use of digital dollars in corporations all around the world. Moving on to details of our stablecoin network and digital asset growth and adoption. Digital asset markets themselves have continued to see significant weakness. Even so, we saw overall growth on a year-over-year basis and continued to maintain mint volumes, building on digital dollars have continued to scale, growing 84% year-over-year. USDC continues to be the leader in stablecoin transaction volumes. In fact, according to Visa, USDC's share of stablecoin transaction volume reached nearly 70% in the month of June, a new record. Key measures of usage and liquidity have continued to grow. USDC on-chain transaction volume grew 151% year-over-year.

While volume was down from the first quarter, which included significant activity from market makers, we continue to see steady growth in transactional utility. At the same time, we are seeing record amounts of minting and redemption of USDC, with mint and redeem volume reaching $170 billion in Q2. This underscores USDC's critical and valuable role supporting payments and settlement moving between fiat infrastructure around the world. We are truly building fundamental new pipes for digital dollar movement globally. While much of the focus is on USDC, we continue to hold market-leading positions across our other digital assets. EURC grew 2.2x year-over-year and remains the largest digital euro in the world. USYC grew 10x year-over-year to become over $3 billion in assets and remains the largest tokenized money market fund in the world.

I also want to talk about the significant evolution happening in digital trading markets and Circle's role in it. Perpetual futures have become one of the most important tradable instruments in the world. The market has evolved from people buying and selling Bitcoin into people trading these perpetual futures at global scale. On the largest centralized and decentralized platforms in the world, Binance and Hyperliquid, USDC's position has continued to strengthen, reaching 40% of open interest collateral in these markets. There is a real shift happening in what people are trading. The market is moving away from speculating on cryptocurrencies and into open, global digital asset markets that support trading tokenized stocks, tokenized commodities, and other tokenized assets.

In fact, for the first time, the majority of traded volume on Hyperliquid, one of the most important venues in the world, is now in real-world assets rather than digital commodities and cryptocurrencies, reaching nearly 75% of perps volume as of last week. This is a major change in the structure of the market. Circle is very well-positioned as the leading provider of stablecoin infrastructure to these markets. We are also seeing dramatic growth in prediction markets as a major source of digital asset trading activity. Spot volume on Polymarket grew more than 8x year-over-year. Open interest posted in these markets grew more than 4x year-over-year. Polymarket is a strategic distribution partner for USDC, which underpins this activity. Now let me turn to Arc. Arc is coming. We are excited to announce today that Arc Mainnet will launch this quarter on September 16th.

We have seen tremendous traction as the infrastructure gets ready for this moment. Our testnet has processed more than half a billion transactions across nearly 3 million wallets with nearly perfect uptime. More than 100 partners are already active on our private mainnet, preparing for the public launch. Crucially, Arc has been built as financial infrastructure to be run by the leading financial firms in the world. Today, we are announcing the initial cohort of firms that will operate the Arc blockchain network alongside Circle as network validators. This includes the world's leading asset manager, the world's leading equities and securities clearing firm, leading digital asset firms, the largest exchange group in the world, the two largest retail payments networks in the world, leading banks from around the world, and leading payment processors and remittance companies. This is an incredible group, running infrastructure that others can build on.