Circle’s First Report After Explosive IPO: High Losses but Stunning Revenue

The “first stablecoin stock” Circle released its first earnings report since going public in the U.S., recording a loss in Q2 but with revenue growth exceeding market expectations. As of this writing, Circle’s pre-market trading is up over 9%.  

 

 

Specific data shows that Circle Internet Group, Inc. (ticker: CRCL) posted a net loss of $482 million in Q2, with an adjusted loss per share of $4.48, largely due to non-cash expenses related to its IPO.  

 

Meanwhile, Circle’s Q2 revenue reached $658 million, up 53% year-over-year, surpassing analysts’ predictions of $647.3 million. Buoyed by this positive news, Circle’s stock rose over 6% pre-market to $172 per share.  

 

Circle’s IPO on June 5 sparked market frenzy—its stock once hit nearly 10 times its IPO price of $31, reflecting optimism about the vast growth potential in this once-niche cryptocurrency subsector.  

 

Analysts note that stablecoins are evolving from their initial role as “chips” in the crypto market to a universal payment medium, offering merchants and consumers a cheaper, more efficient payment system.  

 

However, most of Circle’s revenue still comes from U.S. Treasury bonds and other yield-generating assets backing its USDC token. In contrast, crypto exchange Coinbase derives most of its income from trading fees, resulting in a much higher gross margin.  

 

Additionally, Circle must return a significant portion of its revenue to distribution partners like Coinbase. The company reported that total distribution, transaction, and other costs rose 64% to $407 million in Q2, driven by increased USDC circulation, growth in USDC holdings on the Coinbase platform, and distribution expenses from new strategic partnerships.  

 

Circle’s adjusted EBITDA for Q2 was $126 million, up 52% year-over-year and exceeding the analyst average forecast of $121.1 million.  

 

To fuel growth, Circle announced in June plans to establish a national trust bank in the U.S. If approved, Circle could self-custody its reserves and potentially gain direct access to the U.S. payment system via a Federal Reserve master account.  

 

Currently, Circle’s circulating USDC token supply stands at approximately $65 billion, second only to Tether Holdings SA’s USDT, which has a circulating supply of about $165 billion.