Circle shares climb after Q2 results, federal bank charter approval and higher guidance

Circle Internet Group (NYSE:CRCL) shares rose around 7% in pre-market trading after the stablecoin issuer reported second-quarter results in line with expectations, secured the first federal bank charter granted to a stablecoin company and raised parts of its full-year outlook.

The company also announced that BlackRock, Visa and Mastercard will serve as validators for its upcoming blockchain network.

Circle reported second-quarter earnings of $0.18 per share, matching the Wall Street consensus estimate.

Total revenue and reserve income increased 7% year over year to $701 million. As no analyst consensus was available for this metric, no beat or miss comparison could be made.

Net income from continuing operations reached $48 million, representing a year-over-year improvement of $530 million, largely reflecting lower stock-based compensation expenses following the company's initial public offering in the second quarter of 2025.

Adjusted EBITDA rose 8% to $143 million, although the adjusted EBITDA margin narrowed by 329 basis points to 50% as Circle continued investing in new products and services.

Reserve income increased 5% from a year earlier to $668 million, supported by a 25% increase in the average amount of USDC in circulation.

That growth was partly offset by a decline in the reserve return rate to 3.5%, down 66 basis points from the prior year.

Revenue less distribution costs (RLDC) increased 15% to $289 million, while the RLDC margin expanded by 302 basis points to 41%.

USDC in circulation reached $73.3 billion at the end of the quarter, up 19% year over year.

On-chain transaction volume surged 151% to $14.8 trillion during the period, although Circle's share of the stablecoin market edged down 66 basis points to 27%.

During the quarter, the U.S. Office of the Comptroller of the Currency approved the creation of Circle National Trust, making it the first stablecoin company to receive a federal bank charter.

Separately, the New York Department of Financial Services authorised Circle New York Trust to operate as a digital asset-focused limited-purpose trust company.

Circle also continued expanding its payments infrastructure. The Circle Payments Network reached an annualised transaction volume of $14.7 billion over the 30 days leading up to quarter-end, an increase of 76% from the previous quarter.

The number of financial institutions participating in the network rose 29% quarter over quarter to 175.

Circle increased its full-year 2026 guidance for other revenue to between $310 million and $330 million, compared with its previous forecast of $150 million to $170 million.

The revised outlook includes recognised revenue from the Arc Token presale.

Management also raised its expected RLDC margin to a range of 41.7% to 43.7%, up from its previous guidance of 38% to 40%.

Adjusted operating expense guidance was left unchanged at between $570 million and $585 million.