By Steve Gelsi
Circle’s stock climbs as investors shrug off a one-time quarterly loss and focus on a big jump in revenue and stablecoins in circulation
Circle Internet’s stock is up after it reported a wider-than-expected loss but beat analysts’ revenue estimates.
Circle Internet Group Inc.’s stock rose Tuesday after the company’s first quarterly earnings update since its blockbuster initial public offering, as investors applauded the stablecoin issuer’s growth and plans for a new transaction network.
Circle (CRCL) also reported second-quarter results that impressed Wall Street, with a 53% jump in second-quarter revenue and bullish comments on the outlook for stablecoins – a type of digital currency pegged one-to-one to the U.S. dollar DXY or another reserve asset.
The company said circulation of its USDC stablecoin (USDCUSD) was $61.3 billion as of June 30, up 90% from a year ago. Since then, it has increased another 6.4% to $65.2 billion as of Aug. 10.
On a call with analysts, Circle Chief Executive Jeremy Allaire said the company is readying a test launch this fall of Arc, a blockchain network for capital-markets transactions, foreign exchange and payments using USDC. It’s planning to formally roll out the service by the end of the year.
“We are at the fulcrum of a massive mainstream embrace of stablecoins in the financial system, and firms are racing to build on this infrastructure,” Allaire said. “Until now, the blockchain infrastructure needed to meet the most intense demands of major financial firms and enterprises has simply not existed.”
Circle’s stock ended Tuesday up 1.3% at $163.26 a share – nearly double where it closed on its first day of trading on June 5, at $83.23. Circle’s IPO had priced at $31.
Looking ahead, Circle may take aim at “careful and deliberate” acquisitions, but Allaire said he doesn’t expect any big, complex deals at the current time.
“We only want to do things that really fit clearly in that kind of product mandate,” the CEO said. “We’ve got a lot of organic development happening now and we’re excited to deliver on that.”
The company’s second-quarter revenue increased to $658.1 million, from $430 million a year ago, and topped the consensus analyst estimate of $645.7 million.
Circle said it swung to a loss $482.1 million, or $4.48 a share, in its second quarter ending June 30. In the year-ago quarter, it earned $32.92 million, with no common stock outstanding at the time.
Wall Street analysts expected Circle to lose 97 cents a share, according to FactSet data.
The reason why Wall Street appeared not to care so much about the larger-than-expected loss was that it included one-time, noncash charges of $591 million related to its IPO, including $424 million for stock-based compensation related to vesting conditions.
During the quarter, the company debuted its Circle Payments Network, a product to help financial firms make payments with stablecoins.
It also inked payments alliances with Corpay Inc. (CPAY), Fiserv Inc. (FI) and crypto exchange Binance Holdings Ltd.
Allaire said the company has been growing its relationship with Binance, among the largest trading platforms for crypto assets.
“They’ve been a great partner and they’re leaning into both the technology and really driving USDC growth,” he said.
To be sure, Circle may still face challenges in stablecoin adoption, Deutsche Bank analyst Brian Bedell said as he launched coverage of the stock on Tuesday, giving it a neutral rating and a $155-a-share price target.
“While we see potential for strong long-term industry adoption of stablecoins, the range of outcomes are very wide and likely to create substantial volatility in earnings,” Bedell said in a note. “We see the shares as being fairly valued.”
-Steve Gelsi
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08-12-25 1616ET
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