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Circle Posts Mixed Q2 Results, Lifts Revenue Outlook on Arc Token Sale
14 Aug 2026, 13:49
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Circle raised its full-year revenue forecast on proceeds from a $242 million token sale tied to its new blockchain Arc, even as second-quarter revenue missed estimates and USDC circulation declined from the prior quarter.
Circle raised its full-year revenue guidance on expected proceeds from a $242 million token sale tied to its new stablecoin-focused blockchain, Arc, even as second-quarter results came in mixed. Revenue and reserve income totaled $701 million, below the roughly $717.5 million analysts had expected, while earnings per share of 18 cents beat forecasts of 16 cents. CEO Jeremy Allaire pointed to Arc as the more significant story going forward, calling it "the birth of a new operating system layer for economic activity" and suggesting the network could eventually represent a bigger opportunity than USDC itself.
USDC's own numbers told a more complicated story. Circulation grew 19% year over year to $73.3 billion, but that figure actually declined from $77 billion in the prior quarter and remains well below the company's target of roughly 40% compound annual growth. Usage expanded far faster than circulation, with onchain transaction volume climbing 151% to $14.8 trillion, while adjusted operating expenses rose 23%, more than three times the pace of revenue growth, squeezing the adjusted EBITDA margin down by 329 basis points to 50%. The gap between rising usage and falling circulation, alongside costs growing faster than revenue, illustrates the pressure Circle faces even as its core stablecoin business keeps setting activity records.
Arc itself is entering a crowded field. The network's founding validator cohort includes major names like BlackRock, Mastercard, Visa and Standard Chartered, several of which are also involved in a competing stablecoin consortium called Open Standard that shares significant overlap with Arc's own validator list. CFO Jeremy Fox-Geen raised guidance for revenue outside of reserves to between $310 million and $330 million, up from a prior range of $150 million to $170 million, with proceeds from the Arc token presale expected to cover roughly three-quarters of this year's development milestones. Strip out the token sale revenue, however, and the outlook for the rest of the business actually fell to between $130 million and $150 million, below the range Circle had set the previous quarter.
According to Allaire, Arc's testnet has already processed more than 500 million transactions across close to 3 million wallets, with more than 100 partners active on the private mainnet ahead of a public launch planned for September 16. BlackRock is expected to bring its BUIDL tokenized money-market fund onto the network, while exchanges and wallet providers including Kraken, MetaMask and Uniswap Labs are lined up to offer USDC access on Arc from launch day. The company also highlighted a partnership with perpetual futures exchange Hyperliquid, where USDC now accounts for roughly 40% of collateral posted across major venues, as a potential source of future growth, alongside plans to publish a whitepaper later this year outlining Circle's broader AI agent strategy. Circle shares traded around $63.50 following the results, down about 20% year to date.
USDC's own numbers told a more complicated story. Circulation grew 19% year over year to $73.3 billion, but that figure actually declined from $77 billion in the prior quarter and remains well below the company's target of roughly 40% compound annual growth. Usage expanded far faster than circulation, with onchain transaction volume climbing 151% to $14.8 trillion, while adjusted operating expenses rose 23%, more than three times the pace of revenue growth, squeezing the adjusted EBITDA margin down by 329 basis points to 50%. The gap between rising usage and falling circulation, alongside costs growing faster than revenue, illustrates the pressure Circle faces even as its core stablecoin business keeps setting activity records.
Arc itself is entering a crowded field. The network's founding validator cohort includes major names like BlackRock, Mastercard, Visa and Standard Chartered, several of which are also involved in a competing stablecoin consortium called Open Standard that shares significant overlap with Arc's own validator list. CFO Jeremy Fox-Geen raised guidance for revenue outside of reserves to between $310 million and $330 million, up from a prior range of $150 million to $170 million, with proceeds from the Arc token presale expected to cover roughly three-quarters of this year's development milestones. Strip out the token sale revenue, however, and the outlook for the rest of the business actually fell to between $130 million and $150 million, below the range Circle had set the previous quarter.
According to Allaire, Arc's testnet has already processed more than 500 million transactions across close to 3 million wallets, with more than 100 partners active on the private mainnet ahead of a public launch planned for September 16. BlackRock is expected to bring its BUIDL tokenized money-market fund onto the network, while exchanges and wallet providers including Kraken, MetaMask and Uniswap Labs are lined up to offer USDC access on Arc from launch day. The company also highlighted a partnership with perpetual futures exchange Hyperliquid, where USDC now accounts for roughly 40% of collateral posted across major venues, as a potential source of future growth, alongside plans to publish a whitepaper later this year outlining Circle's broader AI agent strategy. Circle shares traded around $63.50 following the results, down about 20% year to date.