After delivering an impressive Q2 earnings report that sent its share price soaring to an intraday high of $189, Circle (CRCL) staged a “roller-coaster” performance the very same day—sliding 6% after hours. Behind this move were two opposing forces: the long-term boost from strong business growth and the short-term drag from a new share offering. In this piece, we’ll break down everything from the earnings highlights and business model to its partner ecosystem and the real reasons behind the after-hours drop.
Q2 Earnings Highlights
Circle kept up its rapid growth in Q2 2025. USDC circulation jumped 90% year-over-year to $61.3 billion and climbed further to $65.2 billion by August 10, showing continued strong demand for stablecoins. Total revenue and reserve income rose 53% to $658 million, with reserve income up 50% to $634 million, mainly driven by higher average circulation. Other income surged 252% to $24 million. The company posted a net loss of $482 million, but that was largely due to $591 million in non-cash IPO-related expenses. Stripping those out, adjusted EBITDA rose 52% to $126 million, underscoring the operating leverage from business expansion.
Costs rose in line with growth. Distribution, transaction, and other expenses climbed 64% to $407 million, mainly due to increased USDC holdings and greater balances on strategic partner platforms like Coinbase. Operating expenses hit $577 million, with IPO-triggered stock-based compensation making up the bulk. Operationally, average USDC in circulation rose 86% to $61 billion, market share climbed to 28%, and active wallets grew 68% to 5.7 million—clear signs of USDC’s accelerating adoption in global payments and settlement. This growth also sets the stage for Circle’s future payment network and cross-chain initiatives like the Circle Payments Network and Arc blockchain.
Source: Circle Q2 Earnings
Business Model
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Building the stablecoin network: Grow the USDC ecosystem to strengthen network effects and build long-term competitive moats.
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Monetizing the float (reserve income): USDC is backed 1:1 by dollar reserves invested in short-term Treasuries, cash, and repos, generating “risk-free” yield that scales with circulation.
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Monetizing transaction flows and infrastructure: Earn high-margin transaction fees from cross-border payments, real-time settlement, and on-chain services.
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Institutional collateral business (USYC): Offer regulated, yield-bearing assets as collateral for capital markets, adding new revenue streams and deepening institutional relationships.
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Highly scalable internet-platform model: Leverage strong operating margins and low marginal costs to keep expanding EBITDA and profit margins.
Source: Circle Q2 Earnings
Partner Ecosystem
Circle is teaming up with top-tier partners to expand USDC’s reach. This includes major crypto exchanges like Binance and OKX, fintech and payments giants such as Corpay, FIS, and Fiserv, embedding USDC into FX systems, card networks, and bank payment rails. It’s also integrating with Visa and Mastercard for merchant acceptance, powering multi-currency instant settlements for Shopify merchants, and enabling on-chain stablecoin settlement in crypto marketplaces. These use cases massively increase USDC’s transaction velocity and fee generation—hallmarks of a high-margin internet-scale business. As its partner network and application footprint grow, Circle is building a truly global stablecoin financial ecosystem poised for exponential growth.
Source: Circle Q2 Earnings
After-Hours Sell-Off
While CRCL spiked to $189 during the day, it fell 6% after hours when the company announced a 10 million share offering, 8 million of which were secondary shares from existing shareholders. This move sparked short-term selling pressure and diluted shareholders in the near term. However, given Circle’s ongoing investments in payment infrastructure and the massive long-term growth potential, the fundamentals remain intact. Still, with the stock’s inherent volatility, the short-term sentiment shock could magnify the pullback, keeping the near-term trade choppy.
Invesight Viewpoint
Circle’s Q2 showed the powerful growth momentum and network effects of its stablecoin business. Rising USDC circulation and market share are paving the way for deeper penetration in payments, settlements, and capital markets. The share sale-driven volatility is more a knee-jerk market reaction than a sign of fundamental weakness. With its partner network expanding and cross-chain payments plus institutional collateral services gaining traction, Circle’s model is well positioned to deliver both scale and profitability over the coming years. For long-term investors, it still offers a strategic way to gain exposure to the future of stablecoins.
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