01—Abstract
Summary
Summary of the 10-Q filed August 5, 2026. Cited figures are marked; the original filing is the authoritative source.
Circle Internet Group, Inc. reported a second quarter 2026 with total revenue and reserve income of $701.3 milliona, up 6.6% from $658.1 million a year earlier, and net income from continuing operations of $48.2 million, compared with a net loss of $482.1 million in the prior-year quarter.
The prior-year loss was driven largely by $423.8 millionb of stock-based compensation tied to RSU vesting at the IPO and $168.5 million of fair value losses on convertible notes that have since converted. Reserve income rose 5.3% to $667.7 million, with the filing attributing the increase to a 25.2% rise in average daily USDC in circulation, largely offset by a 66 basis point decline in average yields. Adjusted EBITDA was $143.5 million, and USDC in circulation at period end was $73.3 billion, up from $61.3 billion a year earlier.
The balance sheet shows total assets of $77.2 billionc, with cash and cash equivalents segregated for the benefit of stablecoin holders of $73.2 billion offsetting deposits from stablecoin holders of $72.9 billion. Corporate cash and cash equivalents were $1.7 billion, and the company stated total liquidity sources of $2.6 billion. Other current liabilities rose to $256.0 million, reflecting $242.2 million of deferred revenue from a private presale of 807.5 million ARC Tokens at $0.30 per token, of which $222.0 million was received in the quarter.
Operating cash flow for the six months was $538.5 milliond, helped by those presale proceeds. The filing also highlights Arc mainnet expected in September 2026, a private mainnet launched in May 2026, and the OCC approval of First National Digital Currency Bank, N.A.
(Circle National Trust), which opened on July 24, 2026. The company remains in a lawsuit brought by a former financial advisor seeking fees, which it says cannot be reasonably quantified or estimated.
02—Key points
Key Highlights
- Total revenue and reserve income of $701.3 million for Q2 2026, up 6.6% year over year from $658.1 million.
- Net income from continuing operations of $48.2 million versus a net loss of $482.1 million in Q2 2025, which included $423.8 million of IPO-related RSU stock-based compensation.
- Reserve income of $667.7 million (up 5.3%); reserve return rate fell to 3.5% from 4.1%, while USDC in circulation at period end reached $73.3 billion versus $61.3 billion a year earlier.
- Adjusted EBITDA of $143.5 million for Q2 2026 versus $125.8 million in Q2 2025; Adjusted EBITDA margin of 50%.
- ARC Token presale of 807.5 million tokens at $0.30 each for approximately $242.2 million in gross proceeds, recorded as deferred revenue; $222.0 million received in Q2 2026.
- Total liquidity sources of $2.6 billion, including $1.7 billion of cash and cash equivalents and $889.3 million of corporate-held stablecoin cash.
- Convertible notes were fully converted into Class A common stock by January 2026, eliminating the associated fair value volatility in other income (expense).
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2026filed August 5, 2026Financial Statements
Q2 FY2026 against Q2 FY2025
| Line item | Q2 FY2026Q2 FY2025 | Change |
|---|---|---|
| Revenue | $33.58M$658.08M | −94.9% |
| Operating Expenses | $254.49M$576.72M | −55.9% |
| Operating Income | $34.36M-$325.58M | +110.6% |
| Net Income | $48.22M-$482.10M | +110.0% |
| EPS (Basic) | $0.19$-4.48 | +104.2% |
| EPS (Diluted) | $0.18$-4.48 | +104.0% |
| Shares Outstanding (Basic) | 248.18M107.51M | +130.8% |
| Shares Outstanding (Diluted) | 268.64M107.51M | +149.9% |
05—Questions
Frequently Asked Questions
What drove the swing from a large Q2 2025 net loss to Q2 2026 net income?
The prior-year quarter included $423.8 million of stock-based compensation expense recognized upon the IPO-related vesting of RSUs and $167.7 million of fair value losses on convertible debt, warrants, embedded derivatives and U.S. Treasury securities. Compensation expenses fell 73.4% to $134.0 million in Q2 2026, and the convertible notes converted in early 2026.
How much of Circle's revenue comes from reserve income, and how did yields affect it?
Reserve income was 95.2% of total revenue in Q2 2026. It rose $33.5 million, with about $147.4 million of growth from a 25.2% increase in average daily USDC in circulation, largely offset by about $113.9 million from a 66 basis point decline in average yields tied to Federal Reserve rate actions.
What is the ARC Token presale and how is it accounted for?
Circle sold 807.5 million ARC Tokens at $0.30 each to institutional investors under a private placement, for gross proceeds of approximately $242.2 million. Proceeds are recorded as deferred revenue and will be recognized as Other revenue once performance obligations are satisfied. The filing states the Arc network is expected to launch on mainnet in September 2026, and any ARC Token is contingent on a transition to a Proof-of-Stake or delegated Proof-of-Stake consensus model.
Are stablecoin reserves and deposits accounted for on the balance sheet?
Cash and cash equivalents segregated for the benefit of stablecoin holders were $73.2 billion as of June 30, 2026, against deposits from stablecoin holders of $72.9 billion. The company states that it holds only bare legal title to these reserve accounts and that its eligible liquid assets exceeded custodial obligations to stablecoin holders.
What legal or regulatory developments were disclosed after the quarter ended?
On July 9, 2026, the OCC gave final approval to establish First National Digital Currency Bank, N.A., operating as Circle National Trust, which opened on July 24, 2026. On July 31, 2026, the company received a limited purpose trust charter from the New York Department of Financial Services for Circle Internet Trust Company LLC. A pending lawsuit from a former financial advisor over advisory fees also continues, and the company says its outcome cannot be reasonably quantified or estimated.
06—Continue