Circle stock reverses 7% rally as Q2 revenue misses estimates

Circle Internet Group shares erased an early 7 percent rally and fell about 3 percent to $61.39 after second-quarter revenue of $701 million missed the $717 million Wall Street consensus, even as earnings per share of $0.18 beat the $0.17 estimate.

Mizuho maintained its Underperform rating and $45 price target on Circle, pointing to a sequential decline in USDC circulation and a 31 percent quarter-over-quarter drop in on-chain transaction volume. The target implies roughly 27 percent downside from the current share price.

USDC circulation closed June at $73.3 billion, down from $77.0 billion at the end of the March quarter. Adjusted EBITDA fell to $143 million from $151 million in Q1, and the adjusted EBITDA margin contracted 329 basis points from the same quarter last year. Net income reached $48 million, above the $45.8 million analysts expected and a $530 million improvement from the year-ago loss. The stablecoin, which trades at a 1:1 peg to the US dollar, remains the second-largest dollar-backed token by supply after Tether's USDT. Circle operated 7 million meaningful wallets at quarter end.

Circle raised its full-year other revenue guidance to $310-330 million from $150-170 million and lifted its RLDC margin forecast to 41.7-43.7 percent from 38-40 percent. Management expects USDC circulation to grow at a 40 percent compound annual rate. The stock has lost more than 20 percent since the start of 2026 and trades just above major support at $58.04, with the Aroon indicator showing sellers in control at 85.71 percent versus 21.43 percent for buyers.

CRCL tests $58 support as Arc launch approaches

The company secured a limited-purpose trust charter from the New York Department of Financial Services on July 31, adding state oversight for USDC issuance after the OCC approved a federal charter on July 10. Arc, Circle's institutional blockchain, opens its public mainnet on Sept. 16 with founding validators including BlackRock, Visa, Mastercard, DTCC and Intercontinental Exchange. Arc processed 502 million transactions in Q2, while Circle Payments Network annualized volume reached $14.7 billion, up from $8.3 billion in March.

Competition is intensifying. Rival stablecoin Open USD launched in June with more than 140 backers, including Visa and Coinbase. Circle counters that USDC captured close to 70 percent of June stablecoin transaction volume, citing Visa Onchain Analytics. Distribution costs of $407 million against $653 million of reserve income mean roughly 62 cents of every dollar earned leaves the business. Onchain activity is cooling across the sector, with Circle's $14.8 trillion in quarterly volume trailing the $21.5 trillion logged in March.

Analysts model $773.7 million of third-quarter revenue, which would require a 10 percent sequential jump after a quarter of almost no growth. The Sept. 16 Arc launch and the new regulatory charters give Circle a potential growth narrative, but the stock must first defend $58.04. A break below that level would bring Mizuho's $45 target into focus, while reclaiming $63-65 would open a path toward the 78.6 percent Fibonacci level at $75.59.

This article is for informational purposes only and does not constitute investment advice.