Circle financials show it’s riding the stablecoin’s mainstream wave, but it might not be as smooth as it seems.
Circle Internet Group, the issuer of the USDC stablecoin, reported a 53% year-on-year increase in total revenue and reserve income, reaching $658m for the second quarter of 2025.
And yet, the company also reported a net loss of $482m, driven by cash charges tied to its recent IPO.
In June, Circle completed a $1.2bn IPO on the New York Stock Exchange, and shortly after, the US government passed the GENIUS Act, the first federal legislation for stablecoins.
Stablecoins have become one of the most talked-about innovations in payments, especially for cross-border transactions. Their ability to move across blockchains while maintaining value has made them attractive.
The GENIUS Act accelerated this perspective by offering legal clarity, helping traditional institutions overcome concerns about protection and compliance.
As the issuer of the world’s second-largest stablecoin after Tether’s USDT, Circle has been a major beneficiary of this mainstream momentum. According to its financial report for the quarter published today (August 12), USDC in circulation grew 90% year-over-year to $61.3bn at the end of the quarter, and has since risen another 6.4% to $65.2bn as of August 10.
But its IPO also led to $591m in non-cash charges; these included $424m in stock-based compensation triggered by vesting conditions and $167m from the revaluation of convertible debt due to the company’s rising share price.
“I’m proud of Circle’s performance in the second quarter, our first as a public company, where we demonstrated sustained growth and adoption of our platform across a multitude of use cases and with a diverse set of industry-defining partners,” said Jeremy Allaire, Co-Founder, CEO and Chairman at Circle.
“Circle’s successful IPO in June marked a pivotal moment—not just for our company, but for the broader adoption of stablecoins and the growth of the new internet financial system.
Another announcement highlighted in the report is the planned launch of an open Layer-1 blockchain purpose-built for stablecoin finance. Named Arc, Circle described it as a “defining moment” in its journey to deliver a full-stack platform for the “internet financial system.”
However, a definitive launch date for this defining moment has not yet been announced; the company is anticipated to release it on the public testnet in the autumn.
A less positive story
Looking past these attention-grabbing milestones, Circle’s Q2 results reveal a more complex and less flattering picture.
While Circle attributes a large portion of its losses to stock-based compensation and convertible debt revaluation, the scale of the loss raises questions about the true cost of going public and its impact on shareholder value.
It also appears that Circle’s profitability margins are slipping.
Its RLDC margin, a key measure of revenue after distribution costs, fell 408 basis points year-over-year to 38%, and full-year guidance suggests further decline to 36-38%. This signals rising partner payouts and distribution costs, especially with Coinbase’s growing USDC holdings.
Finally, the company’s extensive risk disclosures paint a sobering picture. Circle warns of possible redemption delays, reserve shortfalls and systemic shocks that could undermine USDC’s stability. It also acknowledges that insiders retain substantial control, limiting shareholder influence over key decisions.
