Circle Internet Group Q1 Earnings Call Highlights

Key Points

• Circle’s Q1 results were strong: revenue and reserve income rose 20% year over year to $694 million, adjusted EBITDA increased 24% to $151 million, and the company kept its full-year 2026 guidance unchanged.
• USDC adoption accelerated: USDC circulation reached $77 billion, on-chain transaction volume jumped 263% year over year to $21.5 trillion, and Circle highlighted growing use across enterprises, institutions, and capital markets.
• Circle is pushing beyond stablecoins: the company is advancing its Arc blockchain and ARC token, launching AI-agent tools and expanding its payments network, which reached $8.3 billion in annualized volume and nearly $10 billion by May 7.

Circle Internet Group NYSE: CRCL reported first-quarter 2026 results that showed higher revenue, adjusted EBITDA growth and continued expansion in USDC transaction activity, while management emphasized new product launches tied to stablecoins, blockchain infrastructure and AI agents.

Co-founder, CEO and Chairman Jeremy Allaire framed the quarter around what he called “the largest platform shift in the history of the internet,” describing a convergence between artificial intelligence systems and blockchain-based “economic operating systems.” He said Circle is positioning its stablecoin network, Arc blockchain network and payments products for that shift.

Circle ended the quarter with $77 billion of USDC in circulation, up 28% year over year and roughly flat sequentially. Allaire said on-chain USDC transaction volume increased 263% year over year to $21.5 trillion. He also cited third-party data that includes Solana transaction volume showing nearly $30 trillion in quarterly USDC volume and an approximately 80% share of all on-chain transaction volume.

Revenue and Adjusted EBITDA Rise

Chief Financial Officer Jeremy Fox-Geen said total revenue and reserve income rose 20% year over year to $694 million. Adjusted EBITDA increased 24% year over year to $151 million, with an adjusted EBITDA margin of 53%.

Fox-Geen said the reserve return rate was 3.5% for the quarter, down 66 basis points from a year earlier, reflecting a decline in SOFR. Total distribution, transaction and other costs increased 17% year over year to $407 million. Revenue less distribution cost margin was 41.4%, up 1.5 percentage points from the prior year.

Other revenue doubled year over year to $42 million. Subscription and services revenue totaled $34.9 million, primarily from blockchain network partnerships, while transaction revenue was $6.7 million. Fox-Geen said transaction revenue declined from the prior quarter, when Circle benefited from the Canton Coin launch, but other revenue still grew sequentially.

Adjusted operating expenses rose 32% year over year to $136 million as the company invested in product, distribution and operating infrastructure. Circle left its full-year 2026 guidance unchanged, though Fox-Geen said current guidance does not include future financial impacts from the ARC token presale, ARC incentive programs or potential ARC-related revenue streams.

USDC Adoption Expands Across Enterprises and Institutions

Allaire highlighted several USDC integrations and use cases, including Meta using USDC for creator payouts, DoorDash paying drivers in USDC and Polymarket adopting USDC for funding and settlement. He also pointed to Erebor Bank using USDC for 24/7 banking and expanded relationships with exchanges in Korea.

In capital markets, Allaire said Circle is participating in a DTCC test run of tokenized securities trading and is seeing “emerging traction” for USDC as collateral on regulated derivatives exchanges. In enterprise treasury management, he discussed partnerships with Kyriba and Ramp, as well as Y Combinator using USDC for funding operations.

Allaire said Visa’s reported figures on commercial transaction volume showed USDC accounting for 63% of all stablecoin transactions. During the Q&A, he said USDC represented approximately 60% of traffic in “real commercial transactions” under Visa’s analysis.

Circle also reported growth in other digital assets. Allaire said EURC, which he described as the world’s largest euro stablecoin, doubled year over year to EUR 358 million at the end of the period. USYC, Circle’s tokenized money market fund, grew more than 300% year over year and stood at more than $3 billion in assets as of May 7. Allaire said USYC is now the largest tokenized money market fund in the world.

Arc Network and ARC Token Move Toward Launch

Circle said its Arc network is approaching mainnet launch after what Allaire described as a successful testnet. Arc is designed as a stablecoin-native Layer-1 blockchain for payments, asset issuance, capital markets applications and AI-agent-driven activity.

Circle announced a presale of the ARC token, raising $222 million at a $3 billion fully diluted network value. Allaire said the presale was led by a16z crypto and included investors and strategic participants such as Apollo Funds, ARK Invest, BlackRock, Janus Henderson Investors, Bullish, Intercontinental Exchange, Marshall Wace, SBI Group, Standard Chartered Ventures, General Catalyst, Hana Ventures and IDG Capital.

Allaire said the ARC token is intended to support governance, staking, network security and other protocol functions. He said Circle retains 25% of the ARC tokens, while 60% of tokens are designed for ecosystem grants, airdrops and other incentive programs, according to the ARC token whitepaper.

Fox-Geen said that when ARC tokens are created, they will be held on Circle’s balance sheet at cost, which is zero. Once Circle completes obligations under the token presale, the value of those tokens will be recognized as other revenue. He said ARC token activity could also affect other revenue through incentive grants and potential revenue streams such as running a validator on the Arc network.

AI Agent Products and Payments Network Growth

Circle launched several AI-related products under what it calls the Circle Agent Stack. Allaire said the company introduced Agent Wallets, allowing agents to build on-chain wallets, conduct transactions, on-ramp USDC and operate within predefined policies and safety guardrails. Circle also launched agent Nanopayments, supporting USDC transactions as small as one millionth of a penny.

Allaire said the products support interoperability across agents and API services through the x402 standard, which Circle is helping design. He said USDC settles 99.8% of all x402 agentic payments. Circle also launched the first version of its Agent Marketplace, with more than 500 endpoints available for agents, and a Circle platform command line interface for developers and AI agents.

Allaire also described internal AI adoption at Circle, saying approximately 85% of employees are weekly active users of AI tools for building automations and that teams have deployed more than 600 AI-native apps this year.

Circle’s payments network, CPN, continued to grow. Allaire said Circle ended the quarter with $8.3 billion of annualized total payment volume on a trailing 30-day basis, up 17% quarter over quarter. As of May 7, he said CPN was approaching $10 billion of annualized total payment volume, up nearly 75% since the company last reported. Circle has enrolled more than 136 financial institutions into CPN products, up 36% quarter over quarter.

The company also introduced CPN Managed Payments, which Allaire said is intended to help banks, financial institutions and payment service providers adopt stablecoin payment networks by having Circle manage licensing, USDC liquidity, account infrastructure and blockchain compliance operations.

Management Discusses Regulation and Market Dynamics

In response to analyst questions, Allaire and Circle President Heath Tarbert discussed pending U.S. digital asset legislation, including the CLARITY Act and the GENIUS Act. Tarbert said the CLARITY Act would provide legal certainty for traditional financial institutions and address blockchain networks, digital assets and stablecoin use cases by banks, broker-dealers and custodians.

Allaire said Circle remains focused on expanding USDC’s utility rather than promoting it as a passive yield product. Tarbert said USDC’s value is “in its velocity and its utility, not in its idleness,” and said Circle wants to incentivize use cases such as payments, conversions, remittances, market-making, collateral posting, staking and validation.

Asked about flat sequential USDC circulation, Allaire said Circle looks at long-term growth trends rather than quarterly circulation targets. He pointed to digital asset market weakness, deleveraging and macro factors as influences, while emphasizing that stablecoins held up despite lower digital asset prices and trading volumes. Fox-Geen added that USDC gained share in on-chain transaction usage during the quarter, calling it an important trend for the mainstreaming of stablecoin technology.

About Circle Internet Group NYSE: CRCL

Circle Internet Group NYSE: CRCL is a financial technology company that builds infrastructure to enable businesses and developers to use and move money on public blockchains. Co-founded by Jeremy Allaire and Sean Neville, the company is best known as a principal issuer and steward of USDC, a dollar-pegged stablecoin developed through the CENTRE Consortium, which Circle co-founded with Coinbase. Jeremy Allaire serves as CEO and has been a visible leader in the company’s strategy and public engagement around digital currency and payments innovation.

Circle’s core products and services center on digital currency issuance and programmable payments.

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