Circle Internet Group (CRCL) Earnings

Management highlights

- Strategic Vision * Circle is positioned to capitalize on the convergence of AI/agentic operating systems and blockchain-based economic operating systems, a mega trend expected to transform the global economy over the next decade. * The company operates a reinforcing multi-pillar flywheel model: the stablecoin/digital assets network drives liquidity and developer adoption, the ARK network grows via network effects from new apps and assets, and native Circle applications (CPN, Circle Mint) drive transaction volume and user growth, with all pillars reinforcing each other. - Product Launches and Adoption * Launched the full Circle Agent Stack for AI agent economic activity, including Agent Wallets (permissionless on-chain wallets for agents with predefined policy guardrails), Agent Nano Payments (supporting sub-penny high-frequency machine-to-machine transactions), an open agent marketplace with over 500 available endpoints, and the Circle Platform CLI for developer/agent integration. 99.8% of all X402 standard agentic payments are currently settled in USDC. * Launched CPN Managed Payments, a turnkey managed service for banks and financial institutions that offloads licensing, custody, liquidity and compliance work to Circle, accelerating time-to-market for institutions to join the CPN network. * Announced the planned launch of SurBTC, a compliant wrapped Bitcoin product to be issued on Ethereum and ARK networks, expanding Circle's digital asset portfolio. * Achieved post-quantum security for ARK transaction messages at mainnet launch, addressing long-term security risks. - Institutional Adoption and Partnerships * Secured major new enterprise use cases for USDC, including Meta for creator payouts, DoorDash for driver payouts, Polymarket for prediction market funding/settlement, Airbor Bank for 24/7 banking, and expanded exchange adoption in South Korea. * Partnered with leading treasury management platform Kyriba and fintech Ramp to integrate USDC into corporate treasury workflows, with Y Combinator also using USDC for startup funding operations. * Participating in a DTCC test of tokenized securities trading, with emerging traction for USDC as collateral on regulated derivatives exchanges. - Internal AI Transformation * 85% of Circle employees are weekly active users of AI automation tools, with over 600 AI-native applications deployed internally in 2026 to date, driving accelerated product velocity and operational productivity while maintaining regulated security and governance controls.

Guidance

- Full year 2026 guidance is maintained unchanged from prior announcements. - The existing full year guidance does not include any financial impacts from the ARK token presale, ARK incentive programs, or future ARK-associated revenue streams. - Management expects ARK to be a material long-term growth driver, but cannot yet quantify ARK's financial impacts, and will provide updated guidance including ARK impacts on the next quarterly earnings call. - When ARK tokens are delivered to presale participants, the full value of the presale will be recognized as other revenue, with corresponding impacts to costs and adjusted EBITDA from incentive programs.

Segment performance

1. Stablecoin and Digital Assets Segment: Total USDC circulation ended Q1 2026 at $77 billion, representing 28% year-over-year growth. On-chain USDC transaction volume grew 263% year-over-year to $21.5 trillion (third-party data including Solana volume puts total near $30 trillion). USDC holds 63% of all stablecoin transaction market share per Visa data, and ~80% of all on-chain dollar digital currency transaction volume. EURC (euro stablecoin) grew 2x year-over-year to 358 million euro. Tokenized money market fund USYC grew over 300% year-over-year to over $3 billion in assets as of May 7, 2026, making it the world's largest tokenized money market fund. This segment contributes the majority of total revenue and reserve income, driven by reserve returns on USDC circulation. 2. Payments Segment (CPN): Annualized total payment volume (TPV) reached $8.3 billion at quarter-end, up 17% quarter-over-quarter, and approached $10 billion as of May 7, 2026 (up ~75% since last quarter-end). Over 136 financial institutions are enrolled, up 36% quarter-over-quarter. 3. ARK Network and Interoperability Segment: Cross-Chain Transfer Protocol (CCTP) volume reached almost $50 billion in Q1, 3x year-over-year growth, representing ~60% of all cross-chain blockchain traffic. A successful ARK testnet was completed, and the ARK token presale raised $222 million at a $3 billion fully diluted network valuation.

Risks & headwinds

- Forward-looking statements (including ARK growth and agentic economy adoption) are inherently uncertain, and actual results may differ materially due to unforeseen risks and uncertainties outside of Circle's control, per standard SEC disclosures. - Recent security hacks on competing interoperability and blockchain networks have raised industry-wide concerns about infrastructure safety, highlighting the importance of Circle's focus on foundational security (including post-quantum security for ARK). - Stablecoin circulation and transaction volume can be volatile due to global macroeconomic conditions, digital asset market price swings, and endogenous deleveraging events within the digital asset ecosystem. - Regulatory uncertainty for stablecoins and blockchain tokens could slow institutional adoption until clear, permissive regulation is enacted globally. - Competition from other layer 1 blockchain networks targeting traditional finance applications could limit ARK's adoption and growth.

Analyst Q&A

• Q: What is Circle doing to maintain its stablecoin market leadership?

  A: Management continues to expand USDC's global reach and liquidity, particularly in emerging markets, and grow the base of institutional and enterprise use cases. Major new adopters like Meta and DoorDash reinforce USDC's network effects, drawing more users and use cases. The company is also building out new use cases on ARK (a stablecoin-native layer 1 blockchain) and the Circle Agent Stack for the fast-growing agentic economy, where USDC already captures 99.8% of X402 protocol transactions. Circle is also actively engaging with governments globally to establish clear, supportive stablecoin policy.

• Q: What is the mix of USDC usage between real economic activity vs speculative trading, and how is Circle shifting the mix?

  A: Third-party Visa commercial transaction data shows USDC holds ~60% of real commercial stablecoin transaction volume, with triple-digit year-over-year growth in this category. Internal data shows most new growth is driven by non-speculative use cases including B2B cross-border payments on CPN (which grew 75% quarter-over-quarter), corporate treasury management, 24/7 banking services, and enterprise payouts. Clear US regulation like the Genius Act and forthcoming Clarity Act will provide the legal certainty needed to further accelerate adoption by non-speculative users.

• Q: How will ARK token activity impact Circle's revenue, and is there tension between value accrual to ARK vs Circle shareholders?

  A: When ARK tokens are delivered to presale purchasers, the full value of the sale will be recognized as other revenue, since Circle carries the tokens at zero cost. Circle retains 25% of total ARK tokens, giving it direct long-term exposure to network growth. ARK is designed to drive a large flywheel effect for Circle's core stablecoin, payments, and digital asset businesses by providing a stablecoin-optimized infrastructure, so growth in ARK directly benefits existing Circle revenue streams. There is no inherent economic tension; all ARK growth is additive to Circle's business.

• Q: How does regulation of stablecoin rewards influence Circle's strategy, and will it push the company to more transaction-based revenue?

  A: The forthcoming Clarity Act allows stablecoin rewards only for real transaction-based utility, which aligns perfectly with Circle's strategy of growing USDC's network utility via transaction volume. This alignment is a tailwind for adoption, rather than a headwind. The Clarity Act also provides legal certainty for traditional financial institutions to use digital assets at scale, and codifies a clear framework for token incentive programs, which benefits ARK as well as USDC. Circle already operates USYC as a yield-bearing tokenized money market fund, and focuses on growing USDC's velocity and utility rather than idle holdings, which matches the regulatory framework.