Circle Revenue Misses Estimates Despite Record-Breaking USDC Transactions

Circle, the issuer of the popular stablecoin USDC, reported strong growth in on-chain transaction volume for Q2. Despite reaching $14.8 trillion in transactions, a 151% increase year-over-year, the company's revenue fell short of Wall Street estimates.

The main reason for this discrepancy was lower reserve yields, which limited the income generated from reserves backing the stablecoin to just 5%. As a result, total revenue and reserve income increased by only 7% to $701 million, below analysts' consensus estimate of $717.5 million.

Circle's efforts to diversify its business beyond interest earned on USDC reserves may help mitigate this issue in the future. The company reported revenue growth from payments, subscriptions, and blockchain infrastructure at 41%, reaching $34 million, as well as a significant expansion of the Circle Payments Network, which reached an annualised transaction volume of $14.7 billion.