Circle Internet Group (CRCL) First take In line results, and higher RLDC margin guide, although driven by one time Arc toke...

Equity Research 5 August 2026 | 7:36AM EDT

Circle Internet Group (CRCL): First take: In-line results, and higher RLDC margin guide, although driven by one-time Arc token sales

CRCL reported 2Q26 EPS of 18c, above Visible Alpha Consensus Data estimate of James Yaro | 17c1, and core EPS of 30c2, vs. GSe/consensus like estimates of 29c3, and adj. Goldman Sachs & Co. LLC EBITDA (ex. SBC) of $143mn vs. GSe/Street of $144mn/$142mn.4 Matthew Weng | Key takeaway: We expect a modestly positive response to results, given slightly Goldman Sachs & Co. LLC stronger net revenue and net revenue margins (which the company refers to as RLDC Divyam Harlalka margins), partially offset by lower gross reserve income, and higher expenses. In | addition, the company reiterated 2026 guidance for USDC in circulation through the Goldman Sachs India SPL cycle growth and 2026E adjusted operating expenses, and increased the 2026 RLDC Lokesh Kumar Sangewar | margin and other revenue guides. On the guidance upgrades, we expect questions, Goldman Sachs India SPL as this appears to be largely driven by one-time ARC token presale revenue. Excluding this, we look for clarity on whether and to what degree the core RLDC Thirukumaran R | margin guide changed, especially given the amended Hyperliquid partnership Goldman Sachs India SPL (report here), which we estimate to be RLDC margin-dilutive.

Summary of key quarterly trends: Net revenue came in 2%/1% above GSe/consensus, on 4% higher net reserve income, partially offset by 20% lower net other revenue (both vs. consensus). The higher net reserve income was driven by 4% lower distribution & transaction costs, resulting in a ~190bps higher net reserve margin vs. the Street. The company delivered a 49.7% adj. EBITDA margin, ~10bps lower than consensus.

Summary of guidance and vs. expectations: The company reiterated the following guidance: 1) a 40% CAGR USDC in circulation guidance through the medium term, vs. 26%/24% CAGR in GSe/consensus from 2025-27E; and 2) FY2026 adj. operating expenses of $570-585mn, 1%/2% higher than GSe/consensus at the midpoint. Further, the company increased two guides, driven by the inclusion of ARC token presale revenue: 1) FY26 other revenue of $310-330mn, vs. prior guidance of $150-170mn; and 2) a FY26 net revenue (RLDC) margin of 41.7%-43.7%, vs. prior guidance of 38-40%. CRCL disclosed $222mn of Arc pre-sale revenue in 1Q26 EPS,

1 Note: We calculate consensus EPS from consensus PnL components, vs. pulling consensus EPS estimate directly from data provider and assume consensus change in fair value of warrant liability equal to GSe. 2 Note: Adjusting for below the line items, FV gain on convertible debt, warrant liability, embedded derivatives, and UST, excluding SBC, and normalizing the tax rate. 3 Note: excluding SBC, normalizing for FV gain on convertible debt, warrant liability, embedded derivatives, and UST, normalizing tax rate 4 Note: We calculate consensus EPS from consensus PnL components, vs. pulling consensus EPS estimate directly from data provider and assume consensus change in fair value of warrant liability equal to GSe.

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Goldman Sachs Circle Internet Group (CRCL)

and an additional ~$21mn in June.

We look for further clarity on: 1) An update on the CLARITY act and impacts on the business, whether the bill were to pass or not; 2) We look for clarity on sizing the Arc pre-sale revenue impacts on 3Q-4Q26, and thus the change in core other revenue/RLDC margin guides; 3) Outlook for the Arc blockchain, after the company’s announcement on the morning of earnings that CRCL will launch the public mainnet on 9/16/26; 4) Outlook for USDC growth through 2H26 and…