Key facts
- Circle reported Q2 FY26 net income of $48 million, exceeding expectations of $45.8 million.
- Earnings per share (EPS) were $0.18, surpassing the consensus estimate of $0.17.
- Revenue for the quarter was $701 million, slightly below the expected $717 million.
- Mizuho reiterated an 'Underperform' rating and a $45 price target for CRCL stock.
- Circle expects USDC circulation to grow at a 40% compound annual growth rate.
- The company raised its guidance for other revenue and RLDC margin.
Circle's stock (CRCL) experienced a pre-market decline, reversing an earlier rally, despite the company reporting second-quarter fiscal year 2026 net income and earnings per share that exceeded Wall Street estimates. The company announced net income of $48 million on EPS of $0.18, surpassing consensus figures of $45.8 million and $0.17, respectively. However, revenue for the quarter came in at $701 million, slightly below the anticipated $717 million.
Mizuho analysts maintained their 'Underperform' rating and $45 price target for CRCL stock, citing concerns over declining USDC in circulation and a 31% drop in on-chain transaction volumes quarter-over-quarter. The brokerage also noted a 329 basis point year-over-year decrease in adjusted EBITDA margin, suggesting these trends could overshadow the positive earnings surprise.
Despite the stock's retreat, Circle provided a more optimistic outlook for the full year. The company now forecasts USDC circulation to grow at a 40% compound annual growth rate and increased its guidance for other revenue to between $310 million and $330 million. Additionally, RLDC margin guidance was raised to 41.7%-43.7%. Circle also recently secured a limited-purpose trust charter from the NYDFS for its Circle Internet Trust Company LLC, establishing state-level oversight for USDC issuance.