BloFin Research: Circle’s Q2, Arc Token Presale Lifts Guidance and Bridges the Crypto Downturn
In its Q2 earnings release, management raised guidance for both other revenue and RLDC margin, which surprised us. A closer look shows that the increase is driven by one-time Arc token presale revenue. This buys Circle time through the 2026 crypto bear market. If the crypto cycle bottoms in Q4 and on-chain activity recovers next year, USDC will be well positioned for the next crypto bull market.
- Q2 results were stable, while the increase in FY2026 guidance was driven primarily by Arc token presale revenue.
- Interest-rate and distribution-cost risks appear contained through year-end, while USDC circulation remains under pressure from the current crypto bear market.
- USDC is well positioned to benefit from the next recovery in crypto activity. Its concentration in trading, collateral, and DeFi makes circulation highly pro-cyclical and particularly responsive to a rebound in on-chain liquidity.
Circle reported $701 million in total revenue and reserve income, while adjusted EBITDA rose 8% year over year to $143 million. The more significant update came from guidance: FY2026 other revenue was raised to $310–330 million from $150–170 million, and the revenue less distribution costs (RLDC) margin outlook increased to 41.7–43.7% from 38–40%. The revisions point to stronger non-reserve monetization and better operating leverage than previously expected.
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