Circle stock surges on earnings as USDC growth accelerates

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•  25 Feb 2026
 

•   CRCL  
   
  +4.60%

$CRCL Circle rallied nearly 30% after delivering a material earnings inflection, yet the equity remains more than 70% below its post-IPO peak of $263.45, creating a widening divergence between operating momentum and longer-term price damage. The market is being forced to reassess whether Circle is a crypto proxy or a rate-levered financial infrastructure platform with embedded duration sensitivity.

Fourth-quarter revenue reached $770 million, up 77% year over year, with adjusted EPS of $0.43 versus expectations of $0.16–$0.35. Net income from continuing operations expanded to $133 million from $4.4 million a year ago, while adjusted EBITDA surged 412% to $167 million. The key variable is scale: USDC in circulation rose 72% to $75.3 billion, reinforcing the operating leverage embedded in the reserve income model. On-chain transaction volume grew 247% year over year to $11.9 trillion, suggesting usage elasticity that is decoupling from speculative crypto beta.

For sophisticated traders, the critical issue is not the headline beat but the sensitivity matrix. Circle core revenue stream remains structurally tied to short-duration yield on reserves and the notional base of USDC. In a stable-to-easing rate environment, duration compression becomes the principal risk. However, the company reiterated a 40% multi-year CAGR target for USDC supply and guided to 2026 adjusted operating expenses of $570–$585 million with a 38%–40% margin profile, signaling cost discipline as scale improves. The other revenue line, projected at $150–$170 million in 2026 versus $37 million last quarter, indicates early diversification away from pure float income.

Despite full-year 2025 revenue of $2.7 billion, GAAP optics remain distorted by $424 million in stock-based compensation tied to the IPO, producing a reported net loss of $70 million. Institutional desks will normalize this. The relevant question is whether Circle should trade on earnings power through-the-cycle or on cyclical crypto sentiment. The stock collapse coincided with nearly a 50% drawdown in BTC from its October high, but stablecoins serve a distinct function: liquidity parking, settlement rail, and collateral unit. If volatility persists, conversion flows into USDC can expand balances even as speculative tokens retrace.

Technically, a 30% gap higher after prolonged compression often marks either the beginning of a re-rating phase or a liquidity-driven short-covering rally into overhead supply. Given the magnitude of the post-IPO decline, trapped long positioning likely sits materially above current levels, implying supply friction on further advances. The setup becomes asymmetric only if USDC supply growth and margin stability persist through a softer rate regime, validating the decoupling thesis management is signaling.

Smart money will focus less on crypto headlines and more on reserve yield durability, regulatory clarity in the U.S., and institutional adoption velocity. If USDC continues scaling while expense growth moderates, Circle transitions from narrative volatility to earnings multiple debate. The stock is no longer pricing peak optimism; it is pricing structural skepticism. That gap is where timing and risk/reward now reside.

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