NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Description of business
Overview of the Business
We were founded in 2013, on the belief that we could connect the world more deeply by building a new global economic system on the foundation of the internet, and facilitate the creation of a world where everyone, everywhere can share value as easily as we can today share information, content, and communications.
We are building a full-stack internet financial platform business anchored by our stablecoin network, and organized around our reinforcing pillars — Arc and related developer infrastructure, Circle Digital Assets and related services, and Circle Applications.
These unaudited Condensed Consolidated Financial Statements include the accounts of Circle Internet Group, Inc. (“Circle Group”) and its subsidiaries in which we have a controlling financial interest (together, “Circle,” the “Company,” “we,” “us,” or “our”).
Initial Public Offering
In June 2025, the Company completed its initial public offering (“IPO”), in which the Company issued and sold 19.9 million shares of its Class A common stock, including the underwriters’ over-allotment option which was exercised in full, at a public offering price of $31.00 per share. The IPO resulted in net proceeds to the Company of $583.0 million after deducting the underwriting discounts and commissions and before deducting offering costs of $12.8 million, which were charged to additional paid-in capital as a reduction of the net proceeds received from the IPO. Certain selling stockholders offered an additional 19.2 million shares of our Class A common stock at the IPO price in a secondary offering, for which we received no proceeds.
In connection with the completion of the IPO, the Company filed its Amended and Restated Certificate of Incorporation, effective June 6, 2025 (the “Charter”), which authorizes a total of 2.5 billion shares of Class A common stock with a par value of $0.0001 per share, 500.0 million shares of Class B common stock with a par value of $0.0001 per share, 500.0 million shares of Class C common stock with a par value of $0.0001 per share and 500.0 million shares of preferred stock with a par value of $0.0001 per share. In connection with the IPO, all shares of our outstanding redeemable convertible preferred stock automatically converted into a total of 139.8 million shares of our Class A common stock, and a total of 19.6 million shares of Class A common stock held by our co-founders and certain entities controlled by our co-founders were converted into an equivalent number of shares of Class B common stock. As a result, following the completion of the IPO, we have three classes of authorized common stock: Class A common stock, Class B common stock, and Class C common stock, of which only Class A common stock and Class B common stock were outstanding as of June 30, 2026.
Certain of our restricted stock units granted to employees included both a service condition and a liquidity-event related performance condition. The performance condition related to these awards was met upon the commencement of trading of our Class A common stock on the New York Stock Exchange. As a result, during the three and six months ended June 30, 2025, the Company recognized $423.8 million of stock-based compensation expense, net of $62.7 million of capitalized costs related to internally developed software, for the vesting of approximately 9.5 million shares of Class A common stock, 4.0 million of which were withheld for tax withholding requirements.
Follow-on Public Offering
In August 2025, the Company completed a follow-on public offering of its Class A common stock, in which the Company issued and sold 3.5 million shares of its Class A common stock, including the underwriters’ over-allotment option which was exercised in full, at a public offering price of $130.00 per share. This resulted in net proceeds to the Company of $444.8 million after deducting the underwriting discounts and commissions and before deducting offering costs of $1.8 million, which were charged to additional paid-in capital as a reduction of the net proceeds received from the follow-on public offering. Certain selling stockholders offered an additional 8.0 million shares of our Class A common stock at the follow-on public offering price in a secondary offering, for which we received no proceeds.
2. Summary of significant accounting policies
Basis of Presentation and Principles of Consolidation
The accompanying unaudited Condensed Consolidated Financial Statements have been prepared in accordance with generally accepted accounting principles in the U.S. (“U.S. GAAP”) and the applicable rules and regulations of the United States Securities and Exchange Commission (“SEC”) regarding interim financial information. Certain information and disclosures normally included in the annual consolidated financial statements prepared in accordance with U.S. GAAP have been omitted. Accordingly, the unaudited Condensed Consolidated Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and related notes included in our Annual Report on Form 10-K for the year ended December 31, 2025, filed with the SEC on March 9, 2026.
There have been no changes to our significant accounting policies described in the audited Consolidated Financial Statements as of and for the year ended December 31, 2025 included in our Annual Report on Form 10-K that have had a material impact on our unaudited Condensed Consolidated Financial Statements and accompanying notes. The Company consolidates entities in which it has a controlling financial interest. All intercompany balances and transactions have been eliminated on consolidation.
Reclassifications
Certain prior period amounts have been reclassified in order to conform with the current period presentation. The impact of these reclassifications is immaterial to the presentation of the unaudited Condensed Consolidated Financial Statements taken as a whole and has no impact on previously reported total assets, total liabilities and net income.
Use of Estimates
The preparation of the Condensed Consolidated Financial Statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the Condensed Consolidated Financial Statements and disclosures in the accompanying notes.
Significant estimates that are particularly susceptible to significant change relate to the fair value of stock-based awards issued prior to the IPO, the fair value of convertible debt, the fair value of derivatives and embedded derivatives, the fair value of investments under measurement alternative, the assessment of the amount and likelihood of adverse outcomes from claims and disputes, the valuation of intangible assets acquired in business combinations, including goodwill and acquisition-date deferred taxes, contingent liabilities, and the recognition and measurement of current and deferred income taxes. The Company bases its estimates on historical experience and various other assumptions which we believe to be reasonable under the circumstances. These estimates may change as new events occur and additional information becomes available. Actual amounts or results could differ from these estimates and any such differences may be material to the financial statements. The unaudited Condensed Consolidated Financial Statements have been prepared on the same basis as the audited Consolidated Financial Statements, and in management’s opinion, reflect all adjustments, consisting only of normal, recurring adjustments, that are necessary for the fair presentation but are not necessarily indicative of the results expected for the full year or any other period.
Cash and Cash Equivalents
Cash and cash equivalents are cash and short-term, highly liquid investments with original maturities of three months or less at the date of purchase. The Company holds certain U.S. Treasury securities included in Cash and cash equivalents and accounts for them as financial assets under the fair value option pursuant to ASC 825, Financial Instruments, because the Company believes that measurement at fair value provides more useful information to financial statement users due to the short-term, highly liquid nature of the securities. As of June 30, 2026 and December 31, 2025, U.S. Treasury securities included in Cash and cash equivalents were $150.8 million and nil, respectively. Changes in the fair value of these U.S. Treasury securities are included in Other income (expense), net on the unaudited Condensed Consolidated Statements of Operations.
Assets Segregated for the Benefit of Stablecoin Holders
The Company segregates assets backing Circle stablecoins to satisfy its obligations under all applicable regulatory requirements and commercial laws and classifies these assets as current based on their purpose and availability to fulfill its direct obligation to customers. The Company holds only bare legal title in the accounts holding the reserve funds, and maintains no legal, equitable, financial or ownership interest over the reserves themselves held for the benefit of Circle stablecoin holders in such accounts. The Company’s eligible liquid assets were greater than the aggregate amount of custodial funds due to customers for the periods presented. Refer to Deposits from Stablecoin Holders in this note for further details.
Cash and cash equivalents segregated for the benefit of stablecoin holders and Cash and cash equivalents segregated for corporate-held stablecoins
Cash and cash equivalents segregated for the benefit of stablecoin holders and Cash and cash equivalents segregated for corporate-held stablecoins represent cash and cash equivalents maintained in segregated accounts that are held for the exclusive benefit of customers and stablecoin holders, including stablecoins held by the Company. The Company’s subsidiaries hold shares in the Circle Reserve Fund (the “Fund”), a money market fund managed by BlackRock Advisors, LLC. The securities purchased by the Fund are subject to the quality, diversification, and other requirements of Rule 2a-7 under the Investment Company Act of 1940, as amended. Shares of the Fund are only available for purchase by certain subsidiaries of the Company.
The Company accounts for the Fund as a financial asset under the fair value option pursuant to ASC 825, Financial Instruments, because the Company believes that measurement at fair value provides more useful information to financial statement users due to the short-term, highly liquid nature of the Fund. The shares of the Fund would otherwise be accounted for under the equity method pursuant to ASC 323, Equity Method and Joint Ventures, if the Company had not elected the fair value option. The Company measures fair value at the Fund’s net asset value per share. As of June 30, 2026 and December 31, 2025, balances held in the Fund included in Cash and cash equivalents segregated for the benefit of stablecoin holders were $61.9 billion and $66.3 billion, respectively, and the Fund has maintained a net asset value of $1.00 per share for all periods presented. In connection with the Fund, dividends receivable are included in Prepaid expenses and other current assets on the unaudited Condensed Consolidated Balance Sheets and dividend income is included in Reserve income on the unaudited Condensed Consolidated Statements of Operations.
Digital Assets
The Company receives, purchases, utilizes, and sells digital assets in the ordinary course of business and holds certain digital assets as investments. Digital assets are measured at fair value based on quoted market prices in active markets. If no quoted market price is available, digital assets are measured at fair value using a cost approach or other comparable approach. Changes in fair value of digital assets held in the ordinary course of business are recognized in Digital assets losses (gains) on the unaudited Condensed Consolidated Statements of Operations. Changes in fair value of digital assets held as investments are recognized in Other income (expense), net on the unaudited Condensed Consolidated Statements of Operations. Gains and losses upon sale of digital assets are measured as the difference between the cash proceeds and the carrying basis of the digital assets as determined on a first-in, first-out (“FIFO”) basis for each pool of digital assets. These realized gains and losses on digital assets held in the ordinary course of business are recorded to Digital assets losses (gains), and realized gains and losses on digital assets held as investments are recorded to Other income (expense), net.
Deposits from Stablecoin Holders
Funds received from customers from the issuance of Circle stablecoins represent claims which are reflected as a liability classified as Deposits from stablecoin holders on the unaudited Condensed Consolidated Balance Sheets. As a licensed money transmitter and regulated Electronic Money Institution, Circle is obligated to redeem all Circle stablecoins presented by Circle Mint customers on a one-for-one basis for U.S. dollars or euros, as applicable, except in limited circumstances, such as when prohibited by law or court order or instances where fraud is suspected. As such, the Company does not have an unconditional right to deny Circle stablecoin redemption requests from Circle Mint customers. With the exception of general stablecoin holders subject to specific regulatory requirements such as those in the European Union, the Company does not redeem Circle stablecoins from stablecoin holders who are not Circle Mint customers. However, Circle stablecoins are supported by numerous global digital asset exchanges and marketplaces, including neo-banks, brokerages, payment providers, remittance providers, superapps and commerce companies, and as such, Circle stablecoin holders could transact with Circle Mint customers, ultimately allowing the Circle stablecoins to be redeemed. Deposits from stablecoin holders do not include amounts associated with corporate-held stablecoins. Cash associated with such corporate-held stablecoins is presented as Cash and cash equivalents segregated for corporate-held stablecoins on the unaudited Condensed Consolidated Balance Sheets.
When the Company makes payments in the form of corporate-held stablecoins, the Company records an associated Deposits from stablecoin holders and records the cash associated with such stablecoins as Cash and cash equivalents segregated for the benefit of stablecoin holders. When such payments, in the form of corporate-held stablecoins, are for distribution, transaction and other costs or operating expenses incurred, the payments are presented on the unaudited Condensed Consolidated Statements of Cash Flows in the same manner as if such payments were settled in cash.
As of June 30, 2026 and December 31, 2025, the Company’s eligible liquid assets, which consist of cash and cash equivalents, were greater than the aggregate amount of custodial funds due to stablecoin holders.
Revenue Recognition
The Company determines revenue recognition from contracts with customers through the following steps:
•identification of the contract, or contracts, with the customer,
•identification of the performance obligations in the contract,
•determination of the transaction price,
•allocation of the transaction price to the performance obligations in the contract, and
•recognition of the revenue when, or as, the Company satisfies a performance obligation.
Revenue from contracts with customers is recognized when, or as, the Company satisfies its performance obligations by transferring promised goods or services to customers. A good or service is transferred to a customer when, or as, the customer obtains control of that good or service. A performance obligation may be satisfied over time or at a point in time. Revenue from a performance obligation satisfied at a point in time is recognized at the point in time that the Company determines the customer obtains control over the promised good or service. The amount of revenue recognized reflects the consideration to which the Company expects to be entitled in exchange for those promised goods or services.
The Company recognizes revenue from contracts with customers when, or as it satisfies its obligation to customers. Services include Subscription, Transaction and Other revenue. Reserve income, Treasury services income relating to Circle stablecoin lending services and Other interest income do not represent contracts with customers. Refer to Note 11 — Revenue Recognition for further details.
ARC Token Presale
During the three months ended June 30, 2026, the Company entered into token purchase agreements with certain institutional investors to sell ARC Tokens. Proceeds received from the ARC Token presale are recognized as deferred revenue until the Company's performance obligations under the token purchase agreements are satisfied. Upon satisfaction of the performance obligations, proceeds will be recognized as Other revenue on the unaudited Condensed Consolidated Statements of Operations because the sale and distribution of ARC Tokens are part of the Company's ongoing major or central operations. Refer to Note 11 — Revenue Recognition for further details.
Stock-Based Compensation
Until the date on which our IPO registration statement was declared effective by the SEC on June 4, 2025, the Company provided stock options and restricted stock units (“RSUs”) to its employees and board members under the 2024 Share Award Plan, as amended, which assumed the obligations under the 2013 Share Award Scheme. The Board and our stockholders approved and adopted the 2025 Omnibus Incentive Plan and 2025 Employee Stock Purchase Plan (“ESPP”) which became effective on June 4, 2025 concurrent with the effectiveness of our IPO registration statement. The 2025 Omnibus Incentive Plan provides for the granting of stock options including incentive stock options (“ISOs”), nonqualified stock options (“NSOs”), share appreciation rights (“SARs”), restricted stock, RSUs, performance awards, other cash-based awards and other share-based awards. The number of shares available for grant and issuance under the 2025 Omnibus Incentive Plan is automatically increased on the first day of each fiscal year of our Company following the effective date of the Plan by a number equal to the lesser of (i) 5% of the aggregate number of shares of all classes of our common stock outstanding on the last day of the immediately preceding fiscal year; and (ii) the number of shares determined by the Compensation Committee in its discretion. The number of shares available for grant and issuance under the ESPP is automatically increased on the first day of each fiscal year of our Company following the effective date of the Plan by a number equal to the lesser of (i) 1% of the aggregate number of shares of all classes of our common stock outstanding on the last day of the immediately preceding fiscal year; and (ii) the number of shares determined by the Board in its discretion and subject to a limit on the maximum number of shares of our Class A common stock that may be issued under the ESPP. Collectively, these plans are referred to as the “Award Plans”. The Award Plans are administered by the Board and, where delegated, its committees, who have the authority to grant and amend awards, adopt, amend, and repeal rules relating to the Award Plans and to interpret and correct the provisions of the Award Plans and any award. Pursuant to the Award Plans, the Board and, where delegated, its committees, select the individuals to whom options or RSUs are granted and determine the terms of each award, including (i) the number of shares of common stock subject to the award; (ii) conditions and limitations applicable to each award and the common stock issued, including vesting provisions; (iii) the option exercise price, which must be at least 100.0% of the fair market value of the common stock as of the date of grant; and (iv) the duration of the award, which may not exceed 10 years.
The Board and, where delegated, its committees, may also grant restricted stock awards entitling recipients to acquire shares of common stock subject to (i) delivery to Circle by the participant of cash or other lawful consideration in an amount at least equal to the par value of the stock purchased, and (ii) the right of Circle to repurchase all or part of such stock at their issue price in the event that conditions specified in the applicable award are not satisfied prior to the end of the applicable restriction period.
In certain circumstances, the Company also grants stock-based awards to non-employees in lieu or in reduction of cash compensation for their services. The stock-based awards granted to non-employees generally have the same terms as those granted to employees under the Award Plans and are administered by the Board and, where delegated, its committees, as set forth above. For stock-based awards granted to non-employees, compensation expense is recognized based on the grant date fair value of the awards over the vesting period as the goods or services are received.
The ESPP allows eligible employees the option to purchase shares of the Company's Class A common stock at a 15% discount, over a series of offering periods through accumulated payroll deductions over the period. The ESPP also includes a look-back provision for the purchase price if the stock price on the purchase date is higher than the stock price on the first day of the offering period. The grant date of the initial offering period is March 5, 2026 and will end on September 4, 2026. Subsequent offering periods will be six months in length, from September 5 to March 4 and from March 5 to September 4 each year.
The Company recognizes stock-based compensation expense, net of estimated forfeitures, using a fair-value based method for costs related to all equity awards issued under the equity incentive plans, including options and RSUs granted to employees, directors, and non-employees. Stock-based compensation expense is recognized and included in Compensation expenses on the unaudited Condensed Consolidated Statements of Operations.
The Company estimates the fair value of stock options and ESPP with only service-based conditions on the date of grant using the Black-Scholes-Merton (“Black-Scholes”) option-pricing model. The fair value of the stock option and ESPP shares is expensed over the related service period which is typically the vesting period and the straight-line method is used for expense attribution. The model requires management to make a number of assumptions, including the fair value of our underlying common stock for options granted prior to the IPO, expected volatility of our underlying common stock, expected term of the stock option, risk-free interest rate, and expected dividend yield. The expected term of the stock option and ESPP is based on the average period the stock option and ESPP is expected to remain outstanding based on the stock option’s and ESPP's vesting and contractual terms. The estimated forfeiture rate is based on accumulated historical forfeiture data. The Company evaluates the assumptions used to value stock awards quarterly.
Prior to the IPO, the RSUs vested upon the satisfaction of both a service condition and a liquidity condition. The fair value of RSUs is estimated based on the fair value of our common stock on the date of grant. Stock-based compensation expense related to the RSUs is recorded on a tranche-by-tranche basis over the requisite service period, when the liquidity condition is considered probable. The liquidity condition was satisfied upon the IPO, and the Company recognized expense for the portion of RSUs that had met the service condition as of such date.
The Company’s RSUs granted after the IPO vest upon the satisfaction of a service condition and do not have a corresponding liquidity condition. Expense related to these RSUs is recognized using the straight-line attribution method.
Recently Issued Accounting Pronouncements
In September 2025, the FASB issued Accounting Standards Update No. 2025-06, Targeted Improvements to the Accounting for Internal-Use Software (“ASU 2025-06”). ASU 2025-06 removes all references to software development project stages under the existing standard and states that an entity is required to start capitalizing software costs when (1) management has authorized and committed to fund the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended (the “probable-to-complete recognition threshold”). The new standard also states that an entity must assess whether significant development uncertainty exists in determining whether it has met the probable-to-complete recognition threshold. ASU 2025-06 is effective for the Company for its fiscal year beginning January 1, 2028 and for interim periods beginning in that year, with early adoption permitted. The guidance allows for prospective, retrospective, or modified prospective adoption. The Company is currently assessing ASU 2025-06 and its impact on its financial statements and disclosures.
In November 2024, the FASB issued Accounting Standards Update No. 2024-03, Disaggregation of Income Statement Expenses (“ASU 2024-03”). ASU 2024-03 is intended to provide users of financial statements with more decision-useful information about expenses of a public business entity, primarily through enhanced disclosures of certain components of expenses commonly presented within captions on the statement of operations, such as employee compensation and depreciation and amortization, as well as a qualitative description of the amounts remaining in relevant expense captions that are not separately disaggregated quantitatively. ASU 2024-03 also requires disclosure of the total amount of selling expenses. ASU 2024-03 is effective prospectively or retrospectively for the Company for its fiscal year beginning January 1, 2027 and for interim periods beginning January 1, 2028, with early adoption permitted. The Company is currently assessing ASU 2024-03 and its impact on its disclosures.
3. Acquisitions and divestitures
Hashnote Holdings LLC
In January 2025, the Company acquired 100% of the ownership interest in Hashnote Holdings LLC, a Delaware limited liability company (together with its subsidiaries, “Hashnote”), which, through its affiliates, is the fund manager of Hashnote International Short Duration Yield Fund Ltd. (“SDYF”), a tokenized money market fund and the issuer of USYC.
In accordance with ASC 805, Business Combinations, the acquisition was accounted for as a business combination under the acquisition method. The following table summarizes the allocation of the purchase consideration to the fair value of the assets acquired and liabilities assumed (in thousands):
| | | | | |
| Cash and cash equivalents | $ | 2,412 | |
| Accounts receivable, net | 193 | |
| Prepaid expenses and other current assets | 109 | |
| Fixed assets, net | 8 | |
| Digital assets | 104 | |
| Goodwill | 96,198 | |
| Intangible assets, net | 4,480 | |
| Accounts payable and accrued expenses | (655) | |
Other current liabilities | (2,383) | |
| Deferred tax liabilities, net | (401) | |
| Total purchase consideration | $ | 100,065 | |
The fair value of consideration transferred was approximately $100.1 million, subject to customary adjustments, consisting of $10.2 million in cash, including a purchase price adjustment of $0.3 million, and approximately 2.9 million shares of our Class A common stock. The intangible assets acquired consist of developed technology of $1.7 million and customer relationships of $2.8 million and were each assigned useful lives of two years. The fair value of the customer relationships were determined using the income approach, and the developed technology was determined using the cost approach. These valuations are considered Level 3 fair value measurements due to the use of unobservable inputs including projected timing and amounts of future revenues, cash flows, discount rates and current replacement costs. The excess of the purchase consideration over the fair value of net tangible and identifiable intangible assets acquired and liabilities assumed was recorded as goodwill and is attributable to Hashnote’s workforce and the synergies expected to arise from the acquisition. The Company does not expect goodwill to be deductible for income tax purposes.
The agreement also provided for the issuance of up to approximately 1.8 million additional shares of Class A common stock to certain Hashnote employees, which are subject to the satisfaction of vesting conditions and are accounted for as compensation expense over the requisite service period.
The Company also holds investments in certain funds managed by affiliates of Hashnote. These funds, including SDYF, are variable interest entities that are not consolidated by the Company due to the fact that we are not the primary beneficiary as we do not have an obligation to absorb losses or a right to receive benefits that could potentially be significant to each fund. The Company’s maximum exposure to loss associated with each fund is limited to its insignificant investment and its obligations to perform services as the manager of each fund. The Company provides no guarantees and has no other financial obligations to each of the funds.
Circle SBI Japan K.K.
In November 2025, Circle and SBI Holdings, Inc., (“SBI”), a third-party, each contributed Japanese Yen worth approximately $1.5 million to Circle SBI Japan K.K. (“Circle Japan”), an entity established to provide support in the distribution of USDC in Japan. The Company owns a 50% interest in Circle Japan and controls the variable interest entity as it has the power to direct the activities that most significantly affect the entity and it has the obligation to absorb losses and the right to receive benefits that could be significant to the entity. Therefore, the Company consolidates the assets and liabilities, which primarily consist of cash. There have been no significant operating results to date. SBI's equity interest and its attribution of net income and losses in Circle Japan are presented as noncontrolling interest on the unaudited Condensed Consolidated Balance Sheets and unaudited Condensed Consolidated Statements of Operations. Noncontrolling interests are adjusted for the proportionate share of additional contributions and distributions, earnings or losses, and other comprehensive income or loss.
Malachite
In August 2025, the Company acquired Malachite, a core software component that enables blockchain networks to automatically reach agreement on the validity of transactions, from Informal Systems Inc. for total consideration of $15.0 million consisting of $3.0 million in cash and $12.0 million of shares of Class A common stock. The shares of Class A common stock will primarily be paid in three installments over a period of two years and based on the average closing price of the Company’s shares over a period of 20 trading days prior to each payment. Each payment will also be subject to certain customary adjustments. The obligation to deliver a variable number of shares for a predominantly fixed monetary amount represents a liability, and upon closing of the acquisition the Company recorded $7.8 million and $4.2 million to Other current liabilities and Other non-current liabilities, respectively, of which $2.4 million was paid as of June 30, 2026. The acquisition was accounted for as an asset acquisition, and substantially all of the fair value of the net assets acquired was attributable to intangible assets which are amortized over a period of two years from the time they were placed in service.
4. Leases
The Company leases facilities under non-cancelable operating leases. In addition to fixed monthly lease payments, the Company is required to pay operating expenses and real estate taxes for certain of these facilities.
The components of lease cost were as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | |
Table 4.1. Lease Cost |
| Three months ended June 30, | | Six months ended June 30, |
| 2026 | | 2025 | | 2026 | | 2025 | | |
| Operating lease cost | $ | 843 | | | $ | 834 | | | $ | 1,673 | | | $ | 1,672 | | | |
| Short-term lease cost | $ | 113 | | | $ | 165 | | | $ | 337 | | | $ | 332 | | | |
Supplemental balance sheet information related to leases is as follows (in thousands):
| | | | | | | | | | | |
Table 4.2. Details of Lease Right-of-use Assets and Liabilities |
| June 30, 2026 | | December 31, 2025 |
Operating lease right-of-use assets | $ | 15,162 | | | $ | 14,127 | |
| | | |
| Operating lease liabilities - current | 3,722 | | | 2,686 | |
| Operating lease liabilities - non-current | 12,229 | | | 11,978 | |
| Total operating lease liabilities | $ | 15,951 | | | $ | 14,664 | |
Operating lease liabilities are included in Other current liabilities and Other non-current liabilities on the unaudited Condensed Consolidated Balance Sheets, while operating lease right-of-use assets are included in Other non-current assets on the unaudited Condensed Consolidated Balance Sheets.
Weighted-average lease terms and discount rates are as follows:
| | | | | | | | | | | |
Table 4.3. Weighted-average Lease Terms and Discount Rates |
| June 30, 2026 | | December 31, 2025 |
Weighted-average remaining lease term | 6.4 years | | 7.4 years |
| Weighted-average discount rates | 12.7 | % | | 13.4 | % |
Maturities of lease liabilities under operating leases are as follows (in thousands):
| | | | | |
Table 4.4. Maturities of Lease Liabilities |
| Years ending December 31, |
| 2026 (remaining 6 months) | $ | 2,188 | |
| 2027 | 4,190 | |
| 2028 | 3,132 | |
| 2029 | 3,058 | |
| 2030 | 3,119 | |
| Thereafter | 8,825 | |
| Total lease payments | 24,512 | |
Less: imputed interest | 8,561 | |
| |
| Total lease liabilities | $ | 15,951 | |
5. Intangible assets, net
Intangible assets, net
The useful life of the Company’s finite-lived acquired intangible assets is as follows:
| | | | | | | | | | | | | | |
Table 5.1. Acquired Intangible Assets Useful Life | | | | |
| Acquired intangible assets | | Useful life (years) at acquisition |
| Developed technology | | 2 | ~ | 6 |
| Customer relationships | | 2 | | |
| Regulatory licenses | | 5 | | |
Patents and trade name | | 2 | ~ | 17 |
Intangible assets consists of the following (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Table 5.2. Details of Intangible Assets, net |
| As of June 30, 2026 | | Gross
carrying
amount | | Accumulated
amortization | | Intangible
assets, net | | Weighted
average
remaining
useful
life (in years) |
Amortizing intangible assets | | | | | | | | |
| Internally developed software | | $ | 339,210 | | | $ | (210,867) | | | $ | 128,343 | | | 1.3 |
Acquired intangible assets | | 68,309 | | | (16,905) | | | 51,404 | | | 6.6 |
Total amortizing intangible assets | | $ | 407,519 | | | $ | (227,772) | | | $ | 179,747 | | | |
Indefinite-lived intangible assets | | | | | | | | |
Acquired intangible assets | | 266,830 | | | — | | | 266,830 | | | |
| Total intangible assets, net | | $ | 674,349 | | | $ | (227,772) | | | $ | 446,577 | | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| As of December 31, 2025 | | Gross
carrying
amount | | Accumulated
amortization | | Intangible
assets, net | | Weighted
average
remaining
useful
life (in years) |
| Amortizing intangible assets | | | | | | | | |
| Internally developed software | | $ | 279,472 | | | $ | (161,666) | | | $ | 117,806 | | | 1.5 |
Acquired intangible assets | | 38,109 | | | (11,599) | | | 26,510 | | | 3.0 |
Total amortizing intangible assets | | $ | 317,581 | | | $ | (173,265) | | | $ | 144,316 | | | |
Indefinite-lived intangible assets | | | | | | | | |
Acquired intangible assets | | 266,830 | | | — | | | 266,830 | | | |
| Total intangible assets, net | | $ | 584,411 | | | $ | (173,265) | | | $ | 411,146 | | | |
| | | | | | | | |
During the three months ended June 30, 2026, the Company acquired blockchain technology in the form of patents for total consideration of $20.0 million. This resulted in the recognition of acquired intangible assets which are to be amortized over a period of 13 years.
Acquired intangible assets include certain technology that enhances cross-chain interoperability which was acquired from Interop Labs Inc. and Rapidx Labs, Inc. in January 2026 for total consideration of $10.0 million. The acquisition was accounted for as an asset acquisition, resulting in the recognition of intangible assets which are amortized over a period of two years.
Amortization expense of intangible assets, which is included within Depreciation and amortization expense on the unaudited Condensed Consolidated Statements of Operations, consists of the following (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 5.3. Details of Amortization Expense of Intangible Assets | | |
| | | Three months ended June 30, | | Six months ended June 30, |
| | | 2026 | | 2025 | | 2026 | | 2025 | | |
| Internally developed software | | | $ | 25,683 | | | $ | 12,288 | | | $ | 49,345 | | | $ | 24,404 | | | |
| Acquired intangible assets | | | 3,196 | | | 1,334 | | | 5,306 | | | 2,684 | | | |
Total amortization expense of intangible assets | | | $ | 28,879 | | | $ | 13,622 | | | $ | 54,651 | | | $ | 27,088 | | | |
The expected future amortization expense for intangible assets is as follows (in thousands):
| | | | | |
Table 5.4. Future Amortization Expense of Intangible Assets |
| Years ending December 31, |
| 2026 (remaining 6 months) | $ | 61,462 | |
| 2027 | 84,382 | |
| 2028 | 16,197 | |
| 2029 | 1,663 | |
| 2030 | 1,663 | |
| Thereafter | 14,380 | |
| Total amortization expense | $ | 179,747 | |
6. Fixed assets, net
The following table presents our major categories of fixed assets, net (in thousands):
| | | | | | | | | | | |
Table 6.1. Details of Fixed Assets, net |
| June 30, 2026 | | December 31, 2025 |
Computers & equipment | $ | 6,987 | | | $ | 5,815 | |
Leasehold improvements | 20,288 | | | 20,102 | |
| | | |
Other | 4,125 | | | 4,113 | |
| Total fixed assets | 31,400 | | | 30,030 | |
Less: accumulated depreciation | (9,223) | | | (7,239) | |
| Total fixed assets, net | $ | 22,177 | | | $ | 22,791 | |
Depreciation expense was $1.0 million and $0.6 million for the three months ended June 30, 2026 and 2025, respectively, and $2.0 million and $1.0 million for the six months ended June 30, 2026 and 2025, respectively, which is included within Depreciation and amortization expense on the unaudited Condensed Consolidated Statements of Operations.
7. Digital assets
The composition of digital assets included the following (in thousands, except quantity):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Table 7.1. Details of Digital Assets |
| | June 30, 2026 | | December 31, 2025 |
| | Quantity | | Cost Basis | | Fair Value | | Quantity | | Cost Basis | | Fair Value |
| Canton Coin | | 384,446,370 | | $ | 18,788 | | | $ | 54,306 | | | 367,760,063 | | $ | 13,612 | | | $ | 56,028 | |
| Hyperliquid | | 501,459 | | 22,557 | | | 32,548 | | | 81,437 | | 4,578 | | | 2,072 | |
Bitcoin(1) | | 76 | | 2,497 | | | 4,481 | | | 73 | | 2,255 | | | 6,409 | |
| Sui | | 4,086,013 | | 8,888 | | | 2,821 | | | 3,838,405 | | 8,599 | | | 5,385 | |
| Ether | | 1,718 | | 4,398 | | 2,700 | | 1,747 | | 4,529 | | | 5,188 | |
Other digital assets(2) | | n.m. | | 27,569 | | | 9,683 | | | n.m. | | 22,302 | | | 11,433 | |
| Total digital assets | | | | $ | 84,697 | | | $ | 106,539 | | | | | $ | 55,875 | | | $ | 86,515 | |
(1) Includes Circle-wrapped Bitcoin (“cirBTC”) as of June 30, 2026.
(2) Includes other digital asset balances, none of which individually represented more than 10% of the fair value of the total digital assets.
n.m.= not meaningful
As of June 30, 2026, there are certain digital assets with a total fair value of $1.6 million subject to various time-based contractual sale restrictions ranging from July 2026 until May 2030.
Digital assets losses (gains) consists of the following (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Table 7.2. Digital assets losses (gains) | | |
| | | Three months ended June 30, | | Six months ended June 30, |
| | | 2026 | | 2025 | | 2026 | | 2025 | | |
| (Gains) losses on disposals of digital assets | | | $ | 79 | | | $ | (7) | | | $ | 79 | | | $ | (30) | | | |
| | | | | | | | | | | |
| | | | | | | | | | | |
| Unrealized (gains) losses on changes in fair value of digital assets | | | (777) | | | (686) | | | 79 | | | 5,607 | | | |
| | | | | | | | | | | |
| Total | | | $ | (698) | | | $ | (693) | | | $ | 158 | | | $ | 5,577 | | | |
Refer to Note 12 for gains and losses on digital assets held for investments.
8. Investments
Strategic investments
The Company holds strategic investments in privately held companies as a part of the Company’s strategy to build partnerships across the digital asset ecosystem. The Company also receives certain equity instruments as consideration for services. The Company does not have the ability to exercise significant influence over operating and financial policies of these investments. The carrying amount of these investments was $103.8 million and $84.3 million as of June 30, 2026 and December 31, 2025, respectively, which are included in Investments on the unaudited Condensed Consolidated Balance Sheets. The Company primarily records these investments at cost adjusted to fair value upon observable transactions for identical or similar investments of the same issuer or upon impairment, referred to as the measurement alternative.
The Company’s investments carried under the measurement alternative are recorded at fair value on a non-recurring basis in periods after initial recognition. Investments carried at fair value under the measurement alternative are classified within Level 3 of the fair value hierarchy due to the absence of quoted market prices, the inherent lack of liquidity and unobservable inputs used to measure fair value that require management’s judgment. Any subsequent changes in value of these investments will be included as a part of Other income (expense), net on the unaudited Condensed Consolidated Statements of Operations.
The changes in the carrying value of equity investments carried under the measurement alternative along with investments in limited partnerships and certain forward contracts to purchase a specified quantity of equity shares in private companies are presented below (in thousands):
| | | | | |
Table 8.1. Changes in the Carrying Value of Equity Investments under Measurement Alternative |
| Balance as of December 31, 2025 | $ | 78,508 | |
| Net investments and returns in privately held companies | 13,301 | |
| Upward adjustments | 8,126 | |
| Downward adjustments | (1,621) | |
Realized gains (losses) and impairments | (258) | |
Balance as of June 30, 2026(1) | $ | 98,056 | |
(1) Excludes $5.7 million of strategic investments not accounted for under the measurement alternative as of June 30, 2026.
| | | | | |
| Balance as of December 31, 2024 | $ | 68,229 | |
Net investments and returns in privately held companies | 9,674 | |
| Upward adjustments | 1,511 | |
Downward adjustments | (3,156) | |
Realized gains (losses) and impairments | (217) | |
Balance as of June 30, 2025(1) | $ | 76,041 | |
(1) Excludes $7.8 million of strategic investments not accounted for under the measurement alternative as of June 30, 2025.
9. Derivatives and embedded derivatives
The Company enters into certain strategic investments in the form of forward contracts to purchase a specified quantity of digital assets. Certain of these contracts are accounted for as derivatives or investments with embedded derivatives, and we account for these derivatives and embedded derivatives within Investments on the unaudited Condensed Consolidated Balance Sheets. The derivatives and bifurcated embedded derivatives are marked to market through Other income (expense), net on the unaudited Condensed Consolidated Statements of Operations. Embedded derivatives are presented together with the respective host contract on the unaudited Condensed Consolidated Balance Sheets.
The Company enters into certain agreements with customers to receive digital assets as non-cash consideration for services. These arrangements are hybrid instruments, consisting of a receivable host instrument with an embedded derivative based on the changes in the fair value of the underlying digital asset until receipt. Such feature is bifurcated and marked to market through Other income (expense), net on the unaudited Condensed Consolidated Statements of Operations. Embedded derivatives are presented together with the respective host contract within Accounts receivable, net on the unaudited Condensed Consolidated Balance Sheets.
The fair value of the Company’s derivatives and embedded derivatives are as follows (in thousands):
| | | | | | | | | | | | | | |
Table 9.1. Fair Value of Derivative and Embedded Derivative Assets and Liabilities |
| | June 30, 2026 | | December 31, 2025 |
| Investments - embedded derivatives | | $ | 174 | | | $ | 899 | |
| Investments - derivatives | | $ | 448 | | | $ | 473 | |
Accounts receivable, net - embedded derivatives | | $ | 17,476 | | | $ | 19,942 | |
| | | | |
| | | | |
The following table summarizes notional amounts related to derivatives and embedded derivatives (in thousands):
| | | | | | | | | | | | | | |
Table 9.2. Notional Amounts of Derivative and Embedded Derivative Assets and Liabilities |
| | June 30, 2026 | | December 31, 2025 |
| Investments - embedded derivatives | | $ | 3,393 | | | $ | 1,153 | |
| Investments - derivatives | | $ | 494 | | | $ | 582 | |
Accounts receivable, net - embedded derivatives | | $ | 6,700 | | | $ | 4,000 | |
Gains (losses) on derivatives and embedded derivatives included in Other income (expense), net on the unaudited Condensed Consolidated Statements of Operations are as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | |
Table 9.3. Gains (losses) on Derivatives and Embedded Derivatives |
| | Three months ended June 30, | | Six months ended June 30, |
| 2026 | | 2025 | | 2026 | | 2025 |
| | | | | | | | |
| Investments - derivatives and embedded derivatives | | $ | 256 | | | $ | 1,209 | | | $ | (161) | | | $ | (4,131) | |
| Accounts receivable, net - embedded derivatives | | $ | (2,836) | | | $ | (408) | | | $ | (3,997) | | | $ | (1,384) | |
10. Fair value measurements
Recurring fair value measurements
The following table sets forth by level, within the fair value hierarchy, the Company’s assets and liabilities measured and recorded at fair value on a recurring basis. The carrying amounts of certain financial instruments, including cash, accounts receivable, prepaid expenses and other current assets, and accounts payable and accrued expenses approximate their fair values due to their short-term nature.
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Table 10.1. Fair Value Hierarchy |
| (in thousands) | June 30, 2026 | | December 31, 2025 |
| Level 1 | | Level 2 | | Level 3 | | Level 1 | | Level 2 | | Level 3 |
Assets | | | | | | | | | | | |
Cash equivalents(1) | $ | 63,402,001 | | | $ | — | | | $ | — | | | $ | 67,483,506 | | | $ | — | | | $ | — | |
| Digital assets | 106,539 | | | — | | | — | | | 86,515 | | | — | | | — | |
Digital financial assets | 1,363 | | | — | | | — | | | 542 | | | — | | | — | |
Investments - derivatives and embedded derivatives(2)(3) | — | | | 622 | | | — | | | — | | | 1,372 | | | — | |
Accounts receivable, net - embedded derivatives(4) | — | | | 17,476 | | | — | | | — | | | 19,942 | | | — | |
| Total assets | $ | 63,509,903 | | | $ | 18,098 | | | $ | — | | | $ | 67,570,563 | | | $ | 21,314 | | | $ | — | |
Liabilities | | | | | | | | | | | |
| Convertible debt, net of debt discount | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 36,821 | |
| | | | | | | | | | | |
| Total liabilities | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | — | | | $ | 36,821 | |
(1) Included $61.9 billion and $66.3 billion of Circle Reserve Fund as of June 30, 2026 and December 31, 2025, respectively, and $150.8 million and nil of U.S. Treasury securities as of June 30, 2026 and December 31, 2025, respectively.
(2) The fair value measurement is based on the quoted market price of the underlying digital asset.
(3) Excluded the host contract balance of $3.4 million and $1.2 million as of June 30, 2026 and December 31, 2025, respectively.
(4) Excluded the host contract balance of $6.7 million and $4.0 million as of June 30, 2026 and December 31, 2025, respectively.
During the year ended December 31, 2025, $4.6 million of digital assets related to blockchain rewards revenue which were classified as Level 3 within the fair value hierarchy due to the absence of quoted market prices, inherent lack of liquidity, and reliance on unobservable inputs, were transferred from Level 3 to Level 1 when the digital assets were listed on centralized exchanges and quoted prices in active markets became available.
Convertible debt, net of debt discount
On March 1, 2019, the Company issued a convertible note in connection with an acquisition. The note had an original par value of $24.0 million, a 2.9% interest rate, and matured on March 1, 2026. The note was convertible into Series E preferred stock prior to the IPO, and is convertible into Class A common stock after the IPO. In October 2025, certain holders of the Company’s convertible notes converted their principal and accrued interest balance of $11.0 million into approximately 675 thousand shares of Class A common stock at a conversion rate of $16.23 per share. In January 2026, the remaining holders of the Company’s convertible notes converted their principal and accrued interest balance of $7.5 million into approximately 465 thousand shares of Class A common stock at a conversion rate of $16.23 per share. The fair value of the notes converted in January 2026 was approximately $39.4 million, substantially all of which was recorded to additional paid-in capital upon conversion. The Company elected the fair value option for recording this note. We measured the fair value of our convertible debt using the probability weighted “as converted” model. The change in fair value of the note is recorded in Other income (expense), net on the unaudited Condensed Consolidated Statements of Operations. The changes in carrying value of convertible debt, net of debt discount are reflected in the following tables (in thousands):
| | | | | |
Table 10.3. Changes in Carrying Value of Convertible Debt |
| Balance as of December 31, 2025 | $ | 36,821 | |
| Net discount on convertible notes | — | |
| Capitalized interest | — | |
| Fair value adjustment | 2,558 | |
| Fair value adjustment – credit risk | — | |
Conversion of convertible notes | (39,379) | |
| Balance as of June 30, 2026 | $ | — | |
| | | | | |
| Balance as of December 31, 2024 | $ | 40,717 | |
| Net discount on convertible notes | 420 | |
| Capitalized interest | 334 | |
| Fair value adjustment | 164,591 | |
| Fair value adjustment – credit risk | 78 | |
| Balance as of June 30, 2025 | $ | 206,140 | |
The following significant unobservable inputs were used in the valuation:
| | | | | | | | | | | |
Table 10.4. Significant Unobservable Inputs |
| June 30, 2026 | | December 31, 2025 |
| Discount rate | — | % | | 8.0 | % |
| Volatility | — | % | | 44.8 | % |
| Risk-free rate | — | % | | 3.7 | % |
Nonrecurring fair value measurements
Non-financial assets and investments accounted for under the measurement alternative are measured at fair value on a nonrecurring basis. Certain investments accounted for under the measurement alternative were impaired or adjusted for observable price changes in orderly transactions involving the same or similar investment. Refer to Note 8 for further details. These fair value measurements are based on Level 3 inputs, predominantly projected cash flows from the underlying investments and an applicable discount rate used in an income approach.
11. Revenue recognition
Disaggregation of Revenue
The following table summarizes the disaggregation of revenue by major product and service (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Table 11.1. Revenue by Product and Service |
| | Three months ended June 30, | | Six months ended June 30, |
| | 2026 | | 2025 | | 2026 | | 2025 | | |
Reserve income | | $ | 667,733 | | | $ | 634,274 | | | $ | 1,320,241 | | | $ | 1,192,185 | | | |
| Other revenue | | | | | | | | | | |
| Subscription and services | | 28,156 | | | 17,784 | | | 63,017 | | | 36,495 | | | |
| Transaction revenue | | 5,330 | | | 5,825 | | | 12,060 | | | 7,451 | | | |
| Other | | 96 | | | 195 | | | 130 | | | 520 | | | |
| | | | | | | | | | |
| Total other revenue | | 33,582 | | | 23,804 | | | 75,207 | | | 44,466 | | | |
Total revenue and reserve income | | $ | 701,315 | | | $ | 658,078 | | | $ | 1,395,448 | | | $ | 1,236,651 | | | |
Reserve income
All Circle stablecoins issued and outstanding are fully backed by equivalent amounts of fiat currency denominated assets held in segregated reserve accounts. The Company earns interest and dividends on assets held in reserve accounts, which include cash balances held at banks and investments in the Circle Reserve Fund. Interest income is recognized under the effective interest method, and dividend income from the Circle Reserve Fund is recognized on the declaration date.
Other revenue
Other revenue generally consists of revenues generated from services that increase the utility of Circle Digital Assets and related transactions. The components of other revenue primarily include revenues from subscription and services, transaction revenues, and other revenues.
Subscription and services consist of customer agreements where recurring revenue is generated from integration and maintenance services, fund management, time-based access, and user-based licensing. Payment for services received at the inception of the customer agreements in the form of digital assets is measured at fair value at the contract inception. Revenues from subscription contracts and maintenance services are recognized over time as the services are delivered. Revenues from integration services contracts which have specific performance obligations are recognized at the point in time when delivery of the services are completed and accepted by the customer. The Company receives fees associated with the management of USYC in the form of performance fees. Performance fees represent variable consideration and are recognized as revenue when the Company is entitled to such fees and significant reversals of such fees are not probable.
Transaction revenue is generated from usage-based, volume-based, or event-driven transactions. This includes fees associated with the redemption of Circle stablecoins and USYC, blockchain rewards revenue and use of Circle infrastructure in facilitating digital asset transactions (including CCTP). Transaction revenue contracts constitute a series of distinct processing services that the Company stands ready to provide to the customers over the contract period and services performed for participation in blockchain networks. The transaction price for these services is variable based on the number or volume of transactions processed, and consideration is allocated to the distinct service that forms part of its single performance obligation to provide such services. Revenue is recognized at the point in time as the performance obligation is met. The Company incurs expenses to assist in fulfilling obligations to process transactions. The Company acts as the principal in providing services to customers and, therefore, recognizes associated revenue and expenses on a gross basis.
Other revenue is primarily generated from fees associated with certain non-recurring services and discontinued legacy products. Such customer contracts typically have one performance obligation and revenue is recognized at the point in time the services are provided.
Deferred Revenue
Deferred revenue represents consideration received that is yet to be recognized as revenue. The changes in our deferred revenue are reflected in the following table (in thousands):
| | | | | |
Table 11.2. Changes in Deferred Revenue |
| Balance at December 31, 2025 | $ | 11,512 | |
Deferred revenue billed in the current period, net of recognition | 243,281 | |
| Revenue recognized that was included in the beginning period | (8,590) | |
| Balance at June 30, 2026 | $ | 246,203 | |
| | | | | |
| Balance at December 31, 2024 | $ | 13,390 | |
Deferred revenue billed in the current period, net of recognition | 10,413 | |
| Revenue recognized that was included in the beginning period | (15,296) | |
| Balance at June 30, 2025 | $ | 8,507 | |
| |
During the three months ended June 30, 2026, we entered into token purchase agreements with certain institutional investors pursuant to which we agreed to issue and sell to such purchasers an aggregate of 807.5 million ARC Tokens. The ARC Tokens were offered and sold at a purchase price of $0.30 per token and resulting in aggregate gross proceeds to us of approximately $242.2 million, of which $222.0 million was received during the three months ended June 30, 2026. The aggregate gross proceeds were recognized as deferred revenue within Other Current Liabilities and any gross proceeds not yet received as of June 30, 2026 were recognized within Accounts Receivable, net on the unaudited Condensed Consolidated Balance Sheet as of June 30, 2026.
On May 8, 2026, as part of the ARC Token presale, we entered into a token purchase agreement with an entity affiliated with IDG Capital, a beneficial holder of more than 5% of our capital stock, pursuant to which we agreed to issue and sell to such entity, an aggregate of 83.3 million ARC Tokens for a purchase price of $0.30 per token or $25.0 million in the aggregate. The amount of the token purchase by IDG Capital is included in, and not in addition to, the amounts noted in the preceding paragraph.
12. Other income (expense), net
The following table presents our major categories of Other income (expense), net (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Table 12.1 Other income (expense), net |
| | Three months ended June 30, | | Six months ended June 30, |
| | 2026 | | 2025 | | 2026 | | 2025 | | |
| Realized and unrealized gains (losses), net, on digital assets held for investment, other related investments, and strategic investments | | $ | 3,702 | | | $ | 5,738 | | | $ | 377 | | | $ | (2,524) | | | |
Impairment losses on strategic investments | | (115) | | | (506) | | | (366) | | | (506) | | | |
| Interest income on corporate balances | | 14,517 | | | 9,952 | | | 28,226 | | | 17,917 | | | |
| Changes in fair value of convertible debt, warrant liability, embedded derivatives and U.S Treasury securities | | (1,876) | | | (167,724) | | | (5,984) | | | (170,106) | | | |
Interest expense, net of amortization of discounts and premiums | | (64) | | | (344) | | | (102) | | | (679) | | | |
| Foreign currency exchange gains (losses) | | 1,475 | | | (8,067) | | | 6,596 | | | (8,605) | | | |
| Other, net | | 308 | | | 530 | | | 883 | | | 979 | | | |
Total other income (expense), net | | $ | 17,947 | | | $ | (160,421) | | | $ | 29,630 | | | $ | (163,524) | | | |
13. Income taxes
For the three months ended June 30, 2026 and 2025, the Company recorded consolidated income tax expense from continuing operations of $4.1 million and income tax benefit of $3.9 million, respectively, which represent effective tax rates of 7.8% and 0.8%, respectively.
For the six months ended June 30, 2026 and 2025, the Company recorded consolidated income tax expense from continuing operations of $5.5 million and $21.1 million, respectively, which represent effective tax rates of 5.1% and (5.3)%, respectively.
The Company’s income tax expense and effective tax rate can fluctuate period to period based on the levels of net income before income taxes, the mix of profits earned in various tax jurisdictions with differing statutory tax rates, the magnitude of non-deductible items and tax credits, changes in valuation allowances, and the impact of discrete items.
The income tax expense for the three and six months ended June 30, 2026 primarily consisted of income tax expense in non-U.S. jurisdictions, as federal and state net operating loss carryforwards and stock-based compensation deductions reduced U.S. taxable income. Income tax expense for the six months ended June 30, 2026 also included discrete tax expense items recognized in the first quarter of 2026, including certain prior-period tax adjustments. The Company continues to maintain a valuation allowance against certain U.S. deferred tax assets.
14. Debt
Convertible debt, net of debt discount
In March 2019, the Company issued a convertible promissory note in connection with an acquisition. Pursuant to the note agreement, the Company agrees to pay the holders the principal amount together with any interest on the unpaid principal balance for the note beginning on the date of the agreement. The note had an original principal amount of $24.0 million and was convertible into Series E preferred stock subject to the conversion provisions in the agreement. Subsequent to the IPO, the note is convertible into Class A common stock at a conversion rate of $16.23. The note matured on March 1, 2026, unless earlier converted, and has an annual interest rate of 2.9% due annually in arrears on the last day of each calendar year. The Company has elected the fair value option for recording its convertible notes on the unaudited Condensed Consolidated Balance Sheets, which are recorded at a net discount on acquisition date. The amortization of the debt discount and change in fair value of the convertible notes are included in Other income (expense), net on the unaudited Condensed Consolidated Statements of Operations.
In October 2025, certain holders of the Company’s convertible notes converted their principal and accrued interest balance of $11.0 million into approximately 675 thousand shares of Class A common stock at a conversion rate of $16.23 per share. The fair value of the notes converted in October 2025 was approximately $88.8 million, substantially all of which was recorded to additional paid-in capital upon conversion.
In January 2026, the remaining holders of the Company’s convertible notes converted their principal and accrued interest balance of $7.5 million into approximately 465 thousand shares of Class A common stock at a conversion rate of $16.23 per share. The fair value of the notes converted in January 2026 was approximately $39.4 million, substantially all of which was recorded to additional paid-in capital upon conversion.
The fair value of outstanding convertible notes was nil and $36.8 million as of June 30, 2026 and December 31, 2025, respectively, and are reflected as Convertible debt, net of debt discount on the unaudited Condensed Consolidated Balance Sheets.
15. Stockholders’ equity
Common Stock
In June 2025, the Company completed its IPO, in which the Company issued and sold 19.9 million shares of its Class A common stock, including the underwriters’ over-allotment option which was exercised in full, at a public offering price of $31.00 per share.
In August 2025, the Company completed a follow-on public offering of its Class A common stock, in which the Company issued and sold 3.5 million shares of its Class A common stock, including the underwriters’ over-allotment option which was exercised in full, at a public offering price of $130.00 per share.
The Charter authorizes a total of 2.5 billion shares of Class A common stock with a par value of $0.0001 per share, 500.0 million shares of Class B common stock with a par value of $0.0001 per share, 500.0 million shares of Class C common stock with a par value of $0.0001 per share and 500.0 million shares of preferred stock with a par value of $0.0001 per share. In connection with the IPO, all shares of our outstanding redeemable convertible preferred stock automatically converted into a total of 139.8 million shares of our Class A common stock, and a total of 19.6 million shares of Class A common stock held by our co-founders and certain entities controlled by our co-founders were converted into an equivalent number of shares of Class B common stock. As a result, following the completion of the IPO, we have three classes of authorized common stock: Class A common stock, Class B common stock, and Class C common stock, of which only Class A common stock and Class B common stock were outstanding as of June 30, 2026.
Class B common stock is convertible into Class A common stock on a one-for-one basis at the option of the holder. In addition, Class B common stock will automatically convert into Class A common stock on a one-for-one basis upon any transfer, except for permitted transfers described in our Charter, and in certain other circumstances. Class C common stock is convertible into Class A common stock on a one-for-one basis in connection with certain assignments and transfers.
The holders of Circle’s Class A common stock are entitled to one vote for each share of common stock held. The holders of Circle’s Class B common stock are entitled to five votes for each share of common stock held (but the aggregate voting power of Class B common stock cannot exceed 30% of the total voting power of our capital stock). The holders of Circle’s Class C common stock are not entitled to vote except to the extent set forth in our Charter or as required by applicable law. The voting, dividend and liquidation rights of the holders of our common stock are subject to and qualified by the rights, powers, and preferences of the holders of the Preferred Stock as detailed in the Charter.
Stock Plans
As of June 30, 2026, there were 21.8 million shares of Class A common stock and Class B common stock subject to issued and outstanding stock options and RSUs under the stock award plans, 0.8 million shares of Class A common stock which have been issued in connection with business combinations and remain subject to continued vesting, and 0.3 million shares of Class A common stock issuable in connection with business combinations. In addition, under the stock award plans and the ESPP, there were 37.5 million shares and 8.1 million shares, respectively, of Class A common stock available for future issuance.
Warrants
In April 2023, the Company entered into an agreement with a commercial counterparty to grant warrants to purchase up to 4.5 million common shares of a consolidated subsidiary that will be automatically converted one-for-one into shares of Class A common stock upon exercise. The warrants have an exercise price of $42.14 per share and an exercise period of ten years from the grant date. The warrants are subject to certain service conditions to be achieved over a two-year period and performance conditions to be achieved over a five-year period. The fair value of the warrants, approximately $80.1 million, was measured at the time of issuance using the Black-Scholes option pricing model using the following assumptions: the Company’s estimated common share price on the grant date, a term of ten years, a dividend yield of zero, volatility of 44%, and a risk-free rate of 3.45%. The warrants will be expensed as the service conditions are achieved or over the requisite service period if and when the achievement of the performance conditions are probable. There were no marketing expenses or distribution and transaction costs related to the warrants for the three and six months ended June 30, 2026 and 2025. As of June 30, 2026, 3.4 million of these warrants have expired, and none of the common shares associated with the remaining warrants have been exercised or forfeited.
In August 2023, the Company entered into an agreement with a digital asset exchange to grant warrants to purchase up to 3.6 million common shares of a consolidated subsidiary that will be automatically converted one-for-one into shares of Class A common stock upon exercise. The warrants have an exercise price of $25.09 per share. They expire five years from the grant date and the vesting of the warrants is subject to a performance condition. The fair value of the warrants, approximately $43.9 million, was measured at the time of issuance using the Black-Scholes option pricing model using the following assumptions: the Company’s estimated common share price on the grant date, a term of five years, a dividend yield of zero, volatility of 51%, and a risk-free rate of 4.38%. The warrants will be expensed over the requisite service period if and when the achievement of the performance condition is probable. There were no marketing expenses or distribution and transaction costs related to the warrants for the three and six months ended June 30, 2026 and 2025. As of June 30, 2026, the performance condition had not been met, and none of the common shares associated with these warrants have been exercised, forfeited, or expired.
In December 2024, the Company entered into an agreement with a commercial counterparty which included the issuance of warrants to purchase up to approximately 2.9 million shares of Class A common stock. The warrants vest based upon the achievement of certain performance conditions to be achieved within a three-year period for the benefit of the Company. The warrants have an exercise price of $22.71 per share and an exercise period of six years from the grant date. The fair value of the warrants, approximately $56.1 million, was measured at the time of issuance using the Black-Scholes option pricing model using the following assumptions: the Company’s estimated common share price on the grant date, a term of six years, a dividend yield of zero, volatility of 53%, and a risk-free rate of 4.43%. The warrants are expensed as the service conditions are achieved or over the requisite service period if and when the achievement of the performance conditions are probable. During the three months ended June 30, 2026 and 2025, there was $4.5 million and $4.6 million in distribution and transaction costs related to the warrants, respectively, and during the six months ended June 30, 2026 and 2025, there was $9.2 million and $5.6 million in distribution and transaction costs related to the warrants, respectively. As of June 30, 2026, 1.0 million of these warrants have vested, and the counterparty elected to exercise 0.3 million and 1.0 million of the warrants during the three and six months ended June 30, 2026, respectively, resulting in the net issuance of approximately 0.2 million and 0.7 million shares of Class A common stock during the three and six months ended June 30, 2026, respectively. As of June 30, 2026, none of the common shares associated with these warrants have been forfeited or expired.
Donations to Circle Foundation
In March 2025, the Company’s board of directors approved the reservation of up to 2,682,392 shares of Class A common stock, which represented approximately 1% of our capital stock on the date it was approved by our board of directors. The shares may be issued to or for the benefit of the Circle Foundation, a donor-advised fund, in installments over 10 years.
During the three and six months ended June 30, 2026, the Company re-issued 67,060 and 134,120 shares of Treasury stock, respectively, reserved for the benefit of the Circle Foundation. As a result of this equity contribution, the Company recorded a charge of $5.4 million and $13.1 million for the three and six months ended June 30, 2026, respectively, to General and administrative expenses on the unaudited Condensed Consolidated Statements of Operations.
16. Redeemable convertible preferred stock
In connection with the IPO, all outstanding shares of redeemable convertible preferred stock were converted into shares of our Class A common stock on a one-to-one basis and their carrying value of $1.1 billion was reclassified into stockholders’ equity. As such, there were no shares of redeemable convertible preferred stock issued and outstanding following the completion of the Company's IPO in June 2025.
17. Stock-based compensation
Stock-based compensation expense was $53.6 million and $435.0 million for the three months ended June 30, 2026 and 2025, respectively, and $105.4 million and $447.7 million for the six months ended June 30, 2026 and 2025, respectively. The capitalized stock-based compensation expense related to internally developed software was $13.8 million and $65.6 million for the three months ended June 30, 2026 and 2025, and $23.2 million and $68.3 million for the six months ended June 30, 2026 and 2025, respectively.
Stock options
Granted stock options generally have vesting periods ranging from 12 months to 48 months, and expire 10 years after the initial grant date.
A summary of outstanding stock options activities for the six months ended June 30, 2026 and 2025 is presented below:
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| Table 17.1. Summary of Outstanding Stock Options Activities |
| | Number of Stock
Options (in thousands) | | Weighted
Average
Exercise
Price | | Weighted
Average
Remaining
Contractual
Term (in years) | | Aggregate
Intrinsic Value
(in thousands) |
| Balance as of December 31, 2025 | 13,450 | | $ | 11.36 | | | 4.2 | | $ | 919,115 | |
| | | | | | | | |
| Options exercised | (6,249) | | 6.66 | | | | | |
| | | | | | | | |
| Balance as of June 30, 2026 | 7,201 | | $ | 15.43 | | | 5.0 | | $ | 346,981 | |
| Exercisable at June 30, 2026 | 6,754 | | $ | 13.35 | | | 4.8 | | $ | 334,180 | |
| | | | | | | | | | | | | | | | | | | | | | | | | | |
| | Number of Stock
Options (in thousands) | | Weighted
Average
Exercise
Price | | Weighted
Average
Remaining
Contractual
Term (in years) | | Aggregate
Intrinsic Value
(in thousands) |
| Balance as of December 31, 2024 | 22,751 | | $ | 8.48 | | | 5.5 | | $ | 522,900 | |
| | | | | | | | |
| Options exercised | (1,955) | | 3.48 | | | | | |
| Options forfeited | (93) | | 20.62 | | | | | |
| Balance as of June 30, 2025 | 20,703 | | $ | 8.90 | | | 4.6 | | $ | 3,568,967 | |
| Exercisable at June 30, 2025 | 19,630 | | $ | 7.84 | | | 4.5 | | $ | 3,404,931 | |
As of June 30, 2026, unrecognized stock-based compensation cost net of estimated forfeitures related to outstanding unvested stock options that are expected to vest was $8.3 million, which is expected to be recognized over a weighted-average period of 2.4 years.
Restricted stock units (RSUs)
Prior to the IPO, RSUs granted under the award plan generally vested upon the satisfaction of both a service condition and a liquidity-event related performance condition. Both the service and liquidity-event related performance conditions needed to be met for the expense to be recognized. RSUs granted after the IPO generally vest solely based on the satisfaction of a service condition. We record stock-based compensation expense for service-based RSUs on a straight-line basis over the requisite service period, which is generally the vesting period.
Prior to the IPO, we had not recognized stock-based compensation expense related to certain RSU awards as the qualifying liquidity-event related performance condition had not yet occurred and was not considered probable of occurring. As the performance condition related to these awards was met upon commencement of trading of the Company's Class A common stock on the NYSE, the Company recognized stock-based compensation expense of $423.8 million, net of $62.7 million of capitalized costs related to internally developed software, associated with the vesting of RSUs for which the service-based condition had also been met. Stock-based compensation expense related to remaining service-based awards after the IPO is recorded over the remaining requisite service period.
A summary of RSUs activities for the six months ended June 30, 2026 and 2025 is as follows:
| | | | | | | | | | | |
Table 17.2. Summary of Restricted Stock Units Activities |
| Number of
Shares (in thousands) | | Weighted-
Average
Grant Date
Fair Value |
| Balance as of December 31, 2025 | 14,711 | | | $ | 35.16 | |
| RSUs granted | 5,213 | | | $ | 71.71 | |
| RSUs vested | (4,636) | | | $ | 34.67 | |
| RSUs forfeited | (653) | | | $ | 40.09 | |
Balance as of June 30, 2026 | 14,635 | | $ | 48.12 | |
| | | | | | | | | | | |
| Number of
Shares (in thousands) | | Weighted-
Average
Grant Date
Fair Value |
| Balance as of December 31, 2024 | 19,943 | | | $ | 30.85 | |
| RSUs granted | 7,129 | | | $ | 31.13 | |
| RSUs vested | (9,543) | | | $ | 33.37 | |
| RSUs forfeited | (714) | | | $ | 29.67 | |
| Balance as of June 30, 2025 | 16,815 | | $ | 29.58 | |
As of June 30, 2026, unrecognized stock-based compensation cost net of estimated forfeitures related to outstanding unvested RSUs that are expected to vest was $408.7 million, which is expected to be recognized over a weighted-average period of 3.2 years.
Shares issued for business combinations
The Company has issued the following common shares for the purchase of common shares subject to forfeiture based on certain service conditions in connection with its acquisitions. These shares were issued to the employees of the acquired businesses and are valued based on the fair value of the Company’s common shares at the acquisition date. The Company records stock-based compensation expenses over the requisite service period, with an increase to additional paid-in capital. The shares issued for business combinations are subject to forfeiture based on service conditions through various dates over a four-year period from their respective acquisition dates.
| | | | | | | | | | | |
Table 17.3. Summary of Shares Issued for Business Combinations Activities |
| Number of
Shares (in thousands) | | Weighted-
Average
Grant Date
Fair Value |
| Balance as of December 31, 2025 | 1,744 | | | $ | 33.75 | |
| | | |
Shares vested | (650) | | | $ | 31.16 | |
| | | |
Balance as of June 30, 2026 | 1,094 | | $ | 35.28 | |
| | | | | | | | | | | |
| Number of
Shares (in thousands) | | Weighted-
Average
Grant Date
Fair Value |
| Balance as of December 31, 2024 | 548 | | | $ | 47.82 | |
Shares issued | 1,473 | | | $ | 31.16 | |
Shares forfeited | (6) | | | $ | 47.82 | |
| Balance as of June 30, 2025 | 2,015 | | $ | 35.64 | |
As of June 30, 2026 unrecognized stock-based compensation cost net of estimated forfeitures related to outstanding unvested shares and warrants issued for business combinations that are expected to vest was $25.8 million, which is expected to be recognized over a weighted-average period of 1.5 years.
ESPP
The Company's ESPP became effective on June 4, 2025, with the grant date of the initial offering period beginning on March 5, 2026. Refer to Note 2 for additional details regarding the Company's ESPP.
As of June 30, 2026, $4.5 million has been withheld on behalf of employees for future purchases under the ESPP due to the timing of payroll deductions. As of June 30, 2026, there was approximately $0.8 million of unrecognized stock-based compensation cost net of estimated forfeitures related to the ESPP, which is expected to be recognized over a remaining period of 0.2 years.
The Company estimated the fair value of ESPP purchase rights using a Black-Scholes option-pricing model. The weighted average assumptions utilized in the valuation of ESPP purchase rights are presented below:
| | | | | |
Table 17.4. ESPP Valuation Assumptions |
| June 30, |
| 2026 |
| Risk-free interest rate | 3.65 | % |
| Expected term (years) | 0.5 |
| Expected volatility | 49.33 | % |
| Expected annual dividend | — | |
18. Earnings (loss) per share
The computation of earnings (loss) per share attributable to common stockholders is as follows (in thousands, except per share amounts):
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
Table 18.1. Earnings (loss) per share |
| | Three months ended June 30, | | Six months ended June 30, | |
| 2026 | | 2025 | | 2026 | | 2025 | |
Net income (loss) from continuing operations | | $ | 48,214 | | | $ | (482,100) | | | $ | 103,460 | | | $ | (417,309) | | |
| Less: Net loss attributable to noncontrolling interests | | (7) | | | — | | | (14) | | | — | | |
Net income (loss) attributable to common stockholders | | $ | 48,221 | | | $ | (482,100) | | | $ | 103,474 | | | $ | (417,309) | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Net income (loss) available to common stockholders - basic and diluted | | $ | 48,221 | | | $ | (482,100) | | | $ | 103,474 | | | $ | (417,309) | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Weighted-average common shares – basic | | 248,183 | | | 107,514 | | | 246,122 | | | 82,877 | | |
Add: Weighted-average effect of dilutive securities | | 20,454 | | | — | | | 21,818 | | | — | | |
| Weighted-average common shares – diluted | | 268,637 | | | 107,514 | | | 267,940 | | | 82,877 | | |
| | | | | | | | | |
| Earnings (loss) per common share attributable to common stockholders: | | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Basic | | $ | 0.19 | | | $ | (4.48) | | | $ | 0.42 | | | $ | (5.04) | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
Diluted | | $ | 0.18 | | | $ | (4.48) | | | $ | 0.39 | | | $ | (5.04) | | |
The outstanding securities that were excluded from the computation of diluted earnings (loss) per share attributable to common stockholders for the periods presented because including them would have been antidilutive are as follows (in thousands):
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Table 18.2. Potentially Dilutive Securities | | |
| | | Three Months Ended June 30, | | Six months ended June 30, | | |
| | | 2026 | | 2025 | | 2026 | | 2025 | | |
| | | | | | | | | | | |
| Stock options and RSUs | | | 766 | | | 37,518 | | | 765 | | | 37,518 | | | |
| Common stock in connection with business combinations | | | — | | | 2,103 | | | — | | | 2,103 | | | |
Convertible debt, net of debt discount | | | — | | | 1,125 | | | — | | | 1,125 | | | |
| | | | | | | | | | | |
| Total | | | 766 | | | 40,746 | | | 765 | | | 40,746 | | | |
| | | | | | | | | | | |
19. Accumulated other comprehensive income
Following is a summary of the changes in each component of accumulated other comprehensive income (in thousands):
| | | | | | | | | | | | | | | | |
Table 19.1. Accumulated Other Comprehensive Income |
| | Three Months Ended June 30, |
| | 2026 | | 2025 | | |
| | | | | | |
| Beginning balance | | $ | 8,367 | | | $ | 5,369 | | | |
| Pre-tax change – Foreign currency translation adjustment | | (1,945) | | | 9,984 | | | |
Pre-tax change – Unrealized (loss) gain on convertible notes – credit risk adjustment | | — | | | 13 | | | |
| | | | | | |
| Tax effect | | — | | | — | | | |
| Total accumulated other comprehensive income including noncontrolling interest, net of tax | | 6,422 | | | 15,366 | | | |
| Pre tax change - Foreign currency translation adjustment attributable to noncontrolling interest | | 27 | | | — | | | |
| Total accumulated other comprehensive income attributable to common stockholders, net of tax | | $ | 6,449 | | | $ | 15,366 | | | |
| | | | | | | | | | | | | | | | |
Table 19.2. Accumulated Other Comprehensive Income |
| | Six Months Ended June 30, |
| | 2026 | | 2025 | | |
| | | | | | |
| Beginning balance | | $ | 14,515 | | | $ | 3,644 | | | |
| Pre-tax change – Foreign currency translation adjustment | | (8,117) | | | 11,793 | | | |
| Pre-tax change – Unrealized (loss) gain on convertible notes – credit risk adjustment | | — | | | (78) | | | |
| | | | | | |
| Tax effect | | — | | | 7 | | | |
| Total accumulated other comprehensive income including noncontrolling interest, net of tax | | 6,398 | | | 15,366 | | | |
| Pre tax change - Foreign currency translation adjustment attributable to noncontrolling interest | | 51 | | | — | | | |
| Total accumulated other comprehensive income attributable to common stockholders, net of tax | | $ | 6,449 | | | $ | 15,366 | | | |
20. Prepaid expenses and other current assets
Prepaid expenses and other current assets include the following (in thousands):
| | | | | | | | | | | |
| Table 20.1 Details of Prepaid Expenses and Other Current Assets |
| June 30, 2026 | | December 31, 2025 |
| Reserve income receivable | $ | 193,581 | | | $ | 219,221 | |
| Prepaid expenses | 28,497 | | | 24,243 | |
| | | |
| Digital financial assets | 1,363 | | | 542 | |
| Income tax receivable | 51,828 | | | 65,060 | |
| Other | 8,309 | | | 12,594 | |
| Total prepaid expenses and other current assets | $ | 283,578 | | | $ | 321,660 | |
21. Accounts payable and accrued expenses
Accounts payable and accrued expenses include the following (in thousands):
| | | | | | | | | | | |
Table 21.1 Details of Accounts Payable and Accrued Expenses |
| June 30, 2026 | | December 31, 2025 |
| Accrued distribution costs | $ | 105,799 | | | $ | 119,038 | |
Stablecoin redemptions in transit | 149,016 | | | 80,593 | |
| Accrued expenses | 116,209 | | | 114,272 | |
Accounts payable | 23,399 | | | 24,733 | |
| Income taxes payable | 3,499 | | | 1,632 | |
| Other payables | 20,666 | | | 20,341 | |
| Total accounts payable and accrued expenses | $ | 418,588 | | | $ | 360,609 | |
22. Commitments and contingencies
Legal matters
The Company is subject to various litigation, regulatory investigations, and other legal proceedings that arise in the ordinary course of its business. The Company is also subject to regulatory oversight by numerous regulatory and other governmental agencies. The Company reviews its lawsuits, regulatory investigations, and other legal proceedings on an ongoing basis and provides disclosure and records loss contingencies for such matters when potential losses become probable and can be reasonably estimated. If the Company determines that a loss is reasonably possible and the loss or range of loss can be estimated, the Company discloses the possible loss on the unaudited Condensed Consolidated Financial Statements.
The Company is in a dispute with a financial advisor regarding advisory fees related to two engagement letters between the parties. In 2022, the Company’s Board of Directors passed resolutions terminating the engagement letters. The financial advisor has subsequently asserted that the terminations of the engagement letters are ineffective and has demanded fees and interest for various transactions. The Company believes it has properly and effectively terminated the engagement letters with the financial advisor, and strenuously disputes the financial advisor’s demand for any fees in connection with the transactions, which have all been conducted without the financial advisor’s assistance. On May 28, 2024, the financial advisor filed a lawsuit regarding the dispute, now pending in the U.S. District Court for the Southern District of New York. The operative complaint alleges, among other things, that the terminations of both engagement letters are ineffective and demands, among other relief, fees and interest for various transactions that occurred after termination of the engagement letters, including the Company’s IPO and follow-on public offering. The Company does not believe that the outcome of the dispute at this point can be reasonably quantified or estimated.
Commitments and other contingencies
Current tax rules related to stablecoins require significant judgments to be made in interpretation of the law, including but not limited to the withholding tax, income tax and information reporting. Additional guidance may be issued by U.S. and non-U.S. governing bodies that may significantly differ from the Company’s interpretation of the law, which could have unforeseen effects on our financial condition and results of operations, and as a result, the related impact on our financial condition and results of operations is not estimable but could be material.
23. Subsequent events
On July 9, 2026, the Company received final approval from the U.S. Office of the Comptroller of the Currency (“OCC”) to establish First National Digital Currency Bank, N.A., a national trust bank that will operate under the name Circle National Trust. Circle National Trust opened on July 24, 2026 and is subject to direct federal oversight by the OCC. At opening, Circle National Trust offers fiduciary digital asset custody services to the Company and its affiliates.
On July 31, 2026, the Company received a limited purpose trust charter from the New York Department of Financial Services to establish Circle Internet Trust Company LLC, a New York trust company.