Bernstein Backs Circle With $140 Target Despite Mixed Q2 Results

Circle reported $701 million in revenue for the second quarter, marking a 7% year-over-year increase but falling short of analyst expectations. Profitability metrics told a different story: adjusted EBITDA climbed 8% to $143 million, while earnings per share of $0.19 outperformed consensus. While reserve income still drives 95% of total revenue, the company is pivoting toward a broader financial infrastructure model.

USDC circulation stood at $73.3 billion, representing 19% annual growth despite a 5% sequential decline. Crucially, onchain transaction volume surged 151% to $14.8 trillion, signaling that network utility is decoupling from simple circulation figures. Bernstein analysts led by Gautam Chhugani noted that market participants currently undervalue Circle’s regulatory position, specifically its recent approval to establish a federal trust bank under the Office of the Comptroller of the Currency.

Revenue diversification hinges on the September 16 launch of the Arc public mainnet. With institutional validators including BlackRock, Mastercard, and Visa, the platform aims to generate income through gas fees and transaction revenue, reducing reliance on federal interest rates. While CRCL shares rose 3.18% to $65.29 on Thursday, the stock faces a technical hurdle at the $70 resistance level. Sustained recovery depends on management successfully executing the Arc rollout and reigniting steady USDC growth.