Bernstein reiterates Outperform on Circle as Q2 earnings ease stablecoin competition concerns

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Bernstein Outperform on Circle Q2

Highlights

Circle reports Q2 2026 revenue of $701 million, up 7% year over year but 2% below consensus, with adjusted EBITDA of $143 million and EPS of $0.19 beating expectations.
Bernstein maintains Outperform and $140 price target, citing underappreciated prospects for new revenue streams from Arc blockchain, transaction fees, and partnerships amid stablecoin competition.
Circle's USDC circulation drops 5% sequentially to $73.3 billion but rises 19% year over year, with national trust bank approval and upcoming Arc mainnet launch strengthening diversification and adoption outlook.

Q2 earnings and Bernstein's investment case

As reported by The Block, citing Bernstein, the brokerage reiterated its Outperform rating and $140 price target on Circle after the company reported second-quarter earnings on Wednesday, describing the results as a counterargument to bearish views on the stock.

Circle posts Q2 2026 revenue of $701 million, up 7% year over year but about 2% below consensus estimates. Adjusted EBITDA reaches $143 million and basic earnings per share comes in at $0.19, both ahead of expectations, while reserve income represents roughly 95% of total revenue.

In a note to clients on Thursday, Bernstein analysts led by Gautam Chhugani say two main concerns continue to weigh on Circle shares, rising competition in stablecoins and the sustainability of reserve income in the current rate environment. The analysts argue those concerns underestimate USDC's long-term potential and Circle's strengths in distribution, liquidity and regulatory positioning.

New revenue streams and adoption outlook

Bernstein says investors may be overlooking future revenue from transaction fees, partnerships and the Arc blockchain. The firm points to developments during the quarter including Circle's national trust bank approval, growth in the Circle Payments Network and the planned Sept. 16 launch of the Arc public mainnet.

Arc is set to debut with founding validators including BlackRock, DTCC, Galaxy, Global Payments, ICE, Mastercard, MoneyGram, SBI Group, Standard Chartered, Sumitomo Corporation and Visa. The analysts add that prospective revenue from Arc staking, gas fees and partnership activity does not appear to be reflected in current forward estimates.

Circle ends the second quarter with $73.3 billion of USDC in circulation, down 5% from the previous quarter but up 19% from a year earlier. Bernstein says Circle's expansion beyond crypto trading into payments, tokenized real-world assets and broader financial infrastructure could support the next phase of USDC adoption.

Versant’s Q2 2026 earnings and guidance upgrade showed how investor focus often extends beyond headline beats to what management signals about the path ahead. Our earlier coverage also noted that markets can react sharply—especially in after-hours trading—when forward guidance, growth mix, or visibility shifts expectations, even if results look solid on the surface.

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