What Drove the Post-Earnings Rally?
Shares of Circle Internet Group climbed roughly 30% on Wednesday to around $80, extending pre-market gains after the company reported stronger-than-expected fourth-quarter results and outlined multi-year growth targets for USDC.
Circle posted $770 million in fourth-quarter revenue and reserve income, up 77% year-over-year. The company also guided to a 40% compound annual growth rate in USDC circulation over the coming years, reinforcing expectations that stablecoin supply expansion remains central to its earnings trajectory.
Adjusted EBITDA reached $167 million, topping estimates from William Blair by 12%. The results pushed shares sharply higher, with the stock trading near $79.41 at publication time, according to market data.
Why Analysts Are Turning More Constructive
William Blair reiterated its “outperform” rating following the results and said investors “should be long” Circle, citing improving margins and a higher mix of USDC held directly on Circle’s platform.
Analysts Andrew Jeffrey and Adib Choudhury highlighted a fourth-quarter revenue-less-distribution-cost margin above 40%, 240 basis points higher than their model. That metric, which strips out payments to distribution partners, is similar to gross profit and reflects operating leverage as more USDC remains on-platform. Direct USDC held on Circle’s platform now accounts for nearly 18% of average circulation.
At current levels, shares trade at roughly 17x William Blair’s 2027 EBITDA estimate, representing an 8% premium to fintech peers. The multiple suggests investors are beginning to price in sustained margin expansion rather than viewing the business purely through a crypto-cycle lens.
Investor Takeaway
How Fast Is USDC Usage Growing?
Speaking on CNBC’s Squawk Box, CEO Jeremy Allaire said USDC now accounts for “about 50%” of stablecoin transaction volume measured by Visa, up from just over one-third in the prior quarter.
He added that onchain USDC transaction volume rose more than 250% year-over-year to roughly $12 trillion during the quarter, underscoring accelerating usage beyond simple issuance growth.
The transaction data reinforces Circle’s argument that stablecoin adoption is increasingly tied to payments and financial infrastructure rather than purely to crypto trading activity. Allaire said stablecoin utility is becoming less correlated with bitcoin price swings and more connected to commerce and settlement flows.
What Does Competition Mean for Valuation?
Competition in the stablecoin market is intensifying, including initiatives from major banks and fintech firms. Even so, Allaire framed stablecoins as infrastructure businesses where scale and network effects tend to concentrate activity among a limited number of providers.
The 40% USDC circulation growth target implies continued expansion in reserves and interest income, key drivers of revenue in the current rate environment. However, the durability of those economics remains sensitive to interest rate direction and regulatory developments affecting stablecoin issuance.
For now, the market reaction suggests investors are focusing on execution and margin structure rather than macro risk. The combination of accelerating transaction volume, higher on-platform mix, and upward earnings revisions provided enough evidence to trigger a sharp repricing.
