Circle Internet Group, Inc.

Ladies and gentlemen, thank you for standing by. My name is Krista, and I will be your conference operator today. At this time, I would like to welcome you to the Circle Group, Circle Internet Group Third Quarter 2025 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question at that time, Simply press star followed by the number one on your telephone keypad. And if you'd like to withdraw that question, again, press star one. Thank you. I would now like to turn the conference over to John Andrews, Vice President of Capital Markets and Investor Relations. John, you may begin.

Thank you, Operator, and good morning. I'd like to welcome you to Circle's third quarter 2025 earnings call. I'm joined by Jeremy Allaire, our co-founder, chief executive officer and chairman, and Jeremy Foxkeen, our chief financial officer. Earlier this morning, we posted our earnings press release and earnings presentation on the Circle Investor Relations website, investor.circle.com. The transcript of this call will be posted on that website once available. I do need to remind everyone that our earnings press release, presentation, and this call contain statements that are forward-looking. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur, and actual results could differ materially from those projected in the forward-looking statements. information concerning risks, uncertainties, and other factors that could cause these results to differ as included in RSEC filings. We will also disclose non-GAAP financial measures on this call today. Definitions of those non-GAAP financial measures and reconciliations to the most comparable GAAP financial measures can be found in the earnings press release and earnings presentation, which are posted on CIRCLE's investor relations website, investor.circle.com. Non-GAAP financial measures should be considered in addition to, not as a substitute for GAAP measures. Now, I'd like to turn the call over to Jeremy Allaire.

Thank you, John. I'm excited to talk with all of you today about our quarterly results and general outlook. But before I do, I want to talk about our broader vision for what is taking place in this market, a vision of an internet financial system that guides what we're building towards at Circle. Our vision from the beginning has been that a new set of open Internet infrastructure and open software infrastructure would collide with the global financial system and ultimately transform it. We are moving more and more towards that world and realizing that vision. What we are seeing emerge is the opportunity to build a full-stack Internet financial platform company with several platform layers. The first layer, blockchain networks, are becoming foundational operating systems for economic activity on the Internet, what we call economic OSs for the Internet. These infrastructure layers will be part of migrating coordination, governance, value storage, financial contracts, and other forms of economic intermediation into a software-powered and agentic economic system. This is an enormous platform and infrastructure opportunity. that we believe is even larger than any past internet platform technology. On top of these economic OS's is the second platform layer of digital assets. This includes stable coins, internet native digital assets based on protocols and applications, and broader tokenization, including the tokenization of traditional assets and many other types of economic contracts. All of these digital assets will be built on the first layer of blockchain networks, the economic OSs for the internet. This digital asset layer is fundamental to how economic value will be stored, transformed, transmitted, and exchanged all around the world. On top of the blockchain and digital asset layers is the third layer, new application utilities that are built for the internet economy. Application utilities for payments, commerce, treasury management, capital formation, lending, governance, and many other applications that are fundamental to economic activity. Full-stack internet financial platforms are emerging, and Circle intends to be the leader in this space. With that backdrop, I want to discuss our latest results and our progress in expanding our platform and building towards the vision that I just described. We saw very strong growth in our network. USDC in circulation grew 108% year-over-year to 73.7 billion. This is tremendous growth, and we're very proud that our growth also represents continued market share expansion. Moreover, the amount of on-chain transactions using USDC grew 580% year-over-year to $9.6 trillion in Q3. underscoring the inherent and increasing velocity and efficiency of using USDC as a medium of exchange. This increasing velocity of money is a crucial feature of the Internet financial system. We had strong financial results in the third quarter. We realized $740 million in total revenue and reserve income, representing 66% year-on-year growth. Our adjusted EBITDA grew 78% year-on-year to $166 million with a 57% adjusted EBITDA margin, a 737 basis point expansion. And we've delivered continued expansion in our platform. We launched ARC into public testnet in recent weeks with over 100 major participants. I'm going to talk more about that in a few minutes. We're also sharing today that we are exploring the possibility of launching a native token on the ARK network, which we think could be an important component for driving utility, incentives, growth, and governance of the ARK network. We saw Circle Payments Network product expansion with multiple product releases and significant growth in transaction volumes, and we've continued to expand our stablecoin network across more chains with five new chain launches and 28 supported chains today. part of our deep commitment to maintaining a strongly market-neutral position. And adoption has been expanding across a range of use cases, industries, and types of firms. Overall, the stablecoin market has continued to grow strongly, and Circle continues to gain share. On a year-over-year basis, stablecoins in circulation grew 59%, Because we grew faster than the overall market, Circle's share grew to 29% in the third quarter. Based on Visa's published analysis, stablecoin transaction volumes have grown approximately 130% year-over-year, with USDC share expanding to 40% in Q3. And as you can see, the dollar stablecoin space remains a market with two leading issuers and a number of much smaller players as we continue to sustain our strong position despite increasing competition. At the heart of our competitive position are durable and powerful network effects that are anchored in several areas. The trust that we have enshrined in our infrastructure by being regulated, audited, public, transparent, and compliant. The core liquidity infrastructure, our reserve infrastructure with systemically important banks and banking connectivity around the world providing at scale minting and redemption. but also our broad distribution across blockchain networks and ecosystems, which has helped sustain the broader utility of our network. And we continue to innovate in product and technology and developer services, which provides powerful infrastructure for application developers, financial infrastructure companies, and others to build on. Crucially, we have been able to maintain our competitive position by being a market neutral infrastructure that leading companies can build on top of. Our stablecoin network growth remains strong. As already noted, on-chain transaction volume grew to 9.6 trillion in the quarter, up from 5.9 trillion in Q2. CCTP, our cross-chain transfer protocol, is a key infrastructure in enabling capital-efficient and secure transfers of digital dollars across blockchain networks, applications, and services. CCTP volume grew approximately 640% year-over-year to $31.3 billion in Q3. And, in fact, over the quarter, of all bridged volume of all assets from major bridge providers that we track, CCTP represented 47% of all of that traffic. In October, it was over 50%. This is really key as we think about the expanding role that Circle can play in providing infrastructure that supports broader cross-chain interoperability for digital assets. We're continuing to gain share in digital asset trading markets as well. It's a key priority for us, and you see this in our growing share of spot trading year over year and in the ongoing expansion of USDC within perpetual markets, in particular on platforms such as Binance, the world's largest centralized exchange, and Hyperliquid, the largest decentralized exchange. From June 30th to November 8th, we've seen our tokenized money market fund, USYC, more than triple in size to approximately $1 billion, making it the second largest TMMF in the world. This is an important part of our growth in tokenized collateral for digital asset markets. And use case expansion and adoption is growing. We're seeing adoption in capital markets, in payments, in the digital assets ecosystem, with banking infrastructure providers, and to provide dollar access around the world, including with leading companies such as Brex, Deutsche Borse, Fireblocks, Finastra, Kraken, and Itaewoo, the largest bank in Latin America. These are all key use cases with industry-leading companies that chose to work with Circle and which will be important to the ongoing growth and adoption of our stablecoin network. While USDC and Circle's broader stablecoin network are central to our business today, we are continuing to expand our platform across key dimensions. Coming back to this idea of building a full-stack internet platform company, Circle has been methodically building infrastructure that goes down the stack into the core network operating system layer with Arc and moving up the stack into the application utility layer with CPN. With Arc, we've just delivered a critical and significant milestone in recent weeks with the launch of the Arc public testnet. When we think about this layer of infrastructure, we really look at it as an operating system layer, an economic OS for the Internet. Over prior decades, There have been fundamental platform shifts for how software infrastructure supported growth in the utility of the Internet, the web as an OS for information and data, the evolution into mobile as an organizing operating environment, cloud as an operating infrastructure, and then other core utilities such as social, search, and commerce, helping to organize ecosystems, platforms, and activity. And now we're seeing two new major operating system paradigms. AI platforms, and blockchain platforms. With ARK, we've created something that is enterprise-grade and purpose-built to bring stablecoin finance and real-world economic activity on-chain. Our public testnet launched with over 100 world-class companies spanning every major category of the financial industry, major payments firms, technology companies, fintechs, and broad support across the digital asset markets industry. From Apollo to AWS, BlackRock, HSBC, MasterCard, Standard Chartered, Visa, and so many other tremendous firms who are testing, evaluating, and collaborating with Circle as we seek to bring ARK to commercial mainnet launch in 2026. We've also been activating ARK across our entire Circle product suite. making it seamless for developers and all participants in the ecosystem to take advantage of this new infrastructure from Circle as they prepare for ARC Mainnet. Our vision for ARC is of a globally distributed network with infrastructure operators all around the world, in every region of the world, from every economic system in the world. And we envision strong stakeholder incentives and governance to help drive the adoption and evolution of this network. Consistent with that thinking, Circle is actively exploring the introduction of a native token on the ARK network. This is an exciting development that we're actively looking at, and we'll share more as we continue our exploration. We are also seeing strong early momentum for Circle Payments Network, and we've expanded the CPN product portfolio. We launched CPN Console. which brings self-service operations to CPN members for onboarding, integration, and operating payment flows on behalf of their customers. This will streamline our ability to bring more members and more institutions onto the network. CPN Marketplace itself has continued to expand, as I'll talk about momentarily. And we launched a new capability called CPN Payouts, which is purpose-built for automated stablecoin payouts on CPN. We've seen the number of financial institutions enrolled on the network grow to 29. We've also seen more and more institutions that are actively engaged in eligibility reviews to integrate to our network, including 55 financial institutions. And the overall pipeline of financial institutions seeking to join CPN has grown to 500. Across these participants are global, systemically important banks, payment service providers, cross-border firms, neobanks, digital asset firms, and many others. We've continued to expand the markets where CPN is available, with live flows happening across Brazil, Canada, China, Hong Kong, India, Mexico, Nigeria, and the United States. And we expect upcoming launches for flows into Colombia, the European Union, the Philippines, Singapore, the UAE, and the United Kingdom, to name a few. We've also been seeing strong early adoption with rapid growth in CPN's monthly total payment volume. From our first full month only five months ago to November 7th, we've seen over 100 times growth in trailing 30-day payment volumes. As of last Friday, annualized transaction volume based on trailing 30 days is $3.4 billion. We're excited about this expansion of Circle's platform, continuing to build out what we believe can be one of the most significant and broadly adopted Internet financial platforms in the world. With that, I'm pleased to turn this over to Jeremy Fox-Gein for the financial review.