The USDC issuer reported its second-quarter results: revenue, including income from reserves, totaled $701 million—a mere +7% year on year, compared to analysts’ expectations of $734.7 million.
The reason is clear: the company’s main source of income—interest on reserves—generated $668 million and grew by only 5%. The average yield on reserves fell by 0.66 percentage points, almost offsetting the growth effect of USDC itself.
However, profit returned: net income reached $48 million, compared to a loss a year earlier—though much of this improvement was due to the base effect following last year’s IPO expenses. Adjusted EBITDA came in at $143 million, up 8%.
The picture for the stablecoin itself is mixed. Formally, USDC’s outstanding supply rose by 19% year on year to $73.3 billion, and on-chain transaction volume surged 2.5 times to $14.8 trillion. Yet within the quarter, the circulating supply actually declined, falling to $71.8 billion by July 30—a drop of nearly 7% since March. It was precisely because of this that Morgan Stanley downgraded its recommendation to Underweight ahead of the report and slashed its price target from $106 to $38; shares have lost about 24% since the start of the year.
Investors found some positive news elsewhere: earnings per share did beat forecasts, and the company reminded everyone of the launch of the Arc blockchain on the public mainnet on September 16, its newly obtained federal trust banking license, and institutional clients such as BlackRock, BNY, and Standard Chartered, who, according to the CEO, are no longer just testing USDC—they’re scaling up its use. At the same time, the company’s CEO candidly attributed the weak numbers to interest rates and the slowdown in the crypto market. Shares initially jumped by around 10% in premarket trading but then gave up most of their gains.
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