🎁【Prize Giveaway】Circle to release earnings Monday pre-market! With regulatory headwinds fading, can the latest expectations rewrite the valuation narrative?

Hello fellow investors~

On the pre-market of May 11th Eastern Time, the 'first global stablecoin stock' $Circle (CRCL.US)$ will release its Q1 2026 earnings report.

Just before the earnings season, the market value of USDC stands at the $780 billion mark. Significant progress has been made in bipartisan stablecoin legislation in the United States, and Circle is experiencing a golden macro environment since its IPO.As regulatory discounts gradually fade and the narrative around digital dollar infrastructure heats up, the market is caught in a core debate:Is Circle merely a crypto-concept stock constrained by policy, or is it a financial infrastructure leader about to undergo a value reassessment?

First, let's look at the consensus market expectations: Q1 revenue is expected to be approximately $715 million, a sequential decline of about 7% from the record high of $770.2 million in Q4 last year, but a year-over-year increase of 11%; earnings per share are estimated at $0.178.This quarter’s slight revenue pullback was mainly due to seasonal fluctuations compounded by the impact of the March CLARITY Act draft.

Looking back at previous quarters, Circle has demonstrated strong operational resilience with revenue consistently exceeding expectations: Q2 2025 revenue hit $658.1 million (expected $644.7 million), rising to $739.8 million in Q3 (expected $699.6 million), and reaching a new high of $770.2 million in Q4 (expected $745 million). The company’s ability to deliver on performance has been very solid.
Profit trends have also been impressive. In Q2 2025, due to one-off special factors, the company reported a loss per share of $4.48 but quickly reversed to profitability, with both Q3 and Q4 exceeding expectations. Entering 2026, Circle has entered a stable profit cycle, with the market further raising its Q2 earnings per share forecast to $0.198.

For this earnings release, the market is focusing on three core aspects:

1. Revenue Structure: Can the growth pace of USDC circulation match its market cap increase? Will the proportion of non-interest income see substantial growth?

2. Earnings quality: Can EPS deliver the expected $0.18? When will the interest cost benefits brought by the CLARITY Act officially materialize?

3. Regulatory guidance: Management’s latest stance on stablecoin legislative progress during the earnings call, as well as updates on the implementation progress of major bank partnership projects.

🔎 Underlying Profitability Logic and New Business Exploration

As of May 6, the issuance of USDC surged to $78 billion, continuing to rise from $75.3 billion at the end of 2025. As long as U.S. Treasury rates remain above 4%, the base interest income remains solid.However, Circle is highly sensitive to interest rates; once the Federal Reserve initiates a rate-cutting cycle, even if USDC expands in scale, interest income will come under direct pressure.

Circle's core revenue formula: USDC circulation × U.S. Treasury yield.

Looking at the industry landscape, Mizuho analysts pointed out that since 2026, adjusted USDC trading volume reached $2.2 trillion, while USDT trading volume was only $1.3 trillion during the same period. Circle holds approximately 64% of the market share in adjusted trading volume.However, whether the advantage of leading scale can be successfully converted into sustainable profit margin growth remains a key focus for the market.Meanwhile, Tether is accelerating its compliance efforts, signaling that competition in the stablecoin industry will only intensify further.

Amid uncertainties brought by interest rate fluctuations and industry competition, Circle continues to expand its second growth curve by aggressively broadening non-interest income streams.Leveraging the Circle Payments Network (CPN) to reshape cross-border payments akin to SWIFT, Circle focuses on deepening developer services such as enterprise wallets and fiat on/off-ramp APIs. Additionally, through the acquisition of Hashnote, it has entered the tokenized asset space while expanding its USYC operations.Although revenue from these new businesses currently accounts for a relatively small proportion, they are critical variables determining Circle’s long-term valuation ceiling.

Beyond revenue and business aspects, cost dynamics also significantly influence profitability recovery potential.Circle's revenue-sharing agreements with Coinbase, R&D investments, and global operational expenses are all trending upward rigidly. Coupled with previous practices of distributing interest to idle USDC holders, this has continuously squeezed net interest margins and drawn strong backlash from traditional banks.As the CLARITY Act gradually comes into effect, this passive interest expense will be legally terminated, which could directly boost Circle’s profit margins.。

⚖️ Regulatory Turning Point and the Double-Edged Sword Effect of the CLARITY Act

Looking at recent trends, the CLARITY Act remains a core variable affecting Circle’s stock price and valuation.

In March this year, when the draft was first introduced, explicitly banning stablecoin issuers from paying passive interest to idle balance holders, the news triggered market panic, causing Circle’s stock price to plummet nearly 20% in one day.

By May, U.S. senators reached a bipartisan compromise on the stablecoin provisions in the bill—retaining the core clause banning passive rewards on idle balances while moderately relaxing rules to allow incentives in active scenarios such as trading, transfers, and staking.

This major breakthrough ended a year-long policy deadlock between banks and the crypto industry.On Monday, May 4th, when the market opened, it immediately responded strongly, $Circle (CRCL.US)$ surging 19.89% in a single day, closing at $119.53.

From a deep market analysis perspective,the new regulations may, in the short term, weaken Circle's ability to attract users with high interest rates,but from a long-term perspective, it builds a regulatory moat, driving the industry to shift its narrative from 'high-interest deposits' to 'payment infrastructure.'This also aligns closely with Circle’s long-term strategy of building a global payment network.

As stablecoin regulation reaches a substantial turning point, the market is also gaining a fresh perspective to reassess Circle's strategic layout.In the upcoming earnings call, how management interprets the profound impact of the bill on their business model and partnership relations with platforms like Coinbase will be highly anticipated by investors.Meanwhile, the Senate Banking Committee may initiate bill deliberations during the earnings week, making subsequent policy catalysts worth continued monitoring.

📺 Circle 2026 Q1 Earnings Live Broadcast>>

At this critical earnings window, Circle is at a juncture of both opportunities and challenges. Institutions are sharply divided on its target price, with estimates ranging from $77 to $280; the options market has priced in an implied volatility of ±14%, the highest level since Circle's IPO.

Amidst multiple expectations, the first trading day next week,how will the post-earnings movement for Circle play out? What kind of pricing will the market ultimately give?Come on, let’s all take a guess~👇👇

[Guess the Price Movement to Win Points]

Correctly predict the opening price on May 11 Eastern Time, $Circle (CRCL.US)$ and fellow investors who guess correctly will equally share10,000 points!

(For example, if 100 fellow investors guess correctly, each person will receive 100 points; rewards will be distributed uniformly after the end of this earnings season.)

[Speak Your Mind]

Fellow investors, do you have a positive outlook on Circle's upcoming earnings performance?

Share your thoughts in the comment section—write over 30 words and provide a well-reasoned argument to earn 66 points!

Note: The event will end at 16:00 Beijing Time on May 11; rewards are stackable and will be distributed uniformly after the end of this earnings season.

Earnings announcement coming soon, how to capture key data points? “Earnings Express” AI highlights the key insights>>

Ask Futubull AI: As the CLARITY Act is gradually implemented, what kind of margin recovery potential will it bring for Circle?

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