Circle paid $325m of its $668m reserve interest to Coinbase — USDC in circulation grew 19%, interest income only 5%
Q2 2026 10-Q: 95% of $701m of revenue and reserve income is interest on reserves. Distribution and transaction costs of $410m (59% of income) include $324.6m under the Coinbase agreement. Average USDC in circulation rose 25% to $76.5bn, but the reserve return rate fell from 4.1% to 3.5%, so reserve income rose only 5%. Net income $48.2m
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Circle Form 10-Q for Q2 2026: statement of operations (reserve income, other revenue, distribution and transaction costs), MD&A key metrics (USDC in circulation, reserve return rate, USDC on platform), 'Distribution costs' (Coinbase Collaboration Agreement, Binance), interest-rate risk
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Circle Internet Group (CRCL), issuer of the USDC stablecoin, reported revenue and reserve income of $701,315k for the second quarter of 2026, up 7% from a year earlier, and net income of $48,214k. Two lines of the statement of operations in the 10-Q filed on August 5 show where the money comes from and where it goes: $667.7m of reserve interest in, $410.4m of distribution and transaction costs out.
What happened
Circle Internet Group (CRCL) issues the dollar stablecoin USDC and listed in June 2025.
Its Q2 2026 quarterly report (10-Q) shows revenue and reserve income of $701,315k, up 7% from $658,078k a year earlier. Reserve income was $667,733k (95.2%); other revenue $33,582k. Distribution and transaction costs were $410,414k, operating expenses $254,486k, and net income $48,214k (a $482,100k loss a year earlier on IPO-related compensation).
The distribution-costs section of MD&A reads as follows. Under the Collaboration Agreement, Coinbase receives allocations based on USDC held on its platform and half of the remaining amount tied to ecosystem growth. Coinbase-related distribution costs were $324.6m in Q2 ($332.3m a year earlier) — 48.6% of reserve interest and 46.3% of total income.
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The 10-Q explains that under the Collaboration Agreement Coinbase receives allocations based on USDC held on its platform plus half of the remaining ecosystem amount. Coinbase-related costs were $324.6m in Q2 ($332.3m a year earlier); the exact percentages are not disclosed. What the structure means for profit is explained in the subscriber section.
USDC grew — why is profit flat?
Average circulation rose 25%, but the reserve return rate fell from 4.1% to 3.5%, so reserve income rose only 5%, and distribution costs were essentially unchanged. Net income was $48.2m (the year-earlier quarter was a $482.1m loss from IPO-related compensation).
What if rates fall further?
The company says most of its income depends on interest rates and circulation. A 0.1-point change in the return rate on $76.5bn of average circulation is roughly $77m of annual income (simple calculation).
Where can I verify these numbers?
On SEC EDGAR: Circle's Q2 2026 Form 10-Q (accession 0001876042-26-000248), the statement of operations, the MD&A key-metrics table and the distribution-costs section.
How aiSwingX™ wrote this
We read the filing on SEC EDGAR in full — statements, notes, MD&A. Press releases and news are not used as sources.
Every figure is reconciled to its location in the filing and to XBRL data. One mismatch means no publication.
An editor reviews before publication; any later change is recorded in the revision history.
Circle Form 10-Q for Q2 2026: statement of operations (reserve income, other revenue, distribution and transaction costs), MD&A key metrics (USDC in circulation, reserve return rate, USDC on platform), 'Distribution costs' (Coinbase Collaboration Agreement, Binance), interest-rate risk · SEC EDGAR · This article is not investment advice. Disclaimer
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aiSwingX™ analyzes US filings and reports them as news investors can read.
