Company: CRCL
Filing Date: 2025-06-02
Form Type: S-1/A
Source: 0001193125-25-132755
Chunk: 84

Company: Circle Internet Group, Inc.
Filing Date: 2025-06-02
Form: S-1/A
Chunk 84
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 impact, which may be material, on our business, results of operations, financial condition, and prospects because of legal costs, diversion of management resources, reputational damage, and other factors.

Risks related to our financial condition

Fluctuations in interest rates could impact our results of operations.

Our results of operations are exposed to changes in interest rates, among other macroeconomic conditions.
Interest rate risk is highly sensitive to many factors, including governmental monetary and tax policies, domestic and international economic and political considerations, and other factors beyond our control. For the years ended December 31,
2024, 2023, and 2022, our reserve income earned from the management of Circle stablecoin-related reserves represented 99.1%, 98.6%, and 95.3% of our total revenue from continuing operations, respectively. For the three months ended March 31,
2025 and 2024, our reserve income earned from the management of Circle stablecoin-related reserves represented 96.4% and 98.5% of our total revenue from continuing operations, respectively. Fluctuations in interest rates impact reserve return rates,
such that a decrease in interest rates reduces reserve return rates and an increase in interest rates increases reserve return rates. Reserve return rate is a contributing factor to reserve income, which in turn is a contributor to distribution
costs. As such, fluctuations in interest rates may result in changes in reserve income and in turn distribution costs. However, interest rates are only one contributor to reserve income, and the other primary contributor—USDC in
circulation—is inherently difficult to predict given the uncertainties in end-user and customer behavior. For example, although interest rates are positively correlated with the opportunity cost of holding USDC versus other financial
instruments, given the utility of USDC as a means for the exchange of value, an increase in interest rates does not necessarily result in a decrease in USDC in circulation (and vice versa). Any relationship between interest rates and USDC in
circulation is complex, highly uncertain, and unproven. As a result, while we are able to predict the impact of interest rate changes on the reserve return rate, given the uncertainties in customer behavior and interests and market dynamics, we are
unable to accurately predict the impact of changes in interest rates on our results of operations.

Fluctuations in currency exchange rates could adversely impact Circle.

We earn interest in U.S. dollars with respect to USDC and in euros with respect to EURC. Our expenses are primarily den