IPO and Stock Offering - Circle Internet Group, Inc. is offering 32,000,000 shares of Class A common stock, with 12,800,000 shares offered by the company and 19,200,000 shares by selling stockholders[5]. - The expected initial public offering price is between $27.00 and $28.00 per share[5]. - The underwriters have an option to purchase up to 4,800,000 additional shares of Class A common stock to cover over-allotments[10]. - Following the offering, Class B common stock will represent 30% of the total voting power of the outstanding common stock[8]. - The estimated net proceeds from the offering are approximately $319.6 million, or $444.4 million if the underwriters exercise their option in full, based on an initial public offering price of $27.50 per share[162]. - Approximately $111.1 million of the net proceeds will be used to satisfy tax withholding obligations related to the vesting of outstanding RSUs[162]. - The company will have 200,550,578 shares of Class A common stock outstanding immediately after the offering, which could increase to 205,350,578 shares if the underwriters exercise their option[161]. - The company plans to reserve 28,265,461 shares of Class A common stock for future issuance under its Omnibus Incentive Plan[164]. - The company has indicated an interest from ARK Investment Management to purchase up to $150.0 million of shares in the offering[162]. - The company will not receive any proceeds from the sale of shares by selling stockholders[162]. Financial Performance - Revenue grew from $15.4 million in 2020 to $1.7 billion in 2024, with a net income of $155.7 million and Adjusted EBITDA of $284.9 million reported in 2024[57]. - Total revenue and reserve income from continuing operations for Q1 2025 was $578,573,000, a 58.6% increase from $365,094,000 in Q1 2024[166]. - Net income from continuing operations for Q1 2025 was $64,791,000, compared to $48,639,000 in Q1 2024, reflecting a 33.2% increase[166]. - Adjusted EBITDA for Q1 2025 was $122,439,000, up 60.7% from $76,258,000 in Q1 2024[168]. - Operating income from continuing operations for Q1 2025 was $92,940,000, compared to $52,319,000 in Q1 2024, marking a 77.6% increase[166]. - The company incurred $75,620,000 in compensation expenses in Q1 2025, compared to $61,149,000 in Q1 2024, representing a 23.5% increase[166]. - Total current assets as of March 31, 2025, were $61,501,891,000, with total assets at $62,262,397,000[172]. - Total stockholders' equity as of March 31, 2025, was $744,976,000, reflecting a pro forma adjustment of $1,885,478,000[172]. USDC and Stablecoin Operations - Circle has $60 billion USDC in circulation, fully backed by reserves consisting of highly liquid, price-stable cash and cash equivalents[20]. - USDC transactions can settle in seconds worldwide, with over $1 trillion USDC minted and redeemed since founding and $25 trillion in lifetime on-chain transaction volume[23]. - Circle supports wire transfers for minting and redeeming USDC in over 185 countries, with access to USDC through 600 million end-user wallet products[29]. - Circle has minted over $558 billion of USDC and redeemed more than $502 billion from January 1, 2021, to March 31, 2025, maintaining a one-for-one redemption with the U.S. dollar[56]. - As of March 31, 2025, USDC has been used for over $25 trillion in on-chain transactions, with nearly $6 trillion occurring in Q1 2025 alone[55]. - The Circle stablecoin network includes two payment stablecoins: USDC, a U.S. dollar-denominated stablecoin, and EURC, a euro-denominated stablecoin, with USDC issued by Circle Internet Financial, LLC and Circle Internet Financial Europe SAS[77]. - Circle Internet Financial Europe SAS is obligated under the Markets in Crypto-Assets Regulation to redeem all USDC and EURC on a one-for-one basis for U.S. dollars and euros, respectively[79]. - The Circle stablecoin network has $60.1 billion in circulation across 4.9 million meaningful wallets as of March 31, 2025[93]. - USDC holds a 29% share of the stablecoin market, making it the second largest stablecoin by circulation as of March 31, 2025[103]. - The Circle stablecoin network has facilitated over $25 trillion in on-chain transactions, with $5.9 trillion occurring in the first quarter of 2025, representing a 500% increase from Q1 2024[106]. - Circle stablecoins USDC and EURC are backed by highly liquid reserves and are redeemable on a one-for-one basis for U.S. dollars and euros[108]. Market Dynamics and Competition - The stablecoin market is experiencing intense competition, particularly from yield-bearing digital assets like TMMFs, which could reduce the demand for Circle's stablecoins[184]. - The amount of USDC in circulation declined while USDT's circulation increased from late 2022 to late 2023, indicating competitive dynamics between the two stablecoins[184]. - Circle issued a new TMMF, USYC, following the acquisition of Hashnote, but its success is uncertain and may impact the competitiveness of USDC and EURC[185]. - Concerns about the sufficiency and liquidity of reserves for stablecoins like USDC have been heightened, especially following the transfer issues with Silicon Valley Bank, which affected USDC's price stability[188]. - The digital asset market's systemic risks can lead to higher-than-normal redemption requests for Circle stablecoins, as seen in past market events[189]. - Negative developments regarding USDT, the largest stablecoin, could adversely affect the trust in Circle stablecoins and lead to market volatility[198]. - The acceptance of Circle stablecoins may be negatively impacted by disruptions in secondary marketplaces, affecting liquidity and market access[197]. - The emergence of new competitors and the potential for existing banks to enter the stablecoin industry could intensify competition and cannibalize growth opportunities for Circle[180]. - The launch of central bank digital currencies (CBDCs) may adversely impact the business by reducing the demand for private-sector issued stablecoins[199]. Regulatory and Compliance - Circle's approach includes engaging with regulators and policymakers globally to build a compliant internet financial system[52]. - The company emphasizes the importance of compliance and screening processes for potential Circle Mint customers, including KYC checks and sanctions screening[75]. - Circle is focused on regulatory compliance and transparency, operating under FinCEN regulations and providing daily transparency into the Circle Reserve Fund[94]. - Circle stablecoins are concluded not to be classified as "securities" under U.S. federal securities laws, which helps avoid additional regulation[200]. - Any potential classification of Circle stablecoins as "securities" could materially impact the operation of the business[200]. - The company faces increased compliance costs due to regulation by multiple authorities, which may also lower barriers for new competitors entering the stablecoin market[180]. Strategic Vision and Future Outlook - Circle's mission is to raise global economic prosperity through the frictionless exchange of value, aiming to transform how money is used globally[18]. - Circle's vision is to raise global economic prosperity through the frictionless exchange of value, differentiating itself from speculative cryptocurrency investments[51]. - The company anticipates continued growth in the Circle stablecoin network and plans to innovate and create successful new products and services[176]. - The market opportunity for the Circle stablecoin network encompasses the entire global monetary supply, with significant growth expected as developing nations engage in the financial marketplace[104]. - Circle's strategy includes simplifying blockchain technology for developers and end-users to drive global adoption of stablecoins[98]. - The integration of TMMFs with Circle's infrastructure is expected to enhance capital efficiency and reduce counterparty execution risk in digital asset trading[111]. - Circle's liquidity services support institutional minting and redemption, enhancing the overall efficiency of stablecoin transactions[114]. - Circle's mission is to enhance global economic prosperity through frictionless value exchange, leveraging blockchain technology to address inefficiencies in the legacy financial system[82].
Circle (CRCL) - Prospectus