Circle’s Earnings with CEO Jeremy Allaire, Crypto Treasury Stocks and Xero’s Growth | Aug 12, 2025

0:12Welcome everyone to the information's TITV. My name is Akash Basricha. It is Tuesday, August 12th, and it is a big day today because Circle, the stablecoin company that has been surging in the stock markets, just reported earnings for their first time as a public company. And we have got their CEO, Jeremy Allaire, coming onto the show momentarily. I am very excited for that conversation. We're going to follow that up with some more crypto analysis from our very own Uechi Yang, who's going to walk us through what she's seeing in the land of crypto treasury stocks. We're then going to take a trip across the Pacific and bring on the CEO of a major Australian accounting shop for our company, Xero.

0:51And we're going to end with yet another founder that is taking on NVIDIA. It is a small task, but a little seed funding can sometimes go a long way. Before we start, I want to highlight a breaking story that we published today about how China has depended that companies halt NVIDIA chip orders over security concerns. You might recall that NVIDIA got the green light from the Trump administration to sell its H20 chips in China earlier this month. And President Trump also made a big splash yesterday with his announcement that NVIDIA will pay the U.S. government 15 % of its China revenue on the new chips.

1:26But the Informations Asia Bureau reported this morning that regulators in China have ordered local tech companies like ByteDance, like Alibaba, and like Tencent to suspend their purchases of NVIDIA chips because of potential security concerns. This is clearly a play to get China companies to buy chips locally from companies like Huawei. And given that Donald Trump said yesterday that he might allow NVIDIA to sell modified versions of its very advanced Blackwell chip to China as well, this is a pretty big development. We will keep you posted on how things evolve. Okay, let's get to our first guest.

2:03Circle reported earnings this morning for their first time since a monster IPO a few months ago. The company is the issuer of the popular USDC stablecoin. Revenue grew 53 % year on year. USDC and circulation has basically doubled over the past 12 months. The stock was moving higher this morning and it is already up nearly sixfold from its IPO price. And I want to bring on CEO Jeremy Allaire to talk about what's next for the business. Jeremy, welcome to TITB. It's great to have you. Thank you. It's great to be on with you. So look, I was going to congratulate you on what I thought was your first earnings call as a public company CEO, but this is not your first time doing this?

2:43No, I've had the pleasure of being an officer of a public company twice before Circle. But, you know, Circle is a special company and this is a big thing that we're trying to do. And so, you know, and obviously we've been really, really excited about the market's sort of reaction to the company and it's, you know, kind of vindication of really the strategy that we've been trying to deliver on for over a decade now. Well, look, it's been a big, big start for you guys and a big summer for you. I mean, I want to talk about the business, broadly speaking. I mean, you guys reported 53 % revenue growth this morning.

3:25The thing I want to ask you about the top line is as it relates to revenue, what is the company's plan to diversify away from that interest income that currently dominates the top line? Yeah, so a couple of things. we're trying to build the largest regulated stablecoin network in the world. And when we think about where we are in that journey, we're very early. The internet financial system is nascent. And when people think about the growth of stablecoin supply, there are a lot of different views on this. Some range from a 90 % CAGR over the next five years, some a 25 % CAGR. But wherever you fall in that, the amount of stablecoin money that's going to come into the ecosystem is significant.

4:12And obviously, we want to continue to take market share. And this is a platform and network utility business, which means it's fundamentally driven by the applications, the services, the developers that build on that platform and drive transactional activity on that platform. And so, as you've noted, to date, we've primarily monetized the money stock on the network and And we built many, many different types of partnerships to drive and grow that distribution. And now really starting in the last year, we started to build out many other products. So protocol products, blockchain infrastructure products, developer products, like our Circle Wallets product, and application layer products like Circle Payments Network or CPN.

4:56And so all of those are starting to grow. And we've seen 250 % year-over-year growth in these other revenue. And, you know, our goal is to continue to build out more and more of these revenue streams, both subscription and service and transaction fee revenue streams. We're in many places where we're doing that. And I think what we've kind of talked to, you know, Wall Street about is that we think that these can become quite significant over the coming years. And how big do you, I mean, as it relates to software and subscription, I mean, how big a portion of revenue will that be a year from now?

5:30Yeah, we don't really guide on any kind of future numbers like that as a public company. But I think, you know, at a high level, we think about, you know, our adjusted EBITDA margins. You know, we delivered 52 % year over year growth in our adjusted EBITDA. And we have adjusted EBITDA margins of 50%. And I think it's our belief that we can continue to grow that adjusted EBITDA margin. And a big part of that, I think, can be the growth of these new revenue streams that have higher gross margin. And in fact, in the quarter, I think we shared that, you know, over 200 basis points of our, you know, what we call our RLDC margin, which is, you know, a sort of margin of kind of revenue straight to circle after distribution costs.

6:18It contributed to a couple hundred basis point uplift in that. And so as those grow, it blends out that margin structure, which also drives future profitability. But the more important thing here is that we're building a full stack from the infrastructure layer to the stablecoin layer to the payment network layer and the developer tools that are needed to build on all of that. And that full stack can work together, have multiple sources of monetization, and we believe is what's necessary to usher in the development of the internet financial system. Let me jump in here. The revenue share agreement that you have with Coinbase is something that a lot of people have asked you about on the various podcasts and interviews that you've done.

7:02Do you see that revenue share coming down over time? Yeah, well, a couple things. I think the first is that one of the things that we reported this quarter was that the amount of USDC that is sort of on platform on Circle, it actually grew nearly 10x year over year. And so it's about 10 % of all USDC in circulation is sort of on Circle's platform. And what that reflects is that more and more companies are building partnerships with Circle and building on our infrastructure. And that's a big focus for us. And so when we build partnerships and people build on Circle Wallets or they build on Circle Mint or they build on other infrastructure that we're delivering, we're able to, you know, consider that on platform.

7:50And that gives us the flexibility to also build, I think, novel economic relationships with folks. But that progression of more and more of the USDC ecosystem being built on Circle Stacks obviously does support the kind of continued diversification of our kind of net revenue. So the vision here is that it's built more on Circle Stacks. And so that would mean that the revenue share with a platform like Coinbase would come down over time. Is that the idea? Yeah. So, you know, if the majority of what's happening on our ecosystem is built on Circle Stacks, that can reshape the kind of overall economics that goes to different distribution partners, including Coinbase.

8:36So really, the way I like to think about it is we want to grow the total pie and that total pie of stablecoin money that is issued by Circle. and we want more people in the pie. We want to share that pie with more people. And that's how we're going to get to trillions in circulation. And that's how we're going to get to billions of end users. I think it's been great with Coinbase. They've leaned in really hard. They've made USDC kind of central to all their products and services. And now a lot of other companies are catching up. And I think that the regulatory environment, other things are driving people to catch up.

9:11And now completely new categories of companies that are not in crypto, but traditional banks, payments firms, capital markets firms, internet companies are getting involved. And so that diversification is actually going to really accelerate, we think, in these years. Let me jump in here. I mean, so look, this has been a big summer for you. The stock is up. You had a great IPO. You had good earnings this morning. Jeremy Allaire is having a good summer. Okay. It's been fun for you. So what I want to know is, what is it that keeps you up at night right now? Well, you know, it's interesting. I made some comments about this on our earnings call, which is that, you know, post IPO and post the Genius Act becoming law, we've seen an incredible amount of inbound interest in working with us from major financial companies in every sector of finance, from major internet-based businesses to large corporations, and it's all around the world.

10:11And so one of our greatest challenges is really prioritizing and really being able to scale into that opportunity space. And so I think that's a lot of what I think about is, are we building the right products for all these segments? Can we cover the needs of all these segments really, really well? Are we going to get spread too thin? Those are the kinds of things that I need to be thinking about, the team needs to be thinking about as this market unfolds. We had some news earlier this month, maybe it was last month, that Hong Kong is going to be accepting applicants now for its own stablecoin program.

10:50Does Circle plan to apply for one of those licenses? We haven't announced anything specifically. But what I can say is we view Asia as a critical market. Asia is one of the very largest markets for us today. We're already available. the direct liquidity for USDC is available at an institutional level in Hong Kong today. We work with a global systemically important bank to provide that infrastructure. And so we have customers in Hong Kong and cross-border trade is critical and has critical flows through Hong Kong. And in fact, with Circle Payments Network, CPN, Hong Kong was actually one of the very first corridors that we brought live on CPN.

11:32So Hong Kong is important. We obviously were very familiar with the stablecoin regime there and are obviously kind of considering that in the context of all of our, you know, kind of broader product and growth ambitions. I want to go back to this conversation you talked about sort of building, you know, Circle's own stack. You guys announced your own Layer 1 blockchain today. There are tons of Layer 1s out there. Why is it that we need another one and why do you need to build your own? Yeah, I mean, first of all, you know, Circle is a market neutral company. We operate our stablecoin protocols on 24 different blockchain networks today.

12:12Our cross-chain transfer protocol provides seamless and safe cross-chain liquidity amongst those networks. And our developer tools support building applications and wallet applications on many of those networks as well. When we look at this problem space specifically, though, and really why are we building ARK and launching ARK, we've spent a huge amount of time with regulated financial institutions, mainstream corporations, and others. And we found that there are a number of challenges that exist with mainstream acceptance of stablecoin finance. So that's the first thing, which is ARK is purpose-built as an open blockchain for stablecoin finance.

12:57It's aimed at applications in payments, FX, and capital markets. So this is not general purpose. It's a stablecoin-focused blockchain. And that actually shows up in some of the basic capabilities. So all of the gas fees and transaction fees for the network are paid in USDC. And actually over time, as other people launch stablecoins on ARK, we'll be able to allow those stablecoins to be used for the fee payment of the transactions. That's much simpler. If you're a financial institution or a public company and you need to account for and have predictable fees and have fees that are actually in a cash equivalent instrument, that's a much more straightforward thing to adopt and implement as a mainstream business.

13:46So that's one is sort of low cost, predictable fees in stablecoin. Another big area is really around the assurance that regulated financial institutions need around availability and settlement finality. This is getting slightly esoteric, but broadly around the world, bank regulators really want to hold their banks to a certain level of finality of transactions. You need to know that when a transaction is final, and that's really key. What we've been able to do through a novel consensus mechanism and through a permission validator set is provide deterministic settlement finality nearly instantly.

14:32And that's a big breakthrough. And it's going to be really important if you're a major financial firm and you're trying to build on this infrastructure. Privacy features are also important as well for mainstream finance. Let me jump in here because I know you've got to run. Just last question for you. You talked about those major financial firms. We've heard of other banks talking about issuing their own stable coins. What do you make of that competition? Well, first of all, we view banks as tremendous potential partners for what we do. We already work with many banks and the number of banks, both regional banks, global systemically important banks, networks of community banks and others that are engaging with us right now is at an all time high.

15:12We're seeing so much interest in banks that want to use this as a payment system innovation. And in fact, we announced in the quarter partnerships with Fiserv, FIS, Matera. These are core banking infrastructure providers to tens of thousands of banks. And so we're getting our infrastructure in there. And we think that banks, whether you're the smallest bank in a community or a very large G-SIB, can benefit from this technology. And we're eager to partner and we are partnering with these firms. Great. Well, Jeremy, it's great to have you here. Congrats on your first earnings call as Circle CEO.

15:47And, you know, like you said, you've been at this a couple of times before, but this is a very exciting ride you're on. So thank you for being with us here. That is Jeremy Allaire, the CEO of Circle. Well, I want to keep the crypto conversation going and bring on someone who has been following Circle's journey for quite a long time. Yueqi Yang is our crypto reporter here at The Information. She not only writes about stablecoins, but she also writes about crypto treasury stocks, venture funding, IPOs, and also the many crypto pursuits of Donald Trump and company. I want to bring her on to talk about what she's focused on these days.

16:20Yuichi, welcome to the show. Hey, Akash. Thanks for having me. So very quickly, I mean, we just had Jeremy on. What did you make of the interview? I thought you asked a great question about... Well, not me. I mean what he said. I mean what he said. Well, in response to your great question about Circle's revenue share with their distribution partners, the answer that he gave was that he didn't really commit to whether Circle will share more revenue or less revenue. But he kind of alluded to this theme, which is that if more activities are happening on Stacks, that will shape their economics. and I thought that's an interesting way for him to address the question.

17:04And we do know that - Sounded like he was hinting at something there. And I wonder how is Circle going to go about achieving that exactly? And I also thought the announcement that they're planning to launch a layer one blockchain was a surprise. So I'm wondering how much adoption that you will be able to see from their own blockchain. Right, right. I want to change the topic slightly. You had this story last week about crypto treasury stocks. Tell us about this story that you wrote. Sure. So I've been covering crypto for a few years now, and every year there's always going to be this new shiny thing that takes a lot of attention and a lot of capital.

17:44And you know that in 2017, it was the ICO boom. In 2021, 2022, there was the NFT boom. And then when I talk to investors these days, it quickly became clear that the crypto treasury stock is the thing that's a symbol of the current cycle. And one investor said, is sucking all the oxygen from the room. And that's the only thing that people want to talk about. So I looked deeper into these stocks. Michael Saylor's strategy is one of them, but there are over a hundred of them being launched right now. And that's the Bitcoin one. There seem to be these stocks for Ether, for Solana, for for everything really yes and what i've found so far is that we're starting to see early signs of a cooling down for some of these stocks um their valuations have come down and in some cases the valuation of the stock is lower than the underlying value of the crypto that they hold and anecdotally i've heard investors talking about some of the launches actually fail to materialize And for the ones that do go out of the gate, they're raising at a smaller size than they initially targeted.

18:55Right. So I want to jump into it. So you talked about these valuations cooling down. I mean, why did these catch on in the first place? Explain that to us. Why was the crypto community so gung-ho about it? And it's not just the crypto community. It's also the stock market investors. I think the pitch that they have is that for all these stocks, they provide investors an easy way to get crypto exposure because they can just buy the stock, which will then in turn hold crypto assets for you. And you can gain exposure to crypto assets. And that appeals to investors who either do not want to touch crypto directly or cannot because they're institutional players.

19:37And these stocks really took off, and the data showed that in the U.S. alone, they're raising more than$90 billion so far to buy crypto. And to put that into perspective, all the U.S. IPOs so far this year only raised more than$30 billion. It is attracting a lot of capital and attention. And I think the next question that people are trying to ask is that, how is this going to pan out? And since we're seeing these early signs of slowing down, the natural question that we're asking is, has the music stopped yet? Is the music stopping? And what's going to happen next? Let's pivot to talking about the IPO market.

20:23Which crypto firms are you watching with respect to companies that are likely to go public in the next year or two? So Bullish, which is a crypto exchange backed by Peter Thiel, is set to go public this week. And this is the next big crypto IPO we are watching after Circle's IPO. And so far yesterday, they said that they are talking to raise close to$1 billion, which is upsized from their initial goal, which I think reflects some of the investor enthusiasm in the stock. Other crypto exchanges such as Gemini and Kraken are also making plans to go public. And crypto asset manager Grayscale, which is part of the DCG conglomerate, has also said that they filed confidentially to go public.

21:12Well, look, it's a pretty exciting time for your beat. I expect that we're going to be having you on a lot more as news breaks, not just about these IPOs, but also about these big stock market swings and crypto market swings. So thank you, Yueqi, for coming on. That is Yueqi Yang, our crypto reporter at The Information. Now, before we get to our next guest, there is one headline that I want to get through very quickly. StubHub is giving their IPO another go. The company halted its IPO prep in the spring, but now plans to go public in the fall. They filed their first quarter financial information on Monday and revealed that revenue growth slowed to 10 % and free cash flow margin halved from 14 % to 7%.

21:50That is one that we've been tracking in our IPO tracker on the information's website. You can check that out. I'll link it in the show notes. Okay, speaking of StumHub, our next guest was at one point a couple years ago, the president of that company. That was one stop on her long, winding, and impressive career through the technology sector. Sukinder Singh Cassidy has co-founded companies. She has CEOed companies. She has invested in companies. and her latest gig has been leading Australian accounting software company Xero, which she quarterbacked through quite the turnaround since 2022. I want to bring on Sukinder to talk all about that.

22:26Sukinder, welcome to TITV. Hey, Akash, how are you? Nice to see you. Nice to see you. So I got to ask, I mean, are you in Australia right now? Where are you? Well, I'm actually based in the Valley. So there's a lot of our leadership team because although the company trades on the ASX, it's global. Almost 50 % of our revenues are outside of Australia in markets like the US, Canada, the UK, South Africa, Singapore, and more. So no, I'm based here, but I go quite often. Nice. Well, that's a long flight. So hopefully you don't have to make it that often, but I suspect that as part of the job. Look, I want to talk about the company's growth strategy and all the work that you're doing in the US as well.

23:05But I want to rewind the clock just a little bit because you came into this job. Xero was a very different company then. And the company was not doing so much in the way of free cash flow at that point. The stock, if you look at it, I mean, all the enterprise software stocks were kind of trending downward. But if you look at the stock chart, it comes right back up right after you started joining the company. And today we're looking at a company that is Rule of 40. It's generating free cash flow. So the first question I want to ask is when you took the position as CEO, what were some of the core problems that you identified that you wanted to solve?

23:40Well, first of all, let's just talk about the opportunity. I mean, the opportunity is that small businesses around the world are still digitizing their back office. That's accounting, tax, invoicing, bill pay. And so as you look at the macro, I was first attracted to the opportunity, which is a global software player, SaaS player, high margin, high growth. So it was growing north of 20 percent, diversified footprint, loved brand because it's so easy to use. And the opportunity I think you're talking about is, look, was not yet profitable. So, of course, we did restructure to become profitable.

24:12It was, I'd say, a bit over its skis, like many tech companies of that era, 2021. You know, it hired aggressively, maybe a little too aggressively. Was not yet profitable. Was not yet rule of 40. And I would say the real opportunity for us is, A, to get focused. So we focused on top-line growth profitability, narrowed our footprint of geos we're focusing on. We call them the 3x3 markets and the 3x3 jobs. So that's really Australia, the U.K., and the U.S. and the jobs are accounting, payroll, payments. I mean, if we can build a really seamless and beautiful and matchable experience across those three super jobs, we think we win for SBs.

24:49And so that's been the focus of the last two years. It's just like that, Drumbi. Top line growth, profitability, focus, and innovating, but in a very focused way. And now, of course, including AI. Right, right. And I mean, let's go to AI. I mean, one of the things that I noticed about your website, interestingly, is that while I'm sure AI can have many applications in the world of accounting software and financial tools. Actually, if you go to your website, unlike some of the other enterprise software websites, AI is not the first thing that you see on the website. In fact, I actually couldn't really find it anywhere on the website.

25:24And I don't know if that was a choice or if the website is under development. But I mean, I thought this was going to be the loudest thing for you guys. Well, it's interesting. So first of all, we listen to our customers and their daily need is to get their work done. So you can go out with an AI-first message. I think what you want to do is start with a customer-first message. So, you know, and by the way, you're on our lighting pages logged out. So logged in, if you were logged in, you would have what's called Jax. Jax is Just Ask Zero. It's our AI chatbot. And it already lets you today do things like raise invoices.

25:57By the way, you can write to Jax and create an invoice. Invoicing is one of the big use cases on our platform besides accounting. You can do that from email. You can do that from WhatsApp. You can do that from the website. but you can ask Jax a question about how to set up. So we are indeed off and running as everyone else is. Keep in mind, a lot of what you also don't see is the traditional machine learning and AI we've always had, bill ingestion, managing the reconciliation task, right? Like what categories, auto-categorizing, things like that. So no, we are deep on the AI train, but I think what you see from the website is, look, let's message first to customers about their needs.

26:32And as we're in, again, the job of AI in our world is not to just talk about an investor call, It's really to deliver increased functionality and save users time. And we take perhaps a much more kind of focused approach on the user versus worrying about trumpeting it on our homepage. You mentioned you're based in the Valley. Talk about your U.S. strategy and also talk about the acquisition that you guys just made in Melio. Well, sure. So first of all, as you noted, we are in the U.S. And interestingly, we are underweight the U.S., meaning we're growing well. But it's not our biggest market, as you pointed out earlier.

27:05And so first, the opportunity is zero has long been regarded here in the US as, I'd say, very easy to use and loved, particularly by the channel as well as small businesses. So the channel, I mean, accountants and bookkeepers who advise SMBs. And I would say for those SMBs who are looking for choice, we are a more open stack, let's say, than some of our competitors. I mean, if you want to integrate us with Gusto or Bill or Brex or Ramp, any number of companies in the ecosystem or ADP, you can do that pretty easily. So we're a pretty open ecosystem. Now, what are we doing in the U.S.? Well, look, we're doubling down on the market.