Earnings vs expectations: why IPO-stage reports aren’t straightforward

Key points:

• Circle Internet, Chime, and CoreWeave are three recently listed, high-profile companies that just delivered their first results as public companies.
• Strong results don’t always translate into strong share price performance. All three exceeded revenue expectations, but the market reactions underscored just how volatile and unpredictable newly listed stocks can be.
• Investor takeaway: after an IPO, price moves reflect both the company’s fundamentals and the market’s perception of its future story. Volatility is common and reflects the market’s adjustment from the hype to a more stable trading range.

The first test after the bell

After a company goes public, the first earnings release isn’t just about the numbers — it’s a test of whether the growth story holds up in public markets. New listings often get a warm reception at first. Yesterday’s debut of Bullish, the crypto exchange, is a good example: it priced at $37, opened at $90, spiked to $118 (+219% intraday), and closed up 84% at $68. But as the reactions to Circle, Chime, and CoreWeave highlight, after the initial pop, investors are asking “Can this pace continue?”—not just “Did they beat this quarter?”.

Circle — Insiders selling dims the shine

What they reported: Circle’s Q2 revenue grew 53% year-over-year to $658 million, and adjusted earnings before depreciation and taxes increased by 52% to $126 million. Circle’s tokens (the so-called stablecoins) circulation grew by 90%, and the company saw increased traction in its subscription and service income. However, Circle posted a net loss of $482 million, mostly from non-cash expenses related to its IPO.

How the stock moved: Initially, the stock surged by nearly 20% but ended the session up just 1%. After-hours trading saw a nearly 5% drop, when Circle filed for a 10 million-share offering (about 2 m new shares and 8 m from existing holders). The weakness continued the next day, with the stock down 6% into the close. The offering, which included both newly issued shares and existing shares from insiders, raised concerns among investors, signaling potential profit-taking by managers and other insiders. This raised red flags, especially among investors focused on short-term stock price movements.

In summary, Circle’s growth trajectory looks solid, but the secondary sale and insider selling are common post-IPO headwinds. Near-term price pressure is possible as the new shares are absorbed. Know your time horizon and risk tolerance.

Chime — Punished despite a beat

What they reported: Chime’s Q2 revenue rose 37% to $528 million, surpassing analysts' expectations, and the company maintained positive adjusted earnings for the fourth consecutive quarter. Similar to Circle, the company faced losses of $923 million due to stock-based compensation tied to its IPO.

How the stock moved: Guidance for slower growth and modest user additions led to a drop in stock price by 13%. Investors weren’t disappointed by Chime’s financials; rather, the concern stemmed from doubts about whether the company could maintain its growth trajectory post-IPO.

Chime's operations remain solid, but its ability to continue expanding at the same rate may be in question, leading to a decrease in investor confidence. User growth and engagement are key metrics to monitor for the share price development.

CoreWeave — Strong numbers, but high expectations

What they reported: CoreWeave reported a massive 207% revenue growth, beating market expectations by around 12%. Its adjusted operating margin increased to 16%, up 1.7% from projections. However, the company disappointed on the bottom line, reporting a USD 130,8 million net loss — far wider than the USD 96 million expected, a reminder that heavy losses are common in fast-scaling, innovation-driven businesses.

How the stock moved: Despite beating revenue and margin expectations, the larger-than-expected loss knocked the shares 10% lower after hours, and they fell a further 21% the next session—giving back most of a 30% month-to-date rally heading into the print. Investors appear to be recalibrating for the profit miss and the high ongoing investment needs.

Demand for AI infrastructure is clearly strong, but heavy investment and bigger-than-expected losses keep execution risk and valuation sensitivity high. With the IPO lock-up ending today and insiders free to sell for the first time since March, investors should expect increased volatility in the coming months as the market tests the path to profitability.

Volatility as a feature, not a bug

Post-IPO stock movements rarely follow a predictable pattern. Earnings beats might cause one stock to rise while another falls. This can be attributed to:

• Narrative Premium: Investors often buy into a company’s growth potential rather than just its past performance.
• Guidance Sensitivity: Without a long earnings history, a company’s future outlook can influence stock prices more than its current financials.
• Valuation Sensitivity: IPOs typically debut with high valuations, so any signs of slowing growth can cause a sharp price drop.

Pricing the path, not the print

For Circle, the growth story remains strong, and the metrics suggest it can continue to scale. CoreWeave’s results confirm the robust demand for AI-driven infrastructure, though execution risks are still high. Chime’s solid operations face doubts about its ability to sustain its impressive growth rate.

In the post-IPO phase, large swings in stock prices aren’t necessarily signs of dysfunction. Instead, they reflect the market’s efforts to adjust from high expectations to a more sustainable range. Read more here: Figma and the 6 other biggest IPOs of 2025.

In this article, we highlight the largest IPOs of 2025 by current market cap and not by capital raised. Performance metrics reflect publicly available pricing and return data is calculated based on closing prices, from listing through the stated periods. All data issued from Bloomberg as of 1^stof August 2025. 

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