Circle indicates that the pre-sale of ARC tokens boosted the company's revenue, whereas the lower yield rates dragged down the income of USDC. As the core stablecoin business faces lower yield rates and increasingly fierce competition, Circle is seeking to diversify its income through fees and future staking rewards.
The expansion beyond stablecoins provided the biggest boost to its third-quarter performance. The company confirmed revenue of $182 million from the pre-sale of ARC tokens, which helped offset the decline in reserve earnings that support its flagship stablecoin USDC.
The company announced that the diluted earnings per share were $0.84, which is higher than $0.64 in the same period last year and nearly twice the analysts' forecast of $0.42. Total revenue and reserve income increased by 17% to $865 million. However, without the ARC token sales, revenue would have been lower than in the same period last year.
According to Yahoo Finance data, as of 16:05 on November 4th UTC, the stock price of Circle fell by 0.84% to $74.59.
These results reflect that Circle is undergoing a transformation. Its mature stablecoin business generates revenue through the reserves behind USDC, hence its income is linked to interest rates and the number of tokens in circulation. The company's newer businesses aim to generate revenue from payment and financial activities supported by these digital dollars.
Lower yields drag down the reserve income of USDC.
Circle launched a payment network in May 2025, aiming to connect financial institutions that use stablecoins for cross-border payment settlements. Its blockchain Arc for financial applications went live on the public mainnet on September 16, 2026. The native token ARC of Arc is designed to support network security and governance as Arc transitions to a proof-of-stake mechanism in 2027, with transaction fees being paid using USDC.
Against the backdrop of declining reserve yields and growing balances of USDC, this contribution has emerged. The average circulating volume of USDC increased by 8% year-on-year, but the reserve return rate decreased by 61 basis points to 3.5%. Reserve income also fell by 8%, to $657.6 million.
Despite the Federal Reserve raising interest rates in September, they are still lower than they were a year ago. In September, the Fed raised the benchmark interest rate range by 25 basis points to 3.75% to 4%, but this is still below the range of 4% to 4.25% set a year ago. The return on reserves, denoted by Circle, also increased slightly from 3.48% in the second quarter, but the performance pressure reflects a lower year-over-year yield.
As of the end of September, the trading volume of USDC reached $73.9 billion, while its share in the stablecoin market decreased by 1.83 percentage points to 27%.
Competition is also intensifying. Open USD of Open Standard was launched on Solana on September 30th, with Coinbase, Mastercard, Shopify, Stripe, and Visa as founding partners. This stablecoin model distributes the reserve earnings to the partners after deducting management fees, providing enterprises with another option to obtain stablecoins and share in their economic benefits.
Income structure of Circle
ARC has changed the profit outlook for Circle. Excluding the pre-sale revenue from ARC, total revenue and reserve income amounted to 683 million US dollars, a year-on-year decrease of about 8%. The company disclosed that adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) EBITDA increased by 85% to 317 million US dollars. Without considering the contribution from ARC, adjusted EBITDA was approximately 135 million US dollars, a 21% decline from 171 million US dollars in the same period last year.
Circle It is expected that after Arc switches to proof of stake in 2027, it will receive staking rewards. This will become another source of income, but it still depends on the development progress of the network.
Circle has also begun to charge for certain payment network activities. Chief Financial Officer Jeremy Fox - Geen stated during the financial report conference call that the company expects to achieve meaningful CPN revenue in 2027. CEO Jeremy Allaire described the Circle strategy as building an interconnected network where the growth of stablecoins, payments, and blockchain applications reinforces each other.
Allaire said, "This is not just about payment, nor is it just about digital dollars. It's about creating multiple overlapping growth wheels on a single platform. With each new member added, each new developer recruited, and each new asset introduced, the entire platform becomes more valuable."
The company is also adjusting its workforce size. Financial reports reveal that approximately 5% of the employees were affected by the layoffs. Circle indicates that this move is aimed at aligning the organizational structure with its business model and strategic priorities.
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