Circle’s Expansion Beyond Stablecoins Drives Third-Quarter Revenue Growth

Revenue Growth Fueled by ARC Token Sales

The company posted a diluted earnings per share of $0.84, up from $0.64 the previous year. Total revenue, including reserve income, increased 17% to $865 million. Nevertheless, without the revenue from ARC token sales, overall revenue would have actually decreased compared to the year before.

Following the earnings announcement, Circle's shares dropped by 0.84%, trading at $74.59 as of 16:05 UTC on November 4, based on Yahoo Finance data.

These results highlight a transitional phase for Circle. Its established business model generates income through interest on reserves that back USDC, linking earnings to interest rates and the volume of USDC in circulation. Meanwhile, newer ventures focus on profiting from payment services and financial activities driven by these digital dollars.

Impact of Lower Yields on USDC Reserve Earnings

In May 2025, Circle launched a payments network designed to connect financial institutions handling cross-border settlements through stablecoins. Its Arc blockchain, aimed at financial applications, went public on September 16, 2026. The native ARC token supports network security and governance, with a planned shift to proof of stake in 2027; transactions on Arc pay fees in USDC.

This revenue increase coincided with a drop in reserve yields that outweighed the 8% annual growth in USDC circulating volume. The reserve yield declined by 61 basis points to 3.5%, causing reserve income to fall 8% to $657.6 million.

Interest rates remained lower than the previous year despite a 0.25 percentage point increase by the Federal Reserve in September to a range of 3.75%–4%. This was still below the 4%–4.25% range set a year earlier. Circle's reserve yield edged up slightly from 3.48% in Q2, but lower year-over-year yields exerted pressure on profits.

By the end of September, USDC circulating supply reached $73.9 billion, though its share of the stablecoin market decreased by 1.83 percentage points to 27%.

Competition is intensifying as well. Open Standard introduced Open USD on the Solana blockchain by September 30, with Coinbase, Mastercard, Shopify, Stripe, and Visa as founding partners. This stablecoin model distributes reserve earnings among partners after management fees, offering businesses a new way to access stablecoins and benefit from their economics.

Breakdown of Circle’s Revenue Streams

The introduction of ARC tokens altered Circle's revenue structure. Excluding ARC presale sales, combined revenue and reserve income totaled $683 million, approximately 8% lower than the previous year. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) increased 85% to $317 million. However, without ARC, adjusted EBITDA fell 21% to about $135 million from $171 million last year.

Circle expects to earn staking rewards after Arc transitions to proof of stake in 2027, potentially adding a new revenue source dependent on network growth.

The company has started charging fees for some payments network activities. CFO Jeremy Fox-Geen indicated during the earnings call that significant revenue from the Circle Payments Network (CPN) is expected in 2027. CEO Jeremy Allaire described Circle’s strategy as building interlinked networks where growth in stablecoins, payments, and blockchain applications mutually reinforce each other.

Allaire said, “This is not just about payments, and it is not just about digital dollars. It is about multiple compounding flywheels on one platform. Every new member, every new builder, and every new asset makes the whole platform more valuable.”

Circle is also optimizing its workforce, announcing a reduction of roughly 5% of staff intended to align operations with its strategic goals and business model.