Circle’s Q3 Revenue Jumps 17% to $865 Million as ARC Sale Masks a Reserve Slip

Circle, the company behind the USDC stablecoin, reported a third quarter in which headline growth and underlying pressure pulled in opposite directions. Total revenue plus reserve income reached 865 million dollars, up 17 percent year on year, according to results reported on November 4. That headline figure, however, was shaped by a large boost that masked a decline in the company’s core reserve earnings. Understanding both sides of that story is essential for anyone trying to judge how Circle’s business is actually performing.

Reserve income, the money Circle earns from the reserves backing USDC, fell to 658 million dollars, down 8 percent from a year earlier. Circle attributed part of that decline to a 61 basis point fall in the reserve return rate. A basis point is one hundredth of a percentage point, so a 61 basis point decline is a meaningful drop in the yield earned on reserve assets. When yields fall, a stablecoin issuer that earns most of its money from reserves will feel the effect directly, even if the amount of stablecoins in circulation is growing.

That growth in circulation did happen. Average USDC in circulation was 73.3 billion dollars, up 8 percent year on year. In other words, more USDC was outstanding on average during the quarter than a year earlier, but each dollar of reserves earned less. That combination explains how reserve income can fall while circulation rises, and it highlights a structural challenge: core earnings depend heavily on interest rates, which Circle does not control, and only partly on circulation, which it can influence through partnerships and product adoption.

The offset came from other revenue, which jumped to 207 million dollars, up 627 percent year on year. Within that figure, 182 million dollars came from the ARC token presale. ARC is the token associated with Arc, Circle’s blockchain, and the presale generated a large, concentrated revenue contribution in the quarter. Without that contribution, the overall revenue picture would have looked very different, and the 17 percent headline growth would not have been achieved on reserve income alone. That is why the presale matters so much to any fair reading of the results.

Profitability, on the measures Circle highlighted, improved. Adjusted earnings before interest, tax, depreciation and amortisation, known as adjusted EBITDA, reached 317 million dollars, up 85 percent year on year. Net income from continuing operations was 226 million dollars, up 5 percent, and diluted earnings per share were 0.84 dollars, compared with 0.64 dollars a year earlier. The gap between strong adjusted EBITDA growth and more modest net income growth is a reminder that adjusted measures exclude certain costs, and that net income is the more complete bottom-line figure. Both, however, point to a profitable quarter, even as reserve income slipped.

Why Circle Q3 revenue needs a careful reading

Headline revenue growth can mislead if it is read in isolation. In Circle’s third quarter, the 17 percent increase to 865 million dollars is real, but its composition matters. Reserve income fell, other revenue surged, and the surge was driven largely by a single item: the 182 million dollar ARC token presale. A reader who only sees the headline might conclude that Circle’s core business grew by 17 percent. A closer reading shows that the core reserve business shrank, and that growth came from elsewhere.

What USDC circulation and volume tell us about demand

Average USDC in circulation of 73.3 billion dollars, up 8 percent year on year, shows steady rather than explosive growth in the stablecoin’s outstanding supply. For a stablecoin that is already among the largest in the market, single-digit percentage growth is still meaningful in dollar terms, because 8 percent of a large base is a large absolute increase. It suggests that demand for USDC remains solid, even in a competitive stablecoin market where other issuers are also expanding.

Onchain volume tells a more encouraging story. USDC onchain volume reached 13.9 trillion dollars, up 49 percent year on year. Onchain volume measures the value of USDC moving on blockchains, and a near-50 percent increase suggests USDC is being used more actively for payments, trading, settlement and other onchain activity, not merely held passively. That usage growth is important because it supports Circle’s broader strategy: to make USDC a widely used dollar on the internet, rather than simply a store of value parked in wallets.

Binance’s expanded partnership fits into this picture. Binance made a 100 million dollar equity investment in Circle and renewed and expanded its USDC partnership, with a five-year agreement reported by CoinCodex. Distribution through a major exchange can boost both circulation and volume, because exchange users can hold USDC, trade against it and withdraw it to other platforms. An equity investment alongside the partnership deepens the alignment, giving Binance a financial interest in Circle’s success as well as a commercial relationship. The five-year term, if confirmed in detail, would provide a degree of stability that short-term marketing deals do not.

Arc, ARC token presale and the 2027 roadmap

Arc’s mainnet launched on September 16, with more than 100 builders involved, a genesis mint of 10 billion ARC tokens, and a transition to proof-of-stake targeted for 2027. A mainnet launch means the network is live for real use, rather than only in testing. The builder count gives an early sense of developer interest, although builder numbers alone do not guarantee lasting adoption. The proof-of-stake transition target for 2027 shows that Arc’s design is still evolving, and that its long-term security and decentralisation model is a work in progress.

The 182 million dollar ARC token presale should be understood in that context. A presale allows early participants to acquire tokens before wider distribution, often at terms that reflect early risk. For Circle, the presale generated significant revenue in the quarter and funded ecosystem development. For buyers, the presale is a bet on Arc’s future adoption and token value, which are not guaranteed. Presale revenue is therefore best read as both a commercial success and a forward-looking commitment: Circle now has an ecosystem to build and a token holder community to serve.

Payments, acquisitions and costs: the rest of the quarter

The Circle Payments Network, known as CPN, reported 41.3 billion dollars in annualised volume. Annualised volume extrapolates recent activity to a full-year rate, so it should be read as a run-rate indicator rather than a realised full-year total. Even with that caveat, a run rate above 40 billion dollars suggests that Circle’s payments ambitions are moving beyond theory.

Circle agreed to acquire Tazapay for about 400 million dollars in shares, with closing expected in 2027, pending approval. Tazapay is a payments firm, and the acquisition, if completed, would extend Circle’s payments capabilities and geographic reach. The use of shares rather than cash preserves Circle’s cash position, but it also dilutes existing shareholders to some extent. The 2027 closing expectation and the pending approval condition mean the deal should not be treated as complete until those steps are satisfied.

At the same time, Circle cut its workforce by about 5 percent, incurring 9.1 million dollars in restructuring costs, according to CoinCodex. A workforce reduction of that size, alongside strong adjusted profitability, suggests a focus on efficiency and cost discipline, even in a growing business. Restructuring costs are typically one-off, but the underlying headcount reduction will affect operating costs in future quarters. For employees and for observers, the cut is a reminder that growth in revenue does not always mean growth in headcount.

Looking ahead, Circle guided for full-year other revenue of 310 to 330 million dollars. That guidance is useful because other revenue, which includes the ARC presale contribution, is the most volatile part of Circle’s income. A full-year range in the low 300 million dollar area suggests management expects other revenue to remain a meaningful contributor, but it also implies that the third-quarter presale boost will not simply repeat at the same scale every quarter. Investors will therefore watch whether reserve income stabilises, whether USDC circulation continues to grow, and whether other revenue can be sustained without repeated token sales.

FAQ

What was Circle Q3 revenue?

Circle reported total revenue plus reserve income of 865 million dollars for the third quarter of 2026, up 17 percent year on year. Reserve income was 658 million dollars, down 8 percent, while other revenue was 207 million dollars, up 627 percent, including 182 million dollars from the ARC token presale.

Why did reserve income fall if USDC circulation grew?

Average USDC in circulation rose 8 percent year on year to 73.3 billion dollars, but reserve income fell 8 percent because the reserve return rate declined by 61 basis points. In other words, Circle earned less on each dollar of reserves, and that rate decline outweighed the benefit of having more USDC outstanding.

What is the ARC token presale and why does it matter?

The ARC token presale generated 182 million dollars in other revenue during the quarter. ARC is the token associated with Arc, Circle’s blockchain, whose mainnet launched on September 16 with more than 100 builders and a genesis mint of 10 billion ARC tokens. The presale lifted headline revenue, but it is not recurring in the same way as reserve income, so it should not be mistaken for core growth.

How profitable was Circle in the quarter?

Adjusted EBITDA was 317 million dollars, up 85 percent year on year. Net income from continuing operations was 226 million dollars, up 5 percent, and diluted earnings per share were 0.84 dollars, compared with 0.64 dollars a year earlier. Adjusted EBITDA excludes certain costs, so net income provides the more complete view of bottom-line profit.

What are Circle’s next milestones to watch?

Key milestones include the expected close of the Tazapay acquisition in 2027 pending approval, Arc’s targeted transition to proof-of-stake in 2027, and whether USDC circulation and onchain volume continue to grow. Full-year other revenue guidance of 310 to 330 million dollars will also be tested against future quarterly results, alongside any recovery in reserve income.

Source: Business Wire/Circle

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