Circle Q3 Earnings Report: Playing a Bigger Game?
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Circle Q3 Earnings Report: Playing a Bigger Game?
What to look for in Circle's Q3 financial report, the first stablecoin stock?
Navigating Web3 tides with focused insightsBy KarenZ, Foresight News
Last night, Circle, the first publicly traded stablecoin company, released its third-quarter financial results, delivering an impressive performance and launching a series of strategic initiatives in ecosystem development. Meanwhile, Circle disclosed progress in building the Arc Network and CPN payment network.
Key highlights from this earnings report include:
1. USDC Supply: Up 108% Year-over-Year
As of the end of Q3, USDC's circulating supply reached $73.7 billion, a year-over-year increase of 108%, reflecting overall expansion in the stablecoin market.
At the same time, USDC’s market share reached 29%, up 643 basis points from the same period last year. Among numerous stablecoin competitors, USDC has become the second-largest player after USDT. This growing market share indicates steadily rising user trust in USDC.
2. Net Profit: $214 Million, Up 202% Year-over-Year
This significantly boosted total revenue and reserve interest income to $740 million, a 66% year-over-year increase. Reserve interest income contributed $711 million, up 60% annually, forming the core revenue pillar—driven primarily by increased USDC circulation.
Profitability performance is even more noteworthy. Circle achieved a net profit of $214 million in Q3, a 202% increase year-over-year. This high growth stems partly from expanded business scale and partly from tax benefits and a decline in the fair value of convertible bonds.
Other revenue, though smaller in scale, grew at an astonishing rate—reaching $28.518 million compared to $547,000 in the prior year, an increase of over 50x—mainly driven by strong growth in subscription and transaction revenues.
3. Arc Network: Exploring the Possibility of Launching a Native Token on Arc
Circle stated it is exploring the possibility of issuing a native token on Arc Network. On October 28, Circle launched the Arc public chain testnet, attracting participation from over 100 companies spanning banks, payments, capital markets, asset management firms, technology sectors, and various components of the digital asset ecosystem.
Circle hopes that an Arc token could drive network adoption and further align interests among Arc stakeholders.
4. CPN Payment Network: Annualized Transaction Volume Reaches $3.4 Billion
Since its launch at the end of May this year, Circle Payments Network (CPN) has attracted 29 financial institutions as members, with another 55 under review and around 500 preparing to join. Currently, CPN supports fund flows across 8 countries.
Based on a 30-day rolling transaction volume as of November 7, CPN’s annualized transaction volume reaches $3.4 billion, demonstrating strong institutional demand.
In addition, Circle has formed new partnerships with Brex, Deutsche Börse Group, Finastra, Fireblocks, Hyperliquid, Kraken, Unibanco Itaú, and Visa, further strengthening USDC’s position in global payments and financial infrastructure.
5. Tokenized Money Market Fund USYC: Assets Reach $1 Billion
Circle’s tokenized money market fund USYC also performed strongly, growing more than 200% from June 30, 2025, to November 8, 2025, reaching approximately $1 billion in size—highlighting the potential for integration between digital assets and traditional finance.
6. Fiscal Year 2025 Outlook
Given Q3’s strong performance and growing market demand, Circle has raised its other revenue forecast from $75–85 million to $90–100 million, driven by continued growth in subscription and transaction revenues. RLDC margin (i.e., “Revenue – Distribution Costs” / Revenue) is expected to reach 38%, at the upper end of previous guidance. Adjusted operating expenses are now projected at $495–510 million, indicating Circle is increasing investments.
How to Interpret Circle’s Latest Earnings Report?
This earnings report demonstrates Circle’s strong position in the stablecoin space and early success in diversified exploration. The growth is not isolated but multi-dimensional—spanning supply volume, revenue, profit, and market share—all rising simultaneously.
Though still small in absolute terms, "other revenue" is growing rapidly. Growth in subscription and transaction income suggests Circle is attempting to move beyond "reliance on interest alone," showing initial signs of revenue diversification.
Equally important, this year marks a pivotal moment for Circle’s ecosystem rollout. The launch of the Arc public chain testnet and the scaled expansion of the CPN payment network signal a significant transformation—evolving from a pure stablecoin issuer into a platform providing comprehensive financial infrastructure. Steady growth in USDC scale lays the foundation for this evolution, while developments in the Arc ecosystem and CPN open up greater future possibilities. Combined with regulatory tailwinds following the implementation of the U.S. GENIUS Act, traditional financial institutions entering the space are becoming a new engine driving USDC circulation growth.
However, the report also reveals challenges Circle must confront in its development journey.
Despite rapid growth in "other revenue," reserve interest income still accounts for nearly 96% of total revenue. The company remains highly dependent on interest generated from USDC reserve assets. This single revenue stream makes Circle highly sensitive to interest rate environments. If market rates enter a downward cycle, reserve income growth will face direct pressure, impacting overall profitability. Meanwhile, "other revenue" currently contributes less than 4% and has yet to form an independent profit pillar capable of supporting performance—meaning the transition toward diversified revenue will take time.
A closer look at the earnings reveals that Q3’s $214 million net profit includes a $61 million tax benefit (non-recurring) and a $48 million gain from the decline in fair value of convertible debt (also non-recurring). Together, these items account for half of net profit. Excluding these non-operational gains, the underlying operational profitability appears significantly weaker.
Moreover, cost pressures are noticeably diluting profits. Distribution, transaction, and other costs reached $448 million, up 74% year-over-year—outpacing revenue growth. High costs directly squeeze profit margins. While net profit surged, the improvement in profit margin lags behind revenue growth, leaving room for optimization. From a business perspective, these costs are closely tied to partner revenue sharing and similar factors, which are difficult to reduce quickly in the short term, making them a key constraint on profit realization.
Meanwhile, Arc is still in the testnet phase. Whether it can attract sufficient developers and users to build an active ecosystem remains to be seen over time.
Overall, this earnings report reflects typical characteristics of a fast-growing company: opportunities coexist with challenges, short-term results shine, while long-term success hinges on strategic execution and risk management. As the convergence between crypto assets and traditional finance accelerates, and global demand for digital dollars continues to rise, Circle’s story has only just begun.
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