Circle's third-quarter earnings were powered less by its core stablecoin engine than by its growing business beyond it. The company recognized $182 million in revenue from the presale of its ARC token, a boost that helped offset declining income from the reserves backing its flagship stablecoin, USDC.

According to Circle's third-quarter earnings release, the company reported diluted earnings per share of $0.84, up from $0.64 a year earlier and double the $0.42 analysts had expected. Total revenue and reserve income climbed 17% to $865 million. Without the ARC token sale, however, revenue would have fallen from a year earlier.

Circle shares traded down 0.84% at $74.59 as of 4:05 pm UTC on Nov. 4, according to Yahoo Finance.

The results capture a company in transition. Circle's established stablecoin business earns returns on the reserves backing USDC, tying its income to interest rates and the volume of tokens outstanding. Its newer ventures aim to earn from the payments and financial activity those digital dollars support.

Lower yields weigh on USDC reserve income

The ARC presale contribution arrived just as lower reserve yields began to outweigh growth in USDC balances. Circle launched its payments network in May 2025 to connect financial institutions settling cross-border payments with stablecoins. Arc, its blockchain built for financial applications, went live on public mainnet on Sept. 16, 2026. Its native token, ARC, is designed to support network security and governance as Arc moves toward proof of stake in 2027, while transaction fees are paid in USDC.

On the reserve side, average USDC circulation increased 8% year over year, but the reserve return fell 61 basis points to 3.5%. Reserve income declined 8% to $657.6 million.

Interest rates were lower than a year earlier, despite a Federal Reserve rate hike in September. The Fed lifted its benchmark range by a quarter percentage point to 3.75%–4% in September, which still sat below the 4%–4.25% range set a year prior. Circle's reserve return did edge up from 3.48% in the second quarter, but the earnings pressure reflected the lower year-over-year yield.

USDC ended September at $73.9 billion in circulation, while its share of the stablecoin market slipped 1.83 percentage points to 27%. Because reserve income scales with the volume of tokens outstanding, the share loss compounds the yield pressure on Circle's core business.

Competition is also expanding. Open Standard's Open USD was live on Solana by Sept. 30, with Coinbase, Mastercard, Shopify, Stripe and Visa as founding partners. That model distributes reserve earnings to partners after a management fee, giving businesses another route to accessing stablecoins and sharing in their economics — a contrast with the issuer-retained reserve returns that still drive most of Circle's revenue.

Circle's revenue mix

The ARC presale reshaped Circle's earnings picture. Excluding ARC presale revenue, total revenue and reserve income were $683 million, down roughly 8% year over year. Reported adjusted earnings before interest, taxes, depreciation and amortization rose 85% to $317 million. Without the ARC contribution, adjusted EBITDA was approximately $135 million, down 21% from $171 million a year earlier.

Circle anticipates staking rewards once Arc transitions to proof of stake, which it targets for 2027. That would create another source of revenue, although it remains dependent on the network's development.

The company is also beginning to charge for some payments-network activity. Chief Financial Officer Jeremy Fox-Geen said on the earnings call that Circle expected material CPN revenue in 2027. With staking rewards and material CPN revenue both tied to 2027, nearer-term results continue to hinge on reserve yields and USDC circulation.

CEO Jeremy Allaire described the company's strategy as building connected networks, with growth in stablecoins, payments and blockchain applications reinforcing one another.

"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," Allaire said.

Circle is also adjusting the size of its workforce. The earnings disclosures included a reduction affecting approximately 5% of employees, which the company said was intended to align its organization with its operating model and strategic priorities.