Stablecoin issuer Circle Internet Group surpassed market expectations across the board, and the one-time income from the pre-sale of ARC tokens significantly boosted its adjusted profitability, leading to a stock price increase of over 3% before the market opened.

Circle Announces Third Quarter 2026 Financial Results on Wednesday: Total revenue and reserve income amounted to $865 million, a year-on-year increase of 17%, exceeding market expectations of $776.7 million; adjusted EBITDA was $317 million, a year-on-year increase of 85%, far exceeding the expected $202.8 million; net profit was $226 million, also significantly higher than market expectations of $91.6 million. The company also maintains its full-year 2026 performance guidance unchanged.

The highlights of this quarter's performance largely benefited from the ARC token pre-sale revenue brought about by the launch of the Arc blockchain mainnet. This non-recurring source of income offset the pressure of a decline in reserve income, which decreased by 8% year-on-year due to lower interest rates. At the same time, the trading volume on the USDC chain increased significantly by 49% year-on-year, demonstrating strong momentum in the use of its core stablecoin business.

ARC Token Pre-sale Becomes the Biggest Performance Variable of This Season

Other revenues were the most flexible source of income this quarter, increasing by 627% year-on-year to $207 million, of which $182 million came from the pre-sale of ARC tokens.

On September 16th, Circle officially launched the public mainnet of the Arc blockchain. This represents the largest product release for the company since its launch of USDC. On the first day alone, over 100 institutions and ecosystem builders joined the network. Meanwhile, Circle completed the genesis mining of ARC tokens, with a total supply of 10 billion tokens, making it the first listed company to mint network tokens for a brand-new Layer-1 blockchain. The ARC tokens are designed to serve as a native coordination mechanism for network security, practical functions, and governance on the Arc network, which plans to transition to a proof-of-stake (Proof of Stake) mechanism by 2027.

The global developer community of Arc currently has over 75,000 members of Arc House and 10,000 Architect ambassadors. During the private mainnet period, the latter built more than 1,200 projects in total.

Reserve income under pressure, declining interest rates erode core profits

The reserve income of Circle is 658 million US dollars, a year-on-year decrease of 8%. The main reason for this is that the reserve return rate has declined by 61 basis points to 3.5%, which is partly offset by the year-on-year increase in the average circulation of USDC by 8% to 73.3 billion US dollars.

On a quarter-on-quarter basis, reserve income has been under pressure for two consecutive quarters – in the fourth quarter of 2025, reserve income was $733 million, and it has since declined quarter by quarter, dropping to $658 million this quarter. This trend reflects the ongoing impact of interest rate environment on the core profit model of Circle.

The improvement in distribution costs has alleviated the aforementioned pressures to some extent. This quarter, total distribution, transaction, and other costs amounted to $412 million, a year-on-year decrease of 8%. This was mainly due to reduced distribution payments, which led to an increase in the RLDC profit margin after deducting distribution costs to 52%, an increase of about 13 percentage points year-on-year.

USDC usage accelerates its expansion, with intensive institutional cooperation in place

USDC The on-chain trading volume this quarter reached 13.9 trillion US dollars, a year-on-year increase of 49%, and the scale of on-chain assets grew by 36% compared to the same period last year. The number of "active wallets" holding more than 10 US USDC reached 7.3 million, a year-on-year increase of 16%. At the end of the period, the market share of USDC stablecoins was 27%.

This quarter, there has been intensive institutional collaboration centered around USDC. Visa has transitioned its Visa Direct stablecoin prepaid service from a pilot phase to commercial deployment, enabling customers to conduct near-real-time cross-border payments and settlements in over 180 countries and regions through Inyo Global. SAP's ecosystem company Tereina announced the integration of USDC and EURC into its corporate payment infrastructure, which covers 84% of global business transactions within its SAP ecosystem. Samsung Wallet has also allowed eligible US Galaxy users to remit funds to bank accounts in over 60 countries via USDC.

In addition, Binance announced an equity investment of $100 million in Circle and expanded its strategic partnership with Circle, focusing on promoting USDC in emerging markets. The CEO of Circle, Jeremy Allaire, stated: "Institutions are building and expanding based on USDC, and this trend has continued to be confirmed this quarter."

Acquiring Tazapay to Layout a New Track in Cross-Border Payments

The annualized total payments of Circle Payment Network ( CPN ) this quarter reached $41.3 billion. To further expand its payment infrastructure, Circle has signed a final acquisition agreement with the Singapore cross-border payment platform Tazapay, with delivery expected to be completed in 2027, subject to regulatory approval at that time.

Tazapay has an annual payment volume of over $25 billion, with more than 60 banking and fintech partners. Its local cash withdrawal channels cover over 100 markets, and approximately 60% of its transaction volume involves stablecoins. Circle stated that this acquisition will enhance its payment initiation and settlement capabilities in the Asia-Pacific, Latin American, and emerging markets, where the demand for USDC-denominated transactions is on the rise.

About a 5% layoff, with the annual guidance remaining unchanged

This quarter, Circle completed approximately 5% of layoffs to optimize the alignment between its organizational structure and business model. The costs associated with this reorganization amounted to around $9.15 million, mainly including severance pay during the notice period, redundancy fees, and employee benefits expenditures.

Despite the personnel adjustments, the company maintains its financial guidance for the entire year of 2026 unchanged, which includes: other revenues of $310 million to $330 million (including revenue confirmed from the pre-sale of ARC tokens); a RLDC profit margin of 41.7% to 43.7%; and adjusted operating expenses of $570 million to $585 million. The company also continues to maintain its medium- to long-term guidance for a compound annual growth rate of 40% in USDC traffic over multiple years.