Circle Q3 Revenue Hits $865M Driven by ARC Token Presale
Reserve income declines as Circle reports revenue growth and workforce restructuring measures.
1Revenue Growth Drivers
Circle reported a 17% increase in third-quarter revenue, reaching $865 million. This growth was significantly bolstered by $182 million generated from the presale of ARC, the native token for its Arc blockchain. Consequently, the company's other revenue category surged to $207 million, marking a substantial rise from $29 million during the same period last year.
2Reserve Income Contraction
Reserve income, representing interest earned on assets backing USDC, fell by 8% to $658 million. This decline was primarily driven by a 61 basis point drop in the reserve return rate, which settled at 3.5%. Despite this, the average USDC in circulation grew by 8%, reaching a total of $73.3 billion during the quarter.
3Profitability and EBITDA
Net income from continuing operations rose by 5% to $226 million. Meanwhile, adjusted EBITDA climbed 85% to $317 million, a performance the company attributed to the ARC presale revenue and reduced distribution costs. These figures highlight the company's effort to balance its core stablecoin business with new blockchain-based revenue generation strategies.
4ARC Token Agreement Terms
In May, Circle sold 740 million ARC tokens at $0.30 each, raising approximately $222 million from investors led by a16z crypto. The agreements include specific repayment rights for buyers if the Arc network fails to transition to a proof-of-stake system by May 8, 2028. The company aims to complete this transition by 2027.
5Operational Restructuring Efforts
Circle disclosed a workforce reduction of approximately 5% in its latest release. This restructuring incurred $9.1 million in third-quarter charges, primarily covering severance and notice-period payments. The company stated that these layoffs were necessary to better align its internal structure with its current operating model and long-term strategic priorities for the firm.
6Operating Expense Management
Adjusted operating expenses, excluding restructuring and stock-based compensation, rose 13% to $139 million. Despite this quarterly increase, Circle maintained its full-year guidance for these expenses within the $570 million to $585 million range. This indicates a disciplined approach to managing overhead costs while navigating the evolving regulatory and competitive landscape of stablecoins.
7Future Revenue Projections
The company reaffirmed its 2026 forecast for other revenue, maintaining a range between $310 million and $330 million. This projection incorporates the anticipated revenue from the ARC token presale. By setting these targets, Circle provides clarity to stakeholders regarding its expected financial trajectory as it continues to develop its blockchain infrastructure and services.
8Strategic Market Positioning
Circle's Q3 results reflect a strategic pivot toward diversifying income beyond interest-bearing reserves. By launching the Arc public mainnet on September 16, the firm is actively building a broader ecosystem. The combination of tokenization and cost-cutting measures suggests a focus on operational efficiency as the company prepares for future blockchain-based growth cycles.
Original article: CryptoPotato — Circle Q3 Revenue Hits $865M Driven by ARC Token Presale