Circle’s ARC token sale lifts earnings as lower yields weigh on USDC income

Circle’s expansion beyond stablecoins supplied the biggest boost to its third-quarter earnings, as the company recognized $182 million in revenue from its ARC token presale, helping offset falling income from the reserves backing its flagship stablecoin, USDC.

The company reported diluted earnings per share of $0.84, up from $0.64 a year earlier. Total revenue and reserve income rose 17% to $865 million. Without the ARC token sale, however, revenue would have fallen from a year earlier.

Circle shares were down 0.84% at $74.59 at 16:05 UTC on Nov. 4, according to Yahoo Finance.

The results capture a transition for Circle. Its established stablecoin business earns returns on the reserves backing USDC, tying income to interest rates and the amount of the token outstanding. Its newer businesses aim to earn from the payments and financial activity those digital dollars support.

Lower yields weigh on USDC reserve income

Circle launched its payments network in May 2025 to connect financial institutions settling cross-border payments with stablecoins. Arc, its blockchain for financial applications, went live on public mainnet on Sept. 16, 2026. Its native token, ARC, is intended to support network security and governance as Arc moves toward proof of stake in 2027, while transaction fees are paid in USDC.

That contribution arrived as lower reserve yields outweighed growth in USDC balances. Average 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 raised its benchmark range by a quarter percentage point to 3.75%–4% in September, although that remained below the 4%–4.25% range set a year earlier. Circle’s reserve return also edged 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 fell 1.83 percentage points to 27%.

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. The stablecoin model distributes reserve earnings to partners after a management fee, giving businesses another option for accessing stablecoins and sharing their economics.

Circle’s revenue mix

ARC changed 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 after 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.

Circle is also beginning to charge for some payments-network activity. Chief Financial Officer Jeremy Fox-Geen said on the earnings call that the company expected material CPN revenue in 2027. Chief Executive Jeremy Allaire described Circle’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.

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

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