Circle Q3 Revenue Rises 17% on Arc Token Sales; Outlook Unchanged

Circle Internet Group (NYSE: CRCL) reported a 17% year-over-year increase in third-quarter revenue and reserve income, driven by $182 million of Arc token sales that created a new revenue stream during the period. Adjusted EBITDA rose 85% to $317 million, while the company left its full-year 2026 guidance unchanged as it continued investing in its stablecoin, payments and blockchain infrastructure.

Total revenue and reserve income reached $865 million, up from $740 million a year earlier. Excluding Arc token sales, the figure was $683 million. Reserve income, Circle’s largest revenue source, declined 8% to $658 million as a 61-basis-point decrease in the reserve return rate to 3.54% more than offset an 8% increase in average USDC circulation to $73.3 billion.

GAAP operating income from continuing operations increased to $208 million from $81 million, while net income attributable to common stockholders rose to $226 million from $214 million. For the first nine months of 2026, Circle generated $2.26 billion in total revenue and reserve income and $329 million in net income attributable to common stockholders.

Revenue less distribution, transaction and other costs, or RLDC, totaled $453 million, producing a 52.4% margin. Excluding Arc token sales, RLDC was $271 million with a 39.7% margin. Adjusted EBITDA included the full $182 million contribution from Arc token sales; excluding that amount, adjusted EBITDA was $135 million with a 50% margin. Adjusted operating expenses increased 13% year over year to $139 million.

Circle also recorded $9 million of restructuring expenses related to a workforce reduction of approximately 5%, which the company said was intended to align its organizational structure with its operating model and strategic priorities. The quarter included $8 million of acquisition-related costs, including expenses associated with the pending Tazapay transaction.

USDC Usage Outpaces Supply Growth

Average USDC in circulation increased to $73.3 billion, while period-end circulation was $73.9 billion. USDC onchain transaction volume rose 49% year over year to $13.9 trillion, compared with 26% growth for stablecoins overall, according to the presentation. USDC represented 79% of stablecoin transaction volume in the quarter while accounting for 27% of supply.

Minting and redemption volume reached a quarterly record of $208 billion, up 42% year over year, with $104 billion minted and an equal amount redeemed. Circle said approximately $2.3 billion moved through its minting and redemption infrastructure each day during the quarter.

Beyond USDC, EURC circulation increased 92% to €413 million, while assets in USYC, Circle’s tokenized money market fund product for eligible non-U.S. persons and entities, rose 230% to $2.4 billion.

Payments Network and Arc Expand

Circle Payments Network, or CPN, reached $41.3 billion in annualized total payment volume at quarter-end, up 15.2 times from a year earlier and 2.8 times sequentially. The measure is based on the trailing 30 days. A total of 205 financial institutions had enrolled in CPN products since launch, 4.4 times the year-earlier level.

Circle launched CPN on the Arc mainnet during the quarter, positioning Arc as the network’s preferred settlement layer. Arc went live on September 16 with 11 founding validators and more than 100 applications. As of October 30, the network held about $1.5 billion of assets and had processed more than $30 billion of USDC volume since launch. Activity was running at roughly 500,000 transactions per day, with more than 50 million transactions completed since launch.

The company announced an agreement to acquire payments infrastructure provider Tazapay for $400 million of Class A common stock, with closing expected in 2027. Tazapay has more than $25 billion in annualized payment volume, over 100 payout markets and more than 60 banking and fintech partners. About 60% of its volume already involves stablecoins. Circle said the acquisition would expand CPN’s fiat connectivity and reach in Asia-Pacific and other emerging markets.

Circle also renewed its USDC agreement with Binance for five years, accompanied by a $100 million equity investment from Binance. Separately, USDC became the front-of-shirt sponsor for Chelsea FC’s 2026-27 season.

Guidance Remains Unchanged

Circle maintained its full-year 2026 outlook for other revenue of $310 million to $330 million, including recognized Arc token presale revenue. It continues to expect an RLDC margin of 41.7% to 43.7% and adjusted operating expenses of $570 million to $585 million. The company also retained its longer-term indicator of a 40% compound annual growth rate for USDC circulation through the cycle.

Management is preparing for the GENIUS Act to take effect in January 2027 and expects regulated payment stablecoins such as USDC to become a federally recognized part of the U.S. dollar financial system. Circle said its national trust is federally chartered by the Office of the Comptroller of the Currency, alongside its New York trust charter.

The outlook remains exposed to shifts in interest rates, which directly affect reserve income, as well as competition from other stablecoins and yield-bearing digital assets. Circle also cited risks involving rapid redemption requests, reserve assets, technology and service providers, banking relationships, evolving regulation and compliance requirements. Arc introduces additional execution, adoption, cybersecurity, governance and token-price risks, while the pending Tazapay acquisition remains subject to completion.