Circle's Q3 results are out: Is it playing a bigger game?

Original author: KarenZ, Foresight News

Last night, Circle, the first stablecoin to go public, released its Q3 financial report, delivering an impressive performance and showcasing a series of initiatives in ecosystem development. Circle also revealed its progress in building the Arc Network and CPN payment networks.

Here are some key takeaways from this financial report:

I. USDC Supply: Up 108% compared to the same period last year

By the end of the third quarter, the circulating supply of USDC reached $73.7 billion, a year-on-year increase of 108%, reflecting the overall expansion of the stablecoin market.

Meanwhile, USDC's market share reached 29%, an increase of 643 basis points compared to the same period last year. Among numerous stablecoin competitors, USDC has become a major player second only to USDT, and this increase in market share indicates a continued rise in user trust in USDC.

II. Net profit: reached US$214 million, a year-on-year increase of 202%.

This directly led to a significant increase in the company's total revenue and reserve interest income, reaching $740 million, a year-on-year increase of 66%. Of this, reserve interest income contributed $711 million, a year-on-year increase of 60%, becoming the core pillar of revenue, mainly due to the increase in USDC circulation.

More noteworthy is the performance on the profit side. Circle achieved a net profit of $214 million in the third quarter, a year-on-year increase of 202%. This high growth rate is due to both the expansion of its business scale and tax benefits and the decrease in the fair value of the company's convertible bonds.

Other revenue, though smaller in scale, grew at an astonishing rate to $28.518 million, more than 50 times the $547,000 in the same period last year, primarily driven by strong growth in subscription services and transaction revenue.

III. Arc Network: Circle is exploring the possibility of launching a native token on Arc.

Circle stated that it is exploring the possibility of issuing native tokens on Arc Network. Circle launched its Arc public chain testnet on October 28th, attracting over 100 companies to participate. These participants span multiple sectors including banking, payments, capital markets, asset management companies, and technology, as well as various parts of the digital asset ecosystem.

Circle hopes that the Arc token will drive network adoption and further align the interests of Arc stakeholders.

IV. CPN Payment Network: Annualized transaction volume reaches US$3.4 billion

Since its launch at the end of May this year, Circle Payments Network (CPN) has attracted 29 financial institutions, with another 55 under review and 500 preparing to join. Currently, CPN supports fund flows in 8 countries.

Based on 30-day rolling trading volume up to November 7, CPN's annualized trading volume could reach $3.4 billion, demonstrating strong demand from institutional clients.

In addition, Circle has established new partnerships with companies such as Brex, Deutsche Börse Group, Finastra, Fireblocks, Hyperliquid, Kraken, Unibanco Itaú, and Visa, further enhancing USDC's position in global payments and financial infrastructure.

V. Tokenized Money Market Fund USYC: Reaching $1 billion in size

Circle's tokenized money market fund, USYC, also performed exceptionally well, growing by over 200% to approximately $1 billion from June 30, 2025 to November 8, 2025. This reflects the potential of combining digital assets with traditional finance.

VI. Fiscal Year 2025 Outlook

Based on strong Q3 performance and increased market demand, Circle raised its other revenue forecast from $75 million-$85 million to $90 million-$100 million, primarily driven by continued growth in subscription services and transaction revenue; RLDC margin is expected to reach 38% ("revenue - distribution costs" / revenue), at the upper end of the previous guidance range; adjusted operating expenses are expected to increase to $495 million-$510 million, indicating that Circle is increasing its investment.

What are your thoughts on Circle's latest financial report?

This financial report demonstrates Circle's strong position in the stablecoin field and the initial success of its diversified exploration. This growth is not a single breakthrough, but rather a simultaneous advancement across multiple dimensions, including increases in supply, revenue, profit, and market share.

Although the base of "other income" is small, its growth rate is astonishing. The growth of subscription services and transaction revenue suggests that Circle is trying to break away from "single interest reliance", and the revenue structure is beginning to show signs of diversification.

It's also worth emphasizing that this year is a crucial juncture for the Circle ecosystem's development. The launch of the Arc public chain testnet and the large-scale expansion of the Payment Network (CPN) reflect a significant transformation Circle is undergoing—evolving from a simple stablecoin issuer into a platform company providing comprehensive financial infrastructure. The steady growth of USDC's scale has laid the foundation for this evolution, while the development of the Arc ecosystem and the CPN payment network opens up even greater possibilities for the future. Coupled with the compliance benefits following the implementation of the US GENIUS Act, the entry of traditional financial institutions is becoming a new engine for USDC's circulation growth.

However, this financial report also revealed the potential challenges that Circle needs to face in its development.

Despite the rapid growth of "other income," reserve interest income still accounts for nearly 96% of total revenue, indicating that the company's revenue is highly dependent on interest income generated from USDC reserve assets. This single revenue structure makes the company highly sensitive to the interest rate environment. If market interest rates enter a downward cycle in the future, the growth of reserve income will be directly pressured, thereby affecting the overall profitability. Furthermore, "other income" currently accounts for less than 4% of total revenue and has not yet formed an independent profit pillar to support performance; the transformation towards revenue diversification will take time.

A closer look at the financial statements reveals that the Q3 net profit of $214 million included a $61 million tax benefit (non-recurring) and a $48 million gain from a decrease in the fair value of convertible debt (non-recurring). These two items combined account for half of the net profit. Excluding these non-operating gains, the actual operating profit would be significantly less transparent.

Furthermore, cost pressures significantly diluted profits. Distribution, transaction, and other costs reached $448 million, a 74% year-on-year increase, with cost growth exceeding revenue growth. These high costs directly squeezed profit margins; although net profit saw substantial growth, the alignment between the profit margin increase and revenue growth needs optimization. From a business perspective, these costs are closely related to factors such as partner revenue sharing and are difficult to reduce quickly in the short term, becoming a significant factor restricting profit release.

At the same time, Arc is currently only in the testnet phase, and it will take time to see whether it can attract enough developers and users to drive the formation of an active ecosystem.

Overall, this financial report exhibits typical characteristics of a rapidly growing company: opportunities and challenges coexist, short-term performance is impressive, but long-term success depends on strategic execution and risk management capabilities. With the accelerated integration of crypto assets and traditional finance, and the continued increase in global demand for digital dollars, Circle's story is just beginning.