CRCL Surges 35%: Circle's Q4 EPS Exceeds Expectations by 169%, AI + Stablecoin Moat Continues to Deepen

Source: SoSoValue Analyst Team

Core Summary

Circle recently released its Q4 2025 financial report, with all key metrics significantly exceeding market expectations. Previously, due to the below-expectation performances of Coinbase and Robinhood, the market had low expectations for Circle's results. Against the backdrop of an overall sluggish crypto market, Circle's strong performance once again demonstrated the robustness and superiority of the stablecoin business model to the market. Combined with the oversold effect on its stock price caused by a massive lock-up expiration earlier, and the company's emphasis during the earnings call on its leading position in AI agent payments (currently, approximately 99% of observed AI agent payments use USDC), which opened up new imagination for the market, the company's stock price surged over 35% following the earnings release.

Data Source: https://sosovalue.com/crypto-stocks/crcl

Revenue & Profit: Maintaining Stability in a Rate-Cutting Cycle

Q4 revenue reached $770 million, a 77% year-over-year increase, surpassing the market consensus estimate of $747 million. In a macro environment of consecutive interest rate cuts, Circle's revenue performance remained solid, fully demonstrating the market stickiness of USDC as a compliant stablecoin.

The net profit performance was even more impressive. Q4 net profit was $133 million, compared to just $4 million in the same period last year. Compared to the adjusted profit level in Q3 (excluding non-recurring items), it showed a quarter-over-quarter growth of 25%. Earnings per share (EPS) were $0.43, far exceeding the market expectation of $0.16, an upside surprise of 169%. Against the backdrop of global central banks entering a rate-cutting cycle, Circle managed to stabilize its profit performance against the trend, fully reflecting the continuous optimization of the company's cost control and operational efficiency.

USDC Core Business: Steady Circulation, Enhanced Channel Pricing Power

Circulation & Market Share

Q4 USDC circulation reached $75.3 billion, a 72% year-over-year increase and a 2.2% quarter-over-quarter increase. Market share grew to 28%, slightly down by about 1 percentage point from Q3, but overall remained at a high level. As the world's most important compliant stablecoin, USDC's leading advantage in regulatory compliance continues to solidify its market position.

Reserve Income

Reserve income reached $733 million, a 69% year-over-year increase, higher than the market consensus estimate of $722 million. The Q4 Reserve Return Rate was 3.8%, down 35 basis points quarter-over-quarter, reflecting the impact of consecutive rate cuts during Q4 (SOFA dropped from about 4.15% to about 3.7%). Relying on its stable circulation, Circle still maintained growth in interest income.

Distribution Cost & Channel Structure Optimization

The Q4 RLDC Margin (margin after deducting distribution costs) reached 40%, continuing a slight increase of 0.5 percentage points from Q3, indicating that Circle's pricing power in channels other than Coinbase is steadily improving. Total distribution costs paid in Q4 were $461 million, a 52% year-over-year increase, with a growth rate lower than the 69% growth of reserve income, showing that economies of scale are gradually emerging. Among these, the Coinbase channel accounted for 79%, a 3 percentage point decrease from Q3, reflecting that Circle's continuous expansion into new channels is optimizing the overall distribution structure.

New Growth Engines: Payment Network & Infrastructure Layout

Rapid Growth in Other Income

Q4 other income reached $37 million, compared to just $3 million in the same period last year, representing a year-over-year growth of over 10 times and also exceeding the market consensus estimate of $25 million. Approximately $25 million came from subscriptions and services, and $12 million from payments. The rapid growth of this data indicates that Circle's scenario expansion in the payments field is progressing smoothly, building a second growth curve for the company beyond reserve interest income.

Circle Payment Network (CPN)

The Circle Payment Network (CPN) is expanding rapidly. As of February 20, 2026, 55 financial institutions have officially joined, an increase of 26 from the previous quarter; another 74 are undergoing qualification review. The rapid expansion of the payment network not only creates more application scenarios for USDC but also builds more diversified revenue sources and a deeper competitive moat for Circle.

Arc Public Chain Progress

The Arc public testnet has officially launched and has already attracted over 100 participants. According to the company's plan, the Arc mainnet is expected to launch in 2026. This infrastructure-level layout will further expand Circle's ecosystem footprint, laying the foundation for its transformation from a stablecoin issuer to a comprehensive financial infrastructure provider.

Full-Year 2026 Guidance: Steady Growth Expected

• Other Income: Full-year guidance of $150 million to $170 million, with a midpoint of $160 million, representing approximately 46% year-over-year growth compared to 2025, reflecting the company's strong confidence in the growth of businesses like the payment network.
• USDC Circulation: The target for maintaining a compound annual growth rate (CAGR) of 40% over the coming years remains unchanged, consistent with previous guidance, showing the company's continued optimism about USDC's market share expansion.
• RLDC Margin: Guidance range of 38%-40%, still at a high level, indicating Circle's confidence in maintaining channel negotiation power and profitability.

Key Investment Takeaways

Overall, Circle's Q4 performance released multiple positive signals. Given the previously low level of attention, the stock price demonstrated significant elasticity, especially the discussion about AI, which opened up new valuation imagination:

First, the new narrative of AI + payments expands valuation imagination. During the earnings call, the company emphasized its leading position in the field of AI agentic payments; in particular, it noted that recent estimates show approximately 99% of AI agent payments are conducted in USDC, opening up market imagination.

Second, the resilience of the business model has been fully validated. Against the backdrop of an overall sluggish crypto market in Q4, USDC circulation maintained steady growth, and interest income did not decline as rapidly as the market expected during the rate-cutting cycle. Coupled with the rapid growth of other income, this alleviated excessive market concerns.

Third, there is ample momentum for valuation recovery. Following the Q3 earnings release, Circle faced significant selling pressure from a massive lock-up expiration, leading to the stock being oversold at one point.

Disclaimer:

This article is written by the SoSoValue analyst team and is intended for information sharing and research exchange only, not constituting any investment advice. The data cited in this article is sourced from Circle's public financial reports and company announcements. Please refer to the company's official disclosures for specific data. Investing involves risks, and caution is advised when entering the market.