拆解Circle Q1财报：利率红利退潮后，USDC准备下一盘大棋

Original by Odaily Planet Daily (@OdailyChina)

Author: Azuma (@azuma_eth)

Before the US stock market opened on May 11, stablecoin issuer Circle officially announced its Q1 2026 financial report.

According to the financial data, Circle's total revenue and reserve income for Q1 was $694 million, slightly below the market expectation of $715 million; EPS was $0.21, higher than the expected $0.18; adjusted EBITDA was $151 million, up 24% year-over-year; net profit was $55 million, down 15% year-over-year.

Following the earnings release, CRCL experienced significant volatility in pre-market trading, with an initial pre-market gain of nearly 6% gradually erasing amid fluctuations. As of 22:00, CRCL continued to decline sharply after the US market opened, but quickly reversed to gains, temporarily trading at $115.74, up 2.52% on the day.

Key Data Interpretation

As the financial report shows, Circle's total revenue and reserve income for this quarter was $694 million, a 20% increase year-over-year. However, this broke the growth trend observed over the previous consecutive quarters ($579 million ➡️ $658 million ➡️ $740 million ➡️ $770 million ➡️ $694 million) and fell short of market expectations.

Circle attributed the slowdown in revenue growth to a decline in the Reserve Return Rate. On December 10, 2025, the Federal Reserve lowered the federal funds rate target range by 25 basis points to 3.5%-3.75%, subsequently compressing the yield on Circle's reserve assets, which are primarily US Treasuries.

However, despite the relatively weaker revenue, Circle's financial report still revealed some encouraging localized data points.

First, Circle's Other Revenue, excluding Reserve Income, reached a record high of $42 million, showing a growth trend over consecutive quarters ($21 million ➡️ $24 million ➡️ $29 million ➡️ $37 million ➡️ $42 million).

As mentioned in our article this afternoon, "Earnings, Legislation, the Fed... Circle Faces Three Major Tests This Week", this indicates that Circle's revenue sources are diversifying. Its platform services, API tools, and payment products are generating substantial commercial returns, reducing its reliance on interest income.

Another noteworthy metric is the RLDC Margin, which is the profit margin after deducting distribution costs. This reflects the profitability of core business after accounting for distribution expenses and is widely considered Circle's most critical profitability indicator. This quarter, Circle's RLDC Margin reached 41%, achieving growth for four consecutive quarters (36% ➡️ 39% ➡️ 40% ➡️ 41%). This suggests Circle is becoming more efficient in managing its distribution costs.

Now, let's look at the expenses. Distribution and Transaction Costs remain Circle's largest expense item, reaching $405 million this quarter, a 17% increase year-over-year. This expenditure is primarily linked to the USDC distribution contract with Coinbase. This contract is set to expire in August this year. How it is renewed (mainly regarding whether the revenue share ratio will be adjusted) will significantly impact Circle's future expenses and profitability.

Excluding distribution costs, Total Operating Expenses surged from $138 million last year to $242 million, a substantial 76% year-over-year increase. The main driver of this increase was Compensation expenses, which nearly doubled from $75.62 million to $138 million. Circle explained that this was primarily due to stock-based compensation expenses post-IPO and related taxes.

Affected by the surge in expenses, Circle's operating profit for this quarter fell from $92.94 million in the same period last year to $45 million; net profit attributable to common shareholders decreased from $64.79 million to $55.25 million; Earnings Per Share (EPS) was $0.23, and diluted EPS was $0.21.

Other Operational Highlights

Beyond the core financial data, Circle also disclosed several operational highlights in its Q1 earnings report.

The most crucial piece of data is that USDC's circulating supply reached 77 billion coins at the end of Q1, a 28% increase year-over-year. However, simultaneously, USDC's on-chain transaction volume for Q1 reached a staggering $21.5 trillion, a 263% increase year-over-year. Visa Onchain Analytics data also shows that USDC accounted for 63% of total stablecoin transaction volume across the network in Q1.

The transaction volume growth rate far outpacing the circulation supply growth rate implies that the frequency of each USDC token changing hands and being used on-chain has increased dramatically — USDC is not statically sitting in wallets, but is being genuinely and frequently utilized for payments, DeFi, cross-border settlements, and other scenarios.

Another key point is that Circle also disclosed that its payment network, Arc Network, has completed a $222 million pre-sale of ARC tokens, achieving a valuation of $3 billion. Investors include prestigious institutions such as a16z, BlackRock, Intercontinental Exchange, Standard Chartered, and SBI. The ARC token whitepaper released today reveals that 60% of the tokens will be allocated to the ecosystem (token sales, developer grants, network growth); 25% will be allocated to Circle (protocol development, staking, and governance); and 15% will be allocated to a long-term reserve (strategic flexibility and economic stability).

During the subsequent earnings call, when asked how the ARC tokens belonging to Circle would be accounted for, Circle co-founder and CEO Jeremy Allaire stated: "When the ARC tokens are created, they will be recorded on Circle's balance sheet at cost, which is zero. Subsequently, once Circle fulfills its obligations under the token pre-sale agreement, we will recognize the value of these tokens as 'Other Revenue,' and this value will then be directly reflected in RLDC and adjusted EBITDA."

This also implies that in a future quarter, Circle's reported revenue data will look "exceptionally good" due to the inclusion of the ARC token's value.

Furthermore, Circle's institutional payment service, Circle Payments Network (CPN), has reached an estimated annualized transaction volume (annualized based on the 30 days ending March 31) of $8.3 billion; In April, Circle launched the "Managed Payments" product to expand its payment offerings. This product allows financial institutions to initiate stablecoin payment businesses without needing to manage digital assets themselves.

To prepare for an AI Agent-driven commercial future, Circle also announced the launch of Agent Stack, a suite of infrastructure services and tools designed for the AI Agent economy. It aims to provide high-speed, low-cost financial service capabilities for autonomously operating AI Agents. Jeremy Allaire's outlook on this was: "With the pre-sale of ARC tokens, the growing momentum of the Arc Network, and the launch of Agent Stack, we are building trusted infrastructure for AI-native economic activity and a more programmable internet financial system."

Circle's New Strategy

Against the macroeconomic backdrop of diminishing high-interest-rate dividends (Warsh, upon succeeding as Fed chair, is expected to promote a "rate cut + balance sheet reduction" strategy), Circle clearly does not wish to be entirely at the mercy of the Fed's interest rate policy. Its strategic focus has quietly shifted towards the diversified expansion of non-interest income.

Based on the details disclosed in this quarter's report, following the successive launches of CPN, Managed Payments, Agent Stack, Arc Network, and other services, Circle's goal is no longer just to be a "stablecoin issuer." Instead, it is attempting to establish USDC as the foundational dollar network for the internet era. Under this new vision, Circle's target audience is no longer limited to exchanges or crypto-native users but is expanding comprehensively into cross-border payments, enterprise settlements, and even the AI Agent economy.

Circle's ambition is crystal clear: to completely transform USDC from a "static reserve asset" into "flowing economic lifeblood." This is perhaps the grand strategy Circle truly intends to execute.