拆解Circle Q1财报：利率红利退潮后，USDC准备下一盘大棋

Original | Odaily Planet Daily (@OdailyChina)

Author | Azuma (@azuma_eth)

On May 11, before the US stock market opened, stablecoin issuer Circle officially released its Q1 2026 financial report.

The financial data shows that 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 market expectation of $0.18; adjusted EBITDA was $151 million, up 24% year-over-year; net profit was $55 million, down 15% year-over-year.

Affected by the earnings release, CRCL experienced significant volatility before the market opened, with an initial pre-market gain of nearly 6% gradually erased amidst fluctuations. As of 22:00, CRCL continued to decline sharply after the US market opened, but then quickly reversed from a loss to a gain, temporarily trading at $115.74, an intraday increase of 2.52%.

Key Data Interpretation

As shown in the financial report, Circle's total revenue and reserve income for this quarter was $694 million. Although it increased by 20% year-over-year, it interrupted the growth trend of previous consecutive quarters ($579 million ➡️ $658 million ➡️ $740 million ➡️ $770 million ➡️ $694 million) and also failed to meet 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%, thereby compressing the yield on Circle's reserve assets, mainly US Treasuries.

However, despite the relatively weak revenue, Circle's financial report still reveals some local data points worthy of optimism.

First, Circle's other revenue, excluding reserve income, reached a new high of $42 million, showing a trend of growth for multiple consecutive quarters ($21 million ➡️ $24 million ➡️ $29 million ➡️ $37 million ➡️ $42 million).

As we stated in the article "Financial Reports, Legislation, Fed... Circle Faces Three Major Tests This Week" published this afternoon, this means Circle's revenue sources are becoming more diversified. Its platform services, API tools, and payment products are generating substantial commercial revenue, reducing its reliance on interest income.

Another noteworthy data point is the RLDC Margin, which is the profit margin after subtracting distribution costs from revenue. This reflects the profitability level of the core business after deducting distribution expenses and is widely regarded as Circle's most critical profitability indicator. Circle's RLDC Margin reached 41% this quarter, achieving growth for four consecutive quarters (36% ➡️ 39% ➡️ 40% ➡️ 41%), indicating that Circle's control over distribution costs is becoming more efficient.

Let's look at the expenditure situation. Distribution and Transaction Costs remain Circle's largest expense item, reaching $405 million this quarter, a 17% increase year-over-year. This part of the expenditure is mainly linked to the USDC distribution contract with Coinbase. This contract is set to expire in August this year, and how it is renewed (mainly depending on whether the revenue-sharing ratio will be adjusted) will significantly impact Circle's subsequent expenditure and profit situation.

Excluding distribution costs, Total Operating Expenses surged from $138 million last year to $242 million, a year-over-year increase of 76%. The primary contributor to this increase is compensation expenses, which nearly doubled from $75.62 million to $138 million – Circle explained that this is mainly due to the impact of stock-based compensation expenses after the 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 in the same period last year to $55.25 million; earnings per share (EPS) was $0.23, and diluted EPS was $0.21.

Other Operational Highlights

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

The most critical data point among them is that the circulating supply of USDC at the end of Q1 reached 77 billion tokens, a 28% increase year-over-year. At the same time, however, the on-chain transaction volume of USDC in Q1 reached an astonishing $21.5 trillion, a 263% increase year-over-year. Data from Visa Onchain Analytics also shows that USDC accounted for 63% of the total stablecoin transaction volume across the entire network in Q1.

The transaction volume growth rate far exceeds the circulation growth rate, meaning that the frequency of turnover and application of each USDC token on-chain has significantly increased — USDC is not statically sitting in wallets but is being genuinely and frequently used for payments, DeFi, cross-border settlements, and other scenarios.

Another important point is that Circle also disclosed that its payment network, Arc Network, has completed a $222 million pre-sale of ARC tokens, with a valuation of up to $3 billion. Investors include renowned institutions such as a16z, BlackRock, Intercontinental Exchange, Standard Chartered, and SBI. The ARC token whitepaper disclosed today also shows 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 long-term reserves (strategic flexibility and economic stability).

Furthermore, the estimated annual transaction volume of Circle's institutional payment service, Circle Payments Network (CPN), has also reached $8.3 billion (extrapolated from the 30-day data ending March 31); In April, Circle also launched the "Managed Payments" product to expand its payment offerings, which allows financial institutions to launch stablecoin payment businesses without needing to manage digital assets themselves.

To prepare for a business future driven by AI agents, Circle also announced the launch of Agent Stack, a set of infrastructure services and toolkits for the AI agent economy, designed to provide high-speed, low-cost financial service capabilities for autonomously running AI agents. Circle Co-founder and CEO Jeremy Allaire's vision statement on this is: "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 Chess Game

Against the macro backdrop of the fading high-interest-rate dividend (Warsh, upon succeeding as Fed chair, is expected to promote a 'rate cut + balance sheet reduction' strategy), Circle is clearly unwilling to be entirely subject to the Fed's interest rate policy. Its strategic focus has quietly shifted towards the diversified expansion of non-interest income.

Judging from the details disclosed in this quarterly report, after successively launching services like CPN, Managed Payments, Agent Stack, and Arc Network, Circle's goal is no longer just to be a "stablecoin issuer." Instead, it is attempting to build USDC into the underlying dollar network for the internet era. Under this new vision, Circle's target customers are no longer limited to exchanges or crypto-native users but are comprehensively extending into cross-border payments, enterprise settlements, and even the AI agent economy.

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