Circle Earned $865M, but $182M Came from the ARC Token, Not USDC

Circle closed the third quarter of 2026 with $865 million in total revenue and reserve income, up 17% from a year earlier. But $182 million of that came not from USDC but from the ARC token presale.

Without that one-off item, revenue would have been $683 million, roughly 8% lower. Alongside the report, the company announced cuts affecting about 5% of its staff.

Revenue Without ARC Fell 8%

On paper the numbers look good. Diluted earnings per share rose to $0.84 from $0.64 a year ago, and adjusted EBITDA jumped 85% to $317 million. But the ARC presale made that jump possible, and it supplied 21% of the quarter's income.

Strip it out and adjusted EBITDA is about $135 million, down 21% from $171 million last year. The core business earns less than it did twelve months ago, even though more USDC is in circulation. Investors reacted calmly: at 16:05 UTC on Nov. 4, Circle shares traded at $74.59, down 0.84% on the day.

Reserve Yield Slipped by 61 Basis Points

USDC earns Circle interest on its reserves, so revenue depends on two things: how many tokens exist and where rates sit. Average circulation grew 8% over the year, yet the reserve return fell 61 basis points to 3.5%. As a result, reserve income dropped 8% to $657.6 million and made up 76% of the total.

The Fed raised rates by a quarter point in September, to a range of 3.75-4%. That nudged reserve returns up from 3.48% in the second quarter. But a year ago the range was 4-4.25%, so year over year rates are still lower.

USDC: $73.9 Billion in Circulation and a 27% Share

At the end of September, $73.9 billion of USDC was in circulation. Circle's share of the stablecoin market shrank by 1.83 percentage points over the year to 27%. Tether and its USDT remain the largest by volume.

Rivals are multiplying. By Sept. 30, Open Standard's Open USD was live on Solana, with Coinbase, Mastercard, Shopify, Stripe and Visa among its founding partners. The model works like this: after a management fee, the issuer shares reserve earnings with partners. For businesses it is one more way to get a stablecoin and split its economics.

Betting on Arc, a Payments Network and Staking

Living on interest alone is risky, and Circle knows it. The Arc blockchain went live on public mainnet on Sept. 16, 2026. The ARC token covers network security and governance, while fees are paid in USDC. Arc is due to move to proof of stake in 2027, which would add staking rewards as a new revenue line.

The Circle Payments Network has run since May 2025 and links financial institutions that settle cross-border payments in stablecoins. Chief Financial Officer Jeremy Fox-Geen told investors on the earnings call that material CPN revenue should arrive in 2027. For now that is a promise, not a line in the report.

"This is not just about payments, and it is not just about digital dollars. It is about multiple compounding flywheels on one platform. Every new member, every new builder, and every new asset makes the whole platform more valuable."

Jeremy Allaire, CEO of Circle, on the Q3 2026 earnings call

What Could Go Wrong

Circle's model rests on things the company controls only in part. It said the 5% staff cut is meant to align the organization with its operating model and strategic priorities.

• Rates. Every further drop in yield trims reserve income, even if USDC circulation keeps growing.
• The ARC presale happens once, so later quarters may lack that support.
• Open USD and similar projects share income with partners, which presses on USDC's share, already down to 27%.
• Staking rewards and CPN revenue arrive only in 2027, and only if the network develops as planned.

The Quarter in One Paragraph

Circle posted a strong accounting quarter and a weaker operating one. Without ARC, revenue and EBITDA fell, USDC lost market share, and reserves pay less. The next few reports will show whether payments and Arc can replace a one-time presale.