Circle records a remarkable year: profits triple in the third quarter

Circle Internet Group demonstrated impressive growth in its last quarter, with results that significantly exceeded market expectations. The company’s upward trajectory marks a pivotal year for the issuer of the world’s second-largest stablecoin, reflecting the accelerated adoption of USDC and the expansion of its financial ecosystem.

Revenues that Explode Quarter After Quarter

Circle’s net profit reached $214 million in Q3, marking a staggering 202% increase year-over-year. Even more impressive, earnings per share stood at $0.64, surpassing market estimates of $0.22 and indicating exemplary control of operational costs.

This performance is primarily driven by the continued dynamism of USDC. Total revenue and reserve income more than doubled to reach $740 million, a massive expansion fueled by growing demand for the stablecoin and interest generated by held reserve assets. However, the company acknowledged that revenues were hindered by a 96 basis point decrease in reserve yield, reflecting pressures related to expectations of US interest rate cuts.

USDC Consolidates Its Position Despite Macroeconomic Turbulence

The total USDC in circulation reached $70.20 billion, according to the latest data, representing a spectacular growth compared to the previous year. Although this figure shows recent moderation, it remains a testament to the massive and ongoing adoption of Circle’s stablecoin.

Compared to the market leader, Tether’s USDT (with a market cap of $183 billion), USDC has advanced at a remarkable pace. This competition is fueling innovation in the stablecoin sector and pushing both major players to continually improve their offerings.

Markets responded to these results with mixed reactions. CRCL shares fell 8.6% amid concerns about an additional decrease in US interest rates at the Federal Reserve’s December meeting. The predictive market Polymarket anticipates a 71% probability of rate cuts, while CME’s FedWatch tool estimates it at 65%. Lower rates would mechanically reduce yields on instruments held to support USDC, impacting future revenues.

Arc and Diversification: Preparing for the Future Beyond Reserve Revenues

Circle has recognized that it cannot rely solely on interest income. The company unveiled Arc, a layer 1 blockchain designed to facilitate stablecoin payments, exchange applications, and capital markets. This strategic initiative has quickly gained traction, with over 100 companies joining the public testnet last quarter.

Meanwhile, the Circle Payments Network also shows a “promising early momentum,” according to analysts like Owen Lau of ClearStreet. These diversification efforts are a crucial step toward reducing dependence on reserve income, a development path that analysts see as decisive for sustainable growth.

Jeremy Allaire, co-founder and CEO of Circle, stated: “Circle continued to see accelerated adoption of USDC and our platform in Q3 as we build the new economic system for the Internet.” These words reflect an ambition that goes far beyond merely being a stablecoin issuer.

Towards Sector Consolidation in Stablecoins

Circle’s expansion is part of a broader movement toward maturation in the stablecoin sector. After its listing on the New York Stock Exchange in June, Circle has accelerated its positioning as a major institutional player. The Q3 results confirm this upward trajectory.

William Blair analysts reaffirm their “Outperform” recommendation on Circle, emphasizing solid execution and continued USDC adoption. They also highlight the improvement in the company’s annual forecasts, which now include higher projected revenues from product lines beyond reserve income — a key indicator that economic model diversification could finally bear fruit year after year.

Although operational expenses are expected to increase, Circle’s stablecoin ecosystem continues to strengthen. These strategic investments position the company for longer-term growth and broader USDC usage across financial and corporate ecosystems, marking a pivotal quarter in the sector’s history.