【CRCL Performance】Circle's first-quarter earnings per share beat expectations; USDC trading volume increased 2.6 times; stock price rose nearly 13%

Stablecoin issuer Circle Internet Group (US: CRCL) announced first-quarter results, with total revenue and reserve income growing 20% year-over-year to $694 million, below market expectations of about $720 million; recurring business earnings per share of $0.21, higher than market expectations of approximately $0.18 to $0.19; adjusted EBITDA increased 24% year-over-year to $151 million, also surpassing market expectations of $138 million. The performance was mixed, but profit results exceeded expectations, driving the stock price higher, with Circle’s stock later rising nearly 13%, to $128.

USDC circulation increases, reserve return rate declines drag down income

Circle’s core profit model involves investing the reserve assets backing the US dollar stablecoin USDC in U.S. government securities and other assets to earn interest income. Therefore, as USDC circulation rises, the company’s revenue base can expand; but if interest rates decline or reserve return rates fall, it will directly impact revenue growth.

At the end of the quarter, Circle’s USDC circulation was $77 billion, up 28% year-over-year; first-quarter on-chain USDC trading volume reached $21.5 trillion, a 263% surge year-over-year. However, the reserve return rate fell 66 basis points to 3.5%, below the market expectation of 3.56%.

Benefiting from an average USDC circulation growth of 39% year-over-year, reserve income increased 17% annually to $653 million; other income also doubled year-over-year to $42 million due to growth in subscription and service revenue, as well as trading income.

Revenue below expectations, but core income quality exceeds guidance

Circle’s first-quarter revenue was below expectations, but the income quality (RLDC margin) after deducting distribution and trading costs was better. Circle’s first-quarter RLDC margin was 41%, higher than the full-year guidance of 38% to 40%. This indicator reflects how much income the company can retain in total revenue and reserve income after deducting distribution costs paid to partners like Coinbase and trading-related costs, and is regarded by the market as an important measure of Circle’s profitability.

Finance Chief Jeremy Fox-Green stated during the earnings call that growth in other income, increased USDC on Coinbase platform, and moderate pullback in some high-reward channels all helped explain the first quarter RLDC margin performance. In other words, although Circle’s revenue this quarter did not meet expectations, its ability to convert revenue into profit remains better than management’s full-year targets.

Circle maintains full-year guidance, expecting USDC circulation to achieve a 40% compound annual growth rate over multiple years; other income in 2026 to range between $150 million and $170 million; RLDC margin between 38% and 40%; adjusted operating expenses between $570 million and $585 million. However, the company notes that the current guidance does not include the financial impact of ARC Token pre-sales, Arc incentive plans, and future Arc revenue streams.

Arc pre-sale raises $222 million, AI agent payments as growth driver

On the same day, Circle announced that the ARC Token pre-sale raised $222 million, valuing the fully diluted network at $3 billion. Investors include a16z crypto, BlackRock, Apollo Funds, Ark Invest, Intercontinental Exchange, and Standard Chartered Ventures. Circle stated that the Arc blockchain will support stablecoin financial applications, including cross-border payments and capital markets settlement scenarios.

Circle also launched Circle Agent Stack, positioning itself in AI agent payment scenarios, allowing AI agents to hold assets, search services, and conduct programmatic transactions using USDC. CEO Jeremy Allaire said during the earnings call that AI agent technology has rapidly developed over the past few months, and conversations with enterprises, financial institutions, and key partners almost all involve how to apply agent-based artificial intelligence. Citi analyst Peter Christiansen noted that Circle, with its “stablecoin plus full-service platform” model, is poised to become the default settlement platform for AI agent commerce. Currently, Circle is trying to further push USDC from a crypto trading tool into payments, settlement, and AI agent transaction infrastructure, becoming another focus of market attention for the company’s medium- to long-term growth.