Circle’s Q1 Net Income Dropped 15% Even as USDC Hit $77 Billion

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• Circle’s Q1 net income fell 15% to $55M, even as USDC circulation grew 28% year over year to $77B.

• Circle raised $222M for Arc at a $3B valuation, with backing from BlackRock, Apollo, a16z, and other investors.

Circle Internet Group reported a mixed first quarter as USDC activity and higher revenue failed to prevent a drop in profit. The stablecoin issuer said net income from continuing operations fell 15% year over year to $55 million, or $0.21 per share, even as USDC in circulation rose 28% to $77 billion.

The company’s earnings per share beat analyst expectations, with estimates ranging between $0.17 and $0.18. However, revenue and reserve income came in below forecasts at $694 million. The figure still marked 20% annual growth, though analysts had expected a higher result, around $715 million to $720.8 million.

The Internet’s largest paradigm shift is happening now, and our Q1 results underscore Circle’s role at the center of these changes.

→ $694M total revenue and reserve income, +20% YoY
→ $77.0B USDC in circulation, +28% YoY
→ $21.5T in USDC onchain transaction volume, +263% YoY… pic.twitter.com/GYwLy0v2Dl

— Circle (@circle) May 11, 2026

Circle earns much of its profit from interest on U.S. government securities held in reserve for USDC. During the quarter, its reserve return rate stood at 3.5%, slightly below expectations of 3.56%. That lower return rate came as operating expenses and compensation costs increased, weighing on net income despite stronger activity across the company’s stablecoin business.

USDC remained the main driver of Circle’s operating performance. The stablecoin’s onchain transaction volume jumped 263% year over year to $21.5 trillion.

Adjusted EBITDA rose 24% from a year earlier to $151 million, above market expectations of about $137.9 million. Circle also reaffirmed its 2026 outlook, including projected revenue of $150 million to $170 million and adjusted operating expenses of $570 million to $585 million.

Circle Raises $222 Million for Arc Expansion

Alongside its quarterly results, Circle announced a $222 million token presale for Arc, its new blockchain network built for institutional finance. The ARC token sale valued the network at $3 billion on a fully diluted basis and brought in several major investors from finance and crypto.

Circle Q1 Revenue Rises 20%, Raises $222M for Arc Blockchain at $3B Valuation

Circle reported Q1 2026 revenue and reserve income of $694 million, up 20% year-over-year, while USDC circulation reached $77 billion and on-chain transaction volume surged 263% to $21.5 trillion.… pic.twitter.com/N5EPLGzjGS

— Wu Blockchain (@WuBlockchain) May 11, 2026

Andreessen Horowitz led the raise with a $75 million investment. Other participants included BlackRock, Apollo Funds, Intercontinental Exchange, ARK Invest, Standard Chartered Ventures, Haun Ventures, Bullish, Janus Henderson Investors, and General Catalyst. The investor list placed Arc at the center of Circle’s push beyond stablecoin issuance.

Arc targets stablecoin-based capital markets, tokenized assets, cross-border settlement, and regulated onchain finance. Circle also published the Arc whitepaper, which presents ARC as a native coordination asset for governance, validator security, and network operations.

The network will start with an initial supply of 10 billion tokens. Circle will keep 25% of Arc’s 10 billion token supply. That stake allows the company to run validator infrastructure, collect network fees, and earn staking income. The wider Arc ecosystem will receive 60% of the supply, while the remaining 15% will sit in a long-term reserve.

Additionally, Circle is also expanding its developer tools for AI-driven payments with products like Circle CLI, Agent Wallets, and Agent Marketplace. This month, Circle also partnered with Lighter to make USDC the default and preferred stablecoin across its trading products.