Circle’s ARC token sale lifts earnings as lower yields weigh on USDC income
Circle is looking to payments fees and future staking rewards to diversify revenue as its core stablecoin business faces pressure from lower yields and growing competition.
Circle's ARC token presale significantly boosted earnings as lower yields on reserves backing the company's flagship stablecoin, USDC, impacted profitability. The company reported adjusted earnings per share of $0.84, double analysts' expectations of $0.42. Total revenue and reserve income rose 17% to $865 million. However, without the ARC token sale, revenue would have declined year-over-year.
Circle's expansion beyond stablecoins, primarily through the ARC token presale, provided the biggest boost to its third-quarter earnings. The company's transition to proof of stake for Arc, its blockchain for financial applications, is anticipated to generate additional revenue after 2027. Additionally, Circle is exploring charging for certain activities on its payments network.
The company anticipates material cross-border payments network revenue in 2027. With a workforce reduction affecting approximately 5% of employees, Circle is restructuring to align with its operating model and strategic priorities.
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