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Crypto’s Circle just released its Q3 earnings report, and oh, it’s got the numbers. But Wall Street’s not clapping, so CRCL crashed 5% at the opening bell, right after the company posted blowout Q1 results.
The USDC issuer raked in $739.8 million in revenue, a 66% jump from the same time last year. Profit clocked in at 64 cents per share, crushing the 20 cents analysts expected, based on data shared publicly in Wednesday’s earnings release.
Circulating USDC supply more than doubled to $73.7 billion by the end of September, compared to a year ago. The company makes most of its money from interest on the U.S. dollar reserves that back USDC.
Those reserves sit in a regulated money-market fund. But investors didn’t care about any of that today. The moment they saw the company’s updated full-year outlook, they dumped the stock.
By Tuesday’s close, Circle shares had rallied literally over 200% since its $31 IPO price in June. But they’re now 63% off their peak, which came on June 23. The momentum fizzled after Circle raised its cost forecast for 2025, saying that expenses might eat into all that sweet top-line growth.
Circle’s operating costs surge as Arc blockchain launch draws near
Circle’s updated forecast also shows that operating costs are expected to land between $495 million and $510 million in 2025, which is such a huge step up from the previous estimate of $475 million to $490 million.
Meanwhile, non-reserve revenue, which comes from services and subscriptions, is now expected to hit a midpoint of $95 million, up from $80 million. But the problem is that costs are rising faster than revenue.
A chunk of that cash is going straight into Arc, Circle’s upcoming blockchain project. Sources confirmed Arc already has heavy-hitting partners lined up: BlackRock, HSBC, and Visa.
The company also said it’s considering launching its own token on that network, and that’ll mean more spending before any clear payoff.
Another thing that’s killing the vibe is interest rates. Since Circle makes money from U.S. dollar reserves, any change in rates cuts into earnings.
Now the Federal Reserve has already cut rates twice in the past two months after nearly a year of nothing, and is expected to do it again in December and several more times through 2026 after chairman Jerome Powell leaves.
Even with the near-term drag, executives at Circle are pushing a long-term vision. Chief Financial Officer Jeremy Fox-Geen told Barron’s that stablecoins are the beginning of what he called a “megatrend.”
He’s banking on a global financial shift, not short-term market noise. “The rise of the internet financial system will bring massive benefits to businesses around the world,” he said, sounding more like a futurist than a CFO.
In the big stablecoin game, it’s Circle vs Tether. Those two rule the U.S. dollar-pegged token market. Tether’s USDT is still larger, but Circle is making moves.
CEO Jeremy Allaire said the Genius Act, passed in Washington this summer, is bringing much-needed clarity to crypto regulation. More clarity could attract competitors, sure, but Jeremy isn’t worried. “Overall, the stablecoin market continues to grow strongly and we continue to gain share,” he told analysts on the earnings call. He called the industry a “winner-take-most market,” with Circle locked in as a front-runner.
Analyst Jacob Zuller at Third Bridge agrees. In a Wednesday report, he said Circle is best positioned to dominate the U.S. market because of its regulatory edge.
Jacob doesn’t think Tether’s USDT is a serious threat, pointing to its lack of transparency and weak liquidity.
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