Stock price surges over 35%! Circle's earnings beat expectations: USDC circulation skyrockets by 72%

Author: Zhou, ChainCatcher

On February 25, the stablecoin issuer Circle (NYSE: CRCL) released its fiscal year 2025 Q4 and full-year financial reports.

The report shows that the company’s total revenue and reserve income in Q4 reached $770 million, a 77% year-over-year increase, surpassing market expectations.

Driven by this, CRCL’s stock closed up more than 35% on Wednesday.

Specifically, the growth of its stablecoin USDC became the core highlight of this earnings report. By the end of the year, USDC’s circulating supply reached $75.3 billion, a 72% increase compared to the same period last year.

At the same time, network activity saw explosive growth, with on-chain transaction volume in Q4 hitting $11.9 trillion, a 247% increase year-over-year.

In terms of revenue composition, reserve income remains the company’s main revenue source, contributing $733 million in Q4, a 69% increase year-over-year.

Although market yield rates declined by 68 basis points during the period, this pressure was offset by a significant expansion in USDC’s average circulation size.

Meanwhile, non-interest income reached $37 million, mainly from steady growth in subscription services and transaction fees.

Looking at the full-year performance, the company’s total revenue and reserve income totaled $2.7 billion, a 64% increase.

While the core operating business recorded a net loss of $70 million, this was mainly due to a one-time $424 million stock compensation expense recognized during the IPO process.

Since this expense is non-cash, the company’s core operations have shown profitability after adjustments. Adjusted EBITDA reached $582 million, doubling year-over-year, indicating that operating leverage is gradually emerging.

In strategic development, Circle is gradually transforming from a pure stablecoin issuer into an internet financial infrastructure provider. The company is strengthening its foundational position in real-time trading through multiple technological initiatives.

The report shows that the Arc public blockchain testnet is stable, with final transaction confirmation times shortened to about half a second. Total transaction volume has exceeded 166 million, and the mainnet is expected to launch officially within the year.

In the payments network sector, the Circle Payments Network ecosystem continues to expand. Currently, 55 financial institutions are officially onboarded, with 74 more in qualification review. The annualized transaction volume over the past 30 days has reached $5.7 billion.

Notably, a strategic partnership with Polymarket further highlights USDC’s value in emerging sectors. As one of the largest prediction markets platforms globally, Polymarket will gradually switch all bets and settlements to native USDC.

This collaboration not only eliminates bridging risks and improves capital efficiency but also directly translates user growth in prediction markets into long-term increases in USDC circulation and trading volume.

Additionally, Circle is gradually penetrating the traditional financial ecosystem. The company has achieved 24/7 settlement cooperation with Visa and is expanding application scenarios through platform integrations with Intuit.

On the regulatory front, the company received a conditional approval from the U.S. Office of the Comptroller of the Currency (OCC) in December 2025 to establish a nationwide trust bank, further consolidating its compliance advantages under the GENIUS Act framework.

The secondary market responded positively. Technically, before the earnings release, the stock rebounded from lows and stabilized above the 7-day and 30-day moving averages.

Institutionally, ARK Invest, led by Cathie Wood, increased its holdings multiple times during the market correction, with the latest position of about 4.14 million shares valued at approximately $261 million.

Mizuho Securities upgraded CRCL’s rating from underweight to neutral at the end of January, setting a target price of $77. The firm believes that growth in Polymarket will directly drive expansion in USDC’s scale and revenue.

However, future challenges remain for Circle.

On one hand, the downward trend in interest rates may continue to pressure reserve yields, as reflected in the decline in yields during Q4.

On the other hand, the competitive landscape for stablecoins is changing. USAT, launched by Tether and issued by Anchorage Digital, is targeting the U.S. institutional market and is seen as the first substantial domestic regulatory competitor to USDC, which could lead to some market share shifts among compliant institutions.

Moreover, overall crypto market volatility and macroeconomic cycles will continue to introduce uncertainty in circulation growth. According to Coinglass data, the total stablecoin market cap is about $264 billion, with USDC accounting for roughly 28.5%. Despite USDC’s leading growth rate, Tether remains dominant.

Investors should pay particular attention to management’s outlook and execution plans. The company has provided clear guidance for FY2026:

• USDC circulation is targeted to achieve a compound annual growth rate of 40% over multiple years;
• Other revenues (subscriptions, services, and transaction fees) are expected to be between $150 million and $170 million;
• RLDC profit margin (profit after deducting distribution and transaction costs) will remain high at 38%–40%;
• Adjusted operating expenses are projected between $570 million and $585 million.

These targets reflect management’s confidence in sustained scale expansion, cost control, and accelerated growth of non-interest income.

Additionally, Circle CEO Jeremy Allaire repeatedly mentioned AI agents and their payment needs during the earnings call.

He stated that we are about to enter a world where potentially billions or even hundreds of billions of AI agents will interact and perform economic functions on the internet.

These AI agents will require programmable digital dollars and open infrastructure to enable autonomous transactions, and Circle’s products are built precisely for this purpose.

Specifically, Circle is heavily investing in agent-based payment infrastructure.

Currently, Circle Gateway has entered the testnet phase, supporting AI agents to initiate cross-chain USDC transactions autonomously, with transaction costs as low as $0.00001 per transaction (extremely low fees suitable for micro-payments and high-frequency machine-to-machine trading).

The conference also mentioned that about 99% of agent-based payments currently use USDC, thanks to Circle’s cross-chain deployment and participation in standards like x402, in collaboration with companies like Google.

Overall, this earnings report validates Circle’s strategic execution in a complex regulatory environment, while the new AI + payments story expands the company’s valuation potential. Despite challenges from yield fluctuations and emerging competitors, Circle continues to advance on the tracks of “financial infrastructure” and “compliance expansion.”