Stock price rises over 35%! Circle's financial report exceeds expectations: USDC circulation surges by 72%

By: rootdata|2026/02/27 22:11:30
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Author: Zhou, ChainCatcher

On February 25, stablecoin issuer Circle (NYSE: CRCL) released its financial report for the fourth quarter and the full year of fiscal 2025.

The report shows that the company's total revenue and reserve income for the fourth quarter reached $770 million, a year-on-year increase of 77%, exceeding market expectations.

As a result, CRCL's stock price rose over 35% on Wednesday.

Specifically, the growth of its stablecoin USDC became the core highlight of this financial report. By the end of the year, the circulation of USDC had reached $75.3 billion, a 72% increase compared to the same period last year.

At the same time, network activity showed explosive growth, with on-chain transaction volume reaching $11.9 trillion in the fourth quarter, a year-on-year increase of 247%.

In terms of revenue composition, reserve income remains the backbone of the company's revenue, contributing $733 million in Q4, a year-on-year increase of 69%.

Although market yields decreased by 68 basis points during the period, this pressure was offset by the significant expansion of USDC's average circulation.

Meanwhile, non-interest income reached $37 million, mainly due to steady accumulation from subscription services and transaction fees.

Looking at the overall performance for the year, the company's total revenue and reserve income amounted to $2.7 billion, a year-on-year increase of 64%.

Although the continuing operations recorded a net loss of $70 million, this was primarily influenced by a one-time stock compensation expense of $424 million incurred during the IPO process.

Since this expense is non-cash in nature, excluding it, the company's core business has shown profitability. Adjusted EBITDA reached $582 million, doubling year-on-year, indicating that operational leverage effects are gradually becoming apparent.

In terms of strategic layout, Circle is gradually transforming from a pure stablecoin issuer to a provider of internet financial infrastructure, strengthening its underlying position in real-time trading through various technological initiatives.

The report shows that the Arc public chain public test network is operating stably, with the final confirmation time for transactions reduced to about half a second, and total transaction volume has exceeded 166 million, with the mainnet expected to officially launch within the year.

In terms of payment networks, the ecosystem of Circle Payments Network continues to expand. Currently, 55 financial institutions have officially joined, with another 74 in the qualification review stage, and the annualized transaction volume over the past 30 days has reached $5.7 billion.

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

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

Additionally, Circle is also gradually penetrating the traditional financial ecosystem. The company has not only achieved around-the-clock settlement cooperation with Visa but has also broadened application scenarios through integration with Intuit's platform.

In terms of regulatory compliance, the company received conditional approval from the Office of the Comptroller of the Currency to establish a national trust bank in December 2025, further consolidating its compliance first-mover advantage under the GENIUS Act framework.

The secondary market has responded positively to this. Technically, before the financial report was released, the company's stock price had rebounded from a low point and stabilized above the 7-day and 30-day moving averages.

On the institutional side, ARK Invest, led by Cathie Wood, has repeatedly increased its holdings in Circle stock during the market correction, with the latest position at approximately 4.14 million shares, valued at about $261 million.

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

However, Circle still needs to face potential headwinds in the future.

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

On the other hand, the competitive landscape for stablecoins is changing. The USAT stablecoin launched by Tether and issued by Anchorage Digital is targeting the U.S. institutional market and is seen as USDC's first substantial regulatory competitor in the domestic market, which may lead to some diversion in compliance market share.

Moreover, the overall volatility in the crypto market and macro cycles will still pose uncertainties for the growth rate of circulation. According to Coinglass data, the current total market capitalization of stablecoins is approximately $264 billion, with USDC accounting for about 28.5%. Although USDC leads the industry in growth rate, Tether still holds a dominant position.

Investors should pay special attention to the management's expectations and execution plans for the future. The company has provided clear guidance for fiscal year 2026:

  • USDC circulation aims for a compound annual growth rate of 40% over several years;
  • Other income (subscriptions, services, and transaction fees) is expected to be between $150 million and $170 million;
  • RLDC profit margin (profit after deducting distribution and transaction costs) is maintained in the high range of 38% to 40%;
  • Adjusted operating expenses are expected to be between $570 million and $585 million.

These guidelines also reflect the management's confidence in sustained scale expansion, cost control, and accelerated growth of non-interest income.

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

He stated that we are about to enter a world where there may be billions or even hundreds of billions of AI agents interacting and performing economic functions on the internet.

These AI agents require programmable digital dollars and open infrastructure to enable autonomous trading, and Circle's products are built for this purpose.

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

Currently, Circle Gateway has entered the testing network phase, supporting AI agents to autonomously initiate cross-chain USDC transactions, with a single transaction cost as low as $0.00001 (extremely low fees, suitable for micropayments and high-frequency machine-to-machine transactions).

The meeting also mentioned that currently about 99% of agent-based payments use USDC, thanks to Circle's cross-chain deployment and participation in agent payment standards (such as the x402 standard, in collaboration with companies like Google).

Overall, this financial report validates Circle's strategic execution in a complex regulatory environment, while the new story of AI + payments expands the company's valuation imagination space. Despite facing yield volatility and challenges from emerging competitors, Circle continues to make strides on the path of "financial infrastructure" and "compliance expansion."

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