Circle Internet Group's third-quarter results were lifted by $182 million in revenue recognized from an ARC token presale, giving the newly launched Arc blockchain a material role in the stablecoin issuer's earnings as income from its reserves declined.
The company reported $865 million in total revenue and reserve income for the quarter, up 17% from a year earlier, according to its earnings release issued Wednesday. Net income from continuing operations reached $226 million, compared with $214.4 million in the third quarter of 2025.
The ARC presale accounted for the bulk of Circle's $207 million in other revenue, a category that generated only $29 million in the comparable quarter last year. Circle agreed to sell $242.2 million of ARC tokens at $0.30 each, based on a $3 billion fully diluted valuation for the token.
The figures show Circle adding a new source of reported revenue while its core reserve-income business faces lower returns. Reserve income fell 8% year over year to $658 million, even as average USDC in circulation increased 8% to $73.3 billion.
ARC presale changes the quarterly revenue mix
Circle launched Arc's public mainnet on Sept. 16, with more than 100 institutional and ecosystem builders participating at launch, according to the company. The network is designed around stablecoin payments and capital-markets applications, placing it closer to Circle's existing USDC business than a general-purpose retail blockchain.
The company minted an initial supply of 10 billion ARC tokens. Arc currently operates under a proof-of-authority model, in which a limited set of approved validators helps secure the network. Circle expects to move the blockchain to proof of stake in 2027, a model that would allow token holders or validators to lock up assets to participate in network validation.
Circle maintained its full-year 2026 forecast for other revenue at $310 million to $330 million. With $182 million recognized from the ARC presale in a single quarter, the token-related contribution has become a major factor in meeting that projection.
The presale also introduces a different revenue profile from the company's reserve income, which is earned from the assets backing USDC. Token sales can provide a sizable near-term contribution, but they do not recur in the same manner as interest generated by a stablecoin reserve. Arc's longer-term commercial performance will depend on whether it develops transaction activity, applications, and services that extend beyond the initial token distribution.
Lower rates weigh on reserve income
Circle's reserve income declined despite growth in USDC balances because the reserve return rate fell by 61 basis points from the previous year. The company did not provide a further breakdown of the rate movement in the figures cited in its release.
USDC circulation stood at $73.9 billion at the end of the quarter, unchanged from a year earlier. Circle said USDC's stablecoin market share was 27% at quarter-end, indicating that growth in average circulation over the period did not translate into a larger share of the overall stablecoin market.
Onchain USDC transaction volume reached $13.9 trillion during the quarter, up 49% year over year, according to Circle. The transaction figure points to greater use of USDC across blockchain networks, though transaction volume does not directly correspond to revenue because stablecoin transfers can include trading, treasury movements, and repeated movement of the same tokens.
Circle's financial model remains closely tied to the size of USDC reserves and the yield earned on them. A lower reserve return rate reduces income per dollar of USDC in circulation, placing more weight on payments products, network services, and other revenue lines to support growth.
Costs rose, while distribution payments declined
Adjusted EBITDA was $317 million, up from $171.5 million in the third quarter of 2025. Circle reported $701 million in revenue and reserve income in the second quarter of 2026, meaning third-quarter revenue rose sequentially as well.
Operating expenses increased 16% year over year to $245 million. Circle attributed the rise to higher administrative expenses, IT infrastructure costs, and marketing spending. The company maintained full-year adjusted operating expense guidance of $570 million to $585 million.
A footnote in the company's earnings tables disclosed $9.1 million in restructuring charges tied to a workforce reduction of about 5%. Circle reported approximately 1,100 employees worldwide at the end of 2025 and did not disclose the number of employees affected by the latest reduction.
Distribution, transaction, and other costs decreased 8% to $412 million, driven primarily by lower distribution payments. Those payments are a meaningful part of Circle's economics because the company shares revenue with partners that help distribute or support USDC.
The decline in distribution costs helped offset higher operating expenses and supported the increase in adjusted EBITDA. It also shows that Circle's profitability is influenced not only by reserve yields, but by the commercial terms attached to USDC's distribution.
Tazapay deal extends Circle's payments footprint
Circle also said it agreed in September to acquire Tazapay, a Singapore-based payments company that processes more than $25 billion in annualized payment volume. The transaction is expected to close in 2027, subject to regulatory approvals.
Circle Ventures led Tazapay's $36 million Series B extension in March, giving Circle an existing relationship with the payments firm before the planned acquisition. Tazapay's cross-border payments infrastructure could give Circle another route for integrating stablecoins into business payment flows, particularly in markets where settlement often involves several banks and currency conversions.
In a separate September development, Circle said Binance purchased $100 million of Circle shares and entered a new five-year USDC agreement. The agreement extends an existing commercial connection between the companies and could support USDC availability across Binance's products.
Circle's third-quarter report therefore combines a still-profitable reserve business with an early contribution from its own blockchain and token ecosystem. The company's next financial updates will show whether Arc-related revenue develops into a broader operating line as reserve yields remain under pressure.
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