Circle Q3 revenue and reserve income rise 17% with ARC presale boost

Circle reported $865 million in third-quarter revenue and reserve income on November 4, 2026, up 17% from a year earlier. The total includes $182 million from an ARC token presale, while reserve income fell 8%. Those opposing movements make the revenue mix the central question in the results.

CoinAbout’s revenue bridge, calculated from the rounded figures in Circle’s release, puts the presale at about 21% of the quarterly total and 88% of other revenue. Removing that contribution leaves approximately $683 million of revenue and reserve income. That arithmetic isolates the disclosed presale; it does not produce an adjusted profit figure or establish that everything left is recurring.

The $865 million revenue bridge

Circle’s third-quarter results release gives the ingredients: $658 million in reserve income, $207 million in other revenue and $182 million of ARC presale revenue within that second category. The bridge below uses millions of dollars and the company’s rounded headline amounts:

• Reserve income: $658 million, or approximately 76.1% of the $865 million total.
• ARC presale revenue: $182 million, or approximately 21.0% of the total.
• Other revenue excluding that presale: $207 million minus $182 million, leaving approximately $25 million, or 2.9% of the total.
• Total excluding the presale: $865 million minus $182 million, leaving approximately $683 million.

The three components reconcile: $658 million plus $182 million plus $25 million equals $865 million. Within other revenue alone, the calculation is $182 million divided by $207 million, approximately 87.9%. The denominator matters: that is the share of other revenue, rather than the share of the entire business or of net income.

These are approximate analytical amounts because the inputs are rounded. The $683 million remainder is a subtraction from reported revenue and reserve income, not a separately reported accounting measure. It should not be described as organic revenue, repeatable revenue or what Circle would have earned without launching Arc. That last question would require assumptions about costs, timing and business decisions that this calculation does not supply.

Why reserve income moved in the opposite direction

Circle attributed the reserve-income decline primarily to a 61-basis-point reduction in its reserve return rate, partly offset by 8% growth in average USDC circulation. Average circulation was $73.3 billion during the quarter. Larger balances therefore did not prevent lower reported reserve income in this period.

That distinction helps explain why the 17% growth in the combined revenue line cannot be read as a 17% improvement in reserve economics. Circle reported growth in a total that combines different sources of income. The presale sits in other revenue; reserve income reflects a different business exposure. A stronger total can coexist with pressure on one of its largest components.

Circle’s explanation of USDC’s commercial model, published October 16, says distribution partners holding and growing USDC balances can receive a share of the reserve income those balances generate. This is the company’s account of its model, rather than an independent audit of individual contracts. It makes the next comparison necessary: gross reserve income and the income retained after distribution costs answer different questions.

In the quarterly release, Circle said total distribution, transaction and other costs were $412 million, down 8% year over year, mostly because distribution payments decreased. Those costs are a combined expense category. Subtracting all of them from reserve income alone would attach the entire category to one revenue stream without the segment allocation needed to justify it.

Revenue subtraction does not establish presale profit

Circle reported $226 million in net income from continuing operations, up 5%, and $317 million in adjusted EBITDA, up 85%. The release attributed the adjusted EBITDA increase to ARC presale revenue and lower distribution costs, partly offset by spending on new products. These measures show why revenue mix matters, but they do not disclose a standalone profit margin for the presale.

It would be misleading to subtract $182 million directly from net income and label the remainder underlying earnings. Revenue is measured before relevant expenses and taxes. A credible counterfactual would need to identify which expenses, tax effects and other items changed with the presale. This revenue bridge makes no such adjustment and offers no estimate of presale cash proceeds or cash conversion.

Adjusted EBITDA also needs its own label. Circle identifies it as a non-GAAP measure and lists exclusions including stock-based compensation, certain legal expenses and other items. Beginning in the first quarter of 2026, the definition additionally excludes payroll tax expense related to stock-based compensation. Readers comparing periods should use the company’s stated definitions and reconciliation, rather than treating adjusted EBITDA as interchangeable with net income or operating cash flow.

USDC activity measures a different outcome

Circle reported $13.9 trillion in USDC onchain transaction volume in the third quarter, up 49% year over year. That growth exceeded the reported 8% increase in average circulation. Neither number supplies a transaction-fee rate, a count of individual users or an estimate of Circle’s income from each dollar transferred.

An onchain transaction-volume total also cannot establish how much activity represents payments for goods and services. This article has not independently queried the chains, classified transfers, removed repeated movements or checked the provider’s full coverage. The figure is attributed to Circle. It is not presented as a separately verified measure of customer purchases or comprehensive economic settlement.

For readers following USDC, the useful distinction is between circulation, transfer activity and issuer earnings. Circulation measures a balance; transaction volume measures movements over a period; reported revenue measures the company’s accounting result. They can move at different rates. CoinAbout’s USDC asset page provides a separate market reference, whose current quote and observation time should not be substituted for any of these quarterly figures.

What the ARC contribution establishes

Circle said Arc’s public mainnet launched on September 16 and that it completed an initial genesis mint of 10 billion ARC tokens. The release describes ARC as a coordination mechanism for network security, utility and governance as the network works toward a transition to proof of stake in 2027. Those are company disclosures and plans, not independent confirmation of future adoption or token value.

The strongest argument for treating the presale as meaningful business progress is straightforward: developing another source of revenue could reduce dependence on reserve returns. The quarter demonstrates recognized revenue from that effort. Excluding it from a comparison does not mean it was economically worthless, improper or unrelated to Circle’s strategy.

The counterweight is repeatability. One quarter’s recognized presale revenue does not establish the size or timing of future sales, continuing demand for network services or the economics of operating the blockchain. Circle itself flags risks involving adoption, governance, cybersecurity and token arrangements, including possible repayment obligations if key launch milestones are not achieved. A token’s issuance quantity alone does not resolve those risks.

What would change the assessment

The next useful evidence would be subsequent quarterly disclosures separating presale recognition from other revenue, a clearer account of related costs and obligations, and results showing whether reserve income and distribution costs improve together. Those documents could show a durable additional business, a revenue contribution concentrated in particular periods, or a different mix altogether. The present bridge cannot choose among those outcomes.

USDC holders and Circle shareholders also face different questions. An issuer’s profitable quarter does not independently verify reserve sufficiency, immediate redemption access or the safety of a token investment. This analysis examines the issuer’s disclosed revenue composition; it does not replace an assurance report or recommend a trade. For now, the supported conclusion is narrow: Circle’s quarterly total grew, reserve income declined, and the ARC presale supplied about one dollar in five of reported revenue and reserve income.