Circle’s $182 million crypto token sale masks revenue decline as USDC business weakens
Reserve income fell 8% as presale recognition lifted Circle’s third-quarter total to $865 million. Read the full story on CryptoSlateUnderstand the crypto stories that matter and what to watch next. Get The Catalyst in your inbox
Circle's $182 million ARC token presale drove its third-quarter earnings surprise even as its core USDC reserve income declined.
The stablecoin issuer reported adjusted EBITDA of $317 million, substantially exceeding Wall Street's $218 million consensus estimate and Clear Street's $220 million forecast.
However, the investment bank said the earnings beat was primarily driven by ARC token presale revenue, which exceeded its $90 million projection by $92 million. Excluding that contribution, Circle's adjusted EBITDA would have been approximately $135 million, down from $143 million in the preceding quarter.
The same divergence appeared in revenue. Circle reported a 17% increase in total revenue and reserve income to $865 million, but excluding the token presale would have left approximately $683 million, below the $740 million recorded a year earlier.
Its traditional reserve business remained under pressure despite growing stablecoin adoption. Reserve income fell 8% to $658 million as the average yield on USDC reserves declined by 61 basis points to 3.5%, offsetting an 8% increase in average circulation.
The weaker reserve performance reflects Circle's continued exposure to interest rates, which determine much of the income it earns from the assets backing USDC.