Stablecoin giant Circle (NYSE: CRCL) released its financial results for the first quarter of fiscal year 2026. Benefiting from USDC circulating supply growth and an expansion in on-chain transaction activity, the company reported total revenue and reserve earnings of $694 million, up 20% year over year, but below market expectations. Adjusted EBITDA reached $151 million, up 24% year over year. Circle also announced that Arc token presale fundraising raised $222 million, and it is advancing AI Agent payment infrastructure; USYC has also become the world’s largest tokenized money market fund.
Circle’s Arc public chain completes $222 million presale
Circle also announced that the native token ARC of its institutional finance public chain Arc has completed a $222 million presale, with a fully diluted network valuation of $3 billion. Investors include a16z crypto, Apollo Funds, ARK Invest, BlackRock, Bullish, General Catalyst, Haun Ventures, Intercontinental Exchange, IDG Capital, Janus Henderson Investors, Marshall Wace, SBI Group, and Standard Chartered Ventures.
(Stablecoin giant Circle reports: Arc public chain token fundraising of $200 million! BlackRock, Standard Chartered, ARK Invest participate)
Circle co-founder, CEO, and Chairman Jeremy Allaire said that Circle’s first quarter reflects the company is facing a larger market opportunity—namely the rapid convergence of AI platforms and the economic operating system, forming a new networked finance stack. He noted that with the ARC token presale, Arc network momentum, and the launch of the Agent Stack, Circle is building trusted infrastructure for AI-native economic activity and a more programmable networked financial system.
USDC circulating supply hits $77 billion, on-chain transaction volume up 263% year over year
USDC scale remains Circle’s most critical operating metric for the first quarter. The filing shows that by the end of Q1 2026, USDC circulating supply reached $77 billion, up 28% year over year; average USDC circulating supply was $75.2 billion, up 39% year over year.
More notably, USDC’s on-chain transaction volume in Q1 reached $2.15 trillion, up 263% year over year, indicating that USDC is not only expanding in circulation scale, but also seeing a significant jump in actual on-chain usage.
Circle said that in Q1, USDC’s share in stablecoin trading volume was 63%. Meanwhile, USDC’s ending size on the platform was $13.7 billion, up 254% year over year; USDC on Platform’s daily weighted average share was 17.2%, up 1,149 basis points year over year.
This suggests Circle is not only benefiting from USDC circulating supply on external blockchains, but is also bringing more USDC activity back to its own platform and payments network, strengthening the foundation for its platform-based revenue.
Total revenue and reserve earnings up 20% year over year, but lower interest rates suppress reserve yield
Circle’s total revenue and reserve earnings in Q1 were $694 million, up 20% from $579 million in the same period last year.
Of this, reserve earnings were $653 million, up 17% year over year. The company said reserve earnings growth mainly came from average USDC circulating supply up 39% year over year, but part of the increase was offset by a decline in reserve compensation rate. The reserve compensation rate in Q1 was 3.5%, down 66 basis points year over year.
This also highlights a core shift in Circle’s business model: USDC scale is still growing, but the interest-rate environment is beginning to impact reserve earnings efficiency. When interest rates fall, even if stablecoin circulating supply increases, reserve earnings generated per unit of USDC may be compressed.
In addition, other revenue in Q1 was $42 million, up $21 million from the same period last year, mainly driven by growth in subscription and services revenue as well as transaction revenue. In its full-year guidance, the company also expects other revenue in 2026 to reach $150 million to $170 million.
Distribution costs rise, RLDC Margin rises to 41%
Circle’s total distribution, trading, and other costs in Q1 were $407 million, up 17% year over year, mainly from increased distribution payments. After subtracting distribution, trading, and other costs, Revenue Less Distribution Costs (RLDC) was $287 million, up 24% year over year.
Q1 RLDC Margin was 41%, up 148 basis points from the same period last year, and also above the company’s 2026 full-year guidance of 38% to 40%.
RLDC is an important metric for assessing Circle’s core profitability capacity, because while the USDC business can generate substantial reserve earnings, the company still needs to pay costs to distribution partners. An improvement in RLDC Margin means Circle keeps a higher proportion of revenue after distribution and trading costs.
Net profit down 15% year over year, mainly due to post-IPO equity compensation and higher infrastructure investments
Although revenue and adjusted EBITDA continued to grow, Circle’s net profit performance was weaker in Q1. Net profit from continuing operations in Q1 was $55 million, down 15% year over year; net profit margin was 8%, down 324 basis points.
Circle explained that the decline in net profit was primarily due to growth in Revenue Less Distribution Costs being offset by higher equity compensation, product investment, distribution investment, and investments in operating infrastructure.
The filing shows operating expenses in Q1 were $242 million, up 76% year over year. Of this, compensation expense was $138 million, sharply higher than $75.62 million in the same period last year; general and administrative expenses were $57.26 million, also higher than $30.68 million in the same period last year.
Excluding items such as equity compensation, depreciation and amortization, digital asset gains and losses, legal fees, acquisition-related costs, and others, adjusted operating expenses in Q1 were $136 million, up 32% year over year. Circle said this mainly reflects the company continuing to increase investment in products, distribution, and operating infrastructure.
Adjusted EBITDA up 24% year over year; USDC scale remains the core growth engine
Circle’s adjusted EBITDA for Q1 was $151 million, up 24% year over year; adjusted EBITDA Margin was 53%, down slightly 33 basis points from the same period last year.
From a quarter-over-quarter comparison, Circle’s adjusted EBITDA was below $176 million in Q4 2025 and $171 million in Q3 2025, but above $122 million in the same period last year. This reflects that the company’s core business continues to benefit from USDC circulating supply growth, while costs and capital spending are also rising in parallel.
For Circle’s earnings per share in Q1, basic EPS attributable to common shareholders was $0.23, and diluted EPS was $0.21.
Arc token presale becomes the focus of the earnings report; Circle shifts from USDC issuer to financial public-chain infrastructure
In addition to traditional financial figures, Arc and ARC Token were the biggest highlights of Circle’s earnings report this quarter.
Circle said ARC Token has completed a $222 million presale, with a fully diluted network valuation of $3 billion. The company also released an ARC Token whitepaper explaining how Arc’s native coordinated assets support governance, security, and network operations.
The strategic significance of Arc is that Circle is no longer only playing the role of USDC issuer—it wants to further control the underlying public-chain infrastructure needed for stablecoins, tokenized assets, payments, AI agents, and institutional finance applications.
Therefore, the focus of this Arc fundraising is not just “Circle raised another round of money,” but also that traditional finance and asset-management giants such as BlackRock, Apollo, ICE, Standard Chartered, and ARK Invest are beginning to participate in an institutional finance public chain—driven by a publicly listed company—through token presales.
In its risk disclosures, Circle also clearly mentioned that Arc and ARC Token still face risks including execution, market, operations, technology, cybersecurity, validator governance, token price volatility, and uncertainty in legal and regulatory matters. This indicates Arc is still in an early stage, and whether it succeeds in the future will depend on network launch, developer adoption, institutional usage levels, and the regulatory framework.
Agent Stack launches; Circle goes after AI agent payments and machine economics
Another business focus for Circle in Q1 was Agent Stack. The company said it is building new platform capabilities for an “agent-led future,” launching new permissionless infrastructure, and combining the existing Nanopayments product based on Circle Gateway.
The new products include Circle CLI, Agent Wallets, and Agent Marketplace, enabling developers and merchants to create, fund, and monetize AI agent activities, and supporting USDC usage across multiple blockchains and payment protocols. Circle wants to evolve USDC from a tool for human payments and enterprise settlement to the base money that AI agents can use to execute transactions autonomously, buy services, access APIs, pay small fees, and manage funds.
Circle is expanding USDC use cases from “stablecoin payments” to “machine payments” and “programmable business activity.”
CPN annualized transaction volume reaches $8.3 billion; launches Managed Payments
Circle is also continuing to expand the Circle Payments Network (CPN). As of March 31, 2026, based on the past 30 days of activity, CPN annualized transaction volume reached $8.3 billion.
In April, Circle further launched Managed Payments, allowing financial institutions to offer stablecoin payment services without directly managing digital assets. This is an important product for banks, payments companies, or financial institutions to reduce the entry barrier, because many institutions want to use stablecoin settlement efficiency but may not be willing to assume the burden of wallet management, private keys, on-chain asset management, and compliance operations themselves.
Circle also mentioned new USDC use cases, including enterprise financial management platform Kyriba embedding USDC capabilities into enterprise treasury systems, enabling finance teams to gain 24/7 liquidity within existing workflows, control systems, and management frameworks; and Polymarket continuing to advance USDC as the core collateral and settlement asset in the market.
USYC becomes the world’s largest tokenized money market fund
Circle also emphasized the growth of its digital asset platform in its earnings report. As of May 7, USYC has become the world’s largest tokenized money market fund.
This aligns with Circle’s direction in recent years: extending from USDC to tokenized money market funds, on-chain asset management, and institutional finance infrastructure. Stablecoins are an immediate payments and settlement tool, while tokenized money market funds are a product closer to on-chain yield-generating cash management tools.
For Circle, USDC, USYC, Arc, CPN, and Agent Stack are being packaged into a larger financial network narrative: a networked finance operating system that can serve enterprises, financial institutions, developers, and AI agents at the same time.
Circle maintains full-year guidance; long-term USDC circulating supply CAGR target of 40%
Circle is maintaining its prior guidance this time, but emphasized that the guidance does not yet include the financial impact of the ARC Token presale, the Arc incentive program, and future Arc revenue streams.
The company’s outlook includes:
USDC circulating supply maintains a 40% CAGR over multiple-year cycles
Other revenue in 2026 of $150 million to $170 million
2026 RLDC Margin of 38% to 40%
2026 adjusted operating expenses of $570 million to $585 million
Judging from this guidance, Circle remains highly optimistic about USDC’s long-term growth, but it also clearly expects operating expense to stay high. In the earnings disclosure, operating expenses are expected to be between $950 million and $1.025 billion in 2026, while adjusted operating expenses are expected to be between $570 million and $585 million, reflecting that the company is still in a phase of large-scale investment in products, infrastructure, governance, and compliance.
From Circle’s earnings report: revenue comes from USDC, while the story is Arc and AI agents
Overall, Circle’s Q1 earnings report shows two main themes.
The first is the mature business: continued growth in USDC circulating supply, reserve earnings, RLDC Margin, CPN, and the scale of USDC on the platform, demonstrating that Circle’s stablecoin business still has expansion momentum. However, declining interest rates, rising distribution costs, and increasing operating expenses also put pressure on net profit.
The second is the new narrative: Arc token presale, Agent Stack, USYC, and Managed Payments, showing Circle is trying to transform from a stablecoin issuer into an “institutional finance public chain + AI agent payments + tokenized asset” infrastructure company.
In the short term, Circle’s profit core still hinges on USDC circulating supply and reserve earnings; but in the medium-to-long term, the market will truly focus on whether Arc can successfully attract institutions and developers, whether Agent Stack can become the payments entry point for AI agents to use USDC, and whether Circle can preserve USDC’s network effects after banks, fintech companies, and other stablecoin issuers enter the space.
This article, Circle Q1 earnings revenue below expectations: USDC circulating supply reaches $77 billion; highlights are Arc and AI agent, first appeared on Chain News ABMedia.
