Circle Internet Group ( CRCL ) stock slid after it reported third-quarter results on Wednesday.

The company reported a quarterly revenue growth of 66% year-over-year (Y/Y) to $739.76 million, topping the analyst consensus estimate of $700.53 million.

The quarterly adjusted EPS of 64 cents beat the analyst consensus estimate of 18 cents.

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Revenue Drivers: Stablecoin Reserves and Platform Services

Circle Internet Group ( CRCL ) primarily earns interest income from the reserves backing its stablecoins, like USDC. The company also generates revenue from other sources, including marketplace commissions, payment processing, and fees for its software and platform services.

Reserve income increased 60% Y/Y to $711.24 million, primarily from the 97% growth in average USDC in circulation, partially offset by a 96 bps decline in the reserve return rate.

Other revenue increased from $547,000 to $28.52 million Y/Y as subscription and services revenue and transaction revenue grew strongly.

USDC Growth and Profitability Boost

USD Coin (CRYPTO: USDC/USD) in circulation grew 108% Y/Y to $73.7 billion at quarter end.

The company reported a net income of $214.39 million, $61 million income tax benefit from stock-based compensation expense, and a $48 million benefit from the decrease in fair value of its convertible debt caused by a lower stock price.

The adjusted EBITDA grew by 78% Y/Y to $166.46 million, and the margin expanded 737 bps to 57% reflecting the ongoing growth of USDC in circulation and its inherent operating leverage.

Adjusted operating expenses of $131 million increased 35% year-over-year, primarily driven by higher cash compensation expenses due to increased average headcount of 14%, and general and administrative expenses.

CEO Commentary: Expanding Ecosystem Around USDC

Circle saw accelerating adoption of USDC and its platform in the third quarter as it advanced its vision of building a new Economic OS for the internet, Jeremy Allaire, the company's Co-Founder, CEO, and Chairman, noted.

He noted the Arc public testnet launch drew strong enthusiasm from partners across both traditional and digital finance, reflecting a growing ecosystem around open, programmable money.

Outlook

Circle Internet Group ( CRCL ) raised its fiscal 2025 other revenue outlook to $90 million-$100 million, up from prior outlook of $75 million-$85million.

The company raised its adjusted operating expense guidance to $495 million–$510 million, up from the prior $475 million–$490 million range.

Circle said the increase reflects expanded investment in scaling its platform, strengthening capabilities, and building global partnerships to capture accelerating market demand—alongside higher anticipated payroll taxes from employee stock option exercises.

Price Action: CRCL stock was trading lower by 4.28% to $94.09 premarket at last check Wednesday.

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