Circle recognized $181.8 million of Arc token presale revenue in the third quarter

Circle recognized $181.8 million of revenue from its ARC token presale in the third quarter, making the new blockchain asset a material contributor to results reported Wednesday for the three months ended September 30.

The stablecoin issuer reported $864.9 million of total revenue and reserve income, up from $739.8 million in the same quarter of 2025. That increase did not come from its core reserve business: reserve income fell to $657.6 million from $711.2 million, while other revenue climbed to $207.3 million from $28.5 million.

The distinction matters because the presale contribution reflects Circle’s progress toward contractual milestones, not a recurring stream tied to USDC balances or transaction activity. It also complicates a simple reading of the company’s year-over-year growth rate.

Token revenue changes the quarterly comparison

Circle’s quarterly filing says it agreed during the second quarter to sell 807.5 million ARC tokens to institutional investors for $0.30 each, producing approximately $242.2 million in aggregate gross proceeds. The proceeds were initially recorded as deferred revenue rather than recognized immediately.

Circle’s performance obligation includes minting and distributing the tokens and enhancing their functionality as Arc moves from its initial proof-of-authority design toward proof-of-stake or delegated proof-of-stake consensus. The company completed the genesis mint on September 14, creating an initial supply of 10 billion tokens, and subsequently distributed or placed in escrow part of the presale allocation.

Management said on Wednesday’s earnings call that token delivery and the public mainnet launch allowed Circle to recognize about 75% of the presale proceeds during the quarter. The resulting $181.8 million accounted for most of the $178.7 million year-over-year increase in other revenue.

The filing also shows why the remaining proceeds should not automatically be treated as future profit. The agreements provide repayment rights in specified circumstances, including if the tokens are not delivered or Arc has not completed its planned consensus transition by May 8, 2028. Revenue recognition therefore depends partly on management judgments about progress toward obligations that are not yet fully complete.

Reserve income moved in the opposite direction

Average USDC circulation was $73.3 billion during the quarter, 8% above the year-earlier average, according to Circle. The quarter-end balance was $73.9 billion, approximately flat year over year.

That larger average balance did not offset lower returns on the backing assets. Circle reported a 3.54% reserve return rate for the quarter, down 61 basis points from the comparable 2025 period. Reserve income consequently declined 8% to $657.6 million.

Circle’s filing says USDC reserves at September 30 included $9.73 billion of cash, $1.76 billion of directly held U.S. Treasury securities and $62.47 billion in the Circle Reserve Fund. Those figures are a quarter-end composition snapshot, while reported reserve income and the return rate cover the full three-month period; they should not be read as measurements taken over identical windows.

What the results establish—and what they do not

Net income attributable to common stockholders reached $226 million for the quarter, compared with $214.4 million a year earlier. Circle also reported adjusted EBITDA of $317 million, but that is a company-defined non-GAAP measure and included the token-presale contribution.

The filing establishes that the Arc presale materially affected the quarter’s revenue mix. It does not establish a repeatable level of token-sale revenue, the future market value of ARC, or the timing and economics of the planned proof-of-stake transition. Circle’s retained tokens were recorded at a carrying amount of zero at September 30 because issuer-created tokens fall outside the accounting rule the company uses for acquired crypto assets.

Future quarters will show whether Circle can expand subscription, transaction and other operating revenue after the presale contribution subsides. They will also determine how much of the remaining deferred consideration is recognized as Arc’s contractual milestones are completed.