--- title: "Circle Q1 Revenue Rises 20% YoY to $694 Million, Net Profit Drops 15%, USDC Circulating Supply Up 28% YoY | Financial Report Insights" type: "News" locale: "en" url: "https://longbridge.com/en/news/285935300.md" description: "In Q1 2026, Circle's revenue increased 20% year-over-year to $694 million, but net profit declined 15% to $55 million, primarily due to a 76% surge in operating expenses such as stock-based compensation following its public listing. The circulating supply of USDC grew 28% to $77 billion, serving as the core driver. Strategically, the ARC ecosystem completed a $222 million presale, and the Agent Stack platform entered the AI agent payment sector. The company maintained its full-year guidance, excluding potential incremental contributions from ARC" datetime: "2026-05-11T11:43:40.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/285935300.md) - [en](https://longbridge.com/en/news/285935300.md) - [zh-HK](https://longbridge.com/zh-HK/news/285935300.md) --- # Circle Q1 Revenue Rises 20% YoY to $694 Million, Net Profit Drops 15%, USDC Circulating Supply Up 28% YoY | Financial Report Insights Stablecoin issuer Circle achieved revenue growth in the first quarter of 2026, but net profit declined. On May 11, Circle's financial report showed that total revenue and reserve income for Q1 2026 amounted to $694 million, a 20% year-over-year increase; however, net profit from continuing operations was $55 million, a 15% year-over-year decline. Adjusted EBITDA reached $151 million, up 24% year-over-year, indicating that the profitability of the core business is still improving. The pressure on profits mainly stemmed from **a significant 76% increase in operating expenses**, particularly due to higher stock-based compensation and related payroll taxes after the public listing. Meanwhile, the reserve yield decreased by 66 basis points year-over-year, also dragging down net profit to some extent. However, **the circulating supply of USDC increased 28% year-over-year to $77 billion, remaining the core driver of revenue growth.** In terms of business highlights, **Circle continued to advance the construction of the ARC Token ecosystem**, completing a $222 million presale; **it launched the Agent Stack platform**, supporting AI-driven payment and wallet infrastructure. Additionally, on-chain transaction volume for USDC reached $21.5 trillion, a 263% year-over-year increase. ## **Revenue Growth Without Profit Growth: Expenses Are the Key Variable** In Q1 2026, Circle's total revenue was $694 million, with reserve income of $653 million (accounting for 94%, up 17% year-over-year) as the core engine. This growth resulted from the scale effect driven by a 39% year-over-year increase in the average circulating supply of USDC to $75.2 billion, but was partially offset by a 66 basis point year-over-year decline in reserve yield to 3.5%. Other income (subscription, service, and transaction revenue) was $41.63 million, doubling year-over-year with an incremental increase of approximately $21 million, making it the fastest-growing revenue segment for the company and indicating Circle's continuously improving monetization capability for platform services. Distribution and transaction costs were $407 million, up 17% year-over-year, basically matching the overall revenue growth rate. The Retained Liquidity Distribution Cost (RLDC) margin improved to 41%, an improvement of 148 basis points year-over-year. Notably, **operating expenses under GAAP standards increased 76% year-over-year to $242 million**, **mainly due to a significant increase in equity incentives and related payroll taxes after the IPO**—compensation-related expenses alone rose from $75.62 million to $138 million. ## **USDC Ecosystem: Significant Improvement in Platform Retention, Strong Growth in On-Chain Activity** By the end of the quarter, the circulating supply of USDC reached $77 billion, with a market share of 28%, a slight decrease of 62 basis points year-over-year, mainly influenced by changes in the competitive landscape. More structurally significant is the "USDC on Platform" metric—i.e., USDC balances held within the Circle platform—which reached $13.7 billion at the end of the quarter, a substantial 254% year-over-year increase. The daily weighted proportion of this balance to the total circulating supply was 17.2%, an increase of 1,149 basis points year-over-year, showing that more holders choose to keep their assets within the Circle ecosystem rather than transferring them out to other platforms, providing strong support for the continuous contribution of reserve income. On-chain data also performed strongly. In the first quarter, USDC minting volume was $73 billion, up 38% year-over-year; redemption volume was $72 billion, with a year-over-year growth rate as high as 93%. The redemption growth rate significantly exceeded the minting growth rate, reflecting a significant improvement in two-way liquidity activity. The number of "active wallets" holding more than $10 worth of USDC rose to 7.2 million, a 47% year-over-year increase, indicating continuous expansion of the user base. According to Visa Onchain Analytics data, USDC's share of stablecoin on-chain transaction volume reached 63%, maintaining a significant industry-leading position. ## **Strategic Breakthrough: Launch of ARC Ecosystem, Agent Stack Enters AI Agent Economy** **The most strategically significant breakthrough this quarter was the official launch of the ARC ecosystem.** Circle completed a $222 million presale of ARC tokens, corresponding to a fully diluted network valuation of $3 billion, and simultaneously released a white paper clarifying ARC's core positioning as the native coordination asset of the Arc network in governance, security, and network operations. Investors included BlackRock, a16z crypto, Apollo Global Management, ARK Invest, Intercontinental Exchange, Standard Chartered Ventures, and SBI Group, representing top-tier institutional backing in terms of breadth and depth. At the same time, the launch of the "Agent Stack" product line **marks Circle's formal entry into the infrastructure sector of the AI agent economy.** This product suite includes the Circle CLI command-line interface, Agent Wallets, and the Agent Marketplace. Developers and merchants can use this to create and fund AI agents in multi-chain environments and under multiple payment protocols, deriving economic benefits from them, with USDC serving as the unified underlying settlement asset. Regarding the Circle Payment Network (CPN), based on activity levels in the 30 days prior to March 31, its annualized transaction volume reached $8.3 billion. In April, Circle further launched the "Managed Payments" service, allowing financial institutions to quickly enable stablecoin payment capabilities without needing to manage digital assets themselves, significantly lowering the access threshold for traditional institutions. ## **Full-Year Guidance Unchanged, ARC Impact Not Yet Included** Management reaffirmed the full-year performance guidance: the multi-year compound annual growth rate target for USDC circulating supply is 40%; other income for fiscal year 2026 is expected to be between $150 million and $170 million; the RLDC margin target range is 38% to 40%; and adjusted operating expenses are expected to be between $570 million and $585 million. It should be noted that the above guidance does not include the potential financial impact of the ARC token presale, Arc incentive programs, or future revenue streams related to Arc. This means that if the Arc ecosystem is successfully implemented, the company's actual performance may have significant upside potential. ### Related Stocks - [CRCL.US](https://longbridge.com/en/quote/CRCL.US.md) - [CRCG.US](https://longbridge.com/en/quote/CRCG.US.md) - [BLK.US](https://longbridge.com/en/quote/BLK.US.md) - [APO.US](https://longbridge.com/en/quote/APO.US.md) - [ICE.US](https://longbridge.com/en/quote/ICE.US.md) - [STAN.UK](https://longbridge.com/en/quote/STAN.UK.md) - [02888.HK](https://longbridge.com/en/quote/02888.HK.md) - [8473.JP](https://longbridge.com/en/quote/8473.JP.md) - [V.US](https://longbridge.com/en/quote/V.US.md) - [BTX.US](https://longbridge.com/en/quote/BTX.US.md) - [BIT.RT*.US](https://longbridge.com/en/quote/BIT.RT*.US.md) - [BDJ.US](https://longbridge.com/en/quote/BDJ.US.md) - [BSTZ.US](https://longbridge.com/en/quote/BSTZ.US.md) - [BIT.RT.US](https://longbridge.com/en/quote/BIT.RT.US.md) - [APO-A.US](https://longbridge.com/en/quote/APO-A.US.md) - [APOS.US](https://longbridge.com/en/quote/APOS.US.md) ## Related News & Research - [Dear Circle Stock Fans, Mark Your Calendars for May 11](https://longbridge.com/en/news/285764086.md) - [Circle Q1 Earnings Countdown: Can CRCL Silence Bears And Deliver Another Surprise Beat?](https://longbridge.com/en/news/285925088.md) - [Circle Launches AI Infrastructure to Power the Agentic Economy | CRCL Stock News](https://longbridge.com/en/news/285922739.md) - [Circle Reports First Quarter 2026 Results | CRCL Stock News](https://longbridge.com/en/news/285922749.md) - [Could CLARITY Act Stablecoin Rules Quietly Recast Circle (CRCL) As Core Digital Dollar Infrastructure?](https://longbridge.com/en/news/285627976.md)