📢 Flash
Circle: “Bloated” Earnings, “Backstabbing” Major Distribution Partners—Scaling the Ecosystem Is the Only Way Forward
Circle released its Q3 2024 financial results before U.S. market open on November 4 (ET). While overall results came in “better than expected,” the outperformance was driven almost entirely by the accelerated recognition of Arc token sales revenue. Excluding this item, core operating performance was largely unremarkable—broadly in line with the cautious expectations held by market participants ahead of the earnings release. Key highlights:
1. Reserve interest income declined as anticipated: $660 million in Q3, in line with consensus estimates. Although USDC’s market cap rose 8% year-on-year, falling interest rates led to an 8% YoY decline in interest income. On a sequential basis, average USDC circulation in Q3 stood at $73.3 billion—down 4% from Q2.
2. Arc token sales revenue recognition accelerated sharply: “Other income” totaled over $200 million in Q3, of which $180 million stemmed from Arc token sales—far exceeding the market’s consensus estimate of $90 million and even surpassing Circle’s full-year guidance of $180 million. This entire amount was recognized in Q3.
1. Reserve interest income declined as anticipated: $660 million in Q3, in line with consensus estimates. Although USDC’s market cap rose 8% year-on-year, falling interest rates led to an 8% YoY decline in interest income. On a sequential basis, average USDC circulation in Q3 stood at $73.3 billion—down 4% from Q2.
2. Arc token sales revenue recognition accelerated sharply: “Other income” totaled over $200 million in Q3, of which $180 million stemmed from Arc token sales—far exceeding the market’s consensus estimate of $90 million and even surpassing Circle’s full-year guidance of $180 million. This entire amount was recognized in Q3.
