Why Circle Stock Fell After the Company’s Earnings Beat Expectations

Circle Internet Group, a stablecoin issuer, raised its full-year forecast for operating costs. (NYSE)

Key Points

• Circle Internet Group shares fell after reporting strong third-quarter earnings but increasing its full-year expense outlook.
• Third-quarter earnings were 64 cents per share on revenue of $739.8 million, exceeding analyst expectations.
• Circle updated its 2025 operating expense forecast to $495 million-$510 million, an increase from previous guidance.

Circle Internet Group stock fell to near its lowest levels ever in its brief trading history on Wednesday after the issuer of the USDC stablecoin posted better-than-expected quarterly earnings but updated its full-year outlook to reflect higher expenses.

Circle reported earnings of 64 cents a share for the third quarter, surpassing Wall Street’s call for 20 cents. Revenue totaled $739.8 million, up 66% from last year and above analysts’ consensus estimate of $706.7 million.

USDC in circulation reached $73.7 billion by the end of September, more than double the circulation a year ago. Circle primarily makes money through interest on its USDC reserves, which are held in a registered money-market fund.

Circle stock fell more than 12% on Wednesday to close around $86, its lowest price since the stock’s initial public offering on June 5, according to Dow Jones Market Data. Shares are still up nearly 200% from their IPO price of $31, but down more than 70% from their record high on June 23.

Investors may be worried about the expiration of a so-called lockup period for the stock, which prevents executives and other insiders from selling shares. Typically, investors aren’t allowed to sell until 180 days after an IPO. In this case, that would be early December.

But according to regulatory filings with the Securities and Exchange Commission, Circle said in June that the lockup period could expire as soon as “the second trading day after we publicly announce our earnings for the quarter ending September 30, 2025.” That would be this Friday.

Created with Highcharts 9.0.1Circle Internet GroupStock ticker: CRCLSource: FactSetAs of Nov. 12

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The company’s updated full-year outlook may also be weighing down shares. Circle raised its 2025 forecast for non-reserve revenue, such as subscriptions and services, to a range with a midpoint of $95 million from a previous estimate of $80 million.

However, its cost forecast rose by even more. Circle anticipates a range of $495 million to $510 million in operating expenses in 2025, up from past guidance of $475 million to $490 million.

Part of that may be due to spending on the company’s planned launch of its Arc blockchain network, which has already lined up partners such as BlackRock, HSBC, and Visa. In addition, Circle said it is considering launching its own token on the network.

Fluctuations in short-term interest rates may also be weighing on Circle, which generates income from U.S. dollar reserves that back its stablecoin. The Federal Reserve cut rates in September and October and is widely expected to do so again in December and several times more in 2026. Lower rates could reduce interest income.

Still, Circle executives remain optimistic that the company will benefit from longer-term adoption of stablecoins and other cryptocurrencies. Circle Chief Financial Officer Jeremy Fox-Geen said in an interview with Barron’s that stablecoins are the beginning of a “megatrend” in the world of finance and that “the long-term growth potential is more important than short-term fluctuations.”

“The rise of the internet financial system will bring massive benefits to businesses around the world,” Fox-Geen said.

The market is currently dominated by Circle and its larger rival Tether , the issuer of the USD Token (USDT), which is also pegged to the U.S. dollar.

Circle CEO Jeremy Allaire noted on a conference call with analysts that the regulatory clarity in Washington, thanks to the passage of the Genius Act this summer, will boost the market. Even though the Genius Act could lead to more competition in the stablecoin issuance market, Allaire doesn’t seem too concerned.

“Overall, the stablecoin market continues to grow strongly and we continue to gain share,” Allaire said on the call, adding that the market remains one where there are “two leading issuers and several much smaller players.” He added that the stablecoin business will likely turn out to be “a winner take most market structure.”

Wall Street seems to agree. Jacob Zuller, an analyst at tech research firm Third Bridge, said in a report Wednesday after Circle’s earnings release that “Circle is best positioned to capture the US market given their regulatory moat and do not view Tether’s USDT as a threat given their lack of transparency and minimal liquidity.”

Write to Nate Wolf at nate.wolf@barrons.com and Paul R. La Monica at paul.lamonica@barrons.com.