Author: Zhou, ChainCatcher
February 25 , the stablecoin issuer Circle (NYSE: CRCL) released its financial report for the fourth quarter and full year of fiscal year 2025.
The report shows that the company's total revenue and reserve income in the fourth quarter reached $770 million, a year-on-year increase of 77%, exceeding market expectations.
Driven by this, the CRCL stock price rose more than 35% on Wednesday.
Specifically, the growth of its stablecoin USDC became the highlight of this financial report. By the end of the year, the circulation of USDC had reached $75.3 billion, a year-on-year increase of 72%.
At the same time, network activity showed explosive growth, with on-chain transaction volume in the fourth quarter reaching $11.9 trillion, a year-on-year increase of 247%.
In terms of revenue composition, reserve income remains the company's revenue pillar, contributing $733 million in Q4, a year-on-year increase of 69%.
Although market yields declined by 68 basis points during the same period, this pressure was offset by the significant expansion of the average circulation scale of USDC.
At the same time, non-interest income reached $37 million, mainly attributed to the steady accumulation of subscription services and transaction fees.
Looking at the overall performance for the year, the company had total revenue and reserve income of $2.7 billion, a year-on-year increase of 64%.
Although the continuing operations reported a net loss of $70 million, this was mainly affected by the $424 million stock compensation expense accounted for in the IPO process.
Since this cost is non-cash in nature, after excluding it, the company's core business has shown a profitable state. Adjusted EBITDA reached $582 million, doubling year-on-year, indicating that operating leverage is gradually emerging.
In terms of strategic layout, Circle is gradually transforming from a pure stablecoin issuer to an internet financial infrastructure provider, with the company strengthening its underlying position in the real-time transaction field through various technical measures.
The report indicates that the Arc public chain public test network operates stably, with final transaction confirmation times reduced to about half a second, and total transaction volume has exceeded 166 million
In terms of payment networks, the Circle Payments Network ecosystem continues to expand. Currently, 55 financial institutions have officially joined, and another 74 are in the qualification review stage, with an annualized transaction volume of $57 billion in the past 30 days.
It is worth noting that the strategic cooperation with Polymarket further highlights the value of USDC in emerging fields. As one of the world's largest prediction market platforms, Polymarket will gradually switch all betting and settlement to the native USDC.
This cooperation not only eliminates bridging risks and enhances capital efficiency, but also directly transforms user growth in the prediction market into long-term increments in USDC circulation and transaction volume.
In addition, Circle is also gradually penetrating traditional financial ecosystems. The company has not only achieved all-weather settlement cooperation with Visa, but has also expanded application scenarios through platform integration with Intuit.
On the regulatory compliance side, the company received conditional approval from the U.S. Office of the Comptroller of the Currency to establish a national trust bank in December 2025 and further consolidated compliance first-mover advantages under the GENIUS Act framework.
The secondary market has shown a relatively positive response. Technically, before the financial report was released, the company's stock price has rebounded from the lows and has stabilized above the 7-day and 30-day moving averages.
From the institutional side, Cathie Wood's ARK Invest has repeatedly increased its stake in Circle stocks during market corrections, with the latest holding of about 4.14 million shares valued at approximately $261 million.
Mizuho Securities upgraded the rating of CRCL from underweight to neutral at the end of January, setting a target price of $77. The institution believes that the growth of Polymarket will directly drive the scale and revenue expansion of USDC.
However, in the future, Circle will still need to cope with potential headwinds.
On one hand, the decline in interest rates may continue to pressure reserve income, as reflected in the drop in yields in the fourth quarter.
On the other hand, the competitive landscape for stablecoins is changing. The stablecoin USAT, launched by Tether and issued by Anchorage Digital, is targeting the U.S. institutional market and is regarded as the first substantial regulatory competitor to USDC in its home market, which may bring some diversion in regulatory agency shares.
Additionally, the overall volatility of the cryptocurrency market and macro cycles will continue to create uncertainty regarding the growth rate of circulation volume. According to data from Coinglass, the current total market capitalization of stablecoins is approximately $264 billion, with USDC accounting for about 28.5%. Although USDC leads the industry in growth rate, Tether still dominates the market.
Investors should pay special attention to the management's expectations and execution plans for the future. The company has provided clear guidance for fiscal year 2026:
l USDC circulation aims for a compound annual growth rate of 40% over several years;
l Other income (subscription, service, and transaction fees) expected to be $150 million to $170 million;
l RLDC profit margin (income minus distribution and transaction costs) expected to maintain a high range of 38% to 40%;
l Adjusted operating expenses expected to be $570 million to $585 million.
These guidelines also reflect management's confidence in sustained scale expansion, cost control, and accelerated growth of non-interest income.
Additionally, Circle CEO Jeremy Allaire repeatedly mentioned AI agents and their payment needs during the earnings call.
He stated that we are about to enter a world where there may be billions or even hundreds of billions of AI agents interacting and executing economic functions on the internet.
These AI agents need programmable digital dollars and open infrastructure for autonomous transactions, and Circle's products are built for this purpose.
Specifically, Circle is investing heavily in agent-based payment infrastructure.
Currently, Circle Gateway has entered a testing phase, supporting AI agents to autonomously initiate cross-chain USDC transactions, with individual transaction costs as low as $0.00001 (very low cost, suitable for micro-payments and high-frequency machine-to-machine transactions).
The meeting also mentioned that approximately 99% of agent-based payments use USDC, thanks to Circle's cross-chain deployment and participation in agent payment standards (such as x402 standard, in cooperation with Google, etc.).
Overall, this financial report validates Circle's strategic execution in a complex regulatory environment, while the new story of AI+ payments expands the valuation imagination for the company. Despite facing yield fluctuations and emerging competitor challenges, Circle continues to make strides on the path of "financial infrastructure" and "compliance expansion."
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