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Circle's Soaring Revenue Fails to Ease Concerns Over Profitability Amid Falling Share Prices

Circle's Soaring Revenue Fails to Ease Concerns Over Profitability Amid Falling Share Prices

Bitget-RWA2025/11/12 19:30
By:Bitget-RWA

- Circle's shares fell 9.3% post-Q3 2025 earnings despite 66% revenue growth to $740M and record USDC adoption, erasing IPO gains. - USDC circulation hit $73.7B (+108%) and on-chain volume reached $9.6T (+680%), but $4.48/share Q2 loss vs $0.64 GAAP EPS raised profitability doubts. - Strategic partnerships with Deutsche Börse/Visa and reversible stablecoin pilots aim to strengthen USDC's market leadership against Tether . - Analysts split between J.P. Morgan's Sell and Monness Crespi's Buy ($150 target), w

Shares of Circle Internet Group (CRCL) experienced a significant drop after the release of its Q3 2025 financial results, even though revenue soared 66% year-over-year to $740 million and the company achieved record

stablecoin usage. The stock price fell by 9.3% to $89.15 following the earnings announcement, reported, wiping out the gains made since its June 2025 IPO. Despite strong numbers, concerns about valuation and mixed analyst opinions overshadowed the positive financials, as observed.

The third-quarter report showcased impressive momentum in Circle’s USDC stablecoin network, with circulation climbing to $73.7 billion—a 108% jump from the previous year—and on-chain transaction volume reaching $9.6 trillion, representing a 680% annual increase, according to

. Adjusted EBITDA rose 78% to $166 million, fueled by higher reserve earnings as USDC’s balance sheet expanded, reported. Still, profitability remained an issue: the company posted a net loss of $4.48 per share in Q2, but turned to $0.64 in GAAP earnings per share in Q3, as noted.

Circle continued to broaden its reach through new alliances with Deutsche Börse and Visa, aiming to accelerate stablecoin integration in both European and traditional financial sectors, as

reported. The company also introduced a pilot for reversible stablecoin transactions on its Arc platform, a notable shift from crypto’s usual irreversibility, designed to address institutional needs for refund-like features, noted. These initiatives are intended to reinforce Circle’s dominance as the top USDC issuer, competing with , reported.

Analyst opinions were split. J.P. Morgan kept a Sell rating, citing concerns over the stock’s valuation, while Monness Crespi Hardt began coverage with a Buy rating and a $150 price target, expressing confidence in Circle’s potential to capture more market share,

reported. TipRanks compiled a Moderate Buy consensus, projecting an average upside of 69.1% to $166.19, reported. Wells Fargo and other analysts pointed to opportunities arising from clearer regulations, such as the U.S. GENIUS Act, which established guidelines for dollar-backed stablecoins, noted.

Despite optimism, investors paid close attention to Circle’s shrinking margins. RLDC (revenue less distribution costs) margin dropped by 270 basis points year-over-year to 39%, pressured by higher distribution expenses as more USDC balances shifted to partner platforms,

reported. Management raised its 2025 forecast for “Other Revenue” to between $90 and $100 million, but cautioned that operating costs would rise due to ongoing investments in the platform, noted.

Regulatory changes added further complexity. Bernstein analysts pointed out that the U.S. crypto regulatory environment, including the GENIUS Act, has helped the country become a global leader in stablecoin development, with total supply surpassing $260 billion,

reported. However, stablecoins still face obstacles in gaining traction with consumers, mainly because they do not offer interest, making it challenging for issuers to encourage use outside of institutional markets, reported.

Circle’s third-quarter results highlight the double-edged sword of its growth strategy—capitalizing on stablecoin adoption while contending with valuation doubts and margin pressures. With a 29% share of the total stablecoin market and a growing list of institutional partners,

, the company’s ability to turn its network advantages into lasting profits will remain a central concern for investors.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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