CRCL surged 35%: Circle Q4 EPS exceeded expectations by 169%, AI+ stablecoin moat continues to deepen

Core Summary

Circle recently released its Q4 2025 financial report, with all core indicators significantly exceeding market expectations. Previously, due to the underperformance of Coinbase and Robinhood, the market had no expectations for Circle's performance. Against the backdrop of a sluggish overall cryptocurrency market, Circle once again demonstrated the robustness and superiority of the stablecoin business model with strong performance. Coupled with the overselling effect caused by a massive unlock, and the company's emphasis on its leading position in AI agent payments during the earnings call (currently, about 99% of observed AI agent payments use USDC), the market was given new imaginative space, resulting in a stock price increase of over 35% after the earnings release.

|------------|----------------|----------|----------|-----------| | Core Indicators | Q4 Actual Value | Market Expectation | Year-on-Year Change | Exceeding Expectation Margin | | Total Revenue | $770 million | $747 million | +77% | +3.1% | | Net Profit | $133 million | - | Significant Growth | - | | EPS | $0.43 | $0.16 | - | +169% | | Reserve Interest Income | $733 million | $722 million | +69% | +1.5% | | Other Income | $37 million | $25 million | Significant Growth | +48% |

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Data Source: https://sosovalue.com/crypto-stocks/crcl

Revenue and Profit: Maintaining Stability During the Rate Cut Cycle

Q4 revenue reached $770 million, a year-on-year increase of 77%, surpassing the market consensus expectation of $747 million. In the context of a continuously declining macro environment, Circle's revenue performance remained robust, fully demonstrating the market stickiness of USDC as a compliant stablecoin.

Net profit was even more impressive, achieving $133 million in Q4, compared to only $4 million in the same period last year. Compared to the profit level after excluding non-recurring gains and losses in Q3, it showed a quarter-on-quarter growth of 25%. Earnings per share (EPS) was $0.43, far exceeding the market expectation of $0.16, with an exceeding expectation margin of 169%. Against the backdrop of global central banks entering a rate cut cycle, Circle stabilized its profit performance, reflecting the continuous optimization of the company's cost control and operational efficiency.

USDC Core Business: Steady Circulation and Enhanced Channel Premium Capability

Circulation and Market Share

In Q4, USDC circulation reached $75.3 billion, a year-on-year increase of 72% and a quarter-on-quarter increase of 2.2%. Market share grew to 28%, slightly down about 1 percentage point from Q3, but overall remained at a high level. As the world's most important compliant stablecoin, USDC's leading advantage in regulatory compliance continues to solidify its market position.

Reserve Interest Income

Reserve interest income reached $733 million, a year-on-year increase of 69%, exceeding the market consensus expectation of $722 million. The reserve return rate for Q4 was 3.8%, a decrease of 35 basis points quarter-on-quarter, reflecting the impact of continuous rate cuts during Q4 (SOFA dropped from about 4.15% to about 3.7%). With robust circulation, Circle still maintained growth in interest income.

Distribution Costs and Channel Structure Optimization

In Q4, the profit margin after deducting distribution costs (RLDC Margin) reached 40%, continuing to slightly increase by 0.5 percentage points from Q3, indicating that Circle's premium capability in channels other than Coinbase is steadily improving. A total of $461 million was paid in distribution costs in Q4, a year-on-year increase of 52%, with growth slower than the 69% increase in reserve interest income, showing gradual scale effects. Among them, the Coinbase channel accounted for 79%, a decrease of 3 percentage points from Q3, reflecting that Circle's continuous expansion of new channels is optimizing the overall distribution structure.

New Growth Engines: Payment Network and Infrastructure Layout

Rapid Growth of Other Income

Other income reached $37 million in Q4, compared to only $3 million in the same period last year, a year-on-year increase of over 10 times, and also exceeding the market consensus expectation of $25 million. Approximately $25 million came from subscriptions and services, and $12 million from payments. This rapid growth in data shows that Circle is making smooth progress in expanding scenarios in the payment field, building a second growth curve for the company beyond reserve interest income.

Circle Payment Network (CPN)

The Circle Payment Network (CPN) is expanding rapidly. As of February 20, 2026, 55 financial institutions have officially joined, an increase of 26; another 74 are undergoing qualification review. The rapid expansion of the payment network not only creates more application scenarios for USDC but also builds a more diversified revenue source and a deeper competitive moat for Circle.

Arc Public Chain Progress

The Arc public test network has officially launched, currently attracting over 100 participants. According to the company's plan, the Arc mainnet is expected to launch in 2026. This infrastructure-level layout will further expand Circle's ecological map, laying the foundation for its transformation from a stablecoin issuer to a comprehensive financial infrastructure provider.

2026 Full-Year Guidance: Steady Growth Expected

• Other Income: Full-year guidance of $150 million to $170 million, with a median of $160 million, representing a year-on-year growth of about 46% compared to 2025, reflecting the company's ample confidence in the growth of payment network and other businesses.
• USDC Circulation: The target compound growth rate of 40% over the next few years remains unchanged, consistent with previous guidance, showing the company's continued optimism about the expansion of USDC's market share.
• RLDC Margin: The guidance range is 38%-40%, still at a high level, indicating Circle's confidence in maintaining channel negotiation capabilities and profit margins.

Investment Highlights Summary

Overall, Circle's Q4 performance released multiple positive signals. With previously low attention, the stock price showed great elasticity, especially regarding discussions about AI, which provided new valuation imaginative space:

First, the new story of AI + payments expands valuation imaginative space. The company emphasized its leading position in the AI agent payment field during the earnings presentation; particularly noting that approximately 99% of transactions in recent AI agent payments are conducted in USDC, opening up market imaginative space.

Second, the resilience of the business model has been fully validated. Against the backdrop of a sluggish overall cryptocurrency market in Q4, USDC circulation maintained steady growth, and interest income did not decline as rapidly as the market expected during the rate cut cycle, coupled with the rapid growth of other income, alleviating excessive market concerns.

Third, there is ample momentum for valuation repair. After the Q3 financial report disclosure, Circle faced significant unlock pressure, leading to the stock being oversold at one point.

Disclaimer:

This article is written by the SoSoValue analyst team and is for information sharing and research communication purposes only, not constituting any investment advice. The data cited in this article comes from Circle's public financial reports and company announcements; specific data should be based on the company's official disclosures. Investment involves risks; please proceed with caution.