USDC Adoption and Circulation - As of September 30, 2025, USDC has been used for over $41.4 trillion in on-chain transactions, indicating significant adoption and utilization of Circle's stablecoin [152]. - The total USDC in circulation increased from $61.3 billion at the beginning of Q3 2025 to $73.7 billion at the end of the period, reflecting a net increase of $12.4 billion [158]. - USDC minted during the three months ended September 30, 2025, was $79.7 billion, while $67.3 billion was redeemed, resulting in a net increase of $12.4 billion in circulation [158]. - As of September 30, 2025, USDC in circulation reached $73.749 billion, a significant increase from $35.469 billion in the same period of 2024 [192]. - The average USDC in circulation for the nine months ended September 30, 2025, was $61.069 billion, compared to $31.757 billion in 2024, reflecting a growth of approximately 92% [192]. Financial Performance and Revenue - Reserve income constituted 96.1% of Circle's total revenue for the three months ended September 30, 2025, highlighting the importance of USDC reserves to the company's financial performance [159]. - Total revenue and reserve income for the nine months ended September 30, 2025, was $1.976 billion, up from $1.241 billion in 2024, representing a year-over-year growth of approximately 59% [192]. - Total revenue and reserve income reached $739.8 million for the three months ended September 30, 2025, a 66.0% increase compared to the same period in 2024 [218]. - Net income from continuing operations was $214.4 million for the three months ended September 30, 2025, a 202.0% increase compared to the same period in 2024 [218]. - Other revenue increased by $28.0 million, primarily driven by additional integration services and fund management fees [220]. Market Position and Growth - The stablecoin market share at the end of September 2025 was 29%, an increase from 23% in 2024, highlighting a growing competitive position [192]. - Circle holds a 29% stablecoin market share as of September 30, 2025, making it the second-largest issuer of U.S. dollar fiat-backed stablecoins since 2021 [201]. - The number of monthly active wallets (MeWs) using Circle's services increased to 6.3 million by the end of Q3 2025, up from 3.6 million in Q3 2024 [177]. Strategic Initiatives and Partnerships - Circle aims to expand its global reach by obtaining regulatory licenses and collaborating with strategic partners to enhance the distribution of USDC [178]. - The company has established strategic partnerships with Visa and MoneyGram to enhance the adoption of USDC, which are expected to contribute positively to financial performance over time [179]. - Circle's acquisition of Hashnote in January 2025 led to the issuance of USYC, enhancing interoperability across multiple public blockchains [169]. Operational Costs and Expenses - Distribution costs were $989.1 million, up from $687.4 million in the same period of 2024 [206]. - Compensation expenses surged by $64.0 million, or 98.1%, largely due to stock-based compensation related to RSUs [223]. - Operating expenses totaled $211.1 million, a 69.9% increase compared to the same period in 2024 [218]. - The company anticipates an increase in general and administrative expenses as it continues to support overall business growth [210]. Cash Flow and Liquidity - Cash and cash equivalents increased by $1.1 billion, or 109.1%, to $2.2 billion as of September 30, 2025, primarily due to $1.0 billion cash proceeds from the issuance of common stock [245]. - Cash and cash equivalents segregated for stablecoin holders rose by $29.5 billion, or 67.1%, to $73.4 billion as of September 30, 2025, driven by a $29.9 billion increase in USDC in circulation [246]. - Net cash provided by operating activities for the nine months ended September 30, 2025, was $293.0 million, an increase from $238.2 million in the same period of 2024 [290]. IPO and Capital Raising - The company completed its IPO in June 2025, issuing 19.9 million shares at $31.00 per share, resulting in net proceeds of $583.0 million [186]. - In August 2025, the company executed a follow-on public offering, selling 3.5 million shares at $130.00 per share, generating net proceeds of $444.8 million [189]. Asset Management and Reserves - Approximately 87% of USDC reserves are held in the Circle Reserve Fund as of September 30, 2025 [271]. - The average reserve return rate for Q3 2025 was 4.15%, demonstrating the yield generated from the reserve assets backing USDC [161]. - The reserve return rate decreased to 4.2% in 2025 from 5.1% in 2024, indicating fluctuations in interest rates impacting reserve income [192]. Miscellaneous Financial Metrics - Adjusted EBITDA is a key measure for monitoring and evaluating the growth and performance of business operations [203]. - Digital assets (gains) losses changed by $3.0 million, or 230.0%, due to market fluctuations and increased holdings [228]. - The income tax expense decreased by $76.5 million, or 504.1%, primarily due to stock-based compensation deductions [230].
Circle(CRCL) - 2025 Q3 - Quarterly Report