Shares of Circle Internet Corp. (CRCL) tumbled 6.13% in pre-market trading on Wednesday, despite the stablecoin issuer reporting robust third-quarter earnings that surpassed analyst expectations. The sharp decline comes as investors appear to be focusing on the company's increased cost projections for the full year.
Circle reported impressive Q3 results, with earnings per share of $0.64, significantly beating the analyst consensus estimate of $0.18. Total revenue and reserve income reached $739.8 million, up 66% year-over-year and exceeding the expected $700.5 million. The company's flagship stablecoin, USDC, saw its circulation more than double to $73.7 billion compared to the previous year, indicating strong adoption of the digital dollar.
However, the stock's pre-market plunge suggests investors are more concerned about Circle's updated full-year outlook. The company raised its 2025 forecast for adjusted operating expenses to a range of $495 million-$510 million, up from the previous guidance of $475 million-$490 million. This increase in projected costs appears to be overshadowing the positive earnings results.
Additionally, Circle announced it is exploring the possibility of launching a native token on its Arc network. While this move could potentially open new revenue streams, it may also be perceived as adding complexity and risk to the company's business model, further contributing to investor caution.
As the stablecoin market continues to evolve rapidly, with increasing regulatory attention and competition, Circle's strategic moves and cost management are under close scrutiny by investors. The stock's negative reaction today highlights the market's sensitivity to future growth prospects and profitability concerns, even in the face of strong current performance.
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