Circle Internet Cuts 5% of Staff, Beats Estimates: What's Weighing on the Stock?

Circle Internet Group Inc. (NYSE:CRCL) shares are trading lower Wednesday after the company reported third-quarter results and disclosed a workforce reduction of about 5%.

• Circle shares are experiencing downward pressure. Why is CRCL stock retreating?

Circle Beats Estimates, but $182M Revenue Came From Token Presale

Circle reported third-quarter earnings per share of 84 cents, beating the consensus estimate of 37 cents, and up from 64 cents a year earlier. It reported total revenue and reserve income of $864.888 million, up 17% from a year earlier, beating the consensus estimate of $778.121 million. Net income from continuing operations rose 5% to $226 million, and adjusted EBITDA rose 85% to $317 million. Reserve income, the interest earned on assets backing USDC, fell 8% to $658 million, as a 61 basis point decline in the reserve return rate to 3.5% outweighed 8% growth in average USDC in circulation.

Other revenue was $207 million, of which $182 million came from the presale of the token for Circle’s Arc blockchain, which launched on public mainnet in the quarter. Without the presale, revenue and reserve income would have been about $683 million, according to FinWire’s analysis, compared with $740 million a year earlier.

"In Q3, we saw continued proof that institutions are building and expanding on USDC," said Jeremy Allaire, Circle’s co-founder, CEO and chairman. He cited Tereina bringing USDC and EURC into SAP’s ecosystem, Visa taking stablecoin prefunding into commercial deployment and Binance renewing and expanding its partnership.

USDC Circulation Averaged $73.3B; Circle Books $9.1 M Restructuring Charge

Average USDC in circulation rose 8% to $73.3 billion, while USDC in circulation at the end of the quarter was $73.9 billion, flat from a year earlier. USDC onchain transaction volume rose 49% to $13.9 trillion. Circle’s results included a $9.1 million restructuring charge tied to a workforce reduction of about 5%. According to The Block, Circle’s share of the stablecoin market fell to 27%.

Circle Shares Drop

CRCL Price Action: At the time of publication, Circle shares are trading 1.83% lower at $73.84, according to data from Benzinga Pro.

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