Circle has revised its forecast for 2026: the pre-sale of Arc tokens has become a new growth driver.
Analysts from my research division have carefully examined Circle's fresh Q2 report, and it delivered a number of unexpected surprises. Not only did the company's management keep quarterly metrics at a stable level, but it also significantly raised its forecast for "other revenue" and RLDC margin for 2026. The main catalyst for this revision was one-time revenue from the pre-sale of tokens for its own blockchain, Arc.
This strategic move gives Circle a significant financial cushion to weather the current downtrend in the crypto market. Moreover, it builds a solid foundation for USDC heading into the next upcycle, especially if the market finds its bottom in Q4 and on-chain activity begins to recover next year.
Financial details: what the report showed
Total revenue and reserve income came in at $701 million, while adjusted EBITDA grew 8% year-over-year, reaching $143 million. However, the key update was the forecast: "other revenue" for 2026 was raised to $310–330 million from the previous $150–170 million. The expected revenue margin net of distribution costs (RLDC) was also revised upward — to 41.7–43.7% from 38–40%.
Such a revision, in my view, points to stronger monetization beyond reserve income and more effective operating leverage than previously assumed. The company is clearly diversifying its profit sources, which is crucial in an environment of volatile interest rates.
Arc: a new engine, but the first fuel is the token pre-sale
Arc is Circle's own layer-1 blockchain, a settlement network for stablecoin finance where USDC serves as the native gas token. The company is moving up the technology stack: previously it issued tokens for other networks, now it operates its own infrastructure and can earn from blockchain space fees rather than just reserve income.
The public mainnet launch of Arc is scheduled for September 16. Among the institutional validators are BlackRock and DTCC. The DTCC depository plans to include tokenization of assets it holds in custody into Arc, while BlackRock expects to deploy the BUIDL fund with built-in USDC support. These agreements give the network real reach at launch and clear use cases — tokenized securities, collateral operations, and settlements.
The nearest financial result came from selling the token itself. Circle conducted a pre-sale of Arc before the network launch and placed the native token among investors. Approximately $180 million of the raised "other revenue" forecast comes precisely from this deal. Regular revenue streams from Arc — staking, transaction fees, and commercial services — will only appear after launch and will depend on how actively the network is adopted.
Risks and prospects: my view
Risks from interest rates and distribution costs look limited through the end of the year. Reserve yield in Q2 was 3.48% and declined alongside SOFR, but this source remains the backbone of the business. No significant rate cuts are expected in the near term, so Circle's reserve yield should hold. Distribution costs, which eat into part of this yield, have just passed their main test: the agreement with Coinbase was renewed on the same terms, and the scenario of the largest partner's share growing has been taken off the table.
The circulating supply of USDC remains under pressure due to weak on-chain activity. However, Circle's long-term base case assumes 40% annual growth in this metric. The key question now is whether new USDC use cases can grow fast enough to offset the cyclical downturn. I believe USDC holds a favorable position ahead of the next recovery: the bulk of the stablecoin's supply is concentrated in trading, collateral operations, and DeFi, so circulation is highly cyclical and especially sensitive to the return of on-chain liquidity.
This material is not investment advice.