The Arc token sale radically improved Circle's financial outlook for 2026.
An analysis of the latest quarterly report from the USDC issuer revealed an unexpected growth driver: the company significantly raised its financial guidance for 2026, and the main catalyst for this revision was one-time revenue from the pre-sale of the native token of its own blockchain, Arc. This is a strategic move that gives the stablecoin issuer a significant "safety cushion" for maneuvering amid a prolonged bearish trend in the crypto market.
Key metrics for the second quarter remained stable, but it was the forecast for the next year that underwent dramatic changes. The company raised its bar for other revenue from $150–170 million to an impressive $310–330 million. At the same time, the forecast for revenue margin less distribution costs (RLDC) was also improved, to 41.7–43.7% from the previous 38–40%. Such a revision points to stronger monetization beyond reserves and better operational leverage than previously assumed.
Total revenue and reserve income amounted to $701 million, while adjusted EBITDA grew 8% year-over-year, reaching $143 million. However, it is important to understand the structure of this growth: approximately $180 million of the increased other revenue forecast comes specifically from the pre-sale of Arc tokens, which were placed among investors before the network launch.
Arc: A New Business Model and Institutional Support
Arc is a proprietary layer-1 blockchain where USDC serves as the native gas token. This fundamentally changes the company's economics: previously, Circle earned only from reserve yields; now it receives transaction fees in its own network. The public mainnet launch is scheduled for September 16, and institutional validators already include giants such as BlackRock and DTCC. The latter plans to tokenize assets in custody, while BlackRock intends to deploy the BUIDL fund with built-in USDC support.
Nevertheless, recurring revenue from Arc—staking, fees, and commercial services—will only materialize after launch and will directly depend on real network activity. For now, the primary source of optimism remains the one-time token sale.
Risks and Market Context
Circle's profit still depends on three variables: the volume of USDC in circulation, the yield on reserve assets, and the share of that yield remaining after distribution costs. Reserve yield in the second quarter stood at 3.48%, declining in line with SOFR, but no sharp drop in rates is expected, which supports the core business. Risks related to distribution costs have also eased: the agreement with Coinbase has been extended on the same terms, and the scenario of increasing the largest partner's share has been removed from the agenda.
However, the volume of USDC in circulation continues to shrink, putting pressure on the stablecoin's market cap. Unlike USDT, which is increasingly functioning as a payment instrument, USDC is concentrated in trading, collateral operations, and DeFi. This makes it more sensitive to the cycle: when on-chain liquidity falls, supply contracts, but it can quickly accelerate when trading volumes and capital return.
My expert view: The one-time nature of Arc revenue is not a panacea but a strategic breather. The real test for Circle will be the network's ability to attract genuine institutional traffic after launch. If use cases such as asset tokenization and settlements grow faster than expected, the 2026 forecast could even prove conservative. Otherwise, the company will face the need to find new growth sources amid shrinking on-chain activity.