Circle's Breakthrough: Arc Token Presale Rewrites the 2026 Financial Forecast
A careful analysis of Circle's quarterly report reveals not just improved metrics, but a strategic maneuver capable of altering the trajectory of the USDC issuer. The company has not only confirmed the resilience of its core business but has also radically revised its 2026 targets, with the launch of its own blockchain, Arc, playing a key role.
Financial Foundation and an Unexpected Growth Driver
In the second quarter, total revenue and reserve income amounted to $701 million, while adjusted EBITDA grew 8% year-over-year to $143 million. However, the main news lies in the forecasts: the company raised its 2026 expectations for other revenue from $150–170 million to an impressive $310–330 million. At the same time, the forecast for revenue margin excluding distribution costs (RLDC) was improved to 41.7–43.7% from the previous 38–40%. Such a leap points to stronger monetization beyond traditional reserves and a much more effective operational leverage than previously assumed.
What lies behind this revision? Approximately $180 million of the increased other revenue forecast comes from a one-off transaction — the pre-sale of the native token of the Arc network. This is not merely a liquidity injection but a strategic step that gives Circle a financial cushion to weather the downward trend in the crypto market in 2026.
Arc: A New Engine and a Shift in Business Model
Arc is a proprietary 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 a token for other networks, now it manages its own infrastructure and can earn from fees for blockchain space, not just from reserve income. The public mainnet launch is scheduled for September 16, with institutional validators including BlackRock and DTCC. Such partnerships provide the network with real coverage at launch and clear use cases: tokenized securities, collateral operations, and settlements.
However, recurring revenue from Arc — staking, transaction fees, and commercial services — will only materialize after launch and will depend on actual network activity.
Risks and Market Context
Circle's profit 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%, and it declined along with SOFR, but this source remains the foundation of the business. No significant rate cuts are expected in the near term, so reserve yield should hold. Risks to the distribution economics have eased: the agreement with Coinbase has been extended on the same terms, and the scenario of an increasing share for the largest partner has been taken off the table.
Excluding revenue from the Arc token pre-sale, the RLDC margin for the year is expected to be around 39% — in the middle of the previous range. This confirms resilience, but further profit growth will increasingly depend on the recovery of USDC circulation volume.
The volume of USDC in circulation is currently declining, which pressures metrics. However, my assessment is that USDC holds a favorable position ahead of the next upturn. The bulk of the stablecoin's volume is concentrated in trading, collateral operations, and DeFi, so circulation is highly cyclical and especially sensitive to the return of on-chain liquidity. If the market finds a bottom in the fourth quarter and activity recovers next year, we will see a strong rebound. Circle has every chance not only to weather the storm but to emerge from it in a strengthened position.