Category: general

The post Why Circle Stock Falls 7% Despite $214M Growth com. Circle reported its third-quarter 2025 results on November 12, which showed substantial growth across key metrics. However, Circle stock fell nearly 7% over the past two trading sessions, as investors focused on margin pressure and rising costs beneath the headline numbers. The USDC issuer reported a USDC circulation of $73. 7 billion at quarter-end, representing 108% year-over-year growth. Meanwhile, total revenue and reserve income reached $740 million, representing a 66% increase from the prior year period. Net income hit $214 million, a 202% increase year-over-year, and adjusted EBITDA grew 78% to $166 million. Circle Stock Falls on Margin Compression Despite the strong topline performance, the crypto stock traded at $94. 47 in pre-market hours on November 12, down 3. 65% and extending a decline that began on November 11 when shares fell roughly 3. 5%. The earnings release showed a 39% contraction in RLDC margin, which is revenue less distribution costs as a percentage of total revenue, down approximately 270 basis points year-over-year. Distribution costs jumped 74% as partners, such as Coinbase, held more USDC on Circle’s platform, scaling the company’s payout obligations faster than revenue growth. Circle’s reserve return rate fell 96 basis points year-over-year to 4. 2%, reflecting lower yields on the treasury securities and cash backing USDC reserves. Reserve income still generated $711 million in the third quarter, but the declining rate signals vulnerability if short-term rates continue falling into 2026. Management has raised its 2025 adjusted operating expense guidance to $495-$510 million, up from the previous range of $475-$490 million, citing investments in platform capabilities, global partnerships, and higher payroll taxes resulting from option exercises. The increased expense trajectory came as investors questioned whether the crypto stock could maintain operating leverage as it scales.