Circle Earnings on Deck, With Stock Under Water – What To Expect

Circle reports Q4 and full-year 2025 results today, before market open, after what has been a difficult year for holders. The CRCL stock is trading 26.48% lower since the start of 2026, although has a 2.6% bump in the pre-market leading in.

The quarter tests whether Circle can defend profitability as the Federal Reserve’s rate-cutting cycle compresses the reserve income that generated 98% of 2024 revenue. Consensus sits at $0.15 EPS on $748.6M revenue, down 75% sequentially from Q3’s $0.64 despite modest top-line growth, creating a setup where commentary on reserve yield trajectory and expense discipline will matter more than the print itself.

The CRCL stock price has fallen 79% from its post-IPO peak near $299, reflecting investor recalibration around a fundamental tension: Circle delivered two consecutive quarterly beats (Q2 adjusted EPS $1.02 vs. -$0.69 expected; Q3 $0.64 vs. $0.20 expected), yet shares sold off after Q3 as management raised full-year operating expense guidance to $495M–$510M while acknowledging that the reserve return rate had declined 96 basis points year-over-year to approximately 4.15%.

The market is pricing Circle as a levered play on short-term rates rather than a platform company, a view reinforced by IPO-era analysis estimating that each 25 basis point rate cut reduces EBITDA by roughly $100M absent offsetting volume gains.

What Q4 will determine is whether Circle’s “other revenue” diversification (subscription, services, Arc blockchain) can materially offset macro headwinds, or whether the business remains structurally dependent on reserve income that is now in secular decline. Management’s latest framework points to full-year “other revenue” of $90M–$100M (midpoint $95M) and adjusted operating expenses around $503M midpoint, implying that the path to sustained margin expansion requires either faster non-reserve revenue growth or a willingness to curtail platform investment.

Consensus Estimates

The consensus setup reflects a market that has stopped extrapolating Q3 strength and is instead bracing for the combined effect of reserve yield normalization and continued platform investment. As recently as November 14, 2025, Zacks tracked Q4 EPS expectations at $0.18, revised up from $0.15 over the prior seven days as investors assumed Q3 momentum would persist. By late February 2026, consensus had reversed to $0.15, down one cent over the prior 60 days, as rate-cut sensitivity reasserted itself.

Management Guidance and Commentary

“We’re already in a rate-cutting cycle, and through that cycle we are delivering sustained growth. In many ways, we think falling rates are good for our business in the near term. Falling rates lead to greater economic activity, more risk-taking, and increased investment.”

Circle CFO Jeremy Fox-Geen’s Q3 commentary attempted to reframe the rate-cut narrative, arguing that lower rates could stimulate USDC demand by increasing economic activity and risk appetite. The market response, a sharp selloff despite a 220% EPS beat, suggests investors view this as a best-case scenario rather than a base case. The guidance framework Circle provided after Q3 effectively traded near-term confidence for long-term positioning: management raised full-year “other revenue” expectations to $90M–$100M from $75M–$85M, signaling progress in diversifying beyond reserve income, but also lifted full-year adjusted operating expenses to $495M–$510M from $475M–$490M.

Analyst Price Targets & Ratings

Wall Street maintains a bullish stance with 80% of analysts rating shares a Buy or Strong Buy. The consensus target of $131.06 implies 118% upside from current levels, though this reflects pre-rate cut analysis that may not fully account for the structural pressure on reserve income.

Sector & Peer Comparison

Circle operates in a sector with limited direct public-market comparables. Coinbase Global (COIN) is the most frequently cited peer given its role as a major USDC distribution partner, but Coinbase’s revenue model is fundamentally different (trading fees and subscription services rather than reserve income). Circle’s Q3 EBITDA margin of 57% materially exceeds Coinbase’s 31.2% profit margin, reflecting the high incremental profitability of reserve income when rates are supportive.

Earnings Track Record

Circle’s 100% beat rate across its first two public quarters is less impressive than it appears given the magnitude of estimate recalibration. Q2’s adjusted EPS of $1.02 beat a -$0.69 expectation, but the negative consensus reflected IPO-linked charges that management had telegraphed. Q3’s $0.64 vs. $0.20 expected represented a cleaner upside surprise, yet the stock fell sharply on the day as investors focused on the guidance raise for operating expenses and the disclosed decline in reserve return rate.

Post-Earnings Price Movement History

Circle’s limited post-earnings history as a public company makes pattern analysis speculative, but Q3’s approximately 16% decline despite a 220% EPS beat is instructive: the market sold the news because management’s commentary on rising expenses and falling reserve yields undermined the bull case that Circle could sustain high incremental margins.

Expected Move & Implied Volatility

Options-derived implied volatility data is not available for Circle given its recent IPO, but the 11.71% short interest as a percentage of float provides a useful proxy for positioning risk. The elevated short interest reflects the bear case that Circle is structurally overvalued relative to its rate-sensitive business model.

What To Watch

The Q4 earnings call will likely focus less on the quarter’s reported figures and more on management’s framework for navigating 2026. The stock’s reaction will be determined by commentary on reserve yield trajectory, expense discipline, and Arc’s commercial progress rather than whether Q4 EPS is $0.15, $0.16, or $0.17.