[Hashi Investment Research] Profits surged by 202%, Circle is quietly rewriting the encryption financial landscape.

Last time, the market was still discussing the ceiling of stablecoins; this time, Circle provided an answer with an impressive financial report.
On November 12, Circle announced its performance for the third quarter of 2025 — the circulation of USDC reached $73.7 billion, a year-on-year increase of 108%; net profit surged by 202%, reaching $214 million.
Against the backdrop of a decline in overall trading volume in the encryption industry, such figures not only come as a surprise but also reignite the market's imagination regarding the "stablecoin business model."
It is also worth noting that Circle has announced the official launch of the Arc public testnet, with over 100 financial and technology companies participating in the testing, and is exploring the possibility of launching Arc's native token — this means that Circle may be transitioning from a "stablecoin issuer" to a "on-chain financial infrastructure provider."
Where will Circle head in the future? The following Circle research report may provide the answer.

Overview of Company Business and Fundamentals

Company positioning
Circle Internet Group is a financial technology (FinTech) company dedicated to building "internet financial infrastructure." Its core objective is to connect encryption, stablecoins, digital asset infrastructure with traditional financial systems.

Main business
Mainly can be divided into the following categories:
Stablecoin Issuance and Circulation: The company is one of the main issuers of the well-known stablecoin USD Coin (USDC), and its issuance, redemption, management, and circulation scale are its core assets.
Reserves / Interest Income: The reserves behind USDC (usually low-risk assets such as cash or short-term government bonds) generate interest or returns for the company.
Platform and Developer Services: The company provides API, wallet/minting/redeeming services to help developers, financial institutions, and payment companies integrate stablecoins or digital assets into their business.
Blockchain Infrastructure Expansion: The company's launch of the Arc Network (Layer-1 blockchain) testnet and the "Circle Payments Network" (CPN) payment network aims to build an ecological platform, with the possibility of launching a native token in the future.

Market and Competitive Environment
Market Demand: As blockchain applications (such as DeFi, on-chain payments, and cross-border settlements) expand, the status of stablecoins as bridge assets and on-chain tools is strengthened.
Competition and Risks: Although USDC has scale, it still faces competition from pioneers like Tether USD (USDT); in addition, regulation, interest rates, trust mechanisms, and circulation security are all potential challenges.

Model Highlights
Network Effect: The larger the circulation of USDC and the broader the on-chain applications, the more the company can benefit from it.
Cost/Scale Leverage: As the scale of stablecoins expands, it dilutes the unit cost and enhances profitability.
The long-term vision is to be the "Internet Economy OS": the company's management has proposed that it is not only a stablecoin issuer but also positions itself as the builder of the next generation of Internet financial operating systems.

Latest Performance & Growth Momentum

Q3 2025 financial report key data
According to the company's disclosure:
USDC circulating supply is approximately 73.7 billion USD, with an annual growth of about 108%.
This quarter, the "total revenue + reserve revenue" is approximately $740 million, a year-on-year increase of about 66%.
Net profit of approximately 214 million USD, a year-on-year increase of about 202%.
Adjusted EBITDA is approximately $166 million, representing a year-on-year increase of about 78%.
The company announced that its Arc public test network has attracted over 100 financial or tech companies to participate; it is exploring the launch of the Arc native token.
The company has updated its full-year "Other Revenue" (i.e., non-reserve related income) expectations to $90 million to $100 million.

Interpretation: Growth Drivers
The doubling of circulation scale indicates a significant acceleration in the penetration and adoption of its stablecoin products in the market.
The significant growth in revenue and profits indicates that not only has the scale expanded, but profitability has also begun to emerge.
The business structure is beginning to expand from purely "reserve interest" to "ecosystem/platform services" (growth in "Other Revenue", advancement of strategic projects such as Arc/CPN, etc.).
Although the market reaction is cautious (such as the potential impact of interest rate declines on interest income), the company's growth potential is evident from the operating data.

Industry Position and Competitive Comparison
In the stablecoin issuance market, USDC is one of the main assets, and both its circulation scale and on-chain transaction volume are rapidly expanding.

The company is attempting to expand from "a stablecoin" to "a platform ecosystem" by expanding its payment network, blockchain ecosystem, and tokenized asset services.
Compared to institutions that only issue stablecoins, Circle's advantage lies in building a broader infrastructure, but it also bears higher growth investment and platform construction risks.
Industry risks include regulation (such as stablecoin definitions, compliance requirements), interest rate environment (affecting reserve earnings), and technological/trust risks (reserve transparency, user confidence), etc.

Valuation data

According to StockAnalysis, the current market capitalization is approximately USD 20.7 B, and the enterprise value (EV) is approximately USD 21.55 B.
Main Valuation Ratios (as of latest):
P/S (Price to Sales Ratio) is approximately 4.61 times.
EV/Revenue ≈ 15.10 times.
P/B (Price to Book Ratio) is approximately 13.69 times.
According to SimplyWallSt: P/S is about 10.7 times (slight differences in various data sources) and indicates that it is relatively high compared to its peers.

Valuation Analysis

To facilitate understanding, two basic valuation scenarios are constructed: conservative and optimistic.

Conservative scenario
Assuming that in the next 2-3 years, the circulation scale of USDC continues to grow, but the growth rate slows down, and revenue growth gradually stabilizes.
Assuming revenue grows from approximately $0.74 billion this quarter ×4 (annualized to about $3 billion) to approximately $2 billion.
Assuming a P/S price-to-sales ratio of about 6-8 times.
The theoretical market value is approximately 2 billion × 6 ≈ 12 billion dollars to 2 billion × 8 ≈ 16 billion dollars.
If the share capital remains unchanged, the target price per share should be calculated based on the current number of circulating shares.

optimistic scenario
Assuming the company's ecological structure is successfully established, the circulation scale of USDC and platform services will expand rapidly, with revenue growth reaching levels between 5 to 10 billion dollars.
Assuming a higher P/S multiple, for example, 10-12 times.
If the revenue reaches 5 billion dollars ×10 = 50 billion dollars in market value, or even higher.
Current Valuation/Market Expectations
Although the company has not yet established a long-term profit history, it is currently showing profitability, and the market is beginning to reference profit-based valuations.
However, the market remains cautious about the "decrease in reserve interest rates" and "uncertainty in growth realization", and stock prices may have already reflected part of the expectations.

Investment Logic and Risk Outlook

Investment Highlights
Structural growth in the stablecoin industry: USDC's circulation scale is rapidly expanding, placing the company in a favorable position.
Platform Expansion: Strategic layouts such as Arc Network and payment networks may bring long-term benefits.
Profitability Begins to Show: Net profit and EBITDA growth are strong, providing actual support for valuation.

Risk Factors
Risk of interest rate decline: A decrease in the interest return rate on company reserves may compress profits.
Regulatory uncertainty: stablecoins, tokenized assets, and blockchain networks are affected by policies.
Growth realization risks: Platform and ecosystem development require time, and if growth lags or market competition intensifies, valuations may decline.
Rising Costs: The company has raised its operating expense guidance, and if the profit leverage does not improve as expected, marginal returns may be under pressure.

Please note: This article is not investment advice and is for research analysis purposes only.