About CRCL's $214 million net profit, $153 million of which is "non-recurring income"
CRCL (Circle) Q3 2025 financial report:
GAAP net profit: $214 million
Of which non-recurring gain: $153 million
➤ Net profit approximately $61 million = $61 million
✅ What is this $153 million "non-recurring income"?
Investment fair value changes (mainly from its own USDC reserve fund shares)
Circle holds shares in the Circle Reserve Fund (managed by BlackRock), part of which is the company's "self-invested" funds and is recorded on the company's books as "investment assets."
Due to fluctuations in bond market interest rates in Q3 2025, the fair value of these short-term bond assets held by Circle increased;
Under accounting standards, this unrealized gain must be recognized in the current profit and loss;
So this $153 million is not cash profit, but rather "book income from market value appreciation."
To put it more straightforwardly:
Circle invested some money in the reserve fund, and the T-Bills corresponding to that money appreciated (or the interest spread narrowed), so this appreciation was recorded according to accounting standards, but this money cannot be used for dividends and was not earned from customer business.
✅ What is the actual "valuation usable" quarterly profit?
Net profit after deducting non-recurring income (Non-GAAP net profit)
≈ $61 million / quarter
Thus, the annualized net profit is: $61 million × 4 = $244 million
✅ How to calculate the PE reliably?
Assuming the current market value is $16 billion;
Annualized sustainable profit = $244 million;
Then the true forward PE ≈ 160 / 2.44 ≈ 65.5 times
✅ This PE looks high, is CRCL expensive?
Not necessarily, the reasons are as follows:
Scenario 1: Interest rates remain at 4%+
The current quarter's USDC reserve scale and interest spread continue to expand;
After the interest spread income grows next quarter, "non-recurring" may convert into "normalized" profit;
So the "core profit of the current quarter" is actually a conservative estimate, the valuation looks high, but it may jump in the next quarter.
✅ Scenario 2: The company actively does not adjust "Non-GAAP profit" is just accounting conservatism
Many tech companies actively publish "Adjusted Net Income," but Circle has not adjusted, indicating prudence;
The market at the institutional level will adjust valuation models on its own;
So although you see "GAAP net profit of $214 million" on Futu, professional institutions are definitely looking at core profit;
If the interest spread increases next quarter, and the company no longer has one-time unrealized gains, the profit quality will be better, and the PE will naturally decrease.
✅ The current PE should be estimated based on $61 million net profit × 4 = $244 million
Project values
Reported net profit $214 million
Non-recurring income $153 million
Actual operating net profit ≈ $61 million
Annualized profit ≈ $244 million
Current market value ≈ $16 billion
Actual forward PE ≈ 65–70 times
Disclaimer: This article represents only the personal views of the author and does not represent the position and views of this platform. This article is for information sharing only and does not constitute any investment advice to anyone. Any disputes between users and authors are unrelated to this platform. If the articles or images on the webpage involve infringement, please provide relevant proof of rights and identity documents and send an email to support@aicoin.com. The relevant staff of this platform will conduct an investigation.