Regarding $153 million of “Non-Recurring Income” in CRCL's $214 million Net Profit

CRCL (Circle) 2025 Q3 Financial Report:
GAAP Net Profit: $214 million
Of which Non-Recurring Gain: $153 million

➤ Net profit is about $61 million = $61 million

✅ What is this $153 million “non-recurring income”?

Fair value changes in investments (mainly proprietary USDC reserve fund shares)

Circle holds shares in the **Circle Reserve Fund (managed by BlackRock)**, part of which is the company’s own invested capital, recorded on the company's books as “investment assets.”

Due to interest rate fluctuations in the bond market in Q3 2025, the fair value of these short-term bond assets held by Circle increased;

Under accounting standards, this floating profit must be included in the current period's profit and loss;

So, this $153 million is not cash profit, but rather “book income from mark-to-market appreciation.”

To put it more simply:

Circle invested some of its own money in the reserve fund. The T-Bills corresponding to this money increased in value (or the spread narrowed), so under accounting standards, this appreciation was booked as income. However, this money can't be used for dividends and is not earned from customer business.

✅ So what is the real “profit available for valuation” per quarter?

Net profit after deducting non-recurring income (Non-GAAP net profit)
≈ $61 million / quarter

So the annualized net profit is: $61 million × 4 = $244 million

✅ Then how should PE be calculated properly?

Assume the current market cap is $160 billion;
Annualized sustainable profit = $244 million;
Then the real forward PE ≈ 16 billion / 244 million ≈ 65.5 times

✅ 5. This PE looks high, does that mean CRCL is expensive?
Not necessarily, for the following reasons:

Scenario 1: Interest rates remain at 4%+
The current quarter’s USDC reserve size and interest spread continue to expand;
After interest income increases next quarter, “non-recurring” may become “normalized” profit;
So “core profit for the current quarter” is actually a conservative estimate—valuation looks high, but may jump next quarter.

✅ Scenario 2: The company is deliberately not adjusting “Non-GAAP profit”—just accounting conservatism
Many tech companies proactively release “Adjusted Net Income,” but Circle hasn't, indicating prudence;
Institutions will adjust valuation models themselves at the market level;
So while you see “$214 million GAAP net profit” on Futu, professional institutions are definitely looking at core profit;
If interest spreads rise next quarter and the company no longer has one-off floating gains, profit quality improves and PE will naturally decrease.

✅ The current PE should be estimated based on $61 million net profit × 4 = $244 million
Item Value
Reported Net Profit $214 million
Non-Recurring Income $153 million
Actual Operating Net Profit ≈ $61 million
Annualized Profit ≈ $244 million
Current Market Cap ≈ $16 billion
Actual Forward PE ≈ 65–70 times