Circle's Q1 revenue grows 20% but profits fall amid competition from Ripple and PayPal

Circle reported a 20% revenue increase to $694 million in Q1 2026, but profits dropped sharply due to rising costs and competitive pressure from Ripple's RLUSD and PayPal's PYUSD stablecoins. Despite beating EPS estimates, Circle's net income fell 59% from the previous quarter, signaling margin squeeze. PayPal's expanding PYUSD ecosystem, now in 70 markets, challenges Circle's USDC dominance, pushing Circle to pivot towards AI and new token projects like ARC to defend its market position.