Weird article. “Our annualized revenue as of March 2026 is $19b” is not “telling the public we’ve made $19b.” And the discrepancy the author points at is actually more like revenue to date “exceeds $5b” vs revenue to date looking like $6.7b. I hate to tell you, but $6.7b exceeds $5b.
If you look at the table, the implied revenue for March 2026 was $1.58b. So isn't this just a case of the $5b number being from one month earlier than the $6.66b number? Ed dismisses this, but it seems to be the obvious answer - the CFO quote is from March 9, 2026, so 70% of the March 2026 revenue presumably had not yet been earnt. If you subtract that out (or even the whole month, which would also make sense), it checks out: you get something between $5.08b and $5.54b, reasonably describable as "exceeding $5b".
Ah, OK. It still seems reasonable they might report the number in the court affadavit with one month lag for various reasons. The root cause in the discrepancy is just that Anthropic claims to be (and appears to be) on a ridiculous tear, with +35% MoM growth. OP and Ed both seem to dismiss this as impossible, but it seems to align with Anthropic's recent desperate search for more capacity.
I expect that no figure ever tended to the courts this way is actually correct literally to the date of filing. It's whatever numbers were in the most recent accounts when it was signed off.
Zitron’s narrative around AI revenues is that somehow the people Anthropic/OpenAI etc are pitching to, people who meet the sophisticated or wholesale investor tests (i.e., the only people actually able to trade on this information) do not know what ARR means, how it’s different from revenue, and are unable to read financial statements for themselves. And that he is seemingly the only one with insight, with the partial bits of information he has access to, that can tell them the truth of the situation.
I used to love his stuff. Until he just wouldn’t stop beating this drum so breathlessly. Now I wonder how much I’d suffered Gell-Man amnesia with the other content of his I’d previously enjoyed.
Maybe for people used to deal with financial announcements, but from my ignorant and naive point of view, if I read that claim I think instinctively that they made $19b during the last 12 months, not that they are going to maybe make it if they keep the same rate as the last month for the next 12 months.
It's certainly not a perfect number, but what else are you going to do for a fast growing business? If it does 1B month 1, 5B month 2 and 10B month 3, how does an investor extrapolate the next 12 months? Obviously it's a forecast and will be imperfect without more data. Any potential large investor will be given more financials to help them determine if the 10B was a 1 time event or if it is actually recurring. The harder part is understanding the growth rate.
The be fair to Zitron he claims that enterprise customers are likely paying up front so it won't continue in future months. But now we're into accrual for the future revenues which further complicates the analysis.
The problem is, annualized revenue doesn’t work when your income has a 3 standard of deviation month to month. It is standard for other fields/businesses but these tend to have stable month to month revenue.
Also, the revenue curve probably looks like well behaved exponential growth when Anthropic plots it out. Given that they're making speculative claims in a fast-changing environment anyway, I personally would probably cope if they included extrapolated growth in their annualised revenue figures. Not sure what the custom is, but as the article notes we're dealing with made-up numbers and wild guesses from the accountant's perspective, so it doesn't sound like there is any particular reason to just multiply the current revenue by 12 without making some basic adjustments for the growth rate they're seeing internally.
Revenue recognition for private companies generally is less precise than for public companies, which in the US are obligated to report under GAAP, which uses a different indicator than annualised revenue so public companies are comparable.
It makes sense to scrutinise Anthropic’s revenue in the lead up to IPO on those grounds; their AR figure simply isn’t comparable to revenue numbers from other firms.
However it doesn’t make sense to be sensational about this - iirc reporting GAAP revenue is a necessary condition of going public so the chickens will come home to roost one way or another.
at 3x YoY growth, annualized run rate can be 4-5x trailing revenue. the gap is structural, not deceptive. courts want historical actuals; investors want trajectory
In the current environment of circular money flows “revenue” is a fuzzy number. That’s part of the challenge here. There’s concerning gaps between the money flowing in circles and net-new money entering the ecosystem.
Don't get me wrong, I'm not a big fan of Zitron, but the narrative around revenues and profitability around AI labs are quite misleading.
According to the article the total revenue figure in the affidavit is “to date”, so basically 8th or March.
I used to love his stuff. Until he just wouldn’t stop beating this drum so breathlessly. Now I wonder how much I’d suffered Gell-Man amnesia with the other content of his I’d previously enjoyed.
The be fair to Zitron he claims that enterprise customers are likely paying up front so it won't continue in future months. But now we're into accrual for the future revenues which further complicates the analysis.
It makes sense to scrutinise Anthropic’s revenue in the lead up to IPO on those grounds; their AR figure simply isn’t comparable to revenue numbers from other firms.
However it doesn’t make sense to be sensational about this - iirc reporting GAAP revenue is a necessary condition of going public so the chickens will come home to roost one way or another.