4 ms·

Where's Ed: Anthropic Told Court $5B but Public $19B

57 points by jorisw 5mo ago

josh-sematic 5mo ago
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.
- darkwater 5mo ago
  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.
  - yen223 5mo ago
    "Annualized revenue" is a projection, and is known to be a projection.
    - throwaway713 5mo ago
      Interesting. I’m going to start describing my “annualized impact” in my performance self-reviews in terms of all the things I project that I’ll do.
      - fluidcruft 5mo ago
        Go for it. Be aware of what happens to your stock when expectations you set do not materialize.
        sjsdaiuasgdia 5mo ago
        Dunno about that, somehow Tesla stock doing pretty well despite setting a lot of expectations that haven't materialized.
      - rvnx 5mo ago
        Investors don't want results anyway, they want a dream. Until the IPO which is the final boss stage where you are selling forward looking profits
    - csomar 5mo ago
      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.
      - nraynaud 5mo ago
        I would venture that's it's the whole reason they use it. because it doesn't work.
        jeeeb 5mo ago
        If anything, it’s a very conservative estimate. Short of a major turn of events it seems very unlikely Anthropic’s revenue growth is going to slow to zero.
      - dcre 5mo ago
        It’s not deviating up and down. It’s deviating upward. It is necessarily going to wildly overstate the previous 12 months’ revenue while wildly understating the next 12 months’ revenue. There is no way to describe exponential growth in a single number that doesn’t do this. This is why adults with a brain look at the series.
    - qarl 5mo ago
      Yes but my mother-in-law doesn't understand it, so it's a lie.
  - fluidcruft 5mo ago
    Wall Street be like that (and worse). Caveat emptor.
  - matwood 5mo ago
    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.
    - mbreese 5mo ago
      Even if an enterprise customer was prepaying, that would only show up on a cash balance statement, not as revenue for the month it was collected in. Yes, this is based on accrual in accounting terms. But because the revenue isn’t recognized immediately, collecting prepayment in February shouldn’t skew ARR reported in March.
      - matwood 5mo ago
        Per GAAP you are correct, but many of these ARRs are qualified as non-GAAP. So yes, a real analysis should do what you're saying but are they is the question. Also, if they are buying tokens with no time limit, that will complicate the accrual forecast. This could be why all of the downstream investor companies like Amazon are pushing their employees to tokenmax.
  - deleted 5mo ago
    [deleted]
- vb-8448 5mo ago
  "Exceeds $5b" is a weird way to say "5$b +34%" ... 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.
  - brainwad 5mo ago
    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".
    - vb-8448 5mo ago
      The $19b ARR is from March 3rd, so it is based on the revenue from February.
      - brainwad 5mo ago
        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.
        vb-8448 5mo ago
        > they might report the number in the court affadavit with one month lag for various reasons According to the article the total revenue figure in the affidavit is “to date”, so basically 8th or March.
        5mo ago
- roenxi 5mo ago
  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.
- dcre 5mo ago
  Weird is far too generous. It’s a travesty of thinking.
- windexh8er 5mo ago
  You're missing a very big part of the argument. As I understand it: in a sworn affidavit (in federal court no less) the norm is to state the tightest accurate floor. A CFO sitting on $6.7B in recognized revenue writes "exceeding $6 billion" or "approaching $7 billion," not "exceeding $5 billion." That's the basis for the 25–35% overstatement claim. This is about legal/financial language norms. It's not OK to under-represent just the same as it would not be OK to over-represent. But let's pretend this is an unusual circumstance (it's not) and that the understatement was a one time thing (it wasn't either based on past statements). So... Then you have the speedometer/odometer math. Just December 2025 through early March 2026, at Anthropic's own ARR-implied monthly rates, sums to roughly $4.25B ($750M + $750M + $1.17B + $1.58B). If lifetime revenue is barely "exceeding $5B," that leaves under ~$750M for everything before December 2025. But... Anthropic was already reporting $1B ARR in January 2025. This is the argument and "6.7 > 5" doesn't address it because now we're seeing the CFO play the other side of the coin. So no matter which way you look at it Anthropic's CFO has lied publicly and in very large numbers. You don't get to spin numbers, especially sworn numbers, in a way that benefits you. The only way that can even remotely work is that you're consistent. This is sloppy and all over the board which implies Anthropic wants to hide something.
  - Ukv 5mo ago
    > You don't get to spin numbers, especially sworn numbers, in a way that benefits you If it's "a filing where Anthropic was trying to impress a federal court with its commercial scale", then wouldn't the understatement ("exceeds $5B" rather than "exceeds $6B") be to their detriment? My assumption would be that the February numbers were not yet determined when Krishna Rao was initially writing the affidavit (say, one week before its submission date, if legal review/revisions take some time), which would make "exceeds $5B" the strongest claim that could be safely made.
  - brainwad 5mo ago
    > As I understand it: in a sworn affidavit (in federal court no less) the norm is to state the tightest accurate floor. All three of the numbers in the affidavit are nice round multiples of five billion dollars, so the simpler assumption might be they just rounded looser than you think? He also told the court they'd raised over $60 billion, when the precise number was actually $69.1B (as of Feb 12), so they would appear to have taken the 1 significant figure floor for the numbers in the court filing.
cmiles8 5mo ago
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.
- sjsdaiuasgdia 5mo ago
  Yep. My employer has invested billions in Anthropic, and now there is a strong executive mandate for everyone (regardless of role) to use Claude for everything. The one metric that is being tracked per employee is how much our Claude usage costs. I'm not in a developer role, so I'm wasting time and money making Claude do useless busy-work just to keep my numbers in a range where I'm not in management's focus. I know I'm not alone in my company, and I know the experience is not unique to my company. The money people are absolutely desperate to make this whole mess work.
clearstack 5mo ago
[flagged]
diatone 5mo ago
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.
DeathArrow 5mo ago
Maybe Claude just hallucinated the answers. :)
sigmar 5mo ago
uhhhh isn't the most logical explanation that the "exceeding" number is intentionally vague? Just like literally every other number in the CFO's declaration ("spent over $10 billion"... "raise more than $60 billion"). Helps to look at source documents. Declarations like this are written to be literally true, but not precise enough to reveal more information than they have to.
bcjdjsndon 5mo ago
Ai written, needlessly verbose in sections. 2/10 did not finish
plikd 5mo ago
This article has a point to make, but the framing of the title is extremely misleading. The $5B figure is total revenue, and was framed as a not less than figure. The $19B figure was annualized revenue run rate. A figure that has grown rapidly month over month. These discrepancies are described clearly in the text of the article.
- vb-8448 5mo ago
  His point looks still correct (the total revenue reported to the public is 34% higher than the one in the affidavit) but the title is definitely clickbait. I guess the "5b vs 6.67b" pushes view counters less than "5b vs 19b" ...
barrkel 5mo ago
Is this mostly a mixup between annualized revenue and booked revenue? If so, this is a big pile of nothing. Anyway, the article looked like it was written by Claude and after I read what were clearly references to two different things, I came back here.

57 points by jorisw 5mo ago

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.

darkwater 5mo ago
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.
- yen223 5mo ago
  "Annualized revenue" is a projection, and is known to be a projection.
  - throwaway713 5mo ago
    Interesting. I’m going to start describing my “annualized impact” in my performance self-reviews in terms of all the things I project that I’ll do.
    - fluidcruft 5mo ago
      Go for it. Be aware of what happens to your stock when expectations you set do not materialize.
      - sjsdaiuasgdia 5mo ago
        Dunno about that, somehow Tesla stock doing pretty well despite setting a lot of expectations that haven't materialized.
    - rvnx 5mo ago
      Investors don't want results anyway, they want a dream. Until the IPO which is the final boss stage where you are selling forward looking profits
  - csomar 5mo ago
    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.
    - nraynaud 5mo ago
      I would venture that's it's the whole reason they use it. because it doesn't work.
      - jeeeb 5mo ago
        If anything, it’s a very conservative estimate. Short of a major turn of events it seems very unlikely Anthropic’s revenue growth is going to slow to zero.
    - dcre 5mo ago
      It’s not deviating up and down. It’s deviating upward. It is necessarily going to wildly overstate the previous 12 months’ revenue while wildly understating the next 12 months’ revenue. There is no way to describe exponential growth in a single number that doesn’t do this. This is why adults with a brain look at the series.
  - qarl 5mo ago
    Yes but my mother-in-law doesn't understand it, so it's a lie.
- fluidcruft 5mo ago
  Wall Street be like that (and worse). Caveat emptor.
- matwood 5mo ago
  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.
  - mbreese 5mo ago
    Even if an enterprise customer was prepaying, that would only show up on a cash balance statement, not as revenue for the month it was collected in. Yes, this is based on accrual in accounting terms. But because the revenue isn’t recognized immediately, collecting prepayment in February shouldn’t skew ARR reported in March.
    - matwood 5mo ago
      Per GAAP you are correct, but many of these ARRs are qualified as non-GAAP. So yes, a real analysis should do what you're saying but are they is the question. Also, if they are buying tokens with no time limit, that will complicate the accrual forecast. This could be why all of the downstream investor companies like Amazon are pushing their employees to tokenmax.
- deleted 5mo ago
  [deleted]
vb-8448 5mo ago
"Exceeds $5b" is a weird way to say "5$b +34%" ... 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.
- brainwad 5mo ago
  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".
  - vb-8448 5mo ago
    The $19b ARR is from March 3rd, so it is based on the revenue from February.
    - brainwad 5mo ago
      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.
      - vb-8448 5mo ago
        > they might report the number in the court affadavit with one month lag for various reasons According to the article the total revenue figure in the affidavit is “to date”, so basically 8th or March.
        5mo ago
roenxi 5mo ago
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.
dcre 5mo ago
Weird is far too generous. It’s a travesty of thinking.
windexh8er 5mo ago
You're missing a very big part of the argument. As I understand it: in a sworn affidavit (in federal court no less) the norm is to state the tightest accurate floor. A CFO sitting on $6.7B in recognized revenue writes "exceeding $6 billion" or "approaching $7 billion," not "exceeding $5 billion." That's the basis for the 25–35% overstatement claim. This is about legal/financial language norms. It's not OK to under-represent just the same as it would not be OK to over-represent. But let's pretend this is an unusual circumstance (it's not) and that the understatement was a one time thing (it wasn't either based on past statements). So... Then you have the speedometer/odometer math. Just December 2025 through early March 2026, at Anthropic's own ARR-implied monthly rates, sums to roughly $4.25B ($750M + $750M + $1.17B + $1.58B). If lifetime revenue is barely "exceeding $5B," that leaves under ~$750M for everything before December 2025. But... Anthropic was already reporting $1B ARR in January 2025. This is the argument and "6.7 > 5" doesn't address it because now we're seeing the CFO play the other side of the coin. So no matter which way you look at it Anthropic's CFO has lied publicly and in very large numbers. You don't get to spin numbers, especially sworn numbers, in a way that benefits you. The only way that can even remotely work is that you're consistent. This is sloppy and all over the board which implies Anthropic wants to hide something.
- Ukv 5mo ago
  > You don't get to spin numbers, especially sworn numbers, in a way that benefits you If it's "a filing where Anthropic was trying to impress a federal court with its commercial scale", then wouldn't the understatement ("exceeds $5B" rather than "exceeds $6B") be to their detriment? My assumption would be that the February numbers were not yet determined when Krishna Rao was initially writing the affidavit (say, one week before its submission date, if legal review/revisions take some time), which would make "exceeds $5B" the strongest claim that could be safely made.
- brainwad 5mo ago
  > As I understand it: in a sworn affidavit (in federal court no less) the norm is to state the tightest accurate floor. All three of the numbers in the affidavit are nice round multiples of five billion dollars, so the simpler assumption might be they just rounded looser than you think? He also told the court they'd raised over $60 billion, when the precise number was actually $69.1B (as of Feb 12), so they would appear to have taken the 1 significant figure floor for the numbers in the court filing.

cmiles8 5mo ago

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.

sjsdaiuasgdia 5mo ago
Yep. My employer has invested billions in Anthropic, and now there is a strong executive mandate for everyone (regardless of role) to use Claude for everything. The one metric that is being tracked per employee is how much our Claude usage costs. I'm not in a developer role, so I'm wasting time and money making Claude do useless busy-work just to keep my numbers in a range where I'm not in management's focus. I know I'm not alone in my company, and I know the experience is not unique to my company. The money people are absolutely desperate to make this whole mess work.

clearstack 5mo ago

[flagged]

diatone 5mo ago

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.

DeathArrow 5mo ago

Maybe Claude just hallucinated the answers. :)

sigmar 5mo ago

uhhhh isn't the most logical explanation that the "exceeding" number is intentionally vague? Just like literally every other number in the CFO's declaration ("spent over $10 billion"... "raise more than $60 billion"). Helps to look at source documents. Declarations like this are written to be literally true, but not precise enough to reveal more information than they have to.

bcjdjsndon 5mo ago

Ai written, needlessly verbose in sections. 2/10 did not finish

plikd 5mo ago

This article has a point to make, but the framing of the title is extremely misleading. The $5B figure is total revenue, and was framed as a not less than figure. The $19B figure was annualized revenue run rate. A figure that has grown rapidly month over month. These discrepancies are described clearly in the text of the article.

vb-8448 5mo ago
His point looks still correct (the total revenue reported to the public is 34% higher than the one in the affidavit) but the title is definitely clickbait. I guess the "5b vs 6.67b" pushes view counters less than "5b vs 19b" ...

barrkel 5mo ago

Is this mostly a mixup between annualized revenue and booked revenue? If so, this is a big pile of nothing. Anyway, the article looked like it was written by Claude and after I read what were clearly references to two different things, I came back here.