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

jjorisw about 5 hours ago 30 commentsRead Article on flyingpenguin.com

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josh-sematic•about 1 hour 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.

vb-8448•about 1 hour 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•about 1 hour 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•44 minutes ago

The $19b ARR is from March 3rd, so it is based on the revenue from February.

glenngillen•44 minutes ago

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.

vb-8448•22 minutes ago

To be honest I'm pretty sure he is right about "AI players are basically throwing out numbers because the real one are not so shiny (yet?)".

What I'm not really fan about is the communication style and the "trust me bro" approach, which is pretty annoying ... but I guess it's because it's easier to make the view counter go up.

darkwater•about 1 hour 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•about 1 hour ago

"Annualized revenue" is a projection, and is known to be a projection.

qarl•19 minutes ago

Yes but my mother-in-law doesn't understand it, so it's a lie.

csomar•about 1 hour 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.

throwaway713•about 1 hour 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.

matwood•32 minutes 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•21 minutes 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.

fluidcruft•about 1 hour ago

Wall Street be like that (and worse). Caveat emptor.

dcre•14 minutes ago

Weird is far too generous. It’s a travesty of thinking.

roenxi•30 minutes 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.

diatone•42 minutes 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.

cmiles8•about 1 hour 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.

clearstack•about 1 hour ago

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

DeathArrow•26 minutes ago

Maybe Claude just hallucinated the answers. :)