Look, I've seen and I understand the arguments that the GAAP income adjustment for this kind of thing is fake, but a number of them seemed to take it for granted that it was a "one-time" adjustment. If it's going to keep happening I really feel like we ought to insist on a more comprehensive argument. The accounting principle must be generally accepted for a reason: what shenanigans could someone get up to by reporting net income without this adjustment, and how do we know Anthropic is not getting up to those shenanigans?
We aren’t shareholders, though, so why should we care?
They're going through an IPO, so unless this is a one-off thing, people reading this thread will become shareholders, either directly or through their pension pots.
So while yes, this does look a lot like shareholder dilution, that doesn't really satisfy the question of why it's not treated that way under GAAP. Perhaps GAAP is just wrong, or perhaps there's some possible tricks which Anthropic is provably not engaging in. What it's definitely not is a one-time adjustment now that it's happened in two consecutive quarters.
Consolidated financials are on page 23, quarterly numbers on page 160
> Okay so Q3 ARR at $67.8bn versus $46.2bn for Q2, +47% QoQ. Turns out tokenmaxxing's end over the summer slowed revenue growth versus an absolutely torrid 100%+ growth rate in Q1/Q2 but 46% sequential is still eye-popping
> Operating margins (GAAP) went from 8% to -3$, with a -28.5% QoQ incremental operating margin. $SPCX compute coming online is the reason.
> Bottom line after seeing this Q3 update: the basic takeaways from the original S-1 don't change, but fears that they were excluding Q3 because it was a disaster were definitely wrong. Do with this information what you will.
It's also worth noting that Q3 only has one week of Opus 5.5 (9/22 - 9/30) which may have changed the economics for Q4.
This is specifically about the end of tokenmaxxing and how much worse the growth rate would look after the Q3 numbers came out.
(I do think moats are shallow, and I personally switch away from Anthropic every few months for a while, but I've been coming back. All software moats have been made more shallow now, affecting the entire investment landscape.)
Anthropic is working hard to create a vertically integrated stack from model to harness to productivity apps. That may or may not work, but it’s clear they see models as a value add for integration and not a product that can be a moat in themselves.
Maybe they tried too hard to get good Q2 numbers, making revenue happen earlier and expenses later, and that now makes Q3 look worse? Either way, this does not look great
Additionally, the Anthropic S-1 does indeed show scalable profitable growth. This is perhaps the most shocking thing in the S-1, to me.
That makes any loss or risk reasonable.
It's great propaganda, so great that they have themselves started believing it with certainty. This is one of the self owns that brought down the USSR :)
Of course they could be correct too, time will tell.
Pretty much every technology in history is available at several orders of magnitude lower cost than the first few years of it being invented.
AKA eventually everything runs on a potato.
It's not the same thing as early NVidia / Amazon / Google IPO: these companies didn't IPO at a value immediately placing them in the top 10 (by companies market cap) and certainly didn't IPO at values representing 5% of the US GDP.
Can it x2? x3? x4? Maybe.
Can it x100 and represent five times the US GDP? I don't think so (I know, I know, the US GDP would grow too).
I know ANT ain't SPCX, but look at what happened so far to SPCX's valuation.
In Q3, I think they struggled with the government ban on Mythos/Fable, Opus 5 not being so good, OpenAI models being more token efficient, and they decided to dedicate a higher percentage of compute to training.
It’s not possible at all that they had to cut prices to hold market share as folks switched some of their usage towards open models.
Utterly cringe takes.
Again the issue is not is Anthropic an amazing growth story. Zero would debate that.
The issue is this is a probably $200-300B company pretending it’s a $2T company.
Add to that the insane amount of committed spend, a high interest rate environment which means they’ll pay a painful premium to patch cashflow gaps, and a likely “junk” bond rating (per Friday’s news) and that’s why folks are concerned.
It’s also just wrong to keep dismissing the paper losses from convertible notes as somehow not real losses. Once they are a public company this will be actual value taken away from existing public shareholders so they are legit losses not to be ignored. It’s like claiming equity based comp is free money… it’s not, you’re taking it out of the pockets of shareholders.
It does not make sense but it is what they say
The only way to get value from acquiring other companies is to buy them when they're distressed.
and add'l discussion: https://news.ycombinator.com/item?id=50338510
Tokens themselves are already a bit of a commodity, and the margins are gonna be fierce on these as there is not a whole lot of lock in.
Would Anthropic and OpenAI position themselves using their extra tools, their ai agents, presentations, docs. Are they nice; yes. However, that doesn't make a 2T company. It reminds me a bit of Dropbox, a truly great product, however, they're differentiation is simply not there. I think the momentum is there for the IPO to go decent, but it feels like the company is on such unstable ground that the fallout could be catastrophic.
It is like someone who loses repeatedly at Roshambo while saying: "Okay, then. Best two out of three- three out of five- four out of seven- five out of nine..."
[0] https://edition.cnn.com/2026/10/30/business/ai-stocks-bonds-...
By the way, we get way more value from our Anthropic subscriptions than any Chinese subscription.
That's a very generous reading. Anthropic's entire growth narrative is the rapid growth over the previous 12 months, from near-enough zero to $100bn+ this year. Now we see that actually growth is levelling off and that their revenue was ~$5bn/month over the last quarter, which is barely over their compute commitments, and nothing close to the $100bn+ leaked.
I guess if people thought Q3 would show negative growth rate, sure, it isn't a disaster, but their growth rate slowing so much is surely very bad and matches all the concerns commenters had.
And this is Anthropic! Anthropic are the financial success compared to OpenAI. OpenAI are doing much worse, so this does not bode well for OpenAI either.
https://x.com/billylo/status/2117276235852345425?a=4-pjgf1Ox...
That reason possibly being to grant legitimacy to an otherwise mostly illegitimate and equally mostly fictional branch of the economy (that whole MBA cluster).
Really, you're talking about expectations ("expected") of the expected ("price") trajectory (actual business performance).
If the above comment was intending to say "chart go up steeper make price higher, chart go up less steep make price lower", then no dispute there. But that carries virtually zero predictive information about whether the business will achieve "escape velocity" (whatever that means).
You absolutely cannot predict Anthropic's fate based on their growth rate slowing from Q2 to Q3. Obviously.
You can predict the resting place of a projectile with information like this. You cannot do so with a business, especially one as dynamic as Anthropic in an environment as dynamic as today's.
I really don't understand how could it be otherwise? They're planning to IP at a valuation representing 5% of the US GDP and, unlike NVidia, they are neither selling shovels in a goldrush nor a business with decades-old proven track of records.
Are people really going to buy ANT thinking it'll 10x to 50% of the US GDP?
Aren't there better stocks to YOLO on if you think you could maybe 10x? And if you want something safe instead of YOLO'ing, aren't there plenty of companies much safer and much more boring to invest in than something IPO'ing at 5% of the US GDP?
Isn't the entire Anthropic narrative based on infinite growth? How is infinite growth sustainable?
This is why any [consumer] investment in ANT is bad. If ANT goes 10x then congrats, we [the citizens] are in a crisis. If ANT goes 1/10x then congrats, holders of ANT are in a crisis.
47% quarterly growth is still 4.5x annual growth, which would put them at $300+ billion revenue in a year. This is still unprecedented growth for a company of this size.
The negative perspective depends on assuming that the 47% quarterly growth is going to continue dropping soon. And it is going to drop, since it's only a bit more sustainable than last year's growth. The question is how many hundreds of billions they're making a year when it levels off.
Some people just start out with wanting LLMs/AI/Anthropic to fail or be scams and consistently try to fit any new evidence pegs into those unchanging hypothesis-shaped holes. This group ideologically despised LLMs from the start and needs them to be fake.
Why assume that?
So much money have been given to that handful of companies and to that field, that it's pretty much guaranteed to plateau (it's not some small but growing market with lots of room to grow. It's already taking as investment a huge chunk of the economy, and the returns don't seem to justify it).
Most of it is a pre-IPO hype and a circular financing loop between Nvidia, Oracle, Amazon, and the AI players anyway, so the real returns are even worse.
An average random dev here: I switched to Opus 5.5 and forgot about all other (paid) models.
Now, they need to unearth new use cases and saturate them to keep the momentum going. Its unclear if they have found these opportunities and can turn them into sustained growth.
There is an unbelievably enormous difference in 100% vs 47% -> and when you look at the 2nd derivative this is REALLY REALLY REALLY bad.
I mean, the growth is astounding and incredible. It does not bode particularly well for a ~$2T valuation.
Right now, I could start a business selling gold bars for $1 a piece. There would be more people interested in that than Anthropic.
They stopped when the free packs stopped coming and they needed to finance their own.
All of that isn't very newsworthy though. We knew all that from the Q2 numbers. What is interesting is that reinvesting all their profits to make the number go up in the next quarter didn't work as well this time as it did all the other times
Apparently you’ve missed all of Ed Zitron’s reporting?
The main difference I would concede is that gravity, mass, forces, awind drag etc are much easier to model.
Well that’s the point. They’re not continuing at that rate of growth.
And in 10 years it will be worth the entire Earth's economy.
loveparade•1h ago
vannevar•58m ago
cootsnuck•12m ago
Which was probably the right move. The S-1 didn't seem to really change the overarching economic and financial narratives about Anthropic (it seems like whatever people already felt before the S-1, they felt it even more after looking at it).
So I don't think there's going to be any problem with boosters metabolizing the Q3 numbers.
(Idk, maybe this was their plan from the jump.)
maerF0x0•5m ago
DotNetCorePowa•9m ago
It says "You're absolutely right!".
So they did release the reports.