Anthropic’s amended S-⁠1 shows $17 billion in Q3 revenue, slower growth and a swing to an operating loss

The amended filing

Anthropic, PBC, filed Form S-1/A, the first amendment to its IPO registration statement, with the SEC’s EDGAR system on Nov. 2 (file no. 333-299633). The original S-1 became public on Oct. 26. The company had been submitting confidential draft filings since June 1. The amendment adds figures for the third quarter, which ended Sept. 30. The shares are set to trade on the Nasdaq Global Select Market under the ticker ANT.

The price range in the filing is still blank. As of the morning of Nov. 8, EDGAR showed no new Anthropic filing after Nov. 2. The SEC page for the document could not be opened for this piece. The figures come from reporting by Fortune and TechCrunch. EDGAR full-text search confirmed that the key phrases appear in the S-1/A.

Revenue up, growth slower

According to figures reported by Fortune, Anthropic’s third-quarter revenue was $17 billion. Revenue was $11.6 billion in the second quarter and $1.4 billion in the same quarter a year earlier. Quarter-over-quarter growth slowed from about 144% to about 47%. Year-over-year growth was more than 1,000%.

Total operating expenses rose from $10.6 billion to $17.5 billion. A $974 million operating profit in the second quarter turned into a $567 million operating loss in the third. The company mainly attributes this to compute bought under short-term commitments. According to the filing, that capacity “currently costs significantly more” than compute bought under multi-year commitments. The second factor is a $2 billion non-cash expense tied to an employee donation matching program.

The adjusted operating margin fell from 19% to 15%, while adjusted profit rose slightly in dollar terms. The net loss was $23.3 billion. Most of it is an accounting charge from the rising value of convertible notes.

Compute costs and pricing pressure

According to TechCrunch’s reading of the filing, the quarterly compute bill was about $10 billion, with $5.0 billion bought under short-term commitments. Compute rose from 48% to 58% of revenue. A chart in the filing shows that each dollar spent on compute brought in just over $2 of revenue in the second quarter. In the third quarter, that ratio fell to $1.72.

Prices are under pressure too. According to the filing, part of the growth in usage was offset by about $600 million in price reductions. Those came from new model releases and contract discounts. Anthropic’s total spending commitments are about $895.4 billion. Most of that is for compute and infrastructure, much of it tied to Anthropic Direct, the company’s own infrastructure. The company had $146.6 billion in liquidity on Sept. 30.

The valuation debate

Citing four sources, Reuters reported on Nov. 6 that prospective investors were doubtful about the timeline. According to the report, a roadshow planned for the week of Nov. 9 and a November listing are in question. Some investors see $1.5 trillion as the high end of expectations and may push for a bigger discount. Investors are waiting for October revenue, which the company left blank in the amended filing. Some say the IPO could raise as much as $100 billion. Anthropic declined to comment to Reuters.

According to CNBC’s Kate Rooney, a $2 trillion valuation had been the target until recently. One investor sees $1 trillion to $1.25 trillion as more likely. CNBC reported that the roadshow was expected to start the following week. The company was valued at $965 billion in a private round in May. D.A. Davidson analyst Gil Luria said, “Investors will expect the IPO to be priced at least at the low end of previous expectations.”

According to a Bloomberg report relayed by Quartz, the goal is to list before the Nov. 26 Thanksgiving holiday. Quartz notes that the filing must be public for at least 15 days before the roadshow. All the valuation figures come from unnamed investors, and the company has not disclosed a range. No decision to postpone the IPO has been announced.