Anthropic reported a 50 percent increase in third-quarter revenue to $16.8 billion as it prepares for a planned initial public offering (IPO) in November. The artificial intelligence company also indicated profitability on an adjusted basis for the second consecutive quarter, according to multiple sources familiar with the matter.
The startup, valued at $965 billion, hosted a full-day investor event at its San Francisco office where executives highlighted a safety-focused approach, rapid growth, and efficiency improvements as key factors positioning the company for a successful public listing. Revenues in the third quarter rose from $11.5 billion in the previous quarter but showed a slower growth rate compared to earlier in the year. For context, Anthropic’s revenue more than doubled from roughly $4.8 billion in the first quarter to over $11 billion in the second quarter.
Anthropic did not provide an updated annualized revenue figure, which stood at $65 billion at the end of July. Analysts at SemiAnalysis estimate that the company’s sales could now be around $74 billion annually, based on the latest results. These projections, however, fall short of some investor expectations formed earlier in the year, when several backers anticipated annualized revenue exceeding $100 billion by year-end.
Revenue figures from Anthropic, alongside those of rival AI firm OpenAI, remain a key benchmark for measuring growth and the capacity to sustain significant expenditure on AI infrastructure. The company plans to invest over $500 billion in computing power and infrastructure over the next decade, but rising interest rates and a more challenging economic environment may slow these ambitions.
Anthropic disclosed it was cash flow positive in the third quarter, generating $1.70 in revenue for every dollar spent on computing power. Its adjusted operating margins, which exclude stock-based compensation, stood at 11 percent. The company declined to comment on the figures.
Industry analysts note that some of Anthropic’s major clients, including Meta and Microsoft, have increasingly shifted toward developing their own AI tools, which has pressured revenue growth projections. Additionally, Anthropic has reduced its reliance on a practice known as “distillation,” in which other AI labs train models based on the outputs of more advanced ones, a process that previously contributed 5 to 7 percent of its revenue. The company curtailed this practice significantly in the third quarter.
Despite these factors, some investors regard the company’s revenue growth as notable amid ongoing pricing competition within the AI sector and strategic cutbacks in distillation usage.