Anthropic's 3Q Revenue Reaches $16.8 Billion

SPEAKER_1 (0:02)

Bloomberg Audio Studios, Podcasts, Radio, News. Bloomberg Tech is live from the heart of Silicon Valley with Ed Ludlow in San Francisco.

Ed Ludlow (0:22)

This is Bloomberg Tech, coming up, Anthropic tells prospective investors its third quarter revenue hits $16.8 billion as the company gets ready for its IPO. Plus, unlimited borrowing, two words from CoreWeave that sent a fresh jolt through the AI trade and sent its stock and bonds under severe pressure. And we hear from Nvidia CEO, Jensen Huang, who says safety and containment should be integrated into AI systems. Even as AI advances, that conversation is coming up.

Frankly, the AI trade is under pressure again. The NASDAQ 100 pointing towards a fourth straight day of declines. It is off its session low. The stock is down 3 percent, falling for a seventh straight session, its longest losing streak since May of 2025 Why?

Our top story, Anthropic. Bloomberg reporting new numbers the AI lab shared with investors at a meeting yesterday ahead of its expected IPO. Third quarter revenue, $16.8 billion. Growth, but a sharp slowdown from the prior quarter. That is feeding a bigger concern across the AI trade. Can revenue growth keep pace with the enormous amount of money being spent to build AI? Bloomberg's Bane Lipscholtz, part of the team, they reported on that meeting and the numbers. Let's go with starting with the third quarter revenue number, right, $16.8 billion. Sounds like a lot. But you and I also went back and said, well, what was the second quarter? What was the first quarter?

And to me, the market seems to be saying decelerating growth is disappointing to them.

Bailey Lipscholtz (1:48)

Yeah, and to some investors, they read this number to your point and say, all right, well, actually, that growth quarter over quarter is less than 50%. And we were really baking in closer to 100%.

When you talk to some fundamentalist investors, though, the big pushback is, are you really going to expect a company of this size, of this scale, to realistically double revenue quarter over quarter? One of the folks I spoke to this morning who was in attendance really pointed out that in their view, when you look at the third quarter, there was a big ramp for OpenAI's codex, so that could be a headwind for the company. And their reading of the tea leaves is that they expect a re-acceleration in the fourth quarter. So a lot of uncertainty around what the ultimate kind of impact is. And again, at the end of the week, we're still talking about a record-setting IPO.

Ed Ludlow (2:29)

There were lots of numbers that came out of it. One of them, we've actually just kind of updated on the Bloomberg and on the wire, which is a gross margin of 85%.

That's on a gap basis, is my understanding, from some phone calls I got this morning. There were lots of other numbers. Explain why they matter and what those numbers are, Bailey.

Bailey Lipscholtz (2:47)

Yeah, when you look at something like gross margin or even that adjusted operating margin, yes, we don't know what they're stripping out to get that adjusted number, but investors want to see a company, as we reported, that's free cashflow positive, that's generating real returns on their investment. And when you look at kind of their compute margin as well, the expectation is this is a company that's growing, not only in what they're able to sell to customers, but they're also making quite a bit of money at the end of the day out the door. Because again, as we talk about Anthropic, as we talk about OpenAI and other companies, in the entire ecosystem, the question comes back to will investors see real return on investing capital, and what does that ultimately look like? Can that help justify some lofty ambitions?

Ed Ludlow (3:28)

The next number I'll take, net revenue retention 900%.

In other words, a bucket of customers a year ago that were, say, spending $100, that same bucket is spending $900 today. I think a lot of people will be watching this, Bailey, and thinking, okay, Anthropic had an investor meeting. They're gonna IPO. They're... S1 hasn't flipped public yet. Explain why all of this is happening. Is this normal?

Bailey Lipscholtz (3:52)

This is pretty normal, Ed. It's not as well reported as this. So typically in the lead up to a public filing, a company will have analysts through their headquarters. We know that took place earlier this week. They will have investors sitting in Q&A, sitting throughout an entire day. I think it was about five hours of Anthropic programming at their headquarters yesterday, really to help them understand the story. This is all pretty standard.