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"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.

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".

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

Ah, OK. It still seems reasonable they might report the number in the court affadavit with one month lag for various reasons. The root cause in the discrepancy is just that Anthropic claims to be (and appears to be) on a ridiculous tear, with +35% MoM growth. OP and Ed both seem to dismiss this as impossible, but it seems to align with Anthropic's recent desperate search for more capacity.

> they might report the number in the court affadavit with one month lag for various reasons

According to the article the total revenue figure in the affidavit is “to date”, so basically 8th or March.

I expect that no figure ever tended to the courts this way is actually correct literally to the date of filing. It's whatever numbers were in the most recent accounts when it was signed off.

glenngillen 33 days 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.

ceejayoz 33 days ago

> 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

This is… not unrealistic. Plenty of such investors have fallen for clear scams.

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.

suttontom 33 days ago

I mean, yes, "sophisticated" people, including institutional investors, do fall for scams. See SBF, Theranos. These scams are often most effective when there's mania and FOMO about a technology that everyone seems to be saying is amazing and will make them rich, in spite of the current evidence, which sounds a lot like AI.

StilesCrisis 33 days ago

If I were on the stand and therefore liable for perjury, I'd also try to give safe answers with some buffer.

darkwater 33 days 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 33 days ago

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

csomar 33 days 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.

dcre 33 days ago

It’s not deviating up and down. It’s deviating upward. It is necessarily going to wildly overstate the previous 12 months’ revenue while wildly understating the next 12 months’ revenue. There is no way to describe exponential growth in a single number that doesn’t do this. This is why adults with a brain look at the series.

nraynaud 33 days ago

I would venture that's it's the whole reason they use it. because it doesn't work.

jeeeb 33 days ago

If anything, it’s a very conservative estimate. Short of a major turn of events it seems very unlikely Anthropic’s revenue growth is going to slow to zero.

throwaway713 33 days 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.

fluidcruft 33 days ago

Go for it. Be aware of what happens to your stock when expectations you set do not materialize.

sjsdaiuasgdia 33 days ago

Dunno about that, somehow Tesla stock doing pretty well despite setting a lot of expectations that haven't materialized.

rvnx 33 days ago

Investors don't want results anyway, they want a dream. Until the IPO which is the final boss stage where you are selling forward looking profits

qarl 33 days ago

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

matwood 33 days 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 33 days 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.

matwood 33 days ago

Per GAAP you are correct, but many of these ARRs are qualified as non-GAAP. So yes, a real analysis should do what you're saying but are they is the question. Also, if they are buying tokens with no time limit, that will complicate the accrual forecast. This could be why all of the downstream investor companies like Amazon are pushing their employees to tokenmax.

fluidcruft 33 days ago

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

windexh8er 33 days ago

You're missing a very big part of the argument.

As I understand it: in a sworn affidavit (in federal court no less) the norm is to state the tightest accurate floor. A CFO sitting on $6.7B in recognized revenue writes "exceeding $6 billion" or "approaching $7 billion," not "exceeding $5 billion." That's the basis for the 25–35% overstatement claim. This is about legal/financial language norms. It's not OK to under-represent just the same as it would not be OK to over-represent. But let's pretend this is an unusual circumstance (it's not) and that the understatement was a one time thing (it wasn't either based on past statements). So...

Then you have the speedometer/odometer math. Just December 2025 through early March 2026, at Anthropic's own ARR-implied monthly rates, sums to roughly $4.25B ($750M + $750M + $1.17B + $1.58B). If lifetime revenue is barely "exceeding $5B," that leaves under ~$750M for everything before December 2025. But... Anthropic was already reporting $1B ARR in January 2025. This is the argument and "6.7 > 5" doesn't address it because now we're seeing the CFO play the other side of the coin.

So no matter which way you look at it Anthropic's CFO has lied publicly and in very large numbers. You don't get to spin numbers, especially sworn numbers, in a way that benefits you. The only way that can even remotely work is that you're consistent. This is sloppy and all over the board which implies Anthropic wants to hide something.

Ukv 33 days ago

> You don't get to spin numbers, especially sworn numbers, in a way that benefits you

If it's "a filing where Anthropic was trying to impress a federal court with its commercial scale", then wouldn't the understatement ("exceeds $5B" rather than "exceeds $6B") be to their detriment?

My assumption would be that the February numbers were not yet determined when Krishna Rao was initially writing the affidavit (say, one week before its submission date, if legal review/revisions take some time), which would make "exceeds $5B" the strongest claim that could be safely made.

> As I understand it: in a sworn affidavit (in federal court no less) the norm is to state the tightest accurate floor.

All three of the numbers in the affidavit are nice round multiples of five billion dollars, so the simpler assumption might be they just rounded looser than you think? He also told the court they'd raised over $60 billion, when the precise number was actually $69.1B (as of Feb 12), so they would appear to have taken the 1 significant figure floor for the numbers in the court filing.

dcre 33 days ago

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

roenxi 33 days 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.