Anthropic's Q3 Revenue Hits $16.8B, but Growth Slows Ahead of Planned November IPO

Anthropic has shared its quarterly numbers with potential investors at a private meeting in San Francisco, according to multiple US media reports. The company’s third-quarter revenue hit $16.8 billion, marking a significant milestone for the AI lab. This figure represents a roughly 45 percent jump from the second quarter and is more than 3.6 times the company’s total annual revenue for 2025.

Despite this impressive growth, Anthropic’s valuation has been affected by slowing sales ahead of its planned November IPO. The company’s growth pace has slowed down significantly compared to previous quarters. In the second quarter, surging demand for the developer tool Claude Code had pushed revenue up by more than 140 percent compared to Q1.

Additionally, OpenAI launched a strong competitor with Astra in September, which Anthropic only successfully countered in late September with Opus 5.5. This competition has put pressure on Anthropic’s revenue growth.

Anthropic reported an adjusted operating margin of 11 percent for the year through Q3, according to The Information. This number leaves out major costs like stock-based compensation but shows that the company is moving toward profitability. The Financial Times reports this was the second straight quarter of adjusted profitability for the AI lab.

The company’s cash-flow positive status is also a significant achievement. During the third quarter, Anthropic generated $1.70 in revenue for every dollar it spent on compute. This demonstrates the company’s ability to turn a profit despite months of price wars and steep training costs.

Anthropic estimates that 5 to 7 percent of its revenue comes from distillation, where other companies use Anthropic’s AI to extract data about how it works and train their own models. The company has repeatedly accused Chinese AI labs of copying its models this way. However, with the recent rollout of effective countermeasures, questions have been raised about why Anthropic spent so much time lobbying against distillation if it had the tools to stop the practice all along.

The planned IPO will be a crucial test for investor appetite in the AI sector. With a private valuation jumped to $965 billion in May and expectations of a massive IPO price, some bankers even floated a $2 trillion IPO. However, the now-presented revenue numbers have reportedly disappointed some potential investors, leading several to expect Anthropic’s banking advisors to lower valuation expectations.

The timing for an IPO is hardly ideal, with inflation staying high, borrowing costs rising, public sentiment toward AI remaining more negative than positive, and unsolved cybersecurity risks posing a real operational threat. Additionally, the ongoing price war among major players like OpenAI, Google, and Anthropic has led to concerns about the long-term sustainability of their business models.