Anthropic’s third-quarter revenue reached $16.8 billion, according to figures the company shared with potential investors at a private meeting in San Francisco. The results show continued expansion, but also a slower pace of growth than the company reported in the previous quarter—a distinction investors are weighing ahead of its planned November IPO.
Revenue is rising, but growth has cooled
Third-quarter revenue was roughly 45 percent higher than in Q2. It was also more than 3.6 times Anthropic’s total annual revenue for 2025. Those figures point to a large business, even as the rate of growth has eased.
In Q2, revenue had increased by more than 140 percent compared with Q1, with strong demand for Claude Code, Anthropic’s developer tool. The third-quarter rise is substantially smaller. A summer slowdown may have contributed: people typically work less during those months and use fewer tokens.
Competition is another factor in the company’s outlook. OpenAI launched a strong competitor with Astra in September, and Anthropic successfully countered in late September with Opus 5.5. The source reports these developments alongside the slower growth, but does not say how much either product affected quarterly revenue.
Profitability offers a positive signal, with caveats
Anthropic reported an adjusted operating margin of 11 percent for the year through Q3, according to The Information. That measure excludes major costs such as stock-based compensation, so it does not capture the full cost picture. Still, it suggests the company is moving toward profitability.
The Financial Times reports that this was Anthropic’s second straight quarter of adjusted profitability. The company was also cash-flow positive. In Q3, it generated $1.70 in revenue for every dollar it spent on compute.
These results matter beyond Anthropic: they offer evidence that an AI company can generate returns from its models despite months of price competition. The picture remains qualified by steep training and staff costs, and by the possibility that open-weight alternatives could replace proprietary models such as Claude.
Blocking distillation may reduce revenue in the near term
Anthropic estimates that 5 to 7 percent of its revenue comes from distillation. In this process, other companies use Anthropic’s AI to extract information about how it works and use that data to train their own models.
The company has repeatedly accused Chinese AI labs of copying its models this way. It recently rolled out effective countermeasures. Anthropic told investors that revenue from distillation will likely fall and weigh on the current quarter’s figures.
That creates a near-term trade-off. Blocking the practice may reduce revenue now, while making it harder for rival model makers to match Claude’s quality over time. The source also raises questions about Anthropic’s earlier lobbying against distillation, given that it has now deployed tools to counter it.
IPO expectations face a tougher test
The Information says Anthropic’s planned IPO is set for November before Thanksgiving. The offering would test investor appetite for the AI boom. Anthropic’s private valuation jumped to $965 billion in May, from under $20 billion just two years earlier; some bankers had floated a $2 trillion IPO.
The revenue figures reportedly disappointed some potential investors. Several now expect Anthropic’s banking advisors to lower valuation expectations, possibly to under $1.5 trillion. The company did not discuss its September annualized revenue rate or provide a full-year outlook. In July, that annualized rate was reportedly $65 billion.
Broader market conditions add pressure: inflation remains high, borrowing costs are rising, public sentiment toward AI is more negative than positive, and unsolved cybersecurity risks pose an operational threat. Meanwhile, OpenAI, Anthropic, Google and others have been in a price war for months as open models continue to close the performance gap.
The long-term case is that improving AI capabilities could bring the technology into more everyday office jobs, leading to greater use. For an IPO, however, that prospect must be weighed against the company’s current growth rate, costs and competitive pressures.