That's the trouble I have with ARR, because there's no standard, people engage in shenanigans. I do find the 5bn lifetime revenue versus their ARR figures pretty sketchy which is why I really want to see the S1.
Can you be more specific on his incorrect calculations please?
Wait. ARR has no precise definition but has a clear social understanding. It’s clear Ed doesn’t get that and ARR not having a clear definition doesn’t absolve him of the mistake. His misunderstanding was on a different axis.
The miscalculations are pretty clearly pointed out in the tweet I linked earlier.
> Wait. ARR has no precise definition but has a clear social understanding.
This is (historically) a recipe for fraud and badness. If ARR is important enough to be reported, then there should be a GAAP definition.
Do you use calendar month or four week rolling? Do you account for seasonality? How do you recognise revenue? (My sense is that Anthropic do sketchy things with credits, as the consumer ones last for like 180 days and then expire).
ARR is a really, really, really easy metric to make sound like whatever you want which is why I am sceptical of it.
EDIT: I looked at the tweet which is a screenshot of a supposed sheet that Ed built. Unless you have a source for the sheet then I'll need to assign this relatively low credibility (don't know the user, it's a screenshot with no link).
The user is someone I've followed for more than a decade:
> I’m a reporter who has written about technology, economics, and public policy for more than a decade. Before I launched Understanding AI, I wrote for the Washington Post, Vox.com, and Ars Technica. I have a master’s degree in computer science from Princeton.
> I’m working on Understanding AI full-time, and I have no outside investors or donors. Since I started it in 2023, paying subscribers have accounted for a large majority of my income (you can see full details on my source of income on my disclosure page). Their support allows me to work on the newsletter full-time.
Passes my credibility check because I've read a lot of his work, and he's been around the block a few times in journalism circles.
> But I’m a curious little critter and went ahead and added up all of the times that Anthropic had talked about its annualized revenue from 2025 onward, and the results — which you can find with links here! — and based on my calculations, just using published annualized revenues gets us to $4.837 billion.
It’s here in the blog.
> This is (historically) a recipe for fraud and badness. If ARR is important enough to be reported, then there should be a GAAP definition.
Can you be more specific on his incorrect calculations please?