In an amended prospectus (Form S-1/A) filed with the U.S. Securities and Exchange Commission (SEC) on November 2, 2026, Anthropic disclosed an operating loss of $567 million for the third quarter of 2026 (July–September). The prior quarter showed an operating profit of $974 million, while revenue reached $16.956 billion, roughly 12 times the figure from a year earlier. The company has swung to an operating loss despite rapid growth, but the cost breakdown in the filing helps explain why. A non-cash donation expense of $1.96 billion weighed heavily on the result, while the roughly $5 billion spent on costly short-term compute contracts shows up mainly as a decline in the adjusted operating margin.
Revenue rose $5.4 billion, but operating results worsened by $1.5 billion
According to the quarterly results in the filing, Q3 revenue increased by $5.401 billion from $11.555 billion in the previous quarter. That is about 12 times the $1.382 billion reported a year earlier. Operating expenses, meanwhile, rose by $6.942 billion from $10.581 billion to $17.523 billion, so operating results deteriorated by $1.541 billion. Still, the year-earlier quarter had an operating loss of $3.089 billion, an operating margin of negative 224%. This quarter's operating margin is negative 3%, a large improvement over a year ago.
Most of the increase in operating expenses came from compute and infrastructure costs and other operating and administrative expenses. Compute and infrastructure costs rose by $4.305 billion, from $5.558 billion to $9.863 billion. Other operating and administrative expenses rose by $2.557 billion, from $1.031 billion to $3.588 billion. Personnel costs fell by $146 million, and sales and marketing expenses rose by $226 million.
In non-operating items, losses from changes in the fair value of convertible notes and similar instruments reached $21.936 billion, making up most of the $23.291 billion net loss. This valuation loss stems from the accounting revaluation of financial instruments and should be separated from the profitability of the AI services themselves. To judge the company's earning power, it is therefore important to look at operating results and adjusted profit measures, not just the enormous net loss.
Excluding the $1.96 billion donation expense, operating income would be $1.393 billion
The main reason other operating and administrative expenses jumped is noted in a footnote to the quarterly results. A non-cash expense tied to the employee donation-matching program rose from zero in Q2 to $1.96 billion in Q3. Under this program, when employees pledge to donate part of their equity compensation or the proceeds from selling it, the company contributes a matching amount in Class N common stock. The expense is linked to the value of employees' equity compensation and is recorded within other operating and administrative expenses. Anthropic itself cites two main reasons for the swing to an operating loss: $5 billion of compute procured through short-term contracts and roughly $2 billion in non-cash donation expense.
Simply removing this $1.96 billion donation expense from the Q3 operating loss of $567 million yields an operating profit of $1.393 billion. That is above the Q2 operating profit of $974 million. Because the increase in the donation expense ($1.96 billion) is larger than the deterioration in operating results ($1.541 billion), the company would have stayed profitable at the operating level in Q3 at least when this expense is excluded.
The $1.393 billion figure was calculated without excluding ordinary equity compensation expenses. By contrast, Anthropic's own definition of adjusted operating income excludes equity compensation and non-cash donation expenses, among other items, and rose from $2.235 billion in Q2 to $2.463 billion in Q3. In other words, although operating results under generally accepted accounting principles (GAAP) swung to a loss, profit excluding these costs exceeded the prior quarter. For reference, the $1.96 billion donation expense equals about ¥294 billion at ¥150 to the dollar.
$5 billion in short-term compute purchases pressured margins
If the company remained profitable at the operating level excluding the donation expense, how did the other factor, the $5 billion in short-term compute procurement, affect results? Anthropic secures most of its compute through multi-year contracts, typically 12 to 18 months before it is needed. But when customer demand or the compute required for research and development exceeds the capacity locked in under long-term contracts, it fills the gap with short-term contracts. According to the filing, the cost of such short-term contracts is significantly higher than securing equivalent compute under multi-year agreements.
Because costs under multi-year contracts rise as contracted capacity becomes available, they behave somewhat like fixed costs in the short term. Anthropic has so far improved profitability by growing revenue faster than these relatively fixed compute costs. Indeed, compute costs as a share of revenue had kept falling, from 251% in Q1 2025 to 48% in Q2 2026. In Q3, however, that improving trend was interrupted, as procurement through expensive short-term contracts pushed the cost ratio up.
Q3 compute and infrastructure costs reached $9.863 billion, and their share of revenue rose from 48% in the previous quarter to 58%. Revenue per dollar of compute and infrastructure cost also fell, from about $2.08 to about $1.72. The adjusted operating margin improved from negative 13% in Q1 2026 to 19% in Q2, but fell to 15% in Q3. Anthropic attributes this margin decline mainly to the $5 billion of compute purchased through short-term contracts. At ¥150 to the dollar, $5 billion equals about ¥750 billion.
The company expects greater use of short-term compute contracts to push operating margins down further. However, it says that once its own dedicated infrastructure platform, "Anthropic Direct," is operational, it will be able to replace compute secured on short-term contracts during demand spikes with more cost-efficient long-term compute. Whether it can reduce its reliance on short-term contracts will shape future margin improvement.
Meanwhile, the long-term financial burden of securing compute is also growing. According to the filing, total purchase and lease commitments for compute and infrastructure reach about $895.4 billion. Of this, about $447.5 billion falls due by the end of 2030, with nearly all the remainder arising between 2031 and 2045. However, about $213.8 billion includes commitments where the company can exercise termination rights, or where the start of the contract depends on conditions such as counterparty financing, securing facilities, or regulatory approvals. The total commitment is therefore not all unconditionally fixed spending.
Donation expenses may recur, and next quarter's results will be a key test
One caution in treating this loss as an effect of the non-cash donation expense is that the cost is not necessarily one-time. Donation-matching expenses were not incurred in Q2 2026, but $126 million was recorded in Q1 2026 and $541 million in Q4 2025. Anthropic itself expects the frequency and scale of resources devoted to public-interest activities to increase. Donation-matching expenses for January–September 2026 reached $2.1 billion, about 6% of total operating expenses. Even though the expense is non-cash, it is still an accounting cost, and investors should also watch for dilution from future share issuance. The $1.393 billion operating profit calculated above still includes $1.07 billion in equity compensation expense.
Slowing revenue growth is another concern. Quarter-over-quarter revenue growth fell from about 144% in Q2 2026 to about 47% in Q3. Price reductions and contract discounts tied to the launch of new models reduced revenue by about $600 million. That impact, however, is already reflected in the $1.393 billion operating profit excluding the donation expense. And although growth slowed, Q3 revenue still rose by $5.401 billion from the previous quarter. The number of customers paying $100,000 or more a year also grew from about 400 in March 2025 to more than 11,900 by the end of September 2026.
How to evaluate these results will become clearer with the next quarterly report. If operating results excluding the donation expense also turn negative, it would raise the likelihood that rising compute procurement costs and other factors have made it impossible to sustain an operating profit from normal business activity alone. In that case, the view that this loss was mainly due to the non-cash donation expense would need to be revisited.
Conversely, if operating profit excluding the donation expense holds at around $1.393 billion, or if reliance on short-term contracts declines and the adjusted operating margin moves back toward the 19% of Q2, it would be easier to conclude that the earnings base continues to improve. What matters is not only whether the donation expense is present, but at what cost the company can meet surging compute demand. Whether Anthropic can sustain revenue growth while reducing its reliance on short-term procurement will be the biggest factor in judging its future profitability.