Adjusted Profit, $80.7 Billion Loss: Non-GAAP Lessons From Anthropic

Anthropic described an adjusted profit to IPO investors less than a week before reports of its draft prospectus revealed $80.7 billion of GAAP losses for the half. Both can be true. Here is how founders can report adjusted numbers honestly, and the SEC rules that apply once a company files to go public.

Six days apart in October, two very different versions of Anthropic’s finances reached the public. At an October 14 investor day, attendees told Reuters, Anthropic said it had turned an adjusted profit in the July-September quarter. On October 20 a draft prospectus reviewed by Reuters carried an $80.7 billion GAAP net loss for the half-year. Each statement can be accurate at the same time, and the distance between them is the clearest recent lesson in reporting non-GAAP metrics for startups.

Where it stands: No reconciliation between Anthropic’s adjusted figures and its GAAP results had been published by October 21. The prospectus is still confidential, and the adjusted numbers come from people who attended private briefings.

Two numbers, one company

The GAAP loss is dominated by one item. Reuters reported that the first-half figure “included a $72 billion accounting charge reflecting an increase in the estimated value of bonds that could eventually convert into Anthropic shares, rather than cash costs tied to its operations.” That charge comes from how convertible financing is measured; our companion piece on convertible note accounting at fair value explains the mechanics.

The adjusted figures point the other way. Third-quarter revenue reached $16.8 billion, attendees said, and the company described itself as profitable on an adjusted basis for the quarter. Prospective investors also saw an adjusted operating margin of about 11% for the year through September, the International Business Times reported.

Neither number cancels the other. They answer different questions. The trouble starts when a reader sees only one of them, or cannot tell how one becomes the other.

What was left out, as far as anyone knows

Here the public record thins out. The Next Web summarized the gap in one line: “None of the reports say which costs the adjusted measure leaves out, and no profit figure was given.” A few pieces are known.

Reported measure What is known to be excluded
Q2 2026 adjusted operating income Stock-based compensation (PitchBook)
Adjusted operating margin, about 11% Stock-based compensation, among other items (IBTimes)
FT gross-margin figure, above 80% Revenue shared with partners; training costs
GAAP gross margin Not disclosed in the draft, per PitchBook

PitchBook’s analyst flagged the missing gross margin as “the figure we most want to see.” IBTimes noted that the company “has not published a detailed quarterly cash-flow statement alongside the disclosure.” For founders, that is the pattern to avoid: a headline adjusted number with the bridge to GAAP left for the reader to guess.

The rules that switch on at the IPO

Private companies can send investors whatever metrics they like. Once a company files with the SEC or speaks publicly as a registrant, three sets of rules apply.

Regulation G covers any public disclosure of a non-GAAP measure. The company must pair it with the most directly comparable GAAP figure and a reconciliation between the two.

Regulation S-K Item 10(e) governs filings such as an S-1. It adds a prominence test: the GAAP measure has to appear “with equal or greater prominence” than the adjusted one.

SEC staff interpretations fill in the judgment calls. One warns that a measure excluding “normal, recurring, cash operating expenses necessary to operate a registrant’s business” could be misleading. Another lists leading with an adjusted number, or dropping the GAAP figure entirely, as examples of undue prominence. A third asks whether a measure can mislead when “presented inconsistently between periods,” and the staff answer is that it can.

None of that is exotic. It is the checklist an auditor and an SEC reviewer will apply to the first public draft, and the cheapest time to meet it is years earlier.

What a clean reconciliation looks like

Public filings offer templates. Netskope’s 2025 S-1 defines its non-GAAP loss from operations as the GAAP figure excluding stock-based compensation and related payroll taxes, acquisition transaction costs, amortization of acquired intangibles, right-of-use asset impairments and legal reserve and settlement charges. Every item is named, and the filing walks from the GAAP line to the adjusted one in a table.

That is the standard to copy. A reader can disagree with an exclusion, but they can see it, size it and add it back.

Non-GAAP metrics for startups: a house style for investor updates

A small company does not need a full SEC-style section. It does need a few habits that hold up when a lead investor or an auditor starts asking questions:

  • GAAP first. Put net income or operating loss at the top of the update, then the adjusted figure beneath it.
  • A line-by-line bridge. Show each excluded item with its dollar amount, every period.
  • A fixed definition. Write down what “adjusted” means once. If it changes, say so and restate prior periods.
  • No recurring cash costs removed. Hosting, inference compute, support staff and sales commissions are the cost of running the business, not adjustments.
  • Labels that match the math. Say “adjusted operating income excluding stock-based compensation,” not “profit.”

Revenue metrics deserve the same treatment. Run-rate figures and booked revenue are not interchangeable, as our piece on annualized revenue versus ARR shows.

The exclusions that invite questions

Stock-based compensation is the most common add-back and the most argued over. It costs no cash in the period, but it dilutes every existing holder. Netskope excluded it; the reports on Anthropic say its adjusted measures did too. If you exclude it, show the dollar amount every quarter so investors can judge the trend.

Model training is the harder case for AI companies. The FT’s September gross-margin figure for Anthropic was measured “before the cost of training its models,” according to The Next Web. Available reports do not confirm the same exclusion for the 11% operating margin. A startup that trains models every year should be ready to explain why that spending is not a recurring operating cost, because the SEC staff guidance quoted above is written for exactly that kind of question.

One-time charges are the third category. A restructuring or legal settlement can fairly be excluded once. Excluded every year, it stops being one-time. Netskope names legal reserve and settlement charges in its list of exclusions, so a reader can check whether they keep coming back.

PitchBook’s account of Anthropic’s second quarter shows the stakes: positive adjusted operating income, excluding stock-based compensation, in the same half-year that produced the $80.7 billion GAAP loss.

Frequently Asked Questions

What are non-GAAP metrics?

They are performance figures a company calculates outside generally accepted accounting principles, usually by removing certain costs from a GAAP number. Adjusted operating income, adjusted EBITDA and non-GAAP gross margin are common examples.

Can a private startup report adjusted profit to investors?

Yes. The SEC rules on non-GAAP measures apply to registrants, so a private company sharing an investor update is not bound by them. Following them anyway, with a GAAP figure and a reconciliation beside every adjusted one, avoids rework when the company files to go public.

What does the SEC require for non-GAAP measures in a prospectus?

Under Item 10(e) of Regulation S-K, a filing must show the closest GAAP measure with at least equal prominence, plus a reconciliation. SEC staff guidance adds that excluding normal, recurring cash operating costs can make a measure misleading.

Is stock-based compensation usually excluded from adjusted metrics?

Often, yes. Netskope excluded it in its 2025 S-1, and reports on Anthropic say its adjusted measures leave it out. It is still a real cost to shareholders through dilution, which is why the reconciliation matters.

Was Anthropic profitable in 2026?

Only on an adjusted basis, according to people who attended its investor meetings. Under GAAP, the draft prospectus Reuters reviewed records $80.7 billion of red ink for the half-year to June, and most of that came from a non-cash charge.

Sources

This article is general information for founders and is not accounting, legal or investment advice. How a financing instrument is accounted for depends on its exact terms; work through it with your accountant or auditor. Anthropic has not published its IPO prospectus; figures are as reported by the sources cited on the dates shown.