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We  intend  to  fund  these  investments  through  the  revenue  we  generate  and  the  capital  that  we  raise.  As  of 
September  30,  2026,  and  prior  to  taking  into  account  the  net  proceeds  to  us  from  this  offering, we  had  $           
of liquidity, comprised of $           of cash and cash equivalents, $           of short-term investments, and $           of 
availability  under  our  A&R  Credit  Facility  (as  defined  below).  We  also  maintain  significant  funding  support 
from our strategic partners, including up to $                    in available financing capacity under our note purchase 
agreements and up to $           in equity commitments. In addition, we estimate that the net proceeds to us from 
this offering will be approximately $          , based upon the assumed initial public offering price of $           per 
share, which is the midpoint of the estimated offering price range set forth on the cover page of this prospectus, 
and  after  deducting  estimated  underwriting  discounts  and  commissions  and  estimated  offering  expenses 
payable by us, or approximately $           if the underwriters’ option to purchase additional shares of our Class A 
common stock from us is exercised in full. 

How We Generate Revenue

At the foundation of our business is our family of four Claude model classes—Mythos (including Fable), Opus, 
Sonnet,  and  Haiku—each  optimized  for  a  different  point  on  the  capability-cost-speed  curve.  Our  frontier 
models  allow  customers  to  match  the  right  model  to  each  use  case.  Customers  typically  use  higher-capability 
models  for  complex  reasoning,  coding,  and  agentic  workflows  where  greater  model  intelligence  is  required. 
Customers also frequently adopt our full range of models, routing individual tasks to the models that are most 
optimized to meet their needs along the capability-cost-speed curve. The model a customer uses and the volume 
of  usage  are  the  primary  drivers  of  customer  spend.  We  establish  a  direct  contractual  relationship  with  the 
customer  and  offer  customers  the  flexibility  to  purchase  directly  from  us  or  through  CSP  marketplaces,  and 
many customers utilize both channels.

Pay-for-intelligence,  our  consumption-based  revenue  model,  is  our  primary  revenue  model  and  currently 
represents the substantial majority of our total revenue. Under this model, customers pay for usage, which is 
metered  in  tokens  and  priced  according  to  the  model  selected.  Our  pay-for-intelligence  revenue  is  primarily 
generated from customers building applications incorporating Claude or utilizing our first-party applications. 

In  addition,  we  offer  certain  of  our  applications  on  a  subscription  basis,  serving  both  enterprises  and 
prosumers.  Under  this  model,  customers  pay  a  subscription  fee  for  a  specified  level  of  usage  and  capabilities 
during the subscription term, which is generally 12 months or less. 

Depending  on  the  model,  platform,  or  applications  chosen  by  our  customers,  they  enter  into  pay-for-
intelligence  pricing,  subscription-based  pricing,  or  both.  For  example,  when  subscribers  approach  or  exhaust 
the  usage  capacity  included  in  their  tier,  they  may utilize  a  higher  subscription  tier  or  purchase  more 
intelligence directly, creating a seamless bridge from subscription to incremental pay-for-intelligence revenue. 

A  growing  number  of  enterprise  customers  agree  to  non-cancelable  annual  or  multi-year  contracts  with 
minimum  spend  commitments  in  exchange  for  a  committed  price  list.  These  contracts  result  primarily  in 
consumption-based revenue.

Consumption-based  revenue  increased  from  $288  million,  or  75%  of  total  revenue,  for  the  year  ended 
December  31,  2024,  to  $3.8  billion,  or  83%  of  total  revenue,  for  the  year  ended  December  31,  2025,  to $13.1 
billion, or 80% of total revenue, for the six months ended June 30, 2026. Subscription-based revenue increased 
from $98 million, or 25% of total revenue, to $789 million, or 17% of total revenue, to $3.2 billion,  or 20% of 
total revenue, over the same periods. The higher increase in consumption-based revenue reflects the growth in 
customers  with  $100,000  or  more  of  revenue  on  a  TTM  basis.  For  2023,  our  revenue  of  $41  million  was 
substantially all consumption-based, reflecting our early operations. We expect consumption-based revenue to 
continue to represent the substantial majority of total revenue for the foreseeable future.

Our recent growth may reflect early-stage adoption dynamics, the nascency of the AI market, and rapid initial 
customer expansion that may not be sustainable over time. We expect our revenue growth rate to decline over 
time, and it may decline significantly and more rapidly than we anticipate as our revenue base increases and as 
the market matures. 

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