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Personnel

Personnel expenses primarily consist of stock-based compensation, including expense related to stock options, 
RSUs, and restricted stock awards (“RSAs”), cash compensation, including base salaries and bonuses, employee 
benefits, including health and welfare benefits, and employer payroll taxes. 

We  expect  personnel  expenses  to  increase  in  absolute  dollars  as  we  continue  to  expand  our  headcount  to 
support  the  growth  of  our  business.  We  also  expect  to  incur  additional  stock-based  compensation  expense  in 
connection with this offering, including for certain RSUs for which the performance condition will be satisfied 
upon  the  effectiveness  of  the  registration  statement  of  which  this  prospectus  forms  a  part.  We  expect  that 
personnel expenses may fluctuate as a percentage of revenue depending on the timing and magnitude of stock-
based compensation expense, and the pace of hiring across our organization.

Bartz settlement

Bartz  settlement  consists  of  the  charge  we  recorded  in  2025  to  settle  the  Bartz  litigation.  See  Note  13  to  our 
consolidated financial statements included elsewhere in this prospectus for additional information.

Sales, Marketing, and Partnerships

Sales, marketing, and partnerships expenses primarily consist of fees paid to channel partners and marketing 
and advertising costs, including media and public relations spend. 

We expect sales, marketing, and partnerships expenses to increase in absolute dollars as we continue to invest 
in activities to drive continued adoption and expanded usage of our models. We expect that sales, marketing, 
and partnerships expenses may fluctuate as a percentage of revenue depending on the timing of and spend on 
marketing campaigns and changes in the terms of our channel partner distribution arrangements and the cost 
to deliver our intelligence service. 

Other Operating and Administrative

Other operating and administrative expenses primarily consist of charitable donations expense related to our 
donation  matching  program,  vendor  costs  related  to  data  quality  and  performance  evaluation  services, 
information technology and cloud software costs, payment processing and platform fees, facility and occupancy 
costs,  non-income  taxes,  professional  services  costs,  bad  debt  expense,  and  depreciation  and  amortization 
related to non-data center assets.

We  expect  that  other  operating  and  administrative  expenses  will  increase  in  absolute  dollars  as  our  business 
grows  and  as  a  result  of  operating  as  a  public  company,  including  expenses  related  to  compliance  with  SEC 
rules and regulations, the listing standards of the Nasdaq Global Select Market, additional costs for directors’ 
and  officers’  liability  insurance,  and  professional  services.  We  also  expect  other  operating  and  administrative 
expenses to fluctuate as a percentage of our revenue over time as our business grows, in part as we significantly 
scale  our  public  benefit  initiatives,  including  expanded  programs  to  make  Claude  accessible  to  underserved 
communities,  increased  charitable  donation  matching,  contributions  to  philanthropic  vehicles  or  foundations 
we may establish or support in the future, and other efforts aligned with our mission. 

Interest Income

Interest income consists of interest earned on our cash and cash equivalents and short-term investments which 
primarily  consist  of  debt  securities,  including  U.S.  Treasury  and  agency  securities,  corporate  debt,  and 
commercial paper.

Change in Fair Value of Convertible Notes, Derivative Liabilities, and SAFEs

Change in fair value of convertible notes, derivative liabilities, and SAFEs consists of gains and losses as a result 
of recording our convertible promissory notes, derivative liabilities, and SAFE liabilities at fair value at the end 
of  each  reporting  period.  Because  these  instruments  are  marked  to  market,  increases  in  our  enterprise 
valuation  drive  increases  in  this  expense.  We  will  continue  to  recognize  changes  in  the  fair  value  of  our 

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