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Table of Contents

Anthropic, PBC
Notes to Consolidated Financial Statements
(Continued)

Supplemental Operating Expense Information

The following table presents the Company’s operating expenses grouped by function (in millions):

Cost of revenue(1)
Research and development(2)
Sales and marketing(3)
Bartz settlement
General and administrative(4)
Total operating expenses

Year Ended December 31,
2024

2023

2025

Six Months Ended June 30,

2025

2026

(unaudited)

$

26 $

752 $

2,773 $

1,019 $

422

76

—

68

2,275

163

—

176

6,338

911

1,500

1,123

1,850

239

—

190

$

592 $

3,366 $

12,645 $

3,298 $

2,380

9,741

3,808

—

1,050

16,979

______________
(1) Substantially all of cost of revenue consists of compute and infrastructure costs associated with customer-serving workloads. 

Additionally, cost of revenue includes certain personnel-related costs and allocated overhead costs.

(2) Research and development expenses primarily consist of compute and infrastructure costs associated with model development, 

research, and internal usage workloads, personnel-related costs, software expenses, and allocated overhead costs.

(3) Sales and marketing expenses primarily consist of channel partner costs, marketing and advertising, personnel-related costs, 
compute  and  infrastructure  costs  associated  with  providing  free  access  to  the  Company’s  intelligence  service,  and  allocated 
overhead costs.

(4) General and administrative expenses primarily consist of the Company’s donation matching obligation, personnel-related costs, 

facility costs, allocated overhead costs, legal fees, and non-income-based taxes.

9. Convertible Notes, Revolving Credit Agreement and SAFEs

Convertible Notes

The  Company  has  entered  into  note  purchase  agreements  which  provide  for  the  issuance  of  one  or  more 
convertible  notes.  To  the  extent  that  the  note  purchase  agreements  create  an  obligation  to  issue  notes  in  the 
future, these obligations are accounted for as derivative liabilities on the consolidated balance sheets until the 
related note is issued.

Google

Google 2023 Note Purchase Agreement

In September 2023, the Company entered into a note purchase agreement (“Google 2023 NPA”) with Google 
LLC (“Google”), for the issuance of convertible promissory notes in an aggregate principal amount of up to $2.0 
billion,  issuable  in  three  tranches.  The  Company  issued  the  first  tranche  of  notes  in  an  aggregate  principal 
amount  of $500 million in September 2023, the second tranche of notes in an aggregate principal amount of 
$750  million  in  September  2024,  and  the  third  tranche  of  notes  in  an  aggregate  principal  amount  of $750 
million in September 2025.

The  notes  issued  under Google 2023 NPA bore  interest  at  a  rate  of 10.0% per annum, compounded annually, 
and payable upon maturity, 48 months after the respective issuance date. The Company also has a commercial 
agreement with Google for the provision of intelligence service.

In connection with the Company’s Series E-1 redeemable convertible preferred stock financing in 2025, the first 
and second tranches of notes issued under Google 2023 NPA converted in full into an aggregate of 12.7 million 
shares of the Company’s Series E-3 non-voting redeemable convertible preferred stock at a conversion price of 
$44.8692  per  share  and  an  aggregate  of 15.3  million  shares  of  Series  E-4  non-voting redeemable  convertible 
preferred  stock  at  a  conversion  price  of $50.4779  per  share,  respectively.  The  conversion  prices  reflect  the 
contractual discounts to the Series E-1 original issuance price of $56.0865 per share. As of December 31, 2025, 
$750 million aggregate principal amount remained outstanding under the third tranche of notes issued under 
Google 2023 NPA.

F-39