A New Metric in an IPO Filing Anthropic’s S-1 includes a chart I didn’t expect to see in an IPO filing. It’s titled “Significant increase in revenue per dollar of compute.” I had a big smile on my face. The math is simple. Divide each quarter’s revenue by that quarter’s compute and infrastructure expense. Anthropic’s […]
OpenAI vs. Anthropic: What the S-1 Tells Us About AI ARR
In October 2026, the headlines said Anthropic had passed OpenAI in revenue. Reuters, citing unnamed sources, reported that Anthropic’s annualized revenue crossed $65 billion in July. OpenAI reportedly told investors its annualized revenue for September was almost $50 billion, below the figure approaching $70 billion it had signaled earlier. Keep in mind these are press […]
Why a 10% ARR Miss Never Goes Away
When I build forecasts and budgets for founders and executive teams, it’s easy to treat a revenue or bookings miss like normal budget variance: “We missed our ARR target by 10% this year. That stings, but if we execute our plan and grow 50% next year, we’ll be back on track.” It sounds reasonable. In […]
Cloud Infrastructure Is Now a Finance Problem
For years, cloud infrastructure sat comfortably inside engineering. Finance received the AWS or Google Cloud invoice, booked the expense, asked why it moved, and usually received an answer that was technically vague. It always felt like a black hole of spend. That approach no longer works. Cloud and AI infrastructure are becoming one of the […]
How to Score Your SaaS Exit Readiness
Most founders find out what their company is worth during an exit process. A letter of intent (LOI) gets sent over, and you’ll see the buyers’ valuation ranges. Some way low. Some in a reasonable range. Usually, not on the high side of expectations. But how do you know what valuation range to expect? Valuation […]
The SaaS Billing Stack Is Breaking
For years, the SaaS revenue model was relatively simple. Sell a subscription. Charge by the seat. Generate a monthly or annual invoice. Collect the cash. SaaS finance has never been easy, but the underlying revenue engine was fairly predictable and simple. AI did not break pricing ground here. Usage-based pricing is nothing new, but AI […]
How to Structure Your SaaS Chart of Accounts for AI Revenue and Costs
On the surface, the traditional SaaS P&L looks as clean and predictable as it did five years ago. You have recurring subscription revenue, your cost of goods sold (COGS) is represented properly, and your operating expenses (OpEx) are categorized as R&D, S&M, and G&A. But underneath the hood, AI is completely changing the financial rules. […]
AI Spend Management for CFOs: A 2027 Budget Framework
AI spend is becoming a real finance problem. Price check, please. For the last couple of years, most companies could treat AI as experimentation. Let’s max out on tokens! Employees signed up for ChatGPT or Claude, engineering teams started using AI coding tools, and AI capabilities appeared inside existing software tools. The dollars were often […]
AI COGS Is Now an Earnings Risk
In one week, August 4 to 7, 2026, two software companies told investors the same story from opposite ends of the AI COGS spectrum. Canva cut its full-year 2026 growth forecast from 30% to 20% and said that the cost of serving an AI task had gotten too high. Love the honesty, Canva. Wix said […]
ARR per Employee Benchmarks for SaaS Companies (2026)
For the last decade, our SaaS efficiency conversations lived in several places. The Burn Multiple. The Rule of 40. But neither one tells you how many humans it took to produce a capital efficient organization. Revenue per FTE has been around for a long time. But it regained prominence with the birth of AI. ARR […]