Really good stuff, my friend. Thanks for distilling a lot of this before I could actually get to the doc.
On the OpEx side I found the massive increase in S&M — $2.6B increase in the first 6 months - pretty curious.
Digging in… It appears that most of the increase was paid to the channel — likely mostly to Amazon and Google — as opposed to Sales commissions.
So they’re paying those firms on both sides — for the compute AND for the distribution. (although Anthropic does establish direct customer relationships with such customers).
Big question is whether those heightened S&M costs due to these channel costs will continue and at what marginal cost.
Elsewhere they reference an increase in channel fees in H1 of $2.7B so about 75% of total S&M.
yeah, I didn't call that out directly but yeah you're right, most of it is from channel partner fees. Revenue flowing through CSPs jumped a ton over the past few years and moves inline with revenue. I was surprised nearly 50% flows through them!
Really good stuff, my friend. Thanks for distilling a lot of this before I could actually get to the doc.
On the OpEx side I found the massive increase in S&M — $2.6B increase in the first 6 months - pretty curious.
Digging in… It appears that most of the increase was paid to the channel — likely mostly to Amazon and Google — as opposed to Sales commissions.
So they’re paying those firms on both sides — for the compute AND for the distribution. (although Anthropic does establish direct customer relationships with such customers).
Big question is whether those heightened S&M costs due to these channel costs will continue and at what marginal cost.
Elsewhere they reference an increase in channel fees in H1 of $2.7B so about 75% of total S&M.
Thanks, David!
yeah, I didn't call that out directly but yeah you're right, most of it is from channel partner fees. Revenue flowing through CSPs jumped a ton over the past few years and moves inline with revenue. I was surprised nearly 50% flows through them!