Emergency Damage Control After Earnings Miss: OpenAI CFO States Q3 ARR Up 35%, IPO Possible by 2027 or Earlier

After OpenAI’s Q2 revenue “missed expectations” with only an 18% increase, far trailing Anthropic, OpenAI CFO Sarah Friar held an all-hands meeting for “emergency damage control,” sending a signal of stability to employees.

On Wednesday, Friar told employees at the all-hands meeting that OpenAI “will become a public company in 2027,” but if “business acceleration continues,” the listing could happen earlier. According to two sources familiar with the matter speaking to CNBC, Friar emphasized at the meeting: “An IPO is not the finish line; it is a milestone, another round of financing. We completed $122 billion in financing in March, which gives us ample flexibility.”

Meanwhile, Friar presented a set of latest Q3 data to employees, showing that growth has rebounded significantly compared to Q2—this was one of the core messages of the all-hands meeting.

Q3 Data: Growth Rebounds, Enterprise Segment Particularly Strong

Slides presented by Friar at the meeting showed:

• Since the start of Q3, OpenAI’s overall Annualized Recurring Revenue (ARR) has grown by 35%
• Enterprise ARR grew by 50%
• Weekly active users for AI coding and work products reached 20 million

The context for this data is that OpenAI previously disclosed to investors that Q2 revenue was $6.7 billion, a mere 18% quarter-over-quarter increase from Q1’s $5.7 billion. According to The Wall Street Journal, operating losses widened further during the same period.

OpenAI had stated to investors that Q3 growth had picked up with the release of a batch of new models in July. The data presented at this all-hands meeting specifically corroborates this claim.

Anthropic May List First, Friar Says “It Doesn’t Matter”

Another important backdrop to this all-hands meeting is that competitor Anthropic’s IPO process is accelerating.

Previously, Anthropic secretly submitted its IPO prospectus to regulators and has begun early contacts with potential investors. Market expectations are that it may list this September or October.

OpenAI also secretly submitted its IPO prospectus to the U.S. Securities and Exchange Commission (SEC) in June this year but has not publicly disclosed specific listing plans.

Regarding the possibility of Anthropic listing first, Friar responded directly at the meeting: “As you know, we have secretly filed our documents, and Anthropic has too. It is possible they will unveil that secret filing in the coming weeks and become a public company in September. That doesn’t matter; we are running our own race.”

Sources of Pressure: Q2 Performance and Executive Turmoil

Friar’s proactive “damage control” stems from real-world pressures.

In terms of performance, OpenAI’s Q2 revenue grew 18% quarter-over-quarter, while Anthropic’s preliminary revenue for the same period exceeded $11.5 billion, a quarter-over-quarter increase of over 140%. This marked the first time Anthropic surpassed OpenAI in quarterly revenue and achieved slight operating profitability. The gap in growth rates disappointed some investors.

At the management level, OpenAI has seen frequent executive changes recently. Chief Revenue Officer Denise Dresser left last week after serving for less than eight months; previously, Executive Vice President Brad Lightcap announced he was ending his eight-year tenure to start a new venture; and Head of Product Fidji Simo resigned in July due to health reasons.

In response, OpenAI President Greg Brockman stated in an interview with CNBC on Monday that he believes these personnel changes are not actually that rare.

Currently, Friar, CEO Sam Altman, and Brockman are jointly tasked with conveying signals of stability to the outside world. OpenAI also faces multiple external pressures, including the proliferation of low-cost open-source models, intensifying competition, and price volatility following the listing of SpaceX stock, concerns about which have been expressed by some financial backers.

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