Toronto AI company Cohere reportedly hit $240 million USD in annual recurring revenue (ARR) last year, exceeding its targets.
The enterprise scaleup told investors it reached that figure in a February investor memo obtained by CNBC, significantly overshooting earlier projections of $200 million USD in ARR.
CNBC reported Cohere saw quarter-over-quarter growth of more than 50 percent throughout 2025, and averaged 70-percent gross margins, which expanded by 25 basis points year over year. Cohere declined to comment on the reported metrics.
Founded in 2019 by former Google researchers, Cohere builds the large-language models (LLMs) that power chatbots and other AI applications for companies and government agencies. Cohere has raised $600 million USD from investors including Nvidia, and last year hit a valuation of $7 billion USD. It also recently opened a secondary sale for employees.
Cohere has sought to set itself apart from the world’s handful of foundational model players, like OpenAI and Anthropic, with an enterprise-only offering of secure AI solutions, including data hosting through private deployments. This has made it attractive to clients in highly regulated and sensitive sectors like the Royal Bank of Canada and Thales Canada.
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The company was also among 15 global tech leaders, including Microsoft and Anthropic, who today signed on to be part of a new global group called the Trusted Tech Alliance. The group pledges to follow a set of principles when it comes to AI development, including transparent corporate governance, secure development and independent assessment, and respect for laws and data protection. However Cohere has faced accusations that it hasn’t always practiced responsible tech. Last year, a group of major North American media companies, including Forbes and the Toronto Star, sued Cohere for alleged copyright infringement (Cohere denies the allegations).
The Canadian government, in its quest to support domestic AI companies, has touted Cohere as an AI “champion” and has partnered with the company to use its AI services.
The metrics come as the company flirts with an eventual public offering. At a Bloomberg Tech conference in October, CEO Aidan Gomez said Cohere might IPO “soon” and that he eyed profitability for the company by 2029. Last year, Cohere hired its first CFO, Francois Chadwick, who had served as Uber’s acting CFO and played a leadership role in its public offering.
Feature image courtesy ALL IN.