Key points
- Palantir's U.S. commercial revenue passed government sales
- Third-quarter revenue beat Palantir's forecast
- Palantir raised its full-year outlook
Palantir Technologies (PLTR) reported more revenue from U.S. businesses than from the U.S. government for the first time in the third quarter.
U.S. commercial revenue rose 148% from a year earlier to $984 million, while U.S. government revenue grew 96% to $953 million, according to its earnings release.
Total revenue rose 96% to $2.313 billion, above the $2.160 billion to $2.164 billion Palantir forecast in August. Adjusted earnings were 44 cents a share, beating the 39-cent average analyst estimate in Robinhood's data. Shares traded at $180.03 after hours as of 4:54 p.m. ET on November 2.
What is Palantir forecasting now?
Palantir now expects 2026 revenue of $8.530 billion to $8.534 billion, up from its previous range of $8.150 billion to $8.158 billion. For the fourth quarter, it forecasts revenue of $2.649 billion to $2.653 billion and adjusted operating income of $1.640 billion to $1.644 billion.
The company also raised its full-year U.S. commercial revenue forecast to more than $3.559 billion, which it said would represent growth of at least 143%. Its adjusted free cash flow forecast rose to $4.8 billion to $5.0 billion.
How profitable was the quarter?
Adjusted operating income was $1.427 billion, a 62% margin, compared with the $1.292 billion to $1.296 billion Palantir had forecast. Under standard accounting, operating income was $1.085 billion and net income was $1.128 billion. Palantir ended September with $10.4 billion in cash, cash equivalents, and U.S. Treasury securities.
Why do the contract numbers matter?
The total value of the contracts Palantir closed in the quarter rose only 6% from a year earlier, to $2.918 billion. For U.S. commercial customers, it rose 11% to $1.463 billion. Revenue, by comparison, nearly doubled.
Contract value is a rough guide to future revenue, though deal sizes and lengths vary, and Palantir notes that some contracts can be cut short. The remaining value of its U.S. commercial deals was $6.517 billion at the end of September, up 79% from a year earlier but just 4% from June. U.S. commercial revenue grew 29% over the same three months.
Palantir closed 212 deals worth at least $1 million in the quarter, including 64 worth at least $10 million.
The results come during a rough stretch for AI stocks. Palantir fell 6.3% on October 30 in a broad selloff in chip and AI stocks, as we noted in our preview of this week's earnings.
