Quarterly results
Palantir reported third-quarter revenue of $2.31 billion, a 96% increase year over year and a 20% rise from the prior quarter. The company said the results were “crushing consensus expectations” in its press release. Adjusted earnings per share came in at $0.44 versus analysts’ expectations of $0.41, and revenue beat the consensus forecast of $2.18 billion.
For the first time, U.S. commercial revenue outpaced U.S. government revenue. The company recorded $984 million in U.S. commercial contracts, up 148% from the year-ago quarter, compared with $953 million from the U.S. government.
Enterprise demand and contract patterns
Palantir attributed much commercial momentum to enterprise customers adopting its AI software that can run frontier models and custom-train open-weight models without sharing data, and to its longstanding model of forward-deployed software engineering that helps clients customize deployments.
On the quarterly conference call, CEO Alex Karp described a change in buying behavior: “much quicker interaction, much quicker to deployment, shorter duration of the contract but then an ability to expand that contract dramatically.” He added that companies are trying Palantir’s offerings quickly and, in his words, often expand after initial deployment, saying, “once you go Palantir, you don’t go back.”
Despite those dynamics, Palantir closed $1.46 billion of total contract value (TCV) from U.S. enterprises in the quarter, a decline from a record $2.13 billion in enterprise TCV the previous quarter. That drop suggests a slowdown in large deal closings at least for the quarter reported.
The company raised its guidance for the full year and increased guidance for U.S. commercial revenue to be “in excess of $3.559 billion, representing a growth rate of at least 143%.” The next quarterly report will show whether the mix of shorter-term trials and later expansions stabilizes or continues to affect enterprise sales trends.
Original source: TechCrunch AI