The shares, which have skyrocketed 25 times over the last three years, first surged in after-hours trading before declining approximately 4%.
Here’s a comparison of the company’s performance against LSEG predictions:
- Earnings per share: 21 cents adjusted compared to 17 cents anticipated
- Revenues: $1.18 billion versus $1.09 billion projected
Palantir, known for creating analytics software for major corporations and government bodies, indicated it anticipates revenue of roughly $1.33 billion for the ongoing period, outpacing the $1.19 billion forecasted by analysts, according to LSEG.
The positive outlook arrives amid ongoing government shutdowns, which have extended into a second month and may jeopardize significant contracts. The revenue from Palantir’s U.S. government operations increased by 52% year-on-year, reaching $486 million.
Sales to government clients, especially military organizations, have been crucial to Palantir’s consistent progress. Over the years, Palantir has gradually outperformed prominent traditional government contractors, recently securing a contract worth up to $10 billion with the U.S. Army.
Palantir has encountered criticism regarding the usage of its tools by government entities, including U.S. Immigration and Customs Enforcement.
Total revenue increased by 63% from $725.5 million a year prior, surpassing $1 billion for the second consecutive quarter. Net profits rose more than threefold to $475.6 million, or 18 cents per share, from $143.5 million, or 6 cents per share, in the previous year.
For the entire year, Palantir now predicts sales of around $4.4 billion, exceeding the $4.17 billion estimate provided by Wall Street. The firm also raised its full-year free cash flow forecast to between $1.9 billion and $2.1 billion.
Palantir’s U.S. commercial sector saw its revenue more than double to $397 million. The total contract value for U.S. commercial agreements more than quadrupled to $1.31 billion. In recent weeks, the company has announced new collaborations with Snowflake, Lumen, and Nvidia.
Retail investors have significantly contributed to the soaring stock price of Palantir. The shares have increased more than 170% this year, pushing the company’s market capitalization past $490 billion and establishing it among the most invaluable tech firms globally.
Analysts have voiced concerns about the stock, which trades at an elevated multiple compared to technology giants with much larger revenues. In a communication to shareholders, CEO Alex Karp pointed out the “detractors” who have found themselves “in a rather distressed and self-defeating confusion.”
“The fact is that Palantir has enabled retail investors to attain returns previously reserved for the most prosperous venture capitalists in Palo Alto,” he stated. “And we have achieved this through genuine and meaningful growth.”
In a discussion with CNBC’s Morgan Brennan on Monday, Karp recognized the current excesses in the AI sector and warned that some companies would ultimately feel the repercussions.
“The robust firms will become significantly stronger, while those merely posing as contributors will vanish rapidly,” Karp remarked.
