Palantir Technologies reported third-quarter results that substantially exceeded analysts' expectations: revenue rose 96% year over year to $2.31 billion, topping the $2.18 billion consensus. Adjusted earnings per share were $0.44, compared with the $0.41 analysts had expected.
The growth was driven primarily by services related to artificial intelligence. Revenue from U.S. commercial customers jumped 148% to $984 million, and for the first time in Palantir's history this U.S. commercial revenue exceeded revenue from U.S. government contracts.
Following the strong quarter, Palantir raised its full-year revenue outlook to about $8.53 billion, which would represent roughly 91% year-over-year growth.
Despite beating expectations and increasing its annual guidance, Palantir’s stock fell nearly 5% in after-hours trading. Part of the investor concern appears to stem from the relatively modest 6% year-over-year increase in the total value of new contracts, combined with the company’s already high valuation. The slower expansion in contract value may have tempered enthusiasm among investors despite the robust top-line and EPS beats.
In summary, Palantir delivered strong revenue and adjusted EPS results for Q3 and lifted its annual forecast, but limited growth in new contract value and elevated valuation pressures contributed to a negative market reaction.
This article does not constitute investment advice or a recommendation.
