Palantir (PLTR) reported its third quarter financial results on November 11.
Alex C. Karp, co-founder and CEO of Palantir, said:
“114% – Our Rule of 40 Score! These results make the transformative impact of using AIP to increase AI leverage undeniable. Year-over-year growth in our US business increased to 77% and year-over-year growth in the US commercial sector increased to 121%. We once again announced the highest sequential quarterly revenue growth guidance in our company’s history, representing year-over-year growth of 61%”.
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Revenue grew 63% year over year and 18% quarter over quarter to $1,181 million.
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Operating income of $393 million, representing a 33% margin
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Adjusted operating income of $601 million, representing a 51% margin
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Rule of 40 score 114%
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Net income of $476 million, representing a 40% margin.
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Cash from operations of $508 million, representing a 43% margin.
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Adjusted free cash flow of $540 million, representing a 46% margin
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Earnings per share (EPS) of $0.18
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Adjusted EPS of $0.21
Source: Palantir.
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Revenue guidance in the range of $4.396 billion to $4.4 billion.
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Adjusted income from operations in the range of $2.151 billion to $2.155 billion.
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Adjusted free cash flow in the range of $1.9 billion to $2.1 billion.
Karp wrote a letter to shareholders and, as usual, made comments about analysts:
To better understand Palantir’s earnings report, we reached out to Brian Mulberry, Senior Portfolio Manager at Zacks Investment Management. Zacks owns the following names in its ETFs and mutual funds: Alphabet, Amazon, AMD, Apple, Broadcom, Meta, Microsoft, Nvidia, Tesla and Palantir.
Mulberry said Palantir’s growth is supported by its artificial intelligence strategy, modular approach and exposure to a secular growth market such as defense, along with a loyal customer base.
In an email, he told TheStreet: “A strong balance sheet promises continued investor interest, and that is likely to continue after seeing such a strong result in the third quarter.”
He noted that strong growth in the government segment (+52% year-on-year) was absolutely eclipsed by an explosion in consumer incomes that increased 121% year-on-year.
He considers this to be very positive for Palantir, as it demonstrates two things at the same time:
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Demand for AI is strong and adoption rates are growing in both lines of business.
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Sales pipelines are approaching parity, and that means Palantir is becoming less reliant solely on government contracts for revenue growth.