- Palantir's third-quarter forecast exceeded estimates, implying an acceleration in revenue growth.
- The data-analytics company bumped up full-year guidance for adjusted income from operations.
- During the quarter, Palantir announced a contract from the U.S. Special Operations Command.
Palantir reported a 13% increase in second-quarter revenue on Monday and issued a forecast for the current period that topped analysts' estimates. Investors pushed up shares as much as 3% in extended trading.
Here's how the company did:
- EPS: 5 cents, adjusted, vs. 5 cents as expected by analysts, according to Refinitiv.
- Revenue: $533 million vs. $533 million expected by analysts, according to Refinitiv.
Palantir reported $28 million, or 1 cent per share, in net income, compared with a net loss of $179 million, or 9 cents per share, in the year-ago quarter.
The data-analytics company said third-quarter revenue will likely be between $553 million and $557 million, ahead of the $552 million expected by analysts. The midpoint of the guidance implies 16% growth, a sequential acceleration after three years of gradual deceleration.
Management reiterated expectations for net income in the third and fourth quarters and called for full-year revenue of over $2.212 billion, above the midpoint of its forecast from May. Analysts polled by Refinitiv had expected $2.209 billion.
"We anticipate that we will become eligible for inclusion in the S&P 500 after we report our financial results for Q3 2023 in early November," CEO Alex Karp wrote in a letter to shareholders. "At that point, we will have been profitable on a cumulative basis over the preceding four quarters."
Palantir lifted its forecast for adjusted income from operations for the year to over $576 million, compared with a range of $506 million to $556 million in May.
The company said its board approved a buyback program for the first time, with a capacity of up to $1 billion.
Government revenue accounted for 57% of total sales. During the quarter Palantir announced a contract from the U.S. Special Operations Command that could be worth up to $463 million. The company's fastest area of growth was international government revenue, which increased 31% to $76 million.
Results from the government business during the quarter were disappointing, Ryan Taylor, Palantir's chief legal and revenue officer, said during a webcast.
Karp said the company sees an opportunity to commercialize artificial intelligence.
"I believe this transformation will change the GDP of America and that Palantir will participate in that in the delta between where the GDP is now and where it will get to, powered by unique technologies that are almost exclusively being built in the United States and are being adopted more rapidly, more efficiently with more vigor," the CEO said.
Karp said Palantir's aim is to make money from AI, rather than just produce computer-generated poetry with a tool that boards don't approve of. Many have asked startup OpenAI's ChatGPT, to write poems, and some companies have restricted their workers from using it.
"We will figure out how to monetize it," he said of Palantir's Artificial Intelligence Platform, or AIP.
Prior to the after-hours move, the value of Palantir shares had climbed 177% so far this year, compared with a rise of 17% for the S&P 500.