Palantir tops $1 billion in revenue for the first time, boosts guidance
- Palantir topped Wall Street's estimates and hiked its full-year guidance due to the artificial intelligence boom.
- The AI software provider's revenues grew 48% during the period and hit $1 billion for the first time.
- The software analytics company has seen a boost from President Donald Trump's focus on cutting government costs.
Palantir topped Wall Street's estimates Monday, surpassing $1 billion in quarterly revenue for the first time, and hiking its full-year guidance.
Shares rallied 3% after the bell.
Here's how the company did versus LSEG estimates:
- Earnings per share: 16 cents adjusted vs. 14 cents expected
- Revenue: $1 billion vs. $940 million expected
The artificial intelligence software provider's revenues grew 48% during the period. Analysts hadn't expected the $1 billion revenue benchmark from the Denver-based company until the fourth quarter of this year.
"We're planning to grow our revenue … while decreasing our number of people," CEO Alex Karp told CNBC's Morgan Brennan in an interview. "This is a crazy, efficient revolution. The goal is to get 10x revenue and have 3,600 people. We have now 4,100."
Karp did not specify if the company would lay off employees to achieve his ideal headcount.
The software analytics company also boosted its full-year outlook guidance. For the full year, Palantir now expects revenues to range between $4.142 billion and $4.150 billion, up from prior guidance of $3.89 billion to $3.90 billion.
For the third quarter, Palantir forecast revenues between $1.083 billion and $1.087 billion, beating an analyst estimate of $983 million. Palantir also lifted its operating income and full-year free cash flow guidance.
Palantir's U.S. revenues jumped 68% from a year ago to $733 million, while U.S. commercial revenues nearly doubled from a year ago to $306 million.
The software analytics company has seen a boost from President Donald Trump's government efficiency campaign, which included layoffs and contract cuts. Palantir's U.S. government revenues jumped 53% from the year-ago period to $426 million.
"It has been a steep and upward climb — an ascent that is a reflection of the remarkable confluence of the arrival of language models, the chips necessary to power them, and our software infrastructure," Karp wrote in a letter to shareholders.
During the quarter, Palantir said it closed 66 deals of at least $5 million and 42 deals totaling at least $10 million. Total value of its contracts grew 140% from last year to $2.27 billion.
Net income rose 144% to about $326.7 million, or 13 cents per share, from about $134.1 million, or 6 cents per share a year ago.
Palantir shares have more than doubled this year as investors bet on the company's AI tools and contract agreements with governments.
Its market value has accelerated past $379 billion and into the list of top 20 most valuable U.S companies, surpassing Salesforce, IBM and Cisco to join the top 10 U.S. tech companies by market cap. Shares hit a new high Monday.
Last week, the company also secured a $10 billion software and data contract with the U.S. Army.
At its size, buying the stock requires investors to pay hefty multiples.
Shares currently trade 276 times forward earnings, according to FactSet. Tesla is the only other top 20 with a triple-digit ratio at 177.