Palantir Technologies recently revealed its impressive second-quarter results, along with the announcement of a new $1 billion stock repurchase program. The company’s revenue for Q2 reached $533 million, marking a solid 13% increase compared to the previous year and surpassing the initial range of $528 million to $532 million forecasted for investors. This revenue figure aligns with the Street consensus as measured by FactSet.
On an adjusted basis, Palantir reported earnings of 5 cents per share for the June quarter, meeting estimates. The company’s adjusted income from operations exceeded expectations as well, reaching $135 million, compared to the projected range of $118 million to $122 million provided by management.
Furthermore, Palantir achieved a notable milestone by posting its third consecutive quarter of GAAP profitability, earning $28 million, or a penny per share, under generally accepted accounting principles.
Palantir’s commercial revenue experienced a healthy growth of 10%, totaling $232 million. This growth was partly fueled by an impressive 20% increase in the U.S. commercial business, which generated $103 million in revenue. Government revenue also saw a significant rise, reaching $302 million, reflecting a growth rate of 15%. The company’s customer count displayed impressive growth as well, expanding by 38% compared to the previous year and by 8% sequentially. In particular, U.S. commercial customers witnessed a significant surge of 35% from the previous year, increasing from 129 to 161.
Looking ahead to the upcoming quarter, Palantir projects revenue to be between $553 million and $557 million for the September quarter. This estimate coincides with the consensus expectation of $553 million. Adjusted income from operations is anticipated to fall within the range of $135 million to $139 million, surpassing the Street’s call of $131 million. Importantly, the company remains optimistic about maintaining profitability on a GAAP basis throughout the year.
For the full fiscal year, Palantir anticipates revenue to exceed $2.212 billion, which surpasses its previous guidance range of $2.185 billion to $2.235 billion, with a midpoint of $2.21 billion. Adjusted income from operations for the year is now expected to surpass $576 million, an increase from the previous forecast of $506 million to $556 million. Overall, these strong numbers and positive outlook highlight Palantir’s continued success and positive trajectory in the market.
Palantir Poised for Inclusion in S&P 500 Stock Index
Palantir Technologies, the data analytics company, expects to become eligible for inclusion in the coveted S&P 500 stock index after achieving its fourth consecutive quarter of GAAP profitability. Although the company has not discussed this measure with S&P, CEO Alex Karp and CFO David Glazer are confident about attaining this milestone.
Impressive Financial Performance
Speaking about Palantir’s financial performance, Glazer highlighted that the company generated $285 million in adjusted free cash flow in the first half of the year. He further emphasized that Palantir has achieved positive free cash flow for ten consecutive quarters, indicative of its strong financial position. The company currently boasts $3.1 billion in cash reserves.
Seizing Massive Opportunities
Palantir’s leaders are optimistic about the future and believe that the company has immense growth potential. Karp stated that 80% of the business is growing at a minimum rate of 24% annually, with the exception of continental Europe where business is relatively softer. Undeterred by this, Karp predicted that Palantir will emerge as “the most important enterprise company in the world” due to its focus on artificial intelligence (AI).
Shifting Focus to AI
Palantir is revamping its business strategy to prioritize AI. Karp revealed that the company is refocusing its efforts on AI and plans to link employee compensation directly to the success of its AI initiatives. According to Karp, algorithms and enterprise software are becoming crucial factors for companies to outperform their competitors. He believes that established players will dominate this transition as opposed to emerging companies.
A Different Perspective on AI Investment
While venture capitalists are pouring billions of dollars into new AI companies, Karp holds a different view. He believes that considerable sums of money are being wasted in this area. According to Karp, large language models and AI software actually enhance the value of existing technologies, including those developed by Palantir.
Impressive Market Performance
Palantir’s shares have soared by 175% year-to-date as of the latest regular trading session on Monday. This significant surge reflects the market’s recognition of the company’s achievements and potential.
