Palantir lifts FY income outlook to US$4.9 billion after Q2 results, ‘otherworldly’ sales
Its shares jump as much as 14% to US$142.91 before closing at US$125.65 on Monday
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[SAN FRANCISCO] Palantir Technologies raised revenue and income forecasts for the full year after posting second-quarter sales that far exceeded Wall Street’s estimates, describing commercial demand in particular as “otherworldly”.
Palantir now expects US$4.89 billion to US$4.91 billion in adjusted income from operations this year, up from US$4.45 billion at the top end of the range previously.
The software developer and major military vendor projected as much as US$8.16 billion in sales, above estimates of roughly US$7.7 billion on average.
Palantir chief executive officer Alex Karp said US commercial sales in the second quarter were “staggering”, rising 149 per cent from a year earlier to US$764 million, well above the average analyst estimate of US$716.4 million.
The stronger outlook worked to assuage investors’ fears that Palantir’s business would suffer from artificial intelligence developers such as Anthropic selling their own software and from governments outside of the US increasingly working with tech firms at home.
Karp hit back at the fear of AI upstarts replacing his business in a letter to investors on Monday, pointing to the risks of “letting the models loose within their homes”.
Palantir’s shares gained as much as 14 per cent in late trading to US$142.91. They had closed at US$125.65 on Monday.
“This quarter was otherworldly,” Karp on Monday said in prepared remarks.
“Such an achievement would be cause for astonishment in any business; for one of our size, scale, and consequence, it is simply staggering.”
Palantir gained fame as a stealthy Silicon Valley startup selling customised data analysis software to the US government and allied military forces.
Karp, chief technology officer Shyam Sankar and other company leaders have increasingly cultivated a pro-America image since US President Donald Trump took office, publishing books on the need for tech to re-engage with the defence industrial base and speaking at conferences on the role of AI in war.
Governments abroad have taken notice. Palantir’s US government sales remain strong, but European leaders have called for an increasing need for domestic tech companies to supply the software for national security and critical operations.
In recent months, officials in both France and the UK have moved to end deals with Palantir, citing tech sovereignty.
“Sometimes we make decisions that are against our economic interests, like we’re supporting lots of institutions in Europe,” Karp said in a call with analysts on Monday. “The growth sucks.”
Palantir’s sales abroad grew 33 per cent from a year earlier to US$362.5 million. US revenue meanwhile rose 115 per cent to US$1.57 billion.
In both his letter to investors and on the call with analysts, Karp characterised Palantir’s software as an alternative to working directly with the AI companies that make large language models, systems trained on vast amounts of text and other content.
He praised Palantir customers for declining to become “vassal states of the language labs” and pitched his company as one that will “allow you to switch out models”.
Palantir’s adjusted gross margin was 86 per cent in the last quarter, down slightly from the three months prior, after the company took on cloud hosting for a government customer, chief financial officer Dave Glazer said on the analyst call.
He cautioned that expenses will ramp up in the third quarter, in part because of the seasonality of new hires and other product and marketing efforts. BLOOMBERG
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