Table of Contents
a. Demand
Beat revenue estimates by 6% & beat guidance by 6.8%.
Government revenue beat estimates by 10%.
U.S. government revenue beat estimates by 19%.
International government revenue beat estimates by 5%.
Commercial revenue beat by 4.4%.
U.S. commercial revenue beat estimates by 5%. This quarter marked the first time that U.S. commercial revenue surpassed U.S. government revenue.
International commercial revenue missed estimates by 1.5%.
Beat billings estimates by 15%.
Beat 163% net revenue retention (NRR) estimates by 2 points. 120% NRR is considered very good. Palantir has been over 150% for the last 3 quarters… and it just keeps rising. Wild in the best of ways.
Missed remaining performance obligation (RPO) estimate by 10%. The large deals PLTR is signing are coming with shorter duration. That means customers are spending through commitments more quickly, which weighs on RPO growth. They don’t see duration shrinking much more from here, but contracts should keep getting larger.
“These results are the continued financial expression of the transformational impact we're delivering for our customers, which is also evident in the depth of our customer relationships.” – Chief Revenue Officer Ryan Taylor
b. Profits & Margins
Missed 84.9% GAAP GPM estimate by 150 basis points (bps; 1 bps = 0.01%).
Beat EBIT estimates by 9% & beat guidance by 10%. OpEx rose 53% Y/Y to support its AI roadmap and more technical talent additions.
Beat $0.41 EPS estimates by $0.03.
Beat FCF estimate by 10.5%.
c. Balance Sheet
$10.4B cash & equivalents.
No debt.
Share count roughly flat Y/Y.
d. Guidance & Valuation
For Q4, revenue guidance was 8% ahead of consensus estimates and EBIT guidance was 13% ahead.
For the full year:
Raised annual revenue guidance by 4.6% thanks to the sizable Q3 beat & outperforming Q4 guidance. This beat consensus estimates by 3.8%, as analysts expect a beat & raise at this point.
As part of this, minimum U.S. commercial revenue guidance was raised by 3.9%. This represents an eye-popping 143% Y/Y growth for 2026 at a $3.5B+ run-rate. Again… wild in the best of ways. No company outside of the AI infrastructure supercycle is putting up these kinds of results. And whenever that supercycle does end (it still doesn’t look like that’ll be soon), Palantir will be in far better shape than any of those companies. AI asset deflation means input cost deflation for this company, which feeds demand for its suite.
Raised annual EBIT guidance by 7.2%, which beat estimates by 6.2%.
Raised annual FCF guidance by 6.5%, which beat estimates by 6.1%.
Palantir trades for 97x forward EPS & 80x forward FCF. EPS is expected to grow by 115% this year, by 46% next year and by 46% the year after. FCF is expected to grow by 103% this year, by 53% next year and by 44% the year after. Estimates will keep rising following this report.
e. Call & Release
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