NEW YORK: Palantir Technologies Inc reported a 48% increase in revenue for the second quarter to more than US$1bil, citing the “astonishing impact” of artificial intelligence (AI) technology on its business.
The data software company also raised its revenue outlook for the full year to a range of US$4.14bil to US$4.15bil, exceeding analysts’ prior expectation of US$3.91bil.
The shares gained about 3.5% in extended trading after closing at US$160.66 in New York.
Denver-based Palantir has seen its stock price surge more than 500% over the past year, buoyed by high expectations from investors, growth in demand for AI tools, and a deep reach into both the private and public sectors.
The company’s US$1bil revenue in the period ended June 30 exceeded analysts’ average estimate of US$939mil.
Growth was particularly strong in the United States, where sales jumped 68% to US$733mil, the company said on Monday in a statement.
Palantir said adjusted earnings per share for the quarter were 16 US cents, exceeding analyst expectations of 14 cents.
In a letter to shareholders, chief executive officer Alex Karp lingered on the company’s at-times tenuous relationship with Wall Street.
“The sceptics are admittedly fewer now, having been defanged and bent into a kind of submission,” he wrote.
He also said that AI breakthroughs had helped fuel Palantir’s growth, pointing to the development of large language models and the chips required to power them.
Going forward, Karp said that Palantir planned to be the “dominant software company of the future”, and added that “the market is now waking up to this reality”.
The company’s US government revenue climbed 53% in the quarter to hit US$426mil. Meanwhile, its revenue from commercial contracts in the United States climbed even quicker, rising 93% for the year to hit US$306mil.
The “outperformance” in Palantir’s US commercial business is a key indicator of robust demand, particularly for the company’s AI products, Jordan Berger, an analyst at Third Bridge, said in a note.
“We continue to hear from experts that Palantir maintains unique market positioning for monetising AI technology amid a noisy, crowded, and hype-laden market, and the company’s second quarter performance further validates that sentiment,” Berger said.
Palantir has long played a role as a key US government contractor, working with both the United States military, those of allied countries like Ukraine, and partnering with new defence tech startups.
The company solidified its relationship with the Pentagon during the quarter, striking new deals with the US Space Force and US Army, executives said during a conference call after the results.
Palantir also consolidated 15 prime contracts and 60 related contracts with the US Army into one single deal, a 10-year, US$10bil arrangement.
While the agreement was designed to cut costs for the government and didn’t boost the company’s bottom line, it could provide a template for future federal deals.
In his letter to shareholders, Karp emphasised Palantir’s commitment to defence tech, writing that the United States is “the most consequential country in the West” and added that “it must be protected” — Bloomberg
