NEW YORK: Palantir Technologies Inc raises 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$4.89bil to US$4.91bil in adjusted income from operations this year, up from US$4.45bil at the top end of the range previously.
The software developer and major military vendor projected as much as US$8.16bil in sales, above estimates of roughly US$7.7bil on average.
Palantir chief executive officer (CEO) Alex Karp said US commercial sales in the second quarter were “staggering”, rising 149% from a year earlier to US$764mil, well above the average analyst estimate of US$716.4mil.
The stronger outlook worked to assuage investors’ fears that Palantir’s business would suffer from artificial intelligence (AI) developers such as Anthropic PBC selling their own software and from governments outside of the United States 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”.
“This quarter was otherworldly,” Karp 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 United Kingdom 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% from a year earlier to US$362.5mil. US revenue meanwhile rose 115% to US$1.57bil.
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% 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
