Hiding Inside Palantir’s Skyrocketing Quarter: A Foreboding Signal for TechCrunch Readers

Record revenue and a milestone

Palantir’s revenue reached $2.31 billion, up 96% from a year earlier and 20% from the previous quarter. It was the first quarter in which revenue topped $2 billion, and it exceeded analysts’ $2.18 billion estimate. Adjusted earnings per share were $0.44, compared with the $0.41 analysts expected.

The company raised its full-year revenue guidance. U.S. commercial revenue reached $984 million, a 148% increase from the year-ago quarter, passing U.S. government revenue of $953 million for the first time.

Why companies are signing up

Palantir’s enterprise AI software lets customers run frontier models and customize open-weight models without sharing their data or business processes with outside AI labs. Its forward-deployed software engineers also help tailor the products to customers’ needs.

Those offerings are drawing corporate buyers, but their contracts may begin as short-term trials. Karp said on the earnings call that customers are reaching deployment faster, signing shorter contracts, and then having the option to expand them substantially.

A question over staying power

Karp expressed confidence that customers would remain with Palantir, saying, “once you go Palantir, you don’t go back.” He also described a sharp rise in prospective corporate customers. The contract figures offer a more mixed picture. Palantir closed $1.46 billion in U.S. enterprise total contract value during the quarter, down from a record $2.13 billion in the previous quarter. That decline suggests sales may have slowed, at least for the period.

What comes next

Palantir’s next earnings report will offer another test of whether it can establish a durable position as a U.S. enterprise AI provider. The article notes that many companies make their largest technology purchases in the final quarter of the year.

The company forecast U.S. commercial revenue above $3.559 billion, representing growth of at least 143%. Despite the higher outlook, the short contract terms and quarterly drop in enterprise contract value remain signs investors will be watching.