Palantir Technologies, Inc. (PLTR, Financial) delivered impressive Q3 2024 earnings, supported by record profitability, strong cash flow, and surging demand for AI solutions across both government and commercial sectors. With its recent inclusion in the S&P 500, Palantir continues to establish itself as a key player in the AI landscape, and the stock responded with a 15% post-market increase.
Q3 2024 Earnings Highlights
Palantir reported Q3 revenue growth of 30% year-over-year (YoY), reaching $725 million, with U.S. revenue up 44%. The company posted a record net income of $144 million, marking its largest profit in two decades. GAAP EPS of $0.06 beat expectations by 50%, while Palantir's adjusted operating margin reached 38%, achieving a strong Rule of 40 score of 68%.
The U.S. market remains a core driver, with revenue totaling $499 million across commercial and government segments. U.S. commercial revenue grew 54% YoY and 13% quarter-over-quarter, while U.S. government revenue rose 40% YoY and 15% sequentially, underscoring robust demand from defense and intelligence agencies for secure AI applications.
Palantir closed 104 deals over $1 million, 36 deals over $5 million, and 16 deals over $10 million, highlighting strong enterprise adoption. Additionally, the company generated $416 million in free cash flow, a 215% YoY increase, bringing cash reserves to $4.6 billion with no debt.
For FY 2024, Palantir raised its revenue guidance to $2.805–$2.809 billion, surpassing consensus estimates. U.S. commercial revenue is expected to grow by at least 50%, emphasizing Palantir's confidence in sustained AI demand.
Palantir's inclusion in the S&P 500 reflects its strong fundamentals, although it currently trades at a high price-to-sales ratio of around 43x. With a year-to-date stock gain of over 150%, Palantir stands out as one of 2024's top performers. This earnings report reaffirms Palantir's long-term potential to capitalize on AI demand, solidifying its leadership in AI-driven solutions for mission-critical applications.
