Palantir Technologies (PLTR, Financial) has reported impressive financial results for consecutive quarters, achieving significant gains on both its top and bottom lines in Q3. The company also provided an optimistic revenue forecast for Q4. This year, PLTR has experienced a remarkable rise, with its stock soaring by approximately 200% year-to-date. Founded two decades ago as a CIA-funded startup, Palantir's growth has been driven by its AI software, which has gained popularity among commercial enterprises and governments worldwide, fueling its accelerating growth in Q3.
- PLTR's revenue surged by 30% year-over-year to $725.52 million, enhancing its profitability with non-GAAP EPS rising by 43% year-over-year to $0.10. The total customer count increased by 39% year-over-year and 6% sequentially, reaching 629.
- U.S. government revenue saw substantial growth, increasing by 40% year-over-year and 15% sequentially to $320 million. This marks a seven-fold increase compared to the previous year and represents the best growth rate in the past 15 quarters.
- International government revenue grew by 13% year-over-year but declined by 5% from the previous quarter to $89 million, as anticipated due to unfavorable deal timing.
- The commercial sector was a highlight in Q3, with U.S. commercial revenue growing by 54% year-over-year to $179 million, driven by strong demand for Palantir's AI software. Commercial customer growth reached 77% year-over-year.
- International commercial revenue increased by 3% year-over-year but fell by 7% from the previous quarter to $138 million, impacted by challenges in Europe and reduced revenue from a Middle Eastern enterprise.
- PLTR's Q4 revenue forecast of $767-771 million, reflecting a 26% growth year-over-year at the midpoint, indicates sustained demand for AI. U.S. commercial revenue is expected to grow by at least 50% year-over-year. The company has also raised its financial targets for the year, including adjusted income and free cash flow.
Palantir has been riding the AI momentum sparked by NVIDIA (NVDA, Financial) over a year ago, achieving all-time highs. The company's consistent quarterly revenue growth has bolstered its profitability, leading to its recent inclusion in the S&P 500. With no signs of slowing in the AI sector, Palantir is well-positioned to capitalize on its technological edge in this lucrative market.
