Palantir Technologies Inc.

What they do

Palantir builds four principal software platforms: Gotham, Foundry, Apollo, and the Artificial Intelligence Platform (AIP). These platforms integrate customer data, logic, and actions into a decision-centric architecture (the Ontology), enabling users of varying technical abilities to collaborate and operationalize data at scale. The company serves both U.S. and allied defense/intelligence agencies as well as commercial enterprises.

Revenue drivers

• U.S. Commercial Revenue — Q2 2026 revenue of $764 million, up 149% year-over-year. Represents the largest growth segment; total U.S. commercial remaining deal value was $6.238 billion as of June 30, 2026, up 124% year-over-year.
• U.S. Government Revenue — Q2 2026 revenue of $809 million, up 90% year-over-year. Includes contracts with defense, intelligence, and other federal agencies; government remaining deal value was $4.4 billion as of December 31, 2025.
• Total Revenue Growth — Total revenue for Q2 2026 was $1.935 billion, up 93% year-over-year. The company closed 220 deals of at least $1 million and total contract value of $3.373 billion in the quarter.

Recent performance

In Q2 2026, Palantir reported revenue of $1.935 billion (93% YoY growth), GAAP income from operations of $912 million (47% margin), and GAAP net income of $1.062 billion (55% margin). U.S. commercial revenue grew 149% YoY to $764 million, and U.S. government revenue grew 90% YoY to $809 million. Cash from operations was $1.216 billion, and adjusted free cash flow was $1.220 billion. The Rule of 40 score reached 155%.

Strategy

Palantir's strategy centers on expanding adoption of its AI platform (AIP), which connects large language models and generative AI with customer data and operations under security constraints. The company uses shorter, cost-effective bootcamp deployments to accelerate customer pilots. Management emphasizes 'AI sovereignty' and the need for customers to retain control over their data rather than training external models. Investments continue in R&D, sales, and global infrastructure to support growth across commercial and government verticals.

Risks

• Customer concentration and contract termination — Many contracts are subject to termination for convenience provisions, and a limited number of customers account for a substantial portion of revenue; the U.S. government can also delay options or funding.
• Long and unpredictable sales cycle — Sales efforts involve considerable time and expense, often requiring months of pilot deployments at no or low cost, with no guarantee of future revenue.
• Inability to realize full deal value — The company historically does not realize all revenue from total remaining deal value ($11.2B as of Dec 2025) due to contract renegotiations, non-exercise of options, or macroeconomic factors.
• Rising operating expenses and profitability pressure — Operating expenses are expected to continue increasing as the company hires, expands infrastructure, and invests in R&D and sales; while currently profitable, past losses and upfront costs may strain future profitability.

Outlook

For Q3 2026, management expects revenue between $2.160 and $2.164 billion and adjusted income from operations between $1.292 and $1.296 billion. Full-year 2026 revenue guidance was raised to $8.150–$8.158 billion, with U.S. commercial revenue guidance raised to at least $3.424 billion (134% growth). The company continues to expect GAAP operating income and net income in each quarter of 2026.