The company raised its revenue guidance for 2024 to about US$2.81bil. — Bloomberg
NEW YORK: Palantir Technologies Inc has reported quarterly revenue that beat analysts’ estimates and raised its forecast for operating income in the current period, citing high demand in the United States for its artificial intelligence (AI) software.
The company’s stock jumped about 13% in after-hours trading following the report.
Third quarter sales increased 30% to US$725.5mil, the Denver-based company said on Monday in a statement.
Analysts, on average, estimated US$703.7mil, according to data compiled by Bloomberg. Palantir also reported net income of US$144mil, a record for the company.
“The growth of our business is accelerating, and our financial performance is exceeding expectations as we meet an unwavering demand”, from government and commercial customers in the United States, Palantir chief executive officer Alex Karp wrote in a letter Monday to shareholders.
“The world is in the midst of a US-driven AI revolution that is reshaping industries and economies, and we are at the centre of it.”
The company raised its revenue guidance for 2024 to about US$2.81bil. Analysts expected US$2.76bil.
The company also reported a substantial increase on a closely watched metric: revenue from its US commercial business, a key driver of sales growth.
Palantir expects its US commercial revenue to climb over 50% this year, to more than US$687mil.
Palantir’s share price soared after introducing new AI tools last year, becoming a marquee stock of a tech industry frenzy.
The share price is up more than 140% so far this year, fuelled by demand for its AI software and events such as its recent inclusion in the S&P 500.
Palantir delivered adjusted earnings of 10 US cents a share in the period ended Sept 30, beating analyst estimates of nine US cents.
The company projected fourth quarter adjusted operating income of about US$300mil, compared with the average estimate of US$261.6mil.
Although Palantir counts global organisations like energy giant BP Plc and the United Kingdom’s National Health Service among its customers, demand overseas for its AI software has been weak compared with the United States.
The company said US$499mil of its revenue for the third quarter, about 70%, came from American customers.
“The US is driving the AI revolution we’re seeing,” said chief revenue officer Ryan Taylor during a Monday interview.
Taylor said Palantir closed 104 deals over US$1mil during the third quarter, thanks largely to its unconventional sales strategy of holding bootcamps to teach customers to use its tools.
Commercial business in the United States grew 54% to US$179mil during the quarter, and US government business increased 40% to US$320mil compared with the same period a year earlier.
On a call with analysts on Monday, Palantir credited defence spending for helping boost its US government business to the highest quarterly growth in nearly four years.
Although the US intelligence community was among Palantir’s first clients, winning large government contracts has taken the better part of two decades, with partnerships now playing a bigger role.
Palantir hired former GOP leader and China hawk Mike Gallagher to lead its global defence team in August.
Co-founded by billionaire Peter Thiel, Palantir built its reputation working with the US national intelligence community, and is now used across all US military branches and by allied forces in Ukraine and Israel.
Palantir expanded its partnership with Microsoft Corp in August so that it could use OpenAI – one of several large language models Palantir deploys in its AI platform – in classified environments.
On the Monday call, Karp also touched on the topic of retail investors, who are among Palantir’s most enthusiastic supporters – endowing the company with near-GameStop levels of reverence on the subreddit r/PLTR.
“Our individual investors are near and dear to our, and certainly my, heart,” he said. — Bloomberg
